Sitting of 5 August 1975

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. Speaker in the Chair]
ORAL ANSWERS TO QUESTIONS
  SOCIAL SERVICES

    Speech Therapy Services
    Mr. Cockcroftasked the Secretary of State for Social Services what progress she is making in implementing the Quirk Report recommendations on speech therapists; and if she will make a statement.
    The Secretary of State for Social Services (Mrs. Barbara Castle): The speech therapy services were integrated under the National Health Service on 1st April 1974. My Department has recently appointed a member of the profession as Adviser in Speech Therapy, whose advice will also be available to the Department of Education and Science and the Welsh Office. Implementation of the remaining recommendations depends on further discussion with the College of Speech Therapists and on the resources that health authorities can make available for this service. The House will recall the very substantial improvement in the pay of speech therapists, recommended by Lord Halsbury and implemented by the Government early this year.
    Mr. Frank Allaun: Is my right hon. Friend aware that in Salford there is only one speech therapist although there should be 11 and although the need for therapists has been stressed by the teachers? Is my right hon. Friend further aware that the shortage is not due to money but is because many areas cannot get therapists as there are not sufficient training places for them?
    Mrs. Castle: I am aware that there is an acute shortage of speech therapists in
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    certain areas. I am sorry to hear that my hon. Friend's constituency is one of those areas. As I think he knows, the Government have accepted the target in the Quirk Report for building up to a total of 2,500 whole-time speech therapists but, as he says, the problem in the interim is partly of training and not merely of money. We are in consultation with the Department of Education and Science on ways of increasing the number of speech therapists. I am glad to say that a number of degree courses are now being introduced in addition to the diploma courses.
    Mr. Steen: The right hon. Lady has explained what is happening to speech therapists, and it is true that Lord Halsbury has done them proud, but is she aware that nurses in schools without health visitor certificates and nurses in tuberculosis clinics are not getting the money which they need and which would put them on the same footing as nurses with health visitor certificates for exactly the same work? Does the right hon. Lady realise that she or one of her Ministers promised the House that this matter would be considered? What is happening now?
    Mrs. Castle: I am sure the hon. Gentle-is aware that that is an entirely different question which does not arise from the Question on speech therapists. The matter to which the hon. Gentleman has referred is being discussed in the Whitley Council.

    Hospital Services (Leicester)
    Mr. Farrasked the Secretary of State for Social Services what progress is being made on the provision of hospital services in the Leicester area; and if she will make a statement.
    The Minister of State, Department of Health and Social Security (Dr. David Owen): Three major developments are in progress: an expansion of the Leicester General Hospital, including 124 acute beds and supporting services, which is expected to be completed by the end of this year; phase II of the Leicester Royal Infirmary, containing 415 acute beds and supporting services, which is scheduled for completion in 1977; and a 168-bed geriatric unit and day hospital on the Glenfrith site, expected to be

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    finished by the end of 1976. The provision both of new maternity facilities at the Leicester General Hospital and of residential accommodation at the Leicester Royal Infirmary has received approval to start in the current year, subject to receipt of suitable tenders.
    Mr. Farr: I am grateful to the hon. Gentleman for that information, but will he bear in mind that it is vitally important that Leicester's teaching hospital be not lost sight of and that rapid progress be made towards getting the necessary output of qualified doctors by the given date?
    Dr. Owen: The expansion of the medical student intake is one of the highest priorities, despite the fact that we are having to limit capital expenditure on hospital buildings. That is one of the reasons for the large number of projects being built in the Leicester area.
    Mr. Greville Janner: Is my hon. Friend aware that Leicester has increasing health problems and one of the lowest ratios of hospital beds to population in the country? In the circumstances, will be give Leicester people the assurance that the plans for improving the health services in Leicester will be continued in spite of any cuts that may have to be made?
    Dr. Owen: It is an acknowledged fact that there is a level of health deprivation in Leicester and throughout the region. We are trying to concentrate our resources on the basis of putting them into areas of health deprivation and of seeking to find better indices of such deprivation. I cannot give the assurance that my hon. and learned Friend wants other than to say that we recognise Leicester has a high priority.
    Dr. Vaughan: As these local facilities are within the context of the national health resources, will the Secretary of State announce exactly what cuts she is envisaging nationally, and particularly the implications they will have for medical health staffing?
    Dr. Owen: We are not yet in a position to give regional health authorities capital allocations for future years, although in her answer to the hon. Member for Cornwall, North (Mr. Pardoe) on 29th April my right hon. Friend indicated
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    that the effect of the Budget on the Department's regional allocations for hospital and community health services in 1976–77 would be a 25 per cent. reduction on the allocations for the current year.

    Destitute Young Persons
    Mr. Greville Jannerasked the Secretary of State for Social Services what has been the total cost during the latest year for which records are available of caring for destitute young people aged between 16 and 18 years.
    The Under-Secretary of State for Health and Social Security (Mr. Michael Meacher): This information is not available in the terms requested, but during 1974 the total amount of supplementary allowances paid to young people aged between 16 and 18, including those living as part of a family, is estimated to be £11½ million.
    Mr. Janner: Is my hon. Friend aware that although the problem of destitute and homeless young people is acute and terrible in London and was well highlighted in the television programme "Johnny Go Home", the problem also exists in many other parts of the country, particularly in the great cities en route from Scotland to London, including Leicester? Will he give an idea whether there will be any increase in Government help to public and voluntary bodies which are trying to cope with this desperate human problem?
    Mr. Meacher: Yes, Sir. My right hon. Friend the Secretary of State for the Environment is now seeking to encourage local authorities and housing associations to provide more single-person accommodation, although there are constraints in terms of resources in regard to competition with more accommodation for homeless families. Furthermore, the Housing Act 1974 makes local authorities and housing associations eligible for the first time for grants and subsidies available for other types of accommodation if they provide single-person accommodation. We hope that they will take full advantage of that facility.
    Mrs. Chalker: What steps does the Minister intend to take to make hostel accommodation available in city centres

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    rather than the long-term, purpose-built, single-person housing to which he has referred? Does he not agree that this is what is needed?
    Mr. Meacher: I was not referring only to purpose-built long-term accommodation, because short-term accommodation with a high rate of turnover could also be involved. If the hon. Lady is thinking of the inner cities, and particularly of London, which has the major problem, the Greater London Council and the London Boroughs Association have had a working party sitting for some time seeking to provide means of giving a higher priority of provision to single-person accommodation. I am hopeful that they will have some answer soon.
    Mr. Lipton: Will my hon. Friend see to it that there is more effective coordination involving the Home Office, the police, his own Department, local authorities and people purporting to provide accommodation for homeless young people, of which we have had some horrifying examples lately? Does he not agree that we should take a serious view of the situation?
    Mr. Meacher: I agree that there needs to be closer co-ordination, and the Home Office is already undertaking any internal inquiry about why information concerning the Gleaves hostel empire was not distributed among Government Departments. We are always mindful of closer co-operation, particularly with local authorities which have to provide accommodation. This is why we have written to the chief executives of Camden and Westminster to try to encourage them to provide better answers to the question of identifying homeless young persons at risk and to refer them to suitable accommodation.
    Mr. Norman Fowler: Will the Minister confirm that public money was made available to Gleaves in respect of hostels run by that concern? Will he also say what checks took place before the money was paid out?
    Mr. Meacher: It is not true that money was paid direct to Gleaves. Gleaves did not receive block payments from the Supplementary Benefits Commission on the presentation of a list. Under Section 17 of the Supplementary Benefits
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    Act the commission can award payments to a third party, for example to a hostel warden in respect of board and lodging vouchers, but each voucher is issued to one individual only for one week at a time and only after that individual has been interviewed by a Supplementary Benefits Commission officer. There is no truth in the statement that block payments have been made to Gleaves.

    Supplementary Benefits
    Mr. McCrindleasked the Secretary of State for Social Services if she has received any representations from the CBI on the payment of supplementary benefits.
    The Minister of State, Department of Health and Social Security (Mr. Brian O'Malley): No, Sir.
    Mr. McCrindle: In regard to the payment of social security benefit to strikers, does not the Minister accept that the significant share of responsibility for the welfare of families of people who may strike against the Government's pay policy this winter should fall upon the trade unions? Has any consideration been given to assisting those families by way of loans from the social security system, to be repayable on return to work? Will the right hon. Gentleman confirm that we are the only civilised country that acts in such a benevolent way to strikers and their families?
    Mr. O'Malley: I thought that the hon. Gentleman was against extreme views, even of those attributed to so notable a person as the President of the CBI. I am sorry that he has not behaved in such a manner this afternoon. May I point out to him that when the right hon. Member for Leeds, North-East (Sir K. Joseph) was responsible for these matters in a Conservative Government he conducted a major inquiry into the subject and created the present state of the law in respect of strikers. The present Government are not prepared to make mothers and children pawns on the board of industrial conflict.

    Disabled Housewives
    Mr. Michael McNair-Wilsonasked the Secretary of State for Social Services what further recent representation she has received about introducing a pension for disabled housewives ahead of 1977.
    Mr. Meacher: A substantial number of representations have been received recently including, in particular, representations initiated by the National Federation of Women's Institutes. The replies have pointed out that the introduction of the housewives' non-contributory invalidity pension has to be phased in as part of our heavy overall programme of benefit improvements.
    Mr. McNair-Wilson: Will the Minister say what he means by "has to be phased in"? If some people can receive pension from 1st January 1976, why cannot all invalid housewives who can neither work nor undertake housework in their own homes receive similar pensions? Will he give a more satisfactory answer?
    Mr. Meacher: No, Sir. Housewives are being phased into non-contributory invalidity pension after men and single women breadwiners. The criterion is incapacity for work. In the case of housewives there is an additional criterion of incapacity for housework. I assure the hon. Gentleman that the making of dividing lines as to who is or is not incapable of undertaking housework is a difficult test to devise in a way which can be seen to be both efficient and fair.

    Supplementary Benefit (Long-term Additions)
    Mrs. Haymanasked the Secretary of State for Social Services whether she will now lower from two years to 12 months the qualifying period for the long-term addition to supplementary benefit.
    Mr. O'Malley: This is a question which we shall consider as resources permit.
    Mrs. Hayman: Is my right hon. Friend aware that many people who are dependent on supplementary benefit, particularly one-parent families, are becoming increasingly desperate and disillusioned concerning their ability to cope in the present economic crisis? Does he agree that the Government should take action at least on the short-term measures suggested by the Finer Report? If the Government continue not to accept the guaranteed maintenance allowance, when will they come up with measures involving a non-means-tested benefit for all one-parent families?
    Mr. O'Malley: I wish that my hon. Friend would occasionally draw attention
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    to how much money in additional resources has been spent by the present Government in the whole area of social security. The record of the Labour Government bears comparison with any previous Government in this country throughout the whole post-war period. There is no dispute between my hon. Friend and the Government about wanting to improve the lot of deprived families, whether one-parent families or any other group of families or individuals in the community. We shall achieve this as quickly as available resources permit us to do so.
    Mr. Cormack: Does the Minister agree that he has not answered the question? Does he agree that it is now 13 months since Finer reported? The Government have not yet provided time for a proper debate on that report. Does he not agree that this is a scandalous situation and shows a distorted sense of Government priorities?
    Mr. O'Malley: If there is one thing which is scandalous in the history of the treatment of one-parent families—and, indeed, of all families with children—it is the failure of the previous administration to increase family allowances ever since 1956. As for what has been implemented arising out of the Finer recommendations, I refer the hon. Gentleman to Questions already answered in this House.

    National Insurance Contributions (Calculation)
    Mr. Paul Deanasked the Secretary of State for Social Services what level of unemployment will be assumed by her Department for 1975–76 for the purpose of fixing the level of national insurance contributions.
    Mr. O'Malley: I must ask the hon. Member to await the Government Actuary's Report which we shall be laying before the House in due course, together with a draft order fixing contributions for 1976–77.
    Mr. Dean: I can hardly say that I am grateful to the right hon. Gentleman for that reply. Is he aware that with high rising unemployment, special measures are needed to bring relief and hope to those who will be affected in increasing numbers during the coming winter? Can he give an assurance that his Department

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    will take the initiative to bring together the combined resources of the Government, local authorities and voluntary bodies to try to assist the large number of people who will find themselves out of work during the coming winter?
    Mr. O'Malley: Dealing with the second part of the hon. Gentleman's question, I can give him the assurance that this Government, through my Department, are doing everything possible on the lines described by him to assist individuals who have difficulties. As for his reference to special measures, he will be aware that there is another substantial uprating for November of this year which will help not only retirement pensioners but all other recipients of both long-term and short-term benefits.
    Mr. Skinner: Is my right hon. Friend aware that the line which has been suggested by the hon. Member for Somerset, North (Mr. Dean) is fraught with a little danger in that although most right hon. and hon. Members will applaud the efforts of local communities, authorities and others and Government Departments combining to reduce the level of unemployment in areas where the dole queue may be as large as 20 per cent. of the working population, there is a fellow known as the district auditor who may call upon a local authority and say that it has reduced unemployment levels too greatly and that it will be surcharged to the tune of £30,000, as happened in the recent case of the 11 councillors at Clay Cross?
    Mr. O'Malley: My hon. Friend will get me into trouble. He knows a great deal more than I do about these matters. I think that his question would be more appropriately addressed to my right hon. Friend the Secretary of State for the Environment.

    Pharmaceutical Journals
    Mr. Nicholas Wintertonasked the Secretary of State for Social Services what requests she has received from the pharmaceutical journals for clarification of her policy towards them: and if she will make a statement.
    Dr. Owen: I have received a number of representations about the possible effects of our proposals to reduce pharmaceutical promotion. I do not
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    wish to see the position of journals of reference value prejudiced.
    Mr. Winterton: I thank the hon. Gentleman for that helpful reply. He will agree, I am sure, that there should be the widest possible dissemination of information on new drugs. He will be aware that accidents have occurred because of misunderstandings over the use of new drugs. In my constituency the pharmaceutical industry is a very big and very good employer. It provides excellent working conditions. Can the hon. Gentleman assure the House that he will not impede the fine progress which this industry is making?
    Dr. Owen: Yes. I think that the pharmaceutical industry makes a valuable contribution to the country's export drive, and we shall do everything possible to help it. However, it spends a high percentage—something like 14 per cent.—of the product of its home sales on promotion. Although there is a need for information about new drugs, I think that there can be too much promotional activity.
    Mr. Bryan Davies: Does my hon. Friend also accept that although it is necessary to protect the future of pharmaceutical journals, some of the protection might be afforded by redirecting resources from the industry, which spends too much money on representatives, creating a ratio between representatives and doctors of about one to eight?
    Dr. Owen: The whole question of medical representatives needs looking into. Doctors are scientifically trained, and obviously they need objective information. But whether they need such a large amount of spending on medical representation is open to doubt. I feel that too much is being spent.
    Mr. Beith: Does the Minister agree that it would be all to the good if his proposal led to the pharmaceutical industry spending its promotional money strictly on the provision of information—reducing the money spent on favours and general promotional activity concentrated on general practitioners which have commanded so large a part of it hitherto?
    Dr. Owen: Yes. I have made it clear that gifts and lavish amounts of samples are a charge which should not be made

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    on the National Health Service. At the moment they are claimable on the VPRS system. I think that there is a widespread feeling that this is an area for sensible expenditure cuts which might then be devoted to the National Health Service. I look forward to the support of right hon. and hon. Gentlemen opposite.

    Preventive Medicine
    Miss Fookesasked the Secretary of State for Social Services if she will institute a high-level inquiry into the possibility of extending the scope of preventive medicine.
    Dr. Owen: I have already announced in my reply to my hon. Friend the Member for Eccles (Mr. Carter-Jones) on 30th June—[Vol. 894, c. 277–8.]—the Government's intention to issue a consultative document on preventive medicine either at the end of this year or the beginning of next year. The Government consider that this is the best way to advance this very important subject.
    Miss Fookes: Would it not be helpful to gather people together to discuss this? It seems to me that we have in the past paid too little attention to the old adage about prevention being better than cure.
    Dr. Owen: I agree that we pay too much lip service to preventive medicine. This will be the first document put forward. It will be for consultation. When it is published, the idea of bringing together people to discuss it is one which I shall want to consider.
    Mr. Ronald Atkins: Is my hon. Friend aware that I support the request of the hon. Member for Plymouth, Drake (Miss Fookes) for an inquiry? In view of the fact that so little is spent on preventing illness and so much on curing it, this is vitally necessary. If my hon. Friend agrees to an inquiry, will he include in its terms of reference the effects of such things as pollution, food additives and various other causes of so much illness?
    Dr. Owen: Many of the facts are well known, and if there is any responsibility for the lack of action on preventive medicine it probably lies in this House. There has been a marked reluctance on the part of successive Governments to tackle the problem. We shall bring forward evidence of many aspects, and I hope that it will
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    be possible to debate it. However, that will be a matter for my right hon. Friend.
    Sir David Renton: Is the hon. Gentleman aware that there are scores of known causes of mental handicap but that very few ways are known of preventing those causes? Will his consultative document deal fully with the prevention of mental handicap?
    Dr. Owen: I am sure that it will cover screening. It is a very complex subject, and the document could be very large. It will tend to concentrate on the main areas and perhaps later go into detail on the area in which the right hon. and learned Gentleman is interested. This is an important area, and there have been some recent advances. But progress is slow, although I am hopeful for the future.
    Mr. Carter-Jones: On the subject of preventive medicine, is my hon. Friend aware that the early introduction of good rehabilitative services can be of assistance in prevention?
    Dr. Owen: This is an important aspect. Much of it is related to our concept of community care and involves close association between health services and local authorities. My right hon. Friend and I have made it clear repeatedly that it is impossible to look at the nation's health without looking at the National Health Service and the personal social services together.

    Self-employed Persons (Benefits)
    Mr. Corrieasked the Secretary of State for Social Services if she has reached a decision on earnings-related benefits for the self-employed.
    Mrs. Castle: I would refer the hon. Member to my reply to the hon. Member for Braintree (Mr. Newton) on 8th July.—[Vol. 895. c. 103.]
    Mr. Corrie: Can the right hon. Lady give us any idea how long her studies will take and some estimate of how many self-employed people will still be left in business at that time to receive these benefits when they eventually come?
    Mrs. Castle: The hon. Gentleman's last quip rather militated against the seriousness of his question. We are taking extremely seriously this examination of

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    the possibilities of extending earnings-related benefits to the self-employed. This is a difficult problem. Its solution has defeated the efforts of all previous Governments. I cannot say whether we shall be successful. I am afraid that I cannot give a date for when I shall be ready to put my conclusions to the House. But I am taking the matter very seriously and I am anxious to find a solution.
    Mr. McCrindle: On extending benefits generally to the self-employed, has any thought been given to the possibility of renegotiating the reciprocal agreements between this country and a number of European countries, for example, so that in the future the self-employed may obtain sickness and accident benefits in respect of illness or injury occurring in those countries?
    Mrs. Castle: One of the difficulties that we have faced is that membership of the Community does not automatically bestow these reciprocal benefits on the self-employed, because we have better facilities for the self-employed through our public services. But I was happy to go to the Federal Republic of Germany to sign a reciprocal health agreement which extended to the self-employed from this country benefits equivalent to those that the self-employed from that country obtain here from our health service. We continue to press ahead with these agreements.

    Speech Therapy (Cost)
    Mr. Pattieasked the Secretary of State for Social Services what is the present cost of providing speech therapy in the National Health Service.
    Dr. Owen: The cost of providing speech therapy services is not available centrally, but the cost of employing speech therapists in the National Health Service in England is estimated to be about £3·3 million a year.
    Mr. Pattie: In addition to the question of costs, can the Minister say what is being done to encourage the area health authorities to appoint chief speech therapists and thereby establish a proper career structure, and what is being done to promote the speech therapy tapes for rehabilitation?
    Dr. Owen: I take the view that what share of total resources can or should be
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    devoted to speech therapy, as in many other areas, must be the responsibility of the health authorities to determine in the light of the resource restraints under which they are operating. We have made it clear that we attach importance to speech therapy but that it is one of the many priorities which are pressing for extra resources.

    Disabled Persons (Welfare Services)
    Mr. Carter-Jonesasked the Secretary of State for Social Services if she will make a statement regarding the implementation of Section 2 of the Chronically Sick and Disabled Persons Act 1970 by local authorities.
    Mr. George Rodgersasked the Secretary of State for Social Services what is the most recent information she has on the extent to which local authorities are implementing their duties under Section 2 of the Chronically Sick and Disabled Persons Act 1970.
    Mr. David Priceasked the Secretary of State for Social Services if she will issue a further circular to local authorities regarding their legal duties under Section 2 of the Chronically Sick and Disabled Persons Act 1970.
    Mrs. Castle: The statistics showing help provided by local authorities under Section 2 are placed in the Library of the House each year as soon as available. Local government reorganisation makes comparisons difficult but the returns so far received in respect of 1974–75 suggest that the number of households assisted last year showed an increase over the 1973–74 figure.
    I am satisfied that local authorities are aware of the mandatory nature of Section 2. Once they accept that need exists in respect of one of the services listed in the section, it is incumbent on them to make arrangements to meet that need. While it may be difficult sometimes in present circumstances to balance the discharge of the duty with due exercise of financial restraint, I believe that on the whole the right balance is being maintained. I see no need for a further circular. My hon. Friend the Under-Secretary with responsibility for the disabled has, however, said publicly that he will take up any individual case which suggests that a particular authority is misinterpreting the section.
    Mr. Carter-Jones: I thank my right hon. Friend for that encouraging reply. Will she thank her hon. Friend with responsibility for the disabled for the reply on Section 2 that he gave to the National Deaf Children's Society and Action Research for the Crippled Child? Could that reply be widely circulated among local authorities so that they know the mandatory nature of Section 2? Is she aware that those of us who served in Committee on the Act did not realise how cunning we had been? Will she please review Circular 12/70, particularly the paragraph which discourages people from taking action under Section 2? Will she make sure that this review is made known to the public at large and to the disabled in particular?
    Mrs. Castle: On the first point, I shall certainly convey what my hon. Friend has said to the Minister with responsibility for the disabled, who, I am sure, will carefully consider the suggestion. On the second point, I do not think that there is any need for me to add to what I have said, which is sufficient clarification in itself.
    Mr. Boscawen: Will the right hon. Lady look carefully into the situation in which one area health authority discharges patients who are mentally handicapped or disabled back into the area of another health authority because the one area does not have the facilities and hopes that the other does? I know of a case where that has happened and it is not satisfactory. Will the Secretary of State look into these particular cases?
    Mrs. Castle: I should certainly be willing to look into any case that the hon. Gentleman or any other hon. Member cared to bring to my attention.
    Mr. Rodgers: Does my right hon. Friend agree that there is a feeling abroad, particularly among people serving in local authorities, that this legislation is optional? Would it not be useful if local authority members and officials were advised that this is the law of the land and that the Act must be administered in full? How will it be possible for local authorities to administer the Act successfully in view of the anti-inflation legislation?
    Mrs. Castle: I do not quite see the relevance of the last part of the question,
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    but on the first part I repeat that, once a local authority accepts that need exists in respect of one of the services listed in Section 2, it is incumbent on it, I am advised, to make arrangements to meet that need. Of course, "need" is an imprecise concept and local authorities have discretion in determining that need. Parliament did not attempt to define that precisely, so that there is and must be an area of discretion of which local authorities will take advantage in dealing with the conflict between what they desire to do and the resources they have available. Of course there are other facilities additional to those in Section 2 which are of value to the disabled. For example, they need cash—we try to give it to them—they need a house sometimes and they need social work support. The idea of help is a complex one.
    Mrs. Chalker: Will the right hon. Lady investigate why there is not one Possum appliance in the Wessex Regional Health Authority area? Will she also look into the fact that the giving of appliances and adaptations to disabled people will often save a local authority a great deal of money in the long term, as identified in the Sunday Times article on Wendy Bassett last Sunday?
    Mrs. Castle: I have of course seen that report and was as interested in it as was the hon. Lady. I am having inquiries made into the case and will be glad to write to the hon. Lady about it as soon as my inquiries are complete. With regard to the Possum machine I will draw the attention of the Minister with responsibility for the disabled to what she has said. Even there, however, it is a question of doing the most one can within the resources, which are limited. We all know that, and as a House we must accept it.

    Family Income Supplement
    Mr. Ovendenasked the Secretary of State for Social Services if she will reduce for lone parents the weekly number of hours of work required to qualify for family income supplement.
    Mr. Meacher: We are still continuing studies to identify, if possible, an acceptable scheme which would benefit lone parents unable to work 30 hours a week.
    Mr. Ovenden: Would my hon. Friend accept that that answer will be welcomed? Would he also accept that most people concerned with assisting one-parent families would support the Government's view that a system of child cash allowances to replace means-tested benefits is the best approach? Would he also accept, however, that the introduction of a scheme of that sort with benefits on a scale large enough to meet the aims will be many years delayed? Will he consider carefully whether the FIS can be used to benefit parents who earn too much to benefit from supplementary benefit but who cannot, because of family responsibilities, work long enough to qualify for the FIS? Will he in particular consider whether in those circumstances the hours limit could be reduced to 25 or 20 hours?
    Mr. Meacher: I agree that the introduction of a Finer-type guaranteed maintenance allowance, if non-means tested, at a cost of £400 million a year is not possible in the immediate future. As to reducing the number of hours for entitlement to FIS for lone parents, if the number of hours were reduced from 30 to 24—or 25, as my hon. Friend suggests—only about 5,000 families out of more than 600,000 would benefit and double assessment of all families would be required to see whether they would get greater advantage from family income supplement plus rent and rate rebates or from supplementary benefits. Therefore, what we are concerned to do is to devise a scheme which will give extra help to a significant number of extra families but which is also operationally manageable.
    Mr. Newton: Is the Under-Secretary aware that one of the problems is that the more people there are in receipt of FIS, the greater the number of people who are liable to get into the poverty trap? Have the Government made any progress in reducing the number of families who are subject to these high marginal tax rates?
    Mr. Meacher: One change which reduces liability to the poverty trap is the fact that there is no immediate adjustment of benefits. Therefore, families in receipt of family income supplement and such things as free welfare milk and free school meals now receive
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    those for a period of at least a year before adjustments are made. Although this does not eliminate the poverty trap—the only way to eliminate it is by providing benefits as of right—nevertheless it reduces the liability.

    General Practitioners
    Mr. Watkinsonasked the Secretary of State for Social Services if she is satisfied with the arrangements under which GPs in medical practices are paid.
    Dr. Owen: I have no major proposals for changes, but improvements in the arrangements are negotiated from time to time and priced by the Review Body. I shall be glad to consider any changes my hon. Friend has in mind.
    Mr. Watkinson: Is it not the case that a general practitioner can run his practice with the aid of assistants and that these assistants are paid at present £6,000 a year while the general practitioner can receive £9,000 a year from the Family Practitioner Committee? Will the hon. Gentleman investigate this and take steps to prevent this profiteering?
    Dr. Owen: I will look into any individual cases. I think it is normally accepted that assistants are employed with a view to eventual partnership, and these should be training posts. In some cases the assistantship can become almost permanent, and then there is this development to which the hon. Gentleman referred, which is in some cases undesirable.

    Fraudulent Claims
    Mr. Foxasked the Secretary of State for Social Services what progress has been made in reducing the abuse of the social security system.
    Mr. O'Malley: In all its social security operations, the Department seeks to strike the right balance between dealing with genuine claimants in a prompt and civilised way and providing adequate safeguards against fraud and abuse. One of the best safeguards is the detection and prosecution of fraudulent claimants, and the number of such prosecutions increased from about 12,000 in 1973 to nearly 14,000 in 1974.
    Mr. Fox: While accepting that answer, may I ask the Minister whether he is

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    aware that there is something wrong with the system when a student who works in his vacation finds his earnings aggregated to his parents' income, whereas if he takes the advice of the National Union of Students, as 9,000 did last Easter, and collects supplementary benefits, these are tax-free? To the majority of taxpayers this is an abuse. Will the right hon. Gentleman reconsider the tax payments?
    Mr. O'Malley: I refer the hon. Gentleman to a statement made last week in which it was announced that the whole question of student support was under examination.
    Mr. William Hamilton: Will my right hon. Friend publish in the Official Report the amounts reclaimed from fraudulent claimants of social security side by side with the amounts reclaimed as a result of fraud under the income tax laws?
    Mr. O'Malley: I entirely agree with my hon. Friend. I shall try to provide those figures. It is a pity that Opposition Members do not show the same kind of concern for income tax frauds as they do in the case of a number of very poor people.

    NHS Patients (Private Hospital Care)
    Dr. Vaughanasked the Secretary of State for Social Services how many National Health Service patients are cared for, on average, each month in private hospitals and nursing homes.
    Mrs. Castle: There are approximately 2,000 admissions a month to establishments in England.
    Dr. Vaughan: Is it the policy of the Secretary of State to continue to use beds in the private sector for National Health Service patients while closing down the private beds within the National Health Service?
    Mrs. Castle: Certainly it would be no part of my proposals for the private sector to terminate these arrangements if it was suitable both to the health authorities and to the private sector to continue them.

    Family Allowances
    Mr. Hooleyasked the Secretary of State for Social Services what is the current value of the family allowance
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    expressed in real terms as a percentage of the 1968 value.
    Mr. Meacher: On the basis of the General Index of Retail Prices, June 1975, the family allowance for the second child represented, in real terms, 80·1 per cent. of the value it held in October 1968. For the third and subsequent children the percentage was 72·1.
    Mr. Hooley: Does my hon. Friend agree that this is a very deplorable situation? Is he aware that the combined value of child tax allowances and family allowances is lower after the April Budget this year than it was after the Budget the previous year? Will he make representations to the Chancellor of the Exchequer to take urgent action to bring these figures to a more reasonable state?
    Mr. Meacher: I am sure my hon. Friend is aware that the Government are proposing to introduce a child benefit which will amalgamate the child tax allowances and family allowances. The rate of these has not yet been fixed, but it will be fixed next year. We shall certainly bear in mind the representations that my hon. Friend has made.
    Sir B. Rhys Williams: Can the hon. Gentleman say how the economy can stand an increase of £6 a week for men who go out to work while there is nothing available for women who work at home?
    Mr. Meacher: The Question was about family allowances. Women gain from an increase in family allowances. The increase which the Government introduced this year was the first increase since 1968 under a previous Labour administration. As the hon. Gentleman knows, the last time a Conservative administration raised family allowances was 19 years ago.

    TRADES UNION CONGRESS
    Mr. Norman Lamontasked the Prime Minister if he has received an invitation to address the TUC conference in September.
    Mr. Rathboneasked the Prime Minister if he has received an invitation to address the TUC Congress in September.
    Mr. Lawsonasked the Prime Minister whether he has received an invitation to address the TUC conference in September.
    Mr. Stanleyasked the Prime Minister if he has received an invitation to address the TUC conference in September.
    Mr. Adleyasked the Prime Minister if he has received an invitation to address the TUC conference in September.
    The Prime Minister (Mr. Harold Wilson): No, Sir.
    Mr. Lamont: Since the Prime Minister is always accusing the Opposition of wanting to cause unemployement by cutting public expenditure, will he tell the TUC, if he receives such an invitation and accepts it, how he proposes to cut public spending next year when unemployment will be much higher than it is now?
    The Prime Minister: The proposal was announced by my right hon. Friend. The House will know that unemployment, which is endemic in all advanced countries, for reasons of which the House is aware, is seriously affecting this country, but we are not prepared to accept the proposals of the Opposition which would greatly increase unemployment at this time.
    Mr. Rathbone: If the right hon. Gentleman receives such an invitation, will he take advantage of the opportunity to explain to the TUC how he can reconcile his own commitment to more open government and to proper accountability by the British Government to the British people, as he expressed to the TUC last year, with his suppression of the Crossman diaries, with his lack of inclination to disclose—[Interruption.] I am sorry, Mr. Speaker, but these interruptions come from the Prime Minister's own back benchers.
    Mr. Speaker: Order. This supplementary question is a trifle lengthy.
    Mr. Rathbone: I have three other points which I suggest the Prime Minister should marry up.
    Mr. Speaker: Order. The hon. Member is wrong. He has only one more point to make, and that one shortly.
    Mr. Rathbone: You are entirely correct, Mr. Speaker. How can the Prime Minister reconcile those matters with his refusal to give the Ombudsman the necessary papers so that he can pursue the Clay Cross affair—[Hon. Members: "Court Line."]—I am sorry, the Court Line affair—it is easy to get mixed up with these various affairs of the Government—and the secrecy concerning the Government's reserve powers Bill?
    The Prime Minister: It is quite clear that the hon. Member does not know his Court Line from his elbow. With regard to the Crossman diaries, the matter is currently before the courts and it would be wrong for me to make any comment in reply to the hon. Member. With regard to the Ombudsman and the question of Cabinet documents, this matter was debated in Parliament in 1965 on Government legislation and was fully explained to the House. The rules were laid down and have been followed by successive Governments. But if, after the totally mendacious and characteristic article in The Times yesterday, right hon. and hon. Members would like me to pursue this matter further, I shall be happy to make a statement in the House tomorrow and nail this once and for all.
    Mr. Skinner: Would my right hon. Friend agree that the Government's central strategy of keeping down unemployment is, to say the least, more than a little confusing to the average trade unionist when one takes into account the fact that, having been elected to keep down unemployment, we are now witnessing a very large increase, rising to well over 1 million unemployed this year? Is he aware that the Government are making announcements to throw more people on the dole, as was shown in the statement on Norton Villiers Triumph last week and the possible statement on the steel industry some time this week, while at the same time talking about introducing a temporary unemployment subsidy to reduce the unemployment level? What precisely is the Government's strategy?
    The Prime Minister: My hon. Friend says that our strategy is difficult to understand for the average trade unionist, but he is not an average trade unionist. For example, he does not support, as he showed a couple of weeks ago, the TUC and the vast majority of trade unionists

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    on the Government's anti-inflation policy. As far as unemployment is concerned, the world recession following the oil crisis hit every advanced country, many of which had higher unemployment figures than at any time for 30 years. Apart from the short-term consequences, the long-term problem we face is due to a lack of investment in this country and a failure to make better use of investment—I shall be fair about this—under successive Governments of different parties in this country.
    Mr. Lawson: Is the Prime Minister aware that at his Press conference on 11th July—I refer not to The Times, about which he has this strange obsession, but to page 3/5 of the official Downing Street transcript—he stated categorically that the Government would publish the reserve powers Bill? Why has he now run away from that undertaking?
    The Prime Minister: This was very fully debated in the House—[Hon. Members: "Answer."]—and it was fully answered by my right hon. Friend. I gave no commitment to publish the Bill before the debate—
    Mr. Lawson: I have it here.
    The Prime Minister: I have seen it. I have read that document and I remember what I said. I gave no undertaking. It was used by the Opposition Front Bench as an excuse for their total shambles in their approach to this matter.
    Mr. Heffer: Assuming that the TUC accepts the argument in relation to the £6, can my right hon. Friend explain to the House what he will say, if invited to the TUC conference, in very concrete terms about how the Government are going to deal with rising unemployment and what steps will be taken by the Government to begin to bring down this level, especially as areas such as the one from which he and I both come now have one in eight men unemployed? Does he accept that we cannot stand any more unemployment?
    The Prime Minister: I hope I am right in interpreting that question as meaning that my hon. Friend now accepts the TUC view on the Counter-inflation policy, although that may not be so. When speaking about unemployment at TUC meetings I have repeated the warning I
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    gave a year ago when I last addressed the TUC conference.
    Mr. Stanley: Will the right hon. Gentleman explain how the undertaking given by the Secretary of State for Energy on 6th November to the convener of shop stewards at Small Heath that, to use his own words, the Government were fully committed to securing the future of the motor-cycle industry in this country can be reconciled with the Government's decision to abandon the industry and allow it to collapse? Is it not clear that the undertaking was grossly misleading to the work force of NVT and their families, and is it not high time that the Secretary of State made a public statement on this matter and gave a public apology?
    The Prime Minister: I do not know where the hon. Gentleman has been. This matter is to be debated later this week. I have seen a transcript of the recording of what my right hon. Friend said to the shop stewards and I have no doubt this will be stated to the House. I think it has been published in the Press. The hon. Gentleman should familiarise himself with it. It is a very clear statement involving no possible commitment by any Government in this respect.
    Mr. Stanley: Here is the letter.
    Mr. Sillars: How can the Prime Minister describe the current main policy as anti-inflationary when, in essence, workers are supposed to have their wages kept behind rising prices? Is he aware that this sort of kidology and phraseology will bring an enormous backlash from organised labour in about January or February next year?
    The Prime Minister: I cannot remember offhand whether my hon. Friend supported the policy of the Government and the TUC in this matter. This is TUC policy, and the Congress has slightly more authority to speak for organised labour than has my hon. Friend.
    Mr. Adley: Does the Prime Minister accept that trade unions have a unique position of power in our society? If so, does he agree that it would be very much in the national interest if, whenever possible, they were seen to be supporting the Government of the day, whatever their

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    colour? Assuming that the Prime Minister receives an invitation to address the TUC, will he suggest to its leadership that in future it would be helpful if it invited not only the present Prime Minister but also the present Leader of the Opposition?
    The Prime Minister: I think that would be a very good idea. It would be highly educational for the right hon. Lady. One of the reasons for the troubles of the last few years has been that successive leaders of the Conservative Party have never understood organised labour or the TUC. They have had long meetings with them, but have sought to bully and organise confrontations with them. They have never tried to understand the minds of the trade union movement.
    Mrs. Thatcher: Does the Prime Minister accept that if he had taken action earlier to deal with inflation, the level of unemployment would have been a good deal lower than that which we shall have to endure next year? As the Government's last economic package clearly did not restore confidence, will he say whether he expects to specify any public expenditure cuts between now and the TUC conference or before the House returns after the recess?
    The Prime Minister: When the right hon. Lady says that if we had acted earlier unemployment would be lower, she is totally wrong. She knows that countries which have tried to follow the sort of policies she advocates—in so far as they can possibly guess what they are—have had much higher unemployment than ours and it has come to them much earlier.
    I do not accept the right hon. Lady's statement that our economic package has not carried confidence. We know that it did not carry confidence on the benches opposite. That is why they abstained—that was all they could do—on the main policy and voted against the legislation. She has been told by the Chancellor of the Exchequer and myself in the economic debate that we are carrying through, as is normal at this time of the year, a searching probe into public expenditure which will be published at the proper time in relation to the Public Expenditure White Paper.
    While the right hon. Lady is talking about this, she still has not, after all these
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    months, indicated—[Interruption.] I understand the anxiety that my words be not heard. I was always challenged when I was in her place to say what our policy would be. She has still not said what items of expenditure she would cut, except for food subsidies and housing subsidies, which would increase the rate of inflation.
    Mrs. Thatcher: As the right hon. Gentleman knows that he will make public statements, can he specify the cuts, as Prime Minister?
    The Prime Minister: The cuts were specified in the Budget Statement by my right hon. Friend the Chancellor of the Exchequer this year. A £900 million cut was announced in the Budget. The next lot will be announced, as is always done, in the Public Expenditure White Paper. The trouble about our predecessors is that they announced the cuts and never carried them out.

EUROPEAN SECURITY AND CO-OPERATION CONFERENCE
The Prime Minister (Mr. Harold Wilson): With permission, Mr. Speaker, I shall make a statement.
As the House will know, my right hon. Friend the Foreign and Commonwealth Secretary and I attended the third and final stage of the Conference on Security and Co-operation in Europe in Helsinki last week. The text of my speech has already been published as a White Paper. In accordance with what was agreed at the conference, Her Majesty's Government, in common with all other participating Governments, are also publishing the full text of the Final Act signed at Helsinki, which includes the texts of all the documents adopted at the conference.
The conference included the Heads of State or Government of all countries, except Albania, directly concerned with security and co-operation in Europe. It was not merely an occasion for making speeches and signing documents. It was rather the opportunity for countries scarred by the experience of war 30 years ago, and convinced of the need to end the sterile divisions which followed it, to look towards new and more constructive relationships on the basis of an agreed code of behaviour and undertakings to

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advance co-operation of all kinds and permit the freer flow of people, ideas and information.
Two years from now our representatives will meet in Belgrade to assess the results and recommend action for the future. I can assure the House that for their part Her Majesty's Government will do all in their power to honour and fulfil the undertakings we have accepted in the Final Act. We are also ready to consider making bilateral agreements with other participating States to carry through its provisions.
The Final Act has been variously described. It is not of course a peace treaty, nor is it any other kind of legally binding agreement. It is rather a set of political undertakings which will at the very least provide a yardstick against which future behaviour can be measured and judged. These undertakings apply to all the participating States on the basis of complete equality, irrespective of their social, economic or political systems. At best—and I am thinking here particularly of the articles relating to the rights of individuals, journalists and business men—they should provide the basis for the development of more fruitful and constructive relationships.
This conference represented no more than a beginning, but I hope that the House will agree that it is a beginning in the right direction. Those who worked so arduously for two years, with instructions given by the Prime Ministers of successive Governments in this country, to negotiate the Final Act did not attempt to cover all European problems. The limited measures which were agreed should have their value in creating the first elements of confidence without which further progress will not be possible. But, as the House knows, the problems of military security are being dealt with elsewhere—for Central Europe, in the conference on force reductions at Vienna; in the strategic nuclear field, in the SALT negotiations between the United States and the Soviet Union; and in disarmament discussions generally.
The Vienna negotiations have not made the progress for which we had all hoped, and the disparity of forces between the Warsaw Pact and NATO is as great as
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ever. I expressed our disappointment at the slow progress so far, and a number of those who spoke after me expressed, as I did, the hope that now that the basis for a better political relationship has been established at Helsinki we shall be able to make the progress necessary at Vienna. That should now have the highest priority in the development of East-West relations, together with the negotiation of SALT II.
It is my firm hope that the new spirit of co-operation which was demonstrated at this conference will extend beyond it. I have particularly in mind the economic problems which face the world and the dangers of further nuclear proliferation. What we have achieved in CSCE will be judged by history by our success in extroverting our achievement to a wider world.
The conference also provided the occasion for me to have separate meetings with nearly all the participating Heads of State or Government, including bilateral meetings with the Presidents of the United States, France and Finland, the Federal German Chancellor, Mr. Brezhnev, the Italian Prime Minister—who is, of course, also currently in the Chair of the EEC Council of Ministers—and the Prime Ministers of Greece and Turkey. My right hon. Friend and I had meetings with other East European leaders and with President Tito, and we also had a meeting with President Costa Gomes of Portugal, at which we expressed the very grave concern felt by Her Majesty's Government and, I am sure, the whole House at recent developments in Portugal. I raised the question of Portugal also with the leader of the Soviet delegation.
On my way back from Helsinki on 2nd August my right hon. Friend and I attended in Stockholm a meeting convened by the Swedish Prime Minister of Socialist Heads of Government and Party Leaders, at which Dr. Mario Soares, the Leader of the Portuguese Socialist Party, was also present. This gave us an opportunity to express once again to Dr. Soares the importance we attach to a speedy return to what is known as pluralistic democracy in Portugal—[Interruption.]—it is not a laughing matter—a point which I had already strongly emphasised in my talk with President Costa Gomes

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at Helsinki. I also told the meeting that I had described the future of Portugal as one test, and an early test, of detente during my talk with Mr. Brezhnev. The meeting also discussed the world economic situation and, Prime Minister Rabin of Israel being present, the position of Israel and all of us in relation to possible action against Israel at the forthcoming General Assembly of the United Nations. We expressed our full support for the doctrine of the universality of the United Nations, as I had in my opening speech at the Helsinki conference.
Mrs. Thatcher: I thank the Prime Minister for making that statement. Is he aware that if the political undertakings given at Helsinki are observed a real advance will have come about in East-West relationships? In the meantime, neither some of the excellent speeches nor the signatures have altered the underlying position one bit. Therefore, may I put two main points to the Prime Minister?
First, what actual steps does the right hon. Gentleman expect the Soviet Union to take in the coming year or so if it is to prove that the agreement is a living reality and not a formality? For example, the right hon. Gentleman mentioned that he had raised the question of Portugal with the Soviet Union. He did not say what reply he received. Will he tell the House what the answer was? Does he expect real progress on the freer movement of peoples and ideas across the Soviet frontier? I know that he is as concerned about that matter as the rest of the House is.
Secondly, may I ask the Prime Minister about his own interpretation of Mr. Brezhnev's speech, in view of the previous speech of Mr. Brezhnev which became known as the Brezhnev Doctrine? I read the translations, and found them somewhat ambiguous. Does the Prime Minister take the view that the events which led to the occurrence in Czechoslovakia in 1968 cannot be repeated if the Helsinki agreement is to be honoured in reality?
The Prime Minister: The right hon. Lady said that the political undertakings given—she went on to talk about their fulfilment—represented real progress. Most of us—certainly from the West, but some others as well—said that the real test would not be the undertakings
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signed but the progress in fulfilling them. I said that in my opening speech at the conference, as the right hon. Lady knows, and this was also the chief message of President Ford when he spoke on the Friday morning. As the right hon. Lady has made clear, these matters have to be reviewed afterwards. The Belgrade conference is meant to review the progress in fulfilling the undertakings reached at Helsinki and then to discover to what extent we can build on those undertakings, which we all agree were limited and did not go as far as we would have liked. The actual undertakings must be the subject of continuous monitoring and, finally, the test of Belgrade.
I stressed free movement in my speech and went into it in more detail later. It includes not merely free movement in Europe. I said that there was no reason why people in Europe should not be free to travel, to read what they want, to hear what they want, to settle where they want and to marry whom they want. I said that this was the test we would apply on these matters. However, I went further and said that this also relates to the movements of citizens to States beyond the European borders. I have in mind, as I have emphasised many times, Soviet Jews being free to move to the Middle East.
The right hon. Lady asked about the next steps to be taken. One of the real tests will be in relation to the mutual reductions in forces, because a number of people on the eastern side of what has been the Great Divide in Europe have said that they are not ready to make progress on this until they have the Helsinki agreement. It will be a real test whether we make progress, and it will be in the interests of all concerned and of the economies of both the East and the West. The right hon. Lady will have noticed that as a first consequence, within hours of the signature, the agreement between the German Federal Republic and the Polish Government, which involves the free movement of people from Poland to Germany, came into effect and 120,000 people who sought to return to Germany will be allowed to do so. That is not a bad first dividend. We want to see this followed up.
The right hon. Lady mentioned the Brezhnev Doctrine. She will know that I have said publicly here—and this has

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been the view of many keen and suspicious Western observers in the past—that what happened in Czechoslovakia could not have happened had the Helsinki agreement come first. [HON. MEMBERS: "Oh!"] This may be laughed at but there are some quite serious Heads of Government. I do not know why Opposition Members arrogate to themselves a greater degree of knowledge of world affairs than the President of the United States or Dr. Kissinger, who have both signed these agreements. Hon. Gentlemen opposite might not have done. This was the view that was expressed by a number of leaders at Helsinki.
The right hon. Lady referred to Portugal. I have said that not only myself but other Social Democratic leaders in Western Europe—for example, Herr Schmidt, the Prime Ministers of Sweden and the Netherlands and others-spoke in the very strongest terms to President Costa Gomes. I hope that what we have said has registered. Also in my talk with Mr. Brezhnev I said, as has been said by some of my other colleagues from Western Europe, that we would regard the future events in Portugal as being the first test of the spirit of detente signed at Helsinki.
Mr. Russell Johnston: Is the Prime Minister aware that the Liberal Party welcomes the approach that he has made in emphasising that this is a first step in the right direction but that in the end it all has to be judged on results?
I know that it is difficult to be more specific, but could the right hon. Gentleman explain in more detail how he hopes to monitor progress between now and two years hence, when the Belgrade conference is held, on the freer movement of people, information and the like? For example, does he regard the jamming of overseas broadcasts as a criterion? Does he think that the entitlement of Soviet citizens to leave the Soviet Union if they so wish is a criterion? I agree that this is a difficult matter, but I am sure that we should all appreciate a clearer idea of how the right hon. Gentleman hopes to monitor the situation.
Could the right hon. Gentleman say whether the meeting which he said he had with the Prime Ministers of Greece and Turkey gave him any reason to hope for an early settlement in Cyprus?
The Prime Minister: I thank the hon. Gentleman for welcoming what I have said, and I agree with him that what really counts will be the results which follow the signing of the agreement.
On the matter of monitoring various of the decisions relating, above all, to human freedom, all the signatories will be in a position to do this. There are well-established criteria. For example, it would be easy to test whether broadcasts are being jammed, and whether there is greater freedom of movement of journalists between East and West and in respect of what they write.
On the subject of Greece and Turkey, my right hon. Friend the Foreign Secretary and I met President Makarios and the Prime Ministers of Greece and Turkey. We all know of the serious impasse that has been reached because of certain attitudes there and of everything that has happened since the vote of the American Congress. However, the hon. Gentleman will be glad to know that as a result of the initiative taken at the meeting of the Heads of Government of the European Community last week there is now a hope of an initiative, or hope of an honest broker position being taken up by the President of the European Council—that is to say, Italy—on behalf of the Community.
Mr. Dalyell: Was anything said in discussions with the Portuguese about the question of Angola?
The Prime Minister: Yes, we discussed with the Portuguese mainly internal questions in relation to Portugal and expressed our views, which I am sure will be shared by all hon. Members, about developments there. There is a tragic series of developments in Angola. A massive evacuation is taking place, and we should be prepared to play our part in helping in that evacuation if it were considered necessary or helpful.
Mr. Churchill: Is the Prime Minister aware that it is the wish of this House and the British people as a whole that the establishment of democracy in Portugal should go ahead? Is he further aware that we view with increasing concern and, indeed, disgust the way in which unarmed members of democratic parties in Portugal have recently been shot down in cold blood in the streets?

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Is he aware that we are deeply concerned at the way in which the Portuguese Communist Party is apparently riding to power despite the clear verdict of the Portuguese electorate, which voted anti-Communist four to one? Will the Prime Minister say whether he was able to obtain any reassurance whatever from Mr. Brezhnev that the present unacceptable level of Soviet interference in the internal affairs of a NATO country will be diminished, and, if not, would he regard this as a clear breach of the Helsinki agreement?
The Prime Minister: I thank the hon. Gentleman and agree with everything he has said. Indeed, I agree with the vehemence with which he put it. If he does not mind, I should like to refer to the useful meeting that he and I had on these questions after he returned from Portugal and a few days before I went to Helsinki. I found what he told me useful, and nearly all of it was confirmed by Mario Soares in Stockholm last week, when he set out, with brutal frankness over a period of 90 minutes, the whole situation that democracy faces in Portugal.
As I have said, we have expressed our deep concern—I used stronger words to the Portuguese President, as did my right hon. Friend—about this, and so did other Western leaders. I hope that this has registered. [Interruption.] I am talking at present about the President of Portugal. We know that a great deal of soul-searching, manoeuvring and so on is taking place in Portugal. The European Community has made clear, even against the advice of some Portuguese democrats, that it is prepared to give maximum aid and economic co-operation only on the basis of a pluralistic democracy and not, as it was urged, in any circumstances. I think this is right.
With regard to the Soviet Union, this point was made very clearly by some of my Western colleagues, and finally, on the last night, by myself. I am sure that Mr. Brezhnev will now consider very seriously what was said. [Interruption.] We are more concerned with getting a democratic solution in Portugal than with the titters of hon. Members opposite, as, I am sure, is the hon. Member for Stretford (Mr. Churchill), who put this question. I am sure, from what was said to me, that Mr. Brezhnev will consider very
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seriously what was said by me and by others, and that he will be aware that many of us on the Western side regard the future attitude of the Soviet Union to Portugal as being the first test of the spirit of Helsinki.
Mr. Luard: Will the Prime Minister agree that the arrangements for a follow-up will be crucial to the long-term success of the conference, and is not a period of two years rather a long time to wait for a full stocktaking, at Belgrade? Will the Prime Minister therefore consider proposing that there should be regular meetings at Foreign Minister level between leaders in Eastern and Western Europe, including the President of the United States, to consider the progress that has been made, particularly in improving freedom of movement, of ideas and of people, between East and West Europe?
The Prime Minister: That was the agreement we signed—that two years from now there should be a full stocktaking, that we should see how far the spirit has become reality, and, following that, how far we can build on the undertakings given at Helsinki. These meetings take place all the time. There will be very shortly, I understand, a meeting between the President of the United States and Mr. Brezhnev. There are regular meeting taking place all the time between East and West. Meetings are planned between Ministers in this country and Ministers of countries in Eastern Europe. There will be, therefore, a continuing stocktaking and continuous monitoring. It does not mean that we all go away and do not meet one another until the two years are up.
Sir John Rodgers: When the Prime Minister spoke to General Gomes and Dr. Soares about the necessity of building a pluralistic democratic society, did he stress to both of them, and particularly to Dr. Soares, the need to recognise centre parties such as the Christian Democratic Party, and that they should be allowed to partake in future elections?
The Prime Minister: Yes, indeed. When the President of Portugal said that he wanted a Socialist democracy, and called Dr. Soares a Socialist, I was not sure whether he meant that kind of Socialist democracy, but I said that in a pluralistic democracy any leader, whether

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Socialist or anything else, must face the possibility, as I once did, of a change of Government. We emphasised to the President and to Dr. Soares that we mean a genuine democracy, through the ballot system, under which a Government is formed and is accountable in the future elections. Certain Mario Soares, with the full support of the Socialist leaders at Stockholm, wants to see a democratic system. He would like to win the elections in Portugal but recognises that in the system he wants there will be variations from time to time. So certainly the answer is "Yes, that is what we were contemplating".
Mr. James Lamond: Will my right hon. Friend accept my congratulations to him and to his right hon. Friend the Foreign Secretary for the way in which they assisted in bringing about the success of the Helsinki conference, and in particular for his constructive speech in opening the conference, which was in marked contrast to the remarks of the right hon. Lady the Leader of the Opposition before he left for Helsinki?
Will my right hon. Friend agree that, while it is important to see that there is free movement of individuals between East and West Europe, the real significance of this conference was that it paved the way for a reduction in the arms expenditure of all of the nations involved in the conference—which together account for 80 per cent. of the total arms expenditure in the world—so that resources may be freed to assist the Third World and so carry out the destiny of Europe as a whole?
The Prime Minister: I am grateful to my hon. Friend. He is right in what he says about 80 per cent. of the arms expenditure of the world. Calculations have been made about that. I doubt whether a single one of these countries does not want to see a reduction of that arms expenditure, consistent with the safety of the country concerned.
With regard to the attitude of parties in this country, it really ought to be said to hon. Members opposite who criticise or jibe that the success of the conference had to be prepared over many years. The instructions given by my predecessor, the former Prime Minister, were material in helping to secure the success of the
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conference. It was a continuing process and has been going on now for very many years.
My hon. Friend referred to the speech of the right hon. Lady. She will be glad to know that it made no impact whatsoever on the conference in Helsinki. I think that, on reconsideration, she will probably want to charge it up to experience.
Mr. Maurice Macmillan: Will the Prime Minister accept that the fact that he and Mr. Brezhnev discussed Portugal is an implied admission by the Russians of active interference in the internal affairs of another country? Will he also tell the House whether, in his discussions with Mr. Brezhnev about interference in the internal affairs of other countries, he mentioned clandestine as well as open interference, and whether he received any assurances or had any reactions from Mr. Brezhnev about continuing subversion in Western democratic countries?
The Prime Minister: The fact that Mr. Brezhnev was willing to discuss this, and not rely on the usual stock phrases used on these occasions, certainly did not imply an admission on his part of any complicity in what is going on in Portugal today. One or two of my colleagues who, in consultation with myself, and following the discussions in Brussels a fortnight earlier, raised it with him got the standard reply that there was no interference. I took some encouragement from the fact that some of these points seemed to be registering.
I want to make this distinction to the right hon. Gentleman. I think it is a fair one. There is some evidence, and it has been fairly widely publicised—indeed, some was given to me by the hon. Member for Stretford when we met—of financial assistance from East European countries to party machines, or a party machine, in Portugal. That is a different thing from Government help and support. I think it was important to register—[Interruption.] I am dealing with a very serious subject, and I am saying that it was important to make clear to the Soviet Union that, in terms of their actions as a Government, this will be taken as a test of the détente spirit. We all emphasised this at Helsinki.
Mrs. Bain: In view of the concern shown by the Prime Minister in his statement about the dangers of further nuclear proliferation, will be indicate to the House whether he expects any progress to be made, between now and the Belgrade conference, with regard to the possible limitation of the Polaris and Poseidon bases and their eventual removal from Scottish soil?
The Prime Minister: I did not hear that specifically mentioned by the Heads of Government, but certainly the hon. Lady is right in emphasising the importance that we all attach to nuclear proliferation. We all hope that, following the Helsinki agreement, there will be more rapid progress made on SALT II, the limitation of the international nuclear arms race, as well as the force reduction in central Europe.
There was also some concern, as I said in my opening speech, about the question of nuclear proliferation and the extension to non-nuclear States. The hon. Lady, when she reads the White Paper, will see exactly what I said on that. It received a wide measure of support at Helsinki.
Mr. John Mendelson: As the Prime Minister is now being so closely questioned by the Opposition on whether there has been a link between the force reduction discussions in Vienna and the Helsinki and Geneva conferences, does he recall that when Lord Home was in charge of our foreign affairs, he pointed out several times from the Dispatch Box that we should not link the two together, and that it was his policy not to do so, that the only way in which the Geneva and Helsinki conferences could be brought to a successful conclusion would be by not doing so, and that the Conservative Government was as responsible for the severance between the two as any other of the participating Governments? Has our foreign policy changed? Are we now in favour of making rapid progress with these force reductions?
Is the Prime Minister aware that the friends of political democracy in Portugal were glad that he took the opportunity to have these discussions? However, as all those who have recently visited Portugal will know, this is not a simple
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problem, as the military, who were responsible for the revolution, are working against a backcloth of 48 years of dictatorship dominated by a secret police created by Heinrich Himmler. In that period no member of the Conservative Party ever criticised the dictatorship in Portugal. Only now are the Opposition so vociferous in their defence of democracy in Portugal. Will the Prime Minister ignore the protests of the Opposition and convey to the people of Portugal that those who wish Portuguese democracy well are all the more concerned that political parties and trade unions should have the fullest freedom?
The Prime Minister: One of the great difficulties in Portugal is that, although the situation has become worse since the original revolution in April 1974, before that there were 50 years of Fascism and very little economic advance, which must be made up.
My hon. Friend expressed strictures. I recall, as Leader of the Opposition, opposing the visit of Dr. Caetano and being howled down by the Conservatives, and what they said about that, even though the reason I gave was the Wiriyamu massacre. They denied that, although the evidence has since proved that I was right. Therefore, I am not taking criticism from the Opposition in their support of Portuguese Fascism.
My hon. Friend is right in what he says about force reductions and the statement of Lord Home. Lord Home said that we should not link the two matters together in this period of the run-up to the Helsinki conference. Both points should be followed, but one should not be made a condition of the other. My hon. Friend asked whether the policy had been changed. The policy has not been changed. I repeat what I said in my speech at Helsinki. Some people who have spoken about this have justified the lack of progress on force reductions in central Europe by the fact that they wanted to see the Helsinki agreement signed first. I said "All right, but I hope that is right". If the signature of the Helsinki agreement means more rapid progress on this and on other disarmament matters, we would welcome it, but we would see how far that was tested by the results.

DEVOLUTION
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): I regret that I was not in my place yesterday when the hon. Member for West Lothian (Mr. Dalyell) raised the matter of an article in the Daily Record on Friday 1st August. My right hon. Friend the Chief Whip said that I would make a statement today. I had already seen the article referred to and can only say that if I were to come to this Dispatch Box to comment on all the Press speculation on devolution, I should be here daily.
As I have frequently made clear to the House, the Government are examining all the issues that arise on devolution. Some of these are mentioned in the article—the constitution and working of the Scottish Assembly, its economic and taxation powers, and so on. There is no secret about the issues involved. But this article is intelligent speculation and nothing more. Final decisions on these matters have not been taken. All the issues involved in devolution will be reviewed together before decisions are reached on the scheme as a whole. When we have done that, our proposals will be set out in detail in a White Paper. I have already made clear that this White Paper will be published in the autumn.
Mr. Whitelaw: Will the right hon. Gentleman confirm his appreciation of the major constitutional issue involved? Does he therefore agree that this question is far too serious to be dealt with on the basis of leaks and speculation? Does he accept that in considering devolution proposals we shall discuss not only the future of Scotland and Wales but also the future composition and powers of the Parliament at Westminster? Does he understand that those of us who support sensible proposals for devolution are nevertheless determined to ensure that these do not undermine the basic unity of the United Kingdom?
Mr. Short: I agree with every word spoken by the right hon. Gentleman.
Mr. Dalyell: May we take it that the Daily Record claim, that there is a set blueprint, is without foundation?
Mr. Short: Yes, Sir.
Mr. Donald Stewart: With regret I heard the Lord President say that he agreed with every word spoken by the right hon. Member for Penrith and the Border (Mr. Whitelaw). Does the right hon. Gentleman accept that all that matters is to achieve genuine proposals for devolution, to ensure that the timetable is kept to, and that the reactionaries in the Labour and Tory parties do not dictate against the wishes of the Scottish people?
Mr. Short: I agree that it is important to obtain credible, viable proposals for devolution. I shall present those to the House at the end of the year. That is the only commitment we have made about the timetable. That commitment will be kept.
Mr. Grimond: Are we to understand that the leaks in the Scottish Press are totally without foundation, and secondly, that the devolution Bill will be produced by Christmas of this year, although the White Paper will not be available until the autumn?
Mr. Short: I hope that the White Paper will be available about the second week in October. We hope that the Bill will be available by the end of the year or the beginning of the next year.
I cannot say anything about leaks in the Press. The issues are discussed and are well known. There is no secret about them. The issues were discussed in a seven-hour debate recently. The Press speculates on these issues daily.
Mr. Cledwyn Hughes: Is my right hon. Friend aware that it is not desirable that there should be any great disparity between the proposals for Scotland and the proposals for Wales?
Mr. Short: There is one great disparity, which we set out in the White Paper last year. The Scottish Assembly will have legislative power in restricted fields. The Welsh Assembly will not have that power. It will have executive power. I thought that there was general agreement in Wales on that.
Mr. Alexander Fletcher: In describing this article as intelligent speculation, is the right hon. Gentleman saying that it is largely correct in the analysis it provides of Government intentions on this matter?
Mr. Short: I have said nothing of the kind. I said that this article discussed the

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issues. Newspaper articles do so daily. There is no secret about the issues. The issues are known. Any journalist who has followed the devolution exercise can speculate intelligently on these matters—as this one did.

INDUSTRIAL DEMOCRACY
The Secretary of State for Trade and President of the Board of Trade (Mr. Peter Shore): With permission, I should like to make a statement.
The Government are committed to carrying through as soon as possible a programme for the radical extension of industrial democracy in both the private and public sectors. The first steps have been taken by my right hon. Friends the Secretaries of State for Employment and Industry with the Employment Protection Bill and the Industry Bill which contain provisions allowing for greater disclosure of information and for the work force to be more closely involved in future planning. Meanwhile developments in industrial democracy, particularly below board level, are now taking place and more are planned. It is desirable that these should continue. The next step is to formulate measures which will enable those employed to participate in major decisions affecting the future of their companies through representation at board level. Not only will this involve a major change in company law but it will clearly bring about a fundamental change in the way industry is managed.
Because of this, and because the issues are both complex and in this country relatively unexplored, the Government wish to have the best available advice before coming forward with legislation. I have therefore decided to appoint an independent committee of inquiry to advise on questions relating to representation at board level in the private sector. It will have the following terms of reference:
"Accepting the need for a radical extension of industrial democracy in the control of companies by means of representation on boards of directors, and accepting the essential rôle of trade union organisations in this process, to consider how such an extension can best be achieved, taking into account in particular the proposals of the Trades Union Congress report on industrial democracy as well as experience in Britain, the EEC and other countries. Having regard to the interests of the national economy, employees, investors and consumers, to analyse
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the implications of such representation for the efficient management of companies and for company law."
The names of the chairman and members will be announced very shortly. The committee will be asked to present its report to the Government within 12 months so that legislation can be placed before Parliament during the 1976–77 Session. The committee will wish to call for and receive evidence quickly and I hope that interested parties will begin to prepare their evidence right away. There is a need for a wide-ranging debate on this important subject so that a full measure of public support may be achieved, and I earnestly hope, therefore, that all who are able to make a contribution, including those who are already practising forms of industrial democracy, will assist in the vital work of this committee.
I should also like to pay a tribute to my hon. Friend the Member for Chester-le-Street (Mr. Radice) who brought before the House a Private Member's Bill on industrial democracy and also those who served with him on the Standing Committee. In their debates they examined many of the issues which are fundamental to legislation and this will be a very helpful contribution to the work of the committee of inquiry.
In parallel with the work of the committee, the Government also intend to take a radical look at the rôle of employees in relation to decision-making within the nationalised industries. A study has been set in hand.
Meanwhile, the Government hope that experiments in developing new forms of industrial democracy and democratic self-management within the existing framework of the law will continue, and that the establishment of the committee of inquiry will in no way prevent the work now in progress from continuing to develop.
Mr. Madel: I am sure that the whole House will welcome that statement on this vitally important subject, albeit somewhat late in the Session. It is especially welcome to members of Standing Committee C who considered this matter upstairs.
I recognise the important rôle of trade unions in this matter, but do the Government see industrial democracy as involving all the work force? If so,

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should not they reconsider the terms of reference of the inquiry, which at first sight appear to be somewhat narrow?
Will the Secretary of State say when the study into decision-making in the nationalised industries will be completed?
Will the Minister be a little more precise about when the name of the chairman of the inquiry will be announced? As the Government want the best available advice, and as there will be two studies in progress at the same time as well as developments in Europe, will the Government assure us that they will not sacrifice thorough consultation, especially with those organisations that already practise industrial democracy, for the sake of early legislation? Finally, may we take it that the process up to legislation will be a Green Paper, a White Paper and then a Bill?
Mr. Shore: I begin by thanking the hon. Gentleman for his warm response to the announcement I have made. I believe that the development of industrial democracy is welcomed on both sides of the House and, indeed, broadly in British industry.
I should like to be able to give the hon. Gentleman a firm answer on his last question about a Green Paper, a White Paper and a Bill, but it would possibly be inadvisable for me at least to say that there will be a Green Paper and a White Paper. At the end of the process of inquiry when we have the report the Government may well put forward their conclusions based upon its findings.
As to the timing of the nationalised industry inquiry, we certainly hope that it will be at least in phase with the timing of the inquiry I have just announced.
On the question whether the whole of the work force will be involved, it is clearly not the intention in the terms of reference to close any option for representation in boardrooms.
Mr. Radice: I thank my right hon. Friend for his kind remarks about the contribution made by the Industrial Democracy Bill. Is he aware that we welcome his statement, especially the terms of reference for the inquiry and the commitment to legislate in 1976–77? Does my right hon. Friend accept that the speedy
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appointment of a suitable chairman for the inquiry is crucial for early legislation?
Mr. Shore: I thank my hon. Friend for his welcome and, again, for the conspicuous part he played in pushing forward legislation in this difficult but important area of industrial democracy. It is our intention to be ready with legislation in 1976–77, although I take the point made by the hon. Member for Bedfordshire, South (Mr. Madel) that we have to strike a difficult balance between thoroughness and speed. We shall go all out to get this in the 12-month period I announced. I assure my hon. Friend that there will be no delay on our part in the appointment of the chairman.
Mr. Cyril Smith: Is the Minister aware that his statement will be equally welcome to the Liberal Party which has been committed to the principle of worker participation since 1928, indeed for far longer than any other political party, including his own?
Will the right hon. Gentleman say whether the terms of reference of the inquiry require it to report on the possibility of worker participation as opposed to mere trade union representation at board level?
Will the Secretary of State note the regret that some of us feel that the committee of inquiry will not cover nationalised industries? I understand that there is to be a separate statement about nationalised industries but it seems to me that they have some relationship to this subject and that it is wrong to preclude the committee of inquiry from considering them.
Finally, will the right hon. Gentleman say whether there is to be an opportunity for the official Opposition and other Opposition parties to make nominations for the appointment of members to serve on the committee of inquiry? I am thinking not of politicians but of people of whom we are all aware who have a long history in and knowledge of worker participation. What facilities will be available to us to make nominations?
Mr. Shore: It is always open to hon. Members to make suggestions to a Minister before he has made an announcement and come to a firm conclusion about whom to invite. If the hon. Gentleman

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has proposals to put to me, I shall be glad to have them, but I ask him to make haste if his proposals are to have any effect.
The study of nationalised industries poses questions significantly different from those that are posed by the study of representation on the boards of privately owned companies. Therefore, I think it right that they should be the subject of a separate study, although there might be a certain element of overlap in some of the conclusions reached.
In the terms of reference we draw attention properly in the British context to the importance of trade unions and trade union organisation. They are part of the history of the country and represent a different kind of development in some ways from that which has occurred in many other European countries which have different forms of industrial democracy. We do not rule out worker participation in the broadest sense.
Several hon. Members rose—
Mr. Speaker: Order. The House has a great deal to do today. I hope that questions will be brief.
Mr. Heffer: Is my right hon. Friend aware that long before the Liberal Party was involved in industrial democracy many of us in the Labour Party were arguing for self-management for workers in industry? Is he also aware that some of us will be disappointed that we shall have to wait a further year for the report of another committee of inquiry? The Labour movement has been examining this subject from the time I joined it at 14 years of age. We should have come forward much earlier with concrete proposals. However, the Government have decided upon a year and we shall accept it, but let us get the legislation quickly immediately following the inquiry and not let the inquiry be used as a further excuse for holding up something which should have been done a long time ago.
Mr. Shore: I am being conciliatory to my hon. Friend when I say that whereas I think it is true that he and other hon. Members have given a great deal of thought to questions of industrial democracy in the Labour movement, I do not think that the movement, as a whole, has paid anything like enough
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attention to the questions that are involved. That is certainly my experience over the years that I have been associated with it. As my hon. Friend will recall, it was only recently that the TUC, as the most representative body of organised workers in the country, endorsed the general principle of industrial democracy. There is still a great deal of work and thinking to be done, and I am sure that this committee will be valuable.
Mr. Amery: Having advocated industrial democracy since 1948, before I entered the House of Commons, may I congratulate the right hon. Gentleman on his statement. My only regret is that it was not made by the Conservative Party 15 years ago. I should like to raise one specific matter. Is the right hon. Gentleman aware that under our present antiquated company law, management and labour are still regarded as commodities to be hired in the market? In the guidance which the right hon. Gentleman gives to the committee, will he ask it to consider the representation of management as well as of labour, in other words, both brains and skill, because it is not easy to draw the precise dividing line between the two when considering industrial enterprise?
Mr. Shore: I know that the right hon. Gentleman has been a long-established advocate of forms of industrial democracy. I am glad that he, too, has joined other hon. Members in welcoming this move forward. I believe that management representation, on whatever structure of boards or board is agreed, is certainly one of the questions which the committee of inquiry must consider very carefully.
Mr. Park: In his statement my right hon. Friend mentioned the fact that industrial democracy had been exercising the minds of three Government Departments. May we now take it that there is to be a co-ordinated approach on this subject and not three Departments going in three different directions? Will he also accept from me that the appointment of workers to boards is not the be-all and end-all of worker participation?
Mr. Shore: My hon. Friend was absolutely right in his last observation. One of the matters which caused the Government some anxiety was what was the best way to proceed. Certainly no one

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should underestimate the importance of—if I may put it this way—the sub-board level of industrial democracy, which many people consider to be even more important than representation on the boards themselves.
On the question of the three Departments, I assure my hon. Friend that we have been marching together. We have been one foot after another, or whatever the right phrase is. We have been in close contact and I am not aware of any significant disagreement.
Mr. Maurice Macmillan: I, too, have long advocated participation in ownership as well as in other matters. Can the right hon. Gentleman tell us whether the committee of inquiry will have written into its terms of reference the question of worker participation and ownership and whether it will have the power to consider some of the fiscal obstacles which at present stand in the way of many schemes which would enable employees of a company to become owners of part of the equity?
Mr. Shore: It would not be for me to put limits on the scope of the inquiry. If such matters appear to be relevant I am sure that they will be taken up by those concerned. The terms of the inquiry are clearly related mainly to the question of representation on board of directors.
Mr. Robert Hughes: As my right hon. Friend has said that there will be a 12-month time limit on the working party,
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will he give an undertaking that the study concerning the nationalised industries will be completed at the same time and the conclusions published in the same White Paper?
Mr. Shore: I cannot give my hon. Friend a binding undertaking on that point, but it is certainly my understanding that the inquiry into nationalised industries will be kept in phase and possibly may be concluded at an earlier date.
Mr. Crawford: I, too, welcome the right hon. Gentleman's statement. Industrial democracy tends to flourish more effectively in those companies and factories where decision-making is integral and less effectively in branch factories, of which we have all too many in Scotland. Does the right hon. Gentleman agree that the best way to stimulate industrial democracy in Scotland is by the creation of indigenously owned and run companies?
Mr. Shore: I am not sure that I draw the same conclusions as the hon. Gentleman from that train of reasoning. However, I take the point that in considering the question of representation on boards, the problems of companies with substantial numbers of subsidiaries need to be thought out very carefully. Now that we have heard from the hon. Member for Perth and East Perthshire (Mr. Crawford), I point out that I have seldom launched a statement which has received such unanimous and all-party support in the House. May it continue.

PICKETING (AMENDMENT)
4.25 p.m.
Mr. Greville Janner: I beg to move,
That leave be given to bring in a Bill to amend the law in respect of picketing otherwise than in the course of industrial disputes.
It has long been the right of British people to meet, to demonstrate and to protest against abuses whether at home or abroad and to do so in a manner which is peaceable and does not create any risk of a breach of the law. As a result of a deplorable majority decision of the Court of Appeal in the case of Hubbard v. Pitt, which became well known because it involved the picketing of estate agents' offices in Islington, this important safety valve of our society has been largely sealed.
The Bill has no part to play concerning the criminal law, because the criminal law is designed, effectively or otherwise, to deal with the minimum standards required by society in connection with peaceable picketing. The great danger that has been caused by the decision in Hubbard v. Pitt is that a private individual or group of individuals can now go to the court and obtain an injunction to restrain people, on an interim basis until the hearing of a case, from placarding, demonstrating or showing their disgust in any lawful and peaceable way in connection with any kind of complaint. The type of complaints which are normally the subject of demonstrations are extremely well known. They range from protests against Government activity, although not, of course, in connection with this Government, to the behaviour of foreign authorities. The Islington case was a typical example because the people were protesting against changing the nature of an area by the behaviour of particular estate agents. Had the case come to trial it might have been found to be right or wrong. However, the demonstrations were halted in their tracks as could any future demonstrations be halted, so that by the time the case comes to trial which may be in one, two or three years, the purpose of the protest and the cause of the demonstration will have passed.
Briefly, the decision in the case concerned which I seek to have implemented as law is that of Lord Denning. the
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Master of the Rolls. That will not surprise anyone who knows the views of that very great judge. I am happy to pay tribute to Lord Denning who, although he has been the scourge of law students for a generation, has produced more compassionate, intelligent, and, probably, dissenting judgments than any other judge who has been on the bench this century. He sums up the matter in a paragraph. He referred to the Court of Common Council decision after the demonstration at St. Peter's Fields, Manchester, in 1819 where the court affirmed
"the undoubted right of Englishmen to assemble together for the purpose of deliberating upon public grievances".
Lord Denning then said:
"Such is the right of assembly. So also is the right to meet together, to go in procession, to demonstrate and to protest on matters of public concern. As long as all is done peaceably and in good order, without threats or incitement to violence or obstruction to traffic, it is not prohibited."
He then stressed what he called
"the need for peace and good order"
and said:
"Only too often violence may break out: and then it should be firmly handled and severely punished. But so long as good order is maintained, the right to demonstrate must be preserved."
Lord Denning then quoted from the judgment of Lord Justice Scarman who was asked to recommend after the Red Lion Square disorders that
"a positive right to demonstrate should be enacted".
Lord Justice Scarman said that new law to establish this right was unnecessary:
"The right, of course, exists, subject only to limits required by the need for good order and the passage of traffic".
Finally, Lord Denning, referring to The Sunday Times dispute over thali-domide, said that the committee considered that the issues were
"a legitimate matter for public comment".
The report recognised that it was important to maintain the
"freedom of protest on issues of public concern".
Lord Denning concluded:
"It is time for the courts to recognise this too. They should not interfere by interlocutory injunction with the right to demonstrate and to protest any more than they interfere with the right of free speech; provided that everything is done peaceably and in good order."

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This ringing declaration of the duty of the court to protect the right of the individual to demonstrate was overruled by the decision of Lord Denning's two brother judges. The purpose of this Bill is to reinstate that right.
I appreciate that at this stage in the Session the Bill can only be an indication of what I hope will be the unanimous feeling of the House on the matter and that, as a result, it will not be opposed. It will then be an indication to the courts, if the case goes further, and certainly to this House, that, if the law is to be interpreted in the way in which it has been interpreted, that law is bad and must be changed in order that this safety valve for British society may be properly and fully reopened.
Question put and agreed to.
Bill ordered to be brought in by Mr. Greville Janner, Mr. A. W. Stallard, Mr. George Cunningham, Mr. Max Madden, Mr. Marcus Lipton, Mr. Ronald Atkins, Mr. James Lamond, Mrs. Helene Hay-man, Mr. John Watkinson, Mr. Michael Ward and Mr. Arthur Palmer.

Picketing (Amendment)
Mr. Greville Janner accordingly presented a Bill to amend the law in respect of picketing otherwise man in the course of industrial disputes; and the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 231.]
ORDERS OF THE DAY
  EMPLOYMENT PROTECTION BILL
  As amended (in the Standing Committee), further considered.
  EMPLOYMENT PROTECTION BILL
    Clause 22

      RIGHT TO GUARANTEE PAYMENT
      4.32 p.m.
      Mr. Barney Hayhoe: I beg to move Amendment No. 46, in page 18, line 44, at end insert
      "and in consequence is neither paid for that day by his employer nor entitled to be paid by virtue of his contract of employment remuneration at least equal to the remuneration he would have received if he had been provided with work on the whole of that day".
      Mr. Deputy Speaker (Mr. George Thomas): With this we may take Government Amendments Nos. 47, 62, 68 and 129.
      Mr. Hayhoe: When we considered this Bill on Report last week, we made good progress by short speeches not only from both Front Benches but from all parts of the House. It is our intention to continue in the same vein today.
      A similar amendment to this was moved in Committee when an undertaking was given by the Minister. I understand that the Government's amendments put into effect that undertaking. However, they do so in a fairly unintelligible fashion, because one has to search through the Bill to discover what is meant, whereas our wording is straightforward and simple. That is the way of legislators. If the end result is the same, I imagine that I shall seek leave to withdraw the amendment, having established that the Government's amendments serve the purpose that we have in mind.
      The Under-Secretary of State for Employment (Mr. John Fraser): The phrases "short speeches" and "good progress" sound like an oasis at the end of a desert. I shall certainly wish to fit in with that spirit.
      The Government's amendments propose to do what the Opposition intended to do but what strictly their amendment does not do. The effect of the Government's amendments is that the five

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      guarantee days would run concurrently with any contractual entitlement. The effect, though not the intention, of Amendment No. 46 is that the guarantee days would run consecutively. I am sure that the Government's amendments achieve what the Opposition want. I am glad that I have been able to make my speech so short.
      Mr. Hayhoe: I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendment made: No. 47, in page 19, line 1, after "shall", insert
      " "subject to the following provisions of this Act,".—[Mr. John Fraser.]

    Clause 23

      GENERAL EXCLUSIONS FROM RIGHT UNDER SECTION 22
      Mr. James Prior: I beg to move Amendment No. 48, in page 19, line 23, at end insert:
      'or a trade dispute in a nationalised industry'.
      We had a long discussion on this clause and on similar amendments in Committee. The purpose of the amendment is to ensure that employers who are completely helpless to stop crippling industrial action in the public sector should not be forced to make guarantee payments due to short-time working caused by that action.
      We have had many examples of this problem in recent years. The legislation, as it stands, would mean that in the event of, say, a national rail strike, a partial or total shutdown of power caused by a dispute in the coal mines, the gas or electricity supply industries, an employer in a totally unrelated industry, who is not a party to the dispute and has no say in the negotiations but is already suffering from lost orders and production, would have to make guarantee payments to his employees although, through no fault of his own, he has no work for them. This seems monstrously unfair.
      This is yet another instance where this legislation, in attempting to help work people, may stop the best provision being made. By imposing uniform statutory requirements, it will hinder voluntary negotiations which are already undertaken in many industries to make
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      guaranteed weekly payments appropriate to their circumstances.
      The Opposition have always argued that if collective bargaining means anything at all, it certainly means bargaining about this kind of issue and that it is better left to negotiations conducted between employers and unions. But if, on occasions such as these, there is to be an obligation falling on employers, we believe that it will be more suitable if the State is made responsible for these matters. The State, through the social security system, should foot the bill.
      This is another instance where the onus has been placed on employers at a time when they cannot afford this kind of imposition. The Financial Times, in a leading article some weeks ago, reported:
      "If the economy were expanding, with business in a confident mood and price rises well under control, the case for implementing measures of this kind would be extremely strong; the only reasonable argument in such circumstances could be about whether they should be introduced piecemeal in response to collective bargaining procedures, or as a wholesale legislative package. In present circumstances the argument must be about their contribution to inflation; if the economy is forced by law to swallow all this at one go its present malaise may be worsened."
      We believe that it would be better and more suitable if the negotiations which are already carried out between unions and employers were allowed to continue. We also believe that where a strike takes place or there is a dispute in a nationally owned industry the State, being the employer, should foot the bill for the guaranteed weekly payments. It is monstrously unfair to put this additional imposition arbitrarily and by statute on employers at a time when they are already facing considerable difficulties in trying to control inflation and keep employment going. Therefore, we have tabled this amendment. It follows closely the powerful argument which we deployed in Committee.
      Mr. John Fraser: The right hon. Gentleman's arguments seem to be about the principle of guarantee payments and not about whether such payments should be paid when a dispute flows from a disruption in a nationalised industry. The argument on principle was discussed on Second Reading and at great length in Committee. I must say to the right hon. Gentleman that on the general principle

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      we must agree to differ. We believe that it is right to make the advances in terms of guarantee payments to workers that are provided in the Bill. The right hon. Gentleman may disagree about that, but that is the matter which has been discussed. I think that the principle has already been decided upon.
      I turn to the particularity of the amendment. If the amendment were accepted it would have a number of effects which would be illogical and unjustifiable. The reference to nationalised industries is a discriminatory reference which cannot possibly be supported. On the basis of the amendment, if someone's works were disrupted because of a dispute at British Leyland, the people outside who would lose a day's work as a result would receive no benefit. However, if the dispute were to take place at Chryslers, other workers would receive benefit. If there were a dispute at a nationalised steel mill there would be no benefit for those disrupted, but benefit would be payable if the dispute were to take place at a private foundry or mill. If there were a dispute at British Airways benefit would be denied, but if there were a dispute at British Caledonian Airways it would be available. I believe that that is illogical and an unjustifiable distinction.
      The amendment would mean that whether someone received guarantee payment would be decided on capricious and illogical grounds. I submit that there is no case for drawing a distinction between disputes in nationalised industries and disputes outside. Further, the amount of benefit that may be paid amounts to no more than five days in one period of three months. We are not imposing an intolerable burden on employers.
      The amendment would introduce discrimination in another way, in that it would deny to workers by hand the sort of benefits that have traditionally been enjoyed by workers by brain for many years in the past. The amendment is discriminatory as to the cause of the dispute and the persons who will be denied benefit. I ask the House to reject the amendment.
      Mr. Esmond Bulmer: Briefly I take issue with the Minister on whether it is illogical to discriminate against the nationalised industries. Clearly
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      those industries are apart from the rest of the economy in two important respects. The first respect is that they command a monopoly of vital services. The second respect, which we have seen in recent months, is the extent to which pay and conditions in the nationalised industries have borne no relation to the market place. So long as those who work in the nationalised industries believe that the taxpayer is there to foot the bill, they will have to be regarded as different from the rest of industry. Unfortunately, we are beginning to see the effect of wage increases which have far outstripped productivity. Employment, and the prospects of employment, depends upon the forces of the market place coming far more into the reckoning of the Government than has been the case.
      As my right hon. Friend has said, throughout the Bill we have seen provisions which are to be welcomed in terms of improving conditions for employees, but at the same time we have seen the Government's failure to recognise the many different burdens placed on employers at a time when they are unable to discharge them. If we consider what happens in the rest of Europe, it is clear that the principle of guarantee pay does not fall on the employer to the extent that is mooted in the Bill. In certain European countries provision is made for strikes in the nationalised industries—
      Mr. Ivor Clemitson: I return to the point that the hon. Gentleman made about the nationalised industries being monopolies. He suggested that nationalised industries are always in monopoly positions, but is that true? Is it not true that there are privately-owned companies which are in monopoly positions?
      Mr. Bulmer: I would not seek to argue that every nationalised industry is a monopoly, but I think we are all aware of crucial services that are monopolies. The withdrawal of those services places individual employers in a position in which they cannot carry on their businesses.
      Mr. Clemitson: My point was that we cannot draw a distinction in terms of monopolies and equate monopolies with nationalised industries.
      Mr. Bulmer: The point I was seeking to argue was that if monopoly situations

      261
      are allowed to operate without the normal sanctions of the market applying, there is created a separate and privileged position. Therefore, if people go on strike in that situation they are in a somewhat different position from people who go on strike in a commercial enterprise. So long as the position remains that the Government will foot whatever deficit results at the end of the day, that position will continue.
      I return to the point I was making about the position in Europe. It is accepted throughout Europe that guarantee pay is something that should be offered. On the other hand, there is no country in Europe which seeks to operate a system which is so prejudicial to the employer as that which is proposed in the Bill.
      4.45 p.m.
      Mr. Hayhoe: I am sorry that the Minister has not been forthcoming, but I am not altogether surprised. As he said, this is ground that we debated, albeit in a slightly different context, in Committee. Quite clearly there was a major difference between both sides of the Committee which has been reflected in this short debate.
      We feel that there is unfairness and inadequacy in the present wording of the Bill. When an industrial dispute, a strike, takes place—in some circumstances, a lockout, as the Minister pointed out in Committee—which has nothing to do with a particular employer except that it involves his own work force, and when that work force is laid off, the Bill gives those workers an entitlement to some guarantee pay, and the employer who is the innocent party has to make that guarantee payment. We think that that is an unfairness, and that the innocent employer should be excused from making such payment when the lay-off is being caused by the activities of others.
      Let us take a case under the Remuneration, Charges and Grants Bill. Let us suppose that the maximum or flat-rate increase of £6 leads to industrial action and that there is an attempt to try to break that policy. Such a situation could lead to many workers being laid off in many undertakings. We would then find that employers would be having to make guarantee payments because of action by another group of workers opposed to the Government's policy of trying to overcome inflation. That is a curious and convoluted way of looking at affairs.
      The purpose of our debates in Committee and in this debate today has been to draw attention to what we think is an unfairness. Of course, we do not stand by the precise details of the words of our amendment, and we recognised that it was possible to make the sort of debating point that was made by the Minister. However, we hoped that the Minister recognised the underlying serious nature of the feeling of many employers, including the many people who run small businesses, that this legislation is placing upon them an additional burden, a burden which will mean that their costs will be increased by the activities of others over whom they have no control.
      We would not press our amendment to the vote if we had an indication from the Government that they were prepared to meet what we believe is our legitimate point of view. However, as we have had no such indication, I must advise my right hon. and hon. Friends to divide the House on this matter. We are dividing on the principle of the matter. We accept the inadequacies of the wording of the amendment but because there is such a basic unfairness in the legislation we feel that we should divide on the point.
      Question put, That the amendment be made:—
      The House divided: Ayes 170, Noes 237.

      Division No. 323.]

      AYES

      [4. 50 p.m.

      Aitken, Jonathan

      Boscawen, Hon Robert

      Clark, Alan (Plymouth, Sutton)

      Alison, Michael

      Bottomley, Peter

      Clark, William (Croydon S)

      Arnold, Tom

      Braine, Sir Bernard

      Cockcroft, John

      Atkins, Rt Hon H. (Spelthorne)

      Brittan, Leon

      Cooke, Robert (Bristol w)

      Baker, Kenneth

      Brotherton, Michael

      Cope, John

      Banks, Robert

      Brown, Sir Edward (Bath)

      Cordle, John H.

      Berry, Hon Anthony

      Buchanan-Smith, Alick

      Cormack, Patrick

      Biggs-Davison, John

      Buck, Antony

      Corrie, John

      Blaker, Peter

      Bulmer, Esmond

      Craig, Rt Hon W. (Belfast E)

      Body, Richard

      Carr, Rt Hon Robert

      Critchley, Julian

      Dean, Paul (N Somerset)

      Lane, David

      Rees, Peter (Dover & Deal)

      Douglas-Hamilton, Lord James

      Latham, Michael (Melton)

      Rees-Davies, W. R.

      Drayson, Burnaby

      Lawrence, Ivan

      Renton, Rt Hon Sir D. (Hunts)

      Eden, Rt Hon Sir John

      Lawson, Nigel

      Renton, Tim (Mid-Sussex)

      Edwards, Nicholas (Pembroke)

      Le Marchant, Spencer

      Rhys Williams, Sir Brandon

      Elliott, Sir William

      Lester, Jim (Beeston)

      Ridley, Hon Nicholas

      Eyre, Reginald

      Luce, Richard

      Rifkind, Malcolm

      Fairgrieve, Russell

      McAdden, Sir Stephen

      Roberts, Michael (Cardiff NW)

      Farr, John

      Macfarlane, Neil

      Roberts, Wyn (Conway)

      Fell, Anthony

      MacGregor, John

      Rodgers, Sir John (Sevenoaks)

      Finsberg, Geoffrey

      Macmillan, Rt Hon M. (Farnham)

      Rossi, Hugh (Hornsey)

      Fisher, Sir Nigel

      McNair-Wilson, M. (Newbury)

      Rost, Peter (SE Derbyshire)

      Fletcher, Alex (Edinburgh N)

      Madel, David

      St. John-Stevas, Norman

      Fletcher-Cooke, Charles

      Marshall, Michael (Arundel)

      Shaw, Giles (Pudsey)

      Fookes, Miss Janet

      Marten, Neil

      Shelton, William (Streatham)

      Fowler, Norman (Sutton C'f'd)

      Mates, Michael

      Shepherd, Colin

      Fry, Peter

      Mather, Carol

      Silvester, Fred

      Gardiner, George (Reigate)

      Maude, Angus

      Sims, Roger

      Gardner, Edward (S Fylde)

      Maudling, Rt Hon Reginald

      Sinclair, Sir George

      Gilmour, Rt Hon Ian (Chesham)

      Mawby, Ray

      Skeet, T. H. H.

      Glyn, Dr Alan

      Maxwell-Hyslop, Robin

      Smith, Dudley (Warwick)

      Godber, Rt Hon Joseph

      Mayhew, Patrick

      Speed, Keith

      Goodlad, Alastair

      Meyer, Sir Anthony

      Spence, John

      Gray, Hamish

      Miller, Hal (Bromsgrove)

      Sproat, Iain

      Griffiths, Eldon

      Mitchell, David (Basingstoke)

      Stainton, Keith

      Grist, Ian

      Moate, Roger

      Stanbrook, Ivor

      Hall-Davis, A. G. F.

      Monro, Hector

      Stanley, John

      Hamilton, Michael (Salisbury)

      Montgomery, Fergus

      Steen, Anthony (Wavertree)

      Hampson, Dr Keith

      Moore, John (Croydon C)

      Stradling Thomas, J.

      Harrison, Col Sir Harwood (Eye)

      More, Jasper (Ludlow)

      Tebbit, Norman

      Hastings, Stephen

      Morris, Michael (Northampton S)

      Temple-Morris, Peter

      Hawkins, Paul

      Morrison, Charles (Devizes)

      Townsend, Cyril D.

      Hayhoe, Barney

      Morrison, Hon Peter (Chester)

      Trotter, Neville

      Holland, Philip

      Mudd, David

      Tugendhat, Christopher

      Howe, Rt Hon Sir Geoffrey

      Nelson, Anthony

      van Straubenzee, W. R.

      Howell, David (Guildford)

      Neubert, Michael

      Vaughan, Dr Gerard

      Hunt, John

      Newton, Tony

      Viggers, Peter

      Hurd, Douglas

      Normanton, Tom

      Wall, Patrick

      Irvine, Bryant Godman (Rye)

      Page, John (Harrow West)

      Warren, Kenneth

      Irving, Charles (Cheltenham)

      Page, Rt Hon R. Graham (Crosby)

      Weatherill, Bernard

      Jenkins, Hugh (Putney)

      Parkinson, Cecil

      Whitelaw, Rt Hon William

      Jessel, Toby

      Pattie, Geoffrey

      Wood, Rt Hon Richard

      Percival, Ian

      Johnson Smith, G. (E Grinstead)

      Peyton, Rt Hon John

      Young, Sir G. (Ealing, Acton)

      Kershaw, Anthony

      Price, David (Eastleigh)

      Kimball, Marcus

      Prior, Rt Hon James

      TELLERS FOR THE AYES:

      King, Tom (Bridgwater)

      Pym, Rt Hon Francis

      Mr. Adam Butler and

      Kirk, Peter

      Raison, Timothy

      Mr. W. Benyon.

      Lamont, Norman

      Rathbone, Tim

      NOES

      Allaun, Frank

      Corbett, Robin

      Faulds, Andrew

      Anderson, Donald

      Craigen, J. M. (Maryhill)

      Fitch, Alan (Wigan)

      Archer, Peter

      Crawford, Douglas

      Flannery, Martin

      Armstrong, Ernest

      Crawshaw, Richard

      Fletcher, Raymond (llkeston)

      Ashton, Joe

      Crosland, Rt Hon Anthony

      Fletcher, Ted (Darlingon)

      Atkins, Ronald (Preston N)

      Cunningham, Dr J. (Whiteh)

      Foot, Rt Hon Michael

      Atkinson, Norman

      Dalyell, Tam

      Forrester, John

      Bagier, Gordon A. T.

      Davidson, Arthur

      Fowler, Gerald (The Wrekin)

      Bain, Mrs Margaret

      Davles, Bryan (Enfield N)

      Fraser, John (Lambeth, N'w'd)

      Bates, Alt

      Davies, Denzil (Llanelli)

      Freeson, Reginald

      Beith, A. J.

      Davis, Clinton (Hackney C)

      Freud, Clement

      Benn, Rt Hon Anthony Wedgwood

      Deakins, Eric

      Garrett, John (Norwich S)

      Bennett, Andrew (Stockport N)

      Dean, Joseph (Leeds West)

      Garrett, W. E. (Wallsend)

      Bidwell, Sydney

      de Freitas, Rt Hon Sir Geoffrey

      Gilbert, Dr John

      Bishop, E. S.

