Sitting of 28 July 1975

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

    Independent Commercial Agents
    Mr. Silvesterasked the Secretary of State for Trade what progress has been made towards the agreement of the EEC draft directive on independent commercial agents.
    The Under-Secretary of State for Trade (Mr. Eric Deakins): In May and June 1975 officials of my Department had useful informal talks with Commission officials, who, we understand, are now reviewing the provisions of their draft proposal. My Department is keeping in touch with developments.
    Mr. Silvester: I am glad to hear that things are moving now, although I realise that events are taking place only at official level. What precisely is the objection of the Department? As I understand it, all other eight countries have agreed to the draft before the Commission.
    Mr. Deakins: It is a matter of difficulties rather than of objection, and some of the difficulties are significant. As drafted the proposal would cover a much wider range of activities than the Commission intends. We are obviously seeking solutions for our part, and we believe that Commission officials are doing the same. We are considering the draft sympathetically in the light of problems in agency relationships.
    Mr. Montgomery: Among the interested bodies with which the Department has had discussions was the United Commercial Travellers' Association, which felt that far from being consulted it was
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    merely being questioned on aspects of its work. Would it not be sensible for the Department to have full discussions with people vitally connected with this work before going on to negotiations with the other members of the Nine?
    Mr. Deakins: I have seen the United Commercial Travellers' Association in talks which took place on the 17th July. I had a long and useful discussion with the parliamentary agent and the general secretary. I left them in no doubt that we had been consulting them in the way we had been consulting other interested bodies. The consultations go back as far as the middle of 1973.

    Exports (Small Firms)
    Mr. Laneasked the Secretary of State for Trade what further steps he is taking to help small exporters.
    Mr. Deakins: The British Overseas Trade Board, of which my right hon. Friend is President, offers a wide range of export services which are available to both large and small firms. These services are widely and successfully used by small firms.
    Mr. Lane: Will the Government take one other step, bearing in mind the important part which small exporters, of whom there are many in my constituency, have to play in restoring our balance of payments? My exporting constituents are general satisfied with the services of Customs and Excise and of our posts overseas, but they complain about the slowness of communication with Government offices in this country. Will the Under-Secretary therefore try to speed up this communication?
    Mr. Deakins: I shall look into any complaint, whether from large or small firms, about delays in communication in this country.
    Mr. McCrindle: Does the so-called "piggy-back" system still exist whereby small exporters are encouraged to break into export markets with the assistance of larger exporters? If it does not, can it be revived?
    Mr. Deakins: Several schemes were in operation until recently. One was called the Group Export Representational Unit, which was designed to help small firms to market jointly overseas. This scheme had

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    to be discountinued through lack of support, and there is no evidence that industry's views on the usefulness of such schemes have changed.
    Mr. Tim Renton: What is the Minister doing to promote the export information service which collates market information from Her Majesty's consulates and embassies abroad? It is of very great use to small exporters. Can the Minister do something to ensure that more companies use it?
    Mr. Deakins: I am grateful for the hon. Member's comments. The Export Intelligence Service, with the computer, is a useful service. The Small Firms Division of the Department of Industry has recently commissioned a special booklet for small firms offering basic advice, particularly to those new to exporting, on the use of British Overseas Trade Board services.

    USSR
    Mr. Gwilym Robertsasked the Secretary of State for Trade what steps he is taking to improve the volume of trade with the USSR; if he will seek to renegotiate the 1969 long-term trade agreement with the USSR before the end of September, with the view to increasing this level of trade; and if he will make a statement.
    The Secretary of State for Trade and President of the Board of Trade (Mr. Peter Shore): Following the meeting of the Anglo-Soviet Joint Commission, which I attended in May, discussions are continuing at official level on the implementation of the two long-term co-operation programmes and I hope to make a further visit to Moscow in September. Notice to terminate the 1969 trade agreement will be given before the end of September 1975. The 10-year agreement which I signed with the Soviet Deputy Premier in May 1974 and the credit agreement and co-operation programmes recently signed in Moscow by my right hon. Friend the Prime Minister provide an adequate framework for extending our economic relations with the USSR.
    Mr. Roberts: I appreciate everything that the Government are doing, but will my right hon. Friend accept the need to stimulate East-West trade in view of the recession in the West? Will he take this
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    opportunity of dissociating himself and the Government from the fanatical cold war pose adopted by the Leader of the Opposition during the weekend?
    Mr. Shore: I have certainly no fanatical cold war sentiments. I hope, however, that I have a realistic and determined approach towards British-Soviet trade. I am most anxious to encourage it in every way possible. Exports in the first half of this year to the Soviet Union are up 100 per cent. in value over the first half of last year.
    Mr. Biggs-Davison: Dissociating myself from the hysterical observation of the hon. Member for Cannock (Mr. Roberts) on the objective speech of my right hon. Friend the Leader of the Opposition about the realities as opposed to the wishful thinking of international relations, may I ask the Minister how, apart from the volume of trade, the balance is getting on?
    Mr. Shore: The balance is improving considerably, because whereas our imports from the Soviet Union have remained stable on the whole, our exports have increased in the way I have described. Therefore, the gap is significantly closed.
    Mr. Cant: In view of the current difficulties of the motor car industry in the West Midlands, can my right hon. Friend say whether the rumours are true that such cars as the Polski Fiat and the Soviet Lada are being imported into this country at much-subsidised prices?
    Mr. Shore: No official complaints of that kind have reached me, but if my hon. Friend has any information that he wants to bring to my attention I shall certainly look at it.
    Mr. Michael Marshall: Will the right Gentleman confirm that, while we all accept in principle the value of trade with Russia, it would be extremely dangerous for us to depend on that country for our imports of chrome ore? Therefore, will the right hon. Gentleman take the opportunity of welcoming the decision of the British Steel Corporation to invest in South Africa in chrome ore?
    Mr. Shore: It is not for me to comment on a particular deal, but it is clearly in the interests of Britain to have a supply of chrome ore, and if possible a diversified supply.

    Manufactured Goods
    Mr. Biffenasked the Secretary of State for Trade what is the current trade balance in manufactured goods at the latest available date; what considerations have been given to the application of selective import control on these manufactures; and if he will make a statement.
    Mr. Shore: In the four months March—June 1975 the United Kingdom had a crude trade surplus in manufactured goods of £350 million a month. As regards the second part of the Question, we are prepared to consider action against dumped imports and other special cases on their merits.
    Mr. Biffen: In view of the considerable economic debate which has taken place over the past two or three weeks, may I ask whether the right hon. Gentleman is aware that there will be widespread support for his decisive rejection of die Tribune Group philosophy of import controls? Can he assure the House that he will be equally robust in repelling those who wish to enslave our trade with a fixed system of sterling exchange rates?
    Mr. Shore: I think that there is good sense in the present arrangements for floating sterling, and I shall certainly not advocate any change in it, although another Department invariably takes the lead in this matter. On import controls, the short answer is that it is not so much a matter of looking to one philosophy or another. What we need to have always in mind is where the best interests of the United Kingdom are to be found.
    Mr. Madden: Does my right hon. Friend agree that the case for controls of imported textiles is now overwhelming, and that other textile manufacturing countries which have implemented import controls have not suffered from the retaliation which we alone are said to expect if we were to continue the same course of import controls?
    Mr. Shore: As I have said many times, if there is evidence of dumping we shall, of course, take up any such complaint very vigorously. Beyond that, however, we must consider the balance of advantage. Whilst it is true that some countries have imposed import controls on textiles, my
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    hon. Friend should be aware that an extensive system of controls on imported textiles is operated by this country. The problem, as my hon. Friend and the whole House well know, is that there has been a collapse of demand for textiles on a large scale, certainly in the major consuming countries. The result is that we are all under pressure.

    Shipping (Radio Distress Frequencies)
    Mr. Aitkenasked the Secretary of State for Trade if he will make a statement on his future plans for the radio distress frequencies at sea.
    The Under-Secretary of State for Trade (Mr. Clinton Davis): On 1st January 1976 VHF Channel 16, which is the present maritime "calling and safety" frequency, will be internationally designated as the "distress, safety and calling" frequency. No changes are involved in the respective responsibilities of Her Majesty's Coastguard and the Post Office coast radio stations for search and rescue communications, but modifications in procedural instructions are being discussed with the Post Office.
    Mr. Aitken: Does the Minister agree that the effect of the plans he has just described is that from 1st January there will be three distress frequencies operated by two separate organisations? Is he aware that anxieties have been expressed by the two main professional groups responsible for safety at sea about the possible risks and confusions arising from that division? As the professionals who operate the services seem to be worried, will he please consider looking very carefully at the whole matter again?
    Mr. Davis: We have looked very carefully at the whole situation. The hon. Gentleman is quite right. There will be three frequencies operating, but the new VHF Channel 16 frequency, which is to be regarded, I think, as complementary to the other two, will be of considerable assistance in co-ordinating certain rescue work, particularly in inshore incidents. I am aware that some anxieties have been expressed, though I do not accept that they are as widespread as the hon. Gentleman suggested. I think that they are misplaced.

    Travel Trade (Convention)
    Mr. Neubertasked the Secretary of State for Trade whether he plans to attend the Association of British Travel Agents convention at Miami Beach in the autumn.
    Mr. Deakins: I have no plans to do so.
    Mr. Neubert: While I understand the Minister's natural anxiety that a journey to Miami Beach at this time might be misinterpreted, may I ask whether his failure to go is perhaps rather due to his unwillingness to face the full force of the resentment of retail travel agencies at their exclusion from representation on the Air Travel Reserve Fund Agency? Will the hon. Gentleman comment on their threat not to co-operate with the Court Line liquidator, and report on progress in making repayments to holidaymakers who lost their cash last year?
    Mr. Deakins: I am aware that the retail agents are at the receiving end of complaints from last year's disappointed holidaymakers, and I have every sympathy with them. It is our task as a Government Department and the task of the Association of British Travel Agents to work together as speedily as possible not only with the trustees of the respective bond moneys but with the new Air Travel Reserve Fund Agency to ensure that payments are made as speedily as possible. Nevertheless there have been some legal complications, which I mentioned in my Press statement in May. I am hopeful that they can be overcome in the next few weeks.
    Mr. Dykes: Does the Minister approve of the ABTA meeting in Miami, bearing in mind the foreign exchange costs? Presumably the customers of the industry will be paying for the visit and convention. Is that something that the Minister thinks to be a good idea? Why should it not meet at Bournemouth, Scunthorpe, Blackpool or even Harrow?
    Mr. Deakins: I remind the House that a number of bodies, political bodies included, always prefer to hold their annual conference at places such as Blackpool. Whilst it is not for me to contrast the delights of Blackpool with those of Miami Beach, the location of its annual conference is a matter for the association to
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    decide. I understand that it is not unusual for the ABTA convention to be held overseas.

    Textile Imports
    Mr. Boardmanasked the Secretary of State for Trade whether any approaches have been made by his Department to the importers of textiles with a view to reducing the quantity.
    Mr. Deakins: Discussions which officials of my Department and the Department of Industry have had with leading retailers and manufacturers have explored the possibilities of their buying more of their textile requirements from United Kingdom sources.
    Mr. Boardman: In view of the nonsense which is being talked about the dumping of textiles, will my hon. Friend make it perfectly clear that these textiles have been bought by people in this country before they leave the country of origin? If, for legislative reasons, it is not possible to limit the imports now, surely my hon. Friend could speak with some force to the people who are exploiting the situation and consequently killing off our own textile industry.
    Mr. Deakins: I am well aware of the force of the sentiments expressed by my hon. Friend and other hon. Members. The discussions were held to discover whether any possibilities were left unexploited in terms of the purchase of United Kingdom textiles as distinct from imported textiles, and to make sure that manufacturers and retailers were exerting themselves positively. Although I cannot give a quantitative estimate of the results of the discussions, I can say that the reactions of the retailers and distributors were constructive and can only have been helpful.
    Mr. Fletcher-Cooke: Did the hon. Gentleman point out to these gentlemen that the Government themselves were to change their bad habits in the matter and that the Defence and Health Departments were to buy more British textiles than in the past?
    Mr. Deakins: There was a reference to Government and other public purchasing in the statement on 23rd July by my right hon. Friend the Secretary of State for Industry.
    Mr. Cryer: Can my hon. Friend explain what has happened to the only anti-dumping application about textiles so far? This is the application by the West Riding textile spinners and was apparently made in November last year. My hon. Friend may recall that on several occasions Ministers have said that urgent, immediate action would be taken if evidence were presented. Evidence has been presented, and I wonder on what urgent, immediate action the Government are about to embark.
    Mr. Deakins: I must make one thing clear: there is no formal anti-dumping application in respect of the worsted spinners' federation of the West Riding. Such an application was made and dismissed a long time ago. More recently the federation has complained to the EEC, although not in the form of a formal anti-dumping application, about the imports of acrylic yarn from South Korea and Taiwan. This complaint has now been overtaken by discussions between the EEC and those countries—and some of them have already been successfully concluded—about voluntary restraint, which will certainly help that industry.
    Mr. Shersby: Can the Minister say what rates, if any, will be applied to Portuguese imports?
    Mr. Deakins: An announcement was made recently in a parliamentary answer—I shall see that the hon. Gentleman gets a copy—to say that we are to reimpose import duties on Portuguese textiles. I shall let the hon. Member have full details.

    Civil Aviation Policy
    Mr. Les Huckfieldasked the Secretary of State for Trade whether he will make a statement on his review of civil aviation policy.
    Mr. Tebbitasked the Secretary of State for Trade if he is yet ready to announce the results of his consultations following his review of air transport policy guidelines.
    Mr. McCrindleasked the Secretary of State for Trade if he is now in a position to make a statement on his review of civil aviation policy.
    Mr. Shore: I expect to make a statement very shortly.
    Mr. Huckfield: Will my right hon. Friend bear in mind that as most international airlines on international routes are losing money and as British Airways on its domestic routes is losing money, it does not make sense to go on having a policy of double designation of British-operated international routes or competition on our domestic routes? Does he not think that the time has now come to bring to an end the policy of a mixed economy in British civil aviation?
    Mr. Shore: What my hon. Friend says about double designation and its effect is one of the matters to which I have had to give careful consideration. However, my hon. Friend would not wish me to anticipate my statement by saying any more now.
    Mr. Tebbit: Apart from observing that the hon. Member for Nuneaton (Mr. Huckfield) is talking nonsense, may I ask the Minister whether he is aware that as his statement is so imminent and as we have rehearsed the arguments before, I at least will wait until he makes it?
    Mr. Shore: I thank the hon. Gentleman for showing an unusual degree of self-restraint.
    Mr. Conlan: During the course of his review, will my right hon. Friend take account of the report of the Civil Aviation Authority in connection with the location of airports in this country? If so, will he accept my assurance that the Civil Aviation Authority was right to reject the consultants' recommendation in connection with an airport in the North-East?
    Mr. Shore: I assure my hon. Friend that I shall not be making a statement on this occasion to cover airport policy. I hope to have something separate to say about that a little later.
    Mr. McCrindle: I do not wish the right hon. Gentleman to anticipate the content of his report, but can he say whether he has seen suggestions in the Press that the rôle of his Department in civil aviation is likely substantially to increase as a result of publication of this report and that at the same time the rôle

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    of the Civil Aviation Authority is likely to diminish? Is he in a position to confirm or deny that that will be the situation and to comment on the matter in any way?
    Mr. Shore: Both the CAA, which was established in 1971, and the Department of Trade have indispensable rôles to play in the evolution of British civil aviation policy and its implementation, and I certainly envisage a continuing part for both organisations.
    Mr. Donald Stewart: Contrary to the statement of the hon. Member for Nuneaton (Mr. Huckfield), is it not the case that on some of the routes where British Airways has had competition from another airline the British Airways share of the market has gone up as well?
    Mr. Huckfield: So have the losses.
    Mr. Shore: I know that the hon. Member has a keen interest in this subject, but he should look with great care at the figures for particular routes. It may well be that that has been the result in one or two cases, but he may reach different conclusions about other and rather more important routes.
    Mr. Warren: Will the right hon. Gentleman give an assurance before making his statement that he has consulted the EEC Commission, because any change in British civil aviation guidelines will have implications for the Commission? As he knows, the Commission itself is preparing a civil aviation policy for Europe which it hopes to publish next year.
    Mr. Shore: The answer to that question is "No, Sir."

    Trade Missions (North Africa)
    Mr. Hooleyasked the Secretary of State for Trade how many trade missions will visit the countries of North Africa during 1975.
    Mr. Deakins: The British Overseas Trade Board has approved three trade missions to North African countries for support in 1975.
    Mr. Hooley: Does not my hon. Friend agree that it is absurd to send 16 trade missions to South Africa this year and only 15 to the whole of the rest of Africa? Is it not time on both economic and
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    political grounds, that we reorientated our trade effort to Africa at large?
    Mr. Deakins: I assure my hon. Friend that the determining factor in all trade missions is the commercial judgment of companies. Although our trade with North Africa is relatively small, it is a fast-growing trade. In the first five months of this year our exports to North African countries were up by 72 per cent. over the same period of last year.
    Mr. Robert Taylor: As I have the privilege of leading one of the forthcoming missions to West Africa, may I support the Minister and tell the hon. Member for Sheffield, Heeley (Mr. Hooley) that his knowledge of selling in any part of Africa is absolutely abysmal?
    Mr. Kinnock: Does my hon. Friend agree that another determining factor, as he put it, in making decisions about trade allocations is the Labour Party manifesto, with which he is at least as familiar as I? What is the application of that same manifesto to the decision announced by the British Steel Corporation about the chrome smelter in South Africa, especially as the information is that the chrome ore originates in Rhodesia so that, far from being locked up in South Africa, as the Department of Industry has put it, the dividends resulting from investment in this process could in fact be repatriated?
    Mr. Deakins: This is primarily a matter for my right hon. Friend the Secretary of State for Industry and I am sure that he will be answering a number of Questions on this subject in due course. I assure the House that there is no question of any ECGD facilities being involved in that transaction.

    Export Credits
    Mr. Hal Millerasked the Secretary of State for Trade whether he is yet in a position to relax some of the requirements of the Export Credits Guarantee Department cost inflation insurance scheme; and if he will make a statement.
    Mr. Deakins: We are still considering industry's various comments on the scheme. My right hon. Friend hopes to make an early announcement.
    Mr. Miller: Is the Minister aware that, apart from the representations of the manufacturers in Redditch, about which

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    I wrote to him on 26th June, the whole construction industry in this country attaches the greatest importance to this scheme, which is an essential aid to its export effort, which is vital at a time when domestic construction is so lamentably low? In particular, will he pay attention to covering the total inflation cost, which I am given to understand is the practice in France and West Germany?
    Mr. Deakins: I fully understand and sympathise with the case that the hon. Gentleman is making on behalf of his constituents. It has been made to us by the CBI and a number of major firms. However, primarily we have to have regard to public expenditure considerations. Although in the best possible world open-ended cover would be eminently desirable, consistent with our international obligations, that is obviously impossible for the Government.

    Export Credits
    Mr. Stanleyasked the Secretary of State for Trade whether he is satisfied with the implementation of the Government's policy on export credits.
    Mr. Deakins: Yes, Sir.
    Mr. Stanley: When will the hon. Gentleman be able to give details of the new ECGD scheme to cover pre-shipment finance?
    Mr. Deakins: We hope that an announcement on this matter will be made fairly soon. As the hon. Gentleman will appreciate, there have been a number of difficulties with the clearing banks. The problems are not with my Department but with the clearing banks themselves. I am hopeful for a successful outcome to the discussions and that we shall be in a position to make an early announcement.
    Mr. Dalyell: What are these difficulties?
    Mr. Deakins: My Department wants some assurance that the clearing banks will not regard the provision of pre-shipment finance by the Government as a reason for cutting back on their own overdraft lending to the particular industries concerned. That is a major difficulty which must be overcome before we can put forward an acceptable scheme.

    Concorde
    Mr. Jesselasked the Secretary of State for Trade if Concorde will be further tested for noise.
    Mr. Clinton Davis: Yes, Sir. Special arrangements have been made to monitor Concorde's noise on take-off and landing at Heathrow throughout this summer's endurance flying programme.
    Mr. Jessel: When the next test takes place, will the Minister or the Secretary of State stand under the flight path within about five miles of the airport so that he is personally aware of what people living near the airport will have to suffer? Why is there so much delay in publishing the results of the tests which have been carried out so far? Is the Minister aware that the Greater London Council, which has very great experience in carrying out noise tests, has already published the results of its own tests on Concorde showing that it makes a noise which is seven decibels louder than the next noisiest aircraft?
    Mr. Davis: On that last point, the hon. Gentleman will be aware that the GLC has indicated that it is premature to come to any conclusive verdict about the matter at this stage. I resent the suggestion that there is any desire on the part of the Department to suppress the facts about these endurance tests. It is essential to look upon the tests as a whole, to analyse the results carefully and in accordance with international scientific standards, and then to announce the results. That is the Proper way to proceed. As for the first part of the hon. Gentleman's question, I propose to witness the take-off and landing of Concorde at the earliest possible opportunity.
    Mrs. Millie Miller: Will my hon. Friend say whether there is any truth in a report appearing in a French periodical, Le Sauvage of 19th January, saying that during the course of one Concorde flight over the British Isles a Scottish farmer lost his whole herd of cattle, half the animals being said to have died on the spot and the remainder having to be put down because they had gone mad from the effects of the supersonic bang? The report adds that Her Majesty's Government decided to grant the farmer the sum

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    of £14,000 in compensation for the damage.
    Mr. Davis: I know of no such reports. In any event, the aircraft does not fly at supersonic speeds over the United Kingdom.
    Mr. Warren: Although I respect the point made by my hon. Friend the Member for Twickenham (Mr. Jessel), and although I have great sympathy with people who live near airports, may I ask the hon. Gentleman to confirm that Concorde has met two out of the three required guarantees on noise for certification, that the third will probably be mastered by improved techniques, and that in New York the tests proved conclusively in the hands of American pilots that the aircraft could meet the requirements for noise take-off profiles in New York?
    Mr. Davis: I am grateful to the hon. Gentleman for that intervention. I agree with him entirely. He speaks with considerable expertise.
    Sir Anthony Royle: On a point of order, Mr. Speaker. In view of the fact that my constituents suffer just as badly as those of my hon. Friend the Member for Twickenham (Mr. Jessel)—
    Mr. Speaker: That is not a point of order.

    Counter-Inflation Policy
    Mr. Tim Rentonasked the Secretary of State for Trade what rôle his Department will play in implementing the Government's counter-inflation policy.
    Mr. Adleyasked the Secretary of State for Trade if he will make a statement on his Department's rôle in implementing the Government's incomes policy.
    Mr. Peter Morrisonasked the Secretary of State for Trade if he will make a statement on the rôle of his Department in the Government's counter inflation policy.
    Mr. Shore: As a Minister responsible for a Department whose interests cover exports and important industries in both the public and private sectors, I have been closely involved in the formulation of the policy. My function in implementing it will include the supervision of the
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    nationalised and public bodies for which I am responsible and the control of increases in the scheduled rates of premium for certain insurance business.
    Mr. Renton: Can the Secretary of State say what advice he is now giving to American companies seeking to make new investment in this country? Is he telling them that the Government's wage policy is voluntary on employer or statutory? If they should fail to understand his answer, will he then give them the details of the secret powers Bill so that they may know fully the Government's intentions?
    Mr. Shore: I think that that was a little laboured. Any advice which I give to a company in this position is that, like anyone else, it will be expected to observe the agreed guidelines of Government policy.
    Mr. Tomlinson: If there were any question of import controls on a generalised basis, would not they serve to damage the Government's counter-inflation policy by forcing up the cost of living in the short run?
    Mr. Shore: Yes. The impact of import controls is not helpful to the cost of living, although, as my hon. Friend knows, that is not the only argument put forward by those who advocate import controls.
    Mr. Adley: Is the right hon. Gentleman aware that in my constituency very many small traders and business men earnestly hope that the Government's counter-inflation policy will be successful? Is he aware, further, that some of them are particularly concerned about the variance between the Government's view and the TUC's view on the £6 limit? Will he give urgent consideration to clearing up this point, because none of his right hon. and hon. Friends has yet done so?
    Mr. Shore: I was not aware that there was, after our recent debates, any serious doubt about the matter. If there are further points which need clarification, I have no doubt that my right hon. Friends principally responsible will see that the clarification is made.
    Mr. Raphael Tuck: Will my right hon. Friend press the Secretary of State for Prices and Consumer Protection and the

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    Chancellor of the Exchequer to consider seriously what is now being done in the Republic of Ireland, where large subsidies are being given for essential foods and for services like electricity and gas so that prices may be kept down, and where the Government recoup themselves by imposing a surcharge on income tax?
    Mr. Shore: The policy of giving large subsidies through nationalised industry prices and directly in the form of food subsidies and rent subsidies has been practised by this country long in advance of the Irish Republic. I say additionally to my hon. Friend, whose deep concern I appreciate, that the success or otherwise of the latest Irish measures has yet to be demonstrated.
    Mr. Morrison: What will be the right hon. Gentleman's attitude if firms with large order books from overseas are forced out of business by unions trying to breach the present counter-inflation policy?
    Mr. Shore: I should be very upset about any such outcome to the Government's incomes and prices policy—of course I would. All those concerned have to weigh the consequences of their actions. This is one reason why it was so right to seek to get the maximum of agreement and understanding of all those concerned.
    Mr. Thorne: Can my right hon. Friend say what effect import controls on television glass manufactures would have in relation to Japanese exports to Britain?
    Mr. Shore: If we were to restrict Japanese exports to Britain in the industries mentioned by my hon. Friend—certainly in the case of television tubes—undoubtedly this would improve the British balance of trade. As my hon. Friend knows, however, there are many other factors to be taken into account before drawing too simple a conclusion from that proposition.

    Books and Periodicals (Export)
    Mr. Goodhartasked the Secretary of State for Trade what further action he is taking to promote the export of British books and periodicals.
    Mr. Deakins: Since the hon. Gentleman's earlier Question on this subject, my Department has continued to col-
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    laborate with the publishing industry in promoting its sales overseas.
    Mr. Goodhart: Does the Minister recognise that in January British publishers for export will have to pay postal charges which are 50 to 98 per cent. higher than those paid by their American publishing rivals? Does he recognise that the British Book Development Council believes that these new charges will have a calamitous effect on British book exports, and will he have discussions with those most affected?
    Mr. Deakins: As regards a meeting with the British Book Development Council, I have written assuring its representatives that I should be happy to meet them but that first they should make positive proposals. If they have any suggestions, I and the British Overseas Trade Board will be delighted to receive them. I understand that the industry is looking after itself in the light of the increased postal charges, not only those of which it has had a first instalment, but those represented by the second instalment which comes in in January next year—quite a large increase—and it is investigating quite positively and successfully further and cheaper ways of exporting books.

    USSR
    Miss Fookesasked the Secretary of State for Trade what results to date have followed the trade agreement with the Government of the USSR announced during the Prime Minister's last visit to Moscow.
    Mr. Shore: Our exports to the USSR are rising and there are good prospects for an improvement in Anglo-Soviet trade.
    Miss Fookes: Does the right hon. Gentleman agree that that is an extraordinarily vague answer which seems to belie the great noises of triumph which the Prime Minister made when he returned with this agreement? May we have a few more facts?
    Mr. Shore: If the hon. Lady had come in earlier, she would have heard me answer a similar Question in which I gave figures indicating that there had been a 100 per cent. increase in the first six months of this year compared with the first six months of last year. We are

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    starting from a very low base of trade with the Soviet Union. Therefore, we have a considerable way to go before we can begin to be satisfied about the volume of trade.
    Miss Fookes: On a point of order, Mr. Speaker. Is it correct for the right hon. Gentleman to upbraid me, because I gather that the two Questions were not linked?
    Mr. Shore: The hon. Lady, whose sensitivity I well understand, must not feel that she has been upbraided, I was trying to help her by giving a little bit of additional information which it was her bad luck and misfortune not to hear earlier.

    Cyprus Fruit
    Mr. Townsendasked the Secretary of State for Trade whether Great Britain is importing Greek Cypriot-owned fruit from Turkish-occupied Cyprus.
    Mr. Deakins: Fruit is imported into the United Kingdom from the Republic of Cyprus and disputed ownership is not a ground for refusing entry. Decisions on ownership are not for Ministers but for the courts.
    Mr. Townsend: Does the hon. Gentleman agree that, as a guarantor of a free and independent Cyprus, it behoves this country to treat this matter with considerable caution? Will he be prepared to consider setting up a working party to see what more can be done to exercise greater control?
    Mr. Deakins: There are some complex problems involved, but I am not convinced that the setting up of a working party would be helpful. What is needed in Cyprus is a proper political settlement, and that must spring from the two communities in Cyprus meeting together. That is why we are giving our full support to the inter-communal talks in Vienna.
    Mr. Lipton: Will my hon. Friend see what he can do to ensure that payment is made to the legal owners of these exports and not to the people illegally in possession of them and exporting them to this country? Will he agree to the dispatch of a Select Committee to Cyprus to ascertain the facts?
    Mr. Deakins: On the question of disputed ownership, I understand that a High Court case is pending in which four
    1284
    farmers' co-operatives in the north of Cyprus are seeking an injunction to prevent certain British importers from handling fruit from that part of the island. Obviously I do not think that any further action is called for at the moment.

    Japan (Motor Vehicles)
    Mr. Edwin Wainwrightasked the Secretary of State for Trade if he will give the number of Japanese cars imported into the United Kingdom over each of the past 10 years and the value of such imports in sterling; and if he will also give comparable figures for British cars exported to Japan.
    Mr. Shore: I shall have the detailed figures for which my hon. Friend has asked circulated in the Official Report. They show a large and increasing adverse balance in our car trade.
    Mr. Wainwright: Does my right hon. Friend agree that the figures will most likely prove that for every car exported to Japan from this country at least 50 cars are imported? Is he quite certain that dumping is not taking place? What is the latest evidence that he has received from the Society of Motor Manufacturers and Traders on this issue? What action will he take in the near future to ensure that the British motor car industry is able to supply cars in this country and not allow Japanese cars to come in? If cars can be produced in Japan and shipped to this country to compete with cars produced here, some fiddling must be taking place.
    Mr. Shore: My hon. Friend will know that we have been considering the charge of dumping and there has been an investigation. But the Japanese success in the British market has been due first to the unparalleled opportunities which they had for selling in this country in the 1972–74 period when British supplies were curtailed and limited, and secondly to the fact that in the last year or so the type of car which the Japanese have been selling tends to be of the small variety and, therefore, has a particular attraction in these days of much higher fuel costs. Those are advantages which the Japanese have. We cannot blink the fact or try to dismiss the Japanese success on the ground that they are trading unfairly. If I were to hear evidence of that, I should act on it. The problem is the more serious

    1285
    one of the present strong competitiveness of the Japanese car industry.
    Mr. Ridsdale: Is it not a fact that the French and German industries are looking after their home markets much better than we are looking after ours and, therefore, Japanese imports into Germany and France are not nearly as high as they are into this country? The salvation of our car industry against Japanese imports depends on our own industry and not on the Japanese.
    Mr. Shore: I have no doubt that the salvation of the British car industry lies basically with the British car industry. If our industry is to prosper, which I believe is the wish of hon. Members on both sides of the House, we must give it considerable aid and support in the period ahead. I do not have the figures relating to France and West Germany, but I will check them. Those who tend to single out Japanese car imports as being a problem of special moment should bear in mind that our net trade in cars with France and Germany is worse than it is with Japan.
    Mr. Les Huckfield: Does my right hon. Friend realise that, continuing logically from what he said, leaving out of account the fleet users and company sales, only one in three of British private motorists is buying a British car? As the figures for the first six months of 1975 show that imports have increased in value by 50 per cent, but exports have increased in value by only 19 per cent., even if my right hon. Friend cannot see his way to introducing import controls will he recognise that there is serious concern particularly among hon. Members such as myself who represent car manufacturing constituencies? Is it not about time that his Department made a definitive statement on import controls?
    Mr. Shore: I note and share my hon. Friend's concern about the trend. I offer him one modest solace in the light of the figures that he has mentioned. Taking the car industry in its broadest sense, including not only made-up cars but components and spares and associated vehicle industries, we are still substantial net exporters. Do not let us lose sight of that fact, because it is important to this country and to the future prosperity of
    1286
    the areas which my hon. Friend and other hon. Members represent.
    I take the point that hundreds of thousands of our fellow citizens prefer to buy cars which they know come from countries whose balance of payments situation is stronger than ours. I repeat what I said in the country some time ago: all of us who are concerned about the future of this country and its industry should search our consciences very carefully indeed before deciding to buy foreign cars.
    Mr. Shersby: In the light of the interesting reply which he gave to my hon. Friend the Member for Harwich (Mr. Ridsdale), can the Secretary of State assure us that there are no artificial technical barriers to prevent the export of British cars to Japan?
    Mr. Shore: All the obvious technical trade barriers are either non-existent or lower in the case of Japan than they are in the case of many other countries. For example, their tariff is 6·4 per cent. as against our own 11 per cent. There have been changes in various procedures which the Japanese practised in the past in relation to imports which have been to the advantage of our exports. It is difficult to pin on the Japanese industry any specific measure which it is using to protect its home market which would be disadvantageous to our exporters.

    Following is the information:

    Imports

    Exports

    £'000

    £'000

    Number

    £'000 cif

    Number

    £'000 fob

    1965

    …

    168

    63

    2,540

    1,477

    1966

    …

    1,230

    472

    2,739

    1,618

    1967

    …

    1,425

    550

    2,054

    1,299

    1968

    …

    5,791

    2,220

    1,689

    1,178

    1969

    …

    2,676

    1,186

    1,715

    1,263

    1970

    …

    4,291

    2,031

    1,776

    1,465

    1971

    …

    16,971

    8,231

    1,561

    1,476

    1972

    …

    68,676

    42,355

    1,328

    1,510

    1973

    …

    97,342

    71,395

    997

    1,742

    1974

    …

    86,899

    64,387

    1,805

    3,253

    Tea Estates
    Mr. Bryan Daviesasked the Secretary of State for Trade whether he will introduce an import levy on tea, the proceeds of which will form a welfare fund for the benefit of workers on tea estates.
    Mr. Deakins: I am not convinced that such a scheme would be practicable. However, as far as Sri Lanka is concerned, we are continuing our discussions

    1287
    with the Ceylon Association following the report produced by the group of Members who visited Sri Lanka at Easter. These discussions now need to take account of the Sri Lanka Government's plans to nationalise all foreign-owned estates.
    Mr Davies: I thank my hon. Friend for that reply, but does he accept that many of us will find it somewhat disappointing? Does he agree that something concrete ought to be put forward to help tea workers in Sri Lanka in particular and on many other estates throughout the world where there are British tea interests? Should he not capitalise on the real feeling among public opinion that tea is somewhat underpriced in this country and could bear a modest increase if the proceeds were directed to this meritorious end?
    Mr. Deakins: The Government's policy is to work towards international commodity agreements, of which tea would be one. However, the fact is that to impose a levy for this purpose would require new legislation and could be implemented only with the agreement of all tea exporting countries, not all of which are in need of this type of welfare fund and some of which might be reluctant to see a weakening of the competitiveness of tea vis-à-vis coffee.
    Sir John Hall: Has the hon. Gentleman any reason to believe that the Governments of the countries concerned would be prepared to accept a fund raised in this way for the benefit of one section of workers only? This applies particularly to Sri Lanka, which has been reluctant to accept any help directed specifically to tea plantation workers.
    Mr. Deakins: I cannot speak for the Sri Lanka Government, but I should have thought that other tea exporting countries which would be affected by the levy would be most unlikely to tolerate a levy on all tea exports the proceeds of which were directed merely to one country.

    European Community
    Mr. William Hamiltonasked the Secretary of State for Trade if there is any discernible improvement in the balance of trade with the EEC; and if he will make a statement on the impact of steel and food in this context.
    Mr. Shore: The crude deficit, seasonally adjusted, on our trade with the EEC averaged £171 million a month in the four months March to June 1975, compared with £225 million a month in the preceding three months. Between these periods the crude trade deficit in food and live animals was little changed and the deficit in iron and steel was reduced by half.
    Mr. Hamilton: Will my right hon. Friend confirm that the true balance concerning goods other than food and steel is showing a slight reduction compared with 1974? Will he give us a more specific answer on steel imports in view of the parlous plight of the steel industry in this country? Why are we continuing to import so much steel when our own industry is capable of meeting the demand in this country?
    May I congratulate you, Mr. Speaker, on your birthday and hope that those felicitations might help me to catch your eye in future debates?
    Mr. Shore: There has been a lower level of imports of iron and steel. In our judgment, this reflects the easing of capacity constraint and reduction of demand in the United Kingdom. That has been helpful in terms of the balance of trade with the EEC in iron and steel.
    As for the overall improvement, this is probably the first time in 16 months that I have been able to report to the House that there has been a slight reversal, which I welcome, in the trend. However, the House must be aware that what I am talking about on the basis of the past three months is an annual deficit of £2,000 million as distinct from a crude deficit of £2,500 million which previously obtained.
    Mr. Dykes: The Secretary of State has now admitted that there has been an improvement in the three months to June. During the referendum campaign he categorically said that the situation was getting worse. Should he now apologise for misleading the public?
    Mr. Shore: I do not think so. The referendum campaign ended, as I recall, a month ago. Indeed, the campaign was fought in the main two months ago, and the trend in the figures then was precisely as I described.

    Aircraft Noise
    Mr. Pattieasked the Secretary of State for Trade whether he has seen a copy of the policy document by the Local Authorities Aircraft Noise Council entitled "Relief from aircraft noise"; and if he will make a statement on his policy towards its recommendations.
    Mr. Clinton Davis: Yes. I have seen a copy of the document. My Department is already taking action in a variety of ways to provide relief from aircraft noise, but we are always prepared to consider new measures and study their practicability. The council's document embraces many wide-ranging measures and I cannot at this stage comment on them in detail. They will need careful consideration and my officials have arranged a meeting with the council to discuss the document.
    Mr. Pattie: May I press the Minister further, despite his answer, and ask him to comment on two facets of the report which are particularly important: first, the desirability of encouraging research into the production of quieter aircraft engines and, secondly, the two operational methods mentioned in the report for reducing aircraft noise on landing?
    Mr. Davis: The hon. Gentleman will no doubt recall that on two previous occasions I have indicated to the House that it is important to continue research into the production of quieter engines. The question of landing techniques continues to concern my Department and those engaged in the aviation industry. I hope that the hon. Gentleman will accept my assurance on those matters.
    Mr. R. C. Mitchell: Will my hon. Friend study the report carefully and in particular do something to give relief to many of my constituents who are suffering from continuous aircraft noise caused mainly by training flights from Hamble?
    Mr. Davis: I am aware of the difficulties experienced by my hon. Friend's constituents and by the constituents of other hon. Members who represent areas near Hamble. I have written a number of letters on this matter to them. However, they should make representations to the authorities at Hamble, who, I am sure, are sensitive to these matters and
    1290
    are trying to mitigate the disturbance which is caused.
    Sir Anthony Royle: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply which the Minister has given on the question of aircraft noise, and in view of the fact that I am unable to address a question—
    Mr. Speaker: Order. The hon. Member must make his point of order in the accepted form.
    Sir Anthony Royle: May I make it now in the accepted form? In view of the unacceptable reply which the Minister has given, I beg to ask leave to give notice that I shall raise the matter on the Adjournment.

    Motor Vehicle Insurance (Drunken Driving Offenders)
    Mr. Freudasked the Secretary of State for Trade whether he will conduct an investigation into the practices of motor vehicle insurers in their treatment of persons convicted under Sections 5 and 6 of the Road Traffic Act 1972.
    Mr. Clinton Davis: No, Sir. These are matters for the underwriters.
    Mr. Freud: Is the Minister aware that people convicted under Sections 5 or 6 are now being asked to pay premiums of 200 per cent. and 300 per cent. over the normal premium? Is he also aware that the Act was never really intended to punish people more than the ordinary criminal? A man convicted under Sections 5 or 6 is now not only disqualified from driving but cannot get insurance when he regains his licence after the stipulated time. Is the Minister further aware that this tends to drive people who want insurance to get inadequate cover from fairly unscrupulous companies?
    Mr. Davis: I think that a commercial rather than a moral judgment has to be made. Unquestionably insurers regard convictions of this nature as serious and as evidence of a high risk. Therefore, it is right that, in their judgment, they should charge more where such convictions have been established. If a driver is dissatisfied with the premium charged, he is at liberty to seek other quotations, but I do not accept all the assumptions made by the hon. Gentleman.
    Mr. Speaker: In view of my desire to preserve the sanctity of Question Time, I forbore from doing so earlier but I now take cognisance of the compliment paid to me by the hon. Member for Fife, Central (Mr. Hamilton). There comes a time in one's life when one does not wish to be reminded of one's age. However, I accept the compliment in the spirit in which it was made, even though the spirit was perhaps one designed to turn away wrath.

ANGOLA (BRITISH SUBJECTS)
Mr. Dalyell Mr. Dalyell (by Private Notice) asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the safety of British subjects in Angola.
The Minister of State for Foreign and Commonwealth Affairs (Mr. David Ennals): As hon. Members will know, in view of the dangerous situation in Angola it was decided to evacuate British citizens and to close the Consulate-General. The decision was taken over Friday night, and the Royal Air Force evacuated 26 British citizens from Luanda on Sunday morning. Fourteen EEC nationals, 10 United States nationals and four Commonwealth and other nationals were brought out in this plane. About 12 British citizens decided not to leave. It is hoped that they will have the opportunity if they wish to do so within the next few days to take spare seats under air or sea evacuation arrangements of other friendly countries.
These arrangements were for Luanda only. In other parts of Angola, many have already left independently under arrangements made in consultation with our Consul-General.
Decisions on evacuations and their timing are always difficult. In this case, we were mainly influenced by the importance of using the airport while it remained safe to do so, and while access to the airport through troubled quarters of the city remained feasible.
Our best assessment is that the situation in Angola is likely to get worse and that the capital could become a battleground in which British citizens would be at serious risk. So far, there have been no British casualties, although there has been some damage to property.
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We greatly regret the tragic turn of events which made this evacuation necessary.
Mr. Dalyell: Is it sufficient simply to say, as regards those who elected to remain, that there will be sufficient accommodation for them under the evacuation arrangements of other countries? Would it not be wiser to make some definite arrangement?
Mr. Ennals: The British citizens who decided to remain knew that the evacuation arrangements were being made. We issued a warning on 24th July, which was broadcast on the BBC Overseas Service, advising British citizens whose presence in Angola was not strictly essential to leave. We then informed them as soon as the decision was taken. It seems that about 12 have decided to stay. There are alternative arrangements—quite apart from those made by friendly countries—if in the event these people cannot leave under the arrangements made by friendly countries in the next few days.
Mr. Tugendhat: From this distance it would be impossible to criticise decisions taken in Luanda, but will the Minister of State confirm that a number of other European countries have left diplomatic representation in Luanda and that we are the only country to have withdrawn?
The Minister of State said that some British subjects had decided to stay. I think that he was referring to people in Luanda as distinct from Angola as a whole. Were there any British subjects who, far from declining to leave, were unable to get to Luanda because of the speed with which the operation was conducted? How many British people are there actually in Angola altogether? Can the Minister say what is the value of British interests in Angola currently at risk? Finally, which friendly Power is looking after our interests now that we have left?
Mr. Ennals: There are a number of questions there. As the hon. Gentleman recognised, it is always difficult to take a decision. If we had taken a decision too late and it had been impossible to get the plane into the airport, we would no doubt have been criticised because we had not acted quickly enough. We are not the only country which has evacuated citizens. Some have

1293
done so by their own arrangements and some have done so by our arrangements. There are still some countries, of which the United States is one, which have not evacuated their citizens.
As the hon. Member deduced, the statement I made about 12 British citizens referred to Luanda alone. I do not think that there were any British citizens who decided to remain because they did not know of the operation or were unable to leave at that stage. As for those in other parts of Angola, it is difficult to be certain how many have left under their own arrangements. Some people live in fairly scattered areas. It is a very big country and it had long been agreed—these people knew it—that exacuation from Luanda could not include citizens in the distant areas of Angola. The number is likely to be few. In some cases they are wives of Angolans or of Portuguese settlers. The number is very small.
I will have to inform the House later as to the responsibility that is held.
I cannot at this stage tell the House the total value of the property that is left there. As I said in my statement, some of the property has been damaged. Most of it has not been. The British consular staff are being looked after by non-British staff; so the consulate is still there.
Mr. Newens: Can my right hon. Friend say what the attitude of the British Government will be to the parties involved in hostilities? Can we take it that we shall be pursuing a policy of neutrality?
Mr. Ennals: We certainly deeply regret the situation—
Mr. Speaker: Order. I allowed this Question with some doubts because of the safety of British subjects. I do not think that we can get involved in general questions of foreign policy.
Mr. Newens: On a point of order, Mr. Speaker. Does it not affect the question of the safety of British citizens to know what attitude the British Government are taking towards the parties involved in the hostilities? As the hon. Member for the City of London and Westminster, South (Mr. Tugendhat) asked such a long question, am I not entitled to have a comment on this matter?
Mr. Speaker: The hon. Gentleman is entitled to have a comment if the Minister chooses to make it.
Mr. Maxwell-Hyslop: On a point of order, Mr. Speaker. In at least two respects I think that the Minister will find that he has not said what he meant to say, through verbal infelicities. On this occasion it is important that we should have on the record what he meant to say, so perhaps he can be allowed the same indulgence as a maiden speaker to alter the record in Hansard to what he meant to say.
Mr. Speaker: I do not regard that as a serious point of order.
Mr. Kinnock: On a point of order, Mr. Speaker. While I understand your ruling that the Minister must make up his own mind as to whether he answers the question asked by my hon. Friend the Member for Harlow (Mr. Newens), in fact you rose before my right hon. Friend the Minister of State had had time to answer the question put by my hon. Friend the Member for Harlow. It may be that my right hon. Friend the Minister of State was about to tell my hon. Friend to take a running jump. Surely my right hon. Friend should be allowed to tell my hon. Friend that for himself.
Mr. Ennals: I had intended to answer the question asked by my hon. Friend the Member for Harlow (Mr. Newens). We deeply regret the situation in Angola. It is not for us to take sides. I, and, I think, the whole House, would want to appeal to both sides to call off this very damaging armed struggle so that Angola can have a smooth and peaceful transition to independence. I do not think that it would be helpful to us to take sides.
Perhaps I may be allowed to add that I now know that the estimated value of British property in Angola is £60 million.
Mr. Teddy Taylor: As the situation in Angloa is now developing into little more than a bloodthirsty shambles, is the Minister of State seriously telling us that he has no precise idea of the number of British residents, that he has no precise idea of where they are, and that he has not given them any instructions as to whom they should contact if they get into

1295
trouble? In view of the right hon. Gentleman's obvious and well-known interest in the so-called freedom fighters in Angloa, does he not think that he has a duty to give us some indication of what advice he has given to people whose lives will be at risk?
Mr. Ennals: I do not think that the situation is as the hon. Gentleman describes it. As regards those in Luanda, I have already said that our best information is that the number is about 12. It could be 14, but it is roughly that figure. I cannot give a figure for those in other parts of Angola, simply because, as people have been leaving in the course of the last few weeks, we do not know how many have left and how many are there. They all know perfectly well that if they are able to get in touch with Luanda they will be able to make transitional arrangements to get out of the country.
Mr. Faulds: Is it not the normal practice in circumstances as abnormal as this that one of the matters of first priority is to determine who will oversee British interests when we withdraw?
Mr. Ennals: This decision will be taken probably in the course of the next 24 hours. The operation of the evacuation of citizens has been done very rapidly over the weekend. It is a matter of negotiation, and the matter will be dealt with rapidly. I shall answer a Question in the House concerning which country will take responsibility.
Mr. David Steel: Surely our Consul in Angola does not constitute our diplomatic representation in that area. Somebody must be responsible for British affairs in that country.
Mr. Ennals: It is true that the British Consul has been withdrawn. It clearly would have been wrong to have left our small consular staff in Angola after the vast majority of the British citizens had been withdrawn. The Consul returned in the early hours of this morning.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. I think this matter must be pursued on another occasion.

DIVISION NO. 290
The Parliamentary Secretary to the Treasury (Mr. Robert Mellish): I wish to refer to the adjourned debate on the Solicitor-General's motion which took place in the early hours of last Monday's sitting. As you know, Mr. Speaker, this motion would in the normal way have been accepted without discussion, but in the event a vote was called and a number of my hon. Friends were involved in voting in both Lobbies. I should like to apologise to you, Mr. Speaker, and to all Members of the House for this incident.
Mr. Peyton: There are two points that I wish to make. First, I think the underlying issue of whether or not the House should deny the courts the enjoyment of Hansard needs looking at again. It is a very stupid rule. However, I hope that the Patronage Secretary will agree that votes and rules about votes, whether they are concerned with majorities or quorums, are very important matters that should not be tampered with or treated in any way lightly.
Mr. Mellish: On the question of the Solicitor-General's motion and Hansard, that is not a matter for me at this moment. It is a fact that Members have voted in two different Lobbies before now. However, I do not want to go back too far in the past. I can only say, speaking for myself, that I spend all my time trying to get as many Members as I can into one Lobby. I am overwhelmed by the enthusiasm of those who vote in two.
Mr. George Cunningham: As the most important aspect of this matter is how the rules concerned apply if the number of people voting in both Lobbies produces a number over 40, could you give a ruling now or at some time, Mr. Speaker, as to the proper interpretation of Standing Order No. 29(2), which clearly says:
"If at any time it shall appear…that forty Members are not present"?
It would seem from that provision that one should not count two votes as two but only as one if they are cast by the same Member. Are you in a position to say, Mr. Speaker, what the position would be if the number of Members who voted, however composed, fell short of the

1297
number required for a quorum? If you knew, Mr. Speaker, that that was the case at the time of the Division, is it not the case that you would rule that a quorum was not present? If that knowledge came to you on the day after the vote had taken place, Mr. Speaker, would you declare ex post facto that the quorum had not been present, and declare the decision invalid?
Mr. Speaker: I shall rule upon that matter, but I will first take one more supplementary question.
Mr. Wiggin: This is a matter that was raised almost a year ago when some Members of the Liberal Party voted in both Lobbies on a Friday afternoon.
Mr. Mellish: That was because they did not know.
Mr. Wiggin: I raised the point on that occasion with the Deputy Chairman who was in the Chair, but I received no ruling. I think it would be appropriate if we could have a definitive ruling from you, Mr. Speaker.
Mr. Speaker: I shall rule straight away. It is clear from Standing Order No. 29(2) that on a Division there must be 40 Members present for the decision to count. Included in those 40 Members are the occupant of the Chair and the four Tellers. If 20 Members each vote in both Lobbies, that does not constitute a quorum. If the matter were reported to the Chair, the Chair might order another Division and would rule, but if that moment is allowed to pass, and if the matter is raised on a subsequent occasion, that must be a matter for the House. It seems that this is the kind of thing that always crops up in July. Last July we had a somewhat similar occurrence, which was resolved by the decision of the House. I hope we can leave the matter there.
Mr. Maxwell-Hyslop: On a point of order, Mr. Speaker. If the House or any Member has reason to believe that on an occasion when the question of the quorum is involved there has been voting in more than one Lobby by certain hon. Members, does it lie within the power of the occupant of the Chair to call immediately for the two Division Lists so that either you, Mr. Speaker, or one of your deputies can examine the lists, or is it necessary to wait until the lists appear in the printed
1298
record? This is an important matter, because for the Chair to call for the lists could provide a very much quicker way of resolving the matter rather than waiting for perhaps more than one day, if there is a printing backlog, before the record becomes available.
Mr. Speaker: If there was a difference of opinion about what had happened and if the matter were raised at once, perhaps it would be for me to ask for the Division Lists to be brought to me so that I could examine them and carry out my own count, but the point must be raised at once. The Chair will listen to any representations that are made at once. If there is a difference of opinion, the normal rule is that the Chair asks whether the Tellers agree. If there is a disagreement among the Tellers the Chair orders another Division to take place. That is what normally happens provided that the matter is raised at once.
Mr. Maxwell-Hyslop: Further to that point of order, Mr. Speaker. It seems that there is a difference between dealing with such a question by sending for the lists and ruling, which could result in the adjournment of the House and having a further Division which could give the opportunity for one of the parties to obtain the presence of Members who were not present during the previous Division. That is why I ask you, Mr. Speaker, whether the matter could be disposed of by the Chair sending for the lists. I believe that this is a point of substance, because the results of the two Divisions would not necessarily be the same.
Mr. Speaker: I think that the hon. Gentleman is on an important point, and I shall rule on it when it happens.
Mr. Ridley: Is it not a dubious practice that hon. Members can vote in both Lobbies? Would it not clear up this matter if it were referred to the Procedure Committee, so that that Committee might determine whether we need to vote in both Lobbies on any occasion? Matters are made difficult from the point of view of recording an opinion, if hon. Members can vote in both Lobbies. Of course, they are not allowed to do so in order to try to secure a quorum. The practice of voting in both Lobbies makes matters difficult for the Chair, and it should be possible for hon. Members to

1299
make up their minds as to which Lobby they want to go into before going into one or the other.
Mr. Speaker: I hope the House will not pursue this matter for too long. This is a day to which the guillotine applies, and I want to get on with the Bill as quickly as I can. In my experience I have only known hon. Members to vote in both Lobbies when they wanted to correct a mistake. That has happened within my knowledge only rarely. I would deprecate very much it happening in any other circumstances.

RT. HON. MEMBER FOR WALLSALL, NORTH
Mr. Speaker: As regards the point of order raised by the hon. Member for Birmingham, Handsworth (Mr. Lee) on Thursday last, I give my ruling now. Last Monday I read to the House a letter from the Chief Clerk of the Bow Street Magistrates' Court reporting that the right hon. Member for Wallsall, North (Mr. Stonehouse) had been detained in custody on a number of criminal charges. As explained in pages 100–102 in "Erskine May", the House has long ceased to claim the privilege of freedom from arrest in the case of hon. Members who are charged with criminal offences. Therefore, as long as the right hon. Member for Wallsall, North remains so detained, he will not be in a position to attend this House at his own wish.
Mr. Lee: May I ask you, Mr. Speaker, to enlarge further on that situation. Can the House by its own resolution require the presence of the right hon. Member for Walsall, North (Mr. Stonehouse), or anyone else who is so detained, so that he may address the House if he so wishes?
Mr. Speaker: I am grateful to the hon. Gentleman for raising that point. I want to make it clear that there is no initiative which lies with the Chair in this matter. This is a matter for the House; the Chair has no discretion. The House can by resolution decide what it wants to do. I think that it would even be possible for a Select Committee with the authority of the House, to decide what it wished to do. As I have said, this is not a matter for the initiative of the Chair.

STATUTORY INSTRUMENTS
Ordered,
That the Elections (Welsh Forms) Regulations 1975 be referred to a Standing Committee on Statutory instruments.—[Mr. Dormand.]

PETROLEUM AND SUBMARINE PIPE-LINES BILL (ALLOCATION OF TIME)
Motion made, and Question,
That the Report [17th July] of the Business Committee be now considered.—[Mr. Benn.]
put forthwith, pursuant to Standing Order No. 43 (Business Committee), and agreed to.
Report considered accordingly.
Question,
That this House doth agree with the Committee in their Resolution.—[Mr. Benn.]
put forthwith, pursuant to Standing Order No. 43 (Business Committee), and agreed to.
Following is the report of the Business Committee:
That of the two allotted days for proceedings on the Petroleum and Submarine Pipelines Bill under the Order [7th July], the first shall be allotted to Consideration and the second to Third Reading.

ORDERS OF THE DAY

  PETROLEUM AND SUBMARINE PIPE-LINES BILL
  [1ST ALLOTTED DAY]
  As amended (in the Standing Committee), considered.

New Clause 1

  UNITED KINGDOM OIL CONSERVATION AUTHORITY
  '(1) There shall be a body corporate to be called the United Kingdom Oil Conservation Authority (and hereafter in this Act referred to as "the Authority") which shall be constituted in accordance with the following provisions of this section.
  (2) The Authority shall consist of not more than five persons appointed by the Secretary of State, one of whom shall be appointed chairman and two of whom shall be appointed deputy chairmen.
  (3) No member of the Authority shall have any pecuniary interest in any business engaged in any phase of the oil or gas industries.
  (4) The Authority may from time to time appoint one or more persons having special technical or other knowledge—

  (a) to sit with the Authority to hear and consider any matter before it, or

  (b) to inquire into and report to the Authority in respect of any matter before it.

  (5) The Authority shall have power to do anything which is necessary for or incidental to the achievement of the purposes of this part of this Act, that is to say—

  (a) to provide for the appraisal of the reserves and productive capacity of oil and gas resources in the United Kingdom and controlled waters;

  (b) to provide for the appraisal of the existing or future requirements to be met from United Kingdom oil and gas resources—

  (i) in the United Kingdom and

  (ii) in markets outside the United Kingdom;

  (c) to effect the conservation of, and to prevent the waste of, the oil and gas resources of the United Kingdom;

  (d) to control pollution and ensure conservation of the environment in the exploration for, processing, development and transport of oil and gas resources;

  (e) to secure the observance of safe and efficient practices in the exploration for, processing, development and transport of the oil and gas resources of the United Kingdom; and

  (f) to provide for the recording and timely and useful dissemination of information
  1302
  regarding the oil and gas resources of the United Kingdom.

  (6) The Authority shall, in the exercise of its powers for the purposes of this part of this Act,—

  (a) be guided by directives given to the Authority from time to time by the Secretary of State;

  (b) hold such inquiries, make such orders, give such directions and take such action as the Authority reasonably considers to be necessary to give effect to the purposes of this Part of this Act and to any directives given to it under paragraph (a) above;

  (c) make investigations, undertake studies, and prepare reports on any matter within the purview of this Act or of the Petroleum (Production) Act 1934, the Pipelines Act 1962, the Continental Shelf Act 1964, the Prevention of Oil Pollution Act 1971 and the Mineral Workings (Offshore Installations) Act 1971 or any statutory modification or re-enactment of any of them; and

  (d) provide advice to the Secretary of State with regard to such measures as the Authority considers necessary or advisable in the public interest related to the exploration for, production, development, conservation, control, transport, use and marketing oil and gas resources and for the safety of those engaged or employed in connection with such activities.

  (7) Where under this Act, or under any licence or authorisation issued pursuant to this Act or to the Petroleum (Production) Act 1934, or to any statutory modification or re-enactment of either, any matter falls to be referred to arbitration (howsoever such reference may be described), such matter shall be referred to the Authority for determination and not to any other tribunal.
  (8) Where under this Act or under any licence or authorisation issued pursuant to this Act or to the Petroleum (Production) Act 1934 or to any statutory modification or re-enactment of either any matter or thing falls to be determined decided, directed, approved, specified or consented to by the Secretary of State, then at the instance of any person affected or likely to be affected by such action by the Secretary of State the matter or thing as aforesaid shall be referred to the Authority for inquiry or investigation and recommendation and the Secretary of State shall not act as aforesaid in respect of such matter or thing until the Authority has issued a recommendation thereon and the Secretary of State has considered such recommendation; and where the Secretary of State acts otherwise than in accordance with such recommendation he shall state his reasons for so doing.
  (9) The Secretary of State may after consultation with the Authority and with the consent of the Lord Chancellor make Regulations governing the proceedings of the Authority under subsections (7) and (8) of this section and without prejudice to the generality of the foregoing such Regulations may provide for—

  (i) the service of notices upon any person affected or likely to be affected by any such proceeding;

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  (ii) allowing any such person as aforesaid to submit written or oral evidence or to make representations in any such proceeding;

  (iii) requiring all such persons as aforesaid to have access to all evidence given or representation made as aforesaid;

  (iv) the examination, cross-examination and re-examination of witnesses in any such proceeding;

  (v) representation of any such person as aforesaid by Counsel or a Solicitor;

  (vi) the protection of privilege for any words spoken or written and for any acts done, whether by the Authority or by any person concerned, in any such proceeding;

  (vii) such other matters as the Secretary of State (after such consultation and with such consent) may consider necessary or desirable for the proper performance by the Authority of its functions and duties under subsection (7) and (8) of this section.'—[Mr. Patrick Jenkin.]

  Brought up, and read the First time.
  3.54 p.m.
  Mr. Patrick Jenkin: I beg to move, That the clause be read a Second time.
  We have a very heavy agenda before us and as you have reminded the House, Mr. Speaker, we are operating under the guillotine—a guillotine which, it is agreed on all sides, owes nothing to any intransigence on the part of the Opposition.
  The clause proposes the establishment of a new regulatory body which we have christened the United Kingdom Oil Conservation Authority. It embodies a proposal put forward last year by the Conservative Party in a statement which I made on 11th September. That proposal duly found its way into the Conservative election manifesto.
  It is a happy coincidence that this Report stage of the Bill follows only a few days after the proposal for a regulatory body received powerful endorsement from the Select Committee on National Industries, in a report from Sub-Committee A, under the chairmanship of the hon. Member for Feltham and Heston (Mr. Kerr). I regard that as a valuable report, and it is a pity that it was not available before the conclusion of the Bill's Committee stage. The Select Committee agreed its report on 23rd April, a week before the Second Reading of the Bill, but it was only last week that it was published. It seems to me that if these reports are to be of value to the House, they need to be issued, published
  1304
  and made available to hon. Members as swiftly as possible.
  In Standing Committee we concentrated on three main points: first, the powers, rôle and purposes of the British National Oil Corporation; secondly, the finances of the BNOC and the participation in North Sea oil licences; and, thirdly, the strengthening of the regulatory functions of the Government in relation to licences, pipelines and refineries.
  In our debates we established a number of valuable propositions, as I am sure the Minister will agree. The first proposition was that the central purpose of the existence of the BNOC and the participation in licences was to gain information and expertise. This point was put clearly by the Secretary of State on 17th June, as follows:
  "In addition, participation has a special value, because it gives the nation itself a direct knowledge of and expertise in the production of oil."—[Official Report, Standing Committee D, 17th June 1975; c. 4191
  One might add that the nation needs it.
  I, for one, was not much reassured by the answer given by Lord Balogh on 23rd July in another place, when asked by Lord Orr-Ewing
  "As the noble Lord referred to all previous advisers as amateurs, perhaps he could give the names of the professionals who are advising the present Government?"
  Lord Balogh replied:
  "My Lords, I am."—[Official Report, House of Lords, 23rd July 1975; Vol. 363, c. 332.]
  I find that a very disturbing answer indeed.
  Much had been made in our debates of the need to secure revenue and to exercise control, but in debate it became clear that participation in existing licences will bring no extra revenue because the Government are pledged to negotiate on a "no gain, no loss" basis. Furthermore, it became clear that revenue from new licences must be regarded as a somewhat speculative venture. It was also established that the pattern of control had nothing to do with BNOC. It is interesting to note that when the Department gave evidence to the Select Committee earlier in the year that was not clear. It has now become clear and we welcome it.
  The second point we established was that this by any standards, will be a very costly exercise for the taxpayer. The figure put forward from the Opposition

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  estimated the exercise as costing over £2,000 million of taxpayers' money—sums which will have to be invested up to 1980. The Government were not quite so forthcoming. They admitted to a figure of £500 million in 1976 and a further sum of the same order in 1977, and they went further and said that, in addition, there would need to be added the compensation payable to the companies under Clause 41. Up to the end of 1977, at any rate, we are talking of a sum well in excess of £1,000 million and it could be half as much again.
  The third proposition we established was that to finance this venture we shall need the £900 million which the Corporation will have to borrow under Clause 6 and also the flow of royalties diverted from the Exchequer to the national oil account. Furthermore, there is the question of BNOC's exemption from petroleum revenue tax. The Government did not deny that by 1980 these sources could provide the BNOC with funds of up to £2,000 million at least.
  Fourthly, we established—and, if we did not do so, the Select Committee endorsed the point—that the capacity of the BNOC to operate as an exploration or production company in the early years wil; be virtually nil. Indeed, The Guardian reported last week:
  "The Government is expected to announce shortly that the proposed state oil company will take no technical part in North Sea oil search for the first few years of existence."
  As appears from the Select Committee report, it will take many years before the BNOC can build up the teams of experts necessary to make a success of the operation. For many years it is bound to be no more than a sleeping partner, although an exceedingly expensive one.
  Yet, despite all these considerations, we were able to agree in Committee that there needs to be pretty close supervision of offshore exploration and development. We agree that the Government need high technical competence at their disposal to undertake this task. They need information and expertise, and they also need fully to understand the problems facing the industry which is responsible for carrying out the operations on the continental shelf.
  But nothing said in the course of a long Committee stage, either by the Secretary of State for Energy or by his
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  indefatigable Under-Secretary of State, began to convince me that it makes any sense to invest up to £2,000 million of public money to achieve those purposes by direct participation. At £2,000 million, information and expertise is very dearly bought. On the contrary, the more we discussed the proposal, the more unnecessary and irrelevant it seemed. In our view, the Government's legitimate objectives would be far better achieved, not by investing thousands of millions of pounds in an unnecessary State oil company, but by setting up a proper, well-staffed, regulatory agency of the kind to which we direct new Clause 1 in this Bill.
  4.0 p.m.
  The central idea behind the proposal for an independent regulatory agency is the need to combine three features—competence, impartiality and trust.
  The body needs to be highly expert and to have a high level of technical competence if it is to handle effectively the regulatory functions at present vested in the Secretary of State. The Select Committee cast some doubt on whether the Department of Energy was sufficiently equipped by itself to carry out that task.
  Secondly, the functions need to be exercised with a strict—almost a judicial—impartiality, not only when considering issues that arise between one licensee and another, but perhaps still more when they arise between the licensee and the Government themselves.
  Thirdly, if these functions are to be operated properly, there needs to be built up the trust and confidence of the industry, whose operations and investment decisions can be quite dramatically affected by the exercise of the regulatory power.
  It was these ideas which commended themselves to my party last year and led to its including the proposal for a United Kingdom Oil Conservation Authority in its General Election manifesto. We now know that shortly afterwards the same ideas were put to the Select Committee on Nationalised Industries by several witnesses and were endorsed by the Committee earlier this year. Perhaps I may direct the attention of the House to paragraphs 165 and 166 of the Select Committee's Report. Paragraph 165 reads:
  "On its visit to Norway the Sub-Committee was impressed by the work of the Petroleum

  1307
  Directorate, to which we referred in Chapter 5. This external Government agency's tasks include the monitoring of Shelf activity, the collection and processing of technological material, the preparation of appraisals for Government, the publication of technical data, and the function of ensuring that production takes place in accordance with guidelines laid down. BP in their evidence recommended that a regulatory commission should be set up here, comparable to the Norwegian body. It would be ultimately responsible to DEn (which would fulfil the central policy-making role for oil and gas), but would be semi-autonomous and at arm's length from both the Department and the oil industry. Its functions would include the custody and release of licensees' technical information, conservation policies, unitisation, the assessment of reserves and the regulation and inspection of pro-rationing programmes."
  The Committee then went on to refer to other similar bodies, such as the Energy Resources Conservation Board of Alberta and the Texas Railroad Commission. The House knows that I, together with a number of my hon. Friends, had the opportunity in January of studying these bodies when we visited the United States and Canada. We became convinced that something of the sort is needed in this country. It is through such a body that the Government would best acquire the competence, the information and the expertise which we are all agreed they need to have. It is, therefore, very reassuring to find that the Select Committee has reached the same conclusion. I should like to quote very briefly from paragraph 166:
  "We assume that the Government recognises the need for these tasks to be performed by a competent body, but it was not clear to us how they proposed to handle it ֵ There is also advantage in separating the regulatory body from the Department itself, which would of course retain the ultimate responsibility for its work."
  That is exactly the pattern for which we have provided in new Clause 1, which sets out the framework. I drafted new Clause 1 and put it on the Notice Paper before I had read the report of the Select Committee, so it is all my own work.
  We envisage a small body, of no more than five members, though with power to take on technical assessors for particular studies. We believe that the members should have no financial interests of any sort in oil and gas activities, so that they may be strictly impartial. We believe that this should be the body to monitor and, so far as it can, establish the reserves
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  of oil and gas available to the nation, to prepare reports and studies on the markets, and to be responsible for the conservation rôle and the prevention of waste—waste having in this context a very wide and rather specialised meaning. It would be the body to monitor and control pollution, and deal with safety and other similar matters. It would build up and establish a library of information which would be available to the Government and, as appropriate, to the industry.
  It is worth noting that the Alberta board reckons to have the finest collection of core samples of any such body in the world, because it is entitled to collect, store and monitor them under the Alberta legislation. It is perfectly true that the Institute of Geological Sciences, under the NIRC in this country, performs something of the same function, but in a less satisfactory and rather less coherent way. But, of course, policy must remain with the Government, with the Secretary of State, and we recognise that. New Clause 1, therefore, provides that the Secretary of State may give directives to the conservation authority, and the authority is then bound to carry out its function in the light of those directives. The detailed implementation is for the authority. It would be empowered to hold hearings and inquiries, to undertake studies, to prepare reports and to tender advice to the Secretary of State. It would be the expert arbitration tribunal to hear and decide on disputes that might arise. It would be able to make recommendations to the Secretary of State in cases where he is vested with powers under the licences or under the Bill.
  I am not wedded to the exact wording or even to every detail in the clause. The main purpose is to paint a broad general picture of how such a body could be set up and operated.
  The Secretary of State will no doubt recognise—or his officials will be able to recognise—that I have drawn heavily on the Alberta legislation, and certainly the Alberta board has become the model not only for other provinces in Canada and for the National Energy Board in Ottawa, but for similar bodies in other parts of the world.
  When my hon. Friends and I visited Alberta we were much impressed by the

  1309
  trust and confidence in which the Alberta board was held by industry, and also—just as important—by the confidence of the board that it in turn was not being bamboozled or misled by industry. As the Deputy Chairman, Mr. Doug Craig, said with a smile, "We reckon we know enough to know when the industry is not telling us the whole truth."
  It seemed to us then, as it seems to us today, that the United Kingdom could do much worse than to learn from this experience and base its institutions on the Alberta model.
  The Select Committee's report brings out one other valuable point. In Chapter 5 it goes to some length into the shortage of skilled staff. Indeed, this is perhaps the central message of the report. Paragraph 103 says:
  "A constantly recurring theme in our evidence was the difficulty of finding sufficient technological expertise to direct, operate and support this huge programme of exploration and development. This is a major limiting factor in the aspirations of any nationalised industry, state corporation, private sector company or Government department or agency in playing a useful role in the exploitation of UKCS oil and gas."
  Yet, when the Committee dealt with the question of regulatory aspects, it indicated that staffing might not be quite the difficulty for a conservation authority that it would be, for instance, for the BNOC. In paragraph 112 of the report, Professor Whiteman thought
  "… that if the Department were to carry out the function of a proper regulatory commission a staff much greater than those at present in the department of IGS would be needed to handle all the seismic data, logs, geophysics, etc., and to make assessments, look after conservation and legal problems and so on."
  British Petroleum also said that the Department was not at present properly equipped to handle such matters, and suggested that staff might be recruited from specialists who had just retired and might be willing to serve the Government for a few years. But Sir Eric Drake makes the considerable point that the kind of people nearing the end of their careers who could perform a useful task in a regulatory commission are not the kind of people one should be looking for to start such a body as the BNOC.
  I believe that the establishment of a United Kingdom oil conservation authority is not only necessary but
  1310
  perfectly feasible. It would have one overwhelming advantage compared with the British National Oil Corporation proposed by the Government. Its budget up to 1980, instead of being £2,000 million or more, might require no more than £10 million or £20 million. Instead of saddling the industry with the BNOC, a huge, unwieldy inexpert operating partner—a real cuckoo in the nest if ever there was one—the Government would have their own watchdog, expert, competent and impartial, to safeguard the national interest.
  Mr. Dennis Canavan: But with no teeth.
  Mr. Jenkin: The hon. Gentleman would do well to study some of the orders made by the Alberta board, the Texas Railroad Board, and the Oklahoma Gas and Oil Commission. It is nonsense to say that they have no teeth.
  It is desperately important that the Government should make this change of direction. It is freely admitted that the momentum of exploration is slowing down. Rigs are leaving our waters at the rate of about one a week. The current issue of Offshore Services says:
  "… it now seems that exploration activities are beginning to run down. The contracts of some of the big semi-submersibles expire this year and in the absence of renewal contracts with North Sea operators some of them are now certain to take up overseas contracts and leave the North Sea at the end of Summer."
  We know, too, that there is grave shortage of orders for production platforms. The Under-Secretary of State made a statement last week trying to deal with the danger.
  On 18th July, moreover, The Guardian reported:
  "A serious crisis in the North Sea Oil construction programme is casting doubt on whether Britain will get the oil ashore as speedily as the Government has planned."
  What are the real reasons for the rundown of capacity in the yards, in the manufacture of modules and all the other equipment needed? The Government do not have to look far for them. They were spelt out by Sir Eric Drake in his evidence to the Select Committee earlier this year. He said, in answer to Question No. 603:
  "… I must tell you that the proposed establishment of the B.N.O.C., and the unknown rate of taxation through the petroleum tax, are beginning to slow down the exploration and productive scene of the North Sea."

