Sitting of 1 November 1976

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

    Housing Finance
    Mr. Wyn Robertsasked the Secretary of State for Wales when he proposes to issue a circular to housing authorities on the availability of central Government finance in 1977.
    The Under-Secretary of State for Wales (Mr. Alec Jones): The Council for the Principality has recommended local authorities to accept my proposal that each housing authority should for 1977–78 receive a block allocation to meet all capital housing requirements—new building, purchase of land, improvements to council houses and acquisition of existing properties. When the local authorities' views are fully known, I shall consider whether a further circular is necessary.
    Mr. Roberts: I welcome the Minister's return to good health. May I ask him, however, to explain why housing is due to take the most savage cut of all when the spending on housing per capita in Wales is below the average for the United Kingdom and when we have such a stock of old housing to renew or replace?
    Mr. Alec Jones: I am very grateful to the hon. Gentleman for his kind remarks to me. However, there has been no cut in Welsh new house-building provision for 1977–78. On the contrary, the White Paper provision was increased by some £20 million in July of this year.
    Mr. D. E. Thomas: I, too, welcome the Minister back to the Dispatch Box. I also welcome the system of block alloca-
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    tions which is now being introduced. On the other hand, I should like to ask the Minister on what formula these allocations to each of the districts in Wales will be based.
    Mr. Alec Jones: I thank the hon. Gentleman in similar tones to those I expressed to the hon. Member for Conway (Mr. Roberts). I am glad that the hon. Gentleman welcomes our new proposals about the block allocations, which are designed to give greater flexibility to local housing authorities so that they can decide their own needs and how best to meet them. The criteria that we are using are those of population, the number of council houses, the past building record and the percentage of unfit houses. I know that some hon. Members, on all sides of the House, might have thought that we could have included waiting lists. Unfortunately, there is no common basis of compiling waiting lists and a comparison between the various districts would not, therefore, be possible.

    Area Health Authorities (Membership)
    Mr. Tom Ellisasked the Secretary of State for Wales how many area health authorities in Wales when first constituted had no members of the nursing profession in their composition; and what is the present position.
    The Under-Secretary of State for Wales (Mr. Barry Jones): The answer to the first part of the Question is "None". At present, the Clwyd Area Health Authority does not include someone with current nursing experience.
    Mr. Ellis: What was the argument which persuaded my hon. Friend in the first instance not to have representatives of the nursing profession on the Clwyd Area Health Authority?
    Mr. Barry Jones: I am grateful to my hon. Friend for raising the matter. All nominations for membership of the authority from the various organisations that were invited to nominate were considered very carefully, but at the end of the day, and taking into account all the circumstances, it seemed that the balance of membership which now obtains in Clwyd was the most appropriate. It includes someone with former nursing experience.
    Sir A. Meyer: Will the hon. Gentleman take it from me that there is serious discontent in the ranks of the nursing profession about the absence of any representation on this authority?
    Mr. Barry Jones: The fact that the lady to whom the hon. Gentleman may well be referring was not included was no reflection whatsoever on her contribution. There is no statutory obligation to have a nursing member.

    Education Standards
    Mr. Michael Robertsasked the Secretary of State for Wales if he is satisfied with the standards of literacy and numeracy in Welsh secondary schools.
    Mr. Barry Jones: Standards of literacy and numeracy will have to rise if they are to keep pace with the demands of society.
    Mr. Roberts: That is hardly an answer to the Question. Will the Minister give an assurance that, before he embarks on the great debate about literacy and numeracy and the sensitive subjects of the curriculum and teaching methods, he will, unlike the Prime Minister, consult the teaching profession?
    Mr. Barry Jones: I should like to emphasise that my right hon. Friend the Prime Minister wants a national debate in which everyone can join. Our priority is always our children and the quality of the education they are to receive. I should be very grateful to receive from the hon. Gentleman, who has more than a passing interest in education, his considered views, and in detail.
    Mr. Roy Hughes: I was the only Back-Bench Member who was present to hear the speech of my right hon. Friend the Prime Minister at Oxford. I would say that what the Prime Minister was trying to point out—[Interruption.]
    Mr. Speaker: Order. Perhaps the hon. Gentleman will ask a question.
    Mr. Hughes: That was merely the preamble, Mr. Speaker. Does my hon. Friend agree that what the Prime Minister was trying to point out was that certain questions are being asked about standards? Will my hon. Friend bear in mind that others besides members of the
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    teaching profession are interested in these matters?
    Mr. Barry Jones: I agree with the points made by my hon. Friend. My right hon. Friend the Prime Minister made his points in such a way that many people in Britain were glad that the debate had been started by him. As regards mathematics, there is some cause for concern. Perhaps it is true that there is a justifiable feeling that standards of numeracy and literacy among school leavers are not up to present-day requirements. I think that that was what my right hon. Friend had in mind when he made his speech.
    Mr. Hooson: Following the hon. Gentleman's inquiries, is it correct to say that the standards of numeracy and literacy in Wales are far higher than the general tenor of the Prime Minister's speech would suggest? Since that speech I have made inquiries in my own area, and that seems to be the position. Is it the hon. Gentleman's conclusion that the curriculum is infinitely more important than the method of teaching?
    Mr. Barry Jones: The Prime Minister is the Prime Minister of Great Britain. However, I can say that there has been a levelling up of reading standards between England and Wales. In 1956 children in England were on average somewhat more competent readers of English than their counterparts in Wales, but in 1971 no significant differences were found between the two countries. I have recently commissioned the National Foundation for Educational Research to conduct a further survey of reading standards in both English and Welsh.
    Mr. Grist: Is the hon. Gentleman aware of the considerable and growing concern of employers in Wales at the standards they find in numeracy and literacy among school leavers whom they employ? Does he agree that this is a very serious consideration in Wales, where we desperately need to attract new industry and employ more school leavers?
    Mr. Barry Jones: Yes, the CBI is worried, but if the hon. Gentleman had read the Bullock Report of recent years he would have found that for 50 years the employers of Great Britain have been complaining that educational standards

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    are not good enough. I cannot agree that standards have fallen sharply in recent years. There is no valid statistical evidence to justify some of the wilder allegations now being made.
    Mr. Fred Evans: Is my hon. Friend aware of any evidence that standards have fallen at all?
    Mr. Barry Jones: The debate will find out precisely that.

    New Industry
    Sir A. Meyerasked the Secretary of State for Wales if he will publish a list of new industrial enterprises that have been established in the Blaenau Gwent, Cardiff and Shotton travel-to-work areas since March 1974, together with the number of jobs currently provided and the number anticipated when full production is reached.
    The Secretary of State for Wales (Mr. John Morris): As the answer to the Question involves much detail I have arranged for it to be included in the Official Report. In brief, a total of 23 manufacturing firms are known by my Department to have opened in the three years since March 1974. These presently employ 1,150 people and when fully manned promise 2,300 jobs. In addition, firms which have agreed to set up in these areas but have not yet done so promise a further 1,300 jobs..
    Sir A. Meyer: Are not those figures ludicrously and absurdly inadequate to provide for the growing number of redundancies and the swelling total of unemployment? Is it not a fact that the only chance of providing the badly needed jobs resulting from the closure, for example, of Courtaulds is for the Government to reverse their policies, reduce taxation and allow private enterprise to get on with providing the jobs?
    Mr. Morris: The hon. Gentleman is entitled to his own views, but in some areas and industries it is private enterprise that has failed.
    Mr. Roderick: I welcome the efforts that have been made by my right hon. and learned friend in attracting, in difficult circumstances, industries to the Blaenau Gwent area. Some of us at least would like to give a warm welcome to the WDA's announcement that it will take
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    over responsibility for developing the Rassau site. Had it not been for the efforts that the Government made to establish that agency, we should not have had this assistance.
    Mr. Morris: I am grateful to my hon. Friend for his comments. The action of the WDA this morning was welcome in that it has announced its intentions. The House will be glad to know that it intends to develop an area in Rassau that will provide 100 acres for industrial purposes. This is a significant development, which I hope will be welcomed.
    Mr. Wigley: Is the right hon. and learned Gentleman satisfied with the role of the task forces in these areas, especially in the Clwyd area? Does he believe that they have substantially contributed to finding a solution to these problems?
    Mr. Morris: The task forces were set up by my predecessor some years ago and carried out surveys of needs at that time. The situation has changed since then. We have to ensure that our proposals match whatever needs arise in future.
    Mr. Nicholas Edwards: Will the right hon. and learned Gentleman tell us why he refuses to publish detailed figures on individual projects but publishes them subsequently in the Economic Bulletin? Whether published or not, do not the figures reveal, against a background of 27,000 redundancies this year, that the impetus for creating new jobs in the steel areas has come to a standstill? Does he agree with the blunt verdict on this matter by Mr. Kirkwood of the Welsh Industrial Advisory Board in the report on the Industry Act 1972?
    Mr. Morris: I shall look into the question of publishing or publication, but I fear that the hon. Gentleman drafted his supplementary question before he heard the good news of the action of the Welsh Development Agency this morning. That is a significant development that will allow for more than 1,000 jobs in the first phase and eventually 3,000 to 4,000 jobs.
    Following is the information:
    SHOTTON

    B. B. Shotblast Engineering Services (Plant) Ltd.

    C.& J. Engineering Ltd.

    Christie Hydraulics Ltd.

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    Engineering Concessionaires Ltd.

    Foesco Ltd.

    Glendale Furniture Ltd.

    Quindar Electronics Ltd.

    Tillie & Henderson Ltd.

    Together, these firms presently employ 320 people, and when fully manned promise a total of 530 jobs.
    CARDIFF

    Alpine Soft Drinks Ltd.

    Burroughs Machines Ltd.

    Gardners Transformers Ltd.

    Matsushita Electric (UK) Ltd.

    Portland Chemicals Ltd.

    Together, these firms presently employ 270 and when fully manned promise a total of 670 jobs.
    BLAENAU GWENT

    Celnik & Power Ltd.

    Conestra Ltd.

    Engineering Products Ltd.

    Eurodean Construction Ltd.

    F. B. Industrial Rollers Ltd.

    Grundy Auto Products Ltd.

    Midland Oil Refineries Ltd.

    Protective Clothing Ltd.

    Alfred Teves Ltd.

    Waterfit Ltd.

    Together, these firms presently employ 560 people and when fully manned promise a total of 1,100 jobs.

    Council Housing Starts
    Mr. D. E. Thomasasked the Secretary of State for Wales what is his target figure for new starts by local authority housing departments in Wales in 1977.
    Mr. Alec Jones: We do not set targets for local authority housing departments.
    Mr. Thomas: Does the hon. Gentleman accept that that is a totally inadequate answer in view of the housing needs in Wales? Does he have a target for total public and private sector building needs for Wales in the next year?
    Mr. Alec Jones: I gave the hon. Gentleman an answer on 29th October from which he was entitled to draw, and could draw, certain implications regarding new housing in 1976–77 and up to 1978–79. I should point out to the hon. Gentleman that it is extremely difficult to place validity on such figures. For example, they ignored the extra £30 million that my right hon. and learned Friend announced for expenditure on housing in Wales this year and the £20 million announced for next year. Further, the new block allocations, which the hon. Member has welcomed, mean that local authorities will have the discretion to
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    switch resources from new house building to the acquisition and repair of older houses if they think that that meets the needs of their areas.

    Welsh Assembly
    Mr. Wigleyasked the Secretary of State for Wales what progress has been made in securing premises for the Welsh Assembly; and when he anticipates concluding arrangements for purchasing these premises.
    Mr. John Morris: I announced, in reply to a Question from my hon. Friend the Member for Brecon and Radnor (Mr. Roderick) on 26th October, that the Government intended to accommodate the Assembly in the Exchange, Cardiff. Completion of the lease is expected by the end of the year.
    Mr. Wigley: Is the right hon. and learned Gentleman aware that there is general satisfaction in Wales that the new building is likely to be more practical than that previously considered for the Assembly? Will he comment on reports that the detailed agreement cannot be completed until about October of next year? If that were the case, would it permit the Assembly to go into operation in the spirng of 1978 as has previously been anticipated?
    Mr. Morris: It is my intention that the work which is necessary for changing the Exchange building will be completed in good time for when the Assembly comes into operation. I anticipate no difficulty about the lease. It is expected that the contracts for the work will be entered into in the spring of next year, and that will be in good time. I am not aware of any of the difficulties that the hon. Gentleman canvasses.
    Mr. Cledwyn Hughes: Is my right hon. and learned Friend aware that the satisfaction to which the hon. Member for Caernarvon (Mr. Wigley) has referred would be more general if the Assembly were to be sited in a more convenient place in Wales—for example, in Mid-Wales, which would be far more convenient for representatives who will be coming from various parts of the Principality? Will my right hon. and learned Friend confirm that it will be within the purview of the Assembly, if and when Parliament decides that it is to be set up,

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    to have the right to decide where the Assembly should be sited?
    Mr. Morris: I should have said that I am glad that the hon. Member for Caernarvon (Mr. Wigley) has welcomed the announcement. It will obviously be for the Assembly in due course to decide where it wants to meet. That is the sort of issue on which I expect there to be a great deal of argument from my right hon. Friend and from many other Members who represent other areas. However, Cardiff is the capital of Wales. I regard it as right and proper—I hope that the Assembly will take the same view—that it should meet in the capital city, whatever the convenience of meeting anywhere else.
    Sir Raymond Gower: Without discussing the merits and the nature of the Government's devolution proposals, as there must be uncertainty in view of the precarious future of the Government and of legislation, may I ask whether the Secretary of State thinks it appropriate that the Government should be committed to substantial expenditure in respect of legislation which has not yet been passed?
    Mr. Morris: I have no hesitation in saying that the Government's future is not precarious. The Government will carry out their manifesto and their programme. I should be seriously at fault were I not to make the necessary preparations to ensure that there is a home for the Assembly when it is established.
    Mr. Hooson: Will the Secretary of State heed further the suggestion made by the right hon. Member for Anglesey (Mr. Hughes)? As the Assembly is a new departure, is it not important that the site should be geographically convenient for the whole of Wales? Will the Secretary of State consider the possibility of siting the Assembly at Newtown, where there is a new town development?
    Mr. Morris: I recognise the strength with which the hon. and learned Gentleman is putting forward his case, perhaps with his tongue in his cheek. I am sure that he will be putting a similar case for the siting of the headquarters of the Development Board for Rural Wales. He might have to elect whether the Assembly or the headquarters should be sited there.
    Mr. Abseasked the Secretary of State for Wales what were the total administrative and physical costs expended before the plans to house an Assembly in the Temple of Peace and Health were abandoned; why the intended capital outlay to house the Assembly has increased by more than £1 million since April; what length of lease, and on what terms, is being obtained at the Exchange; and what is the total anticipated commitment including the capital outlay for the Exchange project.
    Mr. John Morris: I understand that about £17,000 was spent by my right hon. Friend the Secretary of State for the Environment on studies of the Temple of Peace by consultants, together with a further £7,000 on internal departmental activities. The capital costs at the Exchange are higher because the building is bigger and older; but these costs are largely offset by lower running costs, greater availability of accommodation and other factors. Thus the total costs of the two projects are similar. The current market rental will be paid for the Exchange. The lease is for 20 years but can be terminated after 10 years.
    Mr. Abse: Will my right hon. and learned Friend confirm the lead story—the happy story—in The Times this morning indicating that the Government do not intend to proceed with the devolution Bill becoming an Act without a referendum in Wales? As the Marplan poll made it unmistakably clear that the people of Wales do not want devolution in any form, is it not outrageous not only that these sums should have been expended but, what is more, that at a time when the people of Wales are more concerned about housing their own people millions more should be spent upon housing an unwanted salaried Assembly?
    Mr. Morris: I have no knowledge at all of the statement in this morning's edition of The Times.
    Mr. Wigley: Will the right hon. and learned Gentleman take the opportunity of making his own and the Government's total rebuttal of the allegations made by the hon. Member for Pontypool (Mr. Abse) in a recent newspaper article that civil servants could not be trusted to run the Welsh Assembly?
    Mr. Abse: On a point of order, Mr. Speaker. I have made no such statement. Therefore, no reference can be made to it. I must ask for your protection, if such I need, as it is entirely taken out of context and it is a very serious allegation to make.
    Mr. Speaker: I deprecate the hurling of charges, especially at Question time, but the hon. Member for Pontypool (Mr. Abse) has made his position quite clear.

    West Wales Steel Development Committee
    Mr. Nicholas Edwardsasked the Secretary of State for Wales when he last met the West Wales Steel Development Committee.
    Mr. John Morris: The committee has not sought a meeting, but I have close and regular contact with many of the bodies represented on it.
    Mr. Edwards: Does the Secretary of State agree with West Glamorgan County Council that the consents given by the Government in July fall far short of the British Steel Corporation's strategy and the case advanced by the West Wales Steel Development Committee that West Wales faces further massive job losses and any further delay will put in jeopardy the chances of the area competing in steel products in United Kingdom and world markets?
    Mr. Morris: I am deeply aware of the concern in West Glamorgan, and I am in close personal touch with the leaders of the steel industry in that part of the world. I spoke to them only last Friday. The hon. Gentleman referred to delays, but the Government have made a firm offer to the industry amounting to the expenditure of £350 million, which is nearly 30 times more than the proposed cut in increased Government expenditure on the Welsh Office Vote. If there is any question of losing time, I hope that the steel industry will take up the whole of that offer as soon as possible. I regret that it has not done so.
    Mr. Edwards: Is it not true that the money in question does not add to steelmaking capacity and that that is the central point that people are pressing on the Government?
    Mr. Morris: The hon. Gentleman should familiarise himself with the problem and perhaps discuss it with his hon. Friend the Member for Flint, West (Sir A. Meyer). The offer we have made is that the industry can invest in expenditure of £350 million on coke ovens, continuous casting work and a hot strip mill. That offer does not prejudice the reappraisal that the Government have asked the BSC to make of the needs of Shotton and development at Port Talbot. No one is more passionately concerned than I to ensure that we have a viable steel industry in this country, in particular in my constituency. Against that background we have given the go-ahead for the necessary investment at Port Talbot, and I hope that the BSC will take it up.

    Welsh National Water Development Authority
    Mr. Roderickasked the Secretary of State for Wales when he proposes to meet the Welsh National Water Development Authority.
    Mr. Alec Jones: I had arranged to meet early in November the late Chairman of the Authority. Hon. Members will join me in sending deepest sympathy to Lady Brecon. I shall now resume the regular meetings which I had been holding, prior to my illness, with representatives of the Authority.
    Mr. Roderick: We share my hon. Friend's regret at the death of Lord Brecon. Our arguments were always about policy and never of a personal nature. Will my hon. Friend intervene in the proposal made by the Authority for direct billing? I am disturbed to find that the Authority is still progressing the proposal, and I ask my hon. Friend to stop it at this stage. Will he also speak to his right hon. Friend the Secretary of State for the Environment about taking the Craig Goch reservoir out of the regional context and considering it in the United Kingdom context, so that we may have the maximum reservoir there and not the minimum reservoir as is now proposed?
    Mr. Alec Jones: We have already told water authorities that in considering whether to extend direct billing they must pay close attention to the overriding need to avoid any net increase in public expenditure. At a meeting last Thursday—at

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    which the Government were represented by my right hon. Friend the Minister of State for Sport and Recreation—with representatives of the local authority associations and the National Water Council, the question of direct billing was discussed. As a result of that meeting, we are considering what further advice should be given. Most hon. Members will be glad to know that three authorities at least have come together and will, we hope, agree on a solution to the problem of Craig Goch that will result in the supply of water to people in Wales and other parts of the United Kingdom.
    Mr. Gwynfor Evans: Does the Minister accept that the Welsh experience of the long drought this summer is final proof, if proof were needed, of the urgent need for a truly Welsh national water authority, covering the whole of Wales, invested with adequate powers to develop our rich water resources, with power to sell surplus resources to the industries and conurbations in England which need them and to establish a Welsh national grid?
    Mr. Alec Jones: As the hon. Gentleman knows, I do not agree with a word he has uttered on this subject. I believe that the resources of the United Kingdom must be developed as a whole for the betterment of all our people.
    Mr. Roy Hughes: Does my hon. Friend appreciate that the proposed arrangement for collecting water charges can only mean rocketing costs followed by great public indignation? Does he further agree that local authorities are perfectly capable of doing this job—as they have done in the past—at far less cost?
    Mr. Alec Jones: The answer is not quite as simple as my hon. Friend suggests. My information is that it is not only a question of whether local authorities are capable of doing this job. Some local authorities want direct billing and others want to continue the present practice. The question of cost is a matter of doubt. Further information is necessary before advice can be given. The WNWDA is paying £1·16 million to local authorities this year for the collection service. The Authority's estimate is that direct billing would save them £600,000 a year. The solutions are not quite as
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    simple as they might seem to be at first sight.

    Local Authority Expenditure
    Mr. Roy Hughesasked the Secretary of State for Wales what discussions he is having with local authorities concerning public expenditure cuts.
    Mr. Alec Jones: Public expenditure is regularly discussed at meetings of the Welsh Consultative Council on Local Government Finance, chaired by my right hon. and learned Friend.
    Mr. Hughes: Does my hon. Friend agree that if there are to be any cuts they should be made in the number of chief executives and not of dustmen? Does he further agree that the huge bureaucracy created by the Conservative reorganisation of local government has been astronomical in cost and has played a major part in hampering the recovery of the British economy?
    Mr. Alec Jones: There is a great deal to be said for the Chiefs and Indians argument which my hon. Friend has put forward today and on other occasions. My view is that local government reorganisation did not help to make local government either more efficient or cheaper.
    Mr. D. E. Thomas: Is the Minister aware that we on this Bench do not accept that there should be any reduction in public expenditure in Wales, particularly on housing and social services? Will he ensure that local authorities in Wales are aware of the needs of their areas and the need for public expenditure?
    Mr. Alec Jones: The hon. Gentleman likes to refer to cuts, but I remind him that the July measures, which involved cuts in Wales of £12 million, were accompanied by an increase in expenditure on housing in Wales of £20 million. Therefore, the net effect was a gain—not a loss—for Wales in public expenditure terms.
    Mr. Wyn Roberts: Will the Minister confirm that, contrary to recent newspaper reports, on a population basis Wales gets a fair share of the rate support grant, her population being 5·6 per cent. of the total for England and Wales and the amount of rate support grant received

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    by Wales in 1976–77 being 7·4 per cent. of the total?
    Mr. Alec Jones: I am advised that Wales's share of rate support grant is higher per capita than that in England.
    Mr. Hooson: Does the Minister know what percentage of the expenditure of local authorities in Wales goes on salaries, wages and so on as opposed to the other services?
    Mr. Alec Jones: I invite the hon. and learned Gentleman to table that question, and I will see that he gets an answer.

    Cleddau Bridge
    Mr. Gwynfor Evansasked the Secretary of State for Wales whether he has reconsidered his decision about the costs of the Cleddau Bridge.
    Mr. John Morris: No new facts have emerged to warrant this.
    Mr. Evans: Is the right hon. and learned Gentleman aware that the £1¼ million burden of interest which has to be borne by Dyfed, which includes the old counties of Cardigan and Carmarthen, which had no responsibility for building this bridge—in fact, this burden should be borne by the Government—is equal to the total of the cuts in roads and almost equal to the total cuts in education? Is not this totally unjust?
    Mr. Morris: As regards the responsibility of Carmarthen and Ceredigion, we—I am one of them—must carry the burden for the activities of the old county council of Pembroke. This is the result of local government reorganisation perpetrated by the Administration of the Conservatives. I understand that for the past year the net expenditure for the county was just over £1 million, not £1¼ million.
    As for the Government not doing anything, I must make it clear that the combination of the resources element and the needs element of the rate support grant which the Government make means that three-quarters of the total of that cost has been met by the Government and only one-quarter by the ratepayers. That should be put in its right perspective, too.
    Mr. Nicholas Edwards: Should not the Secretary of State make it clear that the
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    responsibility for the present situation rests not on the old authority but on an unforeseeable disaster which added £7 million or £8 million to the cost of the bridge? I understand that the right hon. and learned Gentleman is to meet local authority representatives this week. Will he take this opportunity of transferring the burden even more equitably to the taxpayer than he has just suggested? Is there not a special need to do so at a time when unemployment in the area is at the shocking level of one in five?
    Mr. Morris: I should have thought that the hon. Gentleman would have welcomed the fact that three-quarters of the burden is now being carried by the central Government. We all know the history of the building of this bridge. Pembrokeshire County Council decided to go it alone on the building of the bridge. There was no question of central Government financing while the Conservative Government were in power from 1970 to 1974, except for the statement by the hon. Gentleman on the eve of the 1974 General Election, with all the authority of a Conservative spokesman, that if they were elected to power there would be no toll charges. I greatly look forward to seeing what will happen about that statement.

    Morriston Hospital
    Mr. Ifor Daviesasked the Secretary of State for Wales if he will give priority to rebuilding Morriston Hospital in view of its state of dilapidation causing a danger to the health of patients and staff.
    Mr. Barry Jones: My right hon. and learned Friend recently visited Morriston Hospital with my hon. Friend and my hon. Friend the Member for Swansea, East (Mr. Anderson). I am well aware of the need for major redevelopment there. We shall take account of this when deciding the future capital programme.
    Mr. Davies: My hon. Friend will be aware that this hospital was built during a wartime emergency and that, despite its deplorable working conditions, it has rendered remarkable service to the community, thanks to the dedication of its staff. Is he aware further that this hospital provides sub-regional service to the whole of South-West Wales and as such

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    deserves the highest priority in future hospital planning?
    Mr. Barry Jones: There is light at the end of the tunnel for this project. The question is to be decided soon as to how much will be invested and precisely when the starting date will be. I, too, wish to say that the work done at Morriston Hospital is magnificent.
    Mr. Tom Ellis: I sympathise with the problem at Morriston, but may I ask whether my hon. Friend is aware that the position at Wrexham is even worse—
    Mr. Speaker: Order. That is a completely different question that should be on the Order Paper. If the hon. Gentleman wants to ask a question about Wrexham, he can hardly do so on a Question relating to Morriston.
    Mr. Ellis: With the greatest respect to you, Mr. Speaker, I intend to couple the argument between Morriston and Wrexham into this question, because the whole question is one of priority. I want to ask my hon. Friend to ensure that Wrexham, which is the one large population centre in Wales which has not had substantial capital spent on it since the establishment of the National Health Service, retains top priority over all other schemes, on two grounds. The first is the merits of the case. The second is that public disquiet, which is already beginning to express itself at the inferior service—
    Mr. Speaker: Order. Does the Minister wish to reply?
    Mr. Barry Jones: Briefly, Mr. Speaker. My constituency is next to Wrexham. I know precisely the points my hon. Friend is making.

    Fluoridation
    Mr. Gristasked the Secretary of State for Wales what proposals he has received from area health authorities for the fluoridation of water supplies; and if he will give an estimate of the cost of each scheme.
    Mr. Barry Jones: None. Our approval is not required. But I understand that Mid, West and South Glamorgan Area Health Authorities have all decided to introduce new schemes when finances
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    permit. Estimated costs are available only for West and South Glamorgan at about £50,000 and £100,000 respectively.
    Mr. Grist: Is not the Minister aware that the expenditure of such moneys at a time when there is a cut-back in essential services would be viewed with amazement by members of the public and, indeed, by those elected councils in the South Glamorgan area which opposed the introduction of fluoridation, which is an extremely debatable form of compulsory medication?
    Mr. Barry Jones: The Cardiff Community Health Council, the St. Fagan's Community Health Council and all the professional opinion in the area support the area health authority. Fluoridation is by far the cheapest and most effective means of safeguarding dental health. It is our policy to encourage it. Dental health in Wales is not in a good state.
    Mr. Nelson: Because one-third of the people over the age of 16 have no teeth and because dental decay sets in before 16, will the Minister give priority to fluoridation? Will he, in particular, encourage other Government services to provide, for instance, voluntary application of fluoride through mouthwashes, fluoride at school and topical application under the National Health Service?
    Mr. Barry Jones: Capital costs such as installations at waterworks should be borne by the central Government and not by individual area health authorities.
    Mr. Cledwyn Hughes: Whatever the merits of fluoridation, is it not wrong that it should be carried out by an area health authority which is a nominated body and not by elected bodies, the county councils, as was the case before reorganisation of the National Health Service?
    Mr. Barry Jones: My hon. Friend has adopted a statesmanlike attitude in this matter in his constituency. I expect area health authorities thoroughly to consult local opinion, but their decision is their own in the light of their duty to safeguard health.
    Mr. Speaker: Mr. Hooson.
    Sir Raymond Gower: On a point of order Mr. Speaker. Is not Question No. 15 in order?
    Mr. Speaker: I am going by the clock. The hon. Gentleman should study the Order Paper.

  CIVIL SERVICE

    Pay Research Unit
    Mr. Hoosonasked the Minister for the Civil Service if he will consider changing the constitution of the Civil Service Pay Research Unit so as to include independent advice and assessment.
    Mr. Thorpeasked the Minister for the Civil Service if he will review the constitution of the Civil Service Pay Research Unit.
    The Minister of State, Civil Service Department (Mr. Charles R. Morris): May I preface my reply by emphasising that the Pay Research Unit procedures are in suspense during the current period of the Government's pay policies. However, the procedures for determining Civil Service pay have been kept under regular review since they were recommended by the Priestley Royal Commission and the Government are naturally taking the opportunity provided by the current suspension of pay research to look at various aspects of the system. But these are matters which need to be examined very carefully and any suggestions or proposals will have to be the subject of full consultation with the interested parties.
    Mr. Hooson: Is the Minister aware of the grave public concern about earnings and related benefits in the nonproductive public service being out of balance with the earnings and related benefits in the productive area? As the public non-productive sector does not seem to be subject to the Pay Code, and nor do the benefits and pensions, is it not time that independent advice was made available to the unit?
    Mr. Morris: The hon. and learned Gentleman is misleading the House and the country by suggesting that civil servants' pay is not subject to Government pay policy. It is. Civil servants have had no more and no less than comparable groups in the private sector.
    Mr. Thorpe: The Civil Service Pay Research Unit is fully staffed by civil servants. Since hon. Members are prepared to bring in outside advice to determine their own terms and conditions, might that not be right for the Civil Service?
    Mr. Morris: The Government are exploring ways in which it might be possible to ensure that justice is not only done to Civil Service pay but is manifestly seen to be done. I reject the right hon. Gentleman's implication that in some ways there is a conspiracy among civil servants to determine their own rates of pay. That is completely misleading.
    Mr. Ioan Evans: Has my hon. Friend noticed that this is a unique parliamentary occasion, because, of the 14 Questions tabled to the Minister for the Civil Service, nine come from the Parliamentary Liberal Party? Is that not unusual, and can he explain this concerted attack on the Civil Service?
    Mr. Morris: I suppose my hon. Friend is right to say that today we are witnessing a new parliamentary phenomenon. Civil servants, public servants, retired policemen, nurses and all the people who have dedicated their lives to the public service must be wondering what they have done to incur the wrath of these Westminster Order Paper warriors.
    Mr. McCrindle: I do not in any way wish to attack the Civil Service, but will the Minister accept that there is considerable resentment, particularly among pensioners benefiting from private schemes who look at the inflation-proofing of Civil Service pension schemes and find their own standards of living falling? Will the Government consider inflation-proofing both public and private pension schemes and try to bring an end to inflation as soon as possible?
    Mr. Morris: I accept that there may be some resentment among those who are enjoying the benefits of a private pension scheme when they see the inflation-proofed Civil Service scheme. But the feelings of resentment are not based on fact. If the hon. Gentleman examines the basis of the Civil Service indexing of pension schemes, he will see that there is no injustice.
    Mr. Wrigglesworth: Does my hon. Friend agree that there has been much hypocrisy about Civil Service pensions among Liberal Members? Will he tell the House who introduced the 1971 Pensions (Increase) Act and what was the attitude of the Liberal Party to its introduction?
    Mr. Morris: My hon. Friend, with perception, has reminded me that the 1971 Act was initiated by the Conservative Government. Not one Liberal Member took part in the debate on that Bill in the House of Commons. In the House of Lords the Liberal spokesman strongly welcomed the Bill.
    Mr. Hugh Fraser: Apart from the intra-parliamentary inter-party row, is not the real problem that, if a pension is indexed on £3,000 today, in 15 years at a 13 per cent, rate of inflation it will be £18,000? That is the real problem facing the Government, the House and the public, and something must be done about it. It is a nonsense economy.
    Mr. Morris: The answer to the right hon. Gentleman's question in mathematics is for him to join the Government in getting inflation down.
    Mr. Tom King: Does the Minister appreciate that in addition to the problem of pensions the basic level of salaries is causing wide concern throughout the country, particularly in industries which have lost people to jobs with seemingly less responsibility but with higher salaries in the public service? Is not this a feature that should be examined by the Pay Research Unit?
    Mr. Morris: I should like to see the evidence for the hon. Gentleman's claim. The view that the Civil Service is leading in pay and pensions is not borne out by the facts. Three to four years ago, despite all the advantages now being attributed to Civil Service pay and conditions, we could not attract people from the private sector to the Civil Service. The salaries, pensions and perquisites have not changed in the meanwhile.

    Public Appointments
    Mr. Formanasked the Minister for the Civil Service whether his Department has any plans for limiting the extent and the cost of paid public appointments made by Ministers.
    Mr. Charles R. Morris: No, Sir. Responsibility for appointments rests with departmental Ministers, who, as a matter of policy, keep under review the numbers and costs of the appointments they make. In many cases the numbers of appointments are enumerated in the controlling statute or constitution.
    Mr. Forman: Have the Government considered the case for encouraging the establishing of a committee to look into the whole matter, preferably along the lines of the Public Accounts Committee? Does the Minister accept that, if the Government agreed, that would go at least some way towards allaying the justified suspicions of the apparently endless growth of ministerial appointments to non-political bodies outside the Civil Service?
    Mr. Morris: The hon. Gentleman's opinions and observations are fascinating, but they do not come within my field of responsibility.
    Mr. Gow: In the Government's view, what are the qualities of the new Chairman of Cable and Wireless which prompted the Government to make that appointment?
    Mr. Morris: The qualities and the criteria for such appointments are a matter for my right hon. Friend the Secretary of State for Industry.

    Pensions
    Mr. Penhaligonasked the Minister for the Civil Service if the Civil Service Pay Research Unit has made any comparisons between pensions paid in the private sector and pensions paid in the public sector.
    Mr. Charles R. Morris: The Pay Research Unit obtains details of the pension arrangements applying in the outside firms covered by its surveys on a confidential basis. This information is included in its reports and is used to adjust Civil Service pay to allow for differences both in pension benefits and pension contributions.
    Mr. Penhaligon: Does the Minister agree that the vast majority of the British population, retired and working, will have a reduction in their standard of living during the next 12 months? How can he defend a system which lets this elite body

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    off that grave result of our economic chaos?
    Mr. Morris: I do not accept that civil servants and the 1 million public servants who have given a lifetime of service to the community and the State are in any way an elite body.

  DEVOLUTION LEGISLATION
  Mr. Canavanasked the Lord President of the Council whether he can now name a date for the publication of the Bill on devolution.
  The Minister of State, Privy Council Office (Mr. John Smith): The Bill will be introduced early in the coming Session.
  Mr. Canavan: Will my hon. Friend deny the silly rumours that the Government are likely to give way to IMF pressure to scrap the devolution proposals? Bearing in mind last week's opinion poll published in the Scotsman indicating that the vast majority of Scots want a referendum, which would conclusively show that the vast majority of Scots would prefer devolution to SNP-style separation, will my hon. Friend and the Government continue to consider proposals for holding a referendum?
  Mr. Smith: I read with astonishment the story to which my hon. Friend has referred. It is about the silliest story to appear in any newspaper this year, and that is saying quite a lot. My hon. Friend is right in telling the House that recently, according to opinion polls, there has been a convincing demonstration of support for the Government's policy on devolution and an indication that the vast majority of people in Scotland wish to remain full members of the United Kingdom. This encourages the Government to think that their proposals are not only right but popular.
  Mr. Thorpe: Is the Minister hopeful that he can fulfil the promise of the right hon. Member for Huyton (Sir H. Wilson) that when the Bill on devolution is published we shall also be able to see the White Paper on devolution for England? How are the Government getting on with their discussions on that matter?
  Mr. Smith: My right hon. Friend the Lord President has made it clear that
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  we shall publish the consultative document on the English regions before the Second Reading debate on the devolution Bill. That is a categorical assurance that will be adhered to. There has been some fair criticism of the Government for not having produced the document before now.
  Mr. Whitelaw: Is it really the Government's intention still to go on with the idea of having one Bill for both Scotland and Wales when the problems in the two countries are totally different, as everyone knows? What is the purpose of going on with the one Bill when obviously two Bills would be far better?
  Mr. Smith: If we had two Bills for the two countries, they would not both be passed within the next parliamentary Session. We believe that the proposals for both concern themselves with transfer of powers outwards from Westminster and Whitehall and that, therefore, it is appropriate that they should be dealt with together. I should like the right hon. Gentleman or another representative of the Opposition to explain how it is possible to be in favour of devolution for Scotland but not for Wales.
  Mr. Heffer: Is my hon. Friend aware that while there may be pressure for devolution for Scotland and Wales, although I doubt that there is very much in Wales, there is certaintly no real pressure for devolution in England? May I ask him not to consider it in any way a matter of vital importance that such a White Paper should be published before we discuss these unnecessary Bills—unnecessary for Britain, anyway?
  Mr. Smith: My hon. Friend will not be surprised to learn that I disagree with his major point. We consider that the Bill for Scotland and Wales is of paramount importance. We shall produce for the English regions a consultative document, on which my hon. Friend's views and the views of all hon. Members will be welcomed.
  Mr. Gwynfor Evans: Is the hon. Gentleman aware that recent speeches, statements and writings by persons who hold the highest offices in the State have made clear and have underlined the almost desperate need to decentralise power? Is he aware that the main weakness of the British system of government

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  is its extreme centralism, and that powers should be decentralised from the bureaucrats, who now hold it, to the people?
  Mr. Smith: The hon. Gentleman covered a very wide field in that question. I shall confine myself to saying that we believe that the decentralisation of power and the increase of democratic accountability, which lie at the heart of our devolution proposals, are a desirable step forward in modern British government.
  Mr. Reid: Will the hon. Gentleman comment on the report in The Times today that there is to be a referendum on devolution? Is it correct? If so, will he make it plain that it is not for better, more open government but is simply to satisfy dissidents in his own ranks?
  Mr. Smith: My right hon. Friend the Lord President has made it clear that the Government would entertain no referendum in advance of the Bill which is to be published on devolution. If any other proposals are made, they will be considered in Parliament, and the merits and demerits put forward by their advocates and those who oppose such suggestions will be fully considered by the Government.

  SCOTTISH ASSEMBLY
  Mr. Growasked the Lord President of the Council how many representations he has received to the effect that the Government's proposals to set up an Assembly in Scotland will lead to the break-up of the United Kingdom.
  Mr. John Smith: Twelve, Sir.
  Mr. Gow: The hon. Gentleman should not be misled by the round dozen of representations he has received. Is he aware that the cause of discontent in Scotland lies not in the absence of an assembly but in growing revulsion against continuingly unsuccessful government?
  Mr. Smith: There are causes for discontent in Scotland as in other parts of the United Kingdom. Where I disagree with the hon. Gentleman is that my assessment and that of the Government is that the majority of people in Scotland welcome our proposals for the reform of government. I have as much knowledge of the Scottish electorate as the hon.
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  Gentleman has, given whom he represents in Parliament.
  Mr. Adley: The hon. Member for Clackmannan and East Stirlingshire (Mr. Reid) referred to the question of a referendum. Is the Minister aware that, if there is a referendum and if the proposal is that only the people of Scotland and Wales should take part, he must bear in mind that for over 270 years millions of Scots and Welsh people have moved to other parts of the Kingdom without considering that they have travelled abroad? There are in my constituency many people of Scottish and Welsh descent who would reasonably expect to be consulted on these matters.
  Mr. Smith: Of course, Scots and Welsh people do not consider that they are travelling abroad in those circumstances. I do not consider myself to be abroad at this moment. We shall have an opportunity when the Bill is debated for all points of view from all parts of the United Kingdom to be discussed in the House. Questions such as those concerning possible referenda can be discussed by hon. Members.
  Sir J. Langford-Holt: As Scotland is over-represented in the House—I speak as an Englishman—can the Minister assure us that, under any proposals about the extent to which powers are devolved to Edinburgh or Cardiff, representation in this House will be reduced to the same extent?
  Mr. Russell Kerr: That applies to the English counties as well.
  Mr. Smith: This is an important matter which the House will no doubt wish to discuss when the devolution proposals are considered. The Kilbrandon Commission examined the matter and made certain proposals. It thought it impractical to have MPs dealing only with certain matters in the House. This is a fairly complicated matter. The Government would like to hear what hon. Members have to say when the Bill is debated.
  Mr. Skinner: As the political temperature is likely to be taken this week at Walsall, Workington and Newcastle, to what extent is devolution a matter of extreme public concern at those three places?
  Mr. Smith: I imagine that it is of less concern in those constituencies since they are in England.

  HONOURABLE MEMBERS AND THE LAW
  Mr. Skinnerasked the Lord President of the Council whether he has any intention of introducing legislation to subject Members of Parliament to the ordinary processes of law in all cases where bribery and corruption are concerned.
  The Secretary of State for the Home Department (Mr. Merlyn Rees): As my right hon. Friend the Prime Minister told the House on 20th October, the Government are considering the report of the Royal Commission on Standards of Conduct in Public Life, including the recommendation that
  "Parliament should consider bringing corruption, bribery and attempted bribery of a Member of Parliament acting in his Parliamentary capacity within the ambit of the criminal law."
  This is a question for Parliament, and my right hon. Friend the Leader of the House will report to the House how he thinks we can best make progress in the matter.
  Mr. Skinner: Does my right hon. Friend accept that one thing that could give a fillip to the people who will be voting this week would be the announcement that in the next Session of Parliament we shall carry out the recommendations made by Lord Salmon in the Royal Commission's report to the extent that Members of Parliament will be treated like ordinary citizens in matters of corruption and bribery?
  Mr. Rees: It would be as well for the House to consider the matter in depth. There is a major question whether, on matters affecting the House, outside bodies should consider what to do about Members of Parliament. Without prejudging the issue, I can say that we cannot expect quick legislation. We should think about the implications of the Salmon Commission's report.

  LORD PRESIDENT OF THE COUNCIL (VISITS)
  Mr. Adleyasked the Lord President of the Council if he will list those countries which he intends to visit before the end of 1976.
  Mr. John Smith: My right hon. Friend hopes to represent the Labour Party at the Congress of the Spanish Socialist Workers' Party.
  Mr. Adley: Will the Minister tell the Lord President of the Council, when he is better, that some of us used to consider him a democrat, but that we have long since become disillusioned with him? Will he also tell his right hon. Friend not to go trouble-making in Spain, a country that is trying to find the road to democracy, while simultaneously coming to this House and acting as an apologist for an Indian dictatorship?
  Mr. Smith: That supplementary question is below the standards we normally look for in this House. My right hon. Friend the Lord President of the Council has always done a great deal to contribute to the furtherance of democracy.
  Mr. Heffer: Does not my hon. Friend agree that it is right that the Lord President of the Council should attend the Congress of the Socialist Workers' Party in Spain, a country which has not known democracy and which still does not know it? Will not the visit itself be a great contribution towards the democratisation of an ex-Fascist régime? Does my hon. Friend also agree that my right hon. Friend has never at any time defended the present lack of democracy in India?
  Mr. Smith: My right hon. Friend has been consistent in his defence of democracy all over the world, and I am sure that any country or any group of people have a great deal to learn from him. Furthermore, his presence at the Congress of the Spanish Socialist Workers' Party is another demonstration of the internationalism of the Labour Party.

  AMENDMENTS (MR. SPEAKER'S SELECTION)
  Mr. Maxwell-Hyslop: On a point of order, Mr. Speaker. I am most grateful to have the opportunity to ask you whether you will consider, though not necessarily replying today, dispensing to the House an act of grace and discretion by the Chair—not a duty—which would certainly be of great convenience to hon. Members.
  I asked your predecessor, Mr. Speaker Hylton-Foster, eight or 10 years ago whether he would place in the "No" Lobby a list of the provisional selection of amendments to Bills which at a convenient moment in time he had it in mind to call—not a list that would bind him to call all the amendments so selected, or indeed would prohibit him from calling amendments that were not on the list, but a list giving an indication to the House before a debate of the mind of the Chair. I am sure that hon. Members on all sides of the House agree that such a practice has been of great convenience to the House.
  However, that practice was restricted in interpretation and practice to amendments on Bills rather than to amendments on motions. My respectful request to you today, Mr. Speaker, is that you should consider indicating, by papers placed in the "No" Lobby, the amendments which you had it in mind provisionally to call to motions before the House as well as to Bills.
  There are many amendments to motions which are of more than party interest—namely, of interest to Parliament as a whole. However, once the House is sitting it is not mechanically very easy for Members who wish to speak in a debate to discuss with Members on the other side of the House amendments to motions with which they may agree or disagree. When there is a plethora of amendments, it is difficult to know which amendments the Chair has it in mind provisionally to call and this places a restriction on hon. Members because, by the laws of mathematics, only a certain number of hon. Members can be called by Mr. Speaker to speak in any debate.
  This consideration applies to today's events as to matters on other days, and I hope that you will be good enough, Mr.
  968
  Speaker, to consider whether to place in some convenient place, be it in the "No" Lobby or elsewhere, your provisional selection of amendments.
  Mr. Speaker: I am grateful to the hon. Gentleman. I undertake to consider what he said and I shall inform the House tomorrow.

CONDUCT OF MEMBERS
Mr. Speaker: Before I call the Prime Minister to move the order of reference to the Select Committee on the conduct of Members, I should like to explain the procedure that I propose to follow.
When motions setting up Select Committees are moved in the House they usually go through "on the nod" and for that reason the Questions on orders of reference, nominations and powers are put en bloc to save time. When such motions are debated, and more particularly when amendments have been selected, it is clear that the practice is to put the several Questions on the order of reference, nomination of the Committee and its powers separately.
I propose, however, that all the separate motions comprising orders of reference, nomination and powers in this instance be debated first, together with such amendments as I have selected, so that we may have a broad debate on the motion and on the amendments, again to save time.
At the conclusion of the debate I shall put the separate Questions on each paragraph, calling each Member whose amendment I have selected to move his amendment if he so wishes at the proper place in the paragraph concerned, provided that it has not already fallen as a result of the House having agreed to an earlier amendment.
I have selected the amendment in line 22, to leave out from 'That' to end of line 24 and insert
'the Committee shall conduct its proceedings in public:'.
I have also selected both amendments in lines 24, which are as follows:
In line 24, at end insert—
'That no witness summoned to appear before the Committee shall claim Crown Privilege as a justification for refusing to answer questions asked by the Committee:'.

969
In line 24, at end insert—
That the Committee shall at their discretion sit in public if they consider that at any stage of the inquiry the requirements of justice or of the public interest requires them to do so notwithstanding any of the foregoing:'.
The amendment to leave out lines 22 to 24 is unnecessary since under the arrangement I have just announced the hon. Member for Nottingham, West (Mr. English) may vote against the motion when I put the Question on the paragraph comprised in lines 22 to 24.
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Finally, I remind the House that the conduct of Members may not be criticised save on a substantive motion which admits of a distinct vote of the House. This is not such a motion since it goes not further than appointing a Select Committee to make a particular inquiry. While it is open to hon. Members to refer to circumstances attending the inquiry, it will not be in order to make allegations against individual Members. This would prejudge the Committee's findings and recommendations.

CONDUCT OF MEMBERS
That a Select Committee be appointed to inquire into the conduct and activities of Members of this House in connection with the affairs of Mr. J. G. L. Poulson; to consider whether any such conduct or activities amounted to a contempt of the House or was inconsistent with the standards which the House is entitled to expect from its

5

Members; and to report:

That the Committee do consist of ten Members:

That Miss Harvie Anderson, Mr. Peter Blaker, Mr. Leon Brittan, Mr. Emlyn Hooson, Mr. Max Madden, Mr.William Ross, Mr. Donald Stewart, Mr. Michael Stewart, Mr. Jeffrey Thomas, and Mr. Peter Thomas be members of the Committee.

10

That Five be the Quorum of the Committee:

That the Committee have power to send for persons, papers and records; and to sit notwithstanding any Adjournment of the House:

15

That the Committee shall lay before the House all such oral and documentary evidence as upon consideration by them shall appear to be relevant and such as may fairly be taken into account:

That Mr. Attorney General shall attend the Committee so far as the Committee may require to present evidence relevant to the subject matter of the inquiry; and may give such further assistance to the Committee as may be appropriate:

20

That the Committee have power to appoint persons to carry out such work relating to the Committee's order of reference as the Committee may determine:

That the Committee have leave to hear Counsel to such extent as they shall see fit:

That no person not being a member of the Committee shall be present during any of the proceedings of the Committee unless required by the Committee to be present for the purposes of their inquiry:

25

That these Orders be Standing Orders of the House until the end of this Parliament.

The motion stands on the Order Paper in my name and that of my right hon. Friends the Lord President and the Home Secretary.
The House will be grateful to you, Mr. Speaker, for your guidance on the nature of debate and the way in which you propose to conduct it.
The motion arises from the statement made by my right hon. and learned Friend the Attorney-General on Tuesday 19th October about the Poulson case. He then said:
"There are not sufficient grounds to merit the commencement of any further prosecutions or continued inquiry into the possibility of obtaining further evidence of criminal offences. I have accordingly agreed that the investigation should now be brought to an end."—[Official Report, 19th October, 1976; Vol. 917, c. 361.]
In 1972 the decision was taken that police investigations and prosecutions should have precedence over other investigations into the Poulson affair. The names of some hon. Members have been made public in connection with the bankruptcy proceedings of Mr. Poulson, but their alleged connections were but one facet of a complex matter. The view was taken in 1972 that to have referred these matters to Parliament could have pre-empted decisions by the then
972
Attorney-General, or later by his successor, with regard to prosecutions. The present Government reaffirmed that decision when they came to power in 1974, and although it was reviewed from time to time, the decision was adhered to.
With the ending of the prospect of further prosecutions, referred to by the Attorney-General on 19th October, the time has come for the House to consider the matter again, and in my statement of 21st October I said that the Government would have early discussions with other parties in the House about the composition, terms of reference and powers of a Select Committee to make a full and thorough investigation into the allegations made against hon. Members acting in their parliamentary capacity in connection with Mr. Poulson's affairs. In the absence of the Lord President, these consultations have been carried out by my right hon. Friend the Home Secretary, to whom I am very grateful, and the Government's proposals are contained in the motion now before the House.
There is no dispute about the need for a thorough inquiry by the House. The good name of individual Members has been questioned, and that involves the

973
standing of Parliament itself. Hon. Members individually and collectively will be vindicated only by a thorough investigation in which justice is done to all those concerned. That requires not only full investigation of those who may have failed to live up to the standards which this House expects of its Members but also fair treatment of all those whose names have been used, whether they have been involved in the matter or not.
An inquiry can take various forms. Some might prefer a tribunal of inquiry under the Tribunals of Inquiry (Evidence) Act of 1921. Those of us who recall the Lynskey Tribunal will well remember the volume of criticism which those proceedings attracted. There was no universal approbation at the end of its deliberations. The Government have also taken into account some of the observations of the Royal Commission under Lord Salmon's chairmanship, which reported in 1966. I do not refer to the latest report.
That Commission noted that the exceptional inquisitorial powers conferred on a tribunal under the Act would necessarily expose the ordinary citizen to have aspects of his private life uncovered and to the risk of having baseless allegations made against him. The Government do not consider that the allegations which have been made so far constitute anything in the nature of a nation-wide crisis of confidence and we have therefore come down against a tribunal.
As regards Select Committees, there are precedents for such appointments in comparable circumstances, although fortunately those have been rare. The allegations which we have read about relate to Members making speeches or otherwise acting in their parliamentary capacity. Those actions therefore enjoy the protection of parliamentary privilege and are not matters within the jurisdiction of the courts. They are matters for the House, and the House has ample power to investigate them and to apply its own considerable sanctions if those are warranted.
There are important differences between the proceedings of the courts and those of a Select Committee. In the courts, there are specified charges, known to defendants beforehand. The evidence
974
brought forward has to be relevant to those charges. In this case there are no specified charges, nor is the identity known of all those against whom allegations might be made. There are no rules of the House which say that this or that evidence is inadmissible.
The order of reference for the Select Committee in the motion is drawn up with those differences in mind. It will enable a thorough-going inquiry to be held and all the facts germane to it will be laid bare. The motion provides that the inquiry, free, as I have said, from the restrictions and rules of proceedings in courts of law, shall be conducted in such a manner as to safeguard the rights of hon. Members to be treated fairly. The scope of the inquiry fully covers the range of allegations to which publicity has been given.
With the other parties in the House, the Government have carefully considered the composition of the Committee. I said in the House on 20th October that I shared the view then expressed by the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) that the Committee of Privileges was not an appropriate body to consider the matters raised. That is partly a question of composition. The membership proposed for the Select Committee now numbers 10. It has been drawn from four of the parties in the House and it includes six hon. Members who are not members of the Privy Council. All of them are colleagues who are respected by us and who bring to the Committee a wealth of experience and relevant abilities. We can have full confidence in them.
The Attorney-General, who is a member of the Committee of Privileges, will not be a member of the Select Committee, but the order of reference provides that he shall attend the Committee as the Committee may require to present evidence and that he may give further assistance to the Committee as appropriate. I believe that to be the best arrangement. That is what I envisaged in my statement on 21st October.
I also said then, and the order of reference now provides, that the Committee should
"have power to send for persons, papers and records".
It will also
"have power to appoint persons to carry out such work relating to the Committee's order of reference as the Committee may determine".
That is the form of words recently used for the Procedure Committee. It would, for example, allow the Committee to appoint accountants to look at balance sheets, should such assistance be needed. These will, I hope, recommend themselves to the House as straightforward and necessary powers.
The order of reference also provides
"That the Committee have leave to hear Counsel to such extent as they shall see fit".
I have no doubt that the Committee will exercise that discretion wisely, avoiding the formality of court proceedings. That is the intention of that paragraph in the order of reference. It is necessary to express it as a power in order to avoid the imposition of the formality of full court procedures, but our intention is that, in the sense which I have described, the Committee will regard it as a requirement. I believe that that can be left to the good sense of the Committee.
I now come to the question of publication of oral and documentary evidence. The Government considered this matter carefully, and the order of reference does not merely empower but requires the Committee to lay before the House
"… all such … evidence as upon consideration by them shall appear to be relevant, and such as may fairly be taken into account".
I particularly ask the House to look at that in conjunction with the other requirement on which I know the attention of hon. Members will be concentrated:
"That no person not being a member of the Committee shall be present during any of the proceedings of the Committee unless required by the Committee to be present for the purposes of their inquiry".
In our view, those two provisions give the means to provide an open and fair inquiry.
As hon. Members know, any Committee of the House has power to exclude the public from its proceedings. Hon. Members who are not members of the Committee are generally prepared to withdraw from the Committee's deliberations when required to do so. In practice, in no proceedings before the Committee of Privileges has either a Member
976
of the House or a member of the public attended during any part of the proceedings, save as a witness.
The Procedure Committee of 1971–72 recommended that hon. Members should no longer have the right to be present at the deliberations of Select Committees and that the Committees should also have the power to exclude Members when taking evidence. Those recommendations have not so far been adopted.
We are not dealing here with the general run of Select Committee business. We are dealing with an inquiry of a very unusual nature. It is, I believe, unprecedented in its generality and lack of restriction as to both the names and the allegations which may fall to be considered within the terms of reference. The point of having such an inquiry is that it shall pursue the truth and be clearly seen to have done so. That is what the order of reference provides.
It is our view that, if the Committee sat in public, evidence, whatever its basis—whether it was groundless or not—would be subject to daily public sifting. A lie can be half-way around the world before truth has got his boots on. We should have instant judgments on allegations before the Committee had been able to weigh them, before the reputations at stake could be properly upheld or cast down, which might do unnecessary harm not only to the individuals concerned but also to the standing of this House. This is what has happened sometimes in the past in cases before tribunals of inquiry where the evidence was heard in public.
The House has a duty to protect the innocent, as we have a responsibility to punish a misdemeanour. Those in public life, as we are, are especially vulnerable to slander and false allegations, and, if such persons offer themselves as candidates for election, such baseless smears can lead not only to a loss of faith in the individual but also to the undermining of belief in the standing of hon. Members generally.
Although I can see the case both ways, these are the reasons which have persuaded the Government. We considered the matter most carefully. I am sorry that words such as "cover-up" and "whitewash" have been used by some hon. Members. It is nothing of the sort.
There is, I think. a very sound case for this approach, and these are the reasons which have persuaded us, in the light of our discussions with other parties in the House, to reach this conclusion.
Mr, Frank Hooley: Is it the case that, in the event of perjury or baseless allegation, the person so behaving lays himself open to contempt of the House?
The Prime Minister: I understand that it could be, though I suppose that it depends on the specific case.
Mr. G. R. Strauss: My right hon. Friend has made a strong case for having the Committee's proceedings generally in private and for not having the Press there. But there have been cases where a Select Committee has considered that a subject may be quite a tricky one and the Press has not been allowed to attend, but, when witnesses have appeared, hon. Members have been permitted to come along to hear the cross-examination and to follow the proceedings. What reason is there on this occasion for banning hon. Members from attending the Committee when witnesses are before the Committee and cross-examination is taking place, while excluding the Press?
The Prime Minister: I leave my right hon. Friend to consider the matter himself. But, as in the case of the Committee of Privileges, in practice no hon. Member has attended such a Committee during its proceedings. It seems proper that we should follow that precedent in what is happening here, and I think that that will appeal to most hon. Members in the House when they think about the matter.
Mr. Dennis Skinner: My right hon. Friend referred, in his arguments about having this Committee meeting in secret, to the fact that we as Members of Parliament are subject to having our names in the Press on countless other issues and that to some extent we would be likely to suffer more if we were involved. Will he also accept that councillors, too, are in public life and that, therefore, to that extent the argument carries with them just as it does with Members of Parliament, especially if those councillors are well-known public
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names? Will my right hon. Friend also comment on the fact that yesterday it was announced that 16 workers at the British Steel Corporation are to be charged with corruption? Will not they, their families and their relatives be subject to the same problems as any Member of Parliament who represents these ordinary people who are subjected to the constraints of the court?
The Prime Minister: I think that the answer to that is "No". I am not a lawyer but, as I understand the rules of evidence—and I said so earlier today—they are very carefully drawn in terms of what may be advanced in court and what may be admitted in court. This is not the case with a Select Committee of this kind. I am willing to give way to any hon. Member who knows the law better than I do. But it is oven to anyone to come to the Select Committee if he wishes to do so and it is sitting in public and to make accusations of the most scurrilous nature—all of us have had such accusations made against us—without any protection at all. We have already had such an example in connection with this case. I see no reason why those who are apparently guiltless of any offence should, either for reasons of malice or in any other way, have their names broadcast in the Press before the Committee has had a chance to consider the answer and then to publish the full facts. Then the House and the country will have the full position before them. That seems to be the right way to handle this matter.
Several Hon. Members Several Hon. Members rose—
The Prime Minister: I do not think that we should be debating this matter. I doubt whether there is much more information that I can give to the House. Indeed, I have already reached the end of my speech. I dare say that those who disagree will want to advance different arguments. However, I will give way to the Leader of the Liberal Party, as he has tabled an amendment.
Mr. David Steel: Will the Prime Minister explain why he takes a different view when it comes to publication of the evidence? He has rightly given the Committee discretion so that it may delete that which is malicious, trivial or without

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substance. Ought not he to give the Committee the same discretion whether to investigate in private first and to meet in public later?
The Prime Minister: Obviously the Committee could have such a power. We considered this matter, too. On balance, we thought that it was as well to give the Committee a direction from the House that it should sit in private, provided that it published all the relevant evidence at the end, rather than that it should decide one day to sit in private and another day to sit in public. We think that it is better to do it in this way all the way through. I do not think that there is a great issue of principle here about the Committee's deciding whether it wishes to sit in public or not. But, on balance, we think it better that there should be one coherent approach to it throughout the whole of the Committee's deliberations.
It is our desire that the Committee should receive and consider its evidence frankly and without any inhibition. Let it remain private until the Committee has completed its work, and then let all the evidence, oral and documentary, which is relevant to the inquiry be openly published for all to see. By this method, in our view, the House and the country will be able to form a complete, impartial and fair judgment on this unhappy affair, and justice will be done to those who have improperly involved themselves, but, just as important, justice will also be done to those whose names have been or may be baselessly and scurrilously bandied about.
3.56 p.m.
Mrs. Margaret Thatcher: When the Prime Minister announced his provisional decision to set up a Select Committee to consider this matter, he undertook to consult the other parties in the House. He has done so, and I am very grateful to him for it. I should now like to explain in my own words why, in general, although this is a House of Commons matter, the Opposition support a great deal of what he says and his broad conclusions.
It has involved a great deal of study, because a small amount of conclusion often involves a great deal of preceding study. There are many other cases to
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consider, and many more matters such as the blue-covered Salmon Report of 1966 as well as the red-covered Salmon Report of 1976 to be taken into account.
The purpose of the inquiry is, of course, to ensure that the high standards which are expected of a Member of Parliament are upheld and that thereby we retain public confidence in Parliament as a whole. This means that, from time to time, we have the distasteful task of inquiring into cases about which there is some public disquiet. We have this task in common with other members of other professions, and we have to find the best way of carrying it out.
I agree with the Prime Minister in his choice of a Select Committee as a proper vehicle for this inquiry. He quoted from the blue-covered Salmon Report that we should not set up a tribunal of inquiry except where there was very grave public disquiet and public lack of confidence. I do not believe that that is so in this case.
The right hon. Gentleman has chosen, I believe rightly, very wide terms of reference for this Select Committee. I have been through as many of the other Select Committee Reports as I could manage to read during the weekend, and I can find none comparable in the breadth of its terms of reference with this one. Most of them have referred to single specific instances which have been thoroughly investigated by the Committee concerned. But they have been specific. They have referred to existing Members of the House. I understand that this resolution may go wider and take into account those who were previously Members of this House. This is the only resolution that I have been able to find which is so wide in its terms of reference, and it means that it takes on some of the character of an inquisitorial proceeding in the same way as a tribunal of inquiry is an inquisitorial proceeding. That means that we have to take special care to protect those who are innocent, because by its nature an inquisitorial proceeding is rather alien to our laws of justice in this country.
The blue-covered Salmon Report pointed out that it is a quite different procedure from any in a court, in regard to which there have been previous inquiries, and where specific allegations are put down in writing. The person accused knows exactly what the allegations are,

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and depositions are taken from witnesses. There are two sides, with either prosecutor and defendant or plaintiff and defendant.
There is nothing of this kind in a tribunal or in a Select Committee proceeding. It is an inquisitorial proceeding in which allegations emerge as the inquiry goes on. This renders it specially liable to hurt the innocent person—and in particular, if there is a long time elapsing between the allegation and the conclusion, the reputation of the innocent person may never recover. I believe that this puts a very special duty on us to ensure that, while all the relevant evidence is published, no one is subjected needlessly to injustice.
This brings me immediately to the point about the publication of evidence, and to the particular motion on the Order Paper, which is in rather strange wording and not easy to understand. I believe that the best way to achieve these two aims—namely, to bring out all the relevant evidence but to protect the person who is innocent—is to see that every single bit of evidence is published at the time the finding is made by the Select Committee. If by any chance there is then some evidence which goes against a person who is innocent, at least there is the immediate antidote of the finding of the Select Committee.
It is not possible always to have 100 per cent. protection for the innocent in carrying out an inquiry of this kind, but we must make the protection as absolute as possible. This has been done in many past cases. I have been through the Allighan case and all through the Boothby case. Those were single cases. The evidence in the Boothby case ran to some 290 pages. Every single bit was published. The evidence in the Allighan case ran to 122 pages. Every single bit was published. There has been no question about the publication of all relevant facts.
There may from time to time have been discussions about what the House did concerning those relevants facts, but on the whole there has been no criticism that the relevant facts have ever been withheld. Every single thing has been published. How can there be a cover-up when every single bit is published? It is all published and it is all available
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for the House to consider when it comes to debate the matter, and it is the House that decides. It is not a Select Committee.
I now turn to what I believe is a misunderstanding which has arisen from the wording in the Order Paper concerning publication. What I think the words mean, and are intended to mean, is that all oral and documentary evidence shall be published in as much as it is proper evidence. Most of us would not wish to consider improper or irrelevant evidence, because it could only be prejudicial.
Mr. Skinner Mr. Skinner rose—
Mrs. Thatcher: May I just finish? I recognise that the hon. Gentleman feels very strongly about this. So do I. If we look at the reports, we find that all the evidence has been published. I remember only one case where an hon. Member has moved concerning suppression of evidence. That case was taken to the Committee of Privileges. It was a very long time ago. That is why I think it is important to have all the evidence published. For my part, I should be very happy to stand by the normal rules relating to Select Committees.
I notice that the Prime Minister said that the word "inadmissible" is not understood in a parliamentary sense. I believe, with respect, that that is not quite right. I believe that it is understood. I spent some time over the weekend learning a great deal from "Erskine May".
Mr. Skinner Mr. Skinner rose—
Mrs. Thatcher: May I read out the appropriate paragraph relating to the publication of minutes of evidence by Select Committees? I will give way to the hon. Gentleman.
Mr. Skinner: I appreciate the right hon. Lady's point, but does she understand that the crucial point here is not that we must satisfy hon. Members? The people we have to satisfy are the millions who elect us and put us into this place. Indeed, we also have to satisfy those who have been involved in Select Committees dealing with other matters.
Does the right hon. Lady know, for instance, that Alan Grimshaw, one of the people partly responsible for the Select Committee on Nationalised Industries

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making an investigation of the National Coal Board's buying of roof supports and so on, is extremely aggrieved at the result of that investigation? The Select Committee did not publish all the evidence which he believed—as distinct from the Committee's view—should have been published. That is the point at issue. Although the House may be happy that all its Members have been safeguarded, the real question is whether a Select Committee in this form, if it decides not to publish all the evidence, can then satisfy all the people outside.
Mrs. Thatcher: I understand that the direction here relates to all "relevant" evidence, that is to say, all evidence that is relevant. I believe that the next words on the Order Paper,
"and such as may fairly be taken into account"
really mean all evidence that is admissible. But in deciding what those words mean, I believe that the proper authority is "Erskine May" other than the Officers of the House. May I read out the rules relating to the publication of minutes of evidence of Select Committees? On page 650 "Erskine May" goes into what is proper and also deals with what is "inadmissible". That is why I think it is a term understood in the House. It says:
"If a question, which, on being objected to, is decided to be improper or inadmissible, has already been inserted in the minutes, the question is expunged."
It is, therefore, expunged in terms of existing practice if it is improper or inadmissible—and people do not want improper or inadmissible details to be in the evidence. "Erskine May" then goes on to say:
"Other matters which have been expunged by the order of the committee have included answers which, properly speaking, were not evidence and ought not to have been received as such; part of, or certain words in, a witness's evidence; questions and answers relating to a case, of which the witness subsequently admitted he had no personal knowledge"—
and so on. In other words, all evidence which is proper and relevant has to be published, I understand, according to the motion before the House. If that is not so, then most of us would be prepared to say that, provided it is published absolutely at the end, when the findings come out, all evidence should be published if any case is to be raised concerning the
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suppression of evidence. I believe that it is more important to get it all out—but to have none of it coming out until the findings are made—than it is to risk any question about suppression of evidence. But I understand the wording on the Order Paper to mean—and I hope that the advice we shall get is that it means that the Select Committee will take it to mean—all evidence which is relevant and admissible—
Mr. Alexander W. Lyon Mr. Alexander W. Lyon (York) rose—
Mrs. Thatcher: —and that if it is not admissible it ought to be stopped. It sometimes is—as the hon. Member for York (Mr. Lyon), who is a lawyer, well knows—but it is not always easy to stop it before it has come out and some damage has been done.
Mr. Alexander W. Lyon: I am grateful to the right hon. Lady for giving way. I think, with respect, that there is a difference between what "Erskine May" calls inadmissible and the wording used in the motion, which is
"upon consideration … shall appear to be relevant".
What is inadmissible may be, for example, abuse which may not be regarded as orderly in the House and which would be similarly inadmissible in a Select Committee. But it may be that a Select Committee would think that a false allegation against an innocent Member of the House is irrelevant to its general consideration whether some people were guilty of contempt of the House. The Select Committee may think that it would be better in the circumstances not to have such evidence at all. In the one case it would fall within the terms of the motion and would be strictly admissible according to the "Erskine May" test.
I agree with the right hon. Lady's general approach to the problem, and would be anxious to follow her line in dealing with the evidence. I think it is very important, therefore, that we should get it right here and now and not leave it to the Select Committee to decide according to its own test.
Mrs. Thatcher: I do not believe that false allegations against hon. Members which are irrelevant should be published. It is far better to have them published at

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the end of the day than have the proceedings in public or published in the Press all along. I believe that this means what I believe it to mean and I hope it will be made clear to the Select Committee what the House means. All the evidence put forward, if inadmissible in the ordinary usage of the term, should be stopped at the point given or expunged from the record. As we have inquisitorial proceedings here, we can do that.
I believe that the right attitude to take is that all the evidence should be published at the time of the findings, so that there is no great gap between the allegations being made and the findings being given. Then there is no question of a cover-up of any kind. If that is done, I believe that we shall have the full facts put before the House and it is the House, not the Select Committee, which decides what is to be done on the findings.
Mr. Leo Abse: The right hon. Lady has referred to the blue-covered book of Lord Salmon, but only in passing to the red-covered book. In the latter, Lord Salmon, who is fully seized of the facts to come before the Select Committee, and certainly of the evidence which has precipitated this debate today, came to the conclusion, for reasons he has given, including problems about inadmissibility of evidence, that the Select Committee was an unsuitable vehicle. He recommended that every hon. Member should be placed in the same position as a member of the public before the law in a criminal trial. Why has the right hon. Lady not referred to the recommendation specifically made by Lord Salmon that a Select Committee of this kind is highly unsuitable to deal with these matters which we are trying to lay upon them?
Mrs. Thatcher: With due respect to the hon. Gentleman—and I recognise that he is a distinguished lawyer—only a Select Committee can inquire into matters of contempt of this House. No tribunal or other body can do it. The other matter into which the Select Committee is to inquire is whether the standards of conduct fall below those expected of hon. Members. This cannot be a trial, or a criminal trial, and the Prime Minister referred to this matter early on. My understanding is that either before or after the Select Committee has reported, the matter
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referred to in Lord Salmon's red-covered Report, whether there should be a change of law, must be put through this House in the proper way with proper consideration. That is quite separate from what we are doing now. We do no service to anyone to confuse these two issues.
I shall address a few words to an amendment which I think will be moved later about whether the Select Committee should have the right to go in and out of public proceedings. I do not think the Select Committee should be given that discretion at this moment. There will be, at the beginning, quite a number of allegations which come before the Select Committee, and some evidence will be heard. If the Select Committee is given the power to go into public proceedings at its own discretion, one thing will be certain—the public will not have all the evidence at the same time. It will have some evidence and it will not have other evidence, and therefore it cannot have the means of judging the whole thing. Immediately there are two sorts of evidence created—one sort which is published at the end with the findings and one sort which is published at the time the allegation is put and the hearing conducted. That would lead to confusion, and would create suspicion, not allay it. It would be quite wrong to give such discretion at this time.
On the ordinary procedure of Select Committees, followed in the Boothby case, if the Committee wants extra powers it can come back to the House and ask for them. In the Boothby case, Lord Boothby was given the right to appear or be represented by counsel and the Select Committee was given the right to hear counsel. The Committee had thought that its powers were not enough, so it came back to the House, put its case and got the powers it needed.
None of use knows, apart from the Attorney-General, what is contained in the right hon. and learned Gentleman's files, and none of us knows the allegations which will come before the Committee. But if, after several weeks, the Committee wishes or thinks it proper that some of the proceedings should be held in public, the correct and appropriate thing to do is for the Committee to make such a resolution, come back to the House and seek further powers. Then the decision

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whether some of the evidence should be in public and some in private rests with the House. There is nothing in the Committee proedures to preclude that from happening, and it is the right way to go about it.
Mr. Eric Ogden: In her desire to protect every Member of this House, the right hon. Lady spoke of consideration being given for six or seven weeks or more. But has she thought that no one can prevent hon. Members or the Press from waiting in the corridors outside the Committee Room to see who goes in and out? Inevitably there will be some conjecture about who goes in and for what purpose. If the Committee cannot call for factual evidence from one hon. Member to clear his name, there is a danger that anyone called to the Committee will have the stigma, or at least the suspicion, attaching to his or her name. If the Committee could hear this evidence in public his name would be cleared.
Mrs. Thatcher: That is quite different from any allegation being published. I am not certain about the parliamentary law relating to reporting comings and goings in corridors of the House. There have been privilege cases about reporting what goes on in parts of the House which are not the Chamber, and other cases may be referred to the Committee of Privileges. I believe that the mode of operating which the Minister has put forward is, indeed, the best one.
Mr. Emlyn Hooson: But is there not a practical difficulty if, as the right hon. Lady has suggested, the Select Committee comes back to the House and asks for discretion to sit in public? It would have to disclose to the House the reasons why it wished to sit in public and that would raise all kinds of problems. If it had the discretion from the start it could exercise that discretion.
Mrs. Thatcher: It is not right to give a discretion to the Select Committee to hear part of the evidence in public and part in private. That ensures that there are two different sorts of evidence and I think that would create suspicion at the outset.
The procedure which we followed in the Boothby and Allighan cases was that
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the hearings were in private, but the public knew everything at the end because everything was published. The hon. and learned Member for Montgomery (Mr. Hooson) cannot say that there is any cover-up when every word of the evidence is published, because there is no cover-up at all.
I have given my views on what it means, what I believe it should mean, could mean and will be intended to mean. It is far better that we should proceed in this way than by the only alternative, which is for allegations to be published one by one with a very long time between the allegations being made and the findings being published. This is the worst of all possible worlds.
Mr. Alan Clark: There are three categories of evidence and they diminish in significance. First, there is "all the evidence", which my right hon. Friend says she favours publishing—and I agree with her. Secondly, there is "all the admissible evidence" covered by the definition in "Eskine May" which my right hon. Friend read out. Thirdly, there is a still smaller category, which the Prime Minister mentioned, which is "all the relevant evidence"—which means the evidence considered relevant by the subjective tests of the Committee. Which of these groups of evidence does my right hon. Friend favour publishing?
Mrs. Thatcher: The only evidence is evidence which is related to the case. All the rest is not evidence; it is just scurrilous gossip and rumour. The only evidence, by the nature of the word, is evidence relating to the matter which is before the Select Committee. I hope that there will never be any question of using the Select Committee as a means of propounding gossip or scurrilous rumour, if that is what it is, or as a means of seeing that such gossip is published and uttered beyond the House.
If one has any confidence in a Select Committee surely one can trust it to publish all the evidence that truly is evidence and to make an objective assessment. If we do not have that confidence there is no point in setting up the Select Committee.
I am sorry that I have taken longer than the Prime Minister, but at least I have been supporting him this time.