      Delargy, Hugh

      Ginsburg, David

      Booth, Albert

      Dell, Rt Hon Edmund

      Gould, Bryan

      Boothroyd, Miss Betty

      Dempsey, James

      Gourlay, Harry

      Bottomley, Rt Hon Arthur

      Dormand, J. D.

      Graham, Ted

      Boyden, James (Bish Auck)

      Douglas-Mann, Bruce

      Grant, George (Morpeth)

      Bradley, Tom

      Duffy, A. E. P.

      Grimond, Rt Hon J.

      Brown, Hugh D. (Provan)

      Dunn, James A.

      Grocott Bruce

      Buchanan, Richard

      Dunnett, Jack

      Hamilton, W. W. (Central Fife)

      Callaghan, Jim (Middleton & P)

      Eadie, Alex

      Hardy, Peter

      Cant, R. B.

      Edelman, Maurice

      Harper, Joseph

      Carter-Jones, Lewis

      Edge, Geoff

      Harrison, Walter (Wakefleld)

      Cartwright, John

      Edwards, Robert (Wolv SE)

      Hatton, Frank

      Clemitson, Ivor

      Ellis, Tom (Wrexham)

      Hayman, Mrs Helene

      Cocks, Michael (Bristol S)

      English, Michael

      Heffer, Eric S

      Cohen, Stanley

      Ennals, David

      Henderson, Douglas

      Coleman, Donald

      Evans, Ioan (Aberdare)

      Hooley, Frank

      Conlan, Bernard

      Evans, John (Newton)

      Hooson, Emlyn

      Cook, Robin F. (Edin C)

      Ewing, Harry (Stirling)

      Horam, John

      264

      265

      Howell, Denis (B'ham, Sm H)

      Mendelson, John

      Small, William

      Hoyle, Doug (Nelson)

      Mikardo, Ian

      Smith, Cyril (Rochdale)

      Huckfield, Les

      Millan, Bruce

      Smith, John (N Lanarkshire)

      Hughes, Rt Hon C. (Anglesey)

      Miller, Dr M. S. (E Kilbride)

      Snape, Peter

      Hughes, Mark (Durham)

      Miller, Mrs Millie (Ilford N)

      Spearing, Nigel

      Hughes, Robert (Aberdeen N)

      Mitchell, R. C. (Soton, Itchen)

      Spriggs, Leslie

      Hughes, Roy (Newport)

      Molloy, William

      Stallard, A. W.

      Hunter, Adam

      Morris, Charles R. (Openshaw)

      Stewart, Donald (Western Isles)

      Irvine, Rt Hon Sir A. (Edge Hill)

      Moyle, Roland

      Stewart, Rt Hon M. (Fulham)

      Irving, Rt Hon S. (Dartford)

      Mulley, Rt Hon Frederick

      Stoddart, David

      Jackson, Colin (Brighouse)

      Murray, Rt Hon Ronald King

      Summerskill, Hon Dr Shirley

      Janner, Greville

      Newens, Stanley

      Swain, Thomas

      Jay, Rt Hon Douglas

      Noble, Mike

      Taylor, Mrs Ann (Bolton W)

      Jenkins, Hugh (Putney)

      O'Malley, Rt Hon Brian

      Thomas, Mike (Newcastle E)

      Johnson, James (Hull West)

      Orbach, Maurice

      Thomas, Ron (Bristol NW)

      Johnson, Walter (Derby S)

      Ovenden, John

      Tinn, James

      Johnston, Russell (Inverness)

      Palmer, Arthur

      Torney, Tom

      Jones, Barry (East Flint)

      Pardoe, John

      Tuck, Raphael

      Jones, Dan (Burnley)

      Park, George

      Urwin, T. W.

      Judd, Frank

      Parker, John

      Wainwright, Edwin (Dearne V)

      Kelley, Richard

      Parry, Robert

      Walden, Brian (B'ham, L'dyw'd)

      Kerr, Russell

      Pavitt, Laurie

      Walker, Harold (Doncaster)

      Kilroy-Silk, Robert

      Peart, Rt Hon Fred

      Walker, Terry (Kingswood)

      Lamborn, Harry

      Pendry, Tom

      Ward, Michael

      Lamond, James

      Penhaligon, David

      Watkins, David

      Latham, Arthur (Paddington)

      Phipps, Dr Colin

      Watkinson, John

      Lewis, Arthur (Newham N)

      Prescott, John

      Watt, Hamish

      Lewis, Ron (Carlisle)

      Price, C. (Lewisham W)

      Weitzman, David

      Lipton, Marcus

      Price, William (Rugby)

      Welsh, Andrew

      Litterick, Tom

      Radice, Giles

      White, Frank R. (Bury)

      Loyden, Eddie

      Richardson, Miss Jo

      White, James (Pollok)

      Luard, Evan

      Roberts, Albert (Normanton)

      Whitehead, Phillip

      Lyon, Alexander (York)

      Roberts, Gwilym (Cannock)

      Whitlock, William

      Lyons, Edward (Bradford W)

      Robertson, John (Paisley)

      Williams, Alan (Swansea W)

      McCartney, Hugh

      Rodgers, George (Chorley)

      Williams, Alan Lee (Hornch'ch)

      MacCormick, Iain

      Rooker, J. W.

      Williams, Rt Hon Shirley (Hertford)

      MacFarquhar, Roderick

      Roper, John

      Wilson, Alexander (Hamilton)

      Maclennan, Robert

      Ross, Stephen (Isle of Wight)

      Wilson, William (Coventry SE)

      McMillan, Tom (Glasgow C)

      Sandelson, Neville

      Wise, Mrs Audrey

      Madden, Max

      Sedgemore, Brian

      Woodall, Alec

      Magee, Bryan

      Shaw, Arnold (Ilford South)

      Woof, Robert

      Mahon, Simon

      Sheldon, Robert (Ashton-u-Lyne)

      Wrigglesworth, Ian

      Marks, Kenneth

      Short, Rt Hon E. (Newcastle C)

      Young, David (Bolton E)

      Marquand, David

      Short, Mrs Renée (Wolv NE)

      Marshall, Dr Edmund (Goole)

      Silkin, Rt Hon S. C. (Dulwich)

      TELLERS FOR THE NOES:

      Marshall, Jim (Leicester S)

      Sillers, James

      Mr. James Hamilton and

      Maynard, Miss Joan

      Silverman, Julius

      Miss Margaret Jackson.

      Mellish, Rt Hon Robert

      Skinner, Dennis

      Question accordingly negatived.

    Clause 25

      LIMITS ON AMOUNT OF AND ENTITLEMENT TO GUARANTEE PAYMENT
      5 p.m.
      Mr. Hayhoe: I beg to move Amendment No. 49, in page 20, line 43, at end insert:
      ' and the amount of guarantee payment payable to an employee in respect of any one week shall not exceed the amount which when added to any earnings in respect of any work actually done during that week, equals that employee's week's pay, which shall be calculated by applying the provisions of Part II of Schedule 3 to this Act'.
      The object of the amendment is to ensure that in the operation of a guaranteed payments system as outlined in these clauses an individual employee will not end up with more money as a result of their operation than he would receive for
      266
      normal full-time working for a normal week.
      We debated this matter at length in Committee, and the Minister assured the Committee that he would seek to meet what he accepted to be the reasonable arguments that the Opposition made. He concluded his remarks by saying:
      "However, I shall look at this question again and try to find some way of dealing with it on Report, so that we can introduce a guaranteed safeguard element for the week without introducing these enormous complications and difficulties."—[Official Report, Standing Committee F, 19th June 1975; c. 605–6.]
      We recognise that there are difficulties in trying to cover these eventualities in the legislation, but we think that some effort should be made to do so. However, the Opposition's drafting does not necessarily achieve all that we would wish, and it may have some wholly unintentional damaging consequences. So by putting down this amendment again we

      267
      hope that further assurances will be forthcoming from the Minister, since clearly he has been unable to find a way to achieve this during the interval between our discussion in Committee on 19th June and today, that perhaps during the Summer Recess his experts and officials may be able to come up with a formulation of words which can be considered in another place.
      Mr. John Fraser: I appreciate the tone in which the hon. Member for Brentford and Isleworth (Mr. Hayhoe) introduced the amendment. My hon. Friends and I have considered this matter, but without coming to a conclusion that the Bill should be amended. Therefore, I am afraid that I cannot give any assurance that an amendment to meet the hon. Gentleman's points will be introduced in another place.
      The essence of the problem is to decide what is the simplest and most effective scheme both from the point of view of the employee who ought to be able to understand what he is entitled to and from that of employers who have to administer the scheme. We have come to the conclusion that it should be a scheme based on a daily entitlement. To introduce a ceiling on guarantee pay plus earnings in a week would virtually mean grafting a weekly guarantee on to a daily scheme. The mixture of the two would produce inordinate complexities, and we have not been able to find any solution that would not mean that the cure was worse than the disease.
      The chief difficulty lies in the way it would complicate entitlement rules. A weekly ceiling such as is proposed could mean in a particular case that an employee got only, say, £1 or £2 for a day's layoff. Should this day count against his five days? Obviously it would be grossly unfair if it did, for other employees would be getting £6 for each of their five days. It is when we try to get over this difficulty that we come up against the horrifying complications that I have already mentioned.
      My impression in discussing this Bill with employers and with representatives of the CBI is that the general feeling outside this House is that our legislation should be simple to understand for the benefit of those who have to implement it.
      268
      They cry out against undue complications in legislation. If we tried to graft a weekly limit on to a daily entitlement, we would create complications with which they would find it extremely difficult to live.
      We have a choice between a simple comprehensible scheme based on practical experience and of trying to devise one based more on anomalies and perhaps flights of imagination than typical circumstances. Weighing up the two, we feel that it is better to have a simple, comprehensible scheme.
      It is not impossible to conceive of a situation where an employee works extremely hard and puts in extra effort for, say, four days a week not knowing that on the fifth day a boiler will explode or that some event will take place denying him a fifth day's work. In those circumstances, it would be unfair to penalise him by reducing the daily entitlement for the fifth day.
      We have looked at this carefully, but I am afraid that the cure may be worse than the disease. Therefore, with the assurance that we have looked at this proposal carefully, I hope that the Opposition will feel able to withdraw their amendment.
      Mr. Hayhoe: The hon. Gentleman's comments about extra effort are important, and they were made by my right hon. Friend the Member for Lowestoft (Mr. Prior) when he introduced this amendment originally in Committee. We recognise that there are difficulties in seeking to cover all these possibilities by legislation.
      The plea of the Under-Secretary for simplicity is echoed on the Opposition benches. It comes ill from a Minister sponsoring a Bill of unparalleled complexity to argue for simplicity as we move through this rich quarry of unintelligible legal jargon. However, perhaps I should not touch upon these wider questions at this stage, especially when we are making such good progress.
      Obviously it will be open to interested associations and organisations outside which are following our proceedings with care to make further representations to the Minister between now and the Committee stage in the other place, and, if a formulation of words which has the

      269
      advantage of simplicity and fairness can be produced, I am sure that the Ministers will not shut their minds to it.
      I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 26

      SUPPLEMENTARY
      Mr. John Fraser: I beg to move Amendment No. 51, in page 22, line 19, leave out from beginning to 'as' and insert:
      'sections 22(2), 24 and 25(3) above'.
      Mr. Deputy Speaker: We are to discuss at the same time Amendment No. 52, in page 22, line 19, leave out from 'sections' to 'above' in line 21 and insert '22(2) and 24'.
      Mr. Fraser: The Government amendment provides that the Secretary of State's power to modify the guarantee payments scheme will not cover the basic entitlement, grounds for exclusion and so forth, but will be limited to the practical rules in Clause 22, on allocation of a night shift, Clause 24, on method of calculating the payment, and Clause 25(3), which contains the provisions for calculating guarantee entitlement. I hope that this meets the points made in Committee, and Amendment No. 52 tabled by the Opposition.
      Mr. Hayhoe: Yes, the Government amendment meets the points that we made in Committee and sought to make in Amendment No. 52. We are happy to support it.
      Amendment agreed to.

    Clause 28

      EXEMPTION ORDERS
      Mr. John Fraser: I beg to move Amendment No. 53, in page 22, line 41, at end insert ', or a wages order'.
      Mr. Deputy Speaker: With this amendment we are to discuss Amendment No. 54, in page 22, line 41, at end insert 'or Wages Council Orders', and Government Amendments Nos. 55, 56, 58, 59 and 60.
      Mr. Fraser: In Committee, the Opposition tabled an amendment which would
      270
      have added the words "or Wages Council Order" so that the Secretary of State's power of exemption would extend to employees covered by such orders. The principle was accepted, but it was obvious that a number of consequential amendments would be required.
      It is generally agreed that the powers of exemption should be extended to cover employees in wages council industries or SJICs. There is no reason why these categories should be treated any less favourably than those in other areas of employment. We have consulted the Ministry of Agriculture and the Department of Agriculture and Fisheries in Scotland which have told us that orders of the Agricultural Wages Board in England, Wales and Scotland should also be covered. I hope that this deals with the Opposition points made in Committee.
      Mr. Hayhoe: I am delighted that the Government have carried out the undertaking that they gave in Committee to bring forward these amendments. The amendment which we moved in Committee was suggested to us by the Retail Consortium which had been studying this legislation since it affected the consortium very much. Perhaps that underlines how representations from outside bodies have their effect. As a result, an amendment was moved, an undertaking was given by the Government and now the Government have brought forward amendments to give affect to a purpose with which we all agree. I am therefore happy to support the amendments.
      Amendment agreed to.
      Amendments made: No. 55, in page 22, line 42, after "agreement", insert "or order".
      No. 56, in page 22, line 44, leave out "the Secretary of State" and insert
      ", or as the case may be, of the council or Board making the order, the appropriate Minister".—[Mr. John Fraser.]
      Mr. Hayhoe: I beg to move Amendment No. 57, in page 23, line 1, after first "the", insert "generality of".
      This amendment was moved in Committee on 13th June and an indication was given that the point was a fair one. I think that I am right in saying that the Under-Secretary said that he would be happy to accept the words but wanted

      271
      to take advice. The point at issue was whether, by putting in the words we propose in the amendment, we would avoid—this was the phrase used in Committee—" some judicial head-scratching "That seems a highly desirable objective. I hope that the Minister will be able to help us now by either accepting the amendment or saying that he will introduce one in its place in another place.
      5. 15 p.m.
      Mr. John Fraser: I am willing to make a concession to this extent—to assure the hon. Member that his amendment is not necessary. The point made in Committee has been considered by our legal advisers and, if one is allowed to say so, by the draftsmen of the Bill. Our collective view is that the present form of words fully covers the point.
      The present form of words is identical to that in Section 11 of the Redundancy Payments Act 1965, so that any change would be not only unnecessary in itself but would cast doubt on the meaning of that section. Our interpretation is that the agreement as a whole has to be considered. That is something which has always been recognised in interpreting the 1965 Act.
      If there is any final consolation which I have to throw in, perhaps I should say that any exemption orders are subject to scrutiny and debatable in the House. I give that assurance. It is not an assurance about how we shall interpret it but a general assurance about the interpretation of the 1965 Act and the Bill. The amendment is not necessary.
      Mr. Hayhoe: In the light of that, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendments made: No. 58, in page 23, line 1, after 'agreement' insert 'or order'.
      No. 59, in page 23, line 4, at end insert:
      '(1A) In subsection (1) above a wages order means an order made under any of the following provisions, that is to say,

      (a) section 11 of the Wages Councils Act 1959;

      (b) section 3 of the Agricultural Wages Act 1948;

      (c) section 3 of the Agricultural Wages (Scotland) Act 1949.

      272
      (1B) In subsection (1) above the appropriate Minister means—

      (a) as respects a collective agreement or such an order as referred to in subsection (1A)(a) or (c) above, the Secretary of State;

      (b) as respects such an order as is referred to in subsection (1A)(b) above, the Minister of Agriculture, Fisheries and Food. '

      No. 60, in page 23, line 30, after 'question', insert:
      ', or, as the case may be, by the council or Board which made the order in question, '.—[Mr. John Fraser.]

    Clause 29

      RIGHT TO REMUNERATION ON SUSPENSION ON MEDICAL GROUNDS
      The Under-Secretary of State for Employment (Mr. Harold Walker): I beg to move Amendment No. 61, in page 23, line 34, after 'employer', insert 'on medical grounds'.
      This amendment was asked for by the hon. Member for Bedfordshire, South (Mr. Madel) in Committee. I am glad that we have been able to help him.
      Amendment agreed to.
      Amendment made: No. 62, in page 23, line 42, leave out from 'shall' to 'while' in line 44 and insert:
      ', subject to the following provisions of this Act, be entitled to be paid by his employer remuneration '.—[Mr. Harold Walker.]

    Clause 30

      GENERAL EXCLUSIONS FROM RIGHT UNDER S. 29
      Mr. Harold Walker: I beg to move Amendment No. 63, in page 24, line 29, after 'has', insert 'unreasonably'.
      This amendment is to rectify an error which was made in Committee. An Opposition amendment to delete the word "unreasonably" was inadvertently accepted. I thought that I had made it clear to the Committee that there were compelling reasons for retaining the word and we now seek to reinsert it.
      Mr. Hayhoe: The Under-Secretary of State chose a rather curious form of words when he said that an amendment was "inadvertently" agreed to in Committee. In fact, it was a clear decision of the Committee. My recollection is that it was unanimous, as were one or

      273
      two others. It is a curious way to proceed if, when a Committee has made a decision which Ministers do not like, they tell the House that it was inadvertent. Let them confess, as we know anyway, that they did not know what they were doing. It is a good thing for them occasionally to recognise that.
      On the occasion in question, we were not particularly convinced by the Minister's argument. We think that there was considerable substance in the case that we made, but if the Minister's use of the word "inadvertent" means that they would have preferred to have a Division—which, in view of the balance of the parties on the Committee, they would have won—perhaps it would be wiser for us not to push the amendment to a Division now. However, I still find this an unreasonable amendment.
      Amendment agreed to.

    Clause 31

      CALCULATION OF REMUNERATION
      Mr. Harold Walker: I beg to move Amendment No. 64, in page 24, line 42, after 'day', insert 'before that'.
      This is purely a drafting amendment to bring the provision into line with the calculation date used throughout the Bill.
      Amendment agreed to.

    Clause 33

      DISMISSAL OF REPLACEMENT
      Mr. Harold Walker: I beg to move Amendment No. 66, in page 25, line 40, leave out 'is obliged to dismiss' and insert 'dismisses'.
      Mr. Deputy Speaker: With this amendment we are to take Amendment No. 100, in Clause 43, page 33, line 33, leave out 'is obliged to dismiss' and insert 'dismisses'.
      Mr. Walker: These two amendments are in response to a case put to us by the Opposition in Standing Committee. I am glad that we have been able to respond.
      Amendment agreed to.

    Clause 35

      DISMISSAL ON GROUNDS OF PREGNANCY
      Mr. Harold Walker: I beg to move Amendment No. 67, in page 27, line 19, leave out 'or associated employer'.
      This amendment is consequential upon an Opposition amendment in Committee to remove the reference to "associated employer" in Clause 38(2) which is now Clause 35(2).
      Amendment agreed to.

    Clause 36

      RIGHTS OF EMPLOYEE IN CONNECTION WITH PREGNANCIES AND CONFINEMENT
      Amendment made: No. 68, in page 27, line 40, leave out 'provisions of this sections' and insert
      ' following provisions of this Act'.—[Mr. Harold Walker.]
      Mrs. Helene Hayman: I beg to move Amendment No. 69, in page 27, line 45, at end insert—
      ' (c) to paid leave when absent from work on the advice of a doctor, in order to obtain ante-natal or post-natal medical care'.
      The discussions in Committee on the maternity provisions of this Bill were somewhat limited. Perhaps this was because of the absence of any lady Members from the Committee. It is in response to that limited discussion and to what some of us felt were some inadequacies in the maternity provisions that this amendment and others stand in the names of some of my hon. Friends and myself.
      This amendment deals with the question of time off with pay for pregnant employees and those who have just given birth, in order to receive the appropriate ante-natal and post-natal care. I do not think any of us would argue that a piece of legislation such as this should cover all of the problems of the pregnant woman, the nursing mother and the working mother with young children. We must welcome the steps that have been taken by the Government in this respect and the fact that for the first time the rights and the needs of working women who become pregnant, who have children and

      275
      who wish to continue at work have been recognised and put into statutory form. We ought to pay tribute to the work done which, in this country at least, is pioneering work.
      However, there is one aspect which has not been covered in the Bill relating to ante-natal and post-natal care which is extremely important. I would not think it necessary to convince any Member of this House of the importance of medical care for the health of both mother and child. We see in this Bill provisions which are rightly included for employees to have time off to enable them to fulfil trade union official duties and public office duties. I think most of us would also say that there is a duty on a mother to see that her child when she is pregnant receives the right form of medical care.
      It is undoubtedly true that at the moment the women most likely to miss out of ante-natal and post-natal care are the women most likely to give birth to babies under weight and who will suffer from the lack of that care throughout their lives. They are also the women most likely to be hourly paid and most likely to worry about having to take time off work, becauses of the economic consequences of so doing. This is the reason why we think it is extremely important to include in this Bill a provision to the the effect that women seeking ante-natal and post-natal care on the advice of their doctor should be entitled to that care and should not lose money because they get it.
      In particular we think it is important that this provision should apply to all women. We shall obviously be arguing later about the length of time that a woman ought to have been with a single employer before she is eligible for maternity pay, and the qualifications that a woman should have before she should have the right of reinstatement. But this basic and primary right, affecting not only the mother but also her child, is one that we believe should be available to all employees.
      I accept that this amendment may be badly drafted and may not even be in the correct place in the Bill. On that basis, if my hon. Friend the Under-Secretary would be happy to re-draft it and intro-
      276
      duce it in another place, I would be delighted to hear it.
      Mr. Harold Walker: After our very quick sprint through the preceding half-dozen or so amendments, the House and certainly my hon. Friend the Member for Welwyn and Hatfield (Mrs. Hayman) will want me to deal rather more fully with this important amendment.
      I thank her for her warm remarks about the Bill. I hope that she will not assume that because neither she nor her lady colleagues were represented in the Committee there was a lack of understanding of the woman's point of view. I can assure her that not only the wives of my hon. Friends and myself make sure that we are kept very sharply aware of the woman's point of view, but we also have in my Department women officials who make sure that we are fully informed of the woman's point of view.
      My hon. Friend argued persuasively, but notwithstanding her persuasiveness I cannot go along with her argument. I will explain why. The maternity allowances paid by the State under the social security scheme are aimed specifically to allow the employee to stop work completely, while continuing to receive an income, in sufficient time to make the necessary arrangements for child care, and to remain out of work long enough to recover from child birth and to make any necessary arrangements for the future care of the child on her return to work. The return to work provisions of the Bill are also aimed at providing the necessary time by providing for absence for up to six months after confinement.
      It does not, therefore, seem necessary to make additional provision for paid post and ante-natal leave as it would normally be covered by the period of State payments. If an employee continued to work and needed time off to attend antenatal clinic, or needed it before she had reached the qualifying time for State allowance, any reasonable employer would normally be expected to allow her the time—which would probably amount to no more than a few hours a week. A similar position would apply to an employee returning to work early, following child birth, and who needed time off to attend post-natal clinic.
      If the employee's need for ante or postnatal care, not covered by a period of

      277
      maternity allowance, was such that a doctor certified that she was incapable of working, which is the normal "sickness certificate" provided by a doctor, she would, of course, be entitled to sickness benefit, plus any sick pay that her employer might provide under his own scheme. Certification would not cover the odd hours off that the employee would require to attend ante or post-natal clinic. The use of the word "advice" in these circumstances is unhelpful as it is an imprecise expression, but I make nothing of that.
      I hope I have said sufficient to show my hon. Friend that notwithstanding the persuasive way in which she advanced her case, her argument is insufficient to convince us that we ought to go along the path which she has outlined.
      Mr. J. Grimond: I was much impressed by the amendment when I first read it, but it struck me that this is a matter which should be covered by the State and not by the employer. This, I understand, is the view of the Government, and it is a view with which I sympathise.
      Do I understand from the Minister that he is satisfied that there has been no complaint from pregnant women about their treatment under the existing regulations, which he quoted at some length? If that is so, it would seem to me that this is not an obligation which should be laid on employers but should be placed on the State. I take it that he has had no representations that there are deficiencies in the present arrangements.
      5.30 p.m.
      Mr. David Madel: The House is grateful to the hon. Lady the Member for Welwyn and Hatfield (Mrs. Hayman) for raising this point. We have had a short interesting debate, and there are one or two further points which the Government might consider here or in another place.
      The hon. Lady recognises that this Bill cannot cover all the problems relating to maternity leave and ante-natal and postnatal care. Have the Government considered discussing this matter with the Employment Medical Advisory Service? Have they received a report from the service? I assume it would be within the power of the Health and Safety Commission to issue a code of practice about this
      278
      matter and to lay down guidelines. The Minister said that most employers would be reasonable and that only four or five hours a week would be involved for post and ante-natal care, but I think employers would be more willing to grant time off if there were a code of practice issued by the commission.
      The Minister also referred to the question of sickness benefit and I understood him to say that if a woman needed five or six hours a week for this purpose, it would be covered by sickness benefit. Perhaps the supporters of the amendment could discuss this matter with the Department of Health and Social Security and perhaps the Government could give us a little more clarification?
      Mrs. Hayman: I was a little disappointed with the response of my hon. Friend. If the vast majority of employers grant leave at the moment, it would do no harm to legislate for the bad employers who do not.
      On the question of the State providing care, we are talking about perhaps two hours a week or a fortnight at the beginning of pregnancy. The essence of the maternity allowance is that one will be off work full time. We are talking about the continuing care that is necessary throughout pregnancy, and that would not be covered by State benefits or sickness pay. We should not just rely on employers being reasonable and recognising the needs of employees in this situation. If, as we are told, the majority of employers permit this leave at the moment, perhaps the idea of a code of practice is one to which the Government will respond.
      Mr. Harold Walker: There are one or two points to which the House would wish me to respond. The right hon. Member for Orkney and Shetland (Mr. Grimond) asked whether I had received any specific complaints. There may well be problems in some circumstances of employers being reluctant to allow women short periods off work. I cannot say off hand whether we have received specific complaints. My own experience in industry suggests that there might be problems in this area, but whether this is the right way to tackle it is another matter.
      In reply to my hon. Friend the Member for Welwyn and Hatfield (Mrs. Hayman), one of the problems we have is the difficulty of deciding when a doctor is deemed

      279
      to be giving advice. The obligation of a doctor is to certify incapacity for work and, in those circumstances, a medical certificate would be issued and an employee would frequently qualify for sickness benefit.
      The hon. Member for Bedfordshire, South (Mr. Madel) asked me about the Employment Medical Advisory Service and the Health and Safety Commission. I rather doubt whether they have the necessary resources, understanding or expertise and I doubt whether they have ever envisaged being involved in the problems arising from pregnancies of employees. However, I do not see why we should not give some consideration to this point about the possibility—I put it no higher than that—of considering whether there is not scope eventually for a code of practice. I am responding to an idea put forward by hon. Members. It will need careful scrutiny, but I think we ought to consider it.
      Amendment negatived.
      Mr. Madel: I beg to move Amendment No. 70, in page 28 line 1, leave out 'both'.
      Mr. Deputy Speaker: With this we may discuss the following amendments:
      No. 71, in page 28, line 4, leave out 'either right' and insert 'the rights'.
      No. 75, in page 28, line 17, after 'and' insert:
      ' in the case of the right to return to work'.
      No. 79, in line 28, leave out "either right" and insert "exercise the right to return to work".
      We may also discuss Government amendments Nos. 72, 74 and 78.
      Mr. Madel: The Minister will recall that we discussed this matter in Standing Committee when he said,
      "I therefore recommend to the Committee that it accept the principle and spirit of the amendment. I understand that redrafting would be necessary, but the Government accept the amendment in principle and concede the point."—[Official Report, Standing Committee E, 24th June 1975, c. 716.]
      On that undertaking, we withdrew our amendment. We have moved it again now and would like a Government response.
      Mr. Harold Walker: An amendment standing in the name of the Secretary of State, which is being taken with this amendment, is intended to be our recognition of the points made during the Standing Committee and our response to them. I hope the Opposition will feel that this is an adequate response to the points raised by them in Committee and returned to today.
      Mr. Madel: I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendment made: No. 72, in page 28, line 9, at end insert 'and'.—[Mr. Harold Walker.]
      Miss Jo Richardson: I beg to move Amendment No. 73, in page 28, line 11 leave out 'two years' and insert 'one year'.
      Mr. Deputy Speaker: With this we may discuss the following amendments:
      No. 77, in page 28, line 27 leave out 'two years' and insert 'one year'.
      No. 80, in page 28, line 36 leave out subsection (5).
      Miss Richardson: In the original consultative document the period for which a woman had to have continuous service with an employer was one year. Many women's organisations and individual women were pleased to see this provision and were extremely surprised and perturbed to find that, when the Bill was published, the period had been doubled to two years. In some professions, two years would be a reasonable period, but I need not tell Ministers that in manual and clerical work the turnover is very much quicker than two years.
      Some of us would have liked the period to be six months, but I accept that there is the argument that a woman might be pregnant and go to work in order to take advantage of the opportunities provided under the maternity provisions of the Bill. We are not pressing for that kind of period although there is an argument for it. We would, however, like to see this two-year period returned to one year. It is quite unrealistic to have this two-year qualifying period.
      The new earnings survey of 1974 shows that of full-time female employees, over

      281
      18, 23·6 per cent. in manual work and 25·1 per cent. in non-manual work will have been with the same employer for less than a year. We have only to look at the huge lists of advertisements in evening newspapers in most of our big cities, including London, to realise that women in these kind of jobs change them very much more frequently than is recognised in the Bill. Already in some parts of the public sector there is a 12-month qualifying period. In local government, the National Heath Service, the water, gas and electricity services and in universities there is a 12-month period.
      I should like to hear from the Government Front Bench what is behind the increase from the period of one year, which was originally proposed, to a two-years period. I can imagine that some pressure has been put upon Ministers by employers who will naturally realise that they will have fewer women to cope with in this situation. However, this is no argument to those of us who have tabled this amendment. We are concerned to ensure that women who become pregnant, who want to work and who want to qualify under this important Bill should be able to do so and should not be cut out of it altogether by a rather absurd and lengthy period.
      Mr. Harold Walker: I fully understand the strength of feeling behind the remarks of my hon. Friend the Member for Barking (Miss Richardson). She is right to remind us that the consultative document proposed a one-year qualifying period, with four weeks' maternity pay. The period of maternity pay was heavily criticised on the ground that it was totally inadequate. Yet the only way in which we could increase the period without increasing the already heavy cost to employers was by extending the qualifying period to two years. It was decided that this should be done.
      The original proposal for four weeks' pay after one year's qualification was estimated to cost about £14 million. To vary it in the way we have and to make it six weeks' pay after two years' qualification is now estimated to cost a little more—£14·4 million. However, to reduce the qualifying period to one year while maintaining the six weeks' pay period would boost the cost to approximately £17½ million.
      282
      I am quite sure that the right hon. Member for Lowestoft (Mr. Prior) will return yet again to this issue of costs before we finish dealing with this part of the Bill, and criticise us on that ground. I may be wrongly anticipating—
      Mr. Prior: The hon. Gentleman will find that we shall not criticise him on the ground of costs in general but on the ground of costs to an individual employer because we believe that this should be borne by the State and not by the individual employer.
      Mr. Walker: I understand and I look forward to listening to the right hon. Gentleman deploying his argument on this point. It is a straightforward issue of costs. I know that my hon. Friend the Member for Barking and her hon. Friends have tabled amendments to deal precisely with this point. I point out to her that the Secretary of State has powers under the Bill to vary by order the length of the qualifying period. No doubt when economic circumstances improve and permit we shall give the fullest and earliest consideration to reducing the qualifying period.
      I hope that those final words will sufficiently reassure my hon. Friend to persuade her to withdraw her amendment.
      Mr. Eddie Loyden: The figures that the Minister has disclosed underline the arguments deployed by my hon. Friend the Member for Barking (Miss Richardson) about this problem. If we have a two-year period of qualification the figure would be inflated. The purpose of this provision in the Bill is to include as many women as possible. The argument deployed by my hon. Friend indicates that this may be an area that will be omitted and therefore a hard-core section of women could face the problem which my hon. Friend has raised.
      5.45 p.m.
      Mr. Walker: I conclude my remarks by reiterating my sympathy for the argument advanced by my hon. Friend the Member for Barking and what lies behind it. The Government are torn between, on the one hand, their inclinations as reflected in the fact that these provisions are in the Bill at all, and, on the other hand, the severe criticism that we have had to face on the ground of the

      283
      additional cost that this would impose on employers and others. We have had to strike a reasonable balance between these two contending forces.
      However, I believe that the provision which enables the Secretary of State to vary the qualifying period by order and I hope my assurance about our eagerness to look sympathetically at the arguments we have heard this afternoon when economic circumstances improve and permit will satisfy my hon. Friend and the House.
      Mrs. Hayman: I assure my hon. Friend the Under-Secretary that he will not hear from the benches behind him criticisms that these provisions are too expensive for employers. I accept absolutely the sincerity of his assurance that he would like to reduce the qualifying period as soon as possible. However, I am getting increasingly depressed and chary whenever I hear the phrase "when economic circumstances permit" used as a reason for not putting a measure on the statute book.
      My concern is that the women who will not qualify under the Bill are the most vulnerable women. They will be the poorest women, the women who are young and have not been two years in employment, the women in jobs which have a rapid turnover and, if they are the women who have already opted for the married woman's insurance stamp and have been employed for one year, they will not even be getting the maternity allowance from the State, which would in any case be taken away, even if they received it, from the maternity pay to which they are entitled.
      I am concerned that the people who would lose out if we were to have a two-year qualifying period would be the very people who need the maternity pay most. That is why I cannot accept the assurances that have been given.
      Mrs. Audrey Wise: I endorse the remarks of my hon. Friends—I am inclined in this context, to say my honourable sisters—who
      have spoken today. It is not accidental that when my hon. Friend the Under-Secretary spoke about complaints which would arise about the cost of these measures he said that we should have complaints from right hon. and hon. Gentlemen—and he meant that literally. It is no accident that the Government feel more pressed by the voices of employers on this and other issues than they do by the voices of women, who are so under-represented in this House.
      I should like to reinforce the remarks of my hon. Friend the Member for Welwyn and Hatfield (Mrs. Hayman) about "when economic circumstances permit". We have heard these words all our political lives and we know that economic circumstances never permit the improvements in their lives that working people want, particularly those that working women want. The Government and employers should be reminded that if women did not indulge in maternity, which they do not do single-handed incidentally, there would be no one for employers to employ. Employers should be faced squarely with the fact that maternity is a responsibility of society. Employers make their profits out of the work of employees, and maternity undertaken by women is therefore essential to employers.
      The Government should accept this amendment, which will not be withdrawn.—it will be pressed. We urge the Government most seriously to recognise that in the face of the benefit that this would mean to so many women, the extra cost is quite small. In comparison with the many millions of pounds which are often involved in discussions in this House, the cost of this is quite small. I urge the Government to accept the amendment if they do not want to be placed in the position of dividing the House against the Labour women on the back benches.
      Question put, That the amendment be made:—
      The House divided: Ayes 56, Noes 181.

      Division No. 324.]

      AYES

      [5. 50 p.m.

      Allaun, Frank

      Bidwell, Sydney

      Dean, Joseph (Leeds West)

      Ashton, Joe

      Cook, Robin F. (Edin C)

      Edge, Geoff

      Atkinson, Norman

      Crawford, Douglas

      Evans, John (Newton)

      Bennett, Andrew (Stockport N)

      Davies, Bryan (Enfield N)

      Faulds, Andrew

      Flannery, Martin

      Maynard, Miss Joan

      Thomas, Ron (Bristol NW)

      Fletcher, Ted (Darlingon)

      Mendelson, John

      Torney, Tom

      Grocott, Bruce

      Mikardo, Ian

      Walden, Brian (B'ham, L'dyw'd)

      Hatton, Frank

      Miller, Dr M. S. (E Kilbride)

      Walker, Terry (Kingswood)

      Heffer, Eric S.

      Miller, Mrs Millie (Ilford N)

      Watkinson, John

      Henderson, Douglas

      Newens, Stanley

      Watt, Hamish

      Hoyle, Doug (Nelson)

      Noble, Mike

      Welsh, Andrew

      Hughes, Robert (Aberdeen N)

      Parry, Robert

      White, Frank R. (Bury)

      Hughes, Roy (Newport)

      Roberts, Gwilym (Cannock)

      Whitehead, Phillip

      Janner, Greville

      Rodgers, George (Chorley)

      Wilson, Alexander (Hamilton)

      Kilroy-Silk, Robert

      Rooker, J. W.

      Wilson, William (Coventry SE)

      Lamond, James

      Shaw, Arnold (Ilford South)

      Wise, Mrs Audrey

      Litterick, Tom

      Skinner, Dennis

      Loyden, Eddie

      Snape, Peter

      TELLERS FOR THE AYES:

      MacCormick, lain

      Stewart, Donald (Western Isles)

      Mrs. Helene Hayman and

      Madden, Max

      Taylor, Mrs Ann (Bolton W)

      Miss Jo Richardson.

      NOES

      Anderson, Donald

      Freud, Clement

      O'Malley, Rt Hon Brian

      Archer, Peter

      Garrett, John (Norwich S)

      Orbach, Maurice

      Armstrong, Ernest

      Garrett, W. E. (Wallsend)

      Ovenden, John

      Atkins, Ronald (Preston N)

      Gilbert, Dr John

      Palmer, Arthur

      Bagier, Gordon A. T.

      Ginsburg, David

      Pardoe, John

      Bates, Alf

      Gould, Bryan

      Park, George

      Bean, R. E.

      Gourlay, Harry

      Parker, John

      Beith, A. J.

      Graham, Ted

      Pavitt, Laurie

      Benn, Rt Hon Anthony Wedgwood

      Grant, George (Morpeth)

      Peart, Rt Hon Fred

      Bishop, E. S.

      Grimond, Rt Hon J.

      Pendry, Tom

      Booth, Albert

      Hamilton, W. W. (Central Fife)

      Penhaligon, David

      Boothroyd, Miss Betty

      Hardy, Peter

      Perry, Ernest

      Bottomley, Rt Hon Arthur

      Harper, Joseph

      Phipps, Dr Colin

      Boyden, James (Bish Auck)

      Harrison. Walter (Wakefield)

      Price, C. (Lewisham W)

      Bradley, Tom

      Healey, Rt Hon Denis

      Price, William (Rugby)

      Brown, Hugh D. (Provan)

      Hooley, Frank

      Radice, Giles

      Buchanan, Richard

      Hooson, Emlyn

      Roberts, Albert (Normanton)

      Callaghan, Rt Hon J. (Cardiff SE)

      Horam, John

      Robertson, John (Paisley)

      Callaghan, Jim (Middleton & P)

      Howell, Denis (B'ham, Sm H)

      Roper, John

      Cant, R. B.

      Hughes, Rt Hon C. (Anglesey)

      Ross, Stephen (Isle of Wight)

      Carter-Jones, Lewis

      Hughes, Mark (Durham)

      Sandelson, Neville

      Cartwright, John

      Hunter, Adam

      Sedgemore, Brian

      Clemitson, Ivor

      Irvine, Rt Hon Sir A. (Edge Hill)

      Sheldon, Robert (Ashton-u-Lyne)

      Cocks, Michael (Bristol S)

      Irving, Rt Hon S. (Dartford)

      Shore, Rt Hon Peter

      Cohen, Stanley

      Jackson, Colin (Brighouse)

      Short, Rt Hon E. (Newcastle C)

      Coleman, Donald

      Jackson, Miss Margaret (Lincoln)

      Silkin, Rt Hon S. C. (Dulwich)

      Conlan, Bernard

      Jay, Rt Hon Douglas

      Sillars, James

      Corbett, Robin

      Jenkins, Rt Hon Roy (Stechford)

      Small, William

      Craigen, J. M. (Maryhill)

      Johnson, James (Hull West)

      Smith, Cyril (Rochdale)

      Crawshaw, Richard

      Johnson, Walter (Derby S)

      Smith, John (N Lanarkshire)

      Crosland, Rt Hon Anthony

      Johnston, Russell (Inverness)

      Spearing, Nigel

      Cunningham, Dr J. (Whiteh)

      Jones, Barry (East Flint)

      Spriggs, Leslie

      Dalyell, Tam

      Jones, Dan (Burnley)

      Stallard, A. W.

      Davidson, Arthur

      Judd, Frank

      Steel, David (Roxburgh)

      Davies, Denzil (Llanelli)

      Kelley, Richard

      Stewart, Rt Hon M. (Fulham)

      Davis, Clinton (Hackney C)

      Kerr, Russell

      Summerskill, Hon Dr Shirley

      Deakins, Eric

      Lamborn, Harry

      Thomas, Mike (Newcastle E)

      de Freitas, Rt Hon Sir Geoffrey

      Lewis, Arthur (Newham N)

      Tinn, James

      Delargy, Hugh

      Lewis, Ron (Carlisle)

      Tomney, Frank

      Dell, Rt Hon Edmund

      Luard, Evan

      Tuck, Raphael

      Dempsey, James

      Lyon, Alexander (York)

      Urwin, T. W.

      Dormand, J. D.

      Lyons, Edward (Bradford W)

      Wainwright, Edwin (Dearne V)

      Douglas-Mann, Bruce

      McCartney, Hugh

      Wainwright, Richard (Colne V)

      Duffy, A. E. P.

      MacFarquhar, Roderick

      Walker, Harold (Doncaster)

      Dunn, James A.

      Mackenzie, Gregor

      Ward, Michael

      Dunnett, Jack

      Maclennan, Robert

      Watkins, David

      Eadie, Alex

      McMillan, Tom (Glasgow C)

      Weetch, Ken

      Edelman, Maurice

      Magee, Bryan

      Weitzman, David

      Ellis, John (Brlgg & Scun)

      Mahon, Simon

      White, James (Pollok)

      Ellis, Tom (Wrexham)

      Marks, Kenneth

      Whitlock, William

      English, Michael

      Marquand, David

      Williams, Alan (Swansea W)

      Ennals, David

      Marshall, Dr Edmund (Goole)

      Williams, Alan Lee (Hornch'ch)

      Evans, Ioan (Aberdare)

      Marshall, Jim (Leicester S)

      Williams, Rt Hon Shirley (Hertford)

      Ewing, Harry (Stirling)

      Mason, Rt Hon Roy

      Woodall, Alec

      Faulds, Andrew

      Mellish, Rt Hon Robert

      Woof, Robert

      Fitch, Alan (Wigan)

      Millan, Bruce

      Wrigglesworth, Ian

      Fletcher, Raymond (Ilkeston)

      Mitchell, R. C. (Soton, Itchen)

      Young, David (Bolton E)

      Foot, Rt Hon Michael

      Molloy, William

      Forrester, John

      Morris, Charles R. (Openshaw)

      TELLERS FOR THE NOES:

      Fowler, Gerald (The Wrekin)

      Moyle, Roland

      Mr. David Stoddart and

      Fraser, John (Lambeth, N'w'd)

      Mulley, Rt Hon Frederick

      Mr. James Hamilton.

      Freeson, Reginald

      Murray, Rt Hon Ronald King

      Question accordingly negatived.
      Amendments made: No. 74, in page 28, line 13, leave out
      "(c) she informs her employer "
      and insert
      "in the case of the right to return, unless she informs her employer (in writing if he so requests".
      No. 76, in page 28, line 19, leave out "fairly".
      No. 78, in page 28, line 28, leave out
      "either right unless she informs her employer "
      and insert
      "the right to return unless she informs her employer (in writing if he so requests)".—[Mr. Harold Walker.]

    Clause 37

      MATERNITY PAY
      6.0 p.m.
      Mr. Prior: I beg to move Amendment No. 82, in page 28, line 42, leave out Clause 37.
      Mr. Deputy Speaker: With this amendment we may take the following amendments:
      No. 86, in page 29, line 25, leave out Clause 38.
      No. 87, in page 30, line 13, leave out Clause 39.
      Mr. Prior: These three amendments seek to leave out certain clauses concerned with maternity payment. We are not against maternity payment as such. We are against the scheme which puts the responsibility for the payment on the employer.
      We have just had a very interesting debate in which three hon. Ladies on the Government side took part, and the more one listened to that debate the more one became convinced that it would be a far better scheme to have the maternity payment on the national insurance contribution basis rather than to have the responsibility placed on the individual employer, as it is at the moment.
      One of the points made very strongly was that it was very unfair on perhaps the youngest and poorest of women, who were not employed for a period of two years, that they received no maternity payment. I would have a good deal of sympathy with the case made by the hon. Lady if she had gone on to say that
      288
      therefore it would be much better if the State took over responsibility for this. It would be much fairer if the State were responsible, and if it charged all employers equally for the cost of this benefit.
      If that were done it would also not discriminate against the employment of women. There is a real danger, under the scheme as it is now, that women will be discriminated against in terms of employment, and particularly women of child-bearing age. That is another reason for our believing that this would be a better scheme if administered through the State.
      With the exception of the Republic of Ireland, all EEC countries now have legislation which guarantees maternity leave and maintenance of income, or compensation for loss of earnings. In most EEC countries the State system provides the insurance, and we believe that that would be a far more satisfactory way of carrying this out than through the employer.
      We have all, I have no doubt, had letters from constituents, particularly those who employ large numbers of women, pointing out the position that arises with the pension entitlement for women at 60 and the operation of the Equal Pay Act 1970. As one employer wrote in a letter to me:
      "The natural result will be that women will become less attractive to recruit by virtue of the maternity benefits proposed in the Bill which put an added burden on the employer."
      We believe very strongly that, while there is a very good case, and one which should be honoured, for the payment of maternity benefits in this way, as it is carried out by all the countries of the EEC, it is quite wrong to place this burden on the employer. It is wrong from the point of view of women. It is unfair for those employers who employ large numbers of women. It discriminates against the employment of women. It will have an effect which is precisely the opposite to the one the hon. Ladies, who have been arguing so strongly on the last two amendments, wish to see. For all these reasons we have put down the amendments to leave out these three clauses, as a protest against the method that the Government have adopted.
      The Under-Secretary of State has already given us an indication of the cost. The cost will be heavy for certain

      289
      employers employing large numbers of women, but it is a cost that the nation us a whole, and employers as a whole, could bear quite reasonably. It is not something that we would wish to press at this stage, but we think that, as the rest of the EEC has this benefit, we ought to have it as well. But we are extremely worried about the way in which the Government are setting about it. We think it will be unfair and discriminatory, and we hope very much that the Government will think again on these clauses, and recognise the strength of the feeling there is that it is a matter for the State to provide, and not for individual employers.
      Mr. Grimond: The employment of women is a matter of the very greatest importance in my constituency, particularly in Shetland, and therefore, apart from the general considerations, I hope that the House will forgive me if I mention a few particular considerations in relation to this amendment.
      I am wholly in favour of women being paid and, indeed, given leave for pregnancy, and I am in favour of all maternity benefits, but I hold the view that this is an obligation on the community and not upon the employer.
      In Shetland for generations the women have played a major part in the economy. Traditionally they very largely ran the agriculture of Shetland. They maintained the crops while the men were away at sea. They are the mainstay of the knitwear industry today.
      At this time the whole economy of Shetland is under severe strain as a result of the oil development, and the danger is that, when the oil boom is over, we shall find that the oil magnates have gone and that our traditional industries are left depressed, without labour, capital or markets.
      I have constantly urged, not only upon this Government but upon their predecessors, that if they seriously talk of planning they ought to look at the economic effects of oil upon a community like Shetland, as well as its effect upon the environment or upon the nation as a whole. Labour is leaving the traditional industries, particularly knitwear, fishing and so on, to go into oil.
      The knitwear industry, which employs a very great number of women, is organ-
      290
      ised in small units. The knitwear industry in Shetland is in for a difficult time, like all textiles. It is run by businesses which have no great capital resources. If, on top of their present difficulties, these businesses are to have the whole responsibility for maternity pay, there is no doubt that this will do additional harm to the industry. It will also reduce the opportunities for the employment of women.
      Let us be in no doubt about it. This will do immense damage to women in Shetland and, I suspect, in other parts of the country as well. I do not see why this maternity benefit is not regarded as a national or community responsibility.
      Similar obligations are taken on by the State on behalf of the people. If the knitwear industry in Shetland, and I suspect in other parts of Scotland, is to be saddled with unknown and possibly large obligations in addition to the current difficulties, it will be chary of taking on girls, as will other industries. It will be left to the big companies, which admittedly will be able to support this charge, to give such employment as is available. There is not much employment open to girls. The men in Scotland are offered large wages in the oil-related industries, but high wages have not yet percolated to women. Therefore I ask the Government to think again about this matter.
      It may be said that employers underpay women or that husbands underpay wives for working their crofts. Until recently no one in Shetland was paid much. Its economy was poor. The trade unions have not been in the forefront of offering equal pay to women. On the contrary, they have maintained restrictive practices, have kept women out of jobs and have shown no enthusiasm for paying women the full rate. I agree that this obligation exists, but to put it on the small employer instead of the State will harm the economy and the chances of employment for the women and girls about whom we are concerned.
      Mr. Greville Janner: A higher proportion of women are employed in Leicester than anywhere else in the country.
      These matters are of concern, although we must not exaggerate the effects of maternity benefit. I have discussed this matter with employers in Leicester and elsewhere. I have not found that employers fear the effects of this provision.

      291
      With few exceptions employers will be able and willing to meet this payment. The benefit will apply only to people who have been employed for two years, and is not likely to occur on many occasions in a person's working life.
      Sometimes women do jobs as well as men and occasionally, where skilled fingers and dexterity are required, better than men. I do not believe that this clause will affect women's chances of employment or unduly overload the economy. There is anxiety about the textile industry in Shetland and other centres, and the employers in Leicester do not want to undertake any additional burdens if that can be avoided. On the other hand, to say that the State should pay the whole amount is not the correct approach. Women bear children once or twice in their working life. The occasional expense of maternity benefit can be borne by employers.
      I refer to Clause 43 and the question of dismissals. We must consider each clause in isolation—
      Mr. Deputy Speaker: Order. Although we are proceeding at a good speed, the hon. and learned Member is moving even faster.
      Mr. Janner: You are right, Mr. Deputy Speaker. However, with respect, it is difficult to deal with the argument of the right hon. Gentleman in total isolation. To understand the effect of the clause, we must look at it as a whole and in the light of other legislation. I believe that the Opposition have mounted their artillery against the wrong target. This provision should remain unaltered.
      6.15 p.m.
      Mr. Harold Walker: The Opposition put the case succinctly. I shall be brief, but I hope that they will accept that I recognise the importance of their argument.
      I welcome the attitude of the right hon. Member for Lowestoft (Mr. Prior) and the right hon. Member for Orkney and Shetland (Mr. Grimond) towards these provisions, which they both welcomed. They quarrel about the way in which these provisions are to be financed. We see these provisions as part of the employer's social obligations to his employee. They are reasonable costs for him to bear as part of his responsibility as an employer.
      292
      Hon. Members will have heard the blast directed at me by my hon. Friend the Member for Coventry, South-West (Mrs. Wise). That shows that there are strong views the other way, although they were not expressed in this short debate from all parts of the House.
      The right hon. Member for Orkney and Shetland has not fully studied these provisions for financing. He said that the employer was being asked to bear the full cost. The employer is being asked to supplement the State maternity allowance so that employees' earnings can be maintained during a period, for them, of heavy expenditure and when the loss of earnings, especially for a single-parent family, could have serious implications. The suggestion that earnings should be maintained by means of the State paying 100 per cent. of the earnings would put maternity allowances out of line with all other social security benefits.
      The social security system is based on a flat-rate benefit plus an earnings-related supplement. However, the total benefit ceiling is 85 per cent. of employees' average weekly earnings. We think that it will be unacceptable for maternity allowances to be put out of line with the rest of the system.
      The right hon. Member for Lowestoft referred to the practice in the EEC countries. I recall that we discussed this in Committee. I drew a parallel with West Germany, which I think is a fair analogy. In many ways West Germany reflects the United Kingdom. It has a comparable population, working population and industrial pattern. Although Germany is perhaps the exception rather than the rule, we have almost entirely adopted the German pattern of maternity benefits. In Germany there is a topping up by the employer, who makes up the difference in excess of 25 deutschemarks per day. We have that kind of provision in the Bill. In the last resort it is a matter for the judgment of the Government about which way to go. We have decided that the way proposed in the Bill is right.
      Mr. Prior: I am disappointed at the reply of the Minister, especially his reference to the fact that making an additional payment out of the National Insurance Fund would put the benefit out of line with other social security benefits. I do

      293
      not think that that is a strong reason for not doing so now.
      I take the point made by the right hon. Member for Orkney and Shetland (Mr. Grimond) that this will bear extremely hard on women's employers. It will have the effect of making the employment of women more difficult in some areas. The same point applies to the comments of the hon. and learned Member for Leicester, West (Mr. Janner), who said that he thought employers should bear this charge. The employers in his constituency do not take that view.
      The knitwear and hosiery industries have been foremost in their complaints that the scheme should be borne by the State, but they are quite prepared to make their contribution as employers towards it. They are worried about the impact it will have on the employment of women of child-bearing age. I think that the hon. Gentleman will find that not just the employers in his constituency but the employees as well will be disappointed. Their job opportunities, which are already looking bleak, will be made a good deal bleaker.
      I hope that the Government will give further consideration to our arguments during the passage of the Bill through another place. If we are to move, as the Germans have, to a system whereby the employer and not the State is responsible for the payment of many benefits, it will be necessary to consider the taxation level, the profitability level and the whole prosperity of individual firms.
      In Britain we have for many years moved along the lines of a State insurance fund, and I am certain that that is the right way to proceed. The proposal will place additional burdens on employers, whether in the knitwear industry, in Orkney and Shetland, or in my constituency engaged in the manufacture of television sets or food processing, and it will make it more difficult for women to be employed.
      Mrs. Wise: I should be more impressed with the right hon. Gentleman's argument about the unfairness between employers in trades employing many women and other employers if, instead of moving the deletion of the whole clause, he had moved to substitute a system of levy on all employers. If that system were adopted there would be
      294
      no discrimination and it would not be unfair on particular groups of employers.
      Mr. Prior: I am grateful to the hon. Lady because she is firmly on my side. In what she said she accepted the principle of a levy on every employer. If there is a levy on every employer to meet the cost of the maternity payment, the best way to do that is through the employer's insurance contribution. That is what we have been arguing all the way through. It should be a levy imposed on every employer, according to the number of employees, through the ordinary insurance fund. That will put the payment fairly and squarely on all employers regardless of whether they employ men or women of child-bearing age.
      Mrs. Wise: I do not want the right hon. Gentleman to misunderstand my argument. I do not support his line of thought. There is a vast difference between a levy for a specific purpose which would have to be used for that purpose and simply absorbing the cost into the employer's share of the insurance contribution, which would lead to a diminution of interest in maternity benefits.
      Mr. Prior: I do not think so. We already know the estimated figure for the maternity payments. In many other countries—in most EEC countries—service qualifications are not required before a woman becomes eligible. It could all be done on a levy basis but, for convenience, collection would be through the insurance fund.
      Mr. Grimond: If there were to be a levy on all employers for the difference between what is paid and what should be paid, in my constituency the oil companies which employ practically no women would have to pay—and perhaps make up for the alterations they had made to the economy. If the levy were entirely on the knitwear industry, the opportunities for the employment of women would be decreased, the oil companies, which are well able to pay, would be left untouched and, furthermore, women's lib would be set back. Shetland has been far in advance of the rest of the country in women's lib. They virtually run the place because women can get employment there.
      Mr. Prior: I entirely agree with the right hon. Gentleman. That is much the most sensible way to do it. There is agreement between the various parties in the House that we have been backward in maternity payments. There is still some division between the parties about the qualification period. We were not prepared to vote for a short period of qualification so long as the burden was placed on the employer, but if the burden were placed fairly on all employers, whether they be rich oil employers, poor knitwear employers or farmers, there would be general agreement, and I beg the Government to reconsider the clause.
      Mr. Harold Walker: May I clarify the right hon. Gentleman's position? He seems to be adopting a different position from that which he took in Committee. Is he now saying that the scheme should be financed through social security? Is he saying that the additional money that will be required to finance the scheme should be raised exclusively from increased employers' contributions?
      Mr. Prior: Yes, certainly. The employers as a whole should pay. That would ensure that there was no discrimination against the employment of women. That is by far the fairest way. If the Government would give us an undertaking to think about it again we should not press the amendment to a Division. Unless the Government are prepared to give us that undertaking, we shall press it.
      Mrs. Hayman: The right hon. Gentleman has not dealt with the eligibility of the employee if there were to be a national insurance link. At present the maternity allowance is paid only to women who have paid the full contribution. Some women eligible for maternity pay as the Bill stands are eligible for nine-tenths of their weekly wage minus a sum which they do not receive because they have not paid the full contribution. Surely the right hon. Gentleman will get into difficulties with his scheme unless he repudiates the married women's option so that all women pay the full contribution and get the full benefit.
      Mr. Prior: We should not get into anything like the difficulties under the scheme we have put forward as will arise under the existing scheme, which is highly dis-
      296
      criminatory against women. There should be a method whereby for the purposes of maternity benefit a married woman who has not paid the full contribution will be entitled to the maternity payment. There need be no difficulty over that. At present the married woman who does not pay the full contribution will be entitled to maternity payment from the employer. I do not see why under our proposal she should not have the same entitlement. It is for the DHSS to work out a proper scheme. I hope that such a scheme will go some way at least towards providing qualifications which will cover more women than it is possible to cover under the Government's scheme.
      6.30 p.m.
      Mr. Harold Walker: I hope that the right hon. Member for Lowestoft (Mr. Prior) will not think I am accusing him of shifting his ground when I say that he has presented a different argument today from that which he presented in Standing Committee. It may be that I did not follow his argument with sufficient care or understanding in Standing Committee. However, my understanding of the case he has put forward this afternoon is very different from my understanding until now.
      At this late stage in the passage of the Bill it would be foolish for me to try to use words that would unduly raise hopes. Certainly there are formidable difficulties in the way of proceeding along the lines that the right hon. Gentleman has put forward. The most full and detailed considerations will be required with my right hon. Friend the Secretary of State for Social Services about how such a scheme, as has been proposed, could effectively be woven into our social security provisions. Equally I understand that there would be technical difficulties about introducing the proposals in another place because of the financial considerations involved and so on.
      Although I recognise the formidable difficulties and the fact that the right hon. Gentleman and his hon. Friends are asking us to take a very radical departure from the very firm line that we have adopted until now, it would be wrong, in my view, for me not to be able to say to him, "Yes, of course, we ought to think about what you have said"

      297
      However, it would be wrong if I raised unfairly hopes that had no foundation, and, perhaps appeared to do so in order to avoid dividing the House. If the right hon. Gentleman wants to divide the House I have no objection, but I say quite frankly that we shall still look very carefully at what he has said.
      Mr. Prior: That is a fair enough reply. We should like to divide the House. We hope that the Government will understand
      that as far as the Opposition are concerned we believe that by far the best way of carrying this out is through the employer's insurance contribution. If we did not make that clear in Committee I apologise.
      Question put, That the amendment be made:—
      The House divided: Ayes, 189, Noes, 219.

      Division No. 325.]

      AYES

      [6.32 p.m.

      Aitken, Jonathan

      Griffiths, Eldon

      Page, Rt Hon R. Graham (Crosby)

      Alison, Michael

      Grimond, Rt Hon J.

      Pardoe, John

      Arnold, Tom

      Grist, Ian

      Parkinson, Cecil

      Atkins, Rt Hon H. (Spelthorne)

      Hall-Davis, A. G. F.

      Pattie, Geoffrey

      Awdry, Daniel

      Hamilton, Michael (Salisbury)

      Penhaligon, David

      Baker, Kenneth

      Hampson, Dr Keith

      Percival, Ian

      Banks, Robert

      Harrison, Col Sir Harwood (Eye)

      Peyton, Rt Hon John

      Beith, A. J.

      Hastings, Stephen

      Price, David (Eastleigh)

      Berry, Hon Anthony

      Hawkins, Paul

      Prior, Rt Hon James

      Biggs-Davison, John

      Hayhoe, Barney

      Pym, Rt Hon Francis

      Blaker, Peter

      Henderson, Douglas

      Raison, Timothy

      Body, Richard

      Holland, Philip

      Rathbone, Tim

      Boscawen, Hon Robert

      Hooson, Emlyn

      Rees, Peter (Dover & Deal)

      Bottomley, Peter

      Howe, Rt Hon Sir Geoffrey

      Rees-Davies, W. R.

      Brittan, Leon

      Howell, David (Guildford)

      Renton, Rt Hon Sir D. (Hunts)

      Brotherton, Michael

      Hunt, John

      Renton, Tim (Mid-Sussex)

      Brown, Sir Edward (Bath)

      Hurd, Douglas

      Rhys Williams, Sir Brandon

      Buchanan-Smith, Alick

      Hutchison, Michael Clark

      Ridley, Hon Nicholas

      Buck, Antony

      Irving, Charles (Cheltenham)

      Rifkind, Malcolm

      Bulmer, Esmond

      Jessel, Toby

      Rippon, Rt Hon Geoffrey

      Butler, Adam (Bosworth)

      Johnson Smith, G. (E Grinstead)

      Roberts, Michael (Cardiff NW)

      Carlisle, Mark

      Johnston, Russell (Inverness)

      Roberts, Wyn (Conway)

      Carr, Rt Hon Robert

      Kershaw, Anthony

      Rodgers, Sir John (Sevenoaks)

      Clark, Alan (Plymouth, Sutton)

      Kimball, Marcus

      Ross, Stephen (Isle of Wight)

      Clark, William (Croydon S)

      King, Tom (Bridgwaler)

      Rossi, Hugh (Hornsey)

      Cockcroft, John

      Kirk, Peter

      Shaw, Giles (Pudsey)

      Cooke, Robert (Bristol W)

      Lamont, Norman

      Shelton, William (Streatham)

      Cope, John

      Lane, David

      Shepherd, Colin

      Cordle, John H.

      Latham, Michael (Melton)

      Silvester, Fred

      Cormack, Patrick

      Lawrence, Ivan

      Sims, Roger

      Corrie, John

      Lawson, Nigel

      Sinclair, Sir George

      Crawford, Douglas

      Lester, Jim (Beeston)

      Skeet, T. H. H.

      Critchley, Julian

      Luce, Richard

      Smith, Cyril (Rochdale)

      Crowder, F. P.

      McAdden, Sir Stephen

      Smith, Dudley (Warwick)

      Dean, Paul (N Somerset)

      MacCormick, lain

      Speed, Keith

      Douglas-Hamilton, Lord James

      Macfarlane, Neil

      Spence, John

      Drayson, Burnaby

      MacGregor, John

      Sproat, Iain

      Dykes, Hugh

      Macmillan, Rt Hon M. (Farnham)

      Stainton, Keith

      Eden, Rt Hon Sir John

      McNair-Wilson, M. (Newbury)

      Stanbrook, Ivor

      Edwards, Nicholas (Pembroke)

      Madel, David

      Stanley, John

      Elliott, Sir William

      Marshall, Michael (Arundel)

      Steel, David (Roxburgh)

      Eyre, Reginald

      Marten, Neil

      Steen, Anthony (Wavertree)

      Fairbairn, Nicholas

      Mates, Michael

      Stewart, Donald (Western Isles)

      Fairgrieve, Russell

      Mather, Carol

      Stradling Thomas, J.

      Farr, John

      Maude, Angus

      Taylor, R. (Croydon NW)

      Fell, Anthony

      Maudling, Rt Hon Reginald

      Tebbit, Norman

      Fisberg, Geoffrey

      Mawby, Ray

      Temple-Morris, Peter

      Fisher, Sir Nigel

      Maxwell-Hyslop, Robin

      Townsend, Cyril D.

      Fletcher, Alex (Edinburgh N)

      Meyer, Sir Anthony

      Trotter, Neville

      Fletcher-Cooke, Charles

      Miller, Hal (Bromsgrove)

      Tugendhat, Christopher

      Fookes, Miss Janet

      Mitchell, David (Basingstoke)

      van Straubenzee, W. R.

      Fowler, Norman (Sutton C'f'd)

      Moate, Roger

      Vaughan, Dr Gerard

      Freud, Clement

      Monro, Hector

      Viggers, Peter

      Fry, Peter

      Montgomery, Fergus

      Wainwright, Richard (Colne V)

      Gardiner, George (Reigate)

      Moore, John (Croydon C)

      Wall, Patrick

      Gardner, Edward (S Fylde)

      More, Jasper (Ludlow)

      Warren, Kenneth

      Gilmour, Rt Hon Ian (Chesham)

      Morris, Michael (Northampton S)

      Watt, Hamish

      Glyn, Dr Alan

      Morrison, Charles (Devizes)

      Weatherill, Bernard

      Godber, Rt Hon Joseph

      Morrison, Hon Peter (Chester)

      Welsh, Andrew

      Goodhart, Philip

      Mudd, David

      Young, Sir G. (Ealing, Acton)

      Goodlad, Alastair

      Nelson, Anthony

      Gorst, John

      Neubert, Michael

      TELLERS FOR THE AYES:

      Gow, Ian (Eastbourne)

      Newton, Tony

      Mr. W. Benyon and

      Gray, Hamish

      Normanton, Tom

      Mr. Spencer Le Marchant.

      Page, John (Harrow West)

      NOES

      Allaun, Frank

      Gould, Bryan

      Ovenden, John

      Anderson, Donald

      Gourlay, Harry

      Palmer, Arthur

      Archer, Peter

      Graham, Ted

      Park, George

      Armstrong, Ernest

      Grant, George (Morpeth)

      Parker, John

      Ashton, Joe

      Grocott, Bruce

      Parry, Robert

      Atkins, Ronald (Preston N)

      Hamilton, W. W. (Central Fife)

      Pavitt, Laurie

      Atkinson, Norman

      Hardy, Peter

      Peart, Rt Hon Fred

      Bagier, Gordon A. T.

      Harper, Joseph

      Pendry, Tom

      Bates, Alt

      Harrison, Walter (Wakefield)

      Perry, Ernest

      Bean, R. E.

      Hatton, Frank

      Phipps, Dr Colin

      Benn, Rt Hon Anthony Wedgwood

      Hayman, Mrs Helene

      Prescott, John

      Bennett, Andrew (Stockport N)

      Healey, Rt Hon Denis

      Price, C. (Lewisham W)

      Bidwell, Sydney

      Heffer, Eric S.

      Price, William (Rugby)

      Bishop, E. S.

      Hooley, Frank

      Radice, Giles

      Booth, Albert

      Horam, John

      Richardson, Miss Jo

      Boothroyd, Miss Betty

      Hoyle, Doug (Nelson)

      Roberts, Albert (Normanton)

      Bottomley, Rt Hon Arthur

      Hughes, Rt Hon C. (Anglesey)

      Roberts, Gwilym (Cannock)

      Boyden, James (Bish Auck)

      Hughes, Mark (Durham)

      Robertson, John (Paisley)

      Bradley, Tom

      Hughes, Robert (Aberdeen N)

      Rodgers, George (Chorley)

      Brown, Hugh D. (Provan)

      Hughes, Roy (Newport)

      Rooker, J. W.

      Buchanan, Richard

      Hunter, Adam

      Roper, John

      Callaghan, Jim (Middleton & P)

      Irvine, Rt Hon Sir A. (Edge Hill)

      Ryman, John

      Cant, R. B.

      Irving, Rt Hon S. (Dartford)

      Sandelson, Neville

      Carter-Jones, Lewis

      Jackson, Colin (Brighouse)

      Sedgemore, Brian

      Cartwright, John

      Jackson, Miss Margaret (Lincoln)

      Shaw, Arnold (Ilford South)

      Clemitson, Ivor

      Janner, Greville

      Sheldon, Robert (Ashton-u-Lyne)

      Cocks, Michael (Bristol S)

      Jay, Rt Hon Douglas

      Shore, Rt Hon Peter

      Cohen, Stanley

      Jenkins, Rt Hon Roy (Stechford)

      Sillars, James

      Coleman, Donald

      Johnson, James (Hull West)

      Siiverman, Julius

      Conlan, Bernard

      Johnson, Walter (Derby S)

      Skinner, Dennis

      Cook, Robin F. (Edin C)

      Jones, Barry (East Flint)

      Small, William

      Corbett, Robin

      Jones, Dan (Burnley)

      Smith, John (N Lanarkshire)

      Craigen, J. M. (Maryhill)

      Judd, Frank

      Snape, Peter

      Crawshaw, Richard

      Kelley, Richard

      Spearing, Nigel

      Crosland, Rt Hon Anthony

      Kerr, Russell

      Spriggs, Leslie

      Cunningham, Dr J. (Whiteh)

      Kilroy-Silk, Robert

      Stallard. A. W

      Dalyell, Tam

      Lamborn, Harry

      Stewart, Rt Hon M. (Fulham)

      Davidson, Arthur

      Lamond, James

      Sloddart, David

      Davies, Bryan (Enfield N)

      Latham, Arthur (Paddington)

      Summerskill, Hon Dr Shirley

      Davies, Denzil (Llanelli)

      Lewis, Ron (Carlisle)

      Taylor, Mrs Ann (Bolton W)

      Davis, Clinton (Hackney C)

      Litterick, Tom

      Thomas, Mike (Newcastle E)

      Deakins, Eric

      Loyden, Eddie

      Thomas, Ron (Bristol NW)

      Dean, Joseph (Leeds West)

      Luard, Evan

      Tinn, James

      de Freitas, Rt Hon Sir Geoffrey

      Lyon, Alexander (York)

      Tomney, Frank

      Delargy, Hugh

      Lyons, Edward (Bradford W)

      Torney, Tom

      Dell, Rt Hon Edmund

      McCartney, Hugh

      Tuck, Raphael

      Dempsey, James

      MacFarquhar, Roderick

      Wainwright, Edwin (Dearne V)

      Douglas-Mann, Bruce

      Mackenzie, Gregor

      Walden, Brian (B'ham, L'dyw'd)

      Duffy, A. E. P.

      Maclennan, Robert

      Walker, Harold (Doncaster)

      Dunn, James A.

      McMillan, Tom (Glasgow C)

      Walker, Terry (Kingswood)

      Dunnett, Jack

      Madden, Max

      Ward, Michael

      Eadie, Alex

      Magee, Bryan

      Watkins, David

      Edelman, Maurice

      Mahon, Simon

      Watkinson, John

      Edge, Geoff

      Marks, Kenneth

      Weetch, Ken

      Ellis, John (Brigg & Scun)

      Marquand, David

      Weitzman, David

      Ellis, Tom (Wrexham)

      Marshall, Dr Edmund (Goole)

      Wellbeloved, James

      English, Michael

      Marshall, Jim (Leicester S)

      White, Frank R. (Bury)

      Ennals, David

      Mason, Rt Hon Roy

      Whitehead, Phillip

      Evans, Ioan (Aberdare)

      Maynard, Miss Joan

      Whitlock, William

      Evans, John (Newton)

      Mellish, Rt Hon Robert

      Williams, Alan (Swansea W)

      Ewing, Harry (Stirling)

      Mendelson, John

      Williams, Alan Lee (Hornch'ch)

      Faulds, Andrew

      Mikardo, Ian

      Williams, Rt Hon Shirley (Hertford)

      Fitch, Alan (Wigan)

      Millan, Bruce

      Wilson, Alexander (Hamilton)

      Flannery, Martin

      Miller, Dr M. S. (E Kilbride)

      Wilson, William (Coventry SE)

      Fletcher, Raymond (llkeston)

      Miller, Mrs Millie (Ilford N)

      Wise, Mrs Audrey

      Fietcher, Ted (Darlingon)

      Mitchell, R. C. (Soton, Itchen)

      Woodall, Alec

      Foot, Rt Hon Michael

      Molloy, William

      Woof, Robert

      Forrester, John

      Morris, Charles R. (Openshaw)

      Wrigglesworth, Ian

      Fowler, Gerald (The Wrekin)

      Moyle, Roland

      Young, David (Bolton E)

      Fraser, John (Lambeth, N'w'd)

      Mulley, Rt Hon Frederick

      Freeson, Reginald

      Murray, Rt Hon Ronald King

      TELLERS FOR THE NOES

      Garrett, John (Norwich S)

      Newens, Stanley

      Mr. J. D. Dormand and

      Garrett, W. E. (Wallsend)

      Noble, Mike

      Mr. James Hamilton.

      George, Bruce

      O'Malley, Rt Hon Brian

      Gilbert, Dr John

      Orbach, Maurice

      Question accordingly negatived.
      Miss Richardson: I beg to move Amendment No. 83, in page 28, line 43, leave out 'six' and insert 'eighteen'.
      Mr. Deputy Speaker: With this we may take the following amendments:
      No. 84, in page 29, line 7, leave out 'six' and insert 'eighteen'.

      301
      No. 85, in page 29, line 9, leave out subsection (3).
      6.45 p.m.
      Miss Richardson: In view of the debate on the last amendment I am encouraged to think that, as a result of the views put forward and the conclusion arrived at by the right hon. Member for Lowestoft (Mr. Prior)—that a scheme whereby a levy spread over all employers might be one way of looking at this whole problem—the Opposition will support the increase of paid leave from six weeks to 18 weeks.
      We lag behind most of Europe, and some parts of the rest of the world as well, in the length of time which we allow for maternity leave. In the consultative document, four weeks was proposed. The Government have been generous in increasing that period to six weeks.
      I am also encouraged by what my hon. Friend the Under-Secretary of State said. Although he could not give too much hope on the last amendment, I thought that I detected a tiny chink, in that the Government might in time reconsider the whole matter. I hope that they will reconsider the length of time to be made available. Following from the previous debate, if a levy were eventually accepted it would have no worse effect on small firms than on big firms, because the money would be spread out.
      As I said, most European countries make much better provision for maternity pay than we do. The original Six EEC countries, for example, have 14 weeks. One or two countries of Eastern Europe, although I do not know the exact figures, have as much as a year.
      In the public sector, a period of 18 weeks' paid leave is written into local government employment, in the National Health Service, in electricity, water, and gas services and in the universities. It seems a pity that what amounts to the poorer section of the community—women—should be restricted to this short term of six weeks. I was interested to note that the TUC General Council's original proposal was for 30 weeks, not even 18 weeks.
      Some women will want to go back to work as soon as possible—we do not deny that—but others with family responsibilities will need a period of at least
      302
      18 weeks not only to cope with the new baby and to make the necessary adjustments in the home, but, where other children are involved, to make the necessary adjustments in that respect.
      My hon. Friends and I believe that women will still want to return to work. Therefore, 18 weeks is not an untoward, out of the way, figure for this House to consider.
      Mr. Harold Walker: I welcome the way that my hon. Friend the Member for Barking (Miss Richardson) has moved this amendment. She is right to draw attention to the fact that most EEC countries, in their own different ways, make more generous provision than we do for maternity pay. My hon. Friend is also right to urge the Government to seek to match and perhaps eventually to surpass the provisions made in those countries.
      I am glad that my hon. Friend took some encouragement from my earlier remarks regarding the Government's intentions in this direction. When we leave behind our present economic difficulties, my right hon. Friend the Secretary of State will seek to use the powers given to him in the Bill to introduce an order to establish more generous provisions. Certainly neither my hon. Friend nor the House would expect me to commit myself to the figure in the amendment or any other specific amendment. However, it is our hope that eventually we shall be able to make more generous provision.
      I am bound to say that for the moment I am compelled to fall back on the arguments I used earlier about the cost and the present circumstances. Neither my hon. Friend nor the House will want me to rehearse them all again. I hope that my hon. Friend and her colleagues will look carefully at their amendment, which seeks to delete the power of the Secretary of State to vary by order. In the light of what I said earlier, my hon. Friend probably realises that that is not an amendment that should be urged upon the House. I hope that in the light of what I have said my hon. Friend will feel able to ask leave to withdraw her amendment, and particularly will not press the amendment which refers to the Secretary of State's power to vary by order.
      Mr. Hayhoe: I intervene only briefly to refer to the comment of the hon. Member for Barking (Miss Richardson) about the position that we adopted when considering the previous amendment. The hon. Lady suggested that would be an argument for supporting her point of view.
      When we discussed the way in which these matters should be financed, on the previous amendment, the Government suggested that the point of view being put forward by my right hon. Friend was something new. In fact, if the Minister will turn to the report of the debate on Second Reading he will see what I said in winding up for the Opposition, namely:
      "why not place the burden upon industry overall and pay the benefit to those concerned through the national insurance scheme? "—[Official Report, 28th April 1975; Vol. 891, c. 147.]
      That is instead of placing the burden on the individual employer.
      In Committee my right hon. Friend said:
      "I should like to make it absolutely plain that the Opposition believe that it is not the right way of proceeding, that it would be far better if the Government undertook this scheme through the insurance fund and through the ordinary method of social security than by way of the employer being made responsible."
      That means the particular employer. My right hon. Friend continued:
      "It would be far fairer to society as a whole if the imposition of this burden were shared out through the insurance scheme."
      In column 760 my right hon. Friend spoke of the scheme being run by the State. In column 763 I said that there was a basic unfairness in putting the burden on the employer—that is, the specific employer—as is made clear in the context of the debate. I then said:
      "Why should not the State carry it, raising the money from all employers? "—[Official Report, Standing Committee F, 24th June 1975; c. 759–63.]
      It was an outrageous suggestion that the Under-Secretary of State put before the House a short while ago, namely, that this was a matter that had not been mentioned in Committee. From Second Reading onwards it was made clear that we were posing questions but leaving open for argument the balance that should be ascribed between employers generally and the individual employer. However, the balance of the argument that we were putting forward was that rather than
      304
      putting the burden on individual employers of a woman of child-bearing age, it was fairer to spread the burden over industry as a whole.
      I think that it was necessary to make those remarks so as to get the record straight. In the circumstances I am not prepared to recommend my hon. Friends to support the amendment.
      Amendment negatived.
      Mrs. Wise: I beg to move Amendment No. 88, in page 30, line 34, leave out '29' and insert '52'.
      Mr. Speaker: With this we may discuss the following amendments:
      No. 93, in Clause 4, page 31, line 45, leave out '29' and insert '52'.
      No. 94, in page 32, line 6, leave out '29' and insert '52'.
      No. 95, in page 32, line 8, leave out '29' and insert '52'.
      No. 97, in page 32, line 28, leave out '29' and insert '52'.
      No. 98, in page 32, line 34, leave out '29' and insert '52'.
      No. 99, in page 32, line 42, leave out '29' and insert '52'.
      Mrs. Wise: I shall be brief in moving the amendment, which seeks to lengthen the period in which an employer will have to hold a job open for a woman who has recently had a baby. An employer would have to hold it open until 52 weeks after the confinement instead of 29 weeks as in the Bill.
      I do not want to disguise the fact that there may be difficulties for employers in holding jobs open for women to return after childbirth, but I suggest that in practice there will not be a great difference in the difficulty faced by an employer if the period is increased from 29 weeks to 52. It is the initial problem of not being able to replace a woman at the time that she is having her baby that causes the difficulty. I suggest that to lengthen the period would not make a qualitative difference to the difficulties faced by employers. However, it would make a difference to the women concerned.
      I remind my Front Bench colleagues that, lamentably, we have seen a great extension of the artificial feeding of infants. Nevertheless, there may well be a swing back to breast-feeding. I remind

      305
      my hon. Friends that 29 weeks does not even cover the standard lactation time. I speak with some personal knowledge of this matter, as a mother myself. It is extremely important that in any legislation which is brought forward the Government, as a matter of public policy, do not seem to discriminate against women who wish to feed their babies themselves in the standard lactation time.
      There is now strong scientific evidence of the dangers into which women have often been enticed by the upscrupulous advertising indulged in by manufacturers of baby foods. Women have been led to think that natural ways are in some way inferior. Now science is coming on to the side of those who believe in natural methods. It is not unimportant, in the context of maternity provisions, that the Government should bear that factor in mind.
      I also suggest that in some families it is necessary for there to be a period of up to a year for the family to become fully adjusted to the birth of the new infant, and that the Government should be willing to make this possible when families feel the need for extra time. I believe that the difficulties which are faced by employers and the difficulties faced by women and their families should always be resolved in favour of the women and their families.
      In my view most women would either return to work well within the 52-weeks period or would not return for considerably longer, and so put themselves outside this provision in any case. I believe that the Government should provide an adequate margin to enable families to become fully adjusted. I suggest that it is reasonable to make that period 52 weeks instead of 29 weeks.
      Mr. Harold Walker: I shall deal only briefly with the amendment. I hope that my hon. Friend will not think that I am not attaching to it the importance which it clearly deserves. I can only tell her that in Committee we had some long arguments on the question whether the period we were putting forward was right. Conservative Members were seeking most vigorously to reduce the period. Of course, it is never a strong argument to say that because the Opposition are proceeding in a different direction it means that the Government are right.
      306
      However, for the time being we think that we have adopted the right period. Indeed, in Committee, we resisted any proposals for a reduction. I believe that an increase such as my hon. Friend proposes would go too far in the opposite direction. My hon. Friend has recognised that the extension she proposes would cause employers problems. I am sure that she does not seek to underestimate that.
      We have received strong protests from employers to the effect that the present period is too long. Many of them urged a reduction in the period, and if the extension proposed by my hon. Friend is agreed to they will face considerable problems. Such a proposal would be counter-productive, and might result in employers tending more and more to discriminate against women of child-bearing age. For those reasons, I cannot advise the House to accept the amendment.
      7.0 p.m.
      Mr. Hayhoe: I wish to make it clear that when, in Committee, we moved an amendment to reduce the period from 29 to 16 weeks, it was made clear that this was being done with a view to the possibility of an extension to that period on medical grounds. We were told that the Government were seeking to remove the uncertainty of the situation. If one reads the argument set out in Committee, obviously the Minister was attempting to speed up the deliberations, and perhaps, in the event, he tended to condense, oversimplify and slightly misrepresent the point.
      Amendment negatived.
      Mr. Hayhoe: I beg to move Amendment No. 89, in page 30, line 35, leave out 'job' and insert 'occupation'.
      Mr. Speaker: With this amendment it will be convenient to take Government Amendments Nos. 90, 91 and 208.
      Mr. Hayhoe: A similar amendment was moved in Committee, when it appeared that some change of wording had taken place. The Minister then advised that it was a drafting matter, whereas we thought that some point of substance might be involved. It is clear that the Government have given further consideration to the matter, that the Minister has accepted that we made a fair point, and has come forward with his

      307
      own amendment, namely, Government Amendment No. 90.
      Therefore, I do not propose to proceed with the amendment.
      Amendments made: No. 90, in page page 30, line 39, after 'above', insert:
      '—(a)"job", in relation to an employee, means the nature of the work which she is employed to do in accordance with her contract and the capacity and place in which she is so employed; and
      (b)'.
      No. 91, in page 31, line 10, leave out 'an alternative job' and insert 'alternative employment'.—[Mr. Harold Walker.]
      Amendment proposed: No. 92, in page 31, line 27, leave out subsection (7).—[Mr. Harold Walker.]
      Question put. That the amendment be made:—
      The House divided: Ayes 220, Noes 178.

      Division No. 326.]

      AYES

      [7.2 p.m.

      Allaun, Frank

      Fletcher, Raymond (Ilkeston)

      Maclennan, Robert

      Anderson, Donald

      Fletcher, Ted (Darlingon)

      McMillan, Tom (Glasgow C)

      Archer, Peter

      Foot, Rt Hon Michael

      Madden, Max

      Armstrong, Ernest

      Forrester, John

      Magee, Bryan

      Ashton, Joe

      Fowler, Gerald (The Wrekin)

      Mahon, Simon

      Atkins, Ronald (Preston N)

      Fraser, John (Lambeth, N'w'd)

      Marks, Kenneth

      Atkinson, Norman

      Freeson, Reginald

      Marquand, David

      Bagier, Gordon A. T.

      Garrett, John (Norwich S)

      Marshall, Dr Edmund (Goole)

      Bates, Alf

      Garrett, W. E. (Wallsend)

      Marshall, Jim (Leicester S)

      Bean, R. E.

      George, Bruce

      Mason, Rt Hon Roy

      Benn, Rt Hon Anthony Wedgwood

      Gilbert, Dr John

      Maynard, Miss Joan

      Bennett, Andrew (Stockport N)

      Gould, Bryan

      Mellish, Rt Hon Robert

      Bidwell, Sydney

      Gourlay, Harry

      Mendelson, John

      Bishop, E. S.

      Graham, Ted

      Mikardo, Ian

      Booth, Albert

      Grant, George (Morpeth)

      Millan, Bruce

      Boothroyd, Miss Betty

      Grocott, Bruce

      Miller, Dr M. S. (E Kilbride)

      Bottomley, Rt Hon Arthur

      Hamilton, James (Bothwell)

      Miller, Mrs Millie (Ilford N)

      Boyden, James (Bish Auck)

      Hamilton, W. W. (Central Fife)

      Mitchell, R. C. (Soton, Itchen)

      Bradley, Tom

      Hardy, Peter

      Molloy, William

      Brown, Hugh D. (Provan)

      Harper, Joseph

      Morris, Charles R. (Openshaw)

      Buchanan, Richard

      Harrison, Walter (Wakefield)

      Moyle, Roland

      Callaghan, Jim (Middleton & P)

      Hatton, Frank

      Mulley, Rt Hon Frederick

      Carter-Jones, Lewis

      Hayman, Mrs Helene

      Newens, Stanley

      Cartwright, John

      Healey, Rt Hon Denis

      Noble, Mike

      Clemitson, Ivor

      Heffer, Eric S.

      O'Malley, Rt Hon Brian

      Cocks, Michael (Bristol S)

      Hooley, Frank

      Orbach, Maurice

      Cohen, Stanley

      Horam, John

      Ovenden, John

      Coleman, Donald

      Hoyle, Doug (Nelson)

      Palmer, Arthur

      Conlan, Bernard

      Huckfield, Les

      Park, George

      Cook, Robin F. (Edin C)

      Hughes, Rt Hon C. (Anglesey)

      Parker, John

      Corbett, Robin

      Hughes, Mark (Durham)

      Parry, Robert

      Craigen, J. M. (Maryhill)

      Hughes, Robert (Aberdeen N)

      Pavitt, Laurie

      Crawshaw, Richard

      Hughes, Roy (Newport)

      Peart, Rt Hon Fred

      Cunningham, Dr J. (Whiteh)

      Hunter, Adam

      Pendry, Tom

      Dalyell, Tam

      Irvine, Rt Hon Sir A. (Edge Hill)

      Perry, Ernest

      Davidson, Arthur

      Irving, Rt Hon S. (Dartford)

      Phipps, Dr Colin

      Davies, Bryan (Enfield N)

      Jackson, Colin (Brighouse)

      Prescott, John

      Davies, Denzil (Llanelli)

      Jackson, Miss Margaret (Lincoln)

      Price, C. (Lewisham W)

      Davis, Clinton (Hackney C)

      Janner, Greville

      Price, William (Rugby)

      Deakins, Eric

      Jay, Rt Hon Douglas

      Radice, Giles

      Dean, Joseph (Leeds West)

      Jenkins, Hugh (Putney)

      Richardson, Miss Jo

      de Freitas, Rt Hon Sir Geoffrey

      Jenkins, Rt Hon Roy (Stechford)

      Roberts, Albert (Normanton)

      Delargy, Hugh

      Johnson, James (Hull West)

      Roberts, Gwilym (Cannock)

      Dell, Rt Hon Edmund

      Johnson, Walter (Derby S)

      Robertson, John (Paisley)

      Dempsey, James

      Jones, Barry (East Flint)

      Rodgers, George (Chorley)

      Douglas-Mann, Bruce

      Jones, Dan (Burnley)

      Rooker, J. W.

      Duffy, A. E. P.

      Judd, Frank

      Roper, John

      Dunnett, Jack

      Kelley, Richard

      Ryman, John

      Eadie, Alex

      Kerr, Russell

      Sandelson, Neville

      Edelman, Maurice

      Kilroy-Silk, Robert

      Sedgemore, Brian

      Edge, Geoff

      Lamborn, Harry

      Shaw, Arnold (Ilford South)

      Edwards, Robert (Wolv SE)

      Lamond, James

      Sheldon, Robert (Ashton-u-Lyne)

      Ellis, John (Brigg & Scun)

      Latham, Arthur (Paddington)

      Shore, Rt Hon Peter

      Ellis, Tom (Wrexham)

      Lewis, Ron (Carlisle)

      Sillars, James

      English, Michael

      Litterick, Tom

      Sllverman, Julius

      Ennals, David

      Loyden, Eddie

      Skinner, Dennis

      Evans, Ioan (Aberdare)

      Luard, Evan

      Small, William

      Evans, John (Newton)

      Lyon, Alexander (York)

      Smith, John (N Lanarkshire)

      Ewing, Harry (Stirling)

      Lyons, Edward (Bradford W)

      Snape, Peter

      Faulds, Andrew

      McCartney, Hugh

      Spearing, Nigel

      Fitch, Alan (Wigan)

      MacFarquhar, Roderick

      Spriggs, Leslie

      Flannery, Martin

      Mackenzie, Gregor

      Stallard, A. W.

      Stewart, Rt Hon M. (Fulham)

      Stoddart, David

      Walker, Terry (Kingswood)

      Wilson, Alexander (Hamilton)

      Summerskill, Hon Dr Shirley

      Ward, Michael

      Wilson, William (Coventry SE)

      Swain, Thomas

      Watkins, David

      Wise, Mrs Audrey

      Taylor, Mrs Ann (Bolton W)

      Watkinson, John

      Woodall, Alec

      Thomas, Mike (Newcastle E)

      Weetch, Ken

      Woof, Robert

      Thomas, Ron (Bristol NW)

      Weitzman, David

      Wrigglesworth, Ian

      Tinn, James

      Wellbeloved, James

      Young, David (Bolton E)

      Tomney, Frank

      White, Frank R. (Bury)

      Torney, Tom

      Whitehead, Phillip

      TELLERS FOR THE AYES

      Tuck, Raphael

      Whitlock, William

      Mr. J. D. Dormand and

      Wainwright, Edwin (Dearne V)

      Williams, Alan (Swansea W)

      Mr. James A. Dunn

      Walden, Brian (B'ham, L'dyw'd)

      Williams, Alan Lee (Hornch'ch)

      Walker, Harold (Doncaster)

      Williams, Rt Hon Shirley (Hertford)

      NOES

      Aitken, Jonathan

      Hall-Davis, A. G. F.

      Normanton, Tom

      Alison, Michael

      Hamilton, Michael (Salisbury)

      Page, John (Harrow West)

      Arnold, Tom

      Hampson, Dr Keith

      Page, Rt Hon R. Graham (Crosby)

      Atkins, Rt Hon H. (Spelthorne)

      Harrison, Col Sir Harwood (Eye)

      Parkinson, Cecil

      Awdry, Daniel

      Hastings, Stephen

      Pattie, Geoffrey

      Baker, Kenneth

      Hawkins, Paul

      Penhaligon, David

      Banks, Robert

      Hayhoe, Barney

      Percival, Ian

      Beith, A. J.

      Henderson, Douglas

      Peyton, Rt Hon John

      Berry, Hon Anthony

      Holland, Philip

      Prior, Rt Hon James

      Blaker, Peter

      Howe, Rt Hon Sir Geoffrey

      Pym, Rt Hon Francis

      Body, Richard

      Howell, David (Guildford)

      Raison, Timothy

      Boscawen, Hon Robert

      Hunt, John

      Rathbone, Tim

      Bottomley, Peter

      Hurd, Douglas

      Rees, Peter (Dover & Deal)

      Brittan, Leon

      Hutchison, Michael Clark

      Rees-Davies, W. R.

      Brotherton, Michael

      Irving, Charles (Cheltenham)

      Renton, Rt Hon Sir D. (Hunts)

      Brown, Sir Edward (Bath)

      Jessel, Toby

      Renton, Tim (Mid-Sussex)

      Buchanan-Smith, Alick

      Johnson Smith, G. (E Grinstead)

      Rhys Williams, Sir Brandon

      Buck, Antony

      Johnston, Russell (Inverness)

      Ritkind, Malcolm

      Bulmer, Esmond

      Kershaw, Anthony

      Rippon, Rt Hon Geoffrey

      Butler, Adam (Bosworth)

      Kimball, Marcus

      Roberts, Wyn (Conway)

      Carlisle, Mark

      King, Tom (Bridgwater)

      Rodgers, Sir John (Sevenoaks)

      Carr, Rt Hon Robert

      Kirk, Peter

      Ross, Stephen (Isle of Wight)

      Clark, Alan (Plymouth, Sutton)

      Lamont, Norman

      Rossi, Hugh (Hornsey)

      Clark, William (Croydon S)

      Lane, David

      Rost, Peter (SE Derbyshire)

      Cockcroft, John

      Latham, Michael (Melton)

      Shaw, Giles (Pudsey)

      Cooke, Robert (Bristol W)

      Lawrence, Ivan

      Shelton, William (Streatham)

      Cope, John

      Lawson, Nigel

      Shepherd, Colin

      Cordle, John H.

      Le Marchant, Spencer

      Silvester, Fred

      Corrie, John

      Lester, Jim (Beeston)

      Sims, Roger

      Crawford, Douglas

      Luce, Richard

      Sinclair, Sir George

      Crowder, F. P.

      McAdden, Sir Stephen

      Skeet, T. H. H.

      Dean, Paul (N Somerset)

      MacCormick, Iain

      Smith, Cyril (Rochdale)

      Douglas-Hamilton, Lord James

      Macfarlane, Neil

      Smith, Dudley (Warwick)

      Drayson, Burnaby

      MacGregor, John

      Speed, Keith

      Dykes, Hugh

      Macmillan, Rt Hon M. (Farnham)

      Spence, John

      Eden, Rt Hon Sir John

      McNair-Wilson, M. (Newbury)

      Sproat, Iain

      Edwards, Nicholas (Pembroke)

      Madel, David

      Stainton, Keith

      Elliott, Sir William

      Marshall, Michael (Arundel)

      Stanbrook, Ivor

      Eyre, Reginald

      Marten, Neil

      Stanley, John

      Fairbairn, Nicholas

      Mates, Michael

      Steel, David (Roxburgh)

      Fairgrieve, Russell

      Mather, Carol

      Steen, Anthony (Wavertree)

      Farr, John

      Maude, Angus

      Stradling Thomas, J.

      Fell, Anthony

      Maudling, Rt Hon Reginald

      Taylor, R. (Croydon NW)

      Finsberg, Geoffrey

      Mawby, Ray

      Tebbit, Norman

      Fisher, Sir Nigel

      Maxwell-Hyslop, Robin

      Temple-Morris, Pete

      Fletcher-Cooke, Charles

      Mayhew, Patrick

      Trotter, Neville

      Fookes, Miss Janet

      Meyer, Sir Anthony

      Tugendhat, Christopher

      Fowler, Norman (Sutton C'f'd)

      Miller, Hal (Bromsgrove)

      van Straubenzee, W. R.