  1311
  In answer to Question No. 605, Sir Eric said:
  "… in common sense these must have an inhibiting effect on the development of the North Sea, for two reasons, one because of a reduction of an unknown rate, so far not known, and secondly, to the extent that the establishment of B.N.O.C. may represent an interference perhaps by less skilled people in the decisions of those whose profession it is."
  The Government have, of course, since then announced the detail of the PRT but the British National Oil Corporation still hangs over the industry as a threat which is inhibiting activities.
  4.15 p.m.
  Mr. Gordon Wilson: Even if new Clause 1 were accepted, surely the BNOC would still remain in existence. Surely the clause is more to do with the powers of the Department of Energy than with the BNOC.
  Secondly, if, following aspects of Government policy, there is or will be a diminution of activity in the North Sea, would not the proposals in the clause for bringing in a conservation authority and giving it teeth lead to a further diminution of that activity?
  Mr. Jenkin: The hon. Gentleman has been in the House long enough to know that once a decision has been reached in Committee it is unlikely to be permitted to be reopened on Report. We were bitterly opposed to the setting up of the BNOC, and we see the oil conservation authority as a very much better alternative. But, of course, within the constraints of debate on Report, the hon. Gentleman is right. Second, he must distinguish between the machinery for giving effect to proper conservation policies and what those policies might be. The latter would be for the Government to decide. I am content for the purpose here to assume that the powers would be those set out in Part 2 of the model clauses of the licences. If one were looking at this matter de novo that view might also De rather different. But a regulatory body of the sort I have described would be an infinitely better way to look after the public interest than anything proposed in the Bill.
  The Government should abandon their doctrinaire proposals for the BNOC and embrace the concept of a regulatory agency which would secure all its legiti-
  1312
  mate objectives more efficiently, more surely, and much more cheaply.
  Mr. J. Grimond: I hope not to repeat in detail all the arguments I advanced on Second Reading and in Committee. But the fact that I do not repeat them does not mean that I am convinced by the Government's replies.
  I suggested to the Conservative Government that they should set up a committee to monitor developments taking place in connection with oil. I suggested that it should be purely advisory and that its advice should be available not only to the Government but to local authorities. I suggested that it should also try to cover the effects on the environment and on local economies of oil-related work. That was not done. Later, a committee was set up and it is still operational, but it is difficult to find out what it is doing. I think it reports to the Secretary of State for Scotland. Could we be told a little more about its activities?
  I wholly sympathise with the new clause as an alternative to the BNOC. But what alarms me is that if the Government were to accept it we would have the new conservation authority in addition to the BNOC. There must be an end to the setting up of commissions, corporations, Ministries and so forth. We have not the people of sufficiently high calibre at hand unless they are taken out of other important jobs. Secondly, we are always getting top hampers of unproductive officials while the country desperately needs to increase production.
  The right hon. Members for Wanstead and Woodford (Mr. Jenkin) put the conservation authority idea forward as an alternative to the BNOC. He must face the danger that it might be in addition to the BNOC. He may well argue that it would be a small body. No one would want to tie him down to the exact wording, but, against the background of his description of the Alberta authority, it is clear that he would regard the conservation authority as having pretty wide powers, and executive powers into the bargain. For any such body to remain small would be wholly against the whole ethos of its history. The original Cabinet Secretariat contained four people but it now contains 500. It has been steadily accumulating functions, and in my view

  1313
  this body would do the same. The House would be showing total disregard for history and undue optimism if it thought that any such body would remain compact with five or six people. Alas, those happy days of the Indian Civil Service and our Civil Service at its best have disappeared.
  I do not see why most of this function should not be discharged by the existing Department of Energy. It is primarily the business of Government Departments to undertake this sort of general assessment of developments. One reason why I regret appointing civil servants to the BNOC is that it would confuse the position. The Department should be the guardian of the public, looking at developments, advising about them, taking expert advice from universities and other places from which it can be obtained, and ultimately making up its mind on questions of conservation, how fast we should develop our resources and what the effect will be.
  Therefore, my first reaction is that this would be a valuable alternative to the BNOC and one which I should prefer. However, before the debate ends I hope that we shall be more enlightened about whether the Conservative Party will be happy if this new body is set up in addition to the BNOC and the Ministry and the existing committees, of which there are several.
  There are two small points to which I should like to draw attention. It is suggested that this new body will be responsible for the control of pollution. Who is the ultimate authority? Who is in final charge of anti-pollution measures? As I understand it, there are, in effect, various Ministries, such as the Ministry of Defence, the Department of Trade and the Department of the Environment, all of which may have some part to play in anti-pollution measures. If there are oil slicks and so forth, many people will be in control of different means of dealing with them. I make no complaint about that, but there should be some definite chain of command because action may have to be taken quickly. I hope that in that respect we shall know a litle more about the present control of pollution.
  Moreover, I do not think that I shall he in favour of giving this new body,
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  if set up, the ultimate authority to deal with pollution. I do not think that would be a very suitable function for it, if it means deploying the various means which are available to deal with oil slicks and so forth. However, if it means dealing with wider questions such as pollution of the atmosphere, that may be a different matter. I am not certain what is meant.
  The second matter concerns the environment. We are just reaching the stage where oil-related developments may soon have some considerable effect on the environment. Many people will have been alarmed by the events in the Gulf, where apparently large quantities of highly poisonous petroleum are pouring out and cannot be stopped. I doubt whether this body would be the right one to deal with such environmental problems.
  I am a little concerned about who has the ultimate responsibility, especially in Scotland, where the Scottish Office, the Department of the Environment and the local authorities all seem to come into the matter. I do not know whether this matter can be dealt with in an amendment to the Bill on Report, but the fact that this is mentioned in the suggested duties of the new body entitles me to ask the Government to look at the matter and to see whether the present position is satisfactory.
  Dr. Colin Phipps: I declare an interest, as I have done on many previous occasions, and I refer the House to previous energy debates. Very few hon. Members would take exception to the objectives of new Clause 1. Those objectives are fairly well understood within the international oil industry and, as has been pointed out by the right hon. Member for Wanstead and Woodford (Mr. Jenkin), they are similar to objectives that are already carried out by various regulatory bodies in various countries.
  However, it is necessary to state that the proposed regulatory body is hardly an alternative to the BNOC. In my view, it is totally unrelated to the BNOC, and I bear in mind the remarks of the hon. Member for Dundee, East (Mr. Wilson). The BNOC is not designed to be a regulatory body. The proposed regulatory powers, excellent as they are—I have read them carefully but I am subject to correction—are powers already possessed

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  by the Department of Energy. There may be one or two powers which, as suggested by the right hon. Member for Orkney and Shetland (Mr. Grimond), are possessed by other Ministries, but, as far as I know, the powers are not powers which the Ministry cannot already exercise should it so wish.
  I doubt whether the Ministry needs to produce a new body of this complex kind. I should like to see the Ministry grow in expertise. Many of us have felt sad that the Ministry has not developed and built its staff at a more accelerated rate. We have had, since the first gas discovery, some 12 years in which to build a bigger and more competent technical staff in the Ministry. I am in no way suggesting that the current staff are not competent. Indeed, I think that they do their job quite remarkably given the size of the tasks which confront them and the small number of people concerned.
  Since 1965–66 I and many others have pressed what was then the old Ministry of Power—it has had a number of metamorphoses since then—to employ more and more technical people. During the past 12 years the rate of progress in that direction has been most unsatisfactory.
  There is the further question of the BNOC staff. Once more we are told that we cannot have a BNOC because it cannot get sufficient staff, it will take too long to recruit staff and for them to become expert, and, therefore, it will be too long before the BNOC can do anything.
  Precisely the same arguments were put to me in 1966–67 when I proposed the formation of the National Hydro-Carbons Corporation to the then Labour Government. That proposal was put to three successive Labour Ministers of Power and it was rejected by all three. One of the principal grounds of rejection was that it would take too long to develop the staff and the expertise, and too long before we had a body that would genuinely be able to do something positive.
  We are now faced with precisely the same arguments. We all appreciate that it will take time to gather the proper staff and to train them. However, we shall be getting oil and gas out of the
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  North Sea well into the next century. We have to start sometime, and the time has come now. I have heard the same arguments for eight or nine years. The House should not be prepared to accept them again. We need a BNOC not for regulatory purposes—that can be fully carried out by the Ministry—but in order to have proper participation by this country in its own resources.
  I emphasise that the regulatory bodies and the staff of the Ministry, no matter how competent or how dedicated they are, are not concerned with the day-to-day technical difficulties of looking for, winning and producing oil and gas in the North Sea. It is important to have at the Government's disposal a body of people who do have that day-to-day experience. This is not just for the advantage of this country, but for the advantage of all the oil companies.
  I have worked in many countries and dealt with fine technicians who work for the Government and who have made what appear to them to be fine decisions on a political and technical basis, but which frankly, on a practical basis, really were not on. Those countries which have a properly developed national oil company participating with a working interest within the industry are the ones whose Governments are able to get the best possible advice. The industry benefits from this as well as the Government.
  I believe that the objectives of the new clause are excellent but that they are already within the powers of the Ministry. I do not believe that a new regulatory body makes a lot of sense. The BNOC is an essential part of our overall strategy.
  4.30 p.m.
  Mr. T. H. H. Skeet: Plainly, the hon. Member for Dudley, West (Dr. Phipps) accepts the view that the BNOC is essential in its own right, not as a regulatory body but as an oil company. In my view, it is totally irrelevant.
  We already have two major internationals, BP and Royal Dutch Shell, as well as many other smaller companies. Why, therefore, do we need the British National Oil Corporation, which has to start from the ground to build itself up? It has no chairman and no staff. The right hon. Member for Orkney and Shetland (Mr. Grimond) said that he would

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  like to see the Department running the whole show. We cannot have anything like that. The hon. Member for Dudley, West has already vividly reminded us that the gentlemen in Whitehall do not know best, just as they did not know best years ago.
  My right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) has already referred to the argument set out in the First Report of the Select Committee on Nationalised Industries. In paragraph 166 the Committee said:
  "Some of the evidence suggested that the Government might be looking to BNOC for at least a part of the regulatory role. We think this would he undesirable. A regulatory commission, as BP suggested, should be independent of the oil industry, of which BNOC, if it is to act as an effective commercial participant in exploration and development, would obviously be a part."
  To that extent, therefore, the Select Committee accepts the view that the BNOC should be completely independent, that it should, as the hon. Member for Dudley, West said, be an oil company.
  On previous occasions, I have given the reasons why we should not have the BNOC as an oil company, and I am certain that that case can be fully sustained. It would be invidious to put the corporation also into a position where it had some regulatory powers.
  The Secretary of State is on an easy wicket here. He need do no thinking at all. He could look at what is done by the Texas Railroad Commission and study its performance. Equally, he could go to Alberta and study what has been happening there during the past decade or so. Equally, he could follow the advice set out in Appendix 30 to the Report of the Select Committee, in the memorandum by Mr. Kenneth Smith, of the University of Glasgow, who talks about the Norwegian petroleum directorate. Mr. Smith deals with what has been done by that independent body set up by the Norwegians to look after all these matters in considerable detail. It is an advisory body only, giving advice as an expert body to the Government, on the basis of which the Government are able to order what should be done.
  I think it desirable to sketch out in a little more detail the responsibilities of the Energy Resources Conservation Board of Alberta. I turn here to the board's report for 1973. There are 12 departments. In
  1318
  present circumstances, one need not go into coal, electricity and like matters, but I shall mention the relevant departments—those concerning themselves with development, with gas, with economics, with geology, with oil and with pipelines.
  The development department will concern itself with the drilling and production section, enforcing regulations relating to drilling, completion, production and abandonment of wells and pollution abatement in field operations. The field operations section is responsible for implementing the Oil and Gas Conservation Act and the Pipeline Act. There is also an environment protection section. The gas department concerns itself with such matters as determining reserves, establishing permissible rates of production, gas conservation schemes, gas cycling schemes, and gas processing facilities, having an eye to the effect on the environment, and it concerns itself also with the production performance of gas pools.
  The economics department looks at forecasts of supply and demand, preparing monthly oil pro-rationing computations, preparing monthly pro-ration orders, and generally assessing the competitive position of Alberta oil.
  One need not spend time on the geology department. The oil department has as its separate interest to deal with reserves, reviewing the performance of primary depletion oil pools and promoting the application of enhanced recovery methods. Also, it ensures sound operational methods, advising the economics department in the preparation of monthly oil production allowable orders.
  It is apparent from all this that what is going into what are known as the model clauses, relegating to the Secretary of State all manner of powers, could well be done for oil outside Whitehall by an independent body—which, incidentally, could be located in Scotland, not in Whitehall. Such an independent body could be located in Scotland to fulfil all these functions.
  The pipeline department in Alberta would incorporate what we find in Clause 21 of the Bill; namely, authorisations, as well as what we find in Clauses 24 to 26.
  That is just a rough sketch. On Report one ought not to go into the technicalities of what each division of this important body—a body of some size, I should add

  1319
  —in Alberta does, but it illustrates a vital consideration in this context. It takes responsibility away from the Minister and puts it into independent hands. This independent body cannot legislate, but it can advise. In the same way, our Minister could take such advice and dispassionately review it, making a fair judgment on what is reported to him. It should be emphasised that if BP is prepared to recommend a body such as the Norwegian petroleum directorate or something along these lines, there is at least one oil company supporting such proposals.
  I turn now to the Railroad Commission of Texas, another of these organisations. In Article 6008 of its general provisions, it is provided in section 12:
  "If and when the Commission finds that waste exists or is imminent in the production of gas from any reservoir, or that the capacity of the wells to produce gas from any reservoir exceeds the market demand for gas from such reservoir, the Commission shall then proceed by proper order to prorate and regulate the gas production from such reservoir on a reasonable basis."
  This shows that the regulatory bodies in the industry in the United States, in Canada and in Norway are independent bodies separate from the main legislative stream. The idea is that experts talk with the oil industry and, because they are removed from and independent of the industry, they are able to make impartial assessments on the maintenance of performance throughout.
  The Secretary of State's difficulty in the set-up which he has provided is that he is himself embroiled in so many matters that he will have applications put to him on which he will have to decide this, that and the other. No doubt he can delegate minor matters to his Under-Secretary of State, but his Department will be so concerned with many matters that the oil industry will not be able to get on with the job of extracting oil from the North Sea as quickly as is desirable—desirable partly because our own United Kingdom market wants it, and partly because we need it for balance of payments reasons.
  The Under-Secretary of State did not say so, but we know that the only reason why he has been seeking substantial modification of the model clauses has been to allow for depletion control to be introduced. In both the Canadian scheme and
  1320
  the Norwegian scheme—I can give chapter and verse if necessary—and in the Texas scheme depletion is allowed in all cases. As for the United Kingdom, it is not likely that in the next five or 10 years depletion control will be required in relation to North Sea oil because all the oil which can be brought to the surface and marketed either here or in Europe will be required.
  I fully endorse the new clause introduced by my right hon. Friend the Member for Wanstead and Woodford. The Government would be extremely wise to accept it. It would mean that the whole pattern of this legislation would be turned upside down, but something of this kind will have to be introduced at a later stage, so why not do it now? If it cannot be done here on Report, at least let it be done in the other place, or perhaps it could be done by another statute next year. But, however it be done, I am certain that, as sure as I am standing in this Chamber today advocating what my right hon. Friend has proposed and what we have all seen elsewhere in the world, this will be the line which Britain will have to follow in future years.
  If we start off on the wrong foot, notwithstanding the administrative difficulties, the United Kingdom may well find delays developing and increasing, and we shall not have the oil extracted from the Continental Shelf at the rate we want. It will be our fault. There may be an administrative problem, but I strongly urge the Government to take this whole matter very seriously and at least to adopt the principle of the recommendations in the new clause. If they cannot be accepted in the form set out, the skill of our parliamentary draftsmen should be applied to them so that we finally adopt something in the right shape.
  Mr. Robert Hughes: I have the distinct impression that the First Report of the Select Committee on Nationalised Industries gives considerable comfort to those right hon. and hon. Members of the Conservative Opposition who are advocating the new clause, since they have quoted so readily from it. I suppose that that is only reasonable. The right hon. Member for Wanstead and Woodford (Mr. Jenkin) has made clear that, while he sees the rôle of his proposed conservation authority as of importance

  1321
  in itself, he recognises that the rules governing the Report stage do not allow him to argue his main case; namely, that the conservation authority should be a substitute for the British National Oil Corporation rather than an additional body.
  It is fair to point out that the First Report of the Select Committee saw desirable objectives in having some kind of regulatory authority, but, as I read its report, the Committee saw it not as a substitute but as an addition. At no point did the Select Committee argue against the setting up of the BNOC. One of the difficulties of the Select Committee's report is that people draw from it what they want to draw and quote particular paragraphs which suit their own arguments. The report does not come down in such a hard and fast way as one would think from listening to the Opposition.
  For instance, the Committee says it was impressed with the workings of the petroleum directorate in Norway, but goes on to say that the new body, if it was set up, would be ultimately responsible to the Department of Energy, which would fulfil its policy functions and the body would be in some senses semiautonomous and at arm's length from both the Department and the oil industry. I am not quite sure how a body which is ultimately responsible can be semiautonomous and at arm's length at the same time. It is clear that there will be a direct relationship with the Secretary of State for Energy, who will appoint the five or six members and will oversee their functions. There may be a need for a body of this kind, but in the initial stages our main job will not be to set up a regulatory authority. It will be to get the BNOC under way and doing its job.
  Mr. Skeet: I am very much obliged to the hon. Member. Does he not agree that it would make a little more sense if there were no BNOC and the functions of the British Gas Corporation were extended? The report deals with this in paragraph 169, when it says:
  "It is possible that operating companies will see the British Gas Corporation as a more attractive partner than BNOC."
  We have the Gas Corporation, which is a going concern, and we could probably add to it. This would make it unneces-
  1322
  sary to have the organisation the hon. Gentleman is suggesting.
  Mr. Hughes: An argument is developed in the report suggesting that the British Gas Corporation and some of its subsidiaries or the National Coal Board and some subsidiaries might be amalgamated with BP to take on the rôle of the BNOC. If one sees the rôle of the BNOC as research and extraction of oil, there might be something in that argument. But I would like to see BNOC taking part and overseeing a whole range of work connected with the North Sea and eventually involved in the whole rôle of energy production and how energy should be used. The Bill gives the BNOC the power to sell oil, petrol and petro-chemicals. It is given a whole new range of functions and is not limited to one narrow sphere.
  The Select Committee's report points out the difficulty of finding staff, and some hon. Members have put forward suggestions for solving this difficult. The right hon. Member for Wanstead and Woodford suggested that we should rely on retired employees of oil companies who have expertise and could do a useful job with the new authority and others. I do not know how my colleagues on the Front Bench feel about this, but I would think very carefully before accepting as gospel the word of people who have been concerned solely with the oil industry all their lives if we had to rely on them to advise us on how to go about our business. I would like to see instead people brought in new to the industry. They might perhaps have had some experience but their whole lives should not have been steeped in the arguments about how oil companies should operate. That is not to say that retired people or those in semi-retirement do not have a useful rôle to play in relation to the BNOC. Of course they will be needed, and they could be employed in giving expert guidance. They would be selling their wares in exactly the same way as everybody else.
  4.45 p.m.
  I detect a worry about staffing running through this report. It points out the difference in experience between that of BP and Shell and the experience in Norway. Paragraph 117 says:
  "It is worth comparing the Norwegian staffing experience. The generally pessimistic opinions expressed by our witnesses (including

  1323
  the nationalised industries) contrast with the relatively optimistic view taken by its Norwegian partial counterpart, Statoil."
  Statoil felt that we would not have the kind of difficulties being suggested.
  It goes on to mention Professor Whiteman. No doubt he will be mentioned many times in the debate. He said that members of the petroleum directorate were beginners and that some of them had been his pupils. I am not quite sure whether that is a recommendation or not. It is capable of different interpretations. We need the staff, and I believe we shall get them. I do not share the criticisms of the Select Committee's report relating to staff. I am a little concerned that the Department of Energy has come under some criticism for failing to get as much information as it might have done from the British Gas Corporation, the National Coal Board and their subsidiaries during its period of participation. It is unfortunate that the Department has not had the opportunity to study all, and not just some, of the important points in the report.
  The purpose of the BNOC is not to act simply as a pollution expert. It will be the first nationalised industry starting up as a new industry, expanding its field of work. It will be a growth industry where the permutations of operations are almost endless. It gives very wide scope to add to it from time to time. The economics of the North Sea can be argued, but there is no doubt that unless we get firm control through the BNOC we shall lose the benefit to our economy that we might otherwise receive and the opportunity to work in the most profitable fields. They will go to other oil companies.
  Mr. Patrick Jenkin: The hon. Gentleman talks about firm control through the BNOC, but throughout the Committee stage we never got an answer from the Government about how the BNOC would add to their powers of control. It came down in the end to information and expertise.
  Mr. Hughes: Presumably the right hon. Gentleman is saying, and he may be right, that a board of directors in no way controls a company in the interests of shareholders on any occasion. The same case can be made for the BNOC. It can control and operate in the oil industry
  1324
  for the benefit of the shareholders, who in this case are the ordinary people of this country and not those who manage to buy into private companies. That is why I think the Government are right to go ahead with this Bill as it stands and to reject the new clause.
  Mr. Alexander Fletcher: The Government's attitude to this clause will determine in the closing stages of the long debate about this whole concept whether Ministers are motivated by the national interest and a desire to do the job of Government or whether they cannot resist the temptation to play the part of oil barons and to set themselves up in the North Sea as oil operators at the risk and expense of the taxpayer.
  There is clearly a need for a conservation authority. I do not think that anyone is making any bones about that. It should have teeth, be backed by Parliament and act in the national interest, not as a participator but as a referee charged with the responsibility to oversee those matters which are described in subsection (5) of the clause.
  There is no need for the BNOC. We have excellent British oil companies operating today and making a success of their operations very much in the national interest. At no stage of the Bill have Ministers suggested how long it will take for the corporation to become anything like viable, how long it will take for it to become in any way a substantial operator in the North Sea. I doubt whether the Secretary of State would deny that it is more likely to take a generation than a decade for the corporation to produce anything like worthwhile results.
  The justification given in Committee for the BNOC has been the need for the Government and the nation to get hold of the know-how and to understand what is going on in the North Sea with this great British asset. That is what the conservation authority is all about. That agency could provide the Government and the people of this country with the know-how necessary to understand what is happening in the North Sea and could act as a referee in the operations of the oil companies.
  The job of setting up a conservation authority would tax the ability of the Department and the Ministers to the utmost. It would be a tremendously

  1325
  important job which would keep the Secretary of State and his colleagues extremely busy for some time without them being able to take time off to play the oil business game in the North Sea. Ministers therefore should take a lead from my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) and study how in Canada and the United States Government agencies have acquired know-how without duplicating the operations of the oil companies.
  The right hon. Member for Orkney and Shetland (Mr. Grimond), and the hon. Members for Aberdeen, North (Mr. Hughes) and Dudley, West (Dr. Phipps) asked why the authority was necessary, why the controlling agency could not be the Department itself. I understand the principle of that argument, but as Whitehall has grown to such an enormous size people want to be able to identify more easily particular operations and agencies of Government, and the Department of Energy is now just a part of the huge Government machine. Its decision making process would be very much slower than that of a small well-staffed and well-equipped agency of the kind we propose in the clause.
  We could use and follow the example of the Civil Aviation Authority, which was set up independently and separately to do a particular job and to make decisions as rapidly as possible affecting a very important aspect of our affairs. That is how the conservation authority would operate.
  On the question of staff, naturally we should expect to attract good calibre people to this authority from the oil companies. We have no prejudice against oil company executives, civil servants or trade unionists. The only qualification would be that they would know something about the business and were able to administer the affairs of the agency efficiently and effectively. The opposite applies to attracting staff to the BNOC. Here, yet again, we are debating the Bill and still asking the Secretary of State if there is any hope of hearing before rising for the Summer Recess who the chairman of the corporation is likely to be. May we know, or are the Government still plodding through application after application without finding a suit- able applicant? That is how it appears to us.
  1326
  We believe that what we propose in the new clause would lead to the setting up of a worthwhile and streamlined authority which would serve the national interest in the North Sea.
  Mr. Gordon Wilson: The proposal in the new Clause is attractive at first sight because it seeks to lay out certain powers which would be usefully exercised on behalf of any Government. It also analyses the various sources from which to derive information which any Government would wish to build up. The question is whether this could be done effectively or should be done under the proposals of the clause through an oil conservation authority or whether it should be done through the Department of Energy.
  Very few people would quibble about the need to build up these reservoirs of experience and skill which will be necessary to deal with the very many important questions which will arise from the development of our oil resources. This is so in relation to a depletion policy. The Department of Energy will need to get much more information from the oil companies than it already does about their reservoirs, their structures and their reserves which are likely to be capable of development before it can decide upon a depletion policy.
  The report of the Select Committee on Nationalised Industries produces interesting information about the situation in Norway. The Norwegians have gone some substantial distance in building up an oil directorate which is seeking to obtain the information that is required.
  The clause gives rise to certain problems. I appreciate from the outset the difficulty which faces the right hon. Member for Wanstead and Woodford (Mr. Jenkin) when he admits that the clause would still leave the BNOC in existence. There is always the difficulty at Report Stages of ensuring that basic amendments are admitted for discussion even though they were discussed in Committee. However, I do not think that in considering the Opposition proposal we can accept the argument that the operations of the BNOC should be excluded. Most of the powers which the clause seeks are those which would have been enjoyed by the Department of Energy,

  1327
  and very few of them would be exercisable by the corporation except under the agency provisions, when the BNOC would be instructed to do certain things on behalf of certain Government Departments.
  Some of the points which cause me concern are as follows. Will the proposal lead to a splitting in control? It appears certain that the proposed oil conservation authority would not be an independent referee but would come under the direct control of the Department of Energy although the Department of Energy would be required to hold back on decisions until the authority had supplied it with the advice and guidance upon which the Department could then act. If that were so there might be no real difficulty, because then it would be subject to an ultimate source of ministerial control which would oversee oil policy generally and take the authority's guidance.
  5.0 p.m.
  But there is a problem. Two things can flow from setting up a body called the "conservation authority". By its very name, it seems to be much more interested in conservation than in other aspects. From the outset it can set about determining a conservation policy. No one would quibble about the need for that. But it is possible that if it happened the Department of Energy would not take so much interest in conservation. If the United Kingdom Oil Conservation Authority were taken away, we should be left with the Department of Energy and, we hope, its recognition of the need for depletion control and conservation.
  Therefore, there would be possible confusion, which could lead to conservation being put on a rather more minor road than many of us would wish. That is a matter of opinion, and I do not necessarily accept that it would happen. but it causes me to have second thoughts.
  The other problem is that if the Department needs to take speedy action, under what time scale would the authority have the power to make up its mind about the advice and guidance that it would give the Secretary of State? There is nothing here to cause it to take one week, a month, three months, a year or 10 years. It being the creature of the Secretary of State, no doubt there would be certain
  1328
  compulsions, but the fact that the Minister could not take decisions until the authority had given him advice could in certain emergencies place the Department and, therefore, the national interest in difficulty.
  I come thirdly to a point where I probably differ considerably with other hon. Members. Subsection (5)(b) says:
  "to provide for the appraisal of the existing or future requirements to be met from United Kingdom oil and gas resources—

  (i) in the United Kingdom and

  (ii) in markets outside the United Kingdom."

  That begs the question of where we are to set the limits on conservation. One would presumably have to work out what markets were involved. But in subsection (5)(b)(ii) we face the problem of what the EEC's policy will be. Is the subsection intended to apply not just the United Kingdom standards of depletion control applicable to the United Kingdom's needs or to make the new body take into consideration what the new European requirements will be? If so, what will be the emphasis on that?
  This is where I differ from many hon. Members, because I believe that in a sense the difference between the British attitude towards depletion control and the European attitude can be mirrored by the difference between Scottish and British attitudes. Scotland is a small country with a consumption of 10 million tons of oil a year. It is likely to hit oil independence day within a year, and will be much keener on conservation than the United Kingdom as a whole, which will hit oil independence day, at 110 million tons, in the early 1980s. When shall we reach oil independence day for Europe? We do not know. I should not like to see the authority given such latitude that it could stretch the definition of its conservation policy. We must lay down standards by which conservation will be judged—not just the reservoirs, the amount of oil available for development, but the time scale within which we wish it to be used, and the consumption.
  I should like to take the opportunity to protest yet again at the Conservative Opposition's failure to recognise that we who are lawyers in Scotland object to English legal imperialism. I am very sorry that, notwithstanding the criticism made of the hon. Member for Ross and Cromarty (Mr. Gray), he and the hon.

  1329
  Member for Edinburgh, North (Mr. Fletcher) have fallen yet again into the trap of signing amendments which seek to strip away from the Scots law the right to determine what sort of regulations will be made. I would have hoped that the hon. Gentlemen would read the clause before signing it. Perhaps they signed it in blank. Subsection (9) says:
  "The Secretary of State may after consultation with the Authority and with the consent of the Lord Chancellor make Regulations."
  That is an impertinence, when most of the oil is lying in the Scottish jurisdiction, even without my going any further into exactly what that means in terms of ownership. If the hon. Members want my support, they should consider these matters carefully. All Scots lawyers, regardless of their political views, will take umbrage when the rights of Scots law are once again overridden. I hope that the junior Minister, the hon. Member for Lanarkshire, North (Mr. Smith), will agree. It is a small point, perhaps, but it is the sort of matter to which many of us in Scotland take serious exception.
  One of the persuasive arguments in favour of the proposal before us is that it would create a new source of employment. In these desperate days of unemployment, any small crumb of comfort would be of use. If the proposed agency were to be situated in Scotland I could offer my constituency as a location, and I am sure that there would be a rush of offers from other constituencies. But we should not be bound by that argument. If we are to build up the expertise, skill and knowledge required, and if it is more logically to be under the petroleum division of the Department of Energy, it is simple to transfer that division to a Scottish location. The Conservative Opposition have made a manifesto commitment to doing that. They have appreciated that it would be a simple and reasonable thing to do.
  I am not convinced that the clause has been argued through in terms that enable me to support it, but I shall, as always, listen to the closing speeches with some interest.
  Mr. William Small: I intervene briefly to speak about the weaknesses of the clause, which suggests no intellectual embezzlement
  1330
  from the oil industry for its knowledge and wisdom. Subsection (2) speaks of
  "not more than five persons appointed … one of whom shall be appointed chairman and two of whom shall be appointed deputy chairmen."
  The clause then says that members of the authority shall have no
  "pecuniary interest in any"—
  I emphasise "any"—
  "business engaged in any phase of the oil or gas industries."
  Is this not like the Tsarina in St. Petersburg who would not invite a sexless Rasputin into her boudoir.
  What commercial and other knowledge of the oil industry does the authority want? Presumably, the kind of people who would be appointed under the clause are those standing in the wings, with no knowledge and no contribution to make to the national interest.
  Mr. Peter Emery: I am certain that it is not the intention of my hon. Friends, in appointing the conservation authority, to follow the line of reasoning that the hon. Member for Glasgow, Garscadden (Mr. Small) has just suggested. I am convinced that if such an authority existed it should consist of people, appointed by the Minister, with the necessary expertise and ability to carry out the tasks outlined by the clause.
  My hon. Friend the Member for Edinburgh, North (Mr. Fletcher) argued that there was a need for a conservation authority. He appeared to suggest that the need was self-evident, and that no one disputed it. I do not regard it as self evident, and I strongly dispute that it is.
  We do not need the BNOC. It is ponderous, wasteful, unnecessary and costly Socialist dogma. It will do nothing for the oil industry. It will not get more oil out of the ground, or help solve the problems of exploitation and marketing.
  Although I missed the first three minutes of his speech, I listened to my right hon. Friend the Member for Wan-stead and Woodford (Mr. Jenkin) with great interest. I am not completely convinced that we need a conservation authority such as he suggests. Surely we have enough nationalised authorities, public sector advisory bodies and nationalised industry committees advising

  1331
  Ministers. There is no sense in creating a new public body for its own sake.
  Both my right hon. Friend and my hon. Friend the Member for Edinburgh, North cited the example of the Canadian authority, the Alberta Energy Resources Conservation Board, and some of the regulatory bodies in the United States. However, the federal authorities in those countries do not have the powers that exist in this country.
  The new authority is
  "to provide for the appraisal of the reserves and productive capacity of oil and gas resources in the United Kingdom and controlled waters".
  That duty is now undertaken by the Department.
  The authority is
  "to provide for the appraisal of the existing or future requirements to be met from United Kingdom oil and gas resources".
  That duty is now undertaken by the nationalised industry policy division of the Department.
  The authority is
  "to effect the conservation of, and to prevent the waste of, the oil and gas resources of the United Kingdom".
  Although the Government refuse to accept my argument in this respect, in fact they have power to get the industry to agree to a sensible conservation policy without regulations.
  The authority is
  "to control pollution and ensure conservation of the environment in the exploration for, processing, development and transport of oil and gas resources".
  That duty is undertaken by a number of Ministries and local authorities, although perhaps that duty should be centralised under one authority, as was suggested by the right hon. Member for Orkney and Shetland (Mr. Grimond). However, I wonder whether those most concerned about the environment or about the preservation of rural England and Scotland would take the view that the authority should be judge and jury in its own cause.
  The authority is
  "to secure the observance of safe and efficient practices".
  That duty is undertaken by the two inspectorates under Government control. Although regulations in this connection
  1332
  are still in their infancy, I have no doubt that they will be fully implemented.
  Finally, the authority is
  "to provide for the recording and timely and useful dissemination of information".
  That is certainly a function within the Department's aegis. My former hon. Friend Tom Boardman, who was a Minister with me, ensured that we should have an annual report giving any necessary information.
  If these functions are already discharged, what is the need for a new authority? Would the work that is now done by the Department be transferred to the new authority and not also done by the Department?
  Mr. Patrick Jenkin: Of course.
  5.15 p.m.
  Mr. Emery: I am delighted to hear it. Does my right hon. Friend believe that possible? That is the real question. Are Ministers with such authority likely to divest themselves of the ability to undertake some of the responsibilities that existing law puts on their shoulders? Can my right hon. Friend convince me that the Minister will rely entirely on the authority and follow through its recommendations without duplicating its work in the Department?
  Mr. Skeet: The Alberta Energy Resources Conservation Board is charged with the administration of the Canadian Oil and Gas Conservation Act and with all these other duties. That is exactly what my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) has in mind. Part of the responsibility now delegated to the Department would go to the independent authority, which would be thoroughly independent.
  Mr. Emery: I am delighted to hear that, but it is not clear from the new clause, because the authority's recommendations would go to the Minister, who would have to make the necessary regulations.
  Mr. Patrick Jenkin: No.
  Mr. Emery: That is how I read subsection (9). I am helped considerably if my right hon. Friend assures me that that is not so.
  In that case the Minister would not be able to overrule the authority's recommendations. I am not certain that this

  1333
  would appeal to the present Secretary of State, although it might appeal to me. Nevertheless, I need a firm assurance, and I am sure that the industry does, that there will not be a duplicate organisation, which will still have to be supervised by the Department, which until now has done a remarkable job, although normally massively understaffed.
  Does the oil industry want such a conservation authority? I am not certain that it does in normal times. However, perhaps with the right hon. Member for Bristol, South-East (Mr. Benn) as Secretary of State this is not normal times for the industry. The industry believes that the best regulator for conservation is the market itself. What concerns me is that the new regulatory body may set long-term policy on the conservation of existing discoveries which will go a long way to discourage either wild-catting or other exploitation, because the oil companies and their investors will feel that it will not be easy to alter established conservation policy.
  Therefore, my right hon. Friend has to make it clear that the conservation authority would not be so hidebound as to stop the type of investment necessary for an increasing exploitation by private enterprise in the North Sea. That exploitation will become more costly, and, the nearer we come to levels of production which meet the targets set for conservation, the incentive for wild-catting bodies to go into the North Sea will be very much less. If the clause were to be carried, it would be imperative for my right hon. Friend to explain to the industry how he would deal with that specific matter.
  As I said at the beginning of my speech, I believe that the best method of dealing with conservation is the ordinary market place. If the market place goes wrong, it may be necessary for the Government to take certain steps. At this stage, no one has the right to say that the market place will go wrong. It has not gone wrong up to now, and there is no proof that it is likely to. What worries me about the Socialists' intentions is that it is suggested that the market place must automatically prove to be a failure.
  Therefore, before I can give my full support to my right hon. Friend's clause, he must make it clear first that there will not be a duplication of staff or responsi-
  1334
  bility, secondly that he will ensure that it is the authority which has the powers, without further control by the Ministry, and thirdly that any conservation policy will take into account the need to encourage further exploitation. If my right hon. Friend can give the oil industry assurances on those points, I can support his clause.
  Mr. Peter Rost Mr. Peter Rost (Derbyshire, South-East) rose—
  The Secretary of State for Energy (Mr Anthony Wedgwood Benn)The Secretary of State for Energy (Mr Anthony Wedgwood Benn) rose—
  Mr. Speaker: Mr. Benn.
  Mr. Rost Mr. Rost rose—
  Mr. Speaker: Mr. Rost, if he must. [HON. MEMBERS: "Oh."] This is a guillotine day. I hope that the House wishes to make progress.
  Mr. Rost: My name appears on the Notice Paper as one of the sponsors of the clause, and I have been waiting to be called. I am sorry if that is thought to be unconstructive. I do not wish to delay the House. I am sure that none of my colleagues will regard my contribution as an unnecessary filibuster.
  I was very much impressed by the constructive and thoughtful contribution made by my hon. Friend the Member for Honiton (Mr. Emery). However, I hope that he will accept that those matters about which he seeks assurances from my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) are covered adequately in the original construction of the clause. Indeed, I should not be supporting it unless I had similar assurances, and I accept what my right hon. Friend said.
  It may be that my hon. Friend the Member for Honiton does not appreciate the spirit in which the clause is phrased. In my view, it is an attempt to give the Government a last death-bed opportunity to get themselves off their own Left-wing hook. It is an attempt to replace the rather unconstructive and damaging BNOC proposal with something that is constructive and will be in the national interest. In other words, it is an attempt to restore some semblance of responsibility and sanity to the affairs of this House and especially to this legislation.

  1335
  As my right hon. Friend the Member for Wanstead and Woodford said, the BNOC is not only irrelevant. It is damaging and costly. It is irrelevant because we have a British oil industry already, contrary to other less-developed countries, including Norway, where there is no highly developed oil and petro-chemical industry. We have one already. Therefore, the BNOC is irrelevant. It is damaging because it will create further nationalisation on a vast scale and inevitably will produce inefficiency. It is costly because it will divert vast sums of revenue which should be going to the Treasury into the coffers of the National Oil Account which will be spent on profligate nationalisation schemes and, by doing so, will help to create further inflation and accelerate the unemployment problems which will face the country over the next two or three years.
  The real reason why I suggest that the clause should be supported is that no case has been made for the BNOC by the Government, either on Second Reading or in Committee, which is in any way convincing. We have been told that participation will be on a "no loss, no gain" basis. Why, then, go ahead with it when adequate taxation at almost a crippling rate already exists and when adequate Government controls are already in operation?
  Not only have the Government failed to make a case for the BNOC, but they have already by their proposals put the oil industry into retreat so that the main objectives of energy strategy which we should be striving for in order to make ourselves self-sufficient as soon as possible are being delayed.
  We really are giving the Government a last opportunity to get their priorities right and to adopt a policy which will be less doctrinaire and perhaps more pragmatic. As we have said on numerous occasions, the BNOC will not produce any more oil and will not produce it more quickly or more cheaply. On the contrary, the BNOC as proposed by the Government will do precisely the opposite.
  It is really time that this House woke up to the realities of our economic situation and that we gave the Government a last opportunity to abandon their outdated Socialist proposals. The country has
  1336
  already paid too high a price for this extravagance. It cannot afford any more. It is time for more realism and common sense. It is time that the Secretary of State put the national interest above Socialist Party dogma. That is why I beg him to regard this clause as a constructive contribution from the Opposition and as an alternative to the destructive proposal contained in the Bill.
  Mr. Bean: I recognise that, in moving the Second Reading of the clause, the right hon. Member for Wanstead and Woodford (Mr. Jenkin) was putting forward a major statement of Opposiiton policy. The House regards it in that light. It appeared in the Conservative Party's manifesto, and later a number of Opposition Members went to Alberta, where they found that it worked. They were attracted by it, and now we are invited to look again at the North Sea in the light of the Alberta experience. What is more, the Select Committee said one or two things pointing in this direction, and this has been recommended to the House on that basis.
  Governments do not normally refer to Select Committee findings until they have given an official response. But I can say this about the Select Committee. It suffered from the disadvantage, which no doubt it would recognise, of not having had the Government's proposals before it in full prior to completing its report. Therefore, it was a Committee which did valuable work but in ignorance of the development of Government policy.
  Mr. Alexander Fletcher: And vice versa.
  5.30 p.m.
  Mr. Benn: And vice versa. That is manifestly correct. That is what I would call a "no gain, no loss" situation.
  Three main provisions would relate to the United Kingdom Oil Conservation Authority. First, the Secretary of State would have to refer to it before reaching a decision. That would be a built-in delaying feature. Secondly, the authority would have to act under the Minister's orders. That would, to some extent, erode its own authority. Thirdly—and this is the most astonishing thing of all —having advised the Minister on licensing matters, it would have to perform an advisory function and an arbitration function. Theerfore, it would advise the

  1337
  Minister what to do and then arbitrate in any dispute between the Minister and the oil companies. I may have done the new clause an injustice, but it has that slight deficiency.
  The argument for the UKOCA, put forward with great charm, as always, by the right hon. Member for Wanstead and Woodford, is that it would provide knowledge without expenditure. The right hon. Gentleman gave a very cheap figure for it. There would be licensing controls, but one would win back the confidence of the industry despite the fact that UKOCA would have teeth, although they would be cheaper teeth. [Interruption.] It would have teeth of a regulatory character. The right hon. Gentleman therefore asserts that the oil rigs would come cruising back again and our problems would be resolved.
  I have not intentionally minimised the importance of the proposal, because the Alberta scheme and, no doubt, the Texas Railroad Commission are different ways of dealing with the matter, but if the Opposition's proposal is to be fully understood it must be seen as a regulatory proposal compared with our proposal, which was put in our manifesto—and I am in favour of people sticking to their manifestos. Our proposal was for deliberate participation. I invite the House to compare the two propositions.
  My argument is that there is no substitute for participation in regulation. The Opposition, in putting forward their proposal, recognised that the UKOCA would be a spectator, though a critical spectator, of the oil business with certain regulatory powers. I shall return to the question whether one needs the UKOC'A to deal with the matter because the new clause was to some extent torpedoed by a former Parliamentary Secretary at the Department of Energy, the hon. Member for Honiton (Mr. Emery), who made some points which I shall embrace and adopt.
  UKOCA would have no right to explore for oil. Therefore, it would have no expertise in exploration. It would have no control over oil or gas and it would not have the capacity to develop downstream or in other ways which the BNOC would have. Therefore, the House should appreciate, when voting, if it is to vote, on the new clause, that UKOCA would not be an alternative to BNOC. The
  1338
  Opposition's request to us, which they are entitled to make, is to drop the BNOC and hive off the Department of Energy and make that an agency—[HON. MEMBERS: "No."] Many of the functions of the Department of Energy would be hived off.
  Let us consider the regulatory role. To what extent can the Government exempt themselves from matters as important as the regulation of the resources off our shores? The argument sounds attractive, and the hon. Member for Honiton was right in saying that the Opposition felt that they should have an agency, too; it must be cheaper and non-interventionist, but it must be an agency to compete with the Government's proposal. But the balance of payments implications, the question of revenue, international policies and the interests of the supplying industries are such that the Government must take a major part in those aspects of policy which it is suggested should be hived off.
  Even with regard to what are called the small cases, I am advised—and I believe that the figures are right—that the Brent field alone has a potential of about £1 billion in balance of payments terms and £l½ million in supplying industry value terms. One cannot hive off decisions of that magnitude and be dependent on the advice of others, because the House of Commons will expect the Secretary of State of the time to defend his policy. I know that UKOCA would have to do what the Department of Energy said, but since it would have the right to have matters referred to it the House of Commons would find that its rôle had been eroded by UKOCA whereas in matters of concern to the nation we want the Minister to be accountable to Parliament for what has happened.
  I therefore believe that UKOCA is a badly conceived proposal which is no substitute for the BNOC and would weaken parliamentary control, about which hon. Members opposite were concerned in Committee.
  Mr. Skeet: The right hon. Gentleman, in developing his argument, has not dealt with the question of the independent Norwegian board. In Canada all the important matters, such as exploration and exploitation of oil, are dealt with at the centre by the National Eneregy Board. We are not suggesting that such matters should not be considered, but it is better

  1339
  to have an independent body rather than a Government Department to deal with them.
  Mr. Benn: The argument about an independent body rather than the Government is confusing unless it is understood that the independent body must remain answerable to Parliament. The question of execution can be hived off in certain circumstances, but the House of Commons would expect the major decisions to be taken by Ministers who could be cross-examined in the House.
  I did not hear the name of the Committee to which the right hon. Member for Wanstead and Woodford referred and about which he sought information. When I have read the Official Report, I shall reply to him.
  The right hon. Gentleman asked about the question of pollution and the chain of command. Hon. Members who have dealt with this issue and similar issues over the years know that we cannot have a single chain of command for a major subject which impinges on every Department. It is not practicable. It is like asking who is in charge of science, because everybody has a scientific research interest, or who is in charge of space, because many departments use space— the military authorities for their purposes, and the Post Office for its purposes, for example. The Scottish Office, the Department of the Environment, the Department of Trade, with its marine responsibilities which cannot be removed from it on the basis that pollution must take precedence over its other responsibilities, and the Department of Energy have pollution responsibilities and responsibilities for enforcing environmental safety levels.
  It is not therefore possible to put one aspect of a matter in a single Department without creating appalling dereliction of duty by other Departments.
  Mr. Grimond: I apologise to the right hon. Gentleman if I did not make myself clear. I agree that there are two aspects of pollution. There is the general aspect, which I agree affects many departments, but there is the narrower aspect to which I referred. Let us suppose that there is a major accident in, say, Scapa Flow in my constituency. Who will be immediately responsible for mobilising all the Departments which no doubt will be con-
  1340
  cerned? If it is a fire, one does not telephone all the Ministries; the fire brigade deals with it. It is important that we should be clear about this matter. Who will be responsible within minutes for dealing with a situation of that sort?
  Mr. Benn: The right hon. Gentleman has made a different but very important point; namely, when a incident occurs, to whom does one go to discover who should take charge of the matter? If there is any dubiety about it, I undertake to write to the right hon. Gentleman and put the letter in the Library so that there is no doubt about it. It depends whether there was a major leak in a tanker in the Thames or off our coast. Different authorities would be brought into play. The right hon. Gentleman is entitled to a clear answer to that question and I shall seek to give it to him.
  Mr. Tam Dalyell: Is the answer that the man who is still responsible for vast areas of the North Sea is that admirable fellow the Chief Constable of Aberdeen? This matter needs all my right hon. Friend's energy to sort out. Will he reflect that the whole of the anti-pollution strategy has been made to look silly in recent weeks by the proposed experiment with an oil slick in an area where a great number of birds take their young? Although this may not be the most momentous issue with which my right hon. Friend has to deal, the fact remains that the general arrangements for anti-pollution have been open to some ridicule. Ought he not to direct his energy to that subject?
  Mr. Benn: I do not want to treat any intervention without due gravity in responding to it. My hon. Friend referred to the duties of the Chief Constable of Aberdeen. I think that it is the Grampian Region now which has these responsibilities. The Chief Constable deals not with pollution as such, but with enforcement of law and order on the oil rigs. I have had the opportunity of discussing this matter with the authorities up there. This is not primarily a pollution question.
  Concerning the extent to which tests may affect bird life or other interests, this must be looked at seriously. However, it is not always possible to conduct tests without having some effect on the environment. The fact that oil is released into

  1341
  the sea to test means of clearing it up necessarily creates some pollution. It is like the vaccination principle. However, I take seriously what my hon. Friend said and will make inquiries.
  One question asked by my hon. Friends the Members for Dudley, West (Dr. Phipps) and Aberdeen, North (Mr. Hughes) was whether it was true that we could not find staff for the BNOC. Everybody recognises that this is a big operation. The BNOC will have to develop over a period. However, I cannot accept that it will not be possible to recruit, train and develop people for the British National Oil Corporation. I have some sympathy with the point made by my hon. Friend the Member for Dudley. West, who referred to the National Hydrocarbons Corporation of 1968, I think, and listed the number of Ministers whom he was unable to persuade about the matter. Had we started at that time, I believe that we would have been much further advanced than we are now. I cannot accept the argument that suitable people cannot be found for this purpose.
  Mr. Peter Viggers: Does the right hon. Gentleman accept, agree or confirm that several senior oil executives have refused the position of chairman of the BNOC because they do not believe that it is a proper, sensible and commercial operation?
  Mr. Benn: The hon. Gentleman is now inviting a Minister to comment upon matters which are the subject of speculation in an attempt to draw out of him comments on approaches which may or may not have been made. In dealing with this matter we are defending a basic national interest.
  I will give a single example which I quote from a newspaper. I do not know whether the account that I read is correct. Last week it was reported that a single oil company, which I will not name, had paid £20 million in a nine-year period in a country, which I will not name, in contributions to political parties. If anybody seriously believes that what the hon. Member for Honiton called the market place is the only factor which bears on oil politics, he is being naïve to an exceptional degree. The truth is that we must defend the national interest. That statement, which was widely reported, was an official statement.
  1342
  I am pointing out to the Opposition that systematically throughout its deliberations the Select Committee in most cases espoused the interests of the industry and implied that the interests of the Government were not served by the establishment of a national oil capability. I am anxious—indeed, I believe that it will be possible—to develop the strong overlap of interest which exists between this country and the oil companies exploring in the North Sea. They have an interest in forwarding their investment. We have an interest in getting the oil. To say that there is a strong common interest on which we should build is not the same as saying that there is an automaticity of common interest between the oil companies and the United Kingdom.
  Mr. Skeet Mr. Skeet rose—
  5.45 p.m.
  Mr. Benn: The hon. Gentleman must allow me to finish. This argument ought to brought into the open. When the Conservative Government left office, they left this country without a petroleum revenue tax, with having granted 46-year licences with a requirement to drill for only six years, with no participation, with no provision for information, with no depletion control, with no control over flaring and with no control over the transfer of the ownership of licences which had been given. The previous Government, in their handling of operations in the North Sea, failed the nation. That is my argument. To come up now with a conservation agency—a new term for the functions of the Department of Energy—is no substitute for the development of a national capability. That is what is embodied in the Bill. The new clause—
  Mr. Skeet Mr. Skeet rose—
  Mr. Benn: The hon. Gentleman must allow me to finish my sentence. The new clause is, therefore, not an alternative policy, but a cover for a lack of policy. I hope that the House will not give it a Second Reading.
  Mr. Patrick Jenkin: This has been a valuable debate. I am grateful that the Secretary of State recognised the nature of the new clause. There are two kinds of new clause. There is the new clause which is put forward with the avowed intention of attempting to improve the

  1343
  Bill and the new clause which is put forward to air alternative policies to the proposals in the Bill. The right hon. Gentleman fairly recognised that this new clause fell squarely into the latter category.
  To the right hon. Member for Orkney and Shetland (Mr. Grimond) and the hon. Member for Dundee, East (Mr. Wilson) I can categorically say that we envisage a properly constituted conservation authority—a regulatory body—as an alternative to the BNOC. We believe that it would be a much better and far cheaper way of attaining the legitimate objectives of the Government.
  I should like to rebut utterly and completely the outrageous remarks made by the Secretary of State on that subject. In Committee, where he did not have the ear of the Press, he was more reasonable. When talking about depletion, he said that nobody knew—he did not know, we did not know, the Department did not know, and so on. I could quote the passage from the Committee if he wished me to do so. However, on the Floor of the House the right hon. Gentleman makes wild, extravagant claims with no substance at all.
  I think that the House is anxious to reach a decision, so I will be brief. I suggest to the hon. Member for Dudley, West (Dr. Phipps) that we cannot build up the kind of staff which the BNOC needs within a year or two. I commend to him the words of Sir Eric Drake answering Question No. 531 before the Select Committee:
  "You cannot just go out and recruit a man and other men and put them together and say, 'Now we have got a team.' It does not work."
  That is what we fear about the BNOC—it will not work.
  My hon. Friend the Member for Honiton (Mr. Emery) was under a number of misunderstandings about the intention of the clause. Here perhaps I can take up a point made by the Secretary of State. It always seems to me that there is, particularly in this area involving inevitably fairly direct Government intervention, a clear distinction to be drawn between the formulation of policy, which is a matter for Ministers and on which they are answerable to the House, and the
  1344
  detailed implementation of that policy, particularly where that implementation can affect to a dramatic extent the rights and advantages enjoyed by private corporations in the market place.
  Rather than continuing to describe, it is better to illustrate. Let me illustrate how I envisage our proposed conservation authority working in the realm of depletion control. I know that my hon. Friend has studied the new powers which the Government are taking in the model clauses set out in Schedules 2 and 3—powers over exploration, powers over development, and the ultimate depletion power—the power to pro-rate in model clause 16. It is for the Government to determine what the overall rate of production from the United Kingdom oil province should be—one would imagine on a five-year rolling programme; some indication to meet the balance of payments objectives and other objectives that the right hon. Gentleman set out. That is for Ministers and must remain with them.
  When it comes to determining how, within this overall global production, production is to be authorised to this licensee or to that licensee, which fields are to be pro-rated—this field or that one —when one is dealing with an infinite variety of economic and geological circumstances, that is a matter for detailed and impartial administration by a highly expert body of administrators.
  It may well be that my hon. Friend would be content, as he said in an earlier debate, to leave it to the Murrays and the Mongers of this world, but that is not what is wanted by the industry, not that the Ministry has anything but praise for the two individuals concerned. However, it is not, and cannot be, their job.
  I have discussed this proposal with a great many companies in the industry —British, Canadian, American and others. They raised some of the doubts that my hon. Friend expressed, and some went even as far as to say that it should be left to the market. However, I made it clear that no British Government could accept this with an essential national resource of this sort and that administrative powers had to be taken to monitor and control the operations of the United Kingdom's oil province.
  Given that, virtually without exception all the firms that I have consulted would

  1345
  far rather see the detailed implementation of these powers carried out by an impartial regulatory body of the sort described in the clause than they would see it left to the Department, which must inevitably be under the day-to-day political control of the Ministers who run it.
  So I believe that on this point we have the support of the industry, given that any Government must exercise powers of some sort, particularly powers over depletion.
  I come on now to answer my hon. Friend's other questions. First, the Minister would not have to make the detailed orders. We would envisage the regulatory body having an order-making power operating under the firm statutory control and under the broad directives of the Secretary of State. Secondly, certainly these functions would be transferred with the individuals concerned from the Department of Energy to the new authority. I hope that, with those assurances, my hon. Friend will feel able to support the proposal in the clause.
  Finally, the right hon. Gentleman still persists in the delusion that the only way for a Government to exercise effective control over an industry such as the oil industry is that they should get their hands dirty in doing it themselves. That is simply not true. There are examples, mainly in the Western hemisphere, where Governments have exercised perfectly effective control through the kind of regulatory control we are proposing, and they have done it—this is the key point—without the investment of the thousands of millions of pounds of taxpayers' money which the Government are currently proposing to invest in the BNOC.
  I believe that this proposal has a very great deal to commend it. I reject utterly the right hon. Gentleman's argument about the political contributions. Does he think that that kind of undesirable activity on the scale which he indicated is more likely to happen in a case where the decisions are taken by the political bosses than in a case where the decisions are to be taken by an impartial regulatory quasi-judicial authority? Does he not think that, in fact, contributions to a political party are more likely to happen—I do not say in this country, but in countries where decisions by Ministers on the detailed implementation of powers—
  Mr. Skeet: ENI.
  Mr. Jenkin: My hon. Friend is right —in countries where there is an exceedingly powerful ENI-type organisation, than where these powers are exercised openly and impartially by a quasi-judicial regulatory authority?
  Mr. Benn: The right hon. Gentleman has made a very significant statement in which he has recommended the House to consider that ministerial control is more subject to corruption in this country than would be an independent agency. Therefore, he is in a sense inviting the House to adopt his proposal, which is that we go for a conservation agency, on the ground that if the Government proposition for a British National Oil Corporation were to proceed it would be more likely to tempt to corrupt intervention by oil companies in the conduct of our affairs. On reflection, does the right hon. Gentleman wish to pursue that line of argument?
  Mr. Jenkin: The right hon. Gentleman has made abundantly clear the unwisdom of his ever introducing that argument into this debate. It is, of course, totally irrelevant. It is a piece of damaging prejudice against the oil industry, and was intended to be so. I ask my hon. Friends to join me in voting for the clause.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 230, Noes 296.
  [For Division List 305 see col. 1465.]
  Question accordingly negatived.

New Clause 2

  REPORTS OF PARTICIPATION AGREEMENTS
  'It shall be the duty of the Secretary of State to prepare a report of each such agreement as is mentioned in section 2(1)(e) of this Act or similar participation agreements that have been made with the corporation or a relevant subsidiary as and when entered into, such report to contain information as to the parties involved, the field or fields concerned and the interest which the Government as a consequence has in each such field, and forthwith to lay copies of his report before each House of Parliament.'—[Mr. Gray.]
  Brought up, and read the First time.
  Mr. Hamish Gray: I beg to move, That the clause be read a Second time.
  The clause is designed to ensure that the Secretary of State will prepare a report of every agreement made on participation. The purpose of the proposal is to allow us to discuss in some detail the whole principle of participation. For some time we have been debating matters under the guise of participation and those matters have been a fairly considerable step towards nationalisation. When we talk about participation we mean a sharing, but when we have a situation where the Government are to have 51 per cent. of control of the oil industry we are no longer talking of participation; we are talking of wholesale nationalisation.
  Is this in the best interests of the United Kingdom? The Opposition believe that it is not. For example, in respect of steel, shipbuilding, railways, coal and gas, airlines, aerospace and other matters, our performance, compared with that of our competitors, is dismal. We are bottom of the league. Indeed, we are a relegation-haunted team, if ever there was one.
  In Committee, considerable publicity was given to an article in the Daily Mirror on 26th June showing clearly the various leagues in which our nationalised industries were participating. It was apparent that we were not doing at all well. We do not think that it would be advisable to inflict on our newer industry, which offers so much to this country, the dampening hand of Government intervention. The success record of the private sector in the oil industry is outstanding. We believe that the consequent benefits to those employed, either directly or indirectly, have been enormous. At present, there are about 19,000 new North Sea oil jobs in Scotland. About 27,000 Scots are at present involved in work connected with the industry, but 19,000 of those jobs have been directly created as a result of North Sea oil. That work has been created not by the Government but by private enterprise—private companies whose investment we need so much at present. We believe that the profits of those companies can be distributed through Government sources more easily by normal taxation methods. We believe that it is quite irrelevant to create the BNOC.
  1348
  I was surprised that the hon. Member for Dudley, West (Dr. Phipps), whose opinion we always respect and whose knowledge we appreciate, took the line that he did on this subject. As a successful entrepreneur—the type of person we wish to encourage—he argued a case which was strangely alien to his nature and, indeed, to his business instincts.
  6.15 p.m.
  We believe that it is a mistake to create BNOC. What has happened following the Government's decision to take a massive intervention in the oil industry? First, the fear of intervention faces an industry which at present is desperately in need of further investment in the North Sea. That investment is suffering. The number of rigs has dropped substantially. In answer to a Written Question which I tabled to the Secretary of State for Energy on Thursday 19th June 1975, requesting to know how many oil exploration rigs were currently operating in the North Sea, I was told
  "There are 25 oil exploration rigs currently operating in the United Kingdom sector of the North Sea."—[Official Report, 19th June 1975; Vol. 893, c. 501.]
  That was in the month of June, when those rigs should have been at their busiest.
  The Under-Secretary of State for Energy (Mr. John Smith): To put the matter straight, let me tell the hon. Gentleman that the information last week was that there were 29 rigs in operation. The figure goes up or down according to the plans of the companies.
  Mr. Gray: I am grateful to the Minister for that information, and I am glad that there has been an increase to 29. Although that figure is substantially lower than the figure a year ago, it is at least encouraging that there has been a slight revival.
  On the subject of participation, let us consider the case of BP. Before 1967 the Government held just over half the ordinary share capital in BP. Then, as a result of certain transactions, there was a shift in the balance of power, and in December 1974 48·2 per cent. of the ordinary stock was owned by BP, plus some preference stock entitling it to 48·04 per cent. of votes at shareholders' meetings. What did BP have to say to the Select Committee on Nationalised

  1349
  Industries? I make no apology for quoting from that useful publication, although we are sometimes criticised for so doing by some Labour Members.
  Mr. Robert Hughes: All I said earlier was that when people quote from Select Committee reports, they quote those parts which buttress their line of argument. I do not complain about the situation. I am merely saying that it is a fact of life to be taken into account.
  Mr. Gray: I accept that entirely, and I propose to quote from that document to support my argument. It is interesting to note what BP said on that occasion. I refer the House to page xxvii, paragraph 73, of that report, where we read:
  "BP also said that when the Government's share was above 50 per cent. this had caused some difficulties for them in countries which excluded foreign government-controlled companies, and that the fall to 48 per cent. had enabled them to go to certain countries otherwise barred."
  That is an interesting point, because BP and BNOC could become partners in projects operating outside this country altogether.
  When we are considering the whole question of participation we should realise that it can be a mixed blessing, particularly in cases where the Government have a controlling interest. Indeed, the fact that the Government have a controlling interest may adversely affect projects in certain parts of the world which might otherwise meet with considerable success.
  BNOC is likely to be a partner in various consortia, but the problems which BNOC faces are very much the problems which it could inflict not only on its partners but on its competitors.
  Dr. Phipps: Is it not a fact that this has operated in the other direction? If we look at the example of our own country, we have been welcoming the National Iranian Oil Company in partnership in the North Sea because we believe it to be to our advantage to have that sort of relationship with it. Is it not a fact that countries which have national oil companies are doing rather better, in terms of participation in the oil industries of other countries, than those without?
  Mr. Gray: No, I would not accept that, because up till now successive Governments have been only too anxious to
  1350
  obtain investment in the North Sea and have not been all that fussy where the investment came from, as long as the investment was being made. One of the criticisms made of the former Conservative Government concerning licences was that they made the terms of the licences too attractive, but the hon. Gentleman has really made my point for me, which is that because those terms were so attractive we obtained a great deal of investment which we probably would not have managed to get otherwise.
  Mr. Skeet: In the allocation of licences by the Irish Government, BP has done very well, and so have Royal Dutch Shell and Texaco Exploration Ireland. The only State company which has secured blocks alone is Deminex, which is German.
  Mr. Gray: I am grateful to my hon. Friend for that comment. I now return to the problems which will face BNOC, particularly on the question of staff, which has been mentioned by quite a number of hon. Members. I turn yet again to the report of the Select Committee on Nationalised Industries. It is apparent from paragraph 115 that considerable doubt was raised by people who spoke to the Committee on this subject. The paragraph reads:
  "Some of the strongest misgivings expressed to us about the establishment and prospects of BNOC concerned staffing. BGC thought the major problem facing BNOC was that of setting up adequate staff. NCB believed that the question of staffing BNOC in terms of numbers and quality was going to be a difficult one indeed. … BP said that to the extent that BNOC sought to act as an operator in the UKCS, then it would have very real problems … BP also emphasised, from its experience, the value of building up group expertise and team spirit over a long period; merely recruiting a number of individuals and putting them together did not make a team."
  I apologise to my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin), who actually touched on that part of the quotation earlier, I think, but it is significant that all those people, knowledgeable in the problems, expressed similar views. The former Secretary of State for Energy, in an answer to my right hon. Friend, said:
  "we shall have no difficulty in finding someone who will support the corporation."— [Official Report, 12th May, 1975; Vol. 892, c. 6.]

  1351
  I think we are all agreed—I am sure they would not deny it—that even at this stage the Government are having serious difficulty not only in obtaining the services of a suitable chairman but in getting the general outline of BNOC, staff-wise, off the ground. I remember suggesting, in the Second Reading debate, that the Secretary of State might be saving that occasion for announcing the name of the chairman. Here we are, almost at Third Reading, and we still have not the name of the chairman. We have very little more information about how this is to be achieved.
  We believe that the terms of the new clause are extremely important and necessary at this time I should like to look a little further at some of the other problems involved in the whole question of participation. There is the problem of the tax system. We earlier agreed that the most suitable way of clawing back profits was through the normal tax system, without the risk involved and the enormous expense falling on public funds merely in creating BNOC.
  During our debates in Committee we frequently had held up to us, as an example, the Government of Norway. This, it was said, was a Government which had tackled the problem in a splendid way. It was suggested that we should have done well to copy that Government. But that Government came a little unstuck in their taxation methods, because they were strongly criticised for the way they handled their excess profits tax. Last November the Norwegian Government proposed a 40 per cent. tax on excess profits, and there was such a great outcry about it—it would have raised the State take to 90·8 per cent.—that they decided to think again, and on 13th December they actually changed their policy.
  This information can be found by hon. Members in a very interesting article which appeared in the Economist of 26th July 1975. It goes into the matter in considerable detail. The Economist was fairly strong in its criticism. In the article headed "Friday the 13th", it is stated that the Stavanger-based magazine, Noroil, put down this decision by the Government to
  "a wave of unthinking, narrow nationalism",
  and Noroil dismissed the proposal as
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  "One of tae most ill-considered and inept oil political overtures yet … which would give the major investors in the Statfjord field less return on their capital than if they had put the money in the bank."
  I draw the attention of the members of the Scottish National Party to this, because they rival the Government in suggesting that Norway is the be-all and end-all of everything in oil planning. This example of narrow-based nationalism should be pointed out to them, so that they may bear it in mind in relation to some of their future arguments. However, we shall have plenty of time to hear about narrow-based nationalism when we discuss the next amendment, which is a Scottish National Party one.
  It is because of the hazards and the complexities of exploration and production—but particularly of exploration—that we believe that the terms of the new clause are important, and we should like the House to give them consideration.
  6.30 p.m.
  Dr. Phipps: I have always been told to beware of Tories bearing gifts. In this debate, I have been offered no less than the chairmanship of the BNOC by the Opposition and a seductive invitation to share my entrepreneurial gifts with them. First, however, having considered the matter of the chairmanship, I do not believe that I could afford the cut in my living standard that would be entailed. Secondly, I do not want to be seduced into an argument about the corporation, as I wish to talk about participation. It is enough to say that it is not always the case that hon. Members will allow their private interests to stand higher than those which they believe to be the national interests.
  I want to talk about the problems of participation as they affect the nature of the corporation itself. I have raised this point before, and I am grateful to the Opposition for new Clause 2, which again gives us the opportunity to discuss this aspect. We have not paid enough attention to the relationship between the BNOC and the Gas Corporation. That point appears in the report of the Select Committee.
  Ever since we first proposed a national hydrocarbons corporation in 1967, I have believed that the Gas Corporation, if not in its entirety then in its exploration and production division, was the logical place

  1353
  to start the functions of the BNOC. If we had followed that course, it would have answered some of the points raised by the hon. Member for Ross and Cromarty (Mr. Gray). The Gas Corporation has a team which has been developed over many years. Many of its members are known to me, and I have great respect for their abilities. It is one on which we should build.
  Not only is there a distinct lack of logic in having two national companies engaged in the North Sea it is difficult to understand the logic involved in the relationship between the BNOC and the Gas Corporation. If the BNOC goes to the Gas Corporation and says, "We will have 51 per cent. of your entire holdings", what will the Gas Corporation say? Will it say, simply, "No"? or will it say, "You will have to give us money for it"? or will it ask for special arrangements? It is difficult to see how the one will negotiate with the other, not only over existing fields but over new licences. What about the new round of licences? I hope that we shall adopt the principle that participation is the form in which the bid is made.
  I am not in favour in bidding large sums of money—of auctioning blocks in the North Sea. I think that that experiment was a failure. I would rather see the system of bidding in the form of a company saying, "For Block A, which is a good one, we are prepared to give 70 per cent. participation, but Block B is not so good, so we will offer 40 per cent., and for Block C, which is poor, we will offer 20 per cent." In that way, not only would the Government get higher percentage participation in good blocks, but they would have less financial obligation in the poorest blocks. That would be excellent for the Government. It is the practice in many other countries. I see no reason why it should not be the practice here.
  If that were the case, it would be impossible for the Gas Corporation to bid on a percentage participation. It might as well bid for 100 per cent. participation, because to the nation it would all be the same participation—it would be national participation, whether by the Gas Corporation or by the BNOC. I am far from convinced of the logic of allowing the two corporations to run in tandem in the North Sea.
  1354
  I am not persuaded that many of the problems raised about the staffing and the time taken for a company of this kind to develop and become operative could not be solved by taking the Gas Corporation as the basis. We might even solve the problem of the chairmanship, since I understand that the Gas Corporation already has a chairman.
  I turn now to the question of depletion policy. Partnership with the BNOC, far from being destructive with respect to its partners, is more likely to be constructive. Again, I return to the question of the specific working interests and knowledge of what is happening in a field. If the BNOC is involved in a working capacity, it is more likely to appreciate the true economic viability of a field than a Government Department is. This is a particularly important factor in the North Sea.
  In developing a depletion policy, we have to realise the costs involved in getting the installations into the North Sea in the first place. If we are to produce a field in the North Sea, we are in a different situation from land development or development in shallow offshore waters. A well drilled as an exploration well cannot, in normal circumstances, be used as a production well. It is a write-off. To produce a field, one has to make an enormous initial investment in the form of platform facilities, pipelines and so on. It would be totally wrong of any Government to suggest a depletion policy which did not allow at least that investment to be covered by production.
  I do not expect that this Government would suggest such a thing. But it puts a constraint upon depletion policy at a very early stage because if an oil company is to make the enormous investment ready it has to have an assurance that the field will be produced at an economic rate. If the BNOC is involved and is itself a partner to the companies, I believe that there is a much better chance of the Department's getting a thoroughly accurate assessment of the true economics than there would be if it were purely a matter of civil servants, however able, making that decision.
  Mr. Patrick Jenkin: The Government have made it clear again and again that the BNOC is not in any way to be concerned with the exercise of the regulatory

  1355
  powers to which the hon. Gentleman refers. Therefore, if that is the case on which he supports the BNOC, he is in a quagmire.
  Dr. Phipps: The point I was making was that the BNOC, far from supplying regulatory power, would bring pressure to bear on the Department, with its regulatory powers, to see that it allowed a proper depletion policy, I said that it will be better for the companies to be so involved with the BNOC, in that their case is likely to be better put for them by the corporation than by themselves.
  Finally, I want to discuss the effects upon our own resources requirements and our balance of payments position. The best current estimate from the industry is that we will need to have about 100 million tons of oil by 1980. It is probable that we will have 100 million tons of oil from the North Sea by then, but it is of a different nature from the crude oil mix we use to produce the product mix we have now. It is much lighter, and of a better nature. It has a lower sulphur content. I believe that our current sulphur tolerance is about 2 per cent. to 3 per cent., which is a good deal higher than the sulphur content of North Sea oil.
  Currently, we produce our product mix by importing largely medium and heavy crudes from the Middle East. One of the difficulties is to decide whether these crudes should continue to be imported to replace our valuable North Sea oil, which is not only lighter but commands a premium on the world's market, and could be exported as it is or refined and exported as petro-chemical products, as done by the Norwegians.
  I believe that one of the most important factors in ensuring that we produce enough—and produce more than we require, so that we allow for exports, whether as products or as light oil, to help with the balance of payments—will be our dependence on the European market. I do not believe that the market for this oil lies anywhere but within Europe, and I should like to see the European countries more closely involved in both the economic and the physical development of these resources.
  In that respect I see the rôle of the BNOC as extremely important. I believe that it is the ideal body to go to Europe
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  and to various other countries to make the sort of arrangements, both financial and in terms of exports, that are required, in order that we develop our resources not only at the best possible rate but in the best possible way and are able to import cheaper, heavier crudes, which will allow us to take, as it were, a turn on the better crudes from the North Sea which we export. The better crudes will have to go to a home, and that home must be prepared. I believe that only by co-operation between Governments—in our case using the BNOC as our Government agency—shall we get the best deal for this country.
  Mr. John Moore: I shall be brief. I hesitate to comment, but I must say that it would have been most useful if we had had the presence of the hon. Member for Dudley, West (Dr. Phipps) on the Committee, because it is obvious to all hon. Members, however much we may flatter him and perhaps suggest that he becomes the first Chairman of the BNOC, that his views would have been most valuable during the arduous months we spent in Committee. Listening with great attention to what he said, I gained the impression that I was hearing an argument for the BNOC like an advance guard for enlightened capitalism. Perhaps the hon. Gentleman should examine at his leisure the extent to which he was agreeing with views very close to my own heart.
  Mr. Viggers: I have not mentioned this point before, because I expected either the Chancellor of the Duchy of Lancaster or the Paymaster-General to enter the Chamber. As we are discussing participation and it has been made clear that they, together with Lord Balogh, are responsible for participation, does not my hon. Friend find it surprising that they are not present?
  Mr. Moore: Those of us who have sat on both oil Committees in the last eight months—the Committee on this Bill and the Committee on the Oil Taxation Bill—have had the pleasure of the presence of hon. Members on the Treasury Bench who have been most amenable—recognising the ultimate taxpayers' interests—and the benefit of the assiduous work of the Under-Secretary of State for Energy.
  The Under-Secretary and other hon. Members will remember the lengthy

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  debate we had during the fourth sitting of the Committee, when we tried to discuss possible alternatives to the current quagmire at which we had arrived in our society, in terms of the development of nationalised industries. It was a most interesting debate, started by an amendment moved by my hon. Friend the Member for Bedford (Mr. Skeet), who sought to introduce commercial practices into the BNOC at the very beginning. Many hon. Members—although at present I speak only in a personal capacity—are not against participation. We believe that the State has arrived at a sensible attitude towards participation through the tax door. We all know that we are already getting more than 70 per cent. of the profits, at no cost to the nation. I should have thought that this would be regarded by all hon. Members as reasonable.
  The tragedy of the debate in the fourth sitting was that we were not really discussing participation. During that debate we tried to make members of the Committee—now members of the House and, through this House, the public—aware of the route we had taken in the nationalised industries sector which would finish up not providing for the nation the advantages that all hon. Members, in all sincerity, were seeking to argue.
  6.45 p.m.
  Let us examine what we shall have from the Bill. The BNOC will not produce the sort of participation and advantages that the Government seek. It must produce additional negatives, associated with the creation of another nationalised industry. That is what we are debating when we debate the BNOC and this new clause.
  I want to make two points, but I shall not go into the enormous detail that I did in Committee. The hon. Member for Dudley, West said that we were creating a new nationalised industry. If that is so we must ask ourselves, first, to what extent—if we are arguing the nation's interests—are the current nationalised industries responsive to the nation? Are they responsive through Parliament? Whether an hon. Member sits on the Public Accounts Committee or studies the proceedings of the Select Committee on Nationalised Industries it does not take him long to recognise the deep con-
  1358
  cern that exists on both sides of the House about the degree to which it is not in control of the financial arrangements of the nationalised industries. This is an accepted view on both sides of the House. It is not a matter in great dispute.
  We are creating another vehicle which will be equally out of control in terms of its relationship with the public. Surely that is a non-starter from the very beginning? However, not only must we ask ourselves to what extent are we in control through Parliament, but, more important, are the nationalised industries successful? It is no good saying that the nation's interest demands participation through a nationalised industry if we create vehicles of the kind we have seen created in the last 25 years. They are patently unsuccessful.
  I shall not pursue the subject of the figures which my hon. Friend the Member for Ross and Cromarty (Mr. Gray) quoted from that very erudite article in the Daily Mirror, acquired from the Financial Times for a previous month. However, I was delighted to see the article in that more interesting popular paper, because it brought out the point about overmanning. I shall not pursue the argument, because one does not have to be regarded as denigrating or attacking organisations to accept the nation's judgment today, which is that the nationalised industries, however much they try, are patently unsuccessful.
  Dr. Phipps: Does the hon. Gentleman accept that one of the problems with the current nationalised industries is that we are the people who determine the prices that they are able to charge, whereas in terms of participation in the North Sea—where participation is a very important factor—the prices that are charged will be international prices charged by the international oil industry as a whole? Here, we are looking for a piece of public enterprise as opposed to the salvation of "lame ducks" or just the provision of public services.
  Mr. Moore: We argued this point in considerable detail in Committee. I spent half an hour trying to argue the problem of pricing for the nationalised industry boards. I tried to get inside their minds and analyse the difficulties that we, in the House, had created for a nationalised industry in endeavouring to be

  1359
  competitive, when we tried to structure it in a competitive way. I tried to stress that whichever side of the House was in control of the Government politicians would create situations that would make it impossible for a nationalised industry to be competitive. This has been done successfully or, perhaps I should say, unsuccessfully for the past 25 years.
  We know the problem of social pricing. I cannot accept the optimistic note lying behind the words of the hon. Member for Dudley, West. I cannot believe that the BNOC downstream will be successful, especially as I shall not discuss this matter now, but we shall come to it later—with its inability to segregate its accounting functions properly. There is no way in which we can judge the commercial viability of the instrument that we are creating in the Bill. I am concerned about what it will produce. In my view it will produce the reverse of what the Government sincerely wish to produce. I think that it will produce the same sort of monopoly organisation which will eventually monopolise the extraction, production and distribution of petroleum, right the way through to the petro-chemical industry. That is the sort of beast it will produce. That sort of beast has not been a success for this country over the past 25 years, and the beast being created by the present Bill will be no more successful.
  Mr. Gordon Wilson: If I have a criticism of the new clause it is that it does not go far enough. The proposal is that the Secretary of State shall prepare a report on each agreement which is made and that that report shall be laid before each House of Parliament. I should much prefer to see coming before Parliament a report on each negotiation so that we could at that stage say whether we agreed. My worry here is much the same as the worry I had over the Oil Taxation Bill, when the negotiations went on under cover. Eventually, the Government collapsed under pressure from the international oil companies and international banking institutions, and, knowing the poor creditworthiness of the United Kingdom, we were faced with a fait accompli.
  We all know that participation negotiations have been going on to fulfil the
  1360
  pledge in the Labour Party manifesto, but already it has already boiled down to a "no gain, no loss" basis. I had always thought that one of the advantages of participation was that one went into it for gain in the public interest, and one of the reasons for doing it was that one produced petroleum at production cost and could sell it back to the oil companies at the international price if one did not intend to use it for one's own national oil company.
  Mr. Skeet: The British Gas Corporation buys natural gas at 1½p a therm and then charges the public 10p a therm. Is that a public benefit?
  Mr. Wilson: One problem at the moment is that the British Gas Corporation is running at a loss.—[HON. MEMBERS: "Yes. Of course."]—This is one of the problems connected with what it is charging and what it has been doing, but that is a far more complicated issue than the straight issue of participation in the context of the oil lying off our own coast. There may be an argument in connection with natural gas coming from the Frigg Field or the Brent Field, and I say only in passing that we have very little information about the prices likely to be charged in connection with those supplies.
  The theory of participation was that one would make a profit and that that profit would go to the BNOC. My fear, however, is that the Government will be paying to the oil companies compensation for certain items of profit for which they should not pay, and we shall not know the terms of the negotiations till long after they are over and matters are settled. Therefore, as I say, it would have been more useful had we decided that such agreements should be brought before the House for approval and, if necessary—here, I take a view very different from that held by other hon. Members on this side—be sent back to the Government with a clear instruction that they renegotiate on far stricter and tougher terms.
  One of the points that came out in Committee about the value of the National Coal Board holding was that the Government would be repaying the capital of about £50,000 plus the exploration expenditure, and certain hon. Members on the Government side wondered

  1361
  whether the NCB was being done down, although it is another public corporation. I was interested to read in the North Sea Newsletter of 11th July 1975, published by the oil consultants, Wood Gundy Limited, an analysis of what is happening:
  "NCB(Ex) is to form the basis of British National Oil Corporation (BNOC). Its interests are identical with Continental (save Norwegian Statfjord) and Gulf (barring the Southern gas area), for net oil equivalents of about 600 million barrels. This ranks NCB as a North Sea leader, ahead of several international majors. Valued at a conservative 75 cents. a barrel, NCB(Ex) is worth some $450,000,000: rather more than the £50,000 which the United Kingdom Government is to offer for it under the Petroleum Bill (50,000 shares at £1 each)."
  As we know, although it is not stated, there will also be the refunding of exploration expenditure.
  The argument there is that if one is dealing with one public corporation one can balance with one hand against the other, but that ignores the question whether public companies which are involved in exploration, perhaps in a partnership sense, learning the job with other companies which are very experienced, must of necessity do ill. Certainly, the NCB is an example of one public organisation which has done extremely well, but which then, by the sudden appearance of BNOC, is now to find quite a substantial sum of potential profit stripped away.
  I return to the argument that if the clause were stronger, requiring the participation agreements to be brought back to the House while in process of negotiation, the House could exercise some control, and that control, I hope, would be exercised in favour of tougher agreements than those which, I fear, will ultimately appear on the scene.
  Mr. Viggers: I must again express amazement that the Ministers responsible for participation have chosen not to be present for the debate. We have so far had from the Under-Secretary, who is always very courteous in these matters, no explanation of their absence. Are we to take it that, having had Second Reading and Standing Committee, the Government feel that Report and Third Reading are mere formalities to be hustled through during the latter part of July, and that no one need regard this as a debate of any importance?
  Mr. Gray: I suggest to my hon. Friend that the real reason why the Ministers concerned with participation are not here is that the Government realise that if they brought them here at the same time as the Secretary of State there would be such a danger of controversy on their own Front Bench that they would be put in great embarrassment.
  Mr. Viggers: Yes, indeed. I am obliged to my hon. Friend. In the Standing Committee we did not have the benefit of advice and guidance from the Ministers responsible for participation, and now, on this most important new clause, I am amazed at their absence.
  I have to declare an interest in the oil industry, an interest which I have recorded on several previous occasions. How is participation to work? There have so far been four participation agreements, and in each case—Deminex, Blackfriars, Burmah and Tricentrol—there are special features which might cause the company concerned to wish to settle with the Government. But what is to happen where a company has no such desire to settle?
  This question was put specifically to the previous Secretary of State for Energy, the right hon. Member for Chesterfield (Mr. Varley)—and here I quote from Ocean Industry of May 1975, page 51:
  "There is inherent risk in our business and there must be compensation accordingly. What if a company does not want to sell or negotiate, and turn over 51 per cent. to the British Government?"
  The right hon. Gentleman replied:
  "I hope that most companies will want to come into partnership terms with us, and I will absolutely stand by the word I have given that we are not confiscatory."
  The right hon. Gentleman then said:
  "You must realise there is a political commitment to get 51 per cent. participation."
  What a lame, limp reply that was.
  What is to happen if companies do not wish to sell 51 per cent.? Hon. Members on the Government side think they know the answer. They believe that powers will be introduced in due course to force recalcitrant oil companies to sell a 51 per cent. stake. After all, they argue, this is a nationalisation Bill, so why pussy-foot around with voluntary provisions which merely permit companies to sell 51 per cent. and allow the Government to buy? The hawks of the Left wing have no