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I believe that what he proposes is the right way to go about this matter, and I hope that the Select Committee will be speeded on its way and will get down to what is for it a very difficult task.
4.23 p.m.
Mr. Emlyn Hooson: Since my hon. Friends disagree with the view taken by both the Prime Minister and the Leader of the Opposition in one particular matter, I should like to set out first what I think the Select Committee should do, or how it should proceed.
A great deal has been said on both sides today by both right hon. Members to indicate that one of their chief concerns, if not their chief concern, is to protect the innocent. Of course, it is a matter of fine balance as to how that is to be achieved and how it is to be set against the other factor which must surely weigh equally heavily with them, and that is that the public should see that justice has been achieved.
Justice achieved in secret is very rarely seen to be justice. Our courts meet in public. Many of the arguments used by the Prime Minister today were a justification for courts sitting in secret and publishing all their evidence and their findings later because then the nasty allegations can be published together with the findings.
The Prime Minister: No. that is quite wrong. We are dealing with an entirely different matter. A court presumably gives its own findings and its own verdict. I do not know whether the Select Committee will produce findings. It is entitled to do so if it wishes, but the verdict on these issues will be made in this House, in public, after we have read the allegations and the answers. There is nothing here to cover up.
Mr. Hooson: In the proposed terms of reference the Prime Minister has asked the Committee to make recommendations—[HON. MEMBERS: "Where?"] It is to report to the House and presumably that will include making representations.
It is important for this matter to be developed further. When the British Medical Association considers allegations against doctors, once the original evidence has been sifted, the allegations are heard in public. That is a very serious
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matter for a doctor, but because the matter is handled in public the public are reassured.
Let me set out what we think is the right procedure for the Committee to adopt. As Lord Salmon said in his red-covered Report, there are serious deficiencies in the procedure, whatever the procedure we use. Lord Salmon said:
"With the most genuine respect to the Committee of Privileges and the Select Committee on Members' Interests, we do not consider that they provide an investigative machinery comparable to that of a police investigation. We have had frequent occasion to comment on the complexity of investigations into serious corruption, and the special expertise that is necessary for this type of inquiry … Since the bribery of a Member of Parliament acting in his parliamentary capacity does not constitute an offence known to the criminal law, it appears to us that the very locus of the police in respect of such matters must he in doubt."
Let me suggest, therefore, what should be the proper procedure for the Committee.
First, it has to investigate the matter. No doubt it will invite evidence in written statements to be made to the Committee. Maybe oral statements will be made to it. At that stage I agree with the Prime Minister. Individual Members of the House and any outside witnesses should be protected, and at that stage I think the proceedings of the Committee should be entirely in private.
Surely the equivalent of this is the police investigation or the original inquiry of the Director of Public Prosecutions. The DPP has much evidence presented to him which is never revealed to the public because he discards it, perhaps because he regards it as unreliable. The same applies with the early investigation of any disciplinary tribunal in any profession.
However, the Committee having gone through that matter, and having sifted all the evidence, I and my right hon. and hon. Friends believe that if there is a substantial case against any Member of the House the Committee should have discretion to have the hearing thereafter in public. The Select Committee would, as it should, apply very strict rules to what is admissible and relevant. It would be concerned to ensure that scurrilous rumours and that kind of thing were not

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made the foundation of charges. There must be more substance to them than that.
But let us suppose that the Committee finds the substance is there. Surely at that stage it should be entitled to do what is done in a Board of Trade inquiry into a public company and reduce what is found to be a substantive case into writing, to make a précis, which is presented to whoever is involved. Then, if it wishes, I think the Committee could hear that evidence in public. The Member should be entitled to give and should give evidence in public in rebuttal of that.
The Secretary of State for the Home Department (Mr. Merlyn Rees): The hon. and learned Member is worrying me in the light of the discussions that took place last week. Surely in his statement of 19th October the Attorney-General made it abundantly clear that he had reached the conclusion, with which the Solicitor-General and I concur, that for persons within the jurisdiction of the court there are not sufficient grounds to merit the commencement of any further prosecutions or continued inquiry into the possibility of obtaining further evidence of criminal offences.
The hon. and learned Member has talked about building up a case. We are not talking about that. We are talking about whether in this instance there is contempt of the House, or whether there was conduct which was inconsistent with the standard that the House is entitled to expect from its Members. It does an ill service to this House in the eyes of persons outside to suggest that there is a cover-up, because otherwise hon. Members would go before the courts on criminal charges. That has not happened.
Mr. Hooson: I think that the Home Secretary has misunderstood me. Of course there are two issues into which the Committee must inquire. The first is whether the conduct or activities amounted to contempt of the House, and the second is whether the activities of any Members of Parliament were inconsistent with the standards which the House was entitled to expect of them. These are the matters into which the House must inquire.
Mr. Robin Maxwell-Hyslop: I am most grateful to the hon. and learned Member for giving way. He is
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speaking of an inquiry into the conduct and activities of hon. Members which should consider whether any such conduct or activities amounted to a contempt of the House or was inconsistent with the standards which the House is entitled to expect from its Members. Is he aware that this inquiry is confined to matters in connection with the affairs of Mr. J. G. L. Poulson?
As the hon. and learned Member speaks for the Liberal Party, will he tell the House publicly and openly why in his view this motion should exclude the activities of the previous leader of his party who was condemned by an inquiry conducted by an inspector of the Department of Trade and Industry?
Mr. Deputy Speaker (Mr. Oscar Murton): Order. Mr. Speaker has already ruled on the question of imputations against individual hon. Members. They are not in order.
Mr. Maxwell-Hyslop: The hon. and learned Member for Montgomery (Mr. Hooson) has just recommended to the House that there should be a general inquiry. He has not recommended the deletion from the motion of the words:
"in connection with the affairs of Mr. J. G. L. Poulson".
I am entitled to ask him why he does not carry his recommendation to its logical conclusion.
Mr. Deputy Speaker: I shall leave the hon. and learned Member for Montgomery (Mr. Hooson) to answer that, but I must draw attention to the fact that Mr. Speaker ruled earlier that it is in order for hon. Members to refer to the circumstances attending the inquiry, but that it would not be in order to make allegations against individual Members. This would prejudge the Committee's findings and recommendations.
Mr. Maxwell-Hyslop: I have not made any allegation against any hon. Member. The hon. and learned Member for Montgomery has just recommended that the House should conduct an investigation into the conduct and activities of Members of this House to consider whether such conduct or activities amounted to a contempt of the House or was inconsistent with the standards which the House is entitled to expect from its Members—this is not confined to criminal activities—and

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I am asking why he thinks it right that such an investigation should be so constricted that it excludes the ex-leader of his party. I think that I am entitled to a reply to that question.
Mr. Hooson: That scurrilous interruption is probably the most powerful argument yet advanced in favour of the Prime Minister's proposal. The hon. Member for Tiverton (Mr. Maxwell-Hyslop) should have heeded what his right hon. Friend the Leader of the Opposition said on this matter.
Mr. Deputy Speaker: Order. I must draw the attention of the House to the first paragraph of the motion, which refers specifically to activities
"in connection with the affairs of Mr. J. G. L. Poulson".
The Prime Minister: The exchange we have just heard illustrates exactly the point which was very much in our minds. Trial by newspaper took place—the consequences are not of concern to us—and I am most anxious to see that no innocent hon. Members suffer the same fate.
Mr. Maxwell-Hyslop: On a point of order, Mr. Deputy Speaker. I take it that the Prime Minister was purporting to intervene on a point of order. I have accused no one of anything.
Mr. Deputy Speaker: Order. I understood the Prime Minister to be intervening in the speech of the hon. and learned Member for Montgomery.
Mr. Hooson: It is obvious that I should be confident that under the procedure I propose the public would regard the evidence of the hon. Member for Tiverton as worthless.
I wish to outline the important reasons why my right hon. and hon. Friends and I believe that the inquiry into these matters should be held partly in public. The reason we are having this procedure is that hon. Members are not subject to the criminal law in regard to certain aspects of their behaviour. I remind the House of the article in the Bill of Rights which says that the freedom of speech in debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament. We have here a privilege applied to hon.
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Members in the fulfilment of their functions as hon. Members.
Mr. John Peyton: I hope that the hon. and learned Member will clear up doubts which he may have created by what he has just said. I understood him to say that there were some sections of the criminal law to which hon. Members were not amenable. If he did say that, to which sections was he referring?
Mr. Hooson: The Prevention of Corruption Act, for example, makes it an offence for officials, councillors and others to do certain things which are not offences as far as hon. Members fulfilling their parliamentary functions are concerned.
Mr. Alexander W. Lyon: Will the hon. and learned Member for Montgomery (Mr. Hooson) please educate the media? The whole business of the immunity conferred by the Bill of Rights is a red herring since the Prevention of Corruption Act does not apply to Parliament or to the administration of any of our activities in any event. Even if the Bill had never been passed, no hon. Member could have been prosecuted for any offence under the Prevention of Corruption Act appertaining to his parliamentary or any other duties.
Mr. Hooson: We are concerned with the protection of hon. Members and the privilege of an hon. Member in carrying out his functions in Parliament. Hon. Members hold this privilege on behalf of the people they represent. That is why we have freedom of speech in the House. It is not a personal privilege in the true sense. We hold it in a fiduciary capacity and it is there to ensure that there is no restriction on an hon. Member's ability to speak out in the House and in any proceedings of Parliament. It is a principle conceived of our constitutional law. It is the principle that an hon. Member should be able to utter without restraint and be safeguarded by means of privilege. What is safeguarded by this privilege is the public interest. The purpose of our privilege is to preserve and enlarge the freedom within the House to speak without restraint. I ask, therefore, why it is proposed to have an entirely private inquiry in this case.
Let us assume that an hon. Member had received sums of money which would, were he not an hon. Member, be

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regarded as a bribe. As an hon. Member he would not have to face criminal charges, but if he were not an hon. Member there would be a charge and the trial would be held in public in the courts.
Parliament heeded the criticism that the police should not be allowed to deal in private with complaints made against them. The House has introduced a new procedure to deal with this. There is a great danger of the public thinking that double standards are being applied by the House.
I agree that the investigatory phase of the Committee's work should be entirely in private. If there is a prima facie case of a contempt of the House or of conduct which is inconsistent with the standards which the House is entitled to expect, surely it would be in the interests of justice for the individual involved, and in the public interest, for the matter to be discussed in public.
Mr. Patrick Cormack: Surely, it will come out in the House when the Committee reports. If there is a case to answer, the House will have an opportunity to study the evidence and read the report. No one will be protected. There will be no cover-up of any heinous crime. If anybody has done anything wrong, it will come out. But if a man is to have all the Committee sittings listened to in public, and perhaps reported in the Press, the case may well be prejudged and, when the House finally comes to look at it, we shall be in a difficult position.
Mr. Hooson: I have not suggested that every Committee sitting should be in public. I said that the first function of the Committee should be to sift the evidence and decide whether there is any substance in it, and, of course, that evidence must be admissible and relevant. But it is in the interests of any hon. Member against whom a prima facie case is made and who has an answer to it, that at that stage he should be able to give his answer in public.
Mr. Cranley Onslow: Is the hon. and learned Member saying that he would like the Committee to sift all the evidence, presumably having heard it, and then go back to the beginning again to see what constitutes a prima facie case?
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How does he expect any progress to be made?
Mr. Hooson: The procedure of sifting evidence is gone through in many places in our country at present. The Director of Public Prosecutions does it to find out whether there is a prima facie case.
It is important to consider the practical implications of the course which the Government have decided upon here. The Press, for example, already has a great deal of evidence. The transcripts of the public hearings in the bankruptcy proceedings must already be in the hands of a great number of newspapers.
Mr. Maxwell-Hyslop: What about London and County Securities?
Mr. Hooson: The Press could refer to any piece of that evidence at any time when the Committee was sitting. If newspapers knew that a person who had given evidence in the bankruptcy proceedings was called before the Select Committee, they could say what he had said in the bankruptcy proceedings without risk of any action. Also, there are the transcripts of evidence given by various witnesses in the different trials which involved Poulson. They could be referred to at any time.
Therefore, by their proposal that the sittings of the Committee should be entirely in private the Government are risking publication by the Press at various times of extracts of evidence already given.
The Attorney-General (Mr. S. C. Silkin): Would the hon. and learned Gentleman give the House an assurance that if, as is proposed, he becomes a member of the Select Committee, he will ensure in the debate which follows the report that nothing which ought to be brought to the attention of the House in the way of evidence, written or oral, will fail to be brought to the attention of the House?
Mr. Hooson: I assure the Attorney-General that if I were to become a member of the Select Committee it would be my hope that the Committee would come to a unanimous conclusion and that each member of the Committee would put before the House what the

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Committee agreed should be put before the House.
We are in danger here of failing to appreciate the atmosphere of mounting public suspicion of the House.
Mr. Maxwell-Hyslop: Hear, hear.
Mr. Hooson: Let us consider the history of the matter. In 1972—the Prime Minister has already adverted to this—certain events took place which, I assume, will be placed before the Committee, and these were known to some hon. Members and to members of the Government at that time. The matter became public with allegations during the Poulson bankruptcy proceedings. Let it be remembered that those proceedings were held in public, or at least part of them were. Had allegations not been made, would these investigations ever have taken place?
It is right to observe in passing that a distinguished member of the Bar, Mr. Muir Hunter, was called before the Bar Council when he was actually engaged in the middle of the case to answer for his own conduct in those bankruptcy proceedings. He was totally exonerated, but that event caused extreme disquiet among members of the Bar, and, so far as I am aware, Mr. Muir Hunter is the only counsel ever to be called to answer for his conduct while he was still conducting a case.
It is four years now from the time when the letters referred to were found. There has been no action yet on the Salmon Commission's revelations and the loopholes in our law and procedures. Should we be having this debate today and would a Select Committee be set up were it not for the fact that the Observer published its articles?
The Prime Minister: With respect, that question should be answered at once, and the answer is "Yes, we should". The Attorney-General had the information—naturally, he kept the information, because there is a distinction between the Government and the Attorney-General—but it was made clear by the right hon. Member for Sidcup (Mr. Heath), when he was Prime Minister, that the House would return to this matter when the question of prosecutions had been concluded. We have done that within 10 days of the Attorney-General giving his
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view on the matter, and I hope that the hon. and learned Gentleman will not spread that calumny any further. It did not require the Observer to bring the matter forward or to force the Attorney-General to bring it to the notice of the Government.
Mr. Hooson: I am grateful to the Prime Minister for that statement, but he himself partly produced that thought in the minds of many people when he said in the House the day after the Attorney-General's Written Answer:
"… it may be as well to focus on the practice for the future rather than to re-run the past. …".—[Official Report, 20th October 1976; Vol. 917, c. 1449.]
The Prime Minister used those words—such things can easily be said, and one does not always fully intend the meaning attached to them—and I think that he himself contributed to the impression that—
The Prime Minister: I wish to make clear that because the Lord President was ill I received notice of the Private Notice Question. I was then on my way back in a motor car from opening the Motor Show. I did not actually see the papers until after 2 o'clock on that day, and I gave as much of an answer as I could. I said that I wanted to reserve my position on whether the matter should go to the Committee of Privileges. Having studied the matter further, after our exchanges in the House I returned to the House immediately the next day and stated what I thought the right conclusions were. I had by that time seen all the papers, and it was only then that I saw in full some of the letters which had passed.
Mr. Hooson: I readily accept from the Prime Minister that on the occasion when he made his first statement he had not given the matter the mature consideration which he clearly had given it by the time he made his second statement. But it is important to return to the basic question.
The Prime Minister and the Leader of the Opposition have rightly said that they are concerned to protect the innocent. But by recommending the procedure that the Committee shall meet only in private, they are, I suggest, again creating suspicion where no suspicion need exist. I am sure that that is so in the public

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mind, and I am suggesting that it is possible to protect the innocent by a different kind of procedure. I think it right that the Committee should have a discretion to sit in public if the public interest and the interests of justice require it to do so. It should have that inherent discretion from the start.
One of the basic tenets of liberty is that there shall be liberty to know. We live in a mature democracy. Our democracy is used to having evidence published in the newspapers—evidence which is later rejected, for example, by juries. If there be a prima facie case established to the satisfaction of the Committee, at that stage it will be in the interests of the country as a whole that the Committee shall have the right to sit in public.
4.50 p.m.
Mr. Dennis Skinner: The first point to which I should like to refer is the matter that has just been discussed by the spokesman for the Liberal Party, the hon. and learned Member for Montgomery (Mr. Hooson), and my right hon. Friend the Prime Minister. That is whether the Government, through the Attorney-General, would have taken any action on this matter. I want to be fair to the Government on this specific point—although I want to be fair in any case—and, perhaps more precisely, to the Attorney-General.
About a year ago a letter was sent to me in reply to a letter that I had sent to the Attorney-General in which I had raised the fundamental question regarding not the whole Poulson activities but a certain area of them. Much to the chagrin of the Opposition—I am not sure whether they included the Liberals—the Attorney-General replied to me to the effect that the matter was still continuing and that certain decisions would have to be made later. Therefore, it would be wrong of me to assume at the outset that the Government had no intention of returning to this matter. Indeed, the Attorney-General made that point to me in his letter. Many hon. Members were not terribly happy about that. However, the Attorney-General was right to reply to me in that strain.
It can be argued—I put it not higher than that—that the Government would have brought this matter to the House for it to be dealt with. It is not easy
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to talk about the general view outside this place. However, let me put it like this. I get the impression that most people outside Parliament, who start by being a little cynical about politicians, would argue that what we seemed to be doing was evading the issue because it affected Members of Parliament. That may or may not be true. However, I am fairly certain that that was the impression of many people to whom I speak, who have never been to this place and are not terribly anxious to come and have a look at it, but who, nevertheless, want to ensure that a Government of a certain political colour is in being. Today, therefore, we debate this matter against that background.
It is true that we here get a different conception about how things should be dealt with because our environment, both in the Chamber and in places outside it in the House of Commons and thereabouts, is different from that in which our constituents normally live. That is not to say that I know too much about the voters who put the Tories in this place. Of course that is not so. I am talking principally about those who are, roughly, like me. Those are the people who concern me.
There are literally millions of them. There are millions of constituents who, day in and day out, want to support a Socialist Government. On occasions they get the opportunity, and in varying degrees they support a Socialist Government. I tend to get the impression that they are unhappy about what is taking place. For the life of me, I cannot see why the setting up of a public tribunal was not proposed, a tribunal in which the whole of this dirty washing—if it is dirty washing—could have been hung out to dry.
Mr. Kenneth Lewis: Will the hon. Gentleman give way?
Mr. Skinner: Well, I hesitate to do so—but go on.
Mr. Lewis: Does the hon. Gentleman realise that what we are proposing to do here, in bringing this matter out in public on a report with all the evidence, is something that is not done by many trade unions? When they bring their own members before them, they do not

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even present a report. They simply present a verdict.
Mr. Skinner: If people involved in a trade union get involved in some difficulty with their members which is a matter purely for the trade union, they will deal with it in that way. What we are talking about is something entirely different. If a member of a trade union, an officer or a shop steward, were alleged to have been involved in some area of corruption or bribery, he would not be dealt with by the shop stewards' council or whatever it is. He would be dealt with by the courts of law.
When my right hon. Friend the Prime Minister was speaking, I referred to the 16 British Steel Corporation workers who, according to the Sunday Mirror of yesterday, have been charged with corruption arising out of something that has happened at the British Steel Corporation. I do not know the precise allegations. In many ways, I do not need to care too much about them. However, one thing I know is that those 16 people will go through a process that is completely different from the process that Members of Parliament—irrespective of whether they are involved in this matter—would go through.
Therefore, by and large, many people take the view that this particular incident, like many others that arise in this place, suggests that Members of Parliament are above the law. It may be argued by all the lawyers in this place—no doubt they will so argue very forcibly—that that is not true and that it is a generalisation that may easily be challenged.
Mr. Abse: On the contrary, no lawyer worth his salt would argue that. The whole point is that there is an area of law in which the Member of Parliament and those who attempt to corrupt him, in particular circumstances, cannot be brought before the courts, so there is no such argument. I hope to have an opportunity of developing that matter later.
Mr. Skinner: Yes, but the point I am making is that our constituents generally tend to take the view or to get the impression that Members of Parlament are above the law. That is why what we should have done in this case was to say to the public generally "Because there is a great deal of cynicism, because there is this constant reference to Members of
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Parliament being above the law and because some newspapers write editorials which make that suggestion in slogan form—because of all that we shall go one stage further and ensure that we use a sledgehammer to crack a nut." That is what we should be doing, instead of giving the impression that we are posturing as an elite all the time and that we are just a shade better than the ordinary man in the street.
On this occasion there can be no argument about a public inquiry costing any more. We are constantly told that everything must be looked at in terms of public expenditure. I cannot see that this would affect any area of finance. I suppose that it could be argued that it would be cheaper to hold it publicly anyway.
Another important point concerns the terms of the motion. This point has been referred to by the Liberal spokesman, who said that the terms were too narrow. Immediately, Mr. Deputy Speaker, as the hon. and learned Gentleman was anxious to make that point, you had to intervene to prevent another hon. Member from pointing out what would happen if the terms were broadened generally. However, I am concerned about the precise definition.
I want to know what will happen in relation to the Poulson subsidiaries. John Poulson always argued that the subsidiaries were not his companies, but a lot of the shares were owned by him or his family through his wife. Therefore, I want to know from the Government that these companies, such as ITCS—the company that did the international trade and international business—Open System Buildings and Construction Promotions, are all areas into which the Select Committee will delve. We do not want to get into a situation in which it is said, "This is not the main company". I noticed that my right hon. Friend nodded in assent. It seems that at least we shall have some attempt made to investigate these matters a little beyond the narrow area of Poulson's own architectural company.
Even so, we can still run into difficulties. What happens when it has been established that certain of the subsidiaries have been involved in certain activities and various matters need to be examined further? What happens when someone

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demands that Mr. Kenneth Williams, the Medical Director of Vickers, should be brought before the Committee to fulfil the requirements of a thorough and searching investigation into certain aspects of ITCS? What happens when that course is taken regarding the building company in Gozo?
Kenneth Williams, according to the Attorney-General, was being sought by Scotland Yard in Saudi Arabia a year ago. We were told that our relations with Saudi Arabia this is the impression that has been given—were so weak that we could not persuade the Saudi Arabians to allow Scotland Yard to investigate. I am told that Kenneth Williams is now in France. What attempts will be made to get the man here? I am not referring to a Member but to a man who, according to the Attorney-General's letter of a year ago, would be a prime factor in an attempt to root out some of the affairs that have not been concluded in the Poulson inquiries.
What will happen when the Committee reaches the stage when it is necessary to find Kenneth Williams and to bring him before the court to explain his conduct in the affairs of the Poulson international subsidiary that was involved—
Mr. Maxwell-Hyslop: This is a subject that has quite wide surroundings. Does the hon. Gentleman recall that when the Committee on Un-American Activities under the late and unlamented Senator McCarthy wanted to bring American citizens back to America from this country to testify before the committee, Americans who had not committed any offence against American law, people of all parties in this country took the view that we should not waive our sovereignty to allow that to happen? Whatever views we may take about this case, if the hon. Gentleman were a Saudi Arabian, is he quite sure that he would want a British Select Committee to do what I think both he and I would have agreed an American Senate Committee should be allowed to do in Britain?
Mr. Skinner: The McCarthy attempt to drag people back to America from this country, which he says many people resisted, is different from the case to which I am referring. According to the Attorney-General, Scotland Yard was
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attempting to get hold of Kenneth Williams. Apparently it was having some difficulty in finding him. Scotland Yard was interested not in some American senator or a Select Committee but in finding an individual who was wanted. It was suggested that he would be needed at any time if the whole investigation of the Poulson activities were to be concluded in a proper fashion. The point I am making is that it was not a Select Committee that was anxious to fetch him back because of a McCarthy-like witch hunt, but an attempt by Scotland Yard to get him back which was not successful because of various difficulties.
The Select Committee endeavoured to get this little part of this little area of the Poulson activities wound up once and for all.
The Attorney-General: My hon. Friend was very fair to me at the beginning of his speech. The duties given to me by the motion are to
"attend the Committee so far as the Committee may require to present evidence relevant to the subject matter of the inquiry".
Will my hon. Friend take it from me that I shall seek to nut before the Committee all the material in my possession which appears to be relevant? Does he accept that if the Committee asks me to do anything further—and the motion states
"and may give such further assistance to the Committee as may be appropriate"—
I shall do my best to meet its wishes? However, if that involves obtaining for the Committee the evidence of someone who is not within the jurisdiction—namely, someone who is outside the country—I shall have no power to meet such a requirement, although I shall do my best to achieve it.
Mr. Skinner: That outlines the difficulties to which I have referred. Surely that makes it necessary to endeavour to get the matter completely resolved by some other tactic. In the absence of being able to get certain gentlemen to appear before the Committee either inside or outside this country, the Committee will have to use some other tactic to achieve its objective and to allay not merely my fears but the fears of those outside.
There is another matter that worries me about this whole affair. I am pleased

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that my right hon. Friend the Prime Minister is still present to listen to what I have to say. Of course, he might not be terribly concerned about what I say on many other matters, and he might not be concerned in this instance. I regarded the initial announcement by my right hon. Friend with some suspicion. On more than one occasion I heard him refer to the future. Any Socialist worth his salt should be concerned about what we do in the future. He was right on that score, but I think that he concentrated in his initial statement on wanting to do something about the future—this was apparent in the replies he gave to questions from either side of the House—to the detriment of taking immediate action to begin the cleaning up, if there is any cleaning to be done.
I was worried when my right hon. Friend seemed to harp upon that phraseology. It worried me even more when the right hon. Lady the Leader of the Opposition seemed to confirm that point of view in the few remarks she made on 21st October. What makes me more suspicious—I am naturally a suspicious person—is that on the following day, when my right hon. Friend announced that he had managed to get hold of some information that hitherto he had not been made aware of, or had not had the opportunity to see, he was able to put forward the idea of a Select Committee, which, to say the least, was a little different from what he had said the day before.
Strangely enough, this area of collaboration continued. The right hon. Lady said that she had changed her mind as well in the preceding 24 hours. Therefore, they were back together again.
When it comes to the drawing up of the terms of reference for the Committee we see, once again, a convergence of views. My right hon. Friend and the Government Front Bench generally seem to be agreeing with the Opposition Front Bench almost all along the line. We have witnessed that again today. It makes me angry as well as suspicious when I am told that I am expected to continue this collaboration in the Lobby. I am told to vote for the Government in accordance with what the Opposition want. I am sorry, but when it comes to that sort of collaboration I, for one, cannot take part
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in it. I suggest to my right hon. Friend that even in matters of this sort he should always be wary of what the Opposition put forward. When the two Front Benches have agreed on a course there are few occasions when that course has been either for the good of the nation generally or, more important, for the good of our party and our party supporters.
Mr. Peter Tapseil: Will the hon. Gentleman explain why something is more important for the Labour Party than it is for the nation?
Mr. Skinner: As I said at the outset, I am motivated more by what concerns the people who sent me here than by the so-called national interest, which can vary from time to time. Sometimes the national interest corresponds with one line of thought and sometimes with another. I am more concerned with advancing the cause of those who want a change in society, so I start from a completely different point from that adopted by the hon. Gentleman.
Why are we debating this motion in relation to Members of Parliament and the élitism which on this occasion surrounds the operation of a Member of Parliament? It stems from the simple proposition that a Member of Parliament, unlike most workers, is able to have his fingers in more than one pie. It all comes back to the general proposition that this whole area of suspicion cannot be eradicated unless we establish that the principle of one man one job should apply to Members of Parliament. The Register of Members' Interests was an advance along those lines.
Without doubt this is a matter of public concern. No doubt the Liberal amendment will command a good deal of support in the House because it means all things to all people. Many motions which can be interpreted in various ways command a lot of support in the House. The Liberal amendment would allow the Select Committee to hear evidence in public if it so wished. I am not sure that the Select Committee would want to do that. I agree with my right hon. Friend that the composition is not exactly like that of any other Select Committee in the proportion of Privy Councillors who are members of it. My view is that it would be likely to continue

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to sit in private once it started to do so. If that Liberal amendment is not carried today, the Liberal Member who has been allocated a place on the Committee has only one honourable course, and that is to come off it.
The amendment tabled by my hon. Friends and myself provides specifically that the Select Committee must meet in public. The last secret Committee in the House of Commons was in 1857, and we do not want to go back to that kind of operation. That amendment is unqualified. If it is carried, some of the public's fears will be allayed, but not all, because the only way to allay all fears is by the appointment of a full tribunal of inquiry unconnected with the operation of the House.
The fundamental aspect is that Members of Parliament are seen to he investigating allegations against other Members of Parliament. We have just passed an Act which provides that the investigation of complaints against the police shall not be a matter for the police alone. Yet in this internal investigation we are saying to the public that we can do the job better than anyone else. Any ordinary member of the public who was involved in allegations connected with those being debated today would have to appear before a court of law and to pay whatever penalty the court imposed. That is why I feel that we are making the wrong move. We should have established a tribunal of inquiry from the beginning.
5.16 p.m.
Mr. Peter Rees: Over the years the House has had the opportunity to appreciate that the hon. Member for Bolsover (Mr. Skinner) is a man of wide attainments and that his character has many facets. Today, perhaps for the first time, he has demonstrated that he has an unswerving regard for the integrity of public life. He has displayed his considerable forensic talents to demonstrate that he has reservations about the procedure that we are being asked to adopt. I hope that he will not take it too personally when I say that I wish he had displayed those same talents in pressing his right hon. Friends for an inquiry into the administration of Clay Cross. He would have done the general public a greater service
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than he has done in developing some of the arguments, not entirely relevant, which he has deployed today.
At the end of the day I, too, have certain reservations about the procedure we are being asked to adopt. If we are to appreciate why we are being asked to adopt it, we have to look at the whole case in its context—I agree with the hon. Member for Bolsover that we have to look a little further ahead—and start by asking ourselves why we are being asked to set up this special Committee.
A welter of bad law has been deployed in the debate, and I hope that the House will not feel that I am attempting to add to it. The reason why we are being asked to set up the Committee is that there is a gap in the law. I am in agreement with the hon. Members for Pontypool (Mr. Abse) and York (Mr. Lyon) that this is not a question of privilege. It may be peripheral—Article 9 of the Bills of Rights touches on this—but it is not central to the issue. The real point is that neither under the common law nor under statute can Members of Parliament or those who attempt to corrupt them be the subject of a criminal action in the courts.
We might perhaps today debate whether the law should be altered, and I hope that the House will allow me to come on to that, but at the moment the three statutes that bear on this, and the common law, do not touch Members of Parliament in the exercise of their parliamentary duties; nor do they touch those who attempt to corrupt. That is the answer to the hon. Member for Bolsover—it is not élitism. I willingly give way to any hon. and learned Member who wishes to take issue with me on that.
Honourable Members may feel that this is a gap in the law. I do, and so did Lord Salmon and Members who sat on the Committee with him. If we start from that position, I am sure that the whole House will agree that we cannot overlook the case that has been deployed by rumour and in the Observer. I, too, wonder a little whether, if another paper, unsupported by the powerful talents of the hon. Member for Bolsover, had made this case we should have got to this point. However, that is a perhaps unworthy suspicion that will be brushed aside by the Home Secretary.

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Be that as it may, allegations of a fairly specific nature have been made, and I do not believe that the House could have let them pass unnoticed. Indeed, so long ago as 2nd May 1965 a resolution was passed to the effect that
"The offer of money or other advantages to any Member for the promoting of any matter whatsoever depending or to be transacted is a high crime and misdemeanour."
The House has on numerous occasions since then demonstrated that it feels that the kind of conduct which rumour and, in particular, the Observer have suggested has been committed cannot be let pass by the House without some investigation and action.
I find myself entirely in agreement with that point of view, but I wonder whether we should not, particularly in the light of the Report of the Salmon Commission, have had a broader look at the question earlier. I know that it will be objected that the Salmon Commission reported only in July, and I do not wish to take a partisan point about the way in which we have been flooded with legislation of a far less important character. We should direct ourselves to the Salmon Report in the near future. I hope that the Home Secretary, as he is also concurrently Leader of the House, will give its some information on this point.
Accepting that there is a gap in the law and that these matters cannot be examined dispassionately and judicially in the courts—that would be the proper place for them to be examined—we are faced with the option of setting up the Select Committee that we are considering today. May I respectfully offer my condolences and sympathy to those right hon. and hon. Gentlemen who, I have no doubt out of a spirit of public service, have accepted positions on the Select Commitee, because I believe that theirs will be a very onerous and thankless task?
I want to raise a variety of questions, not that I shall suggest the answers to them, nor even expect the Home Secretary to give the answers today, but only to demonstrate the disadvantages under which such a Committee will labour.
Of course we can all take points about the terms of reference. Indeed, other hon. Gentlemen, and I myself, will be anxious to know how far beyond the
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House it will be necessary to investigate. Will it be proper or appropriate for the Committee to investigate those who are no longer Members of the House? Will it be proper to investigate those in local government? How far outside the confines of the Chamber here and now will the Committee have to enlarge its investigations? This is a matter of some ambiguity, as I read the terms of reference. My right hon. Friend the Leader of the Opposition, although not the Prime Minister, certainly threw some light on these ambiguities, but I hope that at the end of our debate the Home Secretary will give us some more enlightenment on this.
Next, the proceedings of the Committee give me cause for thought. The Prime Minister said that the Committee would be entitled to engage accountants. As any of us who have been even peripherally involved with company investigations or with questions of company fraud know, there must be some body charged with the conduct of the investigation. Is the Committee to be equipped with such an investigating body? Dare I say it—it may be out of order—but are the Clerks of Parliament equipped by training to conduct this kind of inquiry?
I do not imagine that the Committee would relish engaging the services of the Fraud Squad, but I believe that probably at the end of the day that is the only body equipped by training and experience to conduct this kind of inquiry. It will be very difficult indeed for the Committee to conduct the sort of roaming inquisition which may be essential, even if it throws out questions from time to time for firms of accountants of the highest repute and the greatest experience to investigate.
When a case is ready to be brought before the Committee, again who is to deploy the case? I understand that the Committee will have the assistance of the Attorney-General. I have no doubt that he will give the Committee all the assistance in his power, but the right hon. and learned Gentleman knows that when be appears in court he has a wealth of support behind him: he has the vast resources of the office of the Director of Public Prosecutions or the Treasury Solicitor. Are those offices to be available to assist the Attorney-General, and how will he present the case to the Committee?

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Then, indeed, when a prima facie case has been made, will it be put extensively to those hon. Gentlemen whose reputations are at stake? We understand that they will be allowed to appear by counsel, but will they be permitted to cross-examine those who evidence is the basis of the case deployed by the Attorney-General? Will they be allowed to look at all the documents and to cross-examine those from whom they derive?
I refer to only one document. This is because it has been so much before the public eye. It is the letter, or perhaps more exactly the photostat copy of the letter, purporting to have been written by an hon. Member to Mr. Poulson. Let us suppose that the Committee feels that that raises a serious case for that hon. Gentleman to answer. Will he be allowed to take, through his counsel, the kind of points that he could take in a court of law? Will he be allowed to find out from what source that letter emanates?
Will he be allowed to cross-examine the Editor of the Observer? It would be nothing but a public scandal if the Editor of the Observer, if he has any confidence in the case which he has deployed, were not called to give evidence and exposed to cross-examination by those hon. Gentlemen whose reputations are at stake. This, perhaps, is unprecedented, but perhaps we are embarked on an unprecedented course.
What standards of proof will be required? Will the onus be on the prosecution, if I may so call the right hon. and learned Gentleman the Attorney-General; or will it be on the defence? These are, perhaps, matters which the Committee will have to determine. We shall no doubt for future reference and future occasions watch with interest what it determines in this case.
I hope that I have uncovered to the House sonic of the difficulties that I see lying in the path of this Committee.
Mr. Peyton: My hon. and learned Friend will find quite a lot of the answers to the questions that he has been asking if he reads the proceedings of the previous Select Committee on the Boothby case, as my right hon. Friend the Leader of the Opposition mentioned this afternoon.
Mr. Rees: I am most grateful to my right hon. Friend. I have indeed taken the precaution of reading those proceedings. We have not been told by the Prime Minister—perhaps it was not for him to tell us—whether this Committee will follow that procedure exactly. May I remind my right hon. Friend, who has no doubt devoted a great deal of thought to these matters and who, though perhaps he may not care to admit it now, had certain legal training at one time, that in the Boothby case one specific allegation was made against one hon. Member? This is to be a roving inquiry—we are not told against whom, nor precisely in what field. We are told that it is in any matter connected with Mr. Poulson. I am not certain—it may be that the Home Secretary will be able to reassure me, or perhaps my right hon. Friend will be giving the House the benefit of his experience—but it may be that there is a precedent that can be followed fairly exactly.
I pass now from the Committee itself to the House. The Prime Minister was apt to give the analogy that the verdict will be ours. I have considerable reservations about that. I greatly hope that the evidence will be produced in full, and I entirely fall in line with the suggestion of my right hon. Friend the Leader of the Opposition that the evidence should not be published until the conclusion, that it should be published then, and that the Committee should then state precisely what evidence it has accepted and what evidence it has rejected.
Again, if I am asked from this Chamber to pass judgment on any right hon. or hon. Gentleman, I shall feel a certain reticence about reaching judgment merely on published evidence. Of course I have confidence in the integrity and judgment of those who are to serve on the Committee, but as we are in fact involved in something very near to a State trial, and if as the Prime Minister suggests I am to be asked to pass the verdict, I am not certain that I should not have preferred to see that evidence tested and to see the prosecution witnesses under cross-examination.
I never like passing judgment at second hand. That may sound a rather priggish point of view, but I can only give it to the

1013
House for what it is worth. If indeed the House is to give the verdict, are we to give it on the basis of the published evidence and the conclusions of the Committee? Shall we be entitled to call any right hon. or hon. Gentleman against whom the Committee has made a finding or on whose conduct it has passed a stricture?
Will such a Member be summoned to the Bar of the House? There is the precedent of the Boothby case. My right hon. Friend will no doubt remind me that Mr. Boothby, as he then was, made a speech to the House. He took his case with a certain gentlemanly reticence. He appeared to accept. But supposing an hon. Member is not disposed to take that attitude, will he be allowed to deploy his case again for the benefit of the House?
Perhaps many of my fears are fanciful and perhaps hon. Members feel that I am drawing on my legal experience—which is not great in the criminal field—and that I am adopting too legalistic an approach to the matter. But the consequences to those concerned will be just as grave as they would be if a court of law were involved. We must be certain that the procedures that we adopt take account of that.
Although on this occasion we may be compelled to adopt a certain course of action, it could be a dereliction of duty if we did not at least consider the Salmon Report, perhaps against the background of this case. We need to consider the gap in the law which means that hon. Members who indulge in corrupt practices and those who attempt to corrupt them are free from criminal charges.
Like the Salmon Commission, I believe that the best course is to amend the law and to introduce a new Corruption Act to enable a criminal charge to be brought against hon. Members and those who attempt to corrupt them in the course of their parliamentary duties. In that way they would at least be assured of a proper trial in a dispassionate, judicial atmosphere, where the evidence against them could be propertly tested and examined and that decision if needs be, be taken to a higher court. Perhaps I am trespassing on the kindness of the House by touching on these matters. It would be wrong to leave this as a narrow issue that we can dispose of today. We must see it in its
1014
proper context and we must see it as a prelude to some kind of implementation of the Salmon Commission's conclusions.
I hope that I share the common desire to see that the name of the House and the name of hon. Members is cleared, but I wonder whether this is what we shall achieve. I shall not be voting against the motion. Perhaps we are putting too heavy a burden on those hon. Members who have consented to sit on the Committee. Perhaps we are putting at risk in an unsatisfactory way the reputations of those hon. Members against whom a case may be made. And finally I wonder whether we shall be able to reassure the public that matters in the House are conducted as they should be.
Mr. Mark Carlisle: Listening to my hon. and learned Friend, I observed that the tenor he has taken throughout is that, were it not for the Prevention of Corruption Act, hon. Members would be charged with criminal offences. Has he any justification for saying that? I have seen nothing to justify the view expressed by the Observer.
Mr. Rees: Of course, I do not know what the evidence is which is available to the Observer and I cannot forecast what it is. But a scintilla of a case, a prima facie case of a kind, appears to have been made and in regard to it one can perhaps detect whether the existing statute law is defective.
I make no assumptions about any hon. Members. I read the Observer articles. I do not know the source of the letter; I do not know whether it is a photostat copy. If the law were effective, I do not know whether there would be a prima facie case. I hope that the Attorney-General will give us his valuable views.
Mr. Abse: Is it not the case that the police are debarred—as the Salmon Report makes clear—from making an investigation at the moment so that nobody could know whether a prima facie case exists? It is a lacuna in the law that prevents anyone from knowing whether there is a prima facie case.
Mr. Rees: I am in the invidious position of trying to answer two questions at once. I am inclined to agree that if the matter had been put to Scotland Yard—and perhaps the Attorney-General will

1015
explain the situation—we should have been told that it was idle for investigations of hon. Members to be conducted, that it was a waste of scarce resources because there is nothing known in law as the corruption of hon. Members or the attempted corruption of hon. Members in the discharge of their duties.
I hope that no words of mine have suggested that I have prejudged the issue in any way. I do not know whether there is a case against any hon. Member who is in or who was formerly in the House. I apologise for being so lengthy but I am concerned about our position as caused by the defects in the law.
I have no doubt that the members of the Committee will do their level best to make the procedure work and to demonstrate to those whose reputations are at stake and to people outside that they are dispassionate and scrupulously fair. But I wonder whether they are qualified for the job—not by their training or character, but by the powers given by the House. I wonder whether they will be able to do a satisfactory job which will satisfy the House, those whose reputations are at stake, and the public.
5.27 p.m.
Mr. Douglas Jay: I am inclined to agree that there is a gap in the law which grants immunity to MPs and which should be removed. But that will not help us in this case.
I remind the House of the things that happened during the Lynskey Tribunal. Those who argue in favour of total publicity have forgotten what occurred at that tribunal. Most of us had no idea at the time what would happen under those circumstances. Mr. Sydney Stanley discovered that what he said at that tribunal was entirely privileged and that no action for slander or libel could result from any statements that he made at the tribunal. The tribunal was conducted on the understanding that he would not be liable for any prosecution for perjury. I am not sure whether that was correct under the law but he proceeded on that assumption. Mr. Stanley made a series of sweeping allegations which were wholly fabricated and for which there was no evidence whatever. He named a large number of individuals and their
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names were published in the newspapers for weeks. No remedy was open to those whose names were flaunted about in that way. There can hardly be a worse procedure than that.
Those who were defamed in that way had no remedy. I remember that on behalf of some colleagues in the House who found their names being bandied about by their constituents I consulted the Law Officers of the Crown to find out whether they had any remedy. The informed legal answer was that they had none, that they had to sit back for weeks at a time and allow those allegations to be made without being able to take any action. That seemed to me a worse abuse than the abuses which the tribunal was asked to investigate. I hope that nothing of that kind is allowed to happen this time. We should think before we argue in favour of unrestricted publicity.
Everyone is conducting the debate today on the assumption that we are protecting only the reputations of Members of Parliament. But Mr. Sydney Stanley did not restrict his wild fabrications to Members of Parliament. Although the terms of reference of this inquiry clearly do not intend that the actions of others should be entered into, if individuals can come before the Select Committee in public, there will be no way of preventing them from making allegations against whomsoever they wish—for example, the Archbishop of Canterbury or the Editor of The Times. To judge from the motion, the Chairman would no doubt rule them out of order, but we well know that you, Mr. Deputy Speaker, and Mr. Speaker cannot always rule hon. Members out of order in this House until their point of order has been stated, and it can then be published.
If there were total publicity I do not see how it would be possible to prevent some characters—no doubt of varying intelligence and discretion—from approaching the Committee and making allegations out of malice or delusion. As Members of Parliament, we all know that there are quite a number of curious characters who from time to time write us letters in which they make the most extraordinary allegations. I have no doubt that the Committee will be approached by at least some such people.

1017
All that I am saying is that when we are advocating or considering the widest possible publicity, which obviously has an appeal at first sight, we should pause and think of what happened in the Lynskey Tribunal. We should be extremely careful not to permit injustices of that kind to occur. Whatever is the right procedure, which, as the last speech clearly showed, is extremely hard to say, the worst possible procedure would be anything on the lines of the Lynskey Tribunal.
5.43 p.m.
Mrs. Lynda Chalker: I am not a lawyer. I have never been employed in the legal profession and I cannot speak in erudite terms about the motion, but I am concerned about the view taken outside the House. Unlike the hon. Member for Bolsover (Mr. Skinner), I am concerned about what is thought not only by those who elect me but by the whole world outside.
There is a grave matter before us. After a long weekend of thought I came to the Chamber ready to support the Liberal amendment, but I have changed my mind after listening to the debate, and for a very good reason. It is the reason just advanced by the right hon. Member for Battersea, North (Mr. Jay), that the public sifting of the evidence referred to by the hon. and learned Member for Montgomery (Mr. Hooson) would unleash something which I do not think hon. Members deserve—accusation and counter-accusation and claims from various people such as the right hon. Gentle man described to give evidence to the Select Committee. We should be doing ourselves a disservice.
I am fully aware of the need to stop any possible suppression of matters which are in the public interest and which may or may not be declared by Members, but we must be clear that it is not a court of law that we are setting up by the motion. It is a Select Committee to inquire into matters which concern the House. Representation before the Committee is a matter of some concern. If it were a court of law, those coming before it would have a legal right to be represented. Why is representation under the motion not a right of the person called but a matter that the Committee may decide
"as they shall see fit"?
1018
That is the part of the motion that most concerns me.
I also wonder whether the laws of libel will apply absolutely to the eventual published report. That is not clear from what I have heard this afternoon.
I firmly believe that until this country has a law of privacy we shall further involve ourselves over a period in disputes and doubts of this nature over the activities of hon. Members. As a supporter of the Register of Members' Interests, I am convinced that most people in the country are prepared to accept that Members of Parliament enter into outside activities in good faith, but we are all well aware that it is not too difficult for some people, if they are of a mind to do so, to represent those outside interests in a manner totally different from that which was intended. Therefore, the House needs a protection which I hope will come from deliberations and probably eventual law on the basis of the Salmon. Report recommendations.
However, that is not what we are considering. We are considering whether the evidence should be published as the Select Committee goes along, as would happen under the Liberal amendment, or whether the Committee should have the right to sift and decide what is relevant and admissible. Who is to decide what is relevant and admissible? I agreed with the hon. Member for Bolsover when he asked who would be the absolute decision-maker. We are in grave difficulty. I believe, from what the Prime Minister and my right hon. Friend the Leader of the Opposition said, that it will be possible for the Select Committee to call on the judiciary for advice on what is relevant and admissible in the evidence that is sifted and then published as the findings of the Select Committee.
But I hope that all hon. Members will accept that there should be no suppression of information which should be laid upon the Table in the public interest. If I thought that the Select Committee was incapable of putting that information in the final report, I should probably still support the Liberal amendment. I find myself unable to do so because I believe that we should cause certain people not to present evidence to the Select Committee if every jot and tittle were reported,

1019
and misreported, in the Press as the Committee proceeded on its difficult way.
I hope that we shall hear from the Home Secretary that those matters which so concern the public about the way in which our national life is now conducted will be considered by the House at an early stage but that for the time being we are taking the fair, considerate and just way for hon. Members who may be named and against whom allegations may be rightly or incorrectly made. I hope that we shall reduce the public disquiet on these matters by an unequivocal report, and that, if the evidence should then be presented to the Attorney-General or other persons, criminal charges will be proceeded with. For the present, it is not for us nor the Select Committee to judge, but it is for us to put our own house in order.
5.50 p.m.
Mr. Leo Abse: When Mr. Boothby, as he then was, spoke to the House when the Select Committee Report dealing with his case was presented, he made some comments which I believe are relevant to our discussions today. He made it clear that the powers of a Select Committee which had made a judgment on his conduct far exceeded those of a court of law. He emphasised the point that much of the evidence that was put in would have been inadmissible in a court. In addition, he said that the decision of the majority in a Select Committee became the findings of the Committee as a whole. He pointed to a specific piece of evidence which had been put in and said that that evidence would not have been upheld had it been presented in a court of law because it would have been privileged and could not have been introduced in that manner.
Commenting on that episode, Mr. Boothby, as he then was, said that there was both rhyme and reason for the procedure in our courts of law, and that there was something to be said for adopting it in his own case. He was saying that what he had gone through was a trial, and so he had. Nobody who has read the evidence or studied the report could come to any other possible conclusion.
The dilemma we now face, as the hon. and learned Member for Dover (Mr. Rees) pointed out, is that we have avoided
1020
taking action so far by dealing with a lacuna in the law. It means that in engaging in parliamentary activities we are immune from the ordinary statute law as it relates to corruption, and so are any people who attempt to corrupt us in our parliamentary activities.
Mr. Alexander W. Lyon: My hon. Friend has put the matter in the wrong way. It is not that we are immune from a criminal act that we could commit. There is no criminal act capable of being committed under the present law by a Member of Parliament in exercise of his parliamentary duties. There is not immunity in that way. The fact is that it is not a criminal offence in the first place, anyway.
Mr. Abse: My hon. Friend is engaging in an argument about semantics. I would ask the House to refer to the relevant paragraph in Lord Salmon's Report:
"It is in the light of the foregoing paragraphs that we note the fact that neither the statutory nor the common law applies to the bribery or attempted bribery of a Member of Parliament in respect of his parliamentary activities. It is clear to us that a Member of Parliament cannot, in that capacity, be deemed an 'agent' for the purposes of the Prevention of Corruption Act 1906. It is equally clear that Parliament could not be deemed to be a 'public body' for the purposes of the Public Bodies Corrupt Practices Act 1889. Nor does membership of Parliament as such, constitute public office for the purposes of the common law."
It means that proceedings cannot be brought to bring before the courts a Member of Parliament or somebody who has attempted to corrupt in respect of actions in connection with those parliamentary activities. It is useless to deny what is being said in every editorial and by people outside the House that Members of Parliament have a special position in relation to the offence of corruption.
Furthermore, it means that in the event of any facts coming to the police which relate to a possible act of corruption by any individual outside the House, or in respect of receipt of money or any other gift by a Member of Parliament corruptly, it is not possible in those circumstances, as Lord Salmon pointed out, for the police to pursue those inquiries with the full confidence that they are engaged in something that comes within their purview. Indeed, they could be in contempt

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of Parliament in pursuing such an investigation. Therefore, it is valueless to attempt to evade the reality of the situation when we are criticised outside the House because we are in this curious position.
It is highly unfortunate that we are in this position at the very moment when we are well aware that throughout the land, and particularly in the Principality of Wales, trials are taking place affecting other people in public office who are able to be brought before the court. My hon. Friend the Member for Bolsover (Mr. Skinner) instanced the case of certain steelworkers against whom charges were laid yesterday. I shall not comment on that case because it is sub judice, but certainly those workers have had to face the publicity involved in the issue of summonses which have been served upon them. It is impossible for us to suggest that those people are not in a different position from any Member of Parliament.
What are we to do about the matter? We can be subjected, as was Lord Boothby on an earlier occasion, to a trial without the proper rules of evidence and without the form of testing that takes place in a criminal court. We are now saying that we have no alternative but to proceed more or less slavishly in the same manner as on other occasions, although we are all uneasy about the situation.
Are we so helpless in the present situation? What are we concerned about? It is true, as the right hon. Lady the Leader of the Opposition tried to suggest in reply to my intervention in her speech, that perhaps the matter with which we are concerned goes beyond matters that would normally concern a criminal court, and indeed, that they go beyond actual corruption. That may be so, but what the general public and the community are concerned about—and I believe that we as Members of Parliament are also concerned about—is the question whether there has been any attempted corruption of a Member of this House, and indeed whether any Member has been corrupted.
Is it being said vaguely and in some inchoate manner that there has been some misbehaviour on the part of some Members which goes beyond a peccadillo but which is less than a criminal act? Is
1022
it being suggested that because of that situation we now have to set up the whole panoply of a Select Committee invested with powers to enable it to have a roving commission and to engage in an inquisition evocative of the McCarthy era? Are we saying that, because there are some rumours abroad that somebody has committed something short of a criminal act but more than some peccadillo, we have to become engaged in a Select Committee investigation invested with powers which make us all profoundly uneasy?
I do not accept it. Outside opinion wants to feel certain not that there is some prurient inquiry into some peripheral activities of Members but that, if there has been any bribery or attempted bribery, or if anyone has acted in his parliamentary capacity in anticipation corruptly of receiving a reward, and if he would have been charged had he not been a Member of Parliament, then he should be placed in exactly the same position as anyone else.
Going almost outside their terms of reference, Lord Salmon and his Commission recommended that corruption, bribery and attempted bribery within a Member's parliamentary activity should be brought within the ambit of the criminal law. Is it too late to do that in these circumstances? I do not share the view expressed today that it is too late. Irrespective of what may come out of this debate. I hope that the Home Secretary will assure us that the small Bill recommended by Lord Salmon is included in the Queen's Speech. Otherwise we shall face this problem again if there is an errant Member at any time in future.
Perhaps the only good thing which can come out of this debate is an intimation that consideration will be given to such a Bill, so that the community may be assured that we are taking action to prevent anything like this occurring again. Could such a Bill apply to these circumstances? People's first reaction is, "Would that not be restrospective?"
Mr. Jay: Well. would it not?
Mr. Abse: My right hon. Friend expressed the strength of his distaste for the Lynskey Tribunal. Will he now vote for a Select Committee which will be retrospective? It will be investigating

1023
conduct which took place, or was alleged to have taken place, years before.
Mr. Jay: Surely that is not the same thing as legislating and declaring something to be an offence which was not a legal offence at the time that it was committed.
Mr. Abse: But the powers of this House in dealing with the Report of a Select Committee are, except in one respect exactly the same punitive powers as any court of law would have—and in another respect we should have more powers. This House can suspend a Member. No court can do that directly, although it could be the consequence of a sentence. We can put an hon. Member into the hands of the Serjeant at Arms and send him to prison. We can do everything except fine him: that is all we cannot do. If my right hon. Friend thinks that the vague, indeterminate rules under which this Committee will operate will give more justice to any hon. Member than a defined law, I do not agree.
I therefore believe that we are committing a blunder in setting up the Select Committee. We are going into a morass. The hon. and learned Member for Dover delineated many of the likely problems. There were enough problems in the Boothby case, but this is a wider dimension. It is suggested that more than one hon. Member may be involved: we know not how wide the net may be cast. The problems caused by the Lynskey Tribunal could arise again, although it is suggested that we shall at least have the benefit of casting a veil over them, because the proceedings will be in secret.
But in going along that path we are estranging ourselves entirely from outside opinion. The views of my hon. Friend the Member for Bolsover to this extent bear the stamp of those expressed in working men's clubs throughout the country. If we set up what will be regarded as a clandestine Select Committee, it will be interpreted, no matter how ungenerously, and no matter how we protest, as giving ourselves treatment which is not afforded to a man before a court of law.
Mr. John Ryman: While one appreciates the force of my hon. Friend's desire for legislation quickly next Ses-
1024
sion to deal with the gap in the law, and while one also appreciates the many difficulties to which he has referred, what is the alternative to a Select Committee in these circumstances? Is he suggesting that the matter should be overlooked? Surely not.
Mr. Abse: No. I do not think that the matter should be overlooked. I hate to say anything in criticism of the Attorney-General, who has enough problems and whose scrupulous conduct we all admire, but if he found himself unable—as he clearly did, judging from the announcement ultimately made—to take any proceedings because of the problems of jurisdiction which we have discussed, the first and obvious thing to do was to come to the House and explain the situation and to get the aid of the House in getting legislation through.
That still could be done. Of this I am certain—we shall not be concluding this matter quickly by setting up a Select Committee which will sit right through the next Session. We can judge that from the time taken by the Boothby inquiry. Setting up this Committee will not cut any corners. We are even placing ourselves under the possibility of severe criticism—that, instead of an independent inquiry before a judge, we are inquiring ourselves. We have told the police that there must be an independent element in inquiries concerning policemen, but we do not adopt that principle for ourselves. Lawyers have introduced a lay element into disciplinary proceedings, but we shall exclude Press and public.
We should say boldly that there is a lacuna in the law. If there is any among us who has offended against the law, let the law be made clear so that he may be brought to trial. When the matter came before the court, no accused would be prejudiced as in a Select Committee. As the law now provides it could sit in secret if it wished during any preliminary proceedings—thus avoiding the danger of a wrongful accusation without prima facie evidence. So I put forward the view that, if we are to vote for this resolution, clumsily though the Liberal Party spokesman put his case, better that than to have a completely secret inquiry.
After all, many of us have sat upon Select Committees which have sometimes sat openly and sometimes privately. I

1025
have been sitting for more than one Session on a Select Committee which has been engaged in that manner. Why should this be so special? Under a disciplined chairman of great experience, as is intended to be appointed, tact can be used to determine whether a meeting should or should not be in private. That would mitigate the problem, though of course it would not solve it. The Attorney-General, who will be presenting evidence, will have a great awareness of what he will be presenting and will undoubtedly be able to give an intimation to the Select Committee if he thinks it likely or probable that someone utterly irresponsible will attend with the intention of indulging in smear campaigns. The disciplines could be imposed. We have eminent lawyers sitting on Select Committees. Why should not they he able to impose the same discipline as they would if they were sitting as recorders and wishing to short-circuit someone who wanted to use the occasion merely to publicise himself and to smear innocent people?
We are taking too comfortable a view. I believe that the two Front Benches are taking far too comfortable a view in believing that, if they can persuade sufficient of us that there should be an inquiry of this kind, the matter can be resolved to the satisfaction of people outside. It will not be. It will attract obliquely even if it is undeserved; and it would be wise for us to make clear that we are ready in the first instance to act upon the recommendations of the Salmon inquiry, that we shall proceed in that matter. But that, if the House cannot be persuaded to act as quickly as that, by way of legislation, at least we shall not impose secrecy on the Select Committee. We ought to give the Committee the discretion to decide when to sit in public and when in private and not give, by passing this resolution, a demonstration by this House that at all costs there must be secrecy during the whole of this prolonged inquiry.
6.13 p.m.
Mr. Robin Maxwell-Hyslop: When the appropriate moment comes, I shall move, in line 24 of the line 24, at the end to insert—
'That no witness summoned to appear before the Committee shall claim Crown Privilege as
1026
a justification for refusing to answer questions asked by the Committee:'
Before getting on to the subject matter of this inquiry, I hope that we can all agree upon one issue. It is that if the Committee is unable to get at the truth because it has inadequate powers it will do a gross disservice to this House and to the public.
What are the powers that the Committee may need? We are concerned, among other matters, with payments of money. Anyone who receives a payment of money for services rendered has, under the existing law, an obligation to declare it for income tax. If that money has been paid to him, whether or not he is a Member of this House, to reimburse him for expenses that he has paid out on behalf of the person who has paid him the money, he can file with his income tax return the receipts for those expenditures and, if the inspector is satisfied, he will not have to pay income tax on the money. But it is not open to a Member of this House to decide for himself whether he should file with his income tax returns payments that he has received from Mr. Poulson or anyone else. He is bound to file them. If he does not, he has committed a criminal offence. But he will not be charged tax on them if the Inland Revenue is satisfied that they are not an income but repayment of a disbursement.
However, no Minister can order the Inland Revenue to reveal such information even to Ministers and, as matters stand at the moment, no Select Committee can require such information from the Inland Revenue without the Inland Revenue being able to claim Crown privilege and to refuse to answer such questions.
Having listened to the entire debate to date, I am not at all certain which of two jobs it is that the Government wish the Select Committee to do. One is to do the job of the criminal court; that is to say, to accuse an hon. Member or Members of what would be an offence in normal criminal law were that hon. Member not an hon. Member of this House of Commons. Alternatively, it is to ascertain whether the hon. Member or Members have been guilty of conduct that

1027
would not be an offence were they not Members of this House but that is
"a contempt of the House or … inconsistent with the standards which the House is entitled to expect from its Members."
Those two are totally different.
If anyone, including a Member of this House, is believed to have committed a statutory offence and is subjected to the normal criminal processes, the case is heard in open court but the evidence given is subject to the rules of evidence and the procedure of the court is subject to the normal rules of procedure.
Those of us who are addicts of Perry Mason on television will know that, very often, participants in those gripping serials ask for certain testimonies to be struck from the record. That does not mean that they are struck from the memories of those who have heard them, as we are vicariously allowed to do on television; it means that in the judge's summing-up they are not alluded to, and the artificial presumption is made that the human beings who constitute the jury will excise them from their memories. All of us know perfectly well that that is an impossible feat.
Incidentally, in the Perry Mason context, I am interested that the Liberal Party decided to choose a member of the jury as its spokesman in this debate, which is a somewhat unusual proceeding. I was astonished that the hon. and learned Member for Montgomery (Mr. Hooson), who appears in the motion as a member of the Select Committee, should it be appointed, was chosen to be his party's ex parte spokesman in this debate—he said that he was speaking on behalf of his right hon. and hon. Friends. I am not a lawyer, but I have never read of a member of the jury, before trying the ease, addressing the court on what he thinks should be the conditions in which he tries the case. I am astonished that the hon. and learned Gentleman should think it proper to do so.
Mr. Hooson: Surely we are discussing entirely procedural matters. Incidentally, I took the advice of one who is perhaps the most distinguished lawyer in the Conservative Party before I spoke in this debate.
Mr. Maxwell-Hyslop: I cannot help whose advice the hon. and learned Gentle-
1028
man took. I am still astonished that he thought it right to speak in this debate.
Mr. Hooson: He is a former Lord Chancellor.
Mr. Maxwell-Hyslop: I cannot help whose advice the hon. and learned Gentleman took. He cannot discharge his responsibility by pleading that he tried to sub-contract that responsibility to someone else. If he thinks it right that he should be a member of the Select Committee, I think that that carries with it certain obligations beforehand. Clearly, the hon. and learned Gentleman is not of that view.
Among the issues that will be considered by the Select Committee, quite apart from who has done what, is what constitutes a contempt of this House and what was—in the past tense—inconsistent with the standards which the House is entitled to expect from its Members. If the Committee, unadvised by the House—this is a decision that the Committee will have to make for itself, without the benefit of any advice from the House—decides that it is
"inconsistent with the standards which the House is entitled to expect from its Members"
that its Members should accept money from a person or firm purely and solely because they are Members of this House and not because of any expertise they may have in the world of business, why are the terms of this inquiry confined to the words
"in connection with the affairs of Mr. J. G. L. Poulson"?
If, on the other hand, the purpose of the inquiry is to examine the conduct of Members of this House in so far as it is
"inconsistent with the standards which the House is entitled to expect from its Members",
but is not restricted to breaches of the criminal law, and it is particularly concerned with what an impartial inquiry has criticised, why is the criticism by the Department of Trade inspector directed towards a right hon. Gentleman who until recently was prominent in this House—he is still a Member of it—excluded from such an inquiry?
If the object of these proceedings is to enable the House to wipe its nose in public, why should it wipe only one

1029
nostril? This is what I do not understand, because clearly that is what it will be doing.
We are told that owing to lacunae in the law Members of this House who accept money for acting corruptly cannot be prosecuted under the existing law. Is this so? There is such a thing as the law of conspiracy. There has been a lot of criticism of the breadth and the scope of the law of conspiracy. It is a novelty to hear it, by implication, criticised for its incapacity, for the smallness of its scope, for its unreasonable restriction.
If it is the case that Members of Parliament have taken money corruptly there must be at least two parties involved in that. Where there are at least two parties involved—I say this subject to correction from the right hon. and learned Gentleman the Attorney-General—I should imagine that that would give basis to a charge of conspiracy, would it not?
Mr. Ryman: I am following the argument with great interest, and the suggestion that the state of affairs complained of is capable of being dealt with by a charge of conspiracy, but does not the hon. Gentleman appreciate that in order to get a charge of conspiracy on its feet, one of two specific things has to be proved which may well not be capable of proof in relation to the mystery that it is sought to solve here, namely, that there must be an agreement to do an unlawful thing or an agreement to do a lawful thing by unlawful means?
Mr. Maxwell-Hyslop: I do not believe that that is an exhaustive description. If the person concerned has agreed for a consideration to do something that he would not have done without that consideration—this is the essential aspect—and if what he has done is contrary to the duty which he owes in his vocation or employment, I think that the ex-prosecuting counsel for the Inland Revenue would be aware that that is a statutory offence.
For instance, if an employee of a firm accepts money to tell somebody outside the firm something about his employer's business, that is not a criminal offence. It is not a criminal offence to tell somebody about one's employer's business, but a charge of conspiracy would lie. I think that the hon. Member for Blyth
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(Mr. Ryman)—whose very pertinent knowledge of these matters must be fresh in his memory—has misguided and misdirected himself to this context.
However, what the House is asked to do is something imprecise. I listened to the Prime Minister's speech with great interest, hoping to discover what it was that the Select Committee is expected to do. What, in fact, is the definition of conduct
"inconsistent with the standards which the House is entitled to expect from its Members,"
and what is
"a contempt of the House"
in that context?
If we look at the nineteenth edition of "Erskine May", we find on page 142, from the last paragraph onwards, descriptions of some acts which have been held to be inconsistent with a Member's duty to the House, but nowhere does it say that this exhausts the contempts of which a Member may be guilty.
Is the Select Committee to take this as the outer limit or the inner limit? We have not been told. What are to be the criteria for the Select Committee? If a man is charged before a court, he is charged with a specific offence, to which he can make an answer. But if the Committee—which is, understandably, prosecuting as well as investigating—does not even know what is and what is not the offence with which he is being charged, how is the Member concerned to know what it is against which he has to defend himself? That is what I do not understand.
If the House is to set up such a Committee—and I happen to take the view that it should set up such a Committee—it should define for the Committee the job that it has to do. I do not think it is right to set up such a Committee without defining the limits of the job that it has to do.
Before I came here today I had considerable sympathy with the amendment that will be moved by the present Leader of the Liberal Party, but I thought that my right hon. Friend the Member for Finchley (Mrs. Thatcher) made a very telling point. Whereas in a normal criminal trial there are, first, the rules of evidence, with the verdict following at least within a day or so of the conclusion of the trial, we all know that the publication of a

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Select Committee's findings comes generally not days, not weeks, but months after the conclusion of its taking evidence. Indeed, many of us have tried to speed up that process.
To make allegations against somebody—allegations that that person cannot rebut because that person is not entitled, as of right, to call witnesses to rebut them, and to have them published days, weeks or months before the assessment of that evidence by the prosecutor, who is also the judge, the maker of the rules of evidence, and the determinant of who shall or shall not be called as witnesses—is a corruption of justice, as I understand the word as a non-lawyer.
I do not say that there is any particular merit in legal processes, and I am all for Select Committees of the House in general making up the rules as they go along so that they can do their jobs more effectively, but if they do not know what their jobs are because it is not laid down in the motion setting them up, then a recognisable rubicon has been crossed.
I conclude by asking this question. What do the Government and the House want the Select Committee to do? Should it do the job of a criminal court with this difference, that because of lacunae in the law it does not happen to be an offence by the hon. Members concerned? Should it look beyond the criminal law and report on whether there has been conduct or activities amounting to contempt of the House, or inconsistent with the standards which the House is entitled to expect from Members as defined in pages 142 to 144 of the nineteenth edition of "Erskine May"? If that is not to be the criterion, what is? The Committee is not specifically empowered to invoke its own criteria. What are the rules of procedure to be?
Usually any person called in evidence has the right to call witnesses in rebuttal of the evidence given which reflects upon him. But the motion does not say this, and we are entitled to know. The problem is that nobody can tell us. Government Ministers who wind up this debate cannot tell us any more than is in the motion. They cannot say that they mean anything which is not in the motion, and that the Committee will do anything which is not in the motion because that
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is not within their power. Members of the Committee cannot say what they will do because they have not yet been appointed as members of the Committee. The most sensible thing would be at the conclusion of this debate for the Government to withdraw the motion and re-table it in a couple of days after taking into consideration the points made from all sides of the House. I think that the Select Committee does need to be set up and it does need to do the job of which all of us are conscious, but the terms of reference in the motion are not fair to members of the Committee, Members of this House, or the public.
We have a duty when we ask our colleagues to discharge a function to define that function. We owe them that duty. It is onerous enough to ask them to be prosecutor, judge and jury, but it is intolerable to ask them as well to write the law on which they are adjudicating.
6.35 p.m.
The Attorney-General (Mr. S. C. Silkin): It may be convenient for the House if I intervene at this stage after the speech of the hon. Member for Tiverton (Mr. Maxwell-Hyslop) who has put down a highly technical amendment on the Order Paper. I am not sure whether he was speaking to that amendment or not.
Mr. Maxwell-Hyslop: The way in which Mr. Speaker has called the amendments is that they should be moved formally at the end of the debate. If that were not the case we would be able to speak only to the amendments and not to the main motion.
The Attorney-General: I was aware of that. What I meant was that I was not quite clear whether the hon. Member's speech was directed towards the question whether a witness should be able to claim Crown privilege as a justification for refusing to answer questions asked by the Committee. If that was the case then I stress straight away that as far as I am concerned it will be my duty, and one I shall do my best to comply with, to make available to the Committee all the relevant materials which are in either my possession or that of the Government, or some other party, or where I have the opportunity of claiming or putting in a claim for material on behalf of the Committee.

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It is possible, although I cannot at the moment think of an occasion on which it has occurred, that there may be some difference of opinion as to whether some document should or should not be produced to the House. If there were such a difference, the amendment put down by the hon. Member for Tiverton would not be the proper way of dealing with it. It would be necessary for an Address to be presented; but that would come if and when the occasion arose. No doubt this was the case with the Boothby Committee. That Committee came back to the House and said it needed something more than it had been provided with and it was given what it needed. I do not believe anything of that kind is likely to happen here because I shall do my best to produce all the relevant material to the House.
Mr. Maxwell-Hyslop: Is the right hon. and learned Gentleman representing himself to the House as being able to speak on behalf of the Commissioners of the Inland Revenue, an independent body, when not even a Treasury Minister can require it to reveal information about individual taxpayers? Is he representing himself as being able to produce such information? Will he undertake on behalf of the Chairman of the Board of the Inland Revenue that Crown privilege will not be pleaded? Is he aware that my amendment does not waive Crown privilege, that it simply orders witnesses not to invoke it?
The Attorney-General: I was coming to matters concerning the Inland Revenue and income tax. The hon. Member has, perhaps, forgotten the fact to which the Prime Minister drew attention at the outset of his speech. The reason why we are coming forward now and have not come forward before with this motion, is, as I said on 19th October, that I have reached the conclusion, with those advising me, that the point has been reached at which there is no evidence to support criminal charges. The position is also that, on the evidence we have, it is plain that a continuation of the investigation, in order to hope that there might be evidence to support criminal charges, would not be justified.
I can assure the hon. Member that that includes any form of offence, whether it be concerned with corruption or with offences again the Income Tax Acts,
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or whether it be concerned with the offence of conspiracy which at one stage in his speech the hon. Member suggested might be involved. He can take, it, therefore, that on the most thorough and exhaustive survey by those advising me and by myself, of the whole of the material, there is no possibility at this stage, which we have reached after so many years of investigation, of coming forward with further criminal charges, whether relating to income tax or anything else. I therefore do not follow the point that he is making specifically in relation to income tax.
However, if some matter arose that in some way related to income tax but did not relate to a possible offence and that was, in the terms of the motion before the House, material—conduct or activities which could amount to contempt or might be inconsistent with the standard the House is entitled to expect from its Members—and this is a highly hypothetical supposition because I do not know of any such material—it would be for the Select Committee to decide whether to make use of its powers to send for persons, papers and records. If any such difficulty arose such as the hon. Member is referring to, I have already told the House that his amendment would not deal with that difficulty, and I have told the House what the proper procedure would be.
Mr. Maxwell-Hyslop: Why would it not deal with it?
The Attorney-General: Because the proper procedure is that to which I have already referred. The hon. Gentleman appears to disagree with me. He is entitled to advise the House just as I am entitled to do so, but I can only give the House the best advice I have, based on my knowledge and on what I am told by my advisers.
Mr. Brian Sedgemore: I am listening with rapt attention to what my right hon. and learned Friend says about there being no possibility of criminal prosecutions on the basis of such evidence as is known in relation to such matters as income tax returns. Ts he, therefore, assuring the House that the income tax returns of the hon. Members who might be concerned in this inquiry have been investigated?
The Attorney-General: I am assuring the House that in so far as the prosecuting authorities possess any material which might suggest that offences against the Income Tax Acts might have been committed, those matters have been gone into, and I have been advised—and I have accepted the advice, having seen that material—that it is not sufficient to warrant criminal proceedings on income tax matters.
I cannot, of course, say that some members of the public, at present unknown, may not write to the Chairman of the Committee giving him information, true, accurate, scurrilous or whatever, which may involve something to do with income tax. What I can say is that the Select Committee is not concerned with criminal offences. It is concerned with conduct or activities which could amount to a contempt of the House or which might be inconsistent with the standards that the House sets. These last words were taken from the resolution in the case of the Boothby Select Committee.
I did not find with those words the difficulty that was encountered by the hon. Member for Tiverton. It is not unusual for all kinds of bodies in dealing with members to take a view whether the conduct of those members is consistent or inconsistent with the standards which are set or expected to be followed by those in the organisation, whether it be a professional organisation dealing with solicitors or accountants, or any other such organisation. It is only by looking at the material which comes forward from case to case that one can build up the standards into a form which may serve as a precedent. That is the way in which the Select Committee on Privileges operates, and I have no doubt that that is the way in which this Committee will operate.
I wish to pass from that point and deal with just one or two other matters without covering any of the ground that my right hon. Friend the Home Secretary intends to deal with later.
One point has been mentioned more than once in the course of the debate. I hope that what I say here will be noted and reported because of some of the observations which have been made in the Press. It is quite untrue that but
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for the article in the Observer these matters would not have been presented to the House, whether by way of such a proposal as we have made, and as I believe is right, for a Select Committee, or in some other way.
I have no doubt that I can speak for my predecessor in this matter when I say that we have been considering what would happen when the time eventually arrived—and it came much later than we had hoped—when I would be able to say, as I did on 19th October, that the criminal investigation had come to an end. We all knew that there would be residual material which could not be left as it stood, whatever the form in which it was inquired into. We did not know whether it would be material affecting only Members of Parliament or outside people as well. We did not know whether it would be material such as has been customarily held to justify a tribunal of inquiry—that is, something affecting gravely the nation as a whole—or whether it would be confined to a much narrower compass. I am glad that it has been confined to the compass of Members of this House, and that means Members at the time when the events were occurring, and that it is for this House to deal with a domestic matter rather than that it should be left to an outside body such as I have described.
Mr. David Steel: Does the right hon. and learned Gentleman accept that, while we may all accept his words, the impression given by the Prime Minister when he answered my Private Notice Question on 20th October was that he twice referred to the need for the House to focus on the future and not worry about the past? Contrary to the impression given by the Attorney-General, he specifically said that he was unable to express a view on whether we should look back. That is reported in column 1453 of Hansard of that day. That is quite contrary to what the Attorney-General is telling us. In the considered statement the following day the Prime Minister said—it is in column 1659—that in the course of exchanges the previous day the view had been expressed that such allegations having been made and having achieved wide publicity it would be in the public interest that they should be investigated. That, too, does

1037
not square with what the Attorney-General is telling us.
The Attorney-General: The hon. Member heard what my right hon. Friend said earlier in the debate when he said that he had been confronted with the Private Notice Question at the very last moment with very little opportunity to go back into the history of the matter. I am telling the hon. Gentleman what was happening as far as my Department was concerned. I have no doubt that the same sort of thing was happening when the hon. and learned Member for Wimbledon (Sir M. Havers) was in office. We were looking forward, not with pleasure but as a fact, to what would happen next.
I do not know whether a motion would have been put down this week or next if it had not been for the Observer article, but a motion would have been put down, for either a Select Committee or some other form of tribunal. In my view, the appropriate tribunal is the one now being discussed by the House. I hope that no one will give currency to the idea, which appeared to emerge from some of the remarks of the hon. and learned Member for Montgomery (Mr. Hooson) and which I hope he will repudiate, and from observations in the Press, that but for the Observer article there would have been a monumental cover-up. The very idea that there could be a monumental cover-up in relation to material which is perfectly well known to the public and which has been the subject of reports in periodicals and the Press is so absurd that it does not stand up for one moment.
Mr. Maxwell-Hyslop: Is it so absurd?
The Attorney-General: I have explained why we propose to set up a Select Committee rather than some other form of tribunal.
The Leader of the Opposition was asked about the possibility of the Press naming people, whether hon. Members or not, who might give evidence to the Committee as a result of newspapermen and others watching who went into the Committee. I have no doubt that for them to do so could be a contempt. It is always a matter for the House to decide whether something is a contempt,
1038
but this sort of conduct could obstruct the Committee in the functions given to it by the House. I hope that I need say no more than that.
Sir Michael Havers: The words in lines 3 and 4 of the motion are in the past tense. They are:
"whether any such conduct or activities amounted to a contempt of the House or was inconsistent with the standards which the House is entitled to expect".
As the right hon. and learned Gentleman will be advising the Committee, can he confirm that the motion applies to anyone who was a Member of this House at the relevant period?
The Attorney-General: The House is here concerned with the conduct of persons who were Members at the time certain events occurred. I read the terms of the motion to mean the conduct and activities of those who, at the material time, were Members, whether they are now or not. It is for the Committee, subject to the view of the House, to decide these matters, but that is the advice which I would give, if asked.
There is only one other matter with which I wish to deal, unless hon. Members have questions on other points. I refer to the procedure which I advise the Committee to adopt in carrying out what I accept will be extremely difficult functions, not made easier by the fact that although I have a great deal of evidence and information which has caused this motion to appear on the Order Paper there may be all kinds of people seeking to assist the Committee by giving it material, whether accurate or ill-founded, scurrilous or not. We start, as has been said quite properly by the hon. Member for Tiverton and others, with no firm knowledge. We have a certain amount of knowledge, but no firm knowledge about how wide the scope of the inquiry will be. I recognise that this creates some difficulty.
Mr. Maxwell-Hyslop: The right hon. and learned Gentleman has told the House that he regards the amendment standing in the names of the hon. Member for Newham, North-West (Mr. Lewis) and myself as being defective in some way, but has not shared with the House the grounds on which he believes it to be so. What are the grounds on

1039
which he believes that a perfectly clear amendment which reads
"That no witness summoned to appeal before the Committee shall claim Crown Privilege as a justification for refusing to answer questions asked by the Committee:"
will not do precisely that? It does not require a Crown waiver of privilege because it is not a waiver of privilege. It is merely an instruction to witnesses not to exercise their right to claim Crown Privilege. On what grounds does the right hon. and learned Gentleman believe the amendment to be defective? If he has grounds, he has a duty to tell the House what they are, or are these groundless observations on his part?
The Attorney-General: I thought that I had satisfied the House—though maybe not the hon. Member for Tiverton—on this matter. I made clear that in questions affecting documents within the possession of the Crown, where the Crown did not make them available—though I hope there will be no such circumstances—the proper course would be to use the procedure of an Address to the Crown. The hon. Gentleman's amendment would not do what he wants it to do.
Mr. Maxwell-Hyslop: Why not?
The Attorney-General: I do not think that the House would want me to go into a long, technical explanation. I have it here if hon. Members want it. I shall gladly put it in writing and send it to the hon. Member for Tiverton. We have studied this matter since the amendment appeared on the Order Paper and I hope that the House will accept what I have said.
I return to the much more important matter of the procedure which the Committee may wish to adopt, having regard to the undoubted difficulty of the task it will be performing. May I advise the House on the way in which I hope and believe the Committee will carry out functions which the House will place upon it?
I went a very long way with the hon. and learned Member for Montgomery, but at the last minute he rather illogically wanted to bring the whole thing into public at a certain stage. I agreed when he said that the type of inquiry we should have in mind is like that carried out by
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Department of Trade and Industry inspectors under Section 165 of the Companies Act.
All kinds of people may give evidence to the Select Committee, and if it became clear that there were matters for a person to answer and an application were made to the Select Committee by that person, who had been given proper notice, for the assistance of counsel, I hope that the Committee would grant him that assistance and also that counsel would have the opportunity to sum up what the person had said at the end of his evidence. I go further even than that. It is vital that everybody concerned, and especially anyone who may be criticised thereafter by the Committee, should feel that he has been treated scrupulously fairly and that no criticism of him has not been put to him in a way which gives him the opportunity to answer.
The procedure which I believe to be current for inquiries under Section 165 is that, if at the end of the day, when the inspectors—in this case it would be the Select Committee—have reached a tentative conclusion, and feel, on the evidence, that somebody should be criticised, they put that criticism to the person concerned and give him the opportunity, if he wishes to do so, to make further representations, either in writing or orally, with the help of counsel again if he wishes.
I hope that that will be the way in which the Committee will operate. It seems a totally fair way of proceeding. There is precedent for it, and I believe that the public will accept it.
Mr. Peter Rees: The right hon. and learned Gentleman will be aware that there is criticism of Board of Trade inquiries on that point, in that those who are to be criticised or who may be at risk of criticism do not have the chance of testing the evidence given by other witnesses against them. I shall be grateful if he will consider whether that defect may be remedied in the proceedings of the Committee.
The Attorney-General: The main criticism of the Section 165 inquiry, as it used to be—I speak with a certain amount of personal experience of the matter—is that some such inquiries did not have the last stage to which I referred—that is, the