      Freud, Clement

      Mitchell, David (Basingstoke)

      Vaughan, Dr Gerard

      Fry, Peter

      Moate, Roger

      Viggers, Peter

      Gardiner, George (Reigate)

      Monro, Hector

      Wainwright, Richard (Colne V)

      Gardner, Edward (S Fylde)

      Montgomery, Fergus

      Wall, Patrick

      Glyn, Dr Alan

      Moore, John (Croydon C)

      Warren, Kenneth

      Godber, Rt Hon Joseph

      More, Jasper (Ludlow)

      Watt, Hamish

      Goodhart, Philip

      Morris, Michael (Northampton S)

      Weatherill, Bernard

      Goodlad, Alastair

      Morrison, Charles (Devizes)

      Welsh, Andrew

      Gorst, John

      Morrison, Hon Peter (Chester)

      Young, Sir G. (Ealing, Acton)

      Gray, Hamish

      Mudd, David

      Griffiths, Eldon

      Nelson, Anthony

      TELLERS FOR THE NOES:

      Grimond, Rt Hon J.

      Neubert, Michael

      Mr. W. Benyon and

      Grist, Ian

      Newton, Tony

      Mr. Michael Roberts

      Question accordingly agreed to.

    Clause 41

      EXERCISE OF RIGHT TO RETURN
      Miss Richardson: I beg to move Amendment No. 96, in page 32, line 12, at end insert:
      ' or she gives the employer a certificate from a duly accredited officer of the local authority within whose area she lives or within which is her place of employment that no nursery or child-minding facilities are available for her child '.
      I think that the amendment is self-explanatory, and I am sure that I do not need to tell the House how many women, whether they have been given maternity leave or are looking for a job anyway, are often prevented from working simply because they have nowhere safe to leave their children. We know of cases where their mothers-in-law, mothers and, occasionally, fathers and fathers-in-law are recruited as child minders to allow women to return to work or to go to work in the first place. We know, too, that in some parts of the country very good nursery facilities are provided by local authorities. I am sorry to say, however, that this is by no means universal, and, unless a woman can be sure that when she returns to work she will be able to put her child into some kind of child minding or nursery accommodation she will, since her first duty is to her child, be unable to return to work as she wants and may very much need to do. I therefore move the amendment if only to draw attention to the problem facing many women.
      The future problem has been made considerably worse by the recent news of a cut-back in resources provided for nursery education. I do not know how the Government can believe that women will be able to return to work if there is not to be a continuing and increasing provision of nursery facilities. In connection with other amendments, we have talked about the way in which this country lags behind others. Not all countries provide nursery facilities through employers or through local or town authorities, but many do. In some countries in Eastern Europe, for example, it is mandatory upon a place of employment to provide creche facilities so that women can return to work as soon as they are able and want to do so.
      312
      7.15 p.m.
      I am not asking employers to provide accommodation of this kind, though, now that I come to think of it, I might have tabled an amendment suggesting that more should take on this responsibility than do at the moment. There are some notably good employers who, because they want women employees to return to work, provide facilities on the spot. But, unfortunately, the numbers are abysmally low, and I believe, anyway, that the duty probably best rests upon local authorities to provide such facilities. If the children of working mothers were under the care of the local authority they would have the best possible supervision and the best standards—or they should have.
      I can almost tell in advance what the Government's reply will be. They will say that the resources are not available, that the responsibility rests on the local authorities, and so on. Nevertheless, I wish to press the point that it will be unfair to expect women to return to work within the period specified in the Bill unless the Government take some note of the present lack of facilities. I do not want to see us get to the stage at which we have unregistered child minders, with mothers being forced to pay people who are not necessarily qualified to do it, to look after their children when they return to work. It is much better to have proper standards, proper creches and other facilities and the proper encouragement and provision of play groups, so that mothers, without anxiety, can return to work and do the jobs that they wish to do.
      Mr. Harold Walker: The amendment seeks to provide that the four-weeks' extension that an employee can claim beyond her notified date of return will also apply where no local authority child-minding facilities are available. The purpose of the extension provisions in subsection (3) is to give flexibility over her return to work to a woman prevented by reasons beyond her control, such as illness, from returning when she should. The circumstances envisaged by my hon. Friend are not beyond her control in the same way or to the same degree. If too many grounds for extension are allowed, there will be a great deal of uncertainty among employers, who could never be entirely sure when an employee would

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      return and would therefore be unable to make the necessary arrangements for taking her back.
      My hon. Friend made it clear that one of the purposes of the amendment was to draw to the Government's attention the need for more expenditure on the provision of nursery schools and child-minding and care facilities generally. I am sure that she will understand that this is not only outside the scope of the Bill but outside the responsibility of me or the Secretary of State. Those are primarily matters for the Secretary of State for Social Services, and I shall ensure that her remarks are drawn to my right hon. Friend's attention.
      Mr. James Dempsey: Will my hon. Friend also draw this matter to the attention of the Secretary of State for Scotland? One of our greatest problems is finding child-care facilities for these mothers. When we talk about employment protection, we should bear in mind the fact that we are providing employment and that it is difficult to do so while also protecting people by giving married women facilities to have their children looked after.
      In our part of the country, we especially require women to train younger ladies in their trade, craft or profession. Teaching is also a matter for employment protection. Not only the jobs but the workers will be unprotected unless these facilities are provided. I am sure that my hon. Friend will know that the responsibility for such action in Scotland is that of the Secretary of State.
      Employers have frequently tried to get local authorities to provide these facilities. I agree that the ideal institution to do so is the local authority, which can provide persons specially trained to look after young children. I appeal to my hon. Friend to do everything he can. I recognise that this is outwith his jurisdiction, but he could make representations to the Secretary of State for Scotland and emphasise that many of our efforts to implement the Bill will be abortive without adequate child care facilities in our part of the country.
      Mr. Madel: This has been a useful debate, of which we hope outside organisations will take note. I agree that more local authority expenditure may be in-
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      volved in this proposal and that some—perhaps not enough—employers already provide such facilities. This is a case for chambers of commerce to let it be known which of their members do so.
      I also agree with the hon. Member for Barking (Miss Richardson) about the dangers of unregistered child minders. Without necessarily incurring extra expense, local authorities could do more to co-ordinate efforts by voluntary organisations to see that codes of conduct or informal arrangements are adhered to.
      This is another reason to ask for a speedy report from the Layfield Committee. The overwhelming majority of ratepayers would like to see more facilities for child minders but not another burden on the present rating system. This is August, and the Committee is due to report at the end of September. The earlier it reports the better. We can then do these extra things which are important for those who wish to return to work but find it impossible because no local child-minding facilities are available.
      Mrs. Millie Miller: I hope that the Minister will also draw the amendment to the attention of the Secretary of State for Education and Science. The recent decision to cut back on expenditure on nursery schools means that women and children will be still further disadvantaged. The object of nursery schools is not merely to help mothers to return to work, but there are often possibilities for them to work within nursery school hours. In such cases nursery schools with proper educational facilities should be made available.
      It is tragic that so long after the war day nursery and nursery school facilities are lacking to such a degree.
      Mrs. Hayman: Is it not a disgrace and a mark of how much we value women as workers now, compared with during the war, that we have fewer day nursery places than in 1945?
      Mrs. Miller: I agree, but it is a double disgrace because we are choosing as objects of the economic stringency we hear so much about the most vulnerable in our society—women and young children. I hope that the Minister will bear this in mind and discuss it with his colleagues, remembering that children should

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      be educated early and that if women decide to continue their careers their children should be properly cared for, educationally and socially.
      Mrs. Wise: I should like to criticise the hon. Member for Bedfordshire, South (Mr. Madel), who implied that the facilities needed can somehow be supplied with little or no increase in public expenditure. He diverted the House in his reference to the Layfield Committee.
      Mr. Madel: For the second time in less than an hour, the hon. Lady has not listened to the debate. I accepted that there would be an increase in local authority expenditure. What I did not accept—and suggested that many ratepayers would not accept—was that it should go on the existing rating system. That is another reason for changing the local government finance system. The hon. Lady's own Government are apparently keen on this, since they set up the Layfield Committee.
      Mrs. Wise: I am keen on it as well, but it has not escaped our notice that hon. Members on the Opposition side, in practice, often encourage people to think that services can be provided without anyone having to pay for them. So it is a question not of not listening but of exercising a certain scepticism, on the basis of experience, about the speeches of Conservative Members.
      I agree that voluntary groups can play an important rôle, but they want some assistance from local authorities, probably in the provision of premises. It is not codes of conduct or supervision by local authorities which is the prime need, but physical assistance, especially with premises.
      I ask my hon. Friend to draw this matter to the attention not only of the Secretary of State for Social Services but also of the Secretary of State for Employment. As I understand it, we have a system of Cabinet responsibility, and I have no doubt that the Secretary of State for Social Services would say that although she agrees with us the exigencies of the situation prevent the Cabinet from going ahead and authorising such expenditure. The Secretary of State for Employment, as a member of the Cabinet, has just as much responsibility for taking an interest
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      in this matter, and it certainly impinges on the work of his Department.
      7.30 p.m.
      Mr. Clemitson: It would be a great pity if the case for nursery education became confused with the question of returning to work. The case for nursery education is surely to be found precisely in its educational value to the children, and particularly to those who are disadvantaged in various ways. It would be a great pity if it were thought that a case for nursery education were being made out in order to enable women to return to work at an earlier stage.
      Mr. Cyril Smith: I agree very much with the hon. Member for Luton, East (Mr. Clemitson). When the hon. Lady the Member for Welwyn and Hatfield (Mrs. Hayman) interrupted earlier and mentioned the rundown in day nurseries since 1945, it struck me that it would be interesting to have the statistics for the increase in nursery schools and nursery classes, which are a far better provision than day nurseries. Indeed, I am not anxious to see an extension of day nurseries, because they were meant for children under two years of age.
      I invite hon. Members to consider my personal record in my constituency. I have as much experience as the hon. Lady has and probably over twice as long a period. Day nurseries were the responsibility of the old health committees. They were meant originally to provide for children of the age of two. It is true that the age can be extended to four, but only for social service cases.
      This is why I welcome the pressure put on the Minister to extend nursery schools and nursery places. I want to refer, with due modesty, to the record of Rochdale, which is one of the leading authorities in the country for the provision of nursery schools and nursery places. I am proud to say that I served for 21 years as a member of that education committee, and for eight years as the chairman of the committee. We have a record second to none in this respect. Indeed, under my chairmanship we lowered the entry age to schools from five to four. There is now a Labour council in Rochdale which says that it has to restore the age to five for reasons of economic stringency.
      Mrs. Hayman: I accept everything that the hon. Gentleman says in favour of nursery education, but the amendment deals primarily with the problem of mothers with very young children. Does the hon. Gentleman agree that no amount of nursery education, as such, can solve the problem, particularly of the unsupported mother and also the mother with the low-wage-earning husband with a very small child—the mother who needs, for economic and social reasons and in order to be a better mother, to go out to work? We cannot dodge the responsibility of providing for such people.
      Mr. Smith: I agree. That is why interceded to support the hon. Member for Luton, East. I am very keen to support his view that we should not confuse the provision of nursery schools, which are for educational purposes, with the provision of day nurseries, which are intended, if you like—though I place them much higher—as child-minding centres. That is why I believe that the mover of the amendment was wrong to press the Minister of State to take up the matter with the Secretary of State for Education and Science. It is a matter for the social services, and I hope that the Minister will stand by his earlier remarks.
      Mr. Harold Walker: With the leave of the House, I shall not follow this very interesting but none the less rather tangential debate, other than to seek to assure my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) and others that I shall draw the points made in it to the attention of the Secretary of State for Scotland, the Secretary of State for Social Services, the Secretary of State for Education and Science and the Secretary of State for Employment.
      Amendment negatived.

    Clause 43
      DISMISSAL OF REPLACEMENT
      Amendment made: No. 100, in page 33, line 33 leave out "is obliged to dismiss" and insert "dismisses".—[Mr. Harold Walker.]
    Clause 44

      INTERPRETATION OF SECTIONS 36 TO 43
      Mr. Harold Walker: I beg to move Amendment No. 102, in page 34, line 6 leave out from "means" to end of line 8 and inert
      "the birth of a living child or the birth of a child whether living or dead after 28 weeks of pregnancy;".
      Mr. Deputy Speaker (Sir Myer Galpern): With this amendment we may take Amendment No. 103, in page 34, line 16 leave out from "means" to end of line 8 and insert
      "giving birth to a living child or to a stillborn child not more than 12 weeks before the last day of the expected confinement".
      Mr. Walker: This amendment arises from criticisms by Opposition Members in Standing Committee about the original definition that we had, and I hope that the words that we have now chosen meet those criticisms.
      There is, however, one point on which we may still have some disagreement. In Committee hon. Members criticised the use of the expression "after 28 weeks of pregnancy". They said that since the Bill counted backwards by referring to the eleventh week before confinement, it would be more consistent for the definition to do likewise.
      We have looked carefully at this point. However, the Bill has to be consistent with other legislation. In particular, the Registration of Births, Deaths and Marriages Act links registration of a birth to the 28th week of pregnancy. Before that time any miscarriage need not be registered. After the 28th week it is a stillborn child and has to be registered. It is important that references to birth are consistent with this, and the definition, therefore, counts forward to the same point in time—that is, the 28th week of pregnancy. Notwithstanding that, I hope that hon. Members opposite feel that we have tried to meet the point which they raised in Standing Committee.
      Mr. Madel: We are also discussing Amendment No. 103 and I should like to ask the Minister a question. He will recall that in Standing Committee—as reported in column 830 of Hansard—we expressed anxiety on the question whether

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      the clause covered the case of a child born by Caesarean section. My hon. Friend the Member for Cleveland and Whitby (Mr. Brittan) raised this point. The Minister said:
      "Although I would assume that the DHSS has ensured that the definition covers the situation which the hon. Gentleman referred to—the Caesarean section situation—I would not categorically assert that it does. I just assume that it does. Nevertheless, I think that it is a point that we ought to look at very carefully and also at the other point that he mentions to see whether it is adequately covered by the definition."—[Official Report, Standing Committee F, 26th June 1975; c. 830.]
      It was precisely for that reason that we tabled Amendment No. 103 again. In other words, we took the amendment that we moved in Standing Committee and tabled it again on Report. In view of what the Minister said about the Caesarean section situation, may I ask him to tell us whether what he thought was the case is in fact the case? He has had some time in which to reflect.
      Mr. Harold Walker: With the leave of the House—I have not had a chance to catch up with the precise reference which the hon. Member has given from Hansard—perhaps I should have said a little more in moving Amendment No. 102. I recall hon. Members opposite, particularly the hon. Member for Cleveland and Whitby (Mr. Brittan), criticising the definition because it referred to
      "labour resulting in the issue of a living child."
      This effectively meant that a woman who had a child by Caesarean section, without labour, would have been outside the definition of confinement and technically would not be eligible for maternity benefits. The Department of Health and Social Security ignored this definition for its purposes, but it would not be possible to take this line under the Bill because these provisions are not on the list which is acceptable by the Department.
      Mr. Madel: Is the Minister satisfied that the situation is adequately covered? According to Hansard, in column 830, we assumed that the situation was covered. Is that assumption correct? There is no rush. It could be dealt with in another place.
      Mr. Harold Walker: I am grateful for the suggestion the hon. Member has just
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      made. I have just found the reference in the Standing Committee Hansard, but it would be unwise to commit myself categorically at the moment. We shall look very carefully at this matter and if necessary I shall write to the hon. Member.
      Amendment agreed to.

    Clause 4

      SUPPLEMENTARY
      Amendments made,
      No. 108 in page 36, line 27 leave out 'purporting to be'.
      No. 109, in line 31 at end insert:
      '; and a document purporting to be such a certificate shall be taken to be such a certificate unless the contrary is proved. '—[Mr. Harold Walker.]

    Clause 48

      ASSESSMENT OF COMPENSATION ON A COMPLAINT UNDER SECTION 46
      The Minister of State, Department of Employment (Mr. Albert Booth): I beg to move Amendment No. 111, in page 36, line 35, leave out from first 'the' to end of line 38 and insert:
      'infringement of the complainant's right under section 45 above by the employer's action complained of and to any loss sustained by the complainant which is attributable to that action'.
      Mr. Deputy Speaker: With this we may discuss Government Amendments Nos. 112 and 114.
      We may also discuss Amendment No. 113, in page 37, line 6 leave out
      ' on or were less favourable than they might reasonably have been expected to be'
      and insert
      ' differ from those which might reasonably have been expected to apply to him'.
      Mr. Booth: The amendments meet a point raised by the Opposition in Committee; namely, that subsection (3) of Clause 48 was not even-handed in the directions it gave to tribunals in assessing the compensation an employee would be entitled to for being prevented or deterred from trade union membership

      321
      or activities. It required them to consider factors possibly leading to loss, but not any factors which might have occasioned savings. This subsection is deleted by Amendment No. 112.
      Subsection (3) was originally included because it was thought that there might be considerable difficulty in establishing financial loss, which would be compensatable, arising from prevention of, or deterrence to, union membership. Subsection (3) in effect invited tribunals to put a price ticket on certain fairly unquantifiable benefits of union membership, and award compensation if they thought compensation was appropriate. However, the better solution seems to be to empower tribunals to award compensation not just for financial loss, but for infringement of rights and for the general affront to an employee of having his fundamental rights of free association impeded. This is comparable to the common law principle that compensation is payable for defamation.
      Subsection (6) of the clause, which directs a tribunal to reduce compensation where an employee's own actions have caused or contributed to the right-infringing actions of his employer, will of course apply to assessment of compensation for infringement of rights.
      The changed format in no way reduces the discretion of a tribunal to award no compensation at all if it feels that none would be appropriate, and that a declaration of rights would be the appropriate remedy in the circumstances.
      In view of the changes we have made and the way we have responded to the points raised with us in Committee and have created a far wider range of options for the tribunal in dealing with infringement of employees' rights, I hope that Amendment No. 113 will not be moved as the Opposition's points have been fully met.
      7.45 p.m.
      Mr. Leon Brittan: I welcome the fact that the Government have sought to respond to the criticisms made during the Committee stage and the complaints that Clause 48 was less than even-handed in relation to assessment of compensation in respect of claims under Clause 46. I shall not seek to move Amendment No. 113, but
      322
      I have considerable reservations about the manner in which the Government have sought to meet our objections and hope that I shall not be thought churlish if I express them. I do so in full recognition of the fact that the Government have tried to be helpful, but I ask them again to reconsider the way in which they have sought to meet our objections to the specifications of the factors that have to be taken into account in considering compensation. The Government have removed all the factors, but not said that compensation should only be such an amount as the tribunal considers to be just and equitable having regard to the loss sustained by the complainant. We have instead reference also to the
      "infringement of the complainants rights".
      That is an undesirable way of doing it because of its vagueness. It would be impossible for a tribunal to have any idea what value to put on that without some degree of guidance. It does not seem to me that, to meet the point that the guidance given originally was unsatisfactory, one should try to solve the problem in this somewhat rude way by removing guidance altogether and putting in a vague concept of infringement that has to be taken into account.
      Reference was made to precedents in common law and damages being made at large and not in relation to compensation for loss actually suffered. This is a very unusual precedent and a very dangerous one to follow because the law of defamation happens to be a rather exceptional branch of the law. It is only in very exceptional torts that affronts to feelings have been taken into account. It is taken into account in these exceptional circumstances because of the nature of the tort and that it is impossible to assess any damage at all.
      That will not be the case here. It will be a supplemental factor which can be assessed and ought not be treated in such a vague and general way. I can tell the Minister from personal experience that the problems caused in a few branches of the law, such as defamation, in assessing damages are very considerable. These precedents should not be imported into legislation of this kind.
      I am not happy about this. I shall not seek to move Amendment No. 113, but I hope that the Government will look

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      again at the provisions they have sought to substitute in the light of some of the criticisms made in Committee.
      Mr. Booth: Although I quoted only the precedent of defamation, it is by no means the only one. There is also provision in the Sex Discrimination Bill for injury to feelings. It must be very difficult, if not impossible, to put a straight financial loss assessment on infringements of rights such as these. But there is the possibility to be sustained. It would be done only under carefully controlled conditions. The tribunal has a right merely to make a declaration and not pay damages, but there could be cases of quite blatant infringements of rights on which one could not place an actual financial loss. The tribunal should have the option of laying down compensation for the infringement of rights by an employer. We claim that our amendments are an adequate response to the points put to us in Committee. The response was in allowing the assessment of any contribution on the part of the employee or any offsetting financial factor.
      Amendment agreed to.
      Amendments made: No. 112, in page 37, line 1, leave out subsection (3).
      No. 114, in page 37, line 23, leave out from "determining" to "on" in line 25 and insert
      "the amount of compensation to be awarded under subsection (1) above".—[Mr. Booth.]

    Clause 49

      TIME OFF FOR CARRYING OUT TRADE UNION DUTIES
      Mr. Brittan: I beg to move Amendment No. 115, in page 37, line 44, at end insert—
      "Provided that no obligation shall arise under this section to permit an employee to take time off for the purpose of calling, organising, procuring, financing of taking part in industrial action whether or not in contemplation or furtherance of a trade dispute".
      Mr. Deputy Speaker: With this we may take Government Amendments Nos. 117 and 126.
      We may also take the following amendments:
      324
      No. 116, in page 38, line 5, leave out from "to" to end of line 6 and insert—
      "(a) how much time off is reasonably required for carrying out the duties or undergoing the training referred to in subsection (1) above and for the particular duty or training;
      (b) how much time off the employee has already been permitted under this section and sections 50 and 51 below;
      (c) the overall needs for time off under this section of all officials of trade unions in the employer's establishment;
      (d) the circumstances of the employer's business and the effect of the employee's absence on the running of that business;
      (e) any relevant provisions of a Code of Practice issued by the Service under section 6 above".
      No. 125, in page 39, line 14, leave out 'themselves'.
      Mr. Brittan: These amendments relate to the provision whereby an employer is required to permit an employee who is an official of an independent trade union recognised by him to take time off. Both the Opposition and Government amendments seek to impose certain limitations on the extent of the obligation on the employer to permit time off to be taken by trade union officials for their union duties.
      Amendment No. 115, which stands in the name of my right hon. Friend the Member for Lowestoft (Mr. Prior) and others, specifically calls for a limitation on the obligation to provide time off to the effect that that obligation shall not arise if it involves permitting an employee
      "to take time off for the purpose of calling, organising, procuring, financing or taking part in industrial action whether or not in contemplation or furtherance of a trade dispute."
      In our view that is a reasonable limitation of the general right for time off, because it is one thing to require an employer to give an employee time to take part in any trade union activity in the discharge of his duties, but quite another thing, which will stick in the throats of most law-abiding and sympathetic employers, to impose on him a legal obligation to permit an employee
      "to take time off for the purpose of calling, organising, procuring, financing or taking part in industrial action".
      In Committee the point was taken that the official might go to a meeting at which it was not intended that industrial

      325
      action should be called, organised, procured or financed, but that the meeting would develop in such a way that it would ultimately become a meeting at which calling, organising, procuring, financing or taking part in industrial action took place. I suggest, in case this argument re-rears its ugly head, that it is inapposite and inappropriate to the terms of this amendment, because the employer would not be able to get over his obligation in such a situation. The question would arise at the time when the employer was obliged or not obliged, as the case may be, to allow the employee time off: what was the purpose of time off in the particular case? The employee would say, in truth, that the purpose was, as far as he knew, to hold a branch meeting, or whatever it might be. If it turned out that the course which the meeting took was different from what was anticipated, it would not alter the purpose of the meeting at the time it was called. Therefore, it would be quite safe and consistent for the amendment to be accepted as providing a reasonable limitation.
      If the Government want the arrangement whereby employers are required to give time off for trade union officials to work, they will be well advised not to add to it a requirement of the kind that I have mentioned, which will stick in the throats of the employers. The appropriate way of dealing with the matter is to agree to Amendments Nos. 115 and 116. It is not sufficient to do what the Government have done, namely, to say that in the code of practice which the Advisory, Conciliation and Arbitration Service is obliged to issue on this matter, practical guidance must be given about the circumstances in which a trade union official is entitled to take time off in respect of duties connected with industrial action.
      With great respect to the Government, that is ducking the issue. It will not do to refer specifically to that in the Bill and to say that it is for the ACAS to decide on practical advice relating to it. Employers are entitled to know that in giving time off to trade union officials to carry out trade union activities they are not expected to give time off for trade union officials to organise a strike, to put it at its simplest. That is the case that Conservative Members deploy, and that
      326
      is why we favour Amendments Nos. 115 and 116.
      Mr. Booth: If one could put the situation at its simplest in legislation and say that officials should not have time off work for the purpose of organising a strike, the issue we are considering would be much simpler. However, we are considering whether an obligation shall arise, under the clause, which permits an official to have time off work to carry out his duties as a trade union official, those duties being concerned with industrial relations between employer and employees, where any question arises of the official being involved in
      "calling, organising, procuring, financing or taking part in industrial action whether or not in contemplation or furtherance of a trade dispute, "
      That is a much more complex matter, because the forms of industrial action may be many and varied—anything from an overtime ban to a work-to-rule in a particular section. The way in which the official concerned is involved may also be complex. In the case of a large motor company, for example, at a meeting of shop stewards or even conveners of different sections of the works it might be known that a question would be raised that involved a form of industrial action. I would not wish the Bill, at this stage, to rule out the possibility of that convener attending in those circumstances. If that decision were made it might be highly desirable that a convener be present in order that his experience of his own work place and the views of the members he represents should be taken into account in that decision.
      Therefore, it would be better to take the course which we are proposing of laying upon the ACAS a duty to provide a code dealing with the question of time off.
      In Amendment No. 116 there is a proposal that a number of factors be stated in the Bill which spell out what must be taken into account in determining what is reasonable in all the circumstances when deciding whether time off for a trade union official or officials should be permitted. It would be better to leave this matter to the code of practice which the service will bring forward dealing with time off for officials. Those who are responsible for making the code, repre-

      327
      sentatives of employers, trade unions and employees—
      8.0 p.m.
      Mr. John Evans: Will my hon. Friend advise ACAS to draw up the code of practice very broadly? I have considerable experience of industrial relations matters. If the day ever dawns when an employer tells a shop steward "You cannot have time off work because of the industrial problem that will aris", the shop steward will walk out of the gate, and the chances are that there will be another strike before the strike that the shop steward was originally talking about. Will my hon. Friend ask ACAS to be careful not to try to lay down every aspect of the matter, not to dot all the i's and cross all the t's, otherwise we shall have a great deal more trouble on our hands.
      Mr. Booth: I know that many of those concerned in ACAS are studying our debates, and I am sure that they will take note of what my hon. Friend says. I am impressed by two points. One concerns the need to draw the code broadly, to cover the wide range of industrial and employment circumstances in which people will require time off. I agree that if a shop steward is refused time off because the meeting to which he is going will consider some form of industrial action, that may in itself lead to the withdrawal of labour. Whether or not it does so, the very refusal is likely to worsen the industrial relations situation.
      Secondly, the matter is not restricted to shop stewards or conveners. There might be other union representatives in a firm requiring time off for matters connected with the people whom they represent. It is of the utmost importance that those considering the code consider all these matters, and that they draw up the code very broadly.
      Mr. Gwilym Roberts: Any employer worth his salt senses the situation. The amendment was a lot of legalistic mumbo-jumbo. It showed a complete lack of understanding of the normal situation on the shop floor. The experience of my hon. Friend the Member for Newton (Mr. Evans) was much more realistic. The situation is fluid and must be dealt with as it arises.
      Mr. Booth: I should like to think that every employer appreciated the importance of union officials having time off to represent employees. If I were convinced of that, I should not be advocating the inclusion of the clause in the Bill. I hope that we are including it for the benefit of the employees of a few bloody-minded employers. To argue in favour of the clause one must believe that it will have to be used in certain circumstances, but we want it to be used intelligently, in a way that reflects the real needs of workshop representation.
      For that purpose, I commend the Government amendments and ask the House to reject the amendments seeking to deny employees the right to attend meetings in any case where industrial action might be considered, or specifying the factors which would have to be weighed before allowing time off.
      Amendment negatived.
      Amendment made: No. 117, in page 38, line 6, at end insert—
      '(2A) In the Code of Practice referred to in section 6(2)(b)(i) above the Service shall in particular provide practical guidance on the circumstances in which a trade union official is entitled to take time off under this section in respect of duties connected with industrial action'.—[Mr. Booth.]
      Mr. Brittan: I beg to move Amendment No. 118, in page 38, leave out lines 7 and 8 and insert—
      'An employee who with the permission of his employer takes time off for the purposes specified in this section shall be entitled to be paid by his employer for that time—'.
      Mr. Deputy Speaker: With this amendment we are to take Government Amendments Nos. 119, 120 and 121.
      Mr. Brittan: The amendments all relate to a point raised in Committee about the proper construction of the Bill in its unamended form. I believe that the Government have taken the point, and that their amendments clarify the situation satisfactorily.
      Mr. Booth: The effect of our amendments is to make it clear that an employer is obliged to pay a union official for time off if the time off has been taken for the agreed purpose and in accordance with the employer's permission.
      Mr. Brittan: I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendments made: No. 119, in page 38, line 8 after 'section' insert 'for any purpose'.
      No. 120, in page 38, line 8, after shall', insert
      ', subject to the following provisions of this section'.
      No. 121, in page 38, line 8, leave out 'that time' and insert
      'the time taken off for that purpose in accordance with the permission'.—[Mr. Booth.]

    Clause 50

      TIME OFF FOR TRADE UNION ACTIVITIES
      Amendments made: No. 122, in page 39, line 2, leave out from 'an' to end of line and insert 'appropriate trade union'.
      No. 123, in page 39, line 7, at beginning insert
      'In this section "appropriate trade union", in relation to an employee of any description, means an independent trade union which is recognised by his employer in respect of that description of employee, and'.
      No. 124, in page 39, line 9, leave out from first 'of' to end of line 13 and insert
      'an appropriate trade union of which the employee is a member; and
      (b) any activities whether or not falling within paragraph (a) above, in relation to which the employee is acting as a representative of such a union, '.
      No. 126, in page 39, line 21, at end insert—
      '(3A) In the Code of Practice referred to in section 6(2)(b)(ii) above the Service shall in particular provide practical guidance on the following matters, that is to say, the question whether, and the circumstances in which a trade union member is entitled to take time off under this section for trade union activities connected with industrial action'.—[Mr. John Fraser.]

    Clause 51

      TIME OFF FOR PUBLIC DUTIES
      Mr. Gwilym Roberts: I beg to move Amendment No. 127, in page 40, line 40, leave out paragraph (b).
      Clauses 49, 50 and 51 are particularly welcome, as they enshrine in the Bill the
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      worker's right to time off for trade union activity and for various forms of public service. But subsection (4)(b) of Clause 51 takes away some of those rights. It says that one of the matters to be taken into consideration in permitting time off is
      "how much time off has the employee already been permitted under this section or sections 49 and 50 above".
      What concerns me is that Clauses 49 and 50 are those which directly refer to trade union activities. Therefore, the worker who is actively involved in trade union matters as well as other forms of public service is penalised for being involved in them. There seems to be a totting-up system, so that the employer takes into account time off that the employee has had for trade union work in deciding whether he should be allowed time off for certain forms of public service. That is unfair.
      I do not see why any account must be taken of time off for trade union activity. Although it is not mentioned in the Bill, some people could take time off to be at the golf club or the Rotary Club, or for similar activities. That could be taken into account when their time off for public service was being considered.
      The provision particularly penalises people on the Labour side of the political fence. Members of local authorities and people carrying out other public work who are also active trade unionists are almost inevitably members of the Labour Party. Conservatives or Liberals are often not even members of a trade union, never mind active participants in one.
      I ask my hon. Friend either to accept my amendment or to look very closely, perhaps in another place, at this whole problem to see whether this paragraph is in any way necessary, because it does not seem to me that it makes any contribution whatsoever to the Bill.
      Mr. Booth: My hon. Friend the Member for Cannock (Mr. Roberts), in pressing this amendment very strongly, cuts me to the quick. He talks of paragraph (b) of subsection (4) hurting members of the Labour Party and trade unionists—the very people with whom I have most in common in creating the right for time off. I understand fully the spirit in which he moves it, and I should very much like, ideally, to create this right to time off for public duties, without regard to any other rights contained in the Bill. But

      331
      in practice I put it to my hon. Friend that it is not quite a possible situation to achieve, particularly since we are giving the right universally to employees.
      We must have some regard to the situation at the work place and to the way in which the right can be ultimately enforced; therefore we must have the three considerations which are embodied in subsection (4).
      One can imagine the situation that might arise in a small work place or workshop with half a dozen workers. Three of them might serve on some form of public authority. One might need a couple of days off a week because he serves on the county council. Another may happen to be a member of the executive of his union. Another may come along who has had previous duties and ask for additional time off to carry out some public duties. At some stage the employer is bound to say that this is not reasonable in the light of all the considerations he has to face, the circumstances of his business, and the amount of time off he is giving to others.
      If the matter cannot be agreed it has to be taken to a tribunal for determination, and the tribunal has to strike a balance of considerations as well.
      I put it to my hon. Friend that paragraph (b) is considerably counterbalanced by paragraph (a) of the subsection, which has regard to the total amount of time needed to perform a public duty, and requires this to be properly taken into account. If a person is elected to or holds a public office, the tribunal has to take that fully into account and cannot reasonably award him less time than is necessary to carry out that public duty.
      In the practical situation it is necessary to be able to have these matters resolved ultimately by the tribunal, and I urge my hon. Friend to consider withdrawing his amendment and to look at subsection (4) in terms of not only paragraph (b) but paragraph (a), and paragraph (c) as well.
      I suggest to my hon. Friend that we might give this a fair wind, test it, and see in practice over the next year or two how many people are able, as a result of what is embodied in the Bill, to exercise rights to time off as trade union officials, as members of local authorities, or in carry-
      332
      ing out other public duties listed in subsection (2).
      If we find that it achieves our aim and enables more people to participate in these activities, we shall all be satisfied. If it does not, I have no doubt that my hon. Friend will be raising in the House the need to change these provisions. I suggest to him that they should be given a fair test, because they are related to the practical problem of extending an important right which both he and I would wish to see exercised.
      Mr. Gwilym Roberts: I am grateful for my hon. Friend's words, particularly the emphasis he laid on paragraph (a), concerning the right to time off in order to carry out fully a public duty. I have noted the assurance that he gave that the system will be thoroughly tested in practice, and that we shall be able to look at the matter again in the light of that experience.
      I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 52

      PROVISIONS AS TO INDUSTRIAL TRIBUNALS
      Mr. Booth: I beg to move Amendment No. 238, in page 41, line 26, leave out from beginning to second 'the' and insert:
      'which shall be of such amount as the tribunal considers just and equitable in all the circumstances having regard to the employer's default in failing to permit time off to be taken by the employee and to any loss sustained by the employee which is attributable to'.
      This amendment is necessary in order to make clear that tribunals may award compensation for an unreasonable refusal of time off, not only in respect of any financial loss arising from refusal, but also in respect of general affront and inconvenience to the employee arising from that refusal.
      This amendment is a parallel to Amendment No. 111, in Clause 48. It makes the basis for assessment of compensation more realistic in a situation where there is no easily identifiable material loss.
      Mr. Brittan: As the Minister has said, the arguments are the same as we have

      333
      already considered, but I think it right to make it clear that we think that the principle of general aggravation, if one may so call it, is an unsound one of which we do not approve.
      Amendment agreed to.

    Clause 53

      TIME OFF TO LOOK FOR WORK OR MAKE ARRANGEMENTS FOR TRAINING
      Amendment made: No. 129, in page 42, line 7, leave out 'subsection (11) below' and insert:
      'the following provisions of this section, '.—[Mr. Booth.]
      8.15 p.m.
      Mr. Booth: I beg to move Amendment No. 130, in page 42, line 25, after 'which', insert:
      'the employer's'.
      This amendment is necessary in order to make it plain that the notice mentioned in Clause 53(5) is the notice of termination of employment given by the employer to the employee.
      Amendment agreed to.

    Clause 54

      PROVISIONS SUPPLEMENTARY TO SECTIONS 49 TO 53
      Amendments made: No. 131, in page 43, line 35, leave out 'negotiation' and insert:
      'collective bargaining'.
      No. 132, in page 43, line 38, leave out 12(8)' and insert:
      '5'.—[Mr. Booth.]

    Clause 56

      EMPLOYEE'S RIGHTS ON INSOLVENCY OF EMPLOYER
      Mr. John Fraser: I beg to move Amendment No. 133, in page 44, line 23, leave out from first 'the' to second 'the' in line 26 and insert:
      'the relevant date'.
      The purpose of this amendment is to ensure that a debt in respect of maternity pay which occurs both after the date of termination of employment and the date of insolvency becomes a payment by the redundancy fund under the clause. It
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      arises out of discussions in Committee, and I hope that it is acceptable to the House.
      Amendment agreed to.
      Amendment made: No. 134, in page 44, line 32, at end insert—
      '(1A) In this section the "relevant date" in relation to a debt means—

      (a) as respects maternity pay, the date of the employee's application to the Secretary of State under this section; and

      (b) as respects any other debt, the date on which the employer became insolvent or the date of the termination of the employee's employment, whichever is the later. '.—[Mr. John Fraser.]

    Clause 59

      TRANSFER TO THE SECRETARY OF STATE OF RIGHTS AND REMEDIES
      Mr. John Fraser: I beg to move Amendment No. 137, in page 49, line 8, at end insert:
      '(1A) There shall be included among the rights and remedies which become rights and remedies of the Secretary of State in accordance with subsection (1)(a) above any right to be paid in priority to other creditors of the employer in accordance with—

      (a) section 33 of the Bankruptcy Act 1914;

      (b) section 118 of the Bankruptcy (Scotland) Act 1913; and

      (c) section 319 of the Companies Act 1948, and the Secretary of State shall be entitled to be so paid in priority to any other unsatisfied claim of the employee; and in computing for the purposes of any of those provisions any limit on the amount of sums to be so paid any sums paid to the Secretary of State shall be treated as if they had been paid to the employee'.

      The purpose of the amendment is to provide that the Secretary of State shall take over and retain the preferential rights of employment in respect of sums paid from the redundancy fund under the provisions of Clause 56.
      Amendment agreed to.

    Clause 63

      ORDER FOR REINSTATEMENT OR RE-ENGAGEMENT
      Mr. Brittan: I beg to move Amendment No. 139, in page 52, line 7, leave out from beginning to 'shall' in line 10 and insert—
      '(1) At the commencement of the hearing of any complaint under paragraph 17 of

      335
      Schedule 1 of the 1974 Act (unfair dismissal) the industrial tribunal hearing the complaint'.
      This amendment relates to the hearing of a complaint for unfair dismissal. Frankly, in view of the number of points on which the Government have felt able to meet us during the conduct of the Committee, I find it mildly surprising that this uncontroversial amendment should still stand on the Order Paper in the name of my right hon. Friend and ourselves, rather than be adopted as a Government one. All it seeks to do is to prevent a hearing of a complaint for unfair dismissal being in two separate sections, rather than in a single unit, which we should have thought preferable.
      Under the Bill as it stands, without this amendment the industrial tribunal has to hear the complaint of unfair dismissal, and then, after it is found that there are grounds for the complaint, it has to explain to the complainant what is the position in regard to the possibility of orders for reinstatement or re-engagement. It then has to ask him if he wants the tribunal to make any such order, and then the tribunal has to decide whether to make such an order.
      The reason that a two-stage hearing is involved is that in considering whether it is appropriate under the Bill or under the statute, as it will have become, to order reinstatement or re-engagement, a great many issues of fact may have to be considered which could and should have been much more conveniently considered when the substantial claim for wrongful dismissal has been heard.
      There seems no purpose in covering the same ground again. This is an unnecessarily cumbersome way of proceeding, especially as the form which the complainant must fill in long before the hearing specifies the details of his complaint. We suggest that instead of requiring the tribunal to give the explanation of reinstatement and re-engagement after the determination of the basic claim, and then to ask the employee whether he wishes to avail himself of these remedies, the tribunal should at the commencement of the hearing explain the orders and ask the employee what he wants. It is important that the matter shoud be made clear at the outset, rather than that the tribunal should be required to take two bites of the cherry.
      Mr. Booth: The object of the Clause 63(1) procedure is to ensure that the successful complainant understands what remedies the tribunal can provide and has an opportunity to tell the tribunal whether he has changed his mind about his preferred remedy. That object would not be fully achieved by Amendment No. 139.
      When we discussed the matter in Committee we indicated that we were already planning to arrange for additional questions to be included in the form of application to the tribunal so that employees would have an opportunity to say what remedy they wanted when they first complained. Moreover, given that officers of ACAS will try to help the employer and employee to settle the complaint by agreement, both parties will normally have a pretty clear idea of the complainant's preferred remedy by the time the case reaches a tribunal hearing.
      There are two main reasons why I urge the House to reject the amendment and retain the provisions of Clause 63(1). first, the employee needs to understand exactly what is involved in tribunal orders for reinstatement, at the point when the final notice is being made, or re-engagement, at the point where the final choice is made. The fact that he has previously opted for reinstatement rather than compensation on his application form will not necessarily mean that he undertands what considerations the tribunal must take into account in deciding whether to make an order for reinstatement or re-engagement.
      Secondly, the tribunal needs to know whether the employee has changed his mind after he has submitted his application form, or at the conciliation stage. There are many reasons why he might do so—the offer of a better job with another employer, or subjective factors such as a changed attitude due to his employer's refusal to consider the conciliated settlement.
      The tribunal therefore must check up on what the employee wants as a remedy at that point in the hearing. In practice, as the hon. Member for Cleveland and Whitby (Mr. Brittan) knows, having studied the matter, we have up to now had only limited experience of successful reinstatement or re-engagement. We are hoping that as a result of this legislation

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      many more people may be successful in obtaining reinstatement or re-engagement after unfair dismissal. However, I believe that we have the best possible chance of that being successful in every sense to the employee and employer most concerned if the options are fully understood and kept open until the last moment of the tribunal's decision.
      Mr. Brittan: The objections and worries of the Minister are unrelated to the amendment and to the arguments I put forward in support of it. The Minister—not I—spoke about the form, which will be amended, to require the applicant to state what he wants. I do not ask that the applicant should be bound by any form submitted long in advance.
      The amendment suggests that at the outset of the hearing the matter should be explained to the employee. That will not tie him down long in advance without any understanding. It will give the tribunal an opportunity to do exactly what it must do, under the clause, in any event. But at a later stage in the hearing the tribunal must explain to the complainant the remedies and the factors which will determine whether it will award those remedies.
      There is no question of the man not being allowed to change his mind between making the original complaint and coming to the tribunal. He is asked to state at the beginning of the tribunal hearing what remedy he wants. I can think of no form of hearing at which that procedure would be regarded as objectionable or at which it is thought appropriate that the person concerned should be asked what he wants only at the end of the tribunal's proceedings. It is a sufficient concession to the general ignorance which may be thought to exist on this matter that the tribunal is required under the statute to take the unusual step of explaining everything. That having been done, I cannot see why it is not possible to give the explanation and to invite the choice to be made at the beginning of the hearing.
      I do not find the explanation given by the Minister convincing. I hope that he will think about this again. He may not have had enough time since the Committee rose to reconsider the matter, but he has other opportunities to do so. I hope that he will make the change, which
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      is not controversial. It is a matter of convenience. I cannot help thinking that the Minister is unduly suspicious of the motives of those proposing this amendment.
      Mr. Booth: I mentioned the procedure which is to occur before the tribunal hearing, and the question of the form, in support of the proposition that applicants need to know the remedies well in advance of the tribunal hearing. I do not think that there is any dispute between us. Given that the person concerned knows the remedies in advance, the requirement of the amendment, that there should be an explanation at the start of the hearing, is superfluous.
      I urge upon the House that there are two points at which there needs to be knowledge on the part of one or more parties of the options of reinstatement or re-engagement. One occurs prior to the start and one occurs at the later stage when the final determination has to be made.
      Amendment negatived.
      Mr. Booth: I beg to move Amendment No. 140, in page 54, line 6, after 'shows' insert '—
      (a)'.
      The effect of this amendment and Amendment No. 141 is to free employers from the requirement imposed by the present provisions of Clause 63(8) to arrange for a dismissed employee's work to be done without recruiting a permanent replacement—except where this is impracticable—if the dismissed employee fails to inform the employer that he wants to be reinstated or re-engaged within a reasonable period after he has received notice of dismissal or after the dismissal notice has taken effect.
      I gave an undertaking to consider the matter further on representations being made in Committee. I hope that it will be considered that we have met the point. We accept that if an employer's decision to take somebody else on in place of an employee whom he has dismissed is to be considered properly—if the dismissal was found to be unfair and reinstatement is claimed—at least the employer should have a right to be informed within a reasonable time that the employee he has dismissed will seek reinstatement or re-engagement at a tribunal. Provided

      339
      that is done the point raised in Committee will be met, and the rights of the respective parties will be properly covered by the Bill.
      Amendment agreed to.
      Amendment made: No. 141, in page 54, line 8, at end insert:
      '; or
      (b) that he engaged the replacement after the lapse of a reasonable period, without having heard from the dismissed employee that he wished to be reinstated or re-engaged, and that when the employer engaged the replacement it was no longer reasonable for him to arrange for the dismissed employee's work to be done except by a permanent replacement'.—[Mr. Booth.]

    Clause 64

      ENFORCEMENT OF SECTION 63 ORDER AND COMPENSATION
      8.30 p.m.
      Mr. Brittan: I beg to move Amendment No. 142, in page 54, line 35, leave out from 'with' to end of line 37 and insert:
      'section 68 below, to be paid by the employer to the employee, but may also award such additional sum as the tribunal considers just and equitable in all the circumstances having regard to any further costs sustained by the complainant in consequence of the failure of the employer to comply with the order, unless the employer satisfies the tribunal that it was not reasonably practicable to comply with it'.
      The amendment relates to the calculation of compensation for unfair dismissal. It is an immensely complicated subject and we spent a great deal of time in Committee considering it. I do not propose to take up the time of the House in re-arguing that line of country, but it is right that we should at least put forward our views in outline.
      We think that the procedures set out in Clauses 65 to 68 for the calculation of the amount of award for unfair dismissal have two compelling disadvantages. On the one hand, they are unfair and, on the other hand, they are cumbersome. The reasons why that is so would take some time to explain. They are on record in the Committee proceedings. I will merely say that Amendment No. 142 is a way of mitigating unfairness to the employee by the considerations set out in Clauses 65 to 68 and that it is a way of simplifying the whole procedure.
      Mr. Booth: Amendment No. 142 is technically deficient in several respects. More important, Clause 64(2) as amended would provide for two separate elements of compensation to be awarded specifically on account of an employer's failure to comply with a reinstatement or re-engagement order, but would not specify the relationship between them. Secondly, the provision that such an employee should receive a compensatory award is inconsistent with the provision in Clause 65 that an award of compensation under Clause 64(2)(a) shall consist of a basic award and a compensatory award. Finally, the amendment refers to Clause 70, but I think the intended reference is to Clause 68.
      However, I do not want to oppose the amendments merely on the grounds of technical deficiency, because there is an important difference between us. I do not seek to detract from the amendment on the ground of the brief way in which the hon. Gentleman introduced it from the importance of the argument which he deployed fully in Committee. I will respond shortly by saying that we think that there is importance in the basic award concept and, secondly, if one were to examine the alternatives proposed here one would see that what are in effect stated as two separate awards might overlap each other considerably or result in very little additional award being available to the employee. The terms set out in the amendment are similar to those in Clause 68 and there may be many cases in which someone who qualified under Clause 68 can qualify for nothing more in the terms of the amendment. For those reasons I hope that the amendment will be rejected.
      Mr. Brittan: We were fully aware that the amendment would not technically meet the problem in its entirety, but we take the view that the principle should first be established. No doubt there are those in another place who could put the tackle in order in so far as it is not already in order.
      As the hon. Gentleman knows we mainly object to the concept of the basic award. We simply believe that a person who is unfairly dismissed should be entitled to compensation, indeed, substantial compensation, but that that compensation should be in respect of what he

      341
      has actually lost. There may be difficulties about the calculation, but that is the principle that we think should apply.
      Our quarrel with the Government lies in the fact that we do not believe that it is right that there should be a principle calculated in relation to the amount of time the man has been at work rather than the loss he has suffered. We believe that the precedent that has been followed from redundancies is not a happy one. That is why we object, as the Minister has rightly said, in principle to these requirements. Therefore, we hope that if not here, elsewhere, the changes that the Government are seeking to make in these principles can be rectified on the lines of the present amendment.
      Amendment negatived

    Clause 66

      CALCULATION OF BASIC AWARD
      Mr. Booth: I beg to move Amendment No. 143, in page 56, line 18, leave out '(6)' and insert '(6A)'
      Mr. Deputy Speaker: With this we may discuss Government Amendments Nos. 144 and 145.
      We may also discuss Amendment No. 146, in Clause 68, page 59, line 6, leave out 'compensatory award' and insert—
      'total award (being the aggregate of the basic award and the compensatory award). '
      Mr. Booth: The effect of Amendments Nos. 143, 144 and 145 is to enable a tribunal that finds a dismissal unfair, but considers that the successful complainant was partly to blame for the dismissal, to reduce the basic award, as well as the compensatory award, subject to the proviso that it must make the basic award equivalent to two weeks' minimum pay.
      During the consideration of Clause 68 in Committee the Opposition tabled an amendment to subsection (6) to give the tribunals powers to reduce the basic as well as the compensatory award for a contributory fault. My hon. Friend the Under-Secretary made it clear that we accepted the principle of the amendment but that we could not accept the Opposition's amendment as drafted, mainly because we take the view that no employee who is found to have been unfairly dis-
      342
      missed should be sent away from the tribunal empty-handed. Even where he has contributed to his dismissal he should at least receive the equivalent of two weeks' pay in recompense for the unfair treatment to which he has been subjected.
      We hope that without entering in any way into the debate again about the rightness or wrongness of compensatory awards, at least it will be conceded that we have met the point that contributory faults should be taken into account in assessing the entitlement of the employee to compensation. For that reason we hope that these three amendments will commend themselves to the House and that the Opposition will consider not moving Amendment No. 146.
      Mr. Brittan: I welcome what the Minister has said and certainly we do not propose to press Amendment No. 146 in view of what has been said. However, I cannot resist the temptation of pointing out that the Government, having accepted three-quarters of what we are arguing, are left in a logically indefensible position. They have accepted that if somebody has caused or contributed to his dismissal, even to a very substantial extent, and has also not lost anything as a result, it is right that the basic award, as well as the compensatory award should, and can, be reduced substantially, but that he still has to go away from the tribunal with something in his hand. We are left with the ludicrous position in which a person has been dismissed, presumably unfairly, because of a technicality. In a situation in which the tribunal has come to the conclusion that he has caused or contributed to his dismissal to such an extent that he really should get nothing, he is saved from that fate by the wording of the statute which rescues for him two weeks' pay. It is an absurd anomaly, but I dare say that the Government feel they cannot go any further along the line of wisdom and logic without losing too much face.
      Amendment agreed to.

    Clause 67

      PROVISIONS SUPPLEMENTARY TO S. 66
      Amendments made: No. 144, in page 58, line 10, at end insert:
      '(6A) Where the tribunal finds that the dismissal was to any extent caused or contributed

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      to by any action of the complainant it shall reduce the amount of the basic award by such proportion as it considers just and equitable having regard to that finding'.
      No. 145, in page 58, line 11, after 'reduced', insert:
      'or, as the case may be, be further reduced, '.—[Mr. Booth.]

    Clause 79

      APPEALS FROM INDUSTRIAL TRIBUNALS AND CERTIFICATION OFFICER
      Mr. Brittan: I beg to move Amendment No. 222, in page 68, line 1, after 'of ', insert:
      'the Committee under this Act or'.
      This amendment leads to the provisions of the Bill providing for appeals to the Employment Appeal Tribunal. Under Clause 9 there are a number of ways by which an appeal can reach the appeal tribunal. Normally, an appeal will lie on a question of law from a decision of an industrial tribunal as a result of the Redundancy Payments Act, the Equal Pay Act, the Contracts of Employment Act, the Trade Union and Labour Relations Act and, after the enactment of this Bill, this Act.
      We believe that an appeal should also lie from the Central Arbitration Committee and its deliberations. We think that it is wrong that the CAC, which carries out extremely important functions, sometimes on a compulsory basis if there has been failure to comply with a recommendation of the Advisory, Conciliation and Arbitration Service concerning a recognition or disclosure of information matter, should be a court not only of first but of last resort. It seems only right that, where we have a perfectly good appeal body such as the Employment Appeal Tribunal, which contains not only a High Court judge as its presiding officer but people with experience in industry, we can safely entrust appeals from the Central Arbitration Committee as well as from an industrial tribunal.
      It may be said that, if the Central Arbitration Committee exceeds its powers in certain respects, even without any express provision for an appeal it would be possible to apply to the High Court for a prerogative order of Certiorari or man-
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      damus. We do not believe that is a satisfactory or sufficient form of appeal, because the procedural limitations imposed on Certiorari mandamus and prohibition are considerable. They permit the High Court to intervene only if there have been procedural irregularities or gross errors in law in the operations of the Central Arbitration Committee. We think that there should be a general right of appeal.
      8.45 p.m.
      Mr. Booth: I am opposed to there being appeals from the decisions of the C. A. C. to the Employment Appeal Tribunal. Most of the decisions of the Central Arbitration Committee will be not judicial decisions but industrial arbitration awards and will therefore not be appropriate for appeal to a court of law. The CAC will have special expertise in these cases, which a court of law would not have.
      Most of the functions of the Central Arbitration Committee will be similar to those exercised by the Industrial Arbitration Board, or, before that—since 1920—the old Industrial Court, namely, awards to settle disputes and to determine terms and conditions of employment. These have never been subject to appeal, and there is no case for so providing now. The object of these decisions, which in all cases are made in proceedings which come at the end of a long process of negotiation and conciliation in which no settlement has been reached, is to put an end to the dispute by providing the terms for settlement.
      Provision for appeal would destroy the value of such arbitration and would, indeed, delay its finality. The force of this can be readily seen when one bears in mind that, if one had an appeal to the EAT, there could be a further appeal to the Court of Appeal and then to the House of Lords, so that what set out as an attempt to get swift and final determination of an issue by the Central Arbitration Committee could be the start of a long legal process. I do not believe that this would commend itself to those who would want to use the CAC, and I hope, therefore, that the amendment will not commend itself to the House.
      Mr. Brittan: At the outset, I thought that the Minister was about to make a conciliatory statement to the effect that,

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      although he could not allow a right of appeal from the Central Arbitration Committee throughout the length and breadth of its juridiction since so much of that would be pure arbitration, none the less, to the extent that the Central Arbitration Committee was engaging in legal functions and not just in pure industrial arbitration, he would consider the question of an appeal.
      I had it in mind at that point to seek leave to withdraw the amendment, on the basis that that was really all we wanted, having put down an amendment calling for a general right of appeal in order to smoke the Minister out. Sadly, however, the hon. Gentleman has not gone along that happy and conciliatory path but has rejected the opportunity of appeal of any kind.
      I accept that it is inappropriate that there should be a legal form of appeal in a straightforward arbitration situation, although I must remind the hon. Gentleman that in commercial arbitrations there is such a right of appeal, so that there is no magic in the concept of arbitration such as to render the idea of appeal inapplicable or inappropriate.
      However, leaving that general argument aside, as regards the essentially legal functions of the Central Arbitration Committee, which, by implication, the Minister conceded do exist, in our view there is no argument against there being an appeal. Therefore, even if the matter will not be resolved to our satisfaction here, we hope that it will be considered and dealt with satisfactorily elsewhere.
      Amendment negatived.

    Clause 81

      CONVERSION OF WAGES COUNCILS TO STATUTORY JOINT INDUSTRIAL COUNCILS
      Amendment made: No. 163, in page 69, line 25, leave out 'may' and insert 'shall'.—[Mr. Harold Walker.]
      Miss Joan Maynard: I beg to move Amendment No. 226, in page 69, line 33, at end insert—
      '(6) This section and sections 81 and 82 of this Act shall apply to Agricultural Wages Boards as they apply to wages councils; but in applying the provisions of this section to an Agricultural Wages Board the Secretary
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      of State shall act jointly with the Minister of Agriculture, Fisheries and Food.
      (7) For the purpose of the application of this section and sections 81 and 82 below to agriculture—

      (a) any reference to a wages council shall be construed as a reference to an agricultural wages board;

      (b) any reference to the Wages Councils Act 1959 shall be construed as a reference to the Agricultural Wages Act 1948 or to the Agricultural Wages (Scotland) Act 1949 and, in particular, references to section 11 of that Act shall be construed as a reference to section 3 of either of those Acts, as appropriate;

      (c) a reference to Part II of the Wages Councils Act 1959 shall be construed as a reference to sections 3 to 11 of the 1948 Act or to the corresponding sections of the 1949 Act, as appropriate'.

      Mr. Deputy Speaker: We may consider at the same time the following amendments:
      No. 227, in Clause 85, page 70, line 41, at end insert—
      'In the case of agriculture, "nominated", in relation to an employers' association or trade union means an association or union for the time being nominated under the appropriate Agricultural Wages Act or Agricultural Wages Board Regulations to appoint persons to represent employers or workers on the wages board in question'.
      No. 228, in Schedule 8, page 1229, line 8, at end insert—
      '(2) On the conversion of an agricultural wages board to a statutory joint industrial council the provisions of sub-paragraph (1) above shall apply as if for the references to a wages council and to the Secretary of State there were substituted references to a wages board and to the Minister of Agriculture, Fisheries and Food, respectively'.
      No. 229, in page 129, line 20, after '1959', insert
      'or under section 3 of the Agricultural Wages Acts 1958 and 1949, '.
      No. 230, in page 130, line 10, at end insert—
      '(2) Any of the following things done by, to or in relation to an agricultural wages board, that is to say—

      any order made under section 3 of the Agricultural Wages Act 1948 or of the Agricultural Wages (Scotland) Act 1949 (power to fix terms and conditions of employment);

      any proposals published in relation to making of such an order, and any notice published and representations made with respect thereto;

      any permit issued under section 5 of either of those Acts (permits to infirm and incapacitated persons);

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      shall as from the date when the board becomes a statutory joint industrial council be treated as having been done by, to or in relation to the latter council'.

      No. 231, in page 130, line 12, after first 'council', insert 'or wages board '.
      No. 232, in page 130, line 13, after 'council', insert 'or wages board'.
      No. 233, in page 130, line 18, after first 'council', insert 'or wages board '.
      No. 234, in page 125, line 19, after 'council', insert 'or wages board'.
      Miss Maynard: All these amendments cover the same principle in relation to the Agricultural Wages Board. My hon. Friends and I put forward similar amendments in Committee, and the Government accepted them in principle, so I do not intend to argue the principle again at this stage. However, I understand that they still need some redrafting, and there has not been time to do this up to now. I hope that the Government accept the amendments as they stand. Of course, at the end of Report the Bill will go to another place. Should the amendments be thrown out there they could be reintroduced subsequently in this place. I hope that I shall have an assurance tonight that they are acceptable as drafted.
      Mr. Harold Walker: My hon. Friend the Member for Sheffield, Brightside (Miss Maynard) is right to remind the House that these amendments were tabled in her name and in the names of other of my colleagues in Committee. At that stage I said that I could see no reason for those persons connected with agriculture not to have the same provisions applied to their industry as apply to other industries if that was their objective. I refer to the power to convert themselves from a statutory wages council into a statutory joint industrial council, including the other provisions relating to the relevant parts of the Bill.
      I could see no reason for not concurring with a wish to go in that direction. I informed the Committee that in principle the Government accepted the amendments tabled in Committee. However, they were unsatisfactory as drafted mainly because unlike wages councils the agricultural wages boards are set up by Act of Parliament. Therefore, the amendments need to be drafted in a
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      different way. I said that we would seek to find an appropriate method of drafting and would hope to be able to come to the House on Report with properly drafted amendments. I pointed out in Committee that there were the most formidable difficulties and that it was feared that the matter would have to wait until the Bill was dealt with in another place.
      I am sorry to have to tell my hon. Friend that in spite of the most intense efforts, the most careful consideration and the fullest discussion, we have not been able to do what my hon. Friend and I had hoped—namely, to have the revised amendments ready for Report. I must also tell my hon. Friend that we cannot accept the amendments now before the House as she had hoped, in the sense that they will subsequently be amended in another place and that whatever happens to them there they will be returned here for consideration. That cannot be done.
      However, I want to reassure my hon. Friend that we accept the principle and the spirit of her amendments. In another place we intend to introduce amendments that will realise the objective that she and I share. I know that what I have said does not meet what my hon. Friend wanted, but we must hope that their Lordships respond to my statement. It is clearly the wish of the agricultural workers' unions that their Lordships should respond and enable this place subsequently to express its own judgment.
      I know that the National Farmers' Union has sent out its usual good briefing to Member of Parliament. I make no complaint about that. I know that the union has some reservations which are expressed in its brief. I recall that the right hon. Member for Lowestoft (Mr. Prior) asked me in Committee whether the Government had heard of any reservations on the part of the NFU. Yes, I understand that it has some reservations. It is clear from its briefing that it has doubts about what is being proposed.
      It is also clear that there is some misunderstanding. The NFU seems to understand that we are seeking to effect a conversion which will be enabled by the proposed amendments. It seems to understand that my hon. Friend is seeking to give the Secretary of State and the agricultural wages boards the powers

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      that are available, and will be available to the wages councils. We are considering an enabling power, but the decision will rest with the membership of the agricultural wages boards and the participants given the full process of consultation and the procedures laid down in the Bill. That process will apply before any conversion takes place. They will be put in the same position as wages councils. It will involve a residual power.
      I regret that we cannot implement what my hon. Friend hoped, but let us at least hope that their Lordships will respond to what we are saying tonight.
      Mr. Prior: I am grateful for the Minister's explanation. I do not think the situation was clear to many people. That applies to me, and I know that it applies to the National Farmers' Union, of which I am a member—although not perhaps the most active member, and in some respects not perhaps the most popular member.
      Can the Minister go a little further in his explanation? As I understand the situation, he is saying that Amendment No. 226 would be merely enabling and would enable the Agricultural Wages Board and its members, if they so wished, to convert themselves into a joint industrial council. The Agricultural Wages Board consists of an equal number of employers and employees, together with a number of independent members. Therefore, the decision whether they should convert into a joint industrial council would presumably have to be a decision of the board as a whole taken on a vote of the board—in which case it is likely that the independent members would decide the policy.
      Presumably, up to that time the Minister of Agriculture would still be responsible for the appointment of independent members to the board and the board would continue to exist as it is at present. We do not know whether the Secretary of State would have to approve any such application to enable a conversion from the Agricultural Wages Board to a joint industrial council. I presume that he would have power to take that step. I presume that the hon. Member for Sheffield, Brightside (Miss Maynard) in moving her amendment spoke on behalf of the National Union of Agricultural Workers.
      Miss Maynard: Yes.
      Mr. Prior: Will the hon. Lady give her reasons for wanting the amendment? The Agricultural Wages Board has enjoyed an almost unique position in wages negotiation machinery and, compared with the majority of wages councils, has been very effective. The Ministry of Agriculture has had the power to nominate independent members and to guide the hand of the board without interference, and I am sure that nobody would deny that it has worked very well. Therefore, I do not see what purpose the National Union of Agricultural Workers hopes to achieve by such a change.
      If I thought that the board had not been operating well, or was not a proper body to represent the interests of the industry as a whole, I would have regarded the hon. Lady's case as a much stronger one, but I do not think that her case has been made out. If the Government at a later stage feel that the Agricultural Wages Board needs to be wound up, it would be better to have separate legislation. I am worried that from now on the board will face the prospect of the sword of Damocles hanging over its head—namely, the threat that it could be turned into a joint industrial council. I am not certain that that is a very good position for the board to be in.
      9.0 p.m.
      I hope that the Government will consider this carefully. It is obvious that the National Farmers' Union is of the view that it prefers matters left as they are. I do not know whether the chairman of the board or its independent members have been consulted in any way. I know from what the hon. Lady said that the NUAW has wanted this amendment, but again it left it to her to raise the matter in the House rather than doing it through the Government, which is surprising in view of the number of other measures taken by the Government in this Bill. Therefore, for all those reasons it seems an unsatisfactory way to do it. It is also unsatisfactory for the hon. Lady in that the amendment has been tabled for a long while. This amendment and those associated with it were some of the first to be tabled, and obviously the Government have not yet found a satisfactory way to carry out the hon. Lady's intentions.

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      In the circumstances, would not it be better to allow matters to go on as they are, for the hon. Lady to ask leave to withdraw her amendment and for the Government to say that, although they are sympathetic to her point of view, they see no real case for carrying it out at this juncture and that perhaps it should be looked at in the cold light of day with the NFU, the NUAW and the independent members of the board being properly consulted and with the Ministry of Agriculture maintaining its parental rôle towards the Agricultural Wages Board, which, as most people will recognise, has been the most successful of all the wages boards that have been set up?
      The Donovan Commission, which made an investigation into employers' associations and trade unions, singled out the Agricultural Wages Board as being uniquely effective in wage determination. Before we move to wages councils, perhaps we ought to consider whether we are taking a wise step in the interests of both agricultural workers and their employers who, on the whole, have perhaps the best relationships of any industry in Britain, which I for one do not wish to harm in any way. It is not my wish to say or do anything likely to prevent agricultural workers having the best possible representation, because they are just about the most deserving section of society not properly recognised by the nation as a whole. Certainly I do not wish to say anything detrimental to their case. But neither do I want to see this House take a decision on such an important matter on a quick examination of some amendments tabled by the hon. Member for Sheffield, Brightside which are not considered to be in order in any event.
      Miss Maynard: Perhaps I may explain the position to the right hon. Member for Lowestoft (Mr. Prior) and to the House. My union decided in May that it would like these amendments to be tabled. The union is committed to the Agricultural Wages Board. There is no dispute about that. I do not wish to argue the merits or demerits of the board. But the purpose of these amendments is to provide the right at some subsequent time to move from the board to a joint industrial council if there is a desire to do so. In other words, as the Secretary of State said,
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      these amendments provide enabling powers. But that is not to say that the union wishes to move from the board. The purpose of the amendments is merely to enable a move from the board if at some future time it is felt desirable to do so.
      It is not true that the Ministry of Agriculture was not consulted. It was consulted, and it accepted the amendments. It is true that the amendments have not been drafted correctly. That is partly because it is rather a complicated business. This is a statutory board set up rather differently from wages councils.
      The right hon. Gentleman thought that it would be better to have subsequent amending legislation. I disagree strongly. That would be virtually impossible without providing cover under this important Bill. We are asking for the same cover as other wages council workers get so that we can transfer in future to an SJIC.
      Mr. Harold Walker: With the leave of the House, may I point out that Clause 81 deals with the conversion of wages councils to statutory joint industrial councils, which my hon. Friend seeks to apply to the Agricultural Wages Board? The clause says that the Secretary of State may by order do certain things and subsection (3) lays on him a requirement to consult
      "…every employer's association and trade union nominated in relation to the wages council in question"—
      in this case, the Agricultural Wages Board—
      "and (whether so nominated or not) all organisations of employers and workers which in his opinion represent a substantial proportion of employers and workers respectively in relation to whom that council"—
      again, in this case, the Agricultural Wages Board—
      "operates".
      Subsection (4) as first amended says that he "shall"
      "…before making an order under this section refer the question…to the Service"—
      that is, ACAS—
      "and the Service shall inquire into it and report on that question."
      So a number of safeguards are built in which should reassure the NFU and the right hon. Member for Lowestoft (Mr. Prior).
      This is a matter for the House as a whole to decide. That is why I hope that

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      my hon. Friend will be able to withdraw her amendment and that in the other place their Lordships will agree to amendments which the Government will propose. The matter will then be available for debate and decision here. I hope that that is how we shall proceed.
      Miss Maynard: With that assurance, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 82

      FUNCTIONS OF STATUTORY JOINT INDUSTRIAL COUNCILS
      Amendment made: No. 164, in page 69, line 38, leave out from 'and' to end of line 39 and insert
      'that Part shall apply to a statutory joint industrial council and the workers and employers within its field of operation as it applies to a wages council and the workers and employers within its field of operation. '.—[Mr. Harold Walker.]

    Clause 83

      DISPUTES BETWEEN EMPLOYERS' AND WORKERS' REPRESENTATIVES
      Mr. Harold Walker: I beg to move Amendment No. 165, in page 70, line 5, leave out from 'shall' to end of line 6 and insert
      'refer the dispute for settlement to the arbitration of—

      (a) one or more persons appointed by the Service for that purpose (not being an officer or servant of the Service); or

      (b) the Committee.

      (2A) Where more than one arbitrator is appointed under subsection (2)(a) above the Service shall appoint one of the arbitrators to act as chairman. '.
      Mr. Deputy Speaker: With this we are to discuss Amendment No. 166, in page 70, line 5, leave out from 'shall' to end of line 6 and insert
      'refer the dispute or settlement to the Committee or, if for any reason the Service considers the Committee inappropriate to settle the dispute, to another arbitrator to be appointed by the Service'.
      We may also discuss Government Amendment No. 167.
      Mr. Walker: These amendments are in response to requests from Conservative Members in Committee.
      Amendment agreed to.
      Amendment made: No. 167, in page 70, line 7, leave out' on a dispute referred to him' and insert
      'arbitrators or Committee on a dispute referred to him, them or it'.—[Mr. Harold Walker.]

    Clause 84

      ABOLITION OF STATUTORY JOINT INDUSTRIAL COUNCILS
      Amendments made: No. 168, in page 70, line 26, at end insert:
      ', but shall not be made without such an application unless the Secretary of State has consulted the council. '.
      No. 169, in page 70, line 27, leave out 'may' and insert:
      'shall'.—[Mr. Harold Walker.]

    Clause 86

      POWER TO OBTAIN INFORMATION
      Amendment made: No. 170, in page 71, line 6, leave out from second 'the' to end of line 8 and insert:
      'purpose of, or in connection with the enforcement, or an order under section 11 of the Wages Council Act 1959'.—[Mr. Harold Walker.]
      Mr. Hayhoe: I beg to move Amendment No. 171, in page 71, line 9, after 'employer', insert 'or a person or body representing workers'.
      This matter was raised in Committee at our twenty-fourth sitting, when the Under-Secretary of State undertook to consider it. His undertaking led us to believe that it was unlikely that he would propose any change in the Bill, but to get the matter on the record, we have tabled the amendment.
      Mr. Harold Walker: If the hon. Gentleman looks at Government Amendment No. 170 he will find that it substantially meets the point which he sought to make in Amendment No. 171.
      Mr. Hayhoe: I am grateful to the hon. Gentleman. I did not appreciate the inter-relation between the two amendments. In the circumstances, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 87

      DUTY OF THE SERVICE TO REPORT ON MACHINERY FOR REGULATING REMUNERATION AND TERMS AND CONDITIONS OF EMPLOYMENT.
      Mr. Cyril Smith: I beg to move Amendment No. 172, in page 71, line 24, leave out from 'shall' to 'inquire' in line 26.
      Mr. Deputy Speaker: With this we are to take the following amendments:
      No. 173, in page 71, line 39, at end insert:
      '(c) report to the Secretary of State within one year of the passing of this Act on the problems of low pay and policies intended to deal with it with particular reference to wages council industries and homeworkers.
      (d) publish any reports made under paragraphs (a), (b) or (c) above'.
      No. 174, in page 71, leave out line 40.
      No. 175, in page 71, line 40, at end insert:
      'The Service shall report to the Secretary of State within one year of the passing of this Act and each year thereafter on the problems of law pay and policies intended to deal with it with particular references to wages council industries and homeworkers'.
      No. 209, in Schedule 7, page 119, line 25, at end insert:
      '(1A) A wages council shall within three years of the passing of this Act set a minimum rate of remuneration of not less than £30 or 66 per cent. of average male earnings for all industries and services, whichever is the higher. The minimum rate of remuneration shall subsequently be maintained at a level not less than the specified minimum rate of remuneration.
      (1B) The Secretary of State shall have the power to call a meeting of the wages council where it appears that the specified minimum rate of remuneration will not be reached within the allotted time period or will not be maintained'.
      No. 210, page 119, line 26, at end insert:
      '(2)A(a) A Wages Council shall within three years of the passing of this Act set a minimum rate of remuneration of not less than £30 or 66 per cent. of average male earnings for all industries and services, whichever is the higher. The minimum rate of remuneration shall subsequently be maintained at a level not less than the specified minimum rate of remuneration.
      (b) The appropriate Wages Council shall ensure that the specified minimum rate of remuneration is reached within the allotted time period and that such rate is maintained
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      and wherever ACAS is of the opinion that this will not be achieved, and so advises the Secretary of State he shall have power to instruct the specified Wages Council to implement the conditions of 2(A)(a) above. '
      An Hon. Member: Where are the troops?
      Mr. Cyril Smith: My troops will be arriving in a very short time. I represent a greater percentage of my party than the whole of hon. Members opposite at the moment represent their party.
      Mr. Deputy Speaker: The hon. Member for Rochdale (Mr. Smith) must not filibuster until his hon. Friends arrive.
      Mr. Smith: Amendment No. 172 requires that the service should inquire into the activities of wages councils and statutory joint industrial councils as a matter of course. As the Bill stands, it requires the service to do so if the Secretary of State requests it to do so. The purpose of the amendment is to make sure that it is done, whether or not the Secretary of State requires it to be done. We believe that that is a vital duty which ought to be imposed by law.
      Amendment No. 173 requires the service to report within one year on the problems of low pay and policies to deal with those problems, and it requires that the reports of those inquiries shall be published. That is a realistic attempt to ensure that the problems of low-paid workers are not overlooked, or swept under the carpet, or ignored.
      Amendment No. 174 seeks to leave out paragraph (c) of Clause 87 because that paragraph would be superfluous should Amendment No. 173 be accepted.
      I now turn to Amendment No. 210. This amendment is a genuine attempt to make sure that over the next three years we move towards a system that makes certain that the lower-paid workers in our society receive a wage which is either £30 a week or 66 per cent. of average male earnings, whichever is the greater. It is an attempt to legislate to cover the lower-paid workers.
      I would have thought—indeed, hoped—that those amendments would have found considerable favour with the Government, and particularly with a Government who claim to be a Labour Government. I am not sure whether they claim

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      to be a Socialist Government or a Social Democratic Government, or whatever, but they certainly claim to be on the side of the workers and wage earners.
      Many examples could be given to support the contention that the wages councils as we have known them have dismally failed the lower-paid workers. I doubt very much whether the SJICs will make much impact in mitigating that weakness or deficiency. Nine of the agreements made by wages councils in 1975 set minimum adult rates of less than £20 a week and 18 set rates of between £20 and £25 a week. In 1975, that kind of wage settlement is absolutely ludicrous and speaks very badly for the wages councils as they have existed. I do not come from a part of the country that is one of the leaders in the wages league table, but even in parts of Lancashire which are suffering from textile depression—which we are to debate tomorrow—wages of £20 or £25 a week would be considered derisory.
      9.15 p.m.
      Since the end of the Committee stage, the Government have moved away from free collective bargaining a little. I do not want to go into the question of whether they have gone for a statutory or a voluntary policy, but they have laid down guidelines relating to wage settlements and, by economic necessity, have shifted slightly from the situation of not being prepared to interfere in wage bargaining. In the light of the slight change in their policy, if they are able to interfere statutorily or play some part in wage bargaining in terms of the maximum amount an employer can pay, I invite the Government to consider whether they should seriously contemplate interfering in terms of the minimum wage an employer can give.
      That is what these amendments are all about. If the Government are looking for an excuse for changing their mind, here it is. The Government's policy on wage bargaining has changed, and they are in the position, if only for a temporary period, of not being entirely on the side of free collective bargaining. They have a glorious opportunity to step in and do something to assist the lower paid.
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      I could give numerous examples of lower-paid workers, but I do not intend to bore the House with them. Many hon. Members will have received documents from the Low Pay Unit and if I gave examples I would largely be quoting from them. I shall put one or two on the record. In dressmaking, for example, the minimum rate for skilled female workers is 54·7p per hour—less than £22 for a 40-hour week. In tailoring, the new minimum rates for men, which were implemented in December 1974, are between £23 and £24 a week. For women the rate is £22 a week. In drapery and outfitting shops, £25 a week is the minimum wage for men. One could go on giving the example of food shops and cafes.
      Mr. John Evans: I am sure that all hon. Members have had their hearts torn listening to the hon. Gentleman speaking about the position of low-paid workers. Does he agree, however, that some of us who served on the Committee for 30 sittings feel that he is being slightly hypocritical? He attended only 13 of the 30 meetings, and only one of the last 15 when these matters were being discussed. It would have been better if he had made these points in Committee and bored hon. Members there rather than on the Floor of the House. I would have thought a great deal more of him if he had done so.
      Mr. Smith: In one sense, I am sorry I gave way to the hon. Member, but in another I am not sorry, because he has put on record the sort of childish, stupid and silly interventions which some hon. Members opposite make.
      If the hon. Member for Newton (Mr. Evans) will contain himself for a moment I shall deal with the point that he has made. I am prepared, in terms of hours put in in this building during the Committee stage of the Bill, to back my attendance record against his and against any other hon. Member. I was unable to attend the Committee. The reason for that—and I hope, Mr. Deputy Speaker, that you will bear with me, as the charge has been made and is on the record—was quite simply that I was given a change in duties after the Committee was formed.
      For the hon. Gentleman's information, I attempted to make a change in my

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      party's representation on the Committee. However, I was advised by the Committee of Selection that once a Bill had started it was not possible to change a Member on the Committee. Therefore, since I have become Chief Whip of the party in the meantime—[Interruption.] I find the amusement of the Government Whips interesting, because they never fail to pay daily visits to my office to find out how Liberal Members will act in the Lobby in the evening. Their derisory laughter will be borne in mind on the next occasion they pay a visit.
      I consider the charge of the hon. Member for Newton to be an absolute disgrace, and unworthy of him. [Hon. Members: "It hurts."] It does not hurt in the slightest. It is true. Whether or not I was a member of the Committee, as a Member of this House I have a right to move amendments on Report and if Mr. Speaker calls those amendments, as he has done in this case, I have a right to move them. When we are talking about an important matter of 3 million workers in this country I am astonished that Labour Members have nothing better to do than make personal attacks on people who move amendments, instead of dealing with the merits or demerits of those amendments.
      I fully understand that many hon. Members, some of whom are sensible—
      Mr. Deputy Speaker: Order. I have, rightly, allowed the hon. Gentleman a great deal of latitude. The hon. Gentleman rightly stated the position when he said that he is entitled to move amendments on Report. He is equally entitled to speak on them.
      Mr. Smith: Yes, and I do not find the plight of the lower paid as amusing as some Labour Members. When I was interrupted I was referring to the disgraceful wages being paid to some of the lower-paid workers in this country. I can well understand the embarrassment caused to Labour Members when figures of this kind are read out, because they are wage settlements made during the lifetime of their Government. I mentioned settlements of £22 a week. The Government must be proud of their record.
      I want a national minimum wage laid down by statute—a policy for which I
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      have argued in this House during the three years I have been a Member of Parliament. [An Hon. Member: "How much?"] If the hon. Gentleman had been here at the beginning of the debate he would know, because I quoted the figure in moving the amendment. I suggest that in order to help his education he reads Hansard tomorrow.
      The Government have been willing, in their wages and economic policy, and in the Bill put through the House last week and the week before, to listen to the advice of Mr. Jack Jones, of the Transport and General Workers' Union—the first man to float the idea of a £6-a-week, across-the-board increase, or certainly the first to suggest it in public. Having listened to his advice in relation to their statutory wages policy, or voluntary wages policy that can be enforced by law, the Government should also listen to his advice in respect to the amendments and the need for a statutory minimum wage. The Transport and General Workers' Union is in favour of a statutory minimum wage. It has published pamphlets arguing the case for it forcefully and logically. This is not the first time that I have drawn the attention of the House to those pamphlets. If the Government listened carefully to the advice of Mr. Jack Jones on the matter, they would find it possible to accept the amendments.
      The Minister will argue that by moving to SJICs, and thus to freer collective bargaining between management and trade unions, they are likely to obtain better results for lower-paid workers. I wish that I could share his optimism, but the fact is that trade union organisation is extremely difficult among the lower paid. For example, the average laundry employs 27 people. Sixty-six per cent. of dressmaking firms employ 25 or fewer employees. In clothing and shoe shops, 440,000 workers work in 55,000 establishments. Clearly, in those circumstances trade union organisation is not easy. That is why I do not believe that SJICs are likely to prove any more effective than wages councils have been in raising the living standards and wages of the lower paid.
      The lower paid must be protected and helped by the process of law if progress is ever to be made towards raising their

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      living standards and wages. If the Minister believes that SJICs will raise the wages of the lower paid, that is no reason not to accept the amendments, because they have effect only if progress is not made. They deliberately say that if the Minister is satisfied that progress to reasonable wage rates is being made he need take no action. He is urged, required or enabled by the amendments to take action only if he is of the opinion, after having had a report, that sufficient progress is not being made.
      I cannot understand why there should be any reluctance to accept the amendments, or why the Government should not want to be given power to protect the lower paid—power which they need invoke only if they are satisfied that the lower paid are not getting a fair deal. I cannot believe that 66 per cent. of average male earnings is an unreasonable figure, or that it will break the bank. What it will do is to make a lasting attack on poverty and contribute to raising the living standards of the workers, over 3 million of whom are covered by existing wages councils.
      I believe that a Government concerned about workers and fair play, and determined to do something about the lower paid, will accept the amendments, or at least accept their spirit and introduce their own amendments in another place. The fact is that in any democratic and humane society the strong have to exert their power in order to help the weak. The strong in this case are the Government. The weak are the lower-paid members of our society.
      9.30 p.m.
      Mr. Harold Walker: I apologise to the House for being unable to reply as briefly as either I or the House would wish, but the hon. Gentleman has dealt with a large group of important amendments. He will recall that, in winding up the debate on Second Reading, I spent a considerable part of my speech dealing with the amendments from the Liberal bench, and in particular those which followed the same line as his amendments this evening.
      Listening to him, I found it rather difficult to reconcile his concern for the low paid with his support in the Standing Committee for the Opposition amendment to deny the privileges, benefits and rights contained in this Bill to people
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      who work in small units. The House will know that many of the people employed in wages council industries are employed in small units. There is an extraordinary contradiction between the hon. Gentleman's attitude on that issue and the speech he has made tonight.
      Dealing first of all with Amendments Nos. 172, 173 and so on, it is the intention that ACAS should report on the development of collective bargaining in wages council industries on a regular and systematic basis. But ACAS does not have the resources to investigate and report on all wages council industries each year. In any event, in the case of a number of wages council industries, formal investigations would be to little purpose, since it is well known that no real movement in the evolution of voluntary machinery has taken place. It should be able to cover all those industries that are worth investigating over a period of years. The clause as drafted will ensure that the Secretary of State has some control over the programme.
      In addition, there is provision in Clause 87 for the Secretary of State to request the service to inquire into and report on negotiating machinery in the wages council field, and whether wages council orders are necessary in order to maintain a reasonable standard of pay and conditions, as well as the general operation of the Act in relation to wages councils and statutory joint industrial councils.
      Furthermore, Schedule 11 provides for an independent trade union to report a claim that an employer is observing terms and conditions of employment less favourable than the recognised terms and conditions of employment or, where there are no recognised terms and conditions, the general level of terms and conditions.
      Schedule 11 also provides in Part II for a claim to be reported to the service, as respects a member of an independent trade union working within the field of a wages council, a statutory joint industrial council or an agricultural wages board, that his employer is paying him less than the lowest collectively negotiated rate of pay that applies in a significant number of establishments covered by the wages council, and so on, where the circumstances of the employer are similar.
      Then, in addition, the reports of the Royal Commission on the Distribution

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      of Income and Wealth on its standing reference should provide from time to time material relevant to the consideration of policy concerning low pay.
      Taken together, these initiatives represent a considerable development in the arrangements for dealing with the problems of low pay. These arrangements make the hon. Gentleman's amendments unnecessary.
      The substance of both the hon. Gentleman's speech and his amendments is to be found in his Amendments Nos. 209 and 210 and his statement about the nine wages councils with minimum adult rates under £20 per week. The hon. Gentleman took those figures from the report of the Low Pay Unit. I know that he relied heavily for his source material on the information which it supplied. My Department takes the Low Pay Unit's reports seriously. We look carefully at what the unit says and at its sources of information. We have not been able to verify the existence of nine wages councils. We find that there are three which make settlements, although I do not make any great point of that.
      I want to give the reasons why we are opposed to these amendments. The hon. Gentleman and I knew each other long before we entered Parliament. I do not question his sincerity in helping the low paid and I am sure that he will not question mine. There is no difference between us on the issue of seeking to help the low paid. That is common ground. What is between us is how best we can tackle the problem.
      On Second Reading I said that the wages council machinery and trade boards were set up in 1909. However, all these years have passed and by and large the same industries are still low paid. The wages council system has not worked. A fresh approach is necessary to facilitate the growth of collective bargaining in those industries. Therefore we have made provision for them to convert themselves into the statutory joint industrial councils with wider functions. The wages councils will therefore have wider functions. We have provided for the wages councils to make the retrospective payments which they have not been able to make up to now. That inability has hit the workers in wages
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      councils industries very hard. We are providing a limited degree of retrospection in the making of council orders.
      We are also extending the scope of their bargaining, which until now has been limited. We must open this area to them so that they can determine pay and holidays and other terms and conditions of employment. The statutory joint councils will also be able to engage in those activities.
      We seek to move towards collective bargaining. The hon. Gentleman's approach would go the opposite way and perpetuate the wages council system. It would ossify and fossilise the wages councils and make it much more difficult for them to break into the area of free collective bargaining. This is a matter of approach. The hon. Gentleman proposes an unprecedented step in the direction of a statutory incomes policy. That is implicit in the proposal. He frankly admitted that he was a long-standing advocate of a statutory incomes policy. The Liberal Party is in a minority on this matter.
      Mr. Cyril Smith: At the moment.
      Mr. Walker: History has taught those of us who have been round the statutory incomes policy course that that is the wrong way. We have learnt that as a result of direct experience.
      Mr. Cyril Smith: Has the Minister read the results of the Gallup Poll? The result of that poll showed a considerable majority in favour of a statutory incomes policy.
      Mr. Walker: I concede that to the hon. Gentleman. I have spoken to the members of my party in my constituency, some of whom support a statutory incomes policy as long as it applies to someone else. But when I ask each individual about his own pay, there is a different story. No doubt there would be a different story from all those interviewed by the Gallup Poll. They think that an incomes policy is very good for the country but that it should not be applied to them.
      In the period 1966 to 1970 I defended the then Government's pay policy. The Gallup Polls then showed support for the Government's policy. But some of those who supported that policy came knocking at my door, accompanied by

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      their employees, saying that there should be exceptions.
      I have given reasons why I think that the House should reject the hon. Gentleman's amendments. The third reason is the provision contained in Schedule 9 in relation to wages council industries. It is an extension of the provisions that were originally contained in Section 8 of the Terms and Conditions of Employment Act 1959.
      For those three reasons—first, our belief that the right way is to proceed through collective bargaining, secondly, our objection to a statutory incomes policy and, thirdly, the additional instruments we have provided for fighting against low pay—I advise the House to reject the amendment.
      Mr. Hayhoe: The question of low pay was dealt with briefly in our debate in the second sitting of the Committee which followed the lines of today's debate. The amendment was moved by the hon. Member for Rochdale (Mr. Smith) who, as today, relied heavily upon the information produced by the Low Pay Unit and the Low Pay Bulletins" which are sent to most, if not all, hon. Members. Despite the comments of the Under-Secretary of State that there are elements of inaccuracy in them, they make a valuable contribution to the general information in this sphere, as the Minister made clear in his comments.
      The amendments fall into two categories. Amendment No. 173 calls for reports. We considered this matter in Committee and there is a provision in Clause 87 which could be used to enable the service to produce the sort of report we have in mind. One of the recommendations of the Royal Commission on the Distribution of Income and Wealth is as follows:
      "We noted in Chapter 4 that the proportion of total personal income received by the 20 per cent. group of lowest income recipients had changed little since the end of the 1950s before and after the payment of income tax. The composition of this group of low income recipients and the make-up of their incomes are matters we wish to study because they may throw light on this part of the distribution of income."
      It is clear that the Royal Commission will be engaged in a further study, and I hope that it moves in parallel or in harmony with the service in that respect.
      Mr. Clemitson: I do not know how up to date the figures are, but in phase 1 of the pay guidelines of the social contract is there not considerable evidence that the poorer-paid workers and women in general did better than the average?
      Mr. Hayhoe: I am not sure that it will help to speed our proceedings to begin a discussion on how effective was the social contract in that sphere, but it is true that the information that the Royal Commission had tended to filter away as it moved closer to the present date. I imagine that on both sides of the House there would be a welcome for more information on these matters.
      Amendment No. 210 and the amendments to the schedule deal with the setting of a target for a minimum wage which is a percentage of average earnings. The danger of that approach is that it provides an in-built pressure towards ever-increasing escalation. If one takes the lowest group and raises it to within two-thirds of the average, one automatically raises the average. So one starts the process again, raises the lowest element up to two-thirds of the average and the average is raised again. It depends how quickly that process goes on, but it is the classic case of chasing after one's tail and results in the spiralling upwards of inflation.
      I believe that there are great dangers to which we may return when we consider the provisions of Clause 89 and Schedule 11. I believe that in all parts of the House there is the desire to improve the conditions of the low paid. Indeed, the incomes policy or the remuneration policy, if I may call it that, of the present Government, like that of previous Governments, has tended to give priority to the position of the low paid in the norms or targets that they set. Nevertheless, the approach set out in the latter of these amendments is wrong. The statutory approach of setting a percentage of average earnings would lead to grave difficulties.
      I hope that we shall get more information about the position of the low paid. In Committee the Minister said that he would at a later stage indicate just how many of the low paid were in the public sector. My own belief is that many more are within the public sector than there should be. Although the Minister has not

      367
      given us the figures today, I hope that he will pay attention to that matter.
      In my view the principles behind Amendment No. 173 commend themselves to the House although probably the amendment itself is unnecessary. I also believe that the other linked amendments
      should not commend themselves to the House.
      Question put, That the amendment be be made:—
      The House divided: Ayes, 10, Noes, 202.

      Division No. 327.]

      AYES

      [9.47 p.m.

      Crawford, Douglas

      Penhaligon, David

      Ewing, Mrs Winifred (Moray)

      Ross, Stephen (Isle of Wight)

      TELLERS FOR THE AYES:

      Grimond, Rt Hon J.

      Steel, David (Roxburgh)

      Mr. Cyril Smith and

      Henderson, Douglas

      Watt, Hamish

      Mr. Richard Wainwright.

      Johnston, Russell (Inverness)

      Welsh, Andrew

      NOES

      Allaun, Frank

      Freeson, Reginald

      Mellish, Rt Hon Robert

      Anderson, Donald

      Garrett, John (Norwich S)

      Mendelson, John

      Archer, Peter

      Garrett, W. E. (Wallsend)

      Mikardo, Ian

      Armstrong, Ernest

      George, Bruce

      Millan, Bruce

      Ashton, Joe

      Gilbert, Dr John

      Miller, Dr M. S. (E Kilbride)

      Atkins, Ronald (Preston N)

      Gould, Bryan

      Miller, Mrs Millie (Ilford N)

      Atkinson, Norman

      Gourlay, Harry

      Mitchell, R. C. (Soton, Itchen)

      Bean, R. E.

      Grant, Anthony (Harrow C)

      Molloy, William

      Benn, Rt Hon Anthony Wedgwood

      Grant, George (Morpeth)

      Morris, Charles R. (Openshaw)

      Bidwell, Sydney

      Hamilton, W. W. (Central File)

      Moyle, Roland

      Bishop, E. S.

      Hardy, Peter

      Mulley, Rt Hon Frederick

      Booth, Albert

      Harper, Joseph

      Murray, Rt Hon Ronald King

      Boothroyd, Miss Betty

      Harrison, Walter (Wakefield)

      Newens, Stanley

      Bottomley, Rt Hon Arthur

      Hatton, Frank

      Noble, Mike

      Boyden, James (Bish Auck)

      Hayman, Mrs Helene

      Orbach, Maurice

      Brown, Hugh D. (Provan)

      Healey, Rt Hon Denis

      Ovenden, John

      Buchanan, Richard

      Heffer, Eric S.

      Palmer, Arthur

      Callaghan, Jim (Middleton & P)

      Hooley, Frank

      Park, George

      Carter-Jones, Lewis

      Horam, John

      Parker, John

      Clemitson, Ivor

      Howell, Denis (B'ham, Sm H)

      Parry, Robert

      Cocks, Michael (Bristol S)

      Hoyle, Doug (Nelson)

      Pavitt, Laurie

      Cohen, Stanley

      Huckfield, Les

      Peart, Rt Hon Fred

      Coleman, Donald

      Hughes, Rt Hon C. (Anglesey)

      Pendry, Tom

      Conlan, Bernard

      Hughes, Mark (Durham)

      Perry, Ernest

      Cook, Robin F. (Edin C)

      Hughes, Robert (Aberdeen N)

      Phipps, Dr Colin

      Corbett, Robin

      Hunter, Adam

      Prescott, John

      Craigen, J. M. (Maryhill)

      Irving, Rt Hon S. (Dartford)

      Price, C. (Lewisham W)

      Crawshaw, Richard

      Jackson, Colin (Brighouse)

      Price, William (Rugby)

      Cunningham, Dr J. (whiteh)

      Janner, Greville

      Radice, Giles

      Dalyell, Tam

      Jay, Rt Hon Douglas

      Richardson, Miss Jo

      Davidson, Arthur

      Jenkins, Hugh (Putney)

      Roberts, Albert (Normanton)

      Davies, Bryan (Enfield N)

      Johnson, James (Hull West)

      Roberts, Gwilym (Carmock)

      Davies, Denzil (Llanelli)

      Jones, Barry (East Flint)

      Rodgers, George (Chorley)

      Davis, Clinton (Hackney C)

      Jones, Dan (Burnley)

      Rooker, J. W.

      Deakins, Eric

      Judd, Frank

      Roper, John

      Dean, Joseph (Leeds West)

      Kerr, Russell

      Ryman, John

      de Freitas, Rt Hon Sir Geoffrey

      Kilroy-Silk, Robert

      Sedgemore, Brian

      Dell, Rt Hon Edmund

      Lamborn, Harry

      Shaw, Arnold (Ilford South)

      Dempsey, James

      Lamond, James

      Sheldon, Robert (Ashton-u-Lyne)

      Dormand, J. D.

      Latham, Arthur (Paddington)

      Shore, Rt Hon Peter

      Duffy, A. E. P.

      Lewis, Ron (Carlisle)

      Sillars, James

      Dunn, James A.