  1363
  patience with such measures and believe that compulsory nationalisation measures will be needed soon.
  My right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) has referred to the rundown of activity in the North Sea. There is no doubt that the confidence of international oil companies has been shaken. But we in this country need their investment drive to help us to develop our resources.
  For my part, I do not believe that the Government will shortly bring forward measures to force companies to sell 51 per cent. participation, because I believe that there is a residue of common sense and realism among the Government's advisers. They know that Britain needs foreign skills and investment, and they recognise that compulsory nationalization would cause serious alarm among foreign investors. There have been consistent and repeated assurances that acquisition will not be compulsory, but there remains something which could cause as much alarm as open compulsory acquisition, and that is forced acquisition.
  7.0 p.m.
  The oil industry works in an environment which is created by Governments. There are 100 ways by which the Government, with a nod here and a wink there, can give oil companies the impression that they will have favourable treatment in the next round of licences or in some other way. I am not suggesting that the Chancellor of the Duchy of Lancaster and the Paymaster-General are resorting to blackmail in their dealings with the oil companies, but how does one persuade a company to sell 51 per cent. when it does not want to? If there is a desire to buy 51 per cent. and no one wants to sell, that is a sellers' market and the seller could name his own price. The present situation does not make sense, and the fact that the Government have declined to show their hand is cause for concern.
  In Committee the Secretary of State said:
  "these are voluntary negotiations and that it would be against the public interest for us to show our hand in too much detail".
  Later, in the same column of Hansard, he said:
  "it manifestly would not be in the public interest for a Minister engaged in the nego-
  1364
  tiations with these oil companies to answer every question that might be put."—[Official Report, Standing Committee D. 17th June 1975; c. 422.]
  What an extraordinary statement for a Minister to make. Why not disclose one's hand and tell us the position with regard to negotiations? This comes from a Secretary of State who says he believes in open Government. Is that only when it suits him?
  There is another point which I have put on several occasions which has not been given sufficient credence. The Government are proposing to buy into oil at a cost of £2,500 million to £3,000 million. This means the Government are gambling on the price of oil continuing to rise, or at least not falling. It is a gamble just as much as if they bought £3,000 million worth of copper bars or soya beans. They are gambling on the future market in commodities. It is estimated to cost £100 per barrel per day to develop oil in the Middle East. The estimate for the North Sea is £2,500 per barrel per day. If the Government go ahead with their participation plans, it will not be the Arabs who will have most need to keep up the price of oil but the British Government. That point has not been considered seriously enough. If the Minister says that the chances of the price of oil coming down are remote, I would agree with him. It is an improbability, but it is not good enough to gamble £2,500 million or £3,000 million of British taxpayers' money on something that is merely a probability. If participation proceeds, the Government dare not let the price of oil drop below 7 or 8 dollars a barrel, and, as development and exploration costs increase, that price will increase.
  The new clause is a modest measure requiring the Government to keep the nation informed of developments in participation and the manner in which negotiations are being handled and developed as companies agree, if they do. I cannot see that it is anything but sinister if the Government do not accept it.
  Mr. Skeet: I agree with the remarks of my hon. Friend the Member for Gosport (Mr. Viggers). The idea of the negotiations for 51 per cent. being put forward by the Government is that they hope to catch as many sprats in their net as they can, but they are prepared to leave those who do not come into the

  1365
  net until, possibly, they nationalise them at a later date. Let us say to the companies concerned—and I can because I have no consultancies with them—that if they stand out against the Government for good economic reasons or because they want to control a field in the North Sea, there is no possibility of the Government passing legislation to nationalise them within the next three years. By then, there may be a new Conservative Government, things could change and reason might prevail.
  What do the Government mean by participation? Is it simply that a corporate State will participate or are they prepared to allow the public to participate as well? In Alberta a number of shares were offered on public subscription, not only to the people of Alberta but to the rest of the Canadian people as well. They could participate in the company concerned.
  I do not know whether the Under-Secretary had had the opportunity to to read the supplement on Iran in The Financial Times today. It refers to:
  "A scheme to make major manufacturing companies offer 49 per cent. of their shares to employees and the public."
  What a good idea this is, but we do not find it being brought forward by our own Government—quite the reverse. What are the benefits? The article reports:
  "It will encourage greater production, a greater sense of belonging and a greater social acceptance, says the Finance Minister … The scheme is an attempt to achieve a more equitable distribution of wealth."
  But what do we find in our case? Participation just means that the Government will step in to acquire 51 per cent. There will be no opportunity for any Englishmen, Scotsmen or Welshmen to buy any shares. This is a charade. The Under-Secretary should spell out a little more clearly what he means by participation.
  If the Government force companies to concede 51 per cent. ultimately, they will create a precedent which other nations will follow. BP and Standard Oil of Ohio have reserves in Alaska totalling 13 billion barrels—roughly equivalent to the reserves in the North Sea. If Fodco, which was a State corporation, was ever established in the United State, could not the argument be used that it should take a 51 per cent. participation in the Alaska
  1366
  deposits? Would not BP and the British Government have lost a considerable sum of money? Have the Government considered the Mineral Leasings Act passed in the United States in 1920? It deals with deposits of coal, phosphate, sodium, potassium, oil, oilshale and gas. It says:
  "Citizens of another country, the laws, customs or regulations of which deny similar or like privileges to citizens or corporations of this country, shall not by stock ownership, stock holding, or stock control, own any interest in any lease acquired under the provisions of said sections."
  I understand that this Bill has not yet been repealed and could have extremely serious consequences for BP.
  The Government insist that when negotiations have failed, they will bring in the big hammer and make the whole compulsory, or, if the negotiations do not fail, include BP in the net, but they could be caught under the provisions of the 1920 Act. We cannot assume that Governments or Parliament will handle these matters the way we would like on this side. Take the recent muddle over the construction of oil platforms. In 1974 the projection was that between 55 and 80 platforms would be required by 1980. Now the projection is for between 43 and 61. The Minister had to go scurrying to Scotland the other day to have talks with a Dutch company to try to persuade it to build construction platforms in the United Kingdom. I wish him well, but that is what happens when there is too much control in the hands of the State. The State is not capable of handling these matters in the way in which we in the United Kingdom would desire.
  I agree with the point made by the hon. Member for Dudley, West (Dr. Phipps). He said that if there has to be a BNOC it ought to be the British Gas Corporation. I deviate from that view in only one respect. The BNOC will have to be formed now because it has been at the root of this Bill, but I predict that it will last for only about a year and that it will then be merged with the British Gas Corporation.
  We are trying to understand what participation is. We are trying to understand the purpose of the BNOC. If there are two major international oil companies in the United Kingdom already we do not want another. If the oil

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  companies are already serving this country by providing petrol at a relatively cheap price, bearing in mind the tax imposed by the host country and this Government, why bring in another competitor? How will it rationalise the market, and what opportunity will it have of doing anything but lose money for the taxpayer?
  I therefore suggest that the Government should consider our ideas on participation. We believe that it will not be necessary for the BNOC to participate. The Government would have one "let out" in that they could lay down any conditions they pleased for subsequent licences in the next round. If they want to make clear that the BNOC must participate then, that is up to the Government because the companies would have known what the conditions were. For existing licences, however, it is totally wrong to impose participation, and it is morally wrong that in the background lurks the threat to nationalise companies. I hope that the Government will take this into account.
  Mr. Rost: The Government call it participation but it is nothing of the sort. It is 51 per cent. nationalisation. We believe that what is proposed is irrelevant, costly, damaging and against the national interest. It is nonsense. If we have to have it, the very least we can expect is a proper statement of the details of each particular piece of grabbing. The clause suggests just that. It is reasonably modest and sensible, which is more than one can say for the Government's policy on 51 per cent. nationalisation.
  We expect our proposals to be accepted because they contain nothing to which the Government can object. The Government should accept them in their own interest. If they are to proceed with 51 per cent. nationalisation they should at very least be prepared to provide evidence that it is being undertaken on a fair basis, and that the dealings between the Government and private enterprise are honest and above board. We are told that the nationalisation negotiations are proceeding on a voluntary basis. Let us have the evidence, because we have not had it yet.
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  We have suspicions which no doubt could be dispelled by the Government accepting the clause. The suspicions are that the negotiations for nationalisation are proceeding behind the scenes, and, goodness knows, they are taking long enough to conclude. The suspicion is that a certain amount of pressure is being exercised and that under this legislation new powers for strengthening the Government's negotiating hand are provided for the Minister, powers perhaps for manipulating the allocation of licences to those companies that are prepared to concede nationalisation. We suspect that he will have powers to influence the investment programmes of those companies which are prepared to concede, and that the difficulties which those companies may get into over financing very heavy capital investment programmes in the North Sea will be eased.
  The BNOC will be trading unfairly as a nationalised corporation in comparison to the private sector. That injustice, for example demonstrated by exempting the corporation from PRT, will work against the private sector and to the advantage of the nationalised sector. It will squeeze the cash flow of the private sector and introduce retroactivity into various financing and other activities. It will make life far more difficult for the private sector.
  The country is entitled to know the evidence for saying that the negotiations are voluntary. We want to be certain that the Government are not using their strong-arm tactics behind the scenes, blackmailing or bullying or even using patronage in order to exert influence over the policy for 51 per cent. nationalisation.
  I therefore urge the House to accept the clause. It gives the Government an opportunity to show their good faith and that they are negotiating on a fair and open basis with nothing to hide. It will give the Government the opportunity to remove the veil of secrecy which hangs over these negotiations. Let us have out in the open the proof that the Government are dealing fairly and honestly with these companies.
  7.15 p.m.
  Mr. John Smith: The clause follows the pattern of the previous new clause in that the Opposition have chosen it as a

  1369
  vehicle for discussing a matter of general interest; namely, participation All those who served on the Committee will share my feeling that we have been round this course once before. We had debates on the principle and practice of participation at some length in Committee. Our debate today has followed much the same pattern as was adopted in Committee, ending with the usual message of joy and hope from the hon. Member for Derbyshire, South-East (Mr. Rost), who can always be relied upon to put in a prejorative way anything which emanates from a Labour Government.
  We have had repeated the dogmatic opposition of the Conservative Party to any notion of public enterprise or the extension of public enterprise in any shape or form. I waited, as I always do in debates on participation, to hear whether they had yet made up their mind about whether they would adopt participation in any future round of licensing for which they were responsible. If participation is so thoroughly wrong as they have constantly argued in our debates they should forswear it as an instrument of future policy. If they are not prepared to do that I see an element of hypocrisy in the argument they constantly use about the principle of participation.
  If this country were not to follow the principle of participation and form a State oil company it would be the only country in the Western world, with the exception of the United States, which did not do so. The Government's desire to secure participation has been explained before. It will give us a measure of national control over an extremely important national asset. It will give the Government a title to the oil. It will give the Government the benefit of the advice and assistance of a State oil company which would acquire expertise and knowledge in the way which was convincingly demonstrated by my hon. Friend the Member for Dudley, West (Dr. Phipps). It provides the possibility of the Government having a 51 per cent. State option in future licensing rounds. It will give us the opportunity of allocating blocks on a 100 per cent. basis to the BNOC so that the Government will get 100 per cent. and not 70 per cent. from some operations in the North Sea.
  All these arguments have been advanced before, and, therefore. I do
  1370
  not claim originality for my reply. However, I say that in the knowledge that there has not been much originality in the attacks made again today on participation and the BNOC as a concept.
  My hon. Friend the Member for Dudley, West introduced the argument about the British Gas Corporation and what its relationship will be to the British National Oil Corporation. He will be aware of the provisions in Clause 12, under which the Secretary of State has a certain influence on co-ordinating the activities of both corporations. I am aware of my hon. Friend's views on the matter. He has made them clear to me before. Many of our colleagues in the Labour Party are aware not only of his campaigning rôle in trying to persuade the party to adopt the policy of a State oil corporation but his views on what should have happened to the British Gas Corporation. This is not a suitable occasion to go into that matter in detail, because the Government have made up their mind and prefer the route of a British National Oil Corporation.
  The hon. Member for Dundee, East (Mr. Wilson) said that we were not going far enough in our participation negotiations. He is aware that one of the difficulties that the Government face is that licences were given out on the terms decided in 1971.
  Mr. Patrick Jenkin: In 1969 and 1965 —the third and second rounds—under Labour Governments.
  Mr. Smith: The right hon. Gentleman knows that during the earlier rounds we were thinking of gas, not oil, and 1971 was the important licensing round for oil.
  I very much agree with the conclusions of the Public Accounts Committee, which criticised the Conservative Government for not having considered participation in 1971. It is a tragedy that we did not follow a policy of participation earlier. As The Economist observed last week:
  "The present Labour Government has been involved in a catching up exercise to close the gaps in Britain's North Sea oil policy."
  This is one of the gaps.
  Mr. Patrick Jenkin: The hon. Gentleman perpetuates mythology. We dealt with this matter at considerable length in Committee, and I thought that the hon. Gentleman accepted the point that all the

  1371
  previous licensing agreements were made on identical conditions. When the hon. Gentleman says that the oil finds were made under the 1971 round, that is not true. The Forties field was found as a result of licences issued in the second round, for which his party was responsible.
  Mr. Smith: I do not want to shuffle off any blame attributable to previous Labour Governments, if an objective case can be made. It is silly for people to introduce party political points and defend previous Governments. We are concerned with 1971, which was the major round of oil licensing. That is indisputable.
  As the right hon. Gentleman is fond of newspaper cuttings, I am sure that he has added to his list some of the comments in The Economist last week about the basis on which those licences were awarded. [Interruption.] It is true that those remarks were addressed to all parties, but the party with most influence was that which was in government in 1971, when there was the major round of licensing.
  Mr. Gordon Wilson: The Minister perhaps accepts his share of the blame for what happened in the 1960s and early 1970s, which cause difficulties about the nature of participation. Participation is highly desirable. Considering the tremendous loss of public resources which will be occasioned by the Government's failure to go through with their negotiations on participation in the full sense, does the hon. Gentleman agree that it would be better to move as quickly as possible to a Scottish Government, which would be a new high contracting party and, therefore, not bound by the previous agreements?
  Mr. Smith: I do not see how anybody can assume the existence of a Scottish Government, as the majority of the electorate rejected that concept at the last General Election. I prefer the guidance of the electorate to a fantasy about the future.
  We have had the usual debate on the nature of participation. As on previous occasions. I have tried to set out clearly why the Government wish to follow a policy of participation for this country. We are in good company with countries
  1372
  which do not necessarily have Left-wing Governments. It is the Conservative Party that is becoming isolated in its continued objections to the principle of participation.
  In a sense the Government agree with the spirit of the clause. It is right that Parliament should be informed about participation agreements, and information broadly along the lines described in the clause will be in the BNOC's annual report. However, I do not believe that it would be proper to put that provision in the Bill.
  The Opposition have legitimately used the clause as a vehicle to discuss the general principle of participation. We are not likely to reach agreement on this matter, as there are profound differences between the parties on it. We believe that fundamentally it is of great importance to the country to assert public control over the development of the North Sea and to acquire a national capacity. That will redound to our benefit in controlling this important national asset.
  I end on a note that the hon. Member for Gosport (Mr. Viggers) introduced. He talked about the great risks of investing in the North Sea. One talks of risks when public enterprise is involved. That does not seem to deter companies such as the one of which the hon. Gentleman is a director from making investments in the North Sea. [Interruption.] That is not a personal attack. The hon. Gentleman declared his interest. He has never attempted to conceal his interest in an oil company. I make the point, as I am entitled to, that for someone in his position to talk of risks, when his company is making an investment in the hope of making a profit, indicates a certain selectivity of approach. We believe that there are profits to be made for the nation, just as for oil companies.
  Mr. Gray: When we began the debate I did not imagine that we should persuade the Minister to accept the clause. It seems that the 25 Committee sittings have done little to mellow him. He still clings to his doctrinaire Socialism.
  It is interesting for the official Opposition to note that the hon. Gentleman has been joined by Scottish National Party Members, who for once cannot adopt a suitable posture here and a different posture outside. [Interruption.] If the

  1373
  hon. Gentleman had given way to me, I might not have had to make the point so forcefully. The Scottish National Party Members are firmly committed to a policy of supporting the Government's attitude to oil. Today they went so far as to say that an independent Scotland would probably be even more Socialist than the Socialists. They made little secret of that.
  The Under-Secretary quoted from The Economist in connection with participation. He might be interested in the following quotation from the same issue:
  "The idea behind participation is to secure greater state control over what is happening out in the North Sea. That makes sense for Norway which had no oil expertise behind it but Britain has a number of established oil companies. The British attempt to negotiate widespread participation agreements therefore seems a rather costly and fruitless exercise, especially as the government insists that it wants no extra financial gain from participation."
  I am glad that the Secretary of State has returned to the Chamber, because I wonder whether he agrees with the writer that the Government want no extra financial gain, and whether he agrees with some of his Cabinet colleagues who have expressed rather controversial views—no doubt controversial to him—on the same issue.
  We could debate the matter for a long time, but we have a huge list of amendments to get through, and we are operating under a guillotine. It is doubtful whether we shall be able to debate before 11 p.m. more than a fraction of the amendments selected.
  Therefore, bearing in mind that a Division now would probably cost us another 15 minutes of valuable time, I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

Clause 1

  CONSTITUTION OF THE CORPORATION
  7.30 p.m.
  Mr. Gordon Wilson: I beg to move Amendment No. 1, in page 2, line 1, leave out subsection (2) and insert—
  '(2) The Corporation shall consist of four Divisions which shall be named respectively the Scottish Division, English Division, Welsh Division and Northern Ireland Division.
  (3) Each such Division shall assume responsibility for the powers granted to the Corporation under section 2 of this Act in relation to the appropriate areas allocated to it as aftermentioned, but shall have no responsibility for the searching for and getting of petroleum existing in its natural condition in strata external to the United Kingdom and its controlled waters other than waters immediately contiguous to areas so allocated to each Division.
  (3) The geographical areas of operation of the respective Divisions of the Corporation shall be defined as follows—

  (i) The Scottish Division shall have power to search for and get petroleum existing in its natural condition in strata lying in the Scottish area of the United Kingdom continental shelf as designated by paragraph 1(3) of the Continental Shelf (Jurisdiction) Order 1968 and, by permission of the Corporation, in any waters immediately contiguous thereto.

  (ii) The Northern Ireland Division shall have power to search for and to get petroleum existing in its natural condition in strata lying in the Northern Ireland area of the United Kingdom continental shelf as designated by paragraph 1(3) of the Continental Shelf (Jurisdiction) Order 1968 and, by permission of the Corporation, in any waters immediately contiguous thereto.

  (iii) The English Division and the Welsh Division shall have power to search and get petroleum existing in its natural condition in strata lying in the area referred to as "the English area" of the United Kingdom continental shelf in paragraph 1(3) of the Continental Shelf (Jurisdiction) Order 1968 and, by permission of the Corporation, in any waters immediately contiguous thereto; but subject to geographical division of said area between England and Wales, by Order in Council for the purposes of defining the respective areas of operations of the English Division and Welsh Division.

  (5) The Board of the Corporation shall consist of not less than sixteen and not more than twenty persons appointed by the Secretary of State to be members of the Corporation; and the Secretary of State—

  (a) shall appoint one member to be chair man of the Corporation;

  (b) may appoint another member or other members to be the deputy chairman or deputy chairmen of the Corporation;

  (c) shall ensure that two members are persons employed in the civil service of the State (or in the cases of the Scottish, Welsh and Northern Ireland Divisions respectively, employed by the civil service of any legislative and executive branch of government for Scotland, Wales and Northern Ireland, respectively, which may by Parliament be created) and that at least three members of the Corporation shall be persons having experience in oil exploration and exploitation;

  (d) shall ensure that at least twelve of the members so appointed have been nominated by the Boards of said Divisions

  1375
  to serve on the Board of the Corporation; and that no Division shall be represented by less than three such members so nominated and appointed'.

  Mr. Deputy Speaker (Mr. Oscar Murton): With this it is proposed to discuss the following amendments:
  No. 29, in page 12, line 25 [Clause 16], at end insert:
  '"Secretary of State" means in relation to the Scottish Division the Secretary for Scotland; in relation to the English Division the Secretary for Energy; in relation to the Welsh Division the Secretary for Wales; and in relation to the Northern Ireland Division the Secretary for Northern Ireland; and'.
  No. 48, in page 38, line 4 [Clause 40], leave out subsection (1) and insert—
  '(1) There shall be accounts to be called respectively the Scottish Oil Account, Welsh Oil Account, English Oil Account and Northern Ireland Oil Account (and hereafter in this section referred to as "the Accounts") which, subject to the following provisions of this section, shall be in the case of the Scottish Oil Account under the control and management of the Secretary for Scotland; in the case of the Welsh Oil Account under the control and management of the Secretary for Wales; in the case of the Northern Ireland Oil Account under the control and management of the Secretary for Northern Ireland; and in the cases of the English Oil Account and the General Oil Account under the control and management of the Secretary for Energy.'
  No. 49, in page 38, line 9, after 'the', insert 'relevant'.
  No. 53, in page 38, line 24, at end insert:
  '; and in determining the appropriate account the criterion shall be operations within the relevant jurisdiction sectors and in the case of the General Oil Account the operations of the Corporation'.
  No. 54, in page 38, line 25, after 'the', insert 'relevant'.
  No. 55, in page 38, line 37, after 'the', insert 'relevant'.
  No. 56, in page 38, line 41, at end insert:
  'and in determining the appropriate account the criterion shall be operations within the relevant jurisdiction sectors and in the case of the General Oil Account the operations of the Corporation'.
  No. 59, in page 38, line 43, leave out from 'credit' to end of line 45 and insert:
  'of the Accounts exceeds the amounts required for the purposes of the Accounts he may with the consent of the Treasury pay the excess from the General Oil Account to the funds of the Scottish Development Agency; the excess of the Welsh Oil Account to the funds of the
  1376
  Welsh Development Agency; the excess of the English Oil Account to the National Enterprise Board; and the excess of the Northern Ireland Oil Account to the funds of the Northern Ireland Finance Corporation'.
  Mr. Wilson: The debate that we have just concluded demonstrates what the Conservative Party stands for—a great deal of wind and nothing much at the end of it. We have debated a clause relating to one of the fundamental parts of the Bill, and yet the Conservative Party did not seek to promote a Division. Unless the Minister sees his way to accept our amendments, I assure him that my hon. Friends and I will have no hesitation about pressing for a Division at the end of the debate.
  Mr. Gray: A waste of my time.
  Mr. Wilson: The hon. Member says that we shall be wasting his time, but by his actions at the end of the last debate he certainly succeeded in doing that.
  We are presenting two sets of amendments crucial to Scotland. The first set deals with the constitution of the British National Oil Corporation. In Committee we had a not inconsiderable battle on the question whether the BNOC should be cut into a Scottish oil corporation, an English oil corporation, and corporations for Northern Ireland and Wales. I still think that that is by far the simplest and best way in which to deal with the Scottish situation.
  However, in Committee, by a combination of the Conservative and Labour Parties, the voting against that proposal was 19 to 1. I was the sole member of the Committee who voted for the amendment when Scottish interests were sold out.
  Mr. Alexander Wilson Mr. Alexander Wilson (Hamilton) rose—
  Mr. Wilson: I am only just starting my speech; I shall give way to the hon. Gentleman later.
  What we are seeking in these amendments is a devolved structure for the BNOC. Once we get a Scottish Government, which will come at the next General Election, we can quickly dismantle the BNOC which, thanks to the Government, will have its headquarters in Scotland, so making our task all the easier. I wish that the Government had set about their participation policy in a much tougher way,

  1377
  for that would have helped us even more with the job that we shall still have to do.
  Here we are dealing with a matter that goes to the root of the Government's devolution policy. Let us assume for the moment that the BNOC is to exist whether people like it or not. We are suggesting that there should be devolution within the format of that body, that it should be split into operating companies—
  Mr. Alexander Fletcher: Why?
  Mr. Wilson:—each responsible for a given area and certain functions, because that would be the most effective way of operating and would help to prevent centralization—
  Mr. Alexander Fletcher: Why?
  Mr. Wilson: Perhaps the hon. Member, who keeps making monosyllabic utterances from a sedentary position, will kindly allow me to continue, or make his interruptions standing.
  Mr. Alexander Fletcher: The hon. Gentleman is advocating not just the one nationalised industry that the Labour Party would set up, but five, because on top of the four that he is advocating there would have to be some kind of holding or controlling authority.
  Mr. Wilson: There would be a holding company, in the sense that one frequently finds a holding company in the private sector. For instance, it is not the parent oil company that goes into the exploration business. The parent company sets out subsidiaries to carry out the work.
  We are proposing that the BNOC should set up operating subsidiaries to take care of functions closely defined in relation to given geographical areas. That would not only make the operations of the BNOC more efficient, but would give a better chance of Scottish control over the operations of the Scottish company. Even though the BNOC is established in Glasgow, it will still be a United Kingdom corporation responsible to the Department of Energy here in London and still closely tied by the Bill.
  If the Government do not accept our proposal for a devolved constitution, they will be back-tracking on some of their manifesto proposals for devolution in
  1378
  Scotland. I should like to make it clear at the outset that two issues are involved in this series of amendments. The first is the constitution of the BNOC itself. The second relates to money and where it should go, and it is on that issue that I expect a number of explosive interruptions from various hon. Members.
  I have in my hand the Royal Commission Report on the Constitution. The year 1969 was the date when the Kilbrandon Commission—under a different chairman—was instructed to consider devolved government. It is six years since that consideration was first given, but still there has been no action. It is one and a half years since the commission reported. There have been two General Elections, and the Government in their manifesto have accepted the need for a Scottish Assembly.
  We are advocating not only political devolution—devolution of a parliamentary type—but administrative devolution. Some of that is already happening, as can be seen from the way in which various Government offices have been spread out. We have seen it in a marginal way—I make this slight concession—in the establishment of the BNOC headquarters in Scotland. One is naturally in a stronger position if the head office is attached closely to the area of operations rather than situated far away in London and near the Department.
  Mr. Alexander Wilson: On the same argument, is it not true that Sir Hugh Fraser's main business interests lie outside Scotland, although he is one of the biggest backers of the Scottish National Party?
  Mr. Wilson: I do not know where Sir Hugh Fraser's business enterprises are. I have never met that gentleman and I cannot speak with authority about him. I know that he has built up industry in Scotland and has supplied employment there, which is a useful purpose. Jobs are not to be sneezed at at any time, and anybody who goes out of his way to build up industry should be congratulated rather than penalised by certain members of the Labour Party who would rather do without jobs for the sake of ideology.
  I am talking about the need for parliamentary and administrative decentralisation, but I am also concerned with

  1379
  industrial decentralisation, which Scotland badly needs in the private sector—that hinges on what has been done by manufacturers and entrepreneurs in Scotland—and the public sector. One of the problems of the public sector is that it is not responsive enough to the demands of public opinion in Scotland. I quote a document that reached me recently:
  "Just as provincial society lacks the capacity for innovation, so a branch-factory economy lacks the possibility of self-sustaining growth."
  The interesting thing about that statement is that it shows the need to get decision-making powers back in Scotland.
  Having the location of the BNOC in Scotland is a helpful step forward, but it is not sufficient in itself. I should like there to be a Scottish oil division of the corporation. It would look at matters through eyes very different from those of the BNOC which, because of the terms of its structure, must consider the United Kingdom point of view. A division of the corporation would try to identify itself much more closely with what was happening in Scotland and with Scottish needs, and would react more efficiently to the situation as it saw it.
  Looking at the structure which I propose, I am not arguing this in isolation, from the position of Scotland by itself. I am suggesting that the same pattern could be employed for other areas. I am not just talking in a vacuum. We know that there is the likelihood of exploration in the Celtic Sea, which could involve both Wales and England, and in the Western Approaches, where the seismic reports look quite reasonable and where there may be hope of finding oil. No one knows until exploration activities begin, but it seems reasonable to have an English division of the BNOC responsible for organising exploration close to where the activity is to be. Looking at the situation in Wales, there would be advantages in having a Welsh division with those functions. I know that it does not look too hopeful in respect of Ireland, because it appears from the map that the division would suit the Republic much more than Northern Ireland, but the point would still apply in that case.
  Mr. Norman Buchan: I agree with a great deal of the hon. Gentleman's argument, but surely
  1380
  there is one feature missing—the autonomy to be offered to Shetland. The amendment does not mention a Shetland oil corporation. Why not?
  Mr. Wilson: This is one of my party's strong points in relation to Orkney and Shetland and, let it be said, the Western Isles. We are in favour of maximum devolution. That is a matter upon which we have not attempted to back-track. Who amongst the other two parties can say what their attitude would be to Shetland, Orkney, the Western Isles, or even to Scotland, by way of devolution? We have seen the grand old Duke of York system of marching them to the top of the hill, but they get only half way and are then marched down again. Until the disorder in the enemy camps is resolved, who am I to pass comment on the weaknesses of the other parties in Scotland, who have lost their way and do not know where to go?
  I am presenting an argument which I hope will be accepted for its own sake. I ask right hon. and hon. Members to consider the organisation of nationalised industries in Scotland. I do not have to preach too much about this, because frost of it is well known to us. There are two which are completely autonomous—the South of Scotland Electricity Board and the Hydro-Electric Board. Both are very successful in their own way. Formerly, there was the Scottish Gas Board. That is no longer autonomous, and I would not have described it as the most successful of the nationalised industries at any time, in view of all the trouble that it caused me personally and is still causing my constituents. I well remember the natural gas period, only six months ago.
  I ask the House to consider the National Coal Board, which has a Scottish Division, British Railways, which have a Scottish Region, and the British Gas Corporation, which has Scottish Gas. Then there is the British Steel Corporation. That does not have a Scottish Division. I believe that it should have. In Scotland, we had an integrated steel industry, and Scottish Members are worried about what is likely to happen this week or next week about the jobs of those workers who are away on holiday at present. It was an integrated industry, but it was not organised on a Scottish basis. Whether or not we agree about the need for a

  1381
  Scottish steel corporation, there was certainly a strong argument for having a Scottish Division of the BSC. As I say, it was dismembered.
  7.45 p.m.
  The Strategy Planning Group which built up Ravenscraig was disbanded. All the technical expertise was thrown away. Much of the value of the Scottish steel industry was lost. This could, in turn, be leading to a reduction in the number of jobs. So we have to be careful to make sure that we have as much true devolution as possible, and the true transfer down of powers, influence and decision-making. It is all part of the great battle for decentralisation which we are fighting in our own ways. At present the British National Oil Corporation is almost a Stalinist creation, because it does not accept the need for a Scottish sector. Admittedly, most of its branches will come to Scotland, but that is only a temporary activity.
  Mr. Iain Sproat: But it is being set up in Scotland.
  Mr. Wilson: I am aware of that, but it should have a Scottish Division considering the development of Scottish oil from a Scottish point of view. That would be entirely different from what the British National Oil Corporation might seek to do.
  I realise that when there are divisions within the same corporation there is not the degree of autonomy which I would wish to see. But by 19 votes to 1 in the Committee my preference for a Scottish oil corporation was not accepted. For that reason, I have to deal with the matter in a way which I hope will be more acceptable to right hon. and hon. Members.
  I pass to the second set of amendments. These seek, in effect, to make sure that where there are surpluses on the oil accounts—and I suggest that there should be Scottish, Welsh, Northern Irish and English oil accounts, as well as a general one—they should be passed over to the areas concerned for development. Amendment No. 59 does not make that entirely clear. But if the first set of amendments is accepted, I shall seek to move a manuscript amendment to Amendment No. 59. However, we propose to leave the matter to be decided on the first set of amend-
  1382
  ments, relating to the structure of the BNOC, rather than to have two votes. It will be our wish to pass on to the second set of amendments if we are successful on the first.
  In relation to the oil accounts, I had better put this into the proper background. In the manifestos of all the parties represented here at present there are references to two matters, although expressed in different ways and with different degrees of intensity. The first is that the financial advantages of oil from the North Sea should go to help Scotland is particular—since we are discussing largely the Scottish sector at present—and also regional development.
  There are variants in each party manifesto, but in the amendments in relation to the oil accounts I specify where the spare cash would go. From the Scottish oil account, it would be fed to the Scottish Development Agency. Any excess from the Welsh oil account would go to the Welsh Development Agency. That from the English oil account would go to the National Enterprise Board, which is intended to help the regeneration of industry in England. Any excess in the Northern Irish account would go to the Northern Ireland Finance Corporation, which was set up in about 1972 with the objective of funding industrial development in Northern Ireland. In other words, in each case in relation to the profits of the BNOC coming from the operating divisions, funds would go into the oil accounts for industrial development. That is a very important principle.
  The alternative to working a system along these lines is to end up with a form of colonialism, with one area being exploited to suit the remainder. The structure which I have suggested would go a long way towards helping us in our present situation.
  We believe that these amendments are very important and we hope that, notwithstanding harsh words which have been exchanged in the past, the Government will agree with them. It is time that the official Opposition came off the fence on the question of devolution. They say specifically in their manifesto that they would like the petroleum division of the Department of Energy to move to Aberdeen. They say that they would fund a Scottish industrial development

  1383
  corporation directly from the oil revenues. Therefore, the proposals which I am putting forward should be acceptable to them. Our proposals also fit in with the formula for the unity of the United Kingdom, which will delight the hearts of all Members present, except my hon. Friends. There is a view about that matter which we do not share and do not intend to share.
  My proposal is quite moderate, and I hope that the Government will accept it. The Government's decision will be a factor which, plainly, we shall have to weigh very carefully when we decide what we should do on Third Reading. We supported the Bill on Second Reading, saying that we believed in participation, but if the Government believe that a further nationalised structure should be created without proper devolution of authority and without a proper sharing of the profits we shall have to change our minds.
  We hope that we shall have the support of the right hon. Member for Orkney and Shetland (Mr. Grimond) and his colleagues. For many years the right hon. Gentleman has been an adherent of devolution and decentralisation. We have had our battles in Committee, but we are now discussing amendments dealing with the question of devolution which is part of the package in the setting up of the Scottish Assembly. How better it would be if we could provide in the Bill a structure on which we can build when the question of the Scottish Assembly arises.
  Mr. Sproat: Has the hon. Gentleman made any calculation of the extra cost to the taxpayer in the United Kingdom, or, perhaps, specifically in Scotland, of setting up the four suggested divisions? How many extra civil servants would have to be employed?
  Mr. Wilson: I know of the hon. Gentleman's obsession with civil servants. If we had a Scottish Assembly and thereby got rid of regional government, and if Scotland had full self-government and we got rid of government from Westminster, there would be a dilution of the number of civil servants. We might well make savings—
  Mr. Sproat: In cost?
  Mr. Wilson: Yes, in cost—from the efficiencies of a devolved structure rather than have the inefficiencies which result from the grotesque scale of, say, the British Steel Corporation and which might result from the BNOC.
  Mr. Alexander Wilson: There is not much difference in the arguments, if they are arguments—they do not persuade me —which the hon. Member for Dundee, East (Mr. Wilson) puts forward for the separation of Scotland from the rest of the United Kingdom. The hon. Gentleman has still not said on behalf of his party what the cost would be to the people of Scotland if his policies were carried out.
  The amendments represent a slight watering down of the proposals of the Scottish National Party as they were put forward in Committee. They represent a greater watering down of the arguments put forward in the SNP's election material in October and during the referendum on the Common Market. We and the Scottish people are sick and tired of hearing the phrase "Scottish oil". There is a contradiction in Amendment No. 1 because it is admitted that there is oil in the Celtic Seas. The hon. Gentleman wants separate divisions of the BNOC to be set up in Scotland, England, Wales and Ireland.
  Is the watering down of the SNP's proposals for the sake of the House or a matter of playing politics for the benefit of the Press? Whatever the answer, it is admitted that the United Kingdom as a whole is involved in the operation of extracting this new indigenous fuel for the benefit of Great Britain.
  Mr. Gordon Wilson: Will the hon. Gentleman give way?
  Mr. Alexander Wilson: Not at this stage.
  During the Committee stage of the Oil Taxation Bill, the right hon. Member for Wanstead and Woodford (Mr. Jenkin), in quoting from the Financial Times, which is not a newspaper I normally take, said that
  "… there was a headline from Washington by Paul Lewis, the American editor: US to warn Wilson on Scots Nationalists and oil'. The Americans are concerned whether the pressure from the Scottish Nationalists will weaken the British Government's control over the development of the North Sea by devolving

  1385
  too much of the responsibility for the oil industry on some form of Scottish Assembly."—[Official Report, Standing Committee D, 30th January 1975; c. 514–5.]
  This argument was used by the Scottish nationals and, to some extent, by the Conservative Party in Committee. The Scottish Nationals, in their propaganda, have tried to frighten away the developments necessary in the North Sea.
  What would it cost the people of Scotland should the policy of complete devolution and separatism by implemented? The answer is still not forthcoming from the SNP. Members of the SNP have changed their argument that whisky is the basis of the Scottish economy. They are now saying that oil is the basis of it. They should study the history of the energy requirements of Great Britain, and particularly of the indigenous fuel industries. Clearly the hon. Member for Dundee, East has not studied it, or, if he has, he has not learned anything from it.
  We should make a reasonable comparison between what is a completely new industry and some of the established industries. I have said before that the only comparison of indigenous fuels which one can validly make is a comparison between coal and oil. The coal industry, following the measures taken by Labour Governments, will far and away outlive any oil which may be extracted from the North Sea, even on the present assessments of oil availability.
  8.0 p.m.
  The increase in demand for energy throughout the world is such that to follow the pattern suggested in the amendments would mean a reversion—almost a revulsion—to old history as far as I knew and lived with it in the coal industry. It would mean unit against unit, area versus area and country versus country for resources and the produce of those resources. The growth and desire for nationalised boards and industries came from the grass roots of some of those industries. To start now with a new industry fragmented in the fashion which the Scottish National Party wants would be a complete disaster for Great Britain. It would make nonsense of the British National Oil Corporation, whether its headquarters be in Glasgow or anywhere else within the United Kingdom.
  1386
  The logic, if it is logic, of the amendments would mean a reversion to Scottish, English, Welsh and Irish Coal Boards. Accepting that thesis and bearing in mind the great desire for compassion which the Scottish National Party claims for the people of Scotland, I ask hon. Gentlemen to consider what acceptance of their amendments would mean. The facts of life are apparent. The English coalfields are far more accessible and have thicker seams than anything in Scotland. It is well to record that known reserves in Britain amount to 100,000 million tons of workable coal of the highest calorific value in Western Europe. We are talking about enough coal on present production of 120 million tons per year to last this country 800 years allowing for progress and industrial expansion.
  The SNP makes great play of what I think is an unknown quantity—namely, the returns to Great Britain's economy. The SNP does not know too much of what men, and women in some instances, went through in the Scottish coal industry. Therefore, hon. Gentlemen do not consider the result of dividing up nationalised industries. Britain is a small country.
  Mr. Gordon Wilson: Would the hon. Gentleman care to give way?
  Mr. Alexander Wilson: I will in a moment. The oil countries and, indeed, this country will view with concern the activities and, to some extent, the threats of this small band of warriors to the economy and working-class people of Scotland and, indeed, Britain.
  Mr. Gordon Wilson: I am grateful to the hon. Gentleman for giving way. Apart from the fact that this series of amendments, as framed, would not have the effect that he has mentioned—the previous set of amendments in Committee would have had that effect—may I ask him how many jobs have been left in his constituency by the British Coal Board and how many steel-making jobs are likely to be left in Lanarkshire by the British Steel Corporation?
  Mr. Alexander Wilson: If you, Mr. Deputy Speaker, would allow me to develop that history, I could do so. I could go through history and show how and why jobs have been lost in Lanarkshire or any other county of Scotland.

  1387
  I was concerned to show the lack of interest displayed by the Scottish National Party when miners and their families were going through the travails, desperation, poverty and degradation of past years. The SNP, from neither inside nor outside this House, ever displayed a desire for a Scottish Coal Board. Hon. Gentlemen were non-existent in their support of some of the people whom I represent.
  I will answer the question in constituency form. There are no pits or miners in the Hamilton constituency, but it is still basically, not far under the surface, mining in content, and proud to be so. I am also proud to represent it.
  Mr. Buchan: Does my hon. Friend agree that the Scottish National Party did not object to the travails through which the miners went in the 1920s and 1930s because the mines were under the control of Scottish coal owners, and the Scottish people have never suffered more as a result?
  Mr. Wilson: I deliberately said that I did not want to develop that point. However, I must agree with my hon. Friend, as I think everyone in the House must agree with him. I will not mention names, but it is a fact that the old Scottish coal owners—the Hamiltons, the Percys, the Wilsons, the Craigs and the Dixons—were responsible for the degradation of Scotland, particularly Lanarkshire. Therefore, let us have no more nonsense about where compassion lies. It certainly does not lie with the publicity hounds of the Scottish National Party.
  The hon. Member for Dundee, East, who moved this series—series, not "serious"— of amendments, referred to Orkney and Shetland. I am glad that the right hon. Member for Orkney and Shetland (Mr. Grimond) is in his place. I think that he will anticipate and know what I am about to quote. I refer to the Daily Telegraph, of all papers, which is certainly no friend of the Labour Party. This may be why the SNP does not include Orkney and Shetland in this series of amendments. The Daily Telegraph states:
  "The Scottish Nationalist party's dream of a North Sea oil empire has been dealt a sharp blow by the Shetland Islands, off whose shores lie some of the biggest reserves in the region.
  The island's council has voted overwhelmingly in favour of retaining its links with
  1388
  Westminster in the event of any devolution of power to a Scottish assembly.
  This in effect means 'no' to an independent Scotland and 'yes' to the United Kingdom."
  Looking at the geography of the North Sea, one can see that within 93 miles of the Shetlands lie five of the richest oil fields so far discovered. Hence the reason for the silence of that area within the context of the amendments moved by the SNP.
  I am sure that everybody will have gathered by now that I want this House overwhelmingly to defeat these amendments. I have no doubt that will be so. I assure the hon. Member for Dundee, East that there is no coalition between myself and the Conservative Party. The hon. Gentleman refused to give way when I wanted to contradict him on that point. There is no coalition. The Scottish and the British Conservatives may say what they like. This series of amendments is a sheer facade. The SNP is using them to have a debate on separatism for Scotland. I hope that the House will unanimously reject the amendment.
  Mr. Grimond: I said earlier that I would try not to repeat the speeches I made in Standing Committee. In Committee I dealt at some length with the position of Orkney and Shetland qua oil. For the benefit of those who had the misfortune of missing that speech but who want to look it up, I may say that it is reported at column 108 of the Official Report of the Second Sitting.
  I then dealt specifically with the question raised by the hon. Member for Hamilton (Mr. Wilson)—that is, the resolution passed by the Shetland County Council, so I do not intend to go again into the question where the boundaries between Scotland and Orkney and Shetland might be drawn—the Minister is an expert on that, too—or, indeed, into the question of the possibility of some form of self-government for Orkney and Shetland. These are important questions, but they have been dealt with, and we are under a guillotine.
  These amendments are different from those put forward in Committee by the hon. Member for Dundee, East (Mr. Wilson). They would, certainly to some extent, keep the control of energy on an all-United Kingdom basis. That would meet the point, which I think I also

  1389
  mentioned in Committee, that one of the largest sources of new energy will be the Yorkshire coalfield and that its exploitation should possibly be planned, to some extent, together with North Sea oil.
  It is always unfair to go too deeply into the details of amendments put forward by back benchers who have no expert draftsmen at their disposal. I am not quite certain whether the amendments, as drafted, would confine the British National Oil Corporation and its four or five divisions entirely to British waters. I think that they would. I do not know whether that is deliberate, but I think that they would preclude any possibility of the corporation's operating elsewhere.
  Mr. Gordon Wilson: I tried not to disturb the Bill too much in the sense of abandoning extra-territorial exploration. What I have done is to exclude the divisions from exploring internationally except to penetrate by agreement immediately contiguous waters—but leaving the corporation power to go abroad. It is a point on which I would probably agree with the right hon. Gentleman, but I felt that if I pushed that point I might detract attention from the many questions.
  Mr. Grimond: I am sorry to hear that but there we are. I had thought that this would be a limiting factor. As I said before, this is a very centralised Bill. I am of the opinion that the nationalised industries are too big and that we should examine how we can decentralise them and how we are to control organisations, even organisations of this size, after they have been decentralised.
  The real point I want to impress upon the House is a genuine one. We are getting into a most terrible muddle. We are all to different degrees committed to Scottish self-government in the very near future. Already an appalling muddle has been caused by the re-organisation of local government. This is not an attack on the present Government, for it was the Tory Government who brought that about. It is obvious to anybody that this will lead to appalling difficulties and that the first year or two of the life of the Scottish Assembly will be spent trying to make sense of Scottish government in general.
  1390
  We are now passing much more legislation. We do not know whether it is proposed that energy should be one of the matters to be controlled to some extent from Scotland or, indeed, if it is to be controlled at all from Scotland, to what extent. Perhaps it is not to be controlled from Scotland. We do not know. In this and other Bills we are passing legislation which, if the Scottish Assembly is given any powers at all, will be wholly altered within two years, and the first year or two of the life of the Scottish Assembly will be chaos. On the other hand, if all these powers over industry, land development and energy are to remain at Westminster, the Scottish Assembly will be nothing but a talking shop and I believe that it will be a disaster for Scotland and will be nothing but another layer of government.
  8.15 p.m.
  I suppose it can be said that this is a possible means of going some way towards meeting that difficulty, in that this centralised corporation would not be quite so rigid, as it were. On the other hand, the hon. Member for Dundee, East has abandoned his proposition of having two or three entirely separate corporations. However, when the Scottish Assembly is set up it is conceivable that it will be easier to deal with a federal structure for energy than it may be if it remains totally centralised, or if it is broken up into three or four entirely separate oil corporations. If so, the difficulties will be enormous.
  What we want to know is: what is to be the position of the Department of Energy after the Scottish Assembly is set up? Until we know that, it is almost impossible to see how these matters can be dealt with.
  I have not said a word about Northern Ireland or Wales. I do not know whether there is a great desire in Northern Ireland to have a national oil corporation. I do not suppose that the right hon. Member for Down, South (Mr. Powell) will be rooting for it. The Government should give us some indication of their thinking. I should even like to know whether the members of the Government who are discussing Scottish devolution have given any thought at all to the Bill. I think that at some point the Government should indicate, either to this House or to another place, what their proposals will be.

  1391
  This is not hypothetical; the Government are committed to it. As far as I remember, even with some delay they are committed to setting up an assembly next year. I make clear that I am not arguing which way it should be played, but it will create great difficulty if we pass these Bills totally separately and in different compartments.
  The same is true of the Scottish Development Agency. The Bill to set up that body is trundling through the House at the same time as this Bill. This amendment proposes to give the agency all the surplus funds from oil. All parties, including the Conservative Party, and, I think, the Government, are committed to giving some of the oil revenues to Scottish development. How is it to be done? Do these Bills really match up?
  I hope that we do not go over exactly the same ground as we did in Committee, but we should have from the Government an assurance that some degree of overall planning is going on in Government circles and that we are not piling up immense troubles for years to come.
  Mr. Sproat: Interesting as it would be to follow the right hon. Member for Orkney and Shetland (Mr. Grimond) into the paths he has somewhat sketchily mapped out as to the relationship between the Department of Energy and any Scottish Assembly which may be set up, I will resist the temptation to do so at any length and merely say that if the control of the revenue from the Scottish waters, however defined, of the North Sea were to be given to a Scottish Assembly that would be an end of the United Kingdom. It would not be so much the slippery slope towards separatism as the break-up of the United Kingdom.
  It is because I believe that this series of amendments is only a stalking horse towards separatism that I reject it and shall happily vote with those who vote against it, if the amendment is put to the vote.
  I rise with some reluctance, and even with some anger because under a guillotine the House has once again had to listen to the wanderings of fantasy of the hon. Member for Dundee, East (Mr. Wilson), to the farrago of rubbish that we had in Committee and that we have now had to listen to again. As no doubt the
  1392
  Scottish Press will be reporting this debate, which is no doubt what the hon. Gentleman wants, we are bound to try to nail these preposterous notions once and for all.
  The hon. Gentleman said that in Committee he was defeated 19 to one on his amendments. The reason he was defeated 19 to one was that it was the most ridiculous series of amendments I have ever heard of in any Committee I have ever served on. Indeed, I do not think that I have heard any hon. Gentleman—
  Mr. Douglas Henderson Mr. Douglas Henderson (Aberdeen shire, East) rose—
  Mr. Sproat: I shall not give way at this moment, because I have a number of arguments to adduce. No doubt there will be plenty of opportunities for hon. Members to catch Mr. Deputy Speaker's eye later.
  I object to our time being wasted on these matters. In Committee the hon. Member for Dundee, East was caught out on a number of examples of total intellectual dishonesty. I remember the arguments that we had about Scottish territorial waters and over Scotland being financially maltreated. On both those matters the hon. Gentleman was forced to yield completely.
  Tonight we have had yet another argument based on intellectural dishonesty. We have members of the SNP coming forward with proposals to set up Scottish, English, Welsh and Ulster divisions. They cannot tell us what the cost will be; they cannot even put forward the vaguest notion. They cannot tell us how many extra civil servants their proposal would involve. It is an abuse of our time to put forward this sort of suggestion without having done any homework.
  I am more glad than words can easily express that 40,000 jobs have been created for Scotland as a result of North Sea oil. Given the overall unemployment situation, words cannot express what that creation of jobs means for Scotland. But there are other advantages. For instance, there are the wages that come to the people of Scotland and the magnetic force of the oil industry drawing other industries into Scotland. However, in terms of oil revenue Scotland should not get one penny more nor one

  1393
  penny less than any other part of the United Kingdom without having regard to the level of deprivation in the area concerned. I hope that the revenue that comes from the Selby coalfield will be evenly spread, so as equally to relieve deprivation in Scotland although the coal is in England. I hope that the revenue from North Sea oil, although off the Scottish coast, will go to relieve deprivation in England. That is an essential principle for those who believe in justice and in the unity of the United Kingdom.
  I move on to the second theme of the amendments, namely, the setting up of the absurd divisions. Essentially they are little different from the setting up of Scottish, English, Welsh and Ulster national oil corporations. We had all this from the hon. Member for Dundee, East in Committee. The amendment now before us is the stalking horse for separatism, wearing a different guise. Essentially it is the same beast.
  At this stage it is not necessary to go into the details of our disagreement over the BNOC. Among other things, we believe that it will be expensive, dilatory and excessively bureaucratic. But if we disagree with the BNOC, all the more do we disagree with the triplication of the nonsense that would result in the separation of the divisions as put forward by the hon. Gentleman.
  It is obvious that the SNP has in no sense attempted to argue, let alone answer, the complaints that have been made on the basis of cost. The Scottish nationalists have given no indication of the costs involved. They have given no indication of the number of extra civil servants required. They have not begun to consider the difficulties of recruitment. That matter was argued endlessly in Committee. It will be difficult enough to recruit for the BNOC, but it will be that much more difficult to recruit for national divisions. Knowing the somewhat racist theories of some members of the SNP, no doubt it would be impossible to recruit for the Scottish division unless the grandmother of the recruit being considered was born in Scotland. How would we find people to staff the separate divisions as put forward in the amendment?
  Let us follow the logic of the argument as put forward by the hon. Member for Dundee, East. I have frequently given credit to the Government for setting up
  1394
  the headquarters of the Offshore Supplies Office in Scotland, but on the basis of the SNP amendments, are we to have divisions of the OSO in England, Scotland, Wales and Ulster. Are we to have drilling training centres in England, Scotland, Wales and Ulster? What about the additional costs involved? What about the complications that would arise for the managements of Shell and BP, for example? Have the SNP Members considered the problems that will arise if the oil companies have to deal not only with the corporation but, at the same time, with divisions in England, Scotland, Wales and Ulster? To envisage the complexities represents a grotesque nightmare. However, we have not even heard mention of these problems from the hon. Member for Dundee, East.
  I believe it essential that we maintain the unity of our energy programme. That must apply, whether we are talking of coal or oil. It is essential that the whole of the United Kingdom should benefit from its oil reserves as well as from its coal reserves. Although the amendments put forward by the hon. Gentleman are marginally less absurd than those he put forward in Committee, I believe that they would be damaging to the energy resources of this country.
  Mr. William Hamilton: I disagree very much with what has been said by the hon. Member for Aberdeen, South (Mr. Sproat). Although we are working under a guillotine, if SNP Members want to make fools of them-selves in a debate of this nature they have every right to do so. I defend to the last the right of SNP Members to make idiots of themselves, even if we lose half an hour in the exercise.
  The hon. Member for Aberdeen, South is quite right to say that no attempt has been made in the amendments to spell out the details of where we shall find the bodies to man a Scottish Oil Corporation. Maybe the SNP has in mind the hon. Member for Banff (Mr. Watt). He has obviously shown the right ability in the House. He has the right qualifications in that I gather he was a member of the Tory Party before he joined the SNP. He has all the characteristics and qualifications to make perfect nonsense of the SNP's idea.
  There are one or two more important matters that I must mention. One of

  1395
  the matters that I have in mind has already been mentioned by the hon. Member for Hamilton (Mr. Wilson). H we accept the principle of division on a nationalistic basis, we cannot stop at oil but must carry through the concept to, for example, coal, to rail, to the media and to the Post Office. In other words, we must set about complete separation. There is no evidence to be found anywhere in Scotland that that is what is wanted by the Scottish people.
  Mr. George Reid: The hon. Gentleman was not born in Scotland.
  Mr. Hamilton: No, and I do not live there. However, nine out of 10 of the Scottish people do not want separation on those terms. That shows that they are not so parochial as SNP Members would have us believe. It is well known that I was not born north of the border, but the Scots take no notice of where one was born; they have more interest in what principles one represents. That is how I found the situation in Fife.
  If we follow the corollary of this proposal, we find that the last thing that the National Union of Mineworkers wants is to have a separate union in Scotland from that which exists in England. We have only to see what has happened to the EIS compared with the NUT to realise the disadvantage of separation. Undoubtedly teachers are put at a disadvantage because of that separation. I repeat that there is not a trade union in Scotland which would seek to bring about the separation proposed in this amendment.
  The right hon. Member for Orkney and Shetland (Mr. Grimond) made an equally valid point—namely, that we were now passing enormously important legislation for the United Kingdom, and not least for Scotland. That obviously applies to the present Bill and also to the Scottish Development Agency Bill. The right hon. Gentleman mentioned the Assembly which we were promised for next year. There is not a cat in hell's chance of getting that Assembly next year. I hope that that will be the case. It is a matter of enormous complexity, and we must get the functions right. Therefore, that cannot be achieved in an overnight exercise. Furthermore, we cannot pretend that if
  1396
  that exercise is carried out there will not be a hostile reaction from other regions in England which are worse affected by the present economic situation than is Scotland. I refer, for example, to the area to which I belong, North-East England. That has a much worse record in terms of unemployment and deprivation than has almost any part of Scotland. If Scotland is to be given preferential treatment, people in the North-East will not sit idly by.
  8.30 p.m.
  I have not heard it suggested by members of the SNP that if all these efforts result in failure their view will be "It is too bad we have spent £500 million. Therefore, our separate Parliament will foot the bill for all the losses." Most sensible people in Scotland regard these as United Kingdom resources, and they believe that the profits which flow from those resources should be used not on the basis of accent or the part of the country from which people hail but on the basis of need in areas of greatest deprivation. That applies to social economic and educational spheres. [Interruption.] I wish the silly little man, the Member for Aberdeenshire, East (Mr. Henderson) would not make comments from a sedentary position.
  The essence of being part of a United Kingdom is that we should recognise our nation as a unity. Therefore, such resources as are available from these industries should be channelled into areas of greatest deprivation. Those areas are not necessarily in Scotland, but are on the peripheral areas of England. For that reason I hope that the House will reject the amendment.
  Mr. Henderson: Some extraordinary views have been expressed in this discussion. The hon. Member for Aberdeen, South (Mr. Sproat) was ungracious not to give way in his remarks when dealing with amendments tabled by the Scottish National Party. Of course the SNP has a full right to table amendments for discussion. I was delighted that Mr. Speaker saw fit to select our amendments, which shows a more tolerant view than that expressed by representatives of the Conservative Party.
  The hon. Member for Aberdeen, South referred to the vote in Committee, where the figures were 19 to one. He implied

  1397
  that that vote was appropriate in the circumstances. Surely that situation reflects only the fact that the rules of the House do not permit the SNP to be fairly represented in these situations. If there were a fair representation of our views, the figure would have been a little different.
  Anybody who listened to the remarks of the hon. Member for Aberdeen, South would quickly come to realise that time and again the Scottish Conservatives have dug their own graves. I am delighted to see the spirit of coalition shown by the hon. Members for Fife, Central (Mr. Hamilton) and Hamilton (Mr. Wilson) in joining hands with the hon. Member for Aberdeen, South. They will find that they are also digging the grave of the Scottish Labour Party in the next General Election.
  Mr. Alexander Wilson: You just wait.
  Mr. Henderson: We have waited for some time, and we are ready.
  I am delighted to see the Under-Secretary of State for Scotland, with his responsibilities for devolution, joining us for this debate. I hope that we shall hear something about the Government's policy objectives. It would appear from the provisions of the Industry Bill, the Scottish Development Agency Bill and the Bill which is now before the House that each Department of Government appears to be framing its legislation separately without any relationship to the Government's central commitment—namely, the devolution of power in these islands. I cannot believe that the Under-Secretary of State, who is here to reply to the debate, will find it possible to reject or resist the amendment in the name of my hon. Friends, if as I believe, he is genuinely committed to the concept that more power should be devolved to Scotland, and that the Scottish people should have some say in these matters.
  We have on previous Bills—for example, the Industry Bill—tried to table amendments which would enable the powers to be devolved into a Scottish, a Welsh or an English setting. I hope that in this Bill the Government will take the opportunity to firm up their commitment to devolution by accepting the amendment.
  1398
  I shall not say very much about the remarks of the hon. Member for Hamilton, which are best forgotten. It is excellent that he now takes his views from the Daily Telegraph, and no doubt we shall be hearing him repeat these at some time. I was glad that the point about Shetland came out in relation to this matter. The statement he made was that any devolution of power to Scotland would be resisted by Shetland, but, of course, the right hon. Member for Orkney and Shetland (Mr. Grimond) has consistently supported a form of devolution and self-government.
  Mr. Alexander Wilson: It may be unfortunate that the hon. Member for Aberdeenshire, East (Mr. Henderson) was not in the Committee—or maybe it was fortunate; I do not know—but in fact the hon. Member for Orkney and Shetland (Mr. Grimond) did not deny that I was the Member who brought this up in Committee, and he followed on. He did not deny it when his own local authority made that statement, nor did he deny it today.
  Mr. Grimond: I referred to the local authority, the County Council of Shetland, at the second sitting of the Committee, in column 110, before the hon. Gentleman spoke about it at all.
  Mr. Henderson: I hesitate very much to get involved in a brawl between two members of the Committee, and, as the hon. Member for Hamilton says, it is certainly fortunate for me—although unfortunate for the Committee—that I did not serve on it.
  One aspect of the amendment that ought to be stressed very strongly is that of providing funds to supplement the work of the Scottish Development Agency. At this time, when I see the unemployment figures in Scotland rising to staggering heights—heights achieved only by the Conservatives in the past, and now being very rapidly approached under this Government—the greater the resources that can be made available to the Scottish Development Agency, the greater will be our chance of providing a future of job opportunities to people in Scotland. It would be possible in these circumstances, and under the structure proposed, for some favours to be shown to Scottish companies, domiciled in Scotland, which provide employment and jobs there.

  1399
  The criticism has been made during the debate that my hon. Friend has not produced a list of civil servants, and so on.
  Mr. Buchan: What does the hon. Gentleman mean by "domiciled in Scotland"?
  Mr. Henderson: I mean companies with establishments in Scotland which produce and manufacture goods within Scotland, irrespective of their ownership, and which provide employment within Scotland. I hone that makes it very clear. I have in mind people like Loudon Brothers, which used to contribute large sums of money to the Labour Party in the West of Scotland and then went bankrupt.
  I should like to turn to the question of the number of civil servants involved, which has been mentioned several times. When I hear the hon. Member for Aberdeen, South ranting and raving, foaming at the mouth and chewing the carpet on this particular issue, as he has been doing, I just wonder whether his Government, when they introduced the Local Government (Scotland) Bill, did all the careful sums they ought to have done concerning the number of new officials required in the region, with the inflated number of posts required. The hon. Member should hold his head in shame over the results of local government reorganisation rather than quibble about whether we shall need a few more typists or desks in the Scottish division of this corporation. The amendments are worthy of acceptance, and we look forward to the Government saying that they are accepted.
  Mr. Robert Hughes: The amendments are about the possibility of the BNOC's being decentralised. One of the saddest things about the way in which they have been presented—indeed, one of the saddest things in any debate about Scottish affairs in recent years—is that every argument is used as a peg on which to hang the argument for devolution, or self-government, or independence. This means that, time and again, the real issues facing the Scottish people are bypassed, in the interests of putting forward the propaganda of the Scottish National Party.
  I do not suggest that a party in this House should argue completely object
  1400
  tively outwith the philosophy upon which its Members were elected or the ethos from which that party sprang, but there are times when we should avoid the nonsense slogans and ex cathedra statements whenever an SNP Member rises to speak. The hon. Member for Dundee, East (Mr. Wilson) has said over and over again that the Government's will to introduce self-government for Scotland is wavering—and he has said it without a single shred of evidence.
  My hon. Friend the Member for Fife, Central (Mr. Hamilton) did not suggest that the Government's commitment to devolution was wavering. He argued that the majority of people in Scotland did not want independence. That is a different matter. But it does not matter what is said—hon. Members representing the SNP simply keep on saying that the Government's commitment to devolution is wavering and that the whole exercise is being held back by some unnamed Cabinet Minister. I am not in a position to say what any unnamed Cabinet Minister is thinking of doing, but I can tell my right hon. Friend the Secretary of State for Scotland that the Government's commitment to devolution is consistent and that the exercise is going ahead to produce a detailed framework in which the Assembly can be set up.
  The most curious argument today was put forward by the hon. Member for Aberdeenshire, East (Mr. Wilson). He asked us to accept that every Bill that goes through the House and which has some impact on Scottish affairs should contain a detailed arrangement affecting the Assembly and stating what the Assembly's powers will be. The sooner the Government get the Scottish Assembly off the ground the better, because the SNP will then stand exposed. At the moment, it suits the SNP to pretend that the Government are wavering in their commitment. It enables the SNP to put forward spurious propaganda. But if the Government were to include such detailed provisions for an Assembly in every Bill, we would never get the Assembly off the ground. We would be bogged down on the detail of each Bill.
  Mr. Henderson: I am pleased to hear the hon. Gentleman's belief that the Government are going full speed ahead with the setting up of the Scottish Assembly,

  1401
  but does not he accept that, with forethought and the use of such amendments as these, the Government could make their commitment to meaningful devolution very much clearer?
  Mr. Hughes: The hon. Gentleman might have made such a point about amendments in Committee, but, as the hon. Member for Dundee, East has admitted, there is nothing in these amendments which would in any way affect the devolution exercise. The amendments are concerned with decentralisation of the operations of a nationalised industry, which could happen equally well if there was a Scottish Assembly or if the BNOC had never been heard of.
  Mr. Patrick Jenkin: Let us get on with the Bill.
  8.45 p.m.
  Mr. Hughes: The right hon. Member for Wanstead and Woodford (Mr. Jenkin) is making remarks from a sedentary position. These amendments are concerned with decentralisation. Therefore, they do not affect the devolution exercises in the way in which hon. Members have put forward spurious argument trying to lead us away from the facts.
  I turn to the amendments. It has been suggested that we should have four separate divisions of the British National Oil Corporation and that these should have a number of functions which would be specially Scottish-oriented. I am not sure what the phrase "specially Scottish-oriented" means, because it was not properly explained at any time. As I understand it, the four Scottish separate divisions would be able to organise their affairs and the economic activities within Scotland to give a special Scottish flavour and interest to the BNOC concerning, for example, the placing of contracts. It was suggested that Scottish companies should receive a special rate.
  This is a very short-term interest, taking the statements of the hon. Member for Dundee, East at their face value. At present, the vast majority of the work connected with North Sea Oil is based in Scotland. I am referring to, for, example, the rig building, which takes place in Scotland because we have the best waters and the deepest water. Indeed, the major part of the development of North Sea oil is taking place in the waters off the Scottish coast.
  1402
  What will happen when the major part of the activity moves south? Does the hon. Gentleman not foresee the possibility that in that case the English division will say, "We will not have any Scottish companies coming to take part in England. You have had your share. What happened before in the development of North Sea oil is fine, but from now on you are finished. Therefore, that will be the end of Scottish jobs."
  Mr. Gordon Wilson: Is the hon. Member for Aberdeen, North (Mr. Hughes) aware of the value of the market which lies off the shores of Scotland? It is a very substantial market, and the supply will last for many years. It is partly upon this that the Government's own calculations are based. Does the hon. Gentleman not realise also that the Scottish share, according to our calculation, is at present approximately 18 to 25 per cent. of that market, which is far too low? In view of the employment situation in Scotland it should be built up.
  Mr. Hughes: I shall not quarrel on the question whether the figure is 18 per cent., 20 per cent. or 25 per cent.; I want as much industry to come to Scotland as is possible. Obviously, I want as many jobs as possible to go to Scotland, because, apart from anything else, I have a constituency interest. However, I do not take the narrow view that only Scots should be employed in the exploration of North Sea oil, or that the benefits should come only to Scotland. In the interests of time, I shall not develop the point concerning the placing of contracts.
  It must be borne in mind that the operation of the four separate divisions, as set out in the amendment, would still be subject to the overall control of the British National Oil Corporation. Although there is a respectable argument concerning decentralisation, it is not one which can be carried forward in that context of devolution.
  Hon. Members representing the Scottish National Party—I am sure that they will accept that the financial side of their argument is the more important—argue that the surplus from the oil accounts should be paid over to the separate divisions and be used wholly within Scotland. The hon. Member for Dundee, East, in an otherwise fairly agreeable speech presenting the amendments, said

  1403
  that unless this were done we should see colonialisation being brought into Britain.
  When I hear emotive words such as "colonialisation" being brought in, I know that the hon. Member has a bad case, and I know that he knows it, too, for these emotive expressions are no more than attempts to divert attention from the essential question. The hon. Member knows—my hon. Friend the Member for Hamilton and others have reminded him—that the curse of Scotland has been the same curse as that which has fallen upon England, Wales and Ireland. Our natural resources, whether of the land or of the sea, have been exploited for the benefit of those who happened to have the power at the relevant time. They have never been exploited for the benefit of working people. They have been exploited for the Hugh Frasers, for the Noble-Grossarts and the rest. The financial and business empires built up in Scotland have been built on cheap labour, in precisely the same way as happened elsewhere in Britain.
  The argument is not between the Scots and the English, the Welsh and the English or the Irish and the English; it is between capitalist and Socialist, and the sooner hon. Members opposite, especially those in the Scottish National Party, understand that, the sooner they will at least begin to understand what is the right thing for the people of Scotland and for the people of the United Kingdom as a whole.
  There have been constant references to the Orkneys and Shetlands. That argument was best exposed and exploded by a short letter in the Scotsman in October 1974, in the middle of the election campaign. The letter came from a resident in Pappa Westray. He took up the argument on the question whether it was Scottish oil, Orkney oil or Shetland oil, and finished by saying that he had noticed that a resident of Stronsay—a small island in the Orkneys—was saying that his island should get the benefit of North Sea oil. His comment was that "if the residents of Stronsay think that they have any claim on North Sea oil, they have another think coming, because the value of the oil belongs to Pappa Westray."
  That sort of attitude—that the benefit belongs only within the narrow confines
  1404
  of where the oil happens to be at any given time—is a narrow, selfish attitude, which entirely ignores the needs of working people throughout the United Kingdom. I set my standard by the move of Socialism towards seeing that people throughout the United Kingdom, irrespective of their origins, or whatever it may be, benefit from our North Sea oil, and I reject these amendments, which are bogus in their construction and would be harmful in their implementation.
  Mr. George Thompson: The hon. Member for Aberdeen, North (Mr. Hughes) seemed to suggest that we should ignore the historical reality of the way the old States came together in the United Kingdom. I do not think that we can so readily ignore that reality in favour of the social reality to which the hon. Gentleman referred. So far as I know, there has been no movement in either Orkney or Shetland to declare independence from the United Kingdom, and until that moment comes we are dealing with a hypothetical situation.
  The hon. Member for Fife, Central (Mr. Hamilton) spoke about the plight of the English regions. Not long ago, I discussed this matter on a television programme in Carlisle with the hon. Member for Carlisle (Mr. Lewis). I said then, and I say again now, that if the people of Northern England wish to run their own affairs through some form of regionalism within England, it is up to them to make their demand and to see that that demand is accepted. I am convinced that the people of Northern England, who centuries ago showed that they had talent and ability beyond that of the English in the south, would still be capable of showing that ability if they were given the chance. If they want regional development of that type in their part of England, they should ask for it from the people of England. I doubt that it would be denied.
  As I see it, there are two kinds of decentralisation. First, one moves the bureaucratic monolithic—or perhaps should be megalith, as they seem to grow bigger and bigger every day—from Whitehall to some remote place that strikes a chill in the hearts of every Home-County-loving civil servant. It goes in one niece and takes longer to arrive than the megaliths took to reach

  1405
  Stonehenge. I remember somebody in a university telling me that to move a university department was like trying to move a cemetery.
  Mr. Joseph Dean: Get on with the Bill.
  Mr. Thompson: I am getting on with the Bill, in my own way. It may not be the way other hon. Members are used to, but it is the way I am used to in my part of Scotland. It may be tedious, but we in Galloway have time. If hon. Members ceased interrupting me I could get on quicker.
  Our amendments propose the other type of centralisation, where the megalith or monolith is broken into pieces and distributed throughout the country.
  Mr. William Hamilton: Then what do you do with it?
  Mr. Thompson: It is not a question of what I do with it; it is a case of what it begins to do for Scotland, Northern Ireland, or Wales. The right hon. Member for Orkney and Shetland (Mr. Grimond) said that we must always bear in mind that we are legislating against a background of devolution for Scotland. We should also remember the possibility of Scottish independence being on the cards soon. We in Galloway have been urging this matter on the Secretary of State for Scotland.
  We had an awful warning in the reform of local government, when we saw what happens when one reform is carried out and it is forgotten that another reform is still to come. We know that local government reform was pushed through because some people thought that if the voters were given regionalism they would not want the full article. These amendments provide for an easy transition from the present régime in the United Kingdom to the régime that will come into existence after devolution and after the independence of the components of the United Kingdom.
  Mr. Buchan: I was so astonished by the last few sentences of the hon. Gentleman's speech that I almost missed my cue. I found some of his statements quite extraordinary.
  As many hon. Members know, I have a long interest in Orkney. I was brought up there, and I rather resent the impu-
  1406
  dence of the SNP in claiming the oil to be its. It says on the one hand that it will grant the fullest desired autonomy to Orkney and Shetland on a level equivalent to the Faroese. I think that is its policy. The problem is that on that basis, even at the level of Faroese independence, all the oil in Orkney and Shetland waters will be Orkney and Shetland oil. Yet the SNP says that it is Scottish oil. It says that it is willing to grant autonomy, but before that happens it will grab all the resources away.
  Mr. Thompson: We have never said that this form of autonomy will be forced on the unwilling people of Orkney and Shetland. It will happen if they desire it, but we are not shoving it down their throats.
  Mr. Buchan: In its overwhelming generosity the SNP says that it will bestow autonomy but that first it will take the resources away, and it is precisely that to which we object. It has come up with the excuse that the islands are not yet independent and that until that moment comes the oil must be treated as Scottish. That proves my point. It illustrates the curious double think that people get into when they no longer care about people as people. I do not believe that the SNP any longer cares what happens to the Scottish people as Scottish people; it is concerned only with the abstract entity of a Scot. It would be just as sensible to say that only people living on top of coal mines should receive the coal resources.
  We say that the resources are for the people as a whole. We cannot tear aside the historic costs put in by the workers of England and Wales as well as Scotland to creating our present industrial entity in Britain under which North Sea oil receives the resources for exploration and the workers who take part in that exploration.
  One point arises with the SNP. Its real problem is that it is unable to distinguish the needs of a free independent Scotland from the needs of Scotland in what it sees as an independent era. Let me give one obvious example. Two points have arisen in our discussions on the Scottish Development Agency Bill. One concerns the creation of the National Enterprise Board in Britain as a whole, applying directly in England and Wales.

  1407
  The SNP has argued that the NEB must in no circumstances touch any industry north of the border, even if that is in the interests of Scotland. It is, however, willing for the Scottish Development Agency to interfere with matters south of the border. The whole thing is nonsense. The well-being of workers in the Linwood Chrysler plant will depend on the operation of both the SDA and the NEB.
  A situation of sheer class lunacy arises because the headquarters of the BNOC is being sent to Glasgow, but the SNP wants to send threequarters of it away again. This is total nonsense. Either we are fighting for the needs of Scotland or we are not. Those who fight for genuine devolution and the genuine saving of jobs in Scotland—
  Mr. Donald Stewart: Not you. You are the enemy of devolution.
  Mr. Buchan: I am concerned with genuine devolution, I will define it in a moment for the hon. Member for the Western Isles (Mr. Stewart). We want to decentralise, with partial control in Scotland, rather than being concentrated at Westminster and in London, but we are having our position cut away from under us by the SNP in its dogmatic approach.
  I cannot understand the Government. They are fighting for secrecy over the Crossman diaries, but they carry secrecy to absurd lengths. They have preserved secrecy for the past two or three years over the nonsense of the line drawn east of Berwick defining Scottish or English territorial waters for oil purposes. I wish my hon. Friend would drop the secrecy and tell the Scottish people the truth. The SNP is trying to persuade the Scottish people that all oil north of that line is, by definition and law, Scottish oil. It is nothing of the kind. The Scottish oil element will be decided by the drawing of a median line.
  As the SNP knows, the existing line is purely an arbitrary line. The SNP, too, has tried to keep that fact secret from the people of Scotland. It is an arbitrary line drawn for the purposes of the operation of civil and criminal law, and nothing else. If there were to be a
  1408
  division of oil between Scotland and England it would have to follow international criteria which would cut out the present operating oil fields from the Scottish sector, and as a Scotsman I would object. Most of the rest would go to Orkney and Shetland. It the SNP pursued its argument too far, there would not be too much oil left for it.
  Basically, the SNP hates devolution. It does not like people running their own affairs. The SNP likes the idea of armies marching up and down Princes Street. It likes the ideas of borders and everything else. Its economic policy demands borders, customs posts and all the rest. [Interruption.] I know a good deal more than SNP Members about Scotland. They violently object to the real devolution of power, which is away from the centre and into the hands of ordinary people. They want a highly centralised Scotland. Hence their hatred of the regional government set-up.
  Here was a chance to extend democracy and devolution further down the line into the hands of ordinary people. But the SNP does not want power in the hands of ordinary people, which is why I had no support from it when I put down an amendment to the Scottish Development Agency Bill to set up workers' co-operatives.
  Mr. Deputy Speaker: Order. The hon. Gentleman said that he would not go on to other matters. He is going very wide of the amendment by going into the whole subject of devolution. He should confine himself to the substance of the amendment.
  Mr. Buchan: That is precisely what I am doing, Mr. Deputy Speaker. We are here concerned with the devolution of industry and industrial control. We are concerned with the devolution of Government controls over an industry, and that is exactly what I am discussing. I gave an example of how, despite this spurious amendment, which they cannot mean, SNP Members are not concerned about devolution of power into the hands of ordinary people, although they may wish for devolution to a concept called Scotland. That is why they opposed an amendment of mine to establish workers' co-operatives in industry [Interruption.] No, but to be fair to the Government,

  1409
  they did not spend a whole Committee stage arguing about the need for Scottish control, devolution and decentralisation. But SNP Members did, until they had a chance to support devolution, and then they ignored it. They even opposed a simple Government amendment to allow the Scottish people, through the Scottish Development Agency, to take over firms where it was necessary to do so for the well-being of the Scottish people. The SNP objected to that, too.
  Mr. Deputy Speaker: The hon. Member must confine his remarks to the subject matter of the amendment. We are discussing the division of the BNOC into four. It is not the wider issue of industrial devolution generally.
  Mr. Buchan: I understand that, but the hon. Member for Dundee, East (Mr. Wilson) discussed the relationship between the BNOC and the Scottish Development Agency and the relationship between the Bill and possible legislation on the Scottish Assembly. That was an integral part of his argument. I merely better his argument; that is the trouble.
  The other thing that must be said—and the Welsh have now arrived—is that the Scottish Nationals even had the impertinence to divide England and Wales. No Welsh National has signed the amendment and might not even wish to do so. So the Scottish Nationals are not only cutting off Scottish worker from Scottish worker—and many Scottish workers work in England—but propose to cut off English worker from Welsh worker.
  Curiously enough, they are emitting dove-like noises. There is a good deal of sense in stripping down the monoliths, in their parlance, and much to be said for decentralising power. I do not know why they are nodding at that, for they objected to that when they had the chance to support it when I proposed giving power into the hands of the workers. They could have joined with me in asking for a workers' take-over of the oil industry in Scotland, and they could have supported workers' cooperatives.
  I understand and respect the views of the hon. Member for Dundee, East. I understand that he is concerned with this single dogma. If this proposal helps towards that dogma, I respect it. But, in the interests of the people of Scotland
  1410
  and the better government of the people of Scotland, and, above all, to make sure that we get a firmer grip on the oil development of Scotland, I believe that the amendments must be rejected.
  Mr. Gray: I suspect that after a long debate the House is anxious at this stage for the Minister to wind up, and I certainly do not propose to take long in what I have to say. Unfortunately, I cannot recommend my hon. and right hon. Friends to support the amendments commended by the hon. Member for Dundee, East (Mr. Wilson). I give the hon. Member a word of advice. If he wants anybody in the House to support him on anything, he must learn to be a little less arrogant and to have a degree of humility in presenting his case. The reason why this debate has proceeded for so long is undoubtedly that the way in which the hon. Member presented his case stirred up hon. Members on both sides of the House. If he wants support, he must change his tactics.
  However, despite the way in which the hon. Member moved the amendment, and although those amendments are different from those he moved in Committee, his arguments are very much the same. I have heard that speech at least twice, and it has not improved all that much from being kept locked away in his locker. I respect the hon. Member's views which I am sure are sincere, but I cannot agree with them for a number of reasons.
  First, the Conservative Party basically disagrees with the concept of the BNOC. I said in Committee that the hon. Member was compounding an error, and he is doing so here. If we have to have the BNOC, surely we in Scotland are likely to gain much more benefit from it if it has its headquarters in Scotland than if the headquarters is elsewhere and part of the corporation is hived off to Scotland. I do not see the Scottish people benefiting in any way from what the hon. Gentleman suggests.
  9.15 p.m.
  A great many interesting points were raised in the debate. We went from the Marxist theories of the hon. Members for Aberdeen, North (Mr. Hughes) and Renfrewshire, West (Mr. Buchan) in one breath to the extreme views of our friends in the Scottish National Party.