1041
inspectors, having heard all the evidence and summed it up, saying "This is what we propose to say about you. Now you have a further opportunity to deal with that".
Cross-examination is a different matter altogether. If one had unlimited cross-examination we should be back to the tribunal of inquiry type of procedure, which I do not think appropriate for this sort of investigation. It is for the Select Committee itself, with all its highly distinguished lawyer members and others, to test the evidence of all the witnesses. I can see no reason in the world why it should not be able to do so by asking appropriate questions and putting to each witness, particularly one under possible criticism, what some other witness may have said, and giving him opportunity to answer.
Mr. Abse: I take the point made by the hon. and learned Member for Dover and Deal (Mr. Rees). Members of the Committee, lacking instructions upon the facts that will come before the Committee, and lacking what every solicitor and every barrister has when he wants to cross-examine, cannot be fully in a position to conduct an inquiry by asking questions. Is it not clear that whoever is being charged is under scrutiny and is disadvantaged by not having an opportunity to cross-examine?
The Attorney-General: I have cited the nearest analogy that one can possibly find to the kind of inquiry which is to be embarked upon as proposed. It is a form of inquiry which has always been regarded, subject to the point I made, as being fair. It is not an inquiry such as is heard in court, where there are charges or pleadings from the very beginning, one knows precisely what material is to be put forward, and cross-examination by a number of people may be permitted.
I hope that the House will agree that we have gone as far along the road as one possibly can in order to comply with both the principle of doing justice to individuals and the principle of not so opening up the matter as inevitably to produce suspicions getting into the Press and so on, to the detriment of Members and, possibly, other people, who would be condemned in advance of any report made by the Committee to the House.
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I hope that the House will accept that this is a proper procedure, which is precedented; and that the House will trust the members of the Committee, when they are appointed, to do in a fair way the job given to them, in a fair way which takes account of all the difficulties and gives every opportunity to anyone who may be criticised to make whatever points he wants to make, and enables the Committee, as a result of the points he makes, to question other witnesses, and so on. It is the method which has been adopted by the Committee of Privileges again and again, and I see no reason why the House should fear that, on this matter, more complex though it is than some of the others which have come before the Privileges Committee, unfairness will be done.
If at any stage the Committee itself feels that it cannot be fair to those who are before it, it has the opportunity, as happened in the Boothby case, to come back to the House to ask for further powers. We think that the powers given to it are adequate. It is for the Committee to apply them, and, if it feels it cannot do justice, it has the opportunity to come back to ask for more.
7.8 p.m.
Mr. Alexander W. Lyon: The question which has most concerned the House in this debate is whether the proceedings of the Committee should be in public. I shall address myself to that, but wish first to go back to the argument that I initiated between the hon. and learned Member for Montgomery (Mr. Hooson) and myself, which has been taken up by other Members since, about what is meant by corruption in law and whether Members of Parliament can be guilty of that offence. I wish to restate the matter not only because the Press has so misunderstood it but because an element of confusion about what is immunity and what is a criminal offence has entered into so many of the speeches, notably that of my hon. Friend the Member for Pontypool (Mr. Abse), in which he made what I thought a disastrous mistake about the question of retrospection, simply because he had misunderstood the distinction.
Corruption arises in law only in relation to three categories—members or agents of public bodies and people who are concerned with Government contracts. It

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is not, as the hon. Member for Tiverton (Mr. Maxwell-Hyslop) said, an offence for any person to take money simply to influence him in the conduct of his job. It has to be a particular type of job, and the law as defined in the Prevention of Corruption Act says that "public body" relates to a local authority and to various other bodies but does not include this House.
Therefore, for a Member of Parliament to take money in order to influence him in the course of his duties is not a criminal offence. Perhaps it should be. Perhaps there ought to be such an offence. I think that there should be. So, apparently, does Lord Salmon. However, it is not a criminal offence, and, most important of all, it was not a criminal offence at the time of the circumstances which have been the subject of so much comments and which will be the subject to consideration by the Select Committee. To make a criminal offence of that kind of conduct and, as my hon. Friend the Member for Pontypool argued, to make it retrospective to the time when a particular person was carrying out certain duties in relation to his parliamentary affairs in this House, would be grossly unjust.
If, in 1965, a Member of Parliament took money in order that he should make a speech in the House, and that was not then a criminal offence, he, properly advised, might well have accepted that money and done that, provided that it was not a criminal offence and not an offence against the rules of order of the House. If it were now to be suggested that it be made a criminal offence in 1976 and that that Member shall have to carry the penalties of the criminal law because of what he did, properly advised, over 11 years ago, it would be grossly unjust. It might become just if it had been a criminal offence then and he had escaped criminal liability only because there was an immunity in respect of Members of this House. That is the difference between the immunity and the fact that it is not a criminal offence.
Perhaps I may illustrate the point. If I make a speech here which is defamatory and incites violence, I may be in law guilty of the offence of criminal libel but I could not be prosecuted for
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criminal libel because of the immunity conferred by the Bill of Rights, but I have committed a criminal offence. What I am arguing is that if a man accepted money to make a speech in the House on behalf of his client in 1965, he had not committed a criminal offence. There was no question of immunity. There was no criminal offence. The same would be true if he were a journalist in 1965, or now, and if he were an independent, freelance journalist—not an agent or an employee. If he took money in order to write an article in a particular way, again, he would not have committed a criminal offence. It is wholly wrong to say that Members of Parliament are above the law because they did what was not a criminal offence. It would be like saying that because I walk across Westminster Bridge I am above the law. Of course I am not. I am free to do that, because it is not a criminal offence to do it.
Mr. Abse: Will my hon. Friend give way?
Mr. Lyon: I shall give my hon. Friend his opportunity shortly.
It is essential to keep that distinction absolutely clear, both because one is tarred by the suggestion that Members of Parliament are above the law and also because it makes such a vital distinction about what we do about anyone who conducted himself in this way when it was not a criminal offence.
Mr. Abse: As I understand it, my hon. Friend is suggesting that if, in 1965, an hon. Member received a bribe to influence Parliament, in fact it would not be a criminal offence. With that I agree. However, it would mean—indeed, this is the purpose of the Select Committee—that if such an unfortunate finding were made available, this House of Commons would be able to send that man to prison, would be able to expel him, and would be able to do all these things. As the House of Commons is able to do that now in relation to an action that was improper some years ago, why does my hon. Friend draw back from our being able to frame a proper criminal charge in respect of an act taking place the same number of years ago? Why is he so squeamish about this so-called retrospective element? Does not such an attitude inevitably corroborate the view of the

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public that an endeavour is being made to grant the hon. Member an immunity from criminal law?
Mr. Deputy Speaker (Sir Myer Galpern): I entreat hon. Members to make their interventions as brief as possible.
Mr. Lyon: if my hon. Friend had allowed me to do, I would have developed the argument in a way that would at least have attempted to answer his question. It is the kernel of what I want to say.
If the hon. Member who committed this act in 1965 had not committed a criminal offence, the question arises whether he had committed a breach of the rules of order of this House or, as the motion suggests, had acted in a way which
"was inconsistent with the standards which the House is entitled to expect from its Members."
Personally, I find it reprehensible for any Member, in the course of his parliamentary duties, to conduct himself for payment from an outside person or body. I believe it wholly wrong that that should take place. However, it is not inconsistent with the rules of this House provided that he discloses his interests at the appropriate moment. It is not entirely clear—this is a matter that the Select Committee will have to go into—what is always the practice in relation to the disclosure of interest.
When I came into the House in 1966 I was very conscious of the fact that some Members frequently spoke in the House, and particularly asked Questions, about matters in which they had a business interest although they did not disclose such an interest. The standards were much looser then than they are now. Now, that would certainly be regarded as reprehensible. Then, it was not so reprehensible. It may be that it was, or was not—It is a matter for the Select Committee to decide—a breach of the rules of the House and a contempt to fail to disclose an interest in such a circumstance. However, if the hon. Member had disclosed his interest in such a circumstance, it would have been neither a criminal offence nor an offence against the rules of this House.
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Therefore, contrary to what has been said by my hon. Friend the Member for Pontypool, it would be wholly wrong, 11 years later, to try to make it such reprehensible conduct that the hon. Member was guilty of an offence and deserving of punishment. It is this that is at the root of this investigation.
The question then arises whether the investigation by the Select Committee should be in public. I must confess that the argument put forward by the Prime Minister and by my right hon. Friend the Member for Battersea, North (Mr. Jay) is extremely powerful. I am much persuaded by it, because it is true that what the Press is looking for is dirt.
Mr. John Mendelson: I have followed my hon. Friend so far in the point that he has developed. However, if a Member in 1965 had been receiving payment from a person outside the House and that person himself had been following criminal pursuits, would not the acceptance of money from such a person change the situation?
Mr. Lyon: With respect, it would not have made any difference at all. The mere fact that a man who offers money to influence a Member of Parliament in the conduct of his parliamentary duties is also in other respects—not in this respect, but others—conducting himself in a criminal way, would not make any difference to the question of the criminal liability of the Member of Parliament, or, indeed, to the question of the payment of that kind of money to the man himself.
Returning to the question of publicity, I was saying that I thought that what the Press was concerned about was getting some dirt, and that if it got the dirt, it would use it, and use it even in relation to a person who might be innocent but might be named. There is the gap, referred to by the Leader of the Opposition, between the allegation and the refutation of the allegation by the Committee at a later stage. In that gap a man's whole career may be wrecked. We are all aware of that, and anxious to avoid it. That argues against publicity.
On the other hand, what we are dealing with here is not a completely new and unexpected revelation of alleged dishonourable conduct by a Member of Parliament. This is a matter that has been

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canvassed in the Press for years, in which almost everything that can be known about the conduct is already known, including the allegation against three Members of Parliament specifically and, in general, against another five Members in relation to a particular list. Therefore, in the course of the evidence that will come before the Select Committee, we are not likely to hear something that has not already been put before the public in one form or another. It will look extremely suspicious to members of the public if, when the report is published, there is reference, for example, to one Member of Parliament but not to the others who have already been named in public accounts of what Mr. Poulson did.
Mr. Jay: Surely it may well be that people of whom at present we have no knowledge will come forward to the Committee and make allegations that are quite apart from those which have already been made.
Mr. Lyon: In theory, that is correct.
Mr. Jay: It has happened.
Mr. Lyon: It happened in the case of the Lynskey Tribunal, which stemmed from a sudden allegation canvassed in the Press that precipitated a tribunal of inquiry. We have heard something that has been canvassed in bankruptcy proceedings and in successive criminal proceedings. A whole lot of evidence has already come out. It seems unlikely in the extreme that we shall now find some members of the public coming forward to the Select Committee with information that they did not want to produce at an earlier stage to the police or anyone else involved. The whole matter has been canvassed so widely that almost any member of the public who had anything to say about the matter has now already said it.
Sir M. Havers: One of the problems is not whether allegations have already been investigated but the succession of cranks whose evidence has been examined and found to be empty. Because they are obsessed, these cranks will continue to repeat their allegations and demand to be heard by the Select Committee. That evidence will then be smeared across the front pages of the Press, how-
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ever hard the Select Committee tries to stop it. Surely it will be impossible for the Select Committee to sieve what is put before it.
Mr. Lyon: If it has been sieved already, it has been done in a way that has allowed some of the flour to get out into the public arena. There has already been some public coverage of allegations against Members, apart from the three who have been so widely named. It seems unlikely that others will be named. However, let us consider the position of one of the list of eight whose names have appeared in the Press—a Member whose name has not been so widely canvassed as the names of the three. If nothing is said about him by the Select Committee in its final report, because it is thought that he is completely innocent and, having regard to the Leader of the Opposition's definition of relevancy, that the charges against him are not relevant, it will look to the public as though something has been hidden that should be disclosed, and that man's name will be besmirched.
I have in mind the Denning Report, which followed on a particularly notorious case. Lord Denning tried to deal with all the wilder allegations against certain Members of Parliament and certain Members of another place—allegations that he regarded as unsubstantiated—by preserving their anonymity but to some extent describing them. For years afterwards there was a flurry of rumour, innuendo and suspicion against all sorts of Members, regardless of whether they were the actual persons, because people were speculating on the identity of the anonymous persons. That is the situation that may arise if all the evidence is not produced.
I was rather attracted to the way in which the Leader of the Opposition put her case. I think it is right that if all the evidence that comes before the Committee is published at the same time as the report of the Committee, the best will have been obtained. That may not be perfect, but it will be the best we can do. That will mean that the allegation will have been made and repudiated then and there in the same document. However, I disagree with the right hon. Lady in thinking that that is what the motion

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will achieve. The fifth paragraph of the motion simply refers to the production of
"all such … evidence … as … shall appear"—
that is, to the Committee—
"to be relevant and such as may fairly be taken into account"
That is clearly much less than the word "admissible" that the right hon. Lady quoted fom "Erskine May". As she indicated, she does not want the evidence published against a person who is found to be innocent. In general, I accept that principle, but for the reasons I have argued I believe that it would be wrong in this instance. Therefore, I come to the conclusion that the proper procedure is that all the evidence should be published—all the evidence that is admissible in the "Erskine May" sense—whether or not it is against a person who is found to be innocent. I believe it should be published at the same time as the report. That would remove most of the sting from any allegation.
As there is no motion on the Order Paper that would allow that to be done, I am not quite sure how I can vote at the end of these proceedings. If the Government agrees to amend in the way I should like the matter to be dealt with and as the right hon. Lady said she would like it dealt with, I shall be satisfied, but otherwise I shall have to vote against the fifth paragraph. If I am placed in that position I shall have to vote for the Liberal amendment or for my hon. Friend's amendment. Of the two, I think that probably the least damaging is the Liberal amendment. I shall probably have to vote for that.
The Attorney-General: Perhaps my hon. Friend will take into account that it is quite impracticable to suggest that the Committee should publish only such material as is both relevant and admissible in the technical, legal sense of what would be admissible in a court of law. It must go further than that; it must go to the point of being able to lay before the House such material as is not, for example, sixth-hand hearsay—material that is totally scurrilous though relevant and which no Committee would consider for one moment as being of probative value. It is that sort of material that is contemplated in the wording that has been used. I hope that my hon.
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Friend will agree that if one were to cut that down so that only what is admissible in a court of law were reported to the House, the public would certainly feel that something was being covered up which should be disclosed.
Mr. Lyon: I did not use "admissible" in the sense in which my right hon. and learned Friend used it. I used it not in the technical sense of criminal evidence but in the sense in which "Erskine May" uses it, as quoted by the Leader of the Opposition. I used the word only in the sense that it is admissible before a Select Committee. That is not out of order by the rules of the House. It would be inadmissible in a court of law, because it might be hearsay or even scurrilous. If that kind of suggestion is to be made against a Member before the Select Committee, my assumption is that it has already been made. If I am wrong about that, I am certain that it will be made after the Committee's report has been produced and that somebody, somewhere, will want to get it into the Press. Therefore, it is better that the Committee should hear it and should tell the country that it has heard it so that all the allegations are made in public.
The Committee should then say "Having considered all the evidence, we, the peers of the people against whom the allegations are made, say that we find that this is unsubstantiated." If that is done, I am sure that it will allay public suspicion and get us away from any suggestion—a suggestion which the Press will undoubtedly make if we produce only part of the evidence—that something has been covered up. I am sure that that is the best way of dealing with the matter. I am prevented from voting for a motion that contains that provision, and I am bound to choose between the two amendments that have been put forward.
Mr. Hooson: One difficulty with publishing the evidence is the scurrilous piece of evidence which reads well but which the Committee rejected because it thought the man who gave the evidence was a liar. The hon. Gentleman knows from his experience at the Bar that evidence in cold print gives a totally different impression from evidence heard by the Committee. That might cause difficulty for both the individual and the House
Mr. Lyon: I can see that that argument could be made, but I am surprised that the hon. and learned Gentleman should make it, he having moved the amendment. According to him, the evidence should be heard in public. My suggestion means that the evidence will come out at the time when a refutation can be made, so that the public can judge between the two. It is naive to think that it will not come out at some stage if it has not already come out in public debate. It is naive to think that a person who might at first sight appear to be speaking the truth will not use an opportunity to go to the Press and make public his allegations after the Committee's report has been published. Although in theory one can take the case of my right hon. Friend the Member for Battersea, North I argue that we are dealing with allegations that will come to public notice anyway, and that the best we can do is to bring them to public notice as quickly as possible and have them refuted.
Mr. David Weitzman: Suppose a completely idle and worthless allegation is made, which the Committee rightly disregards. If that allegation is included in the report, will not people say that there is no smoke without fire?
Mr. Lyon: There is that danger, but I am certain that if the allegation has not been made in the Press already it will be made in the Press after the Committee's report.
Mr. Carlisle: I am totally in agreement with the first three-quarters of the hon. Gentleman's speech—so much so that I have decided not to make the same speech immediately after him—but I draw different conclusions. Surely, with respect, "admissible", in these terms must be what is generally admissible in the courts. We are talking about people's reputations. As, to be admissible, evidence first has to be relevant, why does the hon. Gentleman find "relevant" and "fairly taken into account" more objectionable than "admissible"?
Mr. Lyon: Precisely because it is clear from the interchange between the Leader of the Opposition and myself that she did not take it in that way. Indeed, it
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cannot be taken in that way. "Admissible", in law, means admissible according to certain tests, and the major test is: is it relevant to the specific charge brought before the court? That cannot be true in an inquisitorial system such as the Select Committee will have to adopt, because there is no charge and no specific allegation of dishonourable conduct.
All that can be said is: is it generally relevant to the Poulson business? In that respect we have to distinguish between "relevant", in the sense that the Committee finally will come out with a judgment about the conduct of a specific Member of Parliament which it may find dishonourable, and in the sense of allegations against another Member of Parliament which the Committee dismisses when it finds him totally innocent and which it does not want to disclose because of the feeling that may be engendered that there is no smoke without fire.
In one sense the allegation is relevant because it is an allegation about a Member of Parliament in relation to his conduct with Mr. Poulson, but in another sense it is not relevant because the Committee will finally adjudge that the Member of Parliament is wholly innocent and the allegation is without substance. In the first sense, I would be happy to take "relevant". In the second sense, I would not, for the reasons stated. The allegations will become public and there will be the danger of a feeling of cover-up unless all the evidence is known.
Therefore, I must take the view that all the evidence must come out, either in the way I have indicated or by being taken in public.
7.35 p.m.
Mr. Cranley Onslow: I hope I shall not strike a jarring note by saying that, whatever else may happen, I hope that the Committee we seek to appoint will not make such heavy weather of its task as the House is making of the debate. Some of the speeches we have heard have not been uniquely helpful. In general, the longer they have been, the less helpful, so I shall try to be brief.
The House has agreed that this is an unhappy business and that something must be done about it. Whatever we do about it will not be perfect—we are

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apparently in similar mind on that—but we have to get on with whatever we do. None of us wants to go through all this again, so those who told us that there may be room for a change in the law struck a receptive chord.
If there is any danger of trial by newspaper we should remind ourselves that the only people who benefit from trial by newspaper are newspaper men. It should not he our purpose to advance that cause. We should also remind ourselves that whatever we may do or say on this occasion will not have the effect of raising the reputation of Members of Parliament to supreme heights in working men's clubs. I do not know whether the hon. Member for Bolsover (Mr. Skinner), even if the report were wholly satisfactory, would go about the working men's clubs explaining what splendid people Members of Parliament are and how terrible it is that they should have been maligned.
It is in the nature of things that we are viewed with suspicion. We should not mind that because it is part of the price we expect to pay for such power and privilege as we have, and it is an essential feature of the democratic system.
Let us not suppose that whatever comes out of this arrangement will be perfect, but let us try to achieve some limited objectives clearly and cleanly. It is unfortunate that there has been talk of whitewashing. I am astonished to hear that the hon. Member for York (Mr. Lyon) is contemplating supporting the Liberal amendment, especially after hearing the speech made by the hon. and learned Member for Montgomery (Mr. Hooson), who moved it. However unhelpful the talk of whitewashing may have been, the speech of the hon. and learned Gentleman for Montgomery made me wonder how he dared to be content to be nominated a member of the Committee. However, that is between him and his conscience, not to mention his party.
Can we not at least give the members of the Committee who are accepting this heavy responsibility on our behalf some advice which they may find it helpful to follow? I sum up as follows. The Committee should try to do its work as quickly as it can so that there is no long-drawn-
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out inquiry and no prolongation of this affair, which has already gone on far too long. The evidence that the Committee brings to us should be clear and clearly relevant. The Committee should prepare its report in the knowledge that the House wants to make up its mind as quickly as possible, deal with it with the maximum dispatch and never have to go through all this again.
7.38 p.m.
Mr. Brian Sedgemore: I thought we were to discuss a motion relating to the moral conduct of Members of the House in relation to carrying on their parliamentary duties. The more I listen to the debate the more it becomes clear that we are talking about the definition and interpretation of rules contained in "Erskine May". I refer especially to the extraordinary speech made by my hon. Friend the Member for York (Mr. Lyon).
I understand that we are getting to a simple, clearly defined position, which is that the Committee should look at certain allegations. It might find, to take a hypothetical example, that a Member had accepted £500 in pound notes in return for organising Lobby facilities. Alternatively it might find that a charity with which he was associated had been given thousands of pounds because he had buttonholed a Minister in the corridor. The Committee, bearing in mind the rules contained in "Erskine May", would examine those allegations and, if it found them proved, might well say "That is not a crime and it is not against any of the rules set out in 'Erskine May' either." It would therefore presumably give a box of chocolates to the two hon. Members concerned.
Are we to be told, if the conduct of those hon. Members is such as I have outlined, that the Committee will say "There has been no crime. No rule set out in 'Erskine May' has been broken. It is scandalous that people should have suggested that the conduct of these Members was less than that which is required of the House." Some of us may find it difficult to understand the precepts and definitions in "Erskine May", but we know corruption and immorality when we see it. It is to be hoped that the Committee will know corruption and immorality when it sees it.

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The Prime Minister and the Leader of the Opposition are much older than I am, but I was distressed at the way in which the generation gap expressed itself here today. People of my generation—and this applies to an even greater extent to people of a younger generation—will not see this as an open and an independent inquiry. They will see it as a cover-up. Whether it is or is not a cover-up does not matter. Not to understand that is to display either supreme insensitivity or astonishing ignorance. It is because I do not believe that the two Front Benches are full of astonishing ignorance that I can only conclude that it is extreme insensitivity.
The closed society is once again closing its doors to full and proper public scrutiny of public affairs, and the idea that democracy is government of the people by an elite sprung from the people appears to be gaining substance in this debate.
It was depressing to hear the Prime Minister and the Leader of the Opposition say that there was not widespread disquiet about what had happened over the conduct of Members in relation to the affairs of Mr. Poulson. I do not want to indulge in semantics and seek to define what "widespread disquiet" is. However, there is a resigned contempt for politicians on behalf of the public. Not to realise that is to run away from reality. One realises from talking to people in factories, in shops and in one's own home that it is the resignation to the contempt that is so appalling. People have almost reached the stage where they are saying to themselves "You blokes make a bit on the side. You do favours for people and make a bit of money. That does not matter any more: we expect it. Just continue to do so. It does not matter." To say that there is no widespread disquiet is to misunderstand the public mood over this issue.
Mr. Alexander W. Lyon: What is the difference between a man taking money to represent the business interests of a person and disclosing that in the House and a man taking money to represent the business interests of a person and not disclosing it in the House, apart from the fact that one is a breach of the rules and the other is not? The first is apparently
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entirely unreprehensible whereas the other is entirely reprehensible.
Mr. Sedgemore: I should find both of those forms of conduct open to some criticism. I thought that that was the substantive point with which I opened my speech.
There was great laughter when someone uttered the word "maturity" earlier. I thought that we were supposed to have the oldest and most mature democracy that existed, but it seems, by having this form of inquiry, that we are saying that our democracy does not have the strength and the resilience to stand a full and open public scrutiny of the affairs of Members. I do not believe that.
In any event, assuming that we have, as undoubtedly we are to have, this particular form of inquiry, there seems to be two matters which we should examine. The first is that which refers to the publication of that which is deemed to be relevant and such as may be fairly taken into account. Again, the Prime Minister and the Leader of the Opposition were extraordinarily depressing when they interpreted those remarks. The Prime Minister said that the Committee, when it reported, shall not report really scandalous remarks.
I immediately asked myself what a really scandalous remark would be. My mind turned to the Watergate inquiry. I thought that, if early in the Watergate inquiry someone had said "The President of the United States is engaged in a cover-up", that would have been a scandalous remark and, presumably, would be the sort of scandalous remark which the Committee in its wisdom will exclude from its report.
Then I heard the Leader of the Opposition say "We want only evidence that is truly evidence." That is a great statement for the lawyers to examine in years to come. She was saying "We want only evidence which in the opinion of these 10 white men is truly evidence", which is an even more extraordinary statement.
Then the right hon. Lady got herself caught up in a convoluted lawyers' discussion about what is "relevant" and what is "admissible". I should have thought that the public, had they been here and heard her talking for 20 minutes, would wonder what sort of

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world they were in. I thought that we were discussing a simple concept, one of public confidence.
That point relates back to the other matter to which I take extreme exception, which is that no one other than members of the Committee shall be present at its deliberations. I take exception to that on three grounds. First, it seems to me that in the last resort the public, if they are to be satisfied with the inquiry, have to satisfy themselves that on the evidence that the Committee heard and that the House will consider they somehow could or would have had the opportunity of reaching the same conclusion.
How can the public, still less the House, say that they have had the opportunity of reaching the conclusion which the Committee will reach? Anyone who has practised in a court of law will know that what comes out in the transcript does not tell half the story. It is the manner and the demeanour of the witness which is important. For instance, was a man who does not normally fidget, in fact fidgeting when he gave his evidence? Was a man who is normally cool when talking, hot and perspiring when he gave his evidence to the court? When reaching its decision, a jury has to decide on the conduct, bearing and demeanour of a witness.
The public should be given the opportunity of seeing for themselves. Most of them will not be there and most of us will not be there, even if the proceedings are open. However, the proceedings should be open so that we and the public have the opportunity of weighing up what a witness says.
Reading the transcript will be no adequate substitute. I have rarely been in a case in which a man who has pleaded not guilty has entered the court and said "I had a wicked intent. I intended to murder the deceased. I hit him over the head with a hammer." The accused answers as many questions as he can with a plain "Yes" or a plain "No". The transcript shows answers of "Yes" or "No" to words uttered by counsel. How can any member of the public or Member of the House make up his mind about the probative and evidential value of such answers? We are now talking about Members who can give
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skilled and plausible answers. We are not to be there to see the manner in which they give those answers. Therefore, any attempt by the House after the inquiry is over to evaluate the evidence is almost bound to fail.
I rarely find myself in agreement with anything that the hon. and learned Member for Dover (Mr. Rees) says, but he was right when he said that he does not like dealing with such matters second hand. I do not like dealing with such matters second hand either.
The second reason I object to this form of inquiry at which neither we nor the public can be present is that evidence begets evidence and the publication of evidence begets evidence. In this case a witness might present a line of argument which is known to a person or to an organisation or to a newspaper—it may be the Observer; it may be another newspaper—to be wholly false. If that line of argument were made public, that other person or organisation might well be prepared to come forward and give evidence. Of course, it might be that the other party would be prepared to come forward with evidence anyway. As the inquiry unfolds there is a chance that the evidence given will produce more and relevant evidence for the Committee to consider.
The issue is straight forward and simple—it is one of public confidence. It is not a question of people like me standing here and impugning the motives of the Committee. We are talking of the public's confidence. If we are to have any credibility we should show that as a House we are prepared to adopt the most scrupulous and the highest standards when investigating the conduct of our own Members. This inquiry cannot be described as open or independent. It is not to be exposed to the public gaze which it so desperately needs.
7.51 p.m.
Mr. John Ryman: I support the Government in establishing a Select Committee although I appreciate that there are many imperfections in the type of machinery that has been canvassed. In particular I want to refer to some of the remarks made by the hon. and learned Member for Dover and Deal (Mr.

1059
Rees) on the practical considerations governing the working of the Committee. The Attorney-General has already helpfully intervened to explain some of the difficulties.
The most fundamental difficulty has not yet been mentioned. It is said that the difference between the Select Committee procedure and a trial in a court of law is that in court the allegation is specified in advance and that Members appearing before the Select Committee will have to answer questions without knowing in advance the allegations made. Surely before an individual hon. Member is interviewed by the Committee he can be told by means of documents, broadly speaking, the nature of the questions that he will be asked. An exhaustive list will not be needed but he could be told the broad nature of the allegations which are to be made and the area of questioning that he will experience. No one has suggested that such a procedure will closely resemble that on indictment or proceedings in a civil court but it would be helpful for hon. Members to know as precisely as possible the type of questions that they will have to answer. There will of course be hints before hand about what they will be called upon to answer.
The Attorney-General: I am obliged to my hon. Friend for making that point. If I overlooked it I apologise, although I did not think that I had. In broad terms I hope that what my hon. Friend suggests will happen. But I was trying to explain that the particularity of charges in a court of law remain the charges throughout. In this case there is a broad area at the beginning which may change as the evidence proceeds.
Mr. Ryman: I am obliged to my right hon. and learned Friend and I am glad to hear him express that view. Although circumstances may change during the hearing of the Committee, it cannot be said, as has been suggested by hon. Members during this difficult and distasteful debate, that the hon. Members concerned will have no idea of the allegations against them. The guts of the matter is that hon. Members appearing before the Committee will know perfectly well all the allegations against them.
Shorn of all language and trimmings, it is alleged that, while no criminal offence
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has been committed because no criminal offence exists to deal with such a situation, these hon. Members being investigated by the Committee are guilty—and it is for the Committee to say whether they are—of conduct involving grave moral turpitude which brings them within the ambit of the motion on the Order Paper. It would be artificial to say otherwise. Many of the points that have been made, particularly by lawyers, indicate the legal and practical difficulties but they do not detract from the fundamental reality that we know full well what the whole thing is about.
My next two arguments have not been touched upon before. I was horrified to hear the hon. Member for Woking (Mr. Onslow) say that what really matters is that the issue should be dispensed with as quickly as possible and that speed was of the essence. I appreciate the hon. Member's anxieties but I cannot think of anything more disastrous than to rush through this inquiry in an effort to arrive at finality as quickly as possible. A most careful inquiry and the utmost scrutiny of the evidence before the Committee is needed. Any talk of haste or hurry is wrong.
The other matter which has not been made sufficiently clear is the lack of similarity between this and the Boothby case. They are not alike because the allegation in the Boothby case involved one specific matter of non-disclosure. Here we are dealing with a wider and more complicated situation. It would be wrong simply to compare this with the Boothby case.
We have to appreciate that the machinery, imperfect though it is, is the best available in the circumstances. I fully endorse the pleas by many hon. Members for the Government to introduce early legislation to deal with the obvious gap in the law. It is astonishing that this situation can arise and not be the subject matter of a criminal offence as the law stands. Pending further legislation to deal with the gaps in the law, the Select Committee is the best available machinery.
One of the vital questions is whether the Committee's deliberations should be in secret, in public or part secret and part public. I represent a constituency in the North-East of England that has

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had its fair share—or unfair share—of adverse publicity on the corruption issue. I sense that the mood of the North-East and constituents of mine and of other hon. Members in the region would be wholly dissatisfied by a totally secret hearing. Whether or not there is an intention to whitewash or cover up, my hon. Friend the Member for Luton, West (Mr. Sedgemore) was right, and he echoed the feeling of the country, when he said that the general public would be horrified if they were not able to know what was going on. Their attitude would be "This is a club committee dealing with members of the club alleged to have behaved improperly". If an allegation is made against a member of a club the committee sets its own rules and standards in deciding whether to suspend or expel a member. There is grave disquiet among the people, who fear that if the proceedings are wholly in secret they will be very unsatisfactory.
I shall not get involved in the niceties of what is relevant and irrelevant, what is admissible and inadmissible. Ordinary people do not think like that. They simply want to know what is going on and how a Member has behaved. They are not interested in legal niceties and fine debating points. They want to know whether the behaviour of any hon. Member has fallen below the standards he should adopt.
The Government should carefully consider whether the terms of the motion, which in effect prevent any publicity, are correct in the light of the anxieties expressed by many hon. Members. It is a difficult question for the Government, and there are many permutations, but the present position is profoundly unsatisfactory.
8.2 p.m.
Mr. J. V. Rooker: My hon. Friend the Member for Luton, West (Mr. Sedgemore) restored to the debate some of the sanity which had been missing for the past two or three hours. The prime issue is the public's distrust of hon. Members and the public's disgust. That matter will not be dealt with under the terms of the motion. I intend if possible to vote against the first paragraph, because my amendment seeking to widen the inquiry was not selected. Therefore, I have no
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choice but to vote against. Given the present widespread distrust of Members, it is indefensible to limit the inquiry to matters appertaining to the activities of Mr. Poulson. There is plenty more meat to go at, and the public know it.
What happens if, for example, evidence on other matters comes the Committee's way? That could happen by accident. People who do not understand the motion but who know that there is an inquiry on corruption and bribery of Members of Parliament might write in about other matters. Does the Committee just put such evidence on one side and forget about it? It cannot be dealt with if it has nothing to do with Mr. Poulson. Such questions should be answered, and they would have been answered if my amendment had been selected.
What happens if, a week after the Committee has begun its work, another newspaper, or perhaps the Observer again, brings up a totally different case but with the same sort of prima facie evidence? Must we set up another committee and have this debate all over again, with the same arguments and the mess that many hon. Members have got into over the legal niceties? That would not be satisfactory.
Mr. John Lee: I can give my hon. Friend an example of a matter that requires investigation in addition to the matters for which the motion provides—the allegation of bribery by Lockheed of a former Minister. As both the Prince Consort of Holland and a Japanese Prime Minister were involved, it would not be incredible if somebody in a high position in public life in this country were involved as well.
Mr. Rooker: My hon. Friend helps me make my point. People outside the House could send in what they considered to be evidence, but an inquiry has not been allowed on that matter. However, that will not stop people sending evidence to the Select Committee on other questions. The inquiry should be widened, if only to stop the matter rolling on for years. Many hon. Members would wish the Select Committee's proceedings to be over by Christmas. Others would tell the members of the Select Committee to take their time and make sure that they do a good job for the next two or

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three years—the remainder of this Parliament. That is the period for which the motion provides. When the report is published the matter will start all over again, with arguments about the evidence published by the Select Committee. This could go on for years, and lead to people raising other matters. We should get the whole thing over once and for all.
Like many hon. Members, I was surprised by the speech of the hon. and learned Member for Montgomery (Mr. Hooson). That he spoke at all is surprising as he is to be a member of the Select Committee. I believe it to be superior to that of many others set up to deal with such matters since I entered the House. The composition of the Committee reflects the composition of the House much more accurately than the Select Committee to inquire into the matter of the former right hon. Member for Walsall, North, John Stonehouse. That was a committee of bosses sitting on a former boss—right honourables to the last. On this Select Committee we have recently-elected Members, which is a good thing. It could be argued that there are too many lawyers on the Committee—we have had a real lawyer's debate today—but it could also be said that non-lawyers are not qualified to sit on the Committee. I would argue that we should not have the Committee anyway.
My right hon. and learned Friend the Attorney-General made a telling remark in response to an intervention, when he said that this was a domestic matter and that the Select Committee was the way to settle it. That attitude is totally divorced from the public anger and frustration encountered by many hon. Members of all parties on the doorsteps in the three constituencies where there will be elections later this week. It clearly is not a domestic matter; it is a matter of supreme public concern. Whatever candidate we support, we have all met the attitude "You are all the same. You are all in it for what you can get out of it." The public can reel off one case after another, and we find it difficult to defend ourselves because we know—I shall name no names—that there are hon. Members here for what they can get out of it personally. It is a widespread feeling among the public, which
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one meets on the doorsteps, particularly when canvassing during by-elections.
The public think that the subject of this debate is a disgrace, because they do not see the equity of Members of Parliament sitting in judgment on matters relating to Members of Parliament. Many hon. Members have mentioned the Police Act. The Police Commissioner for the Metropolis resigned, or will retire early, over a similar point. He deeply resents—
Mr. Merlyn Rees: The Commissioner has not resigned. I am not trying to take away from the argument, but that happens not to be true.
Mr. Rooker: I accept what my right hon. Friend says, but there is a widespread impression that Sir Robert Mark feels very deeply on the matter. I accept that it was an error on my part. He has not resigned, but he is retiring early next year.
It is indefensible for us to argue that we can be judge, jury and prosecutor. I cannot defend that stance, and I am not prepared to do so to my constituents or in my local party.
On page 99 in the red-covered version of the Salmon Report we see the following passage:
"With the most genuine respect to the Committee of Privileges and the Select Committee on Members' Interests, we do not consider that they provide an investigative machinery comparable to that of a police investigation."
I accept that the police have no power to investigate these matters under the criminal law. We know that the Select Committee's work will drag on, because we must remember that we are dealing with events that happened many years ago, and these matters are only now coming before the House and being subjected to a process of inquiry. Therefore, to that extent the work of the Select Committee is retrospective.
I believe that we should have used today as an occasion on which to debate the Salmon Report. Having debated that report and having expressed our worries as Members of Parliament, we could then, at the end of this week or early next week, debate a Government motion. Clearly, in a debate on the Salmon Report in its entirety we would have alluded to the

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chapter relating to Members of Parliament. Therefore, the Government would not have had to place themselves in the position of tabling a long motion last Thursday. Incidentally, the result was that many hon. Members who wished to table amendments had to take those steps at 10 o'clock last Thursday evening, because we were away in our constituencies on the Friday. If the Government had allowed the House to debate the Salmon Report in full today, we would have had more time to think about the Government motion that would come later.
Many hon. Members have drawn attention to the fact that the Select Committee is to meet in private and have asked whether that fact will affect hon. Members' reputations. There are many thick skins among hon. Members, as is apparent from this debate. Many hon. Members would prefer not to have any inquiry.
In recent years there have been two cases that have raised interesting factors of relevance to this debate. A year or so ago the Committee of Privileges examined some allegations that were aimed at my hon. Friend the Member for Bassetlaw (Mr. Ashton), concerning some of his comments on a radio programme. The Committee sat and reported—and never at any time was my hon. Friend called to appear before it. What happened was that the whole thing was done by correspondence. There is nothing in the present case to stop the Select Committee kicking off its proceedings on the first day, examining the terms of this motion, looking at a rough outline of the evidence that it might like to consider, and then reading a few newspapers, particularly the Observer. It could then write to certain Members asking questions.
The Committee could write to an hon. Member and say "We have read this letter and presume it is true. We assume that no fraud or forgery is involved. Will you say whether you declared your interest at the time?" The hon. Member may write back with the short answer "Yes", thus satisfying the provisions in "Erskine May", and that would be the end of the inquiry. It would have meant no appearance before the Committee and no examination of the Member concerned. I repeat that that very case has happened within the past two years, when my hon.
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Friend the Member for Bassetlaw was not even called upon to appear before the Committee of Privileges.
The other example that is relevant to today's debate concerned the late Sir Gerald Nabarro, who was called to give evidence before a House of Commons Committee. I understood that that Committee was open; indeed, cohorts of hon. Members went upstairs to listen to the proceedings. They thought that was a right and proper thing to do, because they wanted to listen to what was being said. In that way they could listen to the cross-examination, weigh the answers, listen for the inflections in the voice, and all the rest of it. Those are matters that can be weighed by a jury in a court and they cannot be conjured up by reading a transcript. Those two cases that I have instanced seem to cut across many of the arguments about procedure that have been dredged up in this debate.
We have before us the alternative of publishing all the evidence. Even as a non-lawyer, I appreciate that the motion does not specify "all the evidence", in the true sense of that phrase. Nevertheless, the Committee will have to consider all the evidence, all the admissible evidence, and, indeed, all the relevant evidence—in other words, three entirely separate sets of evidence.
Clearly, we are not to get all the evidence. If I talk to somebody outside the House and say that we have considered all the evidence, he will take my remarks to mean that I am including all the evidence in respect of allegations made. That would include all the testimony put before the Committee. Whether that evidence were true, scurrilous or totally objectionable is beside the point. The point is that all the evidence should be put to the Committee so that its members may hear that testimony and adjudge it. I believe that that should happen. Clearly, the Leader of the Opposition disagrees with me, but she has got what she wants, because her views are reflected in the terms of the motion. There is to be great restriction on the evidence that will be published.
Sir Raymond Gower: Does the hon. Gentleman appreciate that the wording of the motion refers to
"all such … evidence as … shall appear to be relevant …"?

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He surely would not want the Committee to release or indeed to seek evidence that was irrelevant. To that extent I imagine he will approve of the wording.
Mr. Rooker: That is the whole point of my argument. I would deeply resent it if somebody sent into the Committee evidence relating to me, and I should look for some form of redress.
Mr. Kenneth Lewis: The hon. Member would not get it.
Mr. Rooker: I expect that I would not get it, but at the same time I should want to see everything published.
Mr. Kenneth Lewis: If a person is tried in a court of law only the relevant evidence is admissible and would go before the public. What the hon. Member is suggesting in this instance is that irrelevant evidence should be acceptable. That would be totally unfair to the person in question, including the hon. Gentleman if he were involved.
Mr. Rooker: It is a rare occasion when I attend a court of law, but shortly before last Christmas I heard remarks made in one court which were totally irrelevant to the proceedings and which destroyed the reputation of a Member of this House. Therefore, it is not true to say that a court will listen only to relevant evidence.
Mr. Sedgemore: If my hon. Friend asks for a transcript, that will be on it.
Mr. Rooker: I agree that that will be part of the court proceedings.
My right hon. Friend the Prime Minister said that the terms of the motion were unprecedented in their generality, but that is not the case. If the motion were made more general, so as to widen the matter from Poulson, that situation would be far more unprecedented than even the Prime Minister can contemplate in his wildest dreams, with all the evidence that he must have available to him. Even on the information that I have before me about other matters, I believe that the terms should be much wider.
My party fought the last election on a platform of open government. We said that we would reform the Official Secrets Act—although we clearly will not do that
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next Session. But if we cannot be totally open in the proceedings and inquiries that this House sets up, what confidence will the public have, when we start to reform the law, that we will make the Government and public Departments more open?
Earlier, there was an argument about income tax returns. There is a good case for making available to public inspection everyone's income tax return. I know that that goes against the grain. People cringe when I say that. I see the expression on the Home Secretary's face—
Mr. Deputy Speaker: Order. The hon. Member did not see the expression on my face. That subject is strictly out of order.
Mr. Rooker: There was an interchange earlier about conspiracy. The hon. Member for Tiverton (Mr. Maxwell-Hyslop) raised the matter and the Attorney-General responded. A good case can be made for making all income tax returns available to public inspection. That is not unique. It happens in at least one Western country.
Mr. Deputy Speaker: Order. We are not discussing that subject this evening: that is my point.
Mr. Rooker: I finish on the point of total secrecy. We live in a secret democracy—not a mature democracy. It ill behoves this House to continue that process and build upon it in our own internal proceedings, on what the Attorney-General called "domestic matters".
8.22 p.m.
Mr. Michael English: We are using a procedure which was last used in 1857 and it behoves both the Government and Opposition Front Benches who believe in the use of that procedure to justify it. In 1857, it was used for a Select Committee concerned with the Bank Acts. I can see why there should be secret Committees—
Mr. Kenneth Lewis: I am sorry to interrupt the hon. Gentleman so early, but he must get his facts right. He knows better than that. The last time that we had this procedure was in 1971, for the Committee on the Civil List, which was entirely in private. He and I were both involved. Leave of the House

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was not given to hold the Committee in private, but in practical terms that Committee was in private.
Mr. English: The hon. Gentleman is wrong. I said "this procedure"—the procedure whereby the House forbids Members to attend. His intervention, if he will allow me to say so, was somewhat irrelevant, because in the end we both agreed not to sit in on that Committee.
I am talking about the procedure whereby Members and everyone else are forbidden to sit in. It was used in 1857 for a Select Committee to consider the revision of the banking laws of the United Kingdom, the Bank Acts. I can see why the House chose at that time to make that a secret Committee. A similar modern analogy is the secrecy that we attach to the Budget, even in the Cabinet until the last minute—for the simple reason that in such cases people can make money by knowing the proposals in advance.
But we are talking tonight about an investigation into some past activities. This Committee is not set up to make suggestions for the future. One thing which has worried me during these proceedings is the bad advice which it appears the Prime Minister is getting. I will mention in a moment other bad advice that he seems to have received, but on this issue he said that it was not customary for hon. Members other than its membership to attend the Committee of Privileges.
That may or may not be true in recent years. It is very difficult to prove, because no record is kept of the attendance of non-members of a Committee at any Select Committee. I suggest that whoever gave him that advice—he said that he understood it to be so and had been given advice to that effect—had clearly not recollected that the practice of the House is widely varied. Until about 1837, every hon. Member could attend every Committee and speak in it. Thereafter, with one interesting exception—the Committee of Privileges—they were not allowed to speak in a Committee, until we revived the practice for the Report stage Committee. But the Victorians, who precluded that right in 1837 for most Committees, allowed hon. Members for a time not only to attend but to speak
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in the Committee of Privileges—a fact which seems not to have been conveyed to the Prime Minister.
I go that far back for precedents because the Government and the Opposition have themselves gone that far back—to 1857—to find this procedure. I do not know whether they realise the full peculiarities of a secret Committee, with documents carried in through doors in little green bags and things like that. They have set up this Committee under an ancient procedure a Committee which is entirely secret.
Again, I do not know whether they realise some of the peculiarities or not, but why did this happen? It happened in the first place because many years have passed before a matter which may or may not have been a breach of the privileges of this House has been raised before us. Some confusion has been caused by Lord Justice Salmon. His remarks in his report have been taken by people who do not understand this issue to imply a series of things. The first thing that they are taken as implying is that anyone who is corrupt in this House is not guilty of a criminal offence. That is simply not true. I twice said that to the Prime Minister on the occasions last week when we discussed it, and on both occasions, clearly misadvised, he said that it was not necessarily a criminal offence.
This House of Commons has the power to imprison people, rather a weaker power than the House of Lords—
Mr. Alan Clark: In the tower.
Mr. English: The hon. Gentleman should not make silly interruptions. If he looked it up, he would find that it is Wormwood Scrubs to which prisoners can be sent. The condition of the Clock Tower is not such that people would use it nowadays. The hon. Gentleman should get his facts right.
This House has the power, slightly limited, to imprison only for the Session—instead of for any period of time, as the House of Lords can do—and it does not have the power to fine, which the House of Lords has. There are various difficulties connected with the jurisdiction of this House, but it is a criminal jurisdiction. To say that someone has not committed a criminal offence because

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it is a contempt of this House—if anyone has—is quite wrong.
But these difficulties could have been cleared up years ago. There was a Joint Committee of both Houses of Parliament on Privilege. It was the last Joint Committee to consider this issue. The only two people still alive and in this House who were on the Committee are the Attorney-General and myself. Therefore the Attorney-General is the one person who cannot claim not to know what was in it because he was one of the three people from this House who made the recommendations on what needed to be changed in the law of privilege. If one of those changes in the Joint Committee's First Report is not made, I do not see how this House can be broadcast because, by some quirk, the broadcasting authorities are not protected in the way in which the Press is protected in reporting our proceedings, and they will be sued for libel in the way in which we are not capable of being sued under the Bill if Rights.
Mr. Edward Lyons: My hon. Friend has referred to the powers of the Commons to imprison. Would he regard it as unconscionable if this House imprisoned one of its Members for an offence which would not be imprisonable when committed by a local councillor—so that, although there is the technical power, it would be improper to use it?
Mr. English: Quite the opposite is the case. If a Member of this House did something in this House exactly the same as a councillor in a council and we had the power to imprison him and did not use it, I would think that disgraceful, even if the councillor could not be imprisoned, because an offence committed here is far greater than that committed in a local council. However, that is a relatively small point.
The point at issue is that, during all the time that the Attorney-General has been considering this issue, nothing has been done to revise the procedure on the privileges of this House when anyone could have raised all these points. They were not dealt with by a succession of Governments. As I say, one which has not been dealt with will enable any broadcasting authority to be sued for libel if any of us makes a statement in this Chamber for which we cannot be sued and it is
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repeated. The only alternative is for any broadcast to omit such statements. But none of them has been dealt with, yet the Attorney-General is one of the people who know precisely what those discussions were.
A lot of nonsense has been talked, but the first and most important question that we should ask is why the Attorney-General, as a Member of this House, never brought to the attention of this House any question of a possible breach of privilege or contempt of the House if he thought that there was one. That is a question which needs to be asked of him. As Attorney-General, he has the responsibility of deciding upon prosecutions. It is customary not to question him unduly on these matters. I think that they have been discussed only on formal motions before the House. But he also has responsibilities, as we all have, as an individual Member of the House, and he must be asked why, if he had knowledge of the possibilities of contempt of this House, he did not bring them to the House under the normal procedure. As a result of his not doing so, we have not had a normal consideration of this case by the Committee of Privileges.
It looks, therefore, as though someone, somewhere, is trying to cover up things and, because we have not had that normal procedure and because Mr. Speaker ruled the other day that it was possibly too late under our procedure to have it, we have to set up a special Select Committee. It is not the ordinary Committee of Privileges but a special one.
I am sure that my hon. and learned Friend the Member for Bradford, West (Mr. Lyons) will agree that one of the matters that are challengeable, if we have a criminal system, is any attempt suddenly to change a court when a particular case is brought before it. I think that my hon. and learned Friend would take a different view of actions in the High Court if we suddenly changed its membership just before someone brought a specific case before it. That is not consonant with natural justice. When we have a system of law which someone may have broken and, in the same way, when we have a Committee of Privileges with the rights of this House to investigate possible breaches of them, it is not consonant with natural justice either on behalf of this House, on behalf of the

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public at large or on behalf of any possible defendant suddenly to change the court just before the hearing. It is not common practice and should not be done in this case. Nor is it right suddenly to change the procedure of the court. It is not right suddenly to change the rules of evidence if that is what is being done, nor to change the practice of this House which has been compiled over many centuries.
Even if we make the assumption, which I do not, that Members have been guilty of contempt, this is not the first time. If we believed that that would be the result, it would not be the first time in the history of this House. It has happened in every century over the 700 years that this House has been in existence, and there is a proper procedure through the Committee of Privileges and a subsequent resolution of this House for dealing with it and for penalising the offender, if there is one.
Why did not someone adopt it? It would have been much simpler and more believable if that had been done in this case. If the amendment of my hon. Friend the Member for Bolsover (Mr. Skinner) is defeated, I shall therefore vote in the sense of my own amendment on the Order Paper, to leave out the paragraph of the motion that changes the procedure.
I believe that we should have referred the whole matter to the Committee of Privileges. I certainly do not believe in changing the ancient procedures of this House, particularly in a case such as this. There is a good deal to be said for changing our procedures, but we should do it as it is done with the law; we should do it in advance and not after we know about a particular case, as a sort of set-up, special job for that particular case.
8.35 p.m.
Mr. John Mendelson: There are, I believe, three purposes which we ought to seek to accomplish in concluding this particular business and which are only imperfectly covered by what the Government are proposing to the House tonight. What is proposed puts a good many Government supporters, as the debate has shown, in very considerable difficulty. I dare say this applies to right
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hon. and hon. Members in other parts of the House, too.
The first purpose must be to bring out the truth and to allay public concern about what actually happened. The second purpose must be to do justice and to see that fair play is exercised in relation to all individuals, including Members of this House. The third purpose must be to clear up the widespread anxiety about the provisions which enable Members of Parliament to exercise their duties.
I put the third point deliberately in that way because it has not yet been put in that way today. But it is the only way which is either relevant or historically correct. I think it is quite wrong for people to take over from newspapers many of the allegations current at the present time. Along with many other hon. Members, I have been in public life over many years now, and I do not believe that there is widespread corruption. I do not believe that many people in our public life are corrupt, whether in central Government, local government, the Civil Service or in public service generally.
But there is, unfortunately, a growing belief among well-meaning members of the public—supported by a good many people who are in a position to spread what I believe to be false views—that there is increasing corruption in our public life. The fact that there is this growing opinion ought to be recognised by the Government and by this House as a matter of the first importance. The fact that I do not believe that there is any significantly large body of corruption in our public life is irrelevant compared with this growing opinion among our people, because what people think matters much more than any individual assessment made by any of us in our own thinking and researches.
Against that background, Parliament over the years has developed the conditions in which Members work. I have always objected—as have other right hon. and hon. Members—to the term "privilege", to which my hon. Friend the Member for Nottingham, West (Mr. English) referred in his interesting contribution. We cannot help it. It is a term that has been used for some time now. I have always objected to the term "privilege" being used because, as we all know, it is

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not meant to be a privilege at all. It is to create conditions which safeguard the work of a Member of Parliament in the interest of his constituents. The hon. Member is safeguarded physically, as a person, on his way to Parliament. He is safeguarded against physical attack in doing work for his constituents. That was what was originally meant by privilege.
In exactly the same way it must be understood that this privilege, which allows a Member to act freely inside and outside the House in carrying out his parliamentary duty and acting for parliamentary purposes, should have the added phrase "on behalf of his constituents" or "on behalf of the general public". This privilege should never be extended to a Member acting on his own behalf, and that is the cardinal difference at the bottom of this whole problem.
Nobody has ever suggested, nor has it been held to be constitutional doctrine, that any hon. Member ever held, as a result of any part of a legal or constitutional convention, a position which was in any way the slightest bit different from that of any other citizen, apart from the limited function in his political life.
It is a confusion between the two which is involved here, and the public have every reason to be strictly condemnatory, even without knowing all the details, if they think any Member is deliberately confusing the two. As a body, we must be ruthless in exposing and condemning ourselves for any confusion of the two. That does away immediately, without any great difficulty, with the problems which have arisen in the course of the debate this afternoon.
One does not have to accept the deliberate exaggerations of the enemies of the parliamentary system, who feed all this propaganda—and it is highly organised in this country—against Parliament. It is based on little evidence, and most of it is completely unfounded. But in order to see that the enemies of Parliament do not succeed, Parliament has to make its contribution. The Government must give the lead, and the proposition they have put forward this afternoon has sadly failed to meet the point.
It would not matter that it will be difficult for a number of hon. Members who may have to appear and give evi-
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dence and have their positions discussed if that were all that was at stake. But it is not just the position of individual Members which is at stake. Safeguarding the position and purpose of an hon. Member would be the only thing, if the other two purposes to which I referred earlier were not equally important.
We may have to make a sacrifice, and that sacrifice might be finding a form in which the public can be convinced that these exaggerated attacks on Parliament are wrong. I believe that the result of a wide, free and searching inquiry would produce very little that was bad for Parliament. Therefore I deplore the decision to use the Parliamentary Committee instead of a public tribunal to conduct the inquiry in the first place. In spite of all the disadvantages of tribunal processes I believe that the Government have taken the wrong decision. Having taken it, however, I think that this is not the moment for them to change course. Undoubtedly they have consulted some sections of this House. I do not know how widespread the consultations were but obviously there have been some and this decision has been made.
But they have confounded that decision by their reluctance to have at least the whole record published at the end of the Committee. I ask the Government now to amend their present intention. Anybody who listened to the debate would know that there was a marked difference in the interpretation originally given by the Leader of the Opposition and that given by my right hon. Friend the Prime Minister. But the way in which the right hon. Lady started before the lawyers on her side got at her left little to disagree with. She went fairly wide, and the Government have yet to agree with that wider definition. The Government must say authoritatively at the end of the debate that all the evidence will be published, barring bad language under the definition of the late Mr. Justice Simon. If the Government can say that, many of us will feel a lot closer to them than we are at present.
There is the important argument that some of the remarks made about Members would be left in mid-air at the end of one afternoon. But at the end of the Committee there would be the possibility for everyone to be completely convinced since they would have been able to see

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the whole record of everything that took place. I do not think that is too great a decision to take in view of the great advantages of avoiding the dangers that arise with allegations of secrecy which might involve allegations, quite wrongly based of course, of an intended cover-up—and I repudiate such an allegation as much as the Government do.
As my right hon. Friend the Prime Minister said the other day, the reputation of Parliament is at stake. No formulation of mine can be more serious than that.
There is also the urgent need for comparison between representation and self-interest. If under my original definition service to constituents and a wider service to the country were to be the yardstick that justified safeguarding a person and protecting his freedom of speech, there could be no room in that concept for personal gain or personal advantages. The two are separate and can easily be separated.
I do not expect that a lot of evidence of a criminal character will emerge. People are nervous that there will be a fair amount of evidence that is unattractive, but the nation is entitled to have unattractive evidence about its elected representatives. Unattractive evidence is part of the public contract that we enter into when we stand for election. It must be accepted along with the attractive evidence that we present on the platform or at public demonstrations or even at a football match.
I do not believe that anyone has it in his heart to make party capital out of this issue or to try to drive anyone into a particularly difficult position. Every hon. Member will support the creation of the best possible conditions for this old and important body to do its work. However, the Government have not acted correctly so far and they must improve their position to get our support in the Division.
8.50 a.m.
Mr. Kenneth Lewis: I found much of what the hon. Member for Penistone (Mr. Mendelson) said wholly acceptable, but I did not agree with his conclusion. His suggestion of a tribunal to deal with this matter was extreme.
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I have listened to most of the debate and I am concerned that the House is in danger of giving the impression that we are setting up an alternative to what the courts should be doing. Of course, this is not correct. That was obvious from the statement by the Prime Minister and has been confirmed by the Attorney-General.
It is clear that if any hon. Member had been criminally involved in this matter he would have been subject to proceedings in the courts. There could have been court action if it had been justified in this case.
I have heard it implied that hon. Members are somehow above the law. That is utter nonsense, but it would be most dangerous if such an impression got across to the public. I do not believe that people could gain that impression—unless the Press misreports what we are trying to do—because an hon. Member was recently sent to gaol for a considerable term. Hon. Members are brought before the courts for misdemeanours on many occasions. Like everybody else, we commit motoring offences. It is not true to suggest that we can escape the normal rigours of the law.
We are discussing this procedure because there may have been some misdemeanours. I hope that the media and the public will recognise this situation.
I, too, have difficulty in deciding whether the inquiry should be open or whether the Committee should follow the Government's suggestion and submit a report after a hearing. I concluded that the Government and my right hon. Friends on the Opposition Front Bench were correct, for one reason. If it were not so, the hot-house which this place is would have a Roman holiday. There would be great exaggeration of everything said on every day that the Committee met. It is extremely doubtful whether, in those circumstances, the Committee could do its job properly.
When the report is published, the relevant evidence will be produced and printed. The hon. Member for Penistone said that he feared that what would have been said in a court would not be said to the Committee. The Committee would be very ill advised if it left anything out, even if it did cast a distasteful slur upon a Member of Parliament.

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Every Member of Parliament should be subject to his peers in this place, and the House must be able to probe when it thinks that it is justified in doing so. The Select Committee is being set up to do just that. I have every confidence, and I hope that the country will have confidence, that the Committee will print what it thinks needs to be printed and that there will be no secrecy in the report. The point is that the Committee will be able to get on and do its job. Incidentally, I hope that it will do it with as much speed as possible and not prolong the matter. I think that it will be unnecessary to prolong it. It would be extremely dangerous for the House if it were prolonged.
The first principle is that this is a House of Commons matter, because whoever may have been concerned will have been cleared by the courts, as the Attorney-General has indicated. That is the first thing that we ought to make clear to the country. The second is that there will be no secrecy in the long run because the report will be published and both the individuals concerned and the House will be open in the testimony that is produced in terms of whatever investigation takes place.
8.57 p.m.
Mr. Frank Hooley: I think that there has been too much legalistic pedantry in this debate, and what I have to say is purely from the point of view of an ordinary person trying to cope with a rather difficult situation.
What we are purporting to set up is not a trial but an investigation. The Committee will have no power to convict or to impose sentences. It will not be conducting a legal process at all. It will be carrying out an investigation on behalf of the House. Indeed, its findings need not be accepted by the House. There have been many occasions on which the recommendations of Select Committees have been subsequently rejected by the House. That may occur on this occasion as well.
One or two important features of the procedure of the Committee have been touched on in the debate. In the first place, we ought to recognise that to the outside world this will not be an independent investigation. It will be an
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investigation by Members of Members, and by any normal standards in the conduct of public inquiries this does not constitute an independent investigation of what, if anything, is wrong. Therefore, on that ground, it is all the more important that the Committee's work should be in public, not in private.
It has been argued that, somehow, the conducting of the Committee's affairs behind closed doors will ensure that speculation, gossip and malice will be less possible or, indeed, be made impossible. In my view, the reverse is true. There is nothing more conducive to speculation, gossip and malice than the holding of investigations in private.
Unless the investigation is conducted, as it were, entirely on another planet, there are bound to be incidental events—the calling of particular persons. the Committee suddenly deciding to adjourn or sit twice a week and so forth—which will be built up by people who have no good will in these matters as a basis for all kinds of malicious comment.
Indeed, secrecy could damage people who are entirely innocent. Let us take, for example, the possibility of an architect or county treasurer being invited by the Committee to give some purely technical evidence or advice, not in any way involving that person or any allegation of improper conduct. Whatever he said to the Committee, the fact that it was not reported and was not known could give rise to all sorts of speculation in that person's area or home town about why he was suddenly associated with Poulson. If, on the other hand, the matter were conducted openly, everyone would know straight away that that person had been invited simply to give advice on a technical matter on which the Committee needed elucidation.
Then there is the point that, so far as I know, this Committee's proceedings will not be subject in any way to any sort of sub judice rule. When a matter comes before the courts, there are rules relating to contempt of court, but in this case there will be no sub judice rule. At least, I know of no law or rule of the House that provides that there may be no public commentary on a proceeding of the House or a Select Committee. If that is so, secret inquiries, private discussions and private investigations can be the

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subject of all kinds of private speculation, without any limit.
It has been argued that if the matter is conducted in public, cranks or people inspired by sheer malice can come to the Committee, or be invited to the Committee, and spin any yarn to the detriment of the character of Members of the House or other people—that any lie can be told and any allegation can be made, and, so the argument goes, as the matter is held in public it will be reported and, therefore, infinite damage can be done by people giving irresponsible or grossly untrue evidence to the Committee.
I should have thought that the House could deal with that situation, if it arose—which is unlikely—by its ordinary rules of conduct. I should have thought that a person who came before a Committee of the House and told blatant lies in the knowledge that the information given was blatantly untrue and given in bad faith, could be warned of a possible contempt of the House and dealt with in that way. I do not think that the possibility is a very likely one. I suppose that it could happen, but I should have thought that the judgment of the persons we are likely to appoint to this Committee would be such that they could distinguish between evidence that was necessary for elucidating the case and evidence that was based on sheer malice or stupidity.
I have no doubt that a great many hon. Members hope, as I do, that in the end the Committee will decide that nothing, or very little, improper had been committed, and that at the end of its investigations it will find that hon. Members who have been referred to in the Press and so on over the past few weeks have done nothing unworthy, nothing improper and nothing short of the standards that this House would expect.
However, in a situation in which the Committee sits privately, in secret, and publishes only that evidence which is thought by the Committee—the rather unfortunate words "by them" are included in the terms of reference—to be relevant, even if it finds at the end of the day that the persons concerned have done little or nothing improper, the public reaction will be even more to the effect that this is a cover-up operation,
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that the matter has not been thoroughly investigated and that the House, in a nice cosy club atmosphere, has combined in a general conspiracy to see that nothing terrible happens to any of its own Members. By conducting the whole inquiry absolutely in public and publishing all the findings and all the evidence, those kinds of argument can be disposed of.
I agree that there are hazards, as my hon. Friend the Member for Penistone (Mr. Mendelson) said. Some sacrifice might be required of individual Members or, indeed, of other citizens who may accidentally become drawn into the argument or the investigation. However, as my hon. Friend said, that is a price we must pay if we want an absolutely thorough and convincing inquiry into this matter.
It is regrettable that the Government did not see fit to appoint an entirely independent tribunal to look into this matter. That option has apparently been discarded. It has been decided that this is—to use another hon. Member's phrase—"a domestic matter". However, as we have embarked on this course, we must get rid of the neurotic obsession with secrecy and discharge our duty absolutely in public.
9.5 p.m.
Mr. Edward Lyons: The hour is late and I shall not speak for long. Basically the argument is about disclosure and non-disclosure. In this House a Member can speak for money provided that he discloses. If he does not, the House takes a serious view. Basically the Select Committee will be concerned with whether there has been non-disclosure. In my view it is no use the House and the public getting terribly upset about Members taking money in this case when they do not get upset about Members taking money who disclose.
Perhaps we should consider whether we wish to proceed with the custom that enables Members who are elected by constituents to represent them and to take money to represent special interests. That seems to be the core of the evil and it does not matter really whether one discloses. Admittedly it is better that there is disclosure, but it does not remove the evil when we are elected to represent our constituents and not to represent special interests. It seems that

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the Select Committee will do nothing to deal with that major and basic issue.
Another argument appears to be whether publicity has to be day by day or at the end when the evidence is published. Apparently there are those in the House who feel that the situation is disastrous unless we get publicity day by day whereas others take the view that publicity at the end is good enough. I should be in favour of publicity day by day if we had a system of cross-examination so that as fast as an allegation is put there is an opportunity for it to be tested and the counter-allegation or defence to be put. If that were done, the answer could be printed within a short time. That is not the position with a Select Committee as there is no cross-examination permitted.
Before the House changes its procedures to allow a Watergate tribunal system where 10 politicians, some of whom may like publicity, some of whom may have ambition and others of whom may not like Members of opposing parties, may appear before the media day by day, we should consider whether we wish to change the rules to permit the sort of thing that is likely to occur.
My hon. Friend the Member fox Sheffield, Heeley (Mr. Hooley) says that this is an investigation and not a trial, but in my opinion he is playing with words. In effect, the Select Committee is a trial. If the Press were there day by day it would be even more of a trial. The penalty is loss of reputation, destruction of prospects and possibly the destruction of livelihood. Therefore, it is a trial in a real sense, but who has heard of a trial where there are 10 judges drawn from one's own body, judges who may have axes to grind? Why should the accused persons—and there is no doubt that those who appear before the Committee will be the accused persons, whether or not they have technically committed a crime—have to endure 10 people who possibly have axes to grind and who can deal with them in that way?
If we are to have publicity day by day, we should have a tribunal which permits cross-examination. If we are not to have publicity day by day, the argument for a tribunal is clear because there would be no incentive for a member of a tribunal to ask questions to the gallery when he would know that the evidence
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would not be published for some months. With that knowledge the atmosphere is calmer. There is less of a tendency for the members of the Committee—namely, the judges—and the witnesses to say things that are dramatic merely to get a headline or a mention on the television news.
Given that the Government have eschewed the tribunal as a method of procedure, I must support the Government in saying that there should not be day-by-day publicity. When the Committee's report is produced, the evidence in full should be published simultaneously. I agree that there is a risk in doing that, but the evidence should be there for people to read. If there is a commitment by the Government to publish all the evidence simultaneously with the report, the argument that there is no publicity and that the Committee is acting privately loses a great deal of its significance. In those circumstances I should be even happier to support the Government.
If the House wants publicity it must allow the accused person the right to cross-examination day by day and the right to have counsel. Furthermore, in the American system which is being advocated committee members with no legal experience have counsel to guide them. That is not being suggested here. Before the House changes its rules to enable Members of Parliament to bask in publicity, it should see that they also have the benefit of professional advice.
In the American system, the senators have professional advice because they need experts to guide them in procedure. Some of the members of the Select Committee are lawyers, but others are not and do not possess legal expertise. Before we embark at half-cock on the American system—which is what day-by-day publicity means—we should think about that. Formal consideration and investigation by the House are needed before a changeover to the American system of open committees, television cameras and the Press. If the Press is allowed to be present, it is difficult to exclude other media, and that would bring us very close to the American system. One American tried to use such a committee to run for the Presidency. We are dealing with people's careers and reputations and should not embark on a new system of

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that kind without a great deal of thought. I support the Government.
9.12 p.m.
Mr. John Peyton: The debate has gone on for longer than some of us expected. The whole House must be united in regret that such a debate as this is necessary and that we have been forced to set up an investigatory process. These events are always unpleasant. We go along with the Prime Minister when he said that the standing of Parliament requires that the allegations that have been made should be investigated.
I want to be fair to the hon. and learned Member for Montgomery (Mr. Hooson), but he seemed to show rather less than his usual skill. For instance, he said that according to the motion it would be the duty of the Select Committee to make recommendations, but further study of the motion will reveal to him that the Committee is under no such duty; it merely has to report.
It appeared that the hon. and learned Gentleman had been put up to deploy an argument for which he had no heart, and that he was endeavouring to put some life in the notion that the Liberal Party was superior to all others, that it alone was against a cover-up and that it alone was anxious that all should be known. I do not believe, however, that the hon. and learned Gentleman persuaded anyone who was not already of his opinion to espouse his cause. He might even have dissuaded some who previously held that view. The hon. and learned Member hardly helped the cause of the Select Committee, on which he himself is due to serve, by some of the remarks he made.
The hon. Member for Bolsover (Mr. Skinner) made a rather better speech than the hon. and learned Member who preceded him. He said, and went on saying, that he was suspicious, and he reiterated the idea that people outside would believe that we were evading the issue. If people outside convince themselves that we are evading the issue as a result of this debate and what we decide tonight, they will reach that conclusion for two reasons—partly because they are suspicious by nature and wish to reach such a conclusion, and partly because they have received the most liberal encouragement to do so by speeches such
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as that made by the hon. Member for Bolsover and some of his hon. Friends.
I will not now pause to speculate on what exactly the hon. Member meant when he said towards the end of his speech that he and his hon. Friends would be obliged to get the matter resolved by some other tactic. That we shall leave to the future to unfold.
The right hon. Member for Battersea North (Mr. Jay), in perhaps the shortest speech of the whole debate, made one of the most powerful contributions of all. He reminded the House, as perhaps others should have done, of the really painful, unsatisfactory and unjust results of the tribunal procedure. I agreed with the right hon. Member completely and was very glad that he made that contribution, but I am sorry that it was not more widely attended to.
I am also glad that my hon. Friend the Member for Wallasey (Mrs. Chalker) has been persuaded, both by my right hon. Friend the Leader of the Opposition and by the remarks made by the right hon. Member for Battersea, North, that her previous doubts about the procedure adopted were unfounded and that she should support the Government's proposals tonight.
The hon. Member for Pontypool (Mr. Abse), who, unfortunately, is not in his place at present, made an interesting speech on quite another issue. That was whether we should adopt the recommendation of Lord Salmon in paragraph 311 and have new legislation. That is not the question with which we are faced today. That is a matter for the Government and for everyone in the House to make up their minds about in due course. For the moment we have, within the present framework of the law—adequate or inadequate—to decide what to do and we have to make that decision knowing that whatever conclusion we reach it will certainly not be perfect.
My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) was, I am glad to say, persuaded by the arguments of my right hon. Friend the Leader of the Opposition. I do not think that there can be any justification, however, for harping on the point that in this case the Select Committee will be prosecutor, judge and jury. It will be nothing of the kind. There will be no criminal

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cause before it. There will be no prosecution. This is an investigation being carried out at the behest of and on behalf of the House of Commons by a Select Committee of its own Members who, as far as I know, enjoy the trust and confidence of the House.
The Attorney-General helped us considerably with his advice, though I am bound to say that at the end he made two very surprising remarks. First, he announced that he went a long way with the hon. and learned Member for Montgomery, which seemed very surprising, as I had understood that they were on diametrically opposed sides of the argument.
The right hon. and learned Gentleman went on, I thought rather gratuitously, to endorse the Board of Trade inquiries which at least seem to me to be potential sources of very great injustice indeed. I hope that in future the right hon. and learned Gentleman will not go out of his way to confer the immense accolade of his blessing upon them.
My hon. Friend the Member for Woking (Mr. Onslow) made a refreshingly brief intervention which was to the point and which I endorse. The hon. Member for Luton, West (Mr. Sedgemore) surprisingly commented upon the generation gap. I had no idea that he was so young and that there was such a yawning gap between us. I thought that he was a rather bitter old gentleman, but it turns out that he is very young and well on the other side of the yawning generation gap in which I languish. One might have expected much idealism from him, but he expressed a great lurking cancerous suspicion and lack of any confidence in anyone on any side of the House. He gave a cynical example to his generation. Not all the young accept that 40 is young but I give him the benefit of the doubt. Today he gave a typical example of the most deep-dyed cynicism which might have been more suitable to someone twice his age who had experienced an unfortunate and unhappy life.
The hon. Member for Blyth (Mr. Ryman) at least accepted that the Select Committee was the best machinery available. But he complained that it would be like a club committee dealing with allegations against a member and making its own rules as it went along. I am sorry
1088
that we have lost his company but I did not think that there was a word in the latter part of his speech which could be made to stand up except by a mixture of prejudice and misunderstanding.
The hon. Member for Birmingham, Perry Barr (Mr. Rooker) was very regretful indeed about the whole proceedings. He said that there was after all plenty more to be got and he was very sorry that he would have to make do with suet an emaciated and meagre meal. He made it clear to the House that although he would be greatly offended if some slur came anywhere near himself, the idea that the Select Committee could be inhibited from giving further circulation to the merely scurrilous did not bother him.
The real worry that has emerged, particularly from the last speeches from the other side of the House, is whether the Committee should meet in secret. No one would deny that it is a difficult question hut we believe that the time lag between the allegation being made—perhaps baseless allegation—and the conclusion of the Committee is dangerous and exposes innocent people to great hazards. My right hon. Friend the Leader of the Opposition made our view clear. We must retain some regard for the interests of the innocent. The standards of parliamentary conduct are of the greatest possible importance to us all. But let us remember that the proceedings that are contemplated are not the alternative to a criminal trial.
We are concerned, and so will be the Select Committee, with the conduct of Members. The question is whether by their conduct they injured the House of Commons, not whether they were guilty of criminal acts. That has nothing to do with it. We are concerned with the injury or otherwise sustained by the House.
I believe that the standards of parliamentary conduct will be better protected in an assembly the membership of which is widely regarded as a great privilege and in which the public can feel confidence that it is a protector of them and their rights and not merely the creature of a powerful Executive. I believe that the standards of Parliament, of this House, will be less safe if we allow ourselves to degenerate into an assembly where suspicion is assiduously fostered and unfounded charges are allowed to become routine.

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We must also be particularly careful when we embark upon inquisitorial procedures such as the one we are now contemplating. The rules in all criminal proceedings are designed to hedge around and sustain the notion fundamental to the British constitution that a man is innocent until he is proved guilty. We must be careful not to jeopardise that in our haste to satisfy a public demand for a rapid clearing of the decks.
In this instance no one faces any defined charge, nor—and this is important—does anyone know that he is safe from smear or slur. Moreover, if the Committee were not to sit in secret and if it did not publish both the evidence and the conclusion together, innocent people could face pernicious attacks which they could refute only after a lapse of time.
Some comments have been made about the position taken up by my right hon. Friend the Leader of the Opposition on the publication of evidence. As far as I am aware, her position is not changed in the slightest. What she requires is that there should be full publication of all the evidence that is properly put to the Committee. But she is anxious that there should be no unnecessary circulation of the unfounded or the purely scurrilous. That seems to me a perfectly reasonable, defensible and right position.
There is a need for special care in such courses of action as we now contemplate. We should take some encouragement from the good record of Select Committees such as this. We can be confident that if difficulties arise the Committee will be free to return to the House, and that is what it should do.
I should like also to make it absolutely clear that we have neither sought nor reached a bargain with the Government.
Mr. John Evans: Nobody believes the right hon. Gentleman.
Mr. Peyton: There are some people who are such strangers to truth that they find it impossible to believe anything anyone says. The House would have benefited if it had had the chance to hear the hon. Gentleman today, if only so that he unveiled his true character, but perhaps we are better off without that.
1090
We have neither sought nor reached a bargain with the Government. We support the position shown by the motion on the Order Paper, which the Prime Minister explained today, because we think it right for Parliament and the public and because it offers at least a minimum of protection to the individual.
These occasions are sad and, happily, not all that frequent. Therefore, when they occur we must take them seriously and be seen to do so. But they are made sadder by the evident relish with which they are greeted by the few.
9.30 p.m.
The Secretary of State for the Home Department (Mr. Merlyn Rees): There is always a risk, when there have been four Front Bench spokesmen in a debate such as this, that the House may suffer by way of repetition, but in my view, having listened to the debate right through, there are some matters that need to be repeated.
My hon. Friend the Member for Penistone (Mr. Mendelson), fairly and in a non-partisan fashion, raised the subject of the good name of the House. We know from many newspapers that many people outside have become used to suggestions that Members of Parliament are "at the game", "on the fiddle" and so on. Those allegations are made and we have to take account of them in what we are doing. We must give our attention to the good name of the House. Some people talk about "the club", and "looking after themselves", and all the rest of it, and the time comes when all of us who are proud to be Members of this House should consider what is said about us outside and do something to correct it, in whatever way we can. Therefore, it is right that we should consider this matter, because it is a House of Commons matter.
Let me turn to the origins of the appointment of the Select Committee. It started on 19th October, when my right hon. and learned Friend, whose rôle in Government, whatever party is in power, is known to all, was asked whether the Director of Public Prosecutions had received the report
"on the investigations into the affairs of Mr. Poulson and his companies; and whether he will make a statement."