      Litterick, Tom

      Silverman, Julius

      Dunnett, Jack

      Loyden, Eddie

      Skinner, Dennis

      Eadie, Alex

      Luard, Evan

      Small, William

      Edelman, Maurice

      Lyon, Alexander (York)

      Smith, John (N Lanarkshire)

      Edge, Geoff

      Lyons, Edward (Bradford W)

      Snape, Peter

      Edwards, Robert (Wolv SE)

      McCartney, Hugh

      Spriggs, Leslie

      Ellis, John (Brigg & Scun)

      MacFarquhar, Roderick

      Stallard, A. W.

      Ellis, Tom (Wrexham)

      Mackenzie, Gregor

      Stewart, Rt Hon M. (Fulham)

      English, Michael

      Maclennan, Robert

      Stoddart, David

      Ennals, David

      McMillan, Tom (Glasgow C)

      Summerskill, Hon Dr Shirley

      Evans, Ioan (Aberdare)

      Madden, Max

      Swain, Thomas

      Evans, John (Newton)

      Magee, Bryan

      Taylor, Mrs Ann (Bolton W)

      Ewing, Harry (Stirling)

      Mahon, Simon

      Thomas, Mike (Newcastle E)

      Faulds, Andrew

      Marks, Kenneth

      Thomas, Ron (Bristol NW)

      Flannery, Martin

      Marquand, David

      Tinn, James

      Fletcher, Raymond (llkeston)

      Marshall, Dr Edmund (Goole)

      Tuck, Raphael

      Fletcher, Ted (Darlingon)

      Marshall, Jim (Leicester S)

      Urwin, T. W.

      Foot, Rt Hon Michael

      Mason, Rt Hon Roy

      Wainwright, Edwin (Dearne V)

      Forrester, John

      Maynard, Miss Joan

      Walker, Harold (Doncaster)

      Fraser, John (Lambeth, N'w'd)

      Walker, Terry (Kingswood)

      Ward, Michael

      Whitlock, William

      Woodall, Alec

      Watkins, David

      Williams, Alan (Swansea W)

      Woof, Robert

      Watkinson, John

      Williams, Alan Lee (Hornch'ch)

      Wrigglesworth, Ian

      Weetch, Ken

      Williams, Rt Hon Shirley (Hertford)

      Young, David (Bolton E)

      Weitzman, David

      Wilson, Alexander (Hamilton)

      Wellbeloved, James

      Wilson, Rt Hon H. (Huyton)

      TELLERS FOR THE NOES:

      White, Frank R. (Bury)

      Wilson, William (Coventry SE)

      Miss Margaret Jackson and

      Whitehead, Phillip

      Wise, Mrs Audrey

      Mr. James Hamilton.

      Question accordingly negatived.

    Clause 90

      DUTY OF EMPLOYER TO CONSULT TRADE UNION REPRESENTATIVES ON REDUNDANCY
      Mr. Madel: I beg to move Amendment No. 177, in page 72, line 27, leave out 'consult' and insert 'notify'.
      The Minister will recall that we moved this amendment in Committee, at our twenty-sixth sitting, and in reply the hon. Member for Doncaster (Mr. Walker), the Under-Secretary of State, indicated that the Government accepted the spirit of the general approach which we then proposed and suggested that they ought to take it on board and respond to it. The hon. Gentleman said that he hoped that we would regard that as "an adequate response" and would on that basis withdraw the amendment, which we did.
      The matter was covered in a brief debate—reported in cols. 1396–9 of the Official Report—and in order to probe the Government's thinking a little further we have put down this amendment for Report. I shall be grateful if the Minister will now give us a little more information.
      Mr. John Fraser: The effect of the amendment would be to require only notification rather than consultation in the case of small redundancies, since by later provisions the consultation process would be built into redundancy situations affecting more than 10 people. We have given this matter consideration but have come to the conclusion that it is right even in the case of small redundancies—I say "even", but one hardly means that—that an opportunity for consultation would be appropriate, and we do not consider that it would be right to leave
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      to the employer the decision on whether there should be consultation. In our view, trade unions can be trusted in such cases not to waste time in lengthy discussions where these are unnecessary.
      In conclusion, perhaps I should add that, from my own experience, I do not believe that all small employers are the most avuncular and most generous people with whom to deal.
      We have given the matter consideration, and we think it right to follow the general principle that consultation should take place. We hope that that will not result in waste of time, and we do not, for the reasons I have given, wish to accept an amendment to the Bill in this respect.
      Mr. Madel: As I said, there was not a firm commitment by the Government.
      It being Ten o'clock, the debate stood adjourned.

      BUSINESS OF THE HOUSE
      Ordered,
      That the Employment Protection Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Laurie Pavitt.]

      EMPLOYMENT PROTECTION BILL
      Question again proposed, That the amendment be made.
      Mr. Madel: We do not agree with the Government, and certainly we do not agree with what the Minister said about small employers. It is not right to make such generalisations. However, this was a smallish point of difference between us. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Mr. John Prescott: I beg to move Amendment No. 179, in page 73, line 41, at end insert
      '(10) (a) The Secretary of State shall in consultation with employers and independent trade unions representing employees publish a scheme for the payment of redundancy benefit to those seafarers including fishermen who are employed voyage by voyage or trip by trip or under any maritime or fishing articles of agreement.
      (b) Such a scheme shall be subject to negative procedure under the Statutory Instruments Act 1946'.
      The amendment, designed by my hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara), who unfortunately cannot be here tonight, deals with a particular section of workers who are probably the most disadvantaged in this country. The clause is limited to those areas of redundancy where there are over 100 people involved or over 10 involved. It is apparent from the nature of the limitations that exclusions, perhaps not by intention but by effect, take place.
      Fishermen, similarly to seamen, serve on vessels where the crewing can be up to 30, but it can be as low as four or five on small types of fishing vessels. They are, therefore, outside the scope of the clause because not all members of a vessel are normally made redundant at the same time.
      We come up against another conditioning factor which limits the provision of benefits to this type of worker in that they serve under articles. That is a somewhat technical term, but it has an important conditioning effect not only as regards redundancies and benefits under the redundancy legislation but as regards many other factors including the rights guaranteed to workers.
      The articles of agreement which a fisherman or seaman signs with the shipowner or captain set out conditions as terms of employment. They normally apply for the duration of a voyage, and a voyage for a fishing vessel can be anything from 14 days up to three months for a large freezer-type vessel. This means that the articles of agreement or conditions of employment apply only for the duration of the voyage. By definition they would last for 14 days up to three months. That in itself would put this category of workers outside the terms of the clause and outside the terms of the
      372
      redundancy legislation, bearing in mind the requirement of two years' continuous employment.
      Fishermen may well be employed in the industry for all their working lives or for varying periods, but they will not be entitled to the provisions under the clause as they have moved from ship to ship or from company to company. The rights and benefits which usually continue under present legislation, and which guarantee certain terms and conditions and employment rights, do not apply in this instance.
      There are over 23,000 fishermen in this country. We have the third largest body of fishermen in the EEC. However, the fleet has declined from approximately 375 trawlers in 1973 to an estimated 290 in 1975. That decline has thrown hundreds of fishermen out of work. Many of those men have given a considerable time to the industry, and in a shore capacity they could have normally expected to receive redundancy payments as a conditioning factor to help them in these particularly difficult times.
      As I have pointed out, there are difficulties. By the very definition of the terms conditioning redundancy legislation benefit is denied to fishermen and seamen to a considerable extent. It is clear that the legislation allows for exclusion. Merchant seamen, dockers and share fishermen—namely, the fishermen who own their own boats and share the money from their cargoes—are exempt. The exclusions allow for the development of other schemes. We hope that the Government will consider publishing a scheme which will guarantee benefits to fishermen.
      The amendment is designed to deal with this problem. The original benefits applied to fishermen who were employed voyage by voyage, or trip by trip. That is the key to the amendment. In other words, we need a scheme that takes account of the special conditions of employment undergone by fishermen which will guarantee their rights.
      The exclusions in respect of the merchant shipping industry allow contributions paid by employers to be paid back to the employers' fund—in other words, to the State—and for that money to be used to fund the medical severance scheme or some form of redundancy scheme so

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      that some money can be made available to meet the special conditions in the industry. Last year a sum of £330,000 was returned to the shipping industry in respect of redundancy contributions and that money was used to facilitate the medical severance scheme.
      At present when the fishing industry is begging for more money—the industry has had over £6 million in the last six months and has now been given £2¼ million for a further six-month period—many of my constituents who are now unemployed find it strange that the Labour Government should hand out money to the fishing industry, while at the same time not guaranteeing workers in the same industry conditions of employment and rights accorded to other workers on shore. This is a matter of concern to my constituents. The provision calls upon the Department to publish a scheme to meet special conditions to guarantee fishermen the same rights as are enjoyed by other workers when they are made redundant. In the fishing industry the figures throw up a higher-than-average rate of accidental death, nervous disease and other stresses. Therefore, they have greater need to be accorded the same rights as are enjoyed by other workers.
      Why is it that the Government seek to exclude this small class of workers from the provisions? We hope that the Department will look seriously at this matter and will consider establishing a charter of rights for fishermen so as to give them the same rights, privileges and benefits as are given to shore workers. In this way we seek to establish guaranteed conditions of work for fishermen.
      I believe that we should seek to end the casual nature of an industry in which the employers pay off the fishermen at the end of the voyage, throw them on the mercy of the dole, and then hope for those workers to return when the ships are ready to voyage once again. The employers are paid money to subsidise trawlers, but nothing is done to guarantee workers' minimum conditions of work in an industry where on occasions the conditions are barbaric
      The Government later will need to consider legislation involving subsidies and the requirements of EEC legislation about social conditions. The Government should seek to use subsidies, as the EEC
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      requires, to retrain workers who are affected by the conditions in their industry.
      At present the Government are supplying the money without seeking to impose any requirements. This is the responsibility of the Department. I call on the Department to have an urgent inquiry into the conditions of fishermen and to take steps to give them rights already accepted as the normal for shore workers. This is vital. It has been denied them for far too long, and it is about time that it was done.
      Mr. James Johnson: As the House knows, fishermen work in a most unusual, if not a unique, situation. Hon. Members representing fishing constituencies such as Hull, Fleetwood and Lowestoft have constituents who sail to the Arctic and return with fingers missing and all sorts of other injuries as a result of which they are unable to carry on their work and who, at the end of their days, after perhaps 30 or 40 years in the Arctic, get not a stiver. At the same time, probably living next door to them, there are men working on the docks who get redundancy pay of £4,000 or £5,000. Our fishermen are in a parlous position.
      Somehow, the fishing industry is subsidised by unemployment benefit. We have heard about the millions of pounds which the owners have made in past years and which they have put into land speculation. Those owners today have just received £6 million or £7 million in subsidy. But the top and bottom of it all is that few fishermen whom I know have had two years' continuous employment. If they are in receipt of social benefit once or twice in the 24 months, they do not qualify for redundancy pay. Here we have a position where the owner pays for the stamp. But it must be said that not a man jack has not had a week or two off in the past two years.
      The situation must be changed and changed, of course, by this House. But we have to find out how it can be changed. I have never understood why the owners are not prepared to help. As I understand it, they will pay possibly 10 per cent. of redundancy pay. The Government out of social security money find 90 per cent. of the final payment to these men. As we all know, the weekly

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      pay fluctuates. But let us say that there are 1,000 men who will leave the fleet in the next year or two, which is not impossible in view of the difficulties facing them. If they each get £4,000, the owners will be paying only 10 per cent. of £4 million, as I understand it. I find it difficult to know why in an industry like this which is racked and torn by bad labour relations we cannot have some scheme of this nature and get these men what they deserve.
      If we do that—and I think that we must as quickly as possible—it will mean that the fishermen will be on a national register. That in turn will mean that all those engaged in deep sea fishing will find themselves in the position of having to do as they are told. They will go to sea—as a worker on shore goes to work. At sea, they work in what are floating factories, so they should at least qualify for the benefits and the conditions applying on shore.
      I do not know the answer to this. Fishermen like their liberty. They can be on a voyage of perhaps 21 days or they can be on a voyage of seven weeks. They can pick and choose.
      It is interesting to find that certain firms have a work force which is with them month after month and year after year. As Fleck said in 1961 and as the Commission also said in 1969 about the conditions of fishermen, there is no doubt that the good men gravitate and stay closely locked to a good owner. But this makes conditions worse for those men who are sometimes at sea and sometimes not and are working for bad owners.
      10.15 p.m.
      We must have a strict register, which implies some code of discipline. We must carry the workers with us. I believe in participation. These men should be organised in their union, but, more important, we should know how they feel about a register. The only answer is a ballot such as the NUM uses. That would show, I believe, that the men wanted this change.
      I believe that the TGWU, which organises the deckhands, will be vindicated over decasualisation and severance pay, and in its claim that men who work on floating factories should have the
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      same conditions as those in factories on land.
      The owners and others ask us whether the men are interested in this. Of course they are. The House should show its faith in men who do the toughest job. These are men who go to the Arctic in conditions 40 degrees below when one has to chip ice off the winch with an axe. One thinks of the men in the "Gaul" who went down in such conditions and were never seen again. These men above all are worthy of legislation which benefits them.
      Mr. Loyden: The Government deserve one cheer at least for having extended some part of these provisions to all seamen, whether fishermen or others. I congratulate them on that step in the right direction. For the first time, they have accepted that seamen should have the same rights as other workers. They have not only given them the protection of the Bill but have ensured, I believe, rapid movement towards the normalisation of seamen's conditions.
      The argument for keeping the conditions of seamen deplorable has always been the difficulties and peculiarities of the industry. The decision taken today, although it has not achieved all that we wanted, has shown that the Government's sympathy is in the right place. I hope that, as he considers the points made, the Minister will remember that these people are the same as other workers and should have the full protection of the Bill.
      Mr. John Fraser: The Redundancy Payments Act applies to a fisherman employed under a contract of service, but such contracts may be of relatively short duration, and perhaps with different employers, and that is the reason why it is difficult for the fisherman to build up the necessary 104 weeks' continuous service to qualify him for a redundancy payment.
      This kind of situation has been recognised before. It was recognised in the 1965 Act. Section 11 of that Act empowers the Secretary of State to make an order exempting from Section 1 of the Act employees covered by a suitable agreement made between employers and unions. The effect of such an exemption order is that the employers continue to contribute to the redundancy fund and

      377
      can claim rebate, when a redundancy payment is made under the scheme, on the basis of continuous service with the group of employers covered by their agreement.
      We understand from the Ministry of Agriculture, Fisheries and Food and the Department of Trade, both of which have interests in the matter of fishermen, that the Transport and General Workers' Union, which has 75 per cent. membership on deep sea trawlers, with a smaller percentage on smaller vessels, have in mind a decasualisation scheme similar to that in force under the Dock Workers (Regulation of Employment) Act 1946. That is a similar scheme to that for registered dock workers.
      But the fishermen themselves are little enamoured with the implication of being directed from one berth to another. It is of the essence in any kind of scheme that there is as part of that scheme a restriction on the choice of somebody when he leaves one boat and is about to go on another. A group of Lowestoft employers and fishermen tried a scheme of full-time contracts but this did not succeed because of the restriction of choice on both sides. The scheme would involve that kind of arrangement for deemed continuous employment when the fishermen changed from one employer to another.
      I am sorry that I cannot accept the amendment as it stands. I urge employers and unions to get together with a view to negotiating a workable and mutually acceptable scheme, perhaps port by port. I understand that in Hull, for instance, bobbers are employed ashore by the local trawler owners association to unload the fish from the trawlers and thereby get the benefit of continuity of service and payments. Provided that any agreement allowed for reference to industrial tribunals of disputes about redundancy payment entitlement, the Secretary of State could then consider a Section 11 exemption order. It would be possible to devise a scheme which had been incorporated in an order which could be laid under the Redundancy Payments Act 1965. I do not think this goes as far as my hon. Friends have been asking—
      Mr. James Johnson: Is the Minister speaking in the context of the last dispute or the dispute that we are in the middle
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      of, in which bobbers have been discharged from St. Andrew's Dock? Is that the context in which he is speaking?
      Mr, Fraser: I am not speaking in the context of a dispute. I am giving one example of an arrangement which was sought to be reached for providing continuity of employment so that people employed at sea were given some continuity of employment by having a shore job. I am not in a position to go into the merits of any dispute.
      I recognise the points put forward by my hon. Friends. It would be rash of me if I were to say that my right hon. Friend would be willing to set up an inquiry. It would not be possible, on the information and the degree of co-operation which exists at the moment, to publish a scheme to meet the wishes of my hon. Friends.
      However, my hon. Friends have put forward a matter which is worth while exploring further. There are considerable difficulties. I wonder whether I may give an invitation to my hon. Friends to come and discuss this matter in greater detail. It is not a simple matter. It involves the co-operation of employers, trade unions and the men themselves, but it is a matter which is worth exploring further. If my hon. Friend would be willing to withdraw the amendment, we could perhaps arrange to discuss the matter at greater length and see whether some kind of scheme which would meet his wishes could be put forward.
      Mr. Prior: I thought this amendment was an ingenious method of getting a discussion on the decasualisation of fishermen's work. A new clause was put down, but not called, and I congratulate the hon. Members for various Hull constituencies on getting their amendment into order. I join with them in paying tribute to fishermen. I have never been out as far as the Arctic, but I once spent 14 days on a Lowestoft trawler and I was sick for 10 of the 14 days.
      I have never underestimated the life led by fishermen at sea. I know that fishermen are an extremely proud and independent group of people. When a full-time contract scheme between employers and fishermen was tried in Lowestoft, it broke down because it

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      restricted the fishermen, even more than the owners, especially in not being able to move from ship to ship, skipper to skipper and owner to owner. It is not easy to devise a suitable scheme.
      The industry needs a thorough investigation and the opportunity ought to be taken then to look at these problems sympathetically. The situation is far from satisfactory and this is recognised by employers as well as by employees. The difficulty has always been in building up the number of weeks' service to qualify for redundancy pay. I think something could be done under the exemptions, about which I know very little, but which have been mentioned tonight. They could be pursued further.
      I would certainly support any measures which enabled fishermen to bring their standard of living and the protection they are afforded at work more into line with dockers for example. There is something rather remiss about a society that enables dockers to have enormous handshakes if they leave their industry while such people as fishermen are denied them. This produces bad blood between the fishing industry and the docks industry. If anything can be done to help, it would meet with the approval of this side of the House.
      As the hon. Member for Kingston upon Hull, East (Mr. Prescott) said, the fishing industry has been reduced from 375 trawlers to 290 in the past two years and is going through a very difficult time. Since the new clause was put down, I have consulted some people in the industry and they have a good deal of sympathy with the spirit behind it, but they feel that the cash is not there to do anything about it—let alone the other difficulties that have been mentioned in the debate. I hope that the Government will carry out further investigations and not confine them to their own side of the House. The all-party Fisheries Committee might have a view that could be useful and so, too, might the British Trawler Federation and the Transport and General Workers' Union. We support the Government's view but have a good deal of sympathy with the case put forward by those who have spoken in favour of the amendment.
      10.30 p.m.
      Mr. Prescott: I have listened carefully to what has been said. I want to disabuse the Minister of the idea that the exemption under Clause 107(11) is a possibility for this industry because the shipping industry is under this exemption and it pays out very little in redundancy payment, primarily because of the nature of the employment contract in the articles.
      The more difficult part of the problem is that the employer would still be asked to find 50 per cent. of redundancy pay at a time when the industry is begging for more and more money and says that it cannot afford anything. It is hardly likely to agree to a scheme that will cost a lot of money in redundancy payments.
      Mention was made of an investigation being carried out into the industry. I should like to point out that the grants given and reviewed in September would also be tied to whatever agreement is reached in the EEC, and there is a condition that they should be tied to social conditions. Therefore, the Department will have to examine social conditions. I hope it does.
      The industry, particularly the fishermen, are fed up with all the tributes to their bravery and all the sympathy given when crews are lost or when ships go down, no matter how well-intentioned they may be. It still means that they do not get even the rights of other workers. I give notice to the House that we would co-operate with hon. Members who represent fishing constituencies and with trade unions who are giving thought to this problem. We wish to co-operate. However, the time is short, and so is the fuse. This body of workers has not had the rights that should be given to them.
      In view of what has been said, we are prepared at this stage to withdraw the amendment, but we sincerely hope that we shall get some action in the next few months on these matters. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

      Clause 92

        COMPLAINT BY TRADE UNION AND PROTECTIVE AWARD
        Mr. John Fraser: I beg to move Amendment No. 181, in page 75, line 6,

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        leave out 'A' and insert 'An appropriate'.
        Mr. Deputy Speaker: With this it is convenient to take Amendment No. 182, in page 75, line 6, after 'union', insert:
        'which is recognised by the employer as representing employees of the class whom he has dismissed as redundant or proposes to dismiss as redundant'.
        and Government Amendment No. 183.
        Mr. Fraser: The purpose of these amendments is to make it clear beyond all question that only a trade union recognised by the employer for the description of employees concerned in the redundancy is entitled to bring a claim before an industrial tribunal for failure to consult. I believe I am right in saying that this means the same as Opposition Amendment No. 182.
        Amendment agreed to.
        Amendment made: No. 183, in page 76, line 9, at end insert:
        ' (7) "Appropriate trade union", in relation of an employee of any description, means an independent trade union recognised by his employer in respect of that description of employee '.—[Mr. John Fraser.]

      Clause 95

        REDUCTION OF REBATE ON FAILURE TO NOTIFY REDUNDANCIES
        Amendments made: No. 236, in page 79, line 36, leave out 'purporting to be'.
        No. 237, in page 79, line 39, at end insert:
        '; and a document which purports to be such a certificate shall be taken to be such a certificate unless the contrary is proved'.—[Mr. Harold Walker.]

      Clause 97

        SUPPLEMENTARY
        Amendments made: No. 184, in page 79, line 42, leave out 'negotiation' and insert:
        'collective bargaining'.
        No. 185, in page 79, line 44, leave out '12(8)' and insert:
        '15 '.—[Mr. Harold Walker.]

      Clause 100

        POWER TO CONFER JURISDICTION ON INDUSTRIAL TRIBUNALS IN RESPECT OF DAMAGES, ETC., FOR BREACH OF CONTRACT OF EMPLOYMENT
        Mr. Booth: I beg to move Amendment No. 235, in page 83, line 20 leave out subsections (3) and (4) and insert—
        '(3) Without prejudice to the power conferred by subsection (1) above to specify a description of claim which may be brought before an industrial tribunal, this section does not apply to any claim mentioned in subsection (2) above unless the claim satisfies either of the following conditions, that is to say—

        (a) it arises or is outstanding on the termination of the claimant's employment; or

        (b) it arises in circumstances which also give rise to proceedings already or simultaneously brought before an industrial tribunal otherwise than by virtue of this section;

        or, if an order under this section to provides, it satisfies both those conditions. '.
        Mr. Deputy Speaker (Mr. Oscar Murton): With this amendment we may debate Amendment No. 187, in page 83, line 21 leave out from beginning to end of line 26 and insert
        'which arise out of or in relation to the facts before an industrial tribunal relating to a complaint which has been brought before an industrial tribunal otherwise than by virtue of this section'.
        Mr. Booth: The effect of the Government amendment is to enable the Lord Chancellor and the Secretary of State for Scotland to introduce a breach of contract jurisdiction for industrial tribunals to cover either every type of breach of contract claim connected with, or outstanding on, the termination of an employee's employment, or any breach of contract claim which arises directly from a claim under one of the tribunal's other jurisdictions, or to cover both.
        I urge the House to reject Amendment No. 187, as it would confine the scope of the order-making power of the Minister to deal with such breach of contract claims. It is important to retain the power for Ministers to make an order for tribunals to exercise a breach of contract jurisdiction in respect of any claim for wrongful dismissal, whether or not

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        linked with a complaint under one of the tribunals' existing jurisdictions. I therefore ask the hon. Member concerned to consider not moving Amendment No. 187.
        Mr. Brittan: I shall not move our amendment. I do not pretend that the Government amendment fully meets our points, but it is sufficiently close to what the Opposition have in mind for it to be undesirable for us to proceed with Amendment No. 187 at this stage.
        Amendment agreed to.

      Clause 103

        AMENDMENTS OF THE EMPLOYMENT AND TRAINING ACT 1973
        Mr. Hayhoe: I beg to move Amendment No. 223, in page 85, line 10, at end insert
        'and requiring him to report periodically to Parliament thereon'.
        Mr. Deputy Speaker: With this amendment we are to take Amendment No. 224, in page 145, line 7, at end insert
        'and shall require the Secretary of State to report thereon every three months to each House of Parliament'.
        We may also take Government Amendment No. 225.
        Mr. Hayhoe: Clause 103 and Schedule 13 deal with the temporary employment subsidy. They involve general enabling powers which are tacked on to the Employment and Training Act 1973. We have become somewhat sceptical about these plans, which have been well trailed before being revealed. First, the Chancellor of the Exchequer made much of them in his Budget speech. Then the Secretary of State said on Second Reading how important they would be, and in Committee on 17th July the Minister of State gave an indication of what was involved in the subsidy. In his statement about unemployment on 24th July the Secretary of State said that the plans would be revealed later. I do not know whether he was unaware that his Minister of State had revealed them in Committee only a few days before, whether new plans were to emerge, or whether the Minister of State had been misleading the Committee, or had been outflanked or outdated. The Prime Minister has often used
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        Question Time to make references to the temporary employment subsidy, and even the Leader of the House has used the subsidy as an argument to get himself out of one of his traditional difficult spots.
        As reported at column 1575 of the Official Report of our Committee proceedings on 17th July, the Minister of State said that the subsidy would apply where there was a minimum of 100 redundancies. He outlined its object as being to carry people over, and said that if there were a real chance that the enterprise and the jobs could be kept going under reasonable conditions by help for a short period this would be provided on the basis of a £10-a-week subsidy for three months, with the possibility of an extension for another three months.
        The Minister of State indicated in his estimate that probably the number of workers involved would be 13,000. At the going rate of rise in unemployment, that is roughly a week's rise. The latest figures are showing quite startling rises per month in the number of unemployed. The number of people involved, on the basis of what the Minister of State told us, is relatively small, and the gross cost of the scheme would be £3 million to £4 million. It was difficult to estimate the net cost.
        On the assumption that the same individuals would otherwise be entitled to unemployment benefit, it may well be that the net cost would be nil, or there might even be a small profit. The Government would be paying out less in temporary employment subsidy than they would be paying in unemployment benefit.
        Putting all this together, it seemed right for us to put down Amendment No. 223, which requires the Secretary of State to make periodic reports to Parliament about what is happening with this subsidy. The powers being taken are essentially very arbitrary indeed. The enabling powers will be tacked on to Section 5 of the Employment and Training Act of 1973. It is right that reports should be made to Parliament periodically as to what efforts are being made.
        Amendment No. 225, being taken with Amendments Nos. 223 and 224, flows from an undertaking which the Ministers in charge of the Bill gave in Committee that these particular powers—the ability of the Government to use public funds

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        for this temporary employment subsidy—would be for a limited period and could then be extended only by the affirmative order procedure. We welcome Amendment No. 225, which was tabled by the Government to this end.
        It may well be that in the interval between mid-July, when the Minister of State revealed how little they are involved in the temporary employment subsidy, with plans for only a limited number of people, there has been re-thinking in the Government and it is now on a much wider basis.
        As I said in Committee, albeit that a limited number of people may be involved, it would be highly significant for the individuals who were enabled to stay in work as a result of the temporary employment subsidy and did not therefore suffer unemployment. It would be difficult to overestimate the importance of these proposals to those individuals.
        At no time, in thinking of the temporary employment subsidy and matters connected with it, should one overlook what this may mean to men and women and their families and children who will be directly affected.
        But, having said that, it seems to us that, with all the excessively heavy trailing and enormous pre-advertising of the temporary employment subsidy, from the Chancellor of the Exchequer's Budget onwards, what has finally emerged—at least in what was revealed to us at the Committee stage—is a very small initiative indeed.
        Perhaps the Secretary of State will have wider news for us later, and we shall listen to him with great interest. I know that he will appreciate that the scepticism we have about this is reasonably based, in view of the long history that has preceded our debate this evening.
        10.45 p.m.
        The Secretary of State for Employment (Mr. Michael Foot): The hon. Member for Brentford and Isleworth (Mr. Hayhoe) welcomed Amendment No. 225, which the Government are moving, and I presume that he will be prepared to withdraw his amendments. Despite his scepticism, to which I shall refer later, he will agree that the amendment carries out the undertakings given by the Minister of State during the debates in July in Committee. It
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        deals with the parliamentary control aspect of the problem. I hope he feels that that is satisfactory. I trust that the House will accept Amendment No. 225.
        In view of the remarks made by the hon. Gentleman and the general interest in this subject, the House will permit me to comment on the scheme which we propose to introduce shortly. I do not wish to enter into any great argument with the hon. Gentleman about how many references to the temporary employment subsidy have previously been made. A reasonable way for us to proceed is to make an announcement in the Budget and to hold discussions with some of the bodies which may be especially interested and come to the House with specific proposals—which is what we are doing today. I am glad to inform the House about our plans to introduce the temporary employment subsidy scheme. This is one of several measures designed to assist in combating the rising unemployment figures. It is by no means the sole measure. That is part of the answer to what the hon. Gentleman said. It is intended to alleviate some of the effects of high unemployment in the worst-hit areas by providing for a short-term subsidy to be offered to firms which are prepared to defer planned redundancies. It is hoped that, at the end of the period of payment of the subsidy, the company's business would have recovered sufficiently to enable the company to retain the workers concerned in employment.
        In other cases, however, the period of subsidy might be used to facilitate the redeployment of the workers—for example, through retraining—into other jobs, whether within the company or elsewhere. Accordingly, the subsidy would normally be made available where there were reasonable prospects that, with its assistance, the workers concerned would be kept in employment for the period of the subsidy and either retained in the firm or redeployed more effectively thereafter.
        The temporary employment subsidy, for which powers are being taken under Clause 103 and Schedule 13 of the Bill, is a temporary measure to meet exceptional circumstances. We intend to review the need for it in the spring and we do not envisage it continuing beyond one year at most: that is to say, applications

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        would have to be received within 12 months of the date of introduction.
        The scheme is discretionary and indeed, being untried, to a large extent experimental; the detailed provisions will be reviewed in the light of operational experience. Employers' participation will be voluntary; they must judge in the light of their individual circumstances and in consultation with the unions concerned whether the scheme is likely to be beneficial in their case.
        I have given careful consideration to the areas in which the subsidy should be available and to the size of qualifying redundancy, and have decided, after consulting the TUC, the CBI and the Manpower Services Commission, and in the light of comments made in Standing Committee, that the scheme should apply to redundancies affecting 50 or more workers in an establishment in an assisted area. This definition of scope will, I hope, help significantly to limit additions to unemployment in these particularly hard-hit areas. For instance in the period 1970 to 1971, the last period of high and rising unemployment, redundancies affecting 50 or more workers accounted for 77 per cent. of all redundancies of 10 or more.
        All employment in the private sector of industry and commerce in assisted areas will be covered, provided that the workers affected work on average not less than 21 hours per week. The amount of subsidy for each deferred redundancy of a full-time worker will be £10 per week. The subsidy will be payable in each case for a period of three months and may be extended for a further and final three months if the qualifying conditions continue to be satisfied.
        One of these conditions is that there are reasonable prospects that, with the assistance of the subsidy, the workers concerned will be kept in employment for the period of the subsidy and then either retained in the firm or redeployed more effectively elsewhere. Another condition is that the employer must provide evidence of good faith in the decision to declare the impending redundancy. Support for the application from the unions concerned is required. To qualify for the subsidy firms will have to give an undertaking to the effect that they are not in-
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        solvent or near to insolvency. The scheme is intended to encourage the retention of workers in employment but not to enable companies to continue trading when otherwise they would be unable to do so. Finally, as announced in the White Paper, "The Attack on Inflation", the subsidy will not be available to any firms which breach the pay limit.
        It is my belief that this scheme will contribute significantly to limiting additions to unemployment in the particularly hard-hit areas by helping employers to get over temporary difficulties and to maintain their labour force and by enabling work people either to avoid the upheaval of redundancy or to gain time for retraining or redeployment.
        The number of jobs the scheme will temporarily safeguard will depend on the incidence of redundancies affecting at least 50 workers, and the proportion of these cases where employers in consultation with their unions decide to apply for the subsidy. If, for the sake of illustration, 25 per cent. of eligible firms applied for and received the subsidy it is estimated that between some 30,000 and 40,000 workers might benefit and that the gross cost to the Exchequer would be of about £8 million to £9 million. On the other hand, if the take-up approached 50 per cent., 60,000 to 80,000 redundancies might be deferred at a gross cost to the Exchequer of about £16 million to £18 million. The net cost to public funds would, of course, be very much less as most of the workers would otherwise have been in receipt of unemployment benefit.
        The Government promised in the White Paper to introduce the temporary employment subsidy scheme as soon as possible. The serious level of unemployment underlines the need for early action and I am, therefore, arranging that the scheme will come into force from Monday 18th August.
        Mr. Hayhoe: In Committee the Minister of State, in talking of a scheme which had a minimum figure of 100 instead of 50, said that it would cover 60 per cent. of all redundancies—as opposed to the 77 per cent. which the Secretary of State now says will be covered as a result of reducing the minimum figure to 50—which on the 25 per cent. eligibility ratio would cover 13,000 workers. Either that

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        figure or the figure just quoted by the right hon. Gentleman must be wrong. As far as I can judge, it is impossible to line up the figure of 30,000 or 40,000 given by the Secretary of State with the 13,000 given by the Minister of State in Committee. Will the right hon. Gentleman say a little more about that?
        Mr. Foot: I do not think that there is any such conflict between the figures. If there is, I shall be eager to sort it out.
        The illustrative figures I have given of the 25 per cent. which would lead to 30,000 to 40,000 benefiting if the minimum figure of 50 were taken are perfectly accurate. That is why the 50 per cent. and above figure would be between 60,000 and 80,000. I believe that the figures are accurate, although all these figures are estimates of the take-up and no one knows for certain what will be the take-up of the scheme.
        The scheme is experimental and that is why we should proceed in the way we are proceeding and decide how the scheme should be applied on the basis of what happens in experience. As a scheme in this form has not been applied in any other country it is right that we should proceed in this way. I believe that it can make a significant contribution. We do not pretend for one moment that the scheme will deal with the major increase in unemployment which has occurred.
        Mr. Dennis Skinner: Will this sort of scheme apply to Norton Villiers?
        Mr. Foot: No. It would not apply to Norton Villiers unless it was a case of Norton Villiers claiming, with the assistance of its work force, that, if given a temporary subsidy, it would be able to overcome its difficulties and was not in danger of insolvency altogether. Moreover, in the case of Norton Villiers, it would depend partly on where the industries were situated because the scheme deals with the development and intermediate areas.
        We do not claim that this is a scheme to deal with all the problems. We do say that it, along with the other schemes, is the way in which we can assist in dealing with the unemployment problem. What we have to do is take a whole series of measures in different ways to deal with the different problems which arise in
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        different parts of the country. Partly we are going to deal with those problems through the great expansion of the training services; partly by the special measures which will have to be taken for school leavers—another development which will come later; but also we have to take other measures. Beyond this there are measures under the Industry Act, which are different again.
        But I do not believe that it would be right for hon. Members and the country to think that one can deal with an unemployment problem of this scale by any single measure. We have to take a whole series of measures and, of course, in the main, the method of overcoming the unemployment problem depends on the success of our measures for dealing with the economy as a whole. That is the major way of dealing with the problem.
        Mr. Tom King: The right hon. Gentleman said that this scheme had not been tried in any other country. A scheme of this kind was implemented in Japan. Are there any lessons to be drawn from the Japanese experience?
        Mr. Foot: I do not think that the Japanese scheme bore any relation to ours, but certainly if their experience in applying their method was useful or relevant to this country, we would look at it. But I do not think that the Japanese scheme is like ours. I am not boasting about it. What we are trying to do is to devise a scheme which can be of special assistance in this year ahead. I am not making any exaggerated claims for what we are proposing, and we have not at any stage done so.
        I believe that this scheme, along with the others, is a sign of the determination of the Government to take steps to try to deal with the special dangers of the unemployment problem, but I recognise that it is a problem of tragic proportions and that we have to take a whole series of measures to deal with it.
        Mr. Leslie Spriggs: Will my right hon. Friend direct his attention to what I was told in an Adjournment debate, when the Minister referred to all these schemes as they were going through the pipeline of the parliamentary system? In St. Helens, a glass factory which produces television tubes is about to close down, and 750 men face redundancy.

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        Would the temporary employment subsidy apply to that case?
        Mr. Foot: It depends on the circumstances of each case. I have set out some of the conditions in my statement. One of the conditions is that the firm could not be a firm which was facing insolvency. I am not passing any comment about the firm—Pilkington's—in my hon. Friend's constituency or about its economic condition, because that would not be right. I am saying in general terms that one of the conditions is that the firm is not facing insolvency.
        This is not a scheme for dealing with so-called "lame ducks". It is not that kind of provision. It is a scheme for cases where redundancies can be made avoidable, where the firm can be tided over its awkward period and would be able to keep its workers permanently afterwards, or would have a better opportunity of providing them with a chance for retraining and moving elsewhere.
        11.0 p.m.
        Once the scheme is announced—the full anouncement is being made in this statement today and will be in the newspapers tomorrow—employers and trade unions will be able to see the conditions to be applied. We expect to get a considerable number of applications over the next week or two which will have to be sorted out. As I said, the applications must be made by the employers in consultation with the trade unions concerned. Trade unions can also take the initiative with their own employers to see that an application is made if they think that the conditions are satisfied.
        Mr. Kenneth Baker: The House is indeed grateful to the Secretary of State for spelling out the details of the temporary employment subsidy tonight.
        I should like to express some misgivings about the effectiveness of the subsidy. I do so with some diffidence and difficulty because any measure introduced by any Government to mitigate the effect of unemployment must be welcomed by the House and the country. I hope that I shall be acquitted of any feeling of sentiment in welcoming any rise in unemployment or of the belief that unemployment is some mysterious weapon
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        to be used to impose imagined discipline upon our economy. I am not of that school or sentiment at all.
        My first misgiving—this is not a debating point, but it is fair to make it—is that on 15th April the Chancellor announced the concept of this subsidy. We expected something in the Finance Act, but it did not come. We expected some detail in this Bill, and we have had no detail. We have had general enabling powers which have been specified tonight by the Secretary of State.
        This is not the right way to legislate. If a subsidy of this kind is to be introduced and to be justified, the Government, of whatever complexion, owe a duty to the House at a fairly early stage to specify the details so that they may be discussed and debated.
        In effect, we are giving the Secretary of State enabling powers, and he has specified what they are. I understand that the subsidy will be payable for three months for redundancies involving 50 people and that the gross cost will be between £8 million and £18 million.
        I do not think that the subsidy deals with the root cause of the troubles of our economy or with the problem of rising unemployment. I believe that it was conceived earlier this year when different themes were running through the Government's economic policy. I suspect that attitudes have changed.
        Mr. Michael Foot Mr. Michael Foot indicated dissent.
        Mr. Baker: The Secretary of State shakes his head. However, recent statements by the Secretary of State for Industry indicate that the Government emphasis has shifted. I do not want to make a political or a debating point, but it is a matter of fact that the emphasis has shifted. The hon. Member for Bolsover (Mr. Skinner) posed a pertinent question on this matter. We must ask ourselves: what is the purpose of this subsidy? I believe that it is essentially cosmetic rather than curative.
        I believe that this subsidy was devised earlier this year, when the Government thought that unemployment would not rise at the rate at which it has risen, to help companies to keep people on their payrolls and therefore reduce the number of unemployed. But events have moved on. The Secretary of State disagrees, but he

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        must accept the facts. The Government have powers to help companies in the difficulties which the right hon. Gentleman has already outlined. They have powers under the Industry Act 1972. If a company is in difficulties and has cash flow problems, it can apply to the Secretary of State for Industry and ask for financial support. That is provided in Sections 7 and 8 of the Industry Act 1972.
        Basically we are dealing with the short-term cash flow problems of companies. It is short term because the Secretary of State has said it will last for only three months. That is the unreality of the subsidy. The right hon. Gentleman is saying that companies can suddenly say that they have a three-month problem. Which companies can say that? The right hon. Gentleman suggests that they will then say "We shall therefore apply for the subsidy". I believe that to be unrealistic.
        Mr. Tom King: To obtain the subsidy, not only will companies have to make that declaration but they will have to declare that they will have to make many of their employees redundant although they wish to retain them. It seems psychologically damaging for employers to have to go to the brink and to declare that many people will have to be made redundant—many of those people may have worked for one company for a long time—before being granted the subsidy. That is hardly the way to improve relations in the companies concerned.
        Mr. Baker: My hon. Friend brings me to my second misgiving. If a company has reached the stage of having to make 50 or 100 people redundant it will probably be eligible for the subsidy for three months, but will the right hon. Gentleman reflect upon the attitude that will be taken by the other 400, 500 or 1,000 people employed by the company when they know that 50 or 100 people are being kept on the books with no productive work for them? The psychological effect could be very damaging.
        My third and final point is that this proposal is entirely negative. It is cosmetic. It is trying to dress up the fact that certain people will not be laid off when perhaps economic reality determines that that should happen. It is negative because the Government will
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        be faced in the next six or nine months with an avalanche of redundancies. That is a regrettable fact, but I believe it is more sensible to face it at an early stage. I know that on this point I shall not have with me Labour Members below the Gangway. However, we must face the real ties of the situation. I shall not trespass upon a future debate, but the classic case is the motor cycle industry—
        Mr. Norman Atkinson: The hon. Gentleman is dealing with the economic realities as he sees them.
        Mr. Baker: Yes, I am. I would not expect to express the realities of the hon. Member for Tottenham (Mr. Atkinson). I believe that the preservation of jobs in the short term at all costs is against the creation of job opportunities in the long term. That can be seen in the case of the motor cycle industry. If reality had been faced at an earlier stage in that industry I am sure that more people in a year's time would be employed in the British motor cycle industry than will now be the case. The subsidy is a postponement of reality.
        I express my misgivings as someone who deeply regrets the unemployment we shall see in the next six or nine months. This measure will not do very much to relieve that unemployment. Whether it will come in September, October or November I do not know, but we are waiting to hear some positive proposals for job creation from the Government. It will be known that I put forward this argument in Committee when the Minister of State made his speech about the subsidy. However, we have heard tonight about a defensive, negative subsidy.
        The country wants some leadership from the Government and from the Secretary of State. We want some indication of the proposals that the right hon. Gentleman has in mind for providing job opportunities for the tens of thousands and hundreds of thousands of young people who today do not have jobs and who will not have jobs by Christmas. Indeed many of them will not have jobs by Easter. Where is the Government's creative thinking? Such thinking does not lie in the subsidy. We await other measures. The Secretary of State has had five months to think about these

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        matters. I end by asking "Where are the Government's creative ideas?" So far all we have had is cosmetics.
        Mr. Skinner: We are now witnessing a further strategy of the Government in the public sector, and indeed also in the private sector, to the extent that jobs are being lost almost as a direct result of Government action.
        I find it strange that my right hon. Friend the Secretary of State for Employment, at this late hour, can present a scheme to the House in the way in which he has outlined it, and yet at the same time can support the idea advanced by my right hon. Friend the Secretary of State for Industry in respect of Norton Villiers Triumph. That was a firm in the private sector, with cash flow problems, which would have qualified for some kind of subsidy had it not been for the announcement made last week. Since some of the factories are not in intermediate development areas, they would not have qualified for assistance. However, some of the industries affected are in areas with an even worse unemployment record than that reflected in some of the intermediate areas—and this applies to the period of time when Labour was last in office and also to a period of Conservative Government.
        I am concerned about this cosmetic operation. I want to know what will happen following the giving of the £10 per week subsidy. Quite apart from cashflow problems, it is bound to increase an industry's profitability. The additional money will be used to ensure an extra degree of efficiency to provide additional liquidity for a firm.
        I am led to inquire what will happen as a result. Just as with the £6 limit, here we have a Socialist Government applying this cosmetic handing over of money to the private sector, but there are no controls being imposed as to where that extra money will go.
        If a firm is to be given £10 a week for its workers, the total sum eventually involved may amount to £25,000 or even £50,000 for the firm concerned, and there will be no guarantee that that additional money will be used for investment purposes. We as Socialists should insist on a degree of planning to ensure that any money destined for the private sector from funds provided by income tax
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        should result in the alleviation of the unemployment problems and also should assist, if only marginally, in ensuring that the problem will not recur to the same degree. That has not been mentioned by my right hon. Friend.
        11.15 p.m.
        Where is the social justice in this proposal, bearing in mind that we shall be allowing the public sector to have sackings and redundancies of the kind likely to be announced in respect of the 6,000 cut-back in the steel industry very shortly, perhaps some time later this week? Where is the social justice in sacking 6,000 steel workers in the public sector when at the same time another Government Department is trying by this series of measures to pick up a few of the crumbs in the private sector?
        I do not understand why there is no central strategy being developed by the Government not merely to resolve these immediate short-term unemployment problems in certain industries but to devise an overall economic strategy to see that we solve unemployment wherever it occurs. This is one of the weaknesses of the measures my right hon. Friend has announced.
        Facing this situation of chronic unemployment, we are all bound to accept suggestions of the kind that my right hon. Friend has made. But I am trying to impress upon him, first, that we want control of the use to which that money will be put, and, secondly, that we need to be told why we are assisting marginally some firms in the private sector and at the same time, as a result of public expenditure cuts to be announced by the Government, possibly after the Labour Party conference in October, we are to increase unemployment in the public sector. It does not make sense to me. It contradicts all that we stand for, and that is the real problem with which my right hon. Friend has to wrestle not only in the long term but in the short term if we are to avoid these massive unemployment totals that we seem likely to face in the near future.
        Mr. Douglas Henderson: We welcome any method used to try to redress the problem of unemployment. But we have to ask ourselves whether this method will be effective and fair.

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        I think it is a pity that a statement of this importance should be made at 11 o'clock at night when it has been known for some time that it was coming. It ought to have been made at the proper time when Government statements are made, with copies to the other parties beforehand for scrutiny, so that a proper period of questioning could take place. I absolve the Secretary of State from that criticism, because I know of his courtesy to all right hon. and hon. Members. But there are others who are guilty, and it is a very serious matter.
        The Secretary of State says that this will make a significant contribution and that it will form part of a package of other measures. I think that he must be a bit more honest with us about what he means by "a significant contribution", and tell us how many people he is talking about and what these "other measures" are.
        How many jobs does the right hon. Gentleman reckon this subsidy will save in Scotland? How many jobs are budgeted for, because clearly he would not have come before the House tonight without having a clear assessment of the effect of this subsidy? How many jobs in Scotland will this save over the next three months? What special procedures will his Department set up to deal with claims? What does he intend to do to publicise this facility? Will he have a special organisation to deal with these matters? How will he decide between one case and another? The marginal cases and the grey areas will be enormous. If he is to spend some money—and I am unclear about how much, especially about how much will go to Scotland—would not it be more effective for that sum to be voted to the Scottish Development Agency for the creation of new jobs? Has the right hon. Gentleman evaluated this as an alternative possibility for the spending of Government money, or is it, as the hon. Member for St. Marylebone (Mr. Baker) said, purely a cosmetic exercise?
        Mr. Clemitson: I take it that the temporary employment subsidy is not intended to preserve jobs at all costs, to prop up uneconomic enterprises or to further uneconomic uses of labour, but that the purpose is to get over a hump firms which are genuinely economic and to keep together groups of workers—par-
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        ticularly skilled workers—who otherwise would be dissipated, to the detriment of our total economic welfare.
        I take it also that the net cost of the operation will be low—perhaps nil—or that there will even be a net saving on unemployment or redundancy payments. If I am right on those matters, there seems no case for confining the subsidy to development or intermediate areas.
        Unemployment is traditionally low in my constituency, but it is rising. As my hon. Friend the Member for Bolsover (Mr. Skinner) said, in areas such as mine it is reaching the same levels as in intermediate areas and could even exceed them.
        A constituency such as mine depends heavily on one industry and one employer. A sudden reduction in the level of employment—if, for example the dominant employer took certain decisions or the bottom fell out of the market on which my constituency depends—could bring about high unemployment. Consideration should be given to extending the scheme to areas outside the assisted areas.
        Mr. Teddy Taylor: Most hon. Members so far have considered only whether the subsidy is a good or bad thing. But my experience of the Secretary of State's schemes is that the most we can hope for is to discover what we are doing. Only this morning I was having discussions with some of the office bearers at my local church to see whether it was possible to pay a minister more than the £6 limit and how the pay discipline would apply to the Free Church of Scotland. This is a difficult problem, on which I have written to the Secretary of State. So it would help if we tried to find out some of the practical difficulties under the scheme.
        The subsidy might create jobs among those who set themselves up as experts on new schemes and give advice to firms. In almost every subsidy created by the Government there is a provision that anyone providing misleading information in making an application will be subject to a penalty. Will such a condition apply to the temporary employment subsidy? What will be the position of an employer who makes an application for subsidy and says he will have to lay off 500 men

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        unless it is approved? If that application is rejected and the men are not laid off, that employer will find himself in a very strange moral, if not legal, position.
        In confining the subsidy to development and intermediate areas, the Government might increase unemployment in those areas. The Secretary of State must know that many of the firms now considering redundancies are groups or holding companies with a number of factories throughout the country. Has he considered the possibility that a firm might say that if it is to shed labour, it would be sensible to do so in its operations in a development or intermediate area because of the substantial sums of money it might then receive? Firms might prefer that alternative to closing down a factory outside assisted areas and getting nothing.
        Will the subsidy apply to firms for which nationalisation proposals have been brought forward? The shipbuilding industry, in which I worked before coming here and in which I have an interest, is going through appalling times because of the scandalous uncertainty caused by the Government's proposals. The figures of Robb Caledon Ltd. will be published in tomorrow's Press and will show that a successful firm making smallish ships appears to be in a desperate financial plight. It has been baled out by a £2 million loan or guarantee from the Post Office—which has its own financial problems. It may seem unusual, but this kind of thing happens a good deal these days. Many shipbuilding firms are afraid to take on new orders because of the Bill produced by the Government and the substantial penalties that can be imposed for breaches of the rules laid down in the White Paper or the Bill. Many shipbuilding firms will be facing the possibility of lay-offs shortly because it is impossible for those threatened with nationalisation to take on difficult orders. The directors may be liable to penalties under the Bill if the yards are nationalised. The same situation applies in the aircraft industry where the dangers and potential losses on orders are even greater.
        Unless we get the facts straight, this scheme could create confusions. For instance, when the Secretary of State referred to employers making an appli-
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        cation having to consult with unions, does this mean that employers must discuss with workers the precise areas in which redundancies will occur? I am genuinely scared that if an employer enters into a common agreement with trade unions or their representatives that certain of his workers will have to be made redundant—men over 50 years of age, or men in certain shops will be made redundant—if such a scheme goes forward and the application is turned down, or even if it accepted, it could poison relations in the establishment for a long time.
        Lastly, will the Minister say whether the temporary employment subsidy can under any circumstances apply to workers' co-operatives? He will know precisely the one I have in mind.
        11.30 p.m.
        Mr. Bulmer: Will the Minister tell us to what level unemployment will have to rise in an area not covered by these proposals before he will sympathetically consider including it within their terms? Will he say whether he will rule out an application from a company which wishes to keep together a skilled team—whether it is a research and development team, or any other—which happens at the moment to be in a company which is outside the permitted area? I think the Minister understands now, even if the hon. Member for Bolsover (Mr. Skinner) does not, that we have to pay our way in the world, and that it is essential to keep these teams together.
        It may be that, as my hon. Friend the Member for St. Marylebone (Mr. Baker) has indicated, there are other ways in which this help will be forthcoming, but most hon. Members on the Opposition side of the House feel that these proposals are tinkering with the problem and that we shall not get investment and long-term stability in employment until different criteria apply. We believe that business must have stability and incentive before we shall see any resurgence of confidence, leading to fuller employment.
        Mr. Fred Silvester: I shall intervene only briefly. Unlike the hon. Member for Luton, East (Mr. Clemitson), I want to say something on behalf of some areas which will be affected by this offer of help. I particularly concern myself with the amendment

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        of which we are speaking, which provides that the Minister shall, if required, report to the House. The Minister already has powers under the Bill to provide temporary employment.
        The Minister has a good deal of experience in terms of the Employment and Training Act in respect of which he could tell us of the extent to which the provision has already been used. This is particularly important to areas such as the North-West, which now has the dubious honour of being the second worst area in the country in terms of employment. There is a danger that the provision could be harmful to unemployment in the long term.
        Hon. Members have rightly said that the possibility is that the provision could reduce the call on public expenditure. It does not mean that there is not a cost; there is the cost of maintaining these jobs—a cost borne partly by the State and partly by the enterprises concerned.
        In paragraph 2(b) of Schedule 13 there is a general provision which gives the Minister power to give assistance in
        "securing a temporary continuation of employment for persons…who in his opinion would otherwise be likely to be dismissed by reason of redundancy."
        The Minister has elaborated on that this evening, but none of that elaboration is in the Bill. He is therefore entering a valley of temptation. Although he may enter on this procedure with the best will in the world he is, at the moment, offering it to specific areas of high unemployment in three months' time, or six months' time, when the sort of structural problems that we have in the North-West and the problems in the country at large will not have diminished. We will be faced with them on an equal or perhaps even greater scale. The temptation will be there for him to shade the criteria which he will apply to the firms which are seeking his assistance. He will, perhaps, say that a firm is more viable in six months' time than he would today, applying the looser criterion than now. He will tend to accept that more firms are eligible for this form of assistance.
        I strongly and vehemently believe that if such a policy were pursued for any length of time it would make worse the deep structural problems of unemployment in the developing areas. The last thing we want is any form of assistance
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        which appears to be kind and generous but which will make the situation worse by retaining a great deal of effort, time and money in the sort of industries and companies which should be diminishing. Rather, it should be diverted into industries which will be of greater benefit to us in the longer term and in particular to the training of young people who can be used properly when the economy is faced with an up-turn again.
        Mr. Prior: I agree with the hon. Member for Aberdeenshire, East (Mr. Henderson) that it is a pity that this debate is taking place at this time of night and that the Secretary of State did not use another opportunity to make a statement to the House. I do not want to criticise the right hon. Gentleman too much on that because he has done little more tonight than repeat what was available to us in Committee on 17th July when his hon. Friend the Minister of State made a statement.
        What arouses fears and doubts by Conservative Members and probably by Labour Members is that the Government appear not to have given the scheme a great deal of thought. The scheme was announced by the Chancellor as long ago as 15th April. We heard very little about it until 17th July in Committee. Since that time we have heard a good deal about it from the Chancellor of the Exchequer in his speech on the White Paper, from the Prime Minister and from the Secretary of State. Even since 17th July, when the Minister of State announced it in Committee, the scheme has been considerably changed. Governments just do not go around changing schemes in the space of 14 days if they have thought them out properly beforehand. I was amazed to read in an article in the News of the World—which, of course, I take every Sunday—that
        "Though the employers are strongly affected, the CBI claim that Mr. Foot has never discussed this plan with them.
        Three weeks ago they were sent a confidential draft of the scheme. Last week the CBI sent back its comments, expressing its serious reservations."
        It took from 15th April, when the Chancellor of the Exchequer announced the scheme, until three weeks ago for any discussions to begin with the CBI on the effectiveness of the scheme. This does not suggest to me that the Government have

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        thought the scheme through carefully, nor have they prepared it with the care that one expects from a Government Department.
        When my hon. Friend the Member for Bridgwater (Mr. King) intervened to ask the Minister whether he had knowledge of the Japanese scheme, he did not even appear to have heard of it. I confess that I had not heard of the Japanese scheme, but I do not happen to be the Minister. We expect Ministers to come to this House with a proper scheme. I have all the suspicions that, as my hon. Friend the Member for St. Marylebone (Mr. Baker) said at the beginning of this week, this is not a scheme that has been thought out properly and is cosmetic in its effect rather than anything else.
        I shall give an illustration of this. When the scheme was announced on 17th July in Committee the Minister of State said that the minimum of 100 redundancies covers 60 per cent. of all redundancies affecting over 10 workers. The Secretary of State has today said that the minimum of 50 redundancies covers 77 per cent. of all redundancies affecting over 10 workers. The Minister of State said that 25 per cent. of all eligible redundancies would cover 13,000 workers. The Secretary of State now says that that percentage, under his scheme, would cover 30,000–40,000 workers. My arithmetic is not all that hot, but I believe that that arithmetical variation between the figures on 17th July and the figures announced today and on 3rd August suggests that the scheme has been cooked up in a great hurry, and not thought through properly.
        The situation is far too serious for schemes of this kind which have not been properly discussed with industry as a whole, which have not been thought out properly, and of which the House has been given two different versions within a fortnight, and which the Prime Minister, the Chancellor of the Exchequer and the Secretary of State have all said can make a contribution, in some cases a considerable contribution, to solving our problems. That is not good enough for the House and the people who will believe that they will receive help under the scheme and will probaly be disappointed.
        My hon. Friend the Member for St. Marylebone summed the matter up pretty
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        well when he said that the preservation of jobs in the short term could be inimical to saving jobs in the long run. That is our worry about the scheme. It is to last for three months, which can be extended to six months. If it starts fairly soon that will take us into a pretty difficult time. I do not think that we shall get over the hump of difficulties in three months to six months. Employers will keep skilled workers on, and it is the unskilled or the semi-skilled who will suffer in the three months' or six months' period. In any case, I do not think that it would be long enough help for the skilled workers either.
        The hon. Member for Luton, East (Mr. Clemitson) mentioned firms outside assisted areas and the difficulties that the scheme could create for them. My hon. Friend the Member for Bedfordshire, South (Mr. Madel) dealt with that point in Committee.
        The scheme has not been thought through enough. In all probability the money would be better spent on retraining, on job creation or on new industries, particularly for young people.
        The scheme is designed to last a year. The Secretary of State said tonight that he intended that it should last a year at most. Yet his amendment enables him to extend it for a further period not exceeding 12 months. What is the point of saying that it will last for only a year if he is moving such an amendment?
        I am not impressed by the way in which the Government have introduced the scheme. We believe that there are many better ways of helping to deal with what is a very serious problem. We do not believe that jobs can be satisfactorily preserved in the short run by such methods. All the experience of what the Government tried to do in their first 18 months, with Norton Villiers Triumph and in other cases, shows that it does not help employees to tell them that their jobs are secure and to put in Government money if the Government cannot see the matter through.
        For all these reasons, we are sceptical. We do not regard the scheme as one which will make any great impact. We are sorry that the Secretary of State has allowed it to be introduced in such a bodged-up manner.

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        11.45 p.m.
        The scheme needs thinking through far more carefully than it has been so far.
        We shall withdraw our amendment because we think that the right hon. Gentleman's amendment will give the House a better chance of discussing these things in the future, but I hope that before this is done we shall have the opportunity to hear the Secretary of State answer the debate.
        Mr. Foot: I shall try to reply as briefly as I can, without seeking to diminish the importance of the questions. My intervention has stirred up the controversy when many hon. Members were hoping that we should finish at a reasonably early hour, and I apologise on that account. But I do not apologise entirely for having made this statement during the course of the Report stage, because it seemed to me that, particularly as the matter had been raised during the course of this Bill, the proper time for me to make the statement was during the course of the Bill. If the statement had been made on a separate occasion I might have been criticised on that account.
        I do not believe that is the most important aspect. The most important aspect is whether the scheme will assist in dealing with unemployment. I believe that it will provide one measure that will assist us, and I think the House would be unwise to treat the proposition in the way in which the right hon. Gentleman has treated it—as a matter of no importance, as he appeared to say, or as a proposal which has been ill-prepared.
        We have built on the original proposals which we had, and we have expanded the scheme from the original idea. As to the right hon. Gentleman's arithmetic compared with mine, the increase in the numbers covered is smaller than expected, because most of those affected by redundancy are found in the larger firms. That is why the second figures are of the nature that I have already described. If the right hon. Gentleman applies his reason he may find it is better than his arithmetic, and he will be able to solve the matter in that way.
        With regard to the specific questions raised, the hon. Member for Aberdeenshire. East (Mr. Henderson) asked whether I can say how many jobs in Scotland will be protected or sustained by the proposal. I cannot tell him the exact
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        numbers in Scotland, but Scotland will benefit proportionately perhaps more than any other part of the country precisely because Scotland is more widely covered by special development area status. The whole of Scotland will have a special advantage because of its special area status. The right hon. Gentleman, too, will understand and, I am sure, appreciate that fact.
        It is rather interesting that some questions should be put to me by my hon. Friends which are more pertinent than those of the people who are not seeking to take advantage of this scheme. My hon. Friends are asking that the advantages of this scheme should be extended beyond the intermediate areas, and I appreciate how this scheme may assist. But a difficulty is that we should be applying the whole principle of regional policy, changing the areas of regional policy and changing the definitions of regional policy for this particular scheme.
        If we are to change the areas where a special development system applies, or an intermediate system, we shall have to do that generally for the whole country rather than applying it to this particular scheme. But I understand, of course, why my hon. Friends pressed that a scheme such as this should be applied in their areas, if possible, and if the scheme works as successfully as some of us hope it will, I have no doubt that the pressures will be sustained in that respect. We shall have to consider them, too.
        References were made to the way in which protection could be provided against abuse of the scheme, and to ensure that the scheme was not stretched and that misleading and false applications or claims were not made. We do not claim that the scheme is cast-iron in that sense. If people thought that such a scheme could be cast-iron proof against abuse there would be no scheme. Reliance must be placed on the signed declarations by employers. Great care will be taken to make the visits to employers. Local inquiries will be made to check every application both initially and at the three-month review stage. Special attention will be made in those inquiries to establishing the genuineness of the redundancies.
        There is a further aspect of the way in which checks can be made. Applications will be made with the assistance of

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        the trade unions involved. A great deal will be known about the firms making the applications and why they are making them, and the validity of the claims. We need not create such obstacles in advance. We do not say that it can be known altogether in advance how the scheme will operate, in spite of what happened in Japan or the fact that this has not been applied in other countries.
        We believe that the right and sensible way for us to proceed is to apply the scheme with a sense of experiment. Many thousands of workers' jobs will be sustained by this process. Far from approaching the matter in the critical and often churlish spirit displayed by the Opposition, many people will be eager to see the scheme succeed.
        Replying to the point made by my hon. Friend the Member for Bolsover (Mr. Skinner), we do not claim that this is a major scheme for dealing with unemployment. The schemes needed to deal with unemployment on the present scale cover the whole range of economic policy. If we are to overcome employment on this scale we must take a series of measures. Some of those measures are of the nature which my hon. Friend described—planning agreements, the operations of the National Enterprise Board, the possibilities of fresh investment in industry. Those are the most important measures. I do not dispute that with my hon. Friend.
        We believe that long-term investment, or urgent investment, in the major industries is the most important aspect of the problem. However, that does not absolve us from taking many other important steps in the meantime. The Government have already taken much more important steps than any previous Government to provide places for training on a far bigger scale than has been attempted before, by means of the £50 million provided in the Budget and the subsequent £10 million. That process will be assisted by subsequent measures which the Government will develop for the purpose.
        This scheme will also make an important contribution, especially during this coming winter, to sustain firms and jobs which would otherwise go out of existence.
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        The trade unions are the chief people who have urged us to carry this scheme through. We had consultations with the general council of the TUC.
        Mr. Prior: Not with the CBI.
        Mr. Foot: It is wrong for the right hon. Gentleman to say that we did not have consultations with the CBI. We consulted the CBI, which, although critical of many aspects of the scheme, did not oppose it. We shall see whether firms facing these problems will make applications. We shall see who is right. Within months we shall know from the applications coming in whether the scheme is making a valuable—I do not say major—contribution to dealing with the unemployment problem.
        Opposition Members are churlish to pick theoretical holes in the scheme. They do not like any scheme of Government intervention to help primarily the private sector of the economy. But the people who would otherwise be thrown out of jobs will be eager to see the scheme sustained, and trade unionists who would otherwise be threatened will be eager to see the scheme in full operation. I urge the House to give it a fair wind and a good chance to be put into operation. On that basis, I hope that the hon. Member for Brentford and Isleworth (Mr. Hayhoe) will be willing to withdraw the amendment and allow Amendment No. 225 to be carried.
        Mr. Prior: I cannot allow the right hon. Gentleman to get away with suggesting that I said that there had been no consultations with the CBI. I said that there had been no consultations with the CBI until three weeks ago. The scheme was announced on 15th April. For the Government to leave those consultations until three weeks ago shows that they do not give high priority to getting the scheme right. We are far from being churlish in trying to reduce unemployment. It is just that we are a little sceptical about the scheme.
        Mr. Foot: I did not detect a note of welcome in the right hon. Gentleman's voice when he spoke earlier. If he is coming round to supporting the scheme, I welcome his intervention.
        Mr. Baker: Before the Secretary of State sits down, will he meet the argument put forward from the Opposition

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        benches that the scheme is negative and defensive, and that it will not save, though it may sustain for a short time, a certain number of jobs. When shall we hear from the Government their positive proposals for job creation and training opportunities for young people?
        Mr. Hayhoe: It is a pity that the Secretary of State did not answer the perfectly proper question posed by my hon. Friend the Member for St. Marylebone (Mr. Baker) in his initial speech and in his second intervention. Having grossly misrepresented what my right hon. Friend the Member for Lowestoft (Mr. Prior) said about consultation with the CBI, the Secretary of State has not even the grace—perhaps typically—to withdraw the misrepresentation he made.
        The Secretary of State has put before us the scheme which, when I moved the amendment, I said we regarded with some scepticism. Everything he has said tonight has added to that scepticism and made clear that the scheme is ill-considered. The scheme has been oversold by the Secretary of State and his right hon. Friends. His attitude has been characteristic in that he is pleased if he can get the words right. He does not worry about the reality of the figures. His attitude and that approach deepen our scepticism about the measure. Nevertheless, I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.

      Clause 104

        AMENDMENTS OF THE HEALTH AND SAFETY AT WORK ETC. ACT 1974
        Mr. Madel: I beg to move Amendment No. 188, in page 85 line 11, leave out Clause 104.
        Mr. Deputy Speaker: With this we are taking the following amendments:
        No. 189, in page 85, line 13, leave out from 'which' to 'remove' in line 15.
        No. 215, in page 145, line 40, leave out Schedule 14.
        No. 216, in Schedule 14, page 145, leave out lines 45 to 47.
        12 midnight.
        Mr. Madel: The associated amendments give us the opportunity to discuss amendments to the Health and Safety
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        at Work etc. Act proposed by the Government. The Under-Secretary of State will remember that in Committee we said that apart from our anxieties about the agricultural part of the Bill we would delay our debate until now.
        It is a familiar debate, so I will be brief in enunciating the arguments. We have had this matter out many times before. We start from the proposition that we want to involve all work people in safety at work, whether they are or are not members of a trade union. A year after the Health and Safety at Work etc. Act reached the statute book, I felt it right to ask the Under-Secretary of State
        "if he will list those firms which have non-trade unionists on safety committees, those firms which have trade unionists an non-trade unionists on safety committees and those which do not yet have any safety committees as laid down by the Health and Safety at Work Act etc., 1974."
        The hon. Gentleman replied:
        "The Chairman of the Health and Safety Commission informs me that this information is not available."
        "The hon. Member will know that until regulations are made under Section 2(4) and (5) there is no statutory requirement for the appointment or election of safety representatives from among employees. He will also be aware of the Government's intention to repeal Section 2(5) of the Health and Safety Act through the Employment Protection Bill."—[Official Report, 18th July 1975; Vol. 895. c. 620.]
        Thus, one year after the Act went on the statute book, we do not have this information about safety committees. Nor do we have any information to suggest that there is a great yearning among the TUC and trade unionists generally that subsection (5) of Section 2 of the Act should be wiped out. The TUC has issued a valuable and useful booklet called "Health and Safety at Work". I do not detect in it a great yearning to strike out subsection (5).
        The foreword to the booklet, referring to the Act, says:
        "Among the major changes it makes is the recognition, by law, of the right of large numbers of workpeople to appoint their own safety representatives, with statutory responsibilities for monitoring, and setting standards of safety and health at work."
        It goes on to say, in the introduction that the booklet
        "…is designed for those who need to know more about industrial safety, health and welfare problems, but who do not want to get too

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        bogged down in technical and legislative jargon."
        The booklet says, on page 9, that the Act
        "…puts new general duties on employers, ranging from providing and maintaining a safe place of work to consulting with their workers."
        Later, it goes on:
        "In addition to these requirements, employers will need to provide their workers with a written statement of their safety policy…"
        and so on.
        A year after the Act, the TUC booklet and the Answer I received from the Under-Secretary of State do not suggest any need for the Government to strike out subsection (5). An article in Personnel Management in November 1974 stated:
        "The industrial safety committee of the Royal Society for the Prevention of Accidents told Mr. Foot, '…We consider that clause 2 may have a deleterious effect on safety inasmuch as subclause 4 restricts the appointment of safety representatives to the recognised trade unions". This in effect would exclude those work people who are not members of trade unions from participating in the selection and appointment of safety representatives. '
        The article went on to tell of experience in other countries with the establishment of safety committees:
        "In France, for example, safety committees have been mandatory since 1947 for all those organisations employing more than 50 persons and it has been said that their safety record compares poorly with other countries not having such a requirement."
        It said that in the Republic of Ireland
        "…the 1955 Factories Act included a provision for safey committees which would be set up in the same way as that provided for in our own Health and Safety at Work Act. Today, in the whole of Ireland there are only some 187 committees, leaving a massive slice of Irish industry with no safety committees at all."
        All this underlines our anxiety expressed at the time of the passing of the Act that this would be a slow process and that it would take a lot of education to get people at work—managers and workers—interested in health and safety. It is, therefore, wrong for the Government to strike out subsection (5) only a year after the Act reached the statute book.
        Why is there this rush? We do not see the TUC in its booklet pressing for the change. There is no evidence from outside organisations which suggests that there is a need for this change. We cannot see any arguments in the Government's favour for this proposal.
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        It may be in three or four years that factories which are not 100 per cent. unionised will be lagging behind firms which are either closed shops or 100 per cent. unionised in the provision of safety committees. But let a little time elapse. We ask the Government to consider this matter again. There is no need to rush it. Time may prove the Government right. Time may prove us right in what we did in amending the Health and Safety at Work etc. Act. But we suggest that in the 12 months after the Act became law there is not sufficient evidence to justify a change. I urge my Friends to support the amendment.
        Mr. Greville Janner: I think that the hon. Member for Bedfordshire, South (Mr. Madel) has misunderstood the situation. The subsection does not prevent employers from consulting non-union employees. If the subsection is repealed, there is no reason why consultation should not take place. The repeal of the subsection will mean that the Secretary of State cannot and will not make regulations forcing employers to consult nonunion representatives on pain of possible prosecution. That is what must be removed. If that element goes, we are left with the power of the Secretary of State to make regulations requiring employers to consult union representatives so as to bring recognised trade unions into the Health and Safety at Work etc. Act, into the implementation of the rules and, one hopes, into the campaign to try to cut down the terrible toll of death and accidents in industry.
        Once subsection (5) has gone, subsection (4) can be activated in a way which it has not been possible to activate it so far. It is not a question of rushing. Every day which passes without the Act being implemented in this way means that more people die or are injured. I believe that there is a great need to rush. The sooner we get it done, the better.
        We should get the matter right immediately by removing this subsection and enabling the proper regulations to be made by the Secretary of State as soon as possible thereby involving the unions completely in this work.
        Mr. Cyril Smith: I rise to speak to Amendments Nos. 189 and 216. I will do so briefly.

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        The fact is that these amendments raise a fundamental issue which the Government prefer to face, and will have to, in the next 12 or 18 months rather than tonight.
        We heard a statement today by the Secretary of State for Trade on the issue of worker participation in industry, and so on. The real issue in that situation will be whether workers shall be represented only by trade union representatives or by representatives appointed by workers as a whole. That kind of principle is inherent in the amendments which we are now discussing.
        The view of the Liberal Party is that representatives of workers, be they on health and safety committees or on other types of committees, ought to be elected from the whole of the workers in a plant, not necessarily in a whole company, rather than be appointed from, by or with the consent of the trade union movement alone.
        In Committee, not only on this Bill but on other Bills on which I have served, I said that the continual strengthening of the powers of the trade union movement as opposed to the strengthening of that movement—I distinguished between its powers and its strength—was a rod which the Government were making for their own backs and one on which the chicken will ultimately come to roost ere long. It seems to be suggested that the only people who can represent in this way are those who are nominated by or on behalf of the trade union movement. What is the position of a person who is not a member of a union? I shall be moderate in my estimate and say that approximately 50 per cent. of employees are not members of a trade union, however much we may regret the fact.
        Clearly the implication of the clause is that health and safety committees shall consist of employee representatives who are representatives of the trade union movement. Bearing in mind the lateness of the hour I shall not detain the House on this matter, but I took the view, as did my hon. Friends, that we should at least table an amendment to make our view clear on the issue of employee representation. I believe it would be better for industrial relations and for the ultimate strengthening of the trade union movement if the Government could get away
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        from the idea that the only people who should represent workers are trade union representatives rather than workers' representatives. It is vital that the Government get away from that idea. Our industrial relations would benefit as a consequence of such a move.
        Mr. John Evans: I rise briefly to support the clause. I served for a long time on workers' safety committees. I point out to the hon. Member for Rochdale (Mr. Smith) that in the overwhelming number of cases the representatives on safety committees are shop stewards who have been elected by the workers. That applies in almost every establishment where there is any sort of trade union activity. I make that clear because there seems to be a constant thread running through the arguments in Committee and on the Floor of the House that representatives will be directly nominated by the executive councils of the trade unions. Nothing could be further from the truth.
        Let it be remembered that the representatives will come from the shop floor. They will be shop stewards. That has always been the position. Of course, in a large establishment not every shop steward can serve on the safety committee. If that were not the position there would be 40, 50 or 60 shop stewards serving on many safety committees. I have served on workers' safety committees—
        Mr. Cyril Smith: The hon. Gentleman is not the only one.
        Mr. Evans: I know that I am not the only person who knows about these matters, but I am entitled to make a contribution to the debate. I have sat here all night listening to everyone who has taken part in the debate and I shall briefly give the House the benefit of my small experience of these matters. I do not know whether the hon. Member for Rochdale has served on a workers' safety committee—
        12.15 a.m.
        Mr. Cyril Smith: The hon. Gentleman might like to know that I have been secretary of a works committee, the chairman of a works committee, and also a parliamentary candidate on the Transport and General Workers' Union's approved list.
        Mr. Evans: I was not asking the hon. Gentleman for his life story, but about his experience on works safety committees, on which I have served.
        I was seeking to deal with the point about how works committees are formed. We should not lose sight of the fact that shop stewards who serve on safety committees have "teeth", whereas other representatives do not. In many establishments on which I have served managements have been reluctant to introduce measures to protect the safety of their workers. Too often workers' representatives have to threaten action to get anything done. I believe that the only people who can be responsible for representing the labour force are the democratically-elected shop stewards.
        Mr. Bulmer: I wish to express my concern that farm safety should remain with the Ministry of Agriculture. I declare an interest as a member of the National Farmers' Union.
        We have had the benefit of the safety at work legislation for only a year and during that period the Ministry has worked hard on revising the regulations and on draft codes of practice. Furthermore, officials have examined ways in which the regulations can be made more effective. I think that it can be said that the farming industry is ahead of many other industries.
        I hope that the Minister will explain why he feels the need for change at this time. We are concerned to ensure that life on the farm should be as safe as possible, particularly at this time of the year when farms tend to be adventure playgrounds for children.
        The subject of safety falls very much within the responsibility of field officers. Having spoken to a field officer in my county, I discovered that his reaction was unfavourable to any change. Indeed, field officers had not even been consulted. He thought that the proposal would diminish the range of interest in his job and he emphasised the point about continuity. He stressed how important it was for him to be able to combine his other functions with visits to farms on a continuing basis, so that he could build up the confidence of the farmers in a whole range of activities.
        One worry within the farming community is to the effect that a change of
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        responsibility may lead to delay in the payments of grants. If a safety officer has to give his approval, we shall require an undertaking that it will take no longer than it takes at present.
        The field officer has been described by one union official as 20 per cent. police officer and 80 per cent. farmer's next best friend. The change proposed by the National Union of Agricultural Workers has no doubt been introduced on that basis. Perhaps the Minister will be able to confirm it. Those who work on the land comprise as to two-thirds self-employed farmers. I understand that the Minister wishes to differentiate between the fanners who employ labour and those who do not.
        Perhaps the Minister in his reply will be able to say how he sees the future of the people who work for the Ministry and how the situation will affect farmers. I believe that safety standards may be put at risk. I am sure that no hon. Member would wish to see a lowering of standards. Why disturb arrangements which seem to have worked so extremely well?
        I should like to call the Minister's attention to the divisive effect of insisting on safety committees being composed exclusively of trade union members—and this regardless of how few people in a company are organised by the trade unions. There are classes of work people—whether they be women or older employees or those with special knowledge—who are in no way sympathetic to the measures which the Minister has in mind. Does the Minister envisage extending the provisions to rescue teams? Finally, I ask him to recognise the rights of the non-union employee.
        Mr. Harold Walker: The hon. Member for Bedfordshire, South (Mr. Madel) reminded us that we have been over most of this ground on more than one occasion. What has been singled out as the cardinal issue in this debate—that of worker safety representatives and safety committees—has been the subject of dialogue and debate in this House for years. We have been round the course so many times that many of us are becoming dizzy. I think that it is about time that we reached a final decision, once and for all.

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        The hon. Gentleman spoke about the agricultural provisions and the deletion of the special arrangements for agriculture from the Health and Safety at Work etc. Act. I find it astonishing that the Opposition, despite what has been said repeatedly in this House and despite some of the points put by them as recently as the last Question Time but one to my Department, should still want to perpetuate this piece of discrimination against agricultural workers, singling them out for special treatment as though, for some obscure reason, they should be deprived of the protection offered to other workers. That is a situation which will not be tolerated by anyone.
        I turn to the principal issue in this debate, which is whether safety representatives should be drawn exclusively from the ranks of trade unions or whether there should be, in non-organised or ill-organised situations, statutory provision for other than trade union representatives.
        I comment briefly on the provision inflicted upon this House in the Health and Safety at Work etc. Act by another place last year. It said that regulations made by the Secretary of State could provide for the election in prescribed cases by employees of safety representatives from amongst the employees.
        Who did the other place think might trigger off this process? Was it thought that an individual employee might do it? If such a person who could not claim to be representative of anyone but himself approached his employer, the employer would assume that he was not representative and, therefore, would not take any action. Was it thought that an employer might do it? Was it thought that a group of organised employers might trigger off the process?
        If this provision were not in the Act, there would be nothing to stop that taking place on a voluntary basis. The point that I have just made would be essentially a voluntary process. So, first of all, there is no need for it, anyhow.
        I welcome the Opposition's change of heart. For many years they campaigned vigorously against the concept of safety representatives. Now they are saying that they merely think that everyone should have the chance to be a safety representative. I welcome that change of attitude.
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        The hon. Member for Bedfordshire, South made the point that it was a year since the enactment of the Health and Safety at Work etc. Act. He will know that it became operative only on 1st April of this year. The commission was established last autumn. But I am second to none in my desperate anxiety to see these regulations made and the provision prevailing for the appointment of safety representatives and the creation of statutory joint safety committees.
        The reason for the delay is the insertion of Section 2(5) in the Act and the fact that the commission has been deeply divided about how to handle the situation. By getting this provision out of the way, we shall enable the commission to get on with the job.
        I sum up. First, the Government believe that safety representatives should be appointed by the trade unions. We believe in bringing the trade unions more fully into involvement in health and safety matters than they have been hitherto. It is a criticism of the trade unions that perhaps in the past they have been too obsessed with negotiating terms and conditions of employment, rather than getting themselves sufficiently involved in safety matters. This will bring them more fully into involvement.
        Secondly, when they are appointed, the representatives will need the special facility of an organisation like a trade union.
        Thirdly, I return to the point about Section 2(5) of the Health and Safety at Work etc. Act. To do it in any other way than we have proposed would invite all kinds of spurious organisations to use the provisions as a side wind to secure recognition.
        I have spelled out these difficulties so repeatedly that I feel that I might be tilling the ground into dust if I continue. I think the House is familiar with the premise. As I said, it is time to make a final decision. Let us make it now.
        Mr. Prior: In our present drought conditions, the last thing I want the Minister to do is till the ground into dust. All he has done is put a little more fire and life into our debate at this late hour.
        I will not prolong the proceedings. We have been around this course a number of times. We on this side—I believe that that applies to the Liberal

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        Party and even the Scottish National Party—have never felt that we have had satisfactory answers. The Minister must not be allowed to talk this nonsense about agricultural workers being singled out for different or worse treatment. The whole purpose of trying to keep agriculture separate from the commission as a whole was to ensure that the expertise of the safety officers of the Minister would be available.
        I made a suggestion to the Minister in Committee which he felt was worth considering, although he gave no further undertaking about it. I hope that in another place their Lordships will return to this issue of the agricultural workers and the arrangements which have been working satisfactorily in the last year. I support fully the remarks of my hon. Friend the Member for Kidderminster (Mr. Bulmer). We are trying not only to make progress, despite the Minister's efforts to raise the temperature, but also to approach this matter in a more conciliatory manner, particularly on the narrower question of agriculture.
        Because I hope that in another place a view will be taken about agriculture remaining separate, will not advise my hon. Friends to press this matter to a Division [Laughter]. If the hon. Member presses me too hard, we shall have a Division. Otherwise, I was going to ask my hon. Friend whether he would withdraw the amendment.
        Mr. Madel: I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.

      Clause 106

        RESTRICTIONS ON CONTRACTING OUT
        Mr. Booth: I beg to move Amendment No. 190, in page 86, line 1, after 'above', insert 'or Part IV of this Act, '.
        Any provision, agreement or contract of employment which would limit a person's right under the Bill is made void by Clause 106(1), save for one exception in subsection (2) to take into account the fact that the Secretary of State can set aside the guarantee payments provision in those cases where trade unions and employers jointly represent to him to his satisfaction that they have come to a better collective agreement.
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        New Clause 98 requires a similar exception in respect of collective agreements on redundancy. That is the reason for the amendment. If I indicate that Amendment No. 198 is purely consequential on the insertion of new Clause 98, that might also help us to make progress.
        Amendment agreed to.
        Amendment made: No. 191, in page 86, line 2, after '28', insert 'or, as the cat-e may be, section 98'.—[Mr. Booth.]

      Clause 107

        EXCLUDED CLASSES OF EMPLOYMENT
        12.30 a.m.
        Mr. Walker: I beg to move Amendment No. 196, in page 87, line 44, leave out '49, 50'.
        Since we drafted the Bill, there has been fresh evidence on the basis of which we no longer feel that an outright exclusion of all seamen from Clauses 49 and 50 can be justified. Clearly, there will still be circumstances where an employer or his agent could not reasonably be expected to allow time off, but the duty on employers is only to do what is reasonable in all the circumstances. We think that the code of practice supporting these clauses will be able to outline reasonable and unreasonable circumstances.
        However, I must tell my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), who is very anxious about this matter, that we still feel that it is right that Clause 51, which places a duty on employers to allow reasonable time off for the performance of certain public duties, should not be applied to seamen. It could, at best, benefit only a very few seamen; public duties of the kind covered by this clause cannot of course be performed on board ship, and nor can public bodies organise their meetings to suit the likely availability of seamen. We have therefore concluded that Clause 51 should not be applied to merchant seamen in present circumstances. If circumstances change, the Secretary of State may by order change the application of the clause, as is provided for in Clause 107(15).
        Mr. Prescott: I will not detain the House for more than one minute. I want to put on record my grateful thanks to the Government for this amendment and for

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        recognising that seamen do not have to be excluded from the rights granted to other workers.
        I do not accept the argument for exclusion from the provisions of Clause 51. Many seamen are already magistrates or serve on statutory tribunals and education authorities. Councillors and other public representatives can and do carry out their duties adequately—especially with the number of short trips many of them are now doing.
        I do not intend to press the matter further tonight, but I note that the Secretary of State would be prepared to consider a review if there are further representations.
        Amendment agreed to.

      Clause 109

        APPLICATION TO CROWN
        Mr. Brittan: I beg to move Amendment No. 197, in page 91, line 12, leave out '16, 20, 21'.
        This matter was raised in Committee when we proposed that application of the Bill to the Crown should not exclude Clauses 16, 20 and 21. Under the Bill as unamended the exclusion of the Crown from these clauses would mean that it would not be possible to enforce the provisions relating to recognition and the provision of information.
        We have considerable reservations about the principle behind these procedures and we have already expressed grave doubts about the appropriateness of the remedies for failure to recognise or disclose information. However, if it is thought proper that there should be remedies of this kind, we do not see why they should not extend to the Crown as well. No doubt the argument will be put forward that the Crown will be good boys and there is no need for coercive provisions of this kind, but that would be an argument against extending the provisions of any legislation to the Crown and that has not been accepted in the past. We do not see any reason why the Crown should not also be bound by these provisions.
        In Committee, the Minister indicated that there were special factors affecting the Civil Service which might make it undesirable for these provisions to be applied
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        to the Crown. He did not explain what those special characteristics were. We felt a little suspicious and considered that these special characteristics were better known to the Government although there might be other special characteristics affecting other people in other employment which were not known to the Government but which were just as real and significant as the special characteristics of civil servants.
        However, we withheld our suspicions because we were promised a statement by a Minister for the Civil Service, who was carefully unidentified by the Minister of State in the debate in Committee. In the last two or three hours the presence of a certain Gentleman on the Government Front Bench has led one to expect and hope that a statement will be forthcoming from that quarter tonight. Although one's sense of mischief greatly tempted one not to move the amendment in order to see what would happen about the statement, one's sense of responsibility prompted one to give the Minister, who has been sitting here for so long, the opportunity to make a statement.
        The Minister of State, Civil Service Department (Mr. Charles R. Morris): In keeping with the undertaking given by my hon. Friend the Minister of State in Committee I think it right that I should make quite clear the Government's intention that civil servants should receive essentially the same benefits from the Bill as do employees generally. For this reason, most of the provisions of the Bill apply directly to Crown service. There are, however, certain differences between Crown employees and private employees which make it necessary to proceed in a somewhat different way. This has long been recognised in the Whitley Council system, under which staff relations in the non-industrial Civil Service have been successfully conducted since the early 1920s.
        I am proud of this long history of successful staff consultation and involvement in the Civil Service, and it is our objective—which I am sure we share with the National Staff Side—to maintain and continue to improve these longstanding practices of consultation and negotiation, together with the established procedures for arbitration, which have served us so well over many years.

        423
        I should explain that in several respects the Civil Service has already anticipated some of the things now provided for for the first time in the Bill. I have mentioned arbitration. In respect of conditions of service such as maternity leave, we are already in advance of the Bill, and the same may be said of our policy of encouraging union membership and the provision of facilities for trades union representatives, including time off, and so on.
        There is therefore no question of the Government not being prepared to give their own employees the protection that other employees will enjoy under the Bill. At the same time, Ministers have a responsibility to this House for the operations of government—a responsibility which they cannot lightly set aside. Indeed, in this respect Ministers are more fully answerable for their management responsibilities than is any private employer. I do not complain about this—it is right that Ministers should be subject to the full rigours of parliamentary scrutiny—but it does mean that we need to modify certain provisions in the Bill, as they affect the Crown, in order that this responsibility to the House is not removed.
        Therefore, we propose that the legislation should allow a recognition issue to be the subject of an independent inquiry by the Advisory, Conciliation and Arbitration Service, but not of a reference to the Central Arbitration Committee, in the event of a dispute about the application of its findings. It would not, therefore, be possible for the CAC to make binding awards under Clause 16 on matters for which the Government must answer to Parliament. I can, however, give an assurance that, following a reference under Clause 11, under which the union would be able to develop in full its case on recognition, the Government would normally observe the recommendations of the ACAS. If the amendment were accepted it would mean that decisions on matters which could include conditions of service for civil servants could be taken, in effect, by an independent body rather than by Ministers responsible to Parliament.
        I cannot believe that hon. Members would readily accept a situation in which a Minister told the House that a par-
        424
        ticular decision was none of its concern because it had been taken by the ACAS or the CAC.
        The same constitutional considerations apply to Clauses 20 and 21 which are concerned with the refusal of an employer to comply with a declaration of the CAC on the disclosure of information to a trade union, which would have been given after the union had argued its case in full. These are matters on which it is right that Ministers must remain ultimately responsible to Parliament. Equally, I can give an assurance that, following a finding by the CAC that a complaint on disclosure was well founded, the Government would normally accept that finding.
        For the reasons I have given this evening I cannot advise the House to accept the amendment moved so eloquently by the hon. Member for Cleveland and Whitby (Mr. Brittan). I hope that I have demonstrated that it is the Government's intention, so far as is possible, to conform to the spirit and letter of the Bill so far as their own employer responsibilities are concerned.
        Mr. Prior: We are grateful to the hon. Gentleman for giving us this account. We have heard the authentic voice of bureaucracy and it does not get any less long-winded as time goes on. It was Sir Winston Churchill who once said that a certain statement used every cliché in the English language except "Prepare to meet thy God" and "Please adjust your dress before leaving".
        The hon. Gentleman has exceeded even what Sir Winston described with the platitudes and clichés that we have heard in that statement. We are grateful to him for making it, because it was necessary. We hope that civil servants will become a little less long-winded as time goes on. I hope that my hon. Friend the Member for Cleveland and Whitby (Mr. Brittan) will withdraw his amendment.
        Mr. Brittan: I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.

      Clause 110
        ORDERS, RULES AND REGULATIONS
        Amendment made: No. 198, in page 92, line 37, after '28', insert '98'.—[Mr. Harold Walker.]
      Clause 113

        INTERPRETATION
        Amendments made: No. 199, in page 94, line 4, after '"employee", ', insert '"employer", '.
        No. 200, in line 32, leave out 'to' and insert ', 19 and '.
        No. 201, in line 34, leave out 'Part IV of this Act' and insert
        'sections 90 to 92 above'.—[Mr. Harold Walker.]

      Schedule 1

        ADVISORY, CONCILIATION AND ARBITRATION SERVICE
        Amendments made: No. 202, in page 99, line 12, leave out 'sub-paragraph (3)(b)' and insert 'sub-paragraphs (3)(b) and (4)'.
        No. 205, in line 25, after 'above', insert 'or sub-paragraph (4) below'.
        No. 206, in line 26, at end insert—
        '(4) The Secretary of State may, if he thinks fit, appoint a further two members of the Council who shall be appointed so as to take office at the same time) and before making those appointments he shall—

        (a) as to one of them, consult such organisations representing employers as he considers appropriate; and

        (b) as to one of them, consult such organisations representing workers as he considers appropriate. '.

        No. 207, in page 103, line 39, leave out 'this or any other' and insert 'any'.—[Mr. Harold Walker.]

      Schedule 3
        SUPPLEMENTARY PROVISIONS AS TO MATERNITY
        Amendment made: No. 208, in page 107, line 21, leave out 'an alternative job' and insert 'alternative employment'.—[Mr. Harold Walker.]
      Schedule 11

        EXTENSION OF TERMS AND CONDITIONS.
        Mr. Hayhoe: I beg to move Amendment No. 211, in page 139, line 11, after 'conditions', insert 'substantially less favourable than'.
        426
        The schedule, with Clause 99, forms one of the most controversial parts of the Bill, one in which there is, perhaps, the widest difference of judgment about its effect and implications. The purpose of the amendment is to clarify the matter, and to reflect more accurately the purposes which Ministers have from time to time said are behind their proposals.
        The phrase:
        "general level of terms and conditions".
        which has been around for a long time, as part of the fair wages resolution of this House of 1946, is not precise. What does it mean? Is it the numerical average or the arithmetical mean, or a median figure? It seems to be fairly certain that there is no clear and precise definition. I am advised that in one judgment in 1973 the Industrial Arbitration Board came down on the side of its being the numerical average. If that view were endorsed by the Central Arbitration Committee that would give a powerful push to inflationary wage or salary increases. The effect might well be greatest in white-collar employment.
        12.45 a.m.
        In our earlier debate about the low-paid we heard of the problem that if the lowest group within a general body of workers is taken up to a figure close to the average that in turn pushes up the average, which means that a new group can move up to the average. It is a never-ending spiral which can have damaging inflationary effects.
        The fair wages resolution has not been much used over the past 30 years. I think that it has resulted fewer than 50 times in hearings before the industrial arbitration tribunals. But that is no guide for the future, because publicity has been given to these matters, and people may well now be seeing how they can best use the provisions to serve their own interests, particularly as the provisions seem to be outside those governed by the Remuneration, Charges and Grants Act. They may provide the possibility of driving a coach and horses through that measure.
        The Minister has said on a number of occasions that the purpose of these provisions was to deal with certain pockets of low pay. We fear that their effect may well go much wider. I have no general quarrel with the Government's

        427
        stated purpose, but I have grave doubts about their actions. I hope that they will accept that there are genuine fears about the way in which the provisions might be used.
        I appreciate that it is unlikely that the Government will be prepared to accept the amendment, but if they will consider the arguments carefully—I know that representations have been made to them on these matters by the CBI—I shall seek to withdraw the amendment.
        Mr. Teddy Taylor: I should like to ask the Minister of State a question which affects an industry of which he has personal knowledge. If the amendment were accepted, would it—as I hope—prevent the schedule being used to upset a wages pattern within a district in the shipbuilding industry? I think particularly of the situation on Clydeside. In Upper Clyde there is a tradition of having the steel workers all on one basic rate, whereas in the lower reaches, only a few miles down the river, there is not that tradition, and the platers and welders receive substantially more than other steel work trades. It would appear that the schedule, if unamended, could be used to remove a pocket of low pay and upset a wages pattern, thereby causing a great deal of industrial disruption.
        Mr. Booth: The schedule would not touch on the situation that the hon. Member for Glasgow, Cathcart (Mr. Taylor) described, because it is qualified, and where there are existing agreements it would not bite. I should be very surprised if most of the wages, terms and conditions in the shipbuilding industry on Clydeside were not settled through collective agreements already in force and subject to national agreements.
        The effect of the amendment is hard to predict, because it very much depends on what is meant by "substantially". Therefore, I take it a little amiss to be told that the terms we are using are rather imprecise. They are very similar to those used in the Terms and Conditions of Employment Act and the fair wages resolution. These terms have not had the result feared and predicted by the hon. Member for Brentford and Isleworth (Mr. Hayhoe). But I think there is an idea which we have not considered in Committee and which is worthy of con-
        428
        sideration. I do not think we could accept the amendment in these terms, if only because the term "substantial" might have such an effect that somebody who was seeking to make a claim for an increase from £28 to £35 a week might succeed on the ground that £7 a week was a substantial difference, and this could be followed immediately by somebody, starting from a base of £31 a week, making a claim in exactly the same circumstances and being told that the difference was not substantial in that case. No doubt those concerned would feel greatly aggrieved by that situation.
        I say this only to indicate that I would not be prepared, on behalf of my right hon. Friend, to accept the amendment at this stage, but we shall be prepared to consider it, without any commitment whatsoever, because it raises something we have not looked at before, and we are anxious to set at rest what we think are the unjustified fears of many people in relation to Schedule 11 of the Bill, which we think will have the effect of dealing with very low pay areas and particular anomalies which exist in the general level of terms and conditions.
        Mr. Hayhoe: I am grateful for the Minister's assurance that he will look at the point again. Of course, one does not pretend that the words on the Notice Paper are the final answer. I am advised that "substantial" means something to the lawyers in a fairly clear sort of way, but these are matters where technical advice is needed, and I hope that the Minister will now, in discussion with outside authorities, try to achieve a result which will allay their fears without detracting from his intended purpose for this clause, which is to deal with pockets of low pay. If words could be found to limit the impact of Clause 89 and of this schedule it would be a great advantage all round.
        I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.