  1411
  I take up one point made by the hon. Member for Aberdeenshire, East (Mr. Henderson), because we dealt with it at some length in Committee. He complained bitterly that there was not a sufficiently high percentage of jobs, especially in the new technology, coming to Scotland. This is not the fault of the Government. I know that in my own constituency and in other parts of Scotland many of the incoming companies made considerable efforts to buy British and to buy Scottish. The reason why they did not do so was that there were neither British nor Scottish firms in a position to quote them for a great many of their requirements. In any event, I do not think that that was really a valid argument to advance in favour of this set of amendments.
  Therefore, bearing in mind that we are operating under this very strict guillotine, that we are on only our third debate, and that only one and three-quarters hours of debating time remains to us, I shall leave it to the Minister to sum up the debate. I regret that I cannot recommend my right hon. and hon. Friends to support the amendments.
  Mr. John Smith: I hope that the House will forgive me if I reply briefly to the debate. It has been a very wide-ranging one, but I think that I can, in a fairly short compass, explain to the House the Government's attitude to the amendments.
  In the first place, those hon. Members who served on the Standing Committee will recollect that the hon. Member for Dundee, East (Mr. Wilson) as was his privilege, put forward a series of amendments. Those were separatist in tone, whereas the ones that we have been discussing today are devolutionist, but the purpose has been the same in both instances, and the framework adopted in these present amendments, I suspect, has more to do with the rules of order affecting a Report stage than a change of mind on the part of the hon. Member for Dundee, East.
  The hon. Gentleman rather gave the game away at one point, when he said that it was very convenient to have the headquarters of the BNOC located in Glasgow, since that would be an ideal
  1412
  situation when a Scottish Government came into being, because they could grab what was there already. The truth is that putting it in a devolutionist framework is not sincere on the part of SNP members. They see devolution as a step to separatism, whereas we see it as an end in itself. That is a bridge that we shall not cross.
  The point has been made by many hon. Members on both sides of the House that the effect of the amendment would be to give away a great deal of what has been allocated to Scotland in setting up the headquarters of the BNOC there. I had always understood that a great deal of the complaint was that centres of industrial decision-taking were not located in Scotland or in other parts of the United Kingdom. The decision to put the headquarters of the BNOC in Scotland, following as it did the relocation of the headquarters of the Offshore Supplies Office, serving the whole of the United Kingdom, in Glasgow, represents a move of industrial decision-taking which I thought was to be welcomed. The effect of these amendments would be to derogate from that influence and to water it down.
  What is more it is, as my hon. Friend the Member for Renfrewshire, West (Mr. Buchan) noted, rather presumptuous to allocate to the Scottish division that area of the North Sea covered by the Continental Shelf Order. The hon. Member for Dundee, East and I have had this argument many times. But it must be put on the record again that the division of the North Sea into civil jurisdiction zones between the law of England and Wales and the law of Scotland has no reality to any possible median line division, which would be approached on a quite different basis. In this case the hon. Gentleman is indulging in colonialism and trying to allocate to the Scottish section something which ought properly to belong to England and Wales if there were a division.
  The other point which the hon. Gentleman has not answered relates to the question of Orkney and Shetland. If it is desirable to create a Northern Ireland division when there is no oil in the waters covered by the Northern Ireland sector, as defined in the amendment, the stronger is the case for an Orkney and Shetland division. However, the hon. Member for

  1413
  Dundee, East, shied away from the conclusions of his own argument in that respect.
  The argument about the oil accounts is the most threadbare. It is said that there must be separate accounts for the oil. Amendment No. 59, taken with Amendment No. 48, proposes the creation of separate accounts—an English account, a Welsh account, a Scottish account and a general account. The general account would be under the control and management of the Secretary of State for Energy.
  There is a certain plausibility about such an arrangement. To each part of the United Kingdom would go that to which it was properly entitled. Amendment No. 59 proposes that the Welsh oil account should go to Wales and the English oil account should go to England, but that the general account should go to the Scottish Development Agency. I wonder whether other parts of the United Kingdom would feel that that was a fair arrangement. It is one thing honestly to argue nationalism; it is something different to argue it by a side wind under some other pretext.
  Mr. Gordon Wilson: If the hon. Gentleman had been listening to me he would have heard me say that I should have preferred to move a manuscript amendment. The hon. Gentleman will know the pressure under which the amendments were tabled, following the sudden decision to bring the Bill to the Floor of the House when, supposedly, it was to be delayed another eight days.
  Mr. Smith: I confess that I did not hear that explanation by the hon. Gentleman. I apologise if I have misinterpreted his argument and I am glad to hear that he does not put forward that proposition. One might wonder how that mistake came to be made. It is a curiously significant political mistake, but I do not want to misrepresent the hon. Gentleman's argument.
  The point which I wished to make, to which that remark was a preliminary, was that it is curious that we are not asked to create an energy account. What is proposed is purely an oil account. One wonders what would be the consequence of bringing gas into the picture and creating a gas account. It is not sufficiently understood that 95 per cent. of the gas used in the United Kingdom comes from the
  1414
  southern basin of the North Sea, in English Waters. [Interruption.] The hon. Member for the Western Isles (Mr. Stewart) is wrong again. Gas is sold at the same price to every part of the United Kingdom. He should know that. Most of the gas supplied to Scotland, as to other parts of the United Kingdom, comes from the English waters, as the hon. Gentleman would describe them, in the southern basin of the North Sea.
  That shows how foolish it is to parcel lawyers' terminology, irrelevant to the our energy resources in various parts of the United Kingdom. The Government's view—I hope that it will be the view of the House—is that we should approach the development of our energy resources on a United Kingdom basis for the benefit of the whole of the United Kingdom. To the extent that these amendments oppose that principle, I hope that the House will vote against them.
  Mr. Gordon Wilson: The way in which the debate has wandered off the argument is very strange. I well understand the attraction—one might call it the obsession—which certain people see in intervening in debates relating to the Scottish National Party and oil, thus causing them to go on for some time, although perhaps not much longer than previous debates. No one can say that this is not an important question. Many matters have been hammered out, although most of them have been, in lawyers' terminology, irrelevant to the amendments. That has not been the fault of my hon. Friends.
  I regret the rather patronising way in which the hon. Member for Ross and Cromarty (Mr. Gray) prefaced his remarks. It is a great pity that sometimes his talents are not used more productively and carefully.
  Under the structure which I have suggested, there would still be the headquarters of the BNOC, but, in addition, there would be operating headquarters in the form of divisions.
  Mr. Sproat: In Aberdeen?
  Mr. Wilson: That is a matter for the hon. Member for Aberdeen, South (Mr. Sproat) to press or for the hon. Member for Aberdeen, North (Mr. Hughes), who has so recently been returned to the back benches because of lack of Government

  1415
  money through lack of Scottish oil revenues. As soon as developments take place other than in the Scottish sector, divisions will in practice be set up. We are trying to avoid a structure under which that would happen and thereby prevent many of the faults from which Scotland has suffered in the past extending to other parts of the United Kingdom.
  The Government must have an overall attitude to devolution in advance of the Scottish Assembly. The amendment relates not to the Assembly but to decentralisation and devolution. That should be made clear.
  One benefit of a Scottish division would be an improved buying policy. I should be worried about the effect of BNOC as a United Kingdom structure regarding its buying policies. We know from the letter which has been sent to me by the Under-Secretary of State that the Offshore Supplies Office does not have any function concerning the steering of jobs or contracts specifically to Scotland. Its first task is to get the oil out as quickly as possible by providing the provenence or equipment, and its second task is to steer it towards development areas generally.
  We all know the amount of equipment which could be produced in the United Kingdom. Figures have been produced to show that 42 per cent. is going to the United Kingdom now. The Secretary of State on his recent visit to Scotland mentioned that. But it still leaves about 70 per cent. which the IMEG report suggested three and half years ago should be able to come to the United Kingdom. A Scottish division would perform a useful purpose in increasing purchasing.
  We are always willing to listen to Orkney and Shetland. I ask the Government, as I did in Committee, whether they have offered Orkney and Shetland any share of the revenues in the same way as they agreed with the Isle of Man. It would be interesting to know that.
  Initially gas came from the southern sector, but at one stage it was cheaper to get it from Soviet Russia, right across Europe, because the Germans were getting it at a lower price than gas was offered to Scotland. Substantial supplies of gas will shortly be coming from the Frigg field, a third of which is in United Kingdom waters—not to provoke any fur-
  1416
  ther division on that score—and from the Brent field. I understand—I may be wrong—that a third of the United Kingdom's total requirement will be coining from the northern fields. That shows that Scotland will be contributing substantially towards the gas industry in future. I should have no objection to a gas account as well as an oil account being opened. I hope that the Minister will follow his suggestion with subsequent legislation.
  I have been very disappointed by the arid, sterile and negative fashion in which the Under-Secretary has received these constructive amendments. Therefore, I must ask my hon. Friends to press the matter to a Division.
  Mr. Alexander Fletcher: Before the hon. Gentleman sits down—
  Mr. Wilson: I have sat down.
  Mr. Alexander Fletcher: Does the hon. Gentleman appreciate that the logic of his argument is such that had the Government tabled—
  Mr. Deputy Speaker: Order. I understand that the hon. Member for Dundee, East (Mr. Wilson) has resumed his seat.
  Question put, That the amendment be made:—
  The House divided: Ayes 16, Noes 287.
  [For Division List 306 see col. 1469.]
  Question accordingly negatived.
  Mr. John Smith: I beg to move Amendment No. 2, in page 2, line 1, leave out 'six' and insert 'eight'.
  Mr. Deputy Speaker (Sir Myer Galpern): With this amendment it will be convenient to take Amendment No. 3, in page 2, line 1, leave out 'six' and insert 'ten'.
  Amendment No. 4, in page 2, line 3 after 'Corporation', insert 'of whom not more than two-thirds nor less than one-third shall be part-time members'.
  Government Amendment No. 5; Amendment No. 139, in page 2, line 10, at end insert:
  'who shall be given leave of absence from their duties in the civil service while serving on the corporation'.

  1417
  Amendment No. 6, in page 2, line 14, at end insert—
  '(e) shall in appointing members ensure that they are persons appearing to him to be qualified as having had experience of, and having shown capacity in the oil industry, other industrial, commercial or financial matters, applied science, administration or the organisation of workers'.
  Amendment No. 145, in page 2, line 14, at end insert—
  '(e) shall appoint to the Corporation two representatives elected by its employees'.
  and Amendment No. 7, in page 2, line 14, at end insert—
  '(2A) Before appointing a person to be a member of the Corporation the Secretary of State shall satisfy himself that that person will have no such financial or other interest as is likely to affect prejudicially the exercise or performance by him of his functions as a member of the Corporation and the Secretary of State shall also satisfy himself from time to time with respect to every member of the Corporation that he has no such interest; and any person who is or whom the Secretary of State proposes to appoint and who has consented to be, a member of the Corporation, shall, whenever requested by the Minister so to do, furnish to him such information as the Minister considers necessary for the performance by the Minister of his duties under this subsection.
  2A) A member of the Corporation who is any way directly, or indirectly interested in a contract made or proposed to be made by the Corporation, or in any contract made or proposed to be made by a subsidiary of the Corporation which is brought up for consideration by the Corporation, shall as soon as possible after the relevant circumstances have come to his knowledge, declare the nature of his interest—

  (a) if he is not the chairman, to the chairman;

  (b) if he is the chairman, to the Secretary of State;

  (c) in any case, at a meeting of the Corporation'.

  Mr. Smith: Amendment No. 2 relates to the number of members of the BNOC. It will be recollected that I said in Committee that I would reconsider the minimum number of members. Therefore, the amendment proposes that the minimum number be changed from six to eight.
  Aendments Nos. 3 and 4, tabled by the Opposition, propose to increase the number to 10, but the Government feel that a figure of eight would be more realistic. It must be borne in mind that this is the minimum number, and that the maximum number is 20. The Secretary of State will not be inhibited from increasing that number if he so desires.
  1418
  Amendment No. 4 relates to the question of part-time members. There is no restriction in this regard, and the Secretary of State will be flexible.
  Government Amendment No. 5 and Opposition Amendment No. 6 cover very much the same ground and write into the Bill criteria for the appointment of members to the corporation. Since there is so little difference between us, we shall not need to spend much time in arguing that point.
  The other amendments in the group are Opposition amendments, and I shall leave Opposition spokesmen to speak for them selves.
  9.45 p.m.
  Mr. Grimond: I appreciate the time factor and I shall be brief I wish to thank the Government for tabling their amendment. The proposals in this grouping for which I am responsible relate to a point which I wish to press in regard to having civil servants on the board. I believe that such representation will cause confusion in their rôle. I do not believe that it will do either the organisation or the Department any good.
  I wish to draw attention to page 1xi of the First Report of the Select Committee on Nationalised Industries, paragraph 153 of which reads as follows:
  "Here we may remark that it would have been easier to assess and comment on Government objectives if the Department of Energy had met our repeated requests for information on the 'numerical weight factor' given in licensing rounds to the participation of nationalised industries, and to the size of their proposed stake."
  That illustrates my point, namely, that civil servants are supposed to advise Ministers on policy matters rather than become advocates for a company which may be involved in obtaining oil, as opposed to another company. It is difficult in such cases for those members to give impartial advice.
  I am not very impressed by the fact that in other countries civil servants may sit on boards when it has been argued by the Government that one of the reasons for involving civil servants is that they will acquire direct experience in the running of the oil industry. That experience could be obtained if they were seconded and given a sabbatical year

  1419
  while serving on the BNOC. This would put them to some extent at arm's length from the Ministry and enable them to acquire the skill, experience and practical know-how constantly referred to by the Government.
  My other amendment suggests that there should be two employees on the board. This point was mentioned very briefly in Committee, at the end, and I should have thought that the proposal must have general support. I hardly think that the Secretary of State is in a position to object to worker participation. He gave his reason for advising the Committee to oppose the Conservative proposal in Committee, as follows:
  "I do not believe that the new clause is worth the paper it is written on, because it provides only for the right to discuss every three months with the chief executive and anyone he thinks is worth having there."
  I have gone beyond that and suggested that these two people should be on the board, so that must get over the Secretary of State's objection. They would be in constant communication.
  As for the Conservative Party, the point was very well put by the hon. Member for Exeter (Mr. Hannam) at the same sitting. He said:
  "But whether we lean towards supervisory boards, whether we support worker directors or whether we support other forms of industrial democracy, the one general area for agreement surely must be that some kind of employee participation must be written into our company law structure if we are to achieve a meaningful dialogue between management and workers and, therefore, a subsequent degree of industrial productivity comparable with our rival competitor nations abroad."—[Official Report, Standing Committee D, 15th July, 1975; c. 1750–1759.]
  It could not have been put better even if he were a Liberal.
  Because of the guillotine, I have not time to develop these arguments at length, but I seriously suggest that sooner or later we have to face the question of associating workers' representatives—I mean workers who work in the company, and not merely trade union representatives of a general union—with the decisions of the company. I am well aware of the difficulties involved in doing this, whether by supervisory boards or by people directly on the board. Unfortunately, there are another 150 amendments, so this is not the time at which to
  1420
  go into it. But, in view of the Secretary of State's known attitude, and in view of the amendments put down in Committee by the Conservative Party, I hope that the Government will consider this and at least do something in another place to meet the general demand that workers should be associated with the decisions of the board. I hope that they will consider both amendments. I am grateful to the Government for their own amendments to this clause.
  Mr. John Smith: With regard to Amendment No. 139, I think that the right hon. Gentleman misses the point of having civil servants on the board. It is a point that we discussed in detail. It is to improve the flow of communications between the British National Oil Corporation and the Government. That advantage would be struck out completely if the civil servants were given leave of absence. The effect of the amendment would be to wreck the Government's purpose; therefore, I must ask the House to resist it.
  With regard to Amendment No. 145, the right hon. Gentleman referred to the guillotine. It was open to him to table this amendment in Committee and to discuss it more fully when there was no guillotine in operation, but he did not choose to do so then, and the Conservative Party put forward its amendment in such a way that it came up as the last amendment to be discussed in Committee. But, as my right hon. Friend said in the very short debate at the end of the Committee stage, it is very much the view of the Government that the question of industrial democracy cannot be imposed from above, but ought to emerge from below. It is rather simplistic to put two workers' representatives on the board and say that one has thereby achieved industrial democracy. I do not think that that would be seen as industrial democracy by those concerned.
  If the right hon. Gentleman had been more dedicated to this idea he would, I think, have pursued it at an earlier stage in the Bill, when it could have been discussed more fully. It has come in very much as an afterthought and I hope that the Committee will not accept it.
  Mr. Patrick Jenkin: Had the hour been earlier or the time unlimited, I might

  1421
  have sought to press the two points which the hon. Gentleman has not met and which are contained in our amendments. I will not do so, however, as there are more important amendments to follow which we feel we must spare time for.
  Amendment agreed to.
  Amendment made: No. 5, in page 2, line 3 leave out 'and' and insert
  "from among persons appearing to him to have had wide experience of, and shown capacity in, activities connected with petroleum, other industrial, commercial or financial matters, administration or the organisation of workers. [(2A)".—[Mr. John Smith.]
  Mr. Benn: I beg to move Amendment No. 8, in page 2, line 30 leave out from "Act" to "after" in line 31 and insert "1975".
  The Deputy Chairman: With this we are to take Government Amendment No. 9.
  Mr. Benn: These are drafting amendments to take account of the passage of the House of Commons Disqualification Act 1975 and the Northern Ireland Assembly Disqualification Act 1975, both consolidating Acts of the Westminster Parliament.
  Amendment agreed to.
  Amendment made: No. 9, in page 2, line 34 leave out from 'in' to 'after' in line 35 and insert
  "Part II of Schedule 1 to the Northern Ireland Assembly Disqualification Act 1975". —[Mr. Benn.]

Clause 2

  GENERAL POWERS
  Mr. Patrick Jenkin: I beg to move Amendment No. 10, in page 3, line 5 leave out paragraph (d).
  The Deputy Chairman: With this we are to take Government Amendment Nos. 11 and 12 and Amendment No. 140, in page 3, line 8 at end insert
  'and as are otherwise authorised under this "Clause".
  Mr. Jenkin: The Government have gone part of the way to meet what we have in mind in Amendment No. 10. While I do not like this provision, I do not want to take up the time of the
  1422
  House in pressing our objections to it. I therefore will not proceed further with this amendment.
  Amendments made: No. 11 in page 3, line 5 leave out 'such services'
  No. 12, in page 3, line 6 after department', insert
  "such services connected with petroleum and anything derived from it".—[Mr. Benn.]
  Mr. Patrick Jenkin: I beg to move Amendment No. 13, in page 3, line 23 leave out from "functions" to end of paragraph.
  The Deputy Chairman: With these we are to take Government Amendment No. 14.
  Mr. Jenkin: The Government have met entirely the point which we made in Committee. Their Amendment No. 14 achieves the same purpose as Amendment No. 13 would achieve. I therefore will not go on with this amendment either.
  Amendment made: No. 14, in page 3, leave out lines 24 and 25.

Clause 5

  GENERAL FINANCIAL DUTIES
  Mr. Viggers: I beg to move Amendment No. 18, in page 5, line 26, at end add:
  'and shall be laid before each House of Parliament'.
  This is the first Bill of this nature to come before Parliament containing no financial target of any sort. We remain deeply concerned about the financial control of the corporation. The next group of amendments will deal with this aspect in depth. This amendment is modest and requires merely a financial notice to be laid before Parliament. Its implementation would be the simplest way of honouring the assurance given by the Under-Secretary of State in Committee when he said:
  "… I can assure the Committee that, before the financial objectives are set after consultation with the new corporation, Parliament will be informed about them."—[Official Report, Standing Committee E, 26th June 1975; c 811–12]
  Mr. Benn: This amendment would require the corporation's financial duties

  1423
  to be laid before Parliament. It is unnecessary in terms of parliamentary procedure because the financial duties must be published in the annual report, which must be laid before Parliament.
  Mr. Viggers: On that assurance, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.

Clause 10

  ACCOUNTS AND AUDIT
  Mr. John Moore: I beg to move Amendment No. 19, in page 8, line 34, leave out paragraph (b) and insert:
  '(b) to prepare in respect of each accounting year a statement of accounts in such form as the Secretary of State may, with the approval of the Treasury, direct being a form which shall conform with the best commercial standards and which shall distinguish between the exploration activities, the production activities and the other main activities of the Corporation'.
  Mr. Deputy Speaker: With this amendment we may discuss Amendment No. 20, in page 8, line 38, at end insert:
  'and such statements of account shall also include a statement of the amount of Petroleum Revenue Tax to which the Corporation would have been liable and the consequential adjustment to Corporation Tax, were the Corporation not exempted from paying Petroleum Revenue Tax by virtue of section 9 of this Act;
  Government Amendments Nos. 21, 22, 23 and 24, Amendment No. 25, in page 9, line 4, leave out from 'question' to end of subsection,
  Government Amendment No. 26, and Amendment No. 27, in page 9, line 8, at end insert:
  '(2A) A statement under subsection (1)(b) or (2) above shall give separate information with respect to, and show as far as may be the financial and operating results of, each of the main activities of the Corporation or, as the case may be, of the group consisting of the Corporation and its subsidiary or subsidiaries in question; and if the Secretary of State so directs with respect to any statement required by the said subsection (1)(b) or it is so provided in any direction under the said subsection (2) for the preparation of a statement, this statement shall also give separate information with respect to, and show so far as may be the financial and operating results of, each, or such as are specified in the direction and the activities other than main activities of the Corporation or group '.
  Mr. Moore: This is a very serious and important section of amendments relating to Clause 10, which is concerned with the accounts and auditing of the BNOC. I am sure that my colleagues and Labour Members would equally deprecate the degree to which we have to rush the proceedings. Obviously it would not be amiss for me to make reference to the 32 per cent. of the potential debating time tonight that has been spent partly in discussing potential devolution, a shocking indictment of the way the Government see progress on their Bill.
  I turn now to the issues raised by this crucial series of amendments, which were discussed in Committee on Amendments Nos. 81 and 136. We tried to bring out two basic problems in Committee, and we have a third to raise tonight on the clause as they Government now propose it. The first was the degree to which the Bill, if not amended, would not include a breakdown that would allow us to analyse the commercial nature of the corporation and allow it to stand comparison with its competitors in the market. The second problem was exemplified in the phrase which I used that brought out the ire, wrath and distemper of the Under-Secretary—the "licence to lie" clause. I shall not use those words tonight. The phrase repeated the words of the Conservative Government's Gas Act 1972, allowing the BNOC to prevent Parliament and the public knowing the exact loss and profit position of the corporation. I cannot in the time allowed go into the details.
  The third problem relates to the degree to which the BNOC is connected from the payment of PRT. I am sure that my right hon. Friend the Member for Wan-stead and Woodford (Mr. Jenkins) will wish to address himself to this matter on Amendment No. 20, and I hope that at the end of the debate I shall have leave to recommend to my right hon. and hon. Friends that we divide on Amendment No. 20.
  Our amendments in Committee sought to offset these problems. I must draw to the attention of the Under-Secretary, the House and, through the House, the country the problems in terms of government, whichever party is in power. Let us call it a chatter to conceal rather than a licence to lie. Within the Bill as

  1425
  drawn—Just as within the Gas Act—there is ability for the corporation to do things that commercial corporations cannot do. No valid reason has so far been put before the Committee or the House for that.
  We asked the Under-Secretary in Committee, but perhaps he was too concerned with the language I used, and he gave no answer. However, no single positive reason was given to argue the need for that section which I believe is so obnoxious to the practice of good government. We must have a positive reason if we are to allow methods serving the public less well than those used by commercial and other nationalised corporations, apart from the British Gas Corporation.
  It was suggested in Committee that the reporting system in the gas industry had not worked too badly in practice. That is a fair observation, and one would not deny it. However, that would not seem to me to be a good argument from what I am constantly told is the revolutionary party on the other side of the Chamber. [Interruption.] I appreciate that such a party may exist more strongly below the Gangway, but I am addressing my remarks to the Government. It is all very well having a Doric chorus but, so long as it is impotent, it is more relevant for me to direct my remarks to the Treasury Bench.
  10 p.m.
  Although a similar provision may have been thought useful for the gas industry, my concern is not with precedent in that sense, because a bad precedent may create bad practice in the future. I accept that it has not done so hitherto, but it may well do so because we do not know what sort of Government we may have hereafter. It is, therefore, advisable to establish good canons of practice for the Government, recognising, as we must, that some less sincere and less capable Ministers, Ministers less conscious of their public duty than those in the present Government, and less aware of the full implications of the BNOC, may come to power. On that basis, therefore, I want to hear a positive justification for the clause as the Government propose it, and not just a reference to practices in the gas industry.
  1426
  Second, and more important—this was brought out in Committee—we are not here discussing like with like referring to the gas industry. The gas industry is a State monopoly, and we are not referring to that in the same terms as we refer to the BNOC. In Committee the Under-Secretary spoke of the BNOC as a vital and virile—I think that those were his words—or robust commercial undertaking. This will be a commercial undertaking competing downstream with other commercial undertakings, and we cannot allow it to have accounting and reporting standards different from those adopted by other commercial companies. The British Gas Corfporation provides no parallel.
  Concluding the debate in Committee, my right hon. Friend said:
  "I conclude that, without publication of the accounts both for the corporation and for the consolidated accounts, no one will ever know whether the BNOC is operating commercially. No one will know the returns on its upstream and downstream activities. No one will know whether it is cross-subsidising one activity with another. No one will know whether it is engaged in unfair competition with its competitors."
  Those words have not so far been answered.
  In reply to the debate in Committee, the Under-Secretary of State said:
  "We shall certainly take away this clause and see whether we can make a concession at a later stage, so that the account shows some distinction in the different activities of the Corporation."—[Official Report, Standing Committee D, 1st July 1975, c. 994–7.].
  That was the hon. Gentleman's comment or promise, but no essential change has been made in the clause. Tragically, there has been very little done to meet us. I accept that the Under-Secretary has tried to walk a little along the path, but all he has been able to do is encompassed in Government Amendment No. 26—
  "if the notice so requires, the financial and operating results as far as may be of each of the main activities of the group in question."
  But it is still at the instigation of the Secretary of State, and the requirement we seek is not established within the Bill. That cannot be satisfactory. There remain, therefore, three basic requirements. First, we must have a better breakdown, and a statutory breakdown, within the

  1427
  accounts of BNOC to show the figures for its various activities. Second, we must remove the—shall we call it?—charter to conceal unless there is positive reason given for its retention. Third—I am sure that my right hon. Friend will discuss this at length if he has time—we must break out the PRT liability related to the BNOC so that it can stand the test of competitive comparison with other companies in the private sector.
  Dr. Phipps: I shall not detain the House long, but I wish to comment on Amendment No. 20 and the effect of PRT exemption for BNOC. I am not sure whether this is a matter for my right hon. Friend the Secretary of State or for the Paymaster-General. I hope that my right hon. Friend will take it up with the Paymaster-General if necessary.
  I accept that exemption from PRT is a legitimate way for the Government to finance the BNOC. The money would go to the Government anyway. However, there are effects of this exemption which have to be considered. There would be a fairly minor effect on the partnership between a company that was not liable to the tax and one that was. It might have difficulties when deciding the best way of financing a particular project—whether by borrowing money, or purchasing or leasing equipment. The taxation of each party makes a difference to the best way of proceeding. It may be that the best way for the BNOC would not be the best for another company.
  The effect of unitisation is more important. If one has two parties to a unitisation, both of which, under the Government's 51 per cent. participation proposals, will be partnered by the BNOC, and the two sides of the field are different in commercial and physical terms, there will be a very great difference between the parties as regards liability to tax in coming to commercial arrangements for unitisation. It becomes more important if unitisation crosses national boundaries, as has happened between the United Kingdom and Norway, and may in future happen between the United Kingdom and Ireland. These are not insuperable problems, and I hope that my right hon. Friend will discuss them with the Paymaster-General.
  Mr. Patrick Jenkin: Not for the first time, I wish the hon. Member for Dudley, West (Dr. Phipps) had been on the Standing Committee.
  This was perhaps one of the most important debates that we had, and it left me with the greatest unease at the end. I refer particularly to Amendment No. 20 and to the exemption of the BNOC from petroleum revenue tax. We lost that argument in Committee, and I am not seeking to raise it again now. I want to make sure, however, that the effect of the exemption from PRT is plain and visible to all. In my relative ignorance of these matters, I had not referred to the unitisation argument, but it is every bit as strong as the argument about distortion of investment criteria between two partners in a single field with a single licence who have to arrive at common decisions.
  There is also the argument about fair profits. If the BNOC is to sell oil downstream in competition with other companies which have to pay the tax, there is every temptation for the corporation to use the effect of its exemptions to shade its prices in a way that would be unfair to its competitors. Most important of all, there is the argument that this is merely a way of concealing the size of the borrowing requirement needed to finance the BNOC. In a sense, the profit, being a profit after corporation tax but before PRT, will merely be a bogus profit. That is the most serious argument of all. In seeking to justify the exemption, the Under-Secretary said:
  "The main reason for proposing to exempt the corporation from petroleum revenue tax is that payment of the tax by it would not be consistent with the underlying realities of the corporation and its financial relations with the Government. Petroleum revenue tax is levied on the private sector companies to ensure that the nation gets a fair share of North Sea profits. Clearly no such requirement exists in the case of the British National Oil Corporation."
  If that were all, that would be an argument to which one would attach some weight. But it most emphatically is not all. The Under-Secretary, in replying to that debate, made it abundantly clear that he recognised that the arguments put to him from our side of the Committee had substance. When we

  1429
  referred to unfair competition he acknowledged that fact and promised that transfer prices would be on the basis of market prices. He has not been able to satisfy me that this will happen. He referred to provisions in the Oil Taxation Act, but equally he acknowledged that in the circumstances they might not be appropriate.
  I hope therefore that the Secretary of State will tell us what steps the Government are to take to make sure that transfer prices downstream by the corporation will be on the basis of full market prices and that there will be no question of unfair competition steming from the exemption from PRT. The Under-Secretary acknowledged that differing criteria could be a problem and he offered to have talks with the industry. I would be grateful if he would tell us what progress is being made with these talks with the industry to try to iron out the problem.
  The third aspect is dealt with by Amendment No. 20. In Standing Committee the Under-Secretary said:
  "We will consider whether anything more needs to be done, perhaps administratively, to make the whole financial position absolutely clear. We have no wish to hide the effects of BNOC' exemption from petroleum revenue tax."
  Later he said:
  "I assure him that we want to make the whole financial position absolutely clear."—[Official Report, Standing Committee D, 1st July 1975; c. 950, 953 and 972.]
  I welcome that, because it will go part of the way to meet our fears arising from this exemption. This is what the amendment seeks to achieve. It seeks to oblige those preparing the accounts to include a statement of the amount of PRT for which the corporation would have been liable, together with the consequential adjustment of corporation tax if it had not been exempted by Clause 9(1).
  Our prime aim is to make sure that the extent to which the corporation is being financed by the bogus profit accruing to it as a result of the exemption is made abundantly clear to Parliament and the country. I do not accept the view put forward by the hon. Member for Dudley, East that this is a legitimate method of financing. The Government should have allowed PRT to be paid to the Exchequer and then for the corpora-
  1430
  tion to borrow what it needed in the ordinary way. The borrowing limit would then have been probably not £900 million but £2,000 million or more, but I can understand why the Treasury was reluctant to see that appear in the accounts at this time with the difficulties that it is facing.
  As it is, exemption will allow a bypassing of this normal parliamentary control and the throwing up of a sham profit in the accounts of BNOC. At the very least there must be an obligation on the corporation to disclose what the amount would have been so that we could see exactly how much of this finance had accrued to it from this source. Amendment No. 20 provides that obligation.
  My hon. Friend the Member for Croydon, Central (Mr. Moore) made a powerful case. The Government have gone a small part of the way to meet one of the points we made in Committee. So far they have not moved on Amendment No. 20, and, therefore, I hope that to save time, we do not divide on Amendment No. 19, but feel that if the Secretary of State does not accept Amendment No. 20 the House would be entirely justified in dividing in support of it.
  10.15 p.m.
  Mr. Benn: The proposal in Amendment No. 19 is that we should write into the Bill that the BNOC's accounts should
  "conform with the best commercial standards."
  The phrase appeared in earlier legislation.
  Mr. Patrick Jenkin: The earlier legislation was the right hon. Gentleman's own Industry Bill.
  Mr. Benn: The right hon. Gentleman may be wrong.
  Mr. Patrick Jenkin: It is in the Schedule to the Industry Bill.
  Mr. Benn: I think that it is in the Labour Government's Post Office Act 1969, but all Labour measures have certain merits, which the right hon. Gentleman has identified. It is an arguable proposition, which he is not going to press.
  When my right hon. Friend the Secretary of State for Industry tried to have a similar phrase included in the Conservative Coal Industry Act it was resisted by the then Minister of State.

  1431
  Ministerial fashions on the matter seem to change somewhat. I am advised that the phrase has no precise enforceable meaning and adds nothing to the requirements already in the Bill that there should be proper accounts. We are providing in our Amendment No. 26 that there shall be a distinction between different types of activity.
  On Amendment No. 20 I should first tell the House, as I told the Committee, that whether or not PRT is payable by the BNOC has no practical effect. Therefore, the great feelings that were aroused on the matter are properly about accountancy practice and not about the net effect, because if the money were paid under PRT it would go to the Government in one form, and if it were not paid under PRT it would be available in another Government fund. That point should be stressed, because we are not concerned here with a matter of substance with regard to the financial position of the Government or the BNOC.
  However, I said in Committee that we had no wish to hide the effects of the exemption of the BNOC from the petroleum revenue tax. Therefore, I can give an undertaking that the information mentioned in the amendment will be made available to Parliament and the public. However, the form in which that can best be done will require further study. There are problems about the calculation of the precise liability to PRT, and it might be better, to avoid unnecessary work in establishing a notional figure, to give a broad figure showing the effects on the BNOC of the exemption, but, being a broad figure, it would not be subject to the auditing procedure mentioned in the amendment.
  Another question, as yet unresolved, is whether such figures should best be attached to the BNOC's accounts or to the National Oil Accounts. That is a matter to which we should give further attention.
  My hon. Friend the Member for Dudley, West (Dr. Phipps) raised practical questions of two kinds. One concerned the effect of the exemption from PRT on partnership arrangements, particularly the difference between the economic benefits of leasing or buying
  1432
  equipment, and the tax implications. My hon. Friend's second point was about unitisation, and the effect that that might have. The latter point was not made in Committee, but we have given a clear undertaking that in working in partnership the BNOC will operate on a commercial basis. There is no reason why we should doubt that that statement of Government intent could be executed.
  The right hon. Gentleman raised the question of transfer prices. The matter works both ways. One of the anxieties that the BNOC would have in partnership arrangements is that it would be on a perfectly transparent transfer pricing basis. That is embodied in the assurance that I have given about the commercial practice.
  I move to the other amendments—Government Amendments Nos. 21, 22, 23, 24 and 26, of which Amendment No. 26 is the substantive one, the others being consequential. The group of amendments is put before the House in discharge of the undertaking given by my hon. Friend the Under-Secretary that we would arrange that the accounts of the BNOC would show separately each of the main activities of the corporation. It provides for separate accounts for separate activities only where consolidation accounts are produced. Arguably, the same provision should apply where there is no consolidation, where the corporation and its subsidiaries produce separate accounts. I believe that Amendment No. 26 represents a discharge of that obligation.
  I must ask the House not to accept Amendment No. 25. There was an extensive discussion of this matter in Committee. The Government did not feel able in Committee to give an undertaking, and I refer the House to the arguments then used.
  Mr. John Moore: It would be churlish of me not to thank the Secretary of State for his undertaking about the PRT figure. The House will want to study carefully exactly what he said. He used the expression "unaudited", and mentioned the figure disconnected from the legislation. Although because of the Secretary of State's comments I shall not ask my hon. Friend's to divide the House, and although he gave a clear undertaking, his response

  1433
  on other matters was totally unsatisfactory. In Committee his hon. Friend the Under-Secretary said:
  "I am not familiar with all the detail of this and was not able to take the hon. Members argument very closely".—[Official Report, Standing Committee D, 1st July, 1975; c. 998.]
  He specifically did not answer the point that had been put to him.
  It has been put again in this brief debate. We have asked for an explanation why the Government have used a phrase that was admittedly used by the Conservative Government in the Gas Act 1972, when there was no debate on the subject in Committee. We have been referred to what was said in Committee on this occasion, but then there was a complete absence of argument. What I said about PRT has not been satisfactorily answered. It is not enough for the Secretary of State to decide how the accounts are to be broken down. That should be laid down in the Bill.
  Although the undertakings have been limited and although there has not been sufficient time, because the Government have rushed through their legislation so that undertakings have had to be given
  1434
  at the last minute on Report—and if there were more time, we should be able to get better legislation instead of having to hope and pray that the Government are able to concoct some way of matching their undertakings outside the legislation—in view of the Secretary of State's undertakings, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Amendments made:
  No. 21, in page 8, line 44, at end insert "group consisting of the".
  No. 22, in page 9, line 1, after "the" insert "group consisting of the".
  No. 23, in page 9, line 2, after "showing", insert "— (a).
  No. 24, in page 9, line 3, leave out "Corporation and the subsidiary or subsidiaries" and insert "group".
  No. 26, in page 9, line 4, after "and" insert—
  "(b) if the notice so rqeuires, the financial and operating results as far as may be of each of the main activities of the group in question; and".—[Mr. Benn.]

Clause 19

  PROVISIONS SUPPLEMENTARY TO S. 18
  Mr. John Smith: I beg to move Amendment No. 31, in page 15, line 5, at end insert:
  '1(A) Any information which the Commissioners of Inland Revenue possess in connection with petroleum won by virtue of a licence granted under the Petroleum (Production) Act 1934—

  (a) may be disclosed by the Commissioners to the Secretary of State, or to an officer of his who is authorised by him to receive such information, in connection with provisions of the licence relating to royalty payments; but

  (b) shall not be disclosed by a person to whom it is disclosed in pursuance of this subsection except as authorised by the licence or to a person to whom it could have been disclosed in pursuance of the preceding paragraph or for the purposes of proceedings (which may be arbitration proceedings) in connection with the licence'.

  This is a new point which was not touched upon in Committee. The purpose of the amendment is to allow the Inland Revenue to disclose information to the Secreary of State or an officer authorised by him so that royalty may be calculated accurately.
  The need for the amendment arises because royalty evaluation under model clause 9(5), as numbered in Part II of Schedule 2, is to be linked to tax evaluation, and it is clearly essential that the Secretary of State should be able to check the royalty returns made by licensees. The only way of doing this is for him to have access to the returns accepted by the Inland Revenue for tax purposes.
  Similarly it must be possible, as paragraph (b) provides, for the information to be used in arbitration proceedings. Paragraph (b) ensures that information passed to the Secretary of State for authorised officials for the purpose of checking royalty due shall be treated with the same confidentiality as information supplied to the Secretary of State under the licence terms—that is to say, it may not be disclosed to someone not in the service or employment of the Crown except with the licensee's consent. Therefore, there is no question of the BNOC becoming privy to the tax returns of its competitors. This is an inevitable amendment on the basis
  1436
  on which royalty payments are now to be assessed.
  Amendment agreed to.
  Mr. Rost: I beg to move Amendment No. 146, in page 15, line 11, at end insert:
  '(2A) Where a licence is revoked on the grounds of any act or omission occurring alter the licence was altered by virtue of the preceding section which act or omission would not have provided grounds for revocation of the licence had it occurred before the date of such alteration, and it is shown that the holder of the licence—

  (i) has incurred expenditure in carrying out work which is rendered abortive by revocation, or

  (ii) has otherwise sustained loss or damage which is directly attributable to the revocation

  there shall be paid to him out of the National Oil Account full and prompt compensation in respect of that expenditure, loss or damage'.
  Even this shameless Government must be feeling a flush of embarrassment about the unreasonably tight timetable being imposed under the guillotine. This has meant that we have had to curtail debates, and that many crucial and controversial matters affecting a key sector of the economy will not even be reached. It is most unsatisfactory that my colleagues and I will not have time to develop the detailed arguments which we as an Opposition feel that we should be able to develop on controversial and important matters.
  One such is Amendment No. 146. This raises the most important principle—one of the most obnoxious aspects of this legislation—of retroactivity resulting in financial loss to licensees without compensation. This is one of the areas in this legislation causing a great deal of concern to the industry, and we have had no satisfactory assurances during lengthy Committee debates, we have had no assurances on the justification for retroactivity on licences and, even worse, we have not even had any assurance that there will be compensation where financial loss results from this retroactivity. My colleagues and I regard this as most unsatisfactory, quite unacceptable and completely unprecedented. It cannot be allowed to stand unamended.
  The purpose of the amendment is to provide for compensation to licensees whose licences are revoked under the new

  1437
  model clauses in circumstances where they would not have been revocable under the old model clauses. Those hon. Members who have followed the proceedings in Committee in detail will know that the new model clauses create many more possibilities of licence revocation than existed under the original terms. These new risks of licence revocation pose a real threat to licensees, especially where they are associated with the broad discretionary powers that the Government are taking. It is quite wrong that licensees should be confronted with the possibility—some of us suggest the probability—of having to forfeit their licences without compensation in such circumstances.
  I wish that I could have developed at greater length the principles involved here about the problems which will result from this House allowing retroactivity to stand unamended. It creates the most important issues. First, it is quite contrary to the position which has always been taken by the United Kingdom Government in the past on many issues. It is quite unprecedented in Western Europe. It will create the most serious impact on the confidence which has always been placed politically in this country by foreign investors. It raises the most important principle that it invites or even encourages similar action in respect of British investments in other parts of the world.
  10.30 p.m.
  What justification will the British Government have to complain about confiscation without compensation of British investments abroad, as they have always done in the past, when they are setting this example? I could quote many examples of the British Government defending British investments abroad and claiming compensation. The Government's credibility will be undermined. It will never again be possible for us to uphold the rights of British companies abroad if we behave in this way. It could have serious repercussions. Furthermore, there are significant legal implications which the Government have not taken seriously enough. The rights of holders of licences may well be damaged without compensation.
  In the interests of brevity, and so that we may at least refer to other crucial matters, I shall curtail what I wished to
  1438
  say. No case has been made out for retroactivity, and, even worse, there is no justification for accepting it without proper, prompt and full compensation. What the Government propose will create a most dangerous precedent. It will damage the standing of the British Government. It will endanger the status of British investments abroad. It will seriously jeopardise the confidence of foreign investors in this country. It should not be accepted without serious challenge.
  Mr. Skeet: I should not allow this occasion to pass without making a few observations. I can probably couch them in the form of questions to the Minister.
  Why is this country breaking contracts which were entered into with the oil companies when the oil was not discovered? All the conditions are to be changed, without any attempt being made to negotiate with the oil companies, now that the oil has been discovered. The Secretary of State is prepared to negotiate with the oil companies on the basis of a 51 per cent. participation. He is not prepared to negotiate with them in order to revise the terms of the contracts which were negotiated at an earlier date.
  This is a blatant breach of contract by the Government, whose purpose should be to secure the rights of the citizen. Why have they done it, and why is it done in this form? If the Secretary of State can give a precedent for what he is doing, I should like to hear of it.
  The right hon. Gentleman knows perfectly well that Norway has not breached its contracts. It has studiously avoided that course. Australia has adopted the same legal propriety. Spain, in altering its regulations, has left the existing concessions exactly as they were. The Netherlands has respected the contracts. Greenland and the Republic of Ireland have adopted that course.
  Why have the British Government, who pride themselves on the rule of law, espoused a cause which will lead to nations saying that we do not honour the laws which we pass? The Under-Secretary of State said that alterations would be made to enable model Clause 16 on depletion to be introduced. That could have been done simply by inserting

  1439
  a clause in the Bill. In order to bring these things in, however, many other model clauses have also been introduced. This is totally meaningless.
  I ask the right hon. Gentleman to explain why this is to be done. Why have other countries not followed this precedent? Is he aware of the detrimental effect that this could have on one of our big companies—British Petroleum—in Alaska if the Americans were to adopt the same line? We could lose a substantial interest in the considerable reserves of oil in that locality.
  It is well known that we have in our own law plenty of room for compensation to be made available. I mentioned this matter in Committee on the Coal Industry Bill 1975 when we discussed for some time where compensation for subsidence was payable by the National Coal Board. We discussed it on the Water Resources Act 1963 and on the Mines (Working Facilities and Support) Act 1966. If we have it as a precedent in our law, why cannot it be accepted here?
  It would be a great shame on this Parliament if it were to take away rights of compensation from the citizen. All that the Secretary of State and his predecessor are prepared to say is that they will take this matter into account. There is no security in that. People are entitled to have laid down in statutory form that compensation will be paid if there is diminution of rights.
  Mr. Arthur Lewis: What about the protection of workers' rights?
  Mr. Skeet: The hon. Gentleman may say that, but we are dealing with the law of the land. I hope that while we protect workers' rights, which I would vouchsafe, the right hon. Gentleman will protect, not trample under foot, the rights of all the citizens of this realm. This is not the way to run a democracy. I hope that when the Secretary of State springs to his feet he will give the nation, which is watching carefully, a satisfactory explanation.
  Dr. Phipps: I think that the anger displayed by the hon. Member for Bedford (Mr. Skeet) is totally misplaced. We have debated this matter in the House on a number of occasions. Clause 19(2) makes it clear that this is not retroactive
  1440
  in any sense regarding licences already issued. It is retroactive only from the day that the legislation is passed.
  Why are we passing this legislation? I am sure that the hon. Member for Bedford knows that we are passing it because of the abuses of the legislation which we have seen in the past.
  Mr. Skeet: The hon. Gentleman has
  Dr. Phipps: It will apply only to acts which take place after the passage of the Bill.
  Mr. Skeet: It will alter the terms of contracts.
  misconceived the situation. This Bill, on the day that it becomes an Act, will apply a diminution of rights in the licences themselves.
  Dr. Phipps: It will alter the terms of contracts, but it will not apply to events which precede the passage of the Bill.
  We are passing this legislation for reasons which we have debated before. There was considerable abuse of the terms of the licences. People were taking out licences, promoting them—in fact, selling them—pocketing the money and going to existing licences. Therefore, there is back to Alberta, Texas or wherever they came from. The Bill is intended to prevent that kind of abuse. I am sure that my right hon. Friend has no intention of stopping genuine farm-outs or farm-ins or other genuine practices within the industry. The intention is to stop people who have abused these practices and have given a bad name to them in this country.
  Mr. Skeet: Of course, every absolutist authority will say that it will break the law to get away from abuse. But it is interesting that all the countries which I itemised, including Norway, have not adopted this course. They have respected past licences. In this case the terms of the licences have been broken. The contracts have been torn up. New conditions will be imposed on each contract. The companies which have been in from the beginning will say that they are not interested.
  Dr. Phipps: I assure the House that not one bona fide company will mind these conditions being imposed it will be only the promoters and the charlatans who will be upset.
  Mr. Grimond: I argued in Committee against the breaches of contract which are inherent in parts of the Bill. I shall not do that again. I still maintain that this is a very great error in British legislation. The points which I want to raise again relate to compensation. It may well be true that there will be very few companies which under the present arrangements would be entitled to compensation, but the Minister agreed that there might be a diminution in the value of the licences owing to the provisions of the Bill. Both for the sake of our companies operating abroad and because of the precedents set by our neighbours around the North Sea, there should be better terms of compensation. Have the Government checked that what they propose is in accordance with international law?
  Mr. Benn: The issues raised in this debate are important. We discussed them in Committee. I believe that hon. Gentlemen who have spoken have made heavy weather of this and have done so because of a fundamental misunderstanding of the issues at stake.
  The reason for the changes we are proposing is that the existing terms in the fourth round did not provide the opportunity for depletion control, control over conditional exploration or control over dealings in licences for another 40 years. Only in the first six years, as the hon. Member for Derbyshire, South-East (Mr. Rost) knows, because he knows this subject very well, was there even a requirement to drill. For the rest, the Tory Government in 1971 handed out licences for nearly half a century without these basic safeguards in regard to priceless national resources.
  If we are to have these matters elevated to high constitutional principle—if that is the way the hon. Member for Bedford (Mr. Skeet) wishes to discuss it—there is more than one high constitutional principle which can be marshalled in this debate. One is that no Parliament can bind its successors. If one Parliament were to choose to hand over the entire North Sea oil resources to some foreign company under arrangements that were manifestly damaging to the public interest, there is no concept in our domestic law that would make it improper for a subsequent Parliament to remedy the defects.
  Mr. Rost Mr. Rost rose—
  Mr. Benn: The hon. Gentleman must allow me to put this on the record, if he will be so kind. The question then arises as to retrospective legislation. I am no lawyer, but I understand that the main legal objection—indeed, the only legal objection—to retrospection in the ordinary sense is that Parliament should not act in such a way as to make illegal something that was legal at the time it was done.
  These provisions do no such thing. As my hon. Friend the Member for Dudley, West (Dr. Phipps) pointed out, they make no change in past practice. They provide that, if we pass this legislation, from now on certain new conditions will come into operation.
  Mr. Skeet: There are contracts.
  Mr. Benn: The hon. Gentleman should listen to my argument, because I am trying to address myself to what he said. The Government are continually changing the environment in which business operates—by budgetary measures, by legislation governing safety or by advertising standards—and by so doing are changing the environment in which all licence holders or contract holders operate in the United Kingdom.
  I go further. The hon. Gentleman asked me to give him precedents. I do not have to strain my mind to do that. I refer to what happened in Norway, Alberta and Australia. The Fuel and Electricity (Control) Act 1973 introduced by the Tory Government gave the Government of the day—I welcomed it on behalf of the then Opposition—power to make far bigger changes on the licences that had been negotiated two years earlier than the provisions of this Bill confer.
  I come now to the question of compensation and arbitration.
  Mr. Skeet: If the right hon. Gentleman is prepared to say that one Government can alter relevant provisions if they find it expedient to do so, and given that the Government have taken a certain course in participation and negotiation, why do they not take the same line in altering the contractual terms which are to continue into the future and negotiate with the companies so that compensation can be determined and agreed?
  10.45 p.m.
  Mr. Benn: The hon. Gentleman knows very well the argument on participation and on the development of policy generally which the Government put forward. The arguments as regards depletion, exploration and drilling terms are, in our view, fundamental matters which fall quite properly within a range of legislation that any Government might introduce, and would come well within the precedents which could be cited of a kind to which I have referred, given the fact that we do not accept that compensation would be appropriate in these cases and that the question of arbitration does not arise.
  In terms of the operation of the powers that we seek, we are bound to have very much in mind—I think I said this in Committee, but if I did not I say it now, and if I said it I repeat it—the two factors that have been mentioned in the debate, namely, the need for good working relations with the oil companies and the international repercussions following from what we might do.
  There is nothing whatever in the taking of these powers that could conceivably be argued as a move towards expropriation or a breach of international law.
  Mr. Skeet: There is.
  Mr. Benin: That could not arise in any sense, even if I accepted the hon. Gentleman's view, which I do not, until the powers were exercised.
  For the reasons I have given, I believe that we were fully entitled to seek from Parliament the powers that are in the Bill. I believe that they are fully in line with the changes made in the environment in which licence and contract holders operate. I recommend the House not to accept the amendment.
  Mr. Skeet: If the companies decided to take this matter to the International Court, the assent of the United Kingdom Government would be required. Would the United Kingdom Government give that assent?
  Mr. Benn: That is a hypothetical question that would not be for me to answer. If the hon. Gentleman re-reads what I have said, he will recognise that the Government have been able to give a complete answer to the arguments he has put
  1444
  forward. I invite the House not to accept the amendment.
  Mr. Patrick Jenkin: After seven and a half hours we have dealt with rather less than one-third of the amendments on the Paper, but the guillotine is shortly to fall. I regard it as an outrage that one of the most important pieces of legislation that the Government have introduced, on which no one has sought to argue that the Opposition have in any way filibustered or been unreasonably long in discussing, should be dealt with in this manner. The only reason for the introduction of the guillotine is that the Government were five months late in introducing the Bill. They have now run into serious timetable difficulties. It is appropriate that we should end the debate by voting in favour of the amendment, and I ask my right hon. and hon. Friends to do so.
  It is appropriate that we should now be discussing an amendment which makes it clear that the Government are engaged in a blatant breach of international law in that they are proposing the, unilateral retrospective abrogation of contractual rights. They have embarked on a path which will serve them and future British Governments ill in future when they come to negotiate on behalf of British subjects whose property rights are abrogated in a similar way by other Governments. They will not have a leg to stand on. They are doing a gross disservice to themselves, to the British people and to the integrity of the British nation in taking powers unilaterally, without compensation, to abrogate proprietary rights.
  The Secretary of State for Energy sought to offer two legal defences. The first was that the powers were needed. That has not been denied by us. We believe that we need to strengthen the powers, particularly in regard to depletion. We have said that on many occasions, both on Second Reading and in Committee. What is at issue is how those powers should be taken. If they could not have been adequately provided for by negotiation, the contractual rights could have been amended but could have been subject to the right of compensation.
  The right hon. Gentleman's defence was that the powers were not retrospective in a true sense—in other words,

  1445
  that there were no changes to make illegal that which was legal. That is a view of retrospection which is so narrow that no lawyer would recognise it. Any change that alters the basis on which people enter into contractual agreements is to that extent retrospective. Where, however, those contractual agreements confer proprietary rights, international law recognises them as proprietary rights, and therefore the abrogation of those tights amounts to a taking away of property. The Government have sought to deny those rights and, indeed, to deny that they are proprietary rights.
  I shall not repeat the authorities for our argument given by eminent international lawyers. I merely emphasise that over the years successive British Governments, including Labour Governments, have sought to argue in international fora and elsewhere that they are proprietary rights. There was a recent case in which the

  Division No. 307.]

  AYES

  [10.54 p.m.

  Adley, Robert

  Douglas-Hamilton, Lord James

  Hayhoe, Barney

  Aitken, J. W. P.

  Drayson, Burnaby

  Heseltine, Michael

  Alison, Michael

  du Cann, Rt Hon Edward

  Hicks, Robert

  Amery, Rt Hon Julian

  Durant, Tony

  Holland, Philip

  Arnold, Tom

  Dykes, Hugh

  Hooson, Emlyn

  Awdry, Daniel

  Eden, Rt Hon Sir John

  Hordern, Peter

  Baker, Kenneth

  Edwards, Nicholas (Pembroke)

  Howell, David (Guildford)

  Banks, Robert

  Elliott, Sir William

  Howell, Ralph (North Norfolk)

  Beith, A. J.

  Emery, Peter

  Howells, Geraint (Cardigan)

  Bell, Ronald

  Eyre, Reginald

  Hunt, John

  Benyon, W. R.

  Fairbairn, Nicholas

  Hurd, Douglas

  Berry, Hon Anthony

  Farr, John

  Hutchison, Michael Clark

  Biffen, John

  Fell, Anthony

  Irvine, Bryant Godman (Rye)

  Biggs-Davison, John

  Finsberg, Geoffrey

  James, David

  Blaker, Peter

  Fisher, Sir Nigel

  Jenkins, Rt Hon P. (Wanst'd&W'df'd)

  Body, Richard

  Fletcher, Alex (Edinburgh N.)

  Jessel, Toby

  Boscawen, Hon Robert

  Fletcher-Cooke, Charles

  Johnson Smith, G. (E. Grinstead)

  Bottomley, Peter

  Fookes, Miss Janet

  Jopling, Michael

  Bowden, Andrew (Brighton)

  Fowler, Norman (Sutton C.)

  Kaberry, Sir Donald

  Boyson, Dr Rhodes (Brent)

  Fox, Marcus

  Kellett-Bowman, Mrs Elaine

  Braine, Sir Bernard

  Fry, Peter

  Kershaw, Anthony

  Brittan, Leon

  Galbraith, Hon T. G. D.

  Kimball, Marcus

  Brotherton, Michael

  Gardner, Edward (S. Fylde)

  King, Evlyn (South Dorset)

  Brown, Sir Edward (Bath)

  Gilmour, Rt Hon Ian (Chesham)

  King, Tom (Bridgwater)

  Bryan, Sir Paul

  Gilmour, Sir John (East Fife)

  Kirk, Peter

  Buchanan-Smith, Allck

  Glyn, Dr Alan

  Knight, Mrs Jill

  Buck, Antony

  Godber, Rt Hon Joseph

  Knox, David

  Budgen, Nick

  Goodhart, Philip

  Lamont, Norman

  Bulmer, Esmond

  Goodlad, A.

  Lane, David

  Butler, Adam (Bosworth)

  Gorst, John

  Langford-Holt, Sir John

  Carlisle, Mark

  Gow, Ian (Eastbourne)

  Latham, Michael (Melton)

  Chalker, Mrs Lynda

  Gower, Sir Raymond (Barry)

  Lawrence, Ivan

  Channon, Paul

  Grant, Anthony (Harrow C.)

  Lawson, Nigel

  Clark, Alan (Plymouth, S)

  Gray, Hamish

  Le Marchant, Spencer

  Clark, William (Croydon, S.)

  Grieve, Percy

  Lester, Jim (Beeston)

  Clarke, Kenneth (Rushcliffe)

  Griffiths, Eldon

  Lewis, Kenneth (Rutland)

  Cockcroft, John

  Grimond, Rt Hon J.

  Lloyd, Ian (Havant)

  Cooke, Robert (Bristol W)

  Grist, Ian

  Loveridge, John

  Cope, John

  Grylls, Michael

  Luce, Richard

  Cordle, John H.

  Hall, Sir John

  McAdden, Sir Stephen

  Cormack, Patrick

  Hall-Davis, A. G. F.

  McCrindle, Robert

  Corrie, John

  Hamilton, Michael (Salisbury)

  Macfarlane, Neil

  Costain, A. P.

  Hannam, John

  MacGregor, John

  Crouch, David

  Harrison, Sir Harwood (Eye)

  Macmillan, Rt Hon M. (Farnham)

  Crowder, F. P.

  Harvie Anderson, Rt Hn Miss

  McNair-Wilson, M. (Newbury)

  Davies, Rt Hon J. (Knutsford)

  Havers, Sir Michael

  McNair-Wilson, P. (New Forest)

  Dean, Paul (N. Somerset)

  Hawkins, Paul

  Madel, David

  present Government, together with other Community Governments, sought to table an amendment to a United Nations resolution on compensation for the expropriation of rights. It is an irony—but a just irony—that we are now faced with this unjustifiable guillotine and are censuring the Government for breaching international law and upsetting contractual rights in relation to which previous Governments issued licences.
  The amendment, which confines itself solely to compensation for revocation of licences in circumstances where those licences could not have been revoked under reasonable terms, is eminently reasonable and I invite my right hon. and hon. Friends to support it.
  Question put, That the amendment be made:
  The House divided: Ayes 248, Noes 293.

  Marshal, Michael (Arundel)

  Pym, Rt Hon Francis

  Stanbrook, Ivor

  Marten, Nell

  Raison, Timothy

  Stanley, John

  Mates, Michael

  Rathbone, Tim

  Steel, David (Roxburgh)

  Mather, Carol

  Rawlinson, Rt Hon Sir Peter

  Steen, Anthony (Liverpool)

  Maude, Angus

  Rees, Peter (Dover & Deal)

  Stewart, Ian (Hitchin)

  Mawby, Ray

  Rees-Davies, W. R.

  Stokes, John

  Maxwell-Hyslop, Robin

  Renton, Rt Hn Sir D. (Hunts.)

  Stradling Thomas, J.

  Mayhew, Patrick

  Renton, Tim (Mid-Sussex)

  Tapsell, Peter

  Meyer, Sir Anthony

  Rhys Williams, Sir Brandon

  Taylor, R. (Croydon NW)

  Miller, Hal (Bromsgrove)

  Ridley, Hon Nicholas

  Taylor, Teddy (Glasgow C.)

  Mills, Peter

  Ridsdale, Julian

  Tebbitt, Norman

  Mitchell, David (Basingstoke)

  Rifkind, Malcolm

  Temple-Morris, P.

  Moate, Roger

  Rippon, Rt Hon Geoffrey

  Thatcher, Rt Hon M.

  Monro, Hector

  Roberts, Michael (Cardiff N.W.)

  Thomas, Rt Hon P. (Barnet)

  Montgomery, Fergus

  Roberts, Wyn (Conway)

  Townsend, Cyril D.

  Moore, John (Croydon C)

  Rodgers, Sir John (Sevenoaks)

  Trotter, Neville

  More, Jasper (Ludlow)

  Ross, Stephen (Isle of Wight)

  Tugendhat, Christopher

  Morgan, Geraint

  Rost, Peter (SE Derbyshire)

  van Straubenzee, W. R.

  Morgan-Giles, Rear-Admiral

  Royle, Sir Anthony

  Vaughan, Dr Gerard

  Morris, Michael (Northants)

  Sainsbury, Tim

  Viggers, Peter

  Morrison, Charles (Devizes)

  St. John-Stevas, Norman

  Wainwright, Richard (Colne V)

  Morrison, Hon Peter (Chester)

  Scott, Nicholas

  Wakeham, John

  Mudd, David

  Shaw, Giles (Pudsey)

  Wall, Patrick

  Neave, Airey

  Shaw, Michael (Scarborough)

  Walters, Dennis

  Nelson, Anthony

  Shelton, William (Lambeth St.)

  Warren, Kenneth

  Neubert, Michael

  Shepherd, Colin

  Weatherill, Bernard

  Newton, Tony

  Shersby, Michael

  Wells, John

  Normanton, Tom

  Sims, Roger

  Whitelaw, Rt Hon William

  Oppenheim, Mrs Sally

  Sinclair, Sir George

  Wiggin, Jerry (Weston-s-Mare)

  Page, John (Harrow West)

  Skeet, T. H. H.

  Winterton, Nicholas

  Page, Rt Hon R. Graham (Crosby)

  Smith, Cyril (Rochdale)

  Wood, Rt Hon Richard

  Pattie, Geoffrey

  Smith, Dudley (Warwick)

  Young, Sir G. (Ealing, Acton)

  Penhaligon, David

  Spence, John

  Younger, Hon George

  Percival, Ian

  Spicer, Jim (W Dorset)

  Peyton, Rt Hon John

  Spicer, Michael (S. Worcester)

  TELLERS FOR THE AYES:

  Pink, R. Bonner

  Sproat, Iain

  Mr. Fred Silvester and

  Price, David (Eastleigh)

  Stainton, Keith

  Mr. Russell Fairgrieve.

  NOES

  Allaun, Frank

  Conlan, Bernard

  Ford, Ben

  Anderson, Donald

  Cook, Robin F. (Edin C)

  Forrester, John

  Archer, Peter

  Corbett, Robin

  Fowler, Gerald (The Wrekin)

  Armstrong, Ernest

  Cox, Thomas (Tooting)

  Fraser, John (Lambeth, N)

  Ashley, Jack

  Craigen, J. M. (Maryhill)

  Freeson, Reginald

  Ashton, Joe

  Crawshaw, Richard

  Garrett, John (Norwich S.)

  Atkins, Ronald (Preston N)

  Cronin, John

  Garrett, W. E. (Wallsend)

  Atkinson, Norman

  Crosland, Rt Hon Anthony

  George, Bruce

  Bagier, Gordon A. T.

  Cryer, Bob

  Gilbert, Dr John

  Bain, Mrs Margaret

  Cunningham, G. (Islington S.)

  Ginsburg, David

  Barnett, Guy (Greenwich)

  Cunningham, Dr J. (Whiteh.)

  Golding, John

  Barnett, Rt Hon Joel (Heywood)

  Dalyell, Tam

  Gould, Bryan

  Bates, Alf

  Davidson, Arthur

  Gourlay, Harry

  Bean, Robert E.

  Davies, Bryan (Enfield N.)

  Graham, Ted

  Benn, Rt Hon Anthony Wedgwood

  Davies, Denzil (Llanelli)

  Grant, George (Morpeth)

  Bennett, Andrew (Stockport N)

  Davies, Ifor (Gower)

  Grant, John (Islington C.)

  Bidwell, Sydney

  Davis, S. Clinton (Hackney C.)

  Grocott, Bruce

  Bishop, E. S.

  Deakins, Eric

  Hamilton, James (Bothwell)

  Blenkinsop, Arthur

  Dean, Joseph (Leeds West)

  Hamilton, W. W. (Central Fife)

  Boardman, H.

  de Fraitas, Rt Hon Sir Geoffrey

  Harrison, Walter (Wakefield)

  Booth, Albert

  Delargy, Hugh

  Hart, Rt Hon Judith

  Boothroyd, Miss Betty

  Dell, Rt Hon Edmund

  Hatton, Frank

  Bottomley, Rt Hon Arthur

  Dempsey, James

  Hayman, Mrs Helene

  Boyden, James (Bish Auck.)

  Doig, Peter

  Healey, Rt Hon Denis

  Bradley, Tom

  Douglas-Mann, Bruce

  Heffer, Eric S.

  Brown, Hugh D. (Glasgow Pr.)

  Dunn, James A.

  Hooley, Frank

  Brown, Robert C. (Newcastle)

  Dunnett, Jack

  Horam, John

  Brown, Ronald (Hackney S.)

  Eadie, Alex

  Howell, Denis (B'ham, Sm H)

  Buchan, Norman

  Edelman, Maurice

  Hoyle, Douglas (Nelson)

  Buchanan, Richard

  Edge, Geoffrey

  Huckfield, Leslie

  Butler, Mrs Joyce (Haringey)

  Edwards, Robert (Wolv. S.E.)

  Hughes, Rt Hon C. (Anglesey)

  Callaghan, Jim (Middleton & P.)

  Ellis, John (Brigg & Scun)

  Hughes, Mark (Durham)

  Campbell, Ian

  Ellis, Tom (Wrexham)

  Hughes, Robert (Aberdeen N.)

  Canavan, Dennis

  English, Michael

  Hughes, Roy (Newport)

  Cant, R. B.

  Ennals, David

  Hunter, Adam

  Carmichael, Neil

  Evans, Ioan L. (Aberdare)

  Irvine, Rt Hon Sir A. (L'pool)

  Carter, Rav

  Evans, John (Newton)

  Irving, Rt Hon S. (Dartford)

  Cartwright, John

  Ewing, Harry (Stirling)

  Jackson, Colin (Brighouse)

  Castle, Rt Hon Barbara

  Faulds, Andrew

  Jackson, Miss Margaret (Lincoln)

  Clemitson, Ivor

  Fernyhough, Rt Hon E.

  Janner, Greville

  Cocks, Michael (Bristol S)

  Fitch, Alan (Wigan)

  Jeger, Mrs Lena

  Cohen, Stanley

  Flannery, Martin

  Jenkins, Hugh (Wandsworth)

  Coleman, Donald

  Fletcher, Raymond (Ilkeston)

  Jenkins, Rt Hon Roy (B'ham, St)

  Concannon, J. D.

  Fletcher, Ted (Darlington)

  John, Brynmor

  1448

  1449

  Johnson, James (Hull West)

  Mulley, Rt Hon Frederick

  Stallard, A. W.

  Johnson, Walter (Derby S)

  Murray, Ronald King

  Stewart, Donald (Western Isles)

  Jones, Alec (Rhondda)

  Newens, Stanley

  Stewart, Rt Hn Michael (H'smith, F)

  Jones, Barry (East Flint)

  Noble, Mike

  Stoddart, David

  Jones, Dan (Burniey)

  Oakes, Gordon

  Stott, Roger

  Judd, Frank

  Ogden, Eric

  Strang, Gavin

  Kaufman, Gerald

  O'Halloran, Michael

  Strauss, Rt Hon G. R.

  Kelley, Richard

  O'Malley, Brian

  Summerskill, Hon Dr Shirley

  Kerr, Russell

  Orbach, Maurice

  Swain, Thomas

  Kilroy-Silk, Robert

  Ovenden, John

  Taylor, Mrs Ann (Bolton W)

  Kinnock, Neil

  Owen, Dr David

  Thomas, Jeffrey (Abertillery)

  Lambie, David

  Padley, Walter

  Thomas, Mike (Newcastle)

  Lamborn, Harry

  Palmer, Arthur

  Thomas, Ronald (Bristol N.W.)

  Lamond, James

  Park, George

  Thompson, George

  Latham, Arthur (Paddington)

  Parker, John

  Thorne, Stan (Preston)

  Leadbitter, Ted

  Parry, Robert

  Tierney, Sydney

  Lee, John

  Pavitt, Laurie

  Tinn, James

  Lestor, Miss Joan (Eton & Slough)

  Peart, Rt Hon Fred

  Tomlinson, John

  Lewis, Arthur (Newham N.)

  Pendry, Tom

  Tomney, Frank

  Lewis, Ron (Carlisle)

  Perry, Ernest

  Torney, Tom

  Lipton, Marcus

  Phipps, Dr Colin

  Tuck, Raphael

  Litterick, Tom

  Prescott, John

  Urwin, T. W.

  Lomas, Kenneth

  Price, Christopher (Lewisham W)

  Varley, Rt Hon Eric G.

  Loyden, Eddie

  Price, William (Rugby)

  Wainwright, Edwin (Dearne V.)

  Lyon, Alexander (York)

  Radice, Giles

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

  Lyons, Edward (Bradford W)

  Richardson, Miss Jo

  Walker, Harold (Doncaster)

  McCartney, Hugh

  Roberts, Albert (Normanton)

  Walker, Terry (Kingswood)

  McElhone, Frank

  Roberts, Gwilym (Cannock)

  Watkins, David

  MacFarquhar, R.

  Robertson, John (Paisley)

  Watkinson, John

  McGuire Michael (Ince)

  Roderick, Caerwyn

  Watt, Hamish

  Mackenzie, Gregor

  Rodgers, George (Chorley)

  Weetch, Ken

  Mackintosh, John P.

  Rodgers, William (Stockton)

  Weitzman, David

  Maclennan, Robert

  Rooker, J. W.

  Wellbeloved, James

  McMillan, Tom (Glasgow C.)

  Roper, John

  White, Frank R. (Bury)

  McNamara, Kevin

  Rose, Paul B.

  White, James (Pollok)

  Madden, Max

  Ross, Rt Hon W. (Kilm'nock)

  Whitehead, Phillip

  Magee, Bryan

  Rowlands, Ted

  Whitlock, William

  Mahon, Simon

  Ryman, John

  Wlgley, Dafydd (Caernarvon)

  Mallalieu, J. P. W.

  Sandelson, Neville

  Willey, Rt Hon Frederick

  Marks, Ken

  Sedgemore, B.

  Williams, Alan (Swansea)

  Marquand, David

  Selby, Harry

  Williams, Alan Lee (Hornch'ch)

  Marshall, Dr Edmund (Goole)

  Shaw, Arnold (Redbridge, Ilf.)

  Williams, Rt Hn Shirley (Hertford)

  Mason, Rt Hon Roy

  Sheldon, Robert (Ashton-u-Lyne)

  Williams, W. T. (Warrington)

  Maynard, Joan

  Shore, Rt Hon Peter

  Wilson, Alexander (Hamilton)

  Meacher, Michael

  Short, Rt Hon Edward (Newcastle C)

  Wilson, Gordon (Dundee E.)

  Mellish, Rt Hon Robert

  Short, Mrs Renée (Wolv NE)

  Wilson, Rt Hon H. (Huyton)

  Mikardo, Ian

  Silkin, Rt Hn John (Lewish.)

  Wilson, William (Coventry S.E.)

  Millan, Bruce

  Silkin, Rt Hn S. C. (Southwk.)

  Wise, Mrs Audrey

  Miller, Mrs Millie (Redbridge)

  Sillars, James

  Woof, Robert

  Mitchell, R. C. (Soton, Itchen)

  Silverman, Julius

  Wrigglesworth, Ian

  Molloy, William

  Skinner, Dennis

  Young, David (Bolton E.)

  Morris, Alfred (Wythenshawe)

  Small, William

  Morris, Charles R. (Openshaw)

  Smith, John (N. Lanarkshire)

  TELLERS FOR THE NOES:

  Morris, Rt Hon John (Aberavon)

  Snape, Peter

  Mr Joseph Harper and

  Moyle, Roland

  Spriggs, Leslie

  Mr. J. D. Dormand

  Question accordingly negatived.
  11.8 p.m.
  Mr. Deputy Speaker: Under the orders of the House of 7th July and of today, I must now put the Question on the remaining amendments moved by a member of the Government. As these are a considerable number of amendments, and as, so far as I am aware, there is no wish in any quarter of the House to divide against any of them, I propose to put the Question on the amendments in groups, reading out the numbers of the amendments in each group.
  If any hon. Member wishes to divide the House on any amendment, I should be obliged—I do not say I should be very happy— if he would indicate that fact when I read out the number of the amendment concerned.
  It being after Eleven o'clock, Mr. DEPUTY SPEAKER proceeded, pursuant to Standing Order No. 43 (Business Committee) and Orders [7th July and this day] to put forthwith the Questions on amendments moved by a member of the Government of which notice had been given, to the remaining part of the Bill.

Clause 23

  ACQUISITION BY PERSONS OF RIGHTS TO USE PIPE-LINES BELONGING TO OTHERS
  Amendments made: No. 35, in page 19, line 43, leave out 'such'.
  No. 36, in page 19, line 44, after 'right', insert 'of such amounts'.—[Mr. Benn.]

Clause 24
  TERMINATION OF AUTHORISATIONS
  Amendment made: No. 38, in page 20, line 37, leave out 'that period' and insert 'its currency'.—[Mr. Benn.]
Clause 26

  SAFETY
  Amendments made: No. 39, in page 22, line 46, at beginning insert 'assembling or'.
  No. 40, in page 23, line 3, after first 'or', insert 'dismantling or'—[Mr. Benn.]

Clause 35

  AUTHORISATIONS TO CONSTRUCT OR EXTEND REFINERIES
  Amendments made: No. 44, in page 32, line 27, leave out from 'who' to end of line 28.
  No. 46, in page 32, line 29, at end insert:
  'or are so authorised if the Secretary of State consents to the execution of the works by them;'.
  No. 47, in page 32, line 30, leave out 'those' and insert 'the'.—[Mr. Benn.]

Clause 40

  THE NATIONAL OIL ACCOUNT
  Amendments made: No. 58, in page 38, line 42, after 'considers', insert 'and the Treasury agree'.
  No. 60, in page 38, line 44, leave out 'he may with the consent of the Treasury' and insert:
  'the Secretary of State shall'.—[Mr. Benn.]

Clause 41
  PAYMENTS TO PETROLEUM LICENCE HOLDERS ETC. FROM THE ACCOUNT
  Amendment made: No. 63, in page 39, line 42, leave out from 'and' to end of line 43 and insert 'petroleum revenue tax'.—[Mr. Benn.]
Schedule 2

  PRODUCTION LICENCES FOR SEAWARD AREAS
  Amendments made: No. 64, in page 49, line 9, leave out 'determined' and insert 'ascertained'.
  No. 65, in page 49, line 31, leave out
  'specify the mode of determining'
  and insert:
  'determine the mode of ascertaining'.
  No. 68, in page 54, line 36, leave out 'determining' and insert 'ascertaining'.
  No. 73, in page 60, line 50, at end insert—
  '(6) Any question arising under Clause 12A of this licence or this Clause as to what is, is not or is required in the national interest or as to what is, or is required by reason of, a national emergency shall be determined by the Ministers'.
  No. 74, in page 62, line 21, leave out from 'words' to 'and' in line 22 and insert:
  '"within three days of" there shall be substituted the words "forthwith after"'.
  No. 76, in page 62, line 24, leave out within twenty-four hours' and insert 'forthwith after the occurrence'.
  No. 80, in page 63, line 47, after 'him' insert 'at reasonable times'.
  No. 82, in page 63, line 47, after 'such', insert reasonable'.
  No. 83, in page 63, line 48, leave out 'at reasonable times'.
  No. 84, in page 64, line 24, leave out from second 'to' to end of line 31 and insert:
  , or to any proceeds of sale of, any petroleum which, at the time when the agreement is made, has not been but may be won and saved from the licensed area unless the terms of the agreement has been approved in writing by the Minister either unconditionally or subject to conditions; but the preceding provisions of this paragraph do not apply to—

  (a) an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved: and

  (b) an agreement in so far as it provides that, after any petroleum has been won and saved from the licensed area, it shall be exchanged for other petroleum'

  No. 86, in page 64, line 40, leave out
  'such an agreement as is mentioned in'
  and insert:
  an agreement of which the terms require approval by virtue of'.
  No. 87, in page 65, line 17, leave out 'Secretary of State' and insert 'Minister'.
  No. 88, in page 65, line 17, at end insert
  '; but the preceding provisions of this paragraph do not apply to an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved'.
  No. 89, in page 65, line 46, leave out '28 days' and insert 'three months'.
  No. 90, in page 71, line 6, leave out 'determined' and insert 'ascertained'.
  No. 91, in page 71, line 25, leave out
  'specify the mode of determining'
  and insert:
  'determine the mode of ascertaining'.
  No. 94, in page 75, line 47, leave out 'determining" and insert 'ascertaining'.
  No. 99, in page 82, line 26, at end insert—
  '(6) Any question arising under Clause 15 of this licence or this Clause as to what is, is not or is required in the national interest or as to what is, or is required by reason of, a national emergency shall be determined by the Minister'.
  No. 100, in page 85, line 14, leave out 'within twenty-four hours of' and insert 'forthwith after'.
  No. 102, in page 85, line 15, leave out 'within twenty-four hours' and insert 'forthwith after the occurrence'.
  No. 106, in page 89, line 39, after 'such', insert 'reasonable'.
  No. 107, in page 91, line 50, leave out from second 'to' to end of line 6 on page 92 and insert
  ',or to any proceeds of sale of, any petroleum which, at the time when the agreement is made, has not been but may be won and saved from the licensed area unless the terms of the agreement have been approved in writing by the Minister either unconditionally or subject to conditions; but the preceding provisions of this paragraph do not apply to—

  (a) an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved; and

  (b) an agreement in so far as it provides that, after any petroleum has been won and saved from the licensed area, it shall be exchanged for other petroleum'.

  No. 109, in page 92, line 15, leave out
  'such an agreement as is mentioned in'
  and insert:
  'an agreement of which the terms require approval by virtue of'.
  No. 110, in page 92, line 40, leave out 'Secretary of State' and insert 'Minister'.
  No. 111, in page 92, line 40, at end insert
  '; but the preceding provisions of this paragraph do not apply to an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved'.
  No. 112, in page 93, line 29, leave out '28 days' and insert 'three months'.— [Mr. Benn.]

Schedule 3

  PRODUCTION LICENCES FOR LANDWARD AREAS
  Amendments made: No. 113, in page 97, line 14, leave out 'determined' and insert 'ascertained'.
  No. 114, in page 97, line 36, leave out
  'specify the mode of determining'
  and insert:
  'determine the mode of ascertaining'.
  No. 115, in page 103, line 28, leave out 'determining' and insert 'ascertaining'.
  No. 116, in page 109, line 47, at end insert—
  '(6) Any question arising under Clause 12A of this licence or this Clause as to what is, is not or is required in the national interest or as to what is, or is required by reason of, a national emergency shall be determined by the Minister'.
  No. 117, in page 111, line 21, leave out from 'words' to 'and' in line 22 and insert
  '"within three days of" there shall be substituted the words "forthwith after"
  No. 118, in page 111, line 24, leave out 'within twenty-four hours' and insert 'forthwith after the occurrence".
  No. 119, in page 113, line 43, after 'such' insert 'reasonable'.
  No. 120, in page 114, line 14, leave out from 'to' to end of line 21 and insert
  ',or to any proceeds of sale of, any petroleum which, at the time when the agreement is made, has not been but may be won and saved from the licensed area unless the terms of the agreement have been approved in writing by the Minister either unconditionally or subject to conditions; but the preceding provisions of this paragraph do not apply to—

  (a) an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved; and

  (b) an agreement in so far as it provides that, after any petroleum has been won

  1455
  and saved from the licensed area, it shall be exchanged for other petroleum'.