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That was not related to information merely gathered together over the years in an ad hoc fashion; it came from the Director of Public Prosecutions. My right hon. and learned Friend said that the report had been received, and added:
"This investigation, which has been concerned solely with possible criminal offences and has exceeded in scope detail and time spent on it, any similar operation, is now complete. The police the Director of Public Prosecutions and the team of counsel retained to advise throughout the investigation have examined a mass of documentary and oral evidence and many allegations and rumours concerning the possible commission of offences"
My right hon. and learned Friend said a little later:
"Those participating in this investigation have now reached the conclusion, with which the Solicitor-General and I concur, that so far as concerns persons within the jurisdiction, there are not sufficient grounds to merit the commencement of any further prosecutions or continued inquiry into the possibility of obtaining further evidence of criminal offences."—Official Report, 19th October 1976: Vol. 917, c. 361.]
I think that needs saying, and certainly needs saying outside the House. That statement stems from a Law Officer of the Crown. The Select Committee was conceived in that way.
The hon. and learned Member for Dover (Mr. Rees) mentioned the matter of the Observer. In 1972, under a previous Administration, the decision was taken that police investigations should take precedence over other investigations into the Poulson affair. Therefore, the present proposed Select Committee was not prompted by the Observer report.
As for the method that we use to investigate this matter, which is for the House of Commons, I would say to the House what other people who were around at the time have said—that it is not a matter for a tribunal of inquiry. The reasons have been given by my right hon. Friend the Member for Battersea, North (Mr. Jay). Other reasons were given in, to use the felicitous phrase of the Leader of the Opposition, the blue-covered Salmon Report. I believe that, on reflection, those who believe that there should be a commission of inquiry into this material, which has already been considered by the police and the DPP—leaving aside the question whether it was something new—will agree that that would be unwise.
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The Prime Minister mentioned the Committee of Privileges and explained why it was thought better on this occasion to go for a Select Committee—a Select Committee in which, I concede, there will be no specific charge or charges and where the evidence will not necessarily be relevant. I raise those two points because they are two of the main reasons why I believe that the best time to reveal what is said to the Select Committee is at the end of the day.
The inquiry will be into matters concerned with the Poulson companies. That is why we chose the words:
"That a Select Committee be appointed to inquire into the conduct and activities of Members of this House in connection with the affairs of Mr. J. G. L. Poulson".
One could have specified the "companies of" or "persons associated with" Mr. Poulson, but in my view those words are broad enough to take in any possibility. It is the Poulson affair that we are talking about now.
My hon. Friend the Member for Bolsover (Mr. Skinner) asked what would happen if evidence were brought forward relating not to Poulson but to other matters affecting hon. Members. This Select Committee is set up to inquire into the Poulson affair and its ramifications in this House, but if any one has any evidence affecting any other hon. Member—relating to contempt or anything else—the fact that we are talking about Poulson does not prevent my hon. Friend or anyone else, if he has any information or if information comes his way, from raising it in the usual way. But this is an investigation into the Poulson affair, and the motion is so drawn for that reason.
The motion goes on:
"… to consider whether any such conduct or activities amounted to a contempt of the House"—
this is a paraphrase of Section 9 of the Bill of Rights—
"or was inconsistent with the standards which the House is entitled to expect from its Members".
The Committee will be able to send for persons, papers and records. In the Yorkshire Post in my area today, Mr. Poulson is quoted as saying that he is prepared to come to the House. I would only say that if the Committee wants Mr. Poulson it will decide, not he, whether

1093
he should come along. It is a matter for the Committee. It is then a matter for the Attorney-General, in consultation with it, what information he gives to the Committee.
Counsel can be heard if the Committee sees fit. It is certainly the Government's view that the right to counsel for those whose conduct is called into question would be a correct interpretation of the terms of reference.
I believe that it is right for the Committee to sit in private, for reasons which have been given, but what matters at the end of the day is that the information given to the Committee, oral and written, should be made available to the House. I will come to the point about relevancy in a moment, but on the question of secrecy being maintained until the report is published, I would say that the Committee will be sitting and investigating. If it feels that it cannot do its job properly it can always come back to the House and put its view to us. Before I come to the point about relevancy, perhaps my hon. Friend the Member for Nottingham, West (Mr. English) will make the point that he wishes to make.
Mr. English: My right hon. Friend has corrected himself. A Committee of Secrecy has not been used since 1857. All Select Committees meet in private, certainly to start with, and all of them have the power to decide whether to meet in public or in private, so that privacy in that sense is not secrecy, which is true of this one.
Mr. Rees: I accept that. I listened carefully to what was said.
A number of hon. Members have expressed concern about the word "relevant". That was put in for the reason that what we are concerned about is that it is possible that evidence will be sent to the Committee which has no bearing whatever on the cases. All of us who get letters from all over the country—especially as we play a more prominent part in public life—and not just from our own constituencies will know the sort of letters that will be written. All that we suggest is that the Committee should have the right not to publish that material. The Government are concerned to see—
1094
and the Opposition have spoken for themselves—that all the evidence, oral and written, shall be published, but we are trying to protect the innocent from scurrility and material of that kind which I believe that no one in this House will want to see published.
At the end of the day, the report will be presented to the House of Commons. Then it will be for the House of Commons to decide. If anyone then feels that there has been a whitewash—and many people who believe that will have talked around—he will have the chance to put that view to the House of Commons.
Mr. George Cunningham: Once the motion has been passed, it will not be possible for anyone to establish authoritatively what the wording means. Perhaps my right hon. Friend will say what his understanding is on one specific matter. When he says that the evidence will be published, does he mean minutes of evidence, such as those published by a normal Select Committee, or does he have it in mind that the Committee will produce a summary of the material put to it and publish that kind of summary in contrast with the verbatim report that is normally published?
Mr. Rees: My view is that the Committee will publish a verbatim report of all the relevant evidence that is put before it.
I ought perhaps to mention the subject of costs if there are counsel involved. That is a matter for the House. There is no precedent for the House paying costs where a Member has been represented. It is wise, perhaps, not to enter into a commitment. But the Committee itself will be free to make recommendations to the House on the subject of costs at any time.
On occasions, it has seemed apparent that some right hon. and hon. Members have not got quite correctly the recommendation of the Royal Commission on Standards in Public Life. It says:
"Membership of Parliament is a great honour and carries with it a special duty to maintain the highest standards of probity, and this duty has almost invariably been strictly observed. Nevertheless in view of our report as a whole, and especially in the light of the points set out in the foregoing paragraph, we recommend that Parliament should consider

1095
bringing corruption, bribery and attempted bribery …".
It does not say that it should. Right hon. and hon. Members who believe that it would be an easy matter to consider this and to have a quick Act of Parliament in all that spare time that we are likely to have in the next Session should think again.
In my view, the House should have confidence in the Committee, the membership of which is a fair mix of the different age groups—the young, the not so young and the old in wisdom in the House. It is right that there should be lawyers on it, because they will be dealing with criminal reports which will come from the DPP. We should have full confidence in the Committee and in the report that it puts to us at the end of the day.
This House will come to its decision when we see the report. The report will not be a cover-up. It will only leave out what is scurrilous and the things that I feel sure right hon. and hon. Members in all parts of the House would not wish to see published.
I put it to the House that the motion should be passed in the form in which it stands on the Order Paper. I say to my hon. Friend the Member for Bolsover and to his hon. Friends that the effect of their amendment would be to instruct the Select Committee to conduct its proceedings in public, and "proceedings" would normally be interpreted to mean not only the taking of evidence but all
the deliberations of the Committee. That would be the effect of the amendment, whether my hon. Friend intends it or not.
The fact that there is no precedent for such a course does not matter very much, but my lion. Friend ought to take into account that judges, juries and members of tribunals are allowed to confer in private during the course of their activities. Whatever my hon. Friend is trying to do here, in my view he is not getting it right.
As to the Liberal amendment, we have made our case in the course of the day. Our view is that the Committee should meet in private, that it should publish at the end of the day its report, together with the evidence taken, and that this House should then decide what it wishes to do in a matter which is quite properly, as it has been historically, for this House.
Mr. Speaker: I remind the House that I said that I would put the Question paragraph by paragraph until we come to the paragraph to which there is an amendment.
Motion made, and Question put,
That a Select Committee be appointed to inquire into the conduct and activities of Members of this House in connection with the affairs of Mr. J. G. L. Poulson; to consider whether any such conduct or activities amounted to a contempt of the House or was inconsistent with the standards which the House is entitled to expect from its Members; and to report:—
The House divided: Ayes 274, Noes 21.

Division No. 356.]

AYES

[9.47 p.m.

Anderson, Donald

Butler, Adam (Bosworth)

Dodsworth, Geoffrey

Archer, Peter

Callaghan, Rt Hon J. (Cardiff SE)

Doig, Peter

Armstrong, Ernest

Campbell, Ian

Dormand, J. D.

Arnold, Tom

Canavan, Dennis

Douglas-Hamilton, Lord James

Ashton, Joe

Carlisle, Mark

Drayson, Burnaby

Atkins, Rt Hon H. (Spelthorne)

Carmichael, Neil

Duffy, A. E. P.

Bagier, Gordon A. T.

Cartwright, John

Eden, Rt Hon Sir John

Baker, Kenneth

Chalker, Mrs Lynda

Edwards, Nicholas (Pembroke)

Banks, Robert

Clarke, Kenneth (Rushcliffe)

Edwards, Robert (Wolv SE)

Barnett, Guy (Greenwich)

Clemitson, Ivor

Ellis, John (Brigg & Scun)

Barnett, Rt Hon Joel (Heywood)

Cockcroft, John

Ellis, Tom (Wrexham)

Bates, Alf

Cocks, Rt Hon Michael

Emery, Peter

Beith, A. J.

Cohen, Stanley

English, Michael

Bennett, Dr Reginald (Fareham)

Coleman, Donald

Evans, Gwynfor (Carmarthen)

Benyon, W.

Concannon, J. D.

Evans, Ioan (Aberdare)

Berry, Hon Anthony

Conlan, Bernard

Faulds, Andrew

Biffen, John

Cooke, Robert (Bristol W)

Fletcher, Alex (Edinburgh N)

Biggs-Davison, John

Cope, John

Fletcher-Cooke, Charles

Boscawen, Hon Robert

Corbett, Robin

Fookes, Miss Janet

Bowden, A. (Brighton, Kemptown)

Corrie, John

Ford, Ben

Bray, Dr Jeremy

Cox, Thomas (Tooting)

Fox, Marcus

Brocklebank-Fowler, C.

Cunningham, G. (Islington S)

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

Brown, Sir Edward (Bath)

Dalyell, Tam

Freud, Clement

Brown, Hugh D. (Provan)

Deakins, Eric

Fry, Peter

Buchan, Norman

Dean, Joseph (Leeds West)

Gardiner, George (Reigate)

Buck, Antony

Dean, Paul (N Somerset)

Gardner, Edward (S Fylde)

Budgen, Nick

de Freitas, Rt Hon Sir Geoffrey

Ginsburg, David

Bulmer, Esmond

Dell, Rt Hon Edmund

Golding, John

Goodhew, Victor

McGuire, Michael (Ince)

Silkin, Rt Hon John (Deptford)

Gow, Ian (Eastbourne)

Maclennan, Robert

Silkin, Rt Hon S. C. (Dulwich)

Gower, Sir Raymond (Barry)

Mallalieu, J. P. W.

Silverman, Julius

Gray, Hamish

Marshall, Dr Edmund (Goole)

Skeet, T. H. H.

Grieve, Percy

Marten, Neil

Small, William

Grimond, Rt Hon J.

Mather, Carol

Smith, John (N Lanarkshire)

Grist, Ian

Maxwell-Hyslop, Robin

Speed, Keith

Grylls, Michael

Mayhew, Patrick

Spence, John

Hall, Sir John

Mikardo, Ian

Spicer, Jim (W Dorset)

Hamilton, W. W. (Central Fife)

Millan, Rt Hon Bruce

Spicer, Michael (S Worcester)

Harrison, Walter (Wakefield)

Miller, Hal (Bromsgrove)

Spriggs, Leslie

Hatton, Frank

Miller, Dr M. S. (E Kilbride)

Stallard, A. W.

Havers, Sir Michael

Mills, Peter

Stanbrook, Ivor

Hayhoe, Barney

Miscampbell, Norman

Stanley, John

Heffer, Eric S.

Molloy, William

Steel, David (Roxburgh)

Heseltine, Michael

Montgomery, Fergus

Stewart, Donald (Western Isles)

Hooley, Frank

Moore, John (Croydon C)

Stewart, Ian (Hitchin)

Hooson, Emlyn

More, Jasper (Ludlow)

Stoddart, David

Horam, John

Morgan, Geraint

Stradling Thomas, J.

Hordern, Peter

Morris, Alfred (Wythenshawe)

Strauss, Rt Hon G. R.

Howell, Rt Hon Denis (B'ham,Sm H)

Morris, Charles R. (Openshaw)

Summerskill, Hon Dr Shirley

Howells, Geraint (Cardigan)

Morris, Rt Hon J. (Aberavon)

Taylor, R. (Croydon NW)

Huckfield, Les

Murray, Rt Hon Ronald King

Tebbit, Norman

Hughes, Rt Hon C. (Anglesey)

Neave, Airey

Temple-Morris, Peter

Hughes, Roy (Newport)

Nelson, Anthony

Thatcher, Rt Hon Margaret

Hunt, John (Bromley)

Neubert, Michael

Thomas, Dafydd (Merioneth)

Hunter, Adam

Newton, Tony

Thomas, Jeffrey (Abertillery)

Hutchison, Michael Clark

Ogden, Eric

Thompson, George

Irvine, Rt Hon Sir A. (Edge Hill)

Onslow, Cranley

Thorpe, Rt Hon Jeremy (N Devon)

Jackson, Miss Margaret (Lincoln)

Orme, Rt Hon Stanley

Tierney, Sydney

James, David

Owen, Rt Hon Dr David

Tomlinson, John

Janner, Greville

Page, Rt Hon R. Graham (Crosby)

Torney, Tom

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

Paisley, Rev Ian

Urwin, T. W.

Jessel, Toby

Palmer, Arthur

Vaughan, Dr Gerard

John, Brynmor

Park, George

Viggers, Peter

Jones, Alec (Rhondda)

Parker, John

Wainwright, Richard (Colne V)

Jones, Barry (East Flint)

Parkinson, Cecil

Wakeham, John

Judd, Frank

Pavitt, Laurie

Walder, David (Clitheroe)

Kaufman, Gerald

Penhaligon David

Walker, Harold (Doncaster)

Kellett-Bowman, Mrs Elaine

Perry, Ernest

Walker, Rt Hon P. (Worcester)

King, Evelyn (South Dorset)

Peyton, Rt Hon John

Walker, Terry (Kingswood)

Knight, Mrs Jill

Powell, Rt Hon J. Enoch

Walker-Smith, Rt Hon Sir Derek

Knox, David

Rees, Rt Hon Merlyn (Leeds S)

Wall, Patrick

Lamont, Norman

Rees-Davies, W. R.

Ward, Michael

Lawrence, Ivan

Reid, George

Watkins, David

Lawson, Nigel

Renton, Rt Hon Sir D. (Hunts)

Watkinson, John

Leadbitter, Ted

Ridley, Hon Nicholas

Watt, Hamish

Le Marchant, Spencer

Ridsdale, Julian

Weatherill, Bernard

Lester, Jim (Beeston)

Roberts, Albert (Normanton)

Lestor, Miss Joan (Eton & Slough)

Roberts, Michael (Cardiff NW)

Wells, John

Lewis, Kenneth (Rutland)

Roberts, Wyn (Conway)

Welsh, Andrew

Lewis, Ron (Carlisle)

Roderick, Caerwyn

White, Frank R. (Bury)

Lipton, Marcus

Rodgers, Rt Hon William (Stockton)

White, James (Pollock)

Lloyd, Ian

Roper, John

Whitlock, William

Lomas, Kenneth

Ross, Stephen (Isle of Wight)

Wiggin, Jerry

Loveridge, John

Rost, Peter (SE Derbyshire)

Wigley, Dafydd

Luard, Evan

Rowlands, Ted

Willey, Rt Hon Frederick

Lyon, Alexander (York)

Ryman, John

Williams, Alan Lee (Hornch'ch)

Lyons, Edward (Bradford W)

Scott-Hopkins, James

Williams, Sir Thomas (Warrington)

McAdden, Sir Stephen

Shaw, Arnold (Ilford South)

Wilson, Rt Hon Sir Harold (Huyton)

McCartney, Hugh

Shaw, Michael (Scarborough)

Woodall, Alec

McElhone, Frank

Sheldon, Robert (Ashton-u-Lyne)

Macfarlane, Neil

Shelton, William (Streatham)

TELLERS FOR THE AYES:

MacFarquhar, Roderick

Shersby, Michael

Mr. Joseph Harper and

MacGregor, John

Shore, Rt Hon Peter

Mr. James Hamilton.

NOES

Bean, R. E.

Lewis, Arthur (Newham N)

Sedgemore, Brian

Bidwell, Sydney

Litterick, Tom

Skinner, Dennis

Clark, Alan (Plymouth, Sutton)

McDonald, Dr Oonagh

Wise, Mrs Audrey

Evans, Fred (Caerphilly)

Maynard, Miss Joan

Woof, Robert

Evans, John (Newton)

Parry, Robert

Fletcher, L. R. (Ilkeston)

Price, C. (Lewisham W)

TELLERS FOR THE NOES:

Garrett, W. E. (Wallsend)

Richardson, Miss Jo

Mr. J. W. Rooker and

Kerr, Russell

Roberts, Gwilym (Cannock)

Mr. John Lee.

Lamond, James

Question accordingly agreed to.
Ordered,
That a Select Committee be appointed to inquire into the conduct and activities of Members of this House in connection with the
1098
affairs of Mr. J. G. L. Poulson; to consider whether any such conduct or activities amounted to a contempt of the House or was inconsistent with the standards which the House is entitled to expect from its Members; and to report:
Ordered,
That the Committee do consist of ten Members:
Committee accordingly nominated of Miss Harvie Anderson, Mr. Peter Blaker, Mr. Leon Brittan, Mr. Emlyn Hooson, Mr. Max Madden, Mr. William Ross, Mr. Donald Stewart, Mr. Michael Stewart, Mr. Jeffrey Thomas, and Mr. Peter Thomas.
Ordered,
That Five be the Quorum of the Committee:
Ordered,
That the Committee have power to send for persons, papers and records; and to sit notwithstanding any Adjournment of the House:
Ordered,
That the Committee shall lay before the House all such oral and documentary evidence as upon consideration by them shall appear to be relevant and such as may fairly be taken into account:
Ordered,
That Mr. Attorney General shall attend the Committee so far as the Committee may require to present evidence relevant to the subject matter of the inquiry; and may give such further assistance to the Committee as may be appropriate:
Ordered,
That the Committee have power to appoint persons to carry out such work relating to the Committee's order of reference as the Committee may determine:
Ordered,
That the Committee have leave to hear Counsel to such extent as they shall see fit:—[The Prime Minister.]

CONDUCT OF MEMBERS

  BUSINESS OF THE HOUSE
  Ordered,
  That the Motion relating to Conduct of Members and the Development of Rural Wales Bill [Lords] may be proceeded with at this day's Sitting, though opposed, until any hour. —[Mr. Thomas Cox.]

CONDUCT OF MEMBERS
Motion made, and Question proposed,
That no person not being a member of the Committee shall be present during any of the proceedings of the Committee unless required by the Committee to be present for the purposes of their inquiry:—[The Prime Minister.]
Amendment proposed, to leave out from 'That' to end of the Question and add instead thereof,
"the Committee shall conduct its proceedings in public:".—[Mr. Skinner.]
Question put, That the amendment be made:—
The House divided: Ayes 35, Noes 256.

Division No. 357.]

AYES

[10.01 p.m.

Canavan, Dennis

Lestor, Miss Joan (Eton & Slough)

Sedgemore, Brian

Clemitson, Ivor

Lewis, Arthur (Newham N)

Skinner, Dennis

Evans, Fred (Caerphilly)

Litterick, Tom

Thomas, Dafydd (Merioneth)

Evans, Gwynfor (Carmarthen)

McDonald, Dr Oonagh

Thomas, Ron (Bristol NW)

Evans, John (Newton)

Maynard, Miss Joan

Tierney, Sydney

Garrett, W. E. (Wallsend)

Mikardo, Ian

Welsh, Andrew

Hatton, Frank

Ogden, Eric

Wigley, Dafydd

Heffer, Eric S.

Parry, Robert

Wise, Mrs Audrey

Hooley, Frank

Penthailgon, David

Woof, Robert

Hughes, Roy (Newport)

Price, C. (Lewisham W)

Kerr, Russell

Reid, George

TELLERS FOR THE AYES:

Lamond, James

Richardson, Miss Jo

Mr. J. W. Rooker and

Latham, Arthur (Paddington)

Roberts, Gwllym (Cannock)

Mr. John Lee.

NOES

Anderson, Donald

Buck, Antony

Corrie, John

Archer, Peter

Budgen, Nick

Cox, Thomas (Tooting)

Armstrong, Ernest

Bulmer, Esmond

Cryer, Bob

Arnold, Tom

Butler, Adam (Bosworth)

Cunningham, G. (Islington S)

Ashton, Joe

Callaghan, Rt Hon J. (Cardiff SE)

Dalyell, Tam

Atkins, Rt Hon H. (Spelthorne)

Campbell, Ian

Davies, Ifor (Gower)

Baker, Kenneth

Carlisle, Mark

Deakins, Eric

Barnett, Guy (Greenwich)

Carmichael, Neil

Dean, Joseph (Leeds West)

Bates, Alf

Cartwright, John

Dean, Paul (N Somerset)

Beith, A. J.

Chalker, Mrs Lynda

de Freitas, Rt Hon Sir Geoffrey

Bennett, Dr Reginald (Fareham)

Clark, Alan (Plymouth, Sutton)

Dell, Rt Hon Edmund

Benyon, W.

Clarke, Kenneth (Rushcliffe)

Dodsworth, Geoffrey

Berry, Hon Anthony

Cockcroft, John

Doig, Peter

Biffen, John

Cocks, Rt Hon Michael

Dormand, J. D.

Biggs-Davison, John

Cohen, Stanley

Douglas-Hamilton, Lord James

Boscawen, Hon Robert

Coleman, Donald

Drayson, Burnaby

Bowden, A. (Brighton, Kemptown)

Concannon, J. D.

Duffy, A. E. P.

Bray, Dr Jeremy

Conlan, Bernard

Edwards, Nicholas (Pembroke)

Brocklebank-Fowler, C.

Cooke, Robert (Bristol W)

Ellis, John (Brigg & Scun)

Brown, Sir Edward (Bath)

Cope, John

Ellis, Tom (Wrexham)

Brown, Hugh D. (Provan)

Corbett, Robin

Emery, Peter

English, Michael

Loveridge, John

Scott-Hopkins, James

Faulds, Andrew

Luard, Evan

Shaw, Arnold (Ilford South)

Fletcher, Alex (Edinburgh N)

Lyons, Edward (Bradford W)

Shaw, Michael (Scarborough)

Fletcher-Cooke, Charles

McAdden, Sir Stephen

Sheldon, Robert (Ashton-u-Lyne)

Fookes, Miss Janet

McCartney, Hugh

Shelton, William (Streatham)

Ford, Ben

McElhone, Frank

Shersby, Michael

Fox, Marcus

Macfarlane, Nell

Shore, Rt Hon Peter

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

MacFarquhar, Roderick

Silkin, Rt Hon John (Deptford)

Freud, Clement

MacGregor, John

Silkin, Rt Hon S. C. (Dulwich)

Fry, Peter

McGuire, Michael (Ince)

Stlverman, Julius

Gardiner, George (Reigate)

Maclennan, Robert

Skeet, T. H. H.

Gardner, Edward (S Fylde)

McNair-Wilson, M. (Newbury)

Small, William

Ginsburg, David

Mallalieu, J. P. W.

Smith, John (N Lanarkshire)

Golding, John

Marshall, Dr Edmund (Goole)

Speed, Keith

Goodhew, Victor

Mather, Carol

Spence, John

Gow, Ian (Eastbourne)

Mawby, Ray

Spicer, Jim (W Dorset)

Gower, Sir Raymond (Barry)

Maxwell-Hyslop, Robin

Spicer, Michael (S Worcester)

Gray, Hamish

Mayhew, Patrick

Spriggs, Leslie

Grieve, Percy

Mendelson, John

Stallard, A. W.

Grimond, Rt Hon J.

Meyer, Sir Anthony

Stanbrook, Ivor

Grist, Ian

Millan, Rt Hon Bruce

Stanley, John

Grylls, Michael

Miller, Hal (Bromsgrove)

Steel, David (Roxburgh)

Hall, Sir John

Miller, Dr M. S. (E Kilbride)

Stewart, Donald (Western Isles)

Hamilton, James (Bothwell)

Miscampbell, Norman

Stewart, Ian (Hitchin)

Harrison, Walter (Wakefield)

Molyneaux, James

Stoddart, David

Hattersley, Rt Hon Roy

Montgomery, Fergus

Stradling Thomas, J.

Havers, Sir Michael

Moore, John (Croydon C)

Summerskill, Hon Dr Shirley

Hayhoe, Barney

More, Jasper (Ludlow)

Tebbit, Norman

Heseltine, Michael

Morgan, Geraint

Temple-Morris, Peter

Holland, Philip

Morris, Alfred (Wythenshawe)

Thatcher Rt Hon Margaret

Hooson Emlyn

Morris, Charles R. (Openshaw)

Thompson, George

Horam, John

Morris, Rt Hon J. (Aberavon)

Thorpe, Rt Hon Jeremy (N Devon)

Murray, Rt Hon Ronald King

Howell, David (Guildford)

Neave, Airey

Tomlinson, John

Howell, Rt Hon Denis (B'ham,Sm H)

Nelson, Anthony

Torney, Tom

Howells, Geraint (Cardigan)

Neubert Michael

Urwin, T. W.

Huckfield, Les

Newton, Tony

Vaughan, Dr Gerard

Hughes, Rt Hon c. (Anglesey)

Oakes Gordon

Viggers, Peter

Hunt, John (Bromley)

Onslow, Cranley

Wainwright, Richard (Colne V)

Hunter, Adam

Orme, Rt Hon Stanley

Wakeham, John

Hutchison, Michael Clark

Owen, Rt Hon Dr David

Walder, David (Clitheroe)

Irvine, Rt Hon Sir A. (Edge Hill)

Page, Rt Hon R. Graham (Crosby)

Walker, Harold (Doncaster)

Jackson, Miss Margaret (Lincoln)

Paisley, Rev Ian

Walker, Rt Hon P. (Worcester)

James, David

Palmer, Arthur

Walker, Terry (Kingswood)

Janner, Greville

Park, George

Walker-Smith, Rt Hon Sir Derek

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

Parker, John

Wall, Patrick

Jessel, Toby

Parkinson, Cecil

Ward, Michael

John, Brynmor

Pavitt, Laurie

Watkins, David

Jones, Alec (Rhondda)

Perry, Ernest

Watkinson, John

Jones, Barry (East Flint)

Peyton, Rt Hon John

Watt, Hamish

Judd, Frank

Powell, Rt Hon J. Enoch

Weatherill, Bernard

Kaufman, Gerald

Radice, Giles

Wells, John

Kellett-Bowman, Mrs Elaine

Rees, Rt Hon Merlyn (Leeds S)

White, Frank R. (Bury)

King, Evelyn (South Dorset)

Rees-Davies, W. R.

White, James (Pollock)

Knight, Mrs Jill

Renton, Rt Hon Sir D. (Hunts)

Whitlock, William

Knox, David

Ridley, Hon Nicholas

Wiggin, Jerry

Lamborn, Harry

Roberts, Albert (Normanton)

Willey, Rt Hon Frederick

Lamont, Norman

Roberts, (Michael (Cardiff NW)

Williams, Alan Lee (Hornch'ch)

Lawrence, Ivan

Roberts, Wyn (Conway)

Williams, Sir Thomas (Warrington)

Lawson, Nigel

Roderick, Caerwyn

Wilson, Alexander (Hamilton)

Le Marchant, Spencer

Rodgers, Rt Hon William (Stockton)

Wilson, Rt Hon Sir Harold (Huyton)

Lester, Jim (Beeston)

Roper, John

Woodall, Alec

Lewis, Kenneth (Rutland)

Ross, Stephen (Isle of Wight)

Lewis, Ron (Carlisle)

Rost, Peter (SE Derbyshire)

TELLERS FOR THE NOES:

Lipton, Marcus

Rowlands, Ted

Mr. Joseph Harper and

Lloyd, Ian

Ryman, John

Mr. Ted Graham.

Lomas, Kenneth

Question accordingly negatived.
Mr. Speaker: Before I put the next Question, I should like to say to the House that I accepted the last amendment with the hon. Member for Bolsover (Mr. Skinner) standing in the Aisle. I want the House to know that in future I shall not accept any motions or amendments proposed unless hon. Members are standing in their places.
Main Question put and agreed to.
Ordered,
That no person not being a member of the Committee shall be present during any of the proceedings of the Committee unless required by the Committee to be present for the purposes of their inquiry.
Motion made, and Question put,
'That no witness summoned to appear before the Committee shall claim Crown Privilege as a justification for refusing to answer questions asked by the Committee:'.—[Mr. Maxwell-Hyslop.]
The House divided: Ayes 45. Noes 143.

Division No. 358.]

AYES

10.13 p.m.

Allaun, Frank

Lamond, James

Sedgemore, Brian

Atkins, Ronald (Preston N)

Latham, Arthur (Paddington)

Skinner, Dennis

Callaghan, Jim (Middleton & P)

Lawrence, Ivan

Thomas, Dafydd (Merioneth)

Canavan, Dennis

Lee, John

Thomas, Ron (Bristol NW)

Clark, Alan (Plymouth, Sutton)

Litterick, Tom

Thompson, George

Clemitson, Ivor

McDonald, Dr Oonagh

Tierney, Sydney

Drayson, Burnaby

Maynard, Miss Joan

Wainwright, Richard (Colne V)

Evans, Fred (Caerphilly)

Meyer, Sir Anthony

Watt, Hamish

Evans, Gwynfor (Carmarthen)

Miller, Hal (Bromsgrove)

Welsh, Andrew

Evans, John (Newton)

Paisley, Rev Ian

Wigley, Dafydd

Garrett, W. E. (Wallsend)

Penhaligon, David

Wise, Mrs Audrey

Hatton, Frank

Reid, George

Woof, Robert

Heffer, Eric S.

Richardson, Miss Jo

Hughes, Roy (Newport)

Roberts, Gwilym (Cannock)

TELLERS FOR THE AYES:

Jessel, Toby

Rooker, J. W.

Mr. Arthur Lewis and

Kellett-Bowman, Mrs Elaine

Ross, Stephen (Isle of Wight)

Mr. Robin Maxwell-Hyslop

Kerr, Russell

NOES

Anderson, Donald

Hooson, Emlyn

Parker, John

Archer, Peter

Horam, John

Parry, Robert

Armstrong, Ernest

Howell, Rt Hon Denis (B'ham,Sm H)

Pavitt, Laurie

Ashton, Joe

Howells, Geraint (Cardigan)

Perry, Ernest

Barnett, Guy (Greenwich)

Huckfield, Les

Price, C. (Lewisham W)

Bates, Alf

Hughes, Rt Hon C. (Anglesey)

Radice, Giles

Beith, A. J.

Hunter, Adam

Rees, Rt Hon Merlyn (Leeds S)

Bray, Dr Jeremy

Hutchison, Michael Clark

Roberts, Albert (Normanton)

Brown, Hugh D. (Provan)

Irvine, Rt Hon Sir A. (Edge Hill)

Robinson, Geoffrey

Callaghan, Rt Hon J. (Cardiff SE)

Jackson, Miss Margaret (Lincoln)

Roderick, Caerwyn

Campbell, Ian

James, David

Rodgers, Rt Hon William (Stockton)

Carlisle, Mark

Janner, Greville

Roper, John

Cartwright, John

John, Brynmor

Rowlands, Ted

Cocks, Rt Hon Michael

Jones, Alec (Rhondda)

Ryman, John

Cohen, Stanley

Jones, Barry (East Flint)

Shaw, Arnold (Ilford South)

Coleman, Donald

Judd, Frank

Sheldon, Robert (Ashton-u-Lyne)

Concannon, J. D.

Kaufman, Gerald

Shore, Rt Hon Peter

Conlan, Bernard

Lamborn, Harry

Silkin, Rt Hon John (Deptford)

Corbett, Robin

Lester, Jim (Beeston)

Silkin, Rt Hon S. C. (Dulwich)

Cox, Thomas (Tooting)

Lewis, Kenneth (Rutland)

Silverman, Julius

Cryer, Bob

Lewis, Ron (Carlisle)

Smith, John (N Lanarkshire)

Cunningham, G. (Islington S)

Lipton, Marcus

Spriggs, Leslie

Dalyell, Tarn

Lomas, Kenneth

Stallard, A. W.

Davies, Ifor (Gower)

Luard, Evan

Steel, David (Roxburgh)

Deakins, Eric

McCartney, Hugh

Stewart, Ian (Hitchin)

Dean, Joseph (Leeds West)

McElhone, Frank

Summerskill, Hon Dr Shirley

de Freitas, Rt Hon Sir Geoffrey

MacFarquhar, Roderick

Thorpe, Rt Hon Jeremy (N Devon)

Dell, Rt Hon Edmund

McGuire, Michael (Ince)

Tomlinson, John

Doig, Peter

Maclennan, Robert

Torney, Tom

Dormand, J. D.

Mallalieu, J. P. W.

Urwin, T. W.

Duffy, A. E. P.

Marshall, Dr Edmund (Goole)

Walker, Harold (Doncaster)

Ellis, Tom (Wrexham)

Mawby, Ray

Walker, Rt Hon P. (Worcester)

English, Michael

Mikardo, Ian

Walker, Terry (Kingswood)

Evans, Ioan (Aberdare)

Millan, Rt Hon Bruce

Ward, Michael

Faulds, Andrew

Miller, Dr M. S. (E Kilbride)

Watkins, David

Ford, Ben

Miscampbell, Norman

Watkinson, John

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

Molloy, William

White, Frank R. (Bury)

Freud, Clement

Morgan, Geraint

White, James (Pollock)

Ginsburg, David

Morris, Alfred (Wythenshawe)

Whitlock, William

Golding, John

Morris, Charles R, (Openshaw)

Willey, Rt Hon Frederick

Gow, Ian (Eastbourne)

Morris, Rt Hon J. (Aberavon)

Williams, Alan Lee (Hornch'ch)

Graham, Ted

Murray, Rt Hon Ronald King

Williams, Sir Thomas (Warrington)

Gray, Hamish

Neubert, Michael

Wilson, Alexander (Hamilton)

Grimond, Rt Hon J.

Oakes, Gordon

Wilson, Rt Hon Sir Harold (Huyton)

Hamilton, James (Sothwell)

Ogden, Eric

Woodall, Alec

Harper, Joseph

Orme, Rt Hon Stanley

Harrison, Walter (Wakefield)

Owen, Rt Hon Dr David

TELLERS FOR THE NOES:

Hattersley, Rt Hon Roy

Palmer, Arthur

Mr. John Ellis and

Hooley, Frank

Park, George

Mr. David Stoddart.

Question accordingly negatived.
Motion made, and Question put,
'That the Committee shall at their discretion sit in public if they consider that at any stage of the inquiry the requirements of justice
or of the public interest requires them to do so notwithstanding any of the foregoing:'.— [Mr. David Steel.]
The House divided: Ayes 63. Noes 219.

Division No. 359.]

AYES

[10.23 p.m.

Abse, Leo

Bean, R. E.

Canavan, Dennis

Allaun, Frank

Bidwell, Sydney

Clemitson, Ivor

Atkins, Ronald (Preston N)

Callaghan, Jim (Middleton & P)

Corbett, Robin

Cunningham, G. (Islington S)

Litterick, Tom

Spearing, Nigel

English, Michael

McDonald, Dr Oonagh

Steel, David (Roxburgh)

Evans, Fred (Caerphilly)

McNair-Wilson, M. (Newbury)

Stewart, Donald (Western Isles)

Evans, Gwynfor (Carmarthen)

Mallalieu, J. P. W.

Thomas, Dafydd (Merioneth)

Evans, Ioan (Aberdare)

Maynard, Miss Joan

Thomas, Ron (Bristol NW)

Evans, John (Newton)

Mikardo, Ian

Thompson, George

Garrell, W. E. (Wallsend)

Ogden, Eric

Tierney, Sydney

Grimond, Rt Hon J.

Paisley, Rev Ian

Wainwright, Richard (Colne V)

Hatton, Frank

Parry, Robert

Watt, Hamish

Heffer, Eric S.

Pavitt, Laurie

Welsh, Andrew

Hooley, Frank

Penhaligon, David

Whitlock, William

Hooson, Emlyn

Reid, George

Wigley, Dafydd

Howells, Geraint (Cardigan)

Richardson, Miss Jo

Willey, Rt Hon Frederick

Hughes, Roy (Newport)

Roberts, Gwilym (Cannock)

Wise, Mrs Audrey

Hunt, John (Bromley)

Robinson, Geoffrey

Woof, Robert

Kerr, Russell

Rooker, J. W.

Lamond, James

Sedgemore, Brian

TELLERS FOR THE AYES:

Latham, Arthur (Paddington)

Shaw, Arnold (Ilford South)

Mr. A. J. Beith and

Lee, John

Skinner, Dennis

Mr. Stephen Ross.

Lewis, Arthur (Newham N)

NOES

Anderson, Donald

Fry, Peter

Mayhew, Patrick

Archer, Peter

Gardner, Edward (S Fylde)

Mendelson, John

Armstrong, Ernest

Ginsburg, David

Millan, Rt Hon Bruce

Arnold, Tom

Golding, John

Miller, Hal (Bromsgrove)

Ashton, Joe

Goodhew, Victor

Miller, Dr M. S. (E Kilbride)

Atkins, Rt Hon H. (Spelthorne)

Gow, Ian (Eastbourne)

Miscampbell, Norman

Baker, Kenneth

Gower, Sir Raymond (Barry)

Molyneaux, James

Barnett, Guy (Greenwich)

Gray, Hamish

Moore, John (Croydon C)

Bates, Alf

Grieve, Percy

More, Jasper (Ludlow)

Bennell, Dr Reginald (Fareham)

Grist, Ian

Morgan, Geraint

Benyon, W.

Grylls, Michael

Morris, Alfred (Wythenshawe)

Berry, Hon Anthony

Hall, Sir John

Morris, Charles R. (Openshaw)

Bitten, John

Hamilton, James (Bothwell)

Morris, Rt Hon J. (Aberavon)

Biggs-Davison, John

Harper, Joseph

Murray, Rt Hon Ronald King

Boscawen, Hon Robert

Harrison, Walter (Wakefield)

Neave, Airey

Bray, Dr Jeremy

Hattersley, Rt Hon Roy

Nelson, Anthony

Brocklebank-Fowler, C.

Havers, Sir Michael

Neubert, Michael

Brown, Sir Edward (Bath)

Hayhoe, Barney

Oakes, Gordon

Brown, Hugh D. (Provan)

Holland, Philip

Onslow, Cranley

Buck, Antony

Horam, John

Orme, Rt Hon Stanley

Budgen, Nick

Howell, Rt Hon Denis (B'ham,Sm H)

Owen, Rt Hon Dr David

Bulmer, Esmond

Huckfield, Les

Page, Rt Hon R. Graham (Crosby)

Butler, Adam (Bosworth)

Hughes, Rt Hon C. (Anglesey)

Palmer, Arthur

Callaghan, Rt Hon J. (Cardiff SE)

Hunter, Adam

Park, George

Campbell, Ian

Hutchison, Michael Clark

Parker, John

Carlisle, Mark

Irvine, Rt Hon Sir A. (Edge Hill)

Perry, Ernest

Cartwright, John

Jackson, Miss Margaret (Lincoln)

Peyton, Rt Hon John

Clark, Alan (Plymouth, Sutton)

James, David

Powell, Rt Hon J. Enoch

Clarke, Kenneth (Rushcliffe)

Janner, Greville

Radice, Giles

Cockcrott, John

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

Rees, Rt Hon Merlyn (Leeds S)

Cocks, Rt Hon Michael

Jessel, Toby

Rees-Davies, W. R.

Cohen, Stanley

John, Brynmor

Renton, Rt Hon Sir D. (Hunts)

Coleman, Donald

Jones, Alec (Rhondda)

Roberts, Albert (Normanton)

Concannon, J. D.

Jones, Barry (East Flint)

Roberts, Michael (Cardiff NW)

Conlan, Bernard

Judd, Frank

Roberta, Wyn (Conway)

Cooke, Robert (Bristol W)

Kaufman, Gerald

Roderick, Caerwyn

Cope, John

Kellett-Bowman, Mrs Elaine

Rodgers, Rt Hon William (Stockton)

Corrie, John

King, Evelyn (South Dorset)

Roper, John

Cox, Thomas (Tooting)

Knox, David

Rost, Peter (SE Derbyshire)

Cryer, Bob

Lamborn, Harry

Rowlands, Ted

Dalyell, Tarn

Lamont, Norman

Ryman, John

Davies, Ifor (Gower)

Lawrence, Ivan

Scott-Hopkins, James

Deakins, Eric

Lawson, Nigel

Shaw, Michael (Scarborough)

Dean, Joseph (Leeds West)

Le Marchant, Spencer

Sheldon, Robert (Ashton-u-Lyne)

Dean, Paul (N Somerset)

Lester, Jim (Beeston)

Shersby, Michael

de Freitas, Rt Hon Sir Geoffrey

Lewis, Kenneth (Rutland)

Shore, Rt Hon Peter

Dell, Rt Hon Edmund

Lewis, Ron (Carlisle)

Silkin, Rt Hon John (Deptford)

Dodsworth, Geoffrey

Lipton, Marcus

Silkin, Rt Hon S. C. (Dulwich)

Doig, Peter

Lloyd, Ian

Silverman, Julius

Dormand, J. D.

Lomas, Kenneth

Skeet, T. H. H.

Douglas-Hamilton, Lord James

Loveridge, John

Smith, John (N Lanarkshire)

Drayson, Burnaby

Luard, Evan

Speed, Keith

Duffy, A. E. P.

Lyons, Edward (Bradford W)

Spence, John

Edwards, Nicholas (Pembroke)

McCartney, Hugh

Spicer, Jim (W Dorset)

Ellis, Tom (Wrexham)

McElhone, Frank

Spicer, Michael (S Worcester)

Emery, Peter

Macfarlane, Nell

Spriggs, Leslie

Faulds, Andrew

MacFarquhar, Roderick

Stallard, A. W.

Fisher, Sir Nigel

MacGregor, John

Stanbrook, Ivor

Fletcher, Alex (Edinburgh N)

McGuire, Michael (Ince)

Stanley, John

Fletcher-Cooke, Charles

Maclennan, Robert

Stewart, Ian (Hitchin)

Fookes, Miss Janet

Marshall, Dr Edmund (Goole)

Stoddart, David

Ford, Ben

Mather, Carol

Stradling Thomas, J.

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

Mawby, Ray

Summerskill, Hon Dr Shirley

Freud, Clement

Maxwell-Hyslop, Robin

Tebbit, Norman

1106

1107

Temple-Morris, Peter

Walker, Terry (Kingswood)

Wiggin, Jerry

Thatcher, Rt Hon Margaret

Walker-Smith, Rt Hon Sir Derek

Williams, Alan Lee (Hornch'ch)

Tomlinson, John

Wall, Patrick

Williams, Sir Thomas (Warrington)

Torney, Tom

Ward, Michael

Wilson, Alexander (Hamilton)

Urwin, T. W.

Watkins, David

Wilson, Rt Hon Sir Harold (Huyton)

Vaughan, Dr Gerard

Watkinson, John

Woodall, Alec

Viggers, Peter

Weatherill, Bernard

Wakeham, John

Wells, John

TELLERS FOR THE NOES:

Walder, David (Clitheroe)

White, Frank R. (Bury)

Mr. John Ellis and

Walker, Harold (Doncaster)

White, James (Pollok)

Mr. Ted Graham.

Walker, Rt Hon P. (Worcester)

Question accordingly negatived.

Ordered,

That these Orders be Standing Orders of the House until the end of this Parliament.—[The Prime Minister.]

ORDERS OF THE DAY
  DEVELOPMENT OF RURAL WALES BILL [LORDS]
  As amended (in the Standing Committee), considered.
  DEVELOPMENT OF RURAL WALES BILL [LORDS]
    New Clause 1

      RELATIONS BETWEEN THE BOARD AND THE AGENCY
      'In all cases within the area in Wales for which the Board is responsible, when there is a dispute or conflict of interest between the Board and the Welsh Development Agency, such dispute or conflict of interest shall be subject to adjudication and decision by the Secretary of State'.—[Sir R. Gower.]
      Brought up, and read the First time.
      10.34 p.m.
      Sir Raymond Gower: I beg to move, That the clause be read a Second time. [Interruption.]
      Mr. Speaker: Order. It is not fair to the hon. Gentleman who is addressing the House if hon. Members leaving the Chamber do not do so quietly.
      Sir R. Gower: In view of the lateness of the hour I shall abbreviate what I intended to say in support of the new clause. The general objective and function of the Board set up for rural Wales as prescribed in the early part of the Bill is:
      "For the purpose of promoting the economic and social well-being of the people in the area of Wales for which it is responsible under this Act."
      In subsection (5) there is a more detailed explanation of the Board's powers and functions.
      In Section 1(2) of the Welsh Development Agency Act 1975 a similar array of functions is set out. It says:

      "(a) to further the economic development of Wales or any part of Wales;

      (b) to promote industrial efficiency and international competitiveness in Wales;

      (c) to provide, maintain or safeguard employment in any part of Wales; and

      (d) to further the improvement of the environment in Wales (having regard to existing amenity.)"

      It can be seen that there is a similarity between the powers given to the new
      1110
      Board and those given to the Agency. But the remit for rural Wales is much narrower. The powers are restricted to the three counties mentioned at the beginning of the Bill, which form a small part of the Principality. For the time being the area covered by the Board will remain a small part, although I recognise that the Secretary of State may later approve its extension.
      The Board is obviously intended to do in this smaller area things not dissimilar to those that may be done in industrial parts of Wales by the Agency. The Minister told us during the passage of these two measures that the Agency would probably have most of its resources and energies employed not in the whole of Wales, and certainly not in rural Wales, but primarily in the industrial parts. Therefore, I surmise that the main activity in the rural area of Mid-Wales will be by the new Board.
      In these circumstances there could be a difference of opinion between the Board and the Agency on how to ensure the future prosperity of the area. The Agency will be acting more freely, without the direct supervision of the Secretary of State. The Minister may tell me that this will be balanced by the fact that in most cases the Board will be referring its proposals to the Secretary of State, as explained in the detailed functions set out in Clause 3(1)(b):
      "from time to time to prepare and submit to the Secretary of State for his approval proposals (whether of a general or specific character) for the economic and social development of the area or any part of it".
      Nevertheless, I can see possibilities of a difference of opinion between the Agency, with its wider responsibilities, and the new Board, with its remit concerning the comparatively localised area of the three counties specified in the Bill.
      The new clause is partly substantive and partly probing. If there is a conflict between the two authorities I should like the Secretary of State to act more as a referee, judge or arbiter to balance the different views and make a judicial decision.
      Although the wording of the clause may not be perfect, I hope that the Minister will not rely on that fact alone in seeking to defeat the provision on technical grounds. I believe that the clause will be a valuable addition to the Bill

      1111
      because the decision will have to be made by the Secretary of State, who is accountable to the House. In cases of conflict, the Secretary of State should be able to consider the different views put forward by the Agency and, in some circumstances, by the Board, and should be able to adjudge the matter or to refer it to an adjudicator. I hope the Minister will feel that some provision of this nature should be added to the Bill.
      Mr. Nicholas Edwards: We now come to an important objection to the fundamental nature of the Bill. I wish to make one or two general observations about the course adopted by the Government in putting forward this measure and to give our reasons for thinking that it may not work satisfactorily.
      I am not sure that the clause moved by my hon. Friend the Member for Barry (Sir R. Gower) will remove our fundamental objections or ease the uncertainties created in people's minds by these provisions, although the clause seeks to ameliorate some of the consequences. I wish to emphasise that we believe that the structure of the Bill is fundamentally unsound, but I shall put my points more fully in the brief Third Reading debate.
      Let me merely say at this point that we believe that there is plenty of room in the Bill as drafted for uncertainty about geographical boundaries and responsibilities accorded to the Agency and the Board. We believe that this will cause considerable difficulties in future, but I shall not be urging my hon. Friends to press the matter to a vote, unless my hon. Friend the Member for Barry wishes to do so.
      10.45 p.m.
      The Under-Secretary of State for Wales (Mr. Barry Jones): The hon. Members for Pembroke (Mr. Edwards) and Barry (Sir R. Gower) might be at odds over the new clause. There is no reason to expect conflict here. The Development Board for Rural Wales will have its own specific functions, like those relating to new towns—advance factories, housing and COSIRA functions for small industries—while the Agency will get on with the main business of giving direct assistance to industry, and, in the second
      1112
      arm of its activity, the environmental functions.
      To try to reassure the hon. Member for Barry, I would remind him that the Chairman of the DBRW will join the WDA Board. I hope that this will persuade the hon. Member that harmony will be promoted and the conflict he fears avoided.
      As the Bill is drafted, the Secretary of State can direct the Agency under Clause 1 and the Board under Clause 2. Those powers can be used to avoid any conflict which arises. I would advise the House to reject the new clause, but I hope that the hon. Member will consider withdrawing it.
      Sir Raymond Gower: Although I am not entirely satisfied, I beg to ask leave to withdraw the clause.
      Motion and clause, by leave, withdrawn.

    New Clause 2

      DELEGATION OF FUNCTIONS TO THE BOARD
      'Functions exercised by the Welsh Development Agency within the area in Wales for which the Board is responsible shall whenever possible and appropriate be delegated to the Board'.—[Sir R. Gower.]
      Brought up, and read the First time.
      Sir Raymond Gower: I beg to move, That the clause be read a Second time.
      Wherever possible, the functions of the Welsh Development Agency should be delegated to the new authority for rural Wales. The two bodies are rather different. I apprehend that the anxieties, concerns and hopes of the Board will he by their nature more concentrated. Its remit is limited to the rural counties of Mid-Wales. It will not be diverted by consideration of the important matters which must occupy the WDA in all parts of the Principality. It will consider the problems of the industrial South, of North-East Wales and of the extreme North-West.
      On the other hand, the DBRW will be concerned solely with the problems of the rural counties. It will probably, therefore, be more sensitive to local opinion and anxieties, and as time goes on it will be a more responsive instrument to deal with those problems.

      1113
      The Minister may tell me that, under Clause 4 (1)(e) and (f), the Board has the function of providing finance and services other than finance as agent for the Agency, but there is nothing to suggest that in most cases the Agency should seek to have its functions carried through by the new Board, especially in Mid-Wales.
      I should like to see something more definite in this respect. The new clause would ensure that, wherever possible and appropriate, these powers should be delegated by the Agency to the Board in the comparatively narrow areas for which the Board will be responsible. I commend the new clause as a definite improvement.
      Mr. Caerwyn E. Roderick: As the hon. Member of Parliament for an area which the Board will serve, I want to dissociate myself entirely from the clause, because people in the area do not want to be deprived of the work of the WDA. They do not want delegated powers from the Agency to go to the rural development Board. We feel that the work of the WDA in building advance factories, and so on, should continue. The Board is a special one to deal primarily with rural functions. It is not to deal with the overall economic development of Wales. We want to continue our association with that overall economic development by having the WDA operating in our area. One of the fears expressed in the area is that we shall suffer in having a rural development Board——
      Sir Raymond Gower: Does not the hon. Gentleman recall that the Minister has said on a number of occasions that the work of the Agency will be largely concentrated outside Mid-Wales and be in other parts, predominantly in the industrial areas? If there is some work which it is doing in rural Wales, is it not reasonable to suggest that the comparatively small amount of time that it will be able to devote to it should be done through the agency of the rural Board?
      Mr. Roderick: The hon. Gentleman has not listened to my remarks in the past. This was one of the reasons why I was anxious to see the setting up of the Board. We felt that, naturally, the WDA would have to concentrate in the more urban areas most of its time. That
      1114
      is why we want to complement its work in the rural areas. We want the WDA in our areas. We know that it must look after the more serious problems of the urban areas and, therefore, we want this board to complement that work.
      Mr. Nicholas Edwards: One remark of the hon. Member for Brecon and Radnor (Mr. Roderick) brought out the confusion which has arisen in this matter. He said that the Welsh Development Agency was the body that he would like to see dealing with advance factory building in his constituency. As I understand the Bill and the remarks of the Under-Secretary in Committee, it is the Board which will be dealing with advance factories. This is one of the powers reserved to the Board. If at this stage the hon. Gentleman is still confused about this matter—and justifiably, in my view—it is very likely that industrialists and others outside the House are equally confused. This is one of our fundamental complaints about the structure of the Bill.
      Mr. Roderick: It may be that the Board will deal with advance factories. But the WDA has functions which the Board will not have. It will not have the opportunity to make grants for certain developments, and we do not want to lose out on that kind of development. I do not know of anyone in my area who wants these powers transferred. That is why I felt compelled to speak against the clause.
      Mr. Barry Jones: My hon. Friend the Member for Brecon and Radnor (Mr. Roderick) is right. His constituency and others will not lose out in the area of the Board.
      I advise the House to resist the clause. In the first place, it lacks precision. Who is to decide when it shall be appropriate for the WDA to delegate? Then again, other changes might have to be made to the Bill now before Parliament to secure that the Agency could delegate all its functions to the Board; for example, the clearance of derelict land function of the Agency. So, to that extent, the clause is not effective.
      We believe in horses for courses. We believe that the Welsh Development Agency throughout Wales should have responsibility for derelict land clearance and should have investment in industry

      1115
      powers. It has its experts and professional people. We do not believe that we should stretch this expertise around and give the Board too many powers.
      Basically, therefore, for these three reasons I advise the House to reject the clause.
      Question put and negatived

    Clause 2

      DIRECTIONS OF SECRETARY OF STATE TO THE BOARD AND CONSULTATIVE COUNCIL
      Mr. Nicholas Edwards: I beg to move Amendment No. 3, in page 2, line 31, leave out subsection (1).
      Mr. Deputy Speaker (Mr. Oscar Murton): With this we may take the following amendments:
      Government Amendment No. 4.
      Amendment No. 19, in Clause 21, page 15, line 41, leave out
      'Without prejudice to section 1() of this Act,'.
      Government Amendments Nos. 20 and 21.
      Amendment No. 22, in Schedule 1. page 25, line 3, leave out
      under section 1() of this Act'.
      Government Amendment No. 23.
      Amendment No. 24, page 25, line 11, leave out from beginning to first 'the' in line 12.
      Government Amendment No. 25.
      Mr. Edwards: When in Committee we carried our amendment about the establishment of Consultative Council we at the same time replaced the original subsection (7) of Clause 1, which gave the Board power to give directions, with the present subsection (1) of Clause 2, which gives the Secretary of State power only to give general directions.
      The Secretary of State, by a later amendment, now seeks to remove the Consultative Council and, in this group of amendments, to revert to his tighter control of the Board, under which he can give specific directions on a wide range of matters.
      Incidentally, I think it wholly deplorable that the Government should seek by Amendment No. 21 to delete the moderate provision that before giving any
      1116
      direction to the Board the Secretary of State should consult the Board.
      It is this power of the Secretary of State to direct, and our anxieties about it, that led us to table Amendment No. 3 really as a basis for debate and as a probing amendment, and not as one that we wish to press at this stage. But subsequently we shall certainly seek to retain the Consultative Council that we brought into the Bill at the Committee stage.
      I have considerable reservations about the powers of direction given to the Secretary of State by the Bill, and there are a number of specific points which I should like to raise and elaborate upon. But, for the convenience of the House, I propose to do so during our Third Reading debate, because I think it will be just as possible there for me to make those points and for the Under-Secretary to reply to them without losing the essence of the argument at this time.
      The point we seek to make at this stage is that we think the Board, if it is to function successfully, should be a freestanding independent organisation, able to use its judgment with the minimum of Government interference, so that it can decide on the particular needs of its locality. Frankly, we are suspicious of the wide powers given to the Secretary of State to dictate its activities. The Government's economic record does not encourage us to the view that they will be taking the right decisions. As I shall say later to the House, some things which have occurred make us suspect that these powers could be misused.
      We are also concerned about questions of parliamentary administration, in the sense that throughout our debates, on both the Welsh Development Agency and the Board, we have been told that one of the reasons why the Secretary of State should have these wide powers is that, after all, he is responsible, and responsible to Parliament. We anticipated, therefore, that we should be able to press the Secretary of State for information at Question Time.
      We have, I regret to say, when dealing with the matters under the responsibility of the Welsh Development Agency, found very often that our straightforward Questions on such matters as advance factory building and derelict land clearance have been answered with the reply that this is now a matter which is the

      1117
      responsibility of the WDA. The Department and the Secretary of State are not wholly consistent in that, because on Friday they answered a series of Questions which I had put on this point, when previously they had refused to answer them.
      I hope that when we are dealing with matters central to the economic management of Wales, the fact that we have a Development Agency and a rural Board will not prevent the Government from giving the facts to the House in the most convenient way—where possible by parliamentary reply to Questions. There are one or two other general matters which I wish to raise, but I will postpone these until a later occasion.
      11.0 p.m.
      Mr. Barry Jones: I advise the House to resist the Opposition amendment. Our own amendments, particularly Amendment No. 4, will delete the limitation confining the power of the Secretary of State to give directions to the Board to directions of a general character only. Amendments Nos. 20, 23 and 25 are consequential.
      Amendment No. 21 stands apart. Its effect is to remove an unnecessary provision in Schedule 1 relating to a provision in Clause 1 that was removed at Committee stage. This is not a deplorable amendment, as the hon. Member for Pembroke (Mr. Edwards) claimed, and the economic record of the Government is good.
      These are crucial requirements. The Secretary of State has a responsibility to Parliament, and to meet that responsibility he needs the powers of direction. With responsibility goes authority, and the Secretary of State would need his powers of specific as well as general direction. There are many precedents for powers of direction over other bodies, as in the Welsh Development Agency Act 1975, the Highlands and Islands Development Act (Scotland) 1965, and New Towns Act 1965 with regard to development corporations, and the Industry Act 1975 with regard to the National Enterprise Board.
      In particular, we need the powers of specific direction. The Secretary' of State may require the Board to sell land to a local authority as he may wish to indicate that an advance factory will go to a
      1118
      certain town in the Principality. There is a difficulty in defining the dividing line between specific and general directions. General directions have been found to be specific in nature, and, therefore, ultra vires in the absence of provision for specific direction. In the light of what I have said, I hope that the Opposition will withdrawn their amendment.
      Mr. Nicholas Edwards: As I indicated earlier. Mr. Deputy Speaker, that is my intention. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendment made: No. 4, in page 2, line 32, leave out "of a general character".
      Mr. Barry Jones: I beg to move Amendment No. 5, in page 2, leave out lines 35 to 40.
      Mr. Deputy Speaker: With this we may take Government Amendments Nos. 27 and 28.
      Mr. Jones: In urging the House to support these amendments, obviously my memory goes back to the Committee stage. I remind right hon. and hon. Members opposite that if there were to be a Consultative Council we would have in the Principality yet another nominated body. It is very clear that public opinion in Wales does not wish to have another nominated body, and the Government's objective would be to reduce the number of bodies with interests in this area of rural Wales. For too long there have been too many bodies. The idea is to have fewer in order to make action more effective.
      I urge the House to recollect that local interests are to be represented on the Board. Local authorities, we think, would want direct representation on the Board. Five members of the Board will represent local authorities and local authority associations.
      The Board is large. It has 11 to 13 members, and we think that this will adequately represent the interests of the area.
      Mr. Geraint Howells: Is the Minister suggesting that the members of the Board will not consult other organisations in Wales that are not represented on the Board?
      Mr. Jones: Certainly the Board will consult widely at all times. It intends to be responsive and sensitive to the needs of rural Wales. I hope that I can dispel any doubts the hon. Member has on that score. The Board will be required to consult very widely. In another place, proposals for the Consultative Council were, in the end, withdrawn.
      It is expected that when the Welsh Assembly is operative the Board will be responsible to the Assembly. We say that this is yet another very strong reason why the Consultative Council should not come into being.
      Sir Raymond Gower: The hon. Gentleman said that the proposals were withdrawn in another place, but does he not recall that when this was mooted in Committee the Government did not argue strongly against it and they let it go through. They certainly did not make any strong case against it.
      Mr. Jones: I totally reject the recollections of the hon. Member for Barry (Sir R. Gower) of that debate. He might cast his mind back to the response of my hon. Friend the Member for Neath (Mr. Coleman), and his very strong reaction when the Consultative Council was included.
      Mr. Wyn Roberts: Government Amendments Nos. 5 and 27 are major amendments because they eliminate the proposal that there should be a Consultative Council to the Board including representatives of local authorities, agriculture, forestry and such other interests as the Secretary of State sees fit.
      The local authority representatives were to have been selected after consultation with the county councils and district councils in the Board's area and with local authority organisations in Wales. Other representatives of particular interests were also to have been appointed after consultation with the appropriate bodies. So I contest the Minister's view that the council would simply be yet another nominated body in Wales. The purpose of the council is to extend the representation of the interests concerned with the Board. The elimination of the Consultative Council will be very much regretted by those interests which had a reasonable expectation of being represented on it.
      Mr. Barry Jones: Is the hon. Member not overlooking the fact that local authorities would be represented rather absurdly both on the Board and on the Consultative Council?
      Mr. Roberts: I am coming to that point. Of course, the local authorities will have five members on the Development Board, and the Government have argued that this is sufficient. But the Government will recall that my hon. Friend the Member for Pembroke (Mr. Edwards) argued in Committee in favour of a smaller board, similar to the Highlands and Islands Development Board, which also has a consultative council, and which we understand works very well.
      Our amendment having been carried in Committee, and the council having been included in the Bill, we thought that the Government would have accepted it with good grace and possibly would have proposed consequential amendments at this stage to reduce the size of the Board. But they have done nothing of the kind. They have sought to abolish the council and to stick to their large Board of part-timers. But that Board might be dominated by its executive and may prove to be an unwieldy body. Even in those circumstances we still feel that we must defend the Consultative Council, because we are still concerned about the agricultural, forestry and other interests which are specifically mentioned as meriting inclusion in the Consultative Council.
      If the council is removed from the Bill these interests will have no statutory voice since there will be no statutory requirement for them to be represented on the Board. The agricultural interests have very little protection in the Bill. We are deeply concerned about that. The same can be said of tourism. The Government may say that these interests will in all probability be represented on the Board. But we would like their representation to be written into the Bill and not left to the discretion of the Secretary of State and his successors.
      The main arguments against the Consultative Council are that the Board itself has almost double the membership of the Highlands and Islands Development Board, that it is already obliged to consult widely, and, finally, that it is to be responsible to the Welsh Assembly if and when that body comes into being. That

      1121
      last argument is unsound. The Assembly is not yet in being and should not, therefore, be taken into account. The Board is obliged to consult before submitting proposals to the Secretary of State, but those consultations to be held under Clause 3(6), will be primarily with planning authorities and local authorities and other bodies as appear to the Board to have an interest in the proposals. In other words, the initiative lies with the Board, and its consultations can be limited by the very nature of the proposals it hopes to submit to the Secretary of State. I would have thought that such consultations would preclude consultations on other specific matters as well as on more general matters.
      We are concerned that there should be a watchdog body representative of the major interests in Mid-Wales to advise the Board at what is bound to be a difficult time when rural development policies are in the melting-pot and when new town development policies are changing. Without the council we shall have a large and unwieldy Board of part-time members dominated by their executive.
      Our ideal recipe would be a smaller, more compact, efficient and effective Board capable of decisive action after consultation with a larger broadly-based and representative body with its ear close to the ground in Mid-Wales. But if the ideal is to be denied us we still believe that the consultative council is valuable and should be retained. I shall, therefore, ask my hon. Friends to vote against the amendment.
      11.15 p.m.
      Mr. D. E. Thomas: I support what has been said by the hon. Member for Conway (Mr. Roberts). On this issue in Committee, the Opposition parties were united for once because we believe that the Board should be concerned with community development in
      Mid-Wales and community participation in development.
      In order to do this effectively, we need full-time expertise to be active in the day-to-day administration of the Board's work and, at the same time, wide consultative machinery to enable the whole community to participate in development.
      The ideal structure would have been a small professional full-time Board, with a nucleus of three or four, and possibly one or two part-time members—comprising a board of, say, half a dozen—and, in addition, a Consultative Council with representatives not only of local authorities, trade unions and trades councils but of forestry, land use and recreational interests.
      Instead, we have an ineffective, unwieldy compromise. We shall have a large, nominated Board of part-timers which will no doubt meet irregularly and, therefore, leave the day-to-day management in the hands of officers. We ought to have effective day-to-day management of the problems of Mid-Wales by a full-time Board backed up by a Consultative Council engaged in the whole area of the development process. We shall support the official Opposition in trying to restrain the Government from going back on the wishes of the Committee.
      Sir Raymond Gower: We regard the Government's attempt to negate the Board as a most objectionable and reactionary move. They are removing one of the most valuable features of the Bill. It would have made the Bill much better. I deeply regret that the Government have felt it proper to withdraw this valuable addition.
      Question put, That the amendment be made:—
      The House divided: Ayes 86, Noes 80.

      Division No. 360.]

      AYES

      [11.18 p.m.

      Allaun, Frank

      Coleman, Donald

      Evans, John (Newton)

      Anderson, Donald

      Conlan, Bernard

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

      Archer, Peter

      Cox, Thomas (Tooting)

      Golding, John

      Armstrong, Ernest

      Cryer, Bob

      Graham, Ted

      Ashton, Joe

      Dalyell, Tam

      Hamilton, James (Bothwell)

      Atkins, Ronald (Preston N)

      Davies, Ifor (Gower)

      Harrison, Walter (Wakefield)

      Barnett, Guy (Greenwich)

      Deakins, Eric

      Hooley, Frank

      Bates, Alf

      Dean, Joseph (Leeds West)

      Huckfield, Les

      Bray, Dr Jeremy

      Dormand, J. D.

      Hughes, Rt Hon C. (Anglesey)

      Brown, Hugh D. (Provan)

      Duffy, A. E. P.

      Hughes, Roy (Newport)

      Callaghan, Jim (Middleton & P)

      Ellis, John (Brigg & Scun)

      Hunter, Adam

      Campbell, Ian

      Ellis, Tom (Wrexham)

      Jackson, Miss Margaret (Lincoln)

      Canavan, Dennis

      Evans, Fred (Caerphilly)

      John, Brynmor

      Cocks, Rt Hon Michael

      Evans, Ioan (Aberdare)

      Jones, Alec (Rhondda)

      Jones, Barry (East Flint)

      Ogden, Eric

      Thomas, Ron (Bristol NW)

      Judd, Frank

      Owen, Rt Hon Dr David

      Urwin, T. W.

      Kerr, Russell

      Palmer, Arthur

      Walker, Terry (Kingswood)

      Lamond, James

      Parry, Robert

      White, Frank R. (Bury)

      Lestor, Miss Joan (Eton & Slough)

      Richardson, Miss Jo

      White, James (Pollock)

      Lomas, Kenneth

      Roderick, Caerwyn

      Whitlock, William

      Lyons, Edward (Bradford W)

      Rooker, J. W.

      Williams, Sir Thomas (Warrington)

      McCartney, Hugh

      Roper, John

      Wilson, Alexander (Hamilton)

      McDonald, Or Oonagh

      Rowlands, Ted

      Wilson, Rt Hon Sir Harold (Huyton)

      McElhone, Frank

      Ryman, John

      Wise, Mrs Audrey

      Madden, Max

      Skinner, Dennis

      Woodall, Alec

      Mallalieu, J. P. W.

      Small, William

      Woof, Robert

      Mendelson, John

      Smith, John (N Lanarkshire)

      Mikardo, Ian

      Spearing, Nigel

      TELLERS FOR THE AYES:

      Miller, Dr M. S. (E Kilbride)

      Stoddart, David

      Mr. Joseph Harper and

      Morris, Rt Hon J. (Aberavon)

      Thomas, Jeffrey (Abertillery)

      Mr. A. W. Stallard

      NOES

      Arnold, Tom

      Hayhoe, Barney

      Penhaligon, David

      Atkins, Rt Hon H. (Spelthorne)

      Holland, Philip

      Renton, Rt Hon Sir D. (Hunts)

      Beith, A. J.

      Hooson, Emlyn

      Roberts, Michael (Cardiff NW)

      Benyon, W.

      Howells, Geraint (Cardigan)

      Roberts, Wyn (Conway)

      Berry, Hon Anthony

      Hunt, John (Bromley)

      Ross, Stephen (Isle of Wight)

      Boscawen, Hon Robert

      James, David

      Scott-Hopkins, James

      Brittan, Leon

      Jessel, Toby

      Shaw, Michael (Scarborough)

      Brocklebank-Fowler, C.

      Joseph, Rt Hon Sir Keith

      Shelton, William (Streatham)

      Budgen, Nick

      Kellett-Bowman, Mrs Elaine

      Skeet, T. H. H.

      Butler, Adam (Bosworth)

      King, Evelyn (South Dorset)

      Speed, Keith

      Carlisle, Mark

      Knight, Mrs Jill

      Spicer, Michael (S Worcester)

      Clark, Alan (Plymouth, Sutton)

      Lester, Jim (Beeston)

      Stanbrook, Ivor

      Clarke, Kenneth (Rushcliffe)

      Macfarlane, Neil

      Steel, David (Roxburgh)

      Cockcroft, John

      MacGregor, John

      Stradling Thomas, J.

      Cooke, Robert (Bristol W)

      McNair-Wilson, M. (Newbury)

      Tebbit, Norman

      Cope, John

      Mather, Carol

      Thomas, Dafydd (Merioneth)

      Dodsworth, Geoffrey

      Mawby, Ray

      Thomas, Rt Hon P. (Hendon S)

      Drayson, Burnaby

      Maxwell-Hyslop, Robin

      Vaughan, Dr Gerard

      Edwards, Nicholas (Pembroke)

      Mayhew, Patrick

      Viggers, Peter

      Evans, Gwynfor (Carmarthen)

      Meyer, Sir Anthony

      Walder, David (Clitheroe)

      Fisher, Sir Nigel

      Miller, Hal (Bromsgrove)

      Weatherill, Bernard

      Fowler, Norman (Sutton C'f'd)

      More, Jasper (Ludlow)

      Wells, John

      Fry, Peter

      Morgan, Geraint

      Welsh, Andrew

      Gower, Sir Raymond (Barry)

      Neave, Airey

      Wigley, Dafydd

      Grist, Ian

      Nelson, Anthony

      Grylls, Michael

      Neubert, Michael

      TELLERS FOR THE NOES:

      Hall, Sir John

      Newton, Tony

      Mr. John Come and

      Hamilton, Michael (Salisbury)

      Page, Rt Hon R. Graham (Crosby)

      Mr. Spencer Le Marchant.

      Question accordingly agreed to.

    Clause 3

      DUTIES OF THE BOARD
      Mr. Barry Jones: I beg to move Amendment No, 7, in page 4, line 17, at beginning insert 'Copies of'.
      This is a drafting amendment which makes it clear that it is only copies of the Board's annual report that are to be laid before each House of Parliament by the Secretary of State, not the actual report made to him.
      Amendment agreed to.

    Clause 4

      GENERAL POWERS OF THE BOARD
      11.30 p.m.
      Mr. Nicholas Edwards: I beg to move Amendment No. 8, in page 4, line 44, at end insert:
      'which is essential for the economic and social development of the area and which the Board
      1124
      is satisfied after consultation with the Council cannot be provided in any other way'.
      Perhaps the House is in less of a hurry to get on with the Bill and we can elaborate our arguments in view of the vote on the previous amendment. I am sure the Minister will not feel that he has to hurry to reply to the important arguments we shall put forward.
      We seek to return to the scene of old battles. On numerous occasions during proceedings on the Bill and other Bills we have voiced anxieties about the powers taken by the Government to acquire and carry on businesses. Government bodies that do not have to commit their own money are not usually good judges of what constitutes a viable business. The recent report of a Select Committee dealing with the activities of the former Secretary of State for Industry in certain organisations bears out that judgment. About £10 million was spent on organisations that promptly went bankrupt.

      1125
      We are particularly concerned about the possible danger to other business in rural Wales if the Board or the Development Agency—we have to speak of the two organisations jointly because their functions and boundaries frequently averlap—seeks to establish businesses in competition with other organisations or to establish businesses that could threaten the existence of the small businesses that are the foundation of the economic life of rural Wales.
      It has become clear from our discussions that the health of rural Wales depends essentially on the health of small businesses. Because small businesses have been crushed by the burden of taxation and administration placed on them by the Government, high interest rates and inflation, we have record unemployment levels throughout much of rural Wales. Unemployment levels are frequently 14 per cent., 15 per cent. or more. In my constituency they are even higher.
      We believe that potentially successful enterprises can usually raise finance. I do not share the view expressed by the hon. Member for Cardigan (Mr. Howells) in Committee that there are many small businesses that can do well only if they are given a temporary helping hand. I fear that the temporary helping hand would turn into a permanent helping hand and too many businesses would become permanent loss-makers.
      We are told that it may be necessary for the Board to operate certain essential services. Specific reference was made in Committee and in another place to the new town powers. It was argued, not unreasonably, that it would not be sensible in this measure to take away powers that already existed in the new town in Mid-Wales. In Committee we tried to qualify the power to manage businesses and take part in business enterprises by reference to a clause that specified that these pursuits should be carried on in new towns. I recognise that that might have been unduly restrictive and that, within the framework of the Board's activities, to draw the boundaries so tightly might have been difficult in practice.
      We were also strongly critical in Committee of the extension imposed by the Government of the Board's powers which enabled it to acquire businesses. At the end of the proceedings our anxieties
      1126
      remained, and those anxieties are shared by others. The Welsh office of the CBI wrote that its committee was
      "still extremely concerned that the present wording of the clause gives open-ended powers to the Board and it believes that they should be closely and clearly defined. The CBI does not wish to prevent the Board from carrying out essential services but firmly believes that the Board should not be given general powers which might enable it to establish businesses which could compete unfairly with the existing private sector thus affecting employment prospects of employees of established companies."
      This evening we are having another go at the same exercise. The Under-Secretary will concede that the amendment is moderate in tone. It is permissive. It will not place restrictions on necessary activities, but it clearly places the onus on the Board to establish that those activities are necessary and cannot be provided by other means. That is reasonable.
      I have in mind particularly that the Board should consider the situation of other private businesses in the area which might be able to provide the services and the effect of its decisions on businesses within the area for which it is responsible. The amendment that we tabled envisaged consultation with the Council, but the Council has, sadly, just been swept away by a vote of the House, against the combined representations of the Opposition parties. For that reason, clearly I cannot now press this amendment to a vote as I otherwise would have done. All I can hope is that, if it is felt to be reasonable, in another place the Government will have a further look at this proposal, because I genuinely believe that it has merit.
      I urge the Government, when they are considering proposals to establish a development agency or a rural board or any other organisation, not just to be concerned with the actual impact that they believe their proposals will have on business and other activity in an area, but also to take full account of the psychology involved. At present industry is operating under great strains. The small business sector is faced with desperate conditions. Many small businesses find it difficult to survive. Many have had to go under. Many more have laid off one, two or three employees.
      It is important that the Government accept or introduce wordings that at least

      1127
      instil confidence that it is not their intention to weaken small businesses. There is a real fear—it was expressed in the CBI letter—that, whatever the Government's intentions, this will be the effect.
      In considering amendments of this nature and in drafting Bills, if they do not intend to use powers in a dangerous or harmful way the Government should make it clear in the legislation. It is no good giving undertakings in Committee. Most business men do not—perhaps mercifully—read our proceedings in Committee. Indeed, it would be a harsh penalty to ask them to do so. Many of them have to read Bills, however, and they see powers being given that cause them alarm. There is an obligation on the Government to write their Bills in such a way that proper safeguards are introduced and alarm is reduced to the minimum.
      Sir Raymond Gower: I hope that the Government will look at this carefully. My hon. Friend the Member for Pembroke (Mr. Edwards) has explained why we are opposed to the wording of the Bill. It is too wide and will allow any undertaking or business to be carried on. That power would be great in any part of the country but it is particularly extreme and excessive in the context of the rural area of Mid-Wales.
      For various reasons many businesses and industries in rural Wales are experiencing a difficult time. I apportion no blame, but some are finding it difficult to remain solvent. Businesses in rural Wales have several disadvantages, one of which is the population, which is small and scattered. These are scattered catchment areas which are particularly difficult for distribution. Communications are poor, and excessive transport costs cause grave difficulties. Existing businesses, industries and trades in the rural counties of Mid-Wales have long lines of communication for the acquisition of stocks and should they seek to sell outside their immediate neighbourhood.
      In addition to the general disadvantages under which industry in the whole of the United Kingdom is at present operating, those in rural counties have extra disadvantages. Probably some of the businesses will go into liquidation in the months ahead. Let us hope they will
      1128
      be few. Whatever their performance in the past, such firms have every right to be anxious about the future. They face difficult conditions and would be gravely affected if the Agency were allowed to carry on any undertaking or business under the Bill. That is too wide a power to confer on any body in this context.
      I hope that the Government will accept our proposal as reasonable. We recognise the need for emergency action in some circumstances, and that would not be removed by our suggested amendment. But we find it objectionable to give the Agency a totally unfettered power. It could be injurious to those who have to work under the present difficulties in rural Wales. People working in rural Wales are apprehensive about this part of the Bill. I hope that the Minister will say something to lessen their fears.
      11.45 p.m.
      Mr. Ian Grist: The clause is objectionable primarily because subsection (1)(g) is a catch-all phrase:
      "to carry on or acquire and carry on any undertaking or business".
      That is a lazy piece of drafting. The draftsmen are saying We couldn't think of anything more to put in the subsection. We threw this in at the end so that the Board can do anything it wants." It has been done before. It is something that Governments and draftsmen go in for, but I see no reason why Parliament should continue to tolerate it. Ministers will be able to produce a number of precedents from previous Bills, but I take no responsibility for those Bills, and, therefore, feel no shame about those precedents.
      The Board's functions are restricted to a certain geographical area, and we have been told several times by Ministers that it is restrained in its intent and approach. It is non-party-political and non-doctrinaire. Therefore, there should be no need for this catch-all wording.
      The wording is particularly objectionable in the hands of a Socialist Government. We on the Conservative Benches cannot avoid being suspicious about a party which believes in State bodies carrying on, acquiring or starting any business, through the Development Agency, the NEB or whatever it may be. The Government are creating a growing host of bodies. If only they could manage the

      1129
      economy that little bit better they would have the money, and through this legislation the means to carry on a real Socialist State. The one thing which saves us all at present is that they cannot provide the finance to operate these clauses.
      I can see no reason why we should accept this shoddy draftsmanship, especially when we think of the present Government and those who wish to make a reality of the wording.
      Sir Anthony Meyer: I support the amendment, which would tighten the definition of the role to be played by the Board. This is perhaps the last amendment on which it is practicable to consider the Board's role, the philosophy behind it and what it is likely to achieve.
      I have made it clear in previous debates on the Bill and on the Welsh Development Agency that I am not by temperament opposed to the idea of Government intervention. It is ludicrous to claim in modern society that the State can opt out of economic development. Like it or not, the mixed economy is here to stay, and the State will have a large role to play in the direction of the economy.
      The problem then becomes one of balance. Associated with it there is a psychological problem, one of expectations—what people can reasonably expect the State to do. The accumulating evidence. which is now overwhelming, is that the balance has now tilted too far. It is now horribly clear that, for reasons which have nothing to do with political doctrine, the limitations on the effectiveness of Government intervention in the economy are far stricter than any of us had ever imagined.
      It is, alas, now clear that unemployment is going out of control in the sense that it no longer responds to stimuli which a decade or so ago would infallibly have influenced its direction one way or the other. This is the justification for the expenditure cuts which have been so strongly urged on the Opposition Benches, because it is now clear—and I am as sorry to say this as anybody else —that it is Government expenditure that is now causing unemployment.
      As for the reality of unemployment, there is, I fear, no possibility of disguising it. My own county of Clwyd hither-
      1130
      to has been one of the stablest in terms of unemployment. I know that the Rhyl area, as most seaside resorts, has a highly fluctuating unemployment rate, but in the area represented by the Under-Secretary of State for Wales on the littoral of Deeside unemployment remained steady and low for a long period. We are now witnessing for the first time a high level of unemployment in that area also. This must give great cause for anxiety to those such as the Under-Secretary of State who believed that there was scope for effective Government intervention to create employment.
      The Bill comes at the wrong time. The quarrel with the clause as drafted is that it gives the impression that the Board, by a wave of its wand, can create jobs in that part of Mid-Wales to which the Bill applies. I am sorry to say that it will not be able to create these jobs. For any job that the Board creates by this operation the risk is that one-and-a-half jobs will be lost in areas outside the operation of the Board.
      Many people outside the House see these matters more clearly than we do in this House. I refer to the self-employed and the small business men, who are only too aware of the weight of bureaucracy and taxation—a situation brought into being by the existence and activities of well-meaning bodies, such as those that we are discussing tonight. Once expectations are aroused, as they are by the provisions which we are now considering, they are hard to damp down. People who have lost their jobs because of the burdens imposed by the Government on firms, causing those concerns to contract, understandably demand that the Government should take further action to save their jobs and bring in new ones.
      It is our responsibility by adopting some such amendment as that which is now before the House to bring home to people the tight limits on the ability of the Government to do anything to save jobs. The best thing the Government can do, if they wish to create more jobs, is not to create more bodies such as in the Bill, but to pack up and go home
      Mr. Barry Jones: I reject the alarmist employment theories advanced by the hon. Member for Flint, West (Sir A. Meyer). The problem in North-East

      1131
      Wales, put bluntly, is that for too long the area has relied on too few basic industries that are now vulnerable to technological change.
      The hon. Member for Cardiff, North (Mr. Grist) placed strictures on our wording, which he said was lazy. I would say that the wording in the amendment is slap-happy. The aim of the Bill is to stop the depopulation of rural Wales, to generate employment, and to make a better life possible for the people of that part of Wales.
      I also want to nail the misapprehension under which some hon. Members labour, that this Government might be against small businesses. That is not so. The Department of Industry has its small businesses section, and the Welsh Office is as friendly towards small businesses as any other political philosophers.
      Mr. Grist: Since the Minister mentioned the position in North-East Wales, would he not agree that the problem there really lies with the lack of profitability in firms, and that if he wants to bring employment to his part of the world and the rest of Wales, his Government should bring about conditions in which firms can operate profitably?
      Mr. Jones: That has nothing to do with the Bill or with Cardiff.
      Mr. Geraint Howells: The Minister said that the Government were looking after the interests of small businesses. is he aware that the Government promised an interim report five years after the Bolton Report was published in 1971 on the problems of small businesses and that the present Government have refused such an interim report?
      Mr. Jones: Five years ago we did not hold office.
      The amendment is incompatible with the Bill as amended. Who will specify the person or the body to decide what is an "essential" business or undertaking? To develop the point that I made to the hon. Member for Cardiff, North, the language of the amendment is unsatisfactory. For instance, one does not "provide" a business. One carries it on or undertakes it in terms of drafting legislation. But I do not say that that is our major objection to the amendment.
      1132
      The word "essential" is too stringent. Something may be beneficial or desirable without being essential. During the Bill's passage, repeated assurances have been given, here and in another place, that the power of the Board to acquire and carry on a business will be exercised only where it is unable to interest private bodies or persons in a business that it considers is in the interests of an area.
      Sir Raymond Gower: I am grateful for that assurance, but where in the Bill does that appear? I have been unable to find it so far.
      Mr. Jones: Under the powers relating to business. I hope that the hon. Gentleman will allow me to develop the assurance that I am trying to give him.
      The whole purpose is to assist and complement the development of an area. But we cannot allow a project which the Board thinks is in the interests of an area to be balked by unreasonable objections by private bodies which are not themselves willing to undertake the venture.
      Clause 4(5)(c) specifically provides that the consent of the Secretary of State must be obtained by the Board to exercise this power. That consent will be given only when the proposed enterprise would benefit the local community and when the Board cannot interest private bodies or persons in the project. What is more, the Secretary of State would need, among other matters, to consider the viability of the project under consideration before giving his approval.
      For these reasons, I urge the House to reject the amendment.
      Sir A. Meyer: Before the hon. Gentleman sits down——
      Mr. Barry Jones: I have sat down.
      Sir A. Meyer: Will the hon. Gentleman reconsider his remarks——
      Mr. Deputy Speaker: Order. I think that the Minister has sat down.
      12 midnight
      Mr. Nicholas Edwards: When one listens to the Under-Secretary charmingly giving that sort of reply, one knows that he has not a very good case. It was the kind of case that we have heard him advance so often before when he

      1133
      has turned to his advisers and said "We have not a very good argument, but produce some drafting points which will shoot the whole thing down in flames." I have already conceded that, as a result of the passing of an earlier amendment, this one is faulty and that perhaps it can be looked at again where the Bill started its proceedings—in another place.
      Then the Under-Secretary said that it was the Government's intention and object to do all that was contained in my amendment. He proceeded to define the scope of the Board's activities as providing those functions of economic and social development which it felt were desirable and important, which would not he obtained in any other way and which private bodies refused or felt unable to provide.
      Once again we have the Government giving declarations in Committee which they are not prepared to write into the Bill. If they are able to give these declarations and assurances, I cannot understand why they are so slap-happy and shoddy about their drafting. Why cannot they draft a Bill properly so that they do not have to give these repeated assurances about their intentions? We would like legislation to be drafted so that the Government's intentions are clearly spelled out.
      It is because the Government repeatedly fail to do this that we criticise them. We would like the safeguards and Assurances on this point written into the Bill, just as we wanted them on agriculture, and we shall go on chasing the Government until we get some sensibly drafted Bills instead of the shambles usually presented to us.
      Amendment negatived.
      Mr. D. E. Thomas: I beg to move Amendment No. 10, in page 5, line 4, at end insert:
      '(i) to provide financial assistance by way of grant or loan or partly by grant or partly by loan or by taking of equity in a company, to assist any person or persons proposing to carry out any activity in a manufacturing, extractive, agricultural, fisheries, forestry, land-use, recreation, tourist, or service industry which will contribute to the economic and social development of the area for which it is responsible.'
      The purpose of the amendment is to lift into the Bill a major section of the Highlands and Islands Development Board Act which was omitted by the
      1134
      draftsman. In our view, the amendment is crucial to make the Bill into a measure setting up a Development Board for Rural Wales in the full sense of the word. We cannot talk about development in a rural area heavily dependant for its employment on primary industry if development does not include the development and stimulus of primary industry as well as secondary manufacturing activities.
      My major criticism of the Board is that it falls far short of a development board for rural Wales as envisaged by experts whom I shall not quote at this hour and as envisaged in practice by the Highlands and Islands Development Board in Scotland.
      I know that the Minister will say, as he did in Committee, that the intention of the Board is to concentrate on manufacturing industry, to provide COSIRA loan powers and to do some work on social development as such.
      In Scotland, the Highlands and Islands Development Board is to continue to function as an effective agency of regional intervention alongside the Scottish Development Agency, but retaining its financial assistance powers over a whole range of activities in primary as well as manufacturing industry.
      The whole thinking behind the creation of the Board is that regional intervention on a technical level is necessary because of special problems. We need a Board for a given, defined area, because there are special problems. By limiting the powers of the Board to manufacturing industry, the Government seem to be arguing that it is only in that sphere that we ought to intervene, whereas I am arguing that many of the problems of Mid-Wales are concerned with its primary industries. If we are looking to job creation it must be job creation in land use, in recreation, in tourism, in extractive industry and in the other areas of industry which I have mentioned, not merely in manufacturing.
      Indeed, at this time, by concentrating on looking for foot-loose manufacturing industry from outside the area, the Board may be following a dead end from the start in that we already have a substantial problem in Mid-Wales with the existing resources. The WDA has the same problem and has so far been unable to help us here.