      Schedule 13

        AMENDMENTS OF EMPLOYMENT AND TRAINING ACT 1973
        Amendment made: No. 225, in page 145, line 7, at end insert—
        '(2) Paragraph (b) of the said section 5(1) shall cease to have effect on the expiration of

        429
        the period of eighteen months beginning with the commencement of this paragraph unless continued in force by an order under this paragraph.
        (3) The Secretary of State may by order—

        (a) provide that the said paragraph (b) shall continue in force for a period not exceeding twelve months from the expiration of the period mentioned in sub-paragraph (2) above; and

        (b) from time to time extend or further extend the period for which that paragraph is to continue in force by a further period not exceeding twelve months.

        (4) Any arrangements made before the expiration of the said paragraph (b) shall continue in force after its expiration and may be enforced and otherwise implemented accordingly.
        (5) No order shall be made under this paragraph unless a draft of the order is laid before and approved by resolution of each House of Parliament'.—[Mr. Booth.]

      Schedule 14

        AMENDMENTS OF HEALTH AND SAFETY AT WORK, ETC. ACT 1974
        Mr. John Evans: I beg to move Amendment No. 217, in page 148, line 7, at end insert—
        '21. In Clause 10, subsection 7, add at end "and the Secretary of State shall be answerable in Parliament for the Commission and the Executive"'.
        My hon. Friends and I put down this amendment because of the words used by my hon. Friend the Under-Secretary of State in the debate in Standing Committee, when he said:
        "I know that my hon. Friend is not asking me to enter into any firm commitment, but I will look very carefully at what he has said so that on Report we may be able to add something which will provide the further reassurance that he seeks. I hope that on that basis he will feel inclined to withdraw the amendment."—[Official Report, Standing Committee F, 22nd July, 1975; col. 1604.]
        Unfortunately, there is nothing which would meet the points we raised in the Standing Committee.
        This is a quite clear and straightforward amendment. We are seeking to ensure that Ministers answer in Parliament Questions tabled by Members of Parliament about the work of the commission.
        I think that many Members of Parliament are very concerned about the number of extra-governmental agencies which successive Governments have brought into being in the past few years. The end pro-
        430
        duct is that invariably Members of Parliament find that the ycannot ask Questions about the subject. As the executive's powers increase, the powers of Parliament diminish. Millions of workers are affected by the work of the commission.
        I have referred on other occasions to the re-organisation of the Factory Inspectorate. Many of us in the trade union movement have been very concerned in the past that the Factory Inspectorate was badly understaffed and could not do the job Parliament had charged it to do. We doubt whether the re-organised Factory Inspectorate can do the job as laid down, but we cannot ask Questions in Parliament about this.
        To give an example from my own constituency, it is proposed that the Factory Inspectorate office in Warrington—the only growth area in the North-West—should be moved to Newcastle-under-Lyme, a distance of some 42 miles. This would be to the detriment of the workers in my constituency. Something like 1,000 workers are killed through factory accidents at work every year. Something like 500,000 are injured. Something like 23 million working days are lost because of accidents and injuries. This is an important area. It is estimated that the cost of accidents is in excess of £1,000 million, without counting the cost of industrial ill health caused by bad working conditions. Will the Minister accept the spirit of this amendment and enable Ministers to answer Parliamentary Questions? Members of Parliament should be allowed to table Questions about this matter, which is vitally important to millions of people.
        Mr. Harold Walker: My hon. Friend the Member for Newton (Mr. Evans) reminded us that this matter was debated in Committee. There is undeniably a problem here. The Health and Safety Commission, with its heavy responsibilities, must clearly have considerable autonomy. There is no escaping that. It must have a clearly recognisable and separate identity. There must be a link with Government and Parliament, and control and accountability.
        I considered this matter after the debate in Committee. I am satisfied that the Health and Safety at Work etc. Act provides for the final sensitive balance which I think is necessary. I think that the

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        present arrangement is right and that it would be wrong to make a change.
        I take to heart my hon. Friend's criticisms. He thought that we had information which in other circumstances might have been made available in replies to Questions and otherwise. We must look carefully at the question of giving maximum information and the most positive response to Questions. There will be areas of difficulty in future. I shall do whatever I can to ensure that whenever possible we give the fullest information in reply to Parliamentary Questions and in debate.
        Apart from the debate on this measure, unprecedented interest has been shown in the House in these matters during the past few months. This year we answered a record number of Questions on industrial health and safety matters. I welcome that interest. We want to see it maintained by playing our part in giving the right response to Questions.
        Mr. J. W. Rooker: The Minister has done more than most to encourage Members of Parliament to push health and safety aspects. He said that he would do what he could to enable Questions to be answered. I ask him to help us in getting Questions tabled. There is no point in him offering to answer the Questions if we cannot get them passed through the Table Office. I tried to submit a Question about statements made by the Chairman of the Health and Safety Commission on aspects of the Flixborough disaster. I was told that those Questions must be redrafted and that, as an official of the Department, the Minister could not answer them. He is not an official of the Department. We are grateful for the offer to answer Questions on aspects of the Health and Safety Commission.
        Hon. Members experience considerable problems when endeavouring to put down Questions probing the murky areas of health and safety legislation affecting our constituents. The Minister wants to be positive. I know that he is positive. I think that ministerial contact with the Table Office would be appropriate.
        1.0 a.m.
        Mr. Harold Walker: There is an obligation on me to respond to that intervention and, with the leave of the
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        House, I will do so. When in recent years the Government have hived off their responsibilities to extra-governmental agencies, often advice has been given to the Table Office that because the Minister is no longer responsible his Department cannot answer Questions on a whole range of matters. To the best of my knowledge, we have not tendered any such advice to the Table Office. I want to keep it as open as possible.
        If my hon. Friend will let me know the matters on which he has sought to table Questions, I will look into them to see whether they are matters for which we should accept responsibility.
        Mr. John Evans: I am grateful to the Minister for his reply. Although we all appreciate the work he and his colleagues in the Department do, they may not always be there, and other Ministers may not take the line they take. My hon. Friend has always tried to help us.
        With the assurance my hon. Friend has given, I beg to ask leave to withdraw the amendment.
        Amendment, by leave, withdrawn.

      Schedule 15

        MINOR AND CONSEQUENTIAL AMENDMENTS
        Amendment proposed: No. 219, in page 163, line 45, at end insert:
        '(1A) In that subsection, after the definition of "employee" insert—
        ""employer" (subject to subsection (2) below) means, in relation to a worker who is not an employee, a person for whom one or more workers work, or have worked or normally work or seek to work;". '.—[Mr. Booth.]
        Mr. Hayhoe: This is the last amendment we shall consider on Report. Because of the lateness of the hour we have decided to forgo the pleasures of a Third Reading debate, but that does not mean that we still have not many reservations about certain aspects of the Bill.
        The Bill has been improved in Committee and on Report. More than 500 amendments have been made to it, about 50 of them moved by the Opposition or moved by the Government in response to suggestions we have made. Nevertheless, we still have reservations about the Bill.

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        May I say to the Minister of State, who has borne the burden of carrying the Bill through Committee, that we who served on the Committee are most grateful to him for his unfailing courtesy?
        Mr. Booth: I very much appreciate what the hon. Member for Brentford and Isleworth (Mr. Hayhoe) said. I also appreciate the co-operation which he and his hon. Friends have shown during Report and also the co-operation of my hon. Friends. By way of response, I join him in his self-denying ordinance. I shall be a masochist and deny myself the pleasure of a Third Reading speech.
        Mr. Deputy Speaker (Mr. George Thomas): I can never resist these good moments. I should like to be associated with the expressions of gratitude.
        Amendment agreed to.
        Bill read the Third time and passed.

  CALEDONIAN MACBRAYNE LIMITED
  1.3 a.m.
  The Minister of State, Scottish Office (Mr. Bruce Millan): I beg to move,
  That the Undertaking between the Secretary of State for Scotland and Caledonian MacBrayne Limited, a draft of which was laid before this House on 2nd July, be approved.
  The purpose of the draft undertaking for which I seek approval tonight is to give effect to the Government's intention to pay a revenue grant to Caledonian MacBrayne Ltd., a wholly-owned subsidiary of the Scottish Transport Group, to meet a deficit in the group's shipping services on the Clyde and to the Western Isles.
  My right hon. Friend the Secretary of State announced on 16th April this year his intention of paying to Caledonian MacBrayne a new revenue grant amounting to about £2½ million per year. Before I come to the reasons for that decision and before I deal with the main points of the draft undertaking, I should set these matters in perspective.
  The shipping services on the Clyde were for many years operated by the Caledonian Steam Packet Company, owned by British Rail before it was brought into the Scottish Transport Group in 1969. Until this present year,
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  no direct Government revenue grant was paid for these services, and any losses they incurred in the past were taken up within the general financial arrangements of British Rail and the Scottish Transport Group.
  Services to the Western Isles were first subsidised by the Government as long ago as 1928, and for many years Government support for these services took the form of an annual deficit payment in respect of losses incurred by David MacBrayne Limited. This company, immediately prior to the setting up of the STG, was half owned by private interests and half by public interests. The STG, on its foundation, took over the public shareholding and shortly afterwards bought out the private holding.
  The new STG decided that much needed to be done to modernise and improve the shipping services for which it was responsible. It therefore embarked on a programme of conversion to vehicle ferry operation to meet the growing demand from tourists as well as from the operators of commercial vehicles. The speed, frequency and capacity of the services to the islands have been greatly developed in recent years as a result of the change to roll-on/roll-off operation by modern vessels.
  For example, in the summer there are now 31 sailings a week to Barra, the Uists, Harris and Lewis, compared with 12 in 1955 and 25 in 1965, and each sailing has a cargo capacity much greater than that of the old conventional mail-boat. The House will recognise from these figures how greatly the service has been extended—a point not always acknowledged by its critics, which is why I want it to be put on record.
  After considering the finances and traffic prospects of the whole range of services for which it was responsible, the STG came to the conclusion that it should be possible to operate a number of the major services on a commercial basis without Government revenue grant and to concentrate the Government grant on a number of services to small and remote communities which could never hope to pay their way. These views were accepted by the then Government, and new arrangements were announced in April 1972.
  As a part of that policy, the STG's shipping services were divided between

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  two separate companies. Caledonian MacBrayne, with which we are concerned tonight, was set up to operate the commercial services, which included all the main vehicle ferry services to the principal islands. David MacBrayne Limited was to operate those uneconomic services which were known to need Government support on a continuing basis, such as those to the Small Isles and to Colonsay.
  A new undertaking for David MacBrayne, giving effect to this change, was approved by resolution of this House on 11th December 1973. Because of the quite different nature of these two groups and services, we propose to keep the David MacBrayne undertaking in operation for the time being, and it is not affected by the draft undertaking we are considering.
  As things turned out, since the new policy—and the policy of the previous Government—was announced in 1973, the STG has not been able to bring Caledonian MacBrayne on to a fully commercial footing. Price restraint, the fuel crisis, and inflation over the two years 1973 and 1974, brought about a sharp deterioration in the company's financial position. At the same time, there was a considerable volume of complaint from the islands about increases in charges resulting from cost increases, particularly as they affected the economic life in the islands. There was a large volume of complaint, in particular, in the spring last year following an increase introduced at that time.
  After representations from the local authorities, we agreed to review the whole position, and I had a meeting with the local authorities concerned on 16th July 1974. This is bringing the story up to date.
  As a result of that review, we came to the conclusion that it was no longer possible—certainly in the short term—to contemplate a continuation of the policy that Caledonian MacBrayne should operate on a straightforward commercial basis. To balance the books charges would have had to rise by about 65 per cent. in the current year and possibly by more if allowance were to be made for the falling off in demand which would have accompanied such a steep increase.
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  The Government concluded that this kind of increase could not be tolerated and, in accordance with the new policy statement of 16th April 1975, we there fore propose, through this present under taking, to pay a revenue grant to the company which is expected to be about £2½ million per year. This new subsidy represents a substantial increase in Government help to the Scottish Transport Group for shipping services from about £750,000, which has been going to David MacBrayne, to over £3 million a year. I want to emphasise that this is a considerable additional commitment by the Government. There is also help in other ways for capital purposes for these services in the Highlands and Islands, not all of it going directly to the Scottish Transport Group.
  Nevertheless, we did not intend that this increase in subsidy, or this new subsidy, should mean that there would be no increases in charges at all. As was made clear in the statement in April, the new subsidy for the current year was not sufficient to cover all increases in costs and therefore ferry charges were increased from 1st May this year. The increases were those which had already been approved by the Price Commission last October but which were not implemented, on my request to the Scottish Transport Group. From 1st May this year basically the same increases have been introduced.
  In making the increase the Scottish Transport Group sought to meet complaints from the islands about the effect of shipping charges on economic activity by limiting the increase for commercial vehicles to 5 per cent., with the main weight of the increase therefore falling on private cars and passengers, for which charges were increased by 25 per cent. The overall effect of the increase was that revenue from users was about 17 per cent. higher than before.
  I should like to refer briefly to the suggestion that has been put forward from time to time, basically by the Highlands and Islands Development Board, but supported by others, that charges for ferry and shipping services should be based on what is called the "road equivalent tariff"; that is, that the charges should be related to the cost of moving a similar vehicle over the equivalent distance on the road.

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  We have rejected this suggestion for two reasons. First, we consider that charges must bear some relation to actual costs. Otherwise there is a possibility of the whole operation becoming removed from the real economics of the situation.
  Secondly, we consider that the cost of such a charging system to the public-purse would be unacceptably high.
  It is not possible to give precise figures, but the indications are that revenue based on such a system of charging would bring in only about a quarter of the actual operating cost. In terms of the Caledonian MacBrayne services, that would mean a subsidy of about £6 million instead of the £2½ million which we now propose.
  Mr. Iain MacCormick: Does the Minister agree that that would be considerably less than is brought in in total from the whisky distilling industry on the Isle of Islay alone?
  Mr. Millan: I do not know what the hon. Gentleman means by "brought in" by the whisky industry. I do not believe that we can make that kind of comparison. We would get all kinds of bizarre transport charges in different parts of the country if we based such charges on the relative prosperity of the industries in particular areas. It is a plausible argument, but it does not bear serious examination. As I said, in terms of the Caledonian MacBrayne services, the subsidy would be about £6 million rather than £2½ million. Given the present demands on public expenditure, I think that that is far more than could reasonably be expected to be diverted to the support of these shipping services. I believe that £ 2½ million is a very fair additional amount of resources to be allocated at present.
  I make one further point concerning the Isle of Islay before I turn to the main points of the undertaking. I suspect that the matter may be raised by some hon. Members, so I shall briefly refer to it now, in the hope that I may later be able to pick up some of the points that are made when I make my reply.
  In considering the Caledonian MacBrayne services we had to decide whether to include Islay in the arrangements to meet the company's losses, in the knowledge that Western Ferries had written to say that if Caledonian MacBrayne were given a subsidy and Western Ferries
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  were not it would in all probability have to withdraw from the Islay route. We also had in mind that the two previous attempts to rationalise the Islay services came to nothing. The first, and most important, was in 1972 when Caledonian MacBrayne tried to withdraw. The Transport Users' Consultative Committee recommended against that and its recommendation was accepted by the then Government. I remind some Conservative Members of that event. Therefore, Caledonian MacBrayne is effectively under an obligation to continue its Islay services. The second attempt at rationalisation came later the same year, when the board of Western Ferries offered to sell the company to the STG. However, this came to nothing, because of the opposition of those who now control Western Ferries.
  In this difficult situation we decided that the best thing would be not to exclude Islay from the general grant to Caledonian MacBrayne. I think that that would have had certain serious consequences, among other things, on the actual charges for the services to the islands. The question then was, should we also offer a subsidy to Western Ferries? We decided that it would not be a sensible use of public funds to pay two companies, no matter who owned them, to compete with each other. In case there is any misunderstanding, I point out that the Government are involved in paying grants, under similar undertakings, to private companies elsewhere, but not in a situation where we would be in the position of subsidising competing services. Hon. Members will be aware that Western Ferries has now retracted from its earlier decision to the extent of having announced its intention of continuing through the winter.
  I turn now to the main points of the undertaking. The underlying aims are that because of the different nature and character of the services, control should be less detailed than over the present limited number of services operated by David MacBrayne. The Government will support services on an approved list, and any services or activities not approved will require to be operated on a commercial basis or receive financial support from elsewhere. What I have in mind is that any charter work, for example,

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  should meet its full costs and that cruise or other seasonal services which are not approved for the purposes of the undertaking would need to be supported by local authorities or by some other source. The grant will be calculated and paid to the company as an aggregate amount and will not be calculated in respect of the loss of each service. It will be settled each year in advance, and will not be varied except for some major and unexpected change in conditions; the aim here is to provide the company's management with a financial target for each year's operations. The Government will not concern themselves with the detail of the company's price structure, but will influence the general level of charges through the annual grant settlement.
  Mr. Teddy Taylor: Is it the Government's intention that the public in Scotland or anyone else will know the losses of certain services?
  Mr. Millan: The company has always taken the view that for a variety of reasons, including commercial reasons, it should not publish detailed losses on individual services. That is not at the wish of the Government; it is a matter within the commercial jurisdiction of the Scottish the Transport Group and has been cosidered by the Select Committee examining nationalised ferry services in the current year. The Committee may take a different view when it has considered the matter, but I am saying what is the practice determined by the STG. Indeed that has always been the practice. It is a practice which has been neither encouraged nor discouraged by the Government.
  There will not be detailed control over individual services, but in considering how the grant will affect the level of charges we shall have regard to social and economic conditions in the islands. The company also has to observe the requirements of the Price Code, which is an additional safeguard for users.
  Mr. Russell Johnston: The Minister said that the Government had not encouraged or discouraged the company in its commercial judgment. Does he not think that the Government should have taken a view on this matter?
  Mr. Millan: I should be slightly reluctant to take a view on this matter, since it is within the commercial discretion of the group. There is a rather fine relationship between Ministers and nationalised industries on these comercial matters. I am not persuaded that it would be right for the STG to publish these figures. If the group were to decide to do so, I should not object. We are likely to have from the Select Committee some pronouncements on the matter. It was a matter in which that Committee took an interest and, indeed, I believe that the hon. Member for Inverness (Mr. Johnston) gave evidence to that Committee.
  There is also provision for capital grant to be paid as considered appropriate for vessels and harbour facilities, though at present it is expected that the purchase of vessels will be financed in the normal way through a depreciation charge which will be taken into account in calculating the amount of grant. A ceiling of 75 per cent. has been placed on the capital grant and is similar to that applied administratively for the Government grant for harbour improvements in the Highlands and Islands under the eccentrically-named Congested District (Scotland) Act 1897.
  The Secretary of State's consent is necessary for the discontinuance of a service, but not for detailed timetable changes. It is our general intention that complaints about such matters as the quality of service and timetable on which the complainants cannot obtain satisfaction from the shipping company should be dealt with through the Transport Users' Consultative Committee.
  I make that point because I receive a number of detailed complaints which are matters not for the Minister concerned but for the other machinery involved. In the short term the Scottish committee is due for reappointment later this year. Nominations have been sought from a wide range of bodies representing local authorities and other local interests, including the Scottish Council of Social Services, the Federation of Crofters' Unions and the Highlands and Islands Development Board. It is the intention to strengthen the representation on the committee from the highlands and islands.
  I think I have covered the main points. Other articles of the undertaking either

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  make provision for the matters I have already discussed or contain the necessary legal safeguards for the Secretary of State's position in the eventualities which may arise. I hope that a little later I shall have the opportunity to reply to points made in the debate. I commend the proposals to the House.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. George Thomas): I remind the House that there is a total of one hour and 10 minutes remaining for the debate.
  1.25 a.m.
  Mr. Ian Sproat: The Opposition regard this as an extremely important debate, because it concerns very closely the existence of the islanders and because it encapsulates a very important principle about the extent to which subsidy paid to a nationalised industry undermines—and in this case could even put out of business—private enterprise. I hope to return to that in more detail in a moment.
  I want, first, to say something in general about the subsidy. The Opposition accept completely that certain sea routes should be subsidised. We accept the social need and the social cost in principle. The people who live in the islands subsidise, through their taxes, railway networks, motorways, inner city roads, and so on, which may be of little direct benefit to them. At the same time, it is only fair that people living in other parts of the country should expect to see some of their taxes providing some of the transport needs of the islanders. That is agreed between both sides of the House.
  But Governments must go, and have gone, beyond that general principle. As the right hon. Gentleman said, that is why the sea routes were divided, with those believed to be commercially viable going to Caledonian MacBrayne and those believed not to be commercially viable, and therefore in need of a social subsidy, being allocated to David MacBrayne Ltd.
  We have now come to the next stage, in which we find ourselves no longer in total agreement with the Government. Having in the past said that it could run its routes commercially without a subsidy from the taxpayer, Caledonian MacBrayne has now admitted that it can-
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  not not do so without an unacceptable rise in its rates, and that it must have a Government subsidy. The Government now propose to give the company £2·5 million.
  It may be that Caledonian MacBrayne is right about the non-commercial viability of certain routes. It may be, equally, that it is wrong about certain routes. But it is intolerable that it should claim and be given this subsidy without being prepared to reveal how it intends to spend that subsidy and without being prepared to reveal the detailed costings on each route which alone can prove whether it is right about the need for a subsidy of this size.
  Of course, further doubt about the judgment of Caledonian MacBrayne of what is commercially viable is sharply aroused by its behaviour over the Islay route. The broad situation cannot be disputed. Caledonian MacBrayne finds itself in open competition with private enterprise—in this case, Western Ferries—and it has been compelled to lower its fares and to alter and improve its services, yet still it has lost up to two-thirds of the traffic to its competitor.
  Mr. MacCormick: Has the hon. Gentleman ever travelled to Islay by air or by the present steamer services?
  Mr. Sproat: No, I have not. But when I spoke in Campbelltown, I heard a great deal about the issue from both sides.
  My point is that where Caledonian MacBrayne has had to face competiton in Islay its commercial judgment and ability have been found wanting.
  Surely there are some general principles which any Government should apply. First, where a private commercial concern provides a satisfactory and commercial service at a profit and at no cost to the taxpayer, it must be encouraged to continue doing so. Secondly, new competition in the cause of better services to the islanders at lower rates—as has happened in the case of Islay—and at no cost to the taxpayer should be actively encouraged, especially by the open and total disclosure of route costings. Thirdly, specific route subsidising, out of the general subsidy now being granted to routes which private enterprise has shown can be profitable without subsidy should be prohibited totally.

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  On the question of disclosure, Caledonian MacBrayne has so far refused to disclose the detailed costings of each route. That can no longer be tolerated. The Minister has indicated an open mind. I hope that he will tell the company to make the costings available. In the other place on 26th June, Lord Hughes said that if the costings were disclosed people on some routes might complain that others were getting more and that they should have the benefit of the subsidy. No doubt such complaints would be received, but so what? The company would then have to justify its actions and, hopefully, be able to prove that its allocations of expenditure was fair. To shelter behind that feeble excuse, as the noble Lord did, is to negate open government and public accountability.
  If the taxpayer is putting up an extra £2½ million to subsidise part of the sea routes to the Western Isles because it is claimed that they can no longer be run at a profit, surely the taxpayer has the right to know what part of his subsidy is being spent on what routes. That is essential, and it is indefensible to argue otherwise. The Norwegian Government have accepted that principle and this Government should accept it too. I hope that the Minister will undertake to give us the figures for the Islay route.
  I said that there was no good reason for not disclosing how the subsidy will be spent, but there is a bad reason—that the STG wishes to hide the fact that the taxpayer's money will be wasted on the Islay route, because, if it were not paid, Western Ferries would be able to operate without a subsidy and at a profit.
  What is the most economic way of servicing Islay? Either the taxpayer pays out more subsidies—I am advised that it will be about £300,000—and the people of Islay get a worse service, or the taxpayer pays out no more money and the people get a better service. It is incredible that there should be any doubt about this, but it is more incredible that the Scottish Office should pay for the choice which costs more and means a worse service.
  Mr. MacCormick: Would not the hon. Gentleman agree that the best solution
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  for Islay and the people living thereon is to have both services?
  Mr. Sproat: I was coming to that. My next note was to the effect that of course the people would like to retain the services of both Western Ferries and Caledonian MacBrayne—as I would, ideally—because little but good could come from the beneficent effects of competition. The fact that the Islay service is the envy of many other Western Islanders who languish under the MacBrayne monopoly is proof of that. But if one service is to go temporarily, it should be the less efficient and more costly—Caledonian MacBrayne.
  If Western Ferries have to go because the Government subsidise Caledonian MacBrayne as proposed, which will totally undermine Western Ferries' ability to continue—we understand that it will go through to the end of March, but there will not be much hope thereafter—the history of Caledonian MacBrayne shows what the future will be. MacBrayne's standard of efficiency and service will fall and rates will rise into line with the much higher average rates the company charges where it has a monopoly and is not subject to healthy competition. In short, the hon. Member's constituents and the general taxpayer will be worse off.
  Mr. Tam Dalyell: Is the argument that competition should be fostered throughout the islands?
  Mr. Sproat: We should encourage as much competition as possible. There will be certain routes, particularly those operated by David MacBrayne Ltd., on which such competition is not possible, but where it is possible and where it could take place without subsidies, it should be allowed to do so.
  On the troubled question of the Islay services, there are problems which at least have a chance of being settled reasonably and amicably, even at this late stage, if the Government set up a small investigative group with a representative each from, say, the STG, Western Ferries, the Government and the Strathclyde Region. They should have obligatory access to all the facts and figures they require, should aim to report within a month, and their findings should be made public.

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  I accept that in the changed economic circumstances of 1975 and beyond, certain Caledonian MacBrayne services may need a new subsidy, but this extra drain on already heavily burdened taxpayers can be justified only if the taxpayers, through Parliament, can see exactly where and how it is being spent. In future, there must be full and detailed disclosure of all the costs of the Caledonian MacBrayne routes, broken down individually. The money would not be justified if it undermined private enterprise on routes where, because of the subsidy paid to its nationalised rival, private enterprise cannot make a profit.
  I hope that in future the Government will think less doctrinairely and more openly about the nationalised industries.
  1.38 a.m.
  Mr. Donald Stewart: The question whether the Government are undermining private enterprise is not a great issue. I do not worry unduly about that. The people of the Western Isles are entitled to a reasonable, economical form of transport, like anybody else in the United Kingdom, and we have lacked that for many a long day.
  The Minister was more understanding in his speech than he has been in some of the brushes I have had with him across the Floor of the House. He showed a more realistic approach to the problem. The people of the Western Isles pay taxes to subsidise the railway system in the rest of the country and they are entitled to a reasonable form of transport themselves. We are approaching the situation in the Western Isles, the Inner Hebrides, Orkney and Shetland, and perhaps other parts of the country in which it will be almost impossible for people to have a reasonable standard of living. No development is coming into these areas.
  Caledonian MacBrayne has found it impossible to pay its way. I welcome the £ 2½ million Government grant, as I welcomed the Government's deferment of increased freight charges some months ago. The West Coast has a totally inadequate, antediluvian, exorbitantly costly form of transport. For example, it costs £170 to take a lorry load of fish on the short sea crossing to Stornaway. A textile manufacturer in Stornaway bought some machinery in Bradford and took it across through Skye and Harris. The cost
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  was greater than the cost of two lorries to bring the machinery from Bradford. A firm that smokes fish in Stornaway pays 15p per bag of oak chips. Each bag costs £1. 20 to transport from Glasgow to Stornaway.
  Only today I have had telephone calls from the Western Isles to the effect that a well-known mail order firm has advised all the regions that the cost of any goods that cannot be sent by parcel post will have to be borne wholly by the purchaser, and that, owing to transport costs, the firm can send them only to mainland addresses.
  In the last week we have had an intimation that the Glasgow boat was being withdrawn from service to the Inner Hebrides. This was an important vessel to the Islands. It carried goods such as roofing slates and tiles, which could not be taken economically by road. Road haulage costs are exorbitant. We have had this vessel phased out. David MacBrayne Ltd. had a weekly service, then it had a 10-days' service; then it was once every three weeks, and then even the three-weekly service was phased out. Figures were produced to show that the tonnage of goods being transported had dropped and that there was therefore no need for the service. But there is a need for it, because the people cannot afford to pay the transport costs involved in carrying that type of goods by lorry to the Western Isles.
  Why should we bear the total cost? Even in London—the wealthiest city in the country—transport is subsidised. So great is the increase in living costs in the Western Isles that the local council has made an agreement with the NJIC to pay is workmen £3·50 a week weighting allowance, as in London. That shows the extra cost of living, which is entirely due to the appallingly high freight rates to the Western Isles. We should be on an equal footing with the rest of the country in terms of freight rates. The Norwegian Government do this even in respect of the islands right in the north, and I do not see why we should not have the same advantage. If we did, development would increase and the extra traffic would make the services far more viable than they are now.
  I welcome the draft undertaking, as far as it goes, although it is still inadequate to meet the existing situation. I am sorry that the Minister said that it

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  should be applied on a commercial basis. We cannot do that at this stage. We are entitled to the same subsidy as the rest of the country. To suggest that local authorities should provide the subsidies is, as somebody said in the Orkneys a year or two ago, like asking a man to provide the blood for his own blood transfusion. We do not have local authorities with that kind of money. We should receive support to see that we have a fair and economical system of transport to the Western Isles, and to see that we enjoy the same benefits as the rest of the country and are not impeded by such factors as transport costs which do not apply in the rest of the country.
  1.44 a.m.
  Mr. Russell Johnston: It is worth saying—because MacBrayne's inevitably and unavoidably will be criticised throughout this debate—that, speaking for myself and, I am sure, for all Members of Parliament who represent constituencies served by MacBrayne's, in my experience, over 10 years, the criticisms made of MacBrayne's apply hardly at all to the people who provide the service—the deckhands, the skippers, the cooks and the ferrymen. All those people do a very good job. It is worth saying that. The criticism of MacBrayne's is a management argument rather than an argument about the nature of the services provided by the people who work in the organisation.
  I should like to make four points. First it was surprising, pleasant and new to hear the hon. Member for Aberdeen, South (Mr. Sproat) saying that each individual service should declare its profit and loss. This has not been the policy of the Conservative Party in government—a point that I am sure the Minister will not fail to make in his speech later.
  I hope that when the Select Committee on Nationalised Industries, to which the Minister referred, produces its report—which I understand is at the printers—it will make a clear recommendation on this matter. In my constituency it is totally absurd that no one knows how much profit the Kyle—Kyleakin ferry, which is operated by Caledonian MacBrayne, makes. We know by looking at it that it makes a profit, but why should not we know how much?
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  The basic theory about parliamentary control is that we have some idea of where subsidy is applied, how much subsidy is applied in a particular case, and what the result is.
  Reference has been made to Norway—mainly through interjections by the hon. Member for Argyll (Mr. MacCormack), and during the speech of the hon. Member for Western Isles (Mr. Stewart). I received a letter, perhaps not entirely surprisingly, with the compliments of Western Ferries (Argyll) Ltd., writen to the Oban Times in July this year, in which the writer, a Mr. Blue—which is not a strongly Highland name—
  Mr. MacCormick: Does the hon. Gentleman not appreciate that at the time when the MacGregors were proscribed, most of them took names after colours, and anyone called "Blue" today is almost certainly a historical MacGregor?
  Mr. Johnston: I am grateful to the hon. Gentleman and for the opportunity to refer to the hon. Member for Glasgow, Cathcart (Mr. Taylor) as a historical MacGregor. No one could be more blue than he.
  Mr. Blue, who lives in Ardrishaig, made an interesting comparison between the Scottish Transport Group's report and the kind of information available to him or made available equally to the citizens in Norway in comparable reports. He indicates clearly that the Norwegian report contains information:
  "giving detailed route costings, ship costings, and traffic category costings, together with full figures for the previous year and projections forward…".
  He concludes
  "It's peculiar how they manage to provide the information, isn't it?"
  That is a fair point to make. It was interesting that Mr. Blue appended to that letter a comparison of the fares charged on the basis of per kilometre as between certain routes in Scotland compared with similar route distances in Norway. For example, the cost of a single car at full rate on Kyle-Kyleakin, operated by the STG, was £1·05 and the same distance in Norway cost 59p. That figure was reflected quite remarkably throughout long tables going through virtually all the main ferry routes in Scotland, comparing them with

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  the Norwegian situation. This is something we should have regard to. It may be—I do not know—that the Norwegian ferries are heavily subsidised, and that that is why their costs are so much cheaper. On the other hand, they also know where they subsidise, and the Government and the individuals know what the cost is. We in this House cannot judge unless we know. Particularly when increased subsidies are being made, we should know where the main drain is, so that we can make judgments about it.
  Secondly, there is the question of competence and initiative. Caledonian MacBrayne is open to criticism here. I shall not develop Western Ferries' argument, because I am sure that the hon. Member for Argyll, within whose constituency it is, will develop it effectively. We have all had correspondence from Western Ferries, and know the argument. Here we have an independent company which went into competition with a nationalised concern and did very well. The lesson must be taken into account. A constituent, Mr. John Campbell, proprietor of the Isle of Canna, wrote to me last month to say:
  "I hope you will support Western Ferries in their application for aid…I cannot forget how when we widened the pier here from 42ft to 96ft in 1971…MacBraynes were asked if they could bring Messrs Lilley's crane and other machinery here to do the job, and had to admit that they could not do so. Western Ferries were approached and provided transport immediately. Since then MacBraynes have been having the benefit of a much improved pier at Canna, on which the work of improvement could not have been done but for Western Ferries."
  That is a small island. But the evidence clearly is—although one lacks the full information—that Caledonian MacBrayne appears not to have done as well as fairly recent competitors in this country, or as well as those in Norway, for example, operating in basically more difficult circumstances. This is a management matter.
  Thirdly, there is the question of consultation, which the Minister mentioned at the end of his speech. I had some correspondence about the Scottish Transport Users' Consultative Committee procedures at the end of last year. The Minister of State, Department of Prices and Consumer Protection, wrote to me on 5th December:
  "I do not think I need comment on the substance of the Inverness County Council's
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  case; Bruce Millan obviously has the matter well in hand and I am glad to see that the STUCC have already made some headway…
  As far as STUCC procedure is concerned, I agree with you that there is a case for having a fresh look at the mechanisms for considering objections to timetable changes and other service alterations. The present position is that the operator of the service is under no statutory obligation to give notice of alterations in services (unless they be total closures)".
  He added that he thought that the procedures should be reconsidered. I do not know whether that has been done. But I know that one of the major criticisms made of Caledonian MacBrayne again and again throughout the western and island area is that it does not consult well. It is continually announcing fare and service changes without people knowing that they are to happen. That is not good enough, and something should be done about it.
  I am not one of those who go overboard in favour of the consumer councils. I personally prefer the elected members operating rather than that sort of appointed institution, but perhaps we ought to have some sort of consumer council.
  Mr. Dalyell: Can the hon. Member assure us that he took the trouble to talk to the management about the problems?
  Mr. Deputy Speaker: I hope that nobody else will interrupt the hon. Gentleman, otherwise I shall not be able to call all the hon. Members who wish to speak.
  Mr. Johnston: I have only one more point to make. I was not very clear what the hon. Member for West Lothian (Mr. Dalyell) said.
  Mr. Dalyell: Did the hon. Member for Inverness (Mr. Johnston) hear the management side of the story from MacBrayne before making his point?
  Mr. Johnston: Yes, of course. I have talked with the MacBrayne management and, as I said in the evidence that I gave to the Select Committee on Nationalised Industries, they are a very pleasant group of people. They appear to be very understanding, but the fact remains that these changes continue to take place without consultation, and continue to result in these frustrations and

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  objections. I am sorry to say this to the hon. Member for West Lothian but it is a fact. I do not know why it is but I can assure him that it is so. I think the hon. Member for Western Isles would confirm that from his experience.
  Lastly, on the question of the consolidation of fares on some sort of road equivalent—the last point made by the Minister—I am sorry that he rejected us out of hand. I take the figures that he gives. He tells us that it would cost £6 million as opposed to the proposed £ 2½ million. Obviously that is a very big difference and the House would have to think very closely about it. On the other hand, I think it is worth saying that the Highlands and Islands Development Board, a body which the Minister is very happy to quote in support of his approach to Highland problems from time to time—he may smile, but that is true—has said that this seems to it to be the right course of action.
  I think that the Government should give it greater consideration than they appear to have done. Although it is true that it would cost a certain amount, it is equally true that the expenditure on motorways, and so on, throughout the rest of the United Kingdom has been heavy, and in the totality of providing an efficient transport network it has been accepted.
  1.58 a.m.
  Mr. Tam Dalyell: I shall take notice of what you said about time, Mr. Deputy Speaker, because it would be wrong that anybody should be kept out because of the length of speeches. Is it not true that the West Highlanders, on the whole, rather like having a sense of grievance? They might admit this themselves.
  A great deal has been said about MacBrayne's management. It has its problems, but I hear a great deal of good about it from my constituents—the Cadzow family, for example. I, too, have talked to MacBrayne's management, and it has its side of the story. Basically it is a problem, as the hon. Member for Inverness (Mr. Johnston) put it, of the way in which Western Ferries came into the situation. Was not it the most lucrative part of the trade potential?
  Mr. MacCormick: That is wrong.
  Mr. Dalyell: If I am wrong the hon. Gentleman will say so, but to some of us it looks suspiciously like a Skytrain situation. I have talked to Mr. Harrison, of Western Ferries, and put this to him. Here is an incoming firm taking the lucrative aspect of the market and leaving the nationalised industry to do the rest of the routine work that is by its very nature unprofitable.
  Before we criticise Caledonian Mac-Brayne Limited we must hear its side of the story in greater depth than we have heard so far.
  2.0 a.m.
  Mr. Iain MacCormick: I was disappointed at what the hon. Member for West Lothian (Mr. Dalyell) said. We do not condemn the management of Caledonian MacBryane. We admire the company and think that it does a tremendous job.
  I abhor the way in which some hon. Members have tried to inject an ideological concept into this discussion and have said that the Tories are on one side and Labour Party supporters are on the other. Other more important points are involved in this discussion. The first part of the discussion involves the situation obtaining in all the islands. The second involves Islay.
  Last autumn, when the Government announced a survey of the situation, the hopes of population of the Western Isles, or the Hebrides, were raised. The people hoped that the Government would accept the principle enshrined in the Highlands and Islands Development Board, deal with the principle of the road equivalent tariff, as they call it, and evolve a new system of sea transport to the Islands. Unfortunately, the Government did not do that. There was a different result.
  Other countries have successfully worked out better systems of sea transport to outlying islands. I am told that in Norway there is a £12 million subsidy to the island services, compared with the £6 million subsidy in this country. The Norwegian operation is six times larger than ours. How is it possible for the Norwegian Government to grant such a large subsidy? The answer must be that Scotland is a poor relation.

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  The subsidy is disappointing. There is nothing new about it. Before the "New Look" approach to the Highlands and Islands shipping services in the 1960s the Government granted a subsidy to cover the steamship companies' losses. The Government said that that approach would be swept aside. But in 1975 they are reintroducing that approach. They say that if fares are to rise they will draw a line and make up the difference from a subsidy. That is the least sensible way of operating a subsidy system, especially in view of the problems affecting the community of Islay.
  Many hon. Members have spoken about the problems of Islay, but I doubt whether anyone has any experience of the situation there. I invited the Secretary of State to visit Islay. It is a long time since he accepted such an invitation. I hope that he will accept one soon, in view of what I shall say.
  The argument has been developing since the 1940s and 1950s—but particularly when the previous Labour Government were in power—that the overland route should be developed from Keills, on the north side of Loch Sween, to Lagg, through Jura by road and then to Islay.
  In response to that argument a firm came into being, now called Western Ferries, which operated a modification of that route. Western Ferries pioneered the now common concept of roll-on/roll-off ferries in the Western Highlands and Islands of Scotland. The firm revolutionised the whole concept of transport to Islay and other islands. I can remember a time, not 10 years ago, when my wife took 12 hours to travel by bus and steamer to Islay from Oban. Now it takes a fraction of that time. I do not know whether the Government appreciate the extent to which this service has revolutionised the attitude to travel and the whole concept of a viable firm being able to operate in Islay.
  I do not want to introduce political motives because my interests are solely those of my constituents. The success of Western Ferries led, in 1972, to the attempt by Caledonian MacBrayne to withdraw from that service. I pay tribute to my hon. Friend the Member for Moray and Nairn (Mrs. Ewing) for putting forward the evidence which resulted in both services being retained. I and my party believe that both Caledonian
  454
  MacBrayne and Western Ferries should be allowed to continue their present services to the island. There is a good framework whereby both services can be maintained, even if the Government are paying a subsidy to either or both.
  I was surprised that the hon. Member for Aberdeen, South (Mr. Sproat) did not make monetary comparisons. His failure to do so was a weak point in his argument. For example, in 1975 the cost of taking a car to Islay is exactly the same as it was 10 years ago. There can be few similar examples anywhere in the British Isles. That is possible only because Western Ferries ran such an efficient system that Caledonian MacBrayne was forced to cut its fares by half. That situation still exists.
  The hon. Member for Inverness (Mr. Johnston) said that it costs more to take a car to Mull—which is only about 10 miles from Oban—than from West Loch Tarbert to Islay, which is 20 or 30 miles.
  The crux of the matter is whether it is conceivable that only one of the two services can cope with the traffic to and from Islay. All of us have had the chance to read the correspondence which has passed between the Secretary of State and the Chairman of Western Ferries. I was amazed to read one sentence in one of the right hon. Gentleman's letters in which he said, "We have seen over the last few weeks in February and March that Caledonian MacBrayne can cope with this service." Surely everyone appreciates that the real time of the year when there is a service to Islay is in the summer, because the main industry there is tourism. Not many of us take our summer holidays in February or March.
  Granted the situation where the service to Islay is half as expensive pro rata, per mile, as to any other island of Scotland, is it not rather odd to suggest that this situation would continue if there were only one operator?
  The Highlands and Islands Development Board's report—the board is an eminently sound body—says:
  "The shorter the crossing, the greater appears to be the disparity between sea and road. It is also noteworthy that in Islay the service rates per kilometre are less than for any other route, presumably because of the existence of fairly intense competition between Caledonian MacBrayne and Western Ferries."

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  One is surely bound to admit that in the long run, if not in the sort term, if one or other of these services were withdrawn the other would increase fares to be comparable with those levied on other routes in the Western Isles.
  There are not all that many folk on the island of Jura, and there are far too many deer. Jura's only contact with the mainland at present is through the ferry services provided by Western Ferries. If Western Ferries is forced to withdraw, it will mean that the people of Jura, to bring themselves or their goods to the mainland, will have to go across to Feolin, or Port Askaig, take a bus journey the length of Islay, to Port Ellen, and then go by sea to Loch Tarbert. That would be an uneconomic and tedious way of spending their time, when it could be better employed otherwise.
  These are the three vital points affecting those who live in these places. I am met by a feeling of disillusionment. Much in the draft undertaking deserves congratulation, but there is one flaw in it that we should all be concerned about.
  The Government are right to say that we cannot allow fares and charges to go up. Where they go wrong is in saying that we have to make Islay the same as the other places. Islay is a different case, because it is the only island, of all the Western Isles, which has both a nationalised company and an independent company serving it, and it is the only island of the Western Isles which has a genuinely viable community both economically and socially.
  I do not see why it should not have been possible for the Government to say that they would apply their formula to the rest of the Western Isles, but that Western Ferries had revolutionised the whole idea of transport to all the islands and they would allow it to carry on its service to Islay.
  The same sort of people work both services. Last time I travelled by Western Ferries, I went on to the bridge and talked to the captain. Later, I saw the same captain on the bridge of a Caledonian MacBrayne ferry. Therefore, we are not dealing with a different class of folk.
  Why not try out a new system in Islay, which would involve a subsidy based not
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  on making up an operating loss but on the idea of subsidising the inputs? I refer to the inputs in terms of fuel costs, the number of people, cars, and so on, carried. Would that not allow the Government to subsidise both Caledonian MacBrayne and Western Ferries by taking the present subsidy off the routes to Islay and halving it, giving one half to the one and the other half to the other?
  I should like to ask the Minister of State one last question which must be answered in this House tonight if we are having a meaningful debate. How much money is Caledonian MacBrayne losing at present on its service from West Loch Tarbert to Port Ellen in Islay?
  2.16 a.m.
  Mr. Russell Fairgrieve: I shall confine my few brief remarks to the matter of principle, but naturally, debate being what it is, I cannot refrain from referring to the speech made by the hon. Member for Argyll (Mr. MacCormick). He opened his remarks by pointing out that the Scottish National Party did not take up any ideological position; it was not for nationalisation or for private enterprise, but was somewhat in the middle. I am glad that the hon. Gentleman then made a most spirited defence of private enterprise. There is no doubt that the SNP is beginning to realise values in these matters.
  Today we are seeing far too much the fault of what is happening in this country over similar matters. This applies not only to Caledonian MacBrayne and Western Ferries, but to British Airways and British Caledonian in Scotland. The arrival of British Caledonian at Turnhouse and other airports in Scotland meant an immediately more efficient service from British Airways. Had British Caledonian not arrived, I doubt whether we would have had this improved efficiency by British Airways.
  We are seeing the same kind of thing carried out in a bigger way with the arrival of the British National Oil Corporation. Because it is obvious to all concerned that nationalisation does not work, that undertaking is being started with a massive advantage by not being subject to petroleum revenue tax, and so on. The fact remains that everybody who is not just thinking of ideology

  457
  knows that private competitive enterprise delivers the goods and nationalised industry does not. We are having this problem at Islay because Caledonian MacBrayne is being given the subsidy and Western Ferries is not.
  The hon. Member for West Lothian (Mr. Dalyell) said that one ought not to be too general about these matters, but should have specific evidence. I have a letter from a constituent in West Aberdeenshire, where we breed some of the finest cattle in Britain. He writes:
  "As a regular buyer of cattle from the Island of Islay, and as a regular user of Western Ferries—which I have found a most efficient and obliging firm to deal with—it is with great concern that I learn of their impending withdrawal from the Islay route.
  Comparing the two ferry services available, without a doubt Western Ferries offer a keener and more efficient service."
  That is a matter of opinion. However, I suggest that all the evidence shows that when competition is removed, when monopoly is introduced and when no alternative is offered, the users suffer. That is why I wish Western Ferries to be given the same treatment as Caledonian MacBrayne.
  2.20 a.m.
  Mr. Teddy Taylor: This has been a fascinating debate. In a way I am reluctant to intervene in a debate that has been dominated by experts. We have heard from people who represent islands, from people who live on islands, and from people who own islands. I should say that my only qualification for intervening is that my wife and three-year-old son sailed this afternoon on the "Queen Mary II" from Largs to Bute, paying two and a half times as much per mile as the charge per mile on the Islay service.
  There are a number of questions that we are entitled to ask arising out of the debate. First, the Minister has mentioned the £2½ million subsidy without giving us any indication of the future relationship between fares and subsidies on Caledonian MacBrayne services. In April 1975 the Chancellor indicated that there was to be a change in the Government's pricing restraint policies whereby subsidies of £550 million were to be reduced to nothing next year. Will the Minister give us his view of the future relationship between subsidies and fare income on Caledonian MacBrayne services, observing that up
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  to now we have aimed at the company breaking even?
  Secondly, will the Minister consider the question of making available the loss figures for the Caledonian MacBrayne services? The hon. Member for Inverness (Mr. Johnston) chided us on the basis that they have not been provided. I suggest that there is a world of difference between a situation in which we have Caledonian MacBrayne breaking even and not looking for a direct subsidy from the taxpayer, and a situation in which approximately £2½ million of revenue expenditure is to be provided when private firms are in competition. In those circumstances I believe that we are entitled to have individual figures for each service.
  Thirdly, is the Minister prepared to reconsider his policy in relation to Islay? I appreciate that this is a delicate matter. We have heard the hon. Members for Inverness and Argyll (Mr. MacCormick) saying how splendid and wonderful are Caledonian MacBrayne and Western Ferries. The hon. Member for Argyll seems to think that the solution lies in an input cost subsidy in relation to the actual costs. Of course, that would be unfair when the "Pioneer" uses twice as much oil per journey as does the Western Ferries' boat.
  I hope that the Government are prepared to reconsider their policy, bearing in mind that if they operated on the same basis with Caledonian MacBrayne in America they would be prosecuted under the anti-trust laws.
  There appears to be a situation in which Caledonian MacBrayne is driving enterprising private firms out of business by means of unfair State-aided competition. There is no doubt, as the hon. Member for Argyll has rightly said, that the initiative in Western Ferries has led to a situation in which Islay has better services than most of the isles, at the cheapest cost. Bearing in mind that we have set up a Scottish Development Agency, which will expand State control of private industry, the Minister has an obligation to remove the many justifiable fears that are held by many firms and industries that they will be subject to unfair competition by State-owned companies.
  If we need any evidence of that situation, let us bear in mind the figures I have obtained, which show that on the Oban

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  to Craignure service the cost per passenger is 73p a mile and on the Blodick service 55p a mile, whereas on the Islay service it is 21p a mile. That is for a 14ft. car. I am sure that the hon. Member for Inverness would express that as 4½ metres.
  The final question I ask the Minister is whether he will give us an assurance that under paragraph 10 he will ensure that private road hauliers in the Highlands are protected from unfair competition by Caledonian Haulage. Although we are not discussing Caledonian Haulage we are discussing Caledonian MacBrayne.
  We are concerned about the special arrangements regarding fares and transportation, especially about the arrangements between Caledonian MacBrayne and Caledonian Haulage. It is a strange fact that the rate quoted by MacBrayne Haulage to transport a 40 ft. trailer from Inverness to Ullapool is lower than the rate charged to convey that same trailer from Ullapool to Stornaway direct.
  We want to ensure fair competition and we should like to know the Minister's aims in respect of the future relationship between subsidies and fares. Even more important, does the Minister realise that the question of unfair competition is important not just for Islay but for the whole of Scottish industry?
  2.26 a.m.
  Mr. Millan: I should like at the outset to deal with the subject of Islay. It would be interesting if the hon. Member for Glasgow, Cathcart (Mr. Taylor) would explain why his former colleague, the ex-Secretary of State for Scotland, was so anxious to compel Caledonian MacBrayne to stay on the Islay operation when that company wanted to withdraw. It is not in the same position as Western Ferries, because if Western Ferries withdrew from the arrangement there would be no question of the STUCC's being involved, because Western Ferries is not a public enterprise and could withdraw the service tomorrow.
  I do not criticise Western Ferries, but it is not in the same position as a nationalised operator would be. If we are to provide a decent service to the islands, it must be done by the nationalised concern because that concern has an obligation to run the service. This is not a doctrinaire attitude.
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  Mention was made of the Scottish Development Agency Bill. That Bill provides for a subsidised air service to the islands and highlands. Those services are to go to Loganair and will not go to the nationalised British Airways, but they will not go to that organisation in a situation in which they will be compared with another service which is to be subsidised by the Government.
  I take the point about Argyll and the problems that would face certain people if Western Ferries were to withdraw. If that were to happen, we realise that we should have to examine the problem, but we are not approaching the matter from any doctrinaire standpoint. Undoubtedly there would be difficulties involving the expenditure of public money in present circumstances if we were to seek to subsidise what, basically, are competing services to the same island.
  We did not, as the hon. Member for Inverness (Mr. Johnston) said, reject the roads concept out of hand. Careful consideration has been given to the matter and I spoke to the Highlands and Islands Development Board about it on one occasion. However, for the reasons I have mentioned, I do not think it would be justified to earmark such money at present. I accept that if we are to have a decent service to the islands, it is bound to be expensive and as a Government we are bound to have to consider that if people living on the islands are to have reasonable prosperity and opportunities for economic development, we must try to support the services to the islands. It must be a matter of judgment how far we should spend money in this direction compared with the money that goes out in other ways through, say, the Highlands and Islands Development Board. However, I accept that we have as much of an obligation to produce reasonable living standards for people in the islands as for the rest of the, people in Scotland. I believe that the £2·5 million in new subsidy which has gone in is a very important step towards that end.
  I was asked again about the publication of figures. I have never said that these figures should not be published. I gave evidence myself to the Select Committee on this, and I have a completely open mind about it. The STG has probably felt that if it were to disclose all the

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  figures for all the services, for those making substantial losses there would be unlikely to be any demand by the people in the areas concerned for the fares to go up to meet the losses, but that in respect of the few which were paying their way there might be demands that the fares should go down. That is human nature everywhere, especially in the islands. That is a practical objection, quite apart from the normal commercial objections that in certain cases the STG would be disclosing figures which its competitors would not be under an obligation to disclose.
  The point must also be made that the STG is not under a statutory obligation to pay its way on each individual service. The obligation relates to services as a whole. There are substantial objections to making these figures known in detail. But I have no objection to the STG doing that if it thinks it sensible, and obviously the group will read what hon. Members have said in this debate.
  On the general approach to the Scottish Transport Group, management, and the rest, criticism about remoteness of management is made quite frequently. Recently, having had criticisms made by an hon. Member who is not here tonight, I made a point of asking the group to send me copies of the correspondence. In that case, the complaints had been dealt with very promptly—a good deal more promptly than I deal with letters from hon. Members, I am afraid—in great detail and with great courtesy. It was obvious to me that a great deal of attention had been paid to the complaints. I am not saying that that happens always. But, having made the test, I got very favourable results. I also spoke to the chairman of the STG and arranged for him to meet the hon. Member concerned.
  If hon. Members ever feel that they are getting inadequate treatment from the group, I am always willing to make representations, but I am not willing and cannot be expected to take over the rôle of day-to-day management of the group and deal with day-to-day matters which are the responsibility of the group itself. That is not the right kind of relationship.
  Many other detailed matters were raised. Reference was made to the cargo boat. All that has happened—
  It being one and a half hours after the commencement of proceedings on the motion, Mr. Deputy Speaker put the Question, pursuant to Standing Order No. 3 (Exempted business).
  Question agreed to.
  Resolved,
  That the Undertaking between the Secretary of State for Scotland and Caledonian MacBrayne Limited, a draft of which was laid before this House on 2nd July, be approved.

  Adjournment
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. James Hamilton.]

  HOUSING (SERVICE MEN)
  2.33 a.m.
  Mrs. Winifred Ewing: It is a pleasure to address you at 2.30 in the morning, Mr. Deputy Speaker, and I begin by saying that this problem is one which deeply concerns my constituency.
  Each year, as has been explained in Government pamphlets, about 40,000 men leave the Services, and about one-third are married. In my experience and from what I have read from Government sources, it is clear that many older Service men are not able to buy houses through normal commercial mortgages at the end of their service. On the whole Service careers are shorter than others, and usually it is not feasible for a man to consider buying a house at the normal time, in the early part of his life, and, when he seeks to buy a house, very often that is the moment when his family responsibilities are at their greatest. In other words, his career in the Services ends very often when his family responsibilities are at their most weighty, and at that time it is not possible for him to find a normal mortgage arrangement that he can afford.
  In this debate, I am not proposing that Service men be advantaged. I am proposing that ex-Service men be not disadvantaged in regard to the other method of acquiring a house at the end of a Service career, which is through a local authority list. I have made this point before and I am sure that it will be no surprise to the Minister, but I do not seem to be

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  getting anywhere. That is why I have had a standing request for this debate.
  A large proportion of those seeking help in my surgeries come into this category. Many are desperate. Perhaps it is partly their own fault and they should have given more thought to the matter when they entered the Service, but it is sad to see men with 20 years' service worried because they have nowhere to go. Sometimes a trace of bitterness creeps into their minds. Some of them are senior officers. I visited two bases in my constituency recently to prepare for this debate. One senior officer, whose name I cannot give obviously, said that they sometimes felt that they were treated like a bunch of gypsies.
  There are 4,000 men on the two bases in my constituency, which with families means that 10,000 people are involved. My local authorities, both before and after regionalisation, have genuinely tried to do their best to meet the problem. I have not noticed that regionalisation has increased the problem, although I have heard of a bad case from a neighbouring constituency. My hon. Friend the Member for Aberdeenshire, East (Mr. Henderson) has told me tonight of a Service man with 20 years behind him whose name had been accepted for the area of Dyce. He has been told that since regionalisation his name will not be on the list. That shows that it is not universally true that matters did not worsen after regionalisation.
  My problem is highlighted by the fact that Morayshire and Nairnshire are beautiful places where any sensible person would want to settle down. But this creates an added problem. As it was put to me by senior officers, this is not unusual, because flying bases are located where the weather is good and the area attractive.
  So it is understandable that men who have been on the move for years and who have lost their roots will take one look at my beautiful constituency and say "This is the place for us. We and our children have made friends and this is where we should like to establish our roots." These circumstances are not unique to my constituency, but apply to others with bases.
  I have carefully read Government Circular 54/75 and a parliamentary answer
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  on 21st May said that new guidelines were to be produced in the next month. But there is no circular for Scotland. I suspect that that is because of regionalisation, but perhaps the Minister can say whether there will be a Scottish circular and whether the answer means that the existing one will be replaced by something a little stronger. Something stronger is needed. The circular is pleasant and sympathetic but, as the officers have said to me, they have had buckets of sympathy and what they would like now are buckets of action.
  My proposal is simple. I am dealing now with ex-Service men but I hope to deal with problems during service as well. I suggest that on entering the Service, if married, or on marrying after entering the Service, a member of the forces should be able to put his name on the housing list of his choice—and one only. Each of us has a place and he should be entitled to his place.
  Some might put their names down for Glasgow and others for London—although the latter choice would be inconceivable to me. If we had this system, the burden would be spread around the country a bit more. There will always be a bulge in those areas where Service men habitually end their careers, but it would be spread if my suggestion were adopted.
  A man from Leicester should have the right to go on the Leicester housing list and not be disadvantaged by not having the points for residence. If he gets to the top of a list before he leaves the Services, there is no problem. He can stay at or near the top until his career is over. I am suggesting equal treatment with ordinary citizens. Service men fail on most lists through no fault of their own. Members of the forces should not be disadvantaged in this way.
  Very good arrangements are made for special categories of Service men. They are grateful for what is done on behalf of men who are invalided out, and I have no criticism here. I am asking for an improvement in the general situation. I have put forward this idea before and had a sympathetic response from both sides of the House. It is nice to see nodding heads instead of the usual opposite reaction.

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  The Department of the Environment circular says:
  "The Ministry of Defence in their resettlement advice encourages men to move away from the garrison areas and stress that it is wise to move away from any area where local authority housing is short."
  I believe that Service men should also have the right to put their names on local lists and qualify according to local rules. Nairn requires a minimum of 12 years' service and the application must be lodged three years before a man leaves the Services. Moray is not so strict.
  It has been suggested to me that the SSHA might be able to help these men, but unless they were key workers, they would be in such a low category that that would not help. The glossy recruitment literature for the Services makes little or no reference to the problems men will face at the end of their service. The Air Force "glossies" give no warning of the predicament in which men will find themselves. These "glossies" are very attractive, but they should be more realistic.
  There are 33 RAF families on the waiting list at Nairn. In Moray there is quite a generous attitude, but the authorities may have to cope with 20 per cent. of the waiting list comprising of ex-Service families. This is how serious the problem has become in my constituency. It creates a degree of animosity among local people who have always been there and who sometimes feel a bit disadvantaged. The Morayshire authority assures me that there is no question of advantage or disadvantage; it has a fair system.
  During service another problem arises. Is a man to try to buy a house of his own choice? If so, what does he do with it? If he rents it, he often finds that it is not a secure tenancy. Some senior officers have squatters in the houses that they had bought in England. That has put them off the idea of trying to be prudent and buy in advance. They are realistic. There will not be much purchasing in advance.
  That is the problem in Lossiemouth at the moment. There are 162 on the waiting list, and at Kinloss there are 62 families, all separated. I do not need to tell hon. Members of the pressures on separated families. Visits by Service men are very difficult and time consuming. The real
  466
  difficulty is the time factor, because by the time a man gets to his home, his leave is almost up. A spouse's warrant would be a much better idea and would solve the problem in many cases. In my area the bases are considering the possibility of charter flights. It is clear that a warrant is often of not much use to a Service man because he cannot get home in time.
  Farmers in rural areas even now do not appreciate that hiring is a very attractive proposal, because their tenancies will not become secure. Provided they are willing to enter into an initial six-months' agreement they can get the tenant out on six months' notice, with the bills paid. That is not unimportant. I have tried to disseminate this information in my constituency, and it has had a dramatic effect already, as senior officers have said. They are willing to inform the NFU, and I wonder whether the Minister could send a circular round to farming journals, explaining that hirings can be attractive to farmers. Circulars could also be available at post offices and marts, directed to farmers with empty cottages, persuading them to enter into hirings. There need not be any separated families in my constituency, and I am sure that the situation there applies to many other constituencies.
  No measure has been made of home-lessness among ex-Service men. During service many have to wait for homes. They are warned about this in the "glossies", but I suggest that the present situation, which causes much worry and distress to the people thus disadvantaged, should be reconsidered. I urge the Minister to ensure that more action is taken to induce local authorities to act.
  2.48 a.m.
  The Under-Secretary of State for Defence for the Royal Navy (Mr. Frank Judd): Housing is one of the basic human needs, and I should like to assure the House and, in particular, the hon. Member for Moray and Nairn (Mrs. Ewing), who has given us this opportunity to debate the matter tonight, that we in the Ministry of Defence take very seriously indeed our own responsibilities for the housing of those in or about to leave the Services. Although much of the ground goes deeper and further than a half-hour debate can reveal, the hon. Lady has highlighted some of the more important

  467
  issues, and I hope I can do justice to her main points in my reply.
  On the question of assisted warrants for travel for families as distinct from Service men, I shall look into the question and write to the hon. Lady.
  I was, incidentally, pleased to hear that it proved possible for the right hon. Lady to visit the two RAF bases in her constituency—RAF Kinloss and RAF Lossiemouth—over the weekend to see for herself and talk about the housing situation there.
  There are, of course, two sides to the coin; housing for those serving in the forces is four-squarely a matter for the Ministry of Defence, whereas when it comes to those about to return to civilian life the matter is by definition primarily a civil—that is, Department of the Environment—one, although clearly the Ministry of Defence has certain responsibilities and interests, too.
  Perhaps I could deal first with a few points about housing for the serving man.
  Just like any authority administering housing we greatly dislike a situation in which in some areas there are surpluses of married quarters while in others there are shortages. We are always striving to remedy this. As far as shortages are concerned, we are pressing on with our building programme and, for example, as the hon. Lady will be aware, new Service homes are either planned or are under construction in her own constituency.
  I am naturally interested in any suggestions which may have the effect of assisting with Service housing and I am grateful to the hon. Lady for drawing my attention to the possibility that there may be vacant accommodation that local farmers may be willing to let to the Services as hirings, if they can be assured of the Government's position as a tenant of not seeking the protection of the law where a landlord wishes to terminate a tenancy under the terms of the agreement. My Department will certainly look into this suggestion, in conjunction with the Property Services Agency, to see whether there might be scope here to increase the opportunities for obtaining Service hirings.
  Where, conversely, we have more homes available than are needed for
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  present Service requirements, we are always ready to look into the possibility of letting them temporarily, for example to local authorities. Unfortunately, there are obvious difficulties. Local authorities are generally reluctant to guarantee that houses will be returned, at short notice, to meet a Service requirement. However, we were able to help in the case of 122 Army quarters at Fort George in Scotland which have been made available for use by workers engaged in North Sea oil platform construction work.
  The hon. Lady has asked about the advice which the Services give on housing matters to those thinking of joining the forces. An individual's eligibility for Service quarters depends, of course, on a large number of different factors, for example, marital circumstances, length of service and so on, and it would not be possible at the recruiting stage to give a simple statement covering every situation. However, potential recruits are told that they will, in certain circumstances, be eligible for Service quarters but that the availability of these varies from place to place. Information on housing on discharge is part of the resettlement service and is more appropriately given when an individual is nearing the end of his service and knows more clearly the nature and place of his future civilian employment.
  The hon. Lady has expressed considerable interest recently about council housing for ex-Service men and she repeated it tonight. I, too, am deeply concerned that some Service men encounter difficulty, because of residential and other qualifications imposed by some local authorities, in obtaining council housing on leaving the forces. Local authorities are, of course, largely autonomous in their housing allocation policies. I know that my right hon. Friend the Secretary of State for Scotland is considering the issue of a circular similar to the one which has recently been sent to local authorities in England and Wales and I hope that there will be a positive response by local authorities throughout the country.
  As the hon. Lady will be aware, the main features of the new circular are as follows. First, local authorities should not enforce residential qualifications in the case of Service men. Secondly, a Service man should be permitted to go

  469
  on to a housing list well in advance of the date of his discharge and to postpone taking up the offer of a house until his release from the Services. Thirdly, local authorities should treat irregular occupants as being, in effect, homeless and accept a notice to quit Service married quarters as the equivalent of a warrant for possession.
  I appreciate that the hon. Lady does not feel that the circulars are adequate and that legislation is needed to ensure fair treatment for Service men in the allocation of council housing. I am sure my right hon. Friend the Secretary of State for the Environment will take note of what she says. The hon. Lady has, however, put forward her own solution. She has suggested that every member of the Services on entry or on marriage should be entitled to put his name on the local authority list of his choice. The idea behind this would be to spread the burden of ex-Service men requiring council housing more evenly around the country instead of overloading those local authorities that have bases within their areas. I have a great deal of sympathy with this approach. It seems to me that as defence is a national responsibility, the housing problems which face those leaving the forces should also be seen as a matter to be solved on a national basis.
  Local authorities everywhere should accept their share of the responsibility for rehousing the men and women who have provided our national defence system. It is nothing short of disgraceful that this should be left disproportionately to certain local authorities in the vicinity of particular bases, or that ex-Service men should be compelled to settle in those areas because accommodation is available nowhere else.
  Mr. R. C. Mitchell: Is it not absurd that some local authorities insist on the Ministry of Defence obtaining court notices to quit married quarters before they will even consider the occupants for rehousing?
  Mr. Judd: As I have tried to make plain, we hope that local authorities will accept that when the Services call upon irregular occupants to leave, this will be accepted by local authorities as the time at which to act and that they will not wait upon a court notice.
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  As the hon. Lady recognised, the effect of the proposal she makes would be that a large proportion of Service personnel would reach the top of housing lists in advance—in many cases, many years in advance—of their date of discharge, and she has proposed, therefore, that the names of these men and women should be kept at the top of the list until they return to civilian life. That is, of course, principally a matter for the Department of the Environment, but there are one or two points I should like to make. While I do not wish to appear negative towards the hon. Lady's helpful suggestions, I can see a number of difficulties in what she proposes.
  Many Service men might in the early years of their service put their names on the housing lists of their native authorities but most Service men are not in a position to know where they will resettle on return to civilian life until the later years of their service when they know where their future employment is located. Finding a job must clearly be the Service man's first priority in the resettlement process, and I would not wish to see him discouraged from looking for employment outside a narrow radius.
  Moreover, by the time of leaving the forces, many Service men might either have bought or be about to buy houses of their own and would not, consequently, wish to be considered for local authority accommodation. Waiting lists would thus tend to become blocked with the names of Service men requiring houses either elsewhere or not at all. For these reasons, and because they allocate council housing on the basis of need alone, we might expect local authorities to be less than enthusiastic about the idea.
  However, I strongly sympathise with the hon. Lady's point about the need to relieve "garrison towns" of the pressure of ex-Service men seeking council housing. We try to keep in touch with the local authorities concerned about any particular difficulties which arise in their areas. I have held meetings with some of them myself. I can also assure the House that our resettlement advice literature warns those leaving the forces of the difficulties that might be encountered, and encourages them to settle elsewhere, if this is possible.
  The three Services operate a scheme for assisted house purchase under which

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  Service men of all ranks may, in their last two years of service, receive an advance of pay to assist with the cost of buying a house. In the last financial year, about 600 officers and Service men took advantage of this scheme, which has recently been improved. A new assisted house purchase scheme has also been introduced this year which is designed specifically to help the older retiring man in the 50-plus age bracket.
  I can assure the House that we are never complacent about these issues. We are always glad to be subjected to constructive criticism and informed analysis. In the Ministry of Defence we are constantly monitoring the housing situation for Service men and looking for ways in which improvements might be made or problems overcome. We shall continue
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  to look critically at what the Ministry could or should be doing, and we shall maintain the close liaison which already exists with the others concerned, such as the Department of the Environment, the Scottish Office and local authorities, to see that the resources of knowledge and effort can be pooled and brought to bear in assisting us to tackle our task in the best possible way.
  I know that the House will genuinely appreciate the concern of the hon. Lady in this matter, and I assure her that we shall certainly look very carefully at the points she has made tonight as on previous occasions.
  Question put and agreed to.
  Adjourned accordingly at Three o'clock a.m.

DEFENCE
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  Military Bands and Musicians
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  Regional Expenditure
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  Anti-tank Guided Weapons
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  M54
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  Pathology Laboratories (Patients)
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  Broadmoor Hospital
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  Sheltered Housing
  Sheltered Housing

Preamble
The House met at half past two of the clock: THE LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Southwark.

DESTRUCTION OF HEDGEROWS
Lord DAVIES of LEEK: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware that—

(a) in East Anglia, between 1960 and 1966, 10,000 miles of hedgerow were destroyed each year, thus causing soil erosion; and

(b) in the West Country, grazing systems are being created by replacing hedgerows with wire fences;

and what action the Government are taking to limit this ruthless destruction of our hedgerows.
Lord STRABOLGI: My Lords, over the past century there has been a trend towards the enlargement of smaller fields to improve farm management. In 1970, the Nature Conservancy estimated that since 1946 an annual average of 2,000 miles of hedgerow had been lost in Eastern England out of a national loss of 4,500 miles annually. From studies carried out by the Ministry of Agriculture, it has been concluded that well-grown hedgerows may reduce soil erosion for distances up to about 15 times their height: but the typical farm hedge is rarely a sufficient insurance against erosion in the most vulnerable fenlands and supplementary cultural measures are normally necessary. Farmers are advised to retain hedges unless they are a real handicap to efficient farming.
Lord DAVIES of LEEK: My Lords, I thank my noble friend for what I consider to be a constructive Answer. May I ask him whether he is aware that some
1452
kindly noble Lords, most of them on the opposite side of the House, whose ancestors helped to preserve the beauty of England, have written to me, and, while the spirit is willing, they find the flesh weak on this issue of hedgerows? Is my noble friend aware that, apparently, farmers need not make application when they grub out a hedge and that while grassland may not need hedges, the hedgerows of England are twice the size of our nature reserves? While one noble Earl wants to protect the badger, I want to protect my friend the hedgehog, which my grandfather showed me how to cook. Can my noble friend tell me whether any regulations are in force under which farmers have to ask permission before grubbing out their hedges?
Lord STRABOLGI: My Lords, the Government have no statutory power of control over hedgerow removal, but local planning authorities have power to make tree preservation orders in the interests of amenity, and where an order is made on hedgerow trees this may, in practice, have the effect of protecting the hedgerow as well. The Government are very conscious of the loss of hedgerows, but on the other hand I think one must put this into perspective. The national reserve is about 600,000 miles, and about 100,000 miles have been lost since the war. I think we must remember that this is a fairly small amount and it is diminishing every year.
Lord LEATHERLAND: My Lords, apart from the fact that cutting down takes the fun out of fox hunting, can my noble friend give us figures showing how many extra bushels of wheat and barley, and how many extra tons of sugar beet per acre, are grown when hedgerows are cut down?
Lord STRABOLGI: My Lords, not without notice.
Lord CARRINGTON: My Lords, would the noble Lord not agree that with the loss of the hedgerows and the incidence of elm disease, particularly in the Midlands, the whole face of the English countryside is going to change? Would it not be a good thing for the Government to inquire whether it is possible to devise some system whereby landowners and farmers are encouraged to plant trees, if not in hedgerows, in copses and in places which could be landscaped into the countryside?
Lord STRABOLGI: Yes, my Lords, the Government are conscious of this. The Countryside Commission recently produced a report called New Agricultural Landscapes, and the accompanying discussion paper also covered the whole question of landscape cover, including hedgerows. When the Commission puts forward recommendations on the subject, the Government will consider them. With regard to East Anglia, the subject of part of my noble friend's original Question, the strategic team also recorded concern in their report at many of the agricultural methods employed, including the removal of hedgerows. This report is coming before a Select Committee in the other place in the autumn.
Earl FERRERS: My Lords, would the noble Lord agree that it is the smallest fields which have the largest preponderance of hedges, and that the majority of the figures which the noble Lord mentioned have come about by making smaller fields into more economical fields, and not by making large fields into vast fields?
Lord STRABOLGI: My Lords, the Ministry of Agriculture advise against the creation of excessively large fields and the removal of boundary hedges. Farmers are encouraged to retain hedges unless they are a real handicap to efficient farming. The effect varies according to the circumstances but, in suitable cases, the removal of hedgerows can increase yields and reduce costs. It is a question of balance.
Lord SOMERS: My Lords, would the noble Lord not agree that there is another side to this matter? Is he aware that hedges are the natural habitat of many wild species which, without hedges, would become extinct?
Lord STRABOLGI: Yes, my Lords, we are conscious of that. We always take into account the desirability of conserving natural beauty and the amenities of the countryside. The hedges, of which I am very fond, are very much part of the English scene. Most of them date only from the enclosure period of the 18th century.
Lord SLATER: My Lords, is my noble friend aware that successive Governments have been the greatest enemy so far as the hedgerows are concerned,
1454
because they have had them removed in order to give us our highway system.
Lord STRABOLGI: Yes, my Lords. This is a problem. There are points for and against hedgerows alongside roads. One disadvantage is the fact that they encourage snow to collect and it is more difficult to remove. They are also liable to damage from salt which is spread on the road.
Lord SEGAL: My Lords, as the hedgerows on the mainland of Europe are conspicuous by their absence, is this not one further example of where erosion by the Common Market ought to be resisted?

COMMONWEALTH EXPERTS GROUP REPORT
2.44 p.m.
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what proposals the Ottawa Conference of Commonwealth economic experts have made towards a new international economic order (to close the gap between rich and poor nations) in their Interim Report to the Commonwealth Finance and other Ministers who are to meet in Guyana this month.
The PARLIAMENTARY UNDERSECRETARY of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, as the noble Lord has stated, the Interim Report of the Commonwealth Experts Group is to be considered by the Commonwealth Finance Ministers at their meeting in Georgetown later this month. It would not therefore be appropriate for me to make known the proposals contained in the Report at this stage.
Lord BROCKWAY: My Lords, I thank the Minister. In view of the importance of this subject which may dominate the world during the coming year, may we have an assurance that even during the Recess a Report from the Guyana meeting of the Finance Ministers will be made public?
Lord GORONWY-ROBERTS: My Lords, it will be a matter for the meeting of the Commonwealth Finance Ministers to decide; but I will bear in mind my noble friend's suggestion.

OAU MOTIONS AND THE UNITED NATIONS
Lord BARNBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what attitude our Representative at the United Nations is instructed to take should collective motions by members of the O.A.U. appear to aim at the disruption of international relations.
Lord GORONWY-ROBERTS: My Lords, Her Majesty's Government would certainly oppose any motion aimed at the disruption of international relations.
Lord BARNBY: My Lords, does the Minister recall the address of Dr. Kissinger at Wisconsin on 15th July, in which he put on record that if the poorer countries of Africa continue the policy of sabotage and blackmail the American public would be strongly disenchanted? Since the American public give more than anybody else in support of the United Nations, they might even withdraw. Can the Minister give an assurance that the British attitude would be equally strong?
Lord GORONWY-ROBERTS: The British Government's attitude would be as I have stated in my substantive reply, that we would oppose any motion aimed at the disruption of international relations. Regarding the first part of the noble Lord's question, indeed I recall the location and content of the American Secretary of State's speech in Wisconsin last July. I think we would all agree with most, if not all, of the contents of that speech.
Baroness ELLES: My Lords, is the Minister aware of the great concern of many people in this country on all sides, and also in other Western democracies, at the increase in General Assembly Resolutions which are being passed not in accordance with the general principles of civilised nations, but by a built-in majority of an increasing number of States which do not practise civilisation in their own countries? Has the Minister considered a new weighting for the effects of General
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Assembly Resolutions as part of the development of international law?
Lord GORONWY-ROBERTS: My Lords, the latter part of the noble Baroness's question is one that would need to be taken under continuous advisement but I note what she has said. As to her assessment of the comparative civilisation of various members of the United Nations, we all perhaps have our own individual views on that. The first point she made in her supplementary question is of course a worthwhile one. It is essential that the generality of members of the United Nations should approach every question from an objective point of view, addressed only to the objectives of the Charter and not from either a racist or ideological standpoint.
Baroness GAITSKELL: My Lords, since when have the British Government instructed their delegates to take an attitude to any issue? Surely that is not what we have to deal with.
Lord GORONWY-ROBERTS: My Lords, my noble friend will notice that while the word "instructed" occurs in the original Question, I have avoided using that word. I have said what the attitude and policy of Her Majesty's Government would be. It may be taken for granted that our Representative in the United Nations would reflect that attitude and policy.
Lord HARMAR-NICHOLLS: My Lords, when some nations are not taking what the Minister has described as an "objective point of view", when clearly their view is not objective, is there any chance of this nation's Representatives being clearer in the way they react to that matter?
Lord GORONWY-ROBERTS: My Lords, this is a matter of opinion; but I would ask the noble Lord to look at the statements made from time to time by our very able Representative in New York, especially on this kind of matter. I do not think, on reflection, the noble Lord will continue to believe that that expression has either been halting or unforceful. In fact, we have taken something of a lead in making perfectly clear what we consider to be the norm of practice in the international authority, and we shall continue to do that.

BRIDGE STREET PROPERTIES
2.50 p.m.
Lord PANNELL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government on what basis the leases for properties along Bridge Street have been renewed and what is the tenure of such leases for tenancies.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, there are no leases at Bridge Street, only tenancies. All are business tenancies under the provisions of Part II of the Landlord and Tenant Act 1954. The tenancies are all subject to six months' notice but are continuing under the provisions of the Act.
Lord PANNELL: My Lords, while thanking my noble friend for that reply, may I ask her to remember that there is a compulsory purchase order on these properties. May I also ask her whether her Department has any apprehension of the length of time for which these premises will be let for the purposes for which they are now being used?
Baroness BIRK: My Lords, the tenancies have been renewed by the Department over a period of years on the same terms, except for rent, and they are subject to termination by six months' previous notice.
Lord HOUGHTON of SOWERBY: My Lords, may I ask my noble friend whether she is aware that these premises ought not to be occupied by anybody, since they are not fit for occupation? May I further ask whether she has been in them lately, as I have? If she does go there, she will find on almost every door in this block a warning notice that the floors will not bear very much weight. I should like to ask my noble friend what is the use of a block of offices of that kind being let to anybody?
Baroness BIRK: My Lords, I know that some of them are in a bad state of repair, and for that reason I have not attempted to go into them. But, as I
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think my noble friend is aware, the point is that this matter is now before the authorities in another place and when they have come to a decision about the housing, of Members of Parliament or office staffs, then we can take some decision about it. We are well aware of the situation, which is why only minor sums of money can be spent on the premises at the moment.
Lord PANNELL: My Lords, the noble Baroness used the term "minor sums". In reply to a Question of mine last week she referred to a sum of over £2 million being spent for the benefit of Members of the other place in the old Norman Shaw building which, if I had had my way, would have been demolished.
Baroness BIRK: My Lords, as my noble friend knows, that was in order to rehabilitate the building and to make possible its use as offices. What I am saying is that the minor sums are only for immediate repairs until a decision has been reached on what is to be done with these premises.
Lord CHELWOOD: My Lords, does the reply of the noble Baroness apply to security of tenure on both sides of Bridge Street?

COUNTY OF SOUTH GLAMORGAN BILL [H.L.]
The CHAIRMAN of COMMITTEES (The Earl of Listowel): My Lords, I do not propose, for procedural reasons, to move the Motion standing in my name on the Order Paper until after the Summer Recess.
GOVERNMENT STATEMENTS
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, with the leave of the House, my noble friend Lord Goronwy-Roberts will repeat a Statement on the Conference on Security and Co-operation in Europe at a convenient moment after 3.30 p.m. This will be followed by a Statement on industrial democracy repeated by my noble and learned friend the Lord Chancellor.

SHIPBUILDING INDUSTRY (No. 2) (NORTHERN IRELAND) ORDER 1975
2.54 p.m.
The Earl of CORK and ORRERY The Earl of CORK and ORRERY rose to move, That the First Report from the Hybrid Instruments Committee be agreed to and that there should be further inquiry by a Select Committee into

(a) the basis on which the amount of the compensation to be paid to shareholders in Harland and Wolff Limited under paragraph 4(2) of the Order was determined; and

(b) the basis on which the relative treatment of Preference and Ordinary shareholders was determined.

The Report was as follows:
The Committee, as required by Private Business Standing Order 216, have met and considered the Draft Shipbuilding Industry (No. 2) (Northern Ireland) Order 1975 and the 43 Petitions lodged against it. They have also considered the memorandum of the Northern Ireland Office which explains the background to the Order and comments on the Petitions.
The Committee are of opinion that there ought to be a further inquiry by a Select Committee into—

(a) the basis on which the amount of the compensation to be paid to shareholders in Harland and Wolff Limited under paragraph 4(2) of the Order was determined; and

(b) the basis on which the relative treatment of Preference and Ordinary shareholders was determined.