  No. 121, in page 114, line 31, leave out
  'such an agreement as is mentioned in'
  and insert
  'an agreement of which the terms require approval by virtue of'.
  No. 122, in page 115, line 11, leave out 'Secretary of State' and insert Minister'.
  No. 123, in page 115, line 11, at end insert
  '; but the preceding provisions of this paragraph do not apply to an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved'.
  No. 124, in page 115, line 40, leave out '28 days' and insert 'three months'.
  No. 125, in page 120, line 42, leave out 'determined' and insert 'ascertained'.
  No. 126, in page 121, line 13, leave out
  'specify the mode of determining'
  and insert
  'determine the mode of ascertaining'.
  No. 127, in page 122, line 23, leave out 'the said paragraph (1)' and insert
  'paragraph (1) of this Clause'.
  No. 128, in page 126, line 8, leave out 'determining' and insert 'ascertaining'.
  No. 129, in page 133, line 16, at end insert
  '(6) Any question arising under Clause 15 of this licence or this Clause as to what is, is not or is required in the national interest or as to what is, or is required by reason of, a national emergency shall be determined by the Minister'.
  No. 130, in page 136, line 16, leave out 'within twenty-four hours of' and insert 'forthwith after'.
  No. 131, in page 136, line 17, leave out 'within twenty-four hours' and insert 'forthwith after the occurrence'.
  No. 132, in page 140, line 11, at end insert 'reasonable'.
  No. 133, in page 142, line 5, leave out from second 'to' to end of line 11 and insert
  ',or to any proceeds of sale of, any petroleum which, at the time when the agreement is made, has not been but may be won and saved from the licensed area unless the terms of the agreement have been approved in writing by the Minister either unconditionally or subject to conditions; but the preceding provisions of this paragraph do not apply to—

  (a) an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved; and

  1456

  (b) an agreement in so far as it provides that, after any petroleum has been won and saved from the licensed area, it shall be exchanged for other petroleum'.

  No. 134, in page 142, line 20, leave out
  'such an agreement as is mentioned in'
  and insert
  'an agreement of which the terms require approval by virtue of'.
  No. 135, in page 142, line 45, leave out 'Secretary of State' and insert 'Minister'.
  No. 136, in page 142, line 45, at end insert:
  ';but the preceding provisions of this paragraph do not apply to an agreement for the sale of such petroleum under which the price is payable after the petroleum is won and saved'.
  No. 137, in page 143, line 39, leave out '28 days' and insert 'three months'.—[Mr. Benn.]

Schedule 4

  AUTHORISATIONS IN PURSUANCE OF SECTION 20
  Amendment made: No. 138, in page 147, line 1, leave out from 'of' to 'exploitation' in line 2 and insert
  'avoiding or reducing interference with fishing or the'.—[Mr Benn.]
  Bill to be read the Third time tomorrow.

  ADJOURNMENT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Dunn.]

NATIONAL HEALTH SERVICE (AGENCY NURSES)
11.10 p.m.
Mr. Kenneth Lewis: I am sure the Minister and I are glad that this debate is taking place after a guillotine motion, otherwise we would probably have been discussing the question of agency nurses in the National Health Service at seven o'clock tomorrow morning.
This debate arises out of Circular HSC(II) 164, sent out by the Department of Health and Social Security, of 19th June this year. It seeks to do away with

1457
agency nurses in the NHS. One sub-clause says:
"Staffing suffers from an additional clement of instability and discontinuity particularly where there are frequent changes of agency nurses and this is liable to affect patient care and staff communications adversely".
I do not object to a reduction in the number of agency nurses in the National Health Service, but I do object to any attempt to do away with them altogether. It would have a disastrous effect on the Service. If Ministers were tempted to do away with them, it would not assist stability. It would rock stability, especially, for example, during holiday periods. If there were no agency nurses, more permanent staff would have to be taken on and for most of the year they would be under-employed. That would be a more expensive operation.
Where minimum agency staff are employed, discontinuity does not matter. Permanent staff would already be there in situ and agency staff would be entirely under the control of the permanent staff—matrons, deputy-matrons, sisters, and so on.
The circular also says that agency nurses should not be involved in management because this might be harmful. Of course agency staff should not be involved in management, and they are not. Management is a matter for the nursing hierarchy or the hospital administrators.
The circular goes on to say that the employment of agency nurses has an effect on training. But agency nurses have nothing to do with training in the hospital service. They are not involved. They do not determine what should be done by other staff who are permanently employed. Student nurses are trained by the ward sister or the sister tutor at the school to which they belong.
Again in paragraph 2d. it states that the employment of agency nurses may "mask" manpower problems in the health service. In fact it might highlight the problem. If agency nurses are dropped, extra permanent staff must be recruited. Items 2 f. and g. refer to the cost of agency nurses. This is the nub of the problem for the Minister because his case rests on the argument that agency nurses are disruptive and more expensive. There has been a survey which showed that, bearing in mind the hidden costs of
1458
employing permanent staff, the cost of employing agency nurses is 6 per cent. less than the cost of employing permanent staff.
The self-employed must now pay an additional amount in their national insurance stamp which thus reduces the take-home pay of agency nurses. It is take-home pay to which the Minister refers in advancing his argument. On the other side of the coin, the National Health Service must pay an additional cost in terms of pensions. There is also the cost of sick leave which is built into the service agreement. It must also bear the cost of holidays which permanent staff enjoy as of right, while agency nurses receive no holiday pay. If all these items of the social wage are added to the wage cost figure calculated by the Department, the result is that the level of permanent staff wages goes up towards and beyond that of agency nurses.
The Minister gave figures for the cost of agency nurses in a Written Answer to my hon. Friend the Member for Harrow, West (Mr. Page) on 19th February. He said that the average cost of a permanent nurse in the health service was £3,577 a year and that the cost of an agency nurse was between £3,000 and £4,000; he did not give the exact cost. But the average of those two figures is £3,500 a year, and that means that on the Minister's own figures agency nurses cost less than permanent staff.
In 1973 there were 257,975 nurses employed in the health service in the United Kingdom. In addition 21,146 were employed in midwifery, giving an overall total in excess of 278,000. The number of agency nurses employed was 4,061–2 per cent. of that total. All this fuss is being made over 2 per cent. of nurses employed at a cost no higher than for employing staff nurses, taking into account all the fringe benefits.
Who are the people that the Minister wants to get rid of? They are married women, women who have children and who need to go out to work. They are mothers in single-parent families. They are women who look after parents or children and who have part of their time available. They are trained people who have retired from other jobs but who can make a contribution to the hospital service. They want to do a job, but they

1459
can do it only if they are allowed to work fewer hours and are not forced to go into full-time employment. The service needs them and it is already using them.
The Minister says "Once we do away with the agency nurses, the people who come from outside to work part-time in the National Health Service, we shall recreate the system by providing banks of nurses." That was what the Department's circular said. But that would not achieve any savings. A bank system in the service would have to be run by someone, and it would employ more people running it than the outside agencies employ in running their services, for which the Minister and the hospital service pay nothing. Such a system would also have to bear the cost of advertising for personnel, and the cost of advertising for personnel in the National Health Service is already high. There is no justification for adding to it, and there is no justification for the service having to pay when it is already being paid for by the agencies which provide the people whom the service needs.
The agencies have been registered since 1943. There is no complaint about the standard they provide, no complaint that they are not giving the Minister and the hospitals the kind of expertise that is needed. The agencies have to provide a service which is regulated by certain rules which make it imperative to provide the right kind of service and the right kind of people. I very much doubt whether the health service would have been using them until now if there had been any complaints about their ability or the kind of service they provide.
The truth is that in this, as in so many other matters, the Secretary of State is following and not leading. The right hon. Lady has been pressed by the unions to get rid of agency nurses. Like Lady Godiva, she says "I, too, will display my talent for appealing to popular acclaim." She did that with pay beds, and she is doing it in this matter. If she is not careful she will also, like Lady Godiva, finish up on a monument, as the Minister who destroyed the National Health Service by covering up the real deficiencies through the public display of popular but bogus statistics.
If action is taken on the circular, if the hospitals do what the Minister says they should do, what will be the result?
1460
Beds will close. The service to patients will become worse. Waiting lists will increase. Costs will rise. An already rocky health service will become even more rocky. If the hospitals carry out the terms of the circular, the part that has been played by the outside people who come to work in our hospitals will be seriously diminished. In International Women's Year the Secretary of State will make it more difficult for married women who can work only part-time to play a part in the health service. Is that what she wants?
Unions and administrators in the service are to blame in many cases for people opting for agency work. I was on the management committee of a hospital for 12 years, so I know about these matters. I know someone who wanted to work in the service part-time, and her example can be duplicated throughout the country. She had worked in it full-time, and after her marriage she wanted to continue the same work part-time. She was told, however, that she could not have the same holidays as her husband and could not have the odd day off when necessary. On pressure from the unions, the administrators provided no flexibility to allow her to work within the service permanently and meet her domestic needs. She became a permanent agency employee.
That is not necessary. What is required is additional flexibility built into the service. I make this forecast to the Minister: that in the next year—and he knows it—a great deal less money will be available for the National Health Service, as for other Government services, and hospitals will not be able to recruit up to the numbers of permanent staff allowed by their establishments. Restrictions on the employment of permanent staff, imposed not because men and women are not coming into the service but because of the lack of finance to pay for them, will cause a situation in which, if the Minister also clamps down on the employment of agency nurses, wards will be closed in many hospitals throughout the country.
Wards will be closed on the ploy normally used by management committees. I have served on one and done it. A ward is closed and the reason is said to be redecoration. It is closed for that

1461
reason because it is not wanted to reduce the beddage, which is maintained until the management committee can no longer afford to pay for the nurses to man it.
If agency nurses are to be used only for emergencies—perhaps the Minister will explain what he means by "emergency", which is the term used in the circular—what will happen about filling in for holidays, which are not emergencies but normal events? Are permanent nurses to be employed for this purpose, so that they are kept underemployed for the rest of the year? What is to be done about filling in for sickness periods? Are permanent staff to be employed for that purpose, so keeping them underemployed for the rest of the year? What about filling in for the heavy winter months experienced by every hospital?
If hospitals do not have agency nurses, they will need to employ extra permanents. If they have to do that and if at the same time, because of Treasury finance not being available, the Minister imposes a clamp-down, the hospitals will have to reduce their service to the public. They will have to close more wards. They will have to give an inferior service. They will have to lengthen their waiting lists. Fewer patients will be given the treatment they require.
The circular is ill advised. It poses a political posture. Political postures when dealing with health are never good, and the Minister should seek to withdraw it or hope that it is not implemented.
11.29 p.m.
The Under-Secretary for Health and Social Security (Mr. Michael Meacher): I welcome the opportunity to discuss the use of agency nurses in the National Health Service. Perhaps I should say how pleased I am that the subject has been raised by the hon. Member for Rutland and Stamford (Mr. Lewis), who played a very important rôle in regulating the work of employment agencies generally and who promoted the Employment Agencies Act 1973. He will remember that we supported that when we were in opposition.
I noted that the hon. Member said at the start of his speech that he supported a reduction in the use of agency nurses, though not their elimination, but his comments afterwards scarcely bore out even
1462
his acknowledged belief that there should be some reduction, and I hope that I shall be able to persuade him of its merits.
I do not want to belittle the excellent work that individual agency nurses and nurses' agencies have contributed over recent years. But the problem is that our dependence on them, though it is still very small over the country as a whole, has increased substantially in certain areas of the country, especially in London, over recent years. It was clear to us that the time had come to make some move to halt this development, and I do not think that the hon. Gentleman necessarily disagrees with that.
Perhaps I might illustrate the problem with two or three significant figures. The hon. Gentleman perhaps underestimates the extent of coverage of agency nurses. Whereas in 1965 the number of agency nurses and midwives in English hospitals was only about 1,450 in whole-time equivalents, by April 1974—we have no more recent figures—it had risen to about 4,850. That is rather higher than the figure which the hon. Gentleman mentioned of a little over 4,000. The number of qualified nurses has of course risen over this period, but in percentage terms the number of agency nurses has risen more sharply and they constituted not 2 per cent. as the hon. Gentleman said but 3·6 per cent. of all qualified nurses in April 1974—and the proportion probably has increased since then—compared with 1·5 per cent. 10 years ago. That is a substantial increase.
The real impact of agency nursing has been in London and the South-East, as I am sure the hon. Gentleman realises. One in five of all staff nurses in the Thames region is employed by an agency. In our view, this is quite unacceptable in the interests of good management.
I know that in a number of quarters, particularly the agencies which have nearly trebled in number since 1968, there is a belief that the Government have decided to act for ideological or administrative reasons without real regard to the needs of the service and of the patient. The hon. Gentleman made some play of our paying regard to the attitude of the trade unions. I put it to him, however, that this emphasis is not fair and that what he says simply is not true. There are very real problems associated with

1463
agency nurses, and we set them out in the recent circular to health authorities. The most important is that where agency nurses are employed, especially if there is frequent change, continuity and stability in the working environment for all nurses are affected, and the patients suffer in consequence of the continued change in the nurses who are attending them.
Agency nurses tend to be less willing or able to play a full part in administrative work, and the training and supervision of student and pupil nurses may also suffer, precisely for the reason to which the hon. Gentleman drew attention. It puts the responsibility for these important parts of the work on to the remainder of the nurses, and that is why it breeds considerable resentment. Secondly, the morale of nurses employed by the hospital itself may also be lowered.
For many young people the agency way of life is attractive in giving them the opportunity to choose their own hours and periods of work. But those with a more responsible and caring attitude who are employed by the hospital are naturally from time to time resentful of the apparent privileges of the agency nurses, with their higher take-home pay—I acknowledge the point that the hon. Gentleman made there—and greater freedom. On the subject of higher pay, my right hon. Friend the Chancellor of the Exchequer has made proposals in the Finance (No. 2) Bill which will ensure that in future agency nurses along with other agency employees pay income tax through the PAYE system under Schedule E. We have also advised health authorities that they should not pay more than the Whitley Council rates. We think that these two measures should reduce the disparity, which was in most cases more apparent than real, in the pay of the two types of nurses.
Mr. Kenneth Lewis: The hon. Gentleman has just made the extraordinary suggestion that advice has been given to the effect that agencies should not pay more than Whitley rates. On what basis can any Minister tell an agency—people who, after all, are self-employed—what rates they should pay?
Mr. Meacher: It is a matter for the health authorities as to the rate they
1464
will pay nurses who are subcontracted to them from agencies. That is the point I am making. That is the advice we have given health authorities.
Mr. Patrick Cormack: I should briefly declare an interest. Will these measures take account of holidays, sick pay and the other things, so that they do not penalise the agency nurse?
Mr. Meacher: They take account of total employment costs. To that extent there is inevitably built into it some disadvantage for the agency nurse. I should add that the agency nurse will still be exempt from superannuation contributions.
For many years successive Governments have felt the need to reduce the use of agency nurses in the health service. Ten years ago, in 1965, the Department imposed a ceiling at the then current levels of employment on the numbers of agency nurses, but by 1971 the numbers were once again causing anxiety and the Department again advised health boards to review their use and to plan both short-and long-term reductions. I hope the hon Gentleman will accept this substantially bipartisan policy. But as the figures show, far from reducing its dependence on them the NHS has increased its use of them. It was clearly time for us to make another concerted effort with authorities. The recent improvement in nurses' pay, following the recommendations of the committee of inquiry chaired by Lord Halsbury, and the present financial constraints which make efficient use of manpower a prime objective seem also to favour our present efforts.
After consultation with staff as well as management interests, my right hon. Friend issued a circular in June asking health authorities as a matter of urgency to reduce and, where practicable, eliminate the use of agencies and to report to the Department on the targets they have set themselves, the progress being made and any problems encountered, including any effects on services to patients. We have called for these reports by the end of October this year and will take stock then in case any further action is necessary. This is obviously essential if our present effort is not to go the way others have gone.

1465
To achieve the long-term objective of a more stable nursing force of directly employed nurses, with its consequential benefit for patients, my right hon. Friend has explicitly accepted that there could be some risk of a temporary reduction of services in some areas. It will be for local decision how best to proceed with phasing out agency nurses and, of course, authorities will endeavour to eliminate agency nurses to the maximum degree possible without incurring such reductions of services. At the end of the day, however, they may be necessary in certain areas if the long-term benefits are to be reaped. By adopting a restrictive approach on the use of agency nurses we hope to give the necessary stimulus to a number of nurses to give up the agency way of life and return to the NHS.
My right hon. Friend thought it right to show authorities that she accepted that they might have to make hard decisions involving temporary reductions of services, and would support them, but we

PETROLEUM AND SUBMARINE PIPELINES BILL
Divisions 305 and 306

Division No. 305.]

AYES

[5.58 p.m.

Adley, Robert

Davies, Rt Hon J. (Knutsford)

Harrison, Col Sir Harwood (Eye)

Aitken, Jonathan

Dean, Paul (N Somerset)

Harvie Anderson, Rt Hon Miss

Alison, Michael

Douglas-Hamilton, Lord James

Havers, Sir Michael

Amery, Rt Hon Julian

Drayson, Burnaby

Hawkins, Paul

Arnold, Tom

Durant, Tony

Hayhoe, Barney

Atkins, Rt Hon H. (Speithorne)

Eden, Rt Hon Sir John

Heseltine, Michael

Awdry, Daniel

Edwards, Nicholas (Pembroke)

Holland, Philip

Baker, Kenneth

Elliott, Sir William

Hordem, Peter

Banks, Robert

Emery, Peter

Howe, Rt Hon Sir Geoffrey

Benyon, W.

Eyre, Reginald

Howell, David (Guildford)

Berry, Hon Anthony

Fairgrieve, Russell

Howell, Ralph (North Norfolk)

Biffen, John

Fell, Anthony

Hunt, John

Biggs-Davison, John

Finsberg, Geoffrey

Hurd, Douglas

Blaker, Peter

Fisher, Sir Nigel

Irvine, Bryant Godman (Rye)

Body, Richard

Fletcher Alex (Edinburgh N)

James, David

Boscawen, Hon Robert

Fletcher-Cooke, Charles

Jenkin, Rt Hon P. (Wanst'd&W'df'd)

Bottomley, Peter

Fookes, Miss Janet

Jessel, Toby

Bowden, A. (Brighton, Kemptown)

Fowler, Norman (Sutton C'f'd)

Johnson Smith, G. (E Grinstead)

Boyson, Dr Rhodes (Brent)

Fox, Marcus

Jopling, Michael

Braine, Sir Bernard

Fry, Peter

Kaberry, Sir Donald

Brittan, Leon

Galbraith, Hon T. G. D.

Kellett-Bowman, Mrs Elaine

Brotherton, Michael

Gardiner, George (Reigate)

Kimball, Marcus

Brown, Sir Edward (Bath)

Gardner, Edward (S Fylde)

King, Evelyn (South Dorset)

Bryan, Sir Paul

Gilmour, Rt Hon Ian (Chesham)

King, Tom (Bridgwater)

Buchanan-Smith, Alick

Gilmour, Sir John (East Fife)

Kirk, Peter

Buck, Antony

Glyn, Dr Alan

Knight, Mrs Jill

Budgen, Nick

Godber, Rt Hon Joseph

Knox, David

Bulmer, Esmond

Goodhart, Philip

Lamont, Norman

Butler, Adam (Bosworth)

Goodhew, Victor

Lane, David

Carlisle, Mark

Goodlad, Alastair

Langford-Holt, Sir John

Chalker, Mrs Lynda

Gorst, John

Latham, Michael (Melton)

Channon, Paul

Gow, Ian (Eastbourne)

Lawrence, Ivan

Clark, Alan (Plymouth, Sutton)

Gower, Sir Raymond (Barry)

Lawson, Nigel

Clark, William (Croydon S)

Grant, Anthony (Harrow C)

Lester, Jim (Beeston)

Clegg, Walter

Gray, Hamish

Lewis, Kenneth (Rutland)

Cockcroft, John

Grieve, Percy

Loveridge, John

Cooke, Robert (Bristol W)

Griffiths, Eldon

Luce, Richard

Cope, John

Grist, Ian

McAdden, Sir Stephen

Cordle, John H.

Grylls, Michael

McCrindle, Robert

Cormack, Patrick

Hall, Sir John

Macfarlane, Neil

Corrie, John

Hall-Davis, A. G. F.

Macmillan, Rt Hon M. (Farnham)

Costain, A. P.

Hamilton, Michael (Salisbury)

McNair-Wilson, M. (Newbury)

Crouch, David

Hannam,John

McNair-Wilson, P. (New Forest)

hope that this would not normally be necessary, and we have advised authorities of the need to examine carefully their staffing needs, to keep them under constant review and to ensure that available staff are economically deployed. This would be important at any time, but it is particularly so when the country is facing such severe economic difficulties.
How, then, do we see the future? As I have said, we certainly hope that a number of agency nurses will return to direct full-time employment in the NHS. But agency nursing is not the only way that nurses, who either have responsibilities—
The Question having been proposed after Ten o'clock, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twenty minutes to Twelve o'clock.

Madel, David

Prior, Rt Hon James

Sproat, Iain

Marshall, Michael (Arundel)

Pym, Rt Hon Francis

Stainton, Keith

Marten, Nell

Raison, Timothy

Stanbrook, Ivor

Mates, Michael

Rathbone, Tim

Stanley, John

Mather, Carol

Rawlinson, Rt Hon Sir Petet

Steen, Anthony (Wavertree)

Maude, Angus

Rees, Peter (Dover & Deal)

Stewart, Ian (Hitchin)

Mawby, Ray

Rees-Davies, W. R.

Stokes, John

Maxwell-Hyslop, Robin

Renton, Rt Hon Sir D. (Hunts)

Stradling Thomas, J.

Mayhew, Patrick

Ronton, Tim (Mid-Sussex)

Tapsell, Peter

Meyer, Sir Anthony

Rhys Williams, Sir Brandon

Taylor, R. (Croydon NW)

Miller, Hal (Bromsgrove)

Ridley, Hon Nicholas

Taylor, Teddy (Cathcart)

Mills, Peter

Ridsdale, Julian

Tebbit, Norman

Mitchell, David (Basingstoke)

Rifkind, Malcolm

Temple-Morris, Peter

Moate, Roger

Rippon, Rt Hon Geoffrey

Thomas, Rt Hon P. (Kendon S)

Monro, Hector

Roberts, Wyn (Conway)

Townsend, Cyril D.

Montgomery, Fergus

Rodgers, Sir John (Sevenoaks)

Tugendhat, Christopher

Moore, John (Croydon C)

Rost, Peter (SE Derbyshire)

Van Straubenzee, W. R.

More, Jasper (Ludlow)

Royle, Sir Anthony

Vaughan, Dr Gerard

Morgan, Geraint

Sainsbury, Tim

Viggers, Peter

Morris, Michael (Northampton S)

St. John-Stevas, Norman

Wakeham, John

Morrison, Charles (Devizes)

Scott, Nicholas

Walker-Smith, Rt Hon Sir Derek

Morrison, Hon Peter (Chester)

Shaw, Giles (Pudsey)

Wall, Patrick

Mudd, David

Shaw, Michael (Scarborough)

Walters, Dennis

Neave, Alrey

Shelton, William (Streatham)

Warren, Kenneth

Nelson, Anthony

Shepherd, Colin

Weatherill, Bernard

Neubert, Michael

Shersby, Michael

Whitelaw, Rt Hon William

Newton, Tony

Silvester, Fred

Wiggin, Jerry

Normanton, Tom

Sims, Roger

Winterton, Nicholas

Oppenhelm, Mrs Sally

Sinclair, Sir George

Wood, Rt Hon Richard

Page, John (Harrow West)

Skeet, T. H. H.

Young, Sir G. (Ealing, Acton)

Page, Rt Hon R. Graham (Crosby)

Smith, Dudley (Warwick)

Younger, Hon George

Parkinson, Cecil

Speed, Keith

Percival, Ian

Spence, John

TELLERS FOR THE AYES:

Peyton, Rt Hon John

Spicer, Jim (W Dorset)

Mr. Spencer Le Marchant and

Pink, R. Bonner

Spicer, Michael (S Worcester)

Mr. Michael Roberts.

NOES

Abse, Leo

Craigen, J. M. (Maryhill)

Freud, Clement

Allaun, Frank

Crawshaw, Richard

Garrett, John (Norwich S)

Anderson, Donald

Cronin, John

Garrett, W. E. (Wallsend)

Archer, Peter

Cryer, Bob

George, Bruce

Armstrong, Ernest

Cunningham, G. (Islington S)

Gilbert, Dr John

Ashley, Jack

Cunningham, Dr J. (Whiten)

Ginsburg, David

Ashton, Joe

Dalyell, Tam

Golding, John

Atkins, Ronald (Preston N)

Davidson, Arthur

Gould, Bryan

Atkinson, Norman

Davies, Bryan (Enfield N)

Gourlay, Harry

Bagier, Gordon A. T.

Davies, Denzil (Llanelli)

Graham, Ted

Bain, Mrs Margaret

Davies, Ifor (Gower)

Grant, George (Morpeth)

Barnett, Rt Hon Joel (Heywood)

Davis, Clinton (Hackney C)

Grant, John (Islington C)

Bates, Alf

Deakins, Eric

Grimond, Rt Hon J.

Bean, R. E.

Dean, Joseph (Leeds West)

Grocott, Bruce

Beith, A. J.

de Freitas, Rt Hon Sir Geoffrey

Hamilton, James (Bothwell)

Benn, Rt Hon Anthony Wedgwood

Delargy, Hugh

Hamilton, W. W. (Central Fife)

Bennett, Andrew (Stockport N)

Dell, Rt Hon Edmund

Harrison, Walter (Wakefield)

Bidwell, Sydney

Dempsey, James

Hart, Rt Hon Judith

Bishop, E. S,

Doig, Peter

Hatton, Frank

Blenkinsop, Arthur

Dormand, J. D.

Hayman, Mrs Helene

Boardman, H.

Douglas-Mann, Bruce

Healey, Rt Hon Denis

Booth, Albert

Duffy, A. E. P.

Henderson, Douglas

Boothroyd, Miss Betty

Dunn, James A.

Hooley, Frank

Bottomley, Rt Hon Arthur

Dunnett, Jack

Horam, John

Boyden, James (Bish Auck)

Dunwoody, Mrs Gwyneth

Howell, Denis (B'ham Sm H)

Bradley, Tom

Edelman, Maurice

Howells, Geraint (Cardigan)

Brown, Hugh D. (Provan)

Edge, Geoff

Hoyle, Doug (Nelson)

Brown, Robert C. (Newcastle W)

Edwards, Robert (Wolv SE)

Huckfield, Les

Brown, Ronald (Hackney S)

Ellis, John (Brigg & Scun)

Hughes, Rt Hon C. (Anglesey)

Buchan, Norman

Ellis, Tom (Wrexham)

Hughes, Mark (Durham)

Buchanan, Richard

English, Michael

Hughes, Robert (Aberdeen N)

Butler, Mrs Joyce (Wood Green)

Ennals, David

Hughes, Roy (Newport)

Callaghan, Jim (Middleton & P)

Evans, Fred (Caerphilly)

Hunter, Adam

Campbell, Ian

Evans, Ioan (Aberdare)

Irvine, Rt Hon Sir A. (Edge Hill)

Canavan, Dennis

Ewing, Harry (Stirling)

Irving, Rt Hon S. (Dartford)

Cant, R. B.

Faulds, Andrew

Jackson, Colin(Brighouse)

Carmichael, Neil

Fernyhough, Rt Hon E.

Jackson, Miss Margaret (Lincoln)

Carter, Ray

Fitch, Alan (Wigan)

Janner, Greville

Cartwright, John

Flannery, Martin

Jeger, Mrs Lena

Castle, Rt Hon Barbara

Fletcher Raymond (Ilkeston)

Jenkins, Hugh (Putney)

Clemitson, Ivor

Fletcher, Ted (Darlington)

Jenkins. Rt Hon Roy (Stechford)

Cocks, Michael (Bristol S)

Foot, Rt Hon Michael

John, Brynmor

Cohen, Stanley

Ford, Ben

Johnson, James (Hull West)

Conlan, Bernard

Forrester, John

Johnson, Walter (Derby S)

Cook, Robin F. (Edin C)

Fowler, Gerald (The Wrekin)

Johnston, Russell (Inverness)

Corbett, Robin

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

Jones, Alec (Rhondda)

Cox, Thomas (Tooting)

Freeson, Reginald

Jones, Barry (East Flint)

1468

1469

Jones, Dan (Burnley)

Murray, Rt Hon Ronald King

Stewart, Donald (Western Isles)

Judd, Frank

Newens, Stanley

Stewart, Rt Hon M. (Fulham)

Kaufman, Gerald

Noble, Mike

Stoddart, David

Kelley, Richard

Oakes, Gordon

Stott, Roger

Kerr, Russell

O'Halloran, Michael

Strang, Gavia

Kilroy-Sllk, Robert

Orbach, Maurice

Strauss, Rt Hon G. R.

Kinnock, Nell

Orme, Rt Hon Stanley

Summerskill, Hon Dr Shirley

Lambie, David

Ovenden, John

Swain, Thomas

Lamborn, Harry

Owen, Dr David

Taylor, Mrs Ann (Bolton W)

Lamond, James

Palmer, Arthur

Thomas, Jeffrey (Abertillery)

Latham, Arthur (Paddington)

Park, George

Thomas, Mike (Newcastle E)

Leadbitter, Ted

Parker, John

Thomas, Ron (Bristol NW)

Lee, John

Parry, Robert

Thompson, George

Lestor, Miss Joan (Eton & Slough)

Pavitt, Laurie

Thorne, Stan (Preston South)

Lewis, Arthur (Newham N)

Peart, Rt Hon Fred

Thorpe, Rt Hon Jeremy (N Devon)

Lewis, Ron (Carlisle)

Pendry, Tom

Tierney, Sydney

Lipton, Marcus

Perry, Ernest

Tinn, James

Lomas, Kenneth

Phipps, Dr Colin

Tomlinson, John

Loyden, Eddie

Price, William (Rugby)

Tomney, Frank

Luard, Evan

Radice, Giles

Torney, Tom

Lyon, Alexander (York)

Reid, George

Tuck, Raphael

Lyons, Edward (Bradford W)

Richardson, Miss Jo

Urwln, T. W.

McCartney, Hugh

Roberts, Albert (Normanton)

Wainwright, Edwin (Dearne V)

McElhone, Frank

Robertson, John (Paisley)

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

MacFarquhar, Roderick

Roderick, Caerwyn

Walker, Harold (Doncaster)

McGuIre, Michael (Ince)

Rodgers, George (Chorley)

Walker, Terry (Kingswood)

Mackenzie, Gregor

Rodgers, William (Stockton)

Ward, Michael

Mackintosh, John P.

Rooker, J. W.

Watkins, David

Maclennan, Robert

Roper, John

Watkinson, John

McMillan, Tom (Glasgow C)

Rose, Paul B.

Watt, Hamish

McNamara, Kevin

Ross, Stephen (Isle of Wight)

Weetch, Ken

Magee, Bryan

Ross, Rt Hon W. (Kilmarnock)

Weitzman, David

Mahon, Simon

Rowlands, Ted

Wellbeloved, James

Mallalieu, J. P. W.

Sandelson, Neville

White, James (Pollok)

Marks, Kenneth

Sedgemore, Brian

Whitehead, Phillip

Marquand, David

Selby, Harry

Whitlock, William

Marshall, Dr Edmund (Goole)

Shaw, Arnold (Ilford South)

Willey, Rt Hon Frederick

Mason, Rt Hon Roy

Sheldon, Robert (Ashton-u-Lyne)

Williams, Alan (Swansea W)

Maynard, Miss Joan

Shore, Rt Hon Peter

Williams, Alan Lee (Hornch'ch)

Meacher, Michael

Short, Rt Hon E. (Newcastle C)

Williams, Rt Hon Shirley (Hertford

Mellish, Rt Hon Robert

Short, Mrs Renée (Wolv NE)

Wilson, Alexander (Hamilton)

Mendelson, John

Silkln, Rt Hon John (Deptford)

Wilson, Gordon (Dundee E)

Mikardo, Ian

Silkin, Rt Hon S. C. (Dulwich)

Wilson, Rt Hon H. (Huyton)

Millan, Bruce

Sillars, James

Wilson, William (Coventry SE)

Miller, Dr M. S. (E Kilbride)

Silverman, Julius

Wise, Mrs Audrey

Miller, Mrs Millie (Ilford N)

Skinner, Dennis

Woodall, Alec

Mitchell, R. C. (Solon, Itchen)

Small, William

Woof, Robert

Molloy, William

Smith, Cyril (Rochdale)

Wrlgglesworth, Ian

Morris, Alfred (Wythenshawe)

Smith, John (N Lanarkshire)

Young, David (Bolton E)

Morris, Charles R. (Openshaw)

Snape, Peter

Morris, Rt Hon J. (Aberavon)

Spriggs, Leslie

TELLERS FOR THE NOES:

Moyle, Roland

Stallard, A. W.

Mr. Joseph Harper and

Mulley, Rt Hon Frederick

Steel, David (Roxburgh)

Mr. Donald Coleman.

Division No. 306.]

AYES

[9.30 p.m.

Beith, A J.

Ross, Stephen (Isle of Wight)

Wigley, Dafydd

Grimond, Rt Hon J.

Smith, Cyril (Rochdale)

Wilson, Gordon (Dundee E)

Hooson, Emlyn

Steel, David (Roxburgh)

Howells, Geraint (Cardigan)

Stewart, Donald (Western Isles)

TELLERS FOR THE AYES:

Johnston, Russell (Inverness)

Thompson, George

Mrs. Margaret Bain and

Penhaligon, David

Wainwright, Richard (Colne V)

Mr. Douglas Henderson.

Reid, George

Watt, Hamish

NOES

Abse, Leo

Bishop, E. S.

Carmichsel, Neil

Allaun, Frank

Blenkinsop, Arthur

Carter, Ray

Anderson, Donald

Boardman, H.

Cartwright, John

Archer, Peter

Booth, Albert

Castle, Rt Hon Barbara

Armstrong, Ernest

Bottomley, Rt Hon Arthur

Clemitson, Ivor

Ashley, Jack

Boyden, James (Bish Auck)

Cocks, Michael (Bristol S)

Ashton, Joe

Bradley, Tom

Cohen, Stanley

Atkins, Ronald (Preston N)

Brown, Hugh D. (Glasgow, Pr)

Coleman, L,

Atkinson, Norman

Brown, Robert C. (Newcastle)

Concannon, J. D.

Bagier, Gordon A. T.

Brown, Ronald (Hackney S)

Conian, Bernard

Barnett, Guy (Greenwich)

Buchan, Norman

Cook, Robin F. (Edln C)

Barnett, Joel (Heywood)

Buchanan, Richard

Corbett, Robin

Bates, Alt

Butler, Mrs Joyce (Haringey)

Cox, Thomas (Wands, Toot)

Bean, R. E.

Callaghan, Jim (Mlddleton & P)

Craigen, J. M. (Maryhill)

Benn, Rt Hon Anthony Wedgwood

Campbell, Ian

Crawshaw, Richard

Bennett, Andrew (Stockport N)

Canavan, Dennis

Cronin, John

Bidwell, Sydney

Cant, R. B,

Crosland, Rt Hon Anthony

1470

1471

Cryer, Bob

John, Brynmor

Radice, Giles

Cunningham, Dr J. (Whiteh)

Johnson, James (Kingston W)

Richardson, Miss Jo

Dalyell, Tam

Johnson, (Derby S) Walter

Rifkind, Malcolm

Davidson, Arthur

Jones, Alec (Rhondda)

Roberts, Albert (Normanton)

Davies, Bryan (Enfield N)

Jones, Barry (East Flint)

Roberts, Gwilym (Cannock)

Davies, Denzil (Llanelli)

Jones, Dan (Burnley)

Robertson, John (Paisley)

Davies, Ifor (Gower)

Judd, Frank

Roderick, Caerwyn

Davis, S. Clinton (Hackney C)

Kaufman, Gerald

Rodgers, George (Chorley)

Deakins, Eric

Kelley, Richard

Rodgers, William (Teesside)

Dean, Joseph (Leeds West)

Kerr, Russell

Rooker, J. W.

de Freitas, Rt Hon Sir Geoffrey

Kilroy-Silk, Robert

Roper, John

Delargy, Hugh

Kimball, Marcus

Rose, Paul B.

Dell, Rt Hon Edmund

Klnnock, Neil

Ross, Rt Hon W. (Kilm'nock)

Dempsey, James

Lambie, David

Rowlands, Ted

Doig, Peter

Lamborn, Harry

Ryman, John

Dormand, J. D.

Lamond, James

Sedgemore, B.

Douglas-Mann, Bruce

Latham, Arthur (Paddington)

Selby, Harry

Dunn, James A.

Leadbitter, Ted

Shaw, Arnold (Redbridge, Ilf)

Dunnett, Jack

Lee, John

Sheldon, Robert (Ashton-u-Lyne)

Eadie, Alex

Lewis, Arthur (Newham N.)

Shore, Rt Hon Peter

Edelman, Maurice

Lewis, Ron (Carlisle)

Short, Rt Hon Edward (Newcastle C)

Edge, Geoffrey

Lipton, Marcus

Short, Mrs Renée (Wolv NE)

Edwards, Robert (Wolv SE)

Litterick, Tom

Silkin, Rt Hn John (Lewish)

Ellis, John (Brig & Scun)

Lomas, Kenneth

Silkin, Rt Hn S. C. (Southwk)

Ellis, Tom (Wrexham)

Loyden, Eddie

Sillars, James

English, Michael

Lyon, Alexander (York)

Silverman, Julius

Ennals, David

Lyons, Edward (Bradford W)

Skinner, Dennis

Evans, Ioan L. (Aberdare)

McCartney, Hugh

Small, William

Evans, John (Newton)

McElhone, Frank

Smith, John (N Lanarkshire)

Ewing, Harrv (Stirling)

MacFarquhar, R.

Snape, Peter

Fairgrieve, Russell

McGuire, Michael (Ince)

Spriggs, Leslie

Faulds. Andrew

Mackenzie, Gregor

Sproat, Iain

Fernyhough, Rt Hon E.

Mackintosh, John P.

Stallard, A. W.

Fitch, Alan (Wigan)

McMillan, Tom (Glasgow C.)

Stewart, Rt Hn Michael (H'smith, F)

Flannery, Martin

McNamara, Kevin

Stott, Roger

Fletcher, Alex (Edinburgh N)

Madden, Max

Strang, Gavin

Fletcher, Raymond (Ilkeston)

Magee, Bryan

Strauss, Rt Hon G. R.

Fletcher, Ted (Darlington)

Mahon, Simon

Summerskill, Hon Dr Shirley

Ford, Ben T.

Mallalieu, J. P. W.

Swain, Thomas

Forrester, John

Marks, Ken

Taylor, Mrs Ann (Bolton W)

Fowler, Gerald (The Wrekin)

Marquand, David

Thomas, Jeffrey (Abertillery)

Fraser, John (Lambeth, N)

Marshall, Dr. Edmund (Goole)

Thomas, Mike (Newcastle)

Freeson, Reginald

Mason, Rt Hon Roy

Thomas, Ron (Bristol NW)

Garrett, John (Norwich S)

Maynard, Miss Joan

Thorne, Stan (Preston)

Garrett, W. E. (Wallsend)

Hellish, Rt Hon Robert

Tierney, Sydney

George, Bruce

Mendelson, John

Tinn, James

Gilbert, Dr John

Mikardo, Ian

Tomlinson, John

Ginsburg, David

Millan, Bruce

Tomney, Frank

Golding, John

Miller, Mrs Millie (Redbridge)

Torney, Tom

Gould, Bryan

Mitchell, R. C. (Soton, Itchen)

Tuck, Raphael

Gourlay, Harry

Molloy, William

Urwin, T. W.

Grant, George (Morpeth)

Monro, Hector

Varley, Rt Hon Eric G.

Grant, John (Islington C.)

Morris, Alfred (Wythenshawe)

Wainwright, Edwin (Dearne V)

Grocott, Bruce

Morris, Charles R. (Openshaw)

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

Hamilton, James (Bothwell)

Morris, Rt Hon John (Aberavon)

Walker, Harold (Doncaster)

Hamilton, W. W. (Central Fife)

Moyle, Roland

Walker, Terry (Kingswood)

Harper, Joseph

Mulley, Rt Hon Frederick

Watkins, David

Harrison, Walter (Wakefield)

Murray, Ronald King

Watkinson, John

Hart, Rt Hon Judith

Newens, Stanley

Weetch, Ken

Hatton, Frank

Noble, Mike

Weitzman, David

Hayman, Mrs Helene

Oakes, Gordon

Wellbeloved, James

Healey, Rt Hon Denis

Ogden, Eric

White, Frank R. (Bury)

Heffer, Eric S.

O'Halloran, Michael

White, James (Glasgow, P)

Hooley, Frank

O'Malley, Rt Hon Brian

Whitehead, Phillip

Horam, John

Orbach, Maurice

Whitlock, William

Howell, Denis (B'ham, Sm H)

Ovenden, John

Willey, Rt Hon Frederick

Hoyle, Doug (Nelson)

Owen, Dr David

Williams, Alan, Lee (Haver'g)

Huckfield, Leslie

Padley, Walter

Williams, Rt Hn Shirley (Hertford)

Hughes, Rt Hon C. (Anglesey)

Palmer, Arthur

Williams, W. T. (Warrington)

Hughes, Mark (Durham)

Park, George

Wilson, Alexander (Hamilton)

Hughes, Robert (Aberdeen N)

Parker, John

Wilson, Rt Hon H. (Huyton)

Hughes, Roy (Newport)

Parry, Robert

Wilson, William (Coventry SE)

Hunter, Adam

Pavitt, Laurie

Wise, Mrs Audrey

Irvine, Rt Hon Sir A. (L'pool)

Peart, Rt Hon Fred

Woof, Robert

Irving, Rt Hon S. (Dartford)

Pendry, Tom

Wrigglesworth, Ian

Jackson, Colin (Brighouse)

Perry, Ernest

Young, David (Bolton E)

Jackson, Miss Margaret (Lincoln)

Phipps, Dr Colin

Janner, Greville

Prescott, John

TELLERS FOR THE NOES:

Jenkins, Hugh (Wandsworth)

Price, Christopher (Lewisham W)

Miss Betty Boothroyd and

Jenkins, Rt Hon Roy (B'ham, St)

Price, William (Rugby)

Mr. David Stoddart.

  CIVIL SERVICE
    Dispersal
    Dispersal
    Pensions and Terminal Grants
    Pensions and Terminal Grants
DEFENCE
  Berlin (British Forces' Payment)
  Berlin (British Forces' Payment)
  Ordnance Survey
  Ordnance Survey
ENERGY
  Counter-Inflation Policy
  Counter-Inflation Policy
  North Sea Oil
  North Sea Oil
  Nuclear Waste
  Nuclear Waste
  Natural Gas Prices
  Natural Gas Prices
NATIONAL FINANCE
  Widows (Income Tax)
  Widows (Income Tax)
  Corporation Tax
  Corporation Tax
  Taxation (Wales)
  Taxation (Wales)
  Film Industry
  Film Industry
  Public Expenditure
  Public Expenditure
NORTHERN IRELAND
  Royal Ulster Constabulary
  Royal Ulster Constabulary
HOUSE OF COMMONS
  Select Committee (Cyprus)
  Select Committee (Cyprus)
  Broadcasting Experiment (Temporary Structure)
  Broadcasting Experiment (Temporary Structure)
  Members' Accommodation
  Members' Accommodation
  Members' Pay
  Members' Pay
  Members' Facilities
  Members' Facilities
SCOTLAND
  Schooling (Strathclyde)
  Schooling (Strathclyde)
  Mental Illness Hospitals
  Mental Illness Hospitals
  Mileage Allowance (Public Servants)
  Mileage Allowance (Public Servants)
  Rates
  Rates
  Electricity Demand
  Electricity Demand
  Power Stations
  Power Stations
  Deaths by Drowning
  Deaths by Drowning
  Electricity Generation
  Electricity Generation
  Eriskay
  Eriskay
  Disabled Drivers
  Disabled Drivers
  Justices of the Peace
  Justices of the Peace
  Training Ship "Captain Scott"
  Training Ship "Captain Scott"
  M9 and M876
  M9 and M876
EDUCATION AND SCIENCE
  Nursery Education
  Nursery Education
  Bristol Polytechnic
  Bristol Polytechnic
  School Leavers
  School Leavers
  School Meals
  School Meals
  Teachers
  Teachers
  Education Programme (Growth)
  Education Programme (Growth)
  Voluntary Aided Schools
  Voluntary Aided Schools
TRADE
  Pilotage (Scott Report)
  Pilotage (Scott Report)
  Waste Paper
  Waste Paper
  Japan (Motor Vehicles)
  Japan (Motor Vehicles)
  European Community
  European Community
  Motor Vehicles
  Motor Vehicles
  Civil Aviation Authority Headquarters
  Civil Aviation Authority Headquarters
  British Airways (Overbooking)
  British Airways (Overbooking)
  Tourism (Spain)
  Tourism (Spain)
  Companies (Inspection)
  Companies (Inspection)
  Wool Textiles
  Wool Textiles
  Television Sets
  Television Sets
  Whale Oil Imports
  Whale Oil Imports
  Hotels
  Hotels
  Sri Lanka Tea Estates
  Sri Lanka Tea Estates
  Trawlers (Safety)
  Trawlers (Safety)
  Rabbits
  Rabbits
HOME DEPARTMENT
  Republic of Ireland (Broadcasting Bill)
  Republic of Ireland (Broadcasting Bill)
  Prisons (Boards of Visitors)
  Prisons (Boards of Visitors)
  Mileage Allowance (Public Servants)
  Mileage Allowance (Public Servants)
  Political Violence
  Political Violence
  Fire Service
  Fire Service
  Television Licences
  Television Licences
  Police (Cheshire)
  Police (Cheshire)
  Civil Servants (Unauthorised Disclosures)
  Civil Servants (Unauthorised Disclosures)
  Alien Mental Patients (Repatriation)
  Alien Mental Patients (Repatriation)
  Police (Complaints Procedure)
  Police (Complaints Procedure)
  Departmental Correspondence
  Departmental Correspondence
  Fire Precautions (Old People's Homes)
  Fire Precautions (Old People's Homes)
  Parking Offences
  Parking Offences
  Bela River Prison, Westmorland
  Bela River Prison, Westmorland
  Immigration (Children)
  Immigration (Children)
INDUSTRY
  Boat Building (Value Added Tax)
  Boat Building (Value Added Tax)
  Post Office
  Post Office
  Shipbuilding
  Shipbuilding
  Television Sets
  Television Sets
  Postal Deliveries
  Postal Deliveries
  Steel Imports
  Steel Imports
PRICES AND CONSUMER PROTECTION
  Toys
  Toys
  Credit Reference Agencies
  Credit Reference Agencies
  Green Pound
  Green Pound
  Hair Dyes
  Hair Dyes
FOREIGN AND COMMONWEALTH AFFAIRS
  Animals (Illegal Imports)
  Animals (Illegal Imports)
  Cyprus (United Kingdom Citizens)
  Cyprus (United Kingdom Citizens)
  Training (Young Persons)
  Training (Young Persons)
EMPLOYMENT
  Statistics
  Statistics
  Short Time and Overtime
  Short Time and Overtime
  Unemployment Statistics
  Unemployment Statistics
  Redundancy Pay
  Redundancy Pay
  Disabled Persons
  Disabled Persons
  Vacancies
  Vacancies
  Wages Council Legislation
  Wages Council Legislation
  School Leavers
  School Leavers
  Public Holidays
  Public Holidays
  Wool Textile Industry (Scotland)
  Wool Textile Industry (Scotland)
  Employment Exchanges (Managerial and Executive Posts)
  Employment Exchanges (Managerial and Executive Posts)
  Training
  Training
  Building Workers (Scotland)
  Building Workers (Scotland)
  Lanarkshire
  Lanarkshire
  Construction Industry (Apprenticeship Schemes)
  Construction Industry (Apprenticeship Schemes)
  Work Creation
  Work Creation
  Trade Unions (Elections)
  Trade Unions (Elections)
  Unemployed Persons
  Unemployed Persons
  School Leavers
  School Leavers
WALES
  Mileage Allowance (Public Servants)
  Mileage Allowance (Public Servants)
  Office Accommodation (Ruthin)
  Office Accommodation (Ruthin)
  Wages
  Wages
  Roads (Expenditure)
  Roads (Expenditure)
  Water Abstraction Charges
  Water Abstraction Charges
  Employment
  Employment
AGRICULTURE, FISHERIES AND FOOD
  Sugar Beet
  Sugar Beet
  Pigs
  Pigs
  Dairy Products (Disposal)
  Dairy Products (Disposal)
  Hill and Marginal Land Farmers
  Hill and Marginal Land Farmers
  Food Prices
  Food Prices
  Potatoes
  Potatoes
  Eggs
  Eggs
  Agricultural Shows (Departmental Officials)
  Agricultural Shows (Departmental Officials)
  Horticulture (Gas Supplies)
  Horticulture (Gas Supplies)
  Agricultural and Horticultural Co-operation
  Agricultural and Horticultural Co-operation
  Skimmed Milk Powder
  Skimmed Milk Powder
  Beef Prices (Northern Ireland)
  Beef Prices (Northern Ireland)
  Cattle Smuggling (Northern Ireland)
  Cattle Smuggling (Northern Ireland)
  Green Pound
  Green Pound
ENVIRONMENT
  Valuers
  Valuers
  Local Government Pay
  Local Government Pay
  Tring (Bypass)
  Tring (Bypass)
  North West Regional Water Authority
  North West Regional Water Authority
  Listed Buildings (London)
  Listed Buildings (London)
  Pelt Imports
  Pelt Imports
  Housing Costs
  Housing Costs
  Construction Industry (Scotland)
  Construction Industry (Scotland)
  Local Government Boundaries
  Local Government Boundaries
  Bovingdon
  Bovingdon
  British Railways Board (Report)
  British Railways Board (Report)
  House Repairs
  House Repairs
  Play Spaces
  Play Spaces
  Housing Finance
  Housing Finance
  Rents
  Rents
  Drainage Districts
  Drainage Districts
SOCIAL SERVICES
  Mileage Allowance (Public Servants)
  Mileage Allowance (Public Servants)
  Residential Homes (Fire Precautions)
  Residential Homes (Fire Precautions)
  Community Health Councils
  Community Health Councils
  Child Care
  Child Care
  Student Nurses
  Student Nurses
  Scottish Minors (Work Abroad)
  Scottish Minors (Work Abroad)
  Typhoid Vaccine
  Typhoid Vaccine
  Nurses (Bournemouth)
  Nurses (Bournemouth)
  Homeless Persons
  Homeless Persons

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

PENSIONS AND PAY LIMIT
Lord LEATHERLAND: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how the proposed wage and salary restrictions will affect local government and other pensions where the rate of superannuation is based on the final year's or final three years' salaries.
The MINISTER of STATE, SCOTTISH OFFICE (Lord Hughes): My Lords, my right honourable friend the Secretary of State for Employment made the position on pensions clear in his speech during the Second Reading of the Remuneration, Charges and Grants Bill in the other place last Wednesday. My right honourable friend announced that the arrangements for the payment of pensions under existing schemes may continue unchanged. Such arrangements are not affected by the pay limit. He also said that it will be open to those concerned to decide, if they wish, to continue to calculate pension entitlements on the basis of the rate of pay to which the employer was committed before 11th July, even though that commitment may be limited by the new policy.
Lord LEATHERLAND: My Lords, I thank my noble friend for that Answer. Does it mean, as I think it does, that if a man was supposed to have a £500 increment this year, the year of his retirement, the figure upon which his pension is based would be £500 more than the cash he actually drew?
Lord HUGHES: Yes, my Lords; if that was the commitment entered into before 11th July.
Lord LEATHERLAND: My Lords, I thank my noble friend for that Answer. I am sure that it will give great pleasure to many thousands of local government employees.
The Earl of ONSLOW: My Lords, is it not rather odd that we should base pensions on a notional salary received? I note that this habit was started in another place, but surely a pension should be based on the actual salary, not on the notional one.
Lord HUGHES: My Lords, I think the information given by my right honourable friend in another place has received the same sort of general welcome as that given by my noble friend Lord Leatherland.
The Earl of ONSLOW: My Lords, could the noble Lord, Lord Hughes, go slightly further in answering my question, as opposed to saying what his right honourable friend said in another place, and not repeating it?
Lord HUGHES: My Lords, I do not know what the noble Earl, Lord Onslow, wants me to say. I find the position perfectly satisfactory.
The Earl of ONSLOW: My Lords, what I am asking the noble Lord opposite is this. Is it not very odd to base a pension on a notional salary as opposed to a salary actually received?
Lord HUGHES: No, my Lords. This is not something which has just arisen as a result of these present arrangements. It is something which happens from time to time in the ordinary course of pension and working arrangements.
Lord CROOK: My Lords, is the noble Earl, Lord Onslow, not aware that this is part of the contract of employment of the people in question?
Viscount ST. DAVIDS: My Lords, is the noble Lord aware that this habit has been going on for at least 200 years in the Navy, which has been in the habit of making retiring captains into yellow admirals for the specific purpose of getting them a pension of appropriate size?
Lord HUGHES: My Lords, that goes back before my time! But I will accept the noble Viscount's word for it that it is correct.
Viscount DAVENTRY: My Lords, may I just say that that is not correct?

POP FESTIVALS AND AGRICULTURAL LAND RATES
2.40 p.m.
Lord LEATHERLAND: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what local government rates are paid on land rated as agricultural when it is used for pop festivals and similar purposes.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, although no rates are payable on agricultural land, such uses, if regular and on a significant scale, could give rise to a rate liability.
Lord LEATHERLAND: My Lords, I thank the noble Baroness, Lady Birk, for that Answer, which is partly satisfactory. Is the noble Baroness aware that I do not attend these festivals—
Several Noble Lords: Oh!
Lord LEATHERLAND:—but I have no objection to them? Is the noble Baroness also aware that rate exemption for agricultural land is allowed on condition that the land is used solely for agriculture, and if it is not solely used for that purpose, surely it ought to pay a portion of its rates?
Baroness BIRK: My Lords, where agricultural land is not used for that purpose the question of rateable liability can be decided only by the courts. To my knowledge, there have been no decided cases yet concerning pop festivals, but whether or not the land becomes rateable because of the use of the land for pop festivals or other such uses, depends on the degree of use and the revenue to the owner of the land. I was not aware that my noble friend Lord Leatherland did not attend pop festivals.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, can the
710
noble Baroness give an assurance that, where the pop festival has been sanctioned by the Home Secretary against the wish of the local community, it will not adversely affect the liability to rates of the local community?
Baroness BIRK: My Lords, that is a quite different point, as the noble and learned Lord, Lord Hailsham of Saint Marylebone, is aware. It has nothing to do with rateable liability.
Lord AVEBURY: My Lords, how can the noble Baroness say it is only in cases where the use is on a regular or significant scale, if there have not been any cases before the courts on which determination has been made?
Baroness BIRK: My Lords, I believe there was a case brought before the court concerning an occasion when a fair took place for a certain number of days. There has been no degree of case law on which I can base an answer. Every case has to go to the courts.
Lord LEATHERLAND: My Lords, is the noble Baroness aware that in one or two days a single pop festival can do more damage to the agricultural quality of the land than in a month or two of ordinary usage?
Baroness BIRK: My Lords, this is a matter entirely for the person whose land it is. If the land belongs to a private landowner or a farmer, it is up to that landowner or farmer to say whether he will allow his land to be used for a pop festival.
Lord WYNNE-JONES: My Lords, is the noble Baroness aware that the use of land occasionally for pop festivals is very much welcomed? Is she also aware that the beneficial results of pop festivals are generally acclaimed?

MALAGASY REPUBLIC: U.K. REPRESENTATION
Lord MERRIVALE: 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 at a time when the Malagasy Republic is currently passing through a transitional and unsettled period, and

711
bearing in mind the long standing friendship and historical ties between our two countries (e.g. the Treaty of Peace, Friendship and Commerce of 27th June 1865) and that country's present need of encouragement and attention, Her Majesty's Government will make a statement on the decision to close the British Embassy in Tananarive.
The PARLIAMENTARY UNDERSECRETARY of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, the decision to close the British Embassy in Tananarive is a direct result of a reductions in public expenditure for 1976–77 announced by my right honourable friend the Chancellor of the Exchequer in his Budget earlier this year. It has naturally been taken with great regret, particularly in view of the long-standing friendship between this country and Madagascar, to which the noble Lord has rightly referred.
Lord MERRIVALE: My Lords, while thanking the Minister for his reply, may I commend to him Article No. 1 of the 1865 Treaty. Does the Minister consider that the decision might be very ill-timed, as the new Head of State, Didier Ratsiraka came to power only last month, and as the country has at present serious social, political and economic problems, and as there could—and I say could—be increased Communist influence there? Would the Minister also consider that the financial saving might be less than the political loss, at a time when, in effect, Madagascar is seeking to strengthen its commercial relations and its cultural links with this country?
Lord GORONWY-ROBERTS: My Lords, I am bound to say that I have every sympathy with what the noble Lord has said. However, when a demand for economy is made as a matter of national policy my Department cannot expect to be exempt. We gave very careful consideration to this matter, and although this post has done useful work, we found that there was no alternative—if we were to meet the table of requirements included in the Budget speech in another place; namely, a 1½ per cent. reduction in our Departmental overseas expenditure—but to decide on closure of some post or posts. I very
712
much regret this, but it is inevitable in the climate of our time.
Baroness ELLES: My Lords, can the Minister say whether any of the other EEC Member-States will be retaining embassies in Madagascar and whether any arrangements will be made for our diplomatic links with Madagascar to be continued through these other Member-States?
Lord GORONWY-ROBERTS: My Lords, I can give the assurance that a number of EEC Member-States will retain their posts in Tananarive. We shall, of course, be seeking to accredit from elsewhere appropriate representation to the capital of the Malagasy Republic and it is perfectly possible—in fact it is rather a good idea—that a fellow member of the Community might be consulted as to the possibility of taking this on.
Lord BROCKWAY: My Lords, I am not sure whether I ought to declare a personal interest, as my grandfather was one of the first Protestant missionaries in Madagascar in the last century. May I ask the Minister this. Would Her Majesty's Government consider at the earliest possible moment British representation in Madagascar, for two reasons? First, its presence might contribute to the fulfilment of democracy there, and, secondly, it lies between the ex-British colonies in East Africa and Mauritius and is tremendously important in that connection.
Lord GORONWY-ROBERTS: My Lords, I most certainly will bear in mind what my noble friend has said. The second part of his supplementary is most apposite, and so is the first, in which he reminds us that missions of every kind are subject to fluctuation.
Lord DRUMALBYN: My Lords, may I ask the noble Lord what he meant by "accredited elsewhere"? Does he envisage that one of our overseas representatives accredited to another Power will also be able to represent Her Majesty's Government in Madagascar? He is, of course, aware that this is done frequently by other countries. May I also ask him whether it would be appropriate or practicable for a High Commissioner to represent Her Majesty's Government, or must it be somebody accredited to a non-Commonwealth country?
Lord GORONWY-ROBERTS: My Lords, I am most grateful for the opportunity to be somewhat more precise on the subject of accreditation. As the noble Lord implies, multiple accreditation in this case, as in similar cases, would mean that we would empower another of Her Majesty's ambassadors to represent us from a point elsewhere. However, in answer to the interesting suggestion made by the noble Baroness, I thought I would say that in considering where this "elsewhere" should be, it might be interesting to talk it over with a member or members of the Community, because they, without naming any one of them, have interests in that region of the world. On the question of the High Commissioner, I think I know what the noble Lord has in mind. There is nothing to rule out the possible accreditation of a High Commissioner to represent us in Madagascar from elsewhere.
Lord SLATER: My Lords, is my noble friend aware that, while there may be some feeling in regard to the Government having to take this line in regard to Madagascar, the same feeling was also ventilated in regard to the Trucial States, when Her Majesty's Government had to take similar action, when we had to withdraw in regard to the defensive purposes and rights which we had held for so long in that part of the world?
Lord GORONWY-ROBERTS: My Lords, my noble friend is quite right and he has adduced an example of the way in which diplomatic requirements fluctuate at a time when, for reasons of economy, we are so reluctantly closing one or possibly more posts. At the same time, new demands are made on our diplomatic service—for instance, in Brussels—and in regard to almost permanent international conferences which call for ambassadorial or ambassadorial-level representation.
Lord MERRIVALE: My Lords, may I ask the Minister two further questions? Would Her Majesty's Government consider asking our High Commissioner in Tanzania, Mr. Mervyn Brown, an ex-Ambassador to Madagascar who also speaks Malagasy, and who is liked by them and is very fond of them, to go over from Dar es Salaam to explain the position of Her Majesty's Government to them, which would be a friendly and good gesture? Secondly, can the Minister
714
say what other embassies are being closed? I understand that there are a total of eight.
Lord GORONWY-ROBERTS: My Lords, the first point is certainly a helpful suggestion. On the second point, if the noble Lord would put down a separate Question, I shall answer it.

CSCE RECOMMENDATIONS AND HELSINKI SUMMIT
2.52 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 they will make to the Summit Meeting at Helsinki for the implementation of the recommendations of the baskets at Geneva on European Security and Co-operation.
Lord GORONWY-ROBERTS: My Lords, recommendations on how the decisions of the Conference on Security and Co-operation in Europe will be put into effect are included in the Final Act of the Conference which will be signed by my right honourable friend the Prime Minister at the Third Stage of the Conference at Helsinki at the end of this week. A copy of the latest version of the Final Act has been placed in the Library of the House. The test of the success of the Conference will lie in how its decisions are fulfilled, and the noble Lord can be certain that this Government will fully honour their obligations.
Lord BROCKWAY: My Lords, while thanking the Minister for that reply, may I ask him whether he is aware that I spent the weekend reading this 30,000 word document of recommendations, particularly the proposals regarding implementation? In view of the quite extraordinary concessions which the Soviet Union has made on human rights, and the concessions which the West has made in economic co-operation, does not everything depend upon their implementation if the transformation of Europe to which The Times referred this morning is to be carried out? Is he satisfied that we should leave it for two years until there is a meeting of the officials, before anything

715
obligatory is done to carry out these recommendations?
Lord GORONWY-ROBERTS: Yes, my Lords, I entirely agree that the proof of the usefulness of this unprecedented Conference and its decisions will be in the implementation of its agreements by all countries who signed them. As to the way of seeing that implementation is carried out, the general feeling was that time should be given so that all signatory countries would be given a chance of implementing what they had signed. We think that that is right. Of course, their performance will be mutually observed and commented upon in the meantime, and most certainly at the end of that period there will be a conference at which a kind of audit of performance will be rigorously conducted. On the whole, I think it is best to give time for members to show that they mean what they sign before we move on to anything like an institutional check-up on what they are doing.
Baroness GAITSKELL: My Lords, could the Minister tell those of us who regard this as a game of basketball that may go on in Helsinki, but who are glad that we are getting together, what are the concessions that the Soviet Union has made?
Lord GORONWY-ROBERTS: My Lords, I do not think that I could exhaust the categories on either side at Question Time. Possibly I might try the patience of the House if I attempted to do that. There are ways in which we might discuss this. We had a useful debate on this at the instance of my noble friend Lord Brockway about two weeks ago. Speaking for myself, and with due regard to the exigencies which beset my noble friend the Lord Privy Seal, I would welcome a further discussion now that the full agreement has been published.
Earl COWLEY: My Lords, does the noble Lord recognise that we on this side of the House support realistic moves towards détente? But since the Security Conference was made conditional on MBFR, may I ask what incentives the Government will give the Russians and the Warsaw Pact countries to end the stalemate in those talks now that the Security Conference documents are to be signed on Wednesday?
Lord GORONWY-ROBERTS: My Lords, I think that two factors arising from the CSCE should help to make MBFR more practical in results. First, there are certain provisions in the CSCE on confidence-building which I shall not go into in detail today but which should stimulate a faster pace of agreement in MBFR. Secondly, now that we have the CSCE settled, as it were, the scarce and highly qualified manpower hitherto engrossed in the CSCE should be available to speed up the discussions in Vienna.
Lord BROCKWAY: My Lords, while appreciating that this quite astonishing document will require consideration by various Governments, may I ask the Minister whether it would not be possible for the United Nations European Commission on Economic Co-operation in these two years to set up working parties between the Governments to work out these plans in detail? May it not be possible to establish a human rights commission, which will enable us to draw attention to any infringements by the Soviet Union of the decisions to which it has pleged itself?
Lord GORONWY-ROBERTS: My Lords, I have indicated as briefly as I could the Government's view, and that of other Governments, on the question of setting up institutions ahead of practical experience of the working of the agreements. I think it would be wise to let this run to see how it works and who works it, before we get down to the detailed question of prescriptive observance by institutions of how the agreements are working. I understand my noble friend's concern that this should not simply be something on paper, but, as no doubt my right honourable friend will say in Helsinki, as indeed all Heads of State who have pronounced on this have already said, the proof of this is in the implementation. This is not a legal document: it is a statement of standards for European countries to reach. They should be implemented, and we shall be very concerned to see that they are.
The Earl of ONSLOW: My Lords, would the noble Lord tell us his ideas on the free movement of people, for instance, from Czechoslovakia and Hungary, peradventure, across into

717
Western Europe? Secondly, could he tell us how the balance of forces in Russia and Eastern Europe vis-à-vis Western Europe has changed since the discussions have been going on in Helsinki?
Lord GORONWY-ROBERTS: On the second technical question, my Lords, not without notice. On the first, in Basket III there are very detailed provisions for the free movement of persons for personal, professional or, indeed, religious reasons from one country to another. If only that part of the agreement was faithfully carried out it would prove a great boon to many people in Europe.

PRIVATE BILL STANDING ORDERS
The CHAIRMAN of COMMITTEES (The Earl of Listowel): My Lords, I beg to move the Motion standing in my name on the Order Paper. At this time in the Session I usually have to ask your Lordships to dispense with Standing Order No. 147 in order to enable certain Private Bills to pass through both Houses of Parliament before the Summer Recess. The purpose of suspending this Standing Order is to shorten the period between the Committee stage and Third Reading of a Bill by not requiring the Departments concerned to receive the amended Bill three clear days in advance.
Moved, That Standing Order No. 147 (Bill as amended in Committee to be deposited at Public Departments) be dispensed with until the House rises for the Summer Recess.—(The Earl of Listowel.)
On Question, Motion agreed to.

BUSINESS OF THE HOUSE
3.1 p.m.
The LORD PRIVY SEAL (Lord Shepherd): My Lords, I beg to move the Motion standing in my name on the Order Paper. In moving this Motion, may I refer to the programme for two Bills which are affected by it? The Remuneration Charges and Grants Bill has now passed its Committee stage in another place and is expected to complete its remaining stages there tomorrow night. I propose that the Bill should
718
have its Second Reading here tomorrow and for the Committee and other stages to be taken on Thursday. On Wednesday a debate on the economic situation will be followed by a Motion, and the Finance Bill will also be taken through all its stages then.
If noble Lords wish to move Amendments to the Remuneration, Charges and Grants Bill, this will be possible on Thursday and I have arranged that the Public Bill Office will accept notice of Amendments at any time between now and the Committee stage of the Bill, and these will be published from the time when the Bill is received from the Commons. I hope that this arrangement will be for the general convenience of the House. Although unusual, it is not without precedent to put down Amendments before Second Reading. I believe that it is to everyone's advantage to have as much notice as possible of any Amendments that we shall be discussing. I should also inform the House that it is our intention to introduce tomorrow the Community Land (No. 2) Bill which will be for debate on Monday, 4th August.
Moved, That Standing Order No. 38 (Arrangement of the Order Paper) be suspended until the Summer Recess so far as is necessary to give the Government power to arrange the order of business; and that Standing Order No. 44 (No two stages of a Bill to be taken on one day) be suspended for the same period.—(Lord Shepherd.)
Lord CARRINGTON: My Lords, the Motion which the Leader of the House has just moved is one we have come to expect all Governments to move at this time of the year, so nobody on this side of the House would object to what the noble Lord is doing. However, I should like to clear up two points arising out of what he said. First, I understood him to say that the Second Reading of the Remuneration, Charges and Grants Bill would be taken tomorrow. Did the noble Lord mean that?
Lord SHEPHERD: I did not, my Lords. I was doing some quick paraphrasing of a prepared statement and I misunderstood or mistook my own writing; the Second Reading will be on Wednesday with the Committee stage on Thursday.
Lord CARRINGTON: My Lords, that seems to have cleared that up satisfactorily. I hope that my other point will be cleared up equally satisfactorily. In all parts of the House, and certainly on this side, I think there is increasing concern about the amount of legislation which is left for the spill-over, the four weeks before the Prorogation of Parliament. There is no doubt that the House will be very busy indeed. There are three Bills, two of which will only just have been discussed by your Lordships, and all of them have to be on the Statute Book, if the Government have their way, by the end of the Session. They are the Community Land (No. 2) Bill, the Employment Protection Bill and the Petroleum and Submarine Pipe-lines Bill. I doubt very much whether in that short time those three Bills can be discussed by the House in the way they should be discussed. Indeed, two of them have large sections which have never been discussed at all by the House of Commons. Consequently, I am exceedingly worried about what may happen to your Lordships in that month.
All Governments—I am not making a Party point here—make a habit of pushing everything to your Lordships' House at the end of the Session; but there comes a moment when it is almost too much for the House to bear, and it might very well be that unless the Leader of the House finds some other means it will not be possible for the House to do that which he is asking. It is proposed, as I understand it, that next week the second day of the Report stage of the Industry Bill should be taken and that at the same time we should take the Third Reading. I really do not feel that my noble friends and I could agree to that—
Several Noble Lords: Hear, hear!
Lord CARRINGTON:—and it does not seem to me right that on a Bill of this importance, a Bill as controversial as the Industry Bill, we should have the Report stage and Third Reading on the same day. I therefore ask the Leader of the House to take note of the fact that certainly we on this side of the House could not agree to that.
3.7 p.m.
Lord BYERS: My Lords. I wish to endorse what the noble Lord, Lord
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Carrington, has said. This House is in grave danger of risking its reputation as the Revising Chamber if we go on putting this sort of pressure on it at this time of the year. I must express to the Leader of the House my serious doubts about the way in which we are asked to treat the Remuneration, Charges and Grants Bill, by taking all the remaining stages in one day. This Bill has been hastily put together, a tremendous number of Amendments have been put down and selected in another place, and it may be that we shall not only require a Committee stage but a Report stage if, as a Revising Chamber, we are to do our job properly.
Lord SHEPHERD: My Lords, I am entirely in the hands of the House in regard to our business. As the noble Lord, Lord Carrington, said, all Governments at this time of the year find themselves in embarrassing situations. I tell the noble Lord, Lord Carrington, in all honesty, that I find myself in perhaps the most embarrassing situation because I freely recognise that the pressure of business this year is abnormally heavy; but some of that pressure is as a consequence of agreements reached through the usual channels in another place to overcome some of their problems, and of course we have been aware of those arrangements.
This is one of the reasons why we have a particularly short time for dealing with the Remuneration, Charges and Grants Bill. The Bill is required for Royal Assent by 1st August and I am quite willing—I have already had some conversations—to have conservations through the usual channels on how best this Bill can be conducted through your Lordships' House. I had intended to take all stages on Thursday with the general debate on the White Paper on Wednesday; but it had been put to me, again through the usual channels, that it might be wiser to take the Second Reading on the Wednesday, leaving Thursday much freer for the Committee and remaining stages of the Bill. If the noble Lord, Lord Byers, feels very strongly in regard to the Report stage, I am willing to listen to any representations to see whether the situation can be met; but I suggest that we see how we go with this Bill.
Lord BYERS: My Lords, the difficulty is that the Report stage is not being taken in another place until tomorrow and we

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shall not know the attitude of the Government and therefore what attitude this House ought to take as to the Amendments which should be put down here.
Lord SHEPHERD: My Lords, that I fully appreciate. The noble Lord, Lord Byers, is as well aware as I am of the problems and difficulties in another place. If the noble Lord would wish, I will develop my speech somewhat on Wednesday to indicate to your Lordships what Amendments have been made between the conclusion of the Committee stage on Friday afternoon and the Wednesday.
In regard to the problem of the spill-over, it is true that we have three major Bills. Looking at the programme, I should have thought that we could have done justice to these Bills; but I can only say to your Lordships that if there is a genuine desire for a fuller examination of them, then I am quite willing to suggest to your Lordships that we come back sometime in September so that we might then have a much more relaxed examination of the legislation.
In regard to the Industry Bill, I recognise that it is controversial. I would not hazard a guess what will be the situation for some of our companies which may need assistance during what may be our Summer Recess. I should have thought that there was very great advantage in having the Bill on the Statute Book by the Summer Recess, but that is a matter for your Lordships. I am quite willing to have further discussion with the noble Lord the Leader of the Opposition to seek to persuade him and his noble colleagues to let the Bill receive the Royal Assent by then but, if your Lordships insist, there is nothing I can do but let the Royal Assent take place in the spill-over. However, I do not believe that it would be for the good of many companies which are in need of assistance from an organisation like the NEB that we should delay the passage of the Bill.
Lord SLATER: Is my noble friend aware that, being one of the greatest employers of labour in the country, we should take into consideration the employees in Government service who will be responsible in the various Departments? I was rather surprised to hear the observations of the noble Lords, Lord Carrington and Lord Byers. The noble
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Lord, Lord Byers, especially, as an old Parliamentarian from the other place, ought to know the procedure and how matters are conducted there. It was rather remarkable to hear the observations which he made in support of the noble Lord, Lord Carrington.
Lord SHEPHERD: My Lords, I only say to my noble friend that I feel that the noble Lords, Lord Carrington and Lord Byers, have done something perfectly understandable and right. I am indeed fortunate that neither of them quoted a speech that I made in 1971, on a very similar occasion when I said, "Enough is enough!" never dreaming that I should have to deal with a similar situation. But this is a matter for the House. I do not complain. I believe that it is right that Governments should from time to time be brought to heel if they put too great a burden on both Houses. However, I feel that this is a matter which can best be dealt with through the usual channels with our usual degree of harmony and understanding. I believe that in the end we shall reach the best solution.
Lord DRUMALBYN: My Lords, with regard to the Industry Bill, may I say that we on this side of the House very much doubt whether it will be necessary to carry the Industry Bill through in order to help companies. The previous Government put the Industry Act on to the Statute Book and Sections 7 and 8 of that Act still remain. It is very much more important, I believe, that we should not give the impression in the country that we are hastening legislation through and are not discussing it properly.
Secondly, the noble Lord said he was proposing to give a First Reading to the Community Land (No. 2) Bill. Is not this a second example of a rather dubious practice—namely, is it not being brought forward a little too soon? We have already had that procedure with the Protection of Policyholders Bill, but that was for a very different reason. Now we are having a Bill brought to this House before it has been fully discussed in another place, and we shall be debating on Second Reading what may well not be the Bill as it ultimately comes to this House. Surely that cannot be right? It is just an example of how the House is being grossly overladen and of how the

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possibility of discussing legislation properly is being denied to this House.
Lord SHEPHERD: My Lords, with regard to the Industry Bill, I should have been very much happier and should perhaps have concurred with the noble Lord, Lord Drumalbyn, had the Industrial Reorganisation Corporation still been in being. The noble Lord will know what I mean when I say that. With regard to the Community Land (No. 2) Bill, the proposal is made for convenience in order that the House may debate the broad principles of the Government's proposals. The Bill, when it conies from another place, will of course be subject to debate; but it is hoped—again through the usual channels—that having had a broad discussion of the general principles, your Lordships will be willing to give the Bill a formal Second Reading when it comes from another place and to start work on the Committee stage immediately. In my view—and I believe the noble Lord will agree—that is the real purpose of your Lordships' House.
Lord ROCHESTER: My Lords, is it really necessary, in addition to the Report stage and Third Reading of the Industry Bill, to take the Second Reading of the Employment Protection Bill next week? Some of us are engaged on both Bills. Would it not be more sensible to deal with only one, the Industry Bill, and to seek to get it right so far as this House is concerned, rather than starting on the Employment Protection Bill, since we cannot hope to discuss it further in Committee for another month or two?
Lord SHEPHERD: My Lords, the noble Lord would be correct, and I should be very happy to go along with him, if the House would be willing to come back in September to debate the Second Reading and then go on into Committee in the spill-over. Unless we either come back in September or take the Second Reading next week, it will not be possible to provide the usual time between Committee and Report stage to which your Lordships' House has always attached special importance.
The Earl of LAUDERDALE: My Lords, without wishing to distract the Leader of the House and noble Lords opposite from the enticing prospect of
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buckets and spades, is the Petroleum and Submarine Pipe-lines Bill coming to this House before we rise and, if so, on what day are we to have the Second Reading?
Lord SHEPHERD: My Lords, on 7th August.
The Earl of LAUDERDALE: My Lords, while thanking the noble Lord for that information, may I ask whether he is expecting or hoping that that Second Reading will go through on the nod, or is he expecting a real debate about it in view of the unsatisfactory debate we had last week?
Lord SHEPHERD: My Lords, there is a great deal between hope and expectation. My expectation is that it may last a little longer than I had hoped, but I still hope that it will be short.
On Question, Motion agreed to.