      1135
      In a situation of overall economic growth in the area we could manage the migrants from the Midlands overspill if they came into Mid-Wales, but in a situation of contraction the spin-off and the spill-over are no longer there. Therefore, by looking to manufacturing industry to provide the immediate growth in jobs, the Government and the Board may be making a fatal mistake in their economic plan. In the amendment we say that the Board must have powers over a full range of activities within its area and not be merely limited to manufacturing industry.
      With regard to manufacturing industry, I do not want to repeat the arguments already made about the powers of the WDA and the relationship between the Board and the WDA. But, having read carefully the speeches of the Under-Secretary of State in Committee, I still fail to see the logic in giving the Board COSIRA loan powers and no other powers at all.
      If I were a budding entrepreneur or the chairman of a co-operative and looking for an opportunity to develop, or for investment, I might consider COSIRA loan powers or assistance, but the rate is as high as the bank rate. It would not be a type of COSIRA loan that I would feel to be necessary but a form of equity participation by a Board such as this over a short period, which would give me an opportunity later of buying back the equity. But if I wanted that kind of assistance I should have to make, for example, one application to Aberystwyth, then another to Treforest, and, if I were in a difficult situation, I should be making a parallel application to the Industry Division of the Welsh Office in Cardiff.
      We now have this plethora of bodies. The Secretary of State made a great peroration about it when we started off on Second Reading. That was the whole argument for creating an effective Board which would replace the many tiers of industrial assistance in the area. In place of the Development Commission and its range of assistance, we are now to have the Industry Division of the Welsh Office, the Welsh Development Agency, and this Board with its very limited COSIRA loan powers. I do not see the logic of transferring only these powers from the WDA to the Development Board for
      1136
      Rural Wales. Again I am concerned that the WDA will of necessity not only be looking for its development opportunities in industrial South-East Wales and industrial North-East Wales but will also be tending to concentrate on the big fish, or on trying to develop or farm the big fish, whereas the people most in need of assistance in Mid-Wales are the smaller fish. It is the small man who needs a capital injection to help him expand from six to 10 or from 10 to 16 jobs. It is not the big projects which are looking for capital, but small projects which do not automatically turn to the merchant banks.
      This is the whole success of Inverness as the centre of the Highlands and Islands Development Board. Decisions are made there in 24 hours on small-scale projects. That Board has been able to assist a whole range of small projects, not only in manufacturing but in other areas proposed in our amendment.
      I mention specifically the extractive industry, not because I expect RTZ or some other international mining company to go to the Board and ask for help for starting copper mines, but because there are smaller slate quarries in my constituency which could do with a capital injection to develop new machinery and improve—particularly now that their regional development grants are being withdrawn from 1st April 1977. A number of these small enterprises have diversified into producing craft goods for the tourist industry, and that, too, would be more successful if actual capital injection was available for that purpose. As with the extractive industry, the Board will not be able to provide any financial assistance.
      The position is similar with agriculture. We have specific agricultural needs in Mid-Wales. I know that the Minister will say that they are helped by ADAS and various other schemes, including the hill area special compensatory payments from EEC, and so on. In the case of Scotland, the Highlands and Islands Development Board gives assistance to expanding a herd of cows from 15 to 20, for example, and much finance has gone into small schemes of this kind. We have, in Merioneth, designated a hill project area, but this kind of development work on hill land is virtually useless unless there is capital to match it. If hill farming is to develop effectively in Mid. Wales, it will need capital injection like

      1137
      that provided by the Highlands and Islands Development Board, and not provided here.
      Agriculture is a primary source of employment in rural areas of Wales, as is forestry. Once again, the Board has no powers in this area. Our amendment would provide aid for afforestation in the areas I have been talking about—on small farms with hill land on which forests could be developed on a small scale. I am not talking here about pop-singers like Cliff Richard who have trees growing in my constituency. If we are talking about regional intervention in manufacturing industry, it is logical also to talk about the same thing in relation to afforestation.
      As for fisheries, fish-farming could be a major industry in areas of Mid-Wales. Much of the work of the Highlands and Islands Development Board has been in providing aid for fisheries. Our Board could do much to innovate work which would not otherwise be done.
      12.15 a.m.
      Finally, I come to tourism and recreation. This, of course, is the major growth industry in Mid and rural Wales and it is a growth industry which has to be very carefully planned and developed. I think what applies to the Welsh Development Agency in the case of manufacturing industry and its relationship with the area and with potential developers also applies to the Welsh Tourist Board and its links with the area.
      The Board's financial assistance is administered centrally from Cardiff and is not available on a local basis. I have discussed this with the Tourist Board and I can certainly say that there are many people within the Board who feel that the Board might be more effective if it were able to provide grant aid at regional offices rather than all the projects having to be dealt with through Cardiff. There might be a limitation on the amount available locally, but, as things stand, all grant aid for tourist projects has to go through Cardiff.
      I am not complaining, because I have campaigned to get some of these projects off the ground and they are doing so with Welsh Office and Welsh Tourist Board money. But I am worried that the small hotelier who wants more bedrooms or who would like to carry out
      1138
      a small tourist development is not getting any backing.
      It is the smaller-scale development which would provide jobs in Wales but it is the larger development which will have more attention when the application is made to Cardiff. The tourist industry is the major job creator now, not manufacturing industry, and it is essential that there should be powers for the Board in this instance.
      The logic of the amendment is to extend the powers of the Board. It would make it into a Development Board for Rural Wales in the full sense of the word, not merely one which concentrates on the manufacturing sector but one able to assist the whole economic activity in its area. The Government have accepted the logic of my amendment by giving some social powers to the Board but they are not prepared to go the full way and give the Board the whole range of economic development powers which I believe it must have.
      Mr. Nicholas Edwards: The hon. Member for Merioneth (Mr. Thomas) will know that I have sympathy for some of the things he says, though not all. I do not believe that we need a body with these very extensive economic powers that he believes would transform the situation, because, regrettably, I do not think that they would. I think that the central economic responsibility must remain with the Government. We have seen in so many instances how such organisations are powerless against disastrous decisions taken centrally by the Government.
      For example, at the present time there are 53 Government factories and 44 advance factories standing empty in Wales. Needs are not met by the setting up of boards to build advance factories if the central economic management of the economy is wrong.
      That is why I do not go the whole way with the hon. Gentleman and cannot urge my hon. Friends to support him on this occasion. In Committee, we voted with him on the basis that we liked the case he was advancing for trying to centralise functions in one organisation. I said then that the amendment he was moving on that occasion might not be satisfactory to be finally written into the Bill, but that perhaps

      1139
      it could be looked at again on Report stage.
      The point on which we agree with the hon. Member is that the Government have produced total nonsense in the relationship between the Development Agency and the Board. I intend to say more about that if we have a Third Reading debate. I content myself by saying that we think the relationship between the two organisations will be a shambles and that there will be total uncertainty.
      All the extra explanations given by the Under-Secretary during our debates have added nothing to clarity. His repeated incantation that it was all a matter of COSIRA powers, a statement that he made every hour or so in Committee, did not resolve the problem. We think that more fundamental changes will be needed to sort this matter out. That is why we shall not support the amendment. It attempts to place powers which already exist with the Government largely in the Development Agency so that industrialists can look to one body rather than two or three. Nevertheless, we do not think that it gets down to the fundamentals of sorting out relationships between these two bodies. Therefore, we shall have to come back to the matter at some time to try to do the job, but we do not think that the amendment solves the problem.
      Mr. Barry Jones: Everyone who served on the Committee will agree that we debated this matter at length and that we gave it a good airing. I shall therefore be brief.
      The function of investment in industry, which is what the amendment is about, is a central function of the Welsh Development Agency. The Government do not intend that the Board should duplicate the Agency by having the power in its own right to assist companies or individuals by the direct provision of finance or by taking equity in a company. Investment in industry is a specialist function that in general is best left to the Agency. We think that specialist skills are required, and these will be available to the Agency. That makes that body the best channel of this type of direct assistance to industry. I therefore advise the House to reject the amendment.
      Mr. Dafydd Wigley: The Minister's reply this evening has been almost as inadequate as was his reply in Committee. It was almost identical. I strongly support my hon. Friend the Member for Merioneth (Mr. Thomas), and I am disappointed that the Conservatives cannot vote for the amendment in the way that they did in Committee. Presumably that is because of the late hour.
      This is a fundamental amendment which makes the difference between the Board being a success and being a rather dismal failure. We have seen many reports about rural Wales. There was the Beacham report, the Roy Thomas Study, and the Welsh Council's report, among others. Now we have the opportunity to do something, and that opportunity is about to be lost. That is nothing short of tragic.
      We have to see the economy of rural Wales as a sort of integrated whole. Policies which depend upon transferring entities from outside to solve these economic problems are doomed to fail. They will be subject to the rejection which is sometimes experienced in other walks of life when a totally alien development is introduced into a certain area.
      The Board falls between several stools. It is not a rural board for Wales. There are other rural areas with similar problems to the area defined for the Board, but they are excluded. The fundamental weakness is that it is neither a co-ordinating board nor an all-embracing board. It could be one or the other, but it is neither. A few moments ago the Minister told us that there were too many nominated boards, but here we have another. It is to be responsible for economic development, but it is given none of the necessary powers for that function. It exists because there is a difference in the structure of rural areas compared with industrial areas, but it does not have the necessary powers to deal with those different circumstances. It is to do with rural Wales, but it has no powers to deal with the fundamental industry in rural Wales. It deals with an area where the major industry is tourism, but has no responsibilities in this direction. It deals with an area with a major extracting industry, but has no powers in this direction either.

      1141
      The Minister said that the Board has powers to deal with manufacturing; yet the real powers to deal with manufacturing are enshrined in the Welsh Development Agency Act and cannot be used by the Board.
      The Minister also referred to this being a matter for experts. But who are the experts? Are they those used by the Welsh Development Agency? They are merchant bankers from London who could be equally accessible to the Board if it were thought that these were the people to be dealing with the small acorns of Mid-Wales.
      We want people to deal with industries rooted in an area, not those who are good with discounted cash flows and present value ratios, but are lost in a pile of statistics. The Minister spoke about the power of the COSIRA loans, but experience is not very encouraging in terms of the lack of information and reasons given to those who do not get loans. I hate to see these great weaknesses enshrined in the Bill.
      Is the Board or the Agency to pioneer the industrial assault, on a small scale, with industries suited to the problems of rural areas? I suspect that the Agency cannot and will not give priority to this work, because it is an area which is being covered by the Board. Yet the Board will not have the power to do this for itself.
      In Committee the Minister said that the Board had no powers to assist industry directly because of the expertise of the WDA. I suspect that this expertise will be hived off in a totally different direction. The Agency may know about the circumstances of Rhondda, Merthyr, Wrexham, Caernarvon or Cardiff, but what does it know of the situation in Llanuwchllyn, Abergynolwyn, Ciliau Aeron or Llanbrynmair?
      I remember talking to someone from Llanbrynmair when the late Jim Griffiths' new town was going to solve all the area's economic problems. It was pointed out that a factory of British Leyland might move in to solve the problems, and
      the man said "But then it will not be Llanbrynmair." That is the reality of the situation. An answer to the problems of Cardiff and Wrexham will not be suitable for the rural areas. The Government seem to have missed this point.
      We are dealing with small units, small acorns, family companies. It is much more important to know the background of the community in which people live, the interrelationship between them and other aspects of the community than to have analysts at arm's length who know everything about figures but are ignorant of these circumstances.
      The 1973 report of the Welsh Council stated in strong terms that it had been impressed by what had been learned from the work of the Highlands and Islands Development Board. It hesitated to advocate such an approach in Wales only because of the impending local government re-organisation. No one could say that the re-organisation has provided an answer for rural Wales, and the case made by the Welsh Council for the granting of powers similar to those of the Highlands and Islands Development Board remains strong.
      I thought about moving amendments to bring areas of my constituency within the ambit of the Board, but I decided not to because the Board is neither one thing nor the other. It will not add a jot to solving the problems of my area. With this amendment enshrined in the Act, there would at least be some possibility of help. At present the Bill represents an opportunity lost.
      Mr. Roderick: Will the hon. Gentleman vote against it?
      Mr. Wigley: It is not a question of voting against it. There is an opportunity, which the Government side, as much as any other, has always wanted, now going through the window. It is tragic.
      Question put, That the amendment be made:—
      The House divided: Ayes 6, Noes 78.

      Division No. 361.]

      AYES

      [12.30 a.m.

      Beith, A. J.

      Howells, Geralnt (Cardigan)

      TELLERS FOR THE AYES:

      Evans, Gwynfor (Carmarthen)

      Penhaligon, David

      Mr. D. E. Thomas and

      Hooson, Emlyn

      Ross, Stephen (Isle of Wight)

      Mr. Dafydd Wigley.

      NOES

      Allaun, Frank

      Hamilton, James (Bothwell)

      Owen, Rt Hon Dr David

      Anderson, Donald

      Harper, Joseph

      Palmer, Arthur

      Archer, Peter

      Harrison, Walter (Wakefield)

      Richardson, Miss Jo

      Armstrong, Ernest

      Hooley, Frank

      Roderick, Caerwyn

      Ashton, Joe

      Huckfield, Les

      Rooker, J. W.

      Atkins, Ronald (Preston N)

      Hughes, Rt Hon C. (Anglesey)

      Rowlands, Ted

      Barnett, Guy (Greenwich)

      Hughes, Roy (Newport)

      Ryman, John

      Bray, Dr Jeremy

      Hunter, Adam

      Skinner, Dennis

      Brown, Hugh D. (Provan)

      Jackson, Miss Margaret (Lincoln)

      Small, William

      Callaghan, Jim (Middleton & P)

      John, Brynmor

      Smith, John (N Lanarkshire)

      Campbell, Ian

      Jones, Alec (Rhondda)

      Spearing, Nigel

      Canavan, Dennis

      Jones, Barry (East Flint)

      Stallard, A. W.

      Cocks, Fit Hon Michael

      Judd, Frank

      Stoddart, David

      Conlan, Bernard

      Kerr, Russell

      Thomas, Jeffrey (Abertillery)

      Cox, Thomas (Tooting)

      Lamond, James

      Thomas, Ron (Bristol NW)

      Cryer, Bob

      Lestor, Miss Joan (Eton & Slough)

      Walker, Terry (Kingswood)

      Dalyell, Tam

      Lyons, Edward (Bradford W)

      White, Frank R. (Bury)

      Davies, Ifor (Gower)

      McCartney, Hugh

      White, James (Pollock)

      Deakins, Eric

      McDonald, Dr Oonagh

      Wilson, Alexander (Hamilton)

      Dean, Joseph (Leeds West)

      McElhone, Frank

      Wilson, Rt Hon Sir Harold (Huyton)

      Dormand, J. D.

      Madden, Max

      Wise, Mrs Audrey

      Ellis, John (Brigg & Scun)

      Mallalieu, J. P. W.

      Woodall, Alec

      Ellis, Tom (Wrexham)

      Mendelson, John

      Woof, Robert

      Evans, Ioan (Aberdare)

      Mikardo, Ian

      Evans, John (Newton)

      Miller, Dr M. S. (E Kilbride)

      TELLERS FOR THE NOES:

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

      Morris, Rt Hon J. (Aberavon)

      Mr. Donald Coleman and

      Golding, John

      Ogden, Eric

      Mr. Alf Bates.

      Graham, Ted

      Question accordingly negatived.
      Mr. Nicholas Edwards: I beg to move Amendment No. 11, in page 5, line 5, after 'include', insert:
      'in so far only as they are incidental to the Board's other functions'.
      Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this we may take the following amendments:
      No. 12, in page 5, line 6, at end insert:
      but this shall not empower the Board to acquire by agreement, hold and dispose of land in their area for the purpose of affecting amalgamation of agricultural land or the reshaping of agricultural units'.
      No. 16, in page 5, line 30, at end insert:
      '(8A) For the avoidance of doubt, the powers of the Board under this section shall not be construed as allowing the acquisition by agreement or compulsion, the holding or disposal of land in their area for the purpose of affecting amalgamation of agricultural land or the reshaping of agricultural units.'.
      Mr. Edwards: In Committee, and in another place, repeated attempts were made to write into the Bill safeguards for the agricultural industry. In Committee the Government steadfastly refused to accept amendments which would have further limited the powers of the proposed Board to acquire agricultural land and to carry out agricultural or forestry operations on such land. Instead, the Government introduced amendments of their own which are now embodied in Clauses 1(4) and 4(2). The Government also accepted an Opposition amendment which is now Clause 4(8).
      1144
      While the latter amendment, though general in nature, is an improvement, the Government amendments are far from reassuring to the agricultural industry.
      Declarations have been made by the Under-Secretary of State that the Government do not intend the Board to use its powers to restructure agricultural holdings, as was the intention of the rural development board proposed in 1969 under the provisions of the Agriculture Act 1967, but that reassurance has not been written into the Bill. The Government amendments still leave a loophole in the Board's ability to engage in agricultural and forestry operations, which can be seen as a disguised means of reintroducing the earlier proposals for a rural development board. No doubt the Under-Secretary of State will repeat the assurance that he, the Lord Chancellor and others have given on this matter.
      The trouble is that we are dealing not just with the present Government's intention. We are passing a Bill which when enacted will stand on the statute book for a long time and which future Governments may decide to interpret differently. In Committee the right hon. Member for Anglesey (Mr. Hughes) argued in almost violent terms that the Government were wrong to give this assurance and that he would like the power to be used in that way. We fear that there are Government supporters who, given the opportunity in future, might decide that it was not worth getting another Bill through the House and who

      1145
      would wish to use this Bill for the purpose.
      I return to what I said in an earlier debate about psychology and confidence. As the Government are slowly and painfully beginning to realise, our economy is suffering from lack of confidence in the Government's administrative apparatus Here the Government are destroying confidence in the farming industry, which is vital to our economic survival and which should be encouraged to increase production so that we have to place less reliance on imports.
      12.45 a.m.
      At the very time when the farming industry has to cope with all the embarrassments caused by the gross distortion of the green pound, by heavy taxation, and by rising costs, it has the added embarrassment of not knowing the future intentions of the Government. It must be suspicious if the Government refuse to write into the Bill reasonable amendments which would allow them to do the things they say that they want to do and prevent them from doing the things that they say they do not want to do. We cannot understand why the Government do not draft the Bill in such a way that we do not have to spend hours debating issues of this nature.
      We have accepted that it is perfectly reasonable for certain activities to be carried on. I do not argue with the fact that if someone buys land to establish a factory, it must be sensible to go on farming that land for a time before building the factory. There is land in my constituency which is bought by oil companies and used by them for other purposes before they subsequently build oil refineries.
      The fears I have referred to about a loophole exist especially because Clause 4(2), in conjunction with Clause 4(1)(h). allows
      "the carrying out of agricultural operations"
      in a wide number of circumstances where it would
      "facilitate the discharge of the Board's functions or"
      be
      "incidental or conducive to their discharge".
      Read in conjunction with Clause 4(1)(g), it could provide the Board with wider powers than the Government suggest or the farming community would wish.
      Indeed, the powers are further extended by Clause 4(3), which will enable them to be exercised in relation to the carrying out of agricultural operations outside the Board's area—that is, in the whole of rural Wales. Perhaps it is the one area where the Board is able to operate in the whole of rural Wales.
      We seek in Amendment No. 11 to stress the incidental nature of any agricultural operations or any forestry operations which the Board might undertake. We do not object to its undertaking operations of the kind I described briefly in relation to the oil company or in relation to the acquisition of land. If it found itself for some reason having to carry on operations of that kind, that would not seem to be unreasonable, and we think that it could be perfectly easily written into the Bill.
      The other two amendments would close the loophole I have identified and allay the fears of the farming community. I propose that we should make use of the wording in Section 48 of the Agriculture Act 1967, dealing with the powers of a rural development board to promote amalgamations or boundary adjustments, in order to exclude from the Board's remit the powers which would have been available to the Wales rural development board.
      Amendment No. 12 seeks to insert the words:
      "but this shall not empower the Board to acquire by agreement, hold and dispose of land in their area for the purpose of affecting amalgamation of agricultural land or the reshaping of agricultural units."
      There is an express disclaimer of what the Government have disclaimed verbally in Committee. The intention of both Amendment No. 12 and Amendment No. 16 is to narrow the scope of the power granted to the Board. Under the amendments, the Board would still be able to carry out agricultural operations but it would not be able to set itself up as an old-style development board.
      The Government cannot challenge the wording in principle because it is taken from Section 48 of the Agriculture Act 1947, which laid down detailed provisions for amalgamation schemes. The main introductory wording comes from that section.
      I see no reason why one or other of our amendments should not be accepted.

      1147
      They do not challenge the Board's functions but merely insert into the Bill that which the Minister said in Standing Committee. That is all that we ask. He said:
      "I hope I can convince Opposition Members by giving them these details, and that we were in earnest in what we have per previously said".—[Offical Report, Standing Committee K, 22nd July 1976; c. 59]
      He will convince us by belatedly accepting our amendments.
      Mr. Geraint Howells: I support the amendment. We need a written assurance in the Bill. Safeguards are needed by the agricultural industry and especially by the small farmers. Unless the safeguards are written into the Bill, small farmers in rural Wales will be worried. When the last rural development board Bill was introduced they were worried about its being an incursion into the liberty of the individual. We therefore want to ensure that the agriculture sector will work in harmony with the rural development board in Wales.
      Perhaps in five or 10 years' time members of the Board will take a different view from that now taken by Ministers. Perhaps they will want to take over non-viable units, although it is difficult to define a non-viable unit. Whether a small acreage is viable often depends upon the farmer. Farmers have an important role in the economic and social life of rural Wales, and we need an assurance written into the Bill so that their minds can rest easy in the years ahead.
      Mr. Wyn Roberts: I support my hon. Friend the Member for Pembroke (Mr. Edwards). In Committee I argued strongly against the inclusion of subsection (2), which was introduced there as Amendment No. 38. The number is clearly engrained in my mind. It seemed to me then that the insertion of the subsection, which allowed
      "the carrying out of agricultural operations and the carrying on of forestry and afforestation",
      was in contradiction of the assurances given by the Lord Chancellor. The Minister claimed in Committee that the subsection was a fulfilment of the assurances given in the other place, but I have read it again and again and I cannot see that that is so. Rather, it contradicts the Government's assurances.
      1148
      Therefore, I fully support in particular Amendments Nos. 11 and 12, which are amendments to the subsection. They are clearly necessary to give any substance to the assurances given by the Minister and the Lord Chancellor.
      Mr. Barry Jones: I hope that I can show the Opposition that their fears are unjustified. I certainly advise the House to reject the amendments.
      The Bill will not be used to restructure agriculture. Clause 1(6) states categorically that
      "the Board shall not engage in farming any land held by it or in forestry or afforestation on such land",
      except, under Clause 4(1)(h), when this
      "is likely to facilitate the discharge of the Board's functions or is incidental or conducive to their discharge."
      To this end the Board will have to buy and manage agricultural land pending its development—as, say, an industrial estate, or for housing and related urban purposes. The Board is, however, otherwise precluded by the provisions of the Bill from acquiring land for farming or for forestry.
      Subsection (8) requires the Board to
      "have regard to the need to conserve agricultural land and to the requirements of agriculture and efficient land management."
      The Government accepted an Opposition amendment to that effect in Committee, yet the Opposition are still not content. In principle, therefore, this group of amendments is objectionable.
      Mr. Wyn Roberts: Does not the Minister agree that Clause 1(6) is in itself a contradiction of Clause 4(2)?
      Mr. Jones: I disagree with the hon. Gentleman's interpretation.
      I advise the House to reject Amendment No. 11 on the ground that any agricultural operations which the Board undertakes in the short term on land which it ultimately intends to develop cannot be incidental to such functions but must facilitate or be conducive to the discharge of its functions. We feel that the wording must be retained in the Bill as it stands and that the amendment should be rejected.
      1.0 a.m.
      Amendment No. 12 is defective because subsection (2) does not authorise

      1149
      the acquisition, holding or disposal of land, and the assumption on what the amendment is based is therefore incorrect. Again, I advise the House to reject it.
      We believe that Amendment No. 16 is badly drafted. In the context of subsection (8) insertion of the words
      "for the avoidance of doubt"
      is inappropriate. There is no doubt that the Board could not purchase agricultural land if the only purpose was to amalgamate or reshape. Therefore, apart from drafting deficiencies, the amendment is objectionable in principle.
      It is inevitable that at times the Board in properly discharging its functions will in a sense—although not in the sense intended by the Opposition—be required to increase or reduce the area of an agricultural unit. For instance, if the Board is not allowed to effect the amalgamation of agricultural land—and it is assumed that this may be construed as amalgamating fields or holdings—pending development of the land, the power of the Board to manage effectively the land it has acquired for legitimate reasons will be undermined.
      Again, if the Board could not amalgamate land, it could not acquire agricultural land from separate owners for playing fields. To quote yet another example, the Board would not always want to acquire an entire agricultural unit. Yet this amendment would require it to do so, as otherwise in acquiring part of a unit it could be said to be reshaping an agricultural unit.
      Sir Raymond Gower: How does the Minister explain his assertion that the Board cannot acquire the land? Clause 4(1)(a) reads
      "to acquire, hold, manage, develop and dispose of land or other property".
      That is not a narrow purpose but represents a general power.
      Mr. Jones: The hon. Member is a distinguished lawyer but I must stand by my argument. Obviously the Opposition by their amendment do not wish to prejudice the proper discharge of the Board's function. Their concern, which I appreciate, is that the wide powers given to the Board should not be used for the primary purpose of restructuring agriculture. I repeat the assurance that they will not be so used. I repeat that
      1150
      the Board will not restructure agriculture, and the Bill gives the Secretary of State the powers of direction and consent for the disposal of land which will ensure that the Board will not exercise its powers in such a manner as to restructure agriculture in its area. I hope that the House will reject the amendments.
      Sir Raymond Gower: I believe the Minister speaks in good faith when he says that the Board will not do these things, but as the Bill stands it gives power to the Board to acquire land. He will know that Clause 4(2) gives powers relating to
      "the carrying on of forestry and afforestation".
      Those powers are not limited in the manner he seeks to suggest. Indeed, his assurances will not be worth the paper they are printed on in tomorrow's Hansard.
      The Minister's reply was disappointing and indaquate. Some years ago farmers throughout the rural areas were apprehensive about the operations of the Forestry Commission, even though those fears may well have been groundless. Similarly, for good reasons or bad, they are now apprehensive about the powers given to the Board, which go beyond any protection given by the Bill. It does not include the Minister's assurances, and that is why I hope that we shall vote for the amendment.
      Mr. Nicholas Edwards: My views have hardened during the debate. I had thought that, having fought this battle for a long time, we should, regretfully, admit defeat in the face of the Govern-men's peculiar obstinacy. But it is just that obstinacy which makes me suspect their intentions.
      It is not good enough for the Government to raise a series of pedantic drafting objections. They have known throughout what our fears were, and if they felt that our amendments were technically deficient, they could have remedied that themselves. It is pretty ridiculous to say that the amendment might prevent the Board from acquiring land for playing fields. I am not convinced by the argument that the development of rural Wales could not carry on without the Board acquiring playing fields.
      Although what my hon. Friend the Member for Barry (Sir R. Gower) and

      1151
      the hon. Member for Cardigan (Mr. Howells) said carried considerable weight, the final crunch came for me when the Minister, in his quiet and friendly way, referred again to the possibility of direction. It is precisely this power of direction which gives rise to our fears. I am worried not about the members of the Board who will carry out these functions but about members of the Government and future Governments. The Minister apparently regards direction as a protection for people: we see it as a danger in an increasingly extreme Left-wing Government—
      —
      Mr. Barry Jones indicated dissent.
      Mr. Edwards: Yes—an increasingly extreme Left-wing Government. Neither the Minister's smiling dissent nor the opinions of the Welsh National Party will persuade me that that threat does not exist. It is because of this power of direction and because the Minister has again totally failed to reply to the debate that I urge my hon. Friends to support
      Question accordingly negatived.
      Amendment proposed: No. 13, in page 5, line 12, at end insert—
      '(4A) The conditions which may be attached to the provision of finance under this section include conditions for repayment of the whole
      at least one of the amendments. Because of its parentage, in an Act drafted by a previous Labour Government, I believe that the one to support is Amendment No. 12. Therefore, I shall not seek to press Amendment No. 11, but ask my hon. Friends to support No. 12.
      Mr. Deputy Speaker (Mr. Oscar Murton): Does the hon. Gentleman seek the leave of the House to withdraw Amendment No. 11?
      Mr. Nicholas Edwards: Yes. I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Amendment proposed: No. 12, in page 5, line 6, at end insert
      'but this shall not empower the Board to acquire by agreement, hold and dispose of land in their area for the purpose of affecting amalgamation of agricultural land or the reshaping of agricultural units'.—[Mr. Nicholas Edwards.]
      Question put, That the amendment be made:—
      The House divided: Ayes 10, Noes 72.
      or any part of a grant in any circumstances'.—[Mr. Barry Jones.]

      Division No. 362.]

      AYES

      [1.10 a.m.

      Edwards, Nicholas (Pembroke)

      Lester, Jim (Beeston)

      Gower, Sir Raymond (Barry)

      Meyer, Sir Anthony

      TELLERS FOR THE AYES:

      Grist, Ian

      Ridley, Hon Nicholas

      Mr. John Stradling Thomas and

      Hooson, Emlyn

      Roberts, Wyn (Conway)

      Mr. Michael Roberts.

      Howells, Geraint (Cardigan)

      Ross, Stephen (Isle of Wight)

      NOES

      Allaun, Frank

      Golding, John

      Richardson, Miss Jo

      Anderson, Donald

      Graham, Ted

      Roderick, Caerwyn

      Archer, Peter

      Harrison, Walter (Wakefield)

      Rowlands, Ted

      Armstrong, Ernest

      Huckfield, Les

      Ryman, John

      Ashton, Joe

      Hughes, Rt Hon C. (Anglesey)

      Skinner, Dennis

      Atkins, Ronald (Preston N)

      Hughes, Roy (Newport)

      Small, William

      Barnett, Guy (Greenwich)

      Hunter, Adam

      Smith, John (N Lanarkshire)

      Bates, Alf

      Jackson, Miss Margaret (Lincoln)

      Snape, Peter

      Bray, Dr Jeremy

      John, Brynmor

      Spearing, Nigel

      Brown, Hugh D. (Provan)

      Jones, Alec (Rhondda)

      Stallard, A. W.

      Campbell, Ian

      Jones, Barry (East Flint)

      Stoddart, David

      Canavan, Dennis

      Judd, Frank

      Thomas, Dafydd (Merioneth)

      Cocks, Rt Hon Michael

      Lamond, James

      Thomas, Jeffrey (Abertillery)

      Coleman, Donald

      Lestor, Miss Joan (Eton & Slough)

      Thomas, Ron (Bristol NW)

      Cox, Thomas (Tooting)

      McCartney, Hugh

      White, Frank R. (Bury)

      Cryer, Bob

      McElhone, Frank

      White, James (Pollok)

      Dalyell, Tam

      Madden, Max

      Wigley, Dafydd

      Davies, Ifor (Gower)

      Mallalieu, J. P. W.

      Wilson, Alexander (Hamilton)

      Deakins, Eric

      Mendelson, John

      Wilson, Rt Hon Sir Harold (Huyton)

      Dormand, J. D.

      Mikardo, Ian

      Wise, Mrs Audrey

      Ellis, John (Brigg & Scun)

      Miller, Dr M. S. (E Kilbride)

      Woodall, Alec

      Ellis, Tom (Wrexham)

      Morris, Rt Hon J. (Aberavon)

      Evans, Gwynfor (Carmarthen)

      Ogden, Eric

      TELLERS FOR THE NOES:

      Evans, Ioan (Aberdare)

      Owen, Rt Hon Dr David

      Mr. Joseph Harper and

      Evans, John (Newton)

      Palmer, Arthur

      Mr. James Hamilton.

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

      Sir Raymond Gower: This amendment refers to the repayment of whole or part of a grant. Earlier the clause refers to a loan or grant. Surely if conditions

      1153
      are made for the repayment of a grant it is a loan.
      Mr. Barry Jones: This amendment gives power to the Board when giving financial assistance to impose conditions, including conditions that may provide for the repayment in certain specified circumstances of all or part of any grants made.
      Amendment agreed to.
      Amendments made: No. 14, in page 5, line 13, leave out 'Subject to subsection (6) below,'.
      No. 15, in page 5, line 20, leave out subsection (6).—[Mr. Barry Jones.]

    Clause 5

      NEW TOWNS WITHIN THE BOARD'S AREA
      Amendment made: No. 17, in page 5, line 45, at end insert
      '(to the exclusion of any corresponding provision of that Act which is capable of applying within the area for which the Board is responsible)'.—[Mr. Barry Jones.]

    Clause 21

      FINANCIAL ASSISTANCE TOWARDS TENANT'S REMOVAL EXPENSES
      Amendment made: No. 20, in page 15, line 41, leave out '1()' and insert '2'.—[Mr. Barry Jones.]

      '1. Statutory undertakers authorised to carry on any railway, light railway, tramway, road transport, dock, harbour or pier undertaking.

      The Secretary of State for Transport.

      2. Statutory undertakers authorised to carry on any water transport, canal or inland navigation undertaking.

      The Secretary of State for the Environment'.

      —[Mr. Barry Jones.

      Order for Third Reading read [Queen's Consent, on behalf of the Crown, signified.]
      1.23 a.m.
      The Secretary of State for Wales (Mr. John Morris): I beg to move, That the Bill be now read the Third time.
      I do so with some pride, but the House will forgive me if I do not do so at length. As the House knows, the Board will begin its functions on 1st April 1977, but we intend to establish the Board and

  Schedule 1

    THE DEVELOPMENT BOARD FOR RURAL WALES
    Amendments made: No. 21, in page 24, leave out paragraph 17.
    No. 23, in page 25, line 3, leave out '1()'and insert '2'.
    No. 25, in page 25, line 12, leave out '1(1)' and insert '2'.—[Mr. Barry Jones.]

  Schedule 2

    PROVISIONS AS TO THE DEVELOPMENT OF RURAL WALES CONSULTATIVE COUNCIL
    Amendments made: No. 27, in page 26, line 35, leave out Schedule 2.
    No. 28, in page 27, line 28, leave out 'Treasury' and insert
    'Minister for the Civil Service'.—[Mr. Barry Jones.]

  Schedule 4

    THE NEW TOWNS CODE
    Amendments made: No. 29, in page 57, line 23, after 'authority', insert
    'or, where the provision confers or imposes a function on or provides for a thing to be done by or to a local authority, as if the Board were a local authority)'.
    No. 30, in page 61, leave out lines 7 to 12 and insert:
    appoint the members as soon as the Bill has Royal Assent and before the end of the year. The Board will then act in a shadow capacity until 1st April next year, preparing for its task.
    I intend to appoint Mr. Emrys Roberts as the Chairman. He has been a Member of this House, and Chairman of the Mid-Wales Development Corporation since its inception in 1968. No one is more familiar with the problems of rural Wales and the problems facing the Board. As

    1155
    a leader, Mr. Roberts will give guidance based on wisdom and experience.
    Mr. Cledwyn Hughes: Is my right hon. Friend aware that the announcement he has just made of the appointment of Mr. Emrys Roberts will be widely welcomed in Wales in view of the outstanding contribution he has made over the years as Chairman of the Mid-Wales Development Corporation? Will my right hon. and learned Friend indicate how long a term Mr. Emrys Roberts will have?
    Mr. Morris: I am grateful for my right hon. Friend's remarks. He was responsible for originally appointing Mr. Roberts Chairman of the Mid-Wales Development Corporation, which has been such a success. Mr. Roberts's term of office will run from his date of appointment to two years from the end of next March. Therefore it will be an initial period of about two and a half years.
    We shall also be advertising very shortly the appointment of chief executive of the Board to be filled early in the new year. When the Board takes over its responsibilities in April 1977, it will also take over the staff of the Mid-Wales Development Corporation. At the same time the staff of COSIRA who work wholly or mainly in Wales will be taken over by the Welsh Development Agency.
    I am anxious that the assimilation of these staffs into their new organisations should take place smoothly with the minimum of disruption. Discussions and some preliminary meetings have already taken place with staff representatives and every effort will continue to be made to ensure that staff interests will be fully taken into account at the changeover. It is important that the staff should know that we are concerned about their interests. I should like to repeat the assurance given at Second Reading that the power conferred by Clause 26 will be used to continue the support at present being given by the Development Commission towards rural councils—successor bodies to the rural community councils—and the voluntary services committees.
    As to the Council for Social Services for Wales, hon. Members will know that the Council's rôle is changing. Bodies concerned with the elderly and the dis-
    1156
    abled have already resolved to end their direct relationship with the Council. But we are prepared to continue to make grants to the Council in relation to activities where support from the Welsh Office is appropriate in the changing circumstances. We are presently awaiting proposals from the Council.
    Mr. Wyn Roberts: Is the Secretary of State aware that the Council is concerned about the disappearance of the Development Commission because it has been contributing as much as £18,000 to £20,000 a year to the Council? Is it intended that that sum should be replaced under Clause 26?
    Mr. Morris: The rôle of this body is changing and we are now awaiting proposals from the Council which we will look at sympathetically.
    I ask the House to give the Bill a Third Reading.
    1.28 a.m.
    Mr. Nicholas Edwards: I should like to start by wishing all good fortune to Mr. Emrys Roberts and his colleagues, and by wishing the Board success in its activities. We must all hope that the Board will help in some way to alleviate the very serious problems that confront the people of Mid-Wales.
    In order to assist the House, I cut short some of my remarks earlier in our proceedings and I hope the House will therefore forgive me if I return to just a few points now. Faced with the present situation, the Board will need good fortune. That is amply borne out by the current unemployment figures for the area.
    We must be thankful that in Powys the rate of unemployment in October was only 5·9 per cent., but it is 11·1 per cent. in Gwynedd, 8·6 per cent. in Dyfed and 9·8 per cent. in Clwyd. Some of the individual figures are much higher—18·4 per cent. in Cardigan, 16·3 per cent. in Lampeter and 15·4 per cent. in Tywyn PTO—and one could go on. It is against that background that the Board will have to operate.
    Once again it has been emphasised that the Government's overall management of the economy and not the activities of the Board or the Agency will decide the fate of rural Wales. The unfortunate Development Agency, which went into operation

    1157
    about nine months ago, has had to struggle against the consequences of the Labour Government's folly. The huge burden of Government expenditure, with inflation, the record interest rates and the administrative burden that result from it, has been killing off the small businesses which are the backbone of rural Wales. What can the Board do, however able it may be, if it is subject to the detailed control of an incompetent Government? How will it fare if it has to contend with the payroll tax, the crippling interest rates and the other latest manifestations of the Chancellor's folly?
    The one good possibility is that in some way the Board may be able to mitigate the full consequences of Government mismanagement. It may be able to use its own judgment to deal with the practical problems it will face. It is for that reason that the powers of direction that we discussed earlier are so alarming. They alarm me particularly in the light of a remarkable policy statement issued recently by the Pembrokeshire Labour Party. If taken at its face value, that would indicate that the Government intend to use their powers of direction in a way never envisaged by many of us who have been engaged in the various stages of the Bill.
    You might feel, Mr. Deputy Speaker, that for the Pembrokeshire Labour Party to put forward proposals for alleviating unemployment and to suggest how the Board should operate is a pretty incredible piece of effrontery when the policies of a Labour Government have put 4,213 of my constituents out of work—that is one in every five of the insured population. That is more than double the figure in any previous October since the war. What the Pembrokeshire Labour Party says, however, is directly relevant to what we have been discussing. It has proposed, among other things, that 3 per cent. of what it claims to be the Development Agency's funds of £250 million is to be devoted to Pembrokeshire and that this is more than could be obtained on a purely per capita basis. It says also that offices of the WDA and the Board should be set up in Pembrokeshire.
    It may be an apt comment on Socialist financial irresponsibility that the Pembrokeshire Labour Party should overstate
    1158
    the WDA budget by £100 million, and is apparently so ignorant of the population of Wales and Pembrokeshire that on the per capita basis it actually attempts to cheat the constituency of its entitlement. I am concerned about the implication that the Board will be directed by the Government to establish an office in a part of the country where it does not even have a responsibility and to spend a disproportionate share of its budget to deal with the problems there.
    If all this was to happen it would have to be by direction. But what if the Board felt that this was not the right way to allocate its resources? What would be the reaction in other parts of rural Wales where unemployment was equally high? The distribution of resources should be made equitably on the judgment of the Board or the Agency. To switch resources around for immediate political considerations seems to have dangerous implications. Perhaps the Government will say that they have no intention of doing what is advocated by the Pembrokeshire Labour Party, and that its statement is no more than so much hogwash. They should tell us. Is this what the Government have in mind, or is it a form of fantasising by the Pembroke Labour Party?
    Mr. Deputy Speaker: Order. I should point out that what the Pembroke Labour Party has to say is not involved in the Bill.
    Mr. Edwards: Having made my point, I am happy to move on.
    One matter which has been causing anxiety was raised with me by Mr. Davies, Chairman of the Mid-Wales Industrial Development Association, who has written about the statement by the Secretary of State for the Environment about the switch in emphasis in Government policy to inner city areas. Mr. Davies says that the Council of the Association had been concerned to note the statement and adds that it would help if Welsh Members sought an assurance that the new policy would not be detrimental to the Association's efforts to carry forward developments in Mid-Wales. I hope that we can have that assurance from the Government.
    Another matter which has been debated at length is the relationship between the Agency and the Board. This side of the

    1159
    House—not just the Conservative Party—feels that the geographical and organisational boundaries are wholly unsatisfactory. The geographical boundaries will always be unsatisfactory because the Government have sought to divide something which cannot be divided and to define something which cannot be precisely defined. Equally, we are convinced that the division of responsibilities is unclear and unworkable.
    It is a matter of opinion and dispute whether it is an advantage or a disadvantage to be under the Board or the Agency. The hon. Member for Brecon and Radnor (Mr. Roderick) made this clear earlier. Some feel that they would like the powers of the Board to extend to their area while others prefer to benefit from the all-Wales powers of the Agency.
    No one can be satisfied with the present confusion and uncertainty. That confusion is shown by the fact that there are proposals for the Board to establish offices outside its own area. The division of responsibilities is not clear to all hon. Members, and I do not blame them for that. The Secretary of State has told us that the Agency is an all-Wales body with a remit from Gwynedd to Gwent, yet we are also told that it will be too busy to give much thought to rural Wales.
    The Board will deal with advance factories, and I dare say that the Agency will be thankful to be relieved of that responsibility at a time when most advance factories in Wales are standing empty. The Agency will be able to delegate powers to the Board, though not the power to provide assistance under the Industry Act. The ordinary businessman can hardly be expected to know where to turn in these circumstances.
    Lord Goronwy-Roberts said that the Agency would retain its functions as a pump primer in rural Wales and the Under-Secretary has explained that this means that the Agency will retain its industrial investment assistance functions. The Under-Secretary said in Committee that the Board would do its bit as a pump primer by the provision of advance factories, its power to impose infrastructure and its new town functions. However, even that is not the whole answer and does not eliminate the confusion.
    1160
    Whenever we pressed the Undersecretary in Committee, he mouthed his incantation about COSIRA. The Agency will be responsible for direct assistance to industry, but it will delegate the COSIRA functions to the Board. The difficulty about that is that the COSIRA functions involve direct assistance to industry. We have the confusing situation that while COSIRA funds are to be delegated to the Board, the COSIRA powers and staff will go very largely to the Agency. There will be about 20 COSIRA staff of the Agency concerned with that part of rural Wales left out of the Board's responsibilities.
    To summarise, we think that the Government have produced a total muddle. If one has to have a separate Board, the logical boundaries should be based on the Welsh Council's definition in the 1971 report. This is something to be looked at again, fairly soon, under the powers provided in the Bill. It seems a pity that in producing a Bill which could have tidied up and helped to improve the situation in rural Wales, the Government have produced quite unnecessary chaos. It will be urgently necessary, at a very early stage, to re-examine the boundaries. Although we shall have to judge the matter in the light of experience, we may also in due course have to revert to the proposal that we put forward at the Report stage of the Welsh Development Agency Bill and absorb the powers now given to this Board with those of the Agency.
    I do not believe that the Bill will provide the long-term solutions that we are seeking. I agreed with the hon. Member for Caernarvon (Mr. Wigley) when he suggested that an opportunity had been wasted. It has. We shall have lo come back to this matter again to clear up the mess that the Government have left us.
    1.42 a.m.
    Mr. Roderick: I welcome this stage of the Bill. It is difficult to detect the support of the hon. Member for Pembroke (Mr. Edwards) for the Bill. He has poured so much cold water over it from beginning to end that it would have been more honest if he had opposed it wholeheartedly. I am glad that I was not tempted by the hon. Gentleman during one stage of the passage of the

    1161
    Welsh Development Agency Act to support his amendment to create a kind of sub-committee to perform the functions, as he said that this Bill will perform. I hope that the Bill will go from strength to strength. My faith in my right hon. and learned Friend has been vindicated in that I was not tempted to support the hon. Gentleman's amendments.
    My right hon. and learned Friend mentioned Clause 26. I welcomed his remarks regarding the continuing support for the Council for Social Services and for various voluntary agencies. He says that he is awaiting suggestions from the Council for Social Services on its changing role. May we take it that he will ensure that the Council continues in its present form until it seeks a change in its structure?
    With those few remarks, I wholeheartedly welcome the Third Reading of the Bill.
    1.44 a.m.
    Mr. Emlyn Hooson: I congratulate the Government on achieving the Third Reading of the Bill. I have experience of the Mid-Wales Development Corporation at Newtown. I know that it can and does make a substantial contribution to the economic well-being of the area. It is a matter of great reassurance for us to see that Mr. Emrys Roberts, who has performed his tasks so very well in Newtown, will be the Chairman of the Development Board for Rural Wales. The Secretary of State is to be congratulated on making that appointment. I am sure that everyone who knows Mr. Emrys Roberts and the contribution that he has made will have full confidence that he is well aware of the social and cultural implications of the policy as well as the economic implications.
    I particularly welcome the achievement of the Development Board for Rural Wales because of its potential. Under the present economic constraints, we must be realistic. The Board can make but a very modest contribution. Most of its money will undoubtedly have been earmarked for Newtown, I imagine, for the next couple of years. However, it can be gradually built up and its area extended. In that way it can make a real contribution towards the economic well-
    1162
    being of Mid-Wales. Clearly without Mid-Wales having economic well-being, its social and cultural well-being will be in jeopardy.
    1.45 a.m.
    Mr. D. E. Thomas: I, too, welcome the Bill's Third Reading and congratulate the Secretary of State. I have been critical of some of his appointments to public bodies in Wales in the past, but in this case I congratulate him. Mr. Emrys Roberts is one of my predecessors as he was the Member for Merioneth. He has worked in industry in the Midlands and has enjoyed distinctive achievement at Newtown. That experience will stand the Board in good stead as well as the Welsh Development Agency, bearing in mind that he will be a member of both bodies. I hope that the liaison between both bodies, which we have discussed, will be substantially improved by the appointment of Mr. Roberts.
    Many of us have dreamed of an interventionist authority in rural Wales of the sort outlined in the Bill. Perhaps some Opposition Members, including the official Opposition spokesman for Welsh Affairs, have not shown the sensitivity towards the problems of rural Wales when discussing the Bill that one would have expected. Perhaps I am expecting too much to except that sort of sensitivity from the Conservative Party.
    The lack of a framework of economic development in rural Wales has meant that the social fabric of the community has declined. We look to the Bill to introduce a pattern of economic development that will sustain the population in Mid-Wales so that it does not have to suffer from the social collapse that has affected it for so long.
    The Bill is at last one concrete attempt to tackle the problems. We have spoken about the problems of Mid-Wales for so long and here is a positive attempt by the Government to tackle them. I pay tribute to them for having advanced the Bill.
    Finally, I welcome what the Secretary of State said on Clause 26, although I should like more clarification. Many of us were concerned to see the report in the Western Mail on Thursday 28th October by the Welsh Affairs Correspondent. It refers to the axe poised over the social councils. It is not clear precisely what the Secretary of State

    1163
    meant in his remarks about expecting a report from the Council. I hope that the Under-Secretary of State will clarify the matter.
    1.48 a.m.
    Mr. Barry Jones: It is in the nature of things that the Welsh Development Agency and the Board co-operate closely. That is why the Bill made provision for the enlargement of the membership of the Agency and the appointment of the Board's chairman as a member of the Agency. The idea is to secure a harmonious relationship between the Board and the Agency. I am glad that the appointment of Mr. Emrys Roberts has been welcomed so positively by the House.
    The hon. Member for Pembroke (Mr. Edwards) spoke about unemployment. My right hon. Friend the Chancellor of the Exchequer has the correct economic strategy, and that and the Development Board for Rural Wales will help rural Wales considerably in the fullness of time. The Opposition do not have the monopoly of concern for small businesses. The Government care for small businesses.
    Powers of direction are in part a democratic factor. If we did not have the powers of direction for the Secretary of State, the nominated bodies would be not responsible to the House in that sense.
    As for the inner city regions and the Development Board for Rural Wales, there is no indication that the funding of the DBRW will be in any way affected.
    Finally, I take up the point raised by my hon. Friend the Member for Brecon and Radnor (Mr. Roderick), who has struggled so heroically for rural Wales, and a query raised by the hon. Member for Merioneth (Mr. Thomas). I repeat the assurance given on Second Reading—that the power conferred by Clause 26 will be used to continue the support at present being given by the development corporations to the rural councils—which are the successor bodies to the rural community councils and the voluntary services committees.
    The rôle of the Council for Social Services for Wales, as hon. Members know,
    1164
    is changing. Bodies concerned with the elderly and disabled have already resolved to end their direct relationship with the Council, but we are prepared to continue making grants to it for activities for which support from the Welsh Office is appropriate in the changing circumstances. We are awaiting proposals from the Council.
    Question put and agreed to.
    Bill accordingly read the Third time and passed, with amendments.

  EXPENDITURE
  Ordered,
  That, notwithstanding the Order of the House of 18th November in the last Session of Parliament relating to nomination of Members of the Select Committee on Expenditure, Sir John Eden and Mr. A. E. P. Duffy be discharged from the Committee and Mr. Neville Trotter and Mr. Robin Corbett be added to the Committee for the remainder of this Parliament:
  Ordered,
  That this Order be a Standing Order of the House.—[Mr. Waller Harrison.]

  PROCEDURE
  Ordered,
  That, notwithstanding the Order of the House of 15th June relating to nomination of Members of the Select Committee on Procedure, Mr. Nicholas Ridley be discharged from the Committee and Mr. William Shelton be added to the Committee for the remainder of this Parliament:
  Ordered,
  That this Order be a Standing Order of the House.—[Mr. Walter Harrison.]

  SCIENCE AND TECHNOLOGY
  Ordered,
  That, notwithstanding the Order of the House of 21st November in the last Session of Parliament relating to nomination of Members of the Select Committee on Science and Technology, Dr. John Cunningham be discharged from the Committee and Mr. Ken Weetch be added to the Committee for the remainder of this Parliament:
  Ordered,
  That this Order be a Standing Order of the House.—[Mr. Walter Harrison.]

  EUROPEAN SECONDARY LEGISLATION, &c.
  Ordered,
  That, notwithstanding the Order of the House of 18th November in the last Session of Parliament relating to nomination of Members of the Select Committee on European Secondary Legislation. &c, Dr. J. Dickson Mabon be discharged from the Committee and Mr. Ron Thomas be added to the Committee for the remainder of this Parliament:
  Ordered,
  That this Order be a Standing Order of the House.—[Mr. Waller Harrison.]

  STATUTORY INSTRUMENTS (JOINT COMMITTEE)
  Ordered,
  That, notwithstanding the Order of the House of 3rd December relating to nomination of Members of the Joint Committee on Statutory Instruments, Mr. Bob Cryer be discharged from the Committee and Mr. Terry Walker be added to the Committee for the remainder of this Parliament:
  Ordered,
  That this Order be a Standing Order of the House.—[Mr. Walter Harrison.]

  TRANSMISSION LINE TOWERS
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Bates.]
  1.50 a.m.
  Mr. Colin Shepherd: I thank the Minister for coming to the House at this late hour to discuss the United Kingdom manufacturing capacity for transmission line towers. My purpose in raising the matter is to draw the Minister's attention to the possibility of a nonsense arising by the promotion of an over-subscription of manufacturing capacity for transmission line towers through the allocation of public funds administered by the Scottish Development Agency.
  I am told by the British Constructional Steel Works Association that eight companies are currently involved in the fabrication of transmission towers in the United Kingdom, the largest being Painter Brothers Limited, located in my con-
  1166
  stituency of Hereford, with a capacity of 18,500 tonnes per annum. There are two other companies in Hereford—Hereford Welding, with a capacity of 300 tonnes per annum, and Urry Fabrications Limited, with a capacity of 500 tonnes per annum. Two further companies located in Scotland are Hadingtonshire Fabricators and Park Lea, with capacities of 1,000 and 3,000 tonnes respectively, the balance of the 29,300 tonnes per annum total capacity of the industry being made up of Braithwaite and Company of Newport, Clarke Chapman Limited of Tipton and CGS of Peterborough, with 2,000 tonnes, 3,000 tonnes and 1,000 tonnes respectively.
  The Minister will note that the available capacity is spread fairly widely over the United Kingdom, although the greatest part is located in Hereford. With its location on mainline railways serving north, south, east and west, and its proximity to the motorway network, Hereford is well situated to supply contracts in any part of the United Kingdom.
  I have said that the current capacity is approximately 30,000 tonnes per annum, but the current market volume is only about 10,000 tonnes per annum, although the peak demand in 1966 was 70.000 tonnes per annum. Since that time there has been a steadily falling demand, and this resulted in the liquidation two years ago of the other major fabricator, Lothian Structural Development. This company previously had 30 per cent. to 40 per cent. of the United Kingdom market, but was shut down due to the decline in orders. For similar reasons Painter Brothers of Hereford had to shut down a satellite factory in Cinder-ford in the Forest of Dean.
  The future trends of demand are not encouraging. In 1977 the requirements of the four major customers, namely, the North of Scotland Hydro-Electric Board, the South of Scotland Electricity Board, the Northern Ireland Electricity Service and the Central Electricity Generating Board, and area boards will require a total of 9,350 tonnes, and in 1978 the requirement will drop to a mere 4,680 tonnes. It is expected that in 1979 there will be 6,540 tonnes capacity and in 1980–81 10,300 tones capacity. If this is shown as a percentage of the manufacturing capacity available, it comes

  1167
  out as being 31 per cent. in 1977, 16 per cent. in 1978, 22 per cent. in 1979 and 34 per cent. in 1980–81.
  The dramatic fall in demand between 1966 and 1976 has forced companies to adjust their activities. Some, as I have indicated, ceased to trade altogether. Others have spread into other markets at home. Others have sought overseas work so as fully to exploit their technical expertise in transmission tower fabrication.
  I emphasise the technical expertise aspect of this. Of all the companies I have referred to only Painter Brothers is involved in the export market to any degree and great credit is due to that firm as it has in the first nine months of 1976 increased its exports to 54 per cent. and gained the Queen's Award to Industry for its export performance.
  The Minister can imagine the consternation felt in the transmission tower sector of the construction industry when it heard that a proposal had been put forward to create a company with a plant, possibly to be located in the North of Scotland, and with the objective of undertaking work for all the electricity boards in the United Kingdom. I understand that the investors or partners in this venture, if it were to be floated, would include private individuals. I have had identified to me a management consultant, an existing Scottish engineering company, and the Scottish Development Agency.
  If this proposal were just one in which individual and commercial interests had come together to form a consortium and only the private sector was to be involved, I should not be here tonight, but it is the possible inclusion of taxpayers' money by means of the Scottish Development Agency which I think makes it matter of very considerable interest to the House.
  If such a company were to come into existence, the effect on the existing companies already supplying the market could be substantial. I assume that it would have comparatively small beginnings, but it would have as one of its priorities the establishment of a firm home base. The effect on exports would not be very great by its own contribution, but it would have the effect of making it much more difficult for those companies already exporting. In saying
  1168
  this I have Painter Brothers in mind, as it would narrow the home base of these home companies. I mention Painter Brothers in this context because it is the only one to have developed significantly its export business.
  As the Minister will appreciate, it is vital to have a proper base load in the home market to be able to compete effectively in the very keen overseas markets, and for the company to bid for contracts abroad it must be secure in the knowledge that should it obtain those contracts it can fill them profitably. Uncertainty in home markets must undermine that ability.
  If as a result of the intrusion of a new company into the market, with Government backing, there is an adverse effect on the output of a company such as Painter Brothers, there must be a consequent reduction of the labour force employed. As Painter Brothers is located in Hereford, and as two-thirds of the existing capacity is located in Hereford, I find myself having a very strong interest, because in that event taxpayers' money would have been employed not only to create jobs in Scotland but to create unemployment in Hereford.
  I should like at this moment to draw the Minister's attention to the fact that in Hereford, amongst the three companies involved in transmission tower fabrication and galvanising, there are substantially more than 600 people employed. What concerns me as well is that, because of the capital intensive nature of the industry, there would in all probability be fewer jobs created than those destroyed.
  As I understand the position at this time, the proposal first saw the light of day earlier this year, and the Scottish Development Agency is now actively pressing the participants in this proposed venture to get something under way and to try to settle the matter.
  In a letter to Balfour Beaty Ltd., the parent company of Painter Brothers, the Scottish Economic Planning Department says that individual cases cannot be discussed. The Secretary of State for Scotland, in a Written Answer to me, gave a similar reply. However, I understand that the letter from the Scottish Economic Planning Department sets out the criteria for assistance to industry. It says:
  The purpose of the assistance is the provision of jobs in the Development or Special

  1169
  Development Areas. This purpose will not be served if the project for which assistance is provided does not survive. It is therefore an objective of the extremely thorough examination of each application to assess the likelihood of the project being viable. Viability must depend on, amongst other things, the existence of an adequate market. The Department must therefore satisfy itself as far as possible that this condition is met and to do this it must enquire about the size of the market, expected trends and the number and capacity of other suppliers.
  It is for that reason that I am here tonight.
  I trust that I have shown that in relation to the capacity already available to supply the anticipated market demand there is not adequate scope for a new company financed with public money not to have a deleterious effect on those already operating in the market. The figures show that the expected trends are not encouraging, bearing in mind the expected load of more than 34 per cent. capacity in 1981 and that there is today more than three times as much productive capacity available from the existing eight suppliers, two of which are located in Scotland and hold 13 per cent. of existing capacity. The project either will not survive or will inject an unacceptable imbalance into the present market structure.
  As the Minister has responsibility for the construction industry, I ask him to make the strongest possible recommendations to his colleagues in the Department of Industry and to the Secretary of State for Scotland to prevent a nonsense. It would be folly in the extreme to use public money to help finance this project.
  The motto of the Scottish Economic Planning Department is "in defens". If assistance provided by the use of taxpayers' money to create jobs in Scotland led to the loss of jobs in Hereford, I am sure that the Minister would agree that the motto should be revised to "indefensible", as that tag would adequately describe its actions.
  2.3 a.m.
  The Under-Secretary of State for the Environment (Mr. Ernest Armstrong): The hon. Member for Hereford (Mr. Armstrong) has made a strong case for his constituency and he has given us the opportunity to consider the problems of a part of the construction industry. I have carefully listened to his argument.
  1170
  The construction industry generally is going through a very difficult period. There has been a serious decline in work coming forward with subsequent high levels of unemployment throughout the industry. Both sides of the industry have properly expressed their concern not only about the human tragedy involved in laying men off but the anxiety that if the industry continues to decline, when the upturn in the economy comes, the capacity will not be there to meet the demands made upon it. We are paying particular attention to this aspect of the present difficulties.
  In the present serious economic situation I can hold out no hope of increasing public expenditure on construction work. Only in July last we found it necessary to reduce public expenditure proposed for 1977–78 by £1,000 million, and of that sum nearly £300 million will fall on construction work. Nevertheless, the public sector programme is still substantial. Our continuing aim is to get value for money and to ensure that we make the very best use of the resources available. We are working closely with the industry to achieve these aims.
  In an effort to regenerate manufacturing industry the construction side has an important rôle, and this, of course, has been recognised in the special industry schemes for which financial assistance has been made available under the Industry Act. Up to the end of September this year, projects approved under these schemes included over £30 million worth of construction expenditure, and this attracted grants of just under £10 million. The accelerated projects scheme also stimulated a considerable amount of new industrial building. I am pleased to note that there has been some evidence of a recent upturn in new orders for industrial building.
  Constructional steelwork, like other steel manufacturing sectors, is a selected sector in the industrial strategy. In its first report in July the constructional steelwork sector group identified the problems facing the industry and made some suggestions for action. These include measures to ensure that steel supplies are available to meet future demand, consideration of changes in contractual procedures to improve cash flow in the

  1171
  industry, and efforts to increase the contribution which new industrial building makes to regeneration of manufacturing industry. All of these suggestions are being examined. The sector group has also identified areas for future study.
  The immediate problem facing the constructional steelwork industry is the severe cutback in the United Kingdom orders from both the public and private sectors. This has created shortening order books, spare capacity, uneconomic margins, redundancies and some closures. The challenge to the industry currently lies in winning a larger share of a smaller United Kingdom construction market and in increasing the tonnage of structural steel exported.
  The sector group is now turning its attention to ways of increasing exports. It will also look at some longer-term issues. These include an examination of the structure and investment needs of the industry, an investigation of the supply of designers and craftsmen and the need and scope for technological development.
  We are concerned tonight with that part of the constructional steelwork industry which fabricates transmission line towers. Its output is relatively small compared with the total output of the constructional steelwork industry. The hon. Gentleman reminded the House that production of these towers reached a peak of some 70,000 tonnes per year in the 1960s. But demand fell off during the 1970s and at present amounts to about 8,000–10,000 tonnes per year. As a result of this reduction in demand, some of the firms which previously fabricated towers have now moved over to other structural fabrication work, and some, in common with constructional steelwork fabricators generally, are trying to expand their sales in overseas markets.
  The hon. Member referred to the possible financing of a plant for fabrication of transmission line towers in Scotland and the possibility of Government assistance. Section 7 of the Industry Act 1972 enables selective financial assistance to be provided where this is likely to provide, maintain or safeguard employment in
  1172
  development and in intermediate areas. The hon. Gentleman fairly read to the House the conditions that apply.
  The decision on applications for assistance under Section 7 of the Act in Scotland is a matter for my right hon Friend the Secretary of State for Scotland. He has already told the hon. Member that applicants for assistance are assured that details of their proposals will be treated in strict confidence. For this reason 1 am not able to discuss in detail the particular case to which he has referred.
  On the general question of assistance under this section help may be given in order to promote development or modernisation of an industry. It can also be given to promote efficiency and to expand or sustain productive capacity in an industry or in particular undertakings within an industry. The Government published their criteria for dealing with such applications for assistance, and laid them before the House in January this year.
  It is a basic requirement that any project which is assisted must be viable as the hon. Gentleman acknowledged. An appraisal is therefore made in each case of the market for the company's products at home and overseas. This includes the company's ability to sell in these markets at competitive prices. Other Departments concerned are also consulted. Moreover, before any offer of assistance is made, advice is obtained from the Industrial Development Advisory Board, which is drawn from those with experience in industry, trade unions and banking.
  Though, as I have explained, I cannot comment on the particular case raised by the hon. Gentleman, I can assure him that any proposals for assistance for projects in the constructional steelwork sector would be carefully considered in the light of the criteria that I have described. I assure the hon. Gentleman that I shall draw to the attention of my right hon. Friend all the points which he has made tonight.
  Question put and agreed to.
  Adjourned accordingly at twelve minutes past Two o'clock.

OVERSEAS DEVELOPMENT
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EDUCATION AND SCIENCE
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SOCIAL SERVICES
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  National Health Service (Laundry Managers)
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  Uxbridge Cottage Hospital
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  Medical Students

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

LOBSTER STOCKS
Lord DERWENT: 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 the committee which has been investigating the decrease in lobster stocks has yet come to any conclusion.
Lord STRABOLGI: Yes, my Lords. A Report by the Ministry of Agriculture, Fisheries and Food on the Lobster Fishery was issued in March 1975. One of its main recommendations was that the minimum landing size for lobsters, which was an overall length of 9 inches, should he replaced by the equivalent length of the carapace. This recommendation was brought into effect in March this year, when the minimum landing size became a carapace length of 80mm, approximately 3·2 inches, as your Lordships will be aware.
Lord DERWENT: My Lords, I am very grateful to the noble Lord for that amusing Answer, but what are the enforcement provisions? I know that an order has been made, but how is it to be enforced?
Lord STRABOLGI: My Lords, it is being enforced by the local Sea Fisheries Committees, which are responsible to local government. There are certain penalties under the order. There can be a fine of £100 on the first offence, going up to £200 for a subsequent offence.
Lord DERWENT: My Lords, have there been any prosecutions yet and is the
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noble Lord quite certain that the enforcement is adequate?
Lord STRABOLGI: My Lords, data indicate that in 1976 there has been a fall in the number of undersized lobsters landed, but there is still room for improvement.
Lord CLIFFORD of CHUDLEIGH: My Lords, is the noble Lord aware that this problem, so far as the South-West is concerned, was brought out in the debate on the problems of the South-West over seven years ago and that there has been continual poaching by the French in our area over many years, they having fished out their own stock? Would not this be a good opportunity to get the median line fixed once for all so that we can be saved not only from the French but also from the Scots and the Russian fishing fleet hoovering the Channel?
Lord STRABOLGI: My Lords, any foreign vessel—and here I exclude the Scots—within the limits is subject to the enforcement orders.
Lord HAWKE: My Lords, is it not a fact that not only are the French poaching but among our own people amateurs are putting down their own pots and aqualung fishermen are stealing the lobsters out of the pots of professional fishermen?
Lord STRABOLGI: My Lords, one of the proposals in the Edwards Report was that there should be licensing of fishermen, but it is not the Government's intention to take away the freedom of access to sea fishing from one particular group of fishermen in order to reserve it for others. We think that the new enforcement orders and the new length of the carapace should substantially reduce the number of lobsters taken.
Lord DERWENT: My Lords, does that freedom of access apply to other people's lobster pots?
Lord STRABOLGI: No, of course not, my Lords. Each fisherman has his own lobster pots which are labelled.

SPORT AND RECREATION COUNCILS: GARDENING
2.40 p.m.
Lord WALLACE of COSLANY: 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 recreational gardening interests will be represented on the proposed Regional Councils for Sport and Recreation.
Baroness STEDMAN: My Lords, it has been for the voluntary organisations concerned with outdoor recreation to elect their representatives on the councils from among themselves. Although recreational gardening organisations have not in the event secured direct representation, their interests will be taken into account and they could be co-opted on to the committees.
Lord WALLACE of COSLANY: My Lords, is my noble friend aware that, from that Answer, I conclude that the Government are in favour of the representation of recreational gardening interests on such bodies? Can she also tell me why the gardening interest does not appear under Clause 18 of the Local Government (Miscellaneous Provisions) Bill?
Baroness STEDMAN: My Lords, the Government are in favour of recreational gardening as part of the leisure activities of this country and, indeed, the National Society of Leisure Gardeners welcomed the proposal to join the new councils and promised that they would contribute positively and constructively to the work of the proposed regional councils. In so far as the constitution of these bodies is concerned, that was laid down in Circular No. 4776 issued by my Department and comes under outdoor recreation or countryside conservation—it can get in under either section—for representation on the councils.

U. K. ARMED FORCES: GENERAL BROWN'S COMMENTS
2.42 p.m.
Lord VAIZEY: 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 steps they intend to take to express to the Government of the United States the widespread surprise of the British people at the comments made by the Chairman of the United States Joint Chiefs of Staff on the efficiency and morale of Her Majesty's Armed Forces.
Lord WINTERBOTTOM: My Lords, in view of the clarificatory statement made by General Brown on 18th October, in which he expressed, "the greatest admiration and respect for Her Majesty's highly professional Armed Forces", Her Majesty's Government consider that no further steps are necessary.
Lord VAIZEY: My Lords, I thank my noble friend for that reply, but I wonder whether he is aware that many of us on this side and, indeed, all sides of the House are extremely proud of our Armed Forces and particularly of their services in Northern Ireland and do not like to have them denigrated by people who are alleged to be our friends and allies.
Lord WINTERBOTTOM: My Lords, I believe that my noble friend is taking too gloomy a view. I am sure that this is a classic case of misquotation. General Brown was having a private talk in, I think, April, with Mr. Ronan Lurie, who is a contributing editor and cartoonist of Newsweek International. Suddenly, this statement cropped up in October.
Lord SHINWELL: My Lords, is my noble friend aware that, if a fuller and more satisfactory Answer to this Question is required, the Supreme Commander of NATO, General Haig, is addressing a meeting of the House of Lords Defence Group on Wednesday this week at 5 p.m. Members of your Lordships' House will be able to come there and get the answer.
The Earl of CLANCARTY: My Lords, are the noble Lord and Her Majesty's Government aware that the American General George Brown was speaking the absolute truth? He was not criticising our Defence Forces for their traditional bravery or fighting abilities. He used the word "pathetic" in his description of our Forces. However, an article, which some of your Lordships may have seen, in the

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Sunday Telegraph—not yesterday, but the Sunday before—assessing the General's supposed outburst, commented that the General's only error was in using the word, "pathetic", but that actually it would have been more appropriate if he had used the word, "dangerous" in regard to our security situation.
Several noble Lords: Speech, speech!
The LORD PRIVY SEAL (Lord Peart): My Lords, the noble Lord must ask a question.
Lord WINTERBOTTOM: My Lords, following this curtailed report in October of what General Brown said, I should like to quote what he actually said. General Brown said:
"Remarks concerning the Armed Forces of the United Kingdom were spoken out of compassion and understanding. I said we would miss them in the Middle East, where they were withdrawing their Forces, because of their long experience. Americans understand and sympathise with the current economic difficulties the British people are going through. We also know their gallantry. There are no braver people. I have the greatest admiration and respect for Her Majesty's highly professional Armed Forces."

COST OF LIVING AND THE SOCIAL CONTRACT
2.46 p.m.
Lord ORR-EWING: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they accept the figures published in the Digest of Statistics (Table 170) showing that the average basic weekly wage rate in manufacturing industry increased by 18·1 per cent. in the year ending July 1976 when the cost of living increased by 13 per cent.: and why Ministers claim that under the Social Contract it is wage earners and not salary earners who have made the greatest sacrifices.
Lord JACQUES: My Lords, the figures are correct, but the 18·1 per cent. represents the increase in minimum entitlement, not the increase in earnings. The best available indicator is the index of average earnings, which showed a rise
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of 13·9 per cent. for all industries covered for the year to July 1976. The £6 pay policy protected the lower paid. It sought to ensure that sacrifices were made according to ability to bear them.
Lord ORR-EWING: My Lords, is there not an increasing case for restoring the differentials in British industry, particularly in British manufacturing industry and among those who bear more responsibility and wish to work a little harder than others? At the moment they have not been able to increase their wages, and inflation has etched away at the real take-home pay. They are much more handicapped than those who have been able to bargain and have achieved the results that their earnings have rather more kept in line with the rise in the cost or living, whereas the managers at all levels have not been so placed.
Lord JACQUES: My Lords, the Government have made clear their recognition of a number of pay problems, but in the present circumstances there have to be priorities and things, which, however desirable, have often to be deferred.
Lord ORR-EWING: My Lords, will the noble Lord bear in mind that the Minister for Industry, in a speech to the Society of Motor Manufacturers and Traders on 19th October, said:
"It is the trade unions and their members who have made a disproportionate and lopsided sacrifice of income they could have gained."
Would he bear in mind when considering the future that we need differentials, and strong differentials, at all levels if people are to be encouraged to use their skills to the maximum? Is it not a sad fact that British industry today is producing less than it was even during the three-day week at the beginning of 1974? Is this not a reflection of a lack of incentive which exists at so many levels?
Lord JACQUES: That calls for two answers, my Lords. First, what Ministers have claimed in general is that the TUC showed courageous leadership when it recommended its members to accept a pay increase, which at that time was about one-half of the inflation rate for the preceding 12 months, and I doubt whether anybody could deny that. Secondly, whenever there is an attempt

879
to get some measure of equity, or equality, by protecting the lower paid, the margins of difference are inevitably affected. I think that the situation portrays what has been obvious for some time: that the better paid do not mind talking about protection of the lower paid, but do not like to do it.
Lord MURRAY of GRAVESEND: My Lords, is my noble friend aware that it was the Society of Motor Manufacturers and Traders which gave a rather ill-mannered reception to one of our Ministers at the opening of the Motor Show? Is it not a fact that the TUC ought to be congratulated on its efforts within the Social Contract: and is it not time that we heard from the Conservatives their alternative to the Social Contract?
Lord JACQUES: My Lords, I cannot answer for the Conservatives. I am aware, of course, of opinion on the reception which the Minister for Industry got at the Motor Show, but I think this is far from the Question which is under consideration at the moment, and I do not care to comment.

CROMARTY HARBOUR ORDER CONFIRMATION BILL
Considered on Report.

AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL
2.50 p.m.
The MINISTER of STATE, NORTHERN IRELAND OFFICE (Lord Melchett): My Lords, I beg to move that this Report be now received.
Moved, That the Report be now received.—(Lord Melchett.)
Lord HARMAR-NICHOLLS: My Lords, before we move on to Report stage formally, there is a submission that 1 should like to make to your Lordships and particularly to the noble Lord the Leader of the House and to the noble and learned Lord the Lord Chancellor. I think it may be more to the satisfaction of the rules of this House and of Parliament generally if the point I wish to submit is taken into consideration now. It
880
relates to the alleged hybridity of the ship repairing section of the Bill which it is now suggested should be considered at Report stage. The rules under which we work are well known to your Lordships—and if there is a part of Parliament which ought to adhere strictly to the rules it is your Lordships' House. It is the final court of appeal, and it is our well-known n impartiality and objectivity by way of adherence to the rules that causes people, even those outside the boundaries of this country, to accept judgments which come from your Lordships' House.
I submit that on the ship repairing section of the Bill, which it is now suggested should be considered at Report stage there is the necessary doubt which our rules insist should be there before a Bill is deemed to be a hybrid Bill and, as a consequence, special consideration is given to it. Your Lordships will be aware that the ruling on this is very firm and is clearly understood. It is that if any Public Bill is submitted with the idea of its eventually becoming legislation and it can be shown that, as it is framed, there is a possibility that one section of the community or one person may be discriminated for or against, then they can ask that the Bill be looked at by Examiners with a view to its being deemed to being hybrid so that they will not be robbed of the procedures which we have laid down under our rules to see that their interests are properly and fairly looked at. I believe that, so far as this Bill is concerned, such a doubt unquestionably exists in so far as it affects the ship repairing industry.
The reason I am making this submission in these terms now, before we go on to Report stage, is this. Eventually, it would be your Lordships, by their voice and their vote, who would have to decide whether the doubt exists and whether this Bill should be treated as a hybrid Bill—and I think that would be rather sad. I repeat, my Lords, that the rules are there and we have an obligation to adhere to them; and if it is that the rules are being infringed it would be infinitely better if, instead of your Lordships making the decision by debate and vote—perhaps I could have the attention of the noble Lord the Leader of the House, because it is particularly to him that I am submitting this point—it were dealt with now. I submit it would be healthier and better, as well as being more satisfactory

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from every point of view, supposing it can be shown that the doubt does exist, if the Government were to take the lead in saying that they would withdraw it in its present form and send it to the Examiners. That would be better than trying to decide what is an intricate matter by formal debate and, eventually, an overall vote in your Lordships' House. So if I can impress upon the noble Lord the Leader of the House, with perhaps the concurrence of the noble and learned Lord the Lord Chancellor, that such a doubt exists, it may well be that even at this stage he would prefer to move that this section of the Bill he sent to the Examiners.
Perhaps I can substantiate the main point. Is it necessary to show only that there is a doubt? The Record of 10th December 1962 shows clearly what was said by the then Clerk of Public Bills to the Select Committee on Hybrid Bills, 1948. On page 52 of the evidence he was asked:
"Is the principle, then, that when there is any doubt at all the bill must go to the Examiners?"
The answer given was:
"I should say so, yes."—[Official Report, Commons, 10/12/62; col. 37.]
According to that evidence, which was accepted, any doubt, however small, means that there is a doubt. Later on that same day, the 10th December, Mr. Speaker ruled on that—and these are Mr. Speaker's words:
"I do not think that I need quarrel at all about definitions with the honourable and learned Member. I accept the true position to be this, that if it be possible for the view to be taken that this Bill is a Hybrid Bill it ought to go to the examiners. There must not be a doubt about it."—(col. 45.)
That is clearly the basis upon which the rule is framed; and the question I quoted was put by a learned Member of the Labour Party, who was obviously speaking officially for that Party at the time he put that question. Mr. Speaker's reply, in confirming that any doubt, however small, means that it is to be treated as a hybrid Bill, makes it very clear where our duty lies.
Now if it is established that any doubt, however small, is sufficient for it to be sent to the Examiners, we then have to ask: Are there doubts? I have in my hand a suggested Petition prepared by the Bristol
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Channel Shiprepairers Limited, paragraph 4 of which says:
"Your Petitioners submit that the Bill is a hybrid and, if it is passed into law as it low stands, your Petitioners will be prejudicially and unfairly affected and that the Standing Orders of your Right Honourable House, framed for the protection of private interests, are applicable to those provisions of the Bill relevant to shiprepairing companies".
My Lords, there is someone who feels that a discrimination to their detriment is included in this Bill. They claim that the doubt which is necessary to show it as a hybrid Bill exists, and they are ready to submit a Petition. At this stage t hey have not done so, and there will be no need for them to do it if the Government, as I hope they will, face up to the paint that the doubt is there and that evidence of that doubt exists.
It may well be that the noble Lord the Leader of the House will say that the view that a doubt exists, expressed by 3omeone who claims that they would be discriminated against, is perhaps a biased view; that they have an interest which quite naturally has reflected itself in their preparation of that Petition. I could therefore well understand the Government and their advisers thinking that that claim by people affected would not in itself be sufficient. But, my Lords, there is infinitely stronger evidence as to there being more than a casual doubt. My noble friend Lord Colville of Culross submitted a whole series of questions to the Government which reflected the fact that, on soundly-based legal grounds which he clearly set out in detail, he had very grave doubts indeed.
Those questions were submitted to the Government, and they were answered on the 14th October. A record of that exists in the Official Report of this House. When I raised this question in a general way at an earlier stage of this Bill I was told that all the evidence in the possession of the Government was contained in the answers that they gave. We therefore have to decide this. Did the answers giver to my noble friend Lord Colville of Culross remove the doubts? I submit to your Lordships and to the noble Lord the Leader of the House that, far from removing the doubts, the words which they used, which clearly set out the r case, added to them.

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I say that because the Petitioners to whom I have referred passed the replies and the original Question on to learned counsel. I think that no one would deny that, as distinct from the Petitioners themselves thinking they are being discriminated against, if an objective and impartial counsel's Opinion is submitted and that establishes a doubt, then that clearly removes any thought that the suggestion that there is a doubt which brings it within the rule which would send this Bill to the Examiners is a frivolous one. I quote from counsel's Opinion. May I say to the noble Lord the Leader of the House that I shall be happy to hand him counsel's Opinion. I repeat to the noble Lord the Leader of the House—
Lord PEART: I hope that the noble Lord who is a good friend of mine will not assume that I am behaving disrespectfully. I am listening very carefully and taking notes.
Lord HARMAR-NICHOLLS: My Lords, of course, the respect which the noble Lord the Leader of the House and I have for each other is real and deep. There is no question that he would deliberately not pay attention to an important point; but I feel that I have a duty to make certain that this part of my submission is heard by the noble Lord. He may possibly have missed a vital point and I do not want any vital points missed at this stage.
I quote from counsel's Opinion on the reply given by the Government, which is their case to try to show that a doubt does not exist. In paragraph 31 counsel says:
"The proposition set out in para. 1(c) of the Written Answer is, therefore, one from which I dissent. In some circumstances it may be correct. In others it is not. In the particular case of the Cammell Laird company it provides the answer which it is intended to provide; and in my considered opinion that is the wrong answer."
Later on in his Opinion, he says:
"In my opinion the conditions in Schedule 2 Part II paras.3(1)(a) and (b) were satisfied in the case of B.P. Tanker Co. Ltd., and its exclusion from the list of companies in Schedule 2 Part I is therefore a mistake which can therefore be explained only by oversight or by defective formulation of the policy and principles embodied in the Bill."
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I break off to say that I suggested at an earlier stage of this Bill that this mistake was an inadvertent one. No one is suggesting that the Government have deliberately framed this Bill in a way which brings it within the rules I am now trying to argue are the correct ones. Then counsel says:
"It would appear to be a straightforward and obviously correct proposition that, until the end of March 1973 Clyde Wharf, and from the end of March 1973 Sugar Line, was engaged in the same business of repairing … ships'".
"I do not find it possible to disagree with that obviously correct proposition. The Government's dissent from it is, as I think, illogical and wrong."
He then went on in paragraph 39 to say:
"I can deal shortly with paragraph 8 of the Written Answer. The Government is satisfied that a company is not engaged in the business of … maintaining ships if the only ships which it maintains are its own. The Government is mistaken."
Then, in paragraph 44:
"My considered opinion is, therefore, that the Government's policy and intention are not expressed in the Bill; and that, as the Bill is now drawn, the Government's expressed views about its interpretation—and application to the matters discussed in the Written Answer—are unsound and wrong. At the very least the fact that my views differ so markedly from those expressed in the Written Answer indicate that there is grave doubt about the correctness of the Government's views and room for further investigation and enquiry before the Government's views on these important questions are accepted and acted upon."
I do not think that anyone who reads the ruling given by the Clerk to the Select Committee and confirmed by Mr. Speaker in 1962, that all you have to do is to show that there is a doubt however small, will fail to accept that as a basis of the way we have to proceed. Furthermore, we must recognise the Petition drawn up by this company who truly feel that they are being discriminated against and, added to that, this impartial and objective counsel's Opinion upon what was the Government's defence as to there being a doubt existing. If all those things are taken together, I am convinced that your Lordships will have to come to the view that, however accidentally it may have been done, however inadvertent was the inclusion of this clause in the Bill, it has put us in a position where we must of necessity insist upon the rules being observed.
I submit that if we allow it to pass on this occasion where the case is clearly on

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record and should be understood, then the power of this rule, which was inserted for the protection of private individuals, will atrophy, and it will be a convention that this protection for the individual no longer applies. And we will be doing this at a time when so much legislation is being put on to the Statute Book which is likely to affect individuals in a discriminatory way. I believe we have a special responsibility to adhere to the rules. Rather than have to cajole the Government into adhering to the rules, I am arguing that it would be better if at this stage the Government recognise the existence of a doubt and themselves suggest that this clause of the Bill be referred to the Examiners.
May I say to my noble friends that this in no way affects the principle involved. I make my position clear. If it goes to the Examiners and if the Examiners give it a clean bill of health, I would still oppose this on the grounds of principle. The principles are strong apart from adhering to the rules. This in no way overlaps or should give us a conscience for pursuing our defence of what we think is right on a matter of principle apart from the rule. That being my position, if it has to be brought into effect by my voice or vote after it has been to the Examiners, I am now standing firmly and solely upon the proposition that if ever there was an Assembly in the world which had a special responsibility and a special duty to keep to the rules when private freedoms and private discrimination is involved, this is the Assembly which must do it. It ought not to have to be done by using the Whip or by using any sort of argument. It ought to be done by the Government of the day, in the protection of its own power and standing, recognising that a doubt exists, that the rule is being infringed and that they recommend the matter be sent to the Examiners for their impartial decision to be in front of your Lordships when they get to the point of arguing the principle.
3.9 p.m.
Lord PEART: My Lords, I am rather surprised that the noble Lord, who was a colleague of mine, did not do me the courtesy of letting me know about this. It is an important legal matter. I do not
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pretend that I know the law. I do not think he knows it either. My short link with the law was at an Inn before I went into the Army. That was all the connection I have had with the law. I do not pretend to be a legal man. All that I would say is that we have down a Question by the noble Viscount, Lord Colville of Culross, which will be answered today, and I am prepared to see that he has the text of this. The noble Viscount, Lord Colville of Culross, raised this matter some time ago and a reply was made in my name.
This question of hybridity is a very difficult one. If anybody is dogmatic about it, then he must be a strange person. I am not and I do not think that anyone should be dogmatic. From all the evidence and all the legal advice that we have had, we are in no doubt that what we are doing is right. The noble Lord is entitled to raise this matter in debate. There is an argument about whether ship repairing is going to be deleted from the Bill. In view of the fact that the noble Viscount, Lord Colville of Culross, has put down a Question which will be answered, the text of which I will see is available to everyone, we should proceed with the Bill now. I think this is right.
Lord HARMAR-NICHOLLS: My Lords, if the noble Lord feels I have been remiss in not giving him details, I apologise; but I did not have all the evidence, myself until this morning and I did not have a lot of time to do that. In terms of being remiss, I apologise. But I should like an undertaking from the noble Lord the Leader of the House that he will give a clear and unambiguous ruling (a) whether in the light of the evidence I have produced a doubt is raised, and (b) whether or not with that doubt existing he would be prepared to recommend that this matter should go to the Examiners. If not, perhaps he will tell us why he will not adhere to the ruling.
Lord PEART: My Lords, I will certainly look at what the noble Lord has said. There is no question about that.
Lord WIGODER: My Lords, will the noble Lord agree—as I am sure ho will—to receive and study a copy of this Opinion,

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which is by a distinguished and experienced Queen's Counsel, and consult with his colleagues—perhaps in particular the noble and learned Lord the Lord Chancellor and his advisers—with a view to seeing if any further steps are necessary?
Lord PEART: My Lords, of course. That is right and proper on an important matter like this. I accept this, especially where legal opinion is necessary.
Lord CARR of HADLEY: My Lords, perhaps it might help if I say a word as we see the situation from the Opposition Front Bench and the conduct of this Bill. We have been holding off—if that is the right phrase—any action on this point while waiting to see the matter pursued on the basis of the information which we gave on the Second Reading of this Bill which has been followed up by questions by my noble friend Lord Colville. We are awaiting an answer to the latest of his questions. I am glad to know that that will be available today. Our object in doing this has been to establish in our own minds whether we believe that there is a degree of uncertainty which would qualify as a doubt. That would then place upon the House a duty of submitting the whole matter to the Examiners. I am sure the Government will agree that all through we have been making available to them, and also making public, the knowledge we had in order that this whole question could be pursued openly and not in any way sprung as a surprise on anybody at an inconvenient moment. We have not been making it a matter of political tactics but have been trying to deal with the issue in a responsible way.
On industrial grounds we believe that ship repairing ought not to be included in the Bill. We shall be arguing that on industrial grounds which have nothing to do with hybridity. If we were to convince the House on industrial grounds that ship repairing ought not to be included, then by the removal of ship repairing from the Bill all doubt about hybridity would also be removed. I thought it might be helpful to the House if I made that brief explanation.
On Question, Report received.
3.15 p.m.
Clause 1 [British Aerospace and British Shipbuilders]:
Viscount SIMON Viscount SIMON moved Amendment No. 1:
Page 1, leave out line 10.
The noble Viscount said: My Lords, I beg to move Amendment No. 1, the effect of which is to remove the aircraft industry from the scope of this Bill. There are a large number of consequential Amendments and I will not waste the time of the House in reading them out unless I am asked to do so. The consequential Amendments are easily identified because they are in the names of myself and my noble friends Lord Kimberley and Lord Amherst. We have been careful not to put down any other Amendments except those which are consequenital to Amendment No. 1. I moved this Amendment in Committee and we had an interesting discussion. At the end I withdrew the Amendment partly because the noble Lord, Lord Carr of Hadley, pointed out that if we were to press it successfully, it would have shut the door on a number of discussions regarding the aircraft industry which the Committee might have wished to have.
I do not want to make a long speech again or the same speech again, but I must explain what lies behind this Amendment. So far as the aircraft industry is concerned, our belief is that the objects which the Government are seeking to achieve by nationalisation can be achieved without nationalisation. The noble Lord, Lord Kirkhill, explained very clearly on Second Reading what the industrial case for nationalisation was; namely, what was required was a structural reorganisation involving a merger of the two big groups, BAC and Hawker Siddeley. I am not entirely clear where Scottish Aviation comes in, but I assume if the Government could be persuaded to accept the Amendment, that question would not arise.
It is an undisputed fact that the merger of the two groups has been considered for some time but it has failed to come about. In making that statement the noble Lord. Lord Kirkhill, was perfectly fair. I do not think that he was so fair when he went on to say that there was no sign that it ever would be achieved. The noble Lord, Lord Melchett, later,

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during the Committee stage, asked us to say why private enterprise had not succeeded in achieving this result. I suggested that perhaps under the shadow of nationalisation it was not easy to achieve it. The noble Lord, Lord Carr of Hadley, gave me great help by reminding the Committee that there had been in the early 1960s a number of amalgamations and it would have been foolish to have attempted a merger of these two big groups a few years after that. Amalgamations must be given time to get settled.
In the early 1970s there was a revival of interest in the merger between the two big groups. That went on until they were politely asked to drop it because of the advent of nationalisation. My noble friend Lord Kimberley knows more about that than I do, and he will be able to tell us more when he speaks. Whatever difficulties there have been in the past, we are now assured, thanks to the noble Lord, Lord Melchett, that the two groups are working together in real co-operation under the aegis of the noble Lord, Lord Beswick. This is good and encouraging news. Not having been a classical scholar, I am not sure what an aegis is. If I might express it in terms more familiar to me, the noble Lord, Lord Beswick, has been an excellent catalyst.
In this industry the Government will always be deeply involved, not only because they have to provide very large sums of money but also because they are purchasers through various agencies in a large scale. I would have thought that if a merger could be achieved—as we believe it can in the near future—that it would be very reasonable for the Government, in the light of having provided all the finance in the past—and probably they will be asked to provide finance in the future—to have directors on the board.
In fact if one thinks of mergers between two very lively and go-ahead companies like the BAC and Hawker Siddeley, one can imagine that there might perhaps be a little personal difficulty at the top, and it might well be that one of the Government directors should be chairman of the company. Personally I think that would he an excellent idea. It would enable the chairman to have contact with the Secretary of State without having the Secretary of State sitting on top of the company with statutory rights and duties.
We were reminded that at the present time important discussions and negotiations are going on with our friends in Europe, and I hope I am right in assuming that all the parties concerned—and two groups, the Organising Committee and the Government—are fully informed of what is in the wind. I do not see that there is great practical difficulty in whatever is being done now being carried forward without a hitch. I think I am right—and I am sure I shall be corrected if I am wrong—in saying that the Organising Committee is a non-statutory body and while negotiations are going on the Organising Committee could continue its role until the merger is completed.
There is one other matter to which the Government attach considerable importance; that is the attitude of the workforce. The noble Lord, Lord Kirkhill, said again on Second Reading that they were moved by the belief that people will find greater satisfaction in working for industries which belong to them and which contribute to the wealth of the nation. I wonder whether the noble Lord has correctly analysed the factors which go to make up job satisfaction. I should have thought it was just as likely that job satisfaction comes from being in a happy work place, having good industrial relations and, above all, being in a work place which was producing satisfactory results and, particularly in the case of the aircraft industry, making an enormous contribution to British exports. I should have thought that in that way the work people could be proud of the fact that they were contributing to the wealth of the nation. I think the noble Lord, Lord Melchett, agreed with me that while it is right to take the views of the workforce into consideration, they cannot be paramount.
I should like to say one other thing on this aspect. We are told—and I know it to be true—that the work people, through their trade unions, have expressed a wish for nationalisation. Would I be stretching my imagination too far if I suggested that the impetus for this came originally from the Labour Party through the trade unions, that it came from the trade unions to the shop floor and was faithfully reflected on the shop floor? I find it difficult to believe that this suggestion for nationalisation started at the work bench. Naturally, I have no evidence and I am

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only expressing a view in the light of the way people think, but I cannot believe that the average workman thinks about that sort of thing at all.
My Lords, there is an important passage in the Bill, to which I know the Government pay great attention, and that is in regard to industrial democracy. I have already expressed my dislike of the phrase but we can come back to that later. We on these Benches are fully in agreement with what is suggested there and with the proposal of writing into the Bill the need for industrial democracy to be developed in this industry, but I do not see any reason why it should not be developed just as successfully in the private sector as in the public sector. I do not think experience in the past suggests that the public sector is ahead of the private sector in this field.
On those grounds we feel that the situation would not be worsened if this industry was taken out of the Bill and if the projected merger was allowed to go ahead. But it would not be just the same. There are two great advantages: one is that the industry would be free from interference by the Secretary of State. In Committee we limited the interference by the Secretary of State but it is still there, and who knows what may happen to the Amendments which we have sent to another place! Above all, it would be free from the necessity to pay compensation. At an early stage we were blinded with science and told that it would not cost any money at all, that it arose through a transfer of resources; but I think many of us found it very difficult to understand that, because if stock which is redeemable is issued it may be that the debt is postponed but it certainly has to be paid.
I have a feeling that the Government have moved slightly away from that view, because I observed that during discussion on the compensation terms first the noble Lord, Lord Winterbottom, on 25th October in regard to some proposition that the compensation might be increased, said:
"… it is the taxpayers' money that is being shifted to compensate the individual or the company."—[Official Report, 25/10/76; col. 126.];
and a little later on, in the early hours of the next morning, at column 210 the noble Lord, Lord Melchett, referred to some
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propositions put forward from this side of the House as—
"Heads the shareholder wins, tails the taxpayer loses."
Therefore it would seem to me that the Government have given up the idea that it does not cost money to nationalise this industry.
That brings me to my last point. Our reason for moving this Amendment, which I think is well justified in itself, is largely to enable the Government to think again on this question when the Amendment goes back to another place. As I said before, I know that the Government in this House cannot possibly agree—and I do not expect them to—but if the Amendment goes back to another place the Government will have an opportunity of considering whether they could not make this admittedly painful gesture of giving up something which I know they are very keen about. By abandoning this proposal they would show the country, whom they are urging to stand behind them in the difficult times ahead of us, and our foreign creditors, that at this moment an amount of money—I have heard £300 or £400 million quoted—could be saved without any loss to the country. I do not want anybody—and I include the Government—to feel that they were being forced to do this. I would simply give them the opportunity of their own free will to go to the country and to our foreign friends—they are still friends, thank goodness!—and say that to meet this difficult situation they are prepared to give up this thing which they treasure very greatly. I beg to move.
3.30 p.m.
Earl FERRERS: My Lords, considering the enormity of the subject, the noble Viscount, Lord Simon, has moved this Amendment in as gentle and as courteous a way as he could. I am bound to say that I have a great deal of sympathy for the views he has expressed. That is simply because we have come to the stage where, by this Bill, we are nationalising this huge industry and we have not yet heard any reason why it is alleged such a process will enable the country to be better off, or the industry to be better off or will enable the industry to serve the country any better at all. Indeed, I think it would be right to say that, having gone through the Committee stage, we are even

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more depressed because we then sought to introduce a number of Amendments and to find out the Government's view on a number of points. We sought to introduce Amendments which contained a number of constructive ideas. But the extraordinary part is that so often we were unable to elicit the information that not only we wish to know but other people in the country would like to know; nor did we succeed in getting any reasonable Amendments of substance accepted.
I understand the first difficulty, in so far as noble Lords opposite are in the difficult predicament, of speaking for Departments with which they are not intimately involved. We accept the difficulty that that can produce and we acknowledge they have struggled manfully with the problem. We are grateful to them for what they have done; but, on the other hand, in the Committee stage we had a vast quantity of Amendments put forward and only those of the most modest size have been accepted. For example, I can think of one in which the words "in relation to" were replaced by the words "in respect of". I am glad to say that was an Amendment moved from this side of the House, but it did not of course alter the nature or the substance of the Bill.
When the noble Viscount, Lord Simon, says he has heard sums of £300 million and £400 million being put forward as the cost of this nationalisation and that he cannot see how that will benefit the industry, I am bound to say I agree with him entirely. Even if, on the merits of the case, there were justification for nationalising this particular industry, I should have thought that the particular timing of it would cancel out any argument for so doing. The noble Viscount, Lord Simon, referred to the expression "transfer of assets". Of course, it is infinitely more than that. If the Government are going to have to pay out £400 million and to service the loan of £400 million, that is direct expenditure which I would venture to suggest is not in any way a mere transfer of assets.
At this time, when the country is in such an economic mess, one really wonders how one can justify the expenditure of such a sum of money—and for what? It is not that the industry is going to be any better or is going to make aeroplanes
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cheaper or more efficiently; it is not going to compete any better or help to improve the balance of payments. There is not one argument we have heard which in effect says: "If we can do this the industry really will be more profitable in the future." Indeed, it is very difficult for it to be more profitable when it happens already to be extremely successful and when it produces exports of £800 million a year. It is difficult, as I say, to see how that will be improved upon; but the real danger, I would suggest, is that when this industry is nationalised, however much Government Ministers may say that they want to let the industry run itself and to let British Aerospace run itself under aegis of the noble Lord, Lord Beswick, it will be the civil servants who will badger the thing to death. It will be the inevitable prying into and involvement of civil servants that will do all the harm—I say that not in an offensive individualistic way but in a collective sense. It is the involvement of the civil servants and all the paraphernalia that brings which will remove the cutting edge of this industry. That is the real danger, as I see it, and I would only say that one wonders whether one dare risk it.
If the Bill goes forward as the Government wish, that is a risk we shall be taking. I personally think it is a risk that the country as a whole cannot afford to take and indeed should not take. I would see the effect of this legislation as a removal of the huge incentive and the sharp cutting-edge which at the moment is so evident in the British aircraft industry. I have a great admiration for that industry, which I think all your Lordships in this Chamber would share. If this Bill were to go through as it is, I should like to think there would be the possibility of an improvement in the aircraft industry, but I just do not believe it.
Lord ORR-EWING: My Lords, I should like to support the views put forward by my noble friend from the Front Bench. I do so on two scores. First, I believe the aircraft industry has proven itself and I shall seek to show that by the results in the civil and military fields. Secondly, the cost, at a time when our pound is so desperately weak, and the lack of confidence this action will implant in our creditors overseas will be further detrimental to our ability to pay

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our way and for the pound to sustain its value. The Minister of State, speaking in a Commons Standing Committee, gave the facts away when he said:
"What we want from the Bill is an extension of Socialism."
It is an extension. There are in fact in the Society of British Aerospace Companies some 300 companies and this Bill seeks to nationalise four of them: two Hawker Siddeley companies, one BAC company and Scottish Aviation. No doubt under another clause we shall be discussing a point I have always worried about, in other words, the other 300 members, because they naturally feel they may be swallowed up and drawn into the vortex of this huge nationalised concern. I hope that we may be able to have some assurances about that during this stage of the Bill.
So far, if I remember rightly, we have spent eight hours in deliberating on the first Committee day, eight hours on the second Committee day and 12 hours on the third Committee day, which makes 28 hours. We shall be spending eight hours today and five hours on Wednesday. We also intend to have another five hours on Friday, or something of that nature, and I hope that at least we may receive some understanding from the Government Front Bench that we have been trying to put a case which is constructive in many ways. We have not had that so far, which I think must be a disappointment to everyone sitting on the Cross-Benches, the Liberal Benches, on this side and to many on the other side. That is why I, and many others, are concerned. I do not know whether we shall or shall not wish to divide the House, but I hope we shall have something which is a little more forthcoming than hitherto, because although we have argued our case and on a number of occasions the Government have said "Yes, we concede there is something there", we have a horrible feeling that written across every brief in respect of Amendments put from the Opposition Front Bench is, "Resist", "Resist", "Resist". That is not democracy, and I hope that in the hours that remain for discussion of this Bill we shall sec, "Agree", "Agree", "Agree".
I say it is not democracy because it is a minority policy with a minority Government
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imposing it upon this House. Also, many objective critics from overseas, when looking at the sad position of British industry—and this is something which has been said also by the Prime Minister—believe that the serious nature of our problems is brought about by the fact that 60 per cent. of the gross domestic product is already in the hands of the Government and only 40 per cent. in the private sector. This will swing the balance even further; so we shall have a diminishing private sector trying to support an immense and unprofitable public sector.
Looking at the figures, in 10 years BAC and Hawker Siddeley have provided to the public purse more tax from their pockets than all the nationalised industries put together: I repeat, all of them. That is not a bad performance; so on performance one would not wish to see this great aerospace industry nationalised. Looking at the recent results, in 1975 BAC's profit before tax was £27 million out of a sales turnover of £300 million. That is a 9 per cent. return before tax—not very great, but adequate. Hawker Siddeley, with two companies, had £20 million profits from £220 million sales; that is, equally, 9 per cent.
If you compare those results with the nationalised industries, you get the most stark results. In the 18 years to 1975, the net return on assets in the nationalised industries varied between 2 per cent. and 6 per cent., while in the private sector it was 19 per cent. In BAC in 1973 it was 26 per cent., and in Hawker Siddeley in the same year it was 30.8 per cent. What a marked difference! This is not unique. The nationalised industries of this country are in no way unique. If you look at the results of Western Europe, the picture is very much the same. If you take Aerospatiale, which is the most successful of the European aircraft firms, that lost £40 million last year. So you have only to nationalise and you turn profits into losses.
One of the arguments—and I am not going to deal with the participation argument—is that this Bill is needed to restructure. I personally do not believe that it is necessary. I have said before that the 1972 Industry Act would allow one to restructure. We know what has already been done under that Act, including £1,400 million promised, but not yet given, to British Leyland, which,

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of itself, is an immense sum of money. If the Government can do that under the 1972 Act, why can they not proceed under that same Act without this piece of legislation, if they have to?
When I came back from the Royal Air Force in 1945, there were 12 British airframe companies, and by 1959, under Harold Macmillan's Government, we had come down to BAC and two Hawker Siddeley, with much smaller ones not in the top league. By 1973, Michael Heseltine, who was then the Minister responsible, had agreed with Hawker Siddeley, and with GEC and Vickers, who were the shareholders of BAC, that there should be a voluntary coming together of those companies. Here, again, that was possible without nationalisation, just as the restructuring up to that stage had been perfectly possible, without antagonising people working in it at any level; they were very happy to do so. I mention the managers in particular, because if this goes ahead, and the Government are convinced that they must carry out this minority policy, then I am afraid that they will lose some of the most able and dedicated managers who do not wish to work in a large and amorphous body, and who wish to retain their individuality and the loyalty of the company which they have served.
Why have these mergers come about? It is because the increasing cost of developing, launching and building aircraft has gone up and up. I saw the latest estimate for the Hawker Siddeley 146, which is a short-range airliner, and if it goes ahead it is estimated that it will cost £200 million, which will obviously take 10 or more years to recover. Very few private companies can afford that. That happens not only in this country but all over the world, so that Governments throughout the free world have helped private industry cover this risk by loans which they regain from royalties paid. The market is tremendous. I saw that even the Labour Party and the TUC acknowledged this, when they said that by the 1980s the value of civil and military aircraft was likely to exceed £6,000 million. So that the market is there.
I now come to the cost, and this must be very much in everyone's mind at present. It is estimated that it will cost between £300 million and £400 million
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for the take-over. I believe that when the Tribunal has finished its work)it will be more. It is estimated that we shall have to provide borrowing powers for each of the Corporations of £300 million. It is also estimated that they will need working capital amounting to £1,200 million over three years; and, of course, there is the renewal of machine tools and the restructuring of the companies which will need still further money. So that on every score the taxpayer—and I am glad it is now acknowledged that it is the taxpayer, and that this will not be just a transfer of resources—will he clobbered.
If the Government allow this Amendment to go forward, it will not only encourage the taxpayers, because they will know that they are not going to have to meet these tremendous demands in the future, but it will certainly encourage the IMF who will shortly be arriving on our shores, and, if what we read is correct, will ask us for some rather punishing measures to be taken, belatedly. It will certainly encourage our creditors who continue to lend us money as the borrowing goes round and round; and last, and perhaps most important of all at this juncture, it will help sustain confidence in Britain and in the pound sterling, which is more necessary than anything else. So I urge the Government, even at this late stage, to think again to see whether they can use other methods of achieving their object, such as the 1972 Act and a lot of voluntary restructuring, and not use this desperately blunt and inefficient weapon to achieve it
Baroness PHILLIPS: My Lords. before the noble Lord sits down, may I say that I know him not to be unfair or unjust, and indeed to be compassionate. But would he not agree that it is unfortunate to use the words, "unprofitable public expenditure"? Were I still teaching small children, or were I a fireman, a police-man, a doctor or a nurse in the service of the community, the costs of which are met from public expenditure, I would not think my labour was unprofitable. I would think it was yielding a very real profit which is quite comparable to anything yielded by the private sector. It is very unfortunate that it will go on the record on this day, when we are to have these visitors who will bring us money to borrow, that we are considered to have unprofitable public expenditure.
Lord ORR-EWING: My Lords, if I said that, I can only say that I did not intend to do so. What I was saying was that these nationalised structures—and I do not count the educational services—are services which can be maintained in our country only if we have a large enough private sector to earn the profits to make them possible, and we shall not have an educational service, a welfare service or anything else if we make the private sector smaller and smaller. That is why I joined the Conservative Party rather than the Labour Party when I was at Oxford, and that is why I now sincerely believe that the best way of achieving what is wanted is through private enterprise and not through nationalised industries. That is why I am pleading the case.
3.47 p.m.
The Earl of LAUDERDALE: My Lords, I do not want to detain the House for very long, but since we sat through the Committee stage I think it has been suggested that each of us should study the other's arguments, and I have paid some attention to the arguments that were used by the noble Lord, Lord Melchett, when he answered the debate on this Amendment in Committee. He was then fresh, and I hope he is fresh now for a further fairly long session. He looks fresh, and we certainly do not want to make him unduly weary. Because we have been looking as carefully as we can, and with what objectivity we can still muster, at the arguments, I myself should like to express great sympathy with this Amendment, but we shall listen with great interest to the reply and consider whether or not we want to divide.
I was very interested in one remark made by the noble Lord, Lord Melchett, in Committee. He said:
"Under the aegis of my noble friend Lord Beswick and the Organising Committee, the British Aircraft industry is working in real co-operation and speaking with a single authoritative voice."—[Official Report, 11/10/76; col. 34.]
Perhaps he can tell me straight away—and I will gladly give way to him—whether he was referring to the airframe manufacturers only, or to the airframe manufacturers and the engine manufacturers. I draw attention to that, because he had been saying how necessary it was to have, as it were, a single voice in the industry,
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so that the British aircraft industry could talk to foreigners, and he mentioned that the French had announced the partnership with McDonnell Douglas, the Italians were talking with Boeing, and so on.
The simple fact is that so far as the aircraft engine manufactures—which really means Rolls-Royce—are concerned, we do not have to do anything more to Rolls-Royce to enable them to talk with Boeing, with Douglas or with anyone else. Here is one of the major aero-engine manufacturers in the whole world, of unparalleled quality and skill, and, as has been made clear many times in many places, they are quite capable of taking care of themselves where it is a matter of standing up to foreign competition or negotiating with others.
So there appears to be a slight ambiguity in what the noble Lord has said and perhaps he can clear it up when he replies. Certainly the case that may be made by the airframe manufacturers will be very different from that made by the aero-engine manufacturers. It is a great pity not to refer now to an old phrase:
"I do not mind lying but I hate inaccuracy".
I am sure that the noble Lord will agree with me about that and will make the record quite clear.
While answering for the Government on this Amendment the noble Lord said at col. 31 that,
"Workers expressing their views through their unions have made it clear that they wish the industry to be taken into public ownership."—[Official Report, 11/10/76; col. 32.]
No doubt they have done so, but the noble Lord is equating the trade union members with the industry as a whole. Surely that cannot be strictly correct.
Lord MELCHETT: My Lords, like the noble Earl, I dislike inaccuracy. I think that the noble Earl is referring to something that I said in col. 32 rather than in col. 31.
The Earl of LAUDERDALE: My Lords, I beg the noble Lord's pardon. I am very happy to be corrected at any time and I will take correction with a smile, just as the noble Lord, Lord Melchett, always takes it with a smile, too. The suggestion here is that the voice of the industry is determined or determinable by the voice of the trade

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unions. Nobody is going to say that the trade unions are unimportant. Equally, it is untrue to say that they represent the whole of the industry. The noble Lord has said that,
"Workers expressing their views through their unions have made it clear that they wish the industry to be taken into public ownership"
Are the people who belong to trade unions the only workers in the industry? Surely the noble Lord would not claim that. If he does, we would challenge him because the workers in an industry are all those who labour whether by hand or by brain, whether on the shop floor, whether in supervisory grades, whether in management—indeed, whether they are shareholders. All of them are participators in the industry. It seems to me that the noble Lord's reply, which tripped off the tongue very readily when he made it, was not at the time a quite satisfactory answer to the Amendment to which he was replying.
The noble Lord did not answer a point which was put by my noble friend Lord Ferrers, who asked:
"Is it or is it not the case that the fusion of the several companies concerned will involve a reduction in jobs?"
The noble Lord, Lord Melchett, is very agile and we have learned increasingly to respect his agility, but he ducked that question very quickly indeed. The fact is that either the rationalisation which the noble Lord speaks about will lead to lower unit and labour costs, which can only mean a reduction of the labour force, or it will not. I say quite frankly that this will kill so many hundred or a thousand jobs. Let us not hide the matter. Indeed, the noble Lord will be interested to hear that when the Government gave evidence to a Select Committee of this House on the future of the aircraft industry in Europe, a Committee over which I presided only a matter of months ago. the Minister made it absolutely clear that what mattered to the Government in the aircraft industry was the jobs that it provided. We did not think that it was a very worthy approach to the strategic problems in the industry but that was the line which the Minister took. Here we are being promised a fusion for the sake of rationalisation which, if it means anything at all, can mean only a reduction in jobs, contrary to the Government's stated policy elsewhere.
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Then we read that the great means for obtaining accountability at what is known as the strategic and corporate level is again by nationalisation. In the old days we used to say, "Tell it to the marines", but I say tell it to Sir Richard Marsh, to Sir Monty Finniston, to any of the unhappy people who have presided over nationalised industries in the past 25 years. We know very well that account-ability means a lot of niggling interference from civil servants. Sir Richard Marsh's comments on the way he has been treated by successive Governments—by our Government just as much as by thz! Government of the other side—speaks for itself. My goodness! accountability is simply exposure to interference from people who do not always know very much about the industry to start with.
Then there is the question of cost which has been alluded to by the noble Viscount, Lord Simon. Is this the week in our history when we want to speak casually about another £400 million of public money being spent? All I can say is that this Bill is singularly relevant to a radical Government in that a radical is a man with both feet planted firmly in the air.
Lord THOMAS: My Lords, I wonder whether I could make three points. I cannot understand the mania for massive nationalization. When I first came into the civil aircraft industry there were three Corporations: British South-American Airways, the British Overseas Airways Corporation and British European Airways. Now we have one Corporation. Is that Corporation any better? Is it providing any more jobs? Is it making more revenue? No, I do not think so. The mania for massive expansion does not help.
The noble Earl, Lord Ferrers, mentioned the influence of civil servants on nationalised industries. My experience has been that as a manager one is much quicker off the mark in the private sector than one is in a nationalised industry, as the noble Earl, Lord Lauderdale, has instanced in the case of Sir Richard Marsh and Sir Monty Finniston. You are much more agile as a manager when you are running a show under private enterprise. When one turns to international business, noble Lords may not know that under the present system every Boeing 747, 737 and 727 has its inboard flap actuators made in

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this country by private enterprise. If that is not good industrial relations in getting export business I do not know what is.
3.58 p.m.
Lord MELCHETT: My Lords, I confess that one thing which the noble Earl, Lord Ferrers, said slightly upset me. He said that he simply had not heard put the industrial case for public ownership of the aircraft industry. I had felt that I had at least made an attempt to put the case for public ownership of the aircraft industry several times in your Lordships' House: at Second Reading, and possibly several times during the Committee stage. I hope that the noble Earl will accept that while he may not have been satisfied by what he heard, and that is a matter entirely for him, at least those of us on this side of the House who have had to answer the many points which have been raised have done our best to do so. I accept, of course, that our answers may not have been entirely satisfactory. However, we believe that there is an economic and industrial case for public ownership. As I say, I believe that that case has been made many times both here and in another place and I will, of course, make it again this afternoon.
The need for structural reform of the aircraft industry has, I believe, long been recognised. Over 10 years ago the Plowden Committee of Inquiry concluded that the benefits from competition between the two main airframe manufacturers did not bring sufficient benefits to be worth preserving. Indeed, the honourable Member for Henley, Mr. Heseltine, when he was Minister for Aerospace tried to effect a merger between the two companies. The noble Lord, Lord Orr-Ewing, said that he had tried to achieve that merger but that he did not succeed in the period when he was there.
As I understand it, noble Lords opposite have attempted to argue that while they accept the need for structural changes these could be brought about without public ownership. In support of that contention they point, as the noble Lord, Lord Orr-Ewing, did during the Committee stage, and again today, to the reorganisation that resulted in the creation of BAC. If they are right, how can they
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explain the fact that over a period of ten years there was a growing consensus that there should be only one major airframe manufacturing company and yet there are still two companies left in private ownership? With this record I believe there is some justification, to put it no higher, for our believing that the changes will not be made so long as the companies remain in private hands.
The noble Earl, Lord Lauderdale, and I, a moment ago discussed briefly column 31 or 32 of an earlier debate during the Committee stage. The noble Earl knows that I was talking about the airframe manufacturers in the context in which he quoted me, but if I heard him aright he went on to say that Rolls-Royce can already speak with a single voice. Of course he is right. In 1965 the Plowden Committee recommended that there was a case for combining the two main engine firms into one group, namely Bristol and Rolls-Royce, and at the same time the Plowden Committee recommended that the two main airframe firms should be combined. The Bristol/Rolls-Royce merger took place voluntarily, which was something I am sure we all welcomed; the airframe merger did not take place, and hence the argument that is still going on between them.
The Earl of LAUDERDALE: My Lords, I am grateful to the noble Lord for giving way. I only want to make it clear that when he is speaking about standing up to negotiations with companies in other countries, Rolls-Royce as engine manufacturers can stand up to any other firm in the world and negotiate with them on equal terms, which may or may not be true of the airframe manufacturers. That was the point I was trying to make, but when the noble Lord said in his answer during the Committee stage that the industry was speaking with a single voice, do I now understand that he was really referring to the airframe manufacturers?
Lord MELCHETT: Yes, my Lords, I think in the context in which the noble Earl saw the word, without having had a chance to refer to it because I was most anxious to listen to what he said, as I know he is apt to criticise me if my attention even appears to wander while he is speaking; so I have not spent a long time reading the report of the Committee

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stage again, but I think that would be my answer.
It is now more important than ever that we should have a strong and united industry if we are to compete successfully in world markets. The scale of investment in projects has been such that for many years it has been too great for the resources of a single company. It is now growing beyond the resources of a single country. At the present moment, as I have told noble Lords, the British companies through the Organising Committee for British Aerospace are deeply engaged in discussions on future projects with manufacturers, both in Europe and in the United States of America. As I said during the Committee stage debates (and at least two noble Lords have repeated it this afternoon) under the aegis of my noble friend Lord Beswick, the British aircraft industry is for the first time working in real co-operation and speaking with a single authoritative voice. This should help to ensure that this country will be able to play its full and proper part in a world aircraft industry where there is increasingly little scope for competing companies from the same country.
Noble Lords opposite have also suggested that the fine record of the industry is itself an argument against public ownership. I do not accept that argument. The aircraft industry is in many ways a successful industry. It earns a good return, though not without a secure and profitable home base in defence procurement and a degree of support on the civil side. It makes big exports—though the figures claimed by the SBAC are sometimes misrepresented. The level this year and last has in fact fallen in real terms as the official statistics, when adjusted for inflation, show.
I do not make these comments in any destructive way but I think the record of the aircraft industry has been misrepresented as part of an argument that change could only disrupt what is working perfectly. I do not believe that it is working perfectly. There has been no major new project started for many years, with or without Government launching aid. The industry has in effect reached the end, or nearly the end, of its civil projects. It needs to make commitments very soon indeed which will shape the industry's workload for two decades ahead,
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in a world industry and a market increasingly dominated by giants. The United Kingdom industry cannot—and I think this is now generally acknowledged—do that effectively and successfully as two separate and competing groups which vie, as in the past, for Government support. While we may differ about the method of restructuring—and I do not expect that difference to be healed this afternoon, or indeed possibly for some time in the future—I do not believe that the objective is in serious doubt between either side of your Lordships' House.
In any case, the Government reject wholly the argument that public ownership should be restricted to industries with a poor record in private ownership. This is a point I have made at many stages during the debates on the Bill. What matters is whether the record can be maintained in divided private ownership or whether, instead, it can he improved in public ownership, as we believe. We believe that public ownership will help to release the energies and enthusiasm of those working in the industry, and thus improve its performance. It will allow the public accountability essential to an industry so dependent on public purchasing and financial support to be carried out more effectively and less onerously at the Corporation instead of the detailed factory-floor level.
We have never claimed that the Government's role as principal customer and provider of launching aid is in itself a sufficient argument for public ownership. But it reinforces and consolidates the case which is made out on the other grounds I have described. All in all, we believe that the case—a pragmatic one related to the needs and realities of this industry and this market—is overwhelming. As I said when I started, and to the noble Earl, Lord Ferrers, in particular, noble Lords have heard all these arguments before, but I assumed that in tabling this Amendment noble Lords on the Liberal Benches at least wanted to hear them again I do not imagine that I have convinced them, but I hope that at least they will accept, as the noble Earl, Lord Ferrers, obviously had not accepted, that we have a strong case to make for including these companies in the Bill.
The Earl of ONSLOW: My Lords, there are three points I should like to

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make on this Amendment. First, the most successful aircraft companies in the world are in private enterprise hands. I think that goes without saying. Secondly, the public opinion polls and all objective data that has been produced shows that nationalisation is unpopular in this country and it is really the last refuge of idealogues. Those are just two comments.
Now I come to my two questions. As a result of the nationalisation of the aircraft industry will productivity per man—or production per man—go up? If it goes down, not only is it a waste of money at a time when we cannot afford it—a futile waste of money because we shall have spent some money; or, to use that marvellous term "transference of resources"; I wish I could transfer somebody else's resources into my pocket—but this transference of resources will have made the industry less efficient unless the Government can show without doubt that the productivity per man will increase. Above all, how much is it going to cost? Figures have been bandied about, but we have never had a Government statement. How much is it going to cost in transference—oh, how I love that expression!—of resources from one pocket to another? How much will the taxpayer have to pay?
4.9 p.m.
The Earl of KIMBERLEY: My Lords, when my noble friends Lord Simon, Lord Amherst and I tabled this Amendment, we wanted to make ourselves completely clear as to the reason why, and quite honestly I think there is little that I can add to what noble Lords on this side of the House have already said this afternoon in explanation of this Amendment. If anything, the noble Lord, Lord Melchett, has helped our case. He has done his best to present his case, but to my way of thinking much of the material he used for building the edifice is not very sound.
My Lords, your Lordships have been accused of wrecking Bills which have been approved in another place. We all know in our hearts that most of those accusations invariably have been put forward by a minority group, either in another place or in certain rather militant unions. It makes no difference what they are called: it does not matter whether
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they are the Tribune Group, Marxists, or whatever else they may be.
Secondly, if we go into it very carefully, the case put forward for public ownership, or nationalisation—whatever word you want to use—was that it was included in the Labour Party Manifesto. Let us face the fact that this was put in to satisfy the Left-Wing element. Let us not forget that, in the so-called democracy which we have in another place, it is not in fact a true democracy, but a minority. We have had the statistics. Only 39 per cent. of the total electorate voted Labour. That leaves 61 per cent. of the people who did not vote Labour; who are against nationalisation. If you take again the figure of 39 per cent., you will find, I am sure, that a not inconsiderable amount of those voters today do not want nationalisation. They voted Labour out of loyalty to their Party—some may say misguided loyalty. But when the figures come out for the by-elections on Thursday, I would bet any money you like that my arguments will be all the more forceful.
My Lords, for many years the aerospace industry has suffered untold Government interference. It really is a miracle that it has survived, and is still remarkably healthy and well. We must remember that two big companies do not want to he nationalised, and who could blame them? If one looks around and sees the disasters that have befallen other nationalised industries, it is not surprising. The other day, the chairman of one of the big companies said to me, "It would be all right if only there was just one example of how a nationalised industry was a success". I do not wish to have Rolls-Royce thrown up at me, because that is a completely and utterly different story. These two companies want to be left alone to go about their business, which they, more than anyone else, know how to run successfully. Should they want or deem it necessary to make some form of merger in the interests of aerospace and of Britain, I would have a very large bet that they will do this. If the worst should come to the worst, as the noble Lord, Lord Orr-Ewing, said, the Government could always use the 1972 Act, but I do not think that this will be necessary.
Perhaps the noble Lord, Lord Melchett, will ask me why these two companies

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have not got together before. I think he knows the reasons only too well. They tried very hard, and, in racing parlance, they were warned off, or so I have been given to understand.
Lord MELCHETT: My Lords, that is fascinating information. Could the noble Earl, Lord Kimberley, tell us who warned whom off what?
The Earl of KIMBERLEY: My Lords, I was given to understand that when nationalisation appeared imminent and that it was going to be in the Manifesto, they were told that they could stop their negotiations with each other.
Lord MELCHETT: My Lords, I thought the noble Earl was talking about the period when the Conservative Government were in power. That was when a great effort was made by Mr. Heseltine to get the two companies together. I was not aware that that Government were going to nationalise them.
The Earl of KIMBERLEY: My Lords, that was in December 1973 or January 1974. However, that is what I was given to understand, and if I am wrong I apologise to your Lordships.
My Lords, the cost to the taxpayer will he minimal at £400 million as has been stated earlier, which, give or take a little, is the money that the four civil aerospace projects that we need to build would cost us right now in conjunction with Europe. I refuse to believe that wise men, men of integrity and business acumen, will not do what is right for the industry, provided they are left alone. When we first tabled this Amendment on the Committee stage, I will admit, as I said the other day, that it was probably the wrong time to table it. But having listened to I do not know how many hours of so-called reasons as to why the aircraft industry should be nationalised, I am still not convinced and I have not heard one good, solid or logical argument put forward by the Government. I am sure that most noble Lords will agree with me.
I do not want to go into all the details—we have been over them again and again. Suffice it to say that the Concorde project, which is virtually the nationalised part of the industry, is no criterion. The track
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record of the Concorde management board is appalling. The noble Lord, Lord Beswick, may say that under the British Aerospace Corporation he will not tolerate interference and he will run it. But I do not think any man alive today is capable of running a nationalised industry without being hogged down by the Secretary of State, the Civil Service and red tape.
My Lords, one of the elder statesmen of the Labour Party, J. B. Priestley, summed up the situation very aptly. He wrote:
"While public ownership begins to look like elaborate imbecility it is proposed we should have more of it. Sixty years ago, when I was a young Socialist, I used to bring the Post Office into my arguments. I do not know wham common sense left the Post Office for ever, but it has certainly vanished never, I feel, to return in my time".
He goes on:
"When authority is guided by common sense touched with compassion, it takes trouble to discover what people in general want or do not want. This is real democracy. What is false democracy comes from ideology, the fanatical worship of a theory and a system far more important than people. With common sense disregarded we are, at the present time, the constant victims of ideology, busy imposing a stamping process on us, without regard to our thoughts and feelings. We have Ministers who are going to do us good even while we run screaming. We can discover them day after day without a glimmer of common sense between them. Sometimes I feel we are already half way to Moscow".
Mr. Priestley finishes by saying:
"We are commanded to depend more and more on a Government that has offered us no example of common sense in all its operations and transactions".
Here is wisdom, and look from whom it cometh. Can any of your Lordships think of a better way to help stop the pound from sinking than to scrap the nationalisation of the aircraft industry? Just think of the different attitudes that foreign investors immediately would adopt towards Britain. Just imagine how confidence in Britain would be restored, and imagine the confidence restored in our visitors from the IMF in two days' time. Let us begin by putting our country before ideological and nonsensical Party politics. I appeal to your Lordships this afternoon, on all sides of the House, to see reason. If we divide which, alas! I feel will come to pass, I hope that your Lordships will consult your consciences to the full and very deeply before deciding where you should go. I beg to move.
Lord HARMAR-NICHOLLS: My Lords, I was very relieved indeed that the noble Earl, Lord Kimberley, said he had not remembered an occasion where a clear explanation had been given by the noble Lord, Lord Melchett, or anyone else, as to why this is being done. I thought perhaps I had been rather slow on the uptake when, with such confidence, the noble Lord, Lord Melchett, said that he had already explained it in detail on Committee and was merely repeating it. What the noble Lord did was to state two things which I think had truth; that is, that this particular industry has now reached the stage where it is very difficult for small units to operate it in a way that will be successful. One accepts that. Because of the expense, because of the intricacy of the research that has to be done, it has to be bigger units. The noble Lord states those things as a fact and then immediately tags on to that, "Therefore we nationalise; therefore we have to have public control." I think it was the poet Blake who said:
"A truth that's told with bad intent
Beats all the lies you can invent".
I am not suggesting that the noble Lord, Lord Melchett, has told the truth with bad intent, but he has certainly told the truth with wrong intent. If he is going to say "Therefore, we have got to nationalise, because we need big units", he is coming to a conclusion for which he has no support at all in terms of hard clear evidence.
I was very impressed with what my noble friend Lord Thomas said: when you nationalise or take under central control, of necessity you are bringing in an element of Civil Service control. It is not a civil servant's duty to be quick; it is not his duty to take risks. A civil servant, representing what is virtually a monopoly, has to be ultra-careful that he is being fair, that he is taking everything into account and that he is not risking something that does not belong to him. Civil servants have to go into that sort of detail. But if you can leave an element of private enterprise ownership you have various strands to take these various risks; they can be quicker because they have not got on their shoulders the burden of the whole industry, or the whole weight of an idea that may be involved in any move they take. So I suppose the first thing we have to do is to try to alter the outlook of noble Lords who speak for the Government,
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and indeed all Socialists who hold authoritative positions. They have been able to point out weakness in the present system. But they have not yet been able to establish that to replace the present system by a nationalised method is likely to be better.
There is ample evidence, as my noble friend pointed out, that where you have nationalised you have interfered with efficiency and interfered with the results. The thing that bothers me more than anything else is the absolute honesty of the noble Lord, Lord Melchett; he really thinks he has given an explanation, he truly believes he has given a good explanation. The truth of the matter is that he is undermining any chance this country has of regaining the world confidence which is essential. Even if the noble Lord could establish that his form of central control, nationalisation, was going to be marginally more efficient, he could not overcome the fact that nobody outside this country has any faith in it at all, and I would say a good half of the people within the country have got no faith in it at all.
So while we are not going to turn the world around by voting on this particular Amendment, I do hope that we can at some time impress our argument upon the noble Lord, Lord Melchett. He is a young man, he is going to be here for a long time and his influence is going to spread over a good many years. By all means have regard to the weaknesses that he sees in the present system, by all means try and find an alternative which will give greater efficiency and better results for this country, but please let him make up his mind on all the evidence in front of him that nationalisation and more centralised control is not the way. If, by voting on this Amendment, we can hammer that home and go some way towards achieving a transformation of thinking, it may be a vote well worth casting. It is in hope for the future rather than for any immediate gain that if it is put to a vote I shall go into the Lobby and support it.
4.25 p.m.
Lord GEORGE-BROWN: My Lords, if the noble Lord who is going to wind up will allow me, may I just say what staggers me about the whole approach to this issue. We approach it ideologically each way. We use the word "nationalisation" in the loosest and to me the

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most non-understandable way. You do riot, you never have, nationalised an industry. You change the names on the share certificates; that is all you do. The fellows who run an industry are the managers and the managed. I want to ask the noble Lord, Lord Melchett, who is the third or fourth generation of a family that began as managers, why, if you change the name on the certificate, do you suddenly get a better lot of managers or a better relationship between the managers and the managed? I knew his grandfather. He knew how to manage. I do not think it mattered much whose name was on the share certificates. Courtaulds can go wrong and be privately owned; the Coal Board can go wrong and be publically owned. What I should like to hear is an argument as to why it matters, why we commit vast sums of public money just to change the names on the certificates. Why does that matter and how does it change how the job is done?
The answer is, it does not at all. This is the total irrelevance of what the noble Lord, Lord Harmar-Nicholls, calls nationalisation. It is totally irrelevant to what goes on in the industry. No miner now believes that the coal mining industry is run more in his concern, or that he has more to do with the way in which it is run since Lord Shinwell put up that beautiful flag which meant it is now run in the name of the people. No miner believes it; no gasworker believes it; no electrician believes it. And nobody will believe it, if I may say so to the noble Lord, Lord Melchett, if you just change the names on the share certificates in the aerospace industry. It is totally irrelevant. It adds to our borrowing requirement. It complicates all our finances. But it does absolutely nothing whatever for the running of the industry.
The reason I shall vote for the Amendment, which I hope will be pressed, is that. It is not really for the reasons that the noble and reverend Lord, Lord Beaumont, gave. I think he got ideologically involved, too. It is not a matter of ideology. I want industries to be run between those who manage them and those who are managed in them because they care about them. I think you can do it without bothering your head very much about who has his name on the shares. It costs oodles of millions now to invest in plant
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and machinery. If you are lucky you start to get a return in three years. If you arc very lucky you get 5 per cent. return after five years. You have to be very lucky to do that. In the meantime you are paying 18 per cent. for the money to do the job. That is the issue in British industry, not the name which is upon the share certificate. With great respect to the grandson and great-grandson of the fellow I I new, that is what managers should be about. In my view that is what trade union leaders and Socialist leaders should be about.
How do we make it easier to run an industry and to invest in it? How do we make it easier for the fellows who work on the floor to co-operate with the fellows who are in the offices and the drawing offices trying to work out what happens next year? I repeat, my Lords, this is not an ideological Bill calling for rejection; it is just ideologically and in every other way irrelevant. As I come towards the end of a long career as a representative of the managed and now myself a manager, I simply say that this has nothing whatever to do with it.
Perhaps I might remind the noble Lord, Lord Melchett—who is a rather later Socialist that I am—of something that we older Socialists always knew: If anybody ever makes more than he should out of the industrial effort, then that is what we have the Treasury and the Chancellor of the Exchequer for, that is, to tax it back from him. What you do not do is to deny him the opportunity to do it. Let us get it done. This is the most irrelevant Bill and—I forget who actually said this but the noble Lord, Lord Shinwell, will remember—it should have its throat cut.
A noble Lord: Winston said it.
Lord GEORGE-BROWN: Winston, was it? I think he actually said if should have its throat slit before we sent it upstairs. I ask the noble Lord, Lord Melchett, to remember that his grand-father and his whole family knew that it is the running of a business that natters; it is making it effective and efficient; it is making people think it is their show and enabling them to work together; and, I repeat, the name which is on the share certificate has little to do with that. I

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hope the Amendment will be pressed and certainly I will vote for it.
4.34 p.m.
Lord SLATER: My Lords, on the Amendment on nationalisation which is before the House on this particular occasion, I have listened to the speeches of the two noble Lords, Lord Harmar-Nicholls, who came from the other place, and the noble Lord, Lord George-Brown, who held high office in the other place, and to the upbraiding, more or less, of the noble Lord who is in charge of the Bill at this juncture, my noble friend Lord Melchett, as to how he ought to reply to the debate. Unfortunately for: he two noble Lords who have spoken, neither of them has worked within a nationalised industry. They have never experienced it. They do not know anything about it.
Lord GEORGE-BROWN: Oh come off it!
Lord SLATER: Never mind about the come off it". The noble Lord has had his say. He has very often had his say and is very often wrong. He has never worked within the mining industry and never worked in a nationalised industry. He is supposed to be attached to the Transport and General Workers' Union, but I never knew that he had a PSV licence whereby he could drive the buses around London if they were to be nationalised.
One could go on and on drawing examples of what has come out of nationalisation. The men working in the mining industry at this moment are better off than we ever were. I went down the mines at the age of 14 on leaving school and I was down there for 30 years. I know something of what we had to put up with under private enterprise, the punishment that we had to endure, the conditions that prevailed and how the prices were arrived at. But when nationalisation took place and a new form of conciliation machinery was drafted between the two parties, the National Coal Board and the National Union of Mineworkers, great benefits came to our people. We even got holidays with pay. They have now got so many days time off within the year, and their holidays have extended beyond what they were. One could go on to elaborate on the conditions that now prevail which
916
never prevailed before and which have been of great benefit and of great service to those inside the industry.
One thing I took particular notice of was that neither of the two noble Lords who spoke made any reference whatever to the conciliation machinery about which both of them know something and ought to know something as ex-Ministers; that was the machinery which operates on behalf of the Civil Service inside Her Majesty's Government—the Whitley machinery. In my opinion you have a machinery set up which ought to have been redrafted and brought into line with the conciliation machinery that operates within nationalised industries today. If such were to be done, then you would not have the upheaval and the distrust in the Civil Service, whose members are not able to speak for themselves on the Floor of the House. Only those who have had experience of them, and have had to depend upon them for advice and for assistance when faced with problems in regard to policies which the Party in power was prepared to lay down, are prepared to speak on their behalf.
My noble friend Lord Melchett, therefore, has nothing to apologise for in regard to the Amendment that is before the House for consideration. Never for one moment believe what these two noble Lords have had to say in regard to nationalisation. Nationalisation has done tremendous good for this nation. Noble Lords will remember that on one occasion 1 spoke of one noble Lord—who is not here now but has been followed by a successor, his son or his grandson—the noble Marquess, Lord Londonderry, who said that the best thing that ever happened to the mining industry was when we took them over. Nationalisation was able to put money into their pockets that they would never have been able to achieve if they had had to work the industry under private enterprise for any longer. They did not have the capital to inject into the industry to buy new machinery to bring it up to standard. It was left to Her Majesty's Government to nationalise the mining industry. I, for one, benefited while I worked within the industry from that nationalisation that took place. We were proud of the flag that was on every pithead when at the end of every week we were able to break the production target that had been set for us. Every miner who

917
worked at the coal face accepted his individual responsibility, as he still accepts it, in seeking to produce from Mother Nature.
In closing, I want to say one thing: when you talk about nationalisation and you look at the mining industry, remember that every time a miner goes down the pit he is engaged in a battle with Mother Nature, just like the soldier on the battlefield. He has to look after his own safety. Nobody can look after it for him. Things can happen down a mine; the miner can deal with this only by experience, beginning with the form of apprenticeship that he starts off with when he goes down in the first place up to the time when he finishes at the age of 65, when he comes to retire. May the day soon come when the retiring age for a miner and those working in other forms of industry is lowered from 65. Why should not the same case be presented on their behalf as is presented on behalf of the police, the nursing profession and other professions? The door ought not to be closed. Therefore, I hope and trust that my noble friend Lord Melchett will stand his ground, irrespective of what has been said and of the appeals that have been put forward by the other side.
4.41 p.m.
Lord CARR of HADLEY: My Lords, I do not want to get involved with the noble Lord, Lord Slater, in an argument about the nationalisation of coal mines at this juncture. Of course it was right and absolutely necessary that improvements should be made in the working conditions in the mines and, indeed, in many other industries, but I really do not think that an examination of industry as a whole indicates that it was necessary to have nationalisation in order to get, for instance, holidays with pay, better welfare provisions, shorter working hours and the like. When the noble Lord sings the praises of the nationalisation of the mines, he must not forget the really lamentable industrial relations record in the mines in approximately the first decade after nationalisation. If he will refresh his mind about the really appalling record of unofficial strikes under the nationalised Coal Board for about the first decade—it may have been a little more, it may have been a little less—it is far from obvious that nationalisation brought that peace
918
and satisfaction which the noble Lord claims as its fruits.
Turning to the remarks of the noble Lord, Lord George-Brown, I agree with a great deal of what he said and I hope that we can argue this and similar matters on a practical, realistic basis, and not just on an ideological basis. However, though I agreed with much of what he said, I did not agree with all of it because I am afraid that experience has shown me—though, of course, everything looks different to each one of us—that nationalisation is rather worse than irrelevant. When one changes the name on the share certificate and alters it to "the State", experience shows that it becomes more difficult for managers to manage, not less difficult or even the same as before. One of the reasons for that is that even if in some industries prior to nationalisation there was too much detailed interference by the State for the good of management and the success of the industry, it is true that the record proves that that interference becomes far worse after nationalisation. The number of people who crawl over an industry after nationalisation is far greater than those who crawl over it prior to nationalisation, and they crawl more frequently.
I want to return to what seems to be my particular job in this debate. As I sense that the discussion on this Amendment is moving to an end, I have to express some view about the merits of the Amendment as seen by the Conservative Front Bench and to give some advice to my noble friends as to what they should do if the Amendment is pressed to a Division. In order to do so, I must go back to what the noble Lord, Lord Melchett, was saying, because he began by suggesting that the Government have been constantly accused of not having argued the industrial case for the nationalisation of the aircraft industry. I am afraid, however, that I must say to him with respect that, once again, he has not really argued the case today because he has once again made a number of assertions. For instance, he has repeated his assertion that a merger between the two great corporations was necessary and that only nationalisation could bring it about. I think that a case has to be made for the merger. On balance, personally, I am prepared to accept that now that case is probably

919
made, but it is by no means an open and shut case and I have not really heard the Government argue at any stage the case for and against the merger, nor draw up a proper balance between the arguments. However, as I say, I am inclined to accept that, at the present moment in time there is probably, on balance, an argument in favour of the merger.
However, if there is such an argument and if it were to be accepted, the case still has to be made as to why it is necessary to nationalise in order to bring about this merger. I really do not believe that that case has been made at all. It is true that the merger had not taken place by February 1974, and it is obvious that it would not have taken place since then simply because the Government had this commitment to nationalise tied round their neck.
Lord PARGITER: My Lords, has the noble Lord no regard for the amount of public money that is being poured into these two companies?
Lord CARR of HADLEY: My Lords, I have spoken of that before and I was about to come to it again. I believe that, although the merger had not been brought about by February 1974, there is no reason to suppose that a Government which really believed that it should take place could not have persuaded the companies to bring it about. The Government could have acted in their double capacity as the most powerful and demanding customer of the industry and as wielder of the powers, the persuasions and the help that the Industry Act and other legislation give them. So I do not believe that a case has been made, first, for the merger, or, secondly, given that case, that nationalisation was necessary to achieve it.
It is true that, if the Government put in a lot of public money, they must exercise strict control in the interests of the public. It is also true that, if that money becomes risk-money, the Government should look to get some return for the taxpayer in any success that accrues to the industry as a result of being fructified by the taxpayers' money. I shall come to that in a moment. Before I come to that, however, I must tell the noble Lord, Lord Melchett, that he has not attempted to argue the case that I have put forward
920
on a number of occasions and which has been made by many other people in this House and outside—that is, what is the proper relationship between a dominant customer and his monopoly supplier? There are many people—not just Tory Peers—who believe that there are dangers in the major customer owning the monopoly supplier. There are very substantial arguments here, and on no single occasion, to my knowledge, in another place and certainly in this House, have the Government attempted to deal with that argument.
Again, the case is not an open and shut one. I have called this an incestuous relationship and it is one which I strongly feel, and have felt for many years, is against the public interest. I recognise that there are people who take a different point of view. However, there really is an argument here and, once again, the Government have at no stage attempted to meet the criticism that it is against the public interest for the dominant customer to own the monopoly supplier. Therefore, I must repeat to the Government that they have still not answered these first two points of industrial strategy, and in a moment, after I have given way to the noble Lord, I will come to the third point.
Lord WYNNE-JONES: My Lords, I thank the noble Lord for giving way. I should like to ask the noble Lord whether he remembered that argument when he supported European Ferries taking over the Felixstowe Dock, European Ferries being the major user of the Felixstowe Dock?
Lord CARR of HADLEY: My Lords, I certainly took that argument into account. As I said, all the arguments in the case have to be taken into account, and I agree that that was one argument. Another was that one had to balance against that, in the case of Felixstowe, the other loss of competition which would have occurred had the port fallen into the same ownership as the 19 other ports—I think it is 19—owned by the British Transport Docks Board. On balance, since I am a believer in competition as an economic motivator, as a protector of the public and as a way of achieving the best possible economic services for the public, and indeed services other than purely economic ones for the public, I believe that on the whole competition is better served by keeping that dock as a private enterprise dock. But I quite

921
agree; the noble Lord has made a fair point. It is a factor which ought to be taken into account and I can assure him that I did take it into account.
As I have just said, the argument is not an open and closed one to which there is an absolute right answer and an absolute wrong answer. It is a substantial argument, but the Government at no stage have addressed themselves to it at all, and have given no reasons why they believe that the argument in this case is answered as they are answering it in the Bill. It is to make the dominant customer the owner of the monopoly and indeed sole supplier in this country—
Lord LEATHERLAND: My Lords, I thank the noble Lord for giving way. Of course that point about the relationship between the dominant customer and the supplier is a very powerful argument, but exactly that situation prevailed in the case of Rolls-Royce, and the noble Lord's own Government nationalised Rolls-Royce.
4.53 p.m.
Lord CARR of HADLEY: But there was a difference there, my Lords, if I may point it out to the noble Lord. I was a member of the Cabinet that had to deal with that matter. I know that the way we dealt with it is itself open to argument. No doubt the longer we look back on it and the more wisdom we have from hindsight, the more the matter can be questioned; but the question which we had to face, as it presented itself to the Cabinet at that time, was that within about 48 hours or not much longer we had to decide either to nationalise Rolls-Royce—the aero engine part of it—or allow it to go out of existence.
This is not the case here. I am glad to say that the British Aircraft Corporation and the aviation part of Hawker Siddeley are both flourishing, are both doing extremely well. There is no force majeure decision of the kind which the Cabinet, of which I was a member at that time, felt was thrust upon it with only two or three days for it to make up its mind. As we saw it, there really was not the choice on the information we had before us at the time. I can assure the noble Lord that had we felt that there had been a real choice we would have taken it.
The third point I want to come to in this industrial argument is that neither
922
the noble Lord, Lord Melchett, today, nor other Ministers at any other time, have taken on board the arguments of the Plowden Committee. This happens to be an industry which has had a high-powered inquiry set up actually by a Labour Government under the chairmanship of the noble Lord, Lord Plowden. If 1 remember correctly the Plowden Committee must have reported about 10 years ago, and it specifically did not recommend nationalisation. The Plowden Committee recommended, or a majority of it recommended, some shareholding by the Government, but that is very different from nationalisation. The Committee took the view—and I think that this is fairly summarising chapter 37 of the Committee's Report—that, on the one hand, the Government have power in the industry through major strategic decisions but have no responsibility for the consequences, and, on the other hand, the industry has full responsibility for the business including the effect on industrial relations of the changes in defence policy which were going on at that time, but lacks much of the decision-making authority.
The Committee therefore wanted to achieve a solution that would, first, lift the heavy weight of detailed financial and technical control exercised by the Government as a result of their dominant role in the industry which was preventing efficient and dynamic management and which caused in many cases a duplication of effort; a solution which would, secondly, permit the Government to make financial contributions without interfering in the day-to-day management; a solution which would, thirdly, retain the advantages of private enterprise while recognising the Government's dominant position as customer and financier; and a solution which would, fourthly, involve the Government in the management of the economic consequences to the industry of the decision they inevitably have to take in connection with major projects in the industry.
That was the kind of solution which the Plowden Committee was looking at. But it specifically rejected nationalisation because it felt that it would divert senior managements from the material business of the industry, would provoke controversy and uncertainty that would harm the industry, and would make it more difficult to devise the best solutions of the immediate problems of the industry. The

923
Committee also felt that nationalisation would remove the valuable contribution of private investment as an incentive to and a measure of efficiency and profitability. So the only substantial report the country has, after an investigation of the industrial strategy in this industry, while coming down in favour of some public share-holding, specifically came down against the solution recommended by the Government in the Bill. When we say to the Government that they have never tried to deal with the industrial case for nationalisation, that is what we mean. They are specifically denying the findings of the Committee which a previous Labour Government themselves set up, and giving not a single reason for doing so.
We on this side might have grave doubts—indeed, a minority of the Plowden Committee did have grave doubts—about the wisdom even of public State ownership, of the State having some shareholding. But the Committee as a whole, all the Committee, were in no doubt that nationalisation, as proposed in this Bill, was not the right answer for this industry, for the reasons which have been given. Those were not ideological reasons. Those were hardheaded, common-sense reasons argued in that Report. I do not believe that anybody could have accused the Plowden Committee of arguing from an ideological point of view, least of all an ideological point of view which was prejudiced on the side of the sentiments which we on this side of your Lordships' House take on these matters.
So I am afraid that I have to say to your Lordships that this case has not been proved on industrial grounds, and I am afraid that I go on to say to your Lordships that the case runs absolutely at odds with the recommendations of the only substantial study that has ever been made of this problem. When on top of that one looks at the record of other nationalised industries, one is bound to ask, why pick up by the roots one of the few industries in this country which at the moment is being as highly successful as it is? The noble Lord, Lord Melchett, said that some of the figures they gave were rather misleading in their favour. I was rather surprised to hear him say that, because I remember my noble friend Lord Selsdon producing to your Lordships last week, or the week before, the notes
924
produced, I think, by the Treasury for the benefit of speakers when they speak in other countries abroad, and "bullpoint number one" on the notes, he told us, was what a wonderfully successful aircraft industry we have and how wonderfully it was doing.
It is one of the first laws of common sense that one does not pull up by the roots something that is working as successfully as this industry is. I could add to that by drawing attention to the cost; I have done it myself, and many noble Lords have done it again this afternoon. I could add to it the argument which has also been raised this afternoon: at a time when foreign confidence is of greater importance to this country than it has ever been before, why persist in something which even the Government must know is a weakening factor in foreign confidence? I must ask the Government: Why persist in doing something which there is absolutely no evidence to suggest is wanted by the majority of people who work in this industry?
So, my Lords, I think I have made clear, and I hope not just for partisan reasons or reasons of prejudice, that this Amendment is one which in my view should be accepted by the Government. But they have made clear that they are not going to accept it, so I have to address myself to what advice I should give to my noble friends about voting on it. On the Second Reading of this Bill I said on behalf of my Party that, with very great reluctance, we had come to the conclusion that we ought not to break the established convention of your Lordships' House that we do not vote out lock, stock and barrel a major proposition which was contained in the Election programme of the Party holding the elected majority in the other place. When we came to this Amendment on Committee stage I said that I felt that to remove half of this Bill—it is, after all, the Aircraft and Shipbuilding Industries Bill—was really tantamount to a Second Reading vote and that, therefore, with great very reluctance, I had to continue to advise my noble friends not to vote against it. That, I am afraid, is the advice I must maintain today.
I know, of course, as the noble Viscount, Lord Simon, said in moving this Amendment, that in voting it out we should not in fact he thwarting the will of the people;

925
we should be giving the Government an opportunity to reconsider. It is a pity that the Prime Minister and some of his colleagues do not admit this, too. Of course the majority in the other place can have their will whenever they like and with only the minimum of delay, and it is doing no good to unity in this country or to serious consideration of the issues in this country for the Prime Minister and other Ministers to suggest that we in this House can thwart the will and the authority of the elected Chamber, because we have not got the powers to do it. The only powers we have are those given to us by a previous Labour Government in an Act passed when the late Lord Attlee was Prime Minister.
However, although I agree with the noble Viscount, Lord Simon, that that is the fact of the matter, all of us have to face the fact that in the neurotic state in which the present Government of this country exist they would not reconsider the matter. They would explode a huge emotional volcano and hope that, in all the dust and cloud, the real issues would be obscured from the public; and most of all would they do that if they could run their favourite line that this crisis had been brought about by the inbuilt Tory majority in your Lordships' House—something I have noticed them talking about quite a bit in recent days, wholly forgetting the fact that, so far as I know, certainly every important Amendment dealt with at Committee stage of this Bill was supported by noble Lords on the Cross-Benches and by noble Lords on the Liberal Benches as well. So it is nothing to do with the inbuilt Tory majority. All that is noticeable is the lack of Labour Peers to support their own measure, even to the extent, sometimes, of keeping the minimum number required to allow the House to continue and to carry the Bill through.
Lord JACQUES: My Lords, that is grossly unfair. The number of Labour Lords who could attend this House is very much smaller than that on the Conservative side, and I challenge you to contradict—
Lord BYERS: Not "you"—"the noble Lord"!
Lord JACQUES:—that there is a higher proportion of Labour Peers who
926
can attend who in fact attend and vote than there is on the Conservative side.
Lord CARR of HADLEY: My Lords, I am not going into that sort of statistical argument with the noble Lord at this stage, but I think he fails to take account of a number of things. First, he fails to take account, for example, of the number of hereditary Peers (who are all said to be Tories, although I am not sure that this should necessarily he taken for granted) who have leave of absence from this House and who therefore never attend it. I think that is one very big matter which ought to be taken into account. I think the noble Lord ought also to look at the position of those of us who, like himself and myself, are Life Peers. I think he ought to look at the number of Life Peers who have been appointed on to the Benches of his Party, and consider what proportion of them attend as compared with the proportion of other Life Peers who attend. After all, his Party is the Government. This, we are told, is their major measure of this Session, and yet they appear unable sometimes even to have the thirty here that are required as the minimum quorum to get this first-priority Bill, so we are told, through this House. So I do not think the Labour Peers, or their friends in the other place, are in any position to say the sort of things they are saying.
My Lords, it is just because they are behaving like this, and because I fear they are wishing, as I say, to blow up this great emotional volcano and, in the dust and fog that that would create, to obscure the real issue, that I do not want to advise my noble friends to vote on this Amendment. I want the Government to be forced to consider some of the many other Amendments which we have produced to the substance of this Bill, which are very important and which certainly do not begin to raise any confrontation over the major political purposes of this Bill; and I do not want to give the Government the opportunity to get away from that consideration by creating this volcanic smokescreen which I believe they would do if I advised my noble friends to support this Amendment in the Lobby. I can, of course, only advise my noble friends what I think it is wise to do. That is why, with even greater reluctance than on previous occasions, I advise my noble friends not to

927
vote on this Amendment but to concentrate on our own Amendment, which is to postpone the vesting date for the aircraft industry until after the electorate of this country has had another chance to express its view upon it—and I have no doubt what that view will be.
5.7 pm.
Lord WIGODER: My Lords, noble Lords will all want to congratulate the noble Lord, Lord Carr of Hadley, on just running a brilliant race. It is a great pity that he collapsed shortly before reaching the tape. He put the case perfectly clearly in favour of this Amendment, and then ventured to put forward grounds, which I would suggest do not stand up to examination, for advising his noble friends on the Conservative Benches not to support it. Indeed, when the noble Lord, Lord Carr of Hadley, comes later in the Report stage of this Bill to move an Amendment to remove ship repairing from the Bill and no doubt to advise his noble friends on the Conservative Benches to support him, I venture to hope that nobody will then quote back at him the words he has just used. Because there is no difference in principle between removing the aircraft industry and removing the ship repairing industry from this Bill: there is a difference in degree, but there is no difference in principle.
My Lords, I do not want to go over again the grounds as to the merits of this Amendment and as to the demerits of the Government's proposals to nationalise the aircraft industry. At a time when no doubt almost all noble Lords express their faith in the mixed economy, at a time when it is recognised that some 60 per cent. of the country's resources are already tied up in the public sector, it is no doubt generally agreed that any move by the Government to extend the field of nationalisation is one where the case has to be proved by them up to the hilt. It has been clear—and we have all listened with the greatest care to the noble Lord, Lord Melchett, doing his best at the various stages of this Bill—that no overwhelming case has been made out to suggest that the efficiency of the aircraft industry can be increased by its being taken over by the State. In those circumstances, I say nothing more about the merits of the Amendment which is moved from the Liberal Benches.
928
I want to address myself to one other matter which is of great importance in the light of what the noble Lord, Lord Carr of Hadley, has just said; that is as to whether there is a case at this stage for voting the way we believe; whether there is a case for inviting the other place to reconsider the decision that they took on 29th July—and this will, indeed, be the very last opportunity that your Lordships' House will have to invite such reconsideration.
Might I suggest that there were two facts on 29th July that we ought not to forget. The first is that on that date sterling was worth 1.79 dollars; today it is worth 1.59 dollars. That means a totally different economic and financial situation against which this Bill must come to be considered. That means that those in the IMF and elsewhere who are seeking to be generous towards us might find themselves encouraged if the strain on the public resources which would be occasioned by this Bill were now to be gracefully abandoned by the Government. At the very least, that is a matter that the other place should be asked to reconsider in the light of quite different circumstances that exist today.
The other fact about the 29th July is simply this: on Third Reading in another place, the Government had a majority of three. There are three by-elections pending this Thursday. One of those is in a seat where the retiring Member was unable, for various reasons, to vote on the 29th July; the other two were Government seats. No one knows what will happen on Thursday, but if by any chance the Government lose either or both or all three of the seats on Thursday, it may well be that when this Amendment is reconsidered in the other place it will be reconsidered with a totally different result from the result that obtained last time and the result might be more in keeping with the up-to-date wishes of the electorate than prevailed last time.
I hope it is not an exaggeration to venture to suggest to noble Lords who sit on the Conservative Benches that if they follow the advice given them by the noble Lord, Lord Carr, this afternoon and abstain from voting, their sitting in their places might well be misinterpreted by members of the public as indicating that they themselves have no confidence in

929
their Party's electoral prospects on Thursday of this week.
Finally, I want to make it clear that the Liberals do not by this Amendment seek any confrontation with another place. All that we are seeking to do is to exercise the powers which were repeatedly given to us—repeatedly once again given to us by a Labour Government in 1949—of saying to the other place, "Have another look at this proposal in the light of the changed circumstances since it was last
considered. "It is our view that in the situation that exists today there is every reason for inviting the other place to do so and that we can do that with complete constitutional propriety.
5.13 p.m.
On Question, Whether the said Amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 62; Not-Contents, 65.