The noble Earl said: My Lords, I beg to move the Motion standing in my name on the Order Paper. It may occur to your Lordships to wonder why it should be I who does this. Perhaps I might explain very briefly. This is a new Committee, as your Lordships know, and I am privileged to make a small piece of history by rendering its first Report to your Lordships' House this afternoon. The Chairman of this Committee, under the directions given by the House, is a Law Lord; and in this case it is the noble and learned Lord. Lord Wilberforce. He might well be the most appropriate person to present the Report to your Lordships. However, since he is quicker off the mark than I, he has left the country—and your Lordships may take that as you wish!
The noble Earl the Chairman of Committees feels inhibited in doing this job, knowing that an Amendment is to be
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moved on behalf of the Government immediately afterwards, though I believe he is available in case enlightenment on procedural matters should be required from him later in the debate. I am a Member of this Committee and happen to be on the side of those in favour of this Report. Therefore the lot has fallen to me to bring it to your Lordships' notice. It is not for me to set out anything in the nature of an exegesis, which probably will be done later by the noble Lord, Lord Donaldson of Kingsbridge. Nor have I to explain what all this is about. I am concerned solely with the Report, but perhaps I might remind your Lordships briefly that what we are considering is a Report on a Statutory Instrument that is known as a Hybrid Instrument—because if it were in the form of a Bill it would have to be regarded as a Private Bill and go through the hybrid procedure, since it affects private interests.
This order is for the nationalisation, or the complete taking into public ownership, of Harland and Wolff, shipbuilders and engineers; and the people whose private interests are affected are of course the shareholders. They have presented to the Hybrid Instruments Committee, as they are entitled to do by that Committee's terms of reference, their Petitions in writing, that is, in the form of letters, for the most part, to the sum of 43. These are all people of course—and I know it will be understood by us all when I say "of course"—who have lost their money. They are faced with the fact that the Government, as personified by the Department of Commerce in Northern Ireland, are to take over the share capital and pay them some compensation for the shares.
There is no question of a takeover or of an offer which they can refuse or accept. This is a compulsory purchase, and their complaints fall under two main heads: first, that they are not getting enough and, secondly, that preference shareholders are not being treated with any preference over ordinary shareholders. In fact, they are getting slightly less. The money they are getting in compensation is 8p per share for preference shares and 9p per share for ordinary shares. Perhaps the precise amounts are not very important: the important point is that it is not very much.
The second of these counts, as to whether the preference shareholders ought to be treated in the same way or more generously than the common shareholders, is one on which I do not feel particularly qualified to speak; nor do I propose to do so. Others may do that if they wish. I am concerned with the first count, which is whether or not the amount offered to the shareholders of either kind is adequate. The shareholders say that it is not, and it is reasonable to expect that they would. Whether or not they are reasonable is another matter, and that would be for a Select Committee to decide, if your Lordships decide to set one up. This is what the Committee are asking your Lordships to do. I must therefore come absolutely clean about this and say that the Committee were not passionately unanimous over this. It was a majority decision based on considerations of equity, which are not easy to evaluate.
One reason why that is so is that although the Committee had before them the 43 Petitions from the shareholders, they have not much on the other side to go on, except a memorandum from the Northern Ireland Office. It was the business of this memorandum, among other things, to explain how these figures of 8p and 9p were arrived at. Part of the argument that is mentioned—though it is not relied upon by the Government, as represented in this memorandum—is that if the company had gone into liquidation in 1964, which is about the time that the great continuing fall of Harland and Wolff began, the shareholders would have got nothing. In fact, since 1964 the ordinary shareholders have had nothing. The preference shareholders had a 2½ per cent. dividend as recently as 1966. But that is not very recent now.
It is quite true that if the company had gone into liquidation they would have received nothing. It is also quite true that if Belfast had been flattened by an earthquake and swept out to sea by a tidal wave in Belfast Loch, they would have received nothing. But there was no earthquake and no liquidation, and I do not find it easy to see why one argument is more relevant than the other. Nor is it easy to see how anyone could know for certain, when one considers the vast amount of assets which Harland and Wolff possesses, that if the company had
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gone into liquidation in 1964 the shareholders would have received nothing. However, the Government have not relied upon this argument. They have simply pointed out that it is something which they might in equity have done. This is something which one is entitled to doubt, and the doubt is reinforced by this fact.
From 1964 to 1975 or, at any rate, for most of that period the shares of Harland and Wolff have continued to be quoted on the Stock Exchange. This seems improbable when it is considered that they were on the verge of bankruptcy and have been saved by injections of public money by successive Governments. It is these injections of public money that have kept the company alive and, as the Government themselves agree, have allowed, or have perhaps caused, these shares to continue to be quoted on the Stock Exchange. In other words, Government contributions in the form of subventions to Harland and Wolff have been sufficient to bolster up confidence in the company, and to engender in its shareholders a belief, however misplaced, that it would become viable again, that their money was safe and therefore they should leave their money where it was and not withdraw it—which would undoubtedly have been the prudent thing to do if they could.
On the question of how much money the Government should offer in compensation—they have generously agreed that they should offer some—they have gone to the Stock Exchange figures for the last six months before the decision to take over 100 per cent. of the company; that is to say, six months before March this year. They have found that, on average, the share price of these stocks was respectively 8p and 9p in the two classes of shares. That is what they have offered to the shareholders. The shareholders say: "No. The shares are worth far more than that. This is a purely arbitrary way of looking at it and, in any case, the figure has been arrived at by the people who are doing the selling, who are laying down by Order"—this Order that your Lordships are considering—"what they propose to do." The Committee have by a majority come to the conclusion, and have invited your Lordships to agree, that there is a case for setting up a Select Committee to decide whether this method

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of fixing the compensation is fair, and whether the amounts fixed are also fair.
There is one other point which I would invite your Lordships to bear in mind. If the shareholders had lost their nerve, or done the sensible thing (however one likes to put it) in 1964 and got out, they could have invested their money in something else. But, thanks to the confidence instilled in them by the action of successive Governments in their, probably correct, determination to bolster up Harland and Wolff, they have kept their money where it was and have lost all their dividends from 1964 or 1966 to this minute. This has been caused by a false sense of euphoria and confidence bolstered up and instilled in them by Governments. It is my contention, and it will be the contention of those on the Committee who think as I do, that this matter should be looked into rather more fully to see what there is in the way of evidence to support the Government's contention, or to support the contention of the shareholders who feel themselves, quite rightly, to be dispossessed. My Lords, I beg to move.
Moved, That the First Report from the Hybrid Instruments Committee be agreed to and that there should be further inquiry by a Select Committee into—

(a) the basis on which the amount of the compensation to be paid to shareholders in Harland and Wolff Limited under paragraph 4(2) of the Order was determined: and

(b) the basis on which the relative treatment of Preference and Ordinary shareholders was determined.—

(The Earl of Cork and Orrery.)
3.4 p.m.
The PARLIAMENTARY UNDERSECRETARY of STATE, NORTHERN IRELAND OIFFICE (Lord Donaldson of Kingsbridge): My Lords, I beg to move, on behalf of my noble friend the Leader of the House, as an Amendment to the above Motion, to leave out all the words after ("That") and to insert ("the House, having considered the First Report from the Hybrid Instruments Committee, is of the opinion that there ought not to be a further inquiry by a Select Committee since such an inquiry would delay and thereby prejudice the urgently necessary reconstruction of the company.") What
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your Lordships are being asked to decide is whether there should be a further inquiry by a Select Committee into two points arising from the Hybrid Instruments Committee's consideration of the draft Shipbuilding Industry (No. 2) (Northern Ireland) Order.
May I first say that the Government in no way question the right of the Committee to make such a recommendation. In fact, I think we can congratulate ourselves in this House on the fact that we have this extra safeguard for the private citizen, which does not exist in the other place. The Committee have put their views before the House—and, if I may say so, the noble Earl, Lord Cork and Orrery, has put them in the most moderate and reasonable way—and I shall put some views in the opposite sense; then it will be for the House to decide. However, your Lordships may well consider that it would be difficult to arrive at a soundly based view on the need for reference to a Select Committee without examining the content and purpose of the draft Order. So with the permission of the House, I propose to say something about the draft Order as a whole, and then in due course to come on to the procedural questions arising on the Report of the Hybrid Instruments Committee and on the Government's amending Motion which stands on the Order Paper in the name of my noble friend Lord Shepherd. I hope that noble Lords will have had time to look at the memorandum about the recent history, present position and future prospects of Harland and Wolff, which was placed in the Printed Paper Office and the Library about a week ago if they have, my task should be somewhat easier.
Noble Lords will recall that when we debated on 1st May the Order in Council to provide interim financial assistance to Harland and Wolff Limited, I told the House that the Government would be introducing a second Order to take the company into full public ownership. This is that second Order, and noble Lords will see that it provides for the vesting in the Northern Ireland Department of Commerce of the shares which are presently in private hands. The Order now before us provides for the financial assistance which the company must have if it is to meet its existing commitments and to have that chance of getting itself

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on to an economic footing. Pending the making of this Order, the Company is being maintained in funds by subventions under the interim Order—that is, the Shipbuilding Industry (Northern Ireland) Order 1975—which came into effect on 21st May. The draft Order which we are now considering will revoke that interim Order and any moneys advanced to the company under the earlier Order will be covered by the provisions of this new Order.
It is clear that without the support now proposed the company cannot continue to operate. The further financial assistance up to the limit of £60 million specified in Article 6 of the Order represents the best estimate possible of the amount of new money required during the period in which the present loss-making contracts, to which the company is committed, are to be completed.
The reason why the Government propose this enormous injection of new money is basically simple. Harland and Wolff is the largest single employer of male labour in Northern Ireland and it is perhaps difficult for us to imagine the possible repercussions if the firm were to close. Immediately, we would have 10,000 men, about 6 per cent. of the male labour force in the Belfast area, out of work with the prospect of relatively few finding other jobs. I would remind your Lordships that male unemployment in Northern Ireland is already approaching 11 per cent. There would be an effect on Harland's sub-contractors in other parts of Northern Ireland; and there would be the longer-term effect on the engineering industry as a whole in losing this source of training and skill. The Government consider that, in these circumstances, the firm must be given a last chance to get back on to an economic footing.
As a first step, and in order to facilitate the financial reconstruction and other changes which we believe to be necessary, the existing shares of the company which are in private hands will, as from the date on which the Order comes into operation, be transferred to the Northern Ireland Department of Commerce. Following acquisition of ownership it is the intention to carry out a financial reconstruction. It is intended, following this financial reconstruction, that the
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Government's present guarantee of the company's liabilities will be withdrawn as the company will then be creditworthy in its own right. The future relationship between the Department of Commerce, as owner of the shares, and the company will be governed by appropriate directives to the board, and work on preparing these guidelines is well advanced. The board itself will be reconstructed as quickly as possible. The hope is that there will be worker participation at board and other management levels in the yard. The Government attach great importance to the development of this new experiment in relations between managers and other workers. The future of the company will be in the hands of its own workforce—management and shop floor. A good start has already been made through the way in which representatives of the workforce were recently involved, in very distinguished company with Sir Arnold Weinstock, among others, in the appointment of the new managing director; and encouraging progress is being made in the consultations which are now going on to evolve an acceptable system of industrial democracy within the yard. I shall have a little more to say about the financial reconstruction and about the restructuring of the board when I return to the findings of the Hybrid Instruments Committee.
The cash provided to the company under the Order will be "new" money, as distinct from the existing Government loans and shareholding. It is needed to meet future losses on the present order book, together with the cost of completing the present capital programme. It also includes the expenditure to date on loans to the company under the interim Shipbuilding Industry Order—now amounting to £5·7 million. This fresh assistance will be available subject to the continuation of the condition, laid down last March, that Government approval will be required before any new shipbuilding contracts are concluded, and this approval will not normally be given unless the Department of Commerce is satisfied that the contracts will not be loss-making. This is a key requirement—that the company will avoid loss-making contracts in future—and it is essential to the company's survival that it should be able to gear itself to obtain new work within this condition. No further special aid can be expected to bail the company

1467
out of fresh difficulties. If new work cannot be found it will be time to call it a day and allow the rundown, and even closure, of the business.
To return now to the procedural side of the question, I do not think that there is any need for me to dwell on the position under the Standing Orders; the noble Earl, Lord Cork and Orrery, has referred to this and I understand that the noble Earl the Lord Chairman will be intervening later in this debate. Your Lordships will, however, wish to know that the appropriate procedures were operated once the Chairman of Committees had expressed the opinion that the Order was hybrid. Full publicity was given so that people affected by the draft Order would know that they had a right to petition the House against it. Notices were placed in the London Gazette and Belfast Gazette and in newspapers in Britain and in Northern Ireland and in the Irish Republic; in addition, a communication was sent to all the shareholders of the company, of whom there are about 6,000, and in the event 43 persons and institutions, all of them shareholders, sent in petitions. With one or two exceptions the petitions were about the terms of compensation provided in Article 4 of the draft Order. After studying the draft Order and these petitions and a departmental memorandum, the Hybrid Instruments Committee arrived at the opinion that there ought to be a further inquiry by a Select Committee into the basis on which the amount of the compensation to be paid to shareholders was decided and the basis on which the relative treatment of preference and ordinary shareholders was decided.
There is, of course, no doubt at all about the position under Standing Orders. The Hybrid Instruments Committee has recommended—as it was fully entitled to do—that there should be a further inquiry. However, noble Lords will see from the Amendment standing on the Order Paper in the name of my noble friend Lord Shepherd that the Government are asking your Lordships not to agree with the Committee. The first point I would make is this. The purpose of our Hybrid Instruments procedure is to enable the House to take the right decision on the Order which is before your Lordships. We have the Hybrid Instruments Committee and any further Select Committee to help
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us in this, but it is the House which has to take the ultimate decision. I submit that the House is already in a position to take this decision. We are able to decide, for the reasons I gave earlier in my speech, that the Shipbuilding Order is necessary and I shall try to satisfy your Lordships that it can be seen to be fair, without the need for any further inquiry into the terms of compensation.
Secondly, this is not the first time that the House has been invited to decide not to adopt a recommendation that a Select Committee should be set up on a Hybrid Order. The Regulation of Prices (Tranquillizing Drugs) (No. 2) Order, generally known as the Roche Order, was subject to the same kind of procedure in June 1973. The Special Orders Committee, as it was then, recommended a further inquiry, but the House did not adopt this recommendation. In the light of precedent your Lordships may well consider that you are free, if you so wish, not to adopt the recommendation of the Hybrid Instruments Committee. Your Lordships will still wish to consider why you should not do so—to consider, that is, the reasons which can be only hinted at in the briefly worded Amendment on the Order Paper.
If it were decided to proceed with a further inquiry considerable inconvenience would result. If a Select Committee were appointed it would presumably wish to hear argument. Time would have to be allowed for legal representatives to be appointed and briefed and for the hearings to ensue. The Order could not then possibly be approved until late September, and in practice it might be considerably later than that. I know that any of your Lordships who were chosen to sit on the Select Committee would want to carry out the inquiry as soon as possible. But August is not an easy time of the year, and it would still remain for the Order to be made by Her Majesty in Council and to be brought into force, which could hardly be before mid-October and might well be much later.
Such delay would be a matter of serious concern to the Government. So long as the Government are only a minority shareholder in Harland and Wolff, the framework for the conduct of the company's business is unrealistic and inhibiting. The chairman and the board remain

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answerable to the generality of the shareholders, although the company is able to go on trading solely because of the Government's guarantees and the financial support which the Government are providing. That is not a healthy basis for the far-reaching decisions which have to be taken—and taken urgently at this stage of the company's life.
Furthermore, we are most anxious to use the powers of financial assistance which the draft Order, if it is made, will confer on the Government in order to effect a financial reconstruction of the company. Harland and Wolff Limited is insolvent. It is an essential feature of the Government's plans that the company should become creditworthy once again in its own right. This means that the balance sheet must be rectified by the writing off of enough of the outstanding loans to eliminate the losses already incurred and by converting the remainder of the loans into share capital. It is true that the Government already have powers to continue to give financial assistance to the company, in a variety of ways, under the provisions of the earlier Shipbuilding Industry (Northern Ireland) Order which was approved by your Lordships on 1st May and came into force on 21st May. But not until the present draft Order comes into force will the Government, by virtue of being sole shareholder, he able to ensure that the necessary financial reconstruction is undertaken. So long as the Northern Ireland Department of Commerce holds only a minority of the shares the Government could not embark—even with the full co-operation of the company which it would expect to enjoy—on plans for financial reconstruction with confidence that they could be effected. It is urgently necessary to press on also with the reorganisation of the board of the company. The Government are hopeful that an element in the reorganisation of the hoard will he direct worker representation from the shipyard but the board cannot be reshaped until the Order has been made.
If the Hybrid Instruments Committee had been unanimous in its decision, this would obviously have weighed heavily with the House, even in the face of the need to remove the uncertainty about the ultimate control of the firm and to take the urgent action to which I have referred. Since no formal division of the
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Committee took place I am not in a position to quote the exact strength of each side of the argument, but I can quote the noble Earl that it was not passionately unanimous—I think that those were his actual words. I believe it is true that the Committee was very evenly divided and that its decision was taken by the smallest possible majority. In reaching this decision the Committee may also have thought—I put it no higher though I should welcome correction from any noble Lord who feels this to be untrue—that its recommendation would preserve for the House the opportunity to decide finally whether there should be a further inquiry.
If the Committee had said No to the petitions, that would have been an end of it. The petitions would have been turned down out of hand and this would have suggested that the petitioners did not have any justifiable grievance. I accept fully the sincerity of the petitioners and the honesty with which they have put forward their case. But the Committee may have wished that the House should be free to decide whether there should be a further inquiry and how far an inquiry would be able to affect the final outcome.
However I would not be asking your Lordships' House to conclude the proceedings on the Order's hybrid nature if all I had to say was that the continuation of those proceedings would prolong uncertainty and cause delay—significant though that would be. There is the other side of the coin. The objective of the recommended delay is to protect the rights of the shareholder. I hope to satisfy your Lordships that no reference to any Committee, no delays, can possibly improve their position. I say this because, without Government subvention, there is no money available to pay shareholders a penny. There has been no ordinary dividend since December 1964, no preference dividend since June 1966. In a winding up, at any time at least since this Government came into Office in February 1974, there would not have been enough to nay the creditors, and shareholders, both ordinary and preference would have got nothing.
On this matter the first point which the Government had to decide was whether it would be right to pay any compensation at all. But for massive aid from successive Government—

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which has amounted to nearly £90 million over the last 10 years and may well add up to some £140 million by March 1979—Harland and Wolff would have ceased to exist. In the summer of 1974 crisis was fended off by Government guarantees. The company came to the Government and sought those guarantees, saying that without them it would not be able to reopen for business after the holidays. The company is utterly insolvent; indeed it has lost its share capital five times over and more. Without Government support the company would have gone into liquidation and the shareholders would have received nothing for their holdings. However the company's shares have continued to be quoted on the Stock Exchange.
For the reasons given by the noble Earl, I think that the Government support puts some hope into the holders of shares. Between July 1974—when the Government announced that they intended to rescue the company by guaranteeing its liabilities and taking a substantial majority in an expanded equity, without acquiring existing shares—and March 1975, when the Government's intention to take full public ownership was announced, the shareholders could reasonably have supposed that the company would continue in its present form and that their investment would be protected by the Government guarantees then operative. So it seemed right to the Government to pay compensation. The yardstick adopted was the Stock Exchange quotations. After close scrutiny of the share prices over varying periods of time—and particularly over the six months before the announcement in March of this year—the Government decided that the sums shown in Article 4(2) would constitute fair compensation to the private shareholders.
The report of the Hybrid Instruments Committee refers also to the different compensation for preference and ordinary shareholders. The difference is small—8p for each £1 of preference stock and 9p for each £1 of ordinary stock—and your Lordships may have found it prima facie surprising that the ordinary shareholders should receive slightly better terms than the preference shareholders. However, having decided to adopt the Stock Exchange valuations as the deter
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minant of compensation terms, the Government adhered consistently to them. The fact is that on average over recent months—and in particular over the period preceding the Government's announcement in March—the Stock Exchange quotations for the ordinary stock have been slightly higher than for the preference stock. In relation to a company which has not paid a dividend on its preference stock since June 1966 nor on its ordinary stock since December 1964 the Stock Exchange valuations must reflect speculative views about the chances of future profitability.
Some of the petitioners maintain that, since preference shareholders are entitled to priority over ordinary shareholders in the payment of dividend and in the repayment of capital on a winding-up, they ought now to be paid more compensation than ordinary shareholders. Some of them maintain that any money available for compensation should be applied to payment of arrears of dividend on the preference stock and the repayment of capital of the preference stock; or even that the preference shareholders should continue to receive a dividend as if their stock were gilt-edged.
These arguments overlook the fact that the money for compensation is to come from the Government, not the company; and that the balance sheet shows that in a winding-up the shareholders, including the preference shareholders, would receive nothing. It is true that in a winding up the preference shareholders would come before the ordinary shareholders. But both would come after the creditors; and for neither would there be anything left after the assets of the company had been applied to trying to satisfy the creditors. The preferential rights of preference shareholders exist only within the company; they have no special rights in relation to funds provided by the Government.
Some noble Lord may ask whether some other, and possibly more equitable, basis of compensation could not have been found. It may be suggested that the value of the company's assets, after taking account of its liabilities, would have been a better basis. That brings us straight back to the consideration which I have just mentioned in relation to the treatment of preference shareholders; namely, that by July 1974 the

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liabilities of the company far exceeded its assets, and accordingly on this basis no compensation would be payable.
The crux of the matter seems to be this. The petitioners have quite fairly complained. Whether they have substantial grounds for complaint is perhaps arguable in view of what I said earlier in my speech, but I accept that the Hybrid Instruments Committee have judged them to be substantial. Nevertheless, I would ask the House to consider what the outcome of a further inquiry would be. Would the inquiry change the situation of the petitioners? Would it improve their chances of compensation or would it merely delay the chances of recovery for Harland and Wolff and eventually leave the petitioners in no better position than they are now? I suggest that the delay would be damaging and that it would not be justified.
Another place has already approved the Order and if the Government's Amendment is agreed we shall invite your Lordships to proceed to approve it also. I can only ask your Lordships to consider whether, in September or October or November, the outcome would be any different from any decision to which we might come today. I hope noble Lords will accept that the outcome would be the same, and that we should have done considerable harm to the interests of Northern Ireland by delaying. If we can take our decision now we shall be giving the best possible send-off to our newly appointed Managing Director. I hope that is what we shall do. I beg to move the Amendment.
Moved, as an Amendment to the above Motion, to leave out all the words after "That" and to insert:
"the House, having considered the First Report from the Hybrid Instruments Committee, is of the opinion that there ought not to be a further inquiry by a Select Committee since such an inquiry would delay and thereby prejudice the urgently necessary reconstruction of the Company."—(Lord Donaldson of Kingsbridge.)
The Earl of LISTOWEL: My Lords, it might be for the convenience of the House if I were to intervene briefly at this stage to point out some of the procedural considerations which noble Lords may wish to bear in mind when deciding whether to support the Motion or the Amendment. As the noble Earl, Lord Cork and Orrery, has already mentioned,
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I was not able to be present at the meeting of the Hybrid Instruments Committee which has recommended—and the recommendation is before your Lordships—a further inquiry by a Select Committee. But, as your Lordships are aware, it would be improper for me, even if I had the knowledge, to express any opinion about the merits of the complaint of the petitioning shareholders in Harland and Wolff about their offer of compensation or the recommendation of the Committee in its report. The case in the Committee's Report, if I may say so, has been admirably stated by the noble Earl, Lord Cork and Orrery, and I am sure the House is grateful to him for at short notice stepping into the place of the Chairman of the Committee.
Perhaps I should start by reminding your Lordships that a Hybrid Instrument such as this, and this is how such an Affirmative Order is usually described, is an Order which, but for the provisions of the Act authorising the Minister to make it—in this case the Northern Ireland (Temporary Provisions) Act 1972—would require to be enacted by a Private Bill or a Hybrid Bill. A Private Bill or a Hybrid Bill can, of course, be petitioned against by any private citizen who claims that his rights would be prejudiced by the action of the Government: that is to say, what is contemplated would be unjust or oppressive. Normally there is no petitioning procedure against Affirmative Statutory Instruments, but our Standing Order No. 216 provides such a procedure in the case of Hybrid Instruments. This procedure is unique to your Lordships' House. It confers on persons individually and adversely affected by a Hybrid Instrument the right to petition this House against the Order. If petitions are presented, as they were in this case by some of the shareholders in Harland and Wolff, it is then for the Hybrid Instruments Committee, in the light of the criteria set out in the Standing Order, to say whether a prima facie case has been made out for a further inquiry.
I should mention that the new criteria in our Standing Order are the result of the valuable work of the Brooke Committee on Delegated Legislation which made a number of useful recommendations for the improvement of our Hybrid Instrument procedure. I am sorry that the noble Lord, Lord Brooke of Cumnor,

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is unable to be here this afternoon. Had it been possible for him to be present, he would have been able to contribute to the consideration of this Order. The Committee now has to satisfy itself that the Petitioners have a substantial ground of complaint, that the complaint has not been dealt with by a previous inquiry, and that it was not the fault of the Petitioners that no inquiry had taken place. In the light of their answers to these three questions, the Committee has to go on to decide whether there is a prima facie case for a further inquiry.
In the case of the Harland and Wolff Order, the Committee has taken the view that there is a case for a further inquiry, and this indeed was the substance of the speech of the noble Earl, Lord Cork and Orrery, on his Motion. I think I should mention one other change in the procedure of the House which was also mentioned by the noble Earl, Lord Cork and Orrery, in dealing with Hybrid Instruments. It was thought by the Procedure Committee that a Law Lord should be Chairman of the Hybrid Instruments Committee, because of his special knowledge of petitioning and court procedure. I am sure your Lordships will agree that the Committee has been particularly fortunate in securing the services of the noble and learned Lord, Lord Wilberforce, the senior Law Lord, as their Chairman on this occasion.
It is now for the House to decide whether or not it wishes a further inquiry by a Select Committee. This has been rightly emphasised by the noble Lord, Lord Donaldson of Kingsbridge, from the Government Front Bench. If the House accepts the Amendment, there will be no Select Committee and the House can proceed forthwith to deal with the Order. If it rejects the Amendment and accepts the Motion, it cannot decide on the Order until the Select Committee has reported. The decision asked for by the House this afternoon on the Report of the Hybrid Instruments Committee should be taken on the balance of argument heard in the debate, which of course includes the recommendations contained in the Committee's Report. My Lords, I think that is all the advice that I can offer your Lordships.
3.34 p.m.
Lord BELSTEAD: My Lords, I am grateful to the noble Earl the Lord Chairman of Committees for giving advice, which, so far as I am concerned, is certainly extremely helpful. I thought it might be helpful to your Lordships' House if very briefly I tried to indicate how we on this Bench felt as regards the case which has been put forward by the noble Lord, Lord Donaldson of Kingsbridge. I hope that I will not be striking an unnecessarily rasping note if I make the point that the Harland and Wolff Shipbuilding Order, and this rather intricate debate on the Motion of the Hybrid Instruments Committee, are being introduced into your Lordships' House on the second day of the first week in August—a week which in this appalling heat has no business at all to be part of the calendar of Parliamentary sitting days.
The noble Lord, Lord Donaldson, gave us quite a lot of detail in his very thorough running over of Harland and Wolff's affairs, and for that I am grateful to him. But then he went on to make the case as to why the Government must amend the Committee's Motion, which is essentially that the Government are running out of time in bringing forward this Order if the urgently needed reconstruction of Harland and Wolff is to go forward. I hope the noble Lord will not think that I am unfriendly if I say that he has reason to apologise for this state of affairs.
Some of my noble friends, and perhaps also the noble Lord, Lord Donaldson, himself, may remember a punishment which some of us used to suffer when we were at school which went by the name of "tardybook". The noble Lord may remember that twice you could be late for school, and then the third time into the book you went and you were punished, and after that—rather like a magistrate's totting-up procedure for driving offences—if you were late again so, again and again, you were punished. If we had a "tardybook" in your Lordships' House, the Government might take a little more notice of their timetable, and, certainly, we would not be dragged back to sit into August in order to help them get their legislation through.
In all seriousness, the argument of pressure of time is not a very good one

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when we are discussing the First Report which is being put forward by a brand-new Committee of this House. I seriously think we ought to consider carefully before agreeing to amend recommendations of this Committee, particularly when my noble friend Lord Cork and Orrery and his colleagues have, with considerable care, looked into the affairs of the great shipbuilding company and into the compensation which is being offered to many small savers, some of whom have been shareholders in Harland and Wolff for years and years. To be fair to the noble Lord, Lord Donaldson, I know that he is well aware of these points, and I am also bound to agree that he finds himself in a considerable dilemma over this. The fact of the matter, as the noble Lord has explained, is that if changes at board level cannot be carried out until this Order is passed the whole reorganisation of Harland and Wolff, to which he referred, would have to be postponed.
Last May, we agreed in this House what was called the Interim Harland and Wolff Order, which empowered the Northern Ireland Department of Commerce to lend money to Harland and Wolff pending the passing of this Order. I think the House ought to bear in mind that in the 10 short weeks since that Order went through, the company has been forced to call on another £5¾ million, over and above the huge debts to which the noble Lord referred, in order to keep going. I find myself driven to accepting the argument that, although I know that the existing directors of Harland and Wolff have had many intractable problems to deal with, some rapid rethinking at all levels in the company is now urgently needed. In addition, there is a point about which I think noble Lords opposite should be particularly careful. If matters go on sliding, and if men at the yard have to be laid off, this will be a disaster of Herculean proportions not only from a human point of view, but also from a security point of view. I am sure that the Security Forces in Belfast will breathe a sigh of relief if they hear that new arrangements and a new spirit are to match the immense amount of new equipment which has gone into this historic shipyard.
Having listened carefully to my noble friend in the very thorough way he put forward the case, none the less those are
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some of the reasons which I have sought to pick out as to why I think the noble Lord, Lord Donaldson, has made a strong case. Having said that, I think the Committee were absolutely right to question in principle the basis on which shareholders are being compensated. After all, as my noble friend said, the nationalisation of this great company would normally be dealt with by a proper Private Parliamentary Bill. But because we are in a period of Direct Rule, the Government have had to resort to an Order, under the Northern Ireland Act 1974, which cannot be amended. Surely, it is more than usually essential that we have a Committee like the Hybrid Instruments Committee to see that the rights of people are in no way threatened.
Arising from what they said, is it really the answer to say that when you are compensating people you simply take the Stock Market quotation? I should have thought there were many reasons why this could be a most misleading basis for compensation. Yet, after having listened to the noble Lord, I am bound to admit that in this case there is reason to believe that the shareholders are getting a very fair deal. If that is the case, then, thank goodness, and they deserve it, for many of them have stood by this firm, which is one of the premier shipyards of the world, through many difficult years.
My Lords, I hope that perhaps my noble friend and the House may agree that the Motion of the Committee should be amended on this occasion, so that the Order can then be agreed to. I submit that if we do this it will not create a precedent. It will allow the Government on this occasion to get on with trying to create a profitable trading situation at Harland and Wolff, which is crucial for the industrial future of Northern Ireland.
3.41 p.m.
Lord HARMAR-NICHOLLS: My Lords, I have listened to my noble friend Lord Belstead and to the answer of the noble Lord, Lord Donaldson of Kingsbridge. That is all the evidence I have, but I have come to a completely different conclusion from that of my noble friend Lord Belstead. I am of the opinion that if we view this matter properly, there is more to it than merely upholding, the recommendations of a newly formed Committee, and giving it confidence to operate in future. In this

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country today, there is a crisis of confidence in all potential investors. More than anything else we need investment if we are to overcome our problems. Here we have a case where, for quite proper reasons, this firm is being taken over at the instigation of the Government, and there is no criticism on that. But the Hybrid Instruments Committee, which has examined the details more closely than we can, have come to a conclusion, albeit by majority—
Baroness BACON: My Lords, if the noble Lord, Lord Harmar-Nicholls, will allow me to interrupt, he has said that this Committee can examine everything in more detail than can this House. I rise to tell the noble Lord that in fact we have had much more detail given, to us today from the noble Lord, Lord Donaldson of Kingsbridge, than was before the Committee when we met.
Lord HARMAR-NICHOLLS: My Lords, that is a criticism of the Committee that I did not think I should have to substantiate. I should think that a Committee entrusted with this task would have insisted on seeing all the details, and would have insisted that it be given more details than could be given in a speedy debate on an afternoon such as this. If that did not happen, it means that on another occasion one may have to criticise the way this Committee did its work on this particular occasion. I am saying that it coincides with a time when there is a crisis of confidence in the country with regard to investment generally. If it is a fact that this Committee, which ought to have examined the matter in detail, which ought to have had all the facts in front of it, came to the conclusion, albeit a majority conclusion, that there is still a doubt as to whether or not compensation being paid was fair and correct, then I believe that that ought to be pursued to the end, until the doubt is removed; otherwise one will add to the lack of confidence in the country—and perhaps the world—with regard to future investment in concerns such as Harland and Wolff and other like organisations.
My Lords, in order to re-establish confidence in investment, even though it may occasion some kind of delay, this House ought to use the procedures right to the end so that in future potential
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investors can sec to it that they will have the fullest and fairest examination, if the time comes, as to whether they are paid compensation. The only real reason one detected in the argument of the noble Lord, Lord Donaldson of Kingsbridge, as to whether or not the suggestions in (a) and (b) should be carried out, was that it would take up time, and that it may injure the eventual re-establishment on an even keel of Harland and Wolff as an employing organisation.
I have been in and around the Palace of Westminster, in one or other of the Houses, for 25 years now, and I have discovered one thing; that is, that if Parliament wants to do something quickly, it can do it. I have discovered that if they want to use the procedures quickly, it can be done. I believe it would be possible, if the will is there to do it, to have a further inquiry, while at the same time the re-organisation of all the necessary things are set in train for the long-term settlement of Harland and Wolff, so that it merely needs the button to be pressed when the right time comes. We have been told that we are to return in September in order to clear up other matters outstanding. I am not suggesting that the outcome of any further investigation would mean they would have more money.
I am impressed with the Stock Exchange valuation as described to us by the noble Lord, Lord Donaldson. From what little I know, it seems to me a fair valuation. That may not be altered. But the important thing is that potential investors would see that on sheer grounds of convenience, neatness and some sort of special speed, the examination into what they think are their rights has not been properly done. That is more important than the fact that one would merely come to the position then as it is now. In view of the points made by my noble friend, it looks as if we shall not do it but I should have liked to think that we would have supported the Committee on this. I should like to feel that the Government would have speeded up all the necessary procedures to give effect to it. It may well be that the answer would have been the same as we are being asked to accept today—that is more than likely. But in terms of establishing a confidence most essential for the future of this industrial country, it would have been

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well worth while doing just that. Even at this late stage, if it is thought possible that we need not interfere with the organisation and that it can be done in September in the way we are being asked to confirm today, and therefore no time would be lost, I still think that, in the long term, that would be the right thing to do.
3.48 p.m.
Lord SHINWELL: My Lords, if the matter of procedure was of primary concern, the complaints made by the noble Lords. Lord Belstead and Lord Harmar-Nicholls, would be justified. But that is not the issue. The issue is much more important. It is whether we are to take action this afternoon which will salvage the economic life of Northern Ireland, Let us make no mistake about that. It is very seldom we have a shipbuilding debate in your Lordships' House. I cannot remember any since I came here. If we had had a shipbuilding debate, and a probe into the intricacies and complexities of British shipbuilding, many of the observations we have heard this afternoon would not have been uttered at all.
I want to say at once that I have the utmost sympathy, if that is of any value, with those preference and other shareholders who feel they are going to get a rough deal. But let us try to understand this. If we do not proceed with this Order, and if we do not accept the recommendation of the Government, the reconstruction of Harland and Wolff, perhaps the best technically equipped shipbuilding yard in the whole of Europe, cannot be proceeded with. What would be the effect?
I have followed the fortunes of Harland and Wolff for many years. I have no financial interest at all but for many years in another place I was the chairman of the Labour Party Shipbuilding and Shipping Committee and so was able to follow the fortunes, not only of Harland and Wolff, but of the shipbuilding industry as a whole. May I remind noble Lords on the other side of the House, that the first example of credit being supplied to private shipbuilding in the United Kingdom was when Mr. Marples, as Minister of Transport, introduced credit arrangements and provided some kind of consolation for lame ducks. That is when it
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began, and we have been subsidising the shipbuilding industry ever since.
I do not want to introduce a debate on shipbuilding, but I have been reading the debate on this subject in the other place and I make this statement, which I believe is unchallengable, that not a single Member associated with Ulster would dissent from the decision which the Government are asking your Lordships' House to accept this afternoon, although at the same time expressing the utmost sympathy for the shareholders. If we do not proceed with the reconstruction of Harland and Wolff it will go into liquidation, despite the appointment of the new manager, who I believe is one of the best technical experts in the shipbuilding industry in the whole world, and despite the loyalty of those employed at Harland and Wolff. And let this be understood; it is not merely the 10,000 people employed in the shipyard who will be affected, but vast numbers who deal with components and parts associated I with the building of ships in the yard. All these will be affected. Let this too be clearly understood: if we do not proceed with the reconstruction at the earliest date, if we engage in any impediments such as the appointment of a Select Committee with all the palaver associated with it, however strong the case may be on behalf of the shareholders the firm will go into liquidation. Then what will the shareholders get? Nothing at all.
There is the situation. I am pleading on behalf of the workers in Northern Ireland, those associated with the shipbuilding industry, and indeed for the whole of the economic life of Ulster. My noble friend Lord Donaldson mentioned the high rate of unemployment in Ulster. That matter was referred to in the debate the other night in the other place. Let us not accentuate the nature of the problem. Despite the objections—which in my opinion are justified; I have a great deal of sympathy with them, and I would have said pretty much the same thing in different circumstances—since this affects the life of Ulster, its economic future, it seems to me that your Lordships have no alternative other than to accept the decision.
Lord WINDLESHAM: My Lords, I do not want to prolong this debate unduly because there is a lot more business today,

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and very important business too. But since I have an interest in the affairs of Northern Ireland and know the shipyard at Harland and Wolff, and since I also have an interest in the procedure of this House, perhaps I might be allowed to intervene briefly. Like the noble Lord, Lord Shinwell—whom we are all delighted to see back in his place after his recent illness—I listened not only with attention, but also with sympathy to what the noble Lord, Lord Harmar-Nicholls, had to say. He reminded us that he speaks as a Parliamentarian with 25 years' experience. Like the noble Lord I believe it would be quite wrong if we got into the habit, for reasons of expediency put forward by the Government, of setting on one side the recommendations of our own Select Committees, particularly a Committee of the weight and importance of the Hybrid Instruments Committee, chaired, as the noble Earl, Lord Listowel, reminded us, by a Lord of Appeal in Ordinary, Lord Wilberforce. We also have to remember that the petitioning procedure is a protection for the private citizen; it is a protection against legislative acts affecting private interests. To take that away because of the requirements of the Executive is something that should be done only in exceptional circumstances.
Having said that, after listening to this debate I reach the same conclusion as the noble Lord, Lord Shinwell, from the Benches opposite. In the case of Northern Ireland the shipyard of Harland and Wolff is of paramount importance to the economy of Northern Ireland and to the stability, if that is the right word, the comparative stability, of political life in Belfast. I detected some signs of wishful thinking in parts of the brief which the noble Lord, Lord Donaldson, read out. We have heard this story before, although the noble Lord did say at one point in his speech that if this infusion of a further large amount of capital—perhaps amounting to as much as £140 million in total by 1980—was unsucessful the Government might then have to consider running down or even closing the shipyard. I do not know; I suspect we will be having this debate all over again before we reach that day.
In the meantime I think the Government are right, and that this reconstruc
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tion is necessary. We must hope it will be successful. Whether the reconstituted Board, and the introduction of a new managing director, will bring all the benefits that are hoped for I do not know, but they can only do good. That is my reason, in this instance, for agreeing to the Amendment proposed from the Government Front Bench.
3.56 p.m.
The LORD PRIVY SEAL (Lord Shepherd): My Lords, perhaps your Lordships would like to come to a conclusion in this matter. May I thank the noble Earl for the manner in which he introduced the First Report of this Committee. May I say to him that it was only after the deepest thought that I agreed that my name should go on to this Amendment. I, like the noble Lord, Lord Windlesham, attach very great importance to our Committee system, and also the way in which we seek to preserve the rights of individuals. I attach the greatest importance to this particular Committee, and, therefore, it was with reluctance that I felt it necessary, in the light of the advice I received from the Northern Ireland Department, that there should be an Amendment to the Motion on the First Report. To the noble Lord, Lord Belstead, I would say that I fully agree that it appears to be wrong that we should be taking this Order at this late stage, not giving us a great deal of time and flexibility. The Order was a complex Order. It required not only decisions in terms of construction but also in terms of compensation. It has, of course, now been laid before this House for some weeks, and a petitioning period was required before the Select Committee itself could make a decision.
I would suggest your Lordships should bear very much in mind what the noble Lord, Lord Belstead, the noble Lord, Lord Windlesham, and my noble friend Lord Shinwell have said about the need for speed and urgency. It is not just money that the company needs. Nothing can be done about the management, the board, upon which confidence depends, until the Government are in a proper position to exercise their view upon the reconstruction of management, and they cannot do that until they have a majority shareholding. Until this has been achieved nothing in that field can be done. I should have thought that above

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all else, apart from money, the need is to raise the confidence of the workpeople that the company is going to be put in good order, and that the names of the board and the management should be known.
I, too, share the concern expressed as to whether the shareholders have been adequately compensated. I think there is only one way in this present situation in which an assessment could be made in a company which has lost its capital five times over. It has not paid a dividend since, I think, 1964, and compensation for the shareholders is only being made because, as the noble Earl himself suggested, there might have been a feeling among the private shareholders that their shares were worth something more than the market itself would place upon them solely because of the presence of the Government in a minority position. Therefore, I do not see that there is any way in which, in fairness and equity, one could assess the compensation other than using the stock market over a period of six months.
I therefore ask the House, in the interests particularly of Northern Ireland, that we should not delay in the restructuring of the management of this company. To achieve this we need the Order, which can be moved if your Lordships were to agree to the Amendment which my noble friend Lord Donaldson of Kingsbridge moved on my behalf. I join with other noble Lords in expressing gratitude to the noble Lords who sat on this Committee. I would not accept any reflection that was suggested of it, that it had not done its work adequately or that it had not gone into this matter sufficiently. It is not easy, particularly on the First Report of a new Committee, to know what may be the pitfalls. I believe that the Committee went into the matter as fully as it could, on the material that was provided. It may be, because of the circumstances, that more material has been provided to your Lordships by the speech of my noble friend Lord Donaldson. I therefore hope that the House will agree to the Amendment on the Order Paper in my name.
On Question, Amendment agreed to.
Motion, as amended, agreed to.

SHIPBUILDING INDUSTRY (No. 2) (NORTHERN IRELAND) ORDER 1975
4.2 p.m.
Lord SHEPHERD Lord SHEPHERD: My Lords, I beg to move that this Order be now approved.
Moved, That the Draft Shipbuilding Industry (No. 2) (Northern Ireland) Order 1975, laid before the House on 9th July, be approved.—(Lord Shepherd.)
On Question, Motion agreed to.

LERWICK HARBOUR (MISCELLANEOUS PROVISIONS) ORDER CONFIRMATION BILL
Considered on Report.
Then, Standing Order No. 44 having been suspended (pursuant to Resolution), Bill read 3a, and passed.

SECURITY AND CO-OPERATION IN EUROPE CONFERENCE
4.3 p.m.
Lord GORONWY-ROBERTS: My Lords, with the leave of the House I will repeat a Statement that has been made in another place by my right honourable friend the Prime Minister. The Statement is as follows:
"As the House will know, my right honourable friend the Foreign and Commonwealth Secretary and I attended the third and final stage of the Conference on Security and Co-operation in Europe in Helsinki last week. The text of my speech has already been published as a White Paper. In accordance with what was agreed at the Conference, Her Majesty's Government, like all other participating Governments, are also publishing the full text of the Final Act signed at Helsinki, which includes the texts of all the documents adopted at the Conference.
"The Conference included the Heads of State or Government of all countries, except Albania, directly concerned with security and co-operation in Europe. It was not merely an occasion for making speeches and signing documents. It was, rather, the opportunity for countries scarred by the experience of war 30 years ago and

1487
convinced of the need to end the sterile divisions which followed it, to look towards new and more constructive relationships on the basis of an agreed code of behaviour and undertakings to advance co-operation of all kinds and permit the freer flow of people, ideas and information.
"Two years from now our representatives will meet in Belgrade to assess the results and recommend action for the future. I can assure the House that for their part, Her Majesty's Government will do all in their power to honour and fulfil the undertakings we have accepted in the Final Act. We are also ready to consider making bilateral agreements with other participating States to carry through its provisions.
"The Final Act has been variously described. It is not of course a peace treaty, nor is it any other kind of legally binding agreement. It is, rather, a set of political undertakings which will, at the very least, provide a yardstick against which future behaviour can be measured and judged. These undertakings apply to all the participating States on the basis of complete equality, irrespective of their social, economic or political systems. At best—and I am thinking here particularly of the articles relating to the rights of individuals, journalists and businessmen—they should provide the basis for the development of more fruitful and constructive relationships.
"This Conference represented no more than a beginning, but I hope the House will agree that it is a beginning in the right direction. Those who worked so arduously for two years to negotiate the Final Act did not attempt to cover all European problems. The limited measures which were agreed should have their value in creating the first elements of confidence without which further progress will not be possible. But, as the House knows, the problems of military security are being dealt with elsewhere—for Central Europe, in the conference on force reductions at Vienna; in the strategic nuclear field, in the SALT negotiations between the US and the Soviet Union; and in disarmament, discussions generally. The Vienna negotiations have not made the pro-
1488
gress for which we had all hoped, and the disparity of forces between the Warsaw Pact and NATO is as great as ever. I expressed our disappointment at the slow progress so far, and a number of those who spoke later expressed, as I did, the hope that now the basis for a better political relationship has been established at Helsinki, we shall be able to make the progress which is necessary at Vienna. That should now have the highest priority in the development of East-West relations together with the negotiation of SALT II.
"It is my firm hope that the new spirit of co-operation which was demonstrated at this Conference will extend beyond it. I have particularly in mind the economic problems which face the world and the dangers of further nuclear proliferation. What we have achieved in CSCE will be judged by history by our success in extroverting our achievement to a wider world.
"The Conference also provided the occasion for me to have separate meetings with nearly all the participating Heads of State or Government, including the Presidents of the United States, France and Finland, the Federal German Chancellor. Mr. Brezhnev, the Italian Prime Minister—who is, of course, also currently in the Chair of the EEC Council of Ministers—and the Prime Ministers of Greece and Turkey. My right honourable friend and I had meetings with other East European leaders and with President Tito, and we also had a meeting with President Costa Gomez of Portugal, at which I expressed the very grave concern felt by Her Majesty's Government and, I am sure, the whole House, at recent developments in Portugal. I raised the question of Portugal also with the leader of the Soviet delegation.
"On my way back from Helsinki on 2nd August my right honourable friend and I attended in Stockholm a meeting convened by the Swedish Prime Minister of Socialist Heads of Government and Party leaders, at which Dr. Mario Soares, the Leader of the Portuguese Socialist Party, was also present. This gave us an opportunity to express to Dr. Soares the importance we attach to a speedy return to pluralistic democracy in Portugal; a

1489
point which I had already strongly emphasised in my talk with President Costa Gomez at Helsinki. I also told the meeting that I had described the future of Portugal as one test of détente during my talk with Mr. Brezhnev. The meeting also discussed the world economic situation and, Prime Minister Rabin of Israel being present, the position of Israel and all of us in relation to possible action against Israel at the forthcoming General Assembly of the United Nations. We expressed our full support for the doctrine of the universality of the UN, as I had in my opening speech at the Helsinki Conference."
My Lords, that is the conclusion of the Statement.
Lord CARRINGTON: My Lords, the House will be obliged to the noble Lord for repeating that Statement and for the account which the Prime Minister has given of the Helsinki Conference. I am sure it is right that nations which have quarrelled for so long should seek agreements of this kind, and I do not believe that these three years have been wasted. Some of us are perhaps disappointed in the scope of the agreements, but it must be a good thing that the leaders of the European countries, together with the President of the United States, should meet after 30 years in an unprecedented gathering and should have an opportunity of exchanging views, of seeing each other and of talking amongst themselves. I do not feel that we ought to blind ourselves—indeed, I did not feel that the Prime Minister's Statement did that—to the fact that nothing has yet been achieved except a conference. I believe all of us will want to see what is the outcome and what concrete results will emerge from the agreement.
For my part, I believe that there will be two tests. The Statement touches on both. The first will be the Security Conference in Vienna. It has always been my understanding that there was a link between these two conferences, and that one would go hand in hand with the other. I cannot help feeling that it was somewhat of a pity that Helsinki is now over and done with and that nothing has yet been achieved at Vienna. The only thing that has been achieved at Vienna is the dropping of the word "balanced" from the title of the conference. We no
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longer talk about "mutual balanced force reductions", but about "mutual force reductions". I do not find that a very good augury for the future. We shall watch with great care to see whether or not the Warsaw bloc countries are prepared to take constructive steps forward at Vienna. So far as I am concerned, that will be the hallmark of success or otherwise of the Helsinki Conference.
The other issue is Portugal. Here again, the Prime Minister touched on the matter in his Statement. There is ample evidence that there has been interference in the internal affairs of Portugal. We shall watch very carefully in the light of the Helsinki Conference to see whether that interference now stops. Having said that, however, let us welcome this as a step forward and not be grudging about it. Let us reserve our judgment and see how it works.
Lord GLADWYN: My Lords, we on these Benches of course also wholeheartedly welcome the conclusion of the Helsinki Conference. It is excellent that no less than 30 Heads of State, representing most of the countries North of the Tropic of Cancer, including the two super-Powers, should have condemned sin in a detailed and agreed fashion and have solemnly promised to be good. It is true that the leaders of these States and many others have repeatedly done much the same thing since the end of World War I with no noticeably good results, but this time it is, after all, possible that the appalling prospect of a nuclear holocaust may result in at least some of the promises being made to stick.
But noble Lords will forgive me if I briefly quote Gibbon. He says:
"It is not usually in the language of edicts and manifestoes that we should search for the real character and the secret motives of princes."
In other words, as the Government have of course recognised and as the noble Lord has just said, the proof of the Helsinki pudding is in the eating.
In conclusion and speaking, I trust, for all my colleagues, I can only deplore the fact that on all the great issues on which it is hoped that the Helsinki Conference will soon have a favourable effect, including Portugal and the Conference on the Mutual Reduction of Armaments, the individual countries of Europe are likely, I fear, to play, at best, a subsidiary

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not take us very far in détente. role. Therefore, I repeat the hope that, by combining ever more closely, they may, with North America, be able to preserve free institutions in a world which seems increasingly intent on the adoption of directed or dictatorial systems.
Lord GEORGE-BROWN: My Lords—
Lord GORONWY-ROBERTS: My Lords, I hesitate to interrupt my noble friend but I believe that it is a convention of the House that I should reply immediately to the Leader of the Opposition and the Leader of the Liberal Opposition. Very briefly, I welcome both reactions to my right honourable friend's statement. I do not disagree with anything that has been said this afternoon. We must look to the future for action to implement these agreements. They are not binding except in a psychological and moral way. They are yardsticks against which the behaviour and performance of all signatories will be judged in the future. I particularly welcome the two tests of confidence which the noble Lord, Lord Carrington, suggested. Certainly, we shall watch carefully for evidence of constructive co-operation at the Vienna Conference. As the noble Lord said, simply to complete this conference without practical evidence of progress in Vienna will not take us very far in détente.
Secondly, we look to non-interference in the affairs of sovereign States, particularly at this juncture. We look to the future of Western type democracy in Portugal as a second test of good intentions. The noble Lord, Lord Gladwyn, also made an intervention which was very acceptable and helpful. He said that we all united in condemning sin. I would add that we did it in six languages.
Lord GEORGE-BROWN: My Lords, the conventions of this House never cease to puzzle me. I doubt whether my intervention will be quite so helpful as those two to which my noble friend insisted on replying. May I ask my noble friend, as one who has had responsibility for dealing with sinners, how he defends the Statement by his right honourable friend the Prime Minister which describes this as a beginning when it refers to his signature on a document described as "the final act"?
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Secondly, does my noble friend realise that, to the Soviet Union, this does of course look like the final act, in that we have recognised the division of Europe. That is what they meant by the final act. To us, I would hope that that cannot be true. Thirdly, may I ask my noble friend if it is true, as has been widely reported, that the Foreign Secretary, when in Hungary, actually addressed Mr. Kadar and said, "To understand all is to forgive all." if I may say so, if that is true that would be to the Soviets the final act. To some of us it would be the final betrayal.
Lord GORONWY-ROBERTS: My Lords, I am most grateful to my noble friend for his understanding of the conventions of courtesy which rule this House as well as the other place, where he played an equally distinguished part. With regard to the three points he raised, I shall deal first with the Statement by the Prime Minister that this is a hopeful beginning. I do not think that anybody will cavil at that very cautious expression of optimism. The term "Final Act" is a term of art, as he well knows. It is the final act of the conference; it is not the final act for Europe or for the settlement of the world. It is the close to the Conference in terms of an instrument of agreement.
Secondly, my noble friend spoke of the Soviet Union assuming that this series of agreements will settle the frontiers of Europe for all time. What it does is to attempt to outlaw the change of frontiers in Europe, by force or by the threat of force. It lays down clearly, and it has been accepted by East and West, that such frontiers can be changed, but by peaceful means, by negotiation, by agreement. Thirdly, my noble friend referred to something which my right honourable friend the Foreign Secretary said in Hungary. I am afraid that I do not have the text of that speech by me, but I shall examine it with great interest and see how the phrase which my noble friend quoted fits into the context of what my right honourable friend said in Hungary.
Lord ROBBINS: My Lords, I wonder whether the noble Lord who read the Statement would accept a supplement to the extremely weighty texts which were

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enunciated by the noble Lord, Lord Carrington? The supplement which I would suggest is this: that many of us will begin to believe in the reality of the signatures which were appended to the Final Act at Helsinki when it is possible for the ordinary man and woman in Moscow, in Leningrad, and in other parts of the Soviet Union to buy, without interference, even the more disreputable and degraded examples of the Press of the Western World, or to buy books ad lib issued by authors in that part of the world.
Lord GORONWY-ROBERTS: My Lords, when my noble friend, like, I hope, other noble Lords, studies this voluminous document during the Recess he will find that quite a substantial part of it is devoted specifically to enabling the freer passage of information, and indeed of periodicals, from one country to another. I entirely agree with him and with all noble Lords who have so far taken part in this exchange that the proof of this pudding will be in the eating. Hopefully it will lead to fewer and fewer restrictions on the movement of people and of papers for information, and for trade as well. But the 35 signatories must live up to their signatures. As the American President said, it is not the promises which we have made that count but the promises that we shall keep. Therefore, on a note of cautious optimism, particularly on the exchange of even the most disreputable publications, I join my noble friend in expressing the same hope.
Lord DAVIES of LEEK: My Lords, is my noble friend aware that some of us welcome the effort, while noting the warnings given from both sides of the House? Nevertheless, as Mark Twain said, events are in the saddle and are riding mankind. Although I was originally against the Common Market, I accept the referendum, and the Common Market is a demonstration of the movement of peoples. Even those in Eastern Europe—the Yugoslavs and others—are moving into Western Europe to work. This in itself is a tendency of modern times which I think Russia is now beginning to accept. After suffering 20 million dead and 35 million casualties in the last war, they, too, do not want to see a holocaust.
Lord BROCKWAY: My Lords, I do not want to delay the discussion, but as older Members of this House will remember, for eight years I have been a rather lonely voice in urging that the Conference on Security and Co-operation should take place. The Prime Minister's Statement today dealt with wider issues than Helsinki, and all of us very much hope that his discussions with the leaders of other countries, and his discussions in Stockholm with the leaders of European Socialist Parties will lead to democracy in Portugal, and that the Helsinki discussions will lead to a solution of the problem in Cyprus.
I welcome the tremendous scope of the agreements which have been reached at Helsinki. But I accept the view that they will be worth while only if they are implemented. My regret is that the proposals for implementation are so weak. They urge only that there shall be a meeting of officials in two years' time. I should like to have seen immediately the United Nations Commission for European Co-operation setting up Working Parties for carrying out the economic agreements which have been reached, and I should like to have seen the European Commission for Human Rights made an All-European Commission so that the promises of the Soviet Union about human rights might have been maintained.
I welcome the Statement of the Minister that the Government, with bilateral arrangements with other territories, will proceed to carry out the agreements which have been reached at Helsinki. But if this great hope on paper is to be realised, it must be accompanied by implementation, and that does not mean only the agreement of the Communist countries to human rights; it means also the agreement of the West in the pledges which have been given regarding economic co-operation.
Lord SHINWELL: My Lords, before my noble friend replies to the further points raised, would he accept another supplement to the speech by the noble Lord. Lord Carrington? Is he aware that having watched very carefully what was declared at Helsinki and having read all the newspapers, and what documents were available on this subject, I venture

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to recommend to Her Majesty's Government and to Western Europe that they strengthen their defences as far as they possibly can?
Lord GORONWY-ROBERTS: My Lords, certainly Her Majesty's Government will take full note of what a distinguished former Secretary of State for Defence has to say on this subject. My noble friend Lord Brockway raised a number of points, but I shall confine myself to one of them. He referred to there being no means of supervising implementation. That is not the position. It is not proposed that there should be a meeting of officials after two years. There will be a full conference to see how the thing has worked. In the meantime, there will be constant discussions at official level—possibly at Ministerial level, if that is necessary. But for two years all the signatories will have a chance to live up to their signatures; and certainly at the end of two years there will be a full conference to see how they have behaved.
Lord COLERAINE: My Lords, may I ask the noble Lord a question relating to Stockholm rather than to Helsinki? Though the question may sound tendentious it is not meant to be offensive. Is there in fact a precedent for Her Majesty's First Minister and Her Majesty's Principal Secretary of State for Foreign Affairs attending in their official capacity a Socialist Party gathering in Europe or anywhere else? Is it not more fitting that the Prime Minister and the Foreign Secretary should be representing the British people, and not a section of the British people as they seem to have done at Stockholm?
Lord GORONWY-ROBERTS: My Lords, I could not enlighten the noble Lord on precedents in this matter. If there is not the precedent, it is high time that one was created, and it has been created. I see no reason why the Prime Minister and the Foreign Secretary should not attend, as democratic Socialists, a meeting of other Heads of States and leaders of similar Parties to discuss the best way in which they, as democratic Socialists, can further the cause of democracy.
Lord SHEPHERD: My Lords, may I suggest that as we have another State-
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ment and as we also have a heavy business programme—and we have been on this for half an hour—perhaps we could take the second Statement and then proceed to the next business as quickly as possible?

INDUSTRIAL DEMOCRACY
4.30 p.m.
The LORD CHANCELLOR: My Lords, I should now like to repeat a Statement made in another place by the Secretary of State for Trade. The Statement is as follows:
"The Government are committed to carrying through as soon as possible a programme for the radical extension of industrial democracy in both the private and public sectors. The first steps have been taken by my right honourable friends the Secretaries of State for Employment and Industry with the Employment Protection Bill and the Industry Bill which contain provisions allowing for greater disclosure of information and for the workforce to be more closely involved in future planning. Meanwhile developments in industrial democracy, particularly below Board level, are taking place and more are planned. It is desirable that these should continue.
"The next step is to formulate measures which will enable those employed to participate in major decisions affecting the future of their companies through representation at board level. Not only will this involve a major change in company law but it will clearly bring about a fundamental change in the way industry is managed. Because of this, and because the issues are both complex and in this country relatively unexplored, the Government wish to have the best available advice before coming forward with legislation. I have therefore decided to appoint an independent Committee of Inquiry to advise on questions relating to representation at board level in the private sector. It will have the following terms of reference:
'Accepting the need for a radical extension of industrial democracy in the control of companies by means of representation on boards of directors, and accepting the essential role of trade union organisations in this process, to consider how such an extension can best be achieved, taking into account in

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particular the proposals of the Trades Union Congress report on industrial democracy as well as experience in Britain, the EEC and other countries.
'Having regard to the interests of the national economy, employees, investors and consumers, to analyse the implications of such representation for the efficient management of companies and for company law.'
"The names of the Chairman and members will be announced very shortly. The Committee will be asked to present its report to the Government within 12 months so that legislation can be placed before Parliament during the 1976–77 Session. The Committee will wish to call for and receive evidence quickly and I hope that interested parties will begin to prepare their evidence right away. There is a need for a wide-ranging debate on this important subject so that a full measure of public support may be achieved and I earnestly hope therefore that all who are able to make a contribution, including those who are already practising forms of industrial democracy, will assist in the vital work of this Committee.
"I should also like to pay a tribute to my honourable friend the Member for Chester-le-Street who brought before the House a Private Member's Bill on Industrial Democracy and those who served with him on the Standing Committee. In their debates, they examined many of the issues which are fundamental to legislation and this will be a very helpful contribution to the work of the Committee of Inquiry.
"In parallel with the work of the Committee the Government also intend to take a radical look at the role of employees in relation to decision making within nationalised industries. A study has been set in hand.
"Meanwhile the Government hope that experiments in developing new forms of industrial democracy and democratic self-management within the existing framework of the law will continue and that the establishment of the Committee of Inquiry will in no way prevent the work now in progress from continuing to develop."
My Lords, that is the end of the Statement.
Lord LYELL: My Lords, we on these Benches wish to thank the noble and learned Lord for the very forthright and
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clear way in which he set out the Government's intentions on this very important subject. We welcome the independent Committee of Inquiry which is to be set up, and we welcome the references in this Statement to the formulation of measures to enable those employed to participate in major decisions affecting the future of their companies. We also welcome the later references to the interests of the national economy, the employees, the investors and the consumers, as well as the need for a wide-ranging debate on this subject. But we regret what was said in conclusion: that private industry alone will be the subject of scrutiny by this Committee of Inquiry.
However, we have a number of questions that we feel the noble and learned Lord could help us with. First, could he explain more precisely what will be the role of the trade union organisations in this context? Secondly, do the Government believe that the trade unions are, or should be, the only channels whence will flow ideas and communications concerning company management?
Thirdly, does the noble and learned Lord accept that we on this side of the House are concerned that the Government have not been able yet to announce the name of the chairman. We are inclined to think that such a chairman will need to be extremely robust to deal adequately with the whole subject, rather than as seems likely, to be drawn into the curiously contrived terms of reference of the Committee of Inquiry?
Fourthly, do the Government agree with us on these Benches that the entire subject of industrial democracy involves all who work within a plant, factory, company or an industry, and not necessarily just those trades unions, or trade union representatives, who might become involved in major decisions at board level or below? I hope the noble and learned Lord will accept that we are concerned with this point because we consider it to be of the greatest importance.
Lastly, my Lords, we should like to stress that this question of employee participation in management decisions concerns us increasingly, under whatever name it is discussed. We hope that the Committee of Inquiry will be fortunate enough to have a robust, able and independent-minded chairman who will be able to discover all shades of opinion on

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this subject. May we hope that the Government will approach the inquiry and its findings with an open mind; for we believe that no more can this subject be treated as a political Party football or, if the noble and learned Lord would prefer it, as a Rugby football.
Lord ROCHESTER: My Lords, I should like to join in thanking the noble and learned Lord for having repeated this Statement, even though I think it is well known that the Liberal Party have their own policy on this question of employee participation. I prefer that term to "industrial democracy", because I think it is more down to earth and more comprehensive. We welcome the fact that further consideration is to be given to the question by this Committee of Inquiry, before conclusions are reached.
I, too, have a few questions that I should like to ask the noble and learned Lord. Can we take it that employers and trade unionists will be represented on this Committee of Inquiry, and also—and this is very important—people who have some practical experience of the experiments now going on in British companies on this whole question of the participation and involvement of employees? We have noted, and we welcome, the last sentence in the Statement in which the Government express their hope that these experiments will continue and that the establishment of the Committee will in no way prevent work of that kind developing. Will the Government, in their turn, say that this promise can be fulfilled and pay due attention before decisions are reached to the practical exercises and experiments of this kind now going on in industry?
Next, may we also be assured that, in keeping with the spirit of one or two recent debates in your Lordships' House, an opportunity will be given to the Parties in Parliament to express their views on this matter, and perhaps, so far as this House is concerned, by means of some general debate, again before the Government make up their mind.
Finally, can the noble and learned Lord give us any indication of when the promised draft European Statute will be published? It is rumoured to emphasise the part to be played by trade unions in this matter of the representation of
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employees at board level. There are plenty of references to trade unions in this document, but we understand there is emphasis in European thinking on the part also to be played by works councils and consumers in this matter. Can the noble and learned Lord say anything at this stage as to the effect which European thinking on this matter may be having on the Government's own ideas?
4.41 p.m.
The LORD CHANCELLOR: My Lords, I am grateful to the noble Lords who have spoken and have welcomed the proposal to set up an independent Committee. May I deal at once with the problem of representation? I entirely agree with the noble Lord, Lord Rochester, that it is very important. It is contemplated and proposed that the Committee will include people with experience of trade unions, management, investment, industrial relations, the law and consumer interests; and it will clearly be desirable, provided one does not increase the size of the Committee too much, to have upon it—as the noble Lord, Lord Rochester, has said—those who have already had some experience of experimentation and precedents in the field of worker representation at board level. The noble Lord, Lord Lyell, asked me what precisely was intended to be the role of trade unions. As the terms of reference recognise, trade union organisations must have an essential role to play in the extension of industrial democracy, but the inquiry will, according to the terms of reference, be able to examine every possibility for involving work-people in decision-making at board level. It will be free to consider the interests of all employees, and to explore all methods of representation. I agree it is essential that all employees are concerned and should therefore be involved.
Regarding the European company statute, and the work that is being done on the draft fifth Directive, the European Commission have recognised the need to study carefully the question of participation by employees at board level, and the structure of companies. As I understand it, they will shortly be publishing a Green Paper on this subject. I understand that that term of art, Green Paper, has the same connotation in the EEC as it has in Parliament. The independent Committee which is to be set up will clearly need to

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take account in its work of experience and developments in Europe and elsewhere, where there has been more significant progress in this field than has occurred in this country. The European company statute is still in draft, but I am afraid I cannot say when it is likely to see the light of day. It will cover all aspects of company law, and it is clearly a massive subject for study and consideration.
Lord DRUMALBYN: My Lords, while, for my part, I welcome the setting up of this inquiry, there are one or two questions which I should like to ask. The noble and learned Lord said that the Committee will take account of experience in the Common Market. Will it also take evidence in the Common Market countries to see how things are being done there? This is a matter of great importance. We tend to become much too involved in our own affairs and too blinkered by our own procedures. This is an opportunity for looking much more widely at the whole situation.
Secondly, may I ask the noble and learned Lord whether the Government are setting an absolute deadline of 12 months for this inquiry? One remembers the inquiry into the trade unions and the length of time that took. It is almost invariably the fact that inquiries of this type, if they are to be thorough, take longer than is expected. Following from that, may I also ask whether the Government envisage that the inquiry will necessarily result in legislation; whether we are to have, so to speak, a written industrial democracy where we have not a written democracy in this country? These are all matters of importance. My last question is this: in taking account of the various experiments which are taking place in this country, will the Government, if it comes to making up their minds on the proposals, make certain that we leave scope for diversity in the pursuit of the common objective?
Lord HEWLETT: My Lords, before the noble and learned Lord replies, may I ask one further question? Recently it has really depended upon either the Trades Union Congress or the CBI to represent the views of the two sides of industry—I hate to use that term, but it seems generally a consensus view now. So much of industry lies in the medium-
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and smaller-sized enterprise which has no strong representation in either sector. I hope that special care will be taken to see that the small, so to speak, uncommitted enterprise gets direct representation in such an inquiry as this. I am not disparaging the work of the CBI or the TUC, but industry is not just made up of the big battalions: a vast amount of gross national product emerges as a result of the small and medium-sized enterprises who in these complex days tend to be overlooked. I make a special plea to the noble and learned Lord to take that point on board.
Viscount MASSEREENE and FERRARD: My Lords, may I take up what my noble friend has said? My noble friend was right about the big battalions.
Lord SHEPHERD: My Lords, may I interrupt. It seems to me we are getting into a debate: we are discussing a Statement. It is perfectly right to express a view, but the basic purpose is to ask questions. I have a fear that throughout this afternoon we have been getting into a debate. We have a lot of business still to be done today, and I would ask the House to keep their questions short and let us proceed to the next business as quickly as possible.
The LORD CHANCELLOR: My Lords, perhaps my maintaining a sedentary position on the Woolsack gave an impression that we were in the presence of a debate. Perhaps I was at fault in not answering questions as they were asked. May I deal with the questions that have been asked. Terms of reference, when read out, are not easy to note, and the noble Lord, Lord Drumalbyn, will see when he reads them that the Committee will take into account experience in Britain, the EEC and in other countries. That obviously is an essential step. I will communicate the observations of the noble Lord, Lord Hewlett, and, indeed, of the noble Lord, Lord Lyell, about the composition of the Committee and its chairman to my right honourable friend the Secretary of State. A deadline of 12 months ought to be achievable. Legislation is almost certain to be required if only to deal with the changes in the company law which will probably flow from the recommendations of the Committee. Certainly the experiments that

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have taken place in the United Kingdom will no doubt be considered by this Committee. It will contain a high level of expertise.
Lord BRUCE of DONINGTON: My Lords, the noble and learned Lord has already indicated that there is a certain degree of overlap between the subject matter of this inquiry and some of the matters covered by draft Directive No. 5 issued by the European Commission.
Will he inform the House whether this inquiry is being held as a prelude to the determination of the appropriate Ministers representing Britain in the EEC as to what their attitude should be towards Directive No. 5? If that be the case, and since the Report is not due for another 12 months, would he bear in mind that the European Economic Commission envisages legislation in 1976 and that Article 64 of the proposed Directive No. 5 mentions actions by the Member-States within 18 months of the issue of the Directive? I should like to find out whether the Government propose to act before being directed by the European Economic Commission, or afterwards.
The LORD CHANCELLOR: My Lords, we shall have to see how events proceed. In so far as there will he information and recommendations emanating from the EEC, certainly this Committee of Inquiry will bear them in mind; but this is intended to be an independent Committee, acting in the light of experience already existing here, and having regard to the terms of reference.
Lord NELSON of STAFFORD: My Lords, may I ask the noble and learned Lord whether he is aware that a great deal of confusion exists as to what is meant exactly by the term "indsutrial democracy"? Further, may I ask whether it will be the task of this Committee first of all to define exactly what is meant by the term?
The LORD CHANCELLOR: My Lords, this Committee will confine itself to the limited sphere of worker representation on the boards of companies; but whether in the course of that it will engage in the semantic exercise of defining generally what "industrial democracy" is, we shall wait to see what emerges from their wisdom.
Lord SHEPHERD: My Lords, may I suggest that we should now proceed to the main Business before the House.

INDUSTRY BILL
4.52 p.m.
Report of Amendments received.
Clause 1 [The National Enterprise Board]:
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick)The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick) moved Amendment No. 1A:
Page 2, line 2, leave out ("six") and insert ("eight").
The noble Lord said: My Lords, we had a great deal of discussion on this rather narrow point at Committee stage, and this Amendment is intended to do what the noble Lords, Lord Drumalbyn and Lord Aberdare, asked to be done. May I refer to one point, which has relevance to the next three Amendments? What we tried to do in this Part of the Bill was to leave as much room as possible for manoeuvre. The National Enterprise Board will be a very flexible and malleable instrument and it will grow with conditions.
We do not want to have constraints in the Bill. It was put very firmly that six was far too few, and it is conceivable, as I now see, that one could have a situation where, say, two members both fell off a cliff edge or something, leaving a temporary shortage of Board members. Below eight there could be only six, and if we wrote all these figures into a Bill we could be guilty of breaking the law, I suppose. Therefore, although it was not altogether a silly idea to have the figure as low as six, as always, I try to do what I can to help noble Lords opposite, and so the figure has become eight. But may I ask them, when it comes to the next three Amendments, to bear in mind the need for flexibility? Let us not be too constraining, but let us have the maximum amount of flexibility in the Bill. Having said that, I beg to move.
Lord ABERDARE: My Lords, I should merely like to thank the noble Lord for having taken the trouble to reconsider this matter. There was a good deal of discussion about it at Committee stage, and I am grateful to the noble Lord.
Lord DRUMALBYN: My Lords, I, too, am very grateful to the noble Lord for moving this Amendment. I am sorry that at the beginning of his speech I was busy searching for this Amendment on the main Marshalled List. However, I am very grateful to him for moving it. It is a question not so much of what we think, as of how the Bill will operate, and I believe that this Amendment will help the Bill to operate to better advantage. The noble Lord was right to make the Amendment, and we thank him for doing so.
On Question, Amendment agreed to.
5.56 p.m.
Lord ABERDARE Lord ABERDARE moved Amendment No. 1.
Page 2, line 8, leave out ("or joint chief executives").
The noble Lord said: My Lords, I beg to move Amendment No. 1, and it might be convenient to take with it Amendments Nos. 2, 3 and 4 en bloc, since they are successive Amendments and deal with similar subjects. This is a matter which we discussed briefly on Committee stage and the noble Lord, Lord Beswick, said that he would look at it again and promised that points which had been made by your Lordships would be considered. I bring the matter forward again for that reason and also because several of your Lordships lent considerable support to the two ideas that lie behind them. The first, in Amendment No. 1, is that the Board should have only one chief executive. That was supported by several of my noble friends who have considerable experience, including the noble Lords, Lord Nelson of Stafford and Lord Orr-Ewing. Also, it received considerable support from the noble Lord, Lord Bruce of Donington, and since I am not often able to secure his support, and since he is not here at the moment, may I say that I believe this to be a point in favour of the Amendment.
It seems to us that it would be normal, in the interests of efficiency, to have one chief executive. I agree with the noble Lord that one does not want unduly to limit flexibility, but at the same time one wants something which is as efficient as one can make it. Therefore, I should have thought, that, almost without exception, there was normally one chief person; there is a chief in every tribe and there is a chief executive in almost every form
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of organisation. This applies even to the Government's own organisation, the Civil Service. I have never heard of a Department run by joint chiefs. There is always one Permanent Secretary who is the chief one, and the others are not. The noble Lord shakes his head, but I shall be very interested to hear if that is not the case. Although my own experience is limited, in my own Department there were certainly two Permanent Secretaries, one of whom was the principal one. So this is a normal provision and one which would seem to be right for the National Enterprise Board.
We then went on to discuss what is now embodied in Amendments Nos. 2 3 and 4, which would entail that chief executive being a member of the Board. Once again, this received considerable support from several of my noble friends, who stated that it was generally normal in industry for the chief executive to be a member of the Board, and that if we were to get the right calibre of person as chief executive it would be necessary for him to be a member of the Board. I hope that without sacrificing flexibility the noble Lord will be prepared to accept these Amendments, which do not really inhibit flexibility to any great degree, and seem to us to include two principles which are normally held to be right in industry generally. I beg to move.
The Duke of ATHOLL: My Lords, I should very much like to support my noble friend in his Amendment No. 1. I was once chairman of a fairly small company in which there were joint managing directors, and throughout that period I wished that its articles of association had stated firmly that there should be one managing director or chief executive. I can assure your Lordships from my experience that having joint chief executives leads to nothing but friction. I should very much like to support my noble friend Lord Aberdare in this Amendment.
The Earl of BALFOUR: My Lords, I also should like to add a few words here. Under the Development Agency Bill which went through your Lordships' House only one chief executive was appointed and the provision stated that the:
"chief executive of the Board shall be ex officio a member of the Board".
I feel that this is important. As the wording stands, the chief executive may

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be either a member of the Board or a person who is not a member, and that I feel, with all due respect to our deliberations, must be rather contrary to the principles of Clause 2(2)(c) at the top of page 3 of the Bill:
"…promoting industrial democracy in undertakings which the Board control".
I must ask the noble Lords who are steering this Bill through the House to give this matter serious consideration. I am sure that these Amendments are intended to be constructive and will vastly improve the Bill.
Lord ROBBINS: My Lords, may I add a footnote to the recollection of the noble Lord, Lord Aberdare. I believe there is a precedent, or an apparent precedent, for two Permanent Secretaries. At the inception of the Department of Education and Science for a brief period there were two joint chief secretaries, although the arrangement proved to be unsatisfactory and it was dropped almost immediately. I may be wrong in my interpretation of the minutiæ, but certainly that was the impression that was given to the general public.
Lord BESWICK: My Lords, I am not absolutely sure whether or not I can call in aid the noble Lord. Lord Robbins. May I say to the noble Earl, Lord Balfour, that we have taken this point seriously. But I hope that noble Lords opposite will not press these Amendments. I think that what they said about the chief executive being on the Board is right, and almost certainly, I imagine, the chief executive will be on the Board. But if we write this into a Statute we are limiting room for manœuvre. The noble Lord, Lord Aberdare, said that he could not conceive of just one Permanent Secretary. The noble Lord. Lord Robbins, says he knows of a case where there were two. I know of a case where there were four. In the Department of Trade and Industry there were four Permanent Secretaries. The situation changed. The Department was split up and we have only two now.
Lord DRUMALBYN: The Secretaries were not all equal. There was one principal.
Lord BESWICK: My Lords, I do not know about that. I doubt whether the noble Lord should go around saying
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they were not all equal. One might have been receiving a little more salary than the others, but there were four Permanent Secretaries. In my day it would have been considered inconceivable, but the situation changes and it was held to meet the situation at the time. They had four Permanent Secretaries. Whether or not one was superior to the other three I should not like to say.
What I say quite firmly is that it would be wrong to say in an Act of Parliament that the chief executive should be a member of the Board, for example. There may be a full-time chairman and he may not need a chief executive on the Board. There may well be a situation where different divisions are developing and there is a chief executive for each of the two main divisions, and they would he called joint chief executives. I understand that the Shell Company have five managing directors which again, according to some of the arguments, is probably not good administration, but it seems to serve them well. Even though the noble Duke, the Duke of Atholl, had a different experience with his company, I do not think we should completely write off the experience of the Shell Company in this regard. We want the widest possible degree of flexibility. We have it as things are now and it would probably be a mistake to confine the judgment of the Board quite so narrowly as is proposed by the Amendments.
Baroness STEWART of ALVECHURCH: My Lords, I accept what my noble friend has said, but I wonder whether he could reconsider the wording of line 10 on page 2 of the Bill, it appears to say that anybody on earth may be a chief executive of the Board because everybody is either a member of the board or person who is not a member—and that is true of course of everybody here. I am not just quibbling. That is a fact and how many people reading the Bill would interpret it.
Lord BESWICK: Quite so, my Lords, and that is what is intended. The chief executive may be a member of the Board or he may not he a member of the Board.
Lord NELSON of STAFFORD: My Lords, may I express disappointment because the noble Lord, Lord Beswick, is not accepting this Amendment. There is a little confusion. He referred to four

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managing directors and so forth. That is a very different thing from joint chief executives. There can be as many managing directors as one likes looking after separate sections of a business, but there must be one man at the top who makes the final decision. I think this is the point my noble friend had in mind in putting forward this Amendment. I think it would be a great pity if this Enterprise Board go ahead with freedom to have joint chief executives at the top. Chief executives is what we are talking about.
Lord ABERDARE: My Lords, I am grateful to all those noble Lords who have supported me. Practically everybody who has spoken has indeed supported me. I am sorry that the noble Lord, Lord Bruce of Donington, who supported me on the last occasion, was not here at the beginning of the discussion on this Amendment as no doubt he would have lent me his support again. I saw him nodding his head. However, I did not think that the noble Lord, Lord Beswick, had much of a case. He said the provision should not be written into an Act of Parliament. The Government wrote it firmly into the two Development Agency Bills; both the Welsh and the Scottish Bills provided for one chief executive to be appointed and he should ex officio be a member of the Board. I should have thought the same would have applied to the Industry Bill. I do not wish to argue further about the other instances in the Civil Service. I think my noble friend Lord Drumalbyn was right on that point.
Clearly this is not a matter I would wish to insist upon if the noble Lord wants to keep the position flexible. I would only urge that all of us here have expressed the view that for the sake of efficiency there should be one chief executive, even if there is more than one department, as it were, underneath the chief executive. We have also urged that the chief executive should be a member of the Board. Therefore, I hope that the noble Lord will take these feelings into account when the Board is set up. Otherwise, I beg leave to withdraw the Amendment.
Lord BESWICK: My Lords, I can speak only with permission and I ask for it. I do not wish to set a bad example of continual interventions. What I am
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asked is reasonable and I will look into this point again. I think they make a mistake in equating chief executive with managing director and I will see that this point is considered again.
Amendment, by leave, withdrawn.
Clause 2 [General purposes and functions]:
5.8 p.m.
Lord BESWICK Lord BESWICK moved Amendment No. 5:
Page 2, line 30, after first ("the") insert ("development or").
The noble Lord said: My Lords, here again I was asked whether we could help in what was apparently a small point. Certain noble Lords and at least one noble Baroness did not like the word "assistance". I insisted that the purpose of the National Enterprise Board in certain cases would definitely be to give assistance and I said that the word "assistance" would comprehend development. However, there was a widespread feeling that we ought to pay some attention to the development aspects of the Board, and therefore I suggest we have "development and assistance", and I hope that this will be acceptable.
Lord DRUMALBYN: My Lords, I think this Amendment again was in response to my suggestion, after others had made the point, that assistance has a connotation which is more of the "lame-duck" character rather than of the expansionist or modernisation character. So we are glad that the noble Lord will make this Amendment.
Lord ABERDARE: My Lords, may I reinforce what my noble friend has said. It was one of our Amendments. I am very grateful to the noble Lord, Lord Beswick, and I think this is a much better wording.
Lord BESWICK: My Lords, I made a slip of the tongue which I must correct. I said development "and" assistance. The Amendment which I am moving provides for "development or assistance".
On Question, Amendment agreed to.
The Earl of BALFOUR The Earl of BALFOUR moved Amendment No. 6:
Page 2, line 33, leave out ("efficiency") and insert ("profitability").
The noble Earl said: My Lords, in order to be brief I did not speak to the last Amendment but I should also like to thank the noble Lord, Lord Beswick, for including "development or assistance". If I may speak to both Amendment No. 6 and Amendment No. 7, the point is that, as the Bill stands, the promotion of industrial efficiency in any part of the United Kingdom is not the answer. One can have the most efficient industry in the world, but if it does not make money it will go down the drain. As was stated earlier today in your Lordships' House, a tremendous amount of money has been invested in the famous shipbuilding yard of Harland and Wolff. If eventually that company does not become profitable I feel that the Government's efforts and everything that has been done will have been a waste of time.
Therefore, I am asking your Lordships to consider that the promotion of industrial profitability and international competitiveness in manufacturing industry in any part of the United Kingdom must be one of the main purposes of the Board. This can be achieved only by going into market research and finding out the latest development and all the other matters which I raised at Committee stage. In a case like this, efficiency is not the answer. Obviously we want efficiency but if there is no bag of gold at the end of the day we have lost everything. It is just one more drain on our balance of payments and one more drain on our economy. We have learned to accept and to welcome many of the provisions that are made by the Welfare State that we live in, but it is only the profits which are made by industry that will pay for them. For that reason, I sincerely ask your Lordships to agree that these Amendments to the Bill are needed. I beg to move.
5.12 p.m.
Lord LOVELL-DAVIS: My Lords, in some respects, I think that all noble Lords would accept that the promotion of efficiency and the promotion of profitability are the mirror images of one another, since the more efficient an industry the more profitable it will be. The converse, however, is by no means as true. The temptation to make a short term profit can well be contrary to long run efficiency. Indeed,
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I would go so far as to say that British industry has suffered over recent years from too heavy a concentration on short term profit at the expense of efficiency. This has, I think, been a factor in the under-investment in British industry. Short-term profits have been made by keeping to old, depreciated plant, but the long-term consequence has been to reduce the capability to produce to the standards required in world markets.
Take, for example, the two concerns which have been investigated thoroughly at the Government's request in recent months. The Ryder Report on British Leyland said:
"Nearly all the profit was distributed as dividends instead of being retained to finance new capital investment"
and the Boston Consultants' Report published last Thursday said:
"The loss of market share by the British motor cycle industry over the last 15 years resulted from a concern for short-term profitability".
I think that it is this question, of time scale that is the strongest reason for retaining the word "efficiency" rather than changing to "profitability". One of the needs for the National Enterprise Board arises from the need for a body which can and will take a longer-term view than private industry and private financiers. This will be particularly true of the Board's functions of restructuring industry and of promoting development in the assisted areas. These functions will undoubtedly add to the efficiency of the economy, its international competitiveness and in the long run to its profitability. Any actions which put to full constructive use resources which are under-utilised will contribute to these ends. But it may need to be looked at on a longer time-scale than private industry, and that is why efficiency is the word we have deliberately chosen to use.
The noble Earl, Lord Balfour, also asked whether he could take Amendment No. 7 with Amendment No. 6. Therefore, may I reply also to that Amendment. This Amendment restricts one, but only one, of the Board's purposes as set out in Clause 2(1). It restricts this purpose to manufacturing industry. But it does not restrict the other two purposes. In particular, it does not restrict the first purpose, which is to assist the economy of the United Kingdom or any part of the United Kingdom. I am advised that

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this first purpose is so wide that it includes the second purpose. The result is that no restriction of the second purpose would restrict the Board's activities, as the Board could still rely on the width of the first purpose. Accordingly, it seems doubtful whether the effect of this Amendment is what the noble Earl intended.
That said, it is intended, as the White Paper indicated, that the attention of the National Enterprise Board will be primarily directed towards manufacturing industry. But to restrict the Board's activities to this area by Statute would be to hamper their usefulness both to manufacturing industry and to the economy as a whole. For example, in reorganising or developing manufacturing industry it will often prove necessary to develop, assist or reorganise associated sales and service organisations. Restriction of the Board's activities to manufacturing industry alone would prevent this.
The National Enterprise Board's managerial and financial expertise could on occasion be usefully employed in other fields than manufacturing. The IRC was not limited to manufacturing industry and undertook studies of the Cunard Steamships Line, for example, and also of the British trawling industry. The Board's advice—and the power to provide assistance where National Enterprise Board studies reveal the need—could be of great benefit in non-manufacturing sectors. I hope that this fairly lengthy reply will satisfy the noble Earl.
Lord ROBBINS: My Lords, I must confess that the reply of the noble Lord fills me with disquiet and unease. The body which it is proposed to institute will get into very great difficulties indeed if it assumes that there is usually a conflict between efficiency and long-term profitability, and gets into the habit of dragging in all kinds of extraneous reasons why it should act in the interests of a presumed efficiency rather than long-run profitability. I emphasise the term "long run" which I am sure is in the minds of most sensible industrialists. None the less, I would not support this Amendment. There are cases in which public intervention to override conditions of profitability may indeed be desirable. It was Adam Smith, whom many would
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regard as being the leading expositor of the social advantages of the search for profit, who used the phrase "Defence is more than opulence". I can think of many occasions in the modern world in which considerations of defence ought to override considerations of profitability. This is the one justification that I can think of for the, in my opinion, not altogether well-judged manoeuvres in regard to the case of Rolls-Royce. So on the whole I think that the present wording is good enough.
Lord RHODES: My Lords, I have often advocated a good level of profit on the basis of being able to replace old machinery. In my view, the Minister gave an excellent reply when he called in aid the example of written down machinery. All we need to do is to look at any of the craft industries where the purchase of raw material is involved, the expertise in which has been handed down from father to son over the years so that they know where to go for the raw material and what to do with it. But for years the essence of written down machinery, for instance in the wool trade, has been that the expertise is in the hands of the operative who is able to do things with it. That is all right for a time, until the point is reached when you need to re-equip and then you start handing out millions of pounds just to catch up with what should have been done before. Let us keep in the word "efficiency", because if we substitute for it the word "profitability", we shall bless the spiv, and goodness knows we have had enough of them about during these last ten years! Who with any perspicacity at all has not absolutely writhed When at 10 o'clock in the morning a machine has been worth £1,000, and at 4 o'clock in the afternoon has been worth £2,000 and there has been no mention of the services of the man running it being any more valuable at all. So for goodness sake at this juncture keep profitability out of it but do not forget that without an adequate profit according to industry's need, you cannot succeed. This Amendment should be rejected.
Viscount MASSEREENE and FERRARD: My Lords, it may surprise your Lordships to know that I agree with the noble Lord, Lord Lovell-Davis, to a certain extent. For instance, Inter-City

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trains are efficient, but I understand that they do not make a profit. However, by the mere fact that they enable business men to move about the country very quickly, in a manner they help the profitability of the country. What the noble Lord, Lord Lovell-Davis, said, was quite right: you can make a quick profit if you run down your capital equipment in a factory, but I will not go along with him further than that. In my view, the National Enterprise Board must keep profitability in their sights as an A1 priority. I agree that one cannot always have it, especially in the public services, but when we get outside the public services I believe it is essential to keep profitability as the main objective.
Lord ABERDARE: My Lords, I think my noble friend has done a service by drawing attention in this Amendment to the problem of profitability and efficiency. I thought the noble Lord, Lord Lovell-Davis, correctly began by saying that perhaps they were opposite sides of the same coin, but he then rather went on to say that in certain circumstances they were contradictory.
Lord LOVELL-DAVIS: My Lords, I did not say that they were opposite sides of the same coin. In fact, I said the reverse of that: I said that they were mirror images of each other.
Lord ABERDARE: My Lords, does that not mean the same thing? I am not quite sure what "mirror image" means, but it seems to me that the two things are much the same. When I said "opposite sides of the same coin", I did not mean that they were opposed to each other but that they were part of the same coin. So I thought that that was helpful, but I think we are all agreed that it is no good having only efficiency. A company can go on being efficient for years and years, but if it does not make a profit it is not much good. Therefore, all we are asking the Government is to be sure that the National Enterprise Board have profitability within their long-range sights and that though they may seek efficiency in the short-term, they are operating with a view to ultimate profitability. I think my noble friend has made a valuable point.
The Earl of BALOUR: My Lords, must reply to what has been said. First,
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I would thank the many noble Lords who have spoken to this point, and I would particularly ask that in the directives that are given to the Board, besides obviously looking for efficiency, there will be brought in some form of profitability. Unfortunately so many of our nationalised industries at the present moment hardly meet that criterion. Furthermore, it is only by producing a profit from industry that one can accumulate the capital to put money back into that industry and constantly improve it. This is desperately important.
I have no intention of trying to delay the proceedings in your Lordships' House, but I think I must just say a few more words on Amendment No. 7. I thought the words. "in manufacturing industry" had been clearly defined in so many other parts of the Bill covering sales, services and even exports, but what I did not want to become an important function of the Board were matters such as banking or insurance, which I really do not feel the Board should enter into; certainly not in the first few years of their life. However, in view of what has been said, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.28 p.m.
Lord ABERDARE Lord ABERDARE moved Amendment No. 8:
Page 3, line 1, leave out ("industrial democracy in") and insert ("good industrial relations and the involvement of employees in the affairs of").
The noble Lord said: My Lords, this is a matter on which we had a considerable debate at the Committee stage and I do not intend to rehearse all the arguments that we went through at that stage. In broad outline, my objection to these words "industrial democracy" was that they are too vague; they can mean anything to anybody and they cannot be strictly defined. Moreover, we are laying a duty on the National Enterprise Board in exercising their functions to promote industrial democracy, and it seems to me quite wrong in a legal document to lay this legal obligation on the Board to do something that nobody can really define. There is a vast range of different definitions of which I gave some examples during my speech at the Committee stage.

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It can be interpreted by anybody in different ways, and I do not think it is good enough to lay such a legal obligation on the National Enterprise Board.
I have amended the original Amendment that I tabled at Committee stage in the light of the debate we then had, and straight away I say that I am extremely grateful to my noble friend Lady Elliot of Harwood because the present Amendment takes account of a suggestion she made to leave out the words, "appropriate means of involving employees in the affairs of". She made that suggestion, with which I wholly agreed, as a result of some criticism of the original Amendment made by the noble Baroness, Lady Wootton of Abinger. She took the view that my Amendment was too paternalistic, particularly, I think, because of the words "appropriate means". Therefore I have now left out those words and the result is a much simpler sentence,
"promoting good industrial relations and the involvement of employees in the affairs of undertakings which the Board control".
I also have studied what was said throughout that debate. I read again with great interest what was said by the noble Baroness, Lady Lee of Asheridge, who spoke about involving the minds and hearts of work people in the affairs of a concern. Therefore, I am content that we have the word "involvement" in the Amendment, which I hope will go some way to meet the point that she was making.
I believe that the noble Lord, Lord Bruce of Donington, preferred the words "worker participation" rather than "involvement of employees". I do not think there is any real difference between us in those phrases. I see no difference between the word "involvement" and the word "participation". The only reason why I prefer "employee" to "worker" is that the word "worker" so often refers only to the worker on the shop floor, whereas the people we want to involve in the business are all workers, both those on the shop floor and those in lower or middle management. One of the main problems in achieving the involvement of people on the shop floor with the top management is not thereby to bypass and exclude people in the middle management of the company. That is the reason why
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I think the word "employee" has a more exact meaning in this context than the word "worker".
I also read again what was said to me in reply by the noble Lord, Lord Lovell-Davis, but I find it rather difficult to believe that I shall ever convince him of the justice of my case, because he said at Committee stage—
"Noble Lords have argued that the term is imprecise, and unclear, but I think it is clear to all those who have thought objectively without unreasonable prejudice about the concept—"—[Official Report, 22/7/75; col. 172.]
I find it very difficult to argue if he is going to take the view that those of us who take another view have not thought objectively, and have not thought without unreasonable prejudice about this concept. Certainly if he were here I am sure that I would have the support of the noble Lord, Lord Taylor of Gryfe, who spoke very strongly when we were discussing the same matter on the Scottish Development Agency Bill and, with many others of your Lordships, took the view that this term "industrial democracy" was not only vague but had many dangers associated with it.
In an effort to persuade the noble Lord, Lord Lovell-Davis, that we have some justice in our case, I should like to ask him one question. Can he say objectively, and without unreasonable prejudice that the words which I have put in my Amendment would in any way restrict the sort of development in employee participation that he wants to see? Do they not cover fairly accurately what is at present the practice in those firms, both here and abroad which he mentioned in his speech, which are most advanced in employer/employee relations? Further, can he honestly say that the hopes that he may have for the future of the National Enterprise Board and all those future relationships with employees would be in any way adversely affected if the words which I have suggested, rather than this vague and undefined phrase "industrial democracy", go into the Bill? I hope he can ask himself that question honestly, and tell me whether he feels that the words have suggested are perfectly adequate and cover everything that is wanted. Would he not further agree that the words "industrial democracy" have all sorts of overtones that neither he nor I would necessarily think desirable? They could

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certainly be interpreted by those who so wish as worker control of industry.
In conclusion, I would say that those of us who are seeking a better definition are not unreasonably prejudiced. We see genuine dangers in the term "industrial democracy" which can easily be avoided by more precise words, and we think it wrong in a Statute which is laying legal obligations on the National Enterprise Board not to take some account of the necessity of being much more accurate in what we are asking them to do.
5.37 p.m.
Lord BRUCE of DONINGTON: My Lords, I thought that on the last occasion when we met in Committee I had succeeded in persuading the noble Lord, Lord Aberdare, to withdraw his objection to the words "industrial democracy". He expressed a few misgivings, but as I understood it when he sat down he agreed that on balance they would not do any harm. It seems that since the Committee stage his arm has been stiffened and some of his resolve has been fortified. We all know perfectly well what is implied by "industrial democracy". It means for those people who are working in an industry—and in using the term "working" I mean all those who work in it, and not merely those on the shop floor—the progressive attainment of a state in which they exercise more and more control over their own destinies, and over the firm in which they spend a very large part of their lives. Nowhere in this Bill are guidelines laid down as to when this should happen and what form it should take, but the trend is quite unmistakable. It means that instead of individuals, working within a company, being regarded as mere ciphers or being taken into confidence on a social basis in order to be a little more involved—whatever the term "involved" may mean—they progress gradually towards the time when they take an ever more decisive role in the conduct of the affairs of the enterprise in which they work.
My Lords, it seems almost impossible to drag the Tory Party into the second half of the 20th century. I am sometimes dismayed when I hear some of the obsolete and archaic arguments that proceed from the Party opposite. In
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Germany for 25 years, as I ventured to point out to your Lordships earlier, they have had a form of industrial democracy. They have two-tier boards in companies and the supervisory board has upon it a percentage of worker representation. This is accomplished by Statutes. It means that the people employed in German companies feel that they have a measure of control over the destiny of their companies, and over the main policies pursued by them. I venture to draw the attention of your Lordships to the fact that the German companies appear, by and large, to have had a rather more successful history over the last 25 years than have British companies. I have said many times that one of the reasons for this has been the considerably higher capital investment of German industry, but there is the other factor, too.
The fact of the matter is that the German worker working in these enterprises feels that he is participating far more closely in the activities of that company. One cannot ignore this. It is not a matter of pure coincidence that the performance of German companies has so far exceeded that of our own. The whole question of the worker feeling that he is part of the enterprise and sharing to some degree in its control has a most profound bearing on this. We have exactly the same position in France where, on a voluntary basis, although enshrined in Statute, they have the same kind of system. In Holland, too, they have exactly the same kind of democratic participation.
My Lords, as your Lordships will recollect, I was one of those to have some misgivings about entering Europe, about participating in the European Economic Community. We are now in that Community, and we should at least drag ourselves up to the standard of history achieved by the remainder of the EEC.
5.42 p.m.
Lord ROBBINS: My Lords, without entering into debate with the noble Lord, Lord Bruce of Donington, whose remarks I always find provocative and interesting, may I ask him whether in the German legislation, which is an extremely interesting subject at this time, the term "industrial democracy" occurs? I am all in favour of many experiments. The reproaches which the noble Lord has expressed to some Members of your Lordships' House, justifiably or unjustifiably,

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do not wring my withers at all. However, I must confess to very considerable intellectual objection to the introduction into Statute of imprecise words. Although it may be true, as the noble Lord contended, that one knows in a general way what the words "industrial democracy" may mean for some people or, indeed, what the word "democracy" means for some people, I should hesitate very much—and I speak subject to legal correction; there are distinguished lawyers in the House—to vote without considerable reserve for a Statute which alluded to political democracy. I learn from reading the Economist this weekend that in the European Economic Community, entry to which the noble Lord now acquiesces in, we are in a minority in the voting system which we practise in "political democracy". The majority of our partners in the European Economic Community have different habits. If these variations are possible under the term "political democracy", how many more variations are possible under the term "industrial democracy"? Therefore, casting aside ideology and acting simply in the interests of statutory precision, I plead with your Lordships to accept the more precise words which the noble Lord, Lord Aberdare, recommended to the House, rather than the vague terminology—useful enough in certain kinds of conversation—which the noble Lord Lord Bruce of Donington, is recommending to your Lordships.
Viscount MASSEREENE and FERRARD: My Lords, there is a short point in all this. An hour ago the noble and learned Lord the Lord Chancellor, when asked how to define the phrase "industrial democracy", said he could not define it. The noble and learned Lord said he did not know of any definition of "industrial democracy". Surely, therefore, the noble and learned Lord having said that, it would be wrong to insert in an Act of Parliament, the words "industrial democracy".
Lord LEATHERLAND: My Lords, if the noble Viscount, Lord Massereene and Ferrard, finds this difficulty in all walks of life, may I remind him that there is an old conundrum which says, "Can you define an elephant? No; but you can always recognise one."
Baroness GAITSKELL: My Lords, I wish we were not fighting so hard on this
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Amendment. I do not know whether it is because the noble Lord, Lord Aberdare, is so persuasive in his arguments. I find no very great fault in his words, nor do I find any fault in the words of the Government. We are spending a great deal of time on this Amendment. We are also exaggerating worker participation on the Continent. What I have learned about Germany is not quite the thing that I believe the noble Lord, Lord Bruce of Donington, thinks it is, nor is their success due entirely to worker participation. We all know this. Therefore, I really do not know what I should like to plead, but it seems to me we are taking a great deal of time on something on which there is not a great deal between us.
5.48 p.m.
Lord HOUGHTON of SOWERBY: My Lords, I sincerely hope we shall decide to retain the words "industrial democracy" in the Bill. They are, of course, imprecise, but if we attempt to make a more precise definition of what we mean in present circumstances, we shall run into quite a lot of trouble because at present, "industrial democracy" has not been defined. Any terms which at present are intended to define "industrial democracy" are bound to bring into question the big debate that has yet to take place on what we really mean by "industrial democracy". This is a concept. This is "social justice"; it is like "happiness" Until it is more clearly defined, it is better to retain words which are all-embracing, comprehensive and imprecise.
My Lords, my objection to the Amendment is that it is more precise than the words in the Bill. The words "good industrial relations" are mentioned. Industrial democracy goes quite a long way beyond good industrial relations. Good industrial relations can exist where there is no industrial democracy, so that is limiting. The noble Lord, Lord Aberdare, was asking the Minister to say honestly whether he thought the words of the Amendment were restrictive. I will give him my honest opinion—they are.
Several Noble Lords: Hear, hear!
Lord HOUGHTON of SOWERBY: My Lords, "good industrial relations" is restrictive. It is far too narrow as part of the definition of the wider concept which the words "industrial democracy"

1523
imply. The next words in the Amendment are "and the involvement of employees in the affairs of". Here is a question-begging set of words. When it comes to terms in present circumstances which are difficult to define, it is better to have words that beg all the questions than words that beg only some of them, because if you beg only some of them, you have to define the others. If I may say so, with great deference to the Bill and all those who drafted it, at the present time it is better to have meaningless words in the Bill until it is possible to make them more substantive.
The Committee of Inquiry announced this afternoon by the noble and learned Lord the Lord Chancellor is intended to put substance into the words "industrial democracy". This means that when the Committee reports, and when "industrial democracy" is given shape, size and meaning later on, it will not be necessary to amend this Bill, because the words "industrial democracy" will fit whatever is intended by the words "industrial democracy". If, however, we include the Amendment in the Bill, those words will be inadequate when the report comes out and when Parliament has decided on this wider concept of industrial relations. The noble Lord, Lord Robbins, asked if my noble friend Lord Bruce was aware whether the German law mentioned anywhere the words "industrial democracy". So far as I am aware, these words are not mentioned. Why? Because they are putting precise form, shape, powers and functions to "industrial democracy" in their very elaborate industrial relations law.
So, with great respect, is there some doctrinal difference here which runs so deep and is so important, which Lord Aberdare has not yet revealed? Does he feel there is something here which goes against the whole concept of ownership, the function of private enterprise, the rights of management, the functions of ownership? Whether this is the big divide which is being concealed behind this difference in words, I do not know. If it exists, then this debate is important, but if it does not exist, then I agree with my noble friend Lady Gaitskell that it is not worth while spending much more of the time of the House in deciding on the difference between the two.
1524
I apologise for intervening at this stage. I was not able to be in the House when this matter was debated before, but I should certainly have supported the retention of "industrial democracy" in the Bill. If I may say so, I urge this without any bias whatever in favour of one form of industrial democracy as against another. In the end we shall probably have to come to terms with many shifts of opinion and many new vistas of what people want out of life and what they want out of their work. I am more than ever convinced that there will be no social contentment, no political stability, no economic progress in this country until it is possible to ensure that the millions who work in industry today are going to get more satisfaction out of what they do.
Lord LOVELL-DAVIS: My Lords, as we are now all well aware, an Amendment very similar to this was discussed at considerable length at Committee stage, as the noble Lord, Lord Aberdare, pointed out. He asked me whether I thought the words in the Amendment were restrictive or did not fulfil the conditions we want to obtain. As my noble friend Lord Houghton of Sowerby has said, they are too weak. They simply do not contain the Government's intentions. This is how I feel about them; they simply do not contain the Government's intentions to bring about fundamental changes in attitudes and the balance of power and responsibility within industry.
I, like my noble friend Lord Bruce, am at a loss to understand why, having had to withdraw at the end of the very long discussion at Committee stage, noble Lords opposite now think it reasonable to bring the matter back before the House. I simply do not understand why noble Lords opposite are SD distressed by the term "industrial democracy". The phrase has been in common use for some time now, and it is the expression best able to convey the concept the Government have in mind. It seems to me that my noble friend Lady Gaitskell has put her finger on the crux of the matter in saying that we are taking an inordinate amount of time on this Amendment, and I agree with my noble friend Lord Houghton that obviously noble Lords opposite have

1525
in mind something which goes much deeper than the phrase itself. The noble Lord, Lord Aberdare, suggested that it is a vague term, and the noble Lord, Lord Robbins, referred to its lack of precision. In fact last year in another place, in answer to a Parliamentary Question, an explanation was provided which I think was a good one. I give it to the noble Viscount, Lord Massereene and Ferrard. Mr. Albert Booth said in another place:
"Industrial democracy' means ensuring that workers and their trades unions have an effective voice in decisions which affect their working lives."
The Government are committed to the far-reaching extension of industrial democracy and have announced their firm intention to introduce legislation in the 1976–77 Session. This afternoon's Statement by my right honourable friend the Secretary of State, repeated in your Lordships' House by my noble and learned friend the Lord Chancellor, indicated some of the preliminary steps the Government will take towards that end. It is right that the National Enterprise Board should be among the first to implement the proposals which the Government will make and that it should be in the lead in the promotion of experiments in industrial democracy. I say to the noble Lord, Lord Aberdare, that it is not a matter simply of convincing me—and he has not, as it happens. The Government are absolutely convinced that "industrial democracy" is the phrase which we must include in this Bill, and therefore we must resist the Opposition's repeated attempts to water down this function of the Board. I can only hope that the noble Lord will not press his Amendment.
Baroness HORNSBY-SMITH: My Lords, would the noble Lord please answer one point which I think is at the basis of our concern. He just quoted what he said was a very good definition, given in another place, of "industrial democracy", and he used the phrase "workers and their trades unions". There are 14 million people who work for their living and who are not in trade unions, and that is why our emphasis is on employees within the firm. There are many staff associations, professional associations. To a great many people in this country "industrial democracy", as it is voiced by many of the advocates from some of
1526
the unions, means that representation and participation will be only through the avenue of trade unions. We want to see all employees within a factory having the opportunity to be involved.
Lord DRUMALBYN: My Lords, if these words ultimately end up in the Bill as it is finally passed, if the Bill is finally passed, how will the National Enterprise Board show that they are performing this function? The purpose of their Annual Report is to report on the way in which they are performing their functions. How will they be able to report on how they are promoting industrial democracy? Perhaps the noble Lord would be able to tell us that. Would he also bear in mind that "industrial democracy" will be defined. At the moment it is a vague concept. The Statement that was made today by the noble and learned Lord on the Woolsack indicated that some flesh was to be put on that concept before very long. However, flesh perishes and changes can be made. The term "industrial democracy", unless it is defined in the Bill, or unless it is stated in the Bill that there will be a definition of it sooner or later, will, in my view, and I believe in the view of all on this side, prove to be totally impossible to interpret in terms of what the National Enterprise Board are called upon to perform.
Lord LOVELL-DAVIS: My Lords, the question which the noble Baroness, Lady Hornsby-Smith, asked anticipates another Amendment. As for that asked by the noble Lord, Lord Drumalbyn, I think it will become very clear as to how the National Enterprise Board are promoting this. It will certainly be very different compared with the total lack of participation which exists at present in most of our manufacturing industries. The purpose of the inquiry is to look into the way in which measures may be formulated to achieve these ends. I shall be in a much better position to answer his question and we shall all know a great deal more about the matter when the inquiry has reported, and I have no doubt that the sort of views and questions put by the noble Lord could be put forward to the committee.
Lord ABERDARE: My Lords, I have been literally astonished more than somewhat by the speeches that have been made by noble Lords opposite. To put it to

1527
me that I have no right to withdraw an Amendment in Committee and then return to the subject on Report with a different Amendment is quite astonishing coming from a Government spokesman. I have never heard such a thing said in this House before and I hope it will never be the practice. We discuss issues in Committee, we have a good discussion of them and various suggestions are made—and in this case there was an admirable suggestion from my noble friend Lady Emmet—and in this instance we have returned with a different Amendment on Report. I really find such statements from the Government astonishing.
The noble Lord, Lord Bruce of Donington, was back at his wheel with the same old story about Germany. We could debate that for hours—and the noble Baroness, Lady Gaitskell, put her finger on it when she said that conditions and the whole atmosphere in Germany are completely different. We could, as I say, debate this for hours, but as I told the noble Lord, Lord Bruce, when we last discussed this matter, the trade union organisation in Germany is very different, usually with one trade union to match each industry, which makes it rather easier, and the whole free enterprise system is very much further developed and more encouraged, I agree entirely with the noble Lord, Lord Robbins. It is totally wrong to put words into this Bill which we do not know how to define; and I was utterly amazed to hear the noble Lord, Lord Houghton of Sowerby, say—I think I quote absolutely accurately what he said—that it would be better to have meaningless words in the Bill. Coming from a Parliamentarian of his experience, to suggest that it would ever be better in a legal document to have meaningless words leaves me gasping.
Lord HOUGHTON of SOWERBY: My Lords, what the noble Lord, Lord Aberdare, has just said is really torn out of the context of my speech. I did not say that there was any virtue in having meaningless words in a Bill. I simply said that in the present circumstances it was better to express a concept than to go into definitions which, as of now, it would be extremely difficult to give without running into a great deal of trouble.
Lord ABERDARE: My Lords, I do not agree with the noble Lord that it is better to express a concept in a legal document. He spoke of concepts such as social justice and happiness, but I do not believe that "happiness" appears in a Statute; I rather doubt it. We are here talking of a legal document, and I feel that the words we have put forward cover everything we want to see in this relationship. For this reason I will not withdraw the Amendment.
Lord BESWICK: My Lords, I want to make it clear that my noble friend did not say that the noble Lord, Lord Aberdare, had no right to return with this Amendment. Of course the noble Lord has such a right, and he has exercised it. What I thought my noble friend was referring to with a degree of surprise was the fact that the noble Lord had returned to the subject, especially as the noble Lord, Lord Aberdare, said in Committee that there was nothing between us on this issue. He said at that stage that there was not much difference between what the Opposition and the Government were seeking to achieve. We had a very interesting debate and my noble friend was expressing surprise that the noble Lord had nevertheless returned to it.
It would be quite impossible to say that these words mean the same thing to all men, especially after my noble and learned friend the Lord Chancellor announced that we are to have a Commission to look into this very matter. Nevertheless, it is a fact that they have a certain meaning to most people, and it is now clear that noble Lords opposite are beginning to think that they may have some real meaning. That is what is agitating them; they fear there is something between us. We want to go beyond the idea of just good industrial relations. We want to go beyond just involving workpeople in their work. We want them to have a real say, and we believe that if they do have a real say there will then be good industrial relations. Exactly how it will work out and exactly what form it will take in any particular company will be a matter for the personalities involved.
I believe it would be a big mistake to go back to the watery and weaker wording suggested by the noble Lord, Lord

1529
Aberdare, and it would be a mistake also to try to go beyond what is said here and spell it out too clearly in legislation because we have not reached that point yet. It will be a matter for trial and error and experiment. There will be many companies throughout the country which will be seeking to get industrial democracy by rather different ways and it will be very interesting to see the sort of encouragement which will be given and the response we receive. I suggest, therefore, that we leave these words in the Bill. There is no danger in them and no damage will be done. It will be something of a challenge. It is a new phrase which we believe should be incorporated in this legislation.
Lord POPPLEWELL: My Lords, I hope I can persuade the noble Lord, Lord Aberdare, to change his mind about not withdrawing the Amendment because, speaking from practical experience, I assure him that his proposed wording is imprecise, to say the least. We have a genuine desire today on the part of the most advanced industries, particularly the publicly-owned ones, to have good relations involving the workers in the workings of their industries. We have established, particularly in the nationalised industries, consultative committees which take into account the sort of words the noble Lord has used in his Amendment, but that is not sufficient for the future. I agree at once that "industrial democracy" is an imprecise phrase, but there are many different schools of thought at present about the sort of industrial democracy which should develop and how much involvement we want; for example, do we want workers on the boards of directors or should workers divorce themselves, as it were, from the employing side of boards?
Already the idea behind the concept of industrial democracy is generally accepted as a development for the future
as a result of the ordinary progression of industrial relations. I therefore agree with my noble friend Lord Houghton of Sowerby that though this may be a somewhat imprecise phrase, it is one that should be used to enable steps to be taken in future so that employees may be more intimately involved in the undertakings in which they are employed. Thus, I would rather have an imprecise phrase like "industrial democracy" in the Bill than the words suggested in the Amendment, which would not enable us to progress beyond the position at present prevailing in industry. Let us move with the times and, in so important a Bill as this, use a phrase like "industrial democracy" which will enable us to go forward with the general trend of thought in most major industries.
Lord PLATT: My Lords, I agree with the view expressed by the noble Lord, Lord Popplewell. Listening from a neutral Bench and a neutral point of view, I am more impressed by his argument than by any others I have heard on this issue. Despite the persuasive tones of the noble Lord, Lord Aberdare, whose sincerity I never question, I feel that the wording of his Amendment still smacks just a little of the paternalism for which it was originally criticised. I agree that the term "industrial democracy" does not mean the same to everyone; nevertheless, it gives wider scope for the development of what noble Lords in all parts of the House hope may be the development of the future. In spite of the speeches of the noble Lords, Lord Bruce and Lord Houghton, I intend to vote with the Government.
6.10 p.m.
On Question, Whether the said Amendment (No. 8) shall be agreed to?
Their Lordships divided: Contents, 71; Not-Contents, 66.