LIMITATION BILL [H.L.]
3.18 p.m.
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg to move that the Commons Amendments be now considered.
Moved, That the Commons Amendments he now considered.—(The Lord Chancellor.)
On Question, Motion agreed to.
[References are to Bill [167] as first printed for the Commons]

COMMONS AMENDMENTS
[Nos. 1 and 2]
Clause 1, page 2, line 23, leave out from ("to") to end of line 24 and insert ("the act or omission which is alleged to constitute negligence, nuisance or breach of duty, and
(c) the identity of the defendant, and
(d) if it is alleged that the act or omission was that of a person other than the defendant, the identity of that person and the additional facts supporting the bringing of an action against the defendant.").
Clause 1,Page 2, line 26, leave out ("nuisance, negligence") and insert ("negligence, nuisance").
The LORD CHANCELLOR: My Lords, with the leave of the House, I beg to move that the House doth agree with the Commons in their Amendments Nos. 1 and 2 en bloc. The six Amendments with which we are concerned are all Government Amendments which are

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intended to improve the drafting of the Bill, but which make no change of substance. The first Amendment to new Section 2A(6) of Clause 1 sets out in more detail the facts, knowledge of which determines the plaintiff's date of knowledge for the purpose of fixing the time from which the period of limitation runs. It removes a possible difficulty of interpretation in cases where it is alleged by the plaintiff that the defendant is vicariously liable for the act of somebody else. The second Amendment merely changes the order of the closing words of subsection (6) to correspond with the order used elsewhere in the Bill.
Moved, that this House doth agree with the Commons in the said Amendments.—(The Lord Chancellor.)
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, I think that both of these Amendments are acceptable. The second is a pure question of draftsmanship. The first is something which I must say I would not have thought of myself, but the noble and learned Lord has made it very plain and I think that it is a technical improvement.
On Question, Motion agreed to.
COMMONS AMENDMENTS
[Nos. 3 and 4]
Page 4, line 4, leave out from beginning to ("shall") in line 11 and insert—
("(2) Section 2B(3)(b) shall be applied separately to each of them, and if that would debar one or more of them, but not all, the court shall direct that any person who would be so debarred.")
Page 4, line 16, after ("of") insert ("section 22 of this Act (persons under disability) or").
The LORD CHANCELLOR: My Lords, with the leave of the House, I beg to move that this House doth agree with the Commons in their Amendments Nos. 3 and 4 en bloc. Subsection (2) of new Section 2C has been amended, both to simplify the drafting and to remove the risk that its provisions would operate unfairly in certain cases. It now has the effect, which was always intended, that in fatal accident cases the date of knowledge test should be applied to each of the defendants separately. The fourth Amendment, which follows the closing words of this subsection, is consequential on the previous Amendments. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments—(The Lord Chancellor.)
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, again this is a very highly technical matter, and I suppose we could spend a great deal of time on it. But the best thing is to say that there is no serious reason why we should not accept the Commons' view about this.
On Question, Motion agreed to.
COMMONS AMENDMENT
[No. 5]
Page 4, line 33, at end insert—
("If, for example, the person injured could at his death no longer maintain an action under the Fatal Accidents Act 1846 because of the time limit in Article 29 in Schedule 1 to the Carriage by Air Act 1961, the court has no power to direct that section 2B(2) shall not apply.").
The LORD CHANCELLOR: My Lords, Amendment No. 5 to new Section 2D(2) is intended to make clear the effect of this subsection, the purpose of which is to prevent the use of the court's discretion in cases which are governed by a special limitation code, like the Carriage by Air Act. Consultation which took place while the Bill was in progress showed that the intended effect of this subsection was not immediately apparent, and by this Amendment an example is added, I hope, to make its purpose more clear. My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 5.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, again I do not think we need spend time on this. I am not sure that I am very enthusiastic about inserting "e.g.", as it were into, a Statute. It seems to me a questionable practice, but I do not think we ought to take time quarrelling with the noble and learned Lord about it.
The LORD CHANCELLOR: My Lords, with regard to what has just been said by the noble and learned Lord, it has been urged in the Renton Committee that the giving of examples in Acts of Parliament is indeed very helpful. It is a potentially dangerous precedent, because

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the example may not be a very happy one. In this case I think that it is, and I hope that the House will approve of the practice, at any rate in this instance.
On Question, Motion agreed to.
COMMONS AMENDMENT
[No. 6.]
Page 7, line 6, leave out from ("force") to end of line 7 and insert ("on 1st Septembei 1975").
The LORD CHANCELLOR: Finally, my Lords, Amendment No. 6 brings this Bill into force on a fixed day; namely, 1st September, 1975. This Amendment enables me to express the appreciation and gratitude of the Government, and of myself personally, to noble Lords on all sides of this House and to Members of the Opposition in the other place, to whose co-operation and support we owe the fact that it will be possible to bring this Bill—which will greatly help plaintiffs who, in the past, have suffered great injury through the working of the limitation provisions of the law—into force, as I had hoped, in the forthcoming Long Vacation. It will be a great convenience both to the courts and to litigants that changes of the kind made in this Bill should take effect on a fixed day in a period when the higher courts, at least, are not regularly sitting, and when a substantial change of the law might otherwise present particular problems. With that expression of thanks, I beg to move that this House doth agree with the Commons in their Amendment No. 6.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, I do not wish to be churlish, and I am indeed grateful for the thanks which the noble and learned Lord has given. It is a relief to find at least one Bill in this crowded programme with which I do not find myself in hearty disagreement. I agree with the noble and learned Lord that the Long Vacation is a good time to start a new law with regard to the limitation of actions. In thanking the noble and learned Lord for his gracious words, I am as gracious as my conscience allows me to be in the circumstances.
On Question, Motion agreed to.

INDUSTRY BILL
3.25 p.m.
The MINISTER of STATE. DEPARTMENT of INDUSTRY (LORD BESWICK): My Lords, I beg to move that the House do again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Beswick.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Earl of Listowel in the Chair.]
Clause 24 [Information for trade anions]:
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 191:
Page 23, line 7, leave out ("substantial").
The noble Lord said: I think it would be convenient for the Committee if we were to discuss with this Amendment. Amendments Nos. 195 and 196, which also propose the deletion of the word "substantial". We are at the Part of the Bill where we need to consider what constitutes a special reason which an advisory committee, as suggested by the Government, or an appeals body, as proposed by the Liberal Party, or by us from these Benches, could decide would make disclosure of certain information unwise. This is not information which is simply to be restricted to the Minister and to Government Departments only; it is information which the advisory committee may consider and decide can be issued to employees, when it is likely to become semi-public and to reach a competitor.
We believe that if it is clear that an injury would be caused to an undertaking, or to a number of the employees of the undertaking, that reason should be enough. It should not have to be a "substantial" injury. After all, if the advisory committee were to find that certain information if released would cause injury to a number of the employees of a company, surely the employees themselves would prefer to forgo that information, rather than lose their jobs or suffer some other setback as a result. Therefore, we earnestly ask the Government to look again at the drafting of this clause. As

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the Bill now stands, the advisory committee will have to look at this clause and the preceding one for criteria against which to make its judgments; and the more helpful the Bill can be in providing criteria which are clear and cover a wide field, the better will the advisory committee be able to operate in the interests of everyone concerned.
I turn to the word "substantial" itself. I understand from lawyers that it has been shot to pieces in the legal world as being a word which can describe anything without any exactitude; indeed, it is often used when vagueness is required. I suggest to the noble Lord that it is unfair to this advisory committee or appeals body, if a different body is eventually decided upon, to give it the almost impossible task of deciding what "substantial" means in an individual case when considering the extent and magnitude of injury which has to be caused before saying that information should not be disclosed. Therefore, I ask the Government to look again at this important clause and eradicate something which will be vague and will cause difficulty for the advisory committee in a situation where, if injury would be caused by disclosure, it should surely advise against that. I beg to move.
Baroness HORNSBY-SMITH: I should like to support my noble friend in his Amendment. I think a very difficult situation arises where this information may be given to a non-employee of a company under the choice of the trade union delegate who may not be a member of the company but a district officer with no affinity to that company. As I understand it, there are many contracts in industry. I know from experience that company scientists and chemists are under contractual obligation not to disclose information This applies also in the contracts of employment of many others—and I think this has been defended in the courts—and even those without a specific contractual obligation are bound by the terms generally held in their employment not to disclose information to a competitor.
Ministers have repeatedly said that they hoped this information would be voluntarily supplied to the designated nominees whether or not they were employees of the company. But the company might find itself in a very strange position. If
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that nominee entitled to receive the information was an employee of the company, there would be a legal comeback if that employee disclosed information which could harm the interests of the company. But, if the company voluntarily supplied information to a non-employee, then what redress would they have in law if that information was disclosed and gave rise to any injury? The situation might arise in which they would be alleged to have given the information voluntarily because they did not wait for the Minister to demand and compel them to give it. It is very unclear what redress they would have. I believe that to say, "substantial injury" makes the position even more confused and I fully sup port my noble friend in the difficult ramifications of the undertakings that have been given that injury should be injury whether it is substantial or otherwise.
3.33 p.m.
Lord MELCHETT: I think both sides of the Committee accept that there is a need for a balance to be struck between the interests of the undertaking and its employees and the need for disclosure. The Government have been much concerned with this balance, and paragraphs (b) and (c) of subsection 24(4) reflect changes made at an earlier stage in the Bill's progress. It may help noble Lords if I explain what the balance is that we seek, and why the Government believe the words "substantial injury" and "substantial numbers" are appropriate. These were not the words that first appeared in the Bill: it first spoke of "seriously prejudicial". These words follow paragraph 20 of the White Paper. In Committee in another place, there was strong criticism of the phrase "seriously prejudicial", which appeared in the Bill as first drafted.
Although "seriously prejudicial" has a precedent—and I glanced up to see whether the noble Lord, Lord Windlesham, was here, because I know that he always objects to our quoting precedents in the legislation of noble Lords opposite—in Section 158(1)(e) of the Industrial Relations Act 1971, we decided, on reflection, that this was too narrow a ground for safeguarding information. "Serious prejudice", we are advised, is a relative term, and damage of considerable size

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could be incurred without seriously prejudicing a very large business concern. In addition, I am advised, serious prejudice to the undertaking would not cover employees' interests, but would be confined to the interests of shareholders. Because of these problems associated with "serious prejudice", the Government amended the Bill to refer to substantial injury, a measure which is not relative to the size of the business, and also amended it to make explicit provision to safeguard the interests of employees.
We are now being asked in these Amendments to refer only to "injury" and to "injury to a number of employees". This, we believe, would tilt the balance too far. If injury, without any qualification of the extent or seriousness of the injury, or of the number of employees involved, were to be the grounds for non-disclosure, it would be possible for any injury—however small, incidental or insignificant—to justify nondisclosure. This clearly goes too far, and the Government believe that the withholding of information should be based, in this subsection, on the grounds that it would substantially injure the undertaking's interests, or those of a substantial number of employees.
We must strike a balance here, and the Government believe the Amendments we have incorporated into the Bill strike the right one. The further Amendments would militate against disclosure to an unacceptable extent. They would also do something which I know that noble Lords opposite have been very taxed about in previous Amendments, which is that they would take us even further from the words which were originally in the White Paper and which noble Lords opposite, when they have been pressing some of their Amendments, have urged us to stick to as closely as possible. To answer the point raised by the noble Baroness, Lady Hornsby-Smith, if the company were disclosing information voluntarily, of course this provision in the Bill would not apply, but, in any case, they could tell whoever was concerned that some of the information was essentially damaging. I hope that answers the point she raised.
Baroness HORNSBY-SMITH: What is the position in law, as the man is not
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an employee and as such would not have an implied contractual obligation? This is what concerns us. Will they in law have any redress if that information is disclosed?
Viscount MONCK: I fail to understand the argument of the noble Lord opposite. Do let us understand this! The manufacturing industry is the lifeblood of this country, especially exporting manufacturing industry. Anything which is asked to be disclosed which would injure in any way a manufacturing industry should be deprecated to the extreme. We then come to the word "substantial". As a previous speaker said, how do you define "substantial"? Is it more than 50 per cent. harmful, more than 40 per cent. harmful, or what? If the firm in question had to prove that disclosure would do "substantial injury", that firm would be put in a position in which it should never be put. I would respectfully and humbly like to support the Amendment moved by my noble friend.
The Earl of BALFOUR: I wonder whether I could put it a little more firmly? Subsection (4) on page 23 reads:
"For the purposes of this Act special reasons apply if the Minister considers… (c) that its disclosure would cause…"
and here I should like to see,
"any injury to any number of employees".
This is most sensitive. To say "substantial" in both cases could put the employees in a very difficult position. In other words as the wording stands it could upset the whole feeling of a works if, perhaps in some retraining organisation, a few of the employees felt that something was to happen to them in some way. I ask noble Lords opposite to consider this again. We are dealing with a very delicate situation and I should like to see the word, "substantial" left out altogether. I am certain that we need to treat this with great delicacy.
I think you will tend to drive employers into being secretive in their discussions with a Minister, and whenever a board of directors come to what seems a sensitive area they will meet not in the company's quarters but outside, perhaps in their own homes. You could get secrecy creeping in, which I am sure noble Lords on the other side do not want. I am glad that these Amendments have been put down by my noble friend Lord Campbell

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of Croy. I feel that this is the sort of thing which could end up in serious strikes if something went wrong. We have too many strikes over just this sort of thing. I am certain that "substantial" numbers of employees is wrong.
Lord HEWLETT: I support what the noble Earl, Lord Balfour, and the noble Viscount, Lord Monck, have said. Rather than talk about this in abstract, may I say this? As a result of being rather successful in a particular enterprise, we obtained a very large share of the high impact resin market worldwide and, in particular, in this country. In 1963, we had the opportunity of persuading a very big American corporation to put very substantial, multi-million dollar investment into Grangemouth. Because we had the franchise for the sale of this product (which was developed not in the United Kingdom but in the USA) we were offered a share in that enterprise. Then the offer was withdrawn. Why? It was because of the fear of having to disclose information about the market share, about the success of the venture, about the technology and technical aspects of the product. So we had no capital share and Britain has lost several tens of thousands of dollars of investment income each year since 1963, because of those fears, the very fears we are discussing this afternoon.
Worse follows. We were still successful as a British company in selling this product, which earned good money for Britain in taxation terms, and in Grange-mouth every assistance was given by the local authority in the establishment of this enterprise. Then we were told, "No! You have the sole franchise for a multi-million dollar investment in which you have no share. Therefore, we cannot rely upon a foreign company controlling the outlet of a multi-million dollar investment. Sorry, you must give up the representation. You must form a joint selling company with us; and we want a majority holding for our security, because of all that has been said in Parliament about the possible nationalisation of the chemical industry, the disclosure of information, and so on."
The present situation is that that was further extended by pressure and it was not felt to be wise, in view of the projected legislation announced by the Labour Party, in its Party Conference,
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that we should be a party to the sale at all. We had to sell our shareholding. Britain earns nothing; except that I happen to be chairman of the venture because I am still in touch with the industry over many year's service. Do noble Lords opposite appreciate what dynamite they are playing with? International confidence is at stake for British ventures that have spent a lifetime developing, as far as they can, the success of enterprises internationally. Let us not begrudge the fact that the Americans made the technical breakthrough in this acrylonitrile butadiene styrene terpolymer. It was a brilliant development on their part. They still have the largest share of world trade in this high impact resin. Britain's place is nil—snuffed out, because of the thought of Government interference and Parliamentary intervention in what is essentially a commercial and industrial matter; unwarrantable interference, I would say, in an otherwise very successful venture in which Britain could have prospered. Let us take a little more care and listen to the voice of someone who has been directly involved for over 25 years in a highly complex industry where we cannot afford to fool about like this.
Lord MELCHETT: May I put a question to the noble Lord before he sits down? Did he say that there had been interference by this Government in this venture and that that is why it failed? I think he did say that.
Lord HEWLETT: It was the threat of interference, the fear of interference and the fact that one might have to disclose, as this Bill proposes, a great deal of information which the American company felt was private to itself. I am not talking about tax returns; I am talking about having to disclose share of the market, proportion of investment and so on. Even the Companies Bill, which was enacted by the previous Labour Government, forced more disclosure out of industry than was perhaps prudent in the interests of the employees and the shareholders. We are not playing a game! Some of us have a livelihood in this field. We do not talk about the matter; we have to work at it.
Lord WIGODER: On the immediate issue of whether it should be "injury" or "substantial injury", might I ask the

735
noble Lord, Lord Melchett, this? Is it not right that any tribunal considering the word "injury" would apply the de minimus rule, so that if the injury was a wholly trivial one the tribunal would be entitled to say that it did not amount to injury for the purpose of this section of the Bill? If that is right, does not the word "injury" by itself provide a perfectly adequate safeguard without the wholly imprecise and woolly word "substantial" added to it?
Lord BRUCE of DONINGTON: May I suggest that noble Lords opposite appear to be making heavy weather of this part of the clause? This clause is restricted to those cases where Clause 23 applies. I should like noble Lords to look at Clause 23(2) and the various items listed there from (a) to (k). I invite them to say where they consider the disclosure of information comprised under any of those heads is likely to injure, let alone substantially injure any company. It is all very well to have a general suspicion about this; I can understand that. But if there are substantial suspicions, (to use again the word "substantial") I think noble Lords opposite ought to be able to specify the subhead under which their prinicipal anxieties lie. Certainly, the information required in Clause 23 has no bearing on the information that the noble Lord, Lord Hewitt, feared would be supplied to competitor companies. Clause 23 is restrictive. I should not have thought it would present noble Lords opposite with any particular difficulties.
The Earl of BALFOUR: I cannot agree with the noble Lord who has just sat down. I would refer him to Clause 23(2)(k) "expenditure on any research or development programme". I think that the exemaple given by the noble Lord, Lord Hewlett, has been perfect and has hit the nail on the head.
Lord BRUCE of DONINGTON: To reply on that point, subsection (2)(k) does not require that details of the research should be disclosed: it does not require that full details of the development should be disclosed. All it does is to indicate the expenditure. It is a figure that is being disclosed; it is not technical know-how. I ask noble Lords to counsel themselves on this. It is common knowledge
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that in the USA and in Germany the amount of information supplied both to those responsible for assessing the economic situation of the country and to the trade unions is vastly in excess of anything set out in Clause 23 of this Bill. I do not understand their anxiety. They are making heavy weather of it. They must be becoming intoxicated by the extravagant propaganda that was put out prior to the Bill's being published: and it was put out by their own Press.
Lord DRUMALBYN: Perhaps the noble Lord, Lord Melchett, would be willing to confirm or reject what his noble friend has said. His noble friend said that only a figure is required in regard to research and development. A firm may be going in for a lot of research and development. Is it only a figure for the whole lot? It is very important.
Lord HEWLETT: Before the noble Lord replies, may I say that I resent the implication that I have been subjected to propaganda. I have addressed your Lordships on the basis of the fact that I have had 25 years' experience in the chemical industry. I would ask the noble Lord to withdraw and, when he does so, to call me Lord Hewlett and not Lord Hewitt.
Lord MELCHETT: Before my noble friend has a chance to withdraw, may I agree with him in what he said to the noble Lord, Lord Hewlett. The noble Lord said that this deal—which he told us about at great length—was called off on the basis of threats from the Labour Party and remarks which had been made at the Labour Party Conference. I recognise that he has great experience in industrial matters and I bow to his experience in that field.
May I suggest to him that instead of acting on the supposed threats and, as my noble friend says, the overwhelming amount of misleading propaganda which preceded this Bill's progress through Parliament, he might have waited and acted on experience of the Bill when it becomes an Act. Then he would be doing us the courtesy which he is asking us to give to him; that is, to look to his experience. If he had waited to see how the Bill turned out in practice and, indeed, what Bill is passed on to the Statute Book after it has been amended

737
by both Houses of Parliament, he might well have not needed to call off his deal or suffered what I am afraid I consider to be the exaggerated fears from which he is suffering. I have several points to answer which have been raised on the substantive Amendment—
Lord HEWLETT: With respect to the noble Lord the Minister, I am not suggesting the present legislation is affecting 1963. I have told a story which began in the early 'sixties when I persuaded an American corporation to come to Grange-mouth rather than go to Amsterdam, Brussels or elsewhere. I have referred to a continuing story covering the past 12 years. I am saying the concept of what is put in the Bill in this clause we are discussing is precisely the attitude which has been reflected over the past 12 years by the Government Party. I cannot quote instances of the results of the fear caused by this clause: this measure is not even an Act yet. It is the concept of constant interference, constant inquiry, busy-bodying in industries in which the Government have made almost no contribution whatever—and I hope they will not because it is a very successful industry at the moment—that I am trying to press on the Minister.
Lord ROBBINS: Before the noble Lord replies—
Lord MELCHETT: I was in the middle of replying, with great respect noble Lord, Lord Robbins. No doubt he will leap to his feet as soon as I finish. I was in the middle of my reply and gave way to an intervention by the noble Lord, Lord Hewlett. Maybe we can return from matters in 1962 to the substance of the Amendment which we are discussing. We recognise the powers we are discussing in these three Amendments could he used in some circumstances to require disclosure when they result in some injury to the undertaking, or some injury to some employees. We are not denying that is the case. There may be circumstances, in our view, in which this is justified: where the gains from disclosing information outweigh the injury that that information might cause. Those of us who believe in the benefits which will accrue from the wider sharing of information must and do recognise that these benefits are sometimes bought at some cost. But here the
738
discretion afforded to the Secretary of State by the words:
"…the Minister may serve"
in Clause 24(1) will be of great use. The Minister will be able to consider the value of information to the firm's workforce and the prospect of its occasioning some, albeit slight, injury to the business or its employees. If the Minister decides that the harm, although not enough to constitute substantial injury, will be sufficient to outweigh the advantages of disclosure, the Minister can exercise his discretion to protect the business or its workers.
In response to the intervention by the noble Lord, Lord Wigoder, I hesitate to take issue with him on a legal point, but I am advised by our legal advisers that the de minimis rule would not apply in this case. It would be possible, to take up points which were referred to by the noble Earl and others, in an undertaking where there were 200,000 employees, for the disclosure of information to those employees to be of great benefit to them and the efficiency of the company. It may be that it would disclose to employees certain areas of overmanning, and if these areas of overmanning were not dealt with the firm would not be able to maintain profitability. It may be that that 2,001st employee would be badly injured by the disclosure of information. I am taking an extreme example. I dare say that whether or not the de minimis rule applies, people will be sensible about it. It is possible for a small number of employees to be harmed by information which will be of great benefit to industrial efficiency and productivity, in the interests of the employees and the commercial interests of the shareholders and the firm. It is this benefit from the disclosure of information, which we do not want to be limited, which we believe will be severely limited if we accept the Amendments moved by the noble Lord, Lord Campbell of Croy.
3.56 p.m.
Lord ROBBINS: I have great sympathy with what has been said by the noble Lord, Lord Bruce of Donington, regarding the attitude of industry in general in this country concerning the disclosure of information as compared with the disclosure which takes place in other parts of the world. I am in complete sympathy with that general attitude. But.

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at this moment, we are considering the minute drafting of a Bill, and I suggest to the noble Lord, Lord Melchett, that the Secretary of State and the Government generally, of whatever Party, is likely to get into more trouble with the interpretation of the word "substantial" than they would if they left it out. I do not understand the quantitative significance in economic life of the word "substantial". Supposing there is some disclosure of information made by a monster firm—Imperial Chemical Industries—one could easily say they could take that in their stride. On the other hand, supposing it is a small firm which is just starting up, and which has a good idea regarding know-how and, for some reason or other, it is brought in under this rubric. In those circumstances, the damage may be very substantial—using the word "substantial" in the common-sense use of it. I cannot think of any legal way of making this concept precise. I prefer to leave it to the courts to interpret as the noble Lord, Lord Wigoder, said the term "injury" according to the de de minimis rule or something else, rather than encumber this legislation with this superfluous adjective.
Lord MELCHETT: With great respect to the noble Lord, Lord Robbins, it may well be that whoever interprets the provisions in these subsections will have a great deal more difficulty in deciding what is injury and what is not, and whether or not injury to one or two employees should be taken into account. I said earlier that the wording "seriously prejudicial", which was originally in the Bill, was open to the objection which he has raised. Something which was seriously prejudicial to a large company could result in great damage before it seriously prejudiced the company. But we are advised that the term, "substantial injury" is not open to that objection. Something which substantially injures the employees in a large company would not be related to the size of the undertaking; it would be related to the amount of damage. I think the noble Lord's point on that was not valid.
The word "substantial" is obviously causing some noble Lords difficulty because it is not further defined. I know the noble Lord. Lord Hewlett, did not approve of the Companies Act 1967, but
740
it is a word which is already used in that Act in Section 16(1)(a) as well as in a number of other Acts. In the Companies Act it requires the directors' report to contain certain information about changes in fixed assets if the market value of those assets differs substantially from the amount at which they were shown in the last balance sheet. I am not aware that the use of the word "substantial" in that Act causes any problems. Possibly the fears of noble Lords on this point are slightly exaggerated.
Lord CAMPBELL of CROY: The noble Lord reminded us that the words "seriously prejudicial" had originally appeared in this Bill, and I would agree with him that in this context those words are worse than the words with which the Government replaced them. But that is not what we are considering. We are now considering the qualification, in three places in these two paragraphs, with the word "substantial". Why qualify at all? Let me just read paragraph (c):
"that its disclosure would cause substantial injury to a substantial number of employees of the undertaking".
Surely it is enough that disclosure would cause injury to a number of employees in an undertaking. Even the example which the noble Lord, Lord Melchett, gave of one would not apply under this Bill, because it has to be a number.
I referred in passing, not myself being a lawyer, to what I had been informed about the legal difficulties of defining the word "substantial". During the debate we had the contribution of the noble Lord, Lord Wigoder, who is a lawyer, and who gave us his opinion that in the interpretation by the advisory committee of causing injury there would be a de minimis consideration.
Lord MELCHETT: But—
Lord CAMPBELL of CROY: May I just complete this point and then I will give way. I understand what the noble Lord. Lord Melchett, said about the possibility of some completely insignificant pinprick appearing technically to qualify under this provision. But I do not think that the drafting of this Bill, and the guidance to the advisory committee, should be based simply on that concept of some minute and almost invisible pinprick which might then activate this part of the Bill. Now I give way.
Lord MELCHETT: I just wanted to say something about the de minimis provisions which were mentioned by the noble Lord, Lord Wigoder. I said that my legal advice was in conflict with what the noble Lord, Lord Wigoder, said, and he did not rise to contradict my legal advice. I assumed he had accepted what I said. At least, it was not contradicted until the noble Lord, Lord Campbell of Croy, prayed it in aid in his arguments. It would be better to clear up at least that there is a direct conflict of opinion on this matter, or that my legal advice has been accepted by the Committee.
Lord WIGODER: I do not know whether the noble Lord, Lord Campbell of Croy, will forgive me if I intervene in the middle of his intervention, after the intervention of the noble Lord, Lord Melchett. I was raising the issue of whether the de minimis principle would apply, and was suggesting that any tribunal which was considering whether or not there was an injury would be entitled, whether or not the principle as a matter of law applies, to say to itself, "This is a matter so trivial that it does not constitute an injury within the terms of the section".
Lord CAMPBELL of CROY: Not being a lawyer, it was no surprise to me that there should have been a difference of opinion among lawyers on this point. The main point was that the noble Lord, Lord Wigoder, brought to our attention the doubt there could be about the anxiety of the Government concerning what I would describe as the insignificant pinprick. In order to meet that particular pinprick case, it seems unsatisfactory that the guidance to this advisory committee should then have this very vague adjective, which I think noble Lords on all sides of the Committee have agreed would make it exceedingly difficult for them to interpret this part of the Bill. The effect of putting in the word "substantial" in these three places is to pass the buck to the advisory committee. It leaves them with an exceedingly difficult task.
This brings me to asking the Government whether there will be official guidance to the advisory committee in addition to this Bill. So far as we know, it is simply this clause of the Bill to
742
which the advisory committee will be looking for guidance as to how they should carry out their judgments as regards particular information which is put before them. My noble friends who have spoken have expressed themselves quite clearly as being against the inclusion of the word "substantial" in these places, and I hope that the Government will say they will look at this point again. I recognise that this is not an easy drafting matter, and the discussions held in another place indicated this. The noble Lord, Lord Bruce of Donington, referred to the list in Clause 23 of subject matter on which information can be required by the Minister for passing on to trade union representatives. But on Friday we had debates which indicated that some of the information under these headings could be highly sensitive, and indeed cause considerable damage to companies—I do not want to go over those debates again; they are in Hansard. So I would contest what the noble Lord said about that. I hope that the Government will be prepared to reconsider this matter and, in the light of everything that has been said during this brief debate on a very important matter, will still say they are ready to consider the redrafting.
Lord DRUMALBYN: Before the noble Lord opposite finally rises to say that he is going to consider the Amendment, which I feel certain he must do, would he at least consider this point? The noble Lord, Lord Robbins, has put cogently that "substantial" means "substantial" and is not related to the size of the undertaking concerned. It is the same. It must be substantial. There is nothing proportionate about it; it must be substantial. I should have thought it is unwise for noble Lords opposite to stand and be obstinate about an Amendment like this. There are words that can be used—"significant", for example. May I have the noble Lord's attention, because I am making a suggestion? Order! I am making suggestions to the noble Lord. There are other words that can be used. "Significant" is a word: "appreciable" is a word sometimes used. I have had a lot of experience of this matter on the Government side, and I am sure that the noble Lord, Lord Beswick, would agree that "substantial" means "a lot". It does not mean

743
"appreciable" or "significant"; it means "a lot". And that is what we object to.
Lord BESWICK: I am asked a straight question, whether we will consider this point, and I answer that we will consider it. But I am bound to say that if we consider it we shall in all probability come back to the word "substantial". I am almost tempted to repeat what the noble Lord, Lord Drumalbyn, said. I was in fact listening to the noble Lord, Lord Drumalbyn, at the time he made the remark I refer to, because what was going through my mind was this. No matter what word we put here—whether it is "significant", "appreciable", "a lot—we are always going to have argument about it.
The noble Lord, Lord Campbell of Croy, asked whether any guidance is going to be given to the advisory committee. Of course not on this particular point, because, obviously, the Committee must make up their own mind in relation to the facts. When the noble Lord, Lord Wigoder, was telling us about the working of the de minimis rule, what he was really saying was that a court of law would apply that rule if in its opinion the damage or the injury was not substantial. One has to decide at what point the injury was de minimis and at what point it becomes significant, substantial or appreciable. A certain amount of discretion in this connection is, I should have thought, essential. Although I undertake to ensure that what has been said is considered, I still have to record my doubts that there is any word in the dictionary that would not give rise to questions. However, I give the assurance.
Lord CAMPBELL of CROY: I am afraid I do not regard the assurance that was given as something on which noble Lords can base very much hope. The noble Lord, Lord Beswick, was quite frank in saying that at present the Government had no intention of changing the word; they would look at it again but they would probably come back with the same word, "substantial".
Lord BESWICK: I did not say, "no intention". I said I just could not see any other word or way of satisfactorily settling all doubts.
Lord HEWLETT: A substantial intention, perhaps?
Lord CAMPBELL of CROY: I hope that the noble Lord, Lord Beswick, will forgive me for not getting his words correctly. I was trying to repeat what he said. But he was quite frank in telling us that he could not at present see another way of dealing with this point. I and my noble friends feel that it would be much better to remove the word "substantial" and give the Government an opportunity of thinking of another word to insert at a later stage. We have had the benefit of legal advice from the noble Lord, Lord Wigoder. I know that it is apparently contested by legal advice elsewhere, but I certainly feel fortified in sticking to my guns on this question.
4.10 p.m.
On Question, Whether the said Amendment (No. 191) shall be agreed to?
Their Lordships divided: Contents, 96; Not-Contents, 69.

CONTENTS

Aberdare, L.

Boyle of Handsworth, L.

Elles, B.

Airedale, L.

Byers, L.

Elliot of Harwood, B.

Allerton, L.

Campbell of Croy, L.

Elton, L.

Alport, L.

Carrington, L.

Emmet of Amberley, B.

Amulree, L.

Cathcart, E.

Glasgow, E.

Arran, E.

Clifford of Chudleigh, L.

Glenkinglas, L.

Ashbourne, L.

Cottesloe, L.

Grenfell, L.

Atholl, D.

Cowley, E.

Grey of Naunton, L.

Balfour, E.

Cullen of Ashbourne, L.

Gridley, L.

Balfour of Inchrye, L.

Daventry, V.

Grimston of Westbury, L.

Balniel, L.

Denham, L. [Teller.]

Hailsham of Saint Marylebone, L.

Barnby, L.

Deramore, L.

Beaumont of Whitley, L.

Derwent, L.

Hereford, V.

Belstead, L.

Drumalbyn, L.

Hewlett, L.

Berkeley, B.

Dudley, B.

Hornsby-Smith, B.

Bessborough, E.

Dundee, E.

Hylton-Foster, B.

Bledisloe, V.

Ebbisham, L.

Ironside, L.

Boothby, L.

Effingham, E.

Kings Norton, L.

Kinloss, Ly

Onslow, E.

Sudeley, L.

Long, V.

Porritt, L.

Swaythling, L.

Lothian, M.

Rankeillour, L.

Tenby, V.

Loudoun, C.

Rathcavan, L.

Terrington, L.

Lovat, L.

Robbins, L.

Thomas, L.

Lyell, L.

Rochester, L.

Vickers, B.

Macleod of Borve, B.

Sackville, L.

Vivian, L.

Merrivale, L.

St Aldwyn, E.

Wade, L.

Milne, L.

St Davids, V.

Wakefield of Kendal, L.

Monck, V.

St. Helens, L.

Ward of North Tyneside, B.

Mowbray and Stourton, L. [Teller.]

Sandys, L.

Ward of Witley, V.

Seebohm, L.

Wigoder, L.

Northchurch, B.

Sempill, Ly

Wise, L.

Ogmore, L.

Somers, L.

Young, B.

O'Neill of the Maine, L.

Strange, L.

NOT-CONTENTS

Ardwick, L.

Douglass of Cleveland, L.

Mais, L.

Bacon, B.

Elwyn Jones, L. (L. Chancellor.)

Melchett, L.

Balogh, L.

Paget of Northampton, L.

Beswick, L.

Feather, L.

Pannell, L.

Birdwood, L.

Gaitskell, B.

Platt, L.

Blyton, L.

Gardiner, L.

Popplewell, L.

Bowden, L.

Gordon-Walker, L.

Rhodes, L.

Brockway, L.

Goronwy-Roberts, L.

Ritchie-Calder, L.

Brown, L.

Hale, L.

Royle, L.

Bruce of Donington, L.

Harris of Greenwich, L.

Rusholme, L.

Buckinghamshire, E.

Henderson, L.

Slater, L.

Burntwood, L.

Houghton of Sowerby, L.

Stedman, B.

Burton of Coventry, B.

Hughes, L.

Stewart of Alvechurch, B.

Castle, L.

Jacques, L.

Strabolgi, L. [Teller.]

Champion, L.

Janner, L.

Summerskill, B.

Chorley, L.

Kilbracken, L.

Taylor of Mansfield, L.

Collison, L.

Kissin, L.

Wallace of Coslany, L.

Cooper of Stockton Heath, L.

Leatherland, L.

Wells-Pestell, L. [Teller.]

Crook, L.

Lee of Newton, L.

White, B.

Darling of Hillsbrough, L.

Llewelyn-Davies of Hastoe, B.

Wilson of Radcliffe, L.

Darwen, L.

Lloyd of Hampstead, L.

Winterbottom, L.

Delacourt-Smith of Alteryn, B.

Lovell-Davis, L.

Wootton of Abinger, B.

Donaldson of Kingsbridge, L.

McLeavy, L.

Wynne-Jones, L.

Douglas of Barloch, L.

On Question, Amendment agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.
4.19 p.m.
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE moved Amendment No. 192:
Page 23, line 8, leave out ("the") and insert ("any").
The noble Lord said: The purpose of this Amendment is to draw attention to something which seems to me to be potentially dangerous. It could well be that information is disclosed to a Minister which is neither received in confidence for another person nor would cause injury to the undertaking or to its employees, but could cause injury to another undertaking. I think that this could happen with commercial information, but I am particularly exercised in respect of financial information. If, for instance, company A disclosed to the Minister that it was experiencing serious cash flow problems because another company, company B, was being very slow
746
in paying for deliveries and that information was generally disclosed, it would be damaging to the creditworthiness of company B, especially if that information was taken in isolation, which it probably would be. Alternatively, if company C disclosed that it was negotiating for the purchase of an asset from company D which was in a very serious financial state, for that information to get out would be serious and if later it was learned that negotiations had broken down it could be fatal to company D.
As the noble Lord, Lord Houghton of Sowerby, said on Second Reading, under all Governments of recent times there has been suspicion between industry and Government. There can be little doubt that this feeling would be accentuated if an undertaking were compelled by the Minister to disclose information that caused injury to another undertaking. I think it is important that account is taken of this potential danger. I do not

747
suggest that the simple Amendment that I have tabled is necessarily the answer, but I urge the Government to give thought to this matter before the next stage of the Bill. I beg to move.
Baroness WARD of NORTH TYNESIDE: I wish to support the Amendment moved by my noble friend. The alteration of one word for another seems a very small amendment, but it is important that the right word should be embodied in the Bill. I should like to have an undertaking now because, if I may say so, we seem to be deciding to reconstitute the whole Bill with the number of agreements to the points that have been put forward from this side of the Committee. I like to have definite action. I have been brought up in another place where people seem to be more definite than in the place in which I now find myself. Doubtless I shall learn in time.
Lord LOVELL-DAVIS: I should like to clear up one point raised by the noble Lord, Lord Cullen of Ashbourne. He is concerned about financial information.
Baroness WARD of NORTH TYNESIDE: That is very important.
Lord LOVELL-DAVIS: I am not disputing the fact that it is important. The list of subjects on which information can be required does not include financial information, and there is nothing which would lead people to suspect that a business was in difficult financial straits. I take the main point, however, that the noble Lord is making, which is that the interests of third parties should be protected. The Government considered how best to do this. Broadly, there is a choice between the approach adopted in this Amendment, and a reliance on the proper exercise of Ministerial responsibility and discretion. The Amendment proposed here would hardly be adequate in itself: if a statutory reference is to be made to third party interests, it would also be logical to follow this through with subsequent rights for third parties who believe they may be affected to make representations to the Minister. This would be complex, and add very considerably to what are already difficult provisions to follow.
The Government have instead favoured the use of Ministerial discretion. Indeed, the possibility of using the Minister's dis-
748
cretion to protect the interests of third parties was one of the reasons for changing the absolute duty placed upon the Minister to require all information he received to be passed to trade union representatives to the present discretion, by which he may require it to be so furnished. If a company believed that information it was asked to provide would be damaging not to it but to another company, it would be able to bring this to the Minister's attention when submitting the information to him. When examining the information, the Minister would then—either on the advice of the company or quite independently—come to a view on whether information would be damaging to third parties, and, if so, exercise his discretion not to require that information to be passed to trade union representatives. This course has the advantage of simplicity. I can assure noble Lords that we are fully conscious of the need to protect third parties, and that we believe the Bill, as it stands, will allow this to be done.
Lord CAMPBELL of CROY: If I may comment at this point, the noble Lord has indicated that financial information would not be involved. But, unless the Government could guarantee that it would not arise, surely there is a situation where information under Clause 23 could be furnished by company A which could cause damage to company B or C if it were disclosed. What the noble Lord has just said appears to accept that that situation could arise. He is saying that this must be dealt with by Ministerial administrative arrangements. But he also said—and this is what I want to query immediately—that, when company A submitted its information, it could draw attention to the fact that damage might be done to company B, but company A might not know that the disclosure of information will damage another company. It is placing a burden on company A to know that the later disclosure of information might damage third parties. They cannot be omniscient in these matters and they could well not know that the disclosure of the information at a later stage could damage another company.
So I think there is immediately a defect in what the noble Lord has just said on that point. If company A does know this and can be quite certain that all

749
possible injury to other companies is covered in its submission to the Minister, what he is saying is one solution, although not as satisfactory, I believe, as has been suggested by my noble friend Lord Cullen. But he has not dealt with the situation where a company does not know, and what he is saying appears to place yet another burden on the company to be aware, and to inform the Minister, of any possible injury to third parties.
Lord SLATER: Would it be asking too much of the noble Lord to ask what conclusion he has arrived at as to the likeliest person or persons who would disclose such information if they were attached to these respective companies, which would involve these two parties? Has he given any thought to that? What it amounts to is that there is a form of mistrust against the boards that may be set up when they are operating and find themselves in this difficult position. I think the noble Lord should address himself to that.
Lord CAMPBELL of CROY: If I may just deal with that point, I do not think the noble Lord, Lord Slater, has entirely understood the situation. What happens under the Bill as at present drafted is that a company can draw attention to some information which it believes ought not to become semi-public, because at the end of the compulsory disclosure system the information becomes semi-public and can no longer be regarded as confidential. But the company may well say that, so far as the company is concerned, certain information could be disclosed and would be in no way damaging to the company. But what it might not know is that, if that information became public, it might damage another company. It is not a person leaking information; it is the acceptance at the end of this procedure that the information is public.
Lord LOVELL-DAVIS: I find it difficult to imagine the situation that the noble Lord, Lord Campbell of Croy, has adduced. I find it hard to think of a situation where a company would not know that it was damaging other companies. I find it even more difficult to conceive of a situation where this matter is under consideration by the Minister and everyone involved, and a company is damaged and nobody realises it until the damage has been caused. I find it
750
difficult to explain this situation. I said that this is one way a company would be able to say that the disclosure would damage another company; but it is not the only way this will come to light. Under general consideration of a matter of this importance, I should have thought it would become clear if there was a possibility of a third party being damaged. I come back to the main point, which is that we feel the Bill as it stands adequately protects third parties through Ministerial discretion. On that account, I would ask the noble Lord and the noble Baroness who have put their names to this Amendment to consider withdrawing it.
Lord CULLEN of ASHBOURNE: I am grateful to the noble Lord, Lord Lovell-Davis, for that reply; but the whole purpose of the Amendment was not because I thought that altering one word for another would make all the difference, but because I thought there is a possibility of things going wrong. The person putting it wrongly will be the Minister. It is the Government who want this Industry Bill to work properly. All I was trying to do was to point out something which could go wrong—of course, many things can, but there is that one particular thing that I can see, beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.30 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 193:
Page 23, line 8, after ("undertaking") insert ("or one or more of its subsidiaries")
The noble Lord said: I think it would be convenient if Amendment No. 197, which is similar, were discussed with this Amendment, which I now move. I believe that in this Bill it is important not to overlook subsidiaries. For example, a large holding company might not itself technically suffer injury as a result of disclosure of information, but a subsidiary might suffer considerably, or be in danger of being put out of business because of some special process being made public and reaching the hands of competitors. How do the Government explain this? Can the Government convince us that a subsidiary is covered in the Bill? Or do they agree that something ought to be put in to ensure that subsidiaries, as

751
elsewhere in the Bill, are dealt with like the companies?
Lord LOVELL-DAVIS: Here again, I recognise the point that these Amendments seek to make, which is one that the Government considered thoroughly. I should like to explain carefully why, after consideration, we believe the Bill should remain unamended. In doing so, I find it hard to conceive of the sort of case the noble Lord, Lord Campbell of Croy, is talking about. It seems to me that the situation envisaged by the Amendment is not one which is very likely. One would have to postulate two businesses, one run by a company and the other by one of its subsidiaries. Business A is asked to provide information, and there is no question of harm arising to business A or to its employees, but somehow information disclosure would prove harmful to business B or to its employees. I find this very difficult to accept. I think it is rather far-fetched to postulate that situation.
But there is a more serious reason for this. We are here considering a case, albeit a special one, of the general problem of how to protect third parties. In the example I postulated, undertaking B is in the same position as any third party in respect of the undertaking required to furnish information; it merely happens to share common ownership. We have considered how third parties may be protected. This can best be dealt with by the Minister exercising his discretion as to when information should be disclosed to trade union representatives. This is a flexible and practical way of dealing with what otherwise might be a cumbrous problem.
It is our intention, therefore, that protection for all third parties should be given in this way and we see no reason to make special provision for businesses carried on by the same company as that which has to furnish information. I have endeavoured to set out the arguments further, so that noble Lords who support the Amendment can see why we have decided not to recommmend acceptance. The principle of safeguarding third party interest is not at stake, and we accept that. Rather we are concerned how this should be done. We believe the change from a Ministerial duty to a Ministerial discretion in Clause 24(1) affords a simple
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and proper way of achieving what I believe to be a common objective of all noble Lords.
The Earl of ONSLOW: There is one small point which I wish to bring to the attention of your Lordships. Both on this Amendment and on the previous one, the noble Lord, Lord Lovell-Davis, said that he found it extremely hard to conceive of circumstances which could arise because of the objections quoted by the noble Lord, Lord Campbell of Croy. The point I am making here is that there have been so many examples in history of people failing to see the objections beforehand, and the objections happening. I am quite convinced that the French General Staff said they totally failed to see the possibility of the Germans going through the Ardennes in 1940. This may be far away from the Bill, but that the Minister concerned cannot see the possibilities is an extremely bad argument to put forward. That is the point to which I would draw the attention of your Lordships.
Lord LOVELL-DAVIS: If the noble Earl. Lord Onslow, can give the Committee an example, then we shall be in a much better position to consider it. I have thought long and hard about this, and cannot find an example which will stand up. While I am on my feet, I should like to mention something that has been referred to many times since the beginning of the Committee stage of this Bill. The noble Lord, Lord Campbell of Croy, said that he was concerned about the publication of a process of a subsidiary. Clause 23(5) makes it clear that no know-how can be covered by disclosure under these powers. This has been said many times, and that is by the way. I can only rest my case on the fact that I find it almost impossible to conceive of the situation being created for which this Amendment is plainly designed. I feel the discretion of the Minister to cover third parties is adequate.
Lord CAMPBELL of CROY: This is a matter of drafting, and of getting this important section right, because this is the part of the Bill which gives guidance to the advisory committee who have to take these important decisions. The noble Lord appears to agree with our view that damage, or possible injury, to a subsidiary company should be included as affecting

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the company itself. When I moved this Amendment I pointed out that we are trying to make sure that this part of the Bill covers the technical position where the company itself may not stand to suffer injury, although a subsidiary would. The noble Lord is quite clear in his answer that he has the same aim. We must make sure the guidance set out for the advisory committee is clear and beyond dispute.
The reply of the noble Lord, Lord Lovell-Davis, in effect is that Ministerial discretion will govern that, and it is not necessary to write subsidiaries into the Bill. At this stage I am prepared to accept that, because he recognises there is no difference between us on the object to be achieved. But we have to be satisfied with the provisions of the Bill which are to be the criteria to be used by this advisory committee. We must make sure that they are right, not only technically but also in a common sense way, so that the advisory committee are not put into what could be a silly position, by considering only one company and not the position of subsidiaries. In view of what the noble Lord has said, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord CAMPBELL of CROY: I beg to move Amendment No. 195, which has already been discussed with Amendment No. 191. As your Lordships decided to accept Amendment No. 191, I shall move this one formally.
Amendment moved—
Page 23, line 9, leave out ("substantial").—(Lord Campbell of Croy.)
4.40 p.m.
Lord CAMPBELL of CROY: I beg to move Amendment No. 196.
Amendment moved—
Page 23, line 10, leave out ("substantial").—(Lord Campbell of Croy.)
Lord MELCHETT: I have no doubt that many of your Lordships feel that you already voted on the substance of this Amendment when you voted on No. 191, but it covers a slightly different point. I am still advised that if we put into the Bill the words "a number of employees" this can mean any number from one upwards. In our view, this Amendment, taken with Nos. 191
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and 195, will leave this subsection substantially useless. I would ask the noble Lord, Lord Campbell of Croy, before he presses his temporary victory, at least to consider that point.
Lord CAMPBELL of CROY: To show that I certainly do not wish to press anything to which the Government feel they can give further consideration, I will not press this one. I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 198:
Page 23, line 10, at end insert—
("( ) that the information is of a commercial nature which would be of value to the undertakings' competitors;
( ) that this disclosure of the information would infringe the contractual rights or duties of the undertaking or any of its subsidiaries or the contractual rights of third parties or would render the undertaking or any of its subsidiaries in any way liable, in damages at law;").
The noble Lord said: This Amendment, which I now beg to move, would introduce two paragraphs into this Part of the Bill, the provisions against which the advisory committee are to take their decisions. The first paragraph, "that the information is of a commercial nature which would be of value to the undertakings' competitors", I have taken from the wording used by a member of the Government in reply to a Question in another place on 9th June, just over six weeks ago. The question was asked: whether the Government would make a Statement about the criteria adopted in excluding confidential information in the Ryder Report on British Leyland. In reply to that the Minister stated:
"The information that has been excluded from the Ryder Report is of a commercial nature which would be of value to British Leyland's competitors."—[Official Report, Commons, 9/6/75; c. 1.]
That example seemed to be a good reason for information of this kind not being disclosed, and we felt that it should be among the special reasons in this Part of the Bill which the advisory committee would take into account.
I now come to the second paragraph, which deals with contractual rights and liabilities, and here, again, we believe that the special reasons to be placed in this Bill should include the question of

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contractual rights and liabilities. To give an example, a customer or another person affected by the disclosure of information about a company might bring a claim, it the release of that information when it becomes public reaches competitors and then breaches an agreement or causes injury to him, not necessarily to the company itself but to this third party. We believe that something should be inserted to cover this kind of reason for not disclosing information. The special reasons at present contained in subsection (4) of this clause appear to be too narrow, and your Lordships will notice that in the following two Amendments we are also suggesting other matters that should be taken into account by the advisory committee. I beg to move.
Lord BESWICK: The noble Lord, Lord Campbell, has moved his Amendment with commendable brevity, and I will try to respond and answer similarly. May I take first the point about value to competitors? I will tell the noble Lord why it was thought inadvisable to give that information in the Ryder Report. It was, as he rightly said—and it was said in the Statement—because it would be of value to competitors and in so doing would cause injury, or substantial injury, as we thought, to British Leyland. Already one of the reasons for nondisclosure is, or was, substantial injury; it is now injury. If information which is of value or interest to competitors is not of damage to the company, then it does not really matter. It may be of some value and of some interest, but it does not cause damage to the first company and, therefore, as I say, the difficulty would not arise. If it did cause injury, then it is caught by the earlier part of the subsection. I hope that that is sufficient for the noble Lord on the first of his proposed new provisions.
So far as the second one is concerned, where he says that it should not be disclosed if it "would infringe the contractual rights or duties of the undertaking… or would render the undertaking or any of its subsidiaries in any way liable, in damages at law", I do not believe this could arise. The company required to disclose information by law, whether to the Government or to its workers, could not be successfully sued for damages, because it was required by
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law to provide that information. That is sufficient defence. If it were shown that the company was required by law to disclose the information, this would be a complete defence. There is, therefore no need for this provision. I hope that with that explanation the noble Lord will feel able to withdraw his Amendment.
Baroness HORNSBY-SMITH: Could the noble Lord answer one question on what he has just said? If there is a joint Anglo-American undertaking, the English company is bound by English law. But what about the American one, if they are working together on a new process?
Lord BESWICK: If there were such a case and the information was likely to be damaging to the American element in the company, this would be a matter covered by the earlier part of the subsection, which says that no information should be disclosed which would cause damage.
The Earl of ONSLOW: If it is already covered by the first part by implication—and it is only by implication, as the noble Lord said—the courts may find otherwise; we all know that the courts cannot take into account what is said in Parliament but only what is said in Statutes. Would it not be reasonable to leave it in, to underline it and make it absolutely certain? What harm would this do?
Lord BESWICK: I think if we were to put everything in because it did no harm we should have a pretty lengthy Bill.
Lord BROWN: I think this argument is pretty pettyfogging. The circumstances in which the Minister would have to make an order are when he is requested to do so by representatives of trade unions. I have long experience of giving copious information to shop stewards and trade union officials, and the one thing they do not want is information which would be of value to competitors. I have given information on occasions when the fact that I have given it has been deplored, because they felt it would be of value when it leaked out. I have found a consistent attitude on the part of employees, trade union officials and shop stewards, resenting the giving of any information that could be of damage to the firm and thereby to their own employment. The other point about this,

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as my noble friend on the Front Bench said, is that value to the competitor is obviously injury to the firm. I do not think that needs debating at all. I think the whole thing is rather pettyfogging. I believe that people do not want information which can directly or indirectly affect their own chances of employment. There will not be appeals to a Minister coming for orders in these circumstances.
Lord ROBBINS: I cannot resist the feeling that the victory of the noble Lord, Lord Cambell of Croy, in expunging the adjective "substantial" gives him all he wants as regards injury to commercial interests by providing information to competitors.
Lord CAMPBELL of CROY: What I am seeking to do here is to make sure that various possible areas where disclosure of information might have adverse effects are considered for inclusion in this section of the Bill. As the noble Lord, Lord Robbins, has said, the decision taken recently by your Lordships' Committee has improved the situation where this is concerned. On the first paragraph suggested here, I realise that the drafting was not for this purpose complete, but I could not resist taking the wording complete from what had been used in a well-known case recently by a Minister. As the noble Lord, Lord Beswick, pointed out, there was nothing here to indicate that it also had to be to the detriment of the company. It was just the word "competitors" that implied that it would be. The noble Lord has indicated that he does not regard a separate subsection as necessary because it would be caught by the previous subsection on injury.
As regards the second paragraph which I have proposed, the noble Lord has given a rather sweeping assurance, because he has stated that it would not be possible for a claim to be successfully pursued against a company which was having to carry out this Bill when enacted. Therefore, when they were compulsorily required to provide information, if it did appear to cause damage to third parties, or to be in breach of contractual rights, then no claim could be pressed and the company could not be sued. I hope that that is the position. I would ask the noble Lord to confirm that he can give the categorical state-
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ment that no claim of the kind which my second paragraph tries to cover could be pursued successfully. I would give the noble Lord a chance to state that categorically before continuing.
Lord BESWICK: The noble Lord will know, and the Committee will suspect, that I have no legal qualifications. I can go only on advice that I am given. The advice that I am given is that the company required to disclose information by law, whether to the Government or to its workers, could not be successfully sued for damages. If it was shown that the company had been required to furnish the information by law, this would be a complete defence.
Lord CAMPBELL of CROY: I shall no doubt have time to consider any further implications of what the noble Lord says. It looks as though it is not necessary to put this into the Bill because the company would not be in a position to be vulnerable to this kind of claim. Therefore, I beg leave to withdraw the Amendment.
Amendment, by leave withdrawn.
4.53 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 199:
Page 23, line 10, at end insert—
("( ) that the information required cannot reasonably be furnished within the time specified in the notice or at all;").
The noble Lord said: This is a fairly straightforward common-sense subsection, which we think ought to be added again in the interests of completeness in giving guidance to the Advisory Committee. There could be situations where the company could not reasonably furnish the information specified within the time laid down. The Minister may genuinely have made a miscalculation. He can set the time scale. The Bill states that it must be not less than 28 days for preliminary order, and so on, but if he had inadvertently asked for information which takes much longer to assemble than he thought, then we think that again this ought to be clearly written into the Bill, unless it is already covered somewhere else. I beg to move.
Lord MELCHETT: I am not sure whether the noble Lord was taking Amendment No. 275 with this Amendment, but I think it might be sensible

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to do so unless he has any objection. It covers a similar point.
Lord CAMPBELL of CROY: I propose to take it separately.
Lord BRUCE of DONINGTON: I hope that I shall be able to persuade the noble Lord to withdraw this Amendment. The information required once again is circumscribed by Clause 23. If the noble Lord looks down Clause 23 and at the items required to be supplied, he will find that, apart from two items, they ought to be able to be supplied within a matter of hours. If the firm has not got the information in subsections (2)(a), (b), (c), (d), (e) and (h), (i), (j), (k) readily available, it surely does not comply with those conditions that render ordinary private enterprise firms viable. If they do not have this information, they have no business to have the noble Lord's support.
In so far as items (2)(f) and (g) are concerned, which are figures related to productive capacity and capacity utilisation of the undertaking and also in regard to the undertaking's output and productivity, I readily concede that these require a certain amount of extra time. But if these figures cannot be provided by the ordinary accounting or administrative organisation of a company or a group of companies within 28 days, one can understand the reasons why they are in such a state that the Government have to compel them to give information, and they have no right to have the noble Lords' support. I hope that on reflection the noble Lord will withdraw this Amendment, because if he continues with it he is conceding the existence within his own spectrum of support of firms that have no business to succeed at all.
Lord MELCHETT: I should like to make a slightly different point from that made by my noble friend, but I hope also to persuade the noble Lord, Lord Campbell of Croy, that the Amendments are unnecessary. We accept the principle that lies behind this Amendment, and. I was going to say, Amendment No. 275, but I gather that the noble Lord is determined to take that as a separate point, although I am assured that it is merely inserting "within a reasonable time" into a similar part of the Bill. If I may, I shall speak to that at the same time, and
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the noble Lord may then decide to move it if he wishes.
The principle is that a company should not be forced to provide information it cannot provide, or cannot provide within the time specified. Nor should it of course be an offence to fail to so provide information. My noble friend has already pointed out to the noble Lord why he thinks it should be quite easy for a company to supply all the information they are likely to be asked to provide within the minimum of 28 days. The Bill already provides safeguards which cover both the inability to provide information, or not being given a reasonable time to do so, in the unlikely event of the considerations which my noble friend mentioned not applying. On timing, I would draw your Lordships' attention to subsection 24(1)(a) which specifically states that reasonable time must be given, and this must not be less than 28 days. If the time specified in the notice were to be unreasonable, or if the information were simply not available, it would be a defence in terms of subsection 28(1)(b) in that both these would be a reasonable cause for failure to have provided the information, and hence the company would have committed no offence in thus failing to provide it. In our view there is therefore no need to incorporate either Amendment No. 199 to Clause 24 nor Amendment No. 275 to Clause 28.
Lord CAMPBELL of CROY: I assure the noble Lord that when we come to Amendment No. 275, which is some way ahead, I shall not spend any time on it. The point we are considering here is to ensure that this part of the Bill covers the various special reasons which the advisory committee should take into account. The noble Lord, Lord Bruce of Donington, in his criticism of any company that might run into delays, may have misunderstood me. I was not suggesting that this would be normal. I was anxious to cover the exceptions which he agreed might occur and ensure that the advisory committee was authorised to take this special reason into account. The gist of the Government's reply is that the advisory committee would take this into account and that it is catered for without it having to be spelled out in the Bill. I am glad to hear that.
When the noble Lord, Lord Bruce, says the majority of companies should be

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able to produce the information within a matter of hours, he does not appear to be in agreement with the Government, who have given at least 28 days, and longer when 28 days might be insufficient.
Lord MELCHETT: This is another example of how extremely generous and reasonable the Government are being in seeking to implement the provisions of the Bill.
Lord CAMPBELL of CROY: But they appear to be out of line with the thinking of the noble Lord, Lord Bruce of Donington. I was not suggesting that 28 days would not be enough. I simply wanted to ensure that the advisory committee would not find itself powerless to deal with such a case when a good reason could be given why the information could not be provided in time. However, having received that assurance from the Minister, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.3 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 200:
Page 23, line 10, at end insert—
("or
( ) that to compile or assemble the information would involve an amount of work or expenditure out of reasonable proportion to the value of the information;").
The noble Lord said: This is another commonsense point. It may need to be included, if the advisory committee is to be able to take it into account, or the Government may say it is not necessary because it is already catered for. We foreshadow situations when the work of compiling and assembling certain information which has been asked for is out of all proportion to the value of the information, and we would like an assurance that the Bill covers this point. I beg to move.
Lord BESWICK: Perhaps I might remind the noble Lord, Lord Campbell of Croy, and others of the procedure involved here. If the Minister under Clause 23(1) requires certain information from a company, the company would then provide it to him. Then, under Clause 24(1), the Minister might require the company to provide to union representatives
"…the whole or part of the information furnished to him under Section 23…"
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There is no question here of the company being asked to provide new information; it is the same information being supplied, totally or partially, to the trade unions, so there can be no extra cost at all.
If an Amendment of this kind had merit, it would have had merit at an earlier stage of the Bill and not at this point. I would, however, give this assurance to the noble Lord: it is certainly the intention of my right honourable friend and anybody else who is implementing this Bill that if it can be shown to the Minister that there would be an undue amount of work involved, this would be a matter which would have to be considered, and one would have to be reasonable about it.
Lord CAMPBELL of CROY: The noble Lord pointed out that this could have arisen at an earlier stage in our proceedings and I would not disagree with that. Perhaps it was necessary to write something like this into the Bill. However, the noble Lord has given an assurance that he does not visualise a situation arising where the advisory committee would not be able to give this as a special reason in practice, without it being written into the Bill, and I therefore beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord CAMPBELL OF CROY Lord CAMPBELL OF CROY moved Amendment No. 201:
Page 23, line 13, leave out ("of") and insert ("or").
The noble Lord said: This Amendment is tabled simply to correct what appears to be a misprint in the Bill. I beg to move.
Lord BESWICK: I have on occasion made the wounding and unkind charge that certain noble Lords opposite have not read the Bill. It seems obvious that the noble Lord, Lord Campbell of Croy, has read it with great thoroughness, certainly in this case, and I therefore apologise and freely accept his Amendment.
Lord CAMPBELL of CROY: I thank the noble Lord for his apology.
The DEPUTY CHAIRMAN of COMMITTEES (Earl Cathcart): I should point out in calling Amendment No. 202 that if this Amendment is agreed to, I

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will not be able to call Amendments Nos. 202A, 203 or 204.
5.8 p.m.
The Earl of BALFOUR The Earl of BALFOUR moved Amendment No. 202:
Page 23, leave out line 14 and insert—
"(b) to one representative chosen from and by the employees of the undertaking,")
The noble Earl said: I appreciate that my drafting of this Amendment may not be correct. I am anxious, nevertheless, to have a point cleared up and that is why I move it. Under this part of the Bill the Minister may serve a further notice requiring the company:
"…to furnish to a representative of each relevant trade union within… not less than 28 days, as may be specified in the notice, the whole or part of the information furnished to him…"
Under subsection (8) of Clause 24 we read:
"If a notice given to representatives of relevant trade unions… states that the Minister does not propose to require the company… concerned to furnish all the information, it shall give such indication of the nature (without disclosing the substance) of any information which the Minister proposes should not be furnished…"
Of course, it will not always be the Minister of State himself who will do this. It may be a senior official of the Department concerned and when subsection (5)(b) refers to,
"…a representative of each relevant trade union, an opportunity of making representations to him",
this could mean a civil servant being surrounded by 12 or 14 experienced trade union representatives battering him with questions. If he is able to give them,
"…such indication of the nature (without disclosing the substance) of any information
and not let the whole thing leak out, that chap will be doing a marvellous job indeed.
I am therefore suggesting that we bring in one person to decide this because subsection (8) goes on:
"…it shall give such indication of the nature (without disclosing the substance) of any information which the Minister proposes should not be furnished for special reasons as will enable the relevant trade unions' representatives to consider whether or not they ought to exercise their right to require a reference under section 25 below."
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Quite honestly, to take myself as an example, if I have been told half the information—that is, told the nature without being told the substance—I shall not know whether I am in the right sort of position to appeal. I shall not have a clue. That is why I am proposing in Amendment No. 202, though it is wrongly drafted, and in Amendment No. 213, that we should make it one person.
At the top of page 24, the Bill states that a reference to an advisory committee can be required. I repeat that it should be by the one representative who has been given the information under the provisions of Amendment No. 216. Clause 25(5) states:
"The committee shall give the company or companies concerned and…"
and I suggest here "the one relevant representative",
"an opportunity of making representations in relation to the matters to which the reference relates."
Again, that comes into Amendment No. 228. I am putting a condition on this chap and, if I may ask your Lordships to turn to Amendment No. 266, that brings in confidentiality.
I should like the Government to consider inserting right at the bottom of page 25 words roughly to this effect:
"for the use of the one representative under Clause 24(5)(b) above, if that person has been sworn to secrecy and is approved by the Minister."
I may be wrong in using the words, "approved by the Minister", but let us allow this one representative of the workers to know this confidential information and let us make him swear to keep it secret, so he can really act as the workers' representative as to what should be disclosed. Do not let us bring in 12 or 14 representatives. I believe that we could get misinterpretation, and I am quite certain—if I may go back to what originally made me wonder about this—that nobody could ever satisfactorily give an indication of the nature without disclosing the substance of the information. He would really be a better man than I if he could do that. I am sure this will go wrong. I am sorry that my drafting is not right, but I ask the Minister to reply to the points I have made. I would rather bring this up during the Committee stage than later on. I beg to move.
Lord BROWN: I hope that the Committee will not have to spend too long on the substantial edifice of argument which has been erected by the noble Earl on what I believe is a misunderstanding. This Amendment is entirely inconsistent with the reality of industrial life. There is no such thing as one representative of all employees. They have different interests, different strata, different sections, different departments. The possibility of getting one representative of everybody is as likely as of getting one representative of the nation in this House. The Amendment is completely unrealistic and I hope that the noble Earl will withdraw it very rapidly.
Lord LOVELL-DAVIS: First, I refer to the noble Earl's reference to the disclosure to the trade union representatives of the nature but not the substance of the information. He created a picture of a poor civil servant surrounded by vulture-like trade unionists, but I feel that I should point out that this information is to be provided in writing. The Bill uses the words "by notice". Therefore, there will be an opportunity for everyone concerned to choose his words with care.
The Government have made it clear that they believe—and we have already been over this ground a great many times—that the most appropriate channel for disclosure of information to workers is presented by trade union representatives. I do not wish to retrace the paths of argument along which we have already made our arduous way. I am sure that by now noble Lords will appreciate the basis of the Government's case. For my part, I recognise the strength of feeling that lies behind the counter-arguments.
I should like to ask the noble Earl whether, in speaking to Amendment No. 202, I may, as he has also done so, speak at the same time to Amendments Nos. 213, 216, 228 and 266. The Amendments present a new proposal by which one man will be elected from and by the employees of a company. The Government oppose this proposal because they believe that, where there is a trade union representative, he is the proper and most appropriate person to give the information to. I recognise that many noble Lords will not consider this a conclusive argument and I should therefore like to
766
consider the proposal simply as a means of ensuring that there are appropriate arrangements for information disclosure.
The proposal in the Amendments would single out one man in a business to be the recipient of all information relating to that business. As my noble friend Lord Brown has pointed out, this would be almost impossible to do. It would preclude the possibility of local representatives receiving information at plant level which applied to that plant. The Amendments would require a means of electing the representative which would be lacking in many if not all companies. In short, the proposal is not really an appropriate solution and, quite apart from the question of trade union representation, it has grave disadvantages in imposing a single blueprint which is likely to be unsuitable for most if not all companies.
In addition, Amendment No. 266 proposes that, while the information is to be confidential, it may be released under oath of secrecy to the one representative. But what is that representative to do with it when he has it? He will be prevented from discussing the information with the workers who elected him since that would be to break the oath of secrecy. His electors would know that he had the information—and perhaps it might be about redundancies or other matters very closely affecting their interests—yet he could do nothing about it. This is tokenism. It is disclosure in name but not in practice.
The Earl of BALFOUR: I believe that I am almost satisfied with the noble Lord's answer, but one point I should like to make is that some of the information we are considering can, under certain circumstances, be kept secret. If it is kept secret—and clearly it is being kept secret even from the trade unions—and is, perhaps, disclosed only between the Minister and the company, I cannot see how the trade union representatives will know whether they should exercise their right to require a reference under Clause 25. I have been trying to think about this from both points of view. If the representative has only half the information, how is he to know whether he should exercise that right? I am sure that the noble Lord will understand the difficulty. I am grateful for his reply, but I wonder

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whether he would think about that point again.
Lord LOVELL-DAVIS: I feel that this is really beyond the scope of the Amendment. I shall be answering that point on Amendment No. 207B, if the noble Lord can bear with me until then.
The Earl of BALFOUR: I am grateful for that reply, in the light of which I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The DEPUTY CHAIRMAN of COMMITTEES (Earl Cathcart): In calling Amendment No. 202A, I should inform the Committee that if this Amendment is agreed to I cannot call Amendment No. 203.
Lord MELCHETT: I beg to move Amendment No. 202A, to which I spoke on Amendment No. 163A. Judging by precedents, I imagine that the noble Lord will not be moving Amendment No. 203. I hope that the Committee will accept this Amendment.
Amendment moved—
Page 23, line 14, leave out ("a") and insert ("the authorised").—(Lord Melchett.)
Lord LOVELL-DAVIS: I beg to move Amendment No. 206, to which my noble friend Lord Melchett spoke on Amendment No. 163A.
Amendment moved—
Page 23, line 20, leave out ("representative of each relevant trade union") and insert ("authorised representatives").—(Lord Lovell-Davis.)
5.22 p.m.
Lord CULLEN of ASHBOURNE Lord CULLEN of ASHBOURNE moved Amendment No. 207B:
Page 23, line 25, leave out subsection (8).
The noble Lord said: When the Minister contemplates serving a notice on a company to disclose information to representatives of each relevant trade union, he gives to the company, and to the trade union representatives, the right to make representations as to whether the Minister should or should not require the company to furnish to the trade union representatives the information which it has already furnished to the Minister. These representations cannot be made by
768
the trade union's representative without his having been at this stage given some inkling of what the information is. But the Bill contains no provision about the giving of that information. Having considered these representations, the Minister then directs the company either to supply the information to the union's representative, or not to do so. If he directs the company not to supply the information, he must, under Clause 24(8), indicate the nature without disclosing the substance of the information not to be supplied. There is every likelihood that such not to be supplied information would be, in Stock Exchange terms, "price sensitive", and that the mere fact of its existence being indicated in this secretive manner would lead to speculation. If the company were a quoted or listed company, that speculation would be financial. In any event, it would be undesirable and unsettling. The only way to avoid these effects would appear to be to remove the whole of subsection (8) from the Bill. I beg to move.
The DEPUTY CHAIRMAN of COMMITTEES: In calling this Amendment, I should have informed the Committee that if it is agreed to, I will not be able to call Amendments Nos. 207A to 213.
Lord DRUMALBYN: This is a suitable point to examine the working of the whole clause, rather than to wait till the debate on the Question, Whether the Clause shall stand part. The Amendment enables us to take cognisance of the whole procedure of which, perhaps, subsection (8) is the culmination. As my noble friend indicated, subsection (1) enables the Minister to require a company or companies to pass on a notice to the trade union representatives about the information which the company or companies has furnished to the Minister; and to pass on that information within 28 days. Incidentally, I am not quite certain whether what is proposed in paragraph (b) of subsection (1) takes place before what is proposed in paragraph (a). I am not quite certain exactly what that means. There is provision for a further notice requiring a company or companies to pass on the information—all or any of it—and for a notice about the furnishing of that information to be served on the representative of a trade union. I find the clause rather confusing, and therefore it would be worth while

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to try to bring some clarity into it. Subsections (2), (3) and (4) require the Minister not to oblige the company to pass on the information to trade union representatives if he considers that there are good reasons not to do so. Subsection (5) seems to give a representative of each relevant trade union an opportunity of making representations to the Minister about giving a notice under subsection (1) before they have any inkling at all of what the information is about. When we come to subsection (8), we see that they know something about what the information is to be.
Presumably it is envisaged that companies furnishing information to the Minister may, if they think fit, pass on to the Minister at the same time their reasons for thinking that it is not appropriate to disclose that information to trade union representatives. So far as I can see, they can do so if they wish, and there is nothing in the Bill to prevent them from doing so. Unless they do so, it is difficult to see how the Minister can form an opinion on special reasons—as distinct from the reason of the national interest—for not passing on the information. Alternatively, the Minister, having read this information—or not having read it because it has not been supplied—may give the company or companies an opportunity to make representations to him, and so—
Lord BESWICK: I appreciate that the noble Lord is trying to save the time of the Committee, but before he proceeds further I should like to say that I wonder whether he is not going a little wide of the Amendment moved by his noble friend. I suggest that perhaps it would be better to dispose of this Amendment before taking up the points which the noble Lord is now making.
Lord DRUMALBYN: With respect, I should like to develop my argument a little further; if then the noble Lord still has the view he has just indicated, I should not personally agree with him, but I will comply with the wishes of the Committee. As I was saying, unless the reasons for not disclosing are given to the Minister, the Minister can hardly form an opinion about the special reasons. It is difficult to see how the Minister can give an indication of the information which should not be furnished to trade
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union representatives—and here I come to subsection (8)—without giving them at least a strong hint about the substance of the information. Even if he succeeds in doing that—in not disclosing the substance but in giving a hint about the nature—the mere indication is bound to arouse the curiosity of the trade union representatives, or even their suspicions, and in nine cases out of ten is likely to mean that trade union representatives will try to get information either by appealing under the next clause, or in other ways.
Moreover, the fact that such information is not to be passed to the trade union representatives—if that proves to be the fact—is bound to become known publicly, and to give rise to speculation in the Press, and possibly speculation on the Stock Exchange, as my noble friend Lord Cullen of Ashbourne indicated. It would seem to be an open invitation for trouble making. It would be much more satisfactory not to require the trade union representatives to be told what information the Minister has required to be furnished to them under Clause 23 until it has been decided how much of that information is to be passed on to the trade union representatives. If the Bill were amended in that sense, there would be no need to make provision for references to the advisory committee by the trade union representatives. Unless the Bill is amended in that sense, it is difficult to see how confidentiality can be preserved, even up to the point where the information is disclosed to trade union representatives. The trade union representatives are bound to require a reference in almost all cases, and I doubt whether they would think that they were doing their job if they did not require it.
I cannot see how the advisory committee would be able to avoid, in the course of the hearing, extending the indications of the nature of the items of information. My noble friend Lord Campbell of Croy has put down an Amendment about this on the next clause. In other words, confidentiality will be impaired even if the advisory committee recommends against disclosure to the trade union representative. The case I am making is that the only way to preserve confidentiality is not to let the trade union representative know any items of information which the Minister either provisionally or finally decides need not

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be passed on. If he lets them know at an earlier stage, most of the information will come out and certainly confidentiality will be impaired. I beg to support my noble friend.
Lord DAVIES of LEEK: I do not find any difficulty with this subsection and I believe that to erase it could create confusion. All that subsection (8) is saying is that if a notice states that the Minister does not propose to require from the company all information it shall indicate to the trade union and others—I am putting it into plain English instead of legal verbiage—the nature of the information not needed in order that the trade union can judge whether they want to be released from the duty of disclosing information to the union. I can think of quite a lot of information—especially in the drug industry if I may declare an interest—where scientists and groups are working in a laboratory. They may be in unions or in groups and if that information is passed on it could do injury and damage to the firm and to the country in exports.
I can give examples where British drug firms have overseas licences earning good money for the British exchange. I do not want to sound presumptuous, but scientific workers working on drugs or on research in a laboratory know that their knowledge, if disclosed, would be of damage or injury to the nation and the firm. That is all that the subsection is saying. If the Minister does not want all the information a substantial reason must be given or could be given to the trade union and in eight cases out of ten a reasonable trade union, whether scientific, industrial or whatever, would accept that because they would understand the nature of the industry. I hope that my noble friend, when he comes to reply, will retain this clause because I do not see it in any way trespassing on the democratic rights of firms. In fact it is protecting them.
Lord CAMPBELL of CROY: I will not repeat what my noble friend has said, but I think the wording of this subsection asks for something which is exceedingly difficult to carry out. The middle of the subsection reads:
… it shall give such indication of the nature (without disclosing the substance) of any information…".
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This, I recognise, is an exceedingly difficult and delicate part of the Bill. If the timing which my noble friend Lord Drumalbyn has suggested found favour with the Government, it would remove that exceedingly difficult operation. I think that companies will be placed in a very difficult position if they are trying to carry out what is clearly the principle but which is very difficult to put into practice.
I should like to refer to something which the noble Lord, Lord Brown, said earlier. He said that in his experience trade union representatives would not want disclosed anything which was going to help competitors to the detriment of their own company. We also know that there can be the other kind of case where trade union representatives are suspicious because they think the information is not being given because it concerns closures or redundancies. There are situations where trade union representatives will be trying to find out what is at the back of it when they know that information is being considered which the company is suggesting should not be disclosed. It will be exceedingly difficult to carry out this operation of disclosing the nature without disclosing the substance. I ask the Government to consider very carefully the suggestion which my noble friend has made.
Lord BROWN: I do not look at subsection (8) with any great enthusiasm. The whole business seems so complicated. Having had the experience of willingly giving all sorts of information to shop stewards and unions for years and years, I can say that I have never run into any trouble at all. It seems to me an awfully long-winded way of insisting that they get it. However, it seems to be necessary in the Bill.
To take up the point of the Amendment, if one reads subsection (8) and listens to the argument for its deletion, one gets the feeling that there is reasonableness in the argument until one turns to Clause 23(2) and looks at the matters under which the Minister can in fact get information. While the discussion has been going on, I have been reading paragraphs (a) to (k) and I cannot see that anything there could in any circumstances affect the Stock Exchange or disclose in a subterranean way knowledge about the firm. If any one of the paragraphs (a)

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to (k) referred to the firm's intention of taking over another firm or selling one of its subsidiaries, then indeed subsection (8) may have its dangers, but in the light of all these things I do not think it has.
Lord DRUMALBYN: If the noble Lord will turn the page over and look at subsection (3)(b) and (c),
"in relation to a future specified date or a future specified period"
he may have some grounds to qualify it.
Lord BROWN: Subsection (3)(b) is undertaking capital expenditure.
Lord DRUMALBYN: Would the noble Lord turn over to page 22 and read (c).
Lord BROWN: I am still of the same opinion as I was before. Future capital expenditure—I would make the suggestion that firms who are sensible are already doing this. I really cannot see the danger in the arguments. As my noble friend put it—I am happy to call him my friend—when I turned back to (k) I thought: No; in the light of this restriction of information the argument does not hold that water that I thought it did.
Lord DAVIES of LEEK: May I ask my noble friend about (j)? I think my interpretation of subsection (8) was correct, but (j) says:
"sales of industrial or intellectual property owned or used in connection with the undertaking…"
what is "intellectual property"? This is where I made the point about research workers.
Lord BROWN: Sales of know-how; negotiation of licences with companies overseas.
Lord DAVIES of LEEK: I think it goes further than that. There is the molecular roulette which chemistry plays in the drug houses finding formulae. That is certainly valuable information which has made firms very wealthy indeed and when they are playing this molecular roulette and discover an assimilation of molecules that is of value in medicine that is intellectual property, is it not?
Lord BROWN: Information from a firm to the Minister that they are negotiating a licence with Indonesia or wherever it may be is not detailed, technical information.
Lord DAVIES of LEEK: It is not, I agree.
Lord CULLEN of ASHBOURNE: To return to what the noble Lord, Lord Brown, said, I feel that it is (d) and (e) which are liable to be worrying in this case. I think that an inkling of information that an asset is to be either required or disposed of is the kind of thing that is worrying if it leaks out.
Lord BROWN: If it leads to any disposal of assets there is still water in that argument; but it says "such assets" and refers to "fixed capital assets in an undertaking". I am sure the noble Lord will agree that information given by a firm about the sale or purchase of fixed capital assets, which means plant or machinery, is not in the category of dangerous information which would have an effect on the Stock Exchange or elsewhere.
Lord LOVELL-DAVIS: The right to require a reference to the advisory committee under Clause 25(2) to make representations to the advisory committee under Clause 25(5) is one held by both company and trade union representatives. We are seeking, in so far as this is possible, for both to have equal rights. It is most important the provisions in the Bill relating to reference to the advisory committee be fair to both sides.
The company will know, by virtue of Clause 25(6), exactly what information the Minister provisionally requires it to provide. Clearly the substance of this cannot be provided to trade union representatives, since this would negate any attempt by the company to claim that further information should be witheld for special reasons. There is therefore no question of the substance of the information being disclosed. Indeed, this is explicitly stated in Clause 24(8) in the words "without disclosing the substance" In the matter of disclosure I should like to refer to, for instance, the Ryder Report on British Leyland. The Report indicated the nature but not the substance of the information. It contained a general indication of future developments but omitted the facts of specific plans. In Chapter 14 of the Report a lot of information was given about the cost of future development programmes but details of these programmes were omitted.
Equally, however, the trade unions must have some indication of what is at dispute.