CONTENTS

Airedale, L.

Foot, L.

Norwich, V.

Aldenham, L.

Gainford, L.

Platt, L.

Amherst, E.

George-Brown, L.

Robbins, L.

Ampthill, L.

Gladwyn, L.

Romney, E.

Amulree, L.

Gore-Booth, L.

Ruthven of Freeland, Ly.

Avebury, L.

Granville of Eye, L.

Sackville, L.

Banks, L.

Gridley, L.

St. Davids, V.

Barrington, V.

Grimston of Westbury, L.

Saint Oswald, L.

Beaumont of Whitley, L.

Hampton, L.

Simon, V.

Belhaven and Stenton, L.

Harmar-Nicholls, L.

Slim, V.

Bethell, L.

Hylton-Foster, B.

Stamp, L.

Bledisloe, V.

Ilchester, E.

Strathcarron, L.

Boothby, L.

Inchyra, L.

Strathclyde, L.

Byers, L.

Kimberley, E. [Teller.]

Strathspey, L.

Clifford of Chudleigh, L.

Lloyd of Kilgerran, L.

Swaythling, L.

Clwyd, L.

Merrivale, L.

Tanlaw, L.

Cottesloe, L.

Mersey, V.

Vickers, B.

Cullen of Ashbourne, L.

Meston, L.

Wade, L. [Teller.]

De Freyne, L.

Monson, L.

Ward of North Tyneside, B

Emmet of Amberley, B.

Mottistone, L.

Wigoder, L.

Erskine of Rerrick, L.

Northchurch, B.

NOT-CONTENTS

Allen of Abbeydale, L.

Fulton, L.

Pannell, L.

Ardwick, L.

Gordon-Walker, L.

Pargiter, L.

Aylestone, L.

Greenwood of Rossendale, L.

Peart, L. (L. Privy Seal)

Birk, B.

Hale, L.

Philips, B.

Blyton, L.

Harris of Greenwich, L.

Popplewell, L.

Brockway, L.

Henderson, L.

Shinwell, L.

Bruce of Donington, L.

Jacques, L. [Teller.]

Slater, L.

Buckinghamshire, E,

Kirkhill, L.

Snow, L.

Castle, L.

Leatherland, L.

Soper, L.

Champion, L.

Llewelyn-Davies of Hastoe, B.

Stedman, B. [Teller.]

Chorley, L.

Lloyd of Hampstead, L.

Stewart of Alvechurch, B.

Collison, L.

Longford, E.

Stone, L.

Cooper of Stockton Heath, L.

Lovell-Davis, L.

Stow Hill, L.

Davies of Leek, L.

McCluskey, L.

Strabolgi, L.

Davies of Penrhys, L.

Maelor, L.

Taylor of Mansfield, L.

Delacourt-Smith of Alteryn, B.

Maybray-King, L.

Wallace of Coslany, L.

Donaldson of Kingsbridge, L.

Melchett, L.

Wells-Pestell, L.

Douglas of Barloch, L.

Morris of Grasmere, L.

Wigg, L.

Douglass of Cleveland, L.

Murray of Gravesend, L.

Winterbottom, L.

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

Noel-Buxton, L.

Wootton of Abinger, B

Evans of Hungershall, L.

Northfield, L.

Wynne-Jones, L.

Fisher of Rednal, B.

Oram, L.

Resolved in the negative, and Amendment disagreed to accordingly.

5.21 p.m.
Lord STRATHCONA and MOUNT ROYAL Lord STRATHCONA and MOUNT ROYAL moved Amendment No. 3:
Page 2, line 2, at end insert ("from among persons who appear to the Secretary of State to have wide experience of, and to have shown capacity in, the activities specified in section 2(1) or (3) below or in industry, technology, commercial or financial matters, administration or to the organisation of workers.").
The noble Lord said: My Lords, on behalf of my noble friend, I move Amendment No. 3. This is an Amendment which we discussed at the Committee stage. We are seeking in a number of these similar Amendments to take the line that if we have to have these Corporations, we want to ensure they get on and do their job as well as possible, although I accept that we may not always agree about the best way of achieving that.
At the Committee stage, I suggested that this was a common sense Amendment which referred back to many previous Statutes. We are simply saying here that those who are appointed to the boards of these Corporations ought to have some relevant experience. The noble Lord, Lord Kirkhill, gave us a rather strange reply. I thought it worth exploring whether, possibly in the light of further consideration, the Government may have seen the light. We know that unfortunately the noble Lord, Lord Kirkhill, has lost his voice so we understand that the Government are speaking through another medium now; I am sure it is equally authoritative.
The noble Lord said that all the appointments that had been made so far had been of people with the kind of experience that we suggest is relevant in this Amendment. But he did not say why he did not think that the Amendment was a good one. The noble Lord however said that the Amendment was so widely drafted that it gave complete discretion to the Secretary of State. Of course that has been said fairly frequently, and usually the Government mean that since it gives complete discretion to the Secretary of State, this is a good policy.
What we have been seeking to do is merely to confine slightly the Secretary of State's discretion. Our complaint has been—and I hope that this is not going to be another long night—that the Ministers find themselves confined by rather a
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narrow brief while claiming on the one hand that they need flexibility for some of what we regard as the potentially meddlesome powers the Minister gets. Yet, when we invite them to show some flexibility by accepting what they admit is in line with practice, unfortunately they find themselves confined by a narrow brief because it is not in their department. So I can fairly claim here that I am inviting the Government to show some flexibility in responding to this Amendment.
There are a number of perfectly good reasons why it makes sense, as the noble Lord conceded, that people should have the relevant experience before joining the Corporations. But it goes farther than that. We have read in the newspapers about the power of patronage of Governments, and Prime Ministers in particular. It is surely generally being conceded now that public corporations should not be used as pastures on which they can pension out their old political war horses. Having said that, I must be careful not to mention any names, but one can think of a number of Corporations to which this argument could be applied. In some cases I am making an oblique reference to Members of this House. We have seen the staffing of the British National Oil Corporation, which is not beyond criticism, and we have seen the staffing of Cable and Wireless, which is not beyond criticism, on rather the same lines as we are seeking to avoid in this Amendment. So I invite the Government to reconsider what I hope they will agree is a sensible Amendment which merely codifies what they agree they are doing and they intend to do.
My Lords, it has been called to my attention that there is a misprint in the Amendment. It should read: "Line 3" and not "Line 2". Having corrected that, I beg to move the Amendment.
5.27 p.m.
The Earl of LAUDERDALE: My Lords, we spent a lot of time on the first Amendment and so one does not want to spin out discussion on the third Amendment. But it is because there have been complaints of unwarranted delays by your Lordships' House that one must refute some of them before launching on this Amendment. The whole point is that we have deployed arguments and we have

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had some very bad answers. Those answers have not been to the credit of the Government, let alone to the credit of a Parliament. Indeed, they have been rich in their irrelevancy. Lest anyone should think that I am talking just to delay, I have looked back at the answers given on the Committee stage to this Amendment. If we are going now to have the same replies again then one can picture this stage dragging on and even the Third Reading being a very slow affair with still more Amendments.
The noble Lord, Lord Kirkhill, began very promisingly, as he always does, when he said on patronage, and Government patronage (and this is at col. 54 of Hansard of 11th October) that the overall level of political patronage is one to which any Government, no matter what their political complexion, must have considerable and careful regard. That is an unexceptionable sentiment. We thought that this was in the right direction. The noble Lord went on to say that it did not matter in that case because the people who had been appointed for service in the Aerospace Organising Committee were very desirable. But, my Lords, that argument, which really has no bearing on the first one, was set out at col. 55.
Then the noble Lord, Lord Kirkhill, said that in the future any Government must have regard to this matter. Indeed, in column 56 he said:
"This is a question which it falls to the Government of the day to assess for themselves."
So first of all it matters, and then it does not matter because he has done all right, and then it may be a matter in the future for other people. If I may say so, that is somewhat below the standard of logic which we have come to expect, and also to enjoy, from the noble Lord. I can understand that he was not feeling very comfortable with the argument, but it was the best he could do with the brief before him.
Then we were told in column 57, when the noble Lord went on to a further argument:
"The central point of the Government's position here is that the members of these boards will have to declare their interest in exactly the same way as, for example, a Member of Parliament."
That has nothing whatever to do with the argument. We are proposing that members should be appointed only when they
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have the right qualifications. The answer to that proposal seems to be, "Well, you see, they have to declare an interest." But that certainly does not mean to say that they have the right qualifications. I should also like to point out that the interests which it is now normal and proper for an MP to disclose are in no sense related to the kinds of professional qualifications which would be relevant to appointments of this kind. It is simply a non sequitur, and non sequiturs are not what we have come to expect, prior to this Bill, from the noble Lord, Lord Kirkhill.
The noble Lord said: "We have done all right: we have appointed very good people and their qualifications are excellent." But what about what may happen tomorrow? We all agree that all Governments are bad—at least I think they are, and I should like to see them abolished. I am sometimes called an anarchist because I should like to do away with Governments of either Party. All Governments are bad, all Governments are corrupt: they are corrupted by their power, and all Governments get more and more corrupted by more and more power. That applies to all Governments, irrespective of Party. Some of these people will die: we are not all immortal. They may even die premature deaths—and I should not be at all surprised—but when they come to be replaced at a time when perhaps another Government may be in office, whatever their colour, that Government will want to ensure that the people appointed are suited to the job they have to do.
The difficulty one faces now is that although the Government are preening themselves on a wide selection of people, they are not really above suspicion, because it is within very recent memory that the Government made a most appalling hash-up in another nationalised industry—and I understand that in our discussions on this Bill we can talk about mining or anything else that relates to nationalisation. What about the BNOC? We pleaded all through that weary Committee stage that oil men should be appointed to the Board and we pleaded for an oil man to be chairman. Did they find one? No. We appealed for an oil man to be managing director. Did they find one? No. They had not got any oil men. They did not appoint a single oil

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man. The nearest they got to it was to appoint a man who was county clerk of the Shetland Islands County Council. He was considered to be "an oil man" because he never saw one oil company alone but always saw them two at a time and therefore was never tripped up.
The example of British National Oil Corporation is so terrifying because it shows what this Government, who are behaving quite well in their current appointments, can do when they are in a corner or lose their heads or when they are guided by the noble Lord, Lord Balogh, who is a friend of mine. So to insert into this Bill a requirement that suitably qualified persons should be appointed is not really a very harsh requirement. We are not asking the Government for any great level of goodness but merely for ordinary prudence. The case was put very well by the noble Lord, Lord Somers, who is not in his place at the moment, towards the end of the debate during the Committee stage when he said these words:
"Can the noble Lord tell me one thing? … The Government have introduced this Bill, which is apparently very close to their hearts. Why is it that they seem so unwilling to have it really well done?"
That question was never answered. All right: it is superfluous to put in this qualification at this time for these appointments, but surely it is prudent for the future—for the Government's own performance in other respects underlines the objection, that, as I have said, they have not answered that very simple question put by the noble Lord, Lord Somers. In other words, if they want this Bill so much, why not make it as good as possible instead of as bad as possible?
Lord ORR-EWING: My Lords, what is surprising is that these words, as put down in the Amendment, have not been accepted previously. I would not have thought they were very controversial. Indeed, in all previous nationalisation Bills they have been there. So one must ask oneself why have they been left out of this Bill. I wonder whether it is because this board of governors, if I may use that term, is there to undertake a hatchet job". The Secretary of State said in another place that there would have to be considerable reductions in personnel.
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It can be argued that if you appointed people who know the industry, have a feeling for it and have grown up with it, they may be greatly affected and unable to do the kind of "hatchet job" that the Government want done. Perhaps the bluntest axe of all was the Geddes axe; but when I look back on it I must say one understands that once one starts discriminating about which part should or should not be closed down one gets into such difficulties with politics, economics and pressure groups that perhaps it is better in the end just to take 10 per cent. across the board. And you are more likely to get that result if people are used who know nothing about the industry and feel no affiliation to any of the firms concerned. Of course, it may be because one wants ex-politicians in there, and one must confess that some of the recent appointments have been somewhat surprising.
I shall not mention anyone from this House: my noble friend has just referred to one beloved debater from the other side who unfortunately is not seen here so much now that he is deputy chairman of BNOC. But the more recent case of Mr. Edward Short was a rather surprising one, because Cable and Wireless is a fairly technical and international undertaking, and it was rather surprising when Mr. Short left another place at very short notice to become chairman of that outfit. One remembers also a number of questions raised in another place by, I think, Philip Holland and David Price, drawing attention to the fact that some 188 powers of appointment are held by the Prime Minister of the day. He has those at his beck and call. That power of appointment is getting so large that I would have preferred to see some criteria set down in this Bill which would at least make sure that those who were appointed knew something about the tasks they had to undertake, which are highly technical, particularly in the aerospace field, and which are highly sophisticated, involving a lot of electronics, avionics and the like. I should prefer to see criteria written down for such appointments, and particularly in this case, because this is probably the most highly sophisticated industry of all of those which have been proposed for legislation.
I am rather tempted to follow the non sequitur referred to my noble friend

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about the Royal Commission, because I wanted to be a member of the Royal Commission which considered members' interests very thoroughly. I see the noble Lord, Lord Allen, sitting in his place and as I believe we are going to discuss the registration of members' interests—I refer to members of public bodies and of everything else—at the beginning of December, I shall not seek to take up more time by referring to that subject now. The registration of public interests is very thoroughly dealt with, together with the question of who is to be concerned in local authorities, nationalised industries and the like. I think the matter is probably better dealt with there than in any other public document I have seen.
I hope the noble Lord will not shut his mind to accepting what is after all a very reasonable Amendment, which tries to ensure that people who have a knowledge of the business and of industry, and particularly of aerospace, shipbuilding, and, if possible, of marine engine building, should bring that knowledge to the administration of these very important Corporations.
Lord TREFGARNE: My Lords, like my noble friend Lord Lauderdale I am worried about what will happen when the present appointments come up for renewal. I am quite prepared to accept that those who have been appointed so far are splendid people. The appointment of the noble Lord, Lord Beswick, was criticised in some quarters, though not by me. I think he was quite the best person among the Labour Party who could be found for the job. But when these people retire they will have to be replaced, and there will be no other aircraft industry in the country from which they can be recruited. They will have to be either people from within the industry, the nationalised Corporation itself, or people from outside, who must perforce have no experience of the industry for which they are being recruited. This is one of the serious problems that apply to all monopolistic industries, not only nationalised monopolies but other monopolies as well. For that reason I think that the Amendment put forward by my noble friend will serve to concentrate the mind of the Secretary of State when he comes to make these appointments and will be very helpful.
Viscount SIMON: My Lords, I support this Amendment. I particularly noted what the noble Earl, Lord Lauderdale, said that as this is common form in nationalisation Bills; it is rather distinctive if it is left out. People want to ask why it is left out. I hope that when the noble Lord comes to reply, if he cannot give the Amendment to the noble Lord, Lord Strathcona, he will give us some help and guidance on that. May I ask Lord Strathcona when he replies to the debate if he will tell us what the word "to" in the last line means. It looks to me as if it ought to be "in".
The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey): My Lords, on this occasion the Government are said by the noble Lord, Lord Strathcona and Mount Royal, to be speaking through a different medium and I hope t,) make a spirited reply—but that word has rather spiritualist overtones. May I turn to the points that have been made. Of course it is conceded that there are arguments both ways in relation to this matter but it is wrong to say, as the noble Lord, Lord Orr-Ewing, said, that these words which are suggested to be put in here have been contained in all previous nationalisation Bills. They are not to be found in other Statutes which are a precedent here, for example, the Civil Aviation Act 1971, the Post Office Act 1969 or the Industry Act 1975, so there are precedents both ways.
If one looks at the Amendment one finds that the criteria there set out are so widely drafted that it would be virtually impossible to appoint somebody who did not fulfil one or other of the qualifications. I tried to think who would be excluded and I came to the conclusion that it might just be lawyers at whom this Amendment was aimed, but he would be a poor lawyer indeed who had no experience in commercial or financial matters so I assumed that it must he clergymen. I cannot imagine that that is the real purpose of the Amendment. The Government's point is that rather than accept these criteria, which are absolutely wide and would allow anyone to be appointed, it is better to be honest and to leave the clause in its present terms.
There is no disagreement here as to the proper purpose. It is desirable and necessary to get the best man for the job, and we would submit that noble Lords opposite are deceiving themselves if they

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consider that the proposed Amendment would help to ensure the appointment of better men. It has been suggested that this Amendment does not take matters very far and that it would be possible for the Government to accept it. May I remind noble Lords that when the Industry Act was being debated last year there was endless debate about qualifications and criteria, and in the end it was decided that the best way out was to remove them altogether. I do not think it makes for good legislation to lurch first one way, then another, according to the vagaries of debate on successive Bills. I hope therefore that noble Lords will not think me perverse or obstinate in resisting this Amendment. The reason for doing so is an honest and non-Party one and I hope that noble Lords will not support this Amendment.
Lord STRATHCONA and MOUNT ROYAL: My Lords, as the noble and learned Lord promised, he has indeed made a very spirited reply. At least we are in agreement with what we are trying to do. I am disappointed that he does not feel able to say, "Yes, we see what you are trying to do, though we think you are being rather verbose in your attempts to do it "—I hope not in the moving of it. Incidentally, following the remarks of the noble Viscount, Lord Simon, I would be inclined to agree that the changing of one word in the drafting of our Amendment would have improved it. However, since we are not about to insist on this Amendment we can safely leave to those who are more interested in the niceties than we are, the question of whether "in" or "to" in the last line would be better. I still believe that there would be a case for saying that we should accept some degree of restriction on the kind of people we appoint. The noble Lord did not in any way attempt to deal with the problem of patronage. It may well be that this is not the moment to deal with it.
The only thing I should like to say on that point is that throughout this Bill we have gone rather further than in previous cases in the way in which a nationalised corporation can be administered from the centre. When we find that here we are resisting any degree of restriction on the kind of people who are going to be asked to carry out these onerous tasks inevitably
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one feels troubled. I think the noble Lord himself agreed that there was a case to answer. If I may say so, he answered in the sort of way that I would have expected it to be answered by someone who had taken the trouble to think about it. I remain unconvinced, and I feel that this is true of most noble Lords behind me, but the fact remains that we have a long way to go tonight and perhaps the proper thing to do is to consider what the noble Lord has said, to thank him for his reply and, whether or not it is properly phrased, to beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
5.50 p.m.
Earl FERRERS Earl FERRERS moved Amendment No. 12:
Page 3, line 11, leave out subsection (9) and insert—
("(9) Each Corporation shall maintain a register of interests disclosed pursuant to regulations made under subsection (3) (a) above.").
The noble Earl said: My Lords, we went through this Amendment at the Committee stage and we wish to put it down again because I still do not feel entirely happy with the situation. I am also in some confusion over the reply which the noble Lord, Lord Kirkhill, gave me. The object of this Amendment is to remove from the Bill the provisions which require members of the Corporation to disclose their interests in the same way as do Members of another place. May I say at the outset that I think it is wholly right that there should be disclosure of interests. It is quite right that people should know of the interests of folk who serve on public bodies, in the same way as people who serve on private companies have to disclose their interests, and records of them are kept by the companies. Everyone can inspect those records on application, or they can go to Companies House and inspect them there on application. My view is that the same degree of disclosure should apply to people serving on these Corporations.
What I do not see, first, is the reason why the Secretary of State should be required to keep a register of interests, and why it should be he who has to see that the interests concerned are published in the annual report. I should have thought the right course was for a Corporation to

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keep a register of the interests. It is entirely right that the Secretary of State should be seized of the information, that he should have access to it, and that lie should know of the interests of people whom he proposes to select for membership of a Corporation. But I do not believe it is right that he should keep the register. Nor do I believe it is right that these interests should be published, because it may well be that a member of a Corporation has directorships in four companies, he may be the managing director of a fifth and chairman of a sixth. I do not see why it is necessary to publish that information, provided that it is available. One of the drawbacks of publishing it may be that potential candidates for membership of a Corporation will be reluctant to come along. I should like to emphasise, again, that, in my view, this is not a curtailment of the disclosure of interests, but a curtailment of the publication of interests, because I believe that such publication would be wrong.
Secondly, I do not see why the interests which it is suggested should be published should be synonymous with those interests which Members of the House of Commons are required to produce. I cannot see the correlation between them. Disclosure of interests of any type should be tailored to the people concerned, and the influence of Members of the House of Commons, and their involvement in public affairs of all kinds, call for a totally different requirement from that of a person in a nationalised Corporation. As my noble friend Lord Hawke asked at the Committee stage: What happens when, in 30 or 40 years' time, the rules of the House of Commons as regards the disclosure of interests are altered? Why should the fact that the House of Commons alters its requirement about disclosing interests automatically affect the members of the British Aerospace Corporation or of British Shipbuilders? I hope that the noble Lord will feel it is reasonable that there should be disclosure of interests, but not in quite the way suggested in the Bill.
I would draw your Lordships' attention to the fact that under subsection (3)(a) the Secretary of State may by regulations,
"… make provision with respect to the disclosure by members of the Corporation of any interest … in contracts"
which a member may have. It is wholly
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right that members of a Corporation who have interests in other companies should disclose them when contracts are made, but I hope that the noble Lord will feel kindly towards this Amendment.
Unfortunately, I have not given the noble Lord, Lord McCluskey, advance warning, but 1 should be grateful if he could clarify—and I realise that he may not be able to do so—the answer which the noble Lord, Lord Kirkhill, gave me because the more I read the report of what he recently said, the more complicated it becomes. What he said in relation to a similar Amendment—
Lord MELCHETT: My Lords, if the noble Earl is going to read from Hansard, can he tell us the column number?
Earl FERRERS: It is in col. 133 of Monday, 11th October. At the top of that column, the noble Lord said:
"This Amendment could create practical difficulties because, as the noble Earl, Lord Ferrers, said, Clause 18"—
which is now Clause 19—
"requires it to be annexed to the annual report. It might, for instance, be possible to discover from the information disclosed under the suggested provisions in the annual report, both the nature of projects considered by the Corporation as well as the names of companies which had failed to land contracts with the Corporation. I do not believe that noble Lords opposite would really support a system which could, unintentionally, reveal (or at least hint at) decisions which would normally be commercially confidential and where disclosure could be damaging to the interests involved."—[Official Report.]
If that is the effect of these Amendments, I can assure the noble Lord that it is not my desire to expand the nature of the disclosure, and I entirely accept that there are items which have to be, and are, commercially confidential and which should not be disclosed. But I do not see that it is necessary for the requirements of the House of Commons, in regard to the disclosure of interests, to be the same as those for members of these two Corporations. Nor do I see that it is necessary for the interests in other companies to be detailed in the annual report, although it is quite right that records of them should be held by the Corporations. My Lords, I beg to move.
5.57 p.m.
Lord HAWKE: My Lords, there appear to me to be three combined types of interest set out in the Bill in subsections

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(3)(a) and (9). First, there is the ordinary interest in contracts. That is a perfectly simple matter and is covered at a board meeting by a person saying "I have an interest. I am not going to vote on this", and that is recorded in the minutes. Paragraph (a) of subsection (3) goes on to say that there should be disclosure of:
"… any other matter whatsoever which falls to be considered by the Corporation".
Those words are extremely difficult to interpret in practice, because I imagine that a Corporation will have a memorandum of association which is very wide, just like an ordinary company, and will be allowed to do almost everything. It looks to me as if the members of a Corporation will have to disclose almost everything they can conceivably think of.
On the other hand, if it is desired that members shall make a full disclosure of all their financial interests, as in subsection (9), I cannot see that the rules of the House of Commons in future years are particularly relevant. If it is desired that they should conform to those rules today, then think that subsection (9) should say so; in other words, "if they were Members of the Commons in 1976", or words to that effect. I should have thought that subsection (9) was entirely unnecessary, and that the whole situation was covered by the two types of interest set out in paragraph (a) of subsection (3), though I admit that the second part of that paragraph will make it extraordinarily difficult for any man to conform.
The Earl of ONSLOW: My Lords, we must be extremely careful here, in that we on this side of the House must not appear to be advocating any form of cover-up. I am absolutely convinced that we are not. The reason that I say this is that there are now instances of corruption which would have been totally and completely undreamed of 10 years ago. I think I am right in saying that then certain people in the National Coal Board bought shares in a company which had had a big contract awarded to it. That cannot be right. There has been widespread corruption in local government and in planning offices and there have been hints of corruption in, of all places, the Bank of England. Today we hear that there is a case of corruption in British Leyland. There have even been hints of corruption in
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another place. When I was growing up I just did not believe that these were the kind of' things which happened in England. This may have been a very naive or just a plain ignorant view, but—
Baroness SEEAR: My Lords, is it not true that these are only allegations of corruption, not corruptions which have been established?
The Earl of ONSLOW: My Lords, I am very happy to be corrected by the noble Baroness. If I have given the wrong impression I will certainly withdraw what I have said and insert the word, "allegations". I stand corrected.
Lord STRABOLGI: My Lords, may I also remind the noble Earl that it is not proper for him to mention the other place.
Baroness SEEAR: Why not?
The Earl of ONSLOW: Why not, my Lords? These allegations have been made. We all know that 15 or 20 years ago this kind of thing was totally undreamed of in this country.
Lord WIGG: My Lords, surely one of the troubles is that the noble Earl is rather young. Has the noble Earl forgotten the Marconi scandal?
The Earl of ONSLOW: My Lords, if I may be so bold as to say so, that came from the Liberal Party, as did the "flogging" of Peerages, and it is a slightly different kind of argument. However, there have been allegations of corruption and we must be very careful not to give any hint of a cover-up. The point I am trying to make is that the Parliamentary way is not the right way to do it. One can certainly say that the demands on the honesty of those who run nationalised corporations should, if anything, be higher than the demands on the people who run private enterprise. That is because the people who run nationalised corporations are servants of the State. Noble Lords should not think that in this Amendment we are arguing for any form of cover-up. All we are saying is that the method of doing it is wrong.
Lord ORR-EWING: My Lords, I am afraid that I have to mention the House of Commons and I must ask the noble Lord,

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Lord Strabolgi, why he thinks that it is wrong to mention it. The Bill says that members of the Corporations are to register their interests, just as they would if they were in the House of Commons. I cannot see how we can even discuss this matter if we are not to mention the House of Commons. Can the noble Lord explain that point to us?
Lord STRABOLGI: My Lords, the Standing Order says that it is undesirable that any Member of the House of Commons should be mentioned by name or otherwise identified for the purpose of criticism of a personal nature. I realise that the noble Earl did not mention anybody by name but 1 think I am right in saying that it is usually undesirable that criticism of this kind should be levelled at another place. If, however, I went farther than the Standing Order, then I apologise to the noble Earl.
Baroness PHILLIPS: My Lords, is there a Standing Order that the Members of the other place, who seem constantly to be calling us rather harsh names, should not do so?
Lord ORR-EWING: My Lords, the noble Baroness does very well to draw attention to the fact that it is a one-way, not a two-way movement at present! I have in my hand a copy of the register of Members' interests in the House of Commons. In view of what has been said, I will not refer to any particular Member but I wonder whether the criterion of "as mentioned in the House of Commons register of Members' interests" is a good one, because there will be changes. This was the first cockshy. It may be that it is too general, or it may be that it is too detailed. Without mentioning the name, it says that from 10th to 14th May, 1976, this Member visited Los Angeles as a guest of British Airways. I do not know whether that will get one very far. It may be that it is too detailed. It says that he is the chairman and managing director of a company bearing his name. That is another interest. I should not have thought that a register of interests is a good criterion.
My second point is that it should be done for the individual companies. Under Schedule 2, 39 individual companies will be nationalised. It seems to me that, as
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with other companies, you declare your other directorships. This declaration is then put into the company reports and is registered at Companies House, and anybody who wishes to go there can see it for himself. Therefore I do not quite see why the Secretary of State should have a separate list for himself, nor do I see why he should publish it; it can always be reached by those who have doubts about it. That is why I wonder, with other of my noble friends, whether we have the right formula now and whether we ought not to amend it along the lines which we have suggested.
Lord WIGG: My Lords, I will not keep the House for more than a moment, nor will I enter into the merits of the Amendment. When I interrupted the noble Earl, Lord Onslow, to mention the Marconi case, it was not in my mind to make a political point. I have been in public life for half a century and 1 do not believe that standards today are any worse than they were at that time. Things have always happened and will continue to happen in the kind of world in which we live. However, the organs of publicity here are much more inquiring. Perhaps they have different standards. However, if one looks at the political life of all Parties in this country, I do not believe that many people whose life work starts in the House of Commons and which even brings them to this place get very rich out of it. At a time when it is a hobby—perhaps a hobby which is being overplayed by the Party opposite—to denigrate everything in our national life in the hope of scoring a few political points, I do not want to play that particular game.
6.7 p.m.
The Earl of LAUDERDALE: My Lords, we can all see the general purpose that the Government have in mind in this part of the Bill. The language is puzzling at points, but the general purpose is clear enough to us all. There is to be a body which will be controlling and purchasing at the same time and it is very proper that all members of the Board who might have an interest in any of the transactions should dispose of it. Nobody would challenge that. We are for maximum rather than minimum disclosure, particularly when it comes to contracts. However, what is obscure is that we have

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not had an answer to the question why the disclosure should be analogous in any way to the disclosures made by Members of Parliament whose disclosures serve a particular purpose in a particular context. It seems to me that this is irrelevant.
Perhaps I may refer to the answer of the noble Lord, Lord Kirkhill, at the bottom of col. 132 on 11th October, for it was curiously obtuse. I do not expect the noble Lord, Lord Kirkhill, to be obtuse, any more than I expect the noble Lord, Lord McCluskey, to be obtuse. However, now that the text is before the noble Lord, Lord Melchett, I will draw his attention to the penultimate paragraph of col. 132 where the noble Lord, Lord Kirkhill, said:
"The classifications under which they may be expected to notify their interests will be broadly the same as for the Members of another place—particularly share holdings if these exceed 1 per cent. of the issued share capital, directorships, paid overseas trips, payments from abroad or details of land or property held. The Amendment"—
this was the same Amendment as we are discussing now and I am afraid we may discuss it again at Third Reading if we do not get a better reply tonight—
"would reduce the range of financial interests which would have to be disclosed by members of the Corporations solely to those which might be considered directly or indirectly related to the work of the Corporations".—[Official Report, 11/10/76; col. 132.]
What is the matter with that?
If we are really to have a list of all possible interests one would get the most extraordinary and irrelevant interests. I know that there is no danger of I myself ever being appointed to the Aerospace Board, but supposing I were, I should be obliged to disclose (among other things) the following interests: I am a director of a firm of developers; I am the director—indeed the chairman—of a firm that wants to promote a private hospital; I am a director of a firm concerned with the development of natural resources in the Highlands of Scotland; I am the director of a firm involved in the sale of motor cars; I am the director of a firm concerned with underwater structures for the oil industry; I am the director of one or two charities and I am the director of a company that sells linen goods. What relevance could those possibly have to the British Aerospace Corporation? Yet
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if a member of the Aerospace Corporation is to disclose the same sort of interests as a Member of Parliament he would have to disclose such haphazard interests as those.
It is not that anyone does not wish to declare them; I have declared them now—in fact I have missed out one; I am the chairman of a company interested in developing some land opposite Felixstowe Docks, an interest which I declared before the vote the other day—but such interests would not be in the slightest degree relevant to the operations of the Corporation. Somebody's appointment might be proposed and his interests might be as diverse as my own. For all those interests to he declared publicly in the annual report is just sheer nonsense. It would be taking up space in the annual report. Anyone taking up a directorship lists the directorships he already holds and that is on record at Companies House so that there can never be any doubt as to any conflict of interest should one arise. That is one thing, but to list all this irrelevant nonsense in the annual report for the benefit of the public does not make any sense.
We are not saying that matters which are relevant should not be disclosed. On the contrary, we are saying that relevant matters should be disclosed and we are also saying that we should get the best people we can for the Corporation. This kind of thing could very well discourage them. I do not think there is a matter of high principle here. As noble Lords know very well, we are trying to make this a better Bill, if we cannot kill it, and it is in the interests of trying to make it a better Bill that I stress this point.
Baroness WARD of NORTH TYNESIDE: My Lords, I have listened to all the arguments as to how this subsection should be put into the Bill and, although I do not really mind how it is done, I have been interested to note that not a single speaker has said that the disclosure of interest may in fact be a protection to individual members, whether they are Members of another place or of your Lordships' House. The noble Lord, Lord Wigg, said how long he had been in public life but in fact he has not been in public life quite as long as I have, and when one is in public life naturally some people like you and some dislike you and a great

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many things are said which are quite untrue. I think it is important that members of whatever Party should have a protection of this sort because of the kind of things that can be said about what individuals own or do not own or the companies with which they are connected.
Viscount SIMON: My Lords, like my noble friends I feel generally in sympathy with the Government in regard to the retention of subsection (9) and in resisting this Amendment. I believe that the members of public boards of this kind should have a higher degree of interest to declare than people who are on the ordinary boards of companies. I have had the opportunity of looking at the register of interests of Members of another place and, as the noble Earl, Lord Lauderdale, said, it is very interesting and rather long, but my real objection to using it is that if we put it in the Statute that the interests declared shall be in accordance with the Resolutions of the House of Commons—which is what we say here—then surely we are legislating in such a way that the legislation can be amended by the action of one House without it coming to the other House at all, and I question whether that is a constitutional provision. I should have thought the case would be met by spelling out what it is that Members of the House of Commons are required to declare, and then if the other place decides to amend its Resolution it might be just a question of having a brief amendment to the Act if it was thought necessary.
Turning to the Amendment, I cannot help feeling that it has somehow gone a little astray. It refers to the Corporation maintaining a register of interests disclosed pursuant to subsection (3): those are the interests to be declared at a board meeting when a member of the board says, "I declare my interest in this contract that we are discussing", and those are just the interests which certainly ought not to be published. So what is the point of the Corporation maintaining a register. The facts should be recorded in the minute book and that is the end of it. I do not see much point in maintaining a register which in any case nobody can see. If anybody on the board wants to see the interests concerned they can look back through the minutes, so with great respect to noble Lords on my left it seems to me
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that in any case the Amendment is misconceived.
Lord McCLUSKEY: My Lords, first I should like to say that I am grateful for the support which the noble Viscount, Lord Simon, has just given me. That is entirely appropriate as this clause was inserted in response to a suggest, on made by the Liberal Party in another place. I am also indebted to the noble Baroness, Lady Ward of North Tyneside for the helpful comment that she made, because we want to get this clause right. I am grateful, too, to the noble Earl, Lord Ferrers, because at least we are all agreed that there should be some disclosure.
Dealing with the particular points which have been raised, the first one of substance is, why should one make the comparison with Members of Parliament? We all believe that it is fair and reasonable that particulars of relevant financial interests (whatever that may mean) should be available for the public record. I do not think that for public servants it is an undue invasion of privacy to require this to be done. So the question remains: Is it right to look at the requirements laid down for Members of another place? We accept, of course, that the character of the work may be different, and to some extent the interests may be different, but the essence of the matter is that the public concern is the same.
If one looks at the publication which contains the requirements of the register in another place (and the noble Lord, Lord Orr-Ewing, was the first speaker to refer to this) one will see the contents and on page iii paragraph 4—this is a general point which would apply to these Corporations as well—it says:
"But the member"
that is, the Member of the House of Commons—
"is also a private individual and entitled to a proper degree of privacy. For that reason, the House placed limits on the extent of disclosure required. The Member has to disclose the source of any remuneration or benefits he may receive, but not the amount. So far as land and property is concerned, it is the general nature of the interest rather than a detailed list of holdings that is required",
and so on. The point made here, which I would repeat, is that a provision of this kind requires a Member in another place, or a member of the board, to declare his general interest rather than his particular

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interest. I will come back to that in a moment when I deal with the point raised by the noble Earl, Lord Ferrers, in relation to the difficulty spoken of by the noble Lord, Lord Kirkhill, on Committee stage.
I invite noble Lords opposite to look at paragraph 8 of this same document, where they will find that the matters required to be disclosed are matters it is perfectly proper should be disclosed—remunerated directorships of companies, remunerated terms of office, remunerated trades, professions or vocations, the names of clients where the interest referred to included personal contacts by the Member, financial sponsorships as a Parliamentary candidate, overseas visits where the cost of any such visit has not been wholly borne by the Member, and so on. These are all matters which are regarded by the public as benefits conferred on the member of the Board, and public concern about corruption requires to be met.
I turn, then, from that matter to the next question, which is the role of the Secretary of State. In my submission it is right that the Secretary of State should know of an interest immediately it is acquired. As the noble Earl, Lord Ferrers, will appreciate, if the Secretary of State does not know of it immediately it is acquired, he will not discover it necessarily until the publication of the annual report. There could be quite a long gap, and that gap could give rise to concern. The most effective way of ensuring this is to specify that the Secretary of State himself should maintain the register.
The noble Earl also referred to col. 133 of the Official Report, where my noble friend Lord Kirkhill explained the difficulty that could arise if one accepted the Amendment now before the House. The Amendment would create this difficulty, if I could try to explain it in my own words. Under Clause 19(5) it is required to be annexed to the annual report. It might be possible to discover from the information disclosed in the annual report under the suggested provisions both the nature of the projects considered by the corporation and the names of the companies which had failed to land contracts with the Corporation, or who might still be negotiating with them. Let me put it this way. If one takes the
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Amendment which is proposed and a member of the Board is required to register an interest which he has in a contract or in a matter in which the Corporation is interested, he may have an interest in company A and the Corporation is negotiating with companies A, B, C and D. By looking at the register and finding that between the last annual report and the present one he has disclosed an interest in company A, one can determine that the Corporation is in fact negotiating with company A. That may be a matter which is confidential.
Your Lordships may think that in fact the spirit of that Amendment, therefore, and the result of it, are not really consistent with the spirit of the Amendment we are coming to later, No. 58, to Clause 6(5). I would draw this distinction—that the requirement contained in the Amendment requires persons to be quite specific about their interests, whereas the clause as it now stands requires a general disclosure, and therefore does not give rise to this particular difficulty.
The noble Viscount, Lord Simon, made one criticism, that the requirement can be altered by the other House without any control by this House. But 1 think that it is hardly unconstitutional to put into a Statute some later possible alteration in the law by delegated legislation or some other form of delegation. I ask your Lordships not to consider that point as one that is decisive, and in the circumstances I invite noble Lords to withdraw the Amendment.
6.27 p.m.
Earl FERRERS: My Lords, I am grateful to the noble and learned Lord, Lord McCluskey, for having explained his reservations over this Amendment, in particular for having explained the part about which I was worried after the explanation of the noble Lord, Lord Kirkhill. On hearing him, I think that our Amendment is probably deficient in this respect in so far as it might enable people to disclose things which properly should he kept as of a confidential nature. But I am hound to say that I did not find it convincing that the general interests of members of the Corporation nevertheless should have to be disclosed in the annual report. Here, there is nothing between us over the general items of disclosing

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interests. Of course they should be disclosed. It is merely a question of whether they should be published.
The description of my noble friend Lord Lauderdale of his own particular directorships—and one can imagine all the others of other potential members of the Corporation—was fairly graphic of the kind of material that would "gum up" an annual report. I should have thought it was not necessarily appropriate. Nor am I still convinced that it is appropriate to subject members of the Corporation to the same type of disclosure as Members of another place, because, after all, they have different responsibilities. It is rather like saying that cheese requires to be mellowed for six months; therefore, so also does butter. The only common denominator is the fact that they are both of milk.
Lord McCLUSKEY: My Lords, if the noble Earl, Lord Ferrers, will allow me to intervene, owing to my inexperience I failed to draw the attention of noble Lords to the final three words of Clause 1(9)—"with appropriate modifications". So it is not exactly the same information which may be required from a member of the Board as may be required from a Member of the other place.
Earl FERRERS: My Lords, if I may say so, that merely serves to complicate the issue even further. Because what we have here is the fact that it is the requirement of the Members of the House of Commons—and then we come back to the point referred to by my noble friend, Lord Carr of Hadley, that the Secretary of State has huge powers. Apparently he has now powers to alter not only what the House of Commons says is for their Members, but he can alter it from the point of view of the two Corporations. What the Members of the House of Commons elect to do about this disclosure of interest is what I might describe as an in-House arrangement. They have decided what to do about their own membership.
The point raised by the noble Viscount, Lord Simon, who regrettably has just vanished, was a very valid one that here we arc passing a Bill saying what interests should be disclosed. If in fact another place alters their arrangements in the next 10, 20 or 30 years that alteration will come
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about with the approval of only one House, not two. The noble and learned Lord, Lord McCluskey, says, "Let's not worry too much about that", but 1 think we ought to worry about that. What is more worrying is that he then says, "Oh yes, we can have what the House of Commons say they require, but then, of course, the Secretary of State can alter that on his own just by regulation". I ask the noble and learned Lord to be kind enough to think about this; further, because there really is not what one might call partisan feeling over this at all. It is merely to try to get the correct thing put into an Act of Parliament. I cannot believe that it is right to put into an Act of Parliament that people should disclose interests which the House of Commons happen to disclose and which can be altered by the House of Commons altering their own in-House arrangements, and still less that it should be able to be altered by the Secretary of State without the approval of both Houses.
Lord McCLUSKEY: My Lords, may I respond to that. This has been looked at very carefully. It has been decided hitherto that it is not intended to change the matter. Perhaps I may be allowed to make this reply.
Earl FERRERS: My Lords, I invited the noble and learned Lord to break the rules and I am sorry for having done so. He has made it crystal clear that he has no intention of thinking about this again. I do not think it is correct that we should divide on this, and so I beg leave to withdraw the Amendment.
Lord HARMAR-NICHOLLS: My Lords, this is not a matter of realness, but I should have thought that for sheer neatness' sake one ought to know what "appropriate modifications" means. It is not common sense to expect people to move in the dark. But there is more than neatness in this. The House of Commons do not know what their requirement is. This is "appropriate modifications" of something that is already very hazy. Even in relation to the declaration of interests in the House of Commons certain people are not adhereing to it, and they do not know whetter they are wrong, whether they are infringing rules, or what happens. The whole thing is hazy.

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What makes this very important is that we are living in a time when people's reputations and standing are judged by newspaper headlines, by all sorts of comment mixed up with corruption. People must know where they stand, otherwise you are going to drive from public life people who ought to be contributing to the way these things are done. To leave it as hazy as this is not fair; innocent people, inadvertently, because of sloppy language, are put in a position where they can be pilloried and have headlines made about them in two or three years' time because they did not adhere to some declaration, some register. I believe that this has to be spelled out in terms so that people can understand what they are committing themselves to; otherwise this country will be denuded of the talents of people who ought to be taking part in the general debate that goes on over what is supposed to be the new way of life. I hope that this will be looked at from the wider point of view and not just the narrow one of what three or four actual words mean.
Lord CARR of HADLEY: My Lords, I apologise to your Lordships in that I have not heard the whole of the debate on this Amendment. I have, however, heard quite enough to know that the Amendment we have put down is not apt in itself; I fully agree with my noble friend, Lord Ferrers about that. I would hope, however, that the Government will give this some thought. I think that disclosure is of the greatest importance; I have felt so for a long time, and so have most people. In the atmosphere in which we are living at the moment, when, unfortunately, increasing suspicion is resting on people in public life—and I think those who work for nationalised corporations nowadays come into that category—full disclosure is of great importance.
I hope that the Government will realise that there is no difference between us about the need for full disclosure in these matters, but there really is a doubt in our minds, and I do not think it is an unreasonable doubt. This describes what is needed in terms of what happens at the moment in the House of Commons, which, as my noble friend Lord Harmar-Nicholls said, is not really understood properly by the Members of the other place. I must
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confirm, as a fairly recent Member of the other place, that I was far from sure what it was I should put in the register; I had to seek advice about it and hope that I got it right in the end.
I think it is unsatisfactory to write into this Statute a reference to a Resolution of the other place which was designed for Members of the other place rather than for members of a nationalised corporation, and which can be changed by Members of the other place at any time merely by Resolution. What is designed, and quite properly designed, to meet their needs and requirements as Members of Parliament may not be appropriate for members of a corporation.
In pressing this point, as we have, on Report stage as well as Committee stage, I repeat that it is not because we are trying to have less disclosure; it is because we genuinely think that defining disclosure by reference to this rather indeterminate Resolution of the other place is not the right way to do it. T know that it is late in the progress of the Bill, but I believe that if Ministers turned their minds to it they could still introduce other yardsticks which would achieve the purpose which I again assure Ministers we all want to see, but do it in a way more appropriate to an Act of Parliament.
Baroness PHILLIPS: My Lords, the noble Lord, Lord Harmar-Nicholls, raised the point about Members of the other place not understanding what disclosure is about. I feel sure that he, like me, must have listened this afternoon to some of the debate in the other place. Certainly one Member—I suppose we must not mention names—was very clear in his mind; he thought it was in order that you could have only one job to one person. Listening to the noble Earl's recitation of his activities, I should not have thought that anybody with that amount of activity had the time to be a member of a corporation. Certainly if they came before me, as an employer, I would say, "You have enough to do and you cannot be expected to give your attention to it". We have heard about corruption, but this is another angle which I do not think has been brought in. I take the point that it is difficult to know what to disclose, but if in doubt put it all in and let the kernel be taken out of that.
Lord SHINWELL: My Lords, I am inclined to support the view which has been expressed by the Opposition. It seems to me that the position of a member of one of the corporations is quite different from the position of a Member of the House of Commons. A Member of the House of Commons is responsible not only to the House itself and to the country but to his constituents, whereas in the case of a member of a corporation it is quite adequate in my opinion if he discloses his interests; that is to say, how many shares he possesses, whether he has had shares and disposed of them, whether he is associated with some subsidiary corporation, and so on. There is quite a substantial difference. I would advise my noble friends on the Front Bench to give the matter consideration. This is a matter which can be dealt with before we come to Third Reading.
Lord MELCHETT: My Lords, this was something which we considered very carefully after the Committee stage. Either I or one of my noble friends said then in response to the noble Lord, Lord Carr, that we agreed that this might not be an ideal thing to put in this particular Bill, but it seemed to us very difficult to come up with any alternative. I said that I would certainly give it some thought; I have done that, and my advisers have, and we have not been able to think of anything better. Judging from the Amendment put down by noble Lords opposite, I assume that they have found it just as difficult as we have when it comes to thinking of alternatives.
The noble Earl, Lord Ferrers, and the noble Lord, Lord Harmar-Nicholls, mentioned particularly subsection (9), which, of course, relates the register of interests of members of the corporations to that of Members of another place, yet allows for "appropriate modifications". The noble Earl said that this was even more worrying. He was worried about it before, but this was even worse. I understand that the effect is not quite so disastrous as he may have feared and that if a resolution in another place put any new obligation on its Members and it was plainly irrelevant to membership of the Corporations, the Secretary of State could remove this obligation from members of the Corporations as it would be inappropriate. During the Committee state the noble
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Lord, Lord Carr of Hadley, gave some examples of a position which he feared. I cannot remember exactly, but he gave some examples of terrible nonsense arising, and that would be avoided by these particular words in subsection (9).
I should say in response to the fears expressed by the noble Earl that appropriate modification refers only to making exceptions of irrelevancies are not to modifying, in the sense of reducing, the obligation. We think that with this qualification the cross-reference to resolutions in another place is acceptable. We have all given a good deal of thought to this matter and would certainly be happy to consider any further suggestions which noble Lords cared to make, though I could not honestly say we would be likely to come up with anything ourselves at this late stage.
Amendment, by leave, withdrawn.
Clause 2 [General duties of the Corporations]:
6.42 p.m.
Earl FERRERS Earl FERRERS moved Amendment No. 16:
Page 3, line 30, leave out ("economical") and insert ("profitable").
The noble Earl said: My Lords, we come here to the duties put upon British Aerospace and British Shipbuilders where they are obliged to "promote and secure the promotion" of the "efficient and economical design, development, production, sale, repair and maintenance", and at the Committee stage we had a slight discussion about exactly what those words mean. I was particularly worried' at that juncture as to what the word "efficient" meant because it seemed to be rather vague. I now suggest—and this is meant to he helpful—that possibly the word "economical" is too vague.
When we discussed the word "efficient", I asked the noble Lord, Lord Melchett, exactly what was meant by it. In reply he said that I had gone into a long string of things which I said "efficient" could mean and severa' other things which I said it could mean but which "for the life of me", said the noble Lord, Lord Melchett, "I cannot see how it could possibly mean" and various

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other things which he did not think it would mean. He then went on to say:
"efficient' means all the good things that he said it means and I hope that is an efficient explanation of it."
Quite frankly I do not think it was. It still left the word, "efficient" very uncertain. Equally, this word, "economical" leaves a great deal of uncertainty. That is why we have suggested in this Amendment that the word, "economical" should be replaced by the word, "profitable" and then everyone will know what it means.
If one uses the word "economical", it could mean that the Corporations should be run with a view to economy, with a view to cheapness, or possibly with a view to parsimony. I do not know whether that is the intention; I doubt that it is. But I am not quite certain what it means if it does not mean that they should be run profitably, because if they are run profitably they are presumably run economically. Therefore the object of this Amendment is to find out whether the Government would agree to the word, "profitable" being put in place of the word, "economical"; if they do not agree to that, if they are not the same thing, would the noble Lord be kind enough to say what the difference is. I beg to move.
Lord SHINWELL: My Lords, it appears to me that whoever was responsible for drafting this piece of legislation must have had a remarkable vocabulary at his disposal. I cannot understand why we should be so tautological. Obviously we have the word, "efficient" here and I should suppose—though I am open to correction by any intellectual who happens to be present and there are quite a number present—that the term, "efficient" would embrace the term, "economical" and "profitable", also. I would suggest that the Amendment should be withdrawn but that the Government should agree in turn to effect a compromise by withdrawing the word, "economical" and contenting ourselves with the word, "efficient".
Lord ROBBINS: My Lords, I must take issue with the noble Lord, Lord Shinwell, in what he has just said. I can think of all sorts of aeroplanes and guided
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weapons which may be efficient but are not economical or profitable. I suppose no one would dispute the efficiency of the Concorde, that marvellous piece of technology, yet there seems to have been a good deal of public debate—and I do not take sides in this matter, not being an expert—as regards its profitability or indeed the economic wisdom of its undertaking.
On the other hand, I must appeal to the Opposition Front Bench by saying that the term "profitable" surely is unduly narrowing the operations of the Corporations. It might well be public policy that particular instruments of one kind or another should be produced under sub sidy, in which case they could not be said to be profitable and yet at the same time it would be completely conformable to the dictates of public policy that they should continue to be produced. On balance, I certainly regard the word "economical" as being preferable to the word "profitable", but I certainly would not eliminate "economical" and "profitable" in favour of the suggestion made by the noble Lord, Lord Shinwell.
The Earl of LAUDERDALE: My Lords, just before we part with this matter, may I ask whether it is not a pity that we do not take this opportunity to hail, salute and honour the word "profit"? We know that profit is sometimes a rather embarrassing concept to noble Lords and honourable Members on the other side, because it is thought to be a dirty word. I understand that the Marxist word for profit is "rentability".
Surely we are in a state of development where we have all learnt a certain amount about nationalisation. On the whole the lessons have been unpleasant ones, but we have been learning as we have gone along. There was a time when this Party opposed all nationalisation willy-nilly. Now it is not so. We accept that there is a need for a mixed economy and that it may have its place. But what shall be the purpose? When you use a term like "efficient, "it is capable of many different meanings according to the nuances of a person's political position." Efficient "may mean merely socially efficient or it may mean merely what carries out the policies of the Goverment of the day efficiently, well, without at the same time being commercially satisfactory.

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The reason we could come back to the word "profit" is that the Minister of State as far back as 22nd January gave it his blessing, and surely nothing can be better than that. On the 22nd January a Back-Bench Member of the Party opposite criticised the term "efficiently" as being straightforward capitalist economics. Perhaps that is a very good thing, but he thought it was bad. The Minister of State replied—and this is well worth noble Lords opposite taking on board—
"… they could only justify their socialist advance in terms of its efficiency and its profitability."
The reference is to Hansard for 22nd January, column 353. So the case for using "profit" or "profitable" has sound Socialist endorsement. It has the imprimatur, the nihil obstat from the other side, so it is surely worth considering on those grounds. What we really have to be quite sure of is that "efficiency" means "economic efficiency", that it means "commercial efficiency", and that if means "profitability" and, because of that, means "to the general advantage", not merely "social efficiency".
Lord MELCHETT: My Lords, at the Committee stage, as the noble Earl said, we debated a somewhat similar Amendment to delete the words "efficient and". I believe that this was moved by the noble Lord, Lord Carr, and I got into some trouble with noble Lords opposite for taking the matter seriously and answering as if they had really intended to delete "efficiency", which they told me they did not. I can assure them that I have looked at the Amendment very carefully and seriously and I accept that, as the noble Earl, Lord Ferrers, has said, the Amendment is moved in a genuinely helpful spirit.
I do not believe there is any issue of substance between us on this Amendment. It boils down, I think, to two points: First, that the phrase "efficient and economical" is, in the context of nationalised industries' duties, very thoroughly precedented and well understood, and I do not think we should change these standard phrases without careful thought and very compelling reason.
My noble friend Lord Shinwell said some polite or, depending upon how one views it, impolite things about the person who drafted the Bill. Unfortunately, I have not had time to check, but I am fairly
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sure that this is well precedented in that the words appeared in the Coal Industry Nationalisation Act. They certainly appeared in the Gas Act. As I say, they are well precedented and it may be that the draftsman was not drawing on any great skills of his or her own but was simply following precedents in previous legislation.
A second point arises on the Amendment. It is that though "profitable" has an air of precision, it is not in fact precise. There are many ways in which profit figures can be altered up or down by varying accounting treatment. For example, if a corporation is financed—as many are—entirely by interest-bearing loans, it could be making a good return yet still not show a profit because much of the return would be in the form of interest payments. However, if that corporation had a substantial element of public dividend capital, instead of some of its interest bearing capital and the same return on capital employed, it would be showing a considerable profit. There are of course other ways in which profitability can be affected by simply altering the book-keeping, if that is not an impolite way of putting it. An example would be the revaluation of assets.
For those reasons, I do not feel that "profitable" is necessarily any more helpful than the words in the Bill at the moment. I accept that this is simply a matter of exhortation. There is no particularly precise meaning attached to these words, or, rather, there are several meanings which different people might attach to them. It seems reasonable, however, as there are very clear difficulties in putting in other words, and as these words are very well precedented in previous legislation—though of course I have hesitated to mention any Conservative legislation in case I was thought to be jibbing at noble Lords opposite "which I should not want to do—that we should leave the words in the Bill as they are.
Earl FERRERS: My Lords, the noble Lord is so kind that we could not possibly take offence if he said that the worst thing any Conservative Government had done was to put in the words "efficient and economical" into a Bill. I am bound to say that I was glad that the noble Lord, Lord Shinwell, agreed with us that this was not a very appropriate expression

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to insert. If the noble Lord's argument is that these words are well precedented and well understood in terms of the nationalised industries, I find that rather frightening because most people would think that the last thing the nationalised industries were was either efficient or economical. Yet this is the obligation that we are intending to put on these two new Corporations.
In a more serious vein—and I do not mean by that that I was being flippant before—I think it undesirable to put into the Bills which will, after all, become Statutes which will be challengeable in the courts, words that are imprecise and as to whose meaning nobody really knows anything other than that they have already been used before and that their having been used before has resulted in their meaning being totally reversed and in their not being carried out. We would have hoped that the noble Lord, Lord Melchett, would have been able to explain the difference between "economical" and "profitable". I quite see that using "profitable" could result in somebody altering the books and revaluing assets and so on hut, as a general direction to a corporation, I should have preferred to see something considerably more specific. However, this is apparently to be used only as a form of exhortation rather than as a legal obligation and, if that is so, I should not wish to press the Amendment. I therefore beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Lord STRABOLGI: My Lords, this may be a convenient moment to adjourn the Report stage until a quarter to eight in order to take other business. Subject to that other business being completed by then, I beg to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

SUPPLEMENTARY BENEFITS BILL [H.L.]
6.58 p.m.
The LORD CHANCELLOR (Lord Elwyn-Jones): My Lords, I beg to move that this Bill be now read a third time. It
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is, I believe, the last consolidation Bill that will go through the House in this Session of Parliament and I should like to take this opportunity to say a word of appreciation to the noble and learned Lord, Lord Simon of Glaisdale, who I regret to see is not with us in the Chamber and who retires at the end of this Session as Chairman of the Joint Committee on Consolidation Bills.
Mr. Gladstone said on one occasion when he introduced a budget that he did not call the task Herculean because Hercules could not have done it. Lord Simon and his equally dedicated Committee Members must have felt the same in approaching the consolidation of, for instance, the Social Security Benefits Bill, which had to take account of no less than five amending Bills in the same Session. The consolidation of Statutes in respect of which we owe so much to the Law Commissioners is extremely useful and important, but it is also heavy, difficult and unglamorous work, as we saw in the recent Land Drainage Bill.
This present Supplementary Benefits Bill is no exception. We have reason to be particularly grateful for the fact that, after the Bill was recommitted to the Joint Committee, the Committee proceeded to deal with it very efficiently and quickly in order to enable this valuable measure of consolidation of a branch of the law which affects millions of our citizens to get through in the present Session. The House is indeed greatly indebted to the Joint Committee and in particular to its Chairman the noble and learned Lord, Lord Simon, who has borne so much of the burden of the work of the Committee. He followed a distinguished line of recent chairmen in the noble and learned Lord, Lord Morris of Borth-y-Gest, whom I am delighted to see in the Chamber, then the noble Lord, Lord Upjohn, the noble Viscount, Lord Colville, and the noble and learned Lord, Lord Diplock; and it is gratifying to know that the noble Lord, Lord Russell of Killowen, has agreed to take over from the noble and learned Lord, Lord Simon of Glaisdale.
During the period of nearly four years since he became chairman we have depended a great deal on the expertise, the advice, and the immense conscientiousness of the noble and learned Lord, Lord

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Simon of Glaisdale, and I am sure that I speak for all your Lordships when I say how grateful we are to him. He may not have heard this, but I hope that in the fulness of time he will read it. I beg to move.
Moved, That the Bill be now read 3a.—(The Lord Chancellor.)
On Question, Read 3a, and passed, and sent to the Commons.

INSOLVENCY BILL [H.L.]
7.1 p.m.
Lord ORAM: My Lords, I beg to move that the Commons Amendments be now considered.
Moved, That the Commons Amendments be now considered.—(Lord Oram.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[References are to Bill 52 as first printed for the Commons]
[Nos. 1 to 3.]
Clause 1, page 1, line 11, leave out subsection (2) and insert—
(2) The Secretary of State may by regulations increase or reduce any of the sums for the time being specified in the provisions amended by subsection (1) above.'
Clause 1, page 1, line 15, after 'increase' insert 'or reduction'.
Clause 1, page 1, line 18, leave out from 'and' to end of line 20 and insert no such regulations shall be made unless a draft of them has been approved by resolution of each House of Parliament.'
Lord ORAM: My Lords, with the leave of the House I beg to move that this House doth agree with the Commons in their Amendments Nos. 1 to 3 en bloc, and with the leave of the House 1 will also speak to Amendments Nos. 25 to 47 inclusive. Amendments Nos. 1, 2 and 3 will have the effect of empowering the Secretary of State by regulation to vary (that is to increase, further increase, reduce or further reduce) the monetary limits specified in Part I of Schedule I, and of subjecting the draft of any such regulations to approval by Resolution of each House of Parliament. Amendments Nos.25 to 47 inclusive in the main give effect to a number of specific changes in the monetary limits in Part I of Schedule I. These changes were proposed as a result of discussions which took place after the Bill was published in its original form. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Oram.)
Earl FERRERS: My Lords, we are grateful to the noble Lord, Lord Oram, for explaining exactly how these Amendments come about and to what they refer.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 4.]
After Clause 3, insert the following new clause:
Extension of time for complying with bankruptcy notice
'. In section 1(1)(g) of the Bankruptcy Act 1914 (act of bankruptcy if debtor does not comply with bankruptcy notice within seven days) for the words "seven days" there shall be substituted the words "ten days".'
Lord ORAM: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 4. This clause extends the time limit imposed in Section I(1)(g) of the Bankruptcy Act 1914 for compliance with a bankruptcy notice from seven days to 10 days. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Oram.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos.5 and 6.]
Clause 5, page 4, line 17, at end insert; and in determining whether to make an order the court shall have regard to all the circumstances of the case including, in particular,

(a)whether the debtor has made a full disclosure of his affairs;

(b)whether he has been adjudged bankrupt on a previous occasion;

(c)the number and nature of his debts;

(d)whether his bankruptcy would for any reason be a matter of public concern; and

(e)such other matters as may be prescribed for the purposes of this subsection by rules made under section 132 of the said Act of 1914.'

Clause 5, page 4, line 19, at end insert but the power of the court under section 108(1) of the said Act of 1914 to review or rescind any such order may be exercised either on the application of the official receiver or on the application of the debtor, a creditor or the trustee.'
Lord ORAM: My Lords, with the leave of the House I beg to move that this House doth agree with the Commons in their Amendments Nos.5 and 6 en bloc.

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The purpose of Amendment No. 5 is to set out certain criteria to guide the court when considering whether to make an order dispensing with the public examination in a particular case. The effect of the Amendment would be that in determining whether to make an order dispensing with a public examination, the court would have regard to all the circumstances of the case, including in particular: whether the debtor has made a full disclosure of his affairs; whether he has been bankrupt before; the number and nature of his debts; whether his bankruptcy would for any reason be a matter of public concern; and any other criteria as may be prescribed by rules.
The purpose of Amendment No. 6 is to remove any doubt as to whether persons, other than the Official Receiver, can have recourse to Section 108(1) of the Bankruptcy Act 1914 in respect of an order dispensing with a public examination. The Amendment would have the effect of ensuring that the court's power to review or rescind an order dispensing with a public examination, may be exercised on the application under Section 108(1) of the debtor, a creditor or the trustee, in addition to the Official Receiver. I beg to move.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Oram.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos.7 to 9.]
After Clause 5, insert the following new clause:
Automatic discharge of bankrupt.
'(1) Where the court makes an order—

(a)declaring that a debtor's examination under section 15 of the Bankruptcy Act 1914 has been concluded; or

(b)dispensing with his examination under that section,

the court may, if it thinks fit, make an order directing that subsection (2) below shall have effect if he is or has been adjudged bankrupt in the proceedings; and in determining whether to make such an order the court shall have regard to all the circumstances of the case, including in particular, any such facts as are stated in section 26(3) of the said Act of 1914 and whether the debtor has committed any offence under that Act or any other offence connected with his bnakruptcy.
(2) Where the court makes an order under subsection (1) above, then, if the debtor is or
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has been adjudged bankrupt in the proceedings and—

(a) is not discharged in respect of the adjudication under section 26 of the said Act of 1914 before the fifth anniversary of the date of the adjudication; and

(b) the adjudication is not annulled before that anniversary under section 21(2) or 29 of that Act,

the same results shall ensue as if the court had on that anniversary granted him an absolute order of discharge in respect of the adjudication under the said section 26.
(3) Section 108(1) of the said Act of 1914 (power to review, rescind or vary an order) shall not apply to an order under subsection (1) above, but the court may on the application of the official receiver or the trustee rescind the order at any time before the fifth anniversary of the date of the adjudication.
(4) Where a person has been adjudged bankrupt more than five years before the coming into force of this section and—

(a) has not been discharged in respect of the adjudication under section 26 of the said Act of 1914 before the relevant date (that is to say, the coming into force of this section or the tenth anniversary of the date of the adjudication, whichever is the later); and

(b) the adjudication has not been annulled before the relevant date under section 21(2) or 29 of that Act,

the same results shall ensue as if the court had on the relevant date granted him an absolute order of discharge under the said section 26.
(5) In subsections (2)(a) and (4)(a) above references to discharge are references to discharge by an absolute order of discharge or by the expiration of the period, or satisfaction of any requirement, specified by a suspended or conditional order.'
Clause 6, page 4, line 38, at end insert—
(a) the court has not made an order under section (Automatic discharge of bankrupt) (1) above in relation to the adjudication or any such order has been rescinded; and'
Clause 6, page 4, line 42, leave out to apply to the court for a review ' and insert make an application to the court in respect'.
Lord ORAM: My Lords, with the leave of the House I beg to move that this House doth agree with the Commons in their Amendments Nos.7 to 9 en bloc, and with the leave of the House I will also speak to Amendments Nos. 22, 23, 24 and 48. The new clause would have three effects. First, it will empower the court at the time it makes an order concluding the public examination or dispensing with one, to make another order directing that the bankrupt shall have an absolute order of discharge on the fifth anniversary of the date of the adjudication. Secondly, it will empower the Official Receiver or the trustee where such an order has been made,

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to apply to the court to rescind the order at any time before the discharge becomes effective; that is, before the fifth anniversary of the date of the adjudication. Thirdly, it will grant an absolute discharge on the coming into force of this section, or on the tenth anniversary of the date of adjudication, whichever is the later, to all bankrupts who were adjudged bankrupt more than five years before the coming into force of this section.
Amendment No. 8 has the effect of excluding from the review for the purpose of discharge, cases where the court has made an order granting absolute discharge on the fifth anniversary of the date of the adjudication, and such order has not been rescinded. Amendment No. 9 has the effect merely of changing the description of the procedure under which bankruptcies will be reviewed for the purpose of discharge.
Amendment No. 22 provides that the new clause provided for in Amendment No. 7 shall have effect as if contained in the Bankruptcy Act 1914. Amendment No. 23 has the effect of delaying the coming into force of the Act until such date as may be specified by the Secretary of State by order made by Statutory Instrument. The purpose of Amendment No. 24 is merely to reword the subsection in the interests of clarity without changing its effect in any way. I beg to move.
Moved, That this House doth agree with the Common in the said Amendments—(Lord Oram.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 10 to 16.]
Clause 7, page 6, leave out lines 4 to 9 and insert—
'(i) is or has been a director of a company which has at any time gone into liquidation (whether while he was a director or subsequently) and was insolvent at that time; and
(ii) is or has been a director of another such company which has gone into liquidation within five years of the date on which the first-mentioned company went into liquidation; and'
Clause 7, page 6, line 16, after 'period' insert beginning with the date of the Order and'.
Clause 7, page 6, line 18, leave out from '(2)' to 'is' in line 19 and insert 'In the case of a person who is or has been a director of a company which has gone into liquidation as aforesaid and'
Clause 7, page 6, line 44, leave out 'this section' and insert 'subsection (1) above'.
Clause 7, page 7, line 18, after second 'company' insert '(wherever incorporated)'.
Clause 7, page 7, line 23, leave out from 'of' to 'if' in line 24 and insert' this section a company goes into liquidation'.
Clause 7, page 7, line 31, at end insert—
'(9) Subsection (1) above does not apply unless at least one of the companies there mentioned has gone into liquidation after the date of the coming into force of this section; and the conduct to which regard may be had under paragraph (b) of that subsection does not include conduct as director of a company that has gone into liquidation before that date.'
Lord ORAM: My Lords, with the leave of the House I beg to move that this House doth agree with the Commons in their Amendments Nos. 10 to 16 en bloc. The purpose of Amendments Nos. 10, 13 and 15 is to make clearer the original intention of the clause; namely, that for the conditions of Clause 9 (1) (a) to be met, first, the person concerned must be, or have at some time been, a director of at least two companies; secondly, the companies must have gone into liquidation within five years of each other as a result either of a winding-up order made by the court or of the passing of a resolution for voluntary winding-up; and, thirdly, the companies must be insolvent at the date of the winding-up order or resolution for voluntary winding-up.
Amendments Nos. 11, 12 and 14 are also merely drafting Amendments to make clear the original intention of the clause concerning the commencement of the period of disqualification, the jurisdiction of the court where one of the companies is in compulsory liquidation, and the applicability of the clause to foreign companies. The purpose of Amendment No. 16 is to specify the extent to which the clause has retrospective effect. My Lords, I beg to move.
Moved, That this House cloth agree with the Commons in the said Amendments.—(Lord Oram.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 17.]
After Clause 7, insert the following new clause:
Advisory committee on bankruptcy and winding up rules
'(1) There shall be a committee appointed by the Lord Chancellor to keep under review the rules for the time being in force under—

(a) section 132 of the Bankruptcy Act 1914 (bankruptcy rules); and

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(b) section 365 of the Companies Act 1948 (winding up rules);

and to make recommendations to the Lord Chancellor as to any changes in the rules that may from time to time appear to the committee to be desirable.
(2) The Lord Chancellor shall consult the committee before making any rules under the provisions mentioned in subsection (1) above.
(3) Subject to subsection (4) below, the committee shall consist of—

(a) a judge of the High Court attached to the Chancery Division;

(b) a circuit judge;

(c) a registrar in bankruptcy of the High Court;

(d) a registrar of a county court;

(e) a practising barrister;

(f) a practising solicitor; and

(g) a practising accountant.

(4) The Lord Chancellor may appoint as additional members of the committee any persons appearing to him to have qualifications or experience that would be of value to the committee in considering any matter with which it is concerned.'
Lord ORAM: I beg to move that this House doth agree with the Commons in their Amendment No. 17. The purpose of this new clause is to establish a committee which will be under a statutory duty to keep the bankruptcy and winding-up rules under review and to make recommendations to the Lord Chancellor as to any changes in the rules which the committee considers to be desirable. In addition, the Lord Chancellor will be obliged to consult the committee before exercising his existing powers to make bankruptcy or winding-up rules. The committee will comprise four members of the judiciary, two members of the legal profession and an accountant, all of whom are to be appointed by the Lord Chancellor, and such additional members as the Lord Chancellor might appoint. My Lords, I beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Oram.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No.18]
Leave out Clause 8.
The LORD CHANCELLOR: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 18. This Amendment would
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take out of the Bill the clause which extends the power of the county court to make administration orders against judgment debtors. In advising the House to accept the Amendment, I should like, however, to make a few observations. An administration order requires the debtor to make regular payments, and provides for their distribution rateably among the creditors. It is a means of doing distributive justice, on the one hand between the creditors and the debtor and on the other between the individual creditors. At present, these orders can be made only where the total indebtedness is stated not to exceed £1,000, but that figure can be increased by Order in Council.
The main purpose of Clause 8 was to facilitate the making of administration orders against self-employed debtors, who, if I may say so, are very hard to get at. At present, an administration order can be made only, first, where the debtor applies for it or, secondly, where a judgment creditor applies for an attachment of earnings order. The clause enables the court, whether or not there has been an application of the kind I have mentioned, to make an administration order if the judgment debtor has other debts which ought to be dealt with together. The clause has, however, been criticised severely, perhaps surprisingly having regard to its limited scope, by representatives of the legal profession and by honourable Members in another place. The Government tried to meet these criticisms by Amendments, but their efforts did not succeed in carrying the other place.
My Lords, I doubt whether this opposition would have been so vehement had it been possible to include the clause in a Bill unconnected with bankruptcy, for the clause has won a fair measure of support both from the county courts and from practising lawyers. However, opinion has been divided, and in my view it would not have been prudent to persevere with the clause against such strong objection from representatives of those who would have been involved in, or affected by, its practical application. What is needed now is a pause for reflection and reconsideration in the light of the various arguments which have been advanced for and against the clause.
I believe that the clause has served a useful purpose, however, by helping to crystallise

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the arguments and by focusing attention on the administration order procedure, which I am sure could be used more frequently with advantage to creditors and debtors alike. I should like to stress two points. First, even with the omission of Clause 8 the administration order procedure is considerably strengthened by this Bill, for Clause 9 imposes the sanction of bankruptcy for non-compliance with an administration order, whatever the amount of indebtedness. Secondly, the arguments over Clause 8 have brought into prominence the existing power of the court to make an administration order where a creditor applies for an attachment of earnings order.
This power is of great importance where the debtor has a number of liabilities. The court may make the order of its own motion, even where it does not grant the application for attachment of earnings. This power, backed as it will be by the sanction of bankruptcy under Clause 9, is worthy of attention. Since the court can take the initiative by imposing an administration order upon an employed debtor, there seems no reason in principle why it should be precluded from taking a similar initiative against the self-employed.
My Lords, I hope that these remarks will suffice to satisfy the House that, although the idea behind Clause 8 is sound and sensible, it would be better to omit the clause from the Bill in order to give further time to seek agreement on the improvements needed to strengthen the machinery for enforcement against self-employed debtors. I hope that, with the co-operation of those concerned, it will he possible to take the earliest available opportunity to legislate for this purpose. Having made that commercial, I now beg to move.
Moved, That this House doth agree with the Commons in the said Amendment.—(The Lord Chancellor.)
The Earl of GOWRIE: My Lords, I would just say that we on this side are very grateful to the noble and learned Lord the Lord Chancellor for his remarks. He said, if I may quote him, that what is needed is a pause for reflection and re-consideration in the light of the arguments which have been raised against the clause. As one who has not been
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heavily involved in this Bill but who has been involved in many other Bills, would that the noble and learned Lord's words had been uttered in the light of some of the other legislation we have been considering! But we must not be ungrateful for hearing these sentiments wherever we can, and so I would simply repeat our thanks for them.
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 19]
Clause 9, page 9, line 14, leave out from first 'of' to end of line 17 and insert 'section 132 of the said Act of 1914 (power to make rules) this section shall be treated as if contained in that Act'.
Lord ORAM: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 19. This Amendment merely makes clear the original intention of this clause to provide under subsection (7) for the power to make rules under the Bankruptcy Act 1914 to be extended to rules required under this clause.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Oram.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No.20]
After Clause 9, insert the following new clause:
Administration order rules.
'.—(1)The power to make rules under section 102 of the County Courts Act 1959 (county court rules) shall include power to make rules for the purposes of Part VII of that Act (administration orders), section 4 of the Attachment of Earnings Act 1971 and section 9 above.
(2) Section 156 of the said Act of 1959 (administration order rules to be made by the Lord Chancellor) shall cease to have effect; and in section 20(3) and (6) of the Administration of Justice Act 1965 for the words "section 156" there shall be substituted the words "section 102".'
Lord ORAM: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 20. The effect of this Amendment is to tranfer from the Lord Chancellor to the County Court Rule Committee the power to make rules relating to Administration Orders. Subsection (1) extends the scope of Section 102 so as to cover all cases where at present the specific power conferred by Section 156 is applicable and also to cover

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Clauses 8 and 9 of the Bill. Subsection (2) provides for the repeal of Section 156 and also makes consequential Amendments.
Moved, That this House doth agree with the Commons in the said Amendment. (Lord Oram.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 21]
After Clause 9, insert the following new clause:
Other provisions about administration orders.
'.—(1) Section 21 of the Administration of Justice Act 1965 and section 4(3) of the Attachment of Earnings Act 1971 (under which an application for an administration order and the making of an order requiring the debtor to furnish a list of creditors with a view to the making of an administration order constitute an act of bankruptcy) shall cease to have effect.
(2) In section 4(1)(a) of the said Act of 1971 (power to make administration order on application for attachment of earnings order) for the words "an order should be made for the administration of his estate" there shall be substituted the words "an administration order should be made".'
Lord ORAM: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 21. With the leave of the House, I would also speak to Amendments Nos.49 and 50. The effect of Amendment No. 21 is as follows. Section 21 of the Administration of Justice Act 1965, whereby an application for an administration order by the debtor under Section 148(1) of the County Courts Act 1959 is an Act of bankruptcy by the debtor, is repealed. Section 4(3) of the Attachment of Earnings Act 1971 whereby the making of an order requiring the debtor to furnish a list of creditors with a view to the making of an administration order constitutes an act of bankruptcy, is also repealed. The simple term "administration order" has been substituted for the description of an "order should be made for the administration of his estate" in Section 4(1)(a). Amendments Nos. 49 and 50 are consequential upon the new clause inserted after Clause 9 by Amendments Nos.20 and 21.
Moved, That this House doth agree with the Commons in the said Amendment—(Lord Oram.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos. 22 to 24]
Clause 9, page 9, line 23, after '5' insert '(Automatic discharge of bankrupt),'
Clause 9, page 9, leave out lines 29 and 30 and insert—
'(5) This Act shall come into force on such'
Clause 9, page 9, line 35, leave out 'sections 2, 3, 5, 6, 8 and 9 do not' and insert 'only sections 1, 4, 7 and this section and Schedule 1'.
Lord ORAM: My Lords, with the leave of the House, I beg to move that this House doth agree with the Commons in their Amendments Nos.22 to 24 en bloc. I have already spoken to these Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Oram.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos.25 to 47.]
Schedule 1, page 10, line 9, leave out '£300' and insert £200'.
Schedule 1, page 10, line 10, at end insert—

Section 79.

Maximum amount which trustee can retain without banking.

£100.'.

Schedule 1, page 10, line 26, leave out '£120' and insert £50'.
Schedule 1, page 10, line 32, leave out '£300' and insert '£200'.
Schedule 1, page 10, line 46, leave out '£600' and insert '£800'.
Schedule 1, page 10, line 49, leave out '£600' and insert '£100'.
Schedule 1, page 11, line 9, leave out '£120' and insert '£50'.
Schedule 1, page 11, line 38, leave out 'winding up on grounds of insolvency' and insert 'service of statutory demand'.
Schedule 1, page 11, line 38, leave out '£300' and insert '£200'.
Schedule 1, page 11, line 40, leave out '£600' and insert '£100'.
Schedule 1, page 12, line 3, column 2, leave out from 'for' to end of line 5 and insert 'service of statutory demand in case of unregistered company'.
Schedule 1, page 12, line 3, column 3, leave out '£300' and insert '£200'.
Schedule 1, page 12, line 8, leave out '£600' and insert '£400'.
Schedule 1, page 12, line 20, at end insert—
'2. No reduction in any sum specified in—

(a) section 174 or 175(6) of the said Act of 1913;

(b) section 105(1) or 129 of the said Act of 1914; or

(c) section 218(3) or 220(3) of the said Act of 1948,

shall affect any case in which the proceedings were begun before the coming into force of the reduction.