CONTENTS

Aberdare, L.

Carrington, L.

Falkland, V.

Alport, L.

Cowley, E. [Teller.]

Ferrers, E.

Atholl, D.

Cullen of Ashbourne, L.

Fraser of Kilmorack, L.

Auckland, L.

Daventry, V.

Goschen, V.

Balfour, E.

de Clifford, L.

Gowrie, E.

Balfour of Inchrye, L.

Denham, L.

Grenfell, L.

Belstead, L.

Deramore, L.

Hailsham of Saint Marylebone

Berkeley, B.

Drumalbyn, L.

Hankey, L.

Birdwood, L.

Elles, B.

Hanworth, V.

Bridgeman, V.

Elton, L.

Harmar-Nicholls, L.

Campbell of Croy, L.

Emmet of Amberley, B.

Hereford, V.

Hornsby-Smith, B.

Monson, L.

Sandys, L.

Hylton-Foster, B.

Mowbray and Stourton, L. [Teller.]

Sempill, Ly.

Killearn, L.

Somers, L.

Kinnoull, E.

Nelson of Stafford, L.

Strathclyde, L.

Lauderdale, E.

Newall, L.

Strathspey, L.

Lindsey and Abingdon, E.

Northchurch, B.

Sudeley, L.

Long, V.

Pender, L.

Terrington, L.

Lyell, L.

Rankeillour, L.

Teviot, L.

Macleod of Borve. B.

Reay, L.

Tweedsmuir, L.

Massereene and Ferrard, V.

Redesdale, L.

Vickers, B.

Merrivale, L.

Reigate, L.

Vivian, L.

Meston, L.

Robbins, L.

Young, B.

Monck, V.

St. Aldwyn, E.

NOT-CONTENTS

Arwyn, L.

Gardiner, L.

Pitt of Hampstead, L.

Aylestone, L.

George-Brown, L.

Platt, L.

Balogh, L.

Gordon-Walker, L.

Popplewell, L.

Beswick, L.

Goronwy-Roberts, L.

Raglan, L.

Birk, B.

Hale, L.

Rhodes, L.

Blyton, L.

Hamnett, L.

Ritchie-Calder, L.

Brockway, L.

Henderson, L.

St. Davids, V.

Bruce of Donington, L.

Houghton of Sowerby, L.

Segal, L.

Burton of Coventry, B.

Hoy, L.

Shepherd, L. (L. Privy Seal)

Castle, L.

Jacques, L. [Teller.]

Shinwell, L.

Champion, L.

Janner, L.

Slater, L.

Collison, L.

Kilbracken, L.

Stedman, B.

Crook, L.

Kissin, L.

Stewart of Alvechurch, B.

Crowther-Hunt, L.

Leatherland, L.

Stow Hill, L.

Davies of Leek, L.

Llewelyn-Davies of Hastoe, B.

Strabolgi, L. [Teller.]

Donaldson of Kingsbridge, L.

Lovell-Davis, L.

Taylor of Mansfield, L.

Douglass of Cleveland, L.

McLeavy, L.

Wallace of Coslany, L.

Elwyn-Jones, L. (L. Chancellor.)

MacLeod of Fuinary, L.

Wells-Pestell, L.

Feather, L.

Mais, L.

White, B.

Fisher of Rednal, B.

Melchett, L.

Wigg, L.

Foot, L.

Pannell, L.

Winterbottom, L.

Gaitskell, B.

Phillips, B.

Wynne-Jones, L.

Resolved in the affirmative, and Amendment agreed to accordingly.
6.18 p.m.
Lord RAGLAN Lord RAGLAN moved Amendment No. 9:
Page 3, line 6, leave out subsection (3).
The noble Lord said: My Lords, I do not desire to remove this subsection but to raise a matter relating to a point which I made at the same place during the passage of both the Welsh and the Scottish Development Agency Bills, which are scions of the present Bill. My noble friend Lord Lovell-Davis will remember that we had quite an argument about this point. In the present Bill, the Government have entirely met my objections by the inclusion of five words. If I had been as clever as the Parliamentary draftsmen, I should have thought of them myself and put down Amendments to insert them into the Development Agency Bills. I do not doubt that the Government would have been happy to accept them.
I should like to read a similar passage from the Scottish Development Agency Bill. It says that
1532
"The Agency may do anything, whether in Scotland or elsewhere, which is calculated to facilitate the discharge of their functions or is incidental or conducive to their discharge."
This Bill has met my objections. I shall not go over my arguments again, but I was horrified at the vision of the almost unlimited power which the subsection would give to the Agency. The five words "specified in subsection (2) above", which we have in this Bill, make all the difference and now all is as right as possible.
I should like to ask my noble friend whether he would use his good offices to obtain the same wording in the equivalent clauses of the Agency Bills in their passage through the Commons. This is a most important matter, because if the Amendments are not made the subsection will be wide open to misintepretation. In my view, it is vital that the Board's functions are defined as those in the previous subsection; in other words, that they are those functions which are specified by Parliament.
Lord LOVELL-DAVIS: My Lords, I am obliged to my noble friend Lord

1533
Raglan for agreeing to withdraw his Amendment, and I am delighted to know that we have met the case by including in the Bill the words to which he refers. I well remember our discussion during consideration of the Welsh Development Agency Bill. I shall certainly draw my right honourable friend's attention to what my noble friend said, and no doubt he will read it in Hansard. I cannot of course make any promises on his behalf.
Lord RAGLAN: My Lords, I am very grateful to my noble friend, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.23 p.m.
Lord ABERDARE Lord ABERDARE moved Amendment No. 10:
Page 3, line 13, at end insert ("when this would be incidental to the reorganisation of any of their subsidiaries or in the course of the exercise by the Board of powers derived from the provisions of section 3 of this Act or in pursuance of the operation of a partnership made in accordance with paragraph (c) of this sub-section".
The noble Lord said: My Lords, this Amendment follows on a discussion we had at the Committee stage on the power of the Board to form bodies corporate. At the Committee stage we put down two Amendments, Nos. 26 and 36. Amendment No. 26 amended the purposes for which the Board may exercise their functions under Clause 2. The purpose of our Amendment was to remove from those functions one of establishing new industrial undertakings. When I was speaking to Amendment No. 26, I also spoke to what was Amendment No. 36 at the Committee stage, to form bodies corporate, because it seemed to me that these two matters went hand in hand, and Amendment No. 36 was merely consequential on Amendment No. 26.
I had as a precedent for thinking that, the fact that the same procedure was followed in the case of the Bills dealing with the Welsh and Scottish Development Agencies. But when I came to move my Amendment, which was to exclude the words, "to form bodies corporate", I was told by the noble Lord, Lord Beswick, that there were some difficulties and some genuine reasons why it was important that the National Enterprise Board should have powers, in certain circumstances, to form bodies corporate. The fundamental difference
1534
between us remains. We have already divided on the question of establishing new enterprises, and we are still completely of the opinion that the National Enterprise Board should not have the power to set up companies of their own in competition with existing companies in the private sector. When we debated this matter in Committee I do not think it was fully realised that we are fundamentally opposed to this power of the National Enterprise Board.
Of course we welcome free and fair competition, but we do not see State owned, State directed and State financed companies as providing either fair or free competition. Therefore, we are anxious to remove these words, "to form bodies corporate" from the Bill, following on the previous removal of the word "establishing" from the previous clause. But at the Committee stage the noble Lord, Lord Beswick, produced one or two reasons, and he said, in particular, that the Board might need to form bodies corporate in certain circumstances. One of these could well be in carrying out their duties under the 1972 Industry Act. Another could be in connection with the reorganisation of companies already within the Board's ambit or control. Another circumstance that occurred to me, was that it might be necessary for the Board to set up a new company when they were exercising another of their purposes, which was to form partnerships with other companies in the private sector.
The new Amendment which I am now moving covers these points. It gives the noble Lord his point that there are certain circumstances, which are defined in the Amendment, when it would be necessary to form bodies corporate, but it excludes the power of the Board to form bodies corporate on their own account in competition with companies in the private sector, which is the consequence of our previous Amendment which was carried at the Committee stage, and which follows on from similar Amendments which we moved to the Welsh and Scottish Development Agency Bills. I beg to move.
Lord MELCHETT: My Lords, as the noble Lord, Lord Aberdare, said, there is a fundamental difference between noble Lords opposite and those on this side of the House on this issue. I wonder whether noble Lords opposite appreciate

1535
the consequences of the Amendments which they have already made, to which the noble Lord referred, and the one which the noble Lord is now moving. The power to establish new undertakings was included in the Bill for a reason. It was particularly designed to enable the Board to build new factories and create new employment in areas of the country which have been deprived of much needed new investment. It was to provide a new weapon in the armoury of regional measures to replace declining industries in the hardest hit English assisted regions.
The National Enterprise Board will be in a position to assess on a wholly rational basis whether new investments can be sited in the areas of greatest need. Such considerations are often ignored by private industry. I am glad that nothing that was said at the Committee stage has prevented the noble Lord, Lord Aberdare, from coming back with an Amendment now. Indeed, my noble friend Lord Beswick said at the Committee stage that the noble Lord was free to do anything he liked on Report. My noble friend did not add "however disastrous", but I suppose that it may have been implicit in what he said.
The Board's power to establish industrial undertakings will be restored in another place by those who have the responsibility for trying to meet the needs of the assisted areas. Noble Lords opposite have already demonstrated that they place their devotion to Party dogma above their responsibility to the assisted regions. If they carry this Amendment, they will show that that was no mere misguided aberration, but that they are prepared to do further damage to the most deprived areas of this country for straightforward Party political reasons.
Lord BALFOUR of INCHRYE: My Lords, I find the speech by the noble Lord rather out of keeping with the general debate we are having on Report stage. I find it rather offensive, as it brings in Party issues which we have rather kept away from so far. I sincerely hope that the noble Lord, who is very young, will learn a little as his experience gets greater.
Lord ABERDARE: My Lords, I am afraid that I must agree with what was said by noble friend Lord Balfour of Inchrye. I found that reply offensive
1536
and not the least bit helpful. To imply that those who sit on this side have no regard for the assisted areas—particularly those who, like myself, come from one of them—would be a libel outside this House. I resent it very much. We did a great deal for the assisted regions when in Government. I do not want to start slinging brickbats; but if the noble Lord looks at the unemployment figures in the assisted regions since his Government came into power he might think twice.
This is an imporant point. We have argued it before. We do not see that the public sector should be increased in this way by a formation of companies run by the National Enterprise Board in competition with private industry. We see plenty of other ways in which the National Enterprise Board can be of great assistance, working through and with private enterprise. These are all defined earlier on in the Bill where, apart from establishing industrial undertakings (which we object to) they will have the functions of maintaining, developing, promoting and assisting the establishment, maintenance or development of any industrial undertaking. There are plenty of ways in which the National Enterprise Board, with all their financial power and other functions, can stimulate new industry in the assisted areas without itself setting up companies in competition with, or as substitution for, those which could well be set up with the encouragement of the Board in partnership with private industry.
We have argued it before and divided on it. It would be illogical now to allow these words to remain in the Bill as they are. I have no comment whatever on the Amendment I put down, which was designed to meet difficulties envisaged by the noble Lord, Lord Beswick. As I have had no answer on that, I presume there is no answer and that these words will meet his needs. Therefore I am happy with my Amendment.
Lord BESWICK: My Lords, perhaps I could say a few words after what the noble Lord, Lord Balfour of Inchrye, and the noble Lord, Lord Aberdare, have said. It may be that my noble friend is looking at this Bill and at these proceedings in the rather uncomplicated way of someone with less experience than the

1537
noble Lord; but that uncomplicated way is a very genuine and sincere way. Noble Lords opposite must not misinterpret what they are doing to this Bill. This House is not being a Revising Chamber for this Bill; it is degutting it. There are policies that we have thought out carefully and have brought to the other place as a Bill. It has been looked at carefully by the other place as a Bill and they have settled the principles. It comes to us for revision and we have made Amendments, some of it which have been improvements. But matters of principle have been taken out of the Bill by this House, and, in those circumstances, my noble friend is justified in calling attention to it.

CONTENTS

Aberdare, L.

Gladwyn, L.

Newall, L.

Alport, L.

Goschen, V.

Northchurch, B.

Atholl, D.

Gowrie, E.

Pender, L.

Auckland, L.

Grenfell, L.

Rankeillour, L.

Balfour, E.

Hailsham of Saint Marylebone, L.

Redesdale, L.

Balfour of Inchrye, L.

Reigate, L.

Banks, L.

Hankey, L.

Rochester, L.

Beaumont of Whitley, L.

Hanworth, V.

St. Aldwyn, E.

Belstead, L.

Harmar-Nicholls, L.

St. Davids, V.

Berkeley, B.

Hereford. V.

Sandford, L.

Birdwood, L.

Hornsby-Smith, B.

Sandys, L.

Campbell of Croy, L.

Hylton-Foster, B.

Sempill, Ly.

Carrington, L.

Killearn, L.

Somers, L.

Colville of Culross, V.

Kinnoull, E.

Strathclyde, L.

Cowley, E. [Teller.]

Lauderdale, E.

Strathspey, L.

Cullen of Ashbourne, L.

Lindsey and Abingdon, E.

Sudeley, L.

Daventry, V.

Long, V.

Terrington, L.

de Clifford, L.

Lyell, L.

Teviot, L.

Denham, L.

Massereene and Ferrard, V.

Trefgarne, L.

Deramore, L.

Merrivale, L.

Vickers, B.

Elles, B.

Meston, L.

Vivian, L.

Elton, L.

Monck, V.

Young, B.

Emmet of Amberley, B.

Mowbray and Stourton, L. [Teller.]

Ferrers, E.

NOT-CONTENTS

Arwyn, L.

Gardiner, L.

Pitt of Hampstead, L.

Balogh, L.

Gordon-Walker, L.

Platt, L.

Beswick, L.

Goronwy-Roberts, L.

Popplewell, L.

Birk, B.

Hale, L.

Raglan, L.

Blyton, L.

Hamnett, L.

Rhodes, L.

Bruce of Donington, L.

Henderson, L.

Ritchie-Calder, L.

Burton of Coventry, B.

Hoy, L.

Segal, L.

Castle, L.

Jacques, L. [Teller.]

Shepherd, L. (L. Privy Seal.)

Champion, L.

Janner, L.

Shinwell, L.

Collison, L.

Kilbracken, L.

Slater, L.

Crook, L.

Kissin, L.

Stedman, B.

Crowther-Hunt, L.

Leatherland, L.

Stewart of Alvechurch, B.

Darling of Hillsborough, L.

Llewelyn-Davies of Hastoe, B.

Stow Hill, L.

Davies of Leek, L.

Lovell-Davis, L.

Strabolgi, L. [Teller.]

Donaldson of Kingsbridge, L.

McLeavy, L.

Wallace of Coslany, L.

Douglass of Cleveland, L.

MacLeod of Fuinary, L.

White, B.

Elwyn-Jones, L. (L. Chancellor.)

Mais, L.

Wigg, L.

Feather, L.

Melchett, L.

Winterbottom, L.

Fisher of Rednal, B.

Pannell, L.

Wynne-Jones, L.

Gaitskell, B.

Phillips, B.

Resolved in the affirmative, and Amendment agreed to accordingly

Lord ABERDARE: Perhaps I could add one other word. We, too, on this side of the House, have matters of principle which we care about. If the noble Lord and the Government decide on a princple, that is all right; but they cannot expect always to carry us with them.
Lord BESWICK: My Lords, I am saying that this Chamber is a Revising Chamber. It is not a Chamber which settles policies of this kind.
6.34 p.m.
Their Lordships divided: Contents. 68; Not-Contents, 51.
6.42 p.m.
Lord ABERDARE Lord ABERDARE moved Amendment No. 11:
Page 3, line 24, at end insert—
("( ) In the exercise of their functions and in the carrying out of activities as prescribed in this section and generally in this Act, it shall be the Board's duty to have regard to guidelines which shall be set out for them by the Secretary of State and given by him to the Board in the form of a direction under section 7 of this Act.")
The noble Lord said: My Lords, this Amendment seeks to make it the Board's duty to have regard to guidelines which are to be set out by the Secretary State, and which will be given to the Board in the form of a direction and Clause 7 of this Bill. The Amendment has been put down in consequence of an undertaking given at Second Reading by the noble Lord, Lord Lovell-Davis, on the issue of guidelines. At column 992 of Hansard on 10th July he said:
…"The noble Lords, Lord Aberdare and Lord Drumalbyn, have asked for guidelines for the NEB to be made available to this House. This I can guarantee."
But he went on:
"I cannot indicate any expectation that this will he done before the Committee stage."
We are anxious that these guidelines should be available to the House before this Bill leaves us. They will no doubt play a very important part in the way in which the National Enterprise Board act, and I think that we ought to be sure we have seen them properly and have had time to consider them before we leave consideration of this Bill. I hope, at least, that if the noble Lord is not able to accept the Amendment, he will be able to assure us that the guidelines will be made available in the very near future, and certainly before we come to the Third Reading of this Bill. It rather underlines the importance of spacing out various stages of this Bill, and not rushing through it, giving it inadequate consideration and, as was at one time suggested, moving the Third Reading immediately at the end of the Report stage, because there are still important matters which we wish to probe further, and one of these matters is the guidelines which have been promised to us ever since the Bill was in another place. I beg to move.
Lord BESWICK: My Lords, the Amendment requires the Government to issue guidelines to the Board. I am not
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certain why the noble Lord wishes to put Amend this in a Statute. We have already given an undertaking that this will be done. There will be guidelines. The Amendment also requires that these guidelines shall be followed under a directive from the Secretary of State. There are already powers in the Bill to enable the Secretary of State to issue a directive to the Board, but it is unnecessary to have a specific directive related to the guidelines. I suggest, in view of the undertaking given about the guidelines, that it is unnecessary to state in the Bill that there will be guidelines. Therefore, I hope that the noble Lord will not wish to press this Amendment, since he is getting everything he wishes on the basis of assurances which have already been made.
The noble Lord also relates to his Amendment the question of when the guidelines will be published. We gave absolutely no undertaking in the other place or here as to whether they would be published before the Bill. It was thought it would be unwise and probably premature to issue them before the Bill went through its various stages, partly because the CBI still had to be consulted on certain points, and partly because the TUC still had to give its opinion on certain points. Also, there is the general reason, that if one has guidelines laid before the Bill is law, they may or may not relate to what will be in the Act. If there is one conclusive argument against laying the guidelines down, it is the action which has been taken by the Opposition in this House to "degut" the Bill. It is impossible to devise guidelines for this Bill until we know what will emerge from this House.
Lord DRUMALBYN: My Lords, I think it would be convenient if we discussed my Amendment No. 16 now, which deals with a similar point. That Amendment meets some of the points which the noble Lord has made. It specifies a period of two months after the establishment of the Board when the guidelines will be issued. It says:
"…the Secretary of State Shall within two months of the establishment of the Board, and whenever he considers it necessary or expedient thereafter, issue guidelines to the Board…"
They will not be the subject of a directive. It continues:
"…and it shall be the duty of the Board to carry out their functions in accordance therewith."

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If the noble Lord had been on this side of the House he would never have accepted this simply because an assurance had been given from that side of the House. It ought to be in the Bill. When in Government we were constantly being told to put things in Bills. This seems a proper and desirable thing to have in the Bill. I hope the noble Lord will at least look at my Amendment, even if he does not like my noble friend's Amendment.
Baroness GAITSKELL: My Lords, this Bill is so complicated and so detailed that, unless they have not read it with enough care, noble Lords opposite, when asking for guidelines, are asking for a gilding of the lily—or whatever the phrase is. To ask for guidelines after you have read the Bill through and are either trying to understand it as I do, or to understand it as I hope noble Lords opposite do, is really unnecessary.
Lord ABERDARE: My Lords, in reply to what the noble Baroness, Lady Gaitskell, said, it is the Government who have suggested that they will issue guidelines. In the course of the debates in another place, the Government came forward with an offer to issue guidelines to the Board in order to assuage some of the criticism which had been made of the NEB. I am only arguing for something which I am certain the noble Lord would have argued for if he had been on this side of the House. If the Government say that they will issue guidelines to the Board which will give the Board some general ideas as to how they wish them to operate, it is not right to put the Bill through both Houses of Parliament before anybody in either House has seen the sort of guidelines that will be issued. We have had this time and time again on various Bills, where there have been extraneous documents referred to as concerning the Bill, and Members of your Lordships' House—and, even more, Members of another place—have argued that they really cannot consider the Bill properly unless they have seen these other documents.
I agree that no absolute undertaking was given that these guidelines should be available before we completed our deliberations on the Bill, but I had rather hoped that the noble Lord would be able to say that indeed they would be available
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for our consideration before we part with the Bill. If the noble Lord could only give me that assurance, I do not necessarily want to write full details into the Bill. I was really endeavouring to get some assurance from the noble Lord that we should have some sight of the guidelines which the Government are committed to issuing before the Bill finally leaves this House. However, if the noble Lord is not in a position to give me that assurance I will leave the matter as it is and return to it on Third Reading. In the meantime, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.52 p.m.
The Earl of BALFOUR The Earl of BALFOUR moved Amendment No. 12:
Page 3, line 24, at end insert—
("(4A) For the avoidance of doubt it is hereby declared that the power of the Board to acquire or dispose of securities shall only be by agreement with the company concerned.")
The noble Earl said: My Lords, this Amendment is intended to make it absolutely clear beyond doubt, as has appeared in one or two other places in the Bill, the expression "for the avoidance of doubt ". Speaking of what has now become Part I of the Bill, the noble Lord, Lord Beswick, said quite correctly during Committee stage that this Bill contained no power to take over anyone or any thing except by agreement. The noble Lord went on to say that the Board may give assistance under the Industry Act 1972, and he continued in column 134 on 21st July:
"…they may move in where there is need for a joint venture; they may move in where there is participation in reorganisation; they may move in where there is need to create employment in a certain area or to create new industrial capacity; they may move in when it is necessary to prevent a British company from passing into unacceptable foreign ownership."
I should like to draw your Lordships' attention to the fact that, as the Bill stands, the Board have extremely wide powers in being able to acquire the shares of any company, and although in certain cases this could be done only with the approval of the shareholders concerned, I feel that if they are to be as honourable a body as I am sure the Government hope they will be, then let us not leave any doubt concerning this point. Perhaps I might refer also to the extremely interesting speech made by the

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noble Lord, Lord Stow Hill, also on the same day of the Committee stage. In column 143 the noble Lord said this:
"All I am asking my noble friend to do is to look at this again between now and Report stage to see whether he does not think that that wording should be reconsidered in order to make it clear that consent is absolutely necessary."
I raise this point in order to ask the Government to make certain that consent is given before the Board either acquire or dispose of securities. That is all I am asking. If your Lordships will look at the beginning of subsection (4) this says that the Board shall have power:
"(a) to acquire, hold and dispose of securities."
Then it goes on in subsection (3) as had already been mentioned, to say that the Board may do anything which is calculated to facilitate the discharge of their functions or which is incidental to their discharge.
It is purely and simply to make this clear and precise that I feel these words should go in, and I beg to move.
Lord BESWICK: My Lords, there is really no question of doubt here. I beg the noble Earl to believe this: there is no question of doubt whatsoever. The Board will be able to take over shares even though the board of the company whose shares it is proposed to acquire do not give their consent. No one has ever suggested that the board of a company should acquiesce in the purchase of shares by the National Enterprise Board from a willing seller. Perhaps we might think of it in this way: supposing the noble Earl holds a block of shares in a company and he thinks that company is not being properly run, and would like to dispose of those shares. Supposing the NEB come along and think that they can add their expertise and make a contribution, and they offer to buy from the noble Earl his holding in that company—is he really saying that that purchase from him as a free agent should be vetoed by the board of the company? Surely that cannot be what he would like to see.
I therefore say again that the National Enterprise Board will have no power at all to acquire compulsorily any stocks or securities of any company at all. They have no powers to take over anything compulsorily. But the noble Earl goes further: he is saying that the board of
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a company should have the right of veto. We all know that there are cases when the Board does not wish to see shares change hands and they do not wish to see an institution or another company coming in or buying in the open market. They may argue against that, and they are free to do so; but there should be no right given to them to stop a transaction as between a willing buyer and a willing seller. I would hope that the noble Earl would not try to suggest that there is any doubt. There can, and will, be no doubt on this point.
The Earl of BALFOUR: My Lords, perhaps I may carry this a little further. May I remind your Lordships that under the provisions of this Bill Section 7 (5) of the Industry Act is being repealed. Let us look at the provisions here:
"Where financial assistance is given under this section by acquiring shares or stock in a company, the Secretary of State shall dispose of the shares or stock as soon as, in his opinion, it is reasonably practicable to do so; and before making the disposal the Secretary of State shall consult the company."
This was a provision which was put in by the Conservative Government. I would have thought it was a perfectly sensible safeguard, intended to ensure that some consultation shall take place between a company and the Secretary of State or, in this case, the National Enterprise Board, before shares or stock are either acquired or sold. As it is, so far as I can see, under the Bill once the National Enterprise Board have acquired the stocks or shares it is going to be difficult for the company concerned ever to regain control of that company; and I think the chance the National Enterprise Board have to sell stock is very narrow. I think it is a pity that this part is being repealed, because even if the NEB have been substituted for the Secretary of State in this clause, it at least gives a chance for it not to become just a means of nationalising industry to a great extent, which concerns me. It would not concern me anything like as much if the nationalised industries made a profit. They are not making a profit—or very few, and very seldom. This subject concerns me, and I put down this Amendment to clear up the point that some consultation shall take place. My intention was to put that beyond doubt.
Lord BESWICK: My Lords, may I with the leave of the House reply to this

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point? The noble Earl asks that some consultation shall take place. In the majority of cases I have no doubt that there will be consultation, but there are certain cases when there is a difference of interest as between the shareholders, or some of the shareholders and the board of the company. In those cases it is intended that it should be possible for the board, as I have said, as a willing buyer, to buy from a willing seller of shares. That is clear and I hope that the noble Earl will not endeavour to make it less clear.
He has, however, quite fairly called attention to the provisions of the Industry Act 1972. I would put to him that the situation there was very different. That Act was designed to help in the main companies that were in trouble. It would not in those circumstances be appropriate just to buy shares in the market; that would not necessarily help a company in trouble at all. In those cases it would be more usual for new equity to be created and for that equity to be bought with Government money. In that case there must be consultation with the company. It is not possible, as the noble Earl will know, to issue new equity unless the company agrees to it. There are therefore very different circumstances so far as the 1972 selective financial assistance provisions are concerned compared to what we are seeking to do here.
On Committee stage I said that there was one exception to this firm rule that there can be no compulsory acquisition; namely, any company under the Companies Act—I think it is Article 209—can have power to acquire another company compulsorily, but that is a minimal power and there are qualifications to it.
The Earl of BALFOUR: My Lords, I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
7.3 p.m.
Lord ABERDARE Lord ABERDARE moved Amendment No. 13:
Page 3, line 29, at end insert—
"(6) Whenever the Board acquires or holds securities or forms bodies corporate in accordance with the provisions of subsection (4) above, either directly or through any of their subsidiaries, neither the Board nor any such subsidiary shall acquire or hold share capital
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of a body corporate otherwise than in the name of the Board or subsidiary as the case may be, save only that the Board or subsidiary may acquire or hold shares through a nominee or nominees to the extent and only to the extent that such acquisition or holding through a nominee or nominees shall be necessary to prevent infringement of the provisions of the Companies Acts, and no such nominee shall acquire or hold as a nominee more than one share in any such circumstances."
The noble Lord said: My Lords, I beg to move Amendment No. 13. This again arises out of a discussion we had at the Committee stage on nominee shareholdings. The noble Lord will reoollect that the Amendment we moved at Committee stage said that,
"neither the Board nor any of their subsidiaries shall acquire any of the share capital of a body corporate otherwise than in the name of the Board or subsidiary as the case may be."
I was delighted when the noble Lord, Lord Beswick, replied to the effect—and I quote his words:
"Nothing would give me greater pleasure than to accept this Amendment."
He went on to explain that there was a technical difficulty in that it was not possible to require the Board always to act in their own name because they had, under the Companies Act, obligations to have more than one shareholder. The Companies Acts require that a public company must have at least seven members, and a private company at least two members—the members in this case having the same meaning as shareholder. So, as a result of this, if the Board were wishing to take over an existing company as a wholly owned subsidiary, the Board itself cannot be the single direct owner of all the shares in that other company. It would have to arrange that in the case of a private company there was at least one other shareholder who was bidding for the shares; in the case of a public company there would have to be at least six other shareholders.
Therefore, this Amendment seeks to make it possible for the noble Lord to have the pleasure of accepting the Amendment I put forward before, but it gives the Board the right to use its nominee shareholders in bidding for full control of a company but they are limited to one share each. There is no doubt at all about the legal requirements. There have to be seven shareholders in a public company. But it would seem to me

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perfectly easy for the other six shareholders to be limited to one share. Certainly there is no legal reason why they should not be limited to one share. The effect of it would be that when a company's shares were being bought then, except for six shares in the name of the six outside shareholders, the other shares would be being bought in the name of the National Enterprise Board themselves or of the particular subsidiary company that was concerned. This gives considerable reassurance to industry on the subject of warehousing. We are at one, I know, on warehousing. The noble Lord has himself undertaken that the NEB will not go in for warehousing. At the same time, as one knows very well, assurances are perfectly valid but it is far better to have something properly laid down in the Bill; and it seemed to us that this was a way in which we could accomplish our common purpose. I am sure that the noble Lord is going to accept the Amendment. My Lords, I beg to move.
Lord MELCHETT: My Lords, my noble friend is not going to accept the Amendment and I am afraid that I am not going to, either. My noble friend Lord Beswick has given your Lordships a complete assurance that the National Enterprise Board will in no circumstances engage in the practice known as warehousing; that is, building up substantial shareholdings surreptitiously, using associates. As I understand it, this proposed Amendment would not prevent the practice of warehousing, because as I understand the term, it means carrying out such clandestine operations, not through nominees but with formally independent associates. Let us be clear that if the Board and their nominees, or a Board subsidiary and its nominees, acquired 10 per cent. of the shares in a company it will be necessary, under Section 33 of the Companies Act 1967, to notify the company concerned. That is already laid down and that law will apply to the National Enterprise Board and their subsidiaries in just the same way as it applies to any other company. Presumably, therefore, this Amendment is designed to prevent the National Enterprise Board from making use of nominees while they are building up a shareholding of less than 10 per cent. That
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in practice can be the only point of the Amendment.
The Government have been at great pains in the drafting of the Bill to ensure that the National Enterprise Board will have no special privileges not enjoyed by companies in the private sector. But this principle must in our view cut both ways. This Amendment seeks to place restrictions on the Board which are not placed on normal companies. If ordinary, respectable companies can act through nominees when appropriate, there is no reason, in our view, why the National Enterprise Board should not do so as well.
The last time I was on my feet I was taken to task by the noble Lord, Lord Aberdare, for, as I saw it, underlining the perfectly proper but nevertheless existing fundamental differences in political philosophy which divide either side of the House. I regret to say that I think this fundamental difference is brought to bear on this particular Amendment. It seems to me that this is a good example of those who say that they believe in the principles of competition doing all they can to hinder competition from the National Enterprise Board.
Lord DRUMALBYN: My Lords, the noble Lord should try to look at this matter from the point of view of companies, and not from just one side, the official side. We are dealing with a very powerful Board who are backed by enormous Government resources—one may say unlimited Government resources. The only limit is what the Secretary of State and the Treasury are prepared to lend. If for any reason the National Enterprise Board want to buy into a company, one must bear in mind that the Board are a totally different kind of animal from the company that they are buying into. It is a statutory corporation which is backed by Government's funds. Surely a company is entitled to know that the Board are buying into it. Their position is wholly different from that of any other company.
We know what are the purposes of the Board. For instance, they may want to improve the industrial efficiency of the Board. I myself hope that they would not indulge in pure speculation because that would be a gross misuse of taxpayers' money. Supposing, however, that

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they want to buy into a company so that they can keep an eye on it, are they going to keep a clandestine eye on it through nominees or will they, like men, come out into the open and say, "We are not sure that you are running the company correctly. We intend to take shares in your company to find out what you are doing". This is the simple issue. It is not a matter of ideology. We are dealing with a totally different kind of animal from that which normally buys shares—either individuals or companies—and they ought to be treated separately.
The National Enterprise Board should be publicly accountable for the shares that they buy. At the very least, a company should know whose shares it is registering. If it merely appears as a nominee, a company cannot possibly know that the National Enterprise Board are taking an interest in it. If it is the Board's intention gradually to acquire shares over a period, surely a company is entitled to have early warning.
The situation which the noble Lord has spoken about would not continue for very long. Even in a Companies Act, if we are going to have a Companies Act, there will be restrictions on the shareholdings of nominees. For a long time it has been felt that there are gross abuses of this practice. The noble Lord may say that there are restrictions on other people and that there can also be restrictions on the National Enterprise Board. But that is only one side of the argument. I can assure the noble Lord that this is something which foments an enormous amount of suspicion and distrust within industry. The noble Lord will be doing a great deal to ease the passage of his own Bill if he meets industry on this point, and I strongly recommend him to do so. I hope that my noble friend will put down an Amendment at Third Reading to deal with the point that the only circumstance in which the Board should be allowed to register through nominees is where they have to do so for legal reasons and then each nominee should hold only one share. Otherwise they should hold in their own names or in the names of their subsidiaries. It is as clear as that.
The Earl of BALFOUR: My Lords, I entirely support this Amendment. It is only right that in such circumstances no
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nominee shall acquire or hold more than one share. If there is to be trust between the National Enterprise Board and private industry, there must be openness and we must make it perfectly clear that there is no doubt about this. I feel that this Amendment raises many of the points which have been of considerable concern to those people who are connected with industry. They are frightened that the National Enterprise Board will be able to compete directly with them, because it has been made perfectly clear that the National Enterprise Board can set up a company to do that. Therefore, I ask the Government to consider this matter very carefully.
Baroness HORNSBY-SMITH: My Lords, when the IRC, which was set up by a previous Labour Government, was functioning and acquired holdings, were those holdings made public as IRC holdings?
7.15 p.m.
Lord MELCHETT: My Lords, by leave of the House may I deal with one or two of the questions that have been asked. The noble Lord, Lord Drumalbyn, said that he hoped that the National Enterprise Board would stand up like men and declare what they were doing. He said that there had been misuse of nominee shareholdings. I have two comments to make on that. First of all, is he implying that any other company which uses nominee shareholdings to build up a shareholding to 10 per cent. is doing something disreputable and that they are not standing up like men and declaring their interest when they buy their first share in the company? Underlying the treatment of the National Enterprise Board in this Bill the Government have been anxious that the Board should be treated in the same way as any other company.
The noble Lord says that I must look at both sides of the question. May I suggest to him that he should look at both sides of the question, too. We have said that the National Enterprise Board will be subject to various codes of practice in the same way as other commercial companies are subject to the Stock Exchange Rules and so on. On the other side, surely it is fair that the National Enterprise Board should not have totally arbitrary and special restrictions placed

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upon their activities if these are not placed upon any other company.
So far as I can see, the only justification for this proposal was advanced by the noble Lord, Lord Drumalbyn, when he said that the National Enterprise Board are a totally different creature because they are so much bigger and have unlimited resources. But the Board do not have unlimited resources. Certainly they are financed by the public sector, but I should have thought that the difference in scale between the smallest publicly quoted company on the Stock Exchange and the largest international conglomerate was at least as great as that between the National Enterprise Board and any company whose shares they are likely to be buying—if not far greater. Nobody has suggested that when ICI go into the market to buy less than 10 per cent. of the shares of a company—and we are only talking about less than 10 per cent.—because they are big they should stand up like men and say exactly what they are doing. If that is the only justification for treating the National Enterprise Board in a different way, in fairness I do not think that the argument stands up to examination.
Lord ABERDARE: There is a fundamental difference here. We do not consider that the companies which are financed by the National Enterprise Board have the same standing as those in the private sector. All along it has been fear of the actions of the National Enterprise Board which has led to such a lack of confidence in industry. As we have been stressing all along, there is suspicion of the National Enterprise Board. I accept that the noble Lord, Lord Melchett, says that the concept of the Government is that the National Enterprise Board owned company has exactly the same responsibilities and should have imposed upon it the same restrictions as those imposed on a company in the private sector. But that is not the way it is viewed by industry. Moreover, both noble Lords opposite have given us reassurances that the National Enterprise Board will behave in the very highest traditions of other companies in the public sector. At Committee stage the noble Lord, Lord Beswick, went so far as to say that he would have liked to accept the Amendment I put forward. Unless
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there is some intention to buy in the names of nominees, I cannot see why one should not restrict the nominee shareholding to one share. That seems to me to meet all the legal requirements and not to put any great difficulties in the way of the Board acquiring up to 10 per cent. of the shares. I do not really understand what the difficulty is.
Lord BESWICK: My Lords, first may I say that there was no obligation in law for the IRC to say that it was buying a particular share, but it had an obligation at the end of the year to publish in its annual report what it had bought. I can see that the NEB will also publish quite freely what their holdings are, but here we have a situation which is a little different. I acknowledge that the noble Lord is quite right in quoting me when I said that I had some sympathy with the original Amendment and that I wanted to see whether I could help. But what I thought would be wrong was some sort of underground operation by this nationally owned corporation. I thought it would be quite wrong that they should acquire things surreptitiously.
This Amendment would not prevent the kind of practice which is carried on by certain organisations, but I have given an undertaking that they will not use associates in order to build up a shareholding. The noble Lord, Lord Drumalbyn, now says that there should be some sort of constraint upon them. There is the constraint of the 10 per cent. holding. They will be under the same obligation as any other company. If they have a number of nominees with one, two or three shares each which come to a total of 10 per cent., then under the Companies Act they must say that they have this holding and I should have thought this was a reasonable situation. If it is thought that this is not sufficient protection against clandestine operations, there may be a case for bringing down the ceiling of the Companies Act below 10 per cent.
May I open my heart and mind to the noble Lord, Lord Aberdare? What I came across when I discussed this was the principle that here we were saying, as a matter of law, that this organisation will have no additional powers over any other company in the country. With that, it was put to me that it is reasonable to say that they should have no less

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power. One may say that they are publicly owned as against privately owned, but I do not draw that dividing line, as some people do, between public and private; it is drawn too often and too strongly. In this situation, with no more and no less power than other companies have, I should have thought we were in fairly reasonable territory and could leave it there.
Lord ABERDARE: My Lords, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 6 [Financial duties of Board]:
7.25 p.m.
Lord ABERDARE Lord ABERDARE moved Amendment No. 14:
Page 7, line 13, at end insert—
("(c) shall require the Board to adopt a realistic test discount rate when assessing investment plans.")
The noble Lord said: My Lords, this time I am really confident that the noble Lord will accept this Amendment, because once again I am able to quote his words at the Committee stage when he said,
"the Government will require the Board to adopt a realistic test discount rate in assessing the desirability of investments."—[Official Report, 22/7/75; col. 226.]
My Amendment says,
"shall require the Board to adopt a realistic test discount rate when assessing Investment plans."
So my Amendment and the noble Lord's words are in complete accord. Therefore, I am sure he will be honoured to find his words written into this Bill.
I recognise the arguments advanced by the noble Lord at the Committee stage, when we were discussing the whole matter of the Board's financial limitations and the rate of return on their investments. He made the point that this rate of return will necessarily vary in differing circumstances and it is therefore almost impossible to write a rate of return into the Bill. I accept the force of that argument, but my Amendment does not go as far as that. It does not fix a rate of return; it only requires the Board to adopt a realistic test discount rate when deciding on investment opportunities.
I hope that as well as accepting this Amendment, the noble Lord will also give us some further indication than we had at the Committee stage that Parliament
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will be kept informed as to what the test discount rate is and how the NEB are facing up to the requirements placed upon them in the case of a new investment. It is very important that if Parliament is to review the financial success or otherwise of the National Enterprise Board, it should have some information on these matters and such information should certainly be carried in the annual report of the Board. Certainly, where it is a major investment this would seem to us to be the right place for the results of the National Enterprise Board, judged against the realistic test discount rate to be published. I hope that this Amendment will appeal to the noble Lord, and that as well as accepting it he can give us some reassurance on the publication of the future results of the National Enterprise Board. I beg to move.
Lord BESWICK: My Lords, I have been quoted and I am greatly honoured that the noble Lord should quote me, but he might well have quoted rather more than the few words he took out of that speech, because I went on to say that I did not think it was necessary to put into the Bill the use of this tool. That is all it is; it is a monitoring tool, an investment tool, and I have said that the NEB will undoubtedly use it. Exactly what is realistic might be a matter for judgment, but undoubtedly this will be one test that they apply before they make a decision. I honestly do not believe it is necessary to include in a Bill of this kind instructions to the experienced sort of people whom we shall expect to run the National Enterprise Board. I shall not quote the saying about grandmothers, but I should have thought it would have some relevance to that.
The noble Lord asked where Parliament would come into it. I hope very much that the report of the NEB will be as full as possible. Undoubtedly, this would be essential, and I have a note here to the effect that if when the Public Accounts Committee looks at these matters it finds that the Board have not been applying a proper test discount formula, it will certainly have words to say, and we should expect that there would be vigilance of this kind.
Lord ABERDARE: My Lords, I am sorry that the noble Lord does not want to put his own words into the Bill, but

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I think we find ourselves in some difficulty over the question of the financial responsibilities of the NEB, because in no way have they been specified in the Bill. It has been our endeavour throughout the progress of the Bill through the House to try to establish what are to be the financial criteria under which the Board are to operate, because unless one has criteria it is very difficult for Parliament or the Public Accounts Committee to come up with judgments as to whether or not the Board are fulfilling the duties which have been laid upon them.
I must accept the noble Lord's assurance that the National Enterprise Board will employ this sort of test when judging new investments and, further, I very much hope that when they come to their annual report statements will be made explaining the reasons for any investment that they have undertaken—both the underlying reasons in the mind of the Board as a whole, and also the financial considerations on which the investment has been based. I certainly agree that it is a reassurance that the Public Accounts Committee will be looking at the Board's affairs and will naturally be able to examine these sort of matters. Therefore, for the moment, I beg leave to withdraw the Amendment.
Lord BESWICK: My Lords, before the noble Lord withdraws it, as he said there is nothing in the Bill which sets out the financial responsibilities relating to the Board, I wonder whether he would look at Schedule 2 which is probably more comprehensive than most sets of regulations; and, moreover, there will be a six-monthly statement of accounts and not an annual statement.
Amendment, by leave, withdrawn.
7.31 p.m.
Lord ABERDARE Lord ABERDARE moved Amendment No. 15:
Page 7, line 13, at end insert:
Page 7, line 13, at end insert:
("( ) In this Act—
"fair competition" means—

(a) that the following procedure shall apply in any case where any private enterprise makes to the Minister a written complaint about a practice employed by any public enterprise, and the complaint is expressed to be made on the ground that the practice is unfair to the com-
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plainant and specifies the respects in which he considers it is so unfair;

(b) the Minister shall forthwith after receiving the complaint send a copy thereof to the Board and, after such period for consideration of, and comment upon, the complaint by the Board as the Minister thinks reasonable has elapsed, shall send to the complainant a statement of the comments, if any, made by the Board on the complaint and shall, if he is of opinion that the complaint raises a question of substance and that the complainant has a reasonable case to make in support of the complaint, afford the complainant and the Board an opportunity of appearing either personally or by a representative, before a person appointed by the Minister;

(c) the Minister shall consider the report of the person appointed under the last foregoing subsection and may, if it appears to him that the practice complained of is unfair to the complainant, give to the Board such directions as appear to him to be requisite to secure the removal of the grounds on which it is so unfair; and the Minister shall furnish the complainant with a statement of any such directions and the Board shall give effect thereto;

(d) where a complainant avails himself of the right conferred by subsection (3) above to appear before a person appointed by the Minister, the Minister shall furnish the complainant and the Board each with a copy of the report of the person so appointed, and a statement of the conclusions reached by the Minister on considering the report; and

"public enterprise" means the Board or any industrial enterprise in which the Board has directly or indirectly a significant interest or any industrial enterprise conducted wholly or in part under national ownership or control; and
"private enterprise" means any industrial enterprise carried on wholly or mainly in the United Kingdom in which the Board has no significant interest and which is not so conducted.")
The noble Lord said: My Lords, this is an endeavour to return to the question of fair competition between the National Enterprise Board and other companies in the private sector. Having examined my Amendment, I thought that the noble Lord might come back and tell me that the words "fair competition", which I am attempting to define in this Amendment, were not in the Bill, but this awkwardness may be saved by my noble friend Lord Drumalbyn whose Amendment No. 16 brings in the principles of fair competition. In any case, I find that one of the troubles about the Bill is that it does not mention anywhere the words "fair competition". In this Amendment we are endeavouring to give companies in the

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private sector a chance to make representations to the Secretary of State if any company believes it has been unfairly treated by the National Enterprise Board.
The safeguard provided in this new clause is only very minimal, as everything depends on the Minister. If he receives a complaint from a company it is he who decides whether it is a matter of substance and that the case is reasonable before appointing a person to hear both sides of the argument. Further, once that independent person has made his report, it is again the Minister who decides on the report and the action to be taken under it; so that all the decisions within this procedure lie with the Minister. Therefore it does not go very far, but it is some minimal protection to the private sector of industry and is something that would give a great deal of reassurance and more confidence to industry in general.
I know that noble Lords opposite have given assurances that companies within the National Enterprise Board's control will compete fairly and will be subject to all the rules of fair trading legislation. But that is not the point. The point that I am after is that by creating what my noble friend Lord Drumalbyn has called "this new animal" there will inevitably be quite new influences and pressures created—a State-financed conglomerate competing in the private sector. This has not happened before. It is quite different from the normal concept of the nationalised industries. It is a group of companies operating under the control of a State-established body in fields of endeavour where other private companies are already established. Any group of companies has a group loyalty—that I would have thought is entirely natural—and I have no doubt, as I said at the Committee stage, that the National Enterprise Board will seek to foster such loyalty between their companies. This could result in unfair competition so far as the private sector is concerned. Even if other things are equal I should have thought that one NEB company will tend to trade with another NEB company. That is where there can be unfairness as between the public and the private sector.
I was asked by the noble Lord, Lord Beswick, whether I was satisfied with
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the fair trading legislation. I am, so far as it goes; but we are really concerned with more subtle forms of discrimination which would not be deliberate. We are not trying to allege that the NEB would deliberately try to cheat or anything like that. All we are saying is that, inevitably in setting up this new form of organisation, there may well be difficulties, strains and stresses and there is undoubtedly anxiety in industry about fair competition with NEB companies. It is only in an endeavour to try to assuage that anxiety in industry that we put forward this Amendment which, as I said, gives very minimal protection but just allows companies which feel that they have been badly treated to have some form of approach to the Minister, who may or may not in his discretion refer it to an outside person, and may or may not accept the report of that person. I beg to move.
Lord LOVELL-DAVIS: My Lords, I know that the noble Lord will remind me that I said what I am going to say before, but I do not think that noble Lords opposite can really blame me. There is something—
Lord DRUMALBYN: My Lords, the noble Lord is not audible.
Lord LOVELL-DAVIS: I am sorry I thought the noble Lord said that I was not in order. I was saying that I am afraid that I have to maintain the general continuity by saying once again that all the existing legislation governing fair competition will apply to the NEB. It will be bound by the Fair Trading Act which is aimed at preventing restrictive trading practices. It would be extremely difficult, and probably impossible, to seek to impose further restrictions on the NEB without putting the Board at a serious disadvantage in comparison with private sector competitors. However, I can go some way to meet the noble Lord, Lord Aberdare. I am prepared to give an assurance that when the Government produce their guidelines for the Board they will include a requirement to avoid showing undue preference in trading relationships. It is the Government's intention—and I assure the noble Lord of the sincerity of this—that the Board's companies should not be given any unfair competitive advantages and that they

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should observe the best commercial practices in their relationships with their suppliers, customers and competitors. I hope that this assurance will satisfy the noble Lord.
Lord ABERDARE: My Lords, I am grateful for a small crumb. This is a help if only we could see the guidelines. If noble Lords would do their utmost to enable us to consider these guidelines before we come to Third Reading, many of these points might be more helpfully made rather than putting them into the Statute. I am grateful to the noble Lord and I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
Clause 7 [General power of Secretary of State to give Board directions]:
Lord DRUMALBYN Lord DRUMALBYN moved Amendment No. 16:
Page 7, line 26, at end insert—
("( ) With a view to securing that the Board carry out their functions in accordance with the best commercial practices and with the principles of fair competition, the Secretary of State shall, within two months of the establishment of the Board, and whenever he considers it necessary or expedient thereafter, issue guidelines to the Board, and it shall be the duty of the Board to carry out their functions in accordance therewith.").
The noble Lord said: My Lords, I have already referred to this Amendment. It falls in rather neatly immediately after what we have been discussing. The Amendment is self-explanatory. It says:
"With a view to securing that the Board carry out their functions in accordance with the best commercial practices"—
that includes the Stock Exchange Rules, and so on—
"and with the principles of fair competition, the Secretary of State shall, within two months of the establishment of the Board, and whenever he considers it necessary or expedient thereafter, issue guidelines to the Board, and it shall be the duty of the Board to carry out their functions in accordance therewith.".
I am sure this expresses the broad intention of the Government, because that is exactly what the noble Lord, Lord Lovell-Davis, has just been saying to us. Perhaps the Government may find two months a little too restrictive. Perhaps they would like a little longer. But apart from that it seems to me that this epitomises what the noble Lord opposite has been telling us on the last Amendment.
If I might take Amendment No. 17 by the standards of this Marshalled List, it ought also to have been Starred. I may say it was handed in on Friday afternoon, but was not printed, through no fault of the Officers of the House, and was not available until this morning. I think noble Lords opposite suffered from the same trouble, so they will have some sympathy.
I am sorry that noble Lords opposite have not had more time to consider this, but the point of Amendment No. 17 is simply that I am inserting this into the paragraph which has the rubric:
"General power of Secretary of State to give Board directions."
Rubrics are not part of the Bill, however. They are altered to suit the Amendments we put into the Bill itself.
My Lords, it seemed to me that it was perfectly sensible to refer to guidelines also, and the word "guidelines" would go into the rubric in due course. This Amendment would simply mean that subsection (4) would read:
"The Board's report for any accounting year shall set out any direction given and any guidelines issued under this section during that year."
That would make the whole thing comprehensive. I have not asked for the guidelines to be laid before Parliament when made. Perhaps the noble Lord opposite could tell me whether they will be laid before Parliament when made. In any case one could easily add this to the Bill at a later time.
Viscount MASSEREENE and FERRARD: My Lords, may I just refer for a moment to the question of fair competition? I am certain that what the noble Lord, Lord Lovell-Davis, said on the previous Amendment is correct. Perhaps this is not strictly relevant to this Amendment, but our experience has been that with regard to some nationalised industries, we have not had fair competition. I think I mentioned at Committee stage that I know in the part of the world where I live you are not allowed to hire lorries to take your stock to market unless the lorries you hire are Government ones. Do noble Lords opposite call that fair competition? I do not. I could quote other instances, but will not bore the House with them. However, I should just like to point that out.

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I quite agree that presumably the Government will start the National Enterprise Board with the best of intentions, but eventually it depends on whose hands they go into. Governments come and Governments go. I am rather frightened that with the examples we have had of some nationalised industries in certain areas, we will not have fair competition as regards private enterprise. I think many private businesses will suffer.
Lord BESWICK: My Lords, so far as the fair competition point is concerned, it is difficult to get the exact definition as to what is fair competition; I admit that. The noble Viscount, Lord Massereene and Ferrard, keeps returning to the business of the lorries that were used. I have had three or four letters in the last two weeks complaining that a certain nationalised corporation will not use the nationalised road transport system. It uses a private company, and I find out on inquiry that apparently it does so because it is more convenient. I beg the noble Viscount not to worry too much about these lorries of his.
As to the question of guidelines, I can understand noble Lords opposite pressing this. We shall have guide lines, and in those guidelines, there will be a reference to fair competition—that I promise. I think we are making heavy weather a little as to exactly whether we should have this undertaking in the Bill. Another word for a "guideline" could be "directive"—that there shall be directives, or a specific directive. This is the first time that there has been an Act of Parliament relating to a public enterprise in which the Secretary of State has power to issue specific directives. That already appears in Section 7. We are meeting noble Lords on this. There will be power on the part of the Secretary of State to issue special directives. This will be spelt out in rather more detail in what have been called "guidelines", although there is no black magic about what is a "guideline" and what is a "directive".
Lord DRUMALBYN: My Lords, did the noble Lord, Lord Beswick, say that this will be spelt out in more detail than? Did he use the word "than"?
Lord BESWICK: It will be spelt out in more detail than what is in the Bill. I
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envisage that there will not just be a set of guidelines at the beginning. There will be guidelines as experience shows them to be required, which ise another reason why they ought not to be in the Bill. We want somethting separate from the Bill. Indeed, there are precedents for having them quite separate from the Bill. We are having a Third Reading. I will continue to report, and if noble Lords opposite wish to put something more down on Third Reading, they are free to do so. At present I suggest we do not press this Amendment.
Lord DRUMALBYN: My Lords, I am grateful to the noble Lord, Lord Beswick, for what he has said. I thought we had heard in some part of the Bill that the need to adhere to the Stock Exchange Rules would be put into the guidelines. If that is to be done, obviously it has to be done at once, I would have thought other similar things would be done at once. Obviously there will be occasions later on to issue further guidelines. Perhaps I am wrong, but I am certain I have either read or heard this. Perhaps the noble Lord will check on that.
Lord BESWICK: My Lords, there is a case where we have given an undertaking that they will do certain things. If they do not do those things—and I cannot conceive that they would not, because we are still living in a reasonably civilised world—the Secretary of State will have power if the Bill goes through without further Amendment, to issue a specific direction requiring them to do this. I do not think it will be necessary to do that.
Lord DRUMALBYN: Perhaps my memory was at fault, but this is one of the reasons why I put down this Amendment. I was gathering up into one subsection what I thought I recalled from previous references and the fair competition point. There is some difference, of course, between a specific directive and a guideline, in that a guideline by its nature implies a good deal more latitude. One gives someone a specific directive to do something specific, whereas a guideline in general tells them how to act; so there is a difference there. That was one of the reasons why I put it in this way in this clause which deals with directives; in order to draw a distinction between the two kinds of procedure.

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My Lords, my noble friend Lord Massereene and Ferrard referred to certain cases of discrimination in nationalised industries. Perhaps the best known and most complained of were the electricity showrooms, but this has to a large extent been straightened out since. I am not certain what my noble friend on the Front Bench feels about this but the last paragraph we were dealing with, dealt with complaints about failure to observe fair competition. I understand from the noble Lord that it will be possible in a case like that to complain to the Director General of Fair Trading about failure to observe fair competition. I would conclude by observing that "fair competition" probably does not need definition, and certainly needs it much less than "industrial democracy". I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 9 [The Board and the media]:
Lord DRUMALBYN Lord DRUMALBYN moved Amendment No. 18:
Page 9, line 1, after ("prevent") insert ("the provision of financial assistance by way of").
The noble Lord said: My Lords, this Amendment deals with the question of the media; the clause rubric is "The Board and the media". The Government have clearly recognised that there are dangers in the taking of shares in a company which engages in publishing newspapers, periodicals and so on, or in producing radio programmes. There can be very little doubt that the giving of assistance to a newspaper or television company or radio company, in return for shares in the company, would probably incur the suspicion of influencing editorial or producer policy, and might well result in that happening. It is very difficult to draw the line.
The purpose of the Amendment is simply to give a clear pointer to the Department and to the National Enterprise Board not to give assistance by taking shares, because it is dangerous, if there is any other way in which assistance could be given. That is why the Amendment is drafted in that form. Subsection (4) would read:
"Subsection (3) above shall not prevent the provision of financial assistance by way of the acquisition of share capital of a body corporate if the acquisition is made in pursuance of a direction under section 3 above…"
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and then Amendment No. 19 comes in—
"…and if, in the opinion of the Secretary of State, it cannot, or cannot appropriately, be provided in any other way."
The noble Lord will recognise the origin of those words, which come from the 1972 Act. This is not intended to restrict the operations of the National Enterprise Board, but only to make certain that they do not get into any possible trouble through suspicion of being in a position to influence editorial policy or programme production policy. I hope that this may be helpful. I beg to move.
Lord LOVELL-DAVIS: My Lords, this Amendment is the forerunner of others which we shall be discussing shortly, which seek to preserve the Opposition's philosophy that Government assistance to industry should be given in a form which does not involve the acquisition of shares.
Lord DRUMALBYN: No, my Lords, I have just said the opposite.
Lord LOVELL-DAVIS: My Lords, the noble Lord also talked about the dangers involved. I cannot see how he can believe that this clause, the whole of which is carefully designed to avoid those dangers, can apply here. If he will read the clause carefully, surely he will come to the conclusion that there is adequate protection here. I was myself aware of the general Opposition philosophy coming across. I may have been quite wrong, but it seemed to me that it was the principle of giving assistance which would not involve acquisition of shares. As I read the Amendment, this point comes across strongly. The noble Lord must not be surprised if we reject this, because it runs counter to our intentions. We stand firmly on this as a point of principle.
We have never hesitated to make it clear that if the Government provide financial assistance to industry, through the 1972 Act and where it is done directly by the Secretary of State, or through the NEB under Clause 3 of this Bill, it should be open to the Government to take a full return for their assistance. If the noble Lord accepts that point, then I think in all other respects the clause is so designed that there is no real danger. It seems to me that the duties are clearly set out in subsections (5) and (6). If the Secretary of

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State overrides these, he can do so only if serious commercial injury would be caused. Surely the noble Lord is not disputing the desirability of the Secretary of State's maintaining a situation until the possibility of further serious commercial injury disappears, and the right of the NEB to dispose of that shareholding profitably at the value it has achieved.
It may be that I do not understand the point the noble Lord is making. It seems to me that those are the two points; either, first, the basic philosophy of helping by not acquiring shares if there is any other way of doing it; or, secondly, the danger of taking over. It seems to me that there is adequate protection in the Bill to ensure that the NEB do not become owners of newspaper companies. In any event, subsection (10) sets out the matter of editorial control. Perhaps the noble Lord would care to give the House further guidance.
Lord ABERDARE: My Lords, before my noble friend makes his decision, I really do not think that is a very helpful answer. It has nothing to do with the general Opposition philosphy. This clause has the object, as the noble Lord recognises, of wherever possible preventing the Board or any of their subsidiaries from becoming involved in companies that have to do with the media, publishing newspapers or magazines or whatever it may be. We are all at one on this; it is what we are all trying to achieve. But we recognise, and the Government recognise, that there may be difficulties where the Board are coming in to assist a group of companies one of which happens to be involved in newspaper publishing or broadcasting. My noble friend's endeavour is to make it much easier for the Government, and to make sure that when the Secretary of State has to intervene by giving a direction this shall be only when there is no other way of providing the means to help the company in question. It all seems to me to be entirely reasonable, and I am rather surprised at the attitude which the Government have taken.
Lord DRUMALBYN: My Lords, perhaps I should provide myself with a red flag and a green flag, and if I am going to be helpful to the Government I will rise to my feet holding the green flag and if I am going to oppose the Gov-
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ernment I will rise holding the red flag. On this occasion I really did rise holding the green flag. What we are talking about here is a clause which was introduced under the guillotine and which was not discussed in another place. This is an important clause and we hope it will not need to be used very often, but it has to do with the rescuing of media if they get into trouble. The nature of media is such—and this is plainly recognised by the Government's own drafting—that when giving assistance to them, they must do it in such a way that they do not influence editorial policy. We were all agreed on that on the last occasion and I did not think there was anything between us on it. Why the noble Lord should have thought that by introducing this Amendment in this way I was in any way going back on that I do not know. I suppose it was because I happened to choose the most convenient form of words, rather than inventing my own, by taking them out of the 1972 Act.
What we are proposing is quite simple; we are not removing any of the powers in the rest of the clause. We are simply saying, in effect, "If you have to rescue media, do it in such a way as to make it absolutely clear that you are not going to influence the editorial policy of the paper." And the easiest way of doing that is not to take shares unless one absolutely must. This does not debar the NEB from taking shares, but merely says that they should not do so unless there is no other appropriate way of providing the assistance. This has been a genuine attempt to get out of a real difficulty. The Government made it quite clear in subsection (5) that it is the duty of the Board if they acquire shares,
"…to exercise their voting power with a view to securing that the body corporate disposes of the business as soon as practicable."
If they cannot do that because of the position of the company and they are exempted by the Secretary of State from doing so, then they have to concern themselves only with the financial or commercial decisions of the company. All I was saying was that if they should get into that position, nothing would prevent them from being suspected of influencing editorial policy, and therefore it is better to keep out of it; and with a view to avoiding that suspicion I tabled this Amendment. I assure the noble Lord that I am holding the green flag.
Lord LOVELL-DAVIS: My Lords, I am sorry if I misunderstood the noble Lord or misconstrued his intention. My attempt to interpret the reason for the Amendment was entirely genuine, I assure him of that, and I am sorry if the noble Lord, Lord Aberdare, should have taken exception to my referring to Opposition philosophy. He may recall that he reminded me during the debate on the Welsh Development Agency Bill that we have different philosophies. It seems to me reading this clause again, and particularly subsection (3), that there is adequate protection in respect of them taking over any undertaking with a substantial involvement. It seems very difficult to avoid the possibility of acquiring perhaps a minor publishing company of some sort which was involved in a bigger deal without acquiring the shareholding. I recognise the intention of the noble Lord, but I believe that the Amendment would have the effect of saving that assistance should not be given by the acquisition of share capital if there is any other way of giving assistance; but the Government cannot accept that the risks of assistance should be separated from the rewards of successful assistance. I think there is adequate protection in this clause and while I take the noble Lord's point, I hope he will recognise our point of view, also, in so far as the acquisition of shareholding is concerned, given the other protective measures set out in the clause.
Lord DRUMALBYN: My Lords, as the noble Lord did misunderstand my purpose, perhaps he will be kind enough to look at the matter again to see whether there is anything in my suggestion. I am sure he will be willing to do that.
Lord LOVELL-DAVIS: Yes indeed, my Lords; I certainly agree to do that and I will look again at the matter.
Lord DRUMALBYN: My Lords, I am obliged to the noble Lord. I may not be quite right here because obviously there is a difference between acquiring shares in a company which is publishing and taking shares in a group which is controlling the company, but on the under controlling the company, but on the understanding that the noble Lord will look into the matter, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 10 [Other limits on Board's powers.]
8.6 p.m.
Lord BALFOUR Lord BALFOUR moved Amendment No. 20:
Page 9, line 43, leave out from ("State") to end of line 44.
The noble Lord said: My Lords, this clause begins:
"Neither the Board nor any of their subsidiaries shall acquire any of the share capital of a body corporate except with the consent of the Secretary of State or…"
The real problem here is that, as drafted, the Bill could, as I understand it, allow the Secretary of State to give a general directive to the Board to acquire share capital in certain types of undertaking, for example those which are very much labour-intensive.
My Amendment is the same as one which was tabled in the name of my noble friend Lord Drumalbyn in Committee, which was Amendment No. 80. I am not apologising for this because the matter was not fully explained on that occasion and the noble Lord, Lord Beswick, said at that stage:
"I wish to be absolutely frank with the noble Lord."
He was referring to my noble friend Lord Drumalbyn:
"I know what the intention is. It is to relate it to the first case. Whether the effect would be to limit it to that case, I am not absolutely certain. I should like to take advice on this and we could return to it again at the Report stage".—[Official Report, 22/7/75; col. 266–7.]
I have no doubt that the noble Lord, Lord Beswick, has taken this into consideration, but I have been considering the matter and I have read the Official Report of those proceedings carefully and I feel that, as the Bill stands, we shall here be creating far too wide an authority. I feel that the Board must not just be able to acquire shares in a company without having some reason for doing so—that is, if the company needs help—but my fear lies in the fact that subsection (1) of the clause continues:
"…or in accordance with any general authority given by the Secretary of State."
That extends the provision far too wide. That is why I have tabled this Amendment and I hope that the Government will have second thoughts on the matter.
Lord DRUMALBYN: My Lords, my noble friend Lord Balfour beat me to it by tabling this Amendment, and of course if he had not put it down I would have done so because the noble Lord, Lord Beswick, said in Committee:
"I should like to take advice on this and we could return to it again at the Report stage."—[Official Report, 22/7/75; col. 267.]
Earlier the noble Lord had argued:
"What is intended here is a sort of general authority to a subsidiary which will enable it to carry on its business in a proper businesslike way, without having to come back to the Secretary of State for every minor acquisition it might conceivably make."—[Official Report, 22/7/75; col. 266.]
But what we are dealing with in this clause is, of course, a prohibition on the Board or its subsidiaries in acquiring:
"…any of the share capital of a body corporate except with the consent of the Secretary of State or in accordance with any general authority given by the Secretary of State—

(a) if its acquisition would entitle the Board to exercise or control the exercise of 30 per cent. or more of the votes at any general meeting of the body corporate…or

ߪif the value of the consideration for its acquisition…would exceed £10.000,000."
I did not understand how that matched with the sort of general authority to a subsidiary which would enable it to carry on its business in a proper and businesslike way. I could see the possibility of a progression of acquisitions, but not in the context of an acquisition which would entitled the Board:
"to exercise or control the exercise of 30 per cent."
It is difficult to see how that permission could be given in accordance with any general authority given by the Secretary of State. We had understood that the specific consent of the Secretary of State was to be required in each case. If that is not so, I hope the noble Lord will inform us. We should take a very different view if it were left wide open for the Board to acquire more than 30 per cent."—30 per cent. or more of the votes at any general meeting of any number of bodies corporate"—without referring to the Secretary of State but on a general authority. This is what the words can undoubtedly be read to mean, and our point is that they should either be left out or clarified so that it will no longer be ambiguous, because I do not think,
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from what the noble Lord, Lord Beswick, said, that it was the intention that that was what they should mean.
Lord BESWICK: My Lords, the noble Lord is absolutely right. It was not the intention to make it possible for the Secretary of State to circumvent the requirement here with regard to a 30 per cent. holding or to the investment of £10 million. That is not the intention. What the noble Earl, Lord Balfour, and the noble Lord, Lord Drumalbyn, are now saying is that that construction can be placed on that wording. The intention of this general authority, as I tried to indicate before and as I will spell out again, is that we have in Clause 10 a system of executive control which provides that the Secretary of State has to approve the making of a large investment or the acquisition of a 30 per cent. holding. That is what we should all like, I believe. Then it was said in the other place in Committee that this did not prohibit the acquisition of more than 30 per cent. or the investment of more than £10 million by a non-wholly owned subsidiary such as, for example, British Leyland. So we extended the power here to require the non-wholly owned subsidiaries to be brought in.
But what we may find now we have widened this area of monitoring is that a company such as British Leyland or the NEB might in the course of their business wish to make minor acquisitions of an almost routine kind. For example, Rolls-Royce might have selling agents overseas and might want to set up agencies, or British Leyland might well have a requirement to open up new sales points in this country. Instead of having to ask to set up a company in a provincial town, they can be given a general authority to do that sort of thing. Acquisitions by subsidiaries, acquisitions of less than a certain value, acquisitions of overseas sales outlets—there are the occasions for which it was thought that general authorities should be given. I must confess that I think it wrong if this can be construed as meaning that a company may by general authority invest £10 million in each of a number of different sales outlets. I will look at that aspect again.
The Earl of BALFOUR: My Lords, I am most grateful to my noble friend Lord Drumalbyn for his support and also to

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the noble Lord, Lord Beswick. I should like to leave the matter entirely in his hands, for I do not like putting down Amendments on Third Reading. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
8.15 p.m.
The Earl of BALFOUR The Earl of BALFOUR moved Amendment No. 21:
Page 9, line 46, leave out ("30") and insert ("29")
The noble Earl said: My Lords, I wanted to take this Amendment separately because it deals with an entirely different point to the previous Amendment. Again, I must go back to the Committee Stage. I quote from the Official Report. The noble Lord, Lord Melchett, said:
"The 30 per cent. figure is the figure at which the code on takeovers and mergers says the company has to make its offer unconditional. I am being nodded at by noble Lords opposite who know a great deal more about that than I do, so I am sure I am right. There is no question of the Board having power to buy things up lock, stock and barrel."
That we all agree with.
"It is a provision to protect shareholders of the company, not for the benefit of the Board."—[Official Report, 22/7/75; col. 269.]
I am quite certain that that is what the noble Lord, Lord Melchett, meant and I entirely agree with him that this is clearly why 30 per cent. was chosen. However, I feel that in order to create confidence in shareholders of British industry, we should leave a little more of a gap between where the City Codes really come into effect and the extent to which the National Enterprise Board can acquire shares without having to go to the Secretary of State for approval. Let us make a 1 per cent, gap. That is all I am asking. I believe it would create confidence in shareholders; I believe it would give the Secretary of State just that little bit more grip which I feel he should have. I feel that it would avoid any risk of the National Enterprise Board acquiring, possibly by mistake, 30·1 per cent. Again, this was mentioned in Committee. I believe that this would be a safeguard. I beg to move.
Lord MELCHETT: My Lords, as the noble Earl says, this was discussed in Committee. I believe that he quoted me more or less accurately and I went on in
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the next column of the Official Report to answer the point which he has raised again about the NEB acquiring over 30 per cent. by mistake and without realising that they were doing it. If I remember rightly, I said that this was extremely unlikely to happen and that I did not think that it would happen. I am afraid that, having taken further advice on this, it is still my opinion that 30 per cent. is the right figure to have in the Bill. The noble Earl knows that the Board will be under a legal duty to obtain the Secretary of State's permission before they acquire 30 per cent. of the voting rights in a company, that is, before they get to 30 per cent. We explained in Committee that the figure of 30 per cent. had been chosen because it was in the City Code. This provision for them to go to the Secretary of State before they acquire the 30 per cent. stake clearly requires them to obtain the Secretary of State's authority before they reach the obligations in the Takeover Code, which come into effect when somebody acquires 30 per cent. I am afraid that I simply—
The Earl of BALFOUR: My Lords. I should like to interrupt the noble Lord for just a second. Paragraph (a) says. "30 per cent. or more", so it is not before we get to 30 per cent. This is quite important. It is at the bottom of page 9 of the Bill.
Lord MELCHETT: My Lords, my understanding and my advice is that the words in the Bill mean that the Board will have to go to the Secretary of State before they acquire 30 per cent. of the voting shares in a company. I am quite sure that that is the correct interpretation of the words in the Bill. I have given that interpretation in Committee and I am repeating it now—
Lord CULLEN of ASHBOURNE: My Lords, I wonder why we need to have the words "or more" in the Bill. As soon as they get to 30 per cent. they automatically have to go to 100 per cent. I do not quite see why "or more" is in the Bill at all.
Lord MELCHETT: My Lords, I am not a legal expert nor a Parliamentary draftsman, but I imagine that it would be possible, for example, for the NEB to buy a subsidiary which would take their holding up to 40 per cent., 50 per cent. or whatever of a company. Before

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they bought this subsidiary it would be necessary for them to go to the Secretary of State and say that this would give them 50 per cent. of the shares in the company. I imagine—and this is a slightly speculative interpretation of the wording of the Bill—that if the Bill merely said 30 per cent. and if the NEB were buying a company, for example, which would take their holding up to 50 per cent., that that would not be covered. Therefore, I imagine that that is why the phrase, "30 per cent. or more" is included, but as the noble Lord said, the fact is that before they get up to 30 per cent. they will have to go to the Secretary of State.
The only reason for putting in any other figure is, I assume, that it is felt that the National Enterprise Board will reach 30 per cent. without realising it, but if they are to reach 30 per cent. without realising it, might not they just as easily reach 29 per cent. without realising it? The fact is that the legal duty not to acquire 30 per cent. without permission is absolutely unequivocal, and if it were breached the action would be illegal. The company would be entitled to refuse to register the transfer of the shares, for example, if this were done by accident or intentionally. Alternatively, the company would be able to obtain an injunction to stop the NEB proceeding with the transaction. I think, quite honestly, that 30 per cent. is the sensible figure and the right figure, and there is not really any need for any cordon sanitaire, as it were, to be imposed before we get to the 30 per cent. figure.
Lord DRUMALBYN: My Lords, I do not think that it is intended so much as a cordon sanitaire as it is a distant signal. We do not really know whether there is any need for this. It may be that if the NEB were attempting to get a controlling interest, or were working towards a controlling interest, in a company, the shares of which were possibly quoted, or not quoted, but which were certainly not very readily available, they would be picking up the shares in odd packets over a period of time. It could just be possible that they would suddenly reach the point where they would have to ask for the Secretary of State's consent to go any further. This was the only point in the matter. There is no great snag about it. If it is not really a convenience I do not
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see that we need press this matter. If they inadvertently went over the 30 per cent., the noble Lord says they would be doing something illegal and the company would refuse to register. But he is now going back on this own argument. The company could not refuse to register unless they had registered the shares in their own name. Now he is refusing to let them register the shares in their own name, so the company cannot know. If the noble Lord is to put forward that sort of argument he must allow us to stick to our view that there should not be nominee shareholdings except where they are strictly necessary.
Lord MELCHETT: My Lords, the noble Lord is aware, of course, that if the shareholding has gone above 10 per cent. the company will have been informed that the NEB are involved in buying shares in the company, so I do not quite see where the nominee argument comes in when we are talking about going up to 30 per cent.—
Lord DRUMALBYN: My Lords, we are all assuming that everything is going well and according to plan. This was just an effort to try to make certain that there would be a stop point, a safety catch, or whatever one likes to call it. The noble Lord may feel that it is not necessary. The difficulty is that even if the NEB had been registering their shares in their own name with the company, the company would not know, if the Board went over 30 per cent., whether or not the Board had obtained consent. It would obviously refrain from registering until it had been assured that the NEB had the consent of the Secretary of State before they went further. This is slightly obscure. If it works all right, that is fine. We feel that if some type of safety device can be included, so much the better.
The Earl of BALFOUR: My Lords, I should like to say a little more on this matter, on which I should like to have a reply. I do not want the Board to go to 30 per cent., or just over, for some reason or other, and then ask the Secretary of State to homologate their action. This happens in the best of circles. I have found it in county council affairs and in all sorts of other matters. Such occurrences crop up from time to time, and it would be most unsatisfactory in

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this case. I wonder whether the noble Lord would think again.
Lord BESWICK: My Lords, I wonder whether I can assure noble Lords opposite that their fears are unwarranted. I also wish to read out a message of advice which I have received. It says that my noble friend's interpretation of this clause is, to quote the legal phrase, "spot on". It may or may not be strictly necessary to have the words "or more", but they were included to prevent anyone from trying to argue that an acquisition of 35 per cent. was not an acquisition of 30 per cent.
The Earl of BALFOUR: My Lords, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 11 [General extent of powers in relation to control of important manufacturing undertakings]:
8.27 p.m.
Lord BESWICK: My Lords, I beg to move Amendment No. 22. It improves the drafting of the Bill by referring to "this part of this Act" rather than to particular sections. There is a corrigendum attached to the Bill, which is no doubt in the possession of noble Lords opposite. My Amendment is not affected by the corrigendum.
Amendment moved—
Page 10, line 21, leave out from ("by") to ("in") in line 22 and insert ("this Part of this Act shall have effect").—(Lord Beswick.)
Lord BESWICK: My Lords, I beg to move Amendment No. 23. This Amendment simply recognises that the phrase "important manufacturing undertaking" is confined to Part II of the Bill.
Amendment moved—
Page 10, line 24, after ("this") insert ("Part of this").—(Lord Beswick.)
Clause 12 [Meaning of change of control]:
8.29 p.m.
The Earl of BALFOUR The Earl of BALFOUR moved Amendment No. 24:
Page 10, line 35, at end insert ("or any other member State of the Communities")
The noble Earl said: My Lords, this Amendment is the same as the Amendments I put down at Committee stage. I have investigated very carefully the point with which we are now concerned, and I have sought every kind of advice that I could. I want to know in particular whether there is any provision which will prevent the Secretary of State from refusing to allow a national of a Member-State who is not resident in the United Kingdom to obtain control of an undertaking in this country. So far as I am concerned, I feel that the answer is, "Yes". Without going into all the various Articles of the Treaty of Rome, I should like to refer to Article 52 which provides that a national of a Member-State must be allowed to establish himself in business in any other Member-State on the same terms as its own nationals. In the matters referred to, which seem clearly to be concerned with the control of undertakings, there is no discrimination on grounds of nationality against nationals of Member-States.
The Bill, however, does discriminate on the grounds of residence. I think this is a very important point. If a person is living abroad and acquires (as he can) the controlling interest in a British company, the Secretary of State can then put a prohibition order on it. I feel that it could have a disastrous effect in discouraging foreign nationals, or, particularly, nationals of EEC countries, from setting up an industry in this country. As a practical matter, however, the Bill would make it a good deal more difficult for a French national to acquire control of a British undertaking; and it is possible that the European Court might regard the provisions of the Bill as a disguised form of discrimination on the grounds of nationality and therefore contrary to the provisions of the Treaty. This I feel would have the effect of simply discouraging industries from coming to this country.
Clause 12 bites only when somebody who is not resident in the United Kingdom gains control of a company. Change of control means a change of control from a person previously in control to any person not resident in the United Kingdom. But equally this can apply where a person not resident in the United Kingdom has gained control from somebody

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who may be overseas. A Frenchman having a controlling interest in this country, which might be perfectly acceptable, then sells it to another Frenchman. This would he classed as change of control and would come within the provisions of Clause 12. I am sure that this country is looking for the very valuable capital we can sometimes get from overseas. But this is the sort of risk that will prevent people from starting industry in this country. The risk of being subjected to a vesting order, if a Frenchman acquired a controlling interest in a company, probably would be enough to deter a non-resident purchaser, apart from any risk that he might be refused foreign exchange permission. I feel that this is not the sort of thing we want to encourage in this country.
Foreign investment has made a vast difference to Scotland. A tremendous amount of American capital came into Scotland. Half of the industrial estates there have American companies—or Italian; Olivetti, for example—which have created an enormous amount of employment. We had a referendum in June giving an overwhelming vote in favour of our going into Europe. I was told at Committee stage that these Amendments were unnecessary, but as this is the first Bill going through this House that could affect somebody living in the EEC, let us put the words into the Bill that are in my Amendment and make it obvious beyond all reasonable doubt that we have faith in the Treaty of Rome and we have faith in our European friends. Do not let us leave doubt. I am sure we run a far bigger risk of doing harm to ourselves than to them by not having the provision written into the Bill. I beg to move.
8.33 p.m.
Lord LOVELL-DAVIS: My Lords, as the noble Earl said, these are the same Amendments as those put down in Committee. Since I seem not to have satisfied him then, may I deal with it in more detail. We have given a great deal of thought to this matter. These Amendments give rise to two separate points. The first is the relationship between these provisions and our EEC obligations, and the question whether they are in any way in conflict. I think it is this that occupies the noble Earl's mind.
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I can assure noble Lords that there is no question of conflict. This Bill is a piece of United Kingdom legislation, couched in terms of the United Kingdom. This is why in Clause 12 we refer to residents of the United Kingdom. However, this reference is without prejudice to our European obligations. The Government recognise and accept that in certain circumstances our European obligations would prevent the powers set out in Clauses 11 to 20 from being used to prevent the acquisition of a British company by a resident of the EEC. These obligations are part of British law by virtue of the European Communities Act 1972, and the powers contained in this Bill are subject to that Act. There is therefore no possibility of conflict between this Bill and those obligations. There is therefore no question of the Government not understanding or not meeting our European obligations.
The second question is the narrower one of whether it is necessary to draft the Industry Bill so as to reflect these obligations. In Committee, the noble Lord, Lord Elton, argued that, unless there was good reason not to mention our European obligations, we should do so. He argued—with, if I may say so, considerable force—the benefits of clarity brought by explicit, rather than inferred, reference to these obligations. We have looked at this again. I am again advised that no reference to the European Economic Community is necessary: but my advice goes beyond this, in that I am advised also that an explicit reference would in fact be harmful.
Perhaps I might explain why this is so. Our EEC obligations are established under European law, which as noble Lords will recognise has a different tradition to British law. Our European obligations are established in general terms under the Treaties, and are constantly being interpreted and refined by judgments of the European Court of Justice. Our obligations under the Treaties apply at any moment of time as they are interpreted at that moment. It is therefore impossible in a United Kingdom Statute to reproduce exactly what those European obligations are. I ask noble Lords to consider therefore the effect of making an explicit reference to European residents, as it has been argued that we should in the interests of clarity. On

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the one hand, the reference might establish an obligation under British law that fell short of our obligations under European law at some future date; but at that future date our European obligations as they are then interpreted will necessarily have precedence under the European Communities Act.
In this case, the reference in British legislation would be misleading, since it would state incorrectly what our European obligations were. On the other hand, the clear statement in the British Statute could go beyond our European obligations. We do not wish this. We wish to abide by our developing European obligations, not to become more European than the Europeans. Because of these difficulties, it is the accepted practice throughout the Community not to make explicit reference in national legislation to treaty obligations. Rather the practice is to make national law in national terms, and to bring Community law to bear through some general Act. This is the practice which we have followed here. I have explained why this practice has been adopted. There are other arguments. If Community law were applied through a series of pieces of legislation by the Nine Member-States, there would be a danger of inconsistencies being introduced between one piece of legislation and another, and between one country and another. These individual pieces of legislation would have to be considered by the Supreme Courts of each country. It is clearly preferable that there should be a general application of treaty obligations, and that questions on these should be settled centrally by the European Court of Justice. I hope noble Lords will accept, therefore, that what the Government wish to do is in keeping with European practice and that this practice is a sound one.
8.41 p.m.
The Earl of SELKIRK: My Lords, I hope that the noble Lord, Lord Lovell-Davis, is right. The point the noble Earl, Lord Balfour, was making was that European capital would be discouraged from coming here because it could not subsequently be withdrawn. This might work to the disadvantage of this country. Once it was invested here, it might be stuck and could not be withdrawn. I do not think the noble Lord touched on
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that point. I hesitate to comment on what European law is likely to be. If a Frenchman put money in this country and was not allowed to bring it out I should he surprised if, when he took that matter to the European Court, they accepted the judgment that the noble Lord, Lord Lovell-Davis, propounded.
Lord DRUMALBYN: My Lords, what the noble Lord seems to be saying to us is that these provisions do not conflict with EEC provisions. But what the Bill does not make plain is what the situation vis-à-vis the EEC is. May I say that again as the noble Lord was otherwise occupied. What the Bill does not do is to make clear in its own terms what is the position vis-à-vis residents in the Member-States of the EEC. It is all very well to say that that is covered by EEC legislation, and it is also all very well to say that other Member countries do it in this way. But, as the noble Lord himself said, our form of law is somewhat different from EEC law.
It may be true to say that the EEC can make determinations from time to time. The EEC courts may issue judgments which alter the EEC law, and in accordance with those terms we may have to alter our law. It is now up to the Government to make clear in the Bill what is the situation of a person who has been resident here for some years. Let us say he is a Dutchman and has a controlling interest in a firm. He goes back to live in Holland, and then comes under the terms of this Part of the Bill. I am aware it does not mean that change-over powers are automatically used. This is within the discretion of the Secretary of State. The answer may well be that the Secretary of State will have to exercise his discretion in every case of that kind in order not to conflict with European law. In fact, he will exercise his power by discretion. Even though we cannot get this into the Bill, it is up to the Government to make clear what is the position.
As my noble friends have already made clear, it is in the interest of this country that they should do so, because if we are conveying the impression in this Bill as it now stands that anyone who comes and invests in this country from a Member-State—which people are perfectly entitled to do under Article 221 of the Treaty of Rome—and then wants to

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reside in his own country again but continue to exercise that control, he will come under the terms of this Bill. We must know what the position is. Is the Secretary of State then entitled to exercise discretion and put a prohibition order on the transfer of assets? It is possible for him to do it. This is so in the case of a United Kingdom resident who resides elsewhere, such as in Canada, and this then bites on him. We must know the situation of somebody who is a national of a Member-State of the Community. It is not good enough to say that it is all covered and tidy, and that somebody knows about it. Parliament must know what we are legislating about and doing. This is absolutely essential.
Perhaps the noble Lord could also tell us which other Member-States have legislation of a similar character to this. I am not at all certain that it will not create serious friction if control passes from an American or a Swede, whom the Secretary of State likes, to a member of a Community State whom he does not like. This is the same point again, but in a different form. If a manufacturer of ballbearings decides to sell his factories in this country to somebody in Germany, will that be caught by the Act, or not? We must know. This will make it much more difficult for a Frenchman or a Dane to acquire 30 per cent. or more of assets in the United Kingdom. One has to remember that we are looking forward to the time—at least I am—when we shall have multi-Member-State companies, perhaps from three countries, all of whom will have 30 per cent. or more of the shareholdings. This is a very important question indeed. I do not think we have yet had a sufficient explanation. I am not suggesting that the words we have down at the moment are right or necessary, but we must know what we are legislating about.
Lord ELTON: My Lords, as we are at the Report stage, and slightly losing sight of the fact, may I add to the questions which the noble Lord, Lord Lovell-Davis, will answer when, by leave, he replies to the debate. He made a number of general points. My noble friend Lord Drumalbyn illustrated the difficulties by specific points. If I may briefly take up the generalities, the noble Lord, Lord Lovell-Davis, said that there could be no
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conflict with the EEC Act because that Act is superior to this Bill, and this Bill is made without prejudice to that Act. This is not a good reason for putting in the Bill things which are prima facie in contravention of our undertakings under the EEC Act.
He then went on to examine the question of whether the drafting of a Bill which was subordinate, as in this sense, to an EEC Act should make manifest the position of EEC law at the time when the Bill was drafted. He said it should not, because the interpretation and legislation of European law might advance beyond that point, so that in years to come the drafting—which was clear when it was made—would become more misleading than if it was obscure.
I should like to ask him in what direction this obscurity could arise. Is he envisaging that if the words in the Marshalled List are included in the Bill, and if subsequently the European courts or some agreed legislation should extend the privileges of the Community Member-States to, for instance, Chad or Gabon, this would in any way make the situation more confusing than it is at present? Returning to his position that everything is done subordinately to the European legislation, we must have a clear indication of what the effects of this will he. It may he necessary to put at the beginning of the Bill or in the Title an indication that everything in the Bill is done without prejudice to the EEC Act and such other Conventions or Acts which the noble Lord and Her Majesty's Government feel are superior to the powers exercised at the moment by Her Majesty's Parliament.
Lord LOVELL-DAVIS: My Lords, I cannot pretend to be an expert on EEC legislation, but I will attempt to answer some of the questions raised. Perhaps I might quote first from the European Communities Act 1972, Section 2(1), which may throw some light upon it. It reads:
"All such rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Treaties, and all such remedies and procedures from time to time provided for by or under the Treaties, as in accordance with the Treaties are without further enactment to be given legal effect or used in the United Kingdom shall be recognised as available in law, and be enforced, allowed and followed accordingly; and the

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expression 'enforceable Community right' and similar expressions shall be read as referring to one to which this subsection applies."
I hope that has helped to answer the point raised by the noble Earl, Lord Selkirk.
Our legal advice is that the legal acquisition of property in one Member-State by a national of another does not fall within the scope of the freedom of establishment when the acquisition is being attempted from outside the Member-State in which the property is situated. It would therefore be no infringment of the right of freedom of establishment for a prohibition or vesting order to be made to prevent or frustrate a bid for a United Kingdom company made by a company registered in another Member-State: that is, a takeover bid from abroad. But it would infringe our Community obligations if we prevented a United Kingdom subsidiary of a company registered in and controlled by residents of a Member-State from acquiring a British concern through these powers, which could not, by their nature, be used to prevent acquisition by a British company which was not foreign controlled. If, therefore, an EEC company organised a hid for a key British manufacturing undertaking through a United Kingdom subsidiary, Clauses 12 to 20 of the Industry Bill could not be applied to prevent or frustrate the acquisition without the United Kingdom breaching its obligations. I hope that what I have quoted will make our obligations clear as concerning the European Communities Act.
I got the impression, listening to the noble Lord, Lord Elton, saying that the European Communities Act was superior, that this "wrote out" the need for national law. This is not the situation at all. This is a piece of United Kingdom legislation for the United Kingdom, as I have already said. The noble Lord also referred to the point I made about the United Kingdom law changing in the future; and he said this might be an obscurity. As I said in my reply to the noble Earl, it is the accepted practice—and we are framing national law here—not to make explicit reference in national legislation to treaty obligations, but to make national law in national terms. This presumably creates less obscurity than trying to frame the legislation in such a way that it is continually "rolling
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forward", as it were. However, I am no expert in these rather complicated matters.
The noble Lord also asked what other countries had legislation to control inward direct investment and foreign takeover. I believe this was something referred to by the noble Lord, Lord Drumalbyn. I suppose this country is not alone in having legislation to control inward direct investment and foreign takeovers. Other Western countries, either through their exchange control regulations or through specific legislation, exercise such controls. I would draw the noble Lord's attention to the Canadian Foreign Investment Review Act 1973, which has the aim of ensuring that future takeovers and extension of business by foreign companies will bring a "significant benefit to Canada".
Lord DRUMALBYN: My Lords, does that refer to Common Market countries?
Lord LOVELL-DAVIS: Yes, my Lords; the Common Market countries are listed: Belgium, France, Germany and Italy. I have done my best to answer adequately the various points which have been raised and I hope I have succeeded.
Lord DRUMALBYN: May I just ask the noble Lord whether he would be good enough to write to us about these points, because they are not at all easy to follow? Indeed, I do not suppose he followed my points any better than I have followed his!
Lord LOVELL-DAVIS: Yes, my Lords; I will certainly undertake to do that and I hope that your Lordships will then be more enlightened than I feel myself to be at the moment.
The Earl of BALFOUR: My Lords, let us hope there is not a great danger here; but may I again ask your Lordships to look at Clause 12(1) where it talks about "change of control". A change of control means a change of control from any person, and it does not really matter where that person is domiciled. It refers to a change of control to any other person not resident in the United Kingdom. In other words, I think we must be certain about this because it is just the kind of thing that will frighten a person away if he had

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thought of investing in this country. Having read that, he might easily say, "My God! I cannot sell it to anybody else, even in my own country." Therefore he just will not come here.
Having said that—and I do not intend to take up the time of this Committtee for very long—I should like just to say that I hope the Government will look at this again and make quite certain that the provisions here will not have the effect of frightening away Community residents from investing money in the United Kingdom. If we can get that point over, and if we can be certain that that point is all right, then—let us face it—there is no need for any Amendments or anything else. That is the important point.
Lord LOVELL-DAVIS: I should like to assure the noble Earl that we fully take this point. This is a general matter—the one of deciding whether to invest in another country—and the overseas investor must decide, on the basis of this legislation, whether or not he will come here in the light of the general conditions prevailing and so on. I do not see that this will discourage investment from the Community. I would have thought that people who control industries in the Community are fully aware of the freedom of action they have within the Community. I do not see this as discouraging that sort of investment. For the rest, they must make their decision on the legislation that exists and on the totality of Community legislation as well.
The Earl of BALFOUR: My Lords, I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
Clause 13 [Power to make orders]:
Lord ELTON Lord ELTON moved Amendment No. 29:
Page 11, line 41, at end insert ("to prohibit or restrict that change of control")
The noble Lord said: My Lords, I will endeavour to be brief because I raised this point on Committee and was so mystified and provoked to curiosity by the answer that I put down the same point again. During the Committee stage I was told that both the Amendments would not do anything to restrict the actions of the Secretary of State on the one hand and that the restrictions it would place upon him,
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on the other, would be unacceptable to Her Majesty's Government.
If the former is the case, then the words will not alter the effect of the Bill and it cannot be objected that the alteration is therefore deleterious. If the latter is true, then the Government apparently intend the Secretary of State to use his supplementary powers for purposes other than those set out in the Orders to which they are supplementary. This would be quite improper and it is not even clear that supplementary orders would be subject to Parliamentary procedure in the same way as Orders would be; and we would oppose this use of supplementary orders very strongly. The best way to prevent this anomalous situation from arising would seem to be to insert the words as printed on the Marshalled List. My Lords, I beg to move.
Lord LOVELL-DAVIS: My Lords, in Committee the noble Lord, Lord Elton, proposed an Amendment to restrict the incidental or supplementary provisions which a prohibition order may contain to provisions "to prohibit or restrict that change of control". I then explained, obviously not very well, what the Government found restricting in this Amendment, but I undertook to look at it further. There is only a very narrow point between us on this Amendment. Lord Elton wishes to make absolutely certain that supplementary or incidental provisions cannot be made which go beyond the basic purpose of "prohibiting or restricting" a change of control. On that point there is absolutely no disagreement. Even without the Amendment my legal advice is that it would be ultra vires for the incidental or supplementary provisions to go beyond the scope of the vesting order. If they did they would cease to be "incidental or supplementary".
The purpose of the provision in Clause 13(1) which allows for an Order to contain incidental or supplementary provisions is that it may be necessary, in order to ensure that a prohibition Order is effective, to take certain actions which are, in the words of the Bill, "incidental or supplementary". It may be helpful if I give an illustration rather than speak in general terms. A prohibition Order might not forbid but merely restrict the doing of something. For example, it might allow it to be done only subject to

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certain terms or conditions or in certain limited circumstances or with the consent of the Secretary of State. In such a case, it might be desirable to make incidental or supplementary provisions about the giving of notice to the Secretary of State before something was done, or enabling the Secretary of State to relate conditions which he had inspired. Noble Lords will, I am sure, recognise that such provisions would not of themselves be prohibiting or restricting the change of control, but would be incidental or supplementary.
To put the same point another way, this Amendment would confine incidental or supplementary provisions to those which prohibit or restrict. But a provision which prohibited or restricted would not be incidental or supplementary. I have spoken at some length to try to make clear why the Government do not think it right to accept this Amendment. I should, however, close by repeating that, so far as I can see, there is no disagreement between the noble Lord, Lord Elton, and me on any matter of substance. A supplementary or incidental provision could not go beyond the scope of the operative part of the prohibition order.
Lord ELTON: My Lords, I am much obliged for that detailed and careful explanation. When the noble Lord tells me that a supplementary order which was used for a purpose beyond that envisaged by the Order itself would be ultra vires, he satisfies me entirely. I am grateful to him for that and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
9.4 p.m.
Lord ELTON Lord ELTON moved Amendment No. 30:
Page 12, line 6, leave out from second ("of") to ("a") in line 7.
The noble Lord said: My Lords, briefly I should like to know from Her Majesty's Government how, and in what way, the removal of the words which the Amendment will seek to strike from the Bill would in fact alter the effect of the Bill. If it would not, I can see no purpose in keeping those words in. If it would, I should like to know what the change would be.
Lord MELCHETT: My Lords, am I right in thinking that the noble Lord
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would like to deal with Amendments Nos. 40 and 41 at the same time?
Lord ELTON: Yes, indeed, my Lords.
Lord MELCHETT: That will speed things up a little, my Lords. The words are necessary and I will seek, as shortly as I can, to explain to the noble Lord why. First, I refer to the phrase "circumstances which appear to him to constitute" a change of control in subsection (2)(c). This phrase gives the Secretary of State an element of discretion, so that he can deal with the difficult cases which may very well occur when there are strong grounds for suspecting that there is a threatened change of control, but where this cannot definitely be proved. These circumstances might arise when purchasers are acting in concert; or when a single holding in a British company is being acquired by means of several holdings in the names of different nominees. I am speaking of cases where ordinary commercial companies would act in a way which noble Lords and I have discussed at length earlier this afternoon.
I would remind noble Lords that we are dealing with purchases made by people abroad and the scope for investigation by British officials of overseas nominees would be severely limited. There may well be circumstances where the Secretary of State strongly believes, but cannot prove, that a change of control is threatened. Here we believe it proper that the Secretary of State should be able to act after justifying the proposed action to Parliament. The Amendment to delete those words would remove that discretion.
The Amendments to subsection (6)—that is, Amendments Nos. 40 and 41—would go further. Indeed, I am tempted to suggest that they destroy the limit on Government action that this subsection introduced. The purpose of this subsection is to limit the Government's power to vest a holding company to occasions when the change of control involves the holding company. We believe it would be wrong to be able to vest a holding company if the bid were made only for its subsidiary. In simple terms, we believe the shares of the holding company should be vested only if the bid is for the holding company. We are therefore concerned not simply with "a change of control", but with "an event in relation

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to the company which would constitute a change of control"—and that is the significance of those words. For that reason, the words "in relation to the company" are essential. Without them the limiting effect, and hence the purpose of this subsection, would be lost. I hope that with that brief explanation the noble Lord will see why these words are very important and will not seek to delete them.
Lord ELTON: My Lords, I am grateful for that explanation. On the first of the three Amendments we spoke of, I follow the noble Lord. One is always diffident about producing areas of grey for choice by Ministers, but I would not insist on this, and would not return to it. On Amendments Nos. 40 and 41. I found it slightly more difficult to follow the noble Lord in the logic of what he said. It appears to me that the words are superfluous and I do not think the words, "in relation to the company" perhaps have the force he intends for them. However, I do not wish to be difficult. I am always exacerbated by what I term "officialese" if I think that it is unnecessary. Probably the pressure of time is more important than my sense of exacerbation. Therefore, I will read very carefully what the noble Lord has said about these two Amendments and talk to him before we return to the Bill.
Lord MELCHETT: May I ask the noble Lord to read what I have said in Hansard. He will find that I made a strong case for retaining the words in the Bill. If I may say so, they are a far stronger case than they are in relation to the first of the Amendments.
Lord ELTON: My Lords, I was under the impression that I had already given that undertaking. The noble Lord and I do not communicate very well at times. Certainly I will read what the noble Lord has said. In the meantime, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
9.9 p.m.
Lord DRUMALBYN Lord DRUMALBYN moved Amendment No. 31:
Page 12, line 9, leave out ("1st February 1975") and insert ("the passing of this Act").
The noble Lord said: I beg to move Amendment No. 31. At the Committee stage the noble Lord, Lord Beswick, was in full flight in telling me what were the reasons for including the words "1st February 1975"—this is reported in column 500 of Hansard—when my noble friend Lord Hawke asked him about a point which was totally unrelated to the point we were discussing and we never returned to what the noble Lord was telling me. I wonder whether he would be good enough to complete his exposition of why the words "1st February 1975" are necessary. They appear twice. I have another Amendment on this point. Indeed, it was on Amendment No. 42 that the noble Lord was giving the explanation. However, I think that the explanation for the date is the same in both cases.
Lord BESWICK: My Lords, I thought I had made it quite clear that the point about 1st February was that it was the date of publication of the Bill. I must correct myself; it was not. The date of publication of the Bill was 31st January. Therefore, we are saying that anything which takes place after 1st February should be caught. The reasons for that are fairly obvious. If one waits until the passing of the Bill, which could take months, a period of time is given within which action could be taken and it would be possible for anyone who knew of the requirement to keep secret their acquisition. If we did not have the power to go back to 1st February we could do nothing about it. I hope that the noble Lord is in agreement with our intention. If he studies it, he will see that there is no way to achieve that intention other than by saying that the relative date is 1st February, after which date everything about the Bill was known.
Lord DRUMALBYN: My Lords, of course it may be a long time before the Bill becomes law. For how long would the noble Lord be able to go back? Would he be able to go all the way back to 1st February, or would he be able to go back only for a certain period in order to stop the transfer? However, it is very unlikely that the transfer would be made immediately after 1st February. My guess is that it would be some weeks or months later. It is a slightly ticklish point, and I appreciate the main reason which the noble Lord has given.