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We therefore provide that the notice furnished on the trade union representative should indicate whether the Minister is requiring all or some of the information which was furnished to him to be provided to workers and, in addition, whether any is being witheld for "special reasons", and if so, what is its general nature. This is necessary if the representations by trade unionists are to be on a sensible basis. Without this, a trade union representative would not know whether information was not being disclosed because of special reasons—in which case he could make his case to the advisory committee—or because of national reasons, or simply because of an exercise of Ministerial discretion—in which case the advisory committee would have no locus. Similarly, unless the trade union representative knew what type of information it was proposed to withold for "special reasons", his arguments to the Committee would be greatly handicapped.
There is no question of the information at stake being disclosed to the trade unions. Subsection (8) provides that they must be told of the nature but not told of the substance of the information provisionally witheld for special reasons: that is, they must be told that the Minister intends not to require disclosure of information about capital investment by product, or about demand for the company's products; but they must not be told this in such a way that the facts at stake can be discussed. This is not impossible: indeed, the Ryder Report on British Leyland to which I have referred provides a model. In this way, the rights of the trade unions and the confidentiality of information will both be upheld.
I have endeavoured to explain why this subsection is both necessary and fair. I hope that in the light of this explanation the noble Lord will withdraw his Amendment.
Lord DRUMALBYN: Before we reach a conclusion on this, may I say that the whole of the machinery (as the noble Lord, Lord Brown, indicated) is so complicated that I think it is up to the Government to find some way of simplifying it before we come to the final stages of the Bill. Take the question of appeal alone, which is in the next section. If one trade union representa-
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tive asks for a reference to the advisory committee because he wants information disclosed which the Minister is not proposing to disclose, the Committee must see each relevant trade union representative—there could be 20 or 30 of them—presumably separately. I do not know; but the machinery is so grotesquely complicated that I think the Government should look at it again.
Lord BESWICK: It is worth pointing out that one of the reasons why it is so complicated is that we have been anxious to meet criticisms made and to have safeguards written into the Bill. This inevitably leads to complication.
Lord CULLEN of ASHBOURNE: This has gone much wider than the scope of my original Amendment. I agree with my noble friend Lord Drumalbyn that it would be a good idea for the Government to look into this again. In the meantime I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
The PRINCIPAL DEPUTY CHAIRMAN of COMMITTEES: Before calling Amendment No. 207A, I should inform the Committee that, if it is agreed, I cannot call Amendments Nos. 208 or 209.
Lord MELCHETT: Amendment No. 207A was discussed with Amendment No. 163A. In accordance with the usual practice I assume that the following two Amendments will not be called. I beg to move.
Amendment moved—
Page 23, line 25, leave out ("representatives of relevant trade unions") and insert ("authorised representatives").—(Lord Mclchett.)
Lord MELCHETT: Amendment No. 212A was discussed with Amendment No. 163A. I beg to move.
Amendment moved—
Page 23, line 31, leave out ("relevant trade unions' ").—(Lord Melchett.)
Clause 24, as amended, agreed to.
Clause 25 [Release from duty to disclose information to trade union]:
5.49 p.m.
Lord WIGODER Lord WIGODER moved Amendment No. 215:
Page 23, line 36, leave out ("advisory") and insert ("appeal").
The noble Lord said: I beg to move this Amendment. There are certain other Amendments consequential upon it which, for the sake of the record, are Amendments Nos. 231, 232, 243, 251, 264, 295, 296, and 298. The effect of these Amendments is to amend the Government's proposals for the advisory committee as put forward in the Bill. There is a further Amendment (Amendment No. 294) in the names of the noble Lords, Lord Campbell of Croy and Lord Aberdare, which deals with an alternative method of solving the same problem. I have communicated with those noble Lords and with the noble Lord, Lord Beswick, and I think it would be for the convenience of the Committee that all these matters might be debated together at this stage.
Lord CAMPBELL of CROY: I was going to suggest that as being convenient. This therefore includes Amendments Nos. 226 and 263, together with Amendment No. 294 to which the noble Lord referred.
Lord WIGODER: I am grateful. If there are to be provisions for compulsory disclosure of information, some of which may be of an extremely commercially sensitive nature, obviously there has to be some machinery for deciding in a disputed case whether a piece of information should be disclosed. Clearly, its disclosure in error or by a mistake as to its importance might have disastrous consequences for a company, and might have an equally disastrous consequence for employees of that company and therefore for the community as a whole. It is important that any such disputes should be resolved, and resolved by machinery which is quick, fair and commands general confidence. There are three proposals before the Committee. There is a Government proposal; there is a Liberal proposal; and there is a Conservative proposal. I use those words as a form of shorthand. I hope members of the Committee will agree that matters of Party political dogma do not enter into this part of the Bill, and all the proposals are being put forward in a constructive spirit, in good faith and in an attempt to resolve a somewhat difficult problem.
The Government proposals are set out in Clause 25 and Schedule 5 of this Bill. They are by far the most complicated of the three alternatives before the Committee. Under Clause 25 and Schedule
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5 if there is a difference of opinion between the Minister and the company or the trade union representative as to whether a piece of information should be disclosed, the Minister then refers the matter to an advisory committee. The advisory committee is the one set out in Schedule 5 to the Bill which consists of three people in all: a person with experience in industrial affairs as an employer or manager; a person with experience in industrial affairs as a representative of workers; and a chairman who will be a barrister or solicitor. The Minister will refer the matter to such an advisory committee, and that committee will report back to the Minister. If the Minister accepts the advisory committee's recommendation under the Government's Bill, then the matter ends there and the Minister makes the appropriate order. If the advisory committee report that a piece of information should not be disclosed, but the Minister still feels the advisory committee is wrong and it should be disclosed, the Minister makes an order and lays it before Parliament which is subject to annulment in pursuance of a Negative Resolution of either House of Parliament. I hope that is a reasonably accurate presentation of the proposals set out in the Bill for dealing with this difficult problem.
The Liberal proposal is much simpler; it is so simple it may feel a little out of place surrounded by the other provisions in this part of the Bill. Instead of an advisory committee, there should be an appeals committee which would be constituted as in Schedule 5 to the Bill according to the Government's proposals with the same representation, but that that appeals committee should determine matters that are referred to it, and the Minister should be bound by the answer. There would therefore be no need for the Negative Resolution procedure to be gone into in that case. The Conservative proposal is similar to the Liberal one, in that it also wishes to see an appeals tribunal as distinct from a purely advisory panel, a body which will determine the issues referred to it; but the Conservative proposal puts forward a purely legal body composed of three lawyers of considerable experience rather on the lines of the lands tribunal.
Those are the three various ways raised which have been suggested in the Bill and

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the Amendments now before your Lordships' Committee. May I first refer to the Government's proposals as set out in the Bill. I will begin by dealing with the suggestion that if there is a disagreement between the Minister and the advisory committee there should be an order laid subject to annulment in pursuance of a Negative Resolution by either House of Parliament. Although that is a constructive attempt in good faith to deal with the problem, it is unlikely to contribute very much by way of a solution. We suggest that for three reasons: first, there are practical difficulties, certainly in the other place, in the way of obtaining a debate on an order and obtaining its anulment in pursuance of a Negative Resolution. Secondly, any debate that took place would consist of people debating matters about which they knew nothing.
I resist the temptation to make any of the more obvious comments on that situation. But if confidential information is in issue, its details cannot be disclosed in order that they may be debated in either House of Parliament. Therefore members of either House of Parliament would be reduced to attempting to debate details when all they will know will be the nature as distinct from the substance of what it is that they are discussing. That would mean—in relation let us say, to the intended acquisition of a fixed-capital asset for use in the undertaking—that Parliament would have to decide whether the disclosure of the information would cause injury to the undertaking without being told what it was proposed to be acquired, what its value would be, what its cost would be, what its prospects would be in terms of development, or any of the other myriad of commercial features which are directly relevant if a useful judgment were to be made as to whether the disclosure of the information may injure the undertaking. To ask Parliament to debate a matter about which it may know only the nature and not the substance, is to place a safeguard in this Bill which is in practice going to be meaningless.
The third objection to the proposed appeal to Parliament in this matter which is contained in the Bill is that the decision that has to be taken is not a decision that could be sensibly debated by a large
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number of people. Even if the information were disclosed in detail—which I indicated it cannot because of the terms of the Bill—the practical consideration of whether the information about that asset might damage an undertaking is something that would not make for a coherent, balanced debate among a large number of people. I therefore suggest that the proposal in the Bill for an appeal by way of Negative Resolution procedure to either House of Parliament is not a safeguard of any value whatsoever. It follows from that that if there is no safeguard there, the proposal in the Bill establishes the Minister as his own court of appeal. The Minister will take the decision; if his decision is challenged, he will refer it to the advisory committee; if he disagrees with the advice given to him by the committee, in effect his decision will be final, because in practical terms there will be no possibility of the Minister's decision then being overruled in pursuance of any Negative Resolution. It would appear to be not desirable that such powers should be given in general terms of principle. I am not making any comments about excessive discretion by any particular Minister or anything of that nature. It would not be desirable that a Minister should be asked first of all to come to a decision and then, for all practical purposes, to be the court of appeal if the advisory committee disagreed with his own decision.
The other matter I would mention in relation to the Government's proposal in the Bill is that it would give rise to very much less consistency in its operation than would an appeals tribunal of the kind suggested in either of the alternatives that we are inviting your Lordships to consider. Again, that is not meant in any way as a criticism of any particular Minister. Ministers, however, change. Political implications are bound to be involved in decisions that are made under this Bill, and one has only to read, for example, the speeches made on Second Reading in the other place by Mr. Benn and Mr. Dell to realise that different Ministers, approaching this Bill with somewhat different political attitudes, are going to interpret vast sections of it in a different way. It would be undesirable—would it not?—that on questions of compulsory disclosure there should grow up a variety of practice rather than a

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consistency of decision. Consistency, we would suggest, can be reached only if there is going to be an appeals tribunal sitting as regularly as may be needed and at least forming some general standards in dealing with these matters. For those reasons, we would venture to suggest that the proposals for an advisory committee and the appeal to Parliament will not be a satisfactory method of dealing with this problem.
The alternative which is suggested in the Amendment in the name of the noble Lord, Lord Campbell of Croy, of having a wholly legal tribunal, is one which again we on these Benches would venture to query. There are various reasons for that. First of all, the issues that the tribunal will have to decide are not going to be primarily legal issues. The issue of whether a particular piece of information might cause injury to a particular undertaking, and issues of that kind, are ones which are perhaps rather better suited to the representatives of employers and the representatives of workers on the kind of committee which is envisaged in Schedule 5 to this Bill.
Secondly, it might lead to a rather over-formal approach to this problem which is not necessary. Thirdly, there is a practical consideration if the appeal committee is going to consist entirely of a legal tribunal. I have already dealt with the question of the difficulties that would arise in any debate in either House of Parliament where nobody really knew what he was talking about. Equally before an appeals tribunal of whatever kind it was, as I understand the Bill, the trade union representative would not be able to argue the case with any great thoroughness because he would know only the nature of the information; he would not know the substance of it. If that is to be the situation, if before an appeals tribunal it is not going to be open to the representative of the relevant trade union to argue the details of a particular piece of information, it is of crucial importance, if the tribunal is to command the confidence of the trade union movement, that there should be on it somebody who was regarded as a representative of that movement and who can be relied upon, when the tribunal is finally considering the matter, to ensure that all the arguments are taken, knowing the full details as he will do, although the repre-
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sentative of the company would not do, in the terms of the argument. We would therefore suggest that a tribunal of three lawyers is not going to solve this problem.
That leads us therefore to the proposal which is contained in this and the consequential Amendments, which is that the best answer is to have a tribunal constituted as in Schedule 5; namely, of the three people, the lawyer, the person experienced as employer or manager, and the person experienced as a representative of workers. One should have a tribunal of that kind, but one should give that tribunal the power to decide rather than merely to issue advice and allow the Minister in the exercise of what is already a very considerable discretion to overrule that advice if he thinks fit. In those circumstances, I venture to commend this Amendment and the consequential Amendments to your Lordships' Committee.
6.7 p.m.
Lord CAMPBELL of CROY: It might be convenient if I spoke to the Amendments which the noble Lord suggested might be considered with Amendment No. 215 and which are in my name and the name of my noble friend. The noble Lord, Lord Wigoder, has most clearly explained the reasons for the system which he and his colleagues have put forward in their Amendments. As he suggested, we entirely agree with him about the imperfection in the Government system: that it is an advisory committee and the Minister can overrule the advice which he receives. There is also another part of the procedure in the system laid down in the Bill which we criticise. That is, as Lord Wigoder pointed out, that the Negative Resolution procedure has been introduced and it would be exceedingly difficult for your Lordships and for Members of another place to have a debate on the subject of whether certain information should or should not be disclosed, whether the Minister had taken the right decision or not, if the information could not be made public, because that of course would prejudice the issue. So we, like the noble Lord, Lord Wigoder, feel that there should be an appeals body, whether it is an appeals committee which he has suggested or an appeals tribunal of the kind we have suggested,

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which should take the decision which the Minister should then accept.
There is a further point in our group of Amendments additional to what the noble Lord, Lord Wigoder, has proposed. We think that the members of the appeals tribunal should not be appointed by the Minister himself from a panel of names which he keeps, as proposed in the Bill. We consider that the appeals body should be appointed quite independently of the Minister and his Department. As the noble Lord has said, we have based the proposal for an appeals tribunal in our Amendment No. 294 on the provisions of the Lands Tribunal Act 1949.
We have tabled these Amendments as an alternative to the advisory committee system. The Government will have noticed that we have not sought to replace the advisory committee system by our Amendments. So I ought to indicate that it is our intention that, if an independent tribunal of the kind put forward in Amendment No. 294 were to be thought the best of the three courses, it would replace the advisory committee. We are not suggesting that the two systems should exist side by side. But at this stage it seemed convenient to add the independent tribunal system in Amendments for consideration, so that it was possible also to suggest Amendments to the Government system as we go along.
The noble Lord, Lord Wigoder, has pointed out that in our suggested tribunal all the members would have legal backgrounds. I cannot help commenting on the irony that the noble Lord, who himself is a lawyer, should be criticising the fact that we are suggesting that they should all be lawyers. The reason is that we regard this tribunal as having the function of interpreting the provisions of the Bill. We have spent some time considering what should be in that part of the Bill which prescribes the special reasons which the advisory tribunal should take into account. They would also have to interpret the other subsection as to what were reasons of national policy. Therefore we suggest that legal backgrounds are required to carry out the interpretation of this Bill when it is enacted.
There is another point. Whether it is a good or a bad thing, in an advisory
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committee of three where one of the members is to be appointed from an employer's background and another from an employee's background it could well be viewed as a committee of three with one member likely to take the employer's view on any matter and another as likely to take the employee's view; even if behind closed doors they may well be taking the opposite view. The third member might then be regarded as the man with the judgment of Solomon who has to try to deal with the difficult cases.
The advantage of the proposals which we have put forward is that it does not present that situation. They are three members of a tribunal with legal qualifications interpreting an Act of Parliament. However, may I say straight away that my purpose in speaking in this debate and listening most carefully, as I shall, to everything that is said in it is to try to reach agreement on what would be the most satisfactory kind of appeals body, including its membership. Although very late in the day the Government introduced safeguards at the Report stage in another place, including this proposal for the Negative Resolution procedure, we believe that the advisory committee system is complicated. The Government have tried to meet the criticisms which have been levelled at this system. None the less, while it is advisory and not an appeals tribunal we believe that it suffers from a major defect which we hope that the Government will recognise.
6.13 p.m.
Lord BROWN: To me Clause 25 smacks of taking a sledgehammer to crack walnut. I realise that to a large extent it is the result of listening to the Conservative Party dream up a series of awful nightmares on the flimsiest possible evidence and then trying to get the Government to take measures to reassure them on these nightmares. Having listened to the noble Lord, Lord Campbell of Croy, I believe that he is still inhibited by some of this phantasy thinking. Having said that and having listened to the noble Lord, Lord Wigoder, and how he conveniently referred to the Liberal, Conservative and Government proposals, I hope that the Government will take note of the so-called Liberal proposals. I would not say that if they were in the slightest way suggestive

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of any change in principle of the Bill or, indeed, of any sub-principle of the Bill. The series of Amendments to which the noble Lord has spoken is entirely concerned with machinery. They would be helpful to all concerned, including the trade unions. I hope I shall not bring down on my head the wrath of the Front Bench when I say that I hope that the Government will consider those Amendments. If, in the light of them, the Bill were amended, I feel that at a later date it may well be acceptable to the Government in another place.
Lord HARMAR-NICHOLLS: Beneath the charming flippancy of the opening words of the noble Lord who has just spoken, he was clearly agreeing with the general point which was put by the noble Lord, Lord Wigoder, and my noble friend. I think he is right to have done that. I should not have thought there was much doubt now that it ought to be an appeal, not an advisory, tribunal. People's confidence must be maintained. There are all kinds of fears which will arise when this Bill becomes an Act, and anything that can be done to show the objectivity of any decision and its impartiality is quite essential. For that reason it is absolutely clear that it must be an appeal tribunal with the final word, and not an advisory tribunal which leaves the last word with somebody who at the end of the day will be a political Minister.
As to which of the two Amendments commends itself to this Committee, having listened to the most clear explanation which was given by the noble Lord, Lord Wigoder, I feel that on balance we can judge this on the basis of his explanation of what it is all about. He put it very clearly and simply. I do not think he was anything other than absolutely objective in the way he described the points of view and the thoughts behind the Amendment. Even on the basis of his own argument, however, I should have thought that my noble friend's solution is perhaps the right one.
If we want to give confidence to the people who have got to accept any decisions that flow from it, the more impartial the appeal tribunal is and appears to be the better it will be for bringing about the confidence which I claim is essential. I believe that my noble friend made a very strong point when he emphasised
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that if the tribunal is made up of someone representing employers and managers and somebody else representing trade unions, there is bound to be a feeling that those two members of the tribunal will be biased in favour of whatever is wanted by their side. To that extent it takes away the objectivity and the impartiality that I think are absolutely essential. My noble friend's suggestion that it should be left to the lawyers—I myself am no lover of lawyers—is in this instance absolutely the correct one. The one claim which lawyers can justly establish is that part of their training is to be objective and to be able to listen impartially to evidence and form a clear view without having had personal experience of the mechanics of the subject they are examining.
I feel that the old-fashioned way of forming a Government was much the best way. They deviate from it nowadays. In the old days when a Minister of Health was appointed you did not think of appointing a doctor because you knew that to some extent he would be biased by his previous experience. When the Minister was obtaining advice from all the sources from which he obtains advice, he would not be able to accept outside expert evidence because of his own prejudices or beliefs arising from his previous connection with the profession. One tried not to appoint a Minister with past contact with the subject over which he had to preside for the reason that he could not approach it completely impartially.
Similarly, if the appeal tribunal is made up of people who are accepted on all sides as men who are trained to be objective, to accept arguments and to give quite impartial decisions, that will be the most satisfactory way of dealing with it. I was very disturbed to hear the noble Lord, Lord Wigoder, suggest that one of the reasons why he came down on the side of his own Amendment and the procedure suggested by the Government themselves was because, if I heard him aright, the trade unions may not feel that their point of view had had proper treatment unless a member of the tribunal himself was a trade unionist whom they could be sure would be likely to give what he suggested was an objective or impartial view. If that is what the noble Lord meant, I am disturbed by it.
Lord WIGODER: That is what I said and that is what I meant, but I said it against the background that the representative of the relevant trade union who is appearing in the case before the tribunal will not have for himself the details of the information which is being considered.
Lord HARMAR-NICHOLLS: I remembered that, but I felt that the fundamental point the noble Lord was making was a disturbing one. If we are going to accept that an appeal tribunal under this Bill, or any arbitrator or tribunal anywhere, has to recognise that somebody may not be prepared to accept the impartiality of the tribunal's decision unless he comes from their particular group or organisation, it is disturbing. I feel that we have gone a little way along that road over the last two or three years, and in my opinion it is absolutely vital that we should get back to the position where in this country we can appoint arbitrators and tribunals who are capable of being absolutely fair and at the same time absolutely objective and it is not necessary to put on a tribunal someone who carries the card of membership of some group or another before any decisions flowing from it are accepted.
I understand why the noble Lord, Lord Wigoder, felt that this was slightly different, but I do not accept that it is different. I believe we should be deviating from what I think is important if we did not use this Bill to emphasise that we have to establish the situation where we can appoint arbitrators, assessors and appeal tribunals without having to bear that consideration in mind. I feel that we should be doing the right thing under the Bill and the right thing to establish the sort of atmosphere we ought to have if we were to accept my noble friend's Amendment and make it the accepted, impartial, objective appeals tribunal made up of people trained to be impartial.
On the basis of the argument adduced by the noble Lord, Lord Wigoder, if one viewed it impartially it would be seen that his excellent and clear speech came down on the side of meeting this problem by having legal appeals. The noble Lord opposite seems to be disturbed, but I, too, can look at the clock. I consider that this is a subject worthy of having this kind of detailed comment, because
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my contact with industry is such that I feel this is where more headaches will come from than many of the other provisions of this Bill. Unless when something goes to appeal one can be satisfied that it will be dealt with impartially, then all the other good intentions that the noble Lord has in mind will have gone. I support the argument adduced by the noble Lord, Lord Wigoder, but I would accept my noble friend's Amendment in preference.
6.23 p.m.
Lord BESWICK: I recognise the spirit in which these two sets of Amendments have been moved, but I rather agree with my noble friend Lord Brown when he says that the situation has been inflated beyond its true importance in relation to this Bill. I wonder whether I may try to put it into some sort of perspective. I would suggest to the noble Lord that the term "safeguard" that is being used very often (and the noble Lord, Lord Harmar-Nicholls, spoke about arbitration) elevates the whole issue to something the importance of which does not merit his anxiety.
Let us now see what sort of situation we are dealing with. We are here dealing with a piece of legislation which is intended, as I said on Second Reading, to help industry by the exchange of information. There is no question here of any punitive legislation or of imposing any burdens. There is no question here of taxation or any financial loss. Here is an attempt to get a voluntary system of planning agreements, and here is an attempt to get an economic climate within which companies may make their decision on a more secure basis of knowledge. We are hoping also to make it possible for trade unions to come in more and more in an effort to help their industry. We want the atmosphere of our economy in the future to be one in which the unions, instead of trying to get more and more for themselves, actively participate in the improvement of the performance of their respective industries. That is the situation and it is all based on a system of giving information in a two-way street.
There will be cases where this information is withheld. In the overwhelming majority of cases, we have good reason to believe that the whole system will be

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voluntary, but occasionally—and only occasionally—there will be a case where the company will say, "We do not agree that the information should be given". In this case we have provided for the Minister, if he so decides, to say that the information should be given. For very good reasons which are set out in detail in the Bill, he can say that the information should be given, and it is a question of disclosure of that information.
I do not believe that any of us would say that Governments in this country or Ministers of those Governments behave irresponsibly, but in discussion it was thought that there should be safeguards. Therefore, a most elaborate system of safeguards has been erected. Earlier, the noble Lord, Lord Campbell of Croy—or his noble friend Lord Drumalbyn—complained that the system was too elaborate, that it would be time consuming. Nevertheless, we felt that some effort should be made to ensure that the fears that had been expressed at the beginning of this sort of exercise should be allayed. To encourage confidence we said that there should be safeguards. So we provided for the system of an advisory committee, and if the findings of this advisory committee are not accepted by the Minister, he then has to lay an Order. It would be possible for Parliament to say that the Minister is wrong and that he should not continue to persist in requiring this information.
This is a most elaborate system of safeguards. The noble Lord, Lord Wigoder, is endeavouring to strengthen these safeguards, and his Amendments provide a new procedure for settling whether information should or should not be disclosed to trade union representatives for special reasons. As he said, instead of the Committee established under Schedule 5 being an Advisory Committee—whose advice the Minister is not bound to follow, although there is the Parliamentary safeguard—the noble Lord is saying that the appeal committee should have the right of decision.
That is the issue between us, and we believe that in such a situation Ministers should take and accept the responsibility of Government. It is as simple as that. It is not our intention to pass responsibility to an appointed Committee, but rather to maintain the Minister's duty to come to his decision in the light of the
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Committee's advice and then be called upon, if necessary, to account for his decisions before Parliament. The noble Lord, Lord Wigoder, called attention to the fact that if an order is placed before Parliament it will be possible for Parliament to discuss it; but, as he said, they would not know the substance of the issue in doubt and he did not think that the House of Commons or our own House would be the appropriate body to settle these things.
I wonder whether he is right? The two Houses of Parliament in this country have a very sure instinct in these matters. They have the instinct as to whether or not a Minister is behaving responsibly. Even if the matter is not debated, there is still a very sharp discipline on a Minister who knows that he may have to satisfy Parliament. Anyone with experience in these matters knows exactly what sort of discipline rests on a Minister who is likely to be called to Parliament in order to justify what he has done. Even though it is not possible to go into all the details, I think the instinct and the general judgment of Parliament is such that they can decide whether or not in a particular case a Minister is behaving wisely.
The noble Lord, Lord Campbell of Croy, said the advisory committee, or in his case it would be the appeals committee, would have to consider the national interest. This is not so. The advisory committee, or the appeals committee in his case, have to consider the special reasons; that is the point. They have to decide upon whether there are special reasons in a particular case, but the overriding national reasons are not theirs for consideration. Those are matters which the Minister may have to take into account when he comes to take his decision. I suggest to noble Lords that in cases of this kind, if it comes to this point—and I do not believe it will very often—the right way to go about it is to have the Minister answerable to Parliament.
As to the composition and scope of the advisory committee, there again I hope noble Lords will accept that we have tried very hard to come to a reasonable conclusion and a fair balance. In the first place, it was suggested that we use the central arbitration committee. That had certain advocates, but there were certain disadvantages. Then we came to the tailor-made committee

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specially designed to have the skills and independence needed for the duties it would have under Clause 26 of the Bill. I do not accept all that has been said in support of lawyers. There are issues here which are not those that a lawyer can most easily decide upon. Many of these matters will be purely financial or industrial matters; the question of industrial organisations will come into them. Therefore, we came to this balanced committee in which we provided that the lawyer should be in the chair, with two other members of the committee with skills and experience on both sides of the industry. I would have thought that was a reasonable way of going about it.
The discretion of the Minister is limited, in that he shall not require disclosure in certain circumstances, but in our view it is right that the Minister should be the ultimate judge of whether these circumstances are met, just as he is the judge as to whether disclosure is warranted at all. I know that noble Lords are confronted with a situation which in some respects is novel. We are moving into a new phase of economic planning and have to feel our way carefully. But, if one looks back at the history of discussions on this matter, I hope it will be thought that the Government have leaned over backwards to listen to the advice given, and that the solution we have come up with is a balanced and responsible one which I hope the Committee will accept.
The Earl of ONSLOW: There is one point I should like to come back to yet again, which has been raised by the noble Lord, Lord Brown, and also by the noble Lord, Lord Beswick. It has been said that noble Lords on this side of the Committee are raising nightmares. It is surprising how frequently nightmares come true. We do not have to look back very far to see how people in certain parts of the country were prophesying large rates of inflation. Those inflationary rates have come true—yet at the time we were accused of crying, "Nightmare". That is my first point.
Secondly, does the noble Lord, Lord Beswick, have any examples already in existence of Orders in Council on the Negative Resolution procedure which can be made, but which neither House of Parliament can discuss the substance thereof?
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—because if this is a totally novel procedure, it ought to be gone into with inordinate care. It is possible that if an Order in Council were laid at night someone could make bad slips of the tongue; we know what happens late at night in either House of Parliament, and in this there is no element of criticism; this is what happens at three o'clock in the morning. This is when Negative Orders tend to come up for debate. There would seem to be something very dangerous, in that confidences could come out then which should not. Alternatively, what precedents are there for discussing something in either House which neither House knows anything about?
Lord BESWICK: I cannot think of a precise precedent on the spur of the moment, but I can think of many examples where we have had regard to the principle involved without being quite certain about the details. As for the three o'clock business, if it was the fact that one was absolutely certain it was going to come up at three o'clock in the morning when everyone is asleep, it is conceivable that a Minister and his advisers might take risks. But it is not certain it will come up at 3 a.m. I do not believe any Minister lays an Order in the belief that it will come up at three o'clock in the morning and that, therefore, he will get away with it.
The Earl of ONSLOW: I did not say "in the belief that he would get away with it". What I am saying is that this is the kind of thing which happens. Verging on middle age, I am becoming a cynic. This kind of thing does happen and mistakes are made. From all sides of the Committee, this is what we are trying to avoid if humanly possible.
Lord BESWICK: I must emphasise again that we are here dealing with a minority, and I believe it will be a very small minority of cases. The more thought I give to this, the more reason I have for believing that such cases will not emerge, because they will have to be big, responsible companies, otherwise the Minister would not demand information in the first place. He would not go round asking small companies to give information. If there is a case where a company feel strongly that they should not give information, I am quite certain when the Order is laid, there will be

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some noble Lords in this House—and one may well be the noble Earl, Lord Onslow—who will be acquainted with the issues involved and who will put up a very good Parliamentary performance against the Order. There are always ways to ensure that people are informed in either House.
Lord HARMAR-NICHOLLS: One has to accept the importance of the point made by the noble Earl, Lord Onslow, about the Minister who, at the end of the day, is responsible. Does he not recognise, in this instance, that consistency is as important as Ministerial responsibility? With regard to the point made by the noble Lord, Lord Wigoder, Ministers change, and it is clear that their reaction to what may be similar incidents may be very different. Does the noble Lord not recognise that there would be a problem with different Ministers coming to different views on what would be an almost identical problem?
Lord LEATHERLAND: That could well be so. I can imagine various Ministers taking differing views on the same set of circumstances, with the same advocacy having been laid before them. But I have found exactly the same thing in the judiciary. I find it among the highest judges in the land, where one of them, on exactly the same evidence, overturns the decision of another at a lower level, who has heard exactly the same evidence.
Lord HARMAR-NICHOLLS: They are impartial.
The Earl of BALFOUR: Having given this matter quite a lot of thought, and having listened to the evidence, I prefer Amendments Nos. 231 and 232 standing in the name of the noble Lord, Lord Wigoder, and his noble friends. This is an improvement to Clause 25, and an important one. Equally, very definitely there must be a proper tribunal set up. But I am not certain I agree with the noble Lord, Lord Campbell of Croy, that there should be lawyers on it, provided—I say, "provided" with emphasis—that, whoever is taking part in this tribunal, whatever information is disclosed is kept secret throughout their deliberations. They will be dealing with extremely sensitive matters, and this is something we really must ensure. Therefore, I feel that a great deal of thought should be given
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to this. Many of these Amendments are both necessary and worth while.
6.40 p.m.
Lord CAMPBELL of CROY: It is clear from the reply of the noble Lord, Lord Beswick, that the Government wish to leave this as a matter in which the Minister is the ultimate judge. What the Government have done is to make that subject to the Negative Resolution procedure in Parliament. That has leavened the original proposals, and I do not disagree with what the noble Lord said about the efficacy of that procedure, and indeed the Affirmative Resolution procedure, in keeping Ministers in check. What we say is that it is peculiarly inappropriate in this case. We should like to hear the noble Lord explain to us, if he can, how one can have a coherent and sensible debate, either in this Chamber or in another place, on the basis, for example, that the Minister has decided to disclose some information which the company, under subsection (4) at page 23, aver would cause injury to a number of employees of the undertaking. The information itself is still confidential and cannot be disclosed. The argument would be that the company apparently consider it so important as to insist that this would cause injury in that way.
No one in the debate can know what the information is, because the issue is whether it should be disclosed and made public. It would be very difficult for your Lordships, except for the Government Front Bench, who may not disclose the information, to follow what the debate is about. It would in the end presumably be governed by who were apparently powerfully supporting one case or another. One could only go by something like that, because nobody in your Lordships' House could in those circumstances know what is the information. So I am still most dissatisfied with that so-called safeguard, because although the system in general is a good one in this case, where no one knows what is the information that is being discussed and no one can be told, it seems quite inappropriate to add this to the procedure. Unless the noble Lord can add more to that, I must draw attention to that difficulty.
As regards the debate which we have had and the three courses which we have considered, personally I would think that

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this gave us material for further thought and exchanges of views. I do not know whether the noble Lord, Lord Wigoder, will feel the same as regards his Amendment. We have now had a statement by the Government of their view. Unfortunately, they still insist that the Minister must take the final decision. The only qualification there concerns a debate, in either or both Houses of Parliament, which would be an extraordinary one and most inappropriate for a decision of this kind.
Lord SLATER: May I ask the noble Lord whether his Amendment is based on Scottish law as such or English law as such?
Lord CAMPBELL of CROY: I am glad to say that questions of law do not arise. If the noble Lord is looking at Amendment No. 294, which is a Schedule which would set up the proposed independent tribunal, he will see, as I explained, that it is based on one that exists already and has not produced any difficulties.
Lord WIGODER: There appear to be two quite separate issues upon which your Lordships have been expressing views in the course of this debate. The first is that if it is right that the Minister should be allowed to exercise his discretion on the issue as to compulsory disclosure, then the Bill should provide that on specific grounds that discretion can be challenged, but that the Minister's decision on the challenge to his discretion should then be final. There are very many of your Lordships who feel that it is entirely proper to give the Minister abundant discretion in the first place, but that if we are to set out specific grounds on which it can be challenged that should be referred for decision to an independent body.
The second division is clearly among those of us who believe that there should be an independent body but are not agreed among ourselves as to its nature, whether it should be an all legal body or a body of the type, as I would accept, set out by the Government in its existing Schedule 5. I would agree with the noble Lord, Lord Campbell of Croy, that there is clearly scope for further discussion between those of us who would wish to see an appeal body set up, with a view to establishing the type of body
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which meets with general approval, and particularly, if I may echo the words of Lord Brown, which might command the support of the Government on reconsideration of this matter. Clearly the matter will have to be reconsidered at a later stage, and in those circumstances the best course at this stage would be to ask leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
The DEPUTY CHAIRMAN of COMMITTEES (Baroness Wootton of Abinger): I have to call the attention of the Committee to the fact that if Amendment No. 215A is agreed to I will not be able to call Amendments Nos. 216 to 221 inclusive.
6.47 p.m.
Lord DRUMALBYN Lord DRUMALBYN moved Amendment No. 215A:
Page 24, line 1, leave out paragraph (b).
The noble Lord said: I shall be very brief because we have already discussed the substance of this matter. The point here entirely is whether a representative of the trade unions should have the right of reference to whatever body we are going to set up. It seems to me that as the Bill is drafted the onus of convincing the Minister that trade union representatives should not get information lies with the company throughout. I have no doubt the company will ask the Minister not to require disclosure when it originally furnishes the information to the Minister. The Minister will then consider this, and before he delivers a further notice as to disclosure I understand that he is obliged to give an opportunity to the company to make representations and that also applies, as the Bill is now drafted, to the trade union representatives. I have suggested that is unnecessary, but that is another point to be dealt with at Report stage. Then if the Minister decides nevertheless to issue a notice under Clause 24, the company will have a right to require a reference to whatever body Parliament decides to set up.
What I am saying is that I find great difficulty in seeing why the representatives of trade unions should have the same right as the company, because the onus is on the company throughout. They are the people who know what the information is: they know how sensitive it is and so on. The Minister is in a position

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to judge this up to the point of the reference, and then it goes outside. What would remain then would be this: if the company made a reference against disclosure where it was required to disclose by the notice, then the trade union representative would have the right to be heard at that stage. This seems to me to be sense. It cuts a great many corners. If you do it the other way round, the trade unionists will feel honour bound in most cases—I do not say all; the noble Lord, Lord Davies of Leek, indicated a case where they might not be inclined to do so—to require a reference to the advisory body or appeal body or whatever it is.
I know that the Government have been at the greatest pains to achieve a balance here, but balances are not always necessarily fair. There is something different here. I think they have been worrying too much about the verbal balance without a real balance in this matter. As I say, the Bill clearly intends that the information should be disclosed unless the Minister is satisfied that disclosure is not desirable, either in the national interest or for special reasons. On these special reasons, I do not myself see why the trade union representatives should have a right to appeal where they do not know anything more than the broadest outline of the nature of the matter, and know nothing about the detail of it at all, which is the essence of it. You cannot argue with that. I think this would be a sensible Amendment, even though at first sight it may appear not to be fair because both sides are not getting the same treatment; but then both sides are not getting the same treatment throughout, as I have already explained.
Lord LEATHERLAND: Do we understand, in view of the discussion on the last Amendment, that the ultimate power is to be taken out of the hands of the Minister and placed in the hands of a legal court, and that in that legal court the trade unions shall not have the right to appear as a plaintiff, whereas the employers shall have the right to appear as a plaintiff?
Lord DRUMALBYN: I have explained the reason for this. It is so easy to present this as a balance in this case, but there is not a balance. The
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situation is quite different. All along it is the companies that have had to prove that there should not be disclosure.
Lord PANNELL: In about 50 years in the trade union movement, I have always heard the argument that somehow it has nothing to do with the employees, even though it might affect every part of their lives, and may involve considerations on which the trade union representative, because of a national connection would have a better view. I heard the previous argument, particularly from the noble Lord, Lord Harmar-Nicholls, as if there was some infallibility about lawyers. My experience of lawyers is that they always think that words have some significance beyond their meaning, and when you see the product of it at the end you wonder what this ugly duckling is; it has no practical application at all. These things are not of great moment; they would happen under the day-to-day application of the Bill where an employer is not satisfied, and it is quite reasonable then that the responsible trade union should be in with equal rights from the beginning. We have been fighting this for 50 years. It is only in the House of Lords that we would hear that argument put up again.
Lord HARMAR-NICHOLLS: I do not think that the noble Lord understood what my noble friend made perfectly clear; that is, that since it would only be the employers in this case who would know that there ought to be an appeal, they should be the ones who ought to take the active steps to set it on the move, and the tribunal, or whatever body we eventually agree, would be looking after the interests of the trade unions in this sense. It is rather sad that even inadvertently the noble Lord should bring about the one side as against the other for apparently ulterior motives based on 50 years of history which in this instance have no relevance whatsoever.
It is exactly the same as comparing the tribunal with the Lords of Appeal disagreeing with a lower court. The difference in what I was arguing then, and the point made by the noble Lord, is that both are known to be impartial and objective. They have no axe to grind. Therefore, you would accept a different view from somebody who is equally impartial. I am quite certain that if the

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noble Lord will read what my noble friend has said he will see that in what he is suggesting the trade unions are amply and properly looked after, as they should be.
Lord MELCHETT: The provisions relating to references to the advisory committee must be fair to both sides concerned, and that is what in our view, and, I am glad to say, in the view of my noble friends who have opposed this Amendment, paragraph (b) provides for. The committee is there to advise just as much on what information can be disclosed without causing substantial injury as to what cannot, and the right to demand that Minister's decisions should be referred to it should, in the interests of fair play, extend to both the company concerned and to the trade union representatives. It is very important that the powers should be seen to be used openly and fairly if they are to succeed.
If the Amendment were accepted, a patently unfair situation would arise which would hardly be conducive to good industrial relations. The impression would be created that the advisory committee was there simply to serve the interests of employers, and as a check on the Secretary of State—or, equally damagingly, that the decisions about the disclosure of information were settled privately between the company concerned, the Minister, and the advisory committee, since trade unions were denied access to the machinery which helped settle disputes about the information to be disclosed. A climate of suspicion and distrust on the part of the trade unions would tend to grow up around the use of the information powers if this paragraph were deleted. The noble Lord, Lord Drumalbyn, said that balance was not necessarily fair, but the most important thing in our view is that the balance should be seen and thought to be fair by all the parties involved, and that includes the trade unions.
Lord DRUMALBYN: I appreciate the force of what the noble Lord has said. The whole tenor of this part of the Bill is to secure that the trade unions will get information wherever it can possibly be obtained without damage to the undertakings themselves and the workers themselves. The question is how best to
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arrive at that: whether we have the cosmetic business of being fair to both sides and putting in the same provision on each side. Whether or not that is really going to convince the workers that this is right, I do not know.
The noble Lord argues, in effect, that if it is to be accepted by the trade unions, it is necessary that they must have equal rights throughout, although the whole tenor of this part of the Bill is that the unions should have the information unless the company makes a good case against it. There is some muddled thinking on the part of the Government on this, and in what the noble Lord has expressed. I hope they will look at it again. It will cause a great deal of needless waste of time. In almost every case the trade union would be likely to make an appeal if the appeal is there, and this would be nonsense. I do not intend to pursue the matter now. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord MELCHETT: I beg to move Amendments Nos. 218A and 218B en bloc. I spoke to both of these with Amendment No. 163A.
Amendments moved—
Page 24, line 1, after ("the") insert ("authorised")
Page 24, line 3, after second ("to") insert ("authorised").—(Lord Melchett.)
6.58 p.m.
Lord CAMPBELL of CROY moved Lord CAMPBELL of CROY moved Amendment No. 219:
Page 24, line 3, leave out from second ("to") to ("for") in line 4 and insert ("all employees and shareholders").
The noble Lord said: When we discussed earlier in our proceedings Amendments in the name of my noble friend Lord Aberdare and myself involving "all employees" and "representatives of all employees", I said that when we came to this Amendment we ought to have a separate debate because we have brought in "shareholders". The Amendments which go with this one and would be discussed at the same time are Amendments Nos. 223, 236, 247, 252, 255, 259 and 260. They will all be dealt with when we have had this debate.
The noble Lord, Lord Terrington, and my noble friend Lord Cullen have already

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raised the position of shareholders in earlier debates, and have pointed out the requirements that they be given information in certain circumstances. These are existing requirements of Stock Exchange rules and laws. In this Amendment I have used the word "shareholders" because everyone can recognise clearly what is meant by that, but the Amendment by the noble Lord, Lord Terrington, used the term, "members of companies". That may well be correct in the drafting of the Bill, and I recognise that that might have to be used in any Amendment which is finally drafted.
I want now to draw attention to a problem, and there is a problem; companies on the Stock Exchange enter into a listing agreement which places obligations on directors not to divulge price-sensitive information to a restricted group of persons. Under the Bill as drafted, information under this compulsory system would go to certain trade union representatives, and they may or may not pass it on, so that it is in a semi-public state. Under the voluntary system which already exists, companies have to decide whether certain information is price-sensitive, and they can then decide whether to make it public or not to disclose it at all. The information which we are now discussing is additional to that covered by the rules for annual reports and accounts, raising additional capital and intended acquisitions.
As drafted, the Bill places a special new burden on the directors of companies to decide whether certain information is price-sensitive. Although it has been cleared as regards confidentiality through the advisory committee, taking into account special reasons under Clause 24, it could still be price-sensitive in the view of the directors. The representatives of trade unions could, if the information were disclosed, be placed unwittingly in a potential insider trading position and, technically, it would then be necessary for prohibition against dealing in the company's securities in the way that has been prescribed in other situations of the same kind.
I must, therefore, ask the Government whether they are relying on the listing agreement and are leaving it to the boards of companies to have to decide what to
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do in individual cases. Rather than that the information should become semi-public, we believe that the Bill should make it clear that when the information has emerged from the advisory committee procedure and what follows it, it should be available to all employees and also to shareholders. The Government have agreed in earlier debates that the information at that stage, when it has been cleared and screened, should no longer be regarded as confidential. On Friday, when this question of shareholders was raised, the noble Lord. Lord Beswick, suggested that this should be included in some future Companies Act, coming forward in a Companies Bill; but I believe that the Stock Exchange consider that this should not be postponed until then, because this Bill will come into force a great deal sooner than that could happen. I do not know whether the noble Lord. Lord Beswick, wishes to say more today, but I certainly think that this matter needs to be dealt with, perhaps on Report. I do not intend to press this Amendment now, as the noble Lord and the Committee know, but this is a serious problem which will need thought at some stage before the Bill is completed.
Lord BESWICK: I understand why the noble Lord, Lord Campbell of Croy, has raised this matter although I thought we had settled this, for the time being at any rate, when we discussed the issue on an Amendment moved by the noble Lord, Lord Terrington. The answer I gave to that noble Lord was that while I was in favour of giving the maximum amount of information to the shareholder, this was not the Bill in which the shareholder's rights should be dealt with. That should be dealt with in separate legislation and I instanced, as the noble Lord, Lord Campbell, said, the possibility of a new Companies Bill. But I gather from what has been said that there persist doubts with the authorities of the Stock Exchange, and certainly if those doubts could be expressed again I should be happy to ensure that they are considered.
The noble Lord asked about the Listing Agreement and I emphasise that this Bill in no way infringes the duties placed on a quoted company by a Listing Agreement. The information passed to trade union representatives may be price-sensitive and if the information was so

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sensitive that disclosure would not only create problems in the City but damage the interests of the country, it would be covered by the earlier clause, where a company would say that it would cause injury, and then the information would not be given either to the trade unions or, by extension, to the shareholders. But, where there was no question of any injury being done to anybody, if information even of a price-sensitive kind were given to the trade unions, then that information can freely be published to all others, including the shareholders, so there is no question of any restricted insider groups. I should have thought that the situation would be welcomed, but if there are reasons for any other special concern I shall be happy to see that they are considered.
Lord CAMPBELL of CROY: I am grateful to the noble Lord, Lord Beswick, for that further statement today. I should make it clear that this is not so much a question of the rights of shareholders as a new problem and, as I said, added burden for the boards of companies having to deal with certain information in a different category and status from that which they have been dealing with under the voluntary system. It seems that the noble Lord is relying at the moment on the Listing Agreement. He says there is nothing in the Bill which stops its effect. That is not so much the point as the fact that the boards of directors will have still to be guided by that Listing Agreement. Of course, the case I was considering was where injury to the company had not been proved but, nevertheless, price-sensitive information might be emanating as a result of the information becoming semi-public or public. We shall probably have to revert to this at later stages of the Bill and, in the meantime, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
The DEPUTY CHAIRMAN of COMMITTEES (Baroness Wootton of Abinger): In calling Amendment No. 222A I have to inform the Committee that if this Amendment is agreed to I shall not be able to call Amendment No. 223.
7.8 p.m.
Lord MELCHETT: I beg to move Amendment No. 222A. This was discussed with Amendment No. 163A.
Amendment moved—
Page 24, line 7, after ("to") insert ("authorised").—(Lord Melchett.)
Lord MELCHETT: I beg to move Amendment No. 229A, which was spoken to with Amendment No. 163A.
Amendment moved—
Page 24, line 11, after ("union's") insert ("authorised")—(Lord Melchett)
The DEPUTY CHAIRMAN of COMMITTEES: The next Amendment I have to call is No. 230.
Lord CAMPBELL of CROY: My Lords—
Lord BESWICK: If, as I gather he does, the noble Lord, Lord Campbell of Croy, proposes to speak to Amendment No. 230, I suggest that this might be a convenient moment for the Committee to adjourn. I therefore beg to move that the Committee do adjourn until 8 p.m. and that the House do now resume.
House resumed.

MEDICINES (FEEDING STUFF ADDITIVES) ORDER 1975
7.10 p.m.
Lord STRABOLGI: My Lords, I beg to move that the draft Medicines (Feeding Stuff Additives) Order 1975, laid before the House on 4th July, be approved. The Order is intended to correct several anomalies in the Medicines Act 1968, to enable us to exercise full control over the sale, supply, import and labelling of medicated animal feeding-stuffs and over the sampling and analysis of these feedingstuffs for enforcement purposes. The Medicines Act contains provisions relating to the general control of medicated animal feedingstuffs—that is animal feedingstuffs in which medicinal additives have been incorporated.

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The medicinal additive may be a medicinal product as defined in Section 130 of the Act or it may be a substance which, although not a medicinal product as defined, nevertheless has been incorporated in the feedingstuff for a medicinal purpose. This latter expression is also defined in Section 130. It might help to make this difference clear if I take copper as an example. Its derivative copper salt is frequently added to pig feed as a growth promoter. The copper salt is not itself a medicinal product, but under the Act such an addition is for a medicinal purpose.
The Agriculture Ministers propose shortly to make regulations which will deal with the manner in which samples of feedingstuffs are taken and analysed for enforcement purposes. In addition, an order will be made prescribing limits of variation. The enforcement regulations to which I have just referred will apply to all medicated feeds, whether the medicament is a medicinal product or a substance incorporated for a medicinal purpose. But the Act empowers Ministers to make orders prescribing tolerances only in respect of feedingstuffs containing medicinal products, and makes no provision for tolerances for feedingstuffs containing substances, such as copper, incorporated for a medicinal purpose.
Turning to a different matter, the provisions of Sections 40 and 42 of the Act relate to general control over medicated feedingstuffs. Under these sections, licencing controls are imposed on the incorporation of medicinal products in feedingstuffs, and on the sale and import of feedingstuffs so medicated. The incorporation of substances such as copper into feeds is also controlled under these provisions, but not the sale and import of feedingstuffs containing substances incorporated for a medicinal purpose. The Order now before your Lordships' House will remedy this deficiency.
There is one further provision in the Order. In 1973 your Lordships' House approved a similar order (The Medicines (Feeding Stuffs Additives) Order 1973 No. 1164) which extended the requirements for the labelling of medicated feedingstuffs so that they apply to feeding-stuffs containing substances incorporated for a medicinal purpose as well as to those containing medicinal products. The Order now before your Lordships' House
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revokes and re-enacts the earlier one. To summarise, therefore, the Order covers all the provisions in the Act which the agriculture Ministers wish at this time to apply to the substances I have described.
As the Act requires, a number of organisations representing interests likely to be substantially affected have been fully consulted, not only on this Order but on the proposed enforcement regulations and limits of variation order, and have raised no objection. The Veterinary Products Committee, established under Section 4 of the Act to advise Ministers on veterinary medicines, recommends that the Order be made. I beg to move.
Moved, That the draft Medicines (Feeding Stuff Additives) Order 1975, laid before the House on 4th July, be approved.—(Lord Strabolgi.)
Lord SANDYS: My Lords, the House will be grateful to the noble Lord, Lord Strabolgi, for introducing the Order and for explaining it in such detail, particularly in view of the fact that he quoted so striking an example as that of copper salt. We on this side of the House strongly support the Order.
I have two questions which I should like to ask. First, the powers in Section 117 of the parent Act—the Medicines Act, 1968—empower the agriculture Ministers to make regulations. The noble Lord referred to the fact that regulations are to be drafted and my question is as follows: are the agriculture Ministers in Brussels to be consulted when we are drafting our own regulations, and, broadly, are regulations in this field coordinated in the EEC as a matter of practice?
Secondly, can we be assured that at the present moment standards in use in the Common Market are on a parallel basis? I have said that we on this side of the House support the Order. It is clearly beneficial, particularly in view of the fact that I understand that more than 23 organisations have been consulted and have raised no objection
Lord STRABOLGI: My Lords, I am very grateful to the noble Lord, Lord Sandys, for the welcome he has given to the Order. The noble Lord raised the question of the EEC standard. I understand that the Community standard permits the use of 125 parts to a million of

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feed, while the United Kingdom standard permits the use of up to 200 parts. There is therefore, some difference. We have filed a case at Brussels for increasing the EEC standard, and this will be discussed in the autumn.
With regard to the regulations, Section 117 of the Medicines Act is concerned with enforcement and is not therefore the concern of Brussels. I am glad that the noble Lord referred to the number of organisations which have been consulted. As he said, these number some two dozen. There is also the Veterinary Products Committee, which is a committee of veterinary, medical and other scientific experts whose terms of reference are to give advice with respect to safety, quality and efficacy in relation to veterinary use of any substance to which the Medicines Act applies, and to promote the collection and investigation of information relating to adverse reactions to veterinary medicines. The distinguished chairman is Professor Grunsell of the Bristol Veterinary School. I hope this clears up the points about which the noble Lord was asking.

DISEASES OF ANIMALS (AMENDMENT) (NORTHERN IRELAND) ORDER 1975
7.20 p.m.
Lord DONALDSON of KINGSBRIDGE Lord DONALDSON of KINGSBRIDGE rose to move, That the draft Diseases of Animals (Amendment) (Northern Ireland) Order 1975, laid before the House on 2nd July, be approved. The noble Lord said: My Lords, I beg to move that the Draft Diseases of Animals (Amendment) (Northern Ireland) Order 1975 be approved. The Order seeks to extend the Diseases of Animals Act (Northern Ireland) 1958 to make provision for more effective controls to prevent animal disease being introduced into Northern Ireland, and to prevent the internal spread of disease there by regulating the distribution and use of things which are capable of transmitting infection. Certain provisions imposing financial obligations on the Department of Agriculture will also be repealed by the Order.
New import controls are provided for in Article 3. Included is a general power enabling regulation of the import of anything which is capable of transmitting animal or poultry disease. Orders made under this power may apply conditions to the import of a much wider range of items than are covered by existing powers; for example, it will be possible to insist on cleansing and disinfection before used agricultural machinery may be imported. To date the Department has had to rely on voluntary co-operation in this sphere and this has not always been forthcoming. The import of dirty machinery could result in the introduction of serious animal disease.
Under paragraph 2(b) of Article 3, unlicensed imports may be detained on board the vessel or aircraft in which they are conveyed to Northern Ireland and such consignments may be re-exported without being allowed to land. Present legislation extends only to cargoes that have already landed, but the landing of an unlicensed cargo of meat, for example, could in itself constitute a serious threat to Northern Ireland's long history of freedom from diseases, such as foot-and-mouth disease, swine fever and swine vesicular disease. Contaminated material could, for example, be carried off by birds or vermin and this could lead to livestock being infected.
If inspectors are to be in a position to detain unlicensed consignments on board, they must have powers of entry to enable them to check that no such consignments are being carried. Consequently, paragraph 3 of Article 3 extends existing powers of entry so that inspectors will no longer be required to have reasonable grounds for suspicion that the legislation is being infringed before searching the vessel or aircraft. Paragraph 4 makes it an offence to be in possession of anything which has been imported in contravention of the diseases of animals legislation. However, if the person charged with such an offence can satisfy the court that he was unaware the thing concerned was unlawfully imported, having taken reasonable precautions to check that this was so, then the charge will be dismissed. The final paragraph of Article 3 extends the powers of the Department in relation to animals and poultry in quarantine, to allow re-export of livestock which have

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been in contact with diseased stock or which, for some other reason are suspected of being diseased. At present the Department only has power to slaughter such stock.
Article 4 permits the Department to control the movement and use of anything which is capable of transmitting animal disease—including disease-causing organisms themselves. It also permits the exercise of health and hygiene controls over establishments, such as knacker yards and poultry waste processors, which can constitute a potential health risk if proper standards are not maintained. Article 5 gives the Department power to require persons dealing in livestock, poultry and their products to keep documents and records of their stock and transactions. The Department may require production of such documents and where necessary in exceptional circumstances, shall have the power to remove the documents. Recent experience has shown that, in order to trace the movement and origin of illegal imports, the Department must have access to this type of information. The information could also be useful in tracing the origin of an outbreak of disease.
Turning now to the financial provisions which I mentioned earlier, Article 6 removes the Department's liability for the payment of compensation for imported animals which have been slaughtered in quarantine because they are diseased or suspected of being diseased. The philosophy behind this change is that the importer, and not the taxpayer, should be liable for the risks involved in importing animals.
Finally, Article 7 repeals an outdated provision under which the Department is liable for the partial reimbursement of expenses incurred by local authorities under the Diseases of Animals Act. In fact, local authorities in Northern Ireland no longer have any specific obligations under this Act, and the total amount that has changed hands under this heading in the past 10 years has been £3½25. As I have already mentioned, Northern Ireland has a very good animal health record. Its agricultural export trade depends largely on its freedom from the more serious diseases of livestock and
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poultry. Measures incorporated in this Order are largely designed to protect the Province's animal health status and to ensure thereby the security of the agricultural industry in Northern Ireland.
Moved, That the draft Diseases of Animals (Amendment) (Northern Ireland) Order 1975, laid before the House on 2nd July, be approved.—(Lord Donatdson of Kingsbridge.)
Lord BELSTEAD: My Lords, it is clear from the explanation given by the noble Lord that this Order should be supported. Probably the noble Lord can, like myself, remember past occasions when there have been terrible outbreaks of foot and mouth in the United Kingdom, and there have been long debates in this House about the most effective means of trying to combat that disease. Having listened to the noble Lord, it seems clear to me that this Order moves decisively towards more practical and stronger controls from the point of view of animal health.
I wish first to ask the noble Lord a question, notice of which I regret I have not given him because it arose in my mind only as he was speaking. It is clear that as a result of this Order some extra responsibilities will fall upon the farmer, the producer. The noble Lord mentioned the responsibility in importing carcasses for those who do the importing. Can the noble Lord say whether the provisions of this Order have in fact been agreed with the Northern Ireland farmers' union? If they have not been agreed, does the noble Lord know from his experience whether there are any areas of the Order which are in contention? The noble Lord might care to write to me on this point, which can certainly await a written reply.
Secondly, can the noble Lord give me any reason for strengthening the law in the main respect in which the Order strengthens it; namely, in making it an absolute offence—more or less—for anyone who is in possession of anything which has been imported in contravention of an Order under the parent Act? This is a matter to which the Joint Committee on Statutory Instruments drew attention. The point which the Committee raised is of no account this evening; it led the Committee to no conclusion, but from it

811
arises my question. This Order is strengthening the law against those who might contravene an Order under the parent Act, and I should be interested to know whether historically in the past few years there has been any record of contraventions of the law. In particular, have cases of illegal importing increased in respect of any specific animals?
Finally, I wish to ask the noble Lord about Article 5. I may be misreading this article, and it may apply only to the movement of carcasses, but as I read it, it seems to apply to the movement of live animals. If this is so, I find it astonishing, because such records have been obligatory for many years in Great Britain, and therefore surely in Northern Ireland, where agriculture specialises in the raising of livestock, it is extraordinary that records should not have been required in the past. Having posed those three questions, I wish to say that I very much support the direction in which the Order moves. If there were a bad outbreak of swine vesicular disease, foot and mouth, or swine fever—three matters which the noble Lord mentioned—we should probably be having a lengthy debate. In my opinion the methods outlined in the Order are right and should be supported.
Lord DONALDSON of KINGS-BRIDGE: My Lords, I am most grateful to the noble Lord for the welcome he has given to the Order. First, it is not an Order which has a great deal to do with the primary producer; it is much more concerned with the meat plants and the people who handle dead meat. But, in fact, the provisions have been agreed with the Ulster Farmers' Union—a point which the noble Lord asked me about. He also raised the question of the absolute offence. The view taken was that it is very difficult for a prosecution to prove ignorance that meat has been imported; but provided the possessor of meat which has been imported is given a reasonable opportunity to explain why he did not know—and there are very many reasons why this might be so—this was thought to be the fairest way to deal with the matter. It arose not as the noble Lord suggested through some unexpected increase in imports but through rather an important case which arose, I think, during the course of the past 12 months
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where a fairly large quantity of imported meat was found. It was extremely difficult to lay the blame on the people who were holding it until, at the end, one of them admitted to having imported it.
In this case it was dealt with, but without the free admission of this person it was realised that prosecution would be very difficult, and this has been put in to make it easier. I think there is a precedent for doing things this way round, and the best example I can give the noble Lord is one from Northern Ireland. Under Section 110 of the Fisheries Act (Northern Ireland) 1966 it is an offence to be in possession of salmon illegally caught—a similar cases. The defence is described in identical terms to Article 3(4), so that I am quite satisfied, and I hope the noble Lord will be satisfied, that this is not creating some new and terrible crime. It is making a logical position in order to prevent what we are all determined to prevent.
In regard to Section 5, the noble Lord expressed surprise that it was necessary to give the Department or the inspectors power to insist on record keeping. The answer is that there are a number of regulations which insist on record keeping. This is a blanket regulation which gives them power to insist on any record keeping and also goes a good deal further by giving them the right, which is not available generally, to take away the records, if necessary. I hope that those answers will satisfy the noble Lord.
[The Sitting was suspended from 7.33 p.m. until 8 p.m.]
8.0 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 230:
Page 24, line 13, at end insert—
("Provided that the committee shall ensure that such representations shall be made in a manner preventing disclosure of any of the information or substance thereof otherwise than to the committee.")
The noble Lord said: This Amendment is designed to inquire about the confidentiality of the advisory committee proceedings. I think it can be assumed that the proceedings should be confidential and that the information itself, which no doubt will have to be made clear and

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divulged to the members of the Committee, should be protected. The question also arises of whether this should be written into the Bill in the form of this Amendment or something like it so that everybody who reads this subsequently as an Act is informed that the proceedings will be confidential.
May I give an example of what I assume will happen? When the advisory committee gives the representatives of the company and of the trades union the opportunity to make representations under the preceding subsection, one assumes that they will be seen separately so that the company can talk about the information (which is the subject of the question, whether to disclose or not) and the members of the advisory committee will then be aware of what the information is. Subsequently, the trades union representatives make representations and, it may be, see the committee and are received and make oral representations if that is within the procedure. We assume that the advisory committee must then be careful that the trades union representatives are not inadvertently given some of that information. There is also the general point that anything that is learned by a member of the advisory committee should be confidential. That is why I beg to move this Amendment.
Lord MELCHETT: We entirely agree the principle underlying this Amendment. I can assure the noble Lord that the assumptions he makes are more or less in line with practice, and in line with the practice as already outlined by the Government in another place in response to an earlier discussion on this matter. As a result of that discussion the Government indicated how they saw this information being kept confidential. It was felt that any argument that would occur with both sides present would be a general argument about types of information that might be withheld. In closed session the company would then submit to the committee that certain information should not be disclosed because it fell into a particular category.
This, and the provision in paragraph 6 of Schedule 5 that the committee will sit in private, provides a complete assurance that the information will be safeguarded. Were the committee or any of its mem-
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bers to release information by design or by accident—and this answers the point the noble Lord made about inadvertent disclosure—this would be an offence under Clause 28(3) which would be punishable by fine and imprisonment. For these reasons, while we accept the principle underlying the noble Lord's Amendment, I hope that he will see that it is unnecessary as it is already embodied in the provisions of the Bill.
Lord CAMPBELL of CROY: I am glad to have that assurance, and grateful to the noble Lord for giving it. As at present drafted I would not say that it would be easy for someone examining the Bill when it is enacted to reach the conclusion leading to the assurance we have been given. I still think it might be worth examining whether this could not be written clearly into this part of the Bill. The fact that a member of the advisory committee would be committing an offence by breaching this confidentiality is something which, having been stated by the Minister, should give a real assurance to those who are following these proceedings. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord MELCHETT: This Amendment was discussed with Amendment No. 163A. I beg to move.
Amendment moved—
Page 24, line 24, after ("the") insert ("authorised")—(Lord Melchett.)
Lord MELCHETT: This Amendment was discussed with Amendment No. 163A. I beg to move.
Amendment moved—
Page 24, line 28, leave out ("a representative of each relevant trade union"), and insert ("each such representative ")—(Lord Melchett.)
8.7 p.m.
Lord TERRINGTON Lord TERRINGTON moved Amendment No. 239:
Page 24, line 28, at end insert ("and to the members of the company or companies concerned")
The noble Lord said: Although I made reference to this Amendment when

815
speaking earlier to Amendment No. 185, I should like to say a few more words. The noble Lord, Lord Beswick, assured me that he recognised the point I was making with regard to disclosure to shareholders. For this I am grateful. He also expressed the hope that I will accept the Government point that this Bill was not the vehicle through which to make changes of the kind I am proposing. I entirely accept that a Companies Bill would be a more normal method of dealing with the position of shareholders and I said so at the time; but I am still uneasy about the delay involved in waiting for a Companies Bill. In order to obtain their further views, I am therefore having some fresh discussions with the Stock Exchange authorities who have expressed their concern about this. In the meantime I should like to reserve my position for a later stage in this Bill. I beg to move.
Lord BESWICK: I understand what the noble Lord, Lord Terrington, says. If any new points arise from the more recent discussions which the noble Lord has with his colleagues, I shall be glad to consider them. I hope that he will consider what we have said; namely, that there can be absolutely no question of having a restricted number of insiders here. Once information has been disclosed, we should be happy to have it fully disclosed to all the shareholders. We shall see what the noble Lord has to say later. If he cares to let me have a note on what lines he is thinking, I will ensure that the points he raises are carefully considered.
Lord TERRINGTON: I thank the noble Lord and beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Lord MELCHETT: Amendment No. 241A was discussed with Amendment No. 163A. I beg to move.
Amendment moved—
Page 24, line 30, laeve out "representative of each relevant trade union") and insert ("authorised representatives")—Lord Melchett.)
Lord LOVELL-DAVIS: I beg to move Amendment No. 246A. Reference
816
was made to this with Amendment Nos. 246B and 163A.
Amendment moved—
Page 24, line 35, after ("union's") insert ("authorised").—(Lord Lovell-Davies.)
Lord LOVELL-DAVIS: I beg to move Amendment No. 246B. Reference was made to this with Amendment No. 163A.
Amendment moved—
Page 24, line 41, leave out ("a") and insert ("the authorised").—(Lord Lovell-Davis.)
Lord LOVELL-DAVIS: I beg to move Amendment No. 251A. This Amendment was discussed with Amendment No. 163A.
Amendment moved—
Page 25, line 3, after ("the") insert ("authorised").—(Lord Lovell-Davis.)
Lord LOVELL-DAVIS: I beg to move Amendment No. 254A. This Amendment was discussed with Amendment No. 163A.
Amendment moved—
Page 25, line 10, leave out ("the representative of each relevant trade union") and insert ("each such representative")—(Lord Lovell-Davis.)
Lord LOVELL-DAVIS: I beg to move Amendment No. 258A. This Amendment was discussed with Amendment No. 163A.
Amendment moved—
Page 25, line 24, after second ("to") insert ("the authorised")—(Lord Lovell-Davis.)
Clause 25, as amended, agreed to.
Clause 26 [Confidentiality]:
8.14 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 262:
Page 25, leave out lines 29 and 30.
The noble Lord said: This Amendment seeks to delete paragraph (a) at the

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beginning of Clause 26. This clause refers to information which is to be disclosed to the Minister but not to trade union representatives. It appears to lay down the degree of confidentiality attaching to that information. The Minister is to retain, under Clause 23, this information as useful to him, whether it be for the purposes of planning agreements or any other legitimate reason. We have recognised in earlier debates that Government Departments receive in any case confidential information from companies. This is well protected and guarded. Here they are being compulsorily required to provide information to the Minister some of which may well be highly confidential. We see no difficulty about what I have described so far. What we are seeking, in moving this Amendment, is what possible objection there could be to obtaining the company's consent before the Minister passes information to other Government Departments.
It may be for the convenience of the Committee if I also refer to a similar Amendment, No. 265, at this stage in which we are also seeking reasons as to why the company's consent should not first be obtained before this information is passed to three Agencies which are named in paragraph (c). I suggest blanket consent could usually be obtained for the great majority of information which is not highly sensitive by the Minister when he receives information from a company saying that he asks for the company's permission to pass it to other Government Departments or these three Agencies. In that way the sensitive information can be identified because the company may say: "That is fine, but there are two or three matters which are very sensitive and we would ask you to contact us before you pass those points on." I sincerely hope that the company will be informed, because it looks from this clause as though the company will not be informed if the Minister decided to circulate some information round Whitehall, and not only Whitehall, but Cardiff, Edinburgh, Newcastle and other places where Government Departments reside.
Having been in the Government service as a professional civil servant and diplomat, and having occupied positions where secrets and top secret information
818
were the daily business, I am aware of one of the principles which used to operate, and I think still does, in the Government service; that is, the need to know. If there is something confidential or secret, one of the best ways of preserving it in that state is to ensure that only those people who need to know are told it.
Having been, due to my job, a repository of a great deal of such information, I have been in the position of saying that I did not want to know anything more than I needed to know. That does not arise in this case, but I put forward the principle to the Government which is an established principle in the British Government service—that restricted and confidential information should not be passed to people who do not need to know it. That is the way in which a leak can occur inadvertently, because someone forgets where he happened to learn some information. Our purpose is to make sure a company is asked for its consent either in blanket form at the beginning when providing the information, or later if it states it would like to reserve a position on certain sensitive items and be asked individually on those. I should be glad to hear the views of the Government on this.
8.20 p.m.
Lord BESWICK: In the first place. I have to state that the purpose of obtaining information is of course to be able to use it. It would be wrong—and I am not certain the noble Lord wishes to achieve this objective—if the Minister or Secretary of State obtains information that he cannot discuss even with his own officials. That would be the effect of the noble Lord's Amendment. Although I accept what he says about the need to know principle, it is almost certain that there will be other Government Departments—for example, the Department of Employment or it could be the Department of the Environment—which would be concerned with the kind of problem with which we are hoping to help. This information clearly ought to be available to that Department. I hope therefore the noble Lord will agree on consideration that it would be an unwise restriction upon the exercise if we said that it could not he passed to Government Departments.

819
I should however—and I hope that this will be of some assurance to him—say that the National Enterprise Board are not a Government Department and there is no question whatsoever of information obtained under Clause 23 being passed to the NEB while it remains confidential. Apart from that, it goes only to Government Departments and it goes to them under the same conditions of confidentiality that are imposed under Clause 26(1). The noble Lord also asked me in relation to Amendment No. 265—and I gather he would like to clear up this point on this occasion—why reference was made to the Manpower Services Commission, the Employment Services Agency and the Training Services Agency. It is because these Agencies perform functions which are in many ways analogous to functions discharged by Government Departments in the past. Under the Employment Training Act 1973 they were given the status of bodies outside the Government and would not therefore be covered by the reference to Government Departments in Clause 26(1)(a). On the other hand, the noble Lord will appreciate that if we are dealing with development of industry, it is precisely these bodies which will probably have a constructive role to play, and again the confidentiality clause will apply to them and all the penalties attached to improper disclosure would also apply to those who are now employed by these Commissions and Agencies. With that explanation, I hope the noble Lord will see fit to withdraw his Amendment.
Lord CAMPBELL of CROY: I am grateful to the noble Lord for what he has said. Of course I was not intending in this Amendment that a Minister should not be able to discuss information with his officials in his Department. What we are concerned about is the information being spread to many Departments, not perhaps necessarily. The noble Lord has made it clear that this is not the intention. I would hope that in the working of this the Government would be sensible in obtaining blanket consent when the information was first furnished, identifying in the way I suggested with companies what was harmless and what they hoped would be restricted to those Departments which needed to use it. Of course, I agree that where Departments need the
820
information for use it should go to them. But there can be a rather casual way of informing everybody about things in Whitehall, and it ought not to apply in the case of information obtained under this clause. I beg leave to withdraw this Amendment.
Amendment, by leave withdrawn.
8.25 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 267:
Page 25, line 43, at end insert—
("nor shall any such information be disclosed or used without the consent aforesaid for furthering the interests of any person other than those of the person furnishing it or any subsidiary of that person.")
The noble Lord said: This is another suggestion on which we should like to hear the Government's views concerning obtaining consent of a company. We believe it would be prudent to obtain the Government's permission before any of this information be disclosed or used for furthering the interests of any other person than the company or subsidiary of the company. There could be acrimonious relations developing between the Minister and the company if the company suffered because competitors had learned information indirectly as a result of disclosures to the Minister. I realise that this would be entirely unintentional, but it is the company which would know whether the wider disclosure of some information might lead to a situation of damage to it. Here again, we suggest that the Government's practice in a situation of this kind should be to ensure that they have the consent of the company before passing on the information. I beg to move.
Lord MELCHETT: There is no question of information passed by the Minister to any of the bodies listed in Clause 26(1) being passed beyond those bodies while the general confidentiality provision applies. Provided that the company has not been convicted of an offence under Clause 28 the ban on disclosure of information will remain until disclosure has been made to union representatives subject only to the proviso that the Minister will, if necessary, be able to release information in connection with the investigation or prosecution of an offence under this Bill. There is therefore no need, in our view, to impose

821
confidentiality restrictions since these already apply.
The Amendment, as I understand it, is concerned with more than just confidentiality. It would prevent the Minister from disclosing or using any information without the company's consent for the purpose of furthering anybody's interests other than those of the company providing the information. In general our view is that this would be extremely restricting, in that it might well prevent the information from being used for purposes of general economic planning where the benefits were not primarily to accrue to the company but to the economy in general. It would certainly prevent the information from being used, as we believe we must preserve the right to use it, if necessary, for the purpose of preparing and prosecuting an offence. I do not believe that this would be the most important use of information provided in this way, but we must be able to use it in this way as a last resort. This would clearly not be in the direct interests of the company and would thus be excluded by the Amendment.
Lord CAMPBELL of CROY: What the noble Lord has said indicates that the Government do not think this provision need be written into the Bill. What matters is the practice which the Minister will institute when this Bill is enacted and the way in which he deals with companies. There certainly will be situations where he will have the cooperation and confidence of the company if he has obtained their consent to dispersing the information to other parts of the Government machine. So perhaps it is a matter of the administrative way in which this matter is handled, rather than writing something into the Bill. But I should like to draw attention to the importance of this kind of point and, at the same time, beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 268:
Page 25, line 43, at end insert—
("( ) Where information to which this section applies has been disclosed by virtue of one or more of the exceptions set out in subsection (1) above being information which is not generally available but, if it were, would be
822
likely materially to affect the price of any securities, a person receiving that information shall not deal in those securities or procure any other person so to do so long as that information is not generally available and is information to which this section applies.")
The noble Lord said: This is an interesting point arising from the debates which we have had on the Amendments of the noble Lord, Lord Terrington, and also an Amendment which I moved a little earlier today. The effect of the advisory committee system is that a certain number of people might be placed inside a trading position again. I know that in Government Departments this situation has been known over the years and is catered for in various codes and rules. But there are now three Agencies referred to in paragraph (b) and a person brought in to the advisory committee proceedings under paragraph (b) also would be involved. So there would be a restricted number of people who would be privy to certain information about a company which was not publicly known. We should be glad to have the Government's view on this situation and to know whether anything need be done about it.
Lord BESWICK: The noble Lord raises an understandable point. When he says there will be a restricted number of people who will come into possession of information, it may well be so—a restricted number under the provisions of the Act which we hope will follow—but he should not underestimate either the volume of information which goes into a Government Department or the number of people who have access to that information under terms of the strictest confidentiality. I do not see why we should treat differently the officials in one division of one Department who happen to be dealing with information coming under this Bill from officials in another division in the same Department.
Lord CAMPBELL of CROY: I believe that the noble Lord has misunderstood me. I was not referring to officials in the Department. I said that situation is one which has been known for many years and is catered for. It is the situation of people in the three Agencies mentioned in paragraph (c) and also outside persons not in Government service who are brought in under paragraph (b) with which we are dealing.
Lord BESWICK: So far as the Agencies are concerned, as I have already said there is absolutely no difference in their status from that of civil servants who are in a Government Department. They were doing that job in a Government Department. They are now doing it in an Agency or a Commission. The terms of the service are exactly the same. Therefore, they are on all fours with those who are in a Government Department.
There is one other point I would make. I think I am right in saying that the wording has been taken from the previous Government's Companies Bill which did not get on to the Statute Book. It will probably be agreed that there was a good deal of criticism about this form of words. I have heard it described as "a legal mess". Probably this is a point which ought to be covered more fully and I understand that it is being discussed by legal people. However, at the moment there does not appear to be a generally accepted formula to meet the kind of case that arises not simply out of this Bill but generally. May I suggest to the noble Lord that the point he makes is taken. It would not properly be taken by this Amendment. Even if it did, it would be wrong to apply this formula to a restricted number of people.
Lord CAMPBELL of CROY: Certainly this is not the only case of this kind which will arise. The noble Lord has referred to a similar situation and the attempt which was made to meet it in the 1973 legislation which was not completed. The noble Lord has accepted that there is a problem. It seems as though the way to deal with it is still being considered and thought out by lawyers and others. I am glad that the noble Lord has taken the point and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord MELCHETT: Amendment No. 270A was spoken to together with Amendment No. 163A. I beg to move.
Amendment moved—
Page 26, line 3, leave out ("representative of each relevant trade union") and insert ("authorised representatives of relevant trade unions").—(Lord Melchett.)
8.33 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 272:
Page 26, line 5, leave out subsection (3).
The noble Lord said: We should like to hear the Government's explanation of the wording of subsection (3) which this Amendment, which I now move, seeks to delete. It has been thought that it may be harsher than is necessary. It may arise from failure to carry out a preliminary order only within the time set. It is thought outside this House that it might be a single member of a company who failed to produce the required information in time and was then convicted. Clearly this could not be excused. The conviction is an offence which one would deplore, but it seems to be going rather far to decide that the information connected with that case would then be divested of confidentiality and not to take into account whether or not it was very sensitive information. It could be sensitive to an extent which was out of all proportion to the error or offence that had been committed by a member of the company. We should be glad if the Government could explain why it is necessary to have this subsection in the Bill.
Lord MELCHETT: The point of subsection (3) is that it allows the Minister to disclose information if the person required to furnish information to representatives of relevant trade unions has been convicted under Clause 28(1)(b) of refusing or failing to do so without reasonable excuse. This would allow the Minister in effect to set right the wrong done by the commission of the offence. Without this subsection the Minister would be forced, so as to obtain the disclosure to trade union representatives that is sought, to serve a further notice under Clause 23(1) or Clause 24(1). Yet the company would have been convicted of ignoring just such a notice and must be suspected of intending to ignore a second one. If the offence were repeated there might be a further fine, but this would not by itself result in disclosure.
In these circumstances, in our view it would be anomalous for the Minister still to be bound by restrictions on the disclosure of information, and quite proper that he should he able to pass on

825
the information which is in his or her possession. The information that the Minister may disclose in such circumstances is only that which he has obtained under Clause 23. Clause 26(3) does not authorise the Minister to disclose other data furnished to him on a confidential basis. The point to bear in mind is that this is disclosure of information only after a company has been convicted of a criminal offence. I find it hard to believe that a company, even if only one person in that company was responsible, would be convicted of a criminal offence without all the members of the company having considerable notice that this was going to happen, and for them to have time to sort out the position about disclosure of information before it ever got to the stage where they had been convicted and the Minister was acting under this subsection.
Lord CAMPBELL of CROY: May I take up one point. This is an important interpretation of the Bill. The previous subsection, subsection (2), says:
"Subject to subsection (3) below, this section applies to information which has been furnished to a Minister under Section 23 above…"
This confidentiality clause as a whole appears to apply only to information required by the Minister for the purposes of his Department or other Departments, and not for the purpose of passing on information to trade union representatives. Therefore I was a little surprised when the noble Lord spoke about transmitting information to trade union representatives. As I understand it, the words, "Subject to subsection (3)" mean that it is subject to exemption in a case where there has been a conviction. I wonder whether the Minister can confirm my interpretation that the whole of this clause relates to information furnished to the Minister for Government purposes and not to passing on information to trade union representatives, because that seems to be the meaning of the words in the previous subsection:
"…but has not been furnished to the representative of each relevant trade union under Section 25 above".
It could be that the interpretation is one of timing—that the information is in a state where it has reached the Minister
826
but has not yet been considered for the later stage of passing it on to trade unions. I think that there is ambiguity here, and I should be grateful for clarification.
Lord DRUMALBYN: May I go a little further into this. I thought that the Minister's explanation was rather peculiar.
Lord MELCHETT: I was going to explain that I had made a mistake. It may save the Committee's time if I clarify the position. In fact I have not made a mistake, but there is a printing error in the Bill which may be leading the Committee into confusion. Certainly it led me into confusion in my reply. All I said was correct, but the fact is that in subsection (3) on page 26 the Bill should read:
… has been convicted of an offence under Section 28(1)(b) below in relation to it."
and not Section 28(1)(a). The noble Lord, Lord Campbell of Croy, has hit upon a printing error. I am not sure whether or not that is inadvertent accuracy but I hope that it will clear up some of the misapprehensions which both noble Lords opposite have about this provision.
Lord CAMPBELL of CROY: While we are revising our versions of the Bill, I would say straight away that I have been able to assist the Government by picking up some other errors in the Bill, but I do not think anyone could have foreseen that this was an error because it referred to a paragraph which actually existed. Of course, it changes the whole complexion of this subsection, and I am glad that we raised it because paragraph (b) is certainly a stage of the procedure which is a good deal further on than the preliminary notice. That explanation makes this subsection more comprehensible and it is easier to understand why it is in the Bill. I cannot resist reminding your Lordships that on several occasions the noble Lord, Lord Beswick, has genially invited us to read the Bill, but in this case it would not have helped us. I was asking the noble Lord about this other point in regard to interpretation. I entirely understand that if it is a "fast one" at this stage of the Bill, he may wish to reserve the explanation until later, but it is an interpretation which I think ought to be given at some stage.
Lord DRUMALBYN: I would only say in passing that the fact that a company refuses to disclose information in accordance with Clause 28(1)(b) and either Clause 23 or 24, does not necessarily mean that that clause is, to use a kind of Latin grammar phrase "meet to be disclosed." I think this still has to be looked at. It might not be in the national interest to disclose it, and there might still be special reasons for not disclosing it. If the company feel so strongly that they refuse to disclose it even to the Minister, the likelihood is that there are very good reasons for it. I personally should like to study this further.
Lord MELCHETT: It is not merely that they have failed to comply with Clause 28(1)(b), but they have actually been convicted of an offence.
Lord DRUMALBYN: Yes, exactly.
Lord MELCHETT: And then the Minister, instead of issuing another notice—in other words, doing exactly what he has just done before and having the company convicted—we feel must have the power to proceed in a slightly different way. After all, it is not much use to the Minister or anybody else if he keeps issuing notices, the company keeps refusing to comply, keeps getting convicted and fined, and the Minister has the power only to issue another notice. Of course, the Minister still retains some discretion about whether or not he discloses the information. If it is going to be harmful to the national interest. I imagine that the Minister would not disclose it. If the noble Lord thinks about it, I am sure he will feel that it would be a mockery of these provisions in the Bill if the only power the Minister has when somebody is convicted of failing to comply with an order is merely to reissue the same order so that the person may be reconvicted, and nothing more happens than that. That is the purpose of this reserve power. I am afraid that in the confusion about listening to whether it was clause 28(1) paragraph (a) or (b), I did not catch the "fast one" which the noble Lord, Lord Campbell of Croy, claimed to have sent over the table.
Lord CAMPBELL of CROY: I was asking for an interpretation of the previous subsection (2). I have not tabled an Amendment to that subsection, but of
828
course it runs straight into subsection (3) and I was asking whether my interpretation was correct. I merely said that if in the short time available the noble Lord was not able to give me the answer, I was ready to wait until the next stage of the Bill. I will clarify it again as the noble Lord has invited me to. In subsection (2) it appears that this clause is related only to information which is furnished to the Minister and not to information which he is going to seek to pass on to trade union representatives. The confidentiality clause (which this is) relates to information within the Government machine but including three agencies. In his initial reply to me the noble Lord spoke in terms of the information being transmitted to trade union representatives. That surprised me, because I did not think it arose in this clause. I realised that there might be ambiguity in the wording, which I will again repeat,
"that has not been furnished to the representative of each relevant trade union under Section 25 above."
That might indicate that it was a matter of the stage reached rather than the different kind of information; that it was related only to the information going to the Government as opposed to the trade union representatives and therefore was information that was likely to be confidential.
Lord DRUMALBYN: There is a further point here. The noble Lord has been arguing that once a person has been convicted of an offence of refusing or failing without reasonable cause to furnish information, the Department should then be exempted from the requirement not to disclose the information. That is as I understand the position. If they do disclose the information, is the £40 a day fine to go on running for ever? They have disclosed the information, the person who has been convicted of an offence is to be guilty of a further offence so long as the default is continued. I suggest that the noble Lord should look at this. To say the least, it looks a little untidy.
Lord MELCHETT: It may be untidy, but it would certainly he incompetent of the company if they did not disclose the information. I will certainly—if the

829
noble Lord wishes to say something to me perhaps he will rise.
Lord DRUMALBYN: How can they disclose something that has already been disclosed? That is a nonsense, if I may say so.
Lord MELCHETT: If I may say so, I should have thought the company could disclose something from the company although the Minister has already disclosed it from the Minister, but I may well be wrong about that. I will write to the noble Lord if I am wrong, but there would be nothing to stop the company ceasing to be in breach of the law by disclosing the information itself once the Minister had done so.
To answer the noble Lord, Lord Campbell of Croy, my understanding of subsection (2) is that it means the confidentiality provisions cease to apply after information has been furnished to the trade unions. But until then the confidentiality provisions apply, except for the provisions of subsection (3), which is what we have been discussing under this Amendment, even where the information has not been furnished and the company has committed an offence. I hope that clears up the interpretation of subsection (2).
Lord CAMPBELL of CROY: That is a very important statement of interpretation, because it means that this clause refers not only to information which is being disclosed to the Government and not intended to go any further, but also information which may be going on to the trade unions so long as it is with the Minister and before the process is started of suggesting that it be transmitted to the trade unions. I see no difficulty about that; it is covering both eventualities. I am grateful to the noble Lord for having explained the intention of this part, which was not clear. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
8.39 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 273:
Page 26, line 10, at end insert—
"(5) If in contravention of this section information to which this section applies is disclosed and if the person by whom the
830
information was furnished in consequence sustains commercial loss or damage, the Minister to whom the information was furnished shall compensate that person in full for that loss or damage."
The noble Lord said: This Amendment simply raises the question of whether there should be any compensation available if there is a breach of confidence somewhere in the Government machine or through the Government machine, resulting in damages to a company which has supplied this information. It could be said that companies are being kept to a fairly strict discipline, including the whole process of convictions and fines if they do not observe the system correctly, and this simply raises the question of whether there is any way in which, if the company is let down in some way, it can claim compensation for damage which has been proved to have occurred as a result. I beg to move.
Lord BESWICK: I recognise the argument that if the Government require a company or body to provide information of a possibly sensitive kind, and Parliament imposes a duty of confidentiality on that provision, then the Government should reasonably pay compensation because of that breach. Although the noble Lord said that it was a simple matter, it is a little more complicated than that. Information of a commercially sensitive sort has been required before in a number of different Acts; for instance, the Statistics of Trade Act 1947, the Counter-Inflation Act 1973, the Insurance Companies (Amendment) Act 1973, and so on. There is no novelty in a Government or other bodies such as the Monopolies Commission or the Prices Commission, for example, having obtained information either voluntarily or by Statute whose disclosure could cause embarrassment or damage.
What we have put forward in this Bill is exactly comparable to what has been done in some previous legislation. We have proposed that improper disclosure by the Minister or by any other body to which he has passed the information, as he is allowed to by Clause 26, should be a criminal offence. The only difference between this Bill and earlier Statutes is that we have increased the maximum fine payable for a summary conviction; on indictment, a person convicted of an offence may be liable to an

831
unlimited fine or a term of imprisonment not exceeding two years.
One of the matters which should be looked at with some care is as to whether the introduction of an Amendment on the lines proposed could affect the construction which might be placed by the courts on all the other Acts I have mentioned which impose a specific duty to preserve the confidentiality of information which has been required by the Government. It could be that a specific definition of rights in this Bill might reduce the Common Law rights which might exist in other cases. The noble Lord will no doubt bear in mind that the Law Commission have published a working paper, No. 58, on breach of confidence. Again, it would be desirable to consider more fully than has yet been possible what would be the effect of legislating in one specific case when wider and more general legislation has been proposed by the Law Commission, in work which stems from the Report of the Younger Committee on Privacy.
I hope that what I have said indicates the seriousness of what the noble Lord says. I hope he will accept that there is a complication which probably extends further than he thought. With the assurance that I am giving, that the matter is one which is at present receiving study, I hope that he will see fit to withdraw this particular Amendment.
Lord HARMAR-NICHOLLS: Do I understand the noble Lord to suggest that that may well be included in this Bill?—because there ought to be some discipline from that side, too. All the discipline at the moment seems to be directed against management, and that one understands, because they are the source of information that is wanted. But if it is wrongly or carelessly disclosed, which damages the company, it ought to be written in somewhere that compensation will cover it, otherwise there is no discipline at all to be ultra careful in the interests of a company.
Lord BESWICK: Far from there not being discipline, I have detailed the criminal offence as created by the improper disclosure of information. When the noble Lord gets on to a civil offence, it would not be proper to put anything
832
in the Bill which might have an effect upon other areas of legislation. I suggested, though apparently not too clearly, that it is a matter which requires more thought. Some thought has been given to it by the Law Commission, and on the basis of their Report we are giving it further study.
Lord LEATHERLAND: Is there not just a risk that the proposal contained in this Amendment and, perhaps, to some extent, the concessionary attitude of my noble friends on the Front Bench, might go too far? Let us visualise a position in which, let us say, Imperial Chemical Industries, with a capital of many millions of pounds, gives some information to the Minister. Let us assume that by some mishap, that information leaks. Let us then further assume that some wicked people in the Stock Market decide to mount a colossal bear market with the result that the capital value of ICI as quoted on the Stock Exchange is reduced by hundreds of millions of pounds. Is the Minister going to have to be responsible for paying compensation to that extent?
A Noble Lord: Why not?
Lord BESWICK: What I have said I should have thought would have satisfied my noble friend. I have said that we are proposing not to move without due consideration.
Lord CAMPBELL of CROY: I am glad that the problem is recognised. As the noble Lord, Lord Harmar-Nicholls, said, through this Bill companies are now being asked to enter into a system by which they will be directed to provide information. So the Government ought to consider the position even though it is complicated when, as a result of all that companies have done by compulsion, they suffer damage. But as the noble Lord has said that this is being considered in a wider context, I will not press it at this moment and beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 26, as amended, agreed to.
8.55 p.m.
Lord BESWICK: I beg to move Amendment No. 274.
Amendment moved—
After Clause 26, page 26, line 10, at end insert ("PART V").—(Lord Beswick.)
Lord DRUMALBYN: May I ask a more than usually tiresome question? Amendment No. 280A says "Transpose Clause 28 to after Clause 26". Does Part V in fact come at the end of line 10, or does the transposed clause come at the beginning of Part V?
Lord BESWICK: At four minutes to nine that is a particularly tiresome question, and I am afraid I have not got the answer.
Clause 27 agreed to.
Clause 28 [Offences, and enforcement of orders]:
8.58 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 275:
Page 26, line 22, after ("information") insert ("within a reasonable time")
The noble Lord said: At an earlier stage, the noble Lord, Lord Melchett, suggested that this Amendment might be considered at the same time, but I did not agree because it came at a later stage in the Bill and was not, I thought, related exactly to the point I was then making. Fortuitously, it happens that this Amendment now has rather more significance than I had thought as a result of the misprint just announced. It is an Amendment to paragraph (b) which should be referred to in subsection (3) in the previous Clause 26. The suggestion is that in addition to "reasonable cause" in this subsection which reads,
"refuses or fails without reasonable cause to furnish information",
there should also be inserted, "within a reasonable time", because there is nothing to indicate that a company has had enough time to co-operate and furnish the information. I am not sure that it is covered by, "without reasonable cause", but in so far as the Government have put in the words, "without reasonable cause" I should have thought that they could have inserted, "within reasonable time" particularly as (b) now has rather more importance than we previously thought. I beg to move.
Lord MELCHETT: I am afraid that once again, with one eye on the clock, I do not think discussing this point yet again is a reasonable use of time, because we covered it on an earlier Amendment. I said then that I would ask your Lordships to look at paragraph (a) of Clause 24(1), which specifically states that reasonable time must be given and that this shall not be less than 28 days. If the time specified in the notice were to be unreasonable, or if the information simply were not available, it would be a defence in terms of paragraph (b) of Clause 28(1), in that both these would be a reasonable cause for failure to have provided the information and hence the company would have committed no offence in thus failing to provide it. I regret to say I do not think the fact that there was a misprint in the Bill alters the insignificance of this particular Amendment.
Lord BROWN: May I add a little further argument. I was going to comment on the previous Amendment, but thought it was unnecessary at that stage. Clause 24(5) says:
"A Minister shall not serve a notice… without giving… the company… concerned
an opportunity of making representations to him."
If the time given is not reasonable, if the company suggests to the Minister that the time is not reasonable, no doubt he will alter his mind, and in the last analysis it is the Minister who has to say whether or not it is reasonable. There are all sorts of safeguards against unreasonable time being imposed on the company.
Lord CAMPBELL of CROY: The significance I was speaking of was the significance to this paragraph (b), not necessarily to the Amendment. The noble Lord in reply has indicated that where it is written in other parts of the Bill it will have its effect here. This is a subsection dealing with offences and imposing a fine, and it was therefore necessary to ensure that this point about reasonable time was applicable in this subsection of this clause as well as in other parts of the Bill, but in view of the complete assurance we have had from the noble Lord that that is the case, I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
Lord BESWICK: I beg to move Amendment No. 275A, and perhaps we may take with it No. 276A, No. 277A and No. 280A. All these are drafting Amendments which recognise the proposed division of the Bill into different Parts. I beg to move.
Amendment moved—
Page 27, line 13, after "this") insert ("Part of this")—Lord Beswick.)
Lord CAMPBELL of CROY: I beg to to move Amendment No. 276. This is seeking an explanation of why subsection (7) is needed in the Bill. We should be grateful if the Government could give an explanation. I beg to move.
Amendment moved—
Page 27, line 22, leave out subsection (7).—(Lord Campbell of Croy.)
Lord LOVELL-DAVIS: Subsection (7) is simply a standard provision of legilation dealing with offences by bodies corporate and that is why it is included in the Bill. Its purpose, like that of subsection (6) is to provide that persons responsible for failure to meet the requirements imposed by the Statute may be held to be individually liable for the offence thus committed by the body corporate. It therefore covers those cases where the affairs of the body corporate are not managed by a board of directors elected by members but are directly managed by the members, for example, the nationalised industries, and extends to them the same provisions as apply to managers and officers of bodies corporate by virtue of subsection (6). Similar provisions exist in the Fair Trading Act 1973, Section 132(2) of the Civil Aviation Act 1971, and the Gas Act 1972. I hope that explanation satisfies the noble Lord.
Lord CAMPBELL of CROY: I am grateful for the explanation, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord BESWICK: I beg to move Amendment No. 276A.
Amendment moved—
Page 27, line 26, after ("this") insert ("Part of this").—(Lord Beswick.)
Lord CAMPBELL of CROY: I beg to move Amendment No. 277. It may be
836
that my noble friend Lord Balfour will consider it convenient for his immediately-following Amendment to be discussed at the same time. I have a natural curiosity as to why in the Bill Scotland should appear to be missed out, why it should not seem necessary to make separate provision for Scotland, when subsection (8) deals with England and Wales and Northern Ireland. I am sure there is some explanation and your Lordships would be interested to hear what it is. I beg to move.
Amendment moved—
Page 27, line 31, at end insert—
("(c) in Scotland except at the instance of the Lord Advocate").—(Lord Campbell of Croy.)
Lord LOVELL-DAVIS: I am happy to say there is nothing sinister in the omission of Scotland. The Bill, like other Statutes, specifices that the appropriate Attorney General's permission shall be obtained for prosecutions in England, Wales and Northern Ireland. Like other Statutes, it makes no mention of Scotland. This is because in Scotland all prosecutions—other than two categories, neither of which is relevant to the Industry Bill—require the consent of prosecuting authorities. The proposal to designate the Lord Advocate as sole prosecuting authority would disrupt an existing and adequate system without adding any benefit.
Lord CAMPBELL of CROY: I think I can speak for my noble friend and myself in thanking the noble Lord for that explanation, and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord BESWICK: I beg to move Amendment No. 278A.
Amendment moved—
Page 27, line 32, after ("this") insert ("Part of this").—(Lord Beswick.)
The DEPUTY CHAIRMAN of COMMITTEES (Lord Alport): If Amendment No. 278B is approved I cannot call Amendments Nos. 279 and 289.
Lord BESWICK: I beg to move Amendment No. 278B. I spoke to this on Amendment No. 130A.
Amendment moved—
Page 27, line 37, leave out subsections (10) and (11).—(Lord Beswick.)
The Earl of BALFOUR: Could I take the opportunity of asking the noble Lord, Lord Beswick, whether he would look at the bottom of page 27, at the last two paragraphs, where no criminal proceedings take place? Should it not extend to a vesting order as well as a prohibition order? If the noble Lord prefers it, I can leave this and put it down at Report, but I felt I should like the opportunity to ask the question.
Lord MELCHETT: I understand the noble Earl is speaking of his two Amendments which will not be called if this Amendment is passed. Perhaps I can briefly explain the purpose of the two subsections the noble Earl was seeking to amend. That might set his mind at rest. The noble Earl's two Amendments seek to alter the two subsections which are somewhat different from the other provisions in this clause, in that they do not create offences but instead state that any contravention of a prohibition order shall not constitute a criminal offence, but civil proceedings may be brought in respect of a prohibition order. The subsections are confined to prohibition orders, and the question to which they relate is how a prohibition order is to be enforced. The answer they embody in statutory form is that breach of a prohibition order is not to be a criminal offence, but civil proceedings may be brought.
The Secretary of State, if he believed the person to be acting in a manner contrary to a prohibition order, could seek an injunction from the court preventing that person from doing so. Any actions taken in the face of such an injunction would amount to contempt of court, thus making the person guilty of the contempt and liable to committal to prison. This provides a proper and adequate means of ensuring that prohibition orders are respected and criminal proceedings are therefore unnecessary. I hope that that answers the point of the noble Earl.
The Earl of BALFOUR: Yes.
Clause 28, as amended, agreed to.
9.9 p.m.
Lord BESWICK: I beg to move Amendment No. 280A.
Amendment moved—
Transpose Clause 28 to after Clause 26.—(Lord Beswick.)
Clause 29 agreed to.
Clause 30 [Interpretation]:
Lord BESWICK: I beg to move Amendment No. 281A. I spoke to this with Amendment No. 100A.
Amendment moved—
Page 28, leave out lines 25 and 26.—(Lord Beswick.)
Lord BESWICK Lord BESWICK moved Amendment No. 283:
Page 28, line 28, at end insert—
(""holding company" means a holding company as defined by section 154 of the Companies Act 1948 or section 148 of the Companies Act (Northern Ireland) 1960;")
The noble Lord said: I am bound to say that I am not properly advised about this, but it simply provides a definition of a holding company in terms of the existing definitions of the Companies Acts. It is the same as the previous definition which was in Clause 10(2)(b) but which was deleted as part of Amendment No. 97. It is more appropriately placed in the interpretation clause because "holding company" appears elsewhere in this Bill, for example in Clause 22(2)(b) in addition to Clause 10. I beg to move.
Lord BESWICKmoved Amendment No. 284:
Page 28, line 37, at end insert—
(""planning agreement" has the meaning assigned to it by section 16(2) above;")
The noble Lord said: This Amendment explains the meaning of a planning agreement. The same definition also appears in Clause 16, but since the phrase now occurs not only in Clause 16 but in paragraph 2 of Schedule 4 it is appropriate that a reference to the definition in Clause 16 be made in the interpretation clause. I beg to move.
Lord MELCHETT: I beg to move Amendment No. 284A. This was spoken to with Amendment No. 100.
Amendment moved—
Page 28, leave out lines 38 and 39.—(Lord Melchett.)
Lord WIGODER: My noble friends and I find ourselves with a formidable ally on this Amendment. For our part we do not desire to move.
Lord LOVELL-DAVIS: Then it falls to me to move Amendment No. 285 on behalf of the Government.
Amendment moved—
Page 28, leave out from beginning of line 40 to end of line 4 on page 29.—(Lord Lovell-Davis.)
Lord BESWICK: I beg to move Amendment No. 285A. This was taken with Amendment No. 100A.
Amendment moved—
Page 29, leave out lines 10 and 11.—(Lord Beswick.)
9.13 p.m.
The Earl of BALFOUR The Earl of BALFOUR moved Amendment No. 286:
Page 29, line 29, at end insert ("mining and quarrying.")
The noble Earl said: In dealing with Clause 30(2) may I ask your Lordships to look at Clause 30(1) under "manufacturing industry". It says that this
"means, subject to subsection (2) below, activities which are described in any of the minimum list headings in Orders III to XIX (inclusive)…."
Mining and quarrying do not appear in that, but they are both highly labour intensive industries. I should perhaps point out to your Lordships that the intention is that mining and quarrying should go in, if it is accepted, after packaging. There has been a slight muddling of the page numbers, but this is where it is intended to go.
Lord MELCHETT: To show how reasonable we become once we start making progress with Amendments, I fully accept the logic behind this Amendment and if the noble Earl. Lord Balfour, will agree to withdraw it the Government hope to come forward with a similar Amendment, though with slightly different wording, on Report.
The Earl of BALFOUR: With that assurance, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 30, as amended, agreed to.
Clause 31 [Orders]:
9.15 p.m.
Lord MELCHETT: I beg to move Amendment No. 287, which was discussed with Amendment No. 40.
Amendment moved—
Page 30, line 5, at end insert—
("(3) It is hereby declared that any power of giving directions or making determinations conferred on the Secretary of State by any provision of this Act includes power to vary or revoke directions or determinations given or made under that provision.")—Lord Melchett.)
Clause 31, as amended, agreed to.
Remaining clause agreed do.
Schedule 1 [The National Enterprise Board]:
9.16 p.m.
The Earl of BALFOUR The Earl of BALFOUR moved Amendment No. 288:
Page 31, line 39, at end insert ("or is unsuitable to continue as a member")
The noble Earl said: This is typical Scottish caution and I merely intend by this Amendment to insert the phrase:
"or is unsuitable to continue as a member"
which appears in much Scottish legislation.
Lord LOVELL-DAVIS: I am in sympathy with the basic purpose of this Amendment. It is a very important matter that the Secretary of State should be able to exercise his ultimate responsibility for the NEB by controlling the composition of the Board, and this inevitably means that he must be able, should the need ever arise—and, of course we all hope that it never will—to declare vacant the office of any member of the NEB who is manifestly unsuitable to continue as a member.
The need is to find words which give the Secretary of State the appropriate discretion without at the same time depriving Board members of reasonable security, and in the extreme without permitting a situation in which members continued in office only at the Minister's pleasure, and were open to pressure from him to exercise their duties in particular ways against the threat of dismissal. The Government have chosen to use the words "unable or unfit" as the means of giving proper discretion. Although

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the word "unsuitability" carries connotations very similar to the words "unable or unfit", it could probably cover wider considerations, such as political suitability with regard to the Government in power. This would clearly be undesirable and the Government feel that the existing wording conveys their intentions more clearly.
Clause 6(1)(d) ensures that a member's office be declared vacant in other circumstances than those specifically set out in Clause 6(1)(a) to (c), which cover the more readily foreseeable circumstances in which it would plainly be undesirable for members to continue in office; protracted absence from meetings of the Board, bankruptcy, physical and mental illness. Unfortunately these are not, I need hardly remind your Lordships, the only misfortunes and weaknesses to which human beings are subject, and more general grounds for removal from office must be available to the Secretary of State. I am sure noble Lords will agree that a general reserve power such as already exists as a common provision in relation to public corporations must be available to the Secretary of State in the case of the NEB. On the other hand, the power is not arbitrary and there must be specific considerations of inability or unfitness before the office of any member can be declared vacant. I hope that this explanation will satisfy the noble Earl.
The Earl of BALFOUR: Yes, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
9.19 p.m.
The Earl of BALFOUR The Earl of BALFOUR moved Amendment No. 289:
Page 33, line 4, after ("member") insert "or his spouse")
The noble Earl said: In this part of the Bill we read:
"A member who is in any way directly or indirectly interested in a contract made or proposed to be made by the Board…."
I feel that the phrase "or his spouse" should he included here. The highest standard of care must be taken in a matter like this and people in this position might manage to get some gain through passing on information, perhaps to their spouses.
Lord MELCHETT: I hope that I will not shatter the friendship which I trust
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has built up between the noble Earl and myself since I was able to accept an Amendment of his, but I cannot resist pointing out that this Amendment would have the effect that the spouse of a member of the Board would have to turn up at the Board meeting to declare his or her interest rather than, as I think the noble Earl intends, that the member of the Board should declare his or her spouse's interest at the Board meeting. But the fact is that we feel there are safeguards to cover the important point which the noble Earl has raised. They are two. First, under paragraph 1 of the Schedule, the Secretary of State is given the duty of satisfying himself that persons he is considering appointing to the Board do not have financial or other interests likely to prejudice their performance as members of the Board. This would enable him to require such information as he may specify to be furnished by the persons—that is, the Board members—involved. He would therefore be able to require any details about interests of the members' spouse which he thought relevant to be disclosed.
Secondly, the requirement under paragraph 13 for relevant interests of members to be declared at meetings of the Board is very broadly drawn—and deliberately so: the obligation to declare interests relates to
"a member who is in any way directly or indirectly interested in a contract or any other matter."
In our view it must be implicit in this requirement that any relevant interest of the member's spouse would have to be declared as being an indirect interest in the matter to be discussed. I hope that, with those assurances, the noble Earl will see fit to withdraw the Amendment.
The Earl of BALFOUR: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Schedule 1 shall be the first Schedule to the Bill?
Lord BOYLE of HANDSWORTH: I should like to say one word about one crucial category of people who are not specifically referred to in this first Schedule to the Bill, namely, the permanent advisers to the Board. We are quite rightly concerned with the question of Board members, but it is difficult to

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imagine more important work for the Civil Service than that of giving permanent advice to the Board, with their very wide functions. I hope we can be assured that the Minister for the Civil Service will not only be concerned with the salaries of the members of the Board but will also work closely with the Secretary of State to ensure the quality of those who are to advise the Board.
Lord BESWICK: I can say only that this point has not escaped the notice of those who are concerned with this and that it has been taken very much to heart. One of the encouraging features of this whole business is the evidence that we have in this country persons of the quality which will be required.
Schedule 1 agreed to.
Schedule 2 [Financial and Administrative provisions relating to Board]:
9.25 p.m.
Lord BESWICK Lord BESWICK moved Amendment No. 290:
Page 38, line 38, at end insert—
("(2A) A copy of the register under section 1(9) above, as amended from time to time, shall be annexed to each such report.")
The noble Lord said: When we discussed Amendments 19 and 20 to Clause 1, we transferred responsibility for keeping the register of interests of Board members from the Board to the Secretary of State. The Amendment, together with Amendments Nos. 291 and 292, are relatively minor Amendments to the provisions for registering Board members' financial interests.
The Government feel that it is more appropriate for the Secretary of State to maintain the register than the Board themselves, since it is the Secretary of State who has to satisfy himself under the provisions of paragraph 1 of Schedule 1 that the members have no financial interest likely prejudicially to affect the performance of their functions. It also seems appropriate that the register should be made available to Parliament each year, so there is provision for a copy to be annexed to the Board's annual report which must be laid before both Houses of Parliament by the Secretary of State. I hope that what I have said will be accepted as extending also to Amendments Nos. 291 and 292. I beg to move.
Lord BESWICK: I beg to move Amendment No. 291.
Amendment moved—
Page 38, line 39, leave out ("so laid") and insert ("laid before Parliament under subparagraph (2) above").—(Lord Beswick.)
Lord BESWICK: I beg to move Amendment No. 292.
Amendment moved—
Page 38, line 42, leave out ("Board's").—(Lord Beswick.)
Schedule 2, as amended, agreed to.
Schedule 3 [Arbitration]:
9.25 p.m.
Lord ELTON Lord ELTON moved Amendment No. 292J:
Page 39, line 20, after ("solicitor") insert ("who has practised for at least seven years")
The noble Lord said: This Schedule appoints a tribunal to deal with disputes arising over vesting and compensation orders. It will deal with very considerable sums, sometimes matters of considerable and lasting importance, and not necessarily only in questions of value. Its appeal is direct to the Court of Appeal and we feel it proper that the chairman should have a minimum qualification. Your Lordships will be aware that under the Courts Act 1971 minimum qualifications are provided for inter alia coroners and circuit judges. The noble Lord, Lord Beswick, who is to reply—or for whom another noble Lord will reply—was kind enough to tell me that the phrase which I had used in this Amendment was perhaps not exactly acceptable, since the word "practised" is not clearly defined. The noble Lord may prefer that I should return at Report stage, or substitute this Amendment with the manuscript Amendment that I have in my hand, which replaces the phrase concerning standing with the phrase "of at least seven years' standing" I should be happy to do either if it is his intention that the purposes of this Amendment should be incorporated in the Bill.
Lord BESWICK: The noble Lord accurately remembers what we spoke about in the Lobby. I accept the principle of what he says. It is also a fact

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that to have an Amendment referring to a lawyer who has practised for seven years would be somewhat restrictive. That could, for example, leave out a barrister who is not in Chambers but who has considerable experience of precisely the area of work we have in mind. I should rather not have the noble Lord whip a manuscript Amendment out of his coat tails at this stage, but it would be better if we had "seven years' standing", and if he would agree, the noble Lord could put it forward at Report stage.
Lord ELTON: I thank the noble Lord for that reply and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord LOVELL-DAVIS Lord LOVELL-DAVIS moved Amendment No. 292A:
Page 40, line 36, leave out ("25") and insert ("27").
The noble Lord said: With this Amendment I should also like to speak to Amendment No. 292B. These are small Amendments. The first is to correct a drafting mistake by putting in the correct paragraph reference, and the second is to make the normal provision that there shall be Ministerial control over salaries that are paid from monies voted by Parliament. This will bring paragraph 12(2) into line with paragraph 12(1), which provides for the approval of the Minister for the Civil Service of salaries paid to tribunal members. Here we propose similar control over the salaries of officials appointed by the tribunal. I beg to move.
Lord LOVELL-DAVIS: I beg to move Amendment No. 292B.
Amendment moved—
Page 40, line 38, after ("may") insert (", with the approval of the Secretary of State given with the consent of the Minister for the Civil Service,")—(Lord Lovell-Davis.)
Schedule 3, as amended, agreed to.
Schedule 4 [Disclosure of information by Government]:
9.29 p.m.
Lord BESWICK Lord BESWICK moved Amendment 292C:
Page 42, line 41, leave out from beginning to end of line 12 on page 43, and insert—
("PROVISIONS RELATING TO THE MACRO-ECONOMIC MODEL

1. For the purposes of this Schedule the Treasury shall keep a macro-economic model suitable for demonstrating the likely effects on economic events in the United Kingdom of different assumptions about the following matters, namely—

(a) government economic policies;

(b) economic events outside the United Kingdom; and

(c) such (if any) other matters as appear to the Treasury from time to time likely to have a substantial effect on economic events in the United Kingdom.

2. The model shall enable forecasts to be made—

(a) of any of the following, namely—

(i) the level of growth domestic product;

(ii) unemployment;

(iii) the balance of payments on current account;

(iv) the general index of retail prices; and

(v) average earnings; and

(b) of such (if any) other economic variables as are appropriate in the opinion of the Treasury from time to time.

3. The references to forecasts in paragraph 2 above are references to forecasts relating to successive periods of three months and not to shorter periods.

4. The model shall be maintained on a computer.

5. The model shall be available to members of the public during office hours upon payment of such reasonable fee as the Treasury may determine.

6. Not less than twice in each year commencing with a date not later than one year from the coming into force of this Act, the Treasury shall publish forecasts produced with the aid of the model as to such matters and based on such alternative assumptions as appear to them to be appropriate.

7. Any forecast under this Schedule shall indicate, where possible, the margin of error attaching to it.

8. The Treasury shall from time to time publish an analysis of errors in such forecasts that would have remained even if the assumptions set out in the forecasts and on which they were based had been correct.")

The noble Lord said: The Amendment I now move is intended to maintain the essence of paragraph 1 of the Schedule which was introduced into the Bill in another place. The recasting it proposes is to improve the clarity of the text and to express it in an appropriate legal formulation. Changes of substance are few. Provision is made for the Treasury to have some discretion as to the ground which the forecasts will cover, and to

847
provide these not less than twice a year rather than quarterly. Secondly, a provision is made for the Treasury to charge a fee for the use of the facility. Thirdly, provision is made for a suitable period of time before the Treasury is required to bring the new facility into operation. As I hope is clear, the Amendment is an attempt to improve the first part of this Schedule. It has been the subject of constructive discussion outside the Chamber as well as in the other House, and I hope that it will be acceptable to both sides of the Committee. I beg to move.
Lord RHODES Lord RHODES moved Amendment No. 292H as an Amendment to Amendment No. 292C:
Line 1, leave out ("PROVISIONS RELATING TO THE MACRO-ECONOMIC MODEL") and insert ("DISCLOSURE OF INFORMATION BY GOVERNMENT")
The noble Lord said: I want to make it clear that my Amendment is very important. The Government are giving important information and analyses and we should not disguise what is being done by a technical sounding title like "macroeconomic models", which in any case is not the sole object of Schedule 4. If my suggestion could be included I should be satisfied. I beg to move.
Lord BROWN: With respect to my noble friend, predictions made from a computer are not information. They are predictions, nothing more. If one were to call these "information" it would put a false value on them. We are at the beginning of a process of using macroeconomic models based on computer science, and to go into the realms of the future and to regard these as positive information would be highly misleading. I hope that the noble Lord will withdraw this Amendment.
Lord RHODES: May I refer to a comment made by the noble Lord, Lord Beswick, only half an hour ago when he said that the point of obtaining information is to use it, and this is what we are attempting in this Amendment.
Lord BEAUMONT of WHITLEY: On the matters of programmes pertaining to computers the information is programmed into the computer and the result depends on what the computer has done to it. No one is pretending that
848
these are major facts necessarily reaching to the depths of the economic universe. Nevertheless they are information as to what the computer produces if you feed certain assumptions into it. Therefore it is information and I certainly support the noble Lord, Lord Rhodes.
Lord RITCHIE-CALDER: May I ask the Committee to consider the words "facts" and "information". Is information fact or not? Are we getting information from the Government, or are we getting facts, or are we getting something called the product of macroeconomic models?
Lord BOWDEN: The more important question is whether the Government are required to display the postulates which they made when they fed this information into the machine. The devastating fact is that far from frequently—in my experience almost invariably—when unreliable data has been subjected to very complicated calculations, it is assumed that in some mysterious way the original information gains a certain credibility which in fact it does not possess. I feel that it is at least as important, and will be as important for the future of this extremely important enterprise, that the Government should reveal their original postulates, their original assumptions, as that they should reveal the results of the calculations. They are often the more important, the more suspect and the more subject to argument. I wonder how far this point is covered.
While on my feet I should like to ask a very important question, namely: How in practice do you distinguish micro from macro-economics? The Government's policy of what they blandly call "fine tuning", which is what I am sure they mean by macro-economics, often leads to the bankruptcy of quite large industries, and this devastating effect is usually described as "micro", despite the effect it may have on society at large. I think we need a clarification of the phraseology and some guarantee that the information published will include far more than the results of dubious calculations based on unknown data.
Lord WIGODER: May I refer to Clause 22. Subsection (10) of that clause says:
"Ministers of the Crown and Treasury shall publish, make available and provide access to

849
information and analysis as specified in Schedule 4 to this Act."
An attempt to remove subsection (10) from Clause 22 has already failed. Is it not more logical in those circumstances that Schedule 4, which is referred to specifically in Clause 22, should therefore have the heading "Disclosure of information by Government" as proposed in the Amendment moved by the noble Lord, Lord Rhodes?
Lord BESWICK: I cannot understand why there is such argument about it. I entirely agree.
Lord RHODES: Thank you.
Lord RHODES Lord RHODES moved Amendment No. 292D, as an Amendment to Amendment No. 292C.
Paragraph 5, after ("public") insert ("to make forecasts based on their own assumptions using the aforesaid computer")
The noble Lord said: This is to get a bit more clarity into it too because paragraph 5 deals with the public access and I am making it quite clear, by inserting,
"to make forecasts based on their own assumptions using the aforesaid computer"
that the access is not just to this macroeconomic model. The macro-economic model is there in the Treasury already but it is not being used as we want it to be used and it is not being used as it will be used in the future. We want to make it clear that the access is to forecasting and not specifically to this model which on its own is quite indigestible for anybody, however intelligent or academic they may be.
May I say that charging, which is also in this paragraph, is necessary to limit frivolous use; but cheap or free access should be made available. When I say "public" access I mean those who are qualified and obey the precepts laid down in the Schedule: such as Parliament, the TUC, the CBI, research associations and the Press. I beg to move.
Lord BESWICK: Perhaps it would be helpful if I said straightaway that I am happy to accept this; except that on Report it might be advisable to make a minor amendment. For example, I am told by the people who specialise in these things that "aforesaid" is not a word normally put into a Statute and we may
850
have to change it. Otherwise I accept the principle.
9.39 p.m.
Lord RHODES Lord RHODES moved Amendment No. 292E as an Amendment to Amendment No. 292C.
Paragraph 6, leave out ("such matters") and insert ("all economic variables in the model")
The noble Lord said: This Amendment arises from very grave suspicions, because I would think that the term "such matters" is one of those Civil Service ambiguous references that can mean anything or mean nothing at all. The sole purpose of this Amendment is to prevent the Treasury from putting a blue pencil through "forecasting"; because if they did it would upset all the work that has been done in the Commons, speaking with a near unified voice, to put this in. I beg to move.
Lord BESWICK: I wonder whether we can look at this Amendment more critically than the other two. As it is drafted, it would place on the Government a duty to publish forecasts of alternative assumptions about a whole range of variables, including such sensitive items as wage rates, exchange rates, prices and so forth. As I have said already, the Government have a duty to consider the effect on events in this country and abroad of publication of such forecasts, and consider it essential that the Treasury should be given discretion to exercise their judgment on these matters when the national interest is involved. Noble Lords will agree that the Government have a duty not to release material which may be prejudicial to the national interest. Moreover, the model would contain a large number of variables, possibly running into many hundreds, and to publish forceasts of them all would be a mammoth and, I suggest, possibly not very rewarding task. While we have accepted the two previous Amendments, I suggest this one be not agreed to.
Lord BRUCE of DONINGTON: invite your Lordships to accept the Amendment moved by my noble friend. Paragraph 2 of the new Schedule reads:
"The model shall enable forecasts to be made… of any of the following… the

851
level of growth domestic product… unemployment… the balance of payments… the general index of retail prices… and average earnings."
It also covers a whole number of other factors. I can see it to be entirely in the public interest that these matters be made known. Some of our learned economists have made mathematical calculations in the past with pencils and paper, and their forecasts almost invariably over the past 25 years have been falsifying events. It is all very well for them to cast doubt and scorn on the possibility of a computer using a mathematical projection being able to put forward certain facts that ought to be considered by the public. It may well be that, in the event, after periods of six months or three months, subject to correction, the errors of the computer will become known. This is more than can be said for some of the errors which have been committed and compounded by virtually every public economist in this country over a quarter of a century.
Therefore it is in the public interest that the Government make certain forecasts public on the basis of data fed into the computer. The nature of the data can be disclosed so that the public can judge and form their own conclusions as to what predictions can be made. This amended clause which has been proposed by the Minister prescribed that the model shall enable forecasts to be made. It does not say society, or anybody else—
The Earl of BALFOUR: I am sorry to interrupt the noble Lord but I must ask one question: is the noble Lord speaking to Amendment No. 292D or 292E?
Lord BRUCE OF DONINGTON: I am speaking to Amendment No. 292E which was the Amendment moved by my noble friend. It is desirable, particularly in the years that lie ahead, that the public should be made aware of the alternative forecasts that can be made regarding the future of our economy on alternative assumptions. Therefore I consider it highly desirable that the Government should accept not merely the text of this Amendment but the whole spirit that lies behind it.
Lord BEAUMONT of WHITLEY: This is a very difficult question and I take the point of the noble Earl, Lord
852
Balfour, when he questioned which Amendment was being spoken to. Although undoubtedly we are speaking to Amendment No. 292E, Amendment 292D also is very much involved in this question. I feel strongly with the speakers who have spoken so far that we should have as much information as possible regarding the matters which have been fed into the computer and these hypotheses. I think this was the point that the noble Lord, Lord Bowden, was speaking to on the last Amendment and is no doubt going to speak to again.
However, it seems to me that there are undoubtedly parameters to this. Obviously the Government are rather cautious about the number of things they wish to be fed in; and it did not seem to me that the noble Lord, Lord Beswiek, when he was speaking about highly delicate matters on wages, et cetera, put up a case at all. I think those are matters which should be made public. But one would not have to think much further than that to come across matters which it is very much in the public interest that they are not revealed. I hesitate to refer to particular examples, but civil servants always have their own views about what their masters are doing and there could be moments in the history of this country in which the Treasury would wish to put in rather highly sensitive matters which, if it were revealed they had been put in, would, given the nature of the Press and the media, gain absolutely sensational headlines. That there could be such matters is not open to doubt, but I am absolutely and entirely behind the purpose of the Amendment.
I should like to ask the noble Lord, Lord Rhodes, this question. Is the point he is trying to insert, in Amendment No. 292E, not covered by having had No. 292D accepted? If there is freedom to use this computer; if there is freedom for members of the public—and that means, of course, highly skilful and highly informed members of the public—to put their own suppositions into the computer, they will probably do so in a way that the Treasury would also do, and they can get out the same answers and get the same information which can be released to the public. But what will then not happen is this. If the Treasury for some reason wishes to put in some really highly sensitive matters—and I am not just talking

853
about wage claims or rates of inflation, but really sensitive matters—it would not necessarily have to reveal this. I wonder whether Amendment No. 292D does not cover the great substance of what the noble Lord. Lord Rhodes, wants.
9.48 p.m.
Viscount HANWORTH: We have to fact the fact that computer models can be extremely complicated with a very large number of variables indeed, and it is not only the variables; it is the weighting that is given to them. So I have considerable doubts whether this Amendment ought to be accepted. It may be that another compromise is possible. As I think the last speaker said, we probably have all we want in Amendment No. 292D. But to make it compulsory to provide this information is going far to( ) far, and it will be far more complicated than can be of use to any except a very skilled economist, who incidentally is trained in this kind of thing—not every economist is.
Lord BOWDEN: I should like to make two points. First, it is inconceivable that every possible variable should be tried; the task would be wildly beyond the powers of any computer, however powerful. On the other hand, the purpose of doing this enterprise is precisely to be able to compare the economic effects of proposed courses of action. Unless the consequences of these actions are known in fair detail it seems to me that the whole purpose of the exercise is stultified. As I said a few moments ago. I should like to extend the meaning of the word "macro" by the use of the phrase, "or economic variables" to include such effects, for example, as the dramatic effect the 25 per cent. VAT on electronics is having on the electronics industry, which seems to me to be disintegrating under the effect of it.
That is precisely the kind of thing which should emerge from an analysis made with a fairly complicated computer of the kind of action which the Treasury has traditionally taken. I would go so far as to say that many of the economic ills which beset this country at the moment are due to the attempts that the Treasury has traditionally made at what it calls "fine-tuning". These attempts have been made without an adequate
854
survey of their total effect on the economy Of the country at large. It is precisely to make certain that this kind of thing does not occur again that this section of the Bill is so important. I hope that without committing the Treasury to doing the impossible, which is to try everything, we shall require it to publish as many alternative versions of alternative policy that the Government may wish to implement and find out what effect they will have on the economy as a whole.
Lord KAHN: I suffer from something far more serious than doubts about the value of this Amendment. When we return to the original Amendment, Amendment No. 292C as amended, I hope it will not be so late that the Committee will resent my saying a few words in general about that part of the Schedule to which Amendment No. 292C relates. I am afraid my remarks will be rather critical. I want to say now only that they will be even more critical if the Amendment which is now under discussion is passed, and I should like to support the noble Lord, Lord Beswick, in asking the Committee to reject the Amendment.
Lord WYNNE-JONES: It seems to me that we are in a position with which I have been familiar for a large amount of my active scientific life; namely, trying to decide how one uses an expensive facility. When one was faced with treating the use of an expensive facility, one found an enormous number of people—I am talking about the Department of which for many years I was its head—who came forward with schemes and proposals. They were all intelligent people, and they produced hundreds of different schemes. Unfortunately, it was left to me to decide what should be done about them. As my noble friend Lord Bowden has just said, the number of variables is so great that there is no conceivable way of accepting all of them. It would be so expensive of resources and time and it would waste so much energy that it would become an utter nonsense. Therefore one has to reach a decision about what is to be done.
We are always faced with the problem of whether we reach a decision which enables the reasonable things to be done or whether we take into account a large

855
number of unreasonable things. I am a great believer in the unreasonable, because I believe that so frequently the reasonable does not produce the answer. Nevertheless, however far one goes one must draw the line somewhere. Therefore I suggest that it is important that we realise that the Treasury ought to be expected to make these resources available, but they should not be expected to make them available to every Tom, Dick, or Harry, or whatever are the names of the different people concerned. In the end it means that if you do this you waste your resources to the extent that you get nothing done at all. Therefore, I suggest that what has been put forward by my noble friend Lord Beswick is probably, in the circumstances, the best we can do but I would hope that we shall be able to continue to exert continuous pressure.
Lord BOYLE of HANDSWORTH: I personally hope that the Government will resist and that this Committee will resist this Amendment. I should like briefly to explain one argument that influences me. I think the cause of saying that the Government should make more and more information available is always a popular one, and indeed I would say that in the last twenty years or so Governments and Departments have frequently been open to criticism for refusing to "come clean" about certain facts and figures which were germane to the argument. If noble Lords want to see this case set out well, I think Professor John Griffiths' recent book about Committee proceedings in Parliament made this point very effectively in its final chapter.
I see one great difficulty about this Amendment and, if I may say so, I think it is one that noble Lords ought to face quite fearlessly. If you go so far as this Amendment goes, you get into one very great difficulty. If we were to pass this Amendment tonight, it would be difficult for the published information and for the range of options, the range of contingencies that must by law be made available, not to include the possible effects of Government policies that have not yet come into being. That is not a new problem. It arose, as some more senior noble Lords than myself will remember, in the old days in the earlier economic surveys. People used to read the economic surveys—and I am thinking particularly of
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those appearing in the years fairly soon after 1947—trying to get a clue from the forecasts as to just what policies Governments would be following. I may be old-fashioned about this, and if so I apologise, but I personally believe it is important that policies should be introduced by the Government, discussed in both Houses of Parliament and put into effect by Parliament before they become part of the general assumptions or even likely contingencies that become part of the general discussion in this country. For that reason more than any other, I would not feel happy at going so far as the last of these three Amendments.
This is not an easy subject. If we defeat this Amendment tonight, I am sure it will continue to be a bone of contention, but I believe that from the point of view of the delicate interplay between Government and Parliament the wisest course for this Committee to take would be not to pass the third of these Amendments.
Lord BESWICK: I wonder whether we could come to a decision about this. I think there is complete agreement on all sides of the Committee that we need to move on to an era in which the Government make available more information—the Government in general and the Treasury in particular. There is no difference between us on that, and in the Amendment I have already moved I have spelled out the kind of information which I think should be made available.
When we come down to the small print and to Amendment No. 292E, we are really moving into an era where we could be demanding so much information that it becomes worthless. My noble friend Lord Bowden, with his usual passion on these subjects, gave us a practical case. He probably will not be surprised to know that I had myself thought that the particular instance he gave was a prime example of how not to do things, if I may say this about my own Government.
There is every reason to expect that the arrangement set out in my Amendment would provide for that kind of information—the effect on a certain industry of a certain rate of VAT. This certainly would be given, but there could be other cases where the national interest would be involved. If there is one certain way

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of creating a crisis, it is for a more authoritative Government Department to say that a crisis is possible. If that is projected, it is quite likely that people will make their dispositions accordingly and you will have created the very situation that you want to avoid. A certain measure of discretion here is essential.
I do not myself believe that the Treasury could altogether escape from the blame that they have created suspicions in the past. I think we are moving into a new area of consultation and greater confidence in which all available information would be made to those who can properly use it. The later Amendment I propose to make emphasises that still more. With that kind of attitude, I hope we can leave the Amendment which I have moved unaltered by Amendment No. 292E.
Lord RHODES: I have been impressed by what the noble Lord, Lord Boyle of Handsworth, and the Minister have said. I should like to be assured, however, that the phraseology in such matters does not give a loophole to the Treaury to expurgate forecasts. If the Minister will give me a categorical assurance that it does not mean that, I will withdraw my Amendment.
Lord BESWICK: I should be claiming more power than I have if I told the noble Lord, Lord Rhodes, that there may not be some occasions in the future when the Treasury would be open to criticism. I am being perfectly honest with him. My understanding of the situation is that we are trying to avoid the situation in his own Amendment, in which he says, "All economic variables in the model". I have with me a professional definition of what is involved in this macro-economic model. If you ask for all economic variables to be made available, you really are asking for too much. I am asking for a certain latitude. I grant the noble Lord that such matters could—I am not saying they would, but could—leave open certain loopholes. I can only say that the intention is not to use this phrasing for the purpose he fears. I cannot give a guarantee; I can only say that that is the impression I have had from various conversations I have had.
Lord RHODES: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Amendment No. 292C, as amended, shall be agreed to?
10.0 p.m.
Lord KAHN: I know it is getting late, but this Schedule is one of very great importance, and if I may be allowed to say a few words about that part of the Schedule to which this Amendment relates, it will save time so far as I am concerned when we come to later Amendments to this Schedule. I hope that what I have to say will be regarded as reasonably consistent with what has already been said by the noble Lord, Lord Wynne-Jones, and by my noble friend Lord Boyle of Handsworth.
I think I am right in saying that nothing on the lines of the Schedule appeared in the Bill as it went to the Committee upstairs in another place. Something similar to the Schedule was passed through the Committee as a result of an Opposition Amendment supported by Back-Bench Members of the Labour Party, but was rejected on Report stage on the Floor of the House in another place. This Schedule was proposed to the Committee upstairs by a Back-Bench Member of the Labour Party, but in fact when it came to a vote it was passed by 16 votes to 4 in the Committee upstairs. I am bound to admit that it was supported not only by all Members of the other Parties who were members of the Committee, but also by Members of the Labour Party, apart from four who were Ministers and Labour Whips.
Although the noble Lord, Lord Beswick, may wish to disagree, I maintain that the Schedule to which this Amendment relates, although it owes its origin to the Bill, admittedly has an importance which lies entirely without the scope of the Bill and which would either be important or, in my opinion, objectionable, irrespective of whether or not the Bill receives the Royal Assent. I regard it—but I speak subject to correction—as really owing its origins to the members of the Conservative Party, and I cannot believe that members of that Party really believe in this sort of thing.
With great respect I feel bound to take the view that either the intention was to discredit the operation of the Bill when it becomes law, or, if not that, to

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expose the Treasury to public ridicule. And though I entirely agree that, in spite of the two Amendments that have been passed to it, Lord Beswick's Amendment to Schedule 4 which is now under discussion is a great improvement on the relevant part of that Schedule, I still think that the result will expose the Treasury to public ridicule. It is well known to Members of the Committee that the science of economic forecasting is in a very primitive state. It would be far better if the Treasury were left and encouraged to develop the science in private and in co-operation with other Government Departments, rather than be subject to the frustration involved in having to operate within the public view.
One thing I regret about Lord Beswick's Amendment, as opposed to the part of the Schedule to which it relates as printed in the Bill, is that it makes a specific reference to the computer. It ays: "The model shall be maintained on a computer". The computer can be, but very often is not, a remarkably good servant in the hands of those few people who know how to keep it under control, but it can prove an extremely unruly master. I sometimes wish and say to myself and to friends of mine that it might perhaps be better if civil servants were occasionally to subject what emerges from the computer to testing by adopting the old-fashioned method of using the back of an old envelope, which enables judgment based on experience to be exercised.
Lord BRUCE of DONINGTON: I am sorry to detain your Lordships again on this, but in my view Schedule 4 is one of the most important parts of this Bill. The reason why I supported the Amendment moved by my noble friend Lord Rhodes was because I thought that the nature of paragraph 2(b) of the proposed Schedule was unduly restrictive. One of the most important things we have to consider over the next decade is the projected level of capital investment in this country, and within that figure the level of investment in manufacturing industry and in other industry. If possible, I should like an assurance from my noble friend that the items included in paragraph 2(b) will include these most important projections of capital expenditure, and the nature of it, which have a
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profound effect upon all the other variables which may be included in the model.
10.10 p.m.
Lord RHODES: I make no apology for prolonging this debate; I am not obeying the injunction of the Yorkshire coat of arms, "hear all and say nowt". I have listened to 20 years of this debate: I have got it into my system, I have got something to say and I am going to say it, and I might as well say it at this juncture. The Amendments that we are moving are important; they are not just technical. May I say at this juncture that, although there are technical phrases used in the Schedule, I cannot claim to use them myself in everyday language; but I can claim to understand some of the practical application of the language.
The Schedule as printed in the Bill was put down at the Committee stage in another place, as the noble Lord, Lord Kahn, has just said. It was carried, even though four Ministers voted against it. Then it received a resounding majority—I think it was 242 to about 122—on the Report stage. The House left no doubt about what it wanted. The House of Commons is the House that we here have to take notice of, because so often we have been told what will happen unless we do.
Lord KAHN: May I interrupt the noble Lord?
Lord RHODES: No, just let me have my say. You have heard the dynamism of the noble Lord, Lord Kahn, and all that he has said for the conventional attitude. Look what a mess this conventional attitude has got us into, and people of his ken! The noble Lord, Lord Kahn, can reply afterwards. Why did this Schedule command such support? I believe that it was spontaneous recognition of the fact that here was an opportunity to support an effort to create an industrial strategy that will work. Ever since I came to Westminster, 30 years ago, I have seen Government after Government, of both Parties, handing out billions of public money; Industry Act has followed Industry Act on to the Statute Book, and then into limbo. Adult decisions have been taken almost at random; money handed to one company and nothing for another, and very often

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under political duress, without any confidence that it was the right thing to do.
It must be 17 years ago that a colleague of Lord Kahn came to the Parliamentary Scientific Committee of the House and brought with him a model that he was working on, now known as this macro-economic model. Do you know that half the Parliamentary Scientific Committee had a giggle over what that Professor Stone brought to the House, but they do not today. It so happened that in 1959 at about the time Professor Stone came to the Standing Committee, I made a journey to Japan, when they were just starting their forecasts. It so happened that in 1947 I was in Japan when into the ante-room to General McArthur a young man came. He was asking for 830,000 tons of coking coal to make so many tons of steel and he got it. Today that man is the head of Nippon Steel. Nippon Steel makes 33 million tons while we make 17 million tons, with a break-even of 25 million tons. Today, the Japanese are making 106 million tons of steel a year. They prognosticated in 1962 that in the following ten years they would increase their motor vehicle production from 500,000 to 5 million, and that is what they did by 1972. That is one of the reasons why they employ a system similar to the one we are advocating now; and one of the reasons why I am advocating this is because one Government will upset what another have put on the Statute Book—
Lord BESWICK: May I interrupt my noble friend? He was about to give one reason why he is advocating this, but is he aware that there is no difference between us here? We accept both the principle and a large part of the detail of the original Amendment and there is no argument about this at all. Would my noble friend indicate whether he finds my Amendment acceptable?
Lord RHODES: I am coming to that. I accept my noble friend's remarks as being a polite way of telling me to sit down, but I am so seldom on my feet that I shall take advantage of staying on them for a little longer, whatever the consequences. I was saying that one Government upset the actions of the Government who preceded them with almost stupid regularity, and we should adopt a system, perhaps something like our
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budgetary system, which works by policy changes from one Government to another. Considering the form of words in this Amendment, I am satisfied that the Government have met handsomely the demands of the other place. The team who have been working on this Bill is one of the best I have seen in the House of Lords, one of the most painstaking and courteous. It has been a pleasure to listen to my noble friends in this team, and I say that not as a piece of flannelling but as a reminder that I look forward to debating the next Amendment which stands in the name of my noble friend Lord Beswick, and the one which follows it, which stands in my name, and I promise to move that one briefly.
Lord CAMPBELL of CROY: The Government appear to be replacing paragraph 1 of the original Schedule as it came to this Committee and later they will be seeking to replace paragraph 2 and to remove paragraph 3, so completely changing the urtext of the Schedule. We have been waiting since Wednesday to hear an explanation from the Government as to why this was being done, and the noble Lord has briefly explained today. So far as I can see, the effect of the new Schedule is to relieve the Government to some extent of what the other place was expecting the Government to contribute in the disclosure of information. In this paragraph, the Government are seeking a situation in which the Treasury can expurgate its forecasts before they are published. We listened very carefully to the noble Lord, Lord Beswick, explaining that the national interest could be involved if some of the forecasts were issued without expurgation, but this is to a great extent watering down what was clearly the purpose of the other place in the original text of the Schedule.
The Government will later be moving another Amendment which will also have the effect of relieving them of what had been expected in another place. This is a matter which I hope we shall be able to consider at Report stage, since we are looking at material which is new to the Committee and which has been explained only this evening. In the meantime, can the noble Lord tell us whether the text as he moved it and as twice amended—and with the reservation that there is, on one Amendment, the possibility of

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redrafting by the Government—is the text to replace paragraph 1 to which the Government will adhere in later stages of the Bill both here and in another place? Or do the Government propose even more changes to their text later on?
Lord BESWICK: I feel that we should not exaggerate the changes made by the Amendment as against the original Amendment in another place. I should like briefly to state what those changes are. They are that alternative assumptions will be allowed on other matters as well as on policy changes and external events. This will enable alternatives to be used for pay and prices and other sensitive variables, as well as single published figures which could influence public behaviour; a fee will be charged for the use of the model by members of the public; forecasts are to be published not less than twice a year rather than quarterly; there is to be un to one year's grace before implementation of publication; likely margins of error are to be indicated where possible, but not standard errors which virtually cannot be calculated in a model like that of the Treasury.
Those are the main changes which are proposed and I do not feel that they should give rise to any suspicion. The noble Lord, Lord Campbell of Croy, asked whether we had in mind further changes in another place. I can tell him that, to the best of my knowledge and belief, there is no intention of making any changes, except the minor change to which I referred—that is the use of the word "aforesaid".
I am not quite certain what the noble Lord, Lord Kahn, was advising us to do. I hope he was suggesting that, on balance, it would be better to accept my amended version rather than the original version. I share his instinctive and old-fashioned objection to the use of the word "computer" in an Act of Parliament. I have asked whether it is a precedent and I am told that the wretched word appears in the Solicitors Act 1974, so we cannot object to it on principle. I was asked by my noble friend Lord Bruce of Donington whether the requirements would include estimates of capital expenditure. That would be covered by sub-paragraph (b) of the Amendment, but if it was the wish of the Committee
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to make this absolutely clear I should be quite happy to consider an Amendment to that effect on Report stage.
10.25 p.m.
Lord BESWICK Lord BESWICK moved Amendment No. 292F:
Page 43, line 13, leave out paragraph 2 and insert—
". It shall be the duty of a Minister of the Crown with whom a body corporate enters into a planning agreement to participate with that body in demonstrating so far as possible, upon the application of that body, the relationship between the undertaking to which the agreement relates and the national economy."
The noble Lord said: This Amendment, dealing with the second paragraph of Schedule 4, again sets out to give a somewhat improved version of what was originally asked for. The second paragraph of Schedule 4 as it stands raises an issue of a somewhat different order from that raised in the first paragraph. It would impose upon the Government a resource requirement of quite formidable proportions, if they were to maintain models not only in respect of each planning agreement company, but also in respect of its markets, suppliers and sources of manpower. Even if it were possible for the Government to provide a subsidised service of this kind for the nation's major companies—which it is not—the Government have neither the resources nor the information available to undertake modelling work on this vast scale. The estimate given to me of the potential cost is that it could run into several millions of pounds a year. I do not believe that this is the intention of the movers, and I hope that my Amendment will he acceptable. I beg to move.
10.27 p.m.
Lord RHODES Lord RHODES moved Amendment No. 2921 as an Amendment to Amendment 292F.
In the proposed new paragraph leave out ("with whom a body corporate enters into a planning agreement") and insert ("who proposes to enter into, or has entered into a planning agreement with a body corporate").
The noble Lord said: I am with the Minister almost entirely, but there is one little difference and in all probability he will be able to concede it. When a Minister proposes an agreement with a firm he should make absolutely crystal

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clear what is involved. The words in my Amendment try to give effect to that aim. If a firm go to the Treasury after an agreement has been mooted, the firm is entitled, before it commits itself, to get to know what it is all about. I beg to move.
Lord BESWICK: The noble Lord was so kind in his reference to my colleagues and myself that I cannot resist the temptation to accept his Amendment, and I do not intend to try to resist. Therefore, I agree that it should be an amendment to my Amendment.
Lord BESWICK Lord BESWICK moved Amendment No. 292G:
Page 43, line 19, leave out paragraph 3.
The noble Lord said: This Amendment is a somewhat more radical surgical operation. I hope that I have indicated by the Amendments to paragraphs 1 and 2 of the Schedule that the Government are prepared to take a constructive line. The suggestion here is that the Government should produce a "trade-off" matrix, and this implies that the Government should express their economic policy in numerical terms, substituting a series of numbers for complex priorities. Such a process is dependent on the ability of the Government to state the whole of the complex of value judgments implicit in economic policy in terms of a mathematical formulation. It also implies an ability to evaluate a whole range of hypothetical situations in such terms. Whatever the future may have in store for us—and I hope it has a lot of happy things in store for us—I think it is fair to say that Parliament and the Government have some way to go before they see the process of judgment and decision-taking being approached in this fashion. I therefore invite the Committee to approve this Amendment. I beg to move.
The Earl of BALFOUR: If Amendment No. 292G is accepted, can Amendment No. 293 still be moved?
Several Noble Lords: Yes.
The Earl of BALFOUR: I am not too sure about this, but I hope that it can, because I should like to hear what
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the noble Lord, Lord Rhodes, has to say.
The CHAIRMAN of COMMITTEES: Yes, certainly the noble Lord can do that.
10.30 p.m.
Lord RHODES Lord RHODES moved Amendment No. 293:
Page 43, line 19, leave out paragraph 3 and insert—
("3.—(1) Not less than twice in each year commencing with a date not later than three years from the coming into force of this Act, the Treasury shall publish forecasts, produced with the aid of the model or of another macroeconomic model, with those levels of economic policy and other variables which best satisfy alternative sets of priorities of marginal changes in each economic variable, the priorities being expressed in quantitative terms, and the alternative sets of priorities being chosen as appears to the Treasury appropriate.
(2) From the same date as in subparagraph (1) the facility used to make forecasts which best satisfy alternative sets of priorities as specified therein, shall be available to members of the public to make forecasts with sets of priorities specified by themselves, the facility being available during office hours upon payment of such reasonable fee as the Treasury may determine.")
The noble Lord said: I cannot emulate the phraseology of the noble Lord, Lord Beswick. This Amendment seeks to establish that forecasts can and often do go wrong, and in the past when things have gone wrong we have lurched from one mess into another. This Amendment seeks to ensure that contingency plans should be at hand to cope with this situation. Time and time again it has been demonstrated that it is disastrous to react only when a crisis actually occurs. There should be available alternative options based on priorities which Ministers themselves have selected.
To back up what I have said, you can call in aid many instances where this situation has arisen. In recent years, within six months the 1970 Government made a U-turn in policy. House prices rose to the skies, while building costs were very low. And what happened? Building costs rose to join the prices for high-priced property due to the ability of speculative people to gamble in property. Take the textile cyclical boom that we are now suffering from. If there were optional plans that had to do with these arrangements and the escape clauses in GATT—to put forward a very simple

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illustration—we should not be having the mess that we are having now.
Consider the simplicity of the statement made by the Chancellor of the Exchequer during the last Election. The Election was fought for a week on whether the inflation level was 8 per cent, 16 per cent, or, as it turned out to be, 25 per cent. I could go on, but it is late. I beg to move.
Lord BOYLE of HANDSWORTH: If the noble Lord, Lord Beswick, can give me just a moment, I hope that the Government will resist this Amendment. I say this on two grounds. First, I think the kind of work envisaged here is very much more suitable for a university department or a body like the National Institute of Economic and Social Research than as a duty on the Government to put in a Statute passed by Parliament.
Secondly, and perhaps more important, consider the words at the end of the first paragraph of this Amendment—
"and the alternative sets of priorities being chosen as appears to the Treasury appropriate."
Again I take the old fashioned view that when one is setting out in any official publication alternative sets of priorities this must be a matter for Ministerial responsibility. It cannot be a matter for something called the Treasury. As might be expected. We have heard tonight some critical remarks about the Treasury, as well as some critical remarks about economies.
As I am on my feet may I say that I do not agree with the remarks of the noble Lord, Lord Rhodes, about my noble friend Lord Kahn. I can think of at least three or four separate matters on which, if his advice has been heeded—like marrying the public housing programmes and the industrial programmes—in a number of respects we should be better off today. Granted that the Treasury and economists have often made errors and that information has sometimes been unnecessarily denied, I must say, for myself, I would rather settle for the large Amendment that we have just passed. I think this represents a major step forward in a new field, a major new development of policy. I would strongly advise this Committee to leave it at that on this occasion.
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To my old friends on the Opposition Benches, I think there is something to be said for defeating a Government and deciding to take the consequences. I am bound to say that there can be such things as somewhat opportunist Amendments. To carry on with the last part and try to produce a substitute for the original third paragraph in the words moved would come close to the kind of opportunism which seems unwise.
Lord KAHN: While I agree with most of what my noble friend Lord Boyle of Handsworth has said, I am afraid that I cannot agree with him that the passage of this Schedule indicates any kind of progress. I have already made my comments on that. As regards this Amendment. I am bound to say that I have read it a considerable number of times and cannot make any sense out of it. I do not know what is meant by "levels of economic policy" or by "marginal changes". If by "marginal changes" is meant small changes, I would point out to the Committee that some of us some years ago in relation to defence expenditure took the line that what was called for was not a marginal reduction but a large reduction. I do not know quite how far it is expressed in "quantitative terms" but the really serious aspect of this Amendment, leaving aside what is meant by "levels of economic policy" is forcing the Treasury to give indications of what Government policy may be. First, it gives even more importance to the position of the Treasury in the Government that it ought to have. Apart from that, it is very wrong indeed to ask for public statements.
Here I can refer to what my noble friend Lord Boyle of Handsworth said about earlier economic forecasts from 1947 onwards. Anything that is published relating to alternative economic policies is bound to be read sometimes rightly and sometimes wrongly. If it is read rightly, very often it has a perverse effect and sometimes a favourable one as an indication of what Government policy is going to be. Looking at it in the obverse sense, if the Government want to produce a certain result they may give the wrong indication of their policy in order to produce the result they want.
Lord BEAUMONT of WHITLEY: I do not know whether Lord Rhodes is going to press this Amendment. I am

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not competent to oppose the main arguments put forward by the noble Lord, Lord Kahn, but I do not think this Amendment should go by without a word being spoken against the views put forward by the noble Lord, Lord Boyle of Handsworth, on this and the previous Amendment. I do not think it is right that we should say that the Treasury cannot be given a duty to give us information about what they think would happen on various suppositions merely because suppositions might or might not a part of Government policy. If they will forgive me, I think that the noble Lords, Lord Boyle and Lord Kahn, in so far as they touched on this particular matter, were thinking in terms of a situation where the Treasury were still producing forecasts almost entirely geared to what the Government were going to do and that any slight variation about that might perhaps give the papers and the economic experts a hint as to what departure they were going to make.
The suggestion, as I see it, in the Amendments moved by the noble Lord, Lord Rhodes, by the Government and the whole of this Schedule, are completely different: it is that there should be two duties on the Treasury. The first explicity and implicity exists at the moment to serve the Government in forecasting what happens if Government policies are followed, or if various things happen which the Government foresee. The second is that in this Bill we are asking the Treasury to use the resources at their disposal for producing some real information, admittedly speculative in the sense that economic forecasting through a computer is a very fallible method. Nevertheless, we are asking that they should do their best to put at the disposal of the whole community the information that they have, and the expertise that they have, and allow people besides the Cabinet to make judgments about what effect different policies are going to have.
It is entirely right that this should happen and something we should support. Whether this is the right Amendment, whether some of the technical objections made by the noble Lord, Lord Kahn, are right, is another matter. I do not think the Amendment should go by without somebody saying that there are—and I have seen some noble Lords nodding their heads—some who
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think that this is what the Treasury should be doing. It is in no way improper; it would in no way hinder the good government of this country and, indeed, would support it.
10.42 p.m.
Lord BESWICK: I am glad to follow the noble Lord. If he saw heads nodding about the desirability of information being made available, and the expertise of the Treasury being at the disposal of those who have to make decisions in various economic areas, those heads were nodding because without any doubt that is what we are seeking to do. There is no difference between us Here we are dealing with something which is somewhat different. We are here placing obligations which it would be difficult to carry out and, even if it were possible to compel the Treasury to carry out what is stated here, I doubt whether it would be of great value.
The Government accept that application of methods of optimal control to the economy is potentially a valuable tool of analysis. For some time now, work in this area has been proceeding in the United States. Most of this has been in the academic world although the Federal Reserve Board has succeeded with an application in a limited area. In this country my honourable friend Dr. Bray has been in the van of those concerned to develop applications for the United Kingdom. But it is our view that the development and application of these methods to large-scale economic models is still very much at an early experimental stage. So far as we know, no institution in the United States or the United Kingdom at present applies these techniques to a large-scale forecasting model and a very substantial amount of development work is required before useful practical applications might be expected. Our first objection is simply that it is quite wrong to commit the Treasury to produce an adequate solution to the substantial technical problems involved within a limited period of three years. It is in the nature of research projects that they may be unsuccessful even when substantial resources are committed.
Secondly, the extent to which it is desirable to commit major resources to this activity in the present state of knowledge must be a matter of professional

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judgment. The devotion of more resources to the improvement of the basic forecasting model rather than to development of optimisation techniques is clearly an option which requires to be carefully considered.
The next statement that has been given to me is one which I am sure many noble Lords will accept. The solutions of any policy optimising procedures are only as good as the structure of the model which underlies them. In other words, the sum total of this is: let us walk before we run.
Lord BOWDEN: I am sure we can accept most of what the noble Lord, Lord Beswick, has said. But I think we ought to distinguish between the purpose of this exercise and what I call weather forecasting. If all that our computers do is to tell us what is going to happen, we can await events. We may get ready to flee from the oncoming storm. But the purpose of this exercise is to provide us with alternative courses of economic policy which we can decide in the light of the best information available. I would willingly accept that most of the forecasts which have so far been made, either by computer or otherwise, have turned out in the event to be wrong. It is the fact that the country has staggered from crisis to crisis, rather than the thought that the Treasury may be exposed to ridicule, as the noble Lord, Lord Kahn, has said, which really concerns me most. I believe that in so far as this can be done, it is a very worthy objective, although it may well be in the circumstances we are not yet able to do it. This is a matter of opinion and we might perhaps come to some agreement that this work should be encouraged by all possible means without committing the Treasury to achieving any particular results in the time specified in the Amendment.
Lord CAMPBELL of CROY: I do not wish to detain your Lordships at this hour. Some of us have been here more or less without moving since half past two this afternoon. But paragraph 3 having been removed at the behest of the Government, the noble Lord, Lord Rhodes, is now proposing a new one aimed to fit in with the replacement of paragraphs 1 and 2. Various speakers
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in this debate so far have pointed out that this is a new method which, although the Americans have used it some way ahead of us, is not yet fully approved, but none the less could be of great assistance, not only to the Government but also to industry and those concerned with the economy in this country.
The noble Lord, Lord Boyle of Hands-worth, who earlier cautioned us on an Amendment about the dangers there could be in some forecasts being disclosed too early, in this case agreed that these operations could well be carried out but suggested they might more suitably be carried out at a university or some other establishment than the Treasury. The noble Lord, Lord Kahn, suggested that some of the wording in Lord Rhodes's Amendment might be altered. But I have the feeling that none the less at this stage it would be prudent to allow this new paragraph 3 to be inserted in the Bill to replace what has been taken out, on the understanding that its wording would be looked at again at a later stage and be subject to any changes such as the noble Lord, Lord Kahn, has suggested.
The noble Lord, Lord Beswick, told us that time was needed and that it might not be possible to carry out these operations as early as the noble Lord, Lord Rhodes, would wish. Again, the question of the starting time could be considered, if that is an argument. But it would be a pity to allow this provision to disappear completely at this stage and not to put in the paragraph which Lord Rhodes has proposed to replace the one that has been removed.
Lord BROWN: I think we are playing with fire. I can imagine the situation of the self-fulfilling prophecy if we include this paragraph in the Bill, whereby certain predictions are fed into the computer about the level of sterling in the market and so on, and by the time it gets out people will have taken all the actions which make a precipitous fall in sterling come true. I suggest that to go too far in this direction without knowing exactly what is going to happen as a result of all the information that is going to be released is extremely dangerous. We ought to go very cautiously and reject this paragraph because it might lead to dangers of which at the moment we have no idea.
Lord BESWICK: May I ask this of the noble Lord, Lord Campbell of Croy? He said that I had said we could not do this in the time-scale and he thought that nevertheless we ought to try. Is he proposing to lay down in an Act of Parliament that certain things should be done even though he accepts that within that time-scale it is very unlikely we can do them?
Lord CAMPBELL of CROY: No; the noble Lord has misunderstood me. I was suggesting the opposite: that an objection which the noble Lord, Lord Beswick, had raised—that this was something which could not be carried out in the immediate future and not as early as the noble Lord, Lord Rhodes, was contemplating—was not a reason for dispensing with it. One could look at the time-scale of the introduction of the system. That again would be something which could be looked at rather than simply to say, "We are not going to do this at all."
Lord BESWICK: We cannot just look at it. If this Amendment is accepted, we are imposing a legal obligation upon a Government Department to do something which apparently the noble Lord, Lord Campbell of Croy, has accepted could not be done within the time-scale.
Lord CAMPBELL of CROY: I am afraid the noble Lord is still not understanding me. I understood that this was an operation which could be carried out. The noble Lord, Lord Beswick, reckons that it could be carried out, but he says there would be difficulties about doing so in the near future. I am suggesting that this Amendment could be made and that this new paragraph, paragraph 3, could be incorporated into the Bill, subject to changes such as the starting time. I said at the beginning that in accepting it we should not be wedded precisely to the wording as it is at present. One of the suggestions that I made was that the question of the timing might still be left open if the objection which the noble Lord, Lord Beswick, has raised is a valid one which causes difficulty.
Lord HARMAR-NICHOLLS: If these words are written into the Bill, I do not see how government as we know it would be able to function. In theory, both sides of the argument are correct. The point which has been made by the noble Lord. Lord Rhodes, is very sound and has been
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accepted. The information ought to be there and ought to be made public, but it ought not to be made public by the Treasury. The argument of the noble Lord, Lord Boyle, is also extremely sound. It is good that this information should be made available so that people could influence Government and make their contribution, but I do not see how Government could function if one were to give it the authority of coming from the Treasury. Indeed, one of the criticisms of the noble Lord, Lord Rhodes, is confirmation that this happens now to some extent. When he spoke about "U" turns, he meant that the responsible Ministers had been influenced by information which had been fed to them from the various Government channels. It is true that they have to face the criticism of making "U" turns and everything that goes with that.
One has tried to study over the years the form of government that is operated in this country today, and I should have thought that to have one's cards on the table facing upwards all the time is a very dangerous precedent. The information ought to be there when the universities get it, and any other organisation, such as those suggested by the noble Lord, Lord Boyle, should make it available. But do not give it the authority of coming from the Treasury because if a hint is given that it comes from the Treasury it is taken as a fact and is bound to influence what people do and the certain irresponsible actions which may flow from it. If we can arrive at a point where a little of both arguments is put into operation, I shall welcome it. However, we should not write the Amendment into the Bill at this stage. I should not feel happy about voting in support of that proposal.
Lord RHODES: This Amendment has had a good airing. I am not going to press it to a Division. It is accepted to a certain extent in America and is practised, I understand, by the Federal Reserve Bank. We have made a good deal of progress. Both Houses have shown their dissatisfaction with the present method of forecasting. If my Amendment has done that it has achieved a great deal. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Schedule 4, as amended, agreed to.
Schedule 5 [Advisor Committees]:
The CHAIRMAN of COMMITTEES: Before I call Amendment No. 296A I should point out that if this Amendment is agreed to I cannot call Amendment No. 297.
Lord MELCHETT: I spoke to Amendment No. 296A with No. 163A. I beg to move.
Amendment moved—
Page 44, line 7, after ("by") insert ("the authorised representative of").—(Lord Melchett.)
Schedule 5, as amended, agreed to.
Remaining Schedules agreed to.
House resumed: Bill reported with the Amendments.

LONDON TRANSPORT BILL
Reported from the Select Committee with Amendments.
  ONCHOCERCIASIS: CONTROL PROGRAMME
  ONCHOCERCIASIS: CONTROL PROGRAMME
  SANDILANDS COMMITTEE ON INFLATION ACCOUNTING
  SANDILANDS COMMITTEE ON INFLATION ACCOUNTING
  SERVICE DENTAL AND MEDICAL PAY
  SERVICE DENTAL AND MEDICAL PAY