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Unfortunately, he did not come to it in his previous explanation.
Lord BESWICK: My Lords, I am afraid I am not quite sure what the noble Lord is asking me. If he is asking how far we can go back, we can go back to 1st February if we wish to do so.
Lord DRUMALBYN: My Lords, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord ELTON Lord ELTON moved Amendment No. 32:
Page 12, line 9, after ("1975") insert ("but not more than 6 months prior to his learning of them").
The noble Lord said: My Lords, I beg to move Amendment No. 32. This Amendment follows on directly from the point which was raised by my noble friend Lord Drumalbyn. It relates to the limitation of retrospection. I understand the difficulty of the Government. As the point of the publication of the Bill recedes over the stern, so the element of retrospection that is necessary becomes longer; but once the Bill becomes law and once the cases have arisen between that point and the point at which the Bill is published, presumably everything behind us is cleared up. However, the element of retrospection will remain in the Bill ad infinitum. In 1978, in 1980 and in 1984 it will still be possible to use the pretext of events which happened in February or March 1975 coming belatedly to light to institute proceedings under the Act.
My inclusion of six months is probably too short, but one could include a phrase which covered the length of time between the passage of this Bill into law and the publication of the Act—let us say nine months—and which thereafter would be terminus post quam non. In other words, once an event had taken place and had been unchallenged for a period of, let us say, nine months or a year it would not be in order for the Secretary of State on the ground of those events to use a vesting order. This is not unreasonable and it may be reassuring to persons who are engaged in commerce, particularly in the grey areas to which the noble Lord, Lord Melchett, referred earlier, in which it is not absolutely clear whether a particular set of circumstances has or has
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not occurred. In a case like that, once they have been allowed to pass unchallenged for nine months or a year, I thought it would be reasonable that the people involved could feel secure that what they had done would not give rise to this sort of challenge. I beg to move.
Lord MELCHETT: My Lords, the noble Lord, Lord Elton, has said something of what I was going to say and I think he acknowledged that the six months' period was unrealistic. It would of course open up an enormous loophole which it would be impossible to control, because if a foreign company acquired control surreptitiously and without people knowing, through, for example, friends and nominees, and this was kept from the Secretary of State for six months, the powers of Part II of the Bill would be rendered completely useless. In our view this would be an invitation to unscrupulous purchasers to keep their actions secret for six months and then to present the British Government with a fait accompli about which they would be powerless to do anything. If I may say so, I think almost any time limit would be open to much the same objection, although of course if one were to take a long enough period of time I suppose it is extremely unlikely that anyone would be able to keep something secret for that long.
I have a feeling that the way to get at what the noble Lord wants is this. Any foreign purchasers need not be in any doubt about whether or not their purchases are likely to be affected by these powers. Before acquiring control of key British businesses, they may come and seek the views of the Secretary of State. If the Secretary of State then approves the change of control, they can proceed with that assurance. Irrespective of whether or not prior approval has been obtained, purchasers who inform the Secretary of State of a change of control know that after three months have elapsed there can be no further action taken. This is explicitly established by paragraph (b) of Clause 15(4). So I think that any foreign purchasers who act in an open and above board manner have nothing to fear from any form of retrospection, and it will only be people who are deliberately keeping something secret in the hope of evading the use of these

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powers who will have something (quite rightly) to fear from the ability of the Secretary of State to act as he is now empowered to do by the Bill.
Lord ELTON: My Lords, we are now moving at such speed that it is difficult to digest before one is required to comment. I see the difficulty and I accept that the noble Lord has put forward a powerful argument. I think the most powerful part of it was the reference to paragraph (b) of subsection (4) of Clause 15. As I understand it, if the parties to some transaction which might be thought dubious in the terms of the Bill are to go to the Secretary of State and declare what they have done, at that point the Secretary of State is aware of what they have done and he has three months in which to take action in the light of that information. If he does not take action he then loses the power so to do. Therefore this protection is written into the Bill and if I understand the noble Lord aright, which I think for once I do, I do not think it is necessary to proceed with the Amendment and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
9.18 p.m.
Lord DRUMALBYN Lord DRUMALBYN moved Amendment No. 33:
Page 12, line 20, leave out ("and") and insert ("but no such nominee may hold more than one share.
( ) The Secretary of State")
The noble Lord said: My Lords, this is the same point as we have had before: the question of the statutory minimum of shareholders when whatever body was going to hold the shares would have to have a number of other nominees to hold the shares with them. It seems to me that it is unobjectionable to require that no such nominee will have more than one share he probably will not. I beg to move.
Lord LOVELL-DAVIS: My Lords, the purpose of the provison allowing the vesting of the shares in nominees is quite straightforward. Section 1 of the Companies Act 1948 requires a public company to have at least seven members. Since a vesting order may enable all the shares in a company to be vested, it is necessary to provide for nominees so as to avoid a technical breach of the Act. I
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am not quite sure whether there is any further answer the noble Lord requires. I find it rather difficult to see what the Amendment would achieve. There is nothing covert about this in any way.
Lord ELTON: My Lords, I wonder whether I can help, since we are anxious to keep interventions per person to a minimum. As I understand it, the noble Lord has now said that the purpose of this clause is simply to provide for the minimum number required under the Companies Act. The noble Lord will accept that whether it is groundless or well-founded, there are large areas of opinion which are somewhat suspicious of uses to which the Act can be put, and, as I said to the noble Lord, whether or not it is well-founded the fact remains that it exists. In order to reassure us, therefore, it would seem reasonable to put a provision into the Bill which would prevent nominees being used, for instance, doing exactly what the noble Lord suggested might have occurred. I will pause for a moment while he takes advice.
The situation we envisage is that nominees working for the NEB or for the Secretary of State might employ exactly the tactics which the noble Lord has just said that a foreign purchaser might use; that is, to buy a block of shares not so large as to force them to disclose their identity, but large enough to have an effect which the management or the shareholders might think would be prejudicial to the affairs of the company. This they could not do if they could buy only one share each. If they could buy a large number of shares then of course they could. The noble Lord has already said that they do not want to do that so I think he has precluded himself from objecting to the Amendment. I hope so.
Lord LOVELL-DAVIS: My Lords, I really do not see that the Amendment is necessary to prevent clandestine acquisition or hidden control. We are talking here of shares which have been transferred to the Secretary of State or to the NEB by a vesting order. The order will have to be published and approved by Affirmative Resolution of both Houses of Parliament under the terms of Clause 15(3) before it is effective. There is therefore no possibility of anything covert about the acquisition or the vesting in

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nominees. I really do not see that there is anything very much which the noble Lord has to fear.
Lord DRUMALBYN: My Lords, I am not quite certain what one might get up to if one did it in this way, which would be the normal way to do it. Therefore I thought it best to put down the normal way so that there is no possibility of anybody getting up to anything. That is the purpose of it. However, I do not want to press it particularly hard and if the noble Lord feels well disposed to it he might put something down on Third Reading. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The DEPUTY CHAIRMAN of COMMITTEES: My Lords, before I call Amendment No. 34, I should point out that if it is agreed to I cannot call Amendment No. 35. Your Lordships will notice that there is a corrigendum to subsection (4).
9.23 p.m.
Lord ELTON Lord ELTON moved Amendment No. 34:
Page 12, line 27, leave out subsection (4).
The noble Lord said: My Lords, at the outset may I thank the noble Lord, Lord Beswick, for his communication to me on the subject, to which I shall later allude. At the Committee stage the words,
"…together with so much (if any) of the loan capital of the relevant body corporate as may be specified in the order",
came at the end of subsection (4) and in its main body. In other words, in either a case mentioned in paragraph (a) or a case mentioned in paragraph (b) there was provision for the specification of some of the loan capital, together with the share capital in a vesting order, and such loan capital ranked under Clause 19 for compensation.
Since paragraphs (a) and (b) together comprise all cases in which vesting orders are made it follows that in every case where a vesting order was made there was provision for inclusion therein, and in the preceding compensation order, of a proportion of loan stock. These words,
"together with so much (if any) of the loan capital of that body as may be specified in the order".
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as a result of an Amendment at the Committee stage about which we had a confusing debate, appear at the end of paragraph (a) and not in the main body of the subsection. They do not therefore apply to cases falling within the definition given in paragraph (b). That definition in any case is not falling within paragraph (a). The power to vest and to compensate for loan capital has therefore been limited by this Amendment to what I may term paragraph (a) cases. These are cases in which the Secretary of State considers that interest specified in subsection (2)(c) can be only appropriately protected by the vesting of all the share capital of the body corporate that is to say, if the Secretary of State decides on a vesting order by virtue of a case falling within either subsection (2)(a) or (b), it is not open to him to vest any of the loan stock of the body corporate. In the first of these paragraphs, we are concerned with cases where the Secretary of State anticipates a prejudicial change of control. In paragraph (b), we are concerned with cases where a prohibition order has been made. The distinguishing mark of paragraph (c) is that it is a vesting order made as a result of events which have already occurred, of the kind we have been discussing, and which the Secretary of State considers to amount to a prejudicial change of control.
I asked for an explanation on Committee stage, and received it today. I should like to thank the noble Lord for the letter he has sent to me but, none the less, I should like him to clear up a doubt which has now arisen therefrom. Can Her Majesty's Government explain why, in their view, the only occasion on which loan stock should vest and bear compensation is when vesting of it is caused retrospectively, and when, furthermore, the whole of the share capital also vests? How does the noble Lord view the position of a company with a small share capital and a large loan capital, which is thus left with a large debt secured upon a management over which it has no control, and by which it was arbitrarily supplanted on the grounds that its own continuance was contrary to the national interest?
At that juncture in his letter, the noble Lord said it could not possibly be against the interests of any shareholder of loan

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stock to have stock secured on a Government enterprise. I am not sure that this is universally accepted. The noble Lord said in a written reply:
"It is proper….that there should be no power under paragraph (b) of this subsection to vest loan stock, since loan stock will not be involved in the change of control'".
I must emphasise that the criterion distinguishing between paragraph (a) and paragraph (b) cases in Section 34 is not just whether all, or only part, of the share capital vests. The distinction between vesting all or part of the share capital is imposed by those two paragraphs, but the criterion by which they operate is not that at all; it is whether or not they fall within paragraph (c) of subsection (2) of this clause and if they do so fall, whether the Secretary of State considers he can or cannot appropriately protect the interest mentioned therein by any other means.
What distinguishes cases falling under paragraph (c) of subsection (2) from all other cases is that the Secretary of State has learned of the change of control after it has happened. It follows inescapably on that that, unless the Secretary of State learns of the change of control after the event, he has no power to vest loan capital and to compensate for it. I can see that the noble Lord is prompted to some mirth by this intervention, and I am sure he will make it clear to my great disadvantage, why this should be. Perhaps I will leave it there, because it seems that the noble Lord has had an answer all along which he has been longing to spring on me.
Lord BESWICK: My Lords, may I just remind the noble Lord, Lord Elton, that about a quarter of an hour ago he said something about my noble friend speaking rather too quickly, and that it was rather difficult to follow. This is something which we all have in common. Yes, my Lords, I have had a communication. It confirms what I had in my own mind, and it reads as follows: "offer to write again for Third Reading".
Lord ELTON: My Lords, first, I stand entirely convicted of the accusation of speaking too fast. But I think I have been speaking rather less fast than I did two years ago when I came to the Chamber. On this occasion, it has the enormous advantage of precluding the noble Lord from answering at this stage,
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so it does, in fact, accelerate proceedings. Therefore, I think it is appropriate for me to withdraw the Amendment, with the proviso that I can return to the matter on Third Reading, having read the letter of the noble Lord.
Amendment, by leave, withdrawn.
9.29 p.m.
Lord LOVELL-DAVIS Lord LOVELL-DAVIS moved Amendment No. 35:
Page 12, line 36, leave out ("the share capital") and insert ("that part of the share capital of any relevant body corporate").
The noble Lord said: My Lords, the concept in this Part of the Bill is a simple one. It is that when only some of the shares of a company are involved in a threatened or actual change of control, the Secretary of State should normally vest only these shares, and not all the shares of the company concerned. The concept was introduced in another place in response to a Conservative initiative which the Government accepted.
In this Amendment we are seeking to make this concept more precise by specifying that the shares must be shares in a relevant body corporate. In doing this, we are bringing the concept of a relevant body corporate to paragraph (b) of this subsection, and in this way imposing the same limitation to paragraph (b) that already applies to paragraph (a). I beg to move.
The Earl of SELKIRK The Earl of SELKIRK moved Amendment No. 36:
Page 12, line 40, leave out first ("the") and insert ("a").
The noble Earl said: My Lords, I raised this question at the Committee stage, and I was quite convinced that the noble Lord. Lord Beswick, fully understood the point I was making. I am, therefore, disappointed that he has not put down an Amendment himself, and even more disappointed that he should have made the same mistake again in his Amendment No. 60. The point I am making is this. It refers here to the "law of the United Kingdom", and there is no such thing. It is merely a question of wording to put this right. There are laws in Northern Ireland, there is a law system in England and a law system in Scotland, but there is no law of the United Kingdom. I think the noble and learned Lord, Lord Gardiner, would support me on this.
There are various ways in which this could be put right. I have suggested what seems to me a simple way by referring to "a law of the United Kingdom"; that covers any law of any part of the United Kingdom. I think it covers fully the point the noble Lord has in mind. There are many other ways of expressing it. It is purely a drafting point, but I object to the use of words to describe something which does not exist. I beg to move.
Lord MELCHETT: My Lords, the noble Earl drew our attention in Committee to the drafting of this subsection. We have now re-examined it and believe that the drafting can be improved by bringing it into line with the precedent of Section 10(1) of the Industry Act 1972, which spoke of a body corporate incorporated under the law of any part of the United Kingdom. If the noble Earl will withdraw the Amendments he has on the List today, I will be glad to promise a Government Amendment at Third Reading.
The Earl of SELKIRK: My Lords, I am grateful to the noble Lord. I would point out that at Committee stage one of the three suggestions I made was the one that he is proposing, and I regret that the noble Lord has not picked it up sooner. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord BESWICK: My Lords, before we upset the noble Earl, Lord Selkirk, again, I wonder whether we might now adjourn the Report stage.
Lord ELTON: My Lords, for the convenience of the House I would say that I was not proposing to move my next two Amendments and I think I am right in saying that my noble friend was not proposing to move Amendment No. 42.
Lord BESWICK: My Lords, at that point I wonder whether it would be convenient, as we have given certain undertakings, to adjourn until tomorrow the further consideration of this Bill.
I beg to move that the Report stage be adjourned until tomorrow.
Moved accordingly, and, on Question, Report stage adjourned.

CRIMINAL JURISDICTIN BILL [H.L.]
9.34 p.m.
Lord DONALDSON of KINGS-BRIDGE: My Lords, I beg to move that the Commons Amendment be now considered.
Moved, That the Commons Amendment be now considered.—(Lord Donaldson of Kingsbridge.)

COMMONS AMENDMENT
[Refence is to Bill [103] as first printed for the Commons]
Schedule 4, page 15, line 44, at end insert—
"(2) The Commissioner shall arrange his sittings so as to facilitate the attendance of any such judge and, subject to paragraph 2(4) above, shall put to the witness any questions suggested to him under this paragraph.")
Lord DONALDSON of KINGS-BRIDGE: My Lords, I beg to move that this House doth agree with the Commons in their Amendment. The Amendment, which was welcomed and passed in another place on 1st August, provides that at the taking of evidence on commission in Northern Ireland and to assist the court of trial in the Republic the Commissioner shall arrange his sittings for the taking of such evidence so as to facilitate the attendance of any visiting judge from the court of trial. It also provides that the Commissioner shall put any questions suggested by the visiting judge to the witness provided that they do not infringe the rules relating to the immunities and privileges of witnesses which, under the Bill, are determined in accordance with the law of Northern Ireland.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Donaldson of Kingsbridge.)
Lord BELSTEAD: My Lords, I have no objection to this and my only surprise is that it is necessary, for I should have thought that it was already implicit in the wording of the Bill. However, this was not the view taken by another place and I have no objection to this Amendment.

NORTHERN IRELAND (EMERGENCY PROVISIONS) (AMENDMENT) BILL
9.36 p.m.
Lord DONALDSON of KINGS-BRIDGE: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Donaldson of Kingsbridge.)
House in Committee accordingly.
[The Baroness TWEEDSMUIR of BELHELVIE in the Chair.]
Clauses 1 to 3 agreed to.
Clause 4 [Removal of certain limitations on power to grant bail]:
Viscount MASSEREENE and FERRARD Viscount MASSEREENE and FERRARD moved Amendment No. 1:
Page 2, line 41, at end insert—
"(1A) At the end of the said section 3 there shall be added the words 'or of the Royal Ulster Constabulary'."
The noble Viscount said: In view of the fact that the noble Lord, Lord Monson, is not in his place, perhaps I had better step into the breach. We discussed this matter on Second Reading, and we have tabled this Amendment because we feel, and I think other noble Lords feel—at any rate, they did on Second Reading—that members of the Royal Ulster Constabulary are at a disadvantage compared with members of Her Majesty's Forces in the North of Ireland regarding the question of bail. I understand the legal position, in that when members of Her Majesty's Forces under the various Army Acts do something which they should not have done, they are not treated like civilians in that they are under Army discipline. Therefore, when a misdemeanour has been committed, an officer of Her Majesty's Forces—or, for that matter, a private—can appear in court and say that on a given date he will produce the offending member of Her Majesty's Forces.
Members of the RUC, on the other hand, feel, rightly or wrongly, that they are at a disadvantage over this. I agree that in the higher court a judge can, if he wishes, grant bail to a member of the RUC, but that is not so in the magistrates' court. As I say, I understand
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the legal complications, and I further understand that whereas in the Armed Forces men are in barracks and can be confined to barracks until they are produced in court, members of the RUC go home to their houses and there is not quite the same amount of control over them.
I think that this is an exceptional set of circumstances. Here we have men who are in great danger. That has been proved by the statistics of the numbers they have lost in patrolling for security reasons in the North of Ireland. We want to keep RUC morale high, and I believe that it is high, though the recruiting figures would perhaps not quite hear that out for I understand that they are 28 per cent. under strength. I do not know the cause of this, but we should do everything to keep their morale high. Therefore, I ask Her Majesty's Government, since the Secretary of State has, I understand, intimated that it is his desire to widen the policing area of the Royal Ulster Constabulary and gradually to phase out the use of the Army in certain areas, to do everything possible to keep the RUC's morale high. I repeat for the third time that I understand the legal difficulties here, though I am a layman in the law. I ask the Government whether we could not make an exception and do as the Amendment suggests; that is, that the RUC should not be treated as civilians but should be treated for the duration of their role during the emergency as members of Her Majesty's Forces.
I ask Her Majesty's Government to try to make an effort to treat the RUC as members of the Armed Forces. I am sure that in reply the noble Lord, Lord Donaldson, will say that this would be to restrict the RUC because if they were treated in the same way as the Forces they would have to be herded into oar-racks and they would not be allowed to go back to their own houses. But I ask the Government to make an exception here in order to keep morale high and to boost recruiting, and in order that the courts can give bail to members of the RUC. I ask the Government to make a great exception in this case. I realise their difficulties, but I ask them to review the case very sympathetically.
Lord DONALDSON of KINGS-BRIDGE: I should first like to say a

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word. There are three Amendments which all deal with this question and I feel that it would be for the convenience of the Committee if we had a general debate and took the Amendments seratim. The effect of the Amendment is to extend Section 35 of the principal Act to exempt the Royal Ulster Constabulary from the limitations governing the granting of bail in cases involving scheduled offences. In its present form, the section exempts from the limitations persons under the age of 14 and certain members of Her Majesty's Regular Naval, Military and Air Forces, and nobody else. May I first say, as I said on Second Reading, that the Government are extremely proud of the performance of the RUC under circumstances of maximum stress. We are most reluctant to be unable to agree to the Amendment, which would to some extent ease their position.
My right honourable friend the Secretary of State has considered this fully and has discussed it in detail with my right honourable and learned friend the Attorney General, and the RUC accept that it would not be possible for it to keep a police officer confined in the same way as the Army is able to keep a soldier in that period between the charge and the trial, which may be several months. That is a question which the noble Lord, Lord Belstead, asked me, and that is the reply to it. The purpose behind Section 3 of the Emergency Provisions Act is to ensure that persons who are charged with scheduled offences will not be granted bail, unless it is clear that they will comply with any conditions imposed, that they will not interfere with witnesses, and that they will not commit any offence while on bail. Those are the three conditions laid down in the Act.
These are difficult matters to decide in normal circumstances, and they require speculation about future conduct and consistency of decisions is important. Accordingly, the power to make such decisions has been vested in High Court judges. Such considerations do not apply, however, if it is a soldier who is charged with a scheduled offence and the Army guarantee the conduct of the soldier. A soldier is subject to continuance of military discipline and appropriate steps can be taken to ensure his conduct. In these unusual circumstances, it is logical to
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allow magistrates to decide on bail without necessarily applying the criteria mentioned.
A police officer is—and I think that this is extremely important—and always has been, regarded as a civilian member of the community, accountable to the law like all other citizens. This has always been a fundamental matter of constitutional significance. The Royal Commission on the Police in 1929 observed—and its observations were repeated and endorsed by the Royal Commission of 1962—that the police have never been recognised, either in law or by tradition, as a force distinct from the general body of citizens. Any movement to differentiate between a member of the public and a police officer, by providing that the police officer shall be treated more leniently, would be a grave step, however minor the application, particularly at a time when we are trying increasingly to move over to the police enforcement of law and order, as opposed to the military.
However, there are practical reasons which must be taken into account as well. If a police officer is granted bail he will return to his home and family in Northern Ireland and may well appear in the area in which the incident in respect of which he has been charged occurred. It may be that he will encounter the person who made allegations against him, and witnesses. He may decide to leave the country. All these possibilities need to be considered before bail is granted. In some cases there may be a police officer who is, in fact, guilty. This might very well happen, and the point of bail is that it should be given only where it is clear that this will not happen.
A soldier, by contrast, returns to his barracks. Charged with a serious offence, he is given the option of signing a voluntary undertaking to be kept in close arrest, or the alternative of not being granted bail but of being kept in civil custody. If he signs the undertaking, he is kept either under lock and key or under escort, and in any event in accordance with those conditions under which the court grants bail. If a soldier breaches his undertaking he can be arrested by the military for a Service offence arising out of that breach. If the soldier withdrew his agreement and attempted to escape military custody, he

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could also be arrested by the RUC for a breach of conditions of bail. He would then be brought before the court. Therefore, it is unnecessary for the criteria in Section 3(2) of the Act to be applied. Were a police officer to sign an undertaking of this kind, it would not be possible for the police to keep him under arrest or to restrict his freedom in the way open to the military authorities.
As I have said, the police do not have the necessary facilities. Although in practice police officers have always answered to their bail, it is necessary for the person granting bail to consider the criteria in Section 3(2), which I have already quoted. If these criteria are to be considered, consideration should be by a judge. This is a difficult case and we have here an Amendment which needs the most serious consideration. The last consideration that I should like to put forward is that there have been only four cases where a policeman was charged with a scheduled offence. In each case, the existing methods by which he goes to the High Court have worked, and in each case he has got there. In spite of the fact that many of us have great sympathy with what the noble Viscount has moved, I hope that the Committee will not accept this Amendment.
Lord MONSON: I should like to support strongly what my noble friend Lord Massereene and Ferrard has said, despite what the noble Lord, Lord Donaldson, has just explained. The dissatisfaction felt by the RUC was gone into at some length in paragraphs 37 and 62 of the Report produced under the auspices of the noble and learned Lord, Lord Gardiner. In the former paragraph, which dealt specifically with the question of granting bail to the RUC, the Gardiner Report made the same point as did the noble Lord, Lord Donaldson of Kings-bridge, saying that the Regular Forces can usually arrange to have one of their number held in military custody during remand, whereas the police cannot usually so arrange. My noble friend Lord Brookeborough pointed out on Second Reading that in his opinion this practice contravenes the Army Act (though I am not competent to judge this).
So far as the civilian status of the police in Northern Ireland is concerned,
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I agree that in the normal way the police are civilians. Yet I must point out again that, in the Gardiner Report, in the tables on pages 61 and 62, showing casualty figures, the statistics of violence between 1st January 1971 and 30th November 1974 are given. The deaths are listed under the heads of "Security Forces", "Civilians" and "Terrorists". The noble Lord will correct me if I am wrong, but I am almost certain that the police are listed under "Security Forces" in this table.
I pointed out on Second Reading that no fewer than 65 policemen and women have been murdered in Northern Ireland since the start of the emergency. This is as if just under 2,300 police had been murdered in England, Scotland and Wales during the same period; which is rather more than one per day. One can imagine the repercussions in Great Britain proper if this had happened. I have done some more calculations since then. Over the past six years, approximately one ordinary civilian in every 2,200 has been murdered, but more than one policeman in every 73 has been murdered. This is an extremely high proportion. In other words, a policeman is 30 times more likely to be murdered than an ordinary civilian, and Heaven knows the figures are bad enough, so far as the latter are concerned.
Police morale is all important. Mr. Merlyn Rees himself said on 27th June:
"The police are the key to the security situation. They must have support."
I wonder whether your Lordships noticed in The Times today an article by their defence correspondent in which he pointed out that the RUC is 1,859 below their established strength. This is more than 28½ per cent. below strength, which I should have thought was a serious situation. If their morale is not boosted in some way, the situation will surely get worse.
The noble Lord, Lord Donaldson, made the point that if the police were to be released on bail and returned to the areas in which they lived, they might confront the person who had made a charge against them and this could lead to awkwardness and even violence. I should like to make the point that if they are remanded in custody their wives and families could be at risk. There have been several attacks on the private houses

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of policemen in Northern Ireland by either the provisional or the official IRA.
May I touch briefly on Amendment No. 3 tabled by my noble friend Lord Brookeborough. It is a little more restrictive than that of the noble Viscount, Lord Massereene and Ferrard, and my-self in that it refers to regular members of the RUC on duty. I have no particularly strong feelings about the regular members except that I should like to point out that just over 10 per cent. of those murdered have, I understand, been reservists. I think that on balance it is desirable that they should be extended this protection as well. The words "on duty", I must say, with respect to my noble friend Lord Brookeborough, seem a little imprecise and do not say at what point the member of the RUC is on duty; whether at the time of arrest or when the alleged scheduled offence has taken place. This is for the Government to decide. I would urge your Lordships to accept either Amendment No. 1 or Amendment No. 3.
Lord GARDINER: As the noble Lord, Lord Monson, referred to the report of the Committee of which I was chairman, may I say first that there are different ways of arranging statistics. But always when you talk about Security Forces in the plural it is clear that this includes both the Army and the police, notwithstanding the fact that the police are civilians. May I add that we spent a considerable time over this question, discussing it at more than one hearing with the police themselves, with the Army and with others. Speaking only for myself, I formed the highest view of the quality of the Royal Ulster Constabulary. We were sympathetic with them because at first sight it looked as though the Army were, as it were, being given some advantage in relation to the police, and so we were naturally sympathetic with the police.
Then we found that there were these differences. First, it is a fact that in the Army, particularly by consent, a man can be confined to barracks and put under close arrest. We are talking about scheduled offences such as murders or being found in possession of explosives, and very serious offences for which ordinarily very few people would be given bail. But this enables the officer to say
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to the court: "I can undertake that if you give this man bail he will appear to stand his trial."
The police superintendent is in no position to say anything of the kind. A man can be kept in barracks or an Army camp easily because he does not leave the place, but the chief constable has no power to keep a man in a police station. The police are not quartered in a police station; they do not live in it, they live in their own homes. The only place in a police station in which a man could be put is in a police cell which obviously would be most undesirable. Is the man to live at home? I doubt very much whether this would be in the policeman's interest.
Here is a policeman who has shot an 18-year-old Catholic or Protestant, and feeling is running high. Police do not prosecute in Northern Ireland. It is only in England and Wales that they prosecute. Nowhere in Western Europe do the police prosecute; there is always an independent body. But the Director of Public Prosecutions has come to the conclusion that the evidence is such that this man ought to be charged with murder. Of course feeling is running high. Is this policeman to stay at home or go out on duty in the streets in the area in which these feelings are running high? We came to the view that although at first sight there might seem to be some unfair distinction between the Army and the police, they were in a different category. The soldier was, in a sense, in the fortunate position of having an officer who could say: "I can undertake that this man will appear to stand his trial." The police could not do that. It was doubtful whether it was in the interest of the police themselves that they should remain at home or do their ordinary duties. Further, they would at least be safe from any attack by prisoners. Although at first sight it might seem that the Army were being in some way privileged, really this was not so, and really this was the only practical alternative.
Lord MONSON: Before the noble and learned Lord sits down, may I ask whether he would agree that the sort of offences for which the police would think it reasonable that bail should be granted are probably not the really serious offences such as manslaughter or possession of explosives, but rather the

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minor ones such as assault occasioning actual bodily harm under the Offences against the Person Act 1861, or a minor offence under the Firearms (Northern Ireland) Act 1969, such as possessing a firearm without a certificate?
Lord GARDINER: I think it is mainly applying to scheduled offences, and of course they are really serious.
Viscount MASSEREENE and FERRARD: I wonder whether I might ask the noble and learned Lord one question: why is it that so many members of the RUC seem to want to have their cases dealt with in a magistrates' court? Perhaps they are misinformed or do not understand the situation, but it appears that a great many of them want to be treated in the same way as the Armed Forces, without any question of bail.
Lord GARDINER: We are talking about Section 3 of the 1973 Act. This Act limits the power to grant bail only in the case of scheduled offences; so these are really the serious offences. Turning to what the noble Viscount said, I think the police simply had not thought this out. We found when we talked to them that they had not really considered what the consequences would be if we had agreed to their suggestion. They just said: "If the Army are treated in this way, why are we not treated the same?"
Lord MONSON: I am sorry to rise to take up yet again a point put by the noble and learned Lord, but I was looking at Schedule 4 to the 1973 Act and the two relatively minor offences I cited were definitely listed as scheduled offences; that is to say, an assault occasioning bodily harm and possessing a firearm without a certificate.
Lord DONALDSON OF KINGS-BRIDGE: My Lords, it is not usually regarded as a very minor offence to beat somebody up.
Lord BELSTEAD: My noble friend Lord Brookeborough has put his name to this group of Amendments, and perhaps before he speaks on them I might just very briefly indicate how I feel from the Bench on which I sit, having had the benefit of listening to the noble and learned Lord, and also to the noble Lord,
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Lord Donaldson. First, I should like to say that I was very glad that my noble friend Lord Massereene made the point, as did also the noble Lord, Lord Donaldson, and the noble and learned Lord, that there is every reason at the present time to try to see that the Security Forces—both the Army and the police—receive similar recognition in every way for the very dangerous work that they do.
Listening to the noble and learned Lord, it crossed my mind that so often in past years one has heard or read of the popular cry being raised that the Security Forces harass people. But what those who raise that cry so very rarely admit is that the Security Forces, in their turn, often endure severe provocation. They are liable to be involved in incidents where their own lives are at stake, for instance, from gunmen who can open fire quite indiscriminately often in the dark, whereas the Security Forces have to be sure that they do not harm anyone, least of all an innocent person.
As I listened to the noble and learned Lord, I wondered whether he would mind my making the point that what may be the worry in the minds of the RUC—indeed it is a worry in my own mind—is that in the event of a mistake of judgment, possibly in the dark, possibly just because of force of circumstances in a given situation, a soldier or a policeman could find himself charged with a scheduled offence. Of course I realise that the Director of Public Prosecutions has to take a decision on this, and this is possibly a worry in the minds of the RUC. Certainly it was something which was in my mind when I ventured, on Second Reading, to welcome the fact that the Attorney General had clarified the matter about his absolute discretion to "certify out" offences from the scheduled offences in particular cases.
That leads me on to say that I have listened carefully to what the noble and learned Lord has said. I was going to ask three questions, and he has answered all of them, so I do not have to put any of them. I, for my part, as a layman found that the explanation and the words of the noble and learned Lord satisfied me. Indeed, I wonder—and I think my noble friend Lord Brookeborough might elaborate on this—whether it could just be that if the Royal Ulster Constabulary were to press this, and it were to be

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agreed, they might find themselves in a rather ludicrous situation in which members of the RUC could find they were allowed to have bail but it must be in some form of close custody, whereas at the moment they are, as a matter of fact, being granted bail, we are all delighted to say, in the High Court and having bail as completely free citizens.
There is one question which I must ask the noble Lord and I wonder whether it would be possible for him to answer it. I think he said that the RUC accepted the point that on practical grounds it would be exceedingly difficult for them to be exempt. Does that mean that the RUC and the Government have had discussions on this matter? I should be most grateful if, when the noble Lord comes to reply, he could tell me the answer to this.
10.7 p.m.
Viscount BROOKEBOROUGH: As everybody has said, the object of the exercise is to try to see whether we can get for people who do equally dangerous jobs in equally dangerous circumstances the same treatment, if two identical men are charged with an offence at the same time. That is really where the shoe pinches. I have been extremely interested in hearing various noble Lords and noble and learned Lords discussing this subject. I still believe there is a feeling that the police are being humiliated. I quite understand, from what the noble and learned Lord has said, that there was never any such intention in the drafting of the Act or the drafting of the Report.
After going into the matter, I feel that the Army Act comes into it in only one place, and the Police Act comes in in exactly the same place; that is, that the commanding officer can order somebody to appear in court. That is the legal point at which the Army Act comes in and Army discipline comes in: he can order the accused soldier to appear in court at a certain time. I believe that the Chief Constable can do exactly the same; he has exactly the same sanction on that level. I find it hard to believe that the dramatic conditions of murder and things like that which have been spoken about would justify bail in any circumstances at all; and a magistrate, if he is given the option, could not give bail but would refer the man to the High Court in any case at that point. Therefore, I feel
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the matter should be examined on the question of giving power to give bail back to the magistrate.
I have had a certain amount of discussion with people on the fact that the Army go back to barracks and leave Northern Ireland. But somewhere over 50 per cent. of what I would call the fighting force in Northern Ireland is resident in Northern Ireland in some form or another. The people who are most likely to be charged are of the corporal level—somebody in charge of a party. He is likely to have a wife living in Ballykinler or Lisburn or some such place. Unless he is confined to barracks and therefore prevented from going to his family, then we are facing the peculiar situation where a soldier is given bail to be in military custody. I do not want to be too frivolous about it, but I can imagine a certain situation if an accused soldier is marched under escort back to his wife living in barracks. It seems to me that if this man is under military escort or under close arrest then he could be there for some six or nine months. Therefore, he will be very much worse off than a member of the Royal Ulster Constabulary.
There is a very good case for saying that they should be equated the other way. If I were a soldier, I should not like to be in close or open arrest and escorted about the barracks either in Germany or in Northern Ireland in the period before the case comes to court. The courts in Northern Ireland deal extremely rapidly with this kind of allegation, and for that they deserve great credit. If this discretion were to be given back to magistrates I cannot see that it would be abused. We are not asking for bail; we are suggesting that it should be equated so that magistrates could give bail if they believed that to be right. The security for bail which the magistrate gets is the power of the commanding officer to order a man to appear. I believe that the sanctions which can be applied to the policeman who is commanded to appear by his chief constable are the same, and that is why we should try to equate them.
Lord DONALDSON of KINGS-BRIDGE: If I may deal first with one of the points which was made by the noble Viscount who has just sat down, he said that he thought that under these conditions the soldier might well be

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worse off than the policeman. The answer is that at any moment the soldier can withdraw his consent and ask to be sent to prison. That has not yet happened and I do not think it is very likely to happen, but this is his right under the arrangements with the Army. Therefore, I do not think that this is a very cogent point.
Viscount BROOKEBOROUGH: Are soldiers under escort during the whole of this period or does nothing happen when, for instance, they go back to Germany?
Lord DONALDSON of KINGS-BRIDGE: This is entirely a matter for their commanding officer under whose discipline they are. I can add nothing to that, and as a soldier the noble Viscount should understand this. If they doubt the staying power of the soldier, he can be put under close or open arrest, or confined to barracks, or whatever they think. It is up to them. That is the position and I do not think there is any difficulty about it.
My noble and learned friend was of the very greatest assistance to me in answering the legal points far better than I could. I want to end on this—note I shall not go through the arguments again because we have been through them fairly often. The important thing is that even if—which is not the case—the Royal Ulster Constabulary could provide safe keeping for individuals in their force who were charged with scheduled offences, which are very serious offences, I do not think that either the noble and learned Lord or I would agree this should happen. The point is that it is part of the United Kingdom security system that the police are civilians. There is no difficulty and no dichotomy of a worrying kind which distinguishes them from soldiers. They have always been totally distinguished from soldiers and we think that it is desirable that they should be. Although I believe that they could not give the necessary guarantees to a judge in the way that the Army can, nevertheless even if they could I believe that it would be a wrong step.
I believe that the right thing is that, as it always has been since the time of Sir Robert Peel, the police force should be a civilian force and subject to the laws of the civilian State. It would be a very
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retrograde step if we went back on that principle. Also, the pressures that they are under inevitably make one wonder whether or not more ought to be done, but the more I think about it the more clear I am that the right course is that security in Northern Ireland should be handed over gradually to the civilian force which operates under the same rules as the civilian force in the rest of the United Kingdom and that gradually the necessity for Army intervention in difficult areas should cease. This is the policy of the Government. I think it is what most of us want to see, and my own view is that though it is a difficult proposition, because we all admire the RUC and would like to please them, we have to stand on this and I hope the noble Viscount will not press his Amendment.
Viscount MASSEREENE and FERRARD: I thank the Minister very much for his reply. I quite understand everything he has said and I appreciate the difficulties, but I am wondering whether it would be possible for Her Majesty's Government to put over to the RUC, possibly by means of a pamphlet issued to each member, the real difficulties of this case. As I said previously, a great number of them do not understand the position and they are under the impression that they are in an inferior position in regard to the law compared to the members of Her Majesty's Armed Forces. If only the Government could explain to them, as they have explained to me, and especially as the noble and learned Lord, Lord Gardiner explained it, it might do a great deal of good. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The PRINCIPAL DEPUTY CHAIRMAN of COMMITTEES (Baroness Tweedsmuir of Belhelvie): The next Amendment is No. 3, which I understand is not to be moved.
Lord MONSON: If I may just intervene for a moment, I am not quite sure what the noble Viscount, Lord Brookeborough, intends to do with Amendment No. 3, but before we leave this topic I should like to say that we all agree with the noble Lord, Lord Donaldson of Kingsbridge, that the ideal thing would be for the situation to return to normal and for the police to act as

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civilians. But as I said on Second Reading, and I was not contradicted, I think the police have suffered even more than the Army as far as fatalities are concerned in proportion to their numbers. At the moment, the police are not in practice acting as civilians, and they cannot do so. I suppose that in proportion to their numbers 30 to 40 times as many police are being killed in Northern Ireland as in England, Scotland and Wales every year. For that reason alone, one feels that special treatment is reasonable.
As I understand the situation, it is felt among all ranks in the RUC and not just by the constables. Furthermore, in another place special treatment as regards bail was sought not only by the United Ulster Unionists but by the Conservatives
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and also most significantly by Mr. Gerry Fitt, the sole representative of the Social Democratic and Labour Party, who agreed that if the police were to be treated in a different way from other members of the Security Forces there would seem to be a lack of justice. For that reason, we remain very unhappy about none of these Amendments being accepted, but it is clear that the Government do not intend to accept any and the Committee is very thin at the moment so we must accept the situation.
The PRINCIPAL DEPUTY CHAIRMAN of COMMITTEES: Amendment No. 3 is not moved.
Clause 4 agreed to.
Clauses 5 to 11 agreed to.
Clause 12 [Invitations to join, or carry out directions given by, proscribed organisation]:
10.19 p.m.
Lord BELSTEAD Lord BELSTEAD moved Amendment No. 4:
Page 5, line 28, after ("invites") insert ("or by threats induces in public or in private").
The noble Lord said: The effect of this Amendment is that in addition to making it an offence to solicit or invite any persons to become a member of, or to obey, a proscribed organisation, it would also be an offence to induce anyone, in public or in private, by threats to do these things. At this late hour, I will not burden the Committee with any discussion at all about the background to the giving of threats in Northern Ireland. We all know enough about what that means to life in Northern Ireland, both for those who live there permanently and those who visit there.
If I may turn to the text of the Bill and what was said in another place on Second Reading, the Secretary of State explained that the Government wished to bring terrorists to trial, not under an overall charge of terrorism, as paragraph 70 of the Report of the noble and learned Lord, Lord Gardiner, recommended, but for specific crimes, and to this end the Government have drafted this clause and also Clause 15, which respectively bring to justice those who recruit others to an illegal organisation, and those who instruct others in the making or use of firearms or explosives.
I do not dissent from this as a line of policy being put into the Bill. My worry is whether Clause 12 covers those who threaten. When the Minister of State, Mr. Moyle, was replying to the debate on this and a group of Amendments in Committee in another place, he said he had been advised that incitement to violence is an offence. That does not surprise me. Schedule 4, paragraph 13 of the emergency provisions Act 1973 provides that:
"…aiding, abetting, counselling, procuring or inciting the commission of a scheduled offence is an inchoate or related offence"
under the 1973 Act. Obviously therefore, inciting to violence is an offence. But does this include threatening? After all,
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one of the scheduled offences is Section 19 of the 1973 Act, belonging to a proscribed organisation.
My question to the Government is, whether threatening others to join or to obey a proscribed organisation is covered by the words "aiding, abetting, counselling, procuring or inciting"? If it does, then, of course, I am quite prepared to withdraw this Amendment. If not—and I am no lawyer and I am not sure about this—it would seem to me that we are thrown back upon relying on a conspiracy charge when someone threatens. As the Gardiner Report explained, this is a charge which is rarely effective.
May I just add that the noble Lord may refer me to the reply of the Attorney-General to the debate on the clause in Committee, when the right honourable gentleman said that Section 1(d) of the Protection of the Person and Property (Northern Ireland) Act 1969 covers those who threaten for the purpose of joining a proscribed organisation. That would not entail trial by a single-judge court, and for that reason, I do not think it was a very satisfactory answer to this Amendment, with great respect to the right honourable gentleman. I beg to move.
Lord DONALDSON of KINGS-BRIDGE: Of course, if this were not covered, we would be happy to accept the Amendment. But, in fact, my advice, which is absolutely specific, is as already stated in his speech by the noble Lord, Lord Belstead, that any threats of this kind are already covered by the provisions of Section 1 of the Protection of the Person and Property (Northern Ireland) Act 1969 which provides that:
"any person who unlawfully causes by force, threats or menaces, or in any way whatsoever, any person inter alia to do or refrain from doing any act shall be liable on summary conviction to a fine of £500 or two years imprisonment or both, and on conviction on indictment to an unlimited fine or five years imprisonment or both."
This offence is listed in Schedule 4 to the principal Act and hence is a scheduled offence. This meets the point about trial without jury. I do not think I need say more. We are in agreement on the necessity for this, and reckon it will be covered.
Lord BELSTEAD: I must apologise. I am afraid I have not done my homework as I should. I did not think that that Section of the 1969 Act was a scheduled offence. On that, the noble Lord has fully satisfied me.
Amendment, by leave, withdrawn.
Clause 12 agreed to.
Clauses 13 to 23 agreed to.
Schedule 1 [Detention of Terrorists]:
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 5:
Page 10, line 30, leave out ("fourteen") and insert ("seven")
The noble Lord said: In moving Amendment No. 5 I should like at the same time to refer to Amendment No. 6, which is related to it, although the two are not necessarily interdependent. This is a matter which I raised at Second Reading; namely, that when a detainee has been informed of the offence of which he is suspected he is given only one week in which to make representations, through his solicitor if he so desires, to the Adviser. I do feel very strongly that one week simply is not long enough for the man to do that. I do not want to go into detail about how he will be feeling, but he will be picked up by the Army, spend perhaps three or four days being questioned by them, and then handed over to the RUC. He is perhaps a teenager; he is not very well-educated. Perhaps within a week of arriving at the Maze Prison he is informed of the offence alleged against him, and he then, when he is just getting used to prison life, has a mere matter of one week to contact a solicitor and make his written representations for the consideration of the Adviser. In another place the Secretary of State in effect accepted that it was impossible for him to make representations in so short a time when he said that representations made within a longer period would still be considered. If that is the case, surely it ought to be in the Bill. That is what my second Amendment would do.
I appreciate that if my second Amendment by itself was accepted, this would give one week less time before the case had to go before the Adviser, or it would delay by a week the arrival of his representations from the solicitor. Therefore,
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I have put down two Amendments; one would extend by a week the period within which his representations had to be made, and the other would diminish by one week the period within which he has to be notified of the offence alleged against him. There should be absolutely no problem about informing him within one week of the offence alleged against him, which must be well known to the police and to the authorities. If this notification of his alleged offence is made within one week, it does not alter the length of time which has to elapse between receiving the detainee's representations and the hearing of the case. I hope that my noble friend will appreciate the difficulty in which a detainee is going to find himself in making his defence at such very short notice. I hope he may find it possible to agree to that period being doubled, which would be the effect of my next Amendment. I beg to move.
Lord DONALDSON of KINGS-BRIDGE: Following my noble friend, I will discuss both Amendments, No. 5 and 6, together, as he has. The purpose of Amendment No. 5 is to reduce the period during which the Secretary of State must refer the case of a person held under an ICO to an Adviser from 14 days to 7 days. One cannot expect the police to assemble all the evidence against a person overnight. My noble friend says that the information is probably well to hand. It is not always. There is sometimes a good deal of work to be done. I think it is foolish to suppose that in the case of everybody who is picked up in highly suspicious and dangerous circumstances, it is an open-and-shut case straightaway. It has to be carefully investigated. It would, therefore, be absolutely wrong to force the police to put their case within seven days. An Adviser is not bound by the same rules of evidence as a court, but clearly the police must place before him all the evidence in such a way that he can discharge his duty. Seven days would probably be enough to prepare one case, but the police would surely find it difficult to meet this deadline if, as has often happened in the past, a number of cases fell to be dealt with simultaneously. It seems to me and the Government, therefore, that a two week period is much more realistic.
Lord KILBRACKEN: The 14-day period which I am suggesting should be a seven day period is not the period within which the details of the accusations have to be presented but the period within which the Secretary of State must prefer the case to an Adviser. I do not see any reason why that should not be done within one week of the ICO being served, and the nature of the terrorist activities have to be notified only as soon as possible thereafter.
Lord DONALDSON of KINGS-BRIDGE: It is a question of judgement. This has been discussed in great detail with the police and the people who have to operate it and their view is that a fortnight is a reasonable period. When we come to Amendment No. 6 the opposite action is proposed. The purpose here is to increase from seven to 14 days the period within which a person held on an interim custody order may make written representations. It might be argued, for example, that a week is too short a time for the suspect to obtain legal advice or assistance in preparing his representations, but the whole purpose of having a seven-day limit here is to hasten the day by which the Adviser may begin hearing the case. There is, after all, an overall time limit of 49 days; this must be met and it is important to keep the process moving. If the individual concerned cannot get his written representations completed within the period, there is nothing to prevent him from sending them on after the date. The Adviser has the 49 days within which to make these considerations. He does not have to do it immediately, and it will mean, under the present arrangement, that he will be able to begin after seven days, and so the thing keeps moving.
These are questions of practical judgment. They are very difficult to argue specifically. This has been gone into in a good deal of detail with the people who have got to do it and I do not find that my noble friend has produced any cogent reasons for altering it, nor do I think that either of his Amendments would produce a greater level of justice. I believe that justice within the Gardiner recommendations is covered by the present time limits and I therefore hope that my noble friend will not feel it necessary to press his Amendments.
Lord KILBRACKEN: I do not agree with my noble friend in either of the two points he made in connection with my Amendments. It would be perfectly easy for the Secretary of State to see that every case was referred to an Adviser within one week. Why should it take longer than that? If what I suggest were done, there would still be the same general time-schedule after that. My noble friend said there was absolutely nothing to stop a detainee from making his representations at more than one week after being notified of his alleged offence. If there is nothing to stop him, why does it have to be stated in the Bill:
"A person detained may, within seven days…make…written representations concerning his case…".
Surely we have to go by what is in the Bill. That is quite specific in saying that representations have to be made within that period. In my view, that is not long enough and, without any assurance from my noble friend, I feel that as a matter of principle I cannot withdraw either of my Amendments.
10.35 p.m.
Lord GARDINER: I have some sympathy with the Amendment. I do not really understand why the Secretary of State cannot refer the case to the Adviser within seven days after the interim custody order has been made. The man has been arrested, the Secretary of State must have the information to show why the order has been made. All the reference to the Adviser does is to instigate the inquiry as to whether the information was or was not correct. Why this should take more than seven days after the order was made, I do not myself understand. There have been cases of great delay and that is why my Committee cut down on most of these figures. Some of the delay has been shocking. It is not right that it should be six or eight months after somebody has been arrested before he has any chance of saying a word, and then, when he comes before a tribunal, he is released.
Lord RAGLAN: I accept that the police need 14 days in which to assemble evidence against a suspect. But how is it that that suspect is allowed only

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seven days in which to find a defence against charges of which he may not be aware?
Lord DONALDSON of KINGS-BRIDGE: The situation is different. The purpose of the 14-day period before which the Secretary of State has to refer the case of a person held under an ICO to an Adviser, is to allow the police to prepare the case. The Adviser wants to be given as nearly as possible the full case. In the case of Amendment No. 6, the provision of a defence by the defendant does not require to be done on the "dot". It can be continued after the seven-day period and the Adviser is not obliged to produce an answer within days. He has 49 days in total to do so.
It seems to me that the figures we have here, and which were arrived at after discussion with the people who have to do this, are the most satisfactory. I feel that it is extremely difficult to make it perfectly clear why one is better than the other. I believe that it would be a pity if we started pulling the Bill about at this stage, because it would have to go back again to another place, and a number of things which we are most anxious to see done may be held up very badly. I regard this as a point of very little substance. I do not believe that hardship is being caused to anybody by the figures we have put in, nor do I feel that the people concerned would be materially better off as a result of my noble friend's suggestions. So I hope very much that he will not press the Amendment.
Lord GARDINER: The police will already have told the Secretary of State that they have evidence that the man in question committed a certain crime—murdered a policeman or whatever it may be—and the Secretary of State will have weighed that evidence and decided that there is sufficient case to make an interim custody order. The man will be arrested. Somebody will have to inquire into those allegations and this will be the Adviser. But what I do not understand is what it is that the Secretary of State can do in 14 days after the arrest that he could not do in seven.
Lord DONALDSON of KINGS-BRIDGE: He has considered the prima facie evidence and further evidence, parti
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cularly linked very often with other people who have committed other crimes in connection with this, has to be put before the Adviser in order that he can see the whole picture. Is not that the case?
Lord KILBRACKEN: I am in a difficult situation. I am not well acquainted with the procedure of the House, but I understand that there is not a quorum of Members and that if there was a Division the Bill could be lost, and I have no intention of doing anything as dramatic as that. Yet, at the same time, the case put by my noble and learned friend Lord Gardiner seems to be extremely strong and completely supports what I have said; it is totally unnecessary to have more than one week in which to refer the case to the Adviser and something more than that in which to inform the detainee as to his offence. This will make possible, without interfering with the time-schedule, a period of two weeks for the detainee to find a solicitor and to make representations on a highly important matter which will affect his liberty or otherwise for an indefinite period.
Therefore, having listened to what has been said, I cannot withdraw the Amendment, but at the same time, owing to the fact that a matter of this importance—it is of great importance to Northern Ireland—is being taken at this hour of the night, before such a skeleton assembly, I will not divide the Committee, nor will I withdraw the Amendment.
Lord DONALDSON of KINGS-BRIDGE: Before we finish the discussion I should like to try to clarify the problem a little further. The police cannot complete their case within the 72 hours before which the ICO has to be made. They put their suspicions to the Secretary of State and he signs the ICO, which is the normal procedure. They then have to compile the substantive case, and this is, and should be, a careful, not an immediate, procedure. The Secretary of State must then decide on this evidence whether to refer the case. He will not do this before he sees the full case in front of him. This is why he requires more than seven days before he decides to refer the case to an Adviser.
My noble friend is trying to protect the accused man and I respect him for that, but there seems to be absolutely

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nothing in this proposal for 14 days which would hurt the accused man. It means simply that the accusation, when made, will be more carefully sorted, and if the evidence is not forthcoming the Secretary of State will not refer it to the Adviser. I believe this is a storm not perhaps in a tea cup, but in a pudding bowl.
Lord KILBRACKEN: My only reason for seeking to reduce 14 days to seven days in paragraph 5 is to enable the detainee to have 14 days instead of seven to make his representations, and still leave the Adviser with the same length of time in which to continue his case. There should be no difficulty whatever in deciding within seven days to refer the case to the Adviser. If an interim custody order has been made, it is merely an administrative matter to say that the case is to be referred to the Adviser. The person detained does not have to be informed in writing as to the nature of his alleged terrorist activity until as soon as possible thereafter.
Lord RAGLAN: This is an awful thing to blow up at this time of night, but perhaps my noble friend can compromise on 14 days in both instances. Accepting that the police need 14 days, why should not the accused have 14 days, also?
Lord DONALDSON of KINGS-BRIDGE: There is a misconception here. After the seven days, which are being discussed under Amendment No. 6, the Adviser can start his proceedings. We all want this to start and to proceed as fast as possible. It has nothing to do with debarring the detainee from submitting evidence subsequently. The detainee is in no way worse-off, but the Adviser has started grinding away at an earlier stage. I cannot see that the accused would be any worse-off at all, and the whole thing would be more orderly and the evidence would come forward in a more accurate way.
Lord KILBRACKEN: The Adviser can start grinding away as soon as any evidence is put before him, and start considering the case without waiting for the representation—
Lord DONALDSON of KINGS-BRIDGE: With respect, he cannot start considering the case until it is referred to him.
Lord KILBRACKEN: It has to be referred to him, but once it has been he can start considering the case without waiting for representations to be made by the detainee.
Lord DONALDSON of KINGS-BRIDGE: Yes, that is true,
Lord KILBRACKEN: Therefore, there is no reason why he should have to make his representations within those seven days. If that period is extended to 14 days, it will not delay the proceedings. I should be happy to withdraw Amendment No. 5 if I could be given some undertaking with regard to Amendment 6.
Lord GARDINER: What I still do not understand is this. Obviously, a man would not be arrested and thrown into prison unless there is some prima facie case against him. Evidence by the police is put before the Secretary of State, and he must decide whether there is a prima facie case. If he decides that there is, the man is arrested. Then it has to be referred to an Adviser for him to inquire into it and see whether or not the allegations are true. Except for the formal act of doing this, I do not see what the Secretary of State, whether the period is seven days or 14 days, is going to do—he has made an interim custody order—if there is no case for an inquiry. He makes it only if he is satisfied that there is a case for inquiry. If there is a case for inquiry, he ought to send it to the Adviser. This is a formal act and can be done in seven days just as well as in 14 days.
Lord DONALDSON of KINGS-BRIDGE: This is not the view of the people who have to do the job. It is extremely difficult to argue in this sort of case whether it should be 14 days or seven days. The important point is that the accused is not going to suffer by the failure of my noble friend's Amendments. I do not think he will be any better off if they are passed; but I cannot see that he will be any worse off if they are not As the people who are have to do this are asking for this period of time in both directions, and as the accused can continue to make representations after seven days, I do not see any substance in the argument.
On Question, Amendment negatived.
Lord KILBRACKEN: I beg to move Amendment No. 6. May I ask my noble friend whether he will give an absolutely unequivocal undertaking that although the Bill states:
"A person detained may, within seven days following the date on which he receives any such statement… send written representations…";
representations will be accepted if they are made within a week or two after that time? I beg to move.
Amendment moved—
Page 11, line 1, leave out ("seven") and insert ("fourteen").—(Lord Kilbracken.)
Lord DONALDSON of KINGS-BRIDGE: I have already given that undertaking and I repeat it.
Lord KILBRACKEN: In that case, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Lord BELSTEAD Lord BELSTEAD moved Amendment No. 7:
Page 11, line 5, after ("he") insert ("or his counsel or solicitor").
The noble Lord said: On Second Reading, I sought to put forward reservations that I had about new arrangements under Schedule 1 for the process of detention. The effect of this Amendment would be to allow the person who has been under an interim custody order to be legally represented when the case goes to an Adviser, if the accused so wishes. I think it is fair to remind the Government that the Committee of the noble and learned Lord, Lord Gardiner, recommended a division of three Advisers to hear these cases. I accept that the staffing of such divisions would not be possible in North Ireland today; but when one person only is looking into a case, I should have thought it would be fair for legal representation before the Adviser to be allowed.
The Government may say that this is an attempt to return to the adversarial form of hearing which we had before the Commissioners. I would argue that this is not so. It will be the Adviser, after all, who will be solely responsible for conducting the hearing. The effect of the Amendment will only be to allow the person being detained to request that his
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legal representative should be seen personally by the Adviser. Under paragraph 7(3) of this Schedule it will be entirely up to the Adviser as to whether he sees a legal representative alone or with his client, and it is clear from paragraph 7(2) that it is the Adviser who is conducting the hearing and no one else. This is a modest Amendment; it would allow a case to be fully deployed. It might well allow obscure points in the representations which have been made to be clarified. I beg to move.
10.51 p.m.
Lord KILBRACKEN: Your Lordships may notice that the next Amendment, No. 8, which stands in my name, is extremely similar to that of Lord Belstead's, except that in my Amendment it is the detainee and the counsel or solicitor who applies to appear before the Adviser, whereas in the noble Lord's Amendment it is the detainee or his solicitor. I felt that my wording was perhaps preferable, although obviously the detainee is going to appear before the Adviser. On Second Reading I raised the question of the right of the detainee to have a lawyer or solicitor appear with him when he appeared before the Adviser. I mentioned that my noble and learned friend Lord Gardiner had recommended that a solicitor should not be allowed so to appear, although in the Report he did not give any reason for holding this opinion. In the course of his speech on Second Reading, he gave that reason, and from reading the Official Report it appears that I misunderstood him. My noble and learned friend said in effect, if I may paraphrase, that when a detainee appeared before the Commissioners, the process was such a fiasco and such a total travesty of British law that the lawyer could do practically nothing for him, and members of the Bar felt that they were taking money under false pretences in representing him. That is an indictment of the procedure that was adopted although I would not quarrel with it as a description.
It seems to me that if a man is having to appear before a court, Commissioners or an Adviser, where the case against him is so severely prejudiced, as my noble and learned friend indicated it had been in the past, and as there seems to

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be little doubt there will be in the future, that so far from there being no need for him to have legal advisers, it was all the more essential for him to have them. He is allowed a legal adviser in preparing his representations, and this is put into the Bill. I should have thought, a fortiori, that he would need legal representation when he appeared before the Adviser. There is nothing in the Bill to prevent his solicitor or lawyer being one of those called by the Adviser to give evidence in front of him; but we have been informed in another place by the Secretary of State that it is not the intention that he should have any legal representation.
I have spoken in Belfast to men who have appeared before the Commissioners, often after having been detained for many months without being charged. They have been released and I have spoken to them. The first question I have asked is, "Has your solicitor been able to help you?" and they have sometimes said, "He did not need to say a word, because there was no evidence presented against me and I was released immediately". In every other case they have spoken enthusiastically of the help which members of the Bar have been able to give them.
There is an adage—I cannot quote it exactly, but it was certainly invented by a lawyer—to the effect that,
"The man who acts as his own advocate has a fool for a client."
But that is precisely what the Government are forcing the detainee to do, if they insist that he appears on his own without anyone to direct him or to make representations on his behalf to the Advisers. Therefore, I would strongly support the Amendment which has been moved by the noble Lord, Lord Belstead.
Lord GARDINER: I would not my-self have believed that I should ever live to see the day when I should be recommending that somebody was denied legal representation, because all my life I have regarded this as a fundamental civil liberty. But Northern Ireland is a very exceptional place. Detention without trial is no form of legal process at all. It is bare, naked power—the last resort of a Government to meet a condition of extreme terrorism which I think a Government must have in conditions of modern terrorism, though I think it continues, for
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as long as it lasts, to do harm in itself and the sooner it is ended the better.
What we have so far done, with the best of intentions, has been to append to the procedure before the Commissioners our usual kinds of legal safeguards, so far as we could. So the Commissioner appears to be a judge and there are barristers and solicitors there, so that it appears to be an adversial process—when really it is nothing of the kind. In the first place, the witnesses are mainly Army men and men from the Special Branch of the police, some of them giving evidence from behind screens, with voice scramblers being used; and, in the main, the evidence they give is based on what they are told by informers, who are given beer money, the rate for the job, or a large lump sum. They cannot be there, because of course they might be recognised, and then they would be dead.
One quite understands the reason for it. This is why it is hearsay evidence given by the Army or the police of what they have been told, sometimes at firsthand, sometimes at second-hand or even more remotely by these informers; and the main part of the evidence after that is heard in camera, where neither the man nor his solicitor is allowed at all. There is nothing they can say, and in some cases they cannot even be told what they are supposed to have done. For instance, a man is said to have killed a policeman in a particular place on a certain day, and there is only one person who knows he has done that, and that person is the informer. So the man cannot even be told what he is supposed to have done.
A man may be completely innocent yet have no chance whatever of avoiding a detention order. But, as I said, my whole Committee agreed that detention is something which is warrantable in conditions of terrorism, and, while many of us would have liked to recommend that the time had come when it should end, we felt that this was a responsibility which only a Government, knowing the security position in conditions which can change very quickly, could decide.
It is for this reason that I would myself, if I may address myself to all the remaining Amendments, while sympathising with what my noble friend Lord

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Kilbracken has said, think it would be a mistake to try to bring back again what we tried to do before, feeling "A man ought to have a right to have legal representation". That would again, perhaps, lead people generally in the public to think that this was some kind of trial. Indeed, many people in England at all events, I know, say, "It is quite wrong to talk about this as detention without trial. There is a full hearing before a Commissioner and representation by barristers and solicitors". But when one has been into what happens it is seen to be a farce. Nobody is to blame. The Commissioners have done their best. But I am glad, naturally, that the Government have accepted our recommendation that really this is an Executive act; and if it was a mistake to make it appear to have the ordinary legal appendages, it would be a mistake now, if I may respectfully say so, to try to bring them back again.
11.2 p.m.
Lord DONALDSON of KINGS-BRIDGE: I am most grateful to my noble and learned friend who has put my case better than I could have put it. The Government are absolutely satisfied that the Committee's recommendation on this heading is the right way to play the hand. My noble and learned friend has explained the difficulties. The man may be quite innocent. On the other hand, the knowledge that he is guilty may be within the Security Forces. These are the two things that have to be weighed up. Meanwhile, a very large number of people are being killed. What do we do? We have found it necessary until February of this year to imprison people, to detain people, under the ICO system which we all know well. The noble and learned Lord and his Committee accepted that, with the vicious killing which goes on in all directions, and has been going on for the last three to four years in Northern Ireland, one cannot just say "If we cannot prove a man guilty in court in the ordinary way because the witnesses are frightened of being killed"—and many of them are killed—"then we will let it go". We had to do something about it.
I personally support what was done by the previous Government in taking this
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action, which we have continued, reluctant though we are to do it and disagreeable though it is. I do not want to put too much on this. It is noticeable that my right honourable friend has not signed an ICO since. I think, February. In other words, he is doing his best to get out of this very difficult situation. Whether or not he will succeed, as he has hoped, by Christmas depends on the reaction of the people outside. But I am perfectly certain that my noble and learned friend's advice and his Committee's advice is right. This must be an Executive action by the Secretary of State based on the best evidence he has for the protection of the public for whom he is responsible. To dress it up as anything else, though it were done with the best possible motives—and I think at the time we all supported it—is to mislead and, to some extent, as the Report said in rather strong terms, to bring the law into disrepute.
That being so, Amendment No. 7 of the noble Lord, Lord Belstead, and Amendment No. 8 of the noble Lord, Lord Kilbracken—and I think No. 9 comes into the same category—I shall reject absolutely on these broad grounds. The noble and learned Lord said he was surprised that he should find himself on his feet defending a situation where people accused were not given counsel. I am surprised to find myself in that position—perhaps rather less surprised than the noble and learned Lord because we have slight differences here and there. But, generally speaking, it is an astonishing and dreadful situation to have to put before the House. But this is what we are confronted with, and anything else means death on a large scale for a great number of people, and I apologise for none of it. So I think I would ask the noble Lord, Lord Belstead, and the noble Lord, Lord Kilbracken, to withdraw those Amendments which go back on the noble and learned Lord's advice, that we should make this an Executive act and not an imitation of an adversarial trial.
Lord BELSTEAD: My Amendment, Amendment No. 7, was designed to be a probing Amendment. I felt that we should not have a Committee stage without a very brief discussion of detention, even though it was mentioned at Second Reading. It is fortunate for us this evening that as well as the noble Lord, Lord

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Donaldson of Kingsbridge, the noble and learned Lord, Lord Gardiner, has spoken for the Government. If any Amendment were to be moved in earnest, I am also bound to say that the Amendment of the noble Lord, Lord Kilbracken, is very much better worded than mine.
I have one substantive point to make before I sit down. In putting down this Amendment I was motivated by the fact that it is curious that somebody should be invited by the text of the Bill to take legal advice in making their representations. Yet—and here, with respect, I differ from the noble Lord, Lord Kilbracken, in his reading of the Bill—it seems to me that paragraph 6(2)(b) read in conjunction with paragraph 7(3)(a) makes it quite clear that the Bill does not allow that legal representative to appear before the Adviser. That is as may be; certainly I am not going to press that particular point. The noble Lord, Lord Kilbracken, may do so in a moment. With great respect to him, I do not take quite the severe view that the noble and learned Lord, Lord Gardiner, took on the previous arrangements for detention.
Before I sit down, may I repeat what I said on Second Reading. We on these Benches are not going to play this two ways. If things get difficult in a few months' time we are, not going to come back to the noble Lord and say, "We took a rather different view of detention and we believe that you got it wrong". We think that the Government are doing the very best they can in extremely difficult circumstances, and I assure the noble Lord that through thick and thin we shall stand by the arrangements which have been made under Schedule 1 of this Bill.
Lord KILBRACKEN: With regard to paragraph 7(3)(a), (b) and (c), it seems to me that there is doubt about exactly what is meant by the words "any person" or "any assistant". As the noble Lord, Lord Belstead, read it, this would preclude the detainee's lawyer or solicitor from appearing at the same time as the detainee. It is worded in a very vague way:
"(3) No person shall be present except…

(a) any person who for the time being is being seen by the Adviser."

I do not know what is meant by "being seen". Anybody who is in the room
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is being seen by the Adviser. Does it mean any one person, or can there be several persons? If it means only one person, then sub-paragraph (3)(c) which says
"any person who is present in the interests of security",
must mean that there can be only one person present in the interests of security. If you have a very tough Provo detainee coming up, I should think you would need more than one person to be there in the interests of security, or else he would not perhaps like to be an Adviser. The paragraph does not state definitely or unequivocally whether the number of persons is limited to three—one person who is being seen by the Adviser, one assistant to the Adviser and one person who is present in the interests of security—or whether those present can be any person or any number of persons who come into those categories.
Amendment, by leave, withdrawn.
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 10:
Page 11, line 22, at end insert—
("( ) The Adviser shall inform the person detained of the substance of any such information, in so far as the needs of public security and the safety of persons permit.")
The noble Lord said: As I studied paragraph 7 of Schedule 1, the more I looked at it the less I liked it. I was comparing it, of course, with the provisions in paragraph 14 of Schedule 1 to the principal Act. It seemed to me that what the Bill tells us about the way in which the Adviser will consider these cases is extremely unsatisfactory. After all, all we are told in paragraph 7 is that when a case is referred to the Adviser he shall consider it. He shall then have regard to any information which is made available to or obtained by him and no person shall be present except the person who is being seen by the Adviser, any assistant to the Adviser, or any person who is present in the interests of security. That is absolutely all we know about what is going to happen when the detainees appear before these very nearly omnipotent Advisers.
When that is compared with the existing procedure in paragraph 14 of the principal Act we find, for instance, that the respondent (as the detainee is there called) shall be present on the hearing of a reference. That is not allowed any

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longer, we are given to understand, except when he is being seen by the Adviser. The respondent shall be entitled to give and adduce evidence and may make representations to the Commissioner, whether orally or in writing, and may be represented by counsel or solicitor, and we are now informed that he will not be allowed to be represented by counsel or solicitor when he appears before the Adviser. The Commissioner under the principal Act may receive oral evidence notwithstanding that the evidence would be inadmissible in a court of law. That is something that I never agreed with, and now that provision has been removed from the Statute Book. I assume this means that in future it will not be possible for the Adviser to receive evidence notwithstanding that it would be admissible in a court of law. We are not given any information on these subjects in the new Bill.
The Commissioner can at present question any person, including the respondent, and cause inquiries to be made in relation to any matter. There is no reference to that in the new Bill. The Commissioner at present may require any person to give evidence on oath or by affirmation, which the Adviser is not entitled to do. Furthermore, the Commissioner may by summons require any person to return as a witness and may require any person answering a question to produce any documents in his custody. An Adviser does not have any of those rights—or at least they are not stated in the Bill. Another important point, of course, is that the detainee under the new legislation has no right to appeal against a decision of the Adviser as he had against the decision of the Commissioner. That is a very severe curtailment of his rights.
I did not table Amendments on any of those subjects because I did not want to be talking all night, as I seem to be doing, but I consider the substance of Amendment No. 10 to be of great importance. It is that under the existing legislation the person detailed—the respondent, as he was called—was present through the whole hearing before the Commissioners so long as he behaved himself and unless it was thought in the interests of security and the safety of persons that he should be removed; and if it was so thought then he was removed but he had
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to be informed of what had gone on in his absence. In the present Bill before your Lordships, there is nothing on this point either, as there was in the old Schedule 1 which is now going by the board. It is not stated that when a detainee comes before the Adviser he is to be given any information at all about the evidence that has been given against him. My Amendment would insert at page 11, line 22, a new sub-paragraph which is in precisely the same language as that used in Schedule 1 to the principal Act, to the effect that the Adviser must inform the person detained of the substance of information that has been given to the Adviser by other witnesses. Then, in the same phrase as is used in the principal Act, it states:
"in so far as the needs of public security and the safety of persons permit."
I should hope that, in any case, the Adviser would give that information to a detainee who came before him. It is so important that he should know the details of the allegations made against him, that I think that sub-paragraph should be in the Bill. I beg to move.
Lord DONALDSON of KINGS-BRIDGE: My noble friend Lord Kilbracken seems to have missed paragraph 6(1) of Schedule 1 which reads:
"As soon as possible after a case is referred to an Adviser under paragraph 5 above, the person detained shall be served with a statement in writing as to the nature of the terrorist activities of which he is suspected."
This seems to meet the main point of the Amendment. The other point that my noble friend made about the Commissioner goes back into the old system, which we are trying to get away from. The Commissioner can detain a man; the Adviser cannot.
The Commissioner was very properly hedged about by a number of legal restrictions. The Adviser is left as free as possible. So far as is possible, we have not written detailed procedures into this Bill. The Adviser is there to find out the truth. He is left with discretion, and the final decision will be taken by the Secretary of State, who will do so in the light of all the material available to him. Clearly, there can be no appeal against this. To whom could it be—the Queen? on evidence provided by the Secretary of State? It is not acceptable.
Lord KILBRACKEN: Is that not a rhetorical question? The noble Lord will recall that there was, and still is, an appeals tribunal set up by the principal Act, which can still continue to consider appeals.
Lord DONALDSON of KINGS-BRIDGE: The appeals tribunal can be only on a legal or semi-legal basis, and the whole attempt here was to get away from the legal basis. It is late. I do not think I can make things any clearer to the noble Lord than by saying we have accepted in its entirety, with one or two detailed exceptions, the Gardiner approach to this matter. My noble friend is suggesting we go back on this, and I am not prepared to do so.
Lord KILBRACKEN: Confining myself solely to Amendment No. 10, my noble friend said he thought I must have missed what is written in paragraph 6(1) of Schedule 1, which simply states that the person detained shall be served with a statement of the terrorist activities with which he is suspected. Of course I have not missed it, because I have already been referring to it in some detail tonight. My Amendment does not relate to that at all. My Amendment relates to the information which, under paragraph 7(2), is made available to or obtained by the Adviser. That is something quite different. These are people who are coming up before the Adviser and giving him certain information about the offences alleged against the suspect. I am saying that the detainee must be informed in each case of the information so given, in order that he can attempt to rebut it or comment on it. It has nothing to do with paragraph 6(1).
I know that we are trying to put it across that these detainees are going to be appearing in a very informal atmosphere and one that does not pretend to be a court of law, but on the result of what happens before that court depends whether they are held in detention for a year or two without having appeared before a court of law. It is a matter of great importance. Since my noble friend does not refer at all to the point in question, which is nothing to do with the statement in writing as to the nature of the terrorist activities but has to do with the evidence given to the Advisers, I
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would not feel inclined to withdraw the Amendment.
On Question, Amendment negatived.
11.21 p.m.
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 11:
Page 12, line 27, at end insert ("or the person detained shall be discharged unconditionally").
The noble Lord said: In paragraph 9(1) of the Schedule it is stated that the Secretary of State may at any time, in the case of someone who is already being held under a detention order, refer the case to an Adviser for review. If he is requested to do so by the detainee, who is entitled to make that request after one year, then he shall do so within 14 days, beginning with the receipt of the request. I am very glad to see that he is supposed to do so within 14 days, but there is absolutely nothing in the Bill to say what will happen if he does not so refer it within 14 days. So far as I can see, there is absolutely no sanction whatever. I therefore propose to insert at the end of that line words having the effect that if it is not so referred within that period, "the person detained shall be discharged unconditionally". I beg to move.
Lord DONALDSON of KINGS-BRIDGE: The purpose of this Amendment is to provide a sanction against the Secretary of State if he fails to refer to an Adviser within 14 days the case of a person held under a detention order when requested to do so within the terms of sub-paragraph (2). Under that provision the Secretary of State must refer the case if requested in writing by the detainee who has been held for 12 months under a detention order or six months from the date when the detainee was notified that a previous application was unsuccessful. The sanction envisaged by the Amendment is that the person detained shall be discharged unconditionally. Such a provision is quite unnecessary, since a detainee, in the unlikely event of his case not being referred within the 14 days—in other words, in the unlikely event of the Secretary of State not doing what he is obliged to do under the Bill—would have the normal remedy through the courts. I certainly could not accept this Amendment.
Lord KILBRACKEN: Would my noble friend explain what he means by "the normal remedy through the courts"?
Lord DONALDSON of KINGS-BRIDGE: I think it is technically called a writ of mandamus.
Lord KILBRACKEN: Am I right in understanding that if within 14 days of the request being made the case has not been referred to an Adviser, he would be able to bring a writ of mandamus action, if that is the correct word, and he would thereby have redress similar to that which I am proposing in my Amendment?
Lord DONALDSON of KINGS-BRIDGE: I think the redress would be that he would force the Secretary of State to consider his case.
Lord KILBRACKEN: Can I take it that I am assured that this action will be and must he taken within the 14 days set out in the Bill?
Lord DONALDSON of KINGS-BRIDGE: Yes.
Lord KILBRACKEN: In that case, I beg leave to withdraw the Amendment. Amendment, by leave, withdrawn.
11.46 p.m.
Lord KILBRACKEN Lord KILBRACKEN moved Amendment No. 12:
Page 12, line 45, at end insert—
"( ) If lie should fail so to notify him within three months from the receipt of the request, the person detained shall be discharged unconditionally."
The noble Lord said: This Amendment again seeks to impose a time limit within which action has to be taken once a man has applied for his case to be reconsidered. There are time limits already in the Bill; for example, if a person applies for his case to be reconsidered, the case has to be referred within 14 days to an Adviser. But there is nothing in the Bill to state how long can elapse before the Secretary of State has to decide whether or not the man should be released. Incidentally, the wording in the Bill is again rather strange because whereas the Bill says:
"…the Secretary of State shall, after receiving the report of the Adviser, reconsider the case of the person to whom it relates and, if
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he decided not to release that person, shall notify him of his decision",
it does not say, as is the case in the principal Act, what happens if he decides to release him. Presumably he just releases him. Is that right?
Lord DONALDSON of KINGS-BRIDGE: Of course.
Lord KILBRACKEN: But that is not so stated, whereas if one looks at the corresponding passage in the principal Act it says that if he decides to release him, then the man "shall be released." However, that is not my main point. The real point is that although the case may have come up for consideration, an unlimited period could go by after the case has been heard before the person is released. There should be a limit, and in my view three months is a reasonable period.
Lord DONALDSON of KINGS-BRIDGE: If one of Her Majesty's Secretaries of State is required by Statute to undertake a particular course of action, it is reasonable to assume that he will indeed undertake that action. In this case, the Amendment is directed towards an action that does not affect the crucial matter of the determination of whether a person has been concerned in terrorism. That has already been decided. It is an action that is required to assure the detainee that he has not been overlooked. In fact, of course, the Secretary of State keeps all detainees continually under review to ensure that their continued detention is necessary for the protection of the public, and I think his record over the last eight months makes this perfectly clear. If, for some extraordinary circumstance—and mistakes can of course happen—the Secretary of State does not meet his obligation to inform the detainee of the result of the review, the matter can be taken up through the courts; there is no need for the measure to provide for the situation when a Secretary of State does not abide by the law. The law is there and he has to abide by it. If any individual thinks he is not abiding by it, he has recourse to the courts.
Lord KILBRACKEN: I really do not follow that argument at all. Of course we expect the Secretary of State to do what he is bound to do, but paragraph 9(5) states merely that the Secretary of

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State, after receiving the report of the Adviser, shall reconsider the case of the person to whom it relates and, if he decides not to release that person, shall notify him of his decision. I am sure that the Secretary of State will fulfil his legal obligation by doing so, but what I am saying is that he should do so within a specified period of the request being made by the person who is detained, just as there is a specified period when he is first arrested between the issue of the ICO and the detention order which must not be exceeded. I simply do not feel that my noble friend has met my point at all.
Lord DONALDSON of KINGS-BRIDGE: I believe that paragraph 9(1) deals with this. It reads:
"The Secretary of State may at any time refer the case of a person detained under a detention order to an Adviser and, if so requested in writing in accordance with subparagraph (2) below by a person so detained shall do so within fourteen days…"
I feel that that covers the position.
Lord KILBRACKEN: I agree that within 14 days the Secretary of State has to refer the case to an Adviser. He does so. He receives a request from the person who is detained and within two weeks he has to refer the case to an Adviser. But my point is that, after that, there is absolutely no limit laid down anywhere as to when the Adviser has to hear the case, when the Adviser has to submit his account of the case to the Secretary of State or when the latter has to decide whether the man is to be released or held in detention. I am saying that there should be a limit between the time when the evidence is received and when the Secretary of State notifies the detainee as to his decision.
Lord DONALDSON of KINGS-BRIDGE: I cannot give my noble friend the exact answer he want now, but it is my impression that there is a timetable which is laid down by which, as soon as the Adviser has the case referred to him, the wheels start turning, and that there are periods within which this has to be done. I should like to write to my noble friend about this.
Lord KILBRACKEN: This is the sort of difficult situation we get into when we rush a very important Bill through all but two of its stages at a very late hour,
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when practically no one is present and when matters like this cannot be given the consideration and reconsideration that is such an important part of Parliamentary procedure. We can only go by what is in the Bill and there is nothing there to indicate that what my noble friend says is the case. There it is. There are paragraphs 9 and 10 which relate to detainees whose case is reconsidered after a period of being detained for one year. The only time limit which is laid down is the 14 days within which the Secretary of State has to notify the Adviser. There is absolutely nothing to limit the time before the Adviser has to consider the case or before the Secretary of State has to give his decision. There is absolutely nothing in the Bill which says that the Adviser cannot take six months or a year before hearing the case, nor that the Secretary of State cannot wait six months or a year before considering the Adviser's report and announcing his decision.
I am always delighted to receive letters from my noble friend. He writes very charming and informative letters to me. But this is an important matter, which should be in the Bill. It is merely as a matter of form that I say that in view of what my noble friend has said I cannot withdraw my Amendment.
Lord DONALDSON of KINGS-BRIDGE: Just before my noble friend does not withdraw his Amendment—if that is the correct way to put it—I wish to point out that what we have said in the last two cases applies here. If a detainee demands to be submitted to an Adviser, this has to be done within 14 days. If nothing happens, he is once again open to use the courts.
Lord KILBRACKEN: I am sorry to insist on this, but it is not within 14 days that he has to go before the Adviser. It is within 14 days that the Secretary of State must refer the case to the Adviser. But this does not mean that the detainee must see the Adviser within 14 days. He may not see the Adviser within 14 months. There is absolutely nothing to that effect in the Bill.
On Question, Amendment negatived.
Schedule 1 agreed to.
Remaining Schedules agreed to.
House resumed: Bill reported without amendment; Report received
Then, Standing Order No. 44 having been Suspended (pursuant to Resolution):
11.37 p.m.
Lord DONALDSON of KINGS-BRIDGE: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 33.—(Lord Donaldson of Kingsbridge.)
Viscount BROOKEBOROUGH: My Lords, I wish to raise one or two small points, one of which is of major importance to Northern Ireland at the moment The Bill and the Act it amends contain the legislative intention of this Parliament to pursue the IRA terrorists to the bitter end and to defeat them. During the Second Reading of the Bill, I appealed to the Government to be consistent in their approach to this problem, and in trying to shorten my speech I failed to impress on the Government that in point of fact I was referring to the total pursuit of the policy of the Government over the past years. Of course prisoners must be released when the security situation in their particular cases allows them to be released, and that applies to detainees as well.
But during the last five years there have been tremendous changes in Government policy. During almost every one of those changes, to my mind, the terrorists have had cause to wonder whether Parliamentary democracy has the determination to defeat them. We had arguments about whether or not we talk to the terrorists. We have had that twice already, and that is an inconsistency. I believe that once this Bill is passed we should pursue a completely consistent policy. At present there is a great fuss in Northern Ireland over the failure of the forces to arrest Seamus Twomey. Now we are putting in new scheduled offences, and it is very important, in order to establish without doubt the determination of the Government that they will pursue this relentlessly and without change, that we should be convinced that the Govern-
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ment really did try, and are trying, to arrest known IRA terrorists at this time.
It seems to me that the Government might have felt that they were embarrassed if they got leaders like Twomey. After we pass this Bill tonight and it becomes an Act, we shall create many more scheduled offences which could easily produce embarrassment. Therefore, it is of vital importance that the Government make it absolutely clear that they are determined to catch any IRA leader, especially Mr. Seamus Twomey, who is a man of absolutely enormous evil, wanted in both North and South.
May I assure the Government that if they did not want to catch or hold him in the North, the Garda did; for they have one almighty charge that will stick with him. I feel that at this moment when we are passing a Bill which will increase scheduled offences, which is going to require tremendous determination, it is very important that this matter should be cleared up; because it seems to me that it is just as illegal to tell troops not to arrest somebody they believe to be committing or has committed an offence, as it is to order a soldier to commit an illegal act. I wonder whether the Government can give us any assurance now or later. I wish success to this Bill because I believe that without it we cannot hope to convince the terrorists—and I am referring to all terrorists—of their inevitable and complete defeat.
Lord DONALDSON of KINGS-BRIDGE: My Lords, I will only say that the Secretary of State has declared his intention again and again to pursue criminals, irrespective of any releases that may be going on. I am not briefed on the details of the case; but if the noble Viscount likes to put down a Question, he can have an Answer.
Viscount BROOKEBOROUGH: My Lords, in October?
On Question, Bill read 3a and passed.

CHILD BENEFIT BILL
Returned from the Commons with the Amendments agreed to.
HOUSING FINANCE (SPECIAL PROVISIONS) BILL
Returned from the Commons with certain Lords Amendments agreed to; with one other Lords Amendment disagreed to, with Amendments to the words so restored to the Bill; and with the remaining Lords Amendments disagreed to with Reasons for such disagreement. The said Amendments and Reasons to be printed.
SOCIAL SECURITY PENSIONS BILL
Returned from the Commons with certain Lords Amendments agreed to; with two other Lords Amendments disagreed to but with Amendments proposed in lieu thereof; and with the remaining Lords Amendments disagreed to with a Reason for such disagreement; the said Amendments and Reason to be printed.
  BRIDGE STREET PROPERTIES
  BRIDGE STREET PROPERTIES
  LOCAL AUTHORITY HOUSING AND STUDENT ACCOMMODATION
  LOCAL AUTHORITY HOUSING AND STUDENT ACCOMMODATION
  MR. IVOR COOKE: ARMY SERVICE RECORD
  MR. IVOR COOKE: ARMY SERVICE RECORD
  SPORTING EVENTS SPONSORSHIP AND TAX LIABILITY
  SPORTING EVENTS SPONSORSHIP AND TAX LIABILITY