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3. No increase or reduction in the sum specified in section 38(2) of the said Act of 1914 shall affect any case in which the date of the receiving order occurred before the coming into force of the increase or reduction.'
Schedule 1, page 12, line 21, after increase' insert 'or reduction'.
Schedule 1, page 12, line 24, after increase' insert or reduction'.
Schedule 1, page 12, line 25, after 'increase' insert 'or reduction'.
Schedule 1, page 12, line 26, after '(c)' insert 'or 50(3)'.
Schedule 1, page 12, line 31, after 'increase' insert 'or reduction'.
Schedule 1, page 12, line 32, after increase' insert 'or reduction'.
Schedule 1, page 12, line 36, after increase' insert 'or reduction'.
Schedule 1, page 12, line 37, after increase' insert 'or reduction'.
Schedule 1, page 12, line 41, after 'increase' insert 'or reduction'.
Lord ORAM: My Lords, with the leave of the House, I beg to move that this House doth agree with the Commons in their Amendments Nos.25 to 47 en bloc. I have already spoken to these Amendments.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Oram.)
On Question, Motion agreed to.

COMMONS AMENDMENT
[No. 48.]
Schedule 2, page 13, line 1, leave out ', (2)'.
Lord ORAM: My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 48. This has already been dealt with.
Moved, That this House doth agree with the Commons in the said Amendment.—(Lord Oram.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[Nos.49 and 50.]
Schedule 3, page 14, line 15, at end insert—

'7 & 8 Eliz. 2. c. 22.

The County Courts act 1959.

Section 148(5). Section 156".

'1965 c. 2.

The Administration of Justice Act 1965.

Section 21.'

Schedule 3, page 14, line 18, at end insert—

'1970 c. 31.

The Administration of Justice 1970.

Section 29(5)(b).

1971 c. 32.

The Attachment of Earnings Act 1971.

Section 4(3). Section 27(2).

Lord ORAM: My Lords, with the leave of the House, I beg to move that this House doth agree with the Commons in their Amendments Nos.49 and 50 en bloc.
Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Oram.)
On Question, Motion agreed to.
[The Sitting was suspended from 7.25 p.m. till 7.45 p.m.]

AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL
Further considered on Report.
Earl FERRERS Earl FERRERS moved Amendment No. 21:
Page 4, line 18, after ("promote") insert ("omnibus").
The noble Earl said: Now we return to the problem of industrial democracy. At the Committee stage we had a fairly formidable debate on industrial democracy and the part that it should play. We had a considerable discussion as to what was meant by industrial democracy as such, and what was meant by the phrase in the Bill as to whom those people who should take part in the consultations should be. There was a difference of opinion over this. We were anxious to find out what was meant by "industrial democracy" and we discovered it was indefinable. To repeat the words of the noble Lord, Lord Melchett, we know in general what is meant, although we may disagree in particular what is meant. It: is wrong that we should put words on the Statute Book which are indefinable.
We had a long debate about who was to take part in industrial democracy and, in the process of discussion, how industrial democracy should come about. The Government had it firmly in their minds that the people who should be consulted would be the relevant trade unions. We pointed out that this was too restrictive a measure because there ought to be consultation with all employees in industry. We accepted the fact that in consultation you do not negotiate with a lot of individual people but with some bodies of people. We pointed out that one of the

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troubles with the Bill, as it then existed, was either you encourage a lot of people into trade unions, often against their will, or you excluded from the negotiations a lot of people who wanted to be included and who had a right to be included, who were concerned about the future of their industry and had the right to be approached in these matters.
The Committee stage saw an Amendment moved into the Bill allowing this consultation to go further. We believe it is wholly right that all sections of the industries should be consulted on how industrial democracy is going to come about. Obviously industrial democracy should be for everyone. It may be that the Government feel the correct people with whom to carry out discussion are only the relevant trade unions. I know that noble Lords opposite will accept that, whoever is going to be consulted, industrial democracy is going to apply to all people, otherwise the very word "democracy" is absurd. I hope the Government will also agree that, if industrial democracy is going to be undertaken, it should be undertaken by all the people.
In order to underline this point, we have put down this simple Amendment which puts the word "omnibus" in front of the words "industrial democracy". Subsection (6) will read:
"In carrying out its functions under this a Act, it shall he the duty of each Corporation to promote omnibus industrial democracy".
Your Lordships may feel that that seems a funny word to put in the Bill. It is not; it is a simple word that explains exactly what we mean. It means it should be for all people, not just trade union people or shopfloor people, but managers, executives, accountants, designers and everyone. The noble Lord, Lord Melchett, will be perfectly aware that the word "omnibus" comes from Latin, and the Latin ablative form means "by all the people". If you are going to have industrial democracy by all the people this must be a reasonable suggestion. It is possible that the noble Lord, Lord Melchett, may say, "We cannot accept that because, in the Government's view, we do not want industrial democracy to be by all the people, but only by all the relevant trade unions. If we put in this word this might be too restrictive."
I would only suggest that he then turns to the dative form. "Omnibus" is the same in both the dative and the ablative. If he turned to the dative he would realise that it meant "for all the people". There cannot be any dispute that industrial democracy should be for all the people. I would hope that the noble Lord would accept the word "omnibus" as meaning that it should be both for all the people and by all the people. If we put in this simple word it clarifies the whole issue succinctly, so that everyone will know what industrial democracy means and to whom it should apply. I must, of course, tell the noble Lord that that simple word had nothing to do with what one of my noble friends suggested when he saw this Amendment—that is, one of those familiar objects we sometimes see and which was planted in memory by those nice words of Michael Flanders and Donald Swann when they referred to—
"The 30 foot long by 10 foot wide,
The monarch of the road,
The observer of the Highway Code,
The big six-wheeler, scarlet-painted,
London Transport, diesel-engined,
Ninety-seven horsepower
Omnibus"
As I say, it has nothing at all to do with that. It is just a simple word that makes it clear that "industrial democracy" should be for all the people and by all the people. My Lords, I beg to move.
7.52 p.m.
Lord MELCHETT: My Lords, I am not sure whether the noble Earl has left me very clear about whether he actually wanted the ablative or dative form in the Bill. It seems that we might have to qualify "omnibus" to make that clear at least—
Earl FERRERS: Both, my Lords.
Lord MELCHETT: Then I think it probably ought to be made clear in the Bill that it is both, as the noble Earl has now told me. On first seeing this Amendment I had marvellous visions of organically run omnibuses charging all over the place. I accept that there might he some justification for the insertion of the word "organic" in the Bill, but "omnibus" is not necessarily a great deal more helpful than that word: indeed it is possibly less so.
As the noble Earl explained, the word "omnibus" is apparently intended to qualify the words "industrial democracy"

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as they appear in the Bill. Though, as I say, I am not at all sure that the Amendment makes clear exactly what its meaning would be, I can see that it is consistent with the approach noble Lords opposite have taken throughout our discussions on industrial democracy. In particular, it is consistent with the approach adopted in Amendment No. 22 to which we shall come very shortly. As the noble Earl said, I regret to say that we do not think the Amendment is necessary. Indeed, I would go further and suggest that it might be positively harmful. I should have thought the lack of clarity, in itself, would not he particularly helpful. Also, as the noble Lord has said, we have taken a consistent view, on which I shall expand when we come to Amendment No. 22, as to the role the relevant trade unions should play in carrying forward industrial democracy in these two industries. I would hope that we might be able to have a substantive debate on that issue when we come to the later Amendment.
It seems to me, as the noble Earl said, that this is a small word but it raises bigger issues which we have covered in great detail during the Committee stage and which no doubt will continue to occupy our attention throughout the considerable number of Amendments which have still to come. I should be quite happy to go into those substantive issues now but, if I did so, it might not leave me anything to say on the later Amendments. Therefore, having given the noble Earl some idea of my difficulties over the word which, to be fair, he himself appeared to share, perhaps we could agree that while it might possibly give some people a better idea of what was intended by the Bill, it would confuse just as many as it helped.
The Earl of HALSBURY: My Lords, I must apologise to the House for not having heard the first words of the noble Earl, Lord Ferrers. I made my way back to my seat as closely as I could calculate to 7.45, but found the House already busy on this subject. I must say that, although I have gone into the Division Lobby with the Opposition on a number of occasions connected with this Bill, this is one occasion when, if the House is divided, I shall certainly follow the Government. It seems to me that the noble Lord's Amendment turns nonsense into still obscurer nonsense. The whole concept of industrial
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democracy is utterly undefined in the sense that the "cracy" in "democracy"—I am now making a translation from the noble Earl's Latin into my own rather archaic Greek—means the way in which you exercise absolute power.
Democracy is one of the ways in which you can do it: that is, the power given over to a popular assembly, which Socrates said was the worst form of Government in the world. I am sure we do not want to inflict that on industry. In any case, it is an entirely false analogy—and here I tilt a lance against the Government—because industry exercises no power in any sense of the word at all. It is a subject: it is subject to law and to the Constitution of the country and so on. "Industrial democracy" is a totally meaningless phrase, and merely to put the word "omnibus" in front of it not only conserves the meaninglessness of it but, in fact, obscures the meaninglessness of it. I remember Godley's poem about the motor bus in Oxford where he said:
"What is this that roareth thus,
Can it be a motor bus? …
Implet in the Corn and High
Terror me motoris bi …"
Apparently it is the noble Earl, Lord Ferrers, who is issuing roarings at the Government on the implication of the words "industrial democracy" and making it even more obscure by putting in the word "omnibus". Although I am all in favour of apposition of one thing to another as the essence of language, I do not believe this is an improvement on an already very bad phrase. In the event of a Division of the House I shall certainly follow the Government into the Division Lobby.
Earl FERRERS: My Lords, I am delighted to know that the noble Earl, Lord Halsbury, agrees with me that this is the most appalling phrase and is indefinable. Even the Minister of State said that "industrial democracy" was indefiable. I must say, however, that I should have thought his condemnation, if he was going into the Greek, would have been directed to the fact that by the insertion of this word "omnibus" one would have been confusing the Greek with the Latin since, of course,, "democracy" comes from the Greek and "omnibus" comes from the Latin. But I must say

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I really cannot see where any confusion whatever arises. I should have thought it was perfectly clear. The noble Lord, Lord Melchett, said he did not want to shoot off all his guns at once over "industrial democracy" on this simple Amendment, but I am bound to say that I thought it was perfectly clear that in the dative form it would mean that industrial democracy would be for all the people. I tried to explain to the noble Lord, Lord Melchett, that if he could think back a few years to the time he left school that dative meant "to" or "for" and if omnibus—
The Earl of HALSBURY: My Lords, if the noble Earl will allow me—by, with, or from; to, for or at. There is a great deal of ambiguity.
Earl FERRERS: My Lords, I was always led to believe that the dative was "to" or "for" and the ablative was "by", "with" or "from", and I am suggesting that the dative form of "to" or "for", in other words industrial democracy, would be "for all the people" only acceptable to the Government. They might have found some difficulty in accepting the ablative form which should be "by all the people". But as the word "democracy" must mean by all the people if it means anything, I thought that the noble Lord, Lord Melchett, might have swallowed the word "omni-bus" which is the same in the dative as it is in the ablative. However it is not something on which I would give the noble Earl, Lord Halsbury, the pleasure of going into the Division Lobby against me. This is not a point of quite such substance as that. Had the noble Lord, Lord Melchett, felt obliged to accede to this helpful and constructive Amendment, which it is, it would have put into one simple word what everyone really believes; that is, that industrial democracy should be both for the people and by the people. I am sorry he feels that this is not an improvement. To some extent it might have muddled some people, but on the whole it might have been considered to be an improvement and a clarification of the Bill. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Viscount SIMON Viscount SIMON has given Notice of his intention to move Amendment No. 22:
Page 4, line 19, leave out ("in a strong and organic form") and insert ("through the effective participation of employees in the process leading to management decisions")
The noble Viscount said: My Lords, we put down this Amendment for the purpose of trying to put some kind of gloss on the meaning of industrial democracy", but having read the alternative Amendment No. 23 suggested by the noble Lord, Lord Carr, and his friends, my noble friends have decided that we should not move this Amendment and have the discussion on Amendment No. 23.
8.3 p.m.
Lord CARR of HADLEY Lord CARR of HADLEY moved Amendment No. 23:
Page 4, line 19, after ("form") insert ("in which all employees have the right to participate")
The noble Lord said: My Lords, I must confess that we have come on to this Amendment rather sooner than I had expected, but the arguments are well known to us and I want to take this one very seriously indeed. If I may say to the noble Earl, Lord Halsbury, I had a scientific and not a classical education and therefore would have been quite out of my depth in the debate on the previous Amendment. While I agree with the Government that when we are seeking to introduce whatever is meant by "industrial democracy" we should not lay down hard and fast lines on which it must be developed, if we are going to introduce this phrase into an Act of Parliament at this stage of our industrial development there are one or two principles about industrial democracy which we must make clear.
I make the distinction about being clear about principles and laying down methods because I think there is a clear distinction between them. Some of your Lordships may remember that at the Committee stage I had resort to the Oxford Dictionary to try to get some guidance as to what the Government might mean by the phrase "industrial democracy" of a strong organic kind. To be honest, I found that the Oxford Dictionary did not help me much more than the Government's own explanation. It is quite clear that the Government have not a clue what they mean by it. One

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thing that came out clearly from consulting the dictionary was that one of the essential elements of the word "democracy" was that it is something in which the whole of the community about which you are talking should be able to partake.
Our great complaint about the Bill at the moment is that having set out the very high sounding ideal of industrial democracy, it restricts the number of people to whom that shall apply. It restricts it to those described as "relevant trade unions". Whatever it means, I do not begrudge it in any way, to "relevant trade unions". It is clear that they must have a very important part in the future development of this industry. The relevant trade unions must be fully consulted; they must have a very important and probably the chief part in collective bargaining. But in our submission it is not right to exclude at least from the consultative part of industrial democracy—whatever the Government mean by it—large numbers of people who are excluded by the Bill as it is worded at the moment.
In both the shipbuilding and the aircraft industries there are a considerable number of people, mainly technical, managerial, administrative and clerical staff, who are not members of the relative trade unions as at present defined who quite genuinely and understandably do not believe that the relevant trade unions are well suited to meet their particular requirements. It is not in any way a criticism of the relevant trade unions. They simply are not sufficiently widely developed to represent the views and needs and aspirations of the sort of people I have been mentioning. That is why a large and increasing number of these people have been forming their own organisations or joining other bodies which may already be in existence but which are not at the moment included in the definition "relevant trade unions" as indicated in the interpretation clauses of the Bill. Therefore there are large numbers of people who are denied the legal right to consultation which must be implicit if we are going to talk about industrial democracy in any meaningful sense at all.
That is why in the Committee, and again now, we are doing all we can from this side of the House—I am sure with the support of the Liberal Benches and I hope with the support of those on the
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Cross-Benches as well—to see that at least so far as consultation is concerned all employees of all the constituent parts of the new Corporations shall have this legal right to consultation. I know that we have been told by Ministers in the Committee stage that there is nothing in the Bill which prevents the Corporations from consulting people other than relevant trade unions, but I do not think that is good enough. Why should we separate the sheep and the goats or, as I put it in Committee, the citizens and peasants. These other people are employees of equal right with anyone else in the Corporation. They do not believe that the existing relevant trade unions are satisfactory bodies for them to join, but they hold passionately that they should have this right to consultation. They fear that if they do not have the legal right they will not have the right in practice. If anybody is going to have the legal right, all should have it.
There are already signs, of which I gave some evidence towards the end of the Committee stage, that some of the employees who are not in relevant trade unions but belong to other respectable bodies certified as being independent by the certification officer are being denied consultation. A body of managers in the shipbuilding and ship repairing industry wrote to me last week and said that they had been promised a meeting with the Organising Committee but that that meeting still had not taken place. They understood that it was because the relevant trade unions were objecting to its taking place.
It is quite clear to us that there are large numbers of employees in these two industries who will not really have faith that their view will be properly listened to, and properly taken into account, if they are not given the same legal right as everybody else in their industries. If that is so, not only is it unfair on paper, but I suggest to the Government that these new Corporations will start off containing within themselves a source of trouble and grievance from the very beginning. So I repeat what I said on a number of clauses in the Committee stage, that, in our view, it is absolutely essential that we make clear that all have a legal right of consultation.
To make sure that there is no misunderstanding, I want to repeat again

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that we draw a distinction between consultation and collective bargaining. Collective bargaining is more difficult, and, if we are to get reasonable order in industry, those organisations recognised for collective bargaining are more limited and, probably for some time at least, will have to remain more limited. But those entitled to consultation ought not to be limited. That is the reason for our Amendment. We believe that by inserting these words, "in which all employees have the right to participate" immediately after the phrase, "industrial democracy in a strong and organic form" we are establishing an essential principle, without in any way putting rigid definitions on the method by which that principle shall be worked out in the two Corporations by their constituent members. My Lords, I beg to move.
8.12 p.m.
Viscount SIMON: My Lords, we on these Benches should like to support this Amendment. We withdrew Amendment No. 22, which was very much on the same lines, except that we wanted to strike out the words "in a strong and organic form" merely because we did not know what they meant. If they mean something, I do not suppose they do any harm, and perhaps when the noble Lord replies he will tell us what they do mean. I must say that I am in agreement with the noble Earl, Lord Halsbury, that the phrase "industrial democracy" is an abominable one. He reminded us, very properly, that the word "democracy" comes from the Greek. I think it is worth recalling that, if my memory of Greek history is any good at all, in Greek democracies—and they founded the idea—the Helots or slaves were not at all involved; they were right outside the democracies. So that our present views are very different from theirs. We believe that everybody should be included, and that is why I like the words suggested by the noble Lord, Lord Carr, in this Amendment that it is "industrial democracy in a strong and organic form, in which all employees have the right to participate".
As he rightly said, this does not lay down how it will work. It can be worked out in each organisation in a way that best suits that organisation. The important thing is that every employee has the
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right to participate. Of course, those employees who have no kind of organisation, individual "mavericks", will no doubt find it very difficult to participate effectively. That is understandable, and I think we encourage people to enter into agreements with their fellow workers in different fields. But I believe that to confine consultation to the relevant trade unions is making it much too tight.
Noble Lords opposite have said that there is nothing to prevent consultation with everyone, and I believe that the noble Lord, Lord Mottistone, pointed out, very rightly, in an intervention during the Committee stage that any good employer would make whatever effort he could to consult with everyone. But the feelings which have been expressed by some employees, who are not represented by what are likely to become recognised as relevant trade unions, that they are left out in the cold, could be so easily met by accepting these words. As the noble Lord, Lord Carr, said the relevant trade unions will no doubt get most of the consultation. They will, perhaps, be continuously in consultation with the management on many issues. But when the matter is being looked at, we should make it clear to everybody that they all have a possibility of having their say.
When I was once at the top of a fairly large business, we had a convention, which did not mean very much, that the chairman's door was always open. That meant that anybody who wanted to see the chairman could always come in. They did not very often come, but I was always delighted when they did, and it was more a gesture to say to everybody in the organisation, "You are part of it, and you have the same right to be consulted as everyone else."
Lord SHINWELL: My Lords, I have delayed my departure from this assembly, because I was anxious to take part in this debate. I regard the subject as, perhaps, the most essential element in the future restructuring of the aerospace and ship-building industries. The term "democracy" comes trippingly to the tongue. I have the impression that it comes from Shakespeare, but for the moment I cannot offer the exact location. But it is subject to various interpretations. The term is used in the political arena and it is certainly misunderstood.

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I am somewhat surprised at the noble Lord, Lord Carr, who somewhat grudingly accepted what is contained in the Bill; in other words, the Government's offer. I should have thought that every Member of your Lordships' House, particularly on the Conservative and Liberal side, where there are many prominent industrialists who are concerned about the future of British industry, would be as anxious as I am about confrontation in the future, because if we are to have a viable industry in the future—whether it is nationalised or contained in private enterprise, as it is called, under the control of private ownership—we must ensure that we can avoid industrial strife. Indeed, I would say that the avoidance of industrial strife is the prerequisite of a viable British industry in the future. I do not want to impose what may be called an academic lecture on Members of your Lordships' House, but this is a subject which I have tried to understand for a long time. Indeed, if I may dare to digress—although it is not really a digression—I would say that in the political arena true and just democracy is essential.
I am now going to indulge in what may almost be regarded as a fulsome compliment to the Liberal Party. Perhaps they need something of the kind. I am not suggesting that I am an appropriate person to indulge in compliments. I have never been regarded as a person who throws compliments about. But when the Liberal Party decided some time ago to elect a new leader, they did so by injecting into the operation, for the first time, the principle of democracy. In other words, they may not have done it completely. There may have been defects here and there, for geographical and other reasons, but they sought to consult the membership of the Liberal Party and they elected a leader.
May I suggest to my noble friends on the Front Bench—the few who remain there, but they are people with influence—that they should take note of this point because in the future the method that has been adopted by the Liberal Party will be forced upon the Labour Party, and even upon the Conservative Party. In other words, there should be thoroughgoing consultation. I mean by that not merely consultation with Members of Parliament or with Members of your
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Lordships' House—that is all very well and I accept it—but consultation with everybody who can be consulted and has a right to he consulted. For obvious reasons, it is not always possible to consult everybody, but that is what I mean by democracy. I am not suggesting that we shall telescope our Parties and that no longer will there be any confrontations or disputations and that we shall all be happy and contented, but when we reach a situation of that kind in the political arena it will make for a much more interesting and effective Parliamentary situation. That is a digression, but it is related to the subject itself. I cannot understand why the noble Lord, Lord Carr of Hadley, boggles at the offer that the Government have made. It is a very good beginning.
Lord CARR of HADLEY: My Lords, if I sounded grudging about participation, I must have expressed myself wry badly because all my life—I made my maiden speech upon it in another place—I have fought for greater participation. I want greater participation and, like the noble Lord, Lord Shinwell, I believe that participation is vital. My concern is that we shall not get it if something like 30 per cent. of the employees in one industry feel that they are legally excluded from it, or at least are not given the legal right to it.
Lord SHINWELL: My Lords, I accept the principle underlying the observations of the noble Lord, Lord Carr of Hadley. I had something to do with this question a long time ago when a nationalisation Bill came before another place. There was not adequate preparation of the legislation sufficiently far in advance, but that is another story. However, I produced an Amendment along the lines of participation, although it was not in the precise language that has been used in the course of this discussion, in which I suggested that the workers in the industry must have some say in its administ ration—in other words, that they should be consulted. The extraordinary result was that the miners' leaders would have none of it.
They said, "We represent the interests of our members and we want nothing to do with administration". That surprised me. Indeed, when it came to the election

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of members to the first National Coal Board I wanted members of the Miners' Federation executive to participate, but after they had considered the matter they decided that they would rather stay out of it and look after the interests of their members. As a result, I had to appoint somebody who was an ex-miners' leader and other people who were not necessarily interested in the industry. However, they had big names in the Civil Service and in my innocence I selected some of them, sometimes with not very happy results. But let us not speak about that.
The noble Lord, Lord Carr of Hadley, equally wants effective participation but he wants it all round. Therefore he raises a distinction between those who are associated with the relevant trade unions and those who are on the sidelines—the sideline, perhaps. They may be members of other organisations or they may not be members of any organisation at all, but the noble Lord wants them all to be consulted. I think that the noble Lord, Lord Carr of Hadley, should understand this point. It is a practical point and we are concerned about the practicalities, if it is to be effective. The reason that we must consult the relevant trade unions is because they are organised. For the purposes of negotiation they are essential. The remainder are not organised. If an industrial firm has 1,000 employees and 900 of them are organised in a relevant trade union, or relevant trade unions, and can be consulted expeditiously in order to avoid industrial strife, or for some other purpose associated with the operations of the industry, all the better. As for the remainder, you cannot consult individuals so easily or so readily; you do the very best you can.
However, I want to impress upon the noble Lord, Lord Carr of Hadley, and those who are associated with him and support him in this Amendment that it is essential to make a beginning. If we can persuade industry to understand what democracy really means and how effective it can be in the industrial operations, that will be good. Even if we do not get the whole hog to begin with, at least we should make a beginning with some part of the animal, although I shall not specify which part. That is what we ought to do. Therefore I suggest that the Government's terminology should be accepted for the
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time being. Then let us see that it becomes effective.
That is all I want to say about the matter, but I thought it was necessary to say it. I might have said it better if I had prepared it carefully by sitting down at a typewriter and getting the semantics right. However, I have done my very best to convey my ideas about what I think is a very important element in industrial operations. In those circumstances, I should accept the language that is offered and make the very best of it.
8.28 p.m.
The Earl of ONSLOW: My Lords, I have been listening carefully to the debate and I have noticed some supreme ironies in it. The ironies have come from a Party whose egalitarianism wants to exclude 30 per cent. from consultation by law; it comes from a Party—
Lord MELCHETT: My Lords, with great respect to the noble Earl, Lord Onslow, his noble friend Lord Carr of Hadley was careful in the way that he put it. The noble Earl was less careful. It is not that people are being excluded by law. The noble Lord, Lord Carr of Hadley, said that they were not necessarily being given legal rights. There is quite an important difference upon which we have laid great emphasis.
The Earl of ONSLOW: My Lords, I should have thought that the difference between exclusion by law and not being given legal rights is very similar to the filioque argument during the time of the split of the two Churches. However, we will leave that point. The irony is that the Party opposite have introduced the hereditary principle into the Agriculture (Miscellaneous Provisions) Bill. Now we have the argument of the Party opposite which is almost exactly the same as that of those who opposed the Second Reform Bill. This was perfectly personified by the noble Lord, Lord Shinwell, who said, "Yes, we think that this is right but …". The final irony is that it is interesting to note that it was a Tory Government which passed the Second Reform Bill and that it is a Tory Party which is pressing for the inclusion by Statute of everybody to have the right to be consulted. The noble Lord, Lord Kirkhill, said:
"we do not consider it right to prescribe a

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particular form of industrial democracy. … But our firm hope and expectation is that it will enable all employees to play their part in the future of these industries."—[Official Report, 14/10/76; col. 521.]
He then used almost exactly the same words later when he said,
"all employees to play their full part".
It seems to me wrong that we should give an exhortation in Parliament that something should be the case when we are legislating on the subject and not in fact include it in this legislation. In that way you are giving less force and creating unfairness, and the noble Lord, Lord Shinwell, was absolutely right—and it is perhaps impertinent for me to say so as I am probably nearly 60 years younger than he is—when he said that it is vital that industrial relations shall be smooth and not bothersome, and 1 cannot conceive of a way that will cause more ill feeling than by Act of Parliament forcing 70 per cent. to be consulted and leaving it to patronisation for the 30 per cent. I very much support this Amendment.
The Earl of HALSBURY: My Lords, the noble Lord, Lord Carr, expressed the hope that he had the support of the Cross-Benches. There are only two of us here at the moment, but that justifies a comment I made last Tuesday when I said that whatever hour of the day or night it might be there would always be a Cross-Bench presence on these occasions. Whatever minor educational differences in the sphere of classical languages there may be between myself and the noble Lord are completely overweighted by our mutual experience on the shop floor. I think we have both been works managers and we both know that the man on the shop floor wants three things: he wants a good job, a good boss and a good shop steward, and he wants to know that his boss and the shop steward are working together and not at cross purposes. That is a perfectly simple, straightforward state of affairs which the noble Lord and I are quite familiar with, and I am quite sure that he ensured that when he was a works manager just as I did when I was a works manager. I have always given myself a small pat on the back to think that I had made a success of it, and I believe the noble Lord did too, so I will give him a small pat on the back—indeed a big pat on the back.
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The question of whether this Amendment is a good one or a bad one is a question of whether or not what it seeks to amend is viable. If it is a thoroughly bad phrase that he is seeking to amend the Amendment only makes confusion worse confounded. What worries me about the whole business of writing moral sentiments into Statute law is that there is a doctrine in the courts that every word of an Act of Parliament must be there for a purpose. If it is totally meaningless, the courts have to search for the purpose which it is supposed to incorporate and they probably get the answer wrong.
I am sorry to keep the noble Lord on tenterhooks while I make up my mind whether I am coming down on one side of the fence or the other, but I must turn to the noble Lord, Lord Melchett, and ask him to elucidate in his reply to my remarks exactly how he would grade our nationalised industries—the Coal Board, the railways, the gas undertakings, the electricity undertakings, and now the undertakings which we are seeking to add to this long list: to take a spectrum between extremes of those which are strong and organic and those which are weak and inorganic, and to give us the rank order in the spectrum where he would arrange them. If he cannot, then the phrase is meaningless and therefore the modification to the phrase proposed by the noble Lord, Lord Carr of Hadley, only makes confusion worse confounded. For that reason, and that reason only, I could not support it.
Viscount ROCHDALE: My Lords, I think I heard the noble Lord, Lord Shinwell, say that we must be pragmatic in this. I will try to be pragmatic and support my noble friend Lord Carr, based on certain small experience I have had which leads me to support very strongly the emphasis in this Amendment on the point that all employees have the right to participate. I should like briefly to make two points. I can call to mind examples where, for one reason or another, probably reprehensibly, consultation has taken place by the senior management with what would be regarded in the Bill as the relevant trade unions, but where the management at various levels have either been forgotten or overlooked. As my noble friend Lord Carr said, this has caused grievances, but management is apt to be very loyal and it will sit on its grievances for quite a long

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time—probably too long, and damage is done. If all employees have the right and it is written into the Bill, that should assist the position.
My second point is this. Some noble Lords have said that all good employers would automatically consult. I have no doubt that they probably would, or that it would be their intention so to do, but I can equally recall occasions—and this is not being hypothetical—where pressure on the senior management by trade unions might deter him from making the consultations that he ought to make. That being so, if it is written into the Bill and into the Statute, that will relieve the senior management a good deal. When he has these pressures put upon him he will be able to point to the Act—as it will then be—and say, "This is what I have to do by law", and he will therefore consult. Therefore, whatever the correct interpretation of the rest of the clause may or may not be, I would still prefer to have this Amendment in, to make it absolutely clear in order that it may help the management.
Lord TREFGARNE: My Lords, the Government's protestations about this matter would be more convincing if we did not know the facts. The facts seem to he that these provisions were written into the Bill originally on the representation of the TUC, and that it is only unions approved by the TUC which should be consulted in future. The Government have never said that, of course, but it is obvious to most of us that that is what is intended. It is for that reason—I cannot speak for all of us—that I personally find this Amendment so attractive. I said that the difficulty was that the facts dissuaded us from accepting the Government's view. There are further facts like those mentioned by my noble friend Lord Carr just now, and also those mentioned by my noble friend Lord Ferrers during the Committee stage, which confirm our worst fears that consultation has so far at least not taken place with all sorts of people who really ought to have been consulted. For that reason, I hope my noble friends will press this Amendment.
Earl FERRERS: My Lords, I have never hesitated to mention my apprehensions
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of the provisions of industrial democracy. I may be alone in this, but do not think I am. The utterly commendable requirement to consult with people is totally different from what could be the concept of industrial democracy where by some form of election, selection, or something of that sort, the running of industries will be in the hands of people who are not necessarily equipped to run industries. The part of the Bill with which we are now dealing is not that part which says what form industrial democracy shall take; it is the part which says who shall be involved in discussing what form it shall take.
I was struck by two observations, one made by the noble Lord, Lord Shinwell, who said, in effect, "Let us make a start, and the Bill as it stands is a start without the Amendment". The other remark was made by the noble Viscount, Lord Simon, who said that if people are left out of these consultative processes it will be a disaster. I must say I believe the noble Viscount, Lord Simon, is right. If you are going to consult as to what form your industrial democracy should take—and, after all, this could end up by being a consultation as to how the industry in the end should be run and who should run it, and that is a colossal undertaking—then it must be that all the people should be consulted. I sought to achieve this by a very simple little Amendment earlier, an omnibus, which was rejected by everyone. The noble Earl, Lord Halsbury, says he is not quite certain whether he is going to come down in favour of this, but at least this has the merit of being neither Latin nor Greek, but English. Everyone can see that what it really means is that all employees have the right to participate.
Lord SHINWELL: My Lords, I am not sure whether I have misunderstood the noble Earl, Lord Ferrers. There is nothing in the Bill which prevents those who arc not members of a relevant trade union from being consulted. Indeed, there is a provision in this clause with which we are now dealing by which those who are not members of the relevant trade union are entitled to be consulted. There is no difficulty about that at all. It is a question of the method.
Earl FERRERS: My Lords, that is absolutely right. That last provision was

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put in at Committee stage. I think it is a point of principle—after all, we are talking about vague things like industrial demoracy; no one quite knows what it means—that it should be indicated that all people have the right to participate. Of course, the noble Lord, Lord Shinwell, is absolutely correct, because you cannot discuss and negotiate with individual people; of course you cannot; somehow they have to get themselves into bodies suitable to he consulted with. This is one of the great drawbacks of the Bill as it is—that it has resulted in a precipitation of people into, not necessarily unions, but staff associations, and so forth, as a result of the Bill, which they would not have otherwise done. This has a drawback in so far as it has dragooned people who would not wish to be dragooned into joining associations. It also has had the problem of providing a proliferation of bodies who could be consulted. But, with respect, that is the kind of problem you get into if you are going to have suggestions of this kind put into the Bill.
I should like to reiterate what was said by my noble friend Lord Carr of Hadley. There is a world of difference between those who should be consulted from the point of view of collective bargaining, and those who should be consulted from the point of view of how industrial democracy should emerge. It is the latter point with which we are dealing. I hope that the noble Lord, Lord Melchett, will be able to accept this Amendment on the basis that it is putting into clear words what most people think, which is that if you are going to have industrial democracy everyone has the right to be consulted, even though that right may be in the form of being a member of some body which should be consulted in the place of the individual.
8.45 p.m.
Baronesss WARD of NORTH TYNESIDE: My Lords, I should like to support the Amendment of the noble Lord, Lord Carr of Hadley. I have listened with great interest to all the speeches that have been made, and to a great deal of what has been said about industrial democracy. I find it absolutely fascinating that, up to the moment, nobody has referred to a fact that I have raised once before. It seemed odd that I should have to raise it, but at the moment there is a committee,
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appointed by the Government of the day, which is considering industrial democracy. Presumably they are to advise, it being thought, of course, that the Government of today will still be in power, which Heaven forbid! But a committee is sitting on industrial democracy. I raised the matter at the time and I will not continue on this, but no woman has been appointed to the committee.
I should have thought that before the committee report—and Heaven knows how long they will be before they do report—the Government could find out how they were getting on. In this debate on the Amendment of my noble friend Lord Carr, my noble friend, as I shall call him, Lord Shinwell, made a contribution, to which we listened with great interest, as we did to all the contributions made by many other noble Lords. All this will be reported, and there is not the slightest doubt, even if none of them is in the Gallery now, that the Committee on Industrial Democracy will now be in a position to sort out the problem, which is that it is very necessary that everyone in industry shall have the right to be consulted.
In the discussion tonight we have given guidelines to the Committee on Industrial Democracy. It surprises me that no one has ever mentioned this committee. I should like to ask whoever is going to reply whether they will see that the views of this House are sent to the committee without delay, so that they will know the problem, and will know that we feel that it would be right that everyone in an industry should have the right to be consulted. Of course, if one has had any connection at all with industry one knows that in some industrial establishments only the recognised trade unions are consulted. I am not against the trade unions at all, but I think that very often they have been very narrow in their approach. I want to see everybody getting themselves into groups, and if they have not done so, and if we pass this Amendment, which I hope we shall, they will then see the way that we are thinking and they will get themselves into groups.
My Lords, I hope we pass this Amendment and that it goes at once to the Committee on Industrial Democracy. In fact, noble Lords opposite can say to the committee, "Please hurry up with your

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Report", so that when the Bill finally becomes law it will cover the point so adequately put by my noble friend Lord Carr of Hadley, that all people shall have the right to be consulted in certain circumstances. I hope we are going to divide on this and I hope that we get a large majority, so that the committee can know that the majority of people from the House take the view that somehow or other we must provide for all people to be consulted.
The LORD CHANCELLOR: My Lords, the Question is—
8.50 p.m.
Lord MELCHETT: My Lords, grateful as I am to my noble and learned friend for trying to save me from the difficulties I shall have in replying, it would be appropriate if I said a brief word on behalf of the Government, if only to tell the noble Baroness, Lady Ward of North Tyneside, that there are two committees sitting on this subject at the moment. There is the Bullock Committee dealing with private industry, and there is an internal committee looking at industrial democracy in the nationalised industries. I have no doubt that the second committee will be aware of the views expressed in your Lordships' House which are, indeed, in line with the views expressed by the Opposition in another place on the subject of industrial democracy. I think it might be a little late to send evidence to the Bullock Committee, because my understanding is that they are nearing the completion of their report and it might only serve to delay matters (something which both the noble Baroness and I would not wish to do) if we provided them with a rather voluminous number of Hansards. We have discussed this matter at great length and I have no doubt that the points raised by the noble Baroness, Lady Ward of North Tyneside, and her noble friends may well have been put to the Bullock Committee before now.
The noble Earl, Lord Halsbury, asked me some questions. I must say I was slightly surprised to hear him say so categorically what he felt people on the shop floor were after. From my very limited experience—and I immediately admit to having a great deal less experience in these matters than he has, or the noble Lord, Lord Carr, has—from the time I
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was at the Department of Industry and spoke to people working in industry, I would have said a great many people had rather higher aspirations than those the noble Earl suggested they had. Indeed, I met several people who are already wholeheartedly involved in running the undertakings for which they work, which would certainly do a great deal for the noble Earl's suggestions. He has said on two Amendments that he feels the statement in the Statute is meaningless. We discussed what I felt it meant, and noble Lords opposite did not feel it meant, at considerable length during Committee.
I will not go over that again, but it may help if I remind the noble Earl that the words will not cause the court problems in the way he suggested they would because there is a provision in subsection (8) of this clause which makes them non-justiciable in front of the courts, simply because of the worry that it might be difficult for the courts to interpret them. That is something we discussed at length during Committee stage, although it obviously came as a surprise to at least one noble Lord on the Liberal Benches.
The Earl of HALSBURY: My Lords, would the noble Lord give way? I am greatly obliged. If the thing is not binding in the courts, what is the point of putting it into an Act of Parliament. Surely, Acts of Parliament are not here to write moral essays into.
Lord MELCHETT: My Lords, I am not sure that moral essays are that bad a thing, even in an Act of Parliament. The Act will be something which both Corporations will look to see the way that Parliament intended them to run their businesses.
Lord BYERS: My Lords, is the noble Lord not confusing an Act of Parliament and a code of conduct? It seems to me this is a very important point.
Lord MELCHETT: My Lords, I accept that it is an important point, but it is something which we discussed at great length during the Committee stage when an Amendment was moved to alter this provision. It may be that noble Lords are not satisfied with the fact that it is still in the Bill, but we discussed it at length. I have spent some time dodging round the

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edges of this issue, and 1 ought to get to the point. If noble Lords on the Liberal Benches wish to put down another Amendment, so that we can again have the discussion about the words being interpreted by the courts, they can.
My Lords, it is, of course, the Government's intention that employees should be effectively involved in the decisions which affect them. As I see it, the only difference between us is on how this can best be done. We firmly believe that employee interests are best represented through their trade unions. This is not a question of dogma but of facing up to present-day industrial realities, and there I am echoing something which my noble friend Lord Shinwell said in, if I may so, one of the few speeches he has made in support of the Front Bench during the course of this Bill, and all the more welcome for that. It is unreal to suppose that in an industrial landscape increasingly dominated by large conglomerates employee interests can be adequately represented other than by the trade unions, who alone have the resources and the ability to convey the collective views of their membership to management and to ensure that these views do not go unheeded. This view is, of course, reflected in Government policy on proper employee representation throughout industry and explains why independent and recognised unions have been given such a key role in all our industrial relations legislation.
The noble Lord, Lord Carr, said that without the Amendment which he and his noble friends have moved this would be a source of trouble and grievance in these two industries. When he raised this point during the Committee stage I said, and I repeat, that I accepted that there are very strong differences of view on this in the industries and between Parties and many people. But it did seem to me that there was some force in the argument that if in this Statute we followed the consistent line which this Government have adopted in all our industrial relations legislation it would be less likely to lead to particular trouble in these two Corporations than if we changed course, in the Government's view, at least, and gave a statutory right of consultation to people not in recognised trade unions. Although I do not put that as a conclusive argument, I think it is at least a point which should have some force with noble Lords opposite.
The Earl of ONSLOW: My Lords, would the noble Lord give way for a moment? Does he not realise that the argument he has just produced, for the big battalions, that only the big conglomerates can do it properly, is i he most depressing thing we have heard on the issue of individual liberty, and really must be a betrayal of Socialist principle when you consider that the Socialist Party was founded for the protection of the weak, the poor and the minorities.
Lord MELCHETT: My Lords, we fight for the protection of the weak and the poor, but we fight for adequate, realistic and effective protection. My firm belief, and 1 believe it is the experience of other countries with a great deal more experience and a long way ahead of this country in industrial democracy, is that without working through organised and independent trade unions the employee participation can occasionally be a sham; it is not effective representation of employees' views, nor an effective way of giving employees some say in the taking of management decisions or the running of the firms for which they work. I do not think that it is a denial of individual liberty to take the line the Government have taken, because, as I said at Committee stage, the Organising Committees for both British Aerospace and British Shipbuilders have made clear that they are prepared to talk to all the employees in their industries. We are saying that the way we see as going forward is going to be the most effective for all the people in the industries.
Baroness SEEAR: My Lords, before the noble Lord calls in evidence foreign countries whose experiences are in advance of ours, I think it would be fair to point out that in Germany, to which I imagine he is in part referring, employee representation is not dependent on trade union membership.
Lord MELCHETT: Yes, my Lords, and the noble Baroness will remember that during the Second Reading debate when this came up I referred to some research papers which had been published by the Bullock Committee, to which the noble Baroness, Lady Ward, referred, analysing the experience of West Germany, among other European countries. The firm conclusion which I, at least, drew

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from reading those very interesting papers was that, unless independent trade unions had been involved in carrying forward industrial democracy, the fact of the matter had been that the employees had not been able to influence the direction that the management of the companies had taken. As I said, management of companies, particularly large international conglomerates, are extremely powerful people. This is not necessarily a bad thing, but it is important that the employees should have equally powerful bodies to represent their interests.
Lord BEAUMONT of WHITLEY: My Lords, the noble Lord is not being entirely logical. Is it not true that you can have independent trade unions having representation and also have other representation as well? He is trying to bedevil the issue by putting two opposites which are not opposites against each other, that either you have independent trade unions or you have other representation. The point, surely, is that you should have both.
Lord MELCHETT: My Lords, we are not ruling out the fact that these two Corporations can consult with people who are not in recognised trade unions. We are merely saying that, if a statutory duty is to be placed on the Corporations to consult, it should be in line with the rest of industrial relations legislation, with those bodies which we consider to be most able to represent the interests of employees in the firms; that is, the independent trade unions.
I have not touched on the other difficulty which my noble friend Lord Shinwell did touch on—and I think he made the point very forcefully—that of consulting with a very wide range of people, the difficulty that may well occur when there are a large number of small organisations all claiming to represent different interest groups, the impossibility of deciding whether or not they represent particular interest groups.
My Lords, the trades union movement has a long and impressive record of representing the interests of those in industry. It has the organisation in existence to obtain and then effectively
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put forward their views. Recognised unions by definition must have the support of a significant proportion of the workforce. I am sure that noble Lords on all sides of the House would also agree that where an organisation is to represent those working in the industry it is important that it should be independent, otherwise the employers could put pressure on its members to take decisions that would run counter to their own best interests.
We want to build on all these strengths. We believe that the trades union movement provides a workable way for those in the industry to participate in industrial democracy. That is in contrast to the approach in the noble Lord's Amendment, in which the end is clear that rights are conferred but without any practical means of expressing them. I suggest that our approach provides a more effective means of promoting industrial democracy and I therefore commend it to noble Lords opposite in preference to that suggested in the Amendment.
Lord CARR of HADLEY: My Lords, it was the noble Lord, Lord Melchett, who said that he was dodging round the edges of this issue. I do not want to press that point too far, but I am afraid that many of us still feel that he went on dodging round the edges of the issue throughout the whole of his speech.
There is one point he made tonight which he made on a previous occasion; that is, that the line that the Government were taking in this Bill towards relevant trade unions and others was only consistent with our normal established practices of industrial relations in this country and that it would be a mistake to change course now, suddenly. There would be some reason in that argument if the Government were not changing course; but the trouble is that they are changing course. For the first time and in advance of the report of the Bullock Committee and the other Committee looking at the parallel problems within the Public Service, the Government are introducing into this Bill as a pilot experiment this concept of industrial democracy of a strong and organic kind which even they themselves cannot define. They are not pursuing the old course but are putting forward a new concept. They are raising new hopes.

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One of the things that I and others have said when we have discussed this matter before is that it is dangerous in this life to raise people's expectations and then to disappoint them, which is exactly what the Government are in danger of doing. at least so far as some 30 per cent. of the employees in the aircraft industry are concerned. Why create, as the Government are doing, two classes of employee? Labour Governments always talk about the wrongness of class divisions and yet here by Statute they are creating two classes of employees—first-class citizens and second-class citizens. The first-class citizens have the legal right to be consulted but the second-class citizens, although no one will prevent them being consulted, we are told, are not entitled to any legal right to be consulted. What on earth can be the justification for creating these second-class citizens? I should have thought it was impossible to justify.
The noble Lord says that they can be consulted, but I have just made the point that that is not the same as having a legal right to be consulted. Let us put that on one side for the moment, however, and ask the noble Lord whether he really believes they will be consulted, because they do not believe it. Large numbers of them do not believe they will he consulted and some of them are already writing with evidence that they are not being given the meetings with the organising bodies in these two industries that they should be getting and would be getting if indeed they are to be consulted despite not having a legal right.
A senior manager in one of these two industries whom I know said to me the other day that he had been talking to a shop steward in his works who had very strong views on this matter and who said quite bluntly that anybody who did not belong to one of the relevant trade unions as defined in this Bill was a non-person. That was the phrase used, a "non-person". They did not count and should not be considered. I am not suggesting for one moment, nor was my manager friend suggesting, that such an intolerant, uncivilised attitude is the policy of the unions concerned. Of course it is not, and I am sure the leaders of the unions concerned would do their best to prevent such an intolerant attitude ever becoming their policy. But anybody with any experience of industry knows that
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there are within the ranks of these trade unions small, totally unrepresentative groups of people who, alas! have that extremely intolerant and intolerable attitude to anybody who does not think as they do and is not prepared or does not feel it is apt to belong to the same organisation as they do. We in Parliament must realise, therefore, that there are large numbers of people in these industries who see this new concept of industrial democracy being injected, who see that they are being used in a pilot experiment and who see themselves being denied the legal rights under this experiment. It is not surprising, therefore, that they are unhappy. Can we wonder that they have these fears, and genuine fears, and can we wonder, if we allow this to happen, that these industries start with this core of suspicion, distrust and fear, souring employee relations within them from the very beginning.
The noble Lord, Lord Melchett, says that the Government want employees to be effectively involved in matte's which affect them and that they want all employees to be so involved. He went or to say that they also believe that the employees are best represented through their trade unions. I for one would agree with that—although I know that not everybody behind me would believe that perhaps. I do agree with that but with this important proviso, that there are genuinely appropriate trade unions for them to join.
The trouble is that as relevant trade unions are defined in this Bill there are not appropriate trade unions for large numbers of these people to join within the definition of what constitutes a relevant trade union. There are many and increasing numbers of other associations, some of which have already been certified as genuinely independent. Please let me say that no one, least of all from this side, is advocating that legal rights of consultation should be given to unions that are not independent. We are not advocating that. Let me repeat that and let there be no misunderstanding about it. Of course an organisation that is not independent is not what we are talking about. However, there are organisations that are not relevant in the meaning of the Act, though they have already been certified as genuinely independent. I am not suggesting that they should be treated

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as relevant for collective bargaining purposes. I keep on making this point. However, I am suggesting that they are properly relevant for the purposes of consultation.
The noble Lord, Lord Shinwell, said that we should make a start. He did not use the words but I think that what he was really saying to us was, "Half a loaf is better than no bread; let it all develop from here". The point that I am putting to your Lordships is that we should ask ourselves whether it will really all develop from here. Is it not at least likely that the very purpose of the wording is to prevent matters from developing from here and is to freeze the position exactly as it is? Is it not likely that the purpose is to prevent this flexibility and growth?
I believe that the noble Lord, Lord Shinwell—and I say this with great respect in view of his very long experience in the Labour Party and the trade union movement and of his great knowledge of these affairs—may not realise that it is the case now (and those of us who work in industry are aware of this) that some of the great organisations which in the past have fought for this right of organisation and of association and have fought battles that we all admire against great odds have now themselves become rather like the tyrants against whom they themselves once fought. They now want to keep the monopoly to themselves. I repeat: we cannot open the floodgates to everybody to take part in collective bargaining because that would be a recipe for chaos. On the other hand, I really do believe that any worthwhile organisation ought to have a legal right to be consulted. That is what we are pressing for and that is what I believe we must continue to press for.
Finally, may I say to the noble Earl, Lord Halsbury, that, while I agree with
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him that the conditions that he mentioned are indeed fundamental, I am also bound to say to him that I agree with the noble Lord, Lord Melchett, that increasingly—and I hope that this trend will continue—people are looking for more. The fundamentals of which the noble Earl spoke are fundamentals and must be there, but I believe that people are now looking for more. I agree with the noble Earl in that I wish these words were not in the Bill, though not because I do not want to further the cause of joint consultation and ever increasing participation and involvement. I do, as I said in an interruption of the noble Lord, Lord Shinwell, and I think I can honestly say I have fought or at least argued for this all my life and I made my maiden speech in another place on this subject some 26 years ago. So I do not object to these words because I do not want the concept in the Bill. I object to them only because of their imprecision in a Statute.
I agree with what the noble Lord, Lord Byers, said in his intervention. Injunctions of this kind are better in a code of practice rather than a Statute. My judgment, alas! is that, whether 1 or your Lordships like it or not, the Government will insist and that these terribly vague words will appear in the Bill. If so, I submit to your Lordships that it is important to clarify them and that, in principle, if we are to have the word "democracy" in a Statute, we must make it clear that it applies to everyone so far as consultation is concerned. Therefore, I am afraid that I must press the Amendment and ask your Lordships to support it in the Division Lobby.
9.13 p.m.
On Question, Whether the said Amendment (No. 23) shall be agreed to?
Their Lordships divided: Contents, 73; Not-Contents, 40.

CONTENTS

Amory, V.

Greenway, L.

Rochdale, V.

Auckland, L.

Halsbury, E.

Ruthven of Freeland, Ly.

Beaumont of Whitley, L.

Hampton, L.

St. Aldwyn, E. [Teller.]

Belstead, L.

Hanworth, V.

Sandford, L.

Blakenham, V.

Harcourt, V.

Sandys, L.

Bolton, L.

Harmar-Nicholls, L.

Seear, B.

Byers, L.

Hornsby-Smith, B.

Selkirk, E.

Campbell of Croy, L.

Inglewood, L.

Selsdon, L.

Carr of Hadley, L.

Kinnaird, L.

Sharples, B.

Cathcart, E.

Lauderdale, E.

Simon, V.

Clifford of Chudleigh, L.

Lindsey and Abingdon, E.

Skelmersdale, L.

Cork and Orrery, E.

Lloyd of Kilgerran, L.

Stamp, L.

Craigmyle, L.

Long, V.

Strathclyde, L.

Cullen of Ashbourne, L.

Lyell, L.

Trefgarne, L.

de Clifford, L.

Monck, V.

Trevelyan, L.

Denham, L. [Teller.]

Monson, L.

Tweedsmuir, L.

Drumalbyn, L.

Morris, L.

Vickers, B.

Dundee, E.

Mowbray and Stourton, L.

Wade, L.

Elles, B.

Nelson of Stafford, L.

Waldegrave, E.

Elliot of Harwood, B.

Newall, L.

Ward of North Tyneside, B.

Elton, L.

Northchurch, B.

Wigoder, L.

Exeter, M.

Northesk, E.

Windlesham, L.

Falmouth, V.

Onslow, E.

Young, B.

Ferrers, E.

Rankeillour, L.

Gowrie, E.

Redesdale, L.

NOT-CONTENTS

Ardwick, L.

Houghton of Sowerby, L.

Peddie, L.

Birk, B.

Jacques, L.

Pitt of Hampstead, L.

Blyton, L.

Kirkhill, L.

Popplewell, L.

Castle, L.

Llewelyn-Davies of Hastoe, B.

Shackleton, L.

Champion, L.

McCluskey, L.

Shinwell, L.

Collison, L.

Maelor, L.

Stedman, B.

Crowther-Hunt, L.

Melchett, L.

Stewart of Alvechurch, B.

Davies of Leek, L.

Morris of Kenwood, L.

Stone, L.

Davies of Penrhys, L.

Murray of Gravesend, L.

Strabolgi, L. [Teller.]

Donaldson of Kingsbridge, L.

Northfield, L.

Taylor of Mansfield, L.

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

Oram, L.

Wallace of Coslany, L.

Fisher of Camden, L.

Pannell, L.

Wells-Pestell, L. [Teller.]

Greenwood of Rossendale, L.

Peart, L. (L. Privy Seal)

Winterbottom, L.

Hale, L.

Resolved in the affirmative, and Amendment agreed to accordingly.
9.20 p.m.
Viscount SIMON Viscount SIMON moved Amendment No. 24:
Page 4, line 20, at end insert ("incorporated in the United Kingdom").
The noble Viscount said: My Lords, this Amendment and Amendment No. 62 repeat an Amendment which we moved in Committee. The noble Lord, Lord Winterbottom, was good enough to say that he would look into it, and I am wondering whether he will be able to tell us something about it. I beg to move.
Lord WINTERBOTTOM: My Lords, I suspect that when we discussed this last week it was at some late hour, and I may not have been able to grasp fully the exact implications of the noble Viscount's proposals. As he has said, he moved an
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identical Amendment in Committee, when he explained that its purpose was to relieve the Corporation of a task—and this is the important point—which it would be impossible for it effectively to carry out. I think that was the argument. He said, we were trying to impose on it a task which it could not effectively carry out; namely, to promote industrial democracy in wholly-owned subsidiaries operating overseas—say, in a subsidiary of a British aircraft company operating in Saudi Arabia. It was argued by the noble Viscount that it would be impracticable in countries where the legal position was quite different from that in this country.
As I promised on that occasion, we have carefully considered both the Amendments put down by the noble Viscount and we have asked ourselves whether we should seek to achieve the result he intended. The Amendments as drafted do not do this, because the Corporation

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might carry out activities abroad itself, and not through a subsidiary. That is an important point. But these are technical points. Our reason for rejecting the noble Viscount's proposal is that after very careful consideration we have concluded that the potential conflict which he fears could not in fact arise. The duty to promote industrial democracy is not enforceable in a court of law, particularly in a court of law overseas. Nevertheless, we believe it is still a duty, and a duty in the self-interest of company concerned. We therefore do not think that, so far as this duty is concerned, there could be any legal conflict, either with a Corporation or a wholly-owned subsidiary, arising from differences in the situation here and abroad.
As to Clause 6, which I believe is now Clause 7, the reference to a United Kingdom Act colours the clause, and the obligation would therefore, in effect, be limited to undertakings carried out in the United Kingdom and would not put any impossible legal obligation on a company based in this country. My Lords, I hope that this explanation will satisfy the noble Viscount that his points have been carefully considered, but we believe that an Amendment on the lines that he has suggested is simply not necessary.
Viscount SIMON: My Lords, I am much obliged to the noble Lord, Lord Winterbottom, Quite frankly, I should like to read in Hansard what he has said, and perhaps consult those with whom we have been in touch, because I cannot quite grasp the position at the moment. So if I may withdraw this Amendment, I shall perhaps bring the matter up again on Third Reading.
Amendment, by leave, withdrawn.
Lord LLOYD of KILGERRAN Lord LLOYD of KILGERRAN moved Amendment No. 28:
Page 4, line 30, leave out subsection (8).
The noble Lord said: My Lords, the purpose of this Amendment is to remove a subsection from Clause 2 which purports to exclude the rights of persons and firms to apply to the courts. In my submission, as I pointed out at Committee stage, any part of the Bill which purports to exclude rights of individuals or firms going to the courts is worthy of consideration.
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It may be said that such a clause as this, prohibiting people from going to the courts for any reason will be helpful in that there may be persons and firms associated with these Corporations who might go to court on minor matters and therefore cause considerable and unnecessary litigation. But the words of subsection (8) at present in the Bill are:
"Nothing in this section"—
that is, Clause 2—
"shall be construed as imposing upon either Corporation, directly or indirectly, any form of duty or liability enforceable by proceedings before any court."
Therefore, in considering the scope of such a subsection one must question the terms of the clause.
Clause 2 is headed, "General duties of the Corporations" and applies in subsection (1)(a) to a very large number of fundamental attributes in the activities of the companies, such as design, development, production, sales, repair and maintenance. Therefore, as I indicated in Committee, there may be technical matters in relation to confidential technical information which may be imparted to the Corporations and, as a result, certain rights of individuals owning know-how, or intellectual or industrial property in patents, designs, trademarks, might be infringed as a result of the action of the Corporation.
I carefully considered the lucid reply given by the noble Lord, Lord Kirkhill, in this matter at Committee, where he assured the Committee that the exercise of rights in relation to industrial property and intellectual property would not be affected by the prohibitions in this subsection. He also went on to say that this subsection purporting to prevent firms and persons going to the courts was directed to the aspects of industrial democracy which are to be found in subsection (6) of this clause. If that is so, I would go a considerable way with the Government in this because, as I have said before, matters in relation to purely industrial democracy are matters to which the courts should not possibly be involved.
Lord McCLUSKEY: My Lords, will the noble Lord please furnish me with the Hansard reference to the remarks of my noble friend Lord Kirkhill?
Lord LLOYD of KILGERRAN: Lord Kirkhill's remarks are to be found in the Official Report for Friday, 15th October, at columns 601–603. The noble Lord, Lord Kirkhill (in column 603), in reply to my rather long speech on Committee, kindly said that he would reflect on the matters which I had put before the Committee. The noble Lord, Lord Redesdale, in the course of the Committee stage expressed considerable sympathy with my point of view, but felt that in view of the great uncertainty associated with various factors in the Bill this was another matter of uncertainty and he could not go all the way along with me. I did not understand that point of view for if there was uncertainty as to what could he clone with the courts I felt that this was a matter on which I would have expected him to give me more than merely his sympathy.
The noble Lord, Lord Byers, indicated earlier this evening that there were certain matters in this Bill that might be more appropriate to a code of conduct. Subsection (8) might be more appropriate to a code of conduct rather than be included in the Bill. Since the Committee stage, the noble Lord, Lord Melchett, has introduced an Amendment (No. 30) to this subsection which I am suggesting should be deleted. With the leave of the Committee, I should like to speak to this Amendment now. The noble Lord, Lord Melchett, is proposing that the words "directly or indirectly" should be deleted from the subsection. That limits the scope of the Bill to some extent. Before I decide what should be done about Amendment No. 28, I should like to hear what the Government have to say regarding Amendment No. 30. I beg to move.
9.31 p.m.
Lord TREFGARNE: My Lords, I hope that the noble Lord, Lord Lloyd of Kilgerran, will press Amendment No. 28. If he does, I will support him, unless some convincing reasons are adduced by the Minister. Listening to these proceedings and the Committee stage earlier, I have, for some reason, acquired a suspicious mind. I have come to the conclusion that one needs to view the Government's proposals in this Bill with considerable circumspection. That applies to this one, too. How odd when one is enacting a major piece of legislation that one of its
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novel but none the less fundamental provisions has a subsection at the end to prevent it from being enforced in any court of law. My mind is carried back to the various pieces that one has read about how this Bill came to be produced in the first place; how the TUC, we are told, insisted that these provisions were enacted as their price for agreeing to the Social Contract. Whether or not that is the case, I am not able to say. It seems to me remarkable that this provision should be included.
I am convinced that the effect of this subsection is not to prevent the Secretary of State from achieving what he wants, not to prevent the trade unions achieving what they want, not even to prevent the Corporations achieving what they want, but it is to prevent those who have no other recourse but the courts from achieving what they think is their entitlement. Who are these people who have no other recourse than the courts? It is simply the individual people who have no other means of seeking redress for any grievance they may think they have under this clause but going to court and asking for a declaration or a judgment in their favour.
It is likely that the Secretary of State does not need the courts because he has other levers. The TUC and the trade unions do not need the courts because they, too, have all sorts of other levers. The Corporations can achieve their will without necessarily resorting to the courts. By agreeing to this subsection, we shall be depriving the individual of the right of audience where it may be most effective. For that reason, we should agree to this Amendment. I will most certainly support the noble Lord, Lord Lloyd of Kilgerran, unless the Government have a very good answer to put forward why I should not do so.
Lord REDESDALE: My Lords, after the noble Lord, Lord Lloyd of Kilgerran, in his usual charming way, caught me slightly unawares on that one point, I have to admit that on a previous occasion 1 offered him sympathy and nothing else. Perhaps the eloquence of the noble Lord, together with that of my noble friend, has swayed us a little bit more, so that instead of just giving sympathy and tea we would now come back and give tangible support to the noble Lord. I

1015
will not detain the House any longer by talking about this, but we feel that this is an Amendment which should be supported.
Viscount SIMON: Before the noble Lord replies, I wonder whether I might put another point. My noble friend covered one field and the noble Lord, Lord Trefgarne, dealt with another matter. I should like to get some guidance from the noble Lord on a simple case. Looking at subsection (3), your Lordships will see that among other things it is the duty of British Shipbuilders to promote the sale of ships. Let us assume that in the course of promoting sales of ships, a company offer a ship to a client at an agreed price and then somebody comes along and offers them a higher price and the company sell the ship to the second buyer. Would this mean that the man on whom they reneged over the original contract is denied the right to sue them in the court? Perhaps it does not mean that, but it looks to me as though it might.
Lord McCLUSKEY: My Lords, first, I should like to say that, with the leave of the House, I will take Amendment No. 30 along with Amendment No. 28 and deal with them together, as did the noble Lord, Lord Lloyd of Kilgerran. I believe that what my noble friend Lord Kirkhill said in response to this point in Committee is a correct and accurate statement of the position. I would invite your Lordships' attention to the precise terms of subsection (8), because I think it is important that it should not be misunderstood. I got the feeling from some of the observations that fell from the noble Lord, Lord Trefgarne, that he had not properly grasped the limitations of this clause. It says:
"Nothing in this section shall be construed as imposing upon either Corporation, directly or indirectly, any form of duty or liability enforceable by proceedings before any court."
It is the corollary of that that nothing in the clause will detract from any right that the person has independently of the clause. In other words, if there is a duty or liability which the Corporation have by reason of anything else, either in this Bill or in some other enactment, or by reason of some common law right or some other branch of the common law, or by reason of some agreement which has
1016
been entered into, then subsection (8) does not touch that at all. The right of recourse to the courts is still there in respect of the right, the obligation or whatever, which exists independently of Clause 2.
In my submission this is really a very limited clause. I would invite your Lordships' attention to a precedent for that which is to be found in the Iron and Steel Act 1967 in Section 3, which deals with the general duty of the Corporation which was set up under that Act. Section 3(4) provided—and I quote:
"Nothing in subsection (1) above shall be construed as imposing upon the Corporation, either directly or indirectly, any form of duty or liability enforceable by proceedings before any court."
One of the duties laid upon the Corporation under that section was the duty to secure the safety, health and welfare of persons employed by them. Plainly, the duties that arise in the field of safety, health and welfare are not touched by that. People's right to recourse to the courts is not affected by the clause in the Iron and Steel Act and the position is the same here. If there are rights independent of Section 2 or liabilities independent of Section 2, then the courts are not deprived of any right to adjudicate upon them that they have by reason of the enactment of Clause 2(8).
Lord WIGODER: My Lords, did I understand the noble Lord to say that there is a section in the Iron and Steel Act similar to this which says that nothing in subsection (1) shall be construed as imposing … I am sure I ought to have it at my fingertips but I have not. Would the noble Lord be kind enough to read subsection (1) to us?
Lord McCLUSKEY: My Lords, I can do that. Section 3(1) is rather lengthy because there are four paragraphs. It reads:
"It shall be incumbent on the Corporation—

(a) to promote the efficient and economical supply by the Corporation and the publicly-owned companies of iron and steel products, … to satisfy the reasonable demands of the persons…

(b) to secure that neither the Corporation nor a publicly-owned company shall show undue preference to, or exercise unfair discrimination against, any such persons … in the supply and price …

1017

(c) to take such steps as appear to the Corporation to be practical and desirable for the promotion of the export of such products …

(d)to take such steps as appear to the Corporation to be practical and desirable for the promotion of research into matters affecting or arising out of, the carrying on of iron and steel activities …"

and so on. The noble Lord, Lord Wigoder, will appreciate that I have read this short in order to give the general indication; but they are not totally dissimilar. If the noble Lord, Lord Lloyd of Kilgerran, would like to have the precise section before him I am sure it could be passed. I merely direct attention to it because it is a precedent in 1967 covering this kind of thing. Noble Lords opposite may know, but I do not know that it has given rise to any difficulty of the kind which is feared.
The second point arises in relation to Amendment No. 30. I refer to what was said in Committee by the noble Lord, Lord Lloyd of Kilgerran. It may be that the use of the words "directly or indirectly" would appear to give an ambit to the section which it is not intended to have. For that reason it has been decided that it would be desirable to make the position quite clear and it is proposed to remove the words directly or indirectly "by moving Amendment No. 30. I hope that what has been said has allayed any fears that noble Lords had on this matter. The inclusion of the words, "directly or indirectly" was originally designed to help clarify the effects of the subsection, but their inclusion did not in fact have that effect. Accordingly, I would propose that these words should be deleted and at the appropriate moment will move the deletion of these words by moving Amendment No. 30.
Lord CARR of HADLEY: My Lords, I am not quite sure whether I understood the noble Lord. Not being a lawyer myself perhaps I am finding it more difficult than I should. I am interested in the effect of subsection (8), which we are discussing at the moment, on subsection (6), the one we were discussing a little while ago. Supposing a body of workers organised in some association which has been declared to be independent by the certification officer feels that the Corporation is not carrying out the duty
1018
placed upon it to promote industrial democracy in a strong organic form, would that organisation have a recourse to the courts, or is it one of the objects of this clause to prevent it having such recourse?
Lord McCLUSKEY: My Lords, I think it is quite plain that one of the objects is to prevent it having recourse to the courts for that purpose. As the noble Lord, Lord Carr, will appreciate, it is clear that one could not properly have the courts adjudicating upon a matter of that kind.
Lord LLOYD of KILGERRAN: My Lords, I am grateful for that explanation, but I have had some difficulty in under-standing how the matters which the noble Lord raised, such as contracts, in relation to the general duties of the Corporation could be, as it were, inviolate and therefore that anybody who was aggrieved could go to the courts. I, too, prior to this stage, had read the relevant sections in the Iron and Steel Act, because they were referred to by the noble Lord, Lord Kirkhill, in his reply to me. But I found very considerable differences between the wording in that section and in this clause. Clause 2(1) of the Aircraft and Shipbuilding Industries Bill imposes very wide general duties upon the Corporation as to what it should promote and secure the promotion of. In fact, the scope of the duties is even wider at this Report stage, because during the Committee stage a further aspect of the general duties of the Corporation was introduced into this subsection by the Amendment moved by the noble Lord, Lord Kings Norton, which added "guided weapons and of space vehicles and systems" to the duties to be promoted by the Corporation. Therefore, I support the observations of the noble Lord, Lord Carr of Hadley, in regard to the scope of subsection (6), and in these circumstances it seems to me that this is a matter upon which we should move to a Division.
9.46 p.m.
On Question, Whether the said Amendment (No. 28) shall be agreed to?
Their Lordships divided: Contents, 65; Not-Contents, 34.

CONTENTS

Amory, V.

Greenway, L.

Redesdale, L.

Auckland, L.

Hanworth, V.

Rochdale, V.

Belstead, L.

Harcourt, V.

Ruthven of Freeland, Ly.

Blakenham, V.

Harmar-Nicholls, L.

St. Aldwyn, E.

Bolton, L.

Hornsby-Smith, B.

Sandford, L.

Byers, L.

Inglewood, L.

Sandys, L.

Campbell of Croy, L.

Kinnaird, L.

Seear, B. [Teller.]

Carr of Hadley, L.

Kinnoull, E.

Selkirk, E.

Cathcart, E.

Lauderdale, E.

Sharples, B.

Colville of Culross, V.

Lindsey and Abingdon, E.

Simon, V. [Teller.]

Cork and Orrery, E.

Lloyd of Kilgerran, L.

Skelmersdale, L.

Craigmyle, L.

Long, V.

Strathclyde, L.

Cullen of Ashbourne, L.

Lyell, L.

Trefgarne, L.

de Clifford, L.

Morris, L.

Trevelyan, L.

Denham, L.

Mowbray and Stourton, L.

Tweedsmuir, L.

Drumalbyn, L.

Nelson of Stafford, L.

Vickers, B.

Elles, B.

Northchurch, B.

Waldegrave, E.

Elliot of Harwood, B.

Northesk, E.

Ward of North Tyneside, B

Exeter, M.

Onslow, E.

Wigoder, L.

Falmouth, V.

Orr-Ewing, L.

Young, B.

Ferrers, E.

Pender, L.

Gowrie, E.

Rankeillour, L.

NOT-CONTENTS

Ardwick, L.

Halsbury, E.

Pitt of Hampstead, L.

Birk, B.

Houghton of Sowerby, L.

Segal, L.

Blyton, L.

Jacques, L.

Shackleton, L.

Castle, L.

Kirkhill, L.

Stedman, B.

Champion, L.

Llewelyn-Davies of Hastoe, B.

Stewart of Alvechurch, B.

Collison, L.

McCluskey, L.

Stone, L.

Davies of Leek, L.

Melchett, L.

Strabolgi, L. [Teller.]

Davies of Penrhys, L.

Morris of Kenwood, L.

Wallace of Coslany, L.

Donaldson of Kingsbridge, L.

Murray of Gravesend, L.

Wells-Pestell, L. [Teller.]

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

Oram, L.

Winterbottom, L.

Fisher of Camden, L.

Peart, L. (L. Privy Seal.)

Hale, L.

Peddie, L.

Resolved in the affirmative, and Amendment agreed to accordingly.

9.56 p.m.
Lord LLOYD of KILGERRAN Lord LLOYD of KILGERRAN moved Amendment No. 34:
Page 5, line 20, at end insert—
("( ) No consent or general authority shall be given in pursuance of the preceding subsection unless a draft of the document containing it has been laid before Parliament and approved by a resolution of each House of Parliament.").
The noble Lord said: My Lords, the purpose of this Amendment is to render greater accountability to Parliament over certain actions of the two Corporations. It is necessary not to misunderstand the scope of the powers of the Corporations given under Clause 3(3). The purpose of the Amendment is that wherever the Corporation is to dispose of an interest in any of its wholly-owned subsidiaries, unless the disposal is to another such wholly-owned subsidiary, then this is a matter which should be put to Parliament to consider. As at present drafted, subsection (3) is introduced by the words:
"Except with the consent of, or in accordance with the terms of any general authority given by, the Secretary of State, neither Corporation shall have power"
to discuss all these matters.
It seems to me that there could be disposal of interests of very great significance and of great national importance arising under this subsection, where it would be necessary, in my view, to have the approval not only of the Secretary of State but also of Parliament. During the Committee stage the matter was discussed very fully and, if I may say so, the noble Lord, Lord Melchett, gave a helpful reply, but it seemed to me that he was concerned with avoiding the delays that he said might arise if my Amendment were accepted and that these matters should be put to Parliament. It seems that in view of the wide range of activities of both these Corporations the disposal of certain aspects of their interests should be considered by Parliament before such disposal takes place. I beg to move.
Lord MELCHETT: My Lords, as the noble Lord said, I did my best to explain in detail during the Committee stage why we were opposed to this Amendment and I regret to have to tell the noble Lord, Lord Lloyd of Kilgerran, that I am still opposed to the Amendment although I have considered very carefully what he said during the Committee stage.
1022
We believe that the Amendment would have an effect which we would regard as entirely unacceptable; namely, introducing procedures which would make the Corporation commercially impotent. During the Committee stage the noble Lord, Lord Lloyd of Kilgerran, thought that we would not resist this Amendment (if I remember aright) because there was a similar provision, which was then subsection (6) of Clause 2, which was deleted during the Committee stage. However that subsection referred to the power to make an order altering the duties of the Corporation. Certainly we considered it right that this power, to which noble Lords opposite were so opposed, should be subject to direct Parliamentary control through the Affirmative Resolution procedure. However, I hope the noble Lord will accept that there is a difference between the procedures appropriate for changing the duties of a Corporation and those controlling the exercise by it of normal commercial operations, which is what we are dealing with here. In the case of duties, the Corporation is being required to undertake some activity, or to substitute for an existing activity a new one, as the case may be. All we are suggesting here is that, with the consent of the Secretary of State, the Corporations should be able to expand their activities to take advantage of commercial opportunities. The private sector companies enjoy this sort of freedom. The noble Lord is proposing that the power to take shares in companies or to participate in establishing new ones, say a connection with a new international collaborative project, should only be exercised with the specific approval of both Houses.
My Lords, I have said on Committee, and I still firmly believe, that that would be an impossible restriction on the Corporations' freedom of action and, more important, their speed of commercial response. Indeed, I cannot believe this is really a restriction noble Lords would wish to place on the British aircraft industry, however it is owned. The essential problem is one to which I drew attention way back on Second Reading. If they are to have any chance of commercial success, public corporations need scope to exploit market opportunities. At the same time, because of their role in the economy and their source of finance, they must be properly accountable. We

1023
believe these objectives are potentially in conflict and give rise to considerable difficulties. I would not attempt to hide that for a moment. We believe these objectives are best achieved and the right balance struck between them by the arrangements in nationalised industries legislation pursued by Governments of both Parties.
These objectives combine Ministerial control at strategic level with accountability by Ministers to Parliament for their responsibilities. This leaves the Corporations a reasonable degree of freedom while ensuring Parliamentary control. I would emphasise that our main objection is in the area where we believe the Corporations should have the ability to react very quickly if the need arises. That simply would not be possible if they had to come to both Houses of Parliament for a Resolution to be passed. Aside from the broad principles of the way in which we see the relationship between Government and the nationalised industries operating, which I accept is a difficult area and one, indeed, in which neither Party is entirely right—again, that is something I have made a point of saying during the proceedings of the Bill, because I do not want to hide the difficulties which undoubtedly exist in this area—the speed of reaction to exploit commercial opportunities is important. This Amendment would deny the Corporations that freedom.
The Earl of ONSLOW: My Lords, there is one thing about this Amendment which commends it quite enormously to me. A week or so ago, we went through a long process of debate and argument on the Second Reading of the Felixstowe Docks Bill. We had the Third Reading, and, finally, the Bill was rejected by this House on the grounds of nationalisation by the back door. As I under-stand this Clause 5, without this provision in it, the Secretary of State may nationalise what he likes by agreement.
My Lords, because nationalisation is not just a normal commercial transaction—it is something which affects the right of us all and it affects Parliament above all—it would seem to me absolutely right that something along these lines is put into the Bill. The noble Lord, Lord
1024
Melchett, says that the speed of reaction is important; but the inhibition on the British Transport Docks Board if it wants to take over another set of docks is that it has to proceed by the admittedly cumbersome procedure of the Private Bill. It seems to me very much less than that of the Affirmative Resolution procedure of each House of Parliament.
There is a difficulty in adopting this Amendment as it stands completely, in that it makes it impossible either to sell off or to buy something very small. Obviously, I do not think we want the whole procedure of affirmative act of Parliament; but it would seem right—and I hope we will come back to this on Third Reading—that we should get something which will stop nationalisation by the back door without the express approval of both Houses. If that is the view of both Houses of Parliament, so be it, and so it is right. But we do not want it to be done just on the ukase of the Secretary of State. I sincerely hope that my noble friend Lord Carr and my noble friend (in a non-Parliamentary sense) Lord Lloyd of Kilgerran can get together and sort out something for Third Reading which will overcome my fears and still not hamper the perfectly reasonable arrangements of wanting to sell or buy something very small.
Lord MELCHETT: My Lords, may I ask the noble Earl a question for clarification. There is no hidden motive in this. I think the noble Earl is quite clear that there is no power of compulsory acquisition here. If that is the case, is he defining nationalisation—we have had a great deal of talk this evening about what particular words mean—as being the perfectly voluntary selling of shares to a publicly owned corporation by a private company? That is not what I have ever understood by nationalisation.
The Earl of ONSLOW:My Lords, nationalisation does not have to be forced; it can be voluntary. It may be that both Houses of Parliament would think it is against the wider public interest to have even voluntary nationalisation, and it certainly states in this clause that that is what can happen.
Lord Carr of HADLEY: My Lords, I accept that this is a difficult point. I

1025
take the point made by the noble Lord, Lord Melchett, that if we wish these Corporations to succeed, to be profitable, economical and efficient and all the other things we have said, it is important for them to be able to react quickly to commercial opportunities. On the other hand, the Government, for their part, have to accept the fact that, whatever benefits they may see in nationalisation, one of the penalties of nationalisation is that it puts the activity under the Corporation's control outside the realm of normal commercial operation. This indeed is one of the claims that is made for nationalisation: that it sets different objectives, different standards, and altogether puts that previously commercial undertaking into a different—and the Socialists would say a higher—sphere of human endeavour. I do not believe we can have it all ways.
What concerns me is that if one looks at the whole of Clause 3, one starts off with subsection (1) which says what activities the Corporations may carry on, and paragraph (a) of subsection (1) says that they can carry on,
"any activities which were carried on, immediately before the date of transfer, by a company which, by virtue of this Act, becomes the Corporation's wholly owned subsidiary.".
At least we know where we stand. We know what all these companies being nationalised are doing at the moment. If we were being asked to say that these Corporations should be free, merely on the Secretary of State's say so, to exploit commercial opportunities which may present themselves to them in those spheres of activities of which we are aware, then I think that although some of us might have some fears, we should nevertheless have to concede to the noble Lord that probably it was a reasonable request that the Government were making. But, unfortunately, from our point of view, there is a paragraph (b) to subsection (1) and that says that what each Corporation may do can "with the consent of … the Secretary of State" be extended to "any other activities". That is really taking them into the field of the unknown. I know that we are talking here about powers and not duties and that makes a difference. But here we come back to what I christened my "paper bag" point in relation to powers.
It seems to me that without any rhyme or reason or accountability to Parliament
1026
the Secretary of State could lay down that these Corporations could go into the manufacture of paper bags and that thereafter they could set about an active takeover policy offering high prices for the shares of paper bag manufacturers and be able to go into the paper-bag manufacturing industry without any Parliamentary control of any kind. I am again taking an absurd example. But there is a fairly respectable mode of proof by reductio ad absurdum. If they can do it, it is something which even though Ministers may say that the Government would never think of such a thing, they have the power to do such a thing—not just this Government and this Secretary of State, but all Governments in future and all Secretaries of State in future. That seems to be going too far. In other words, if we had only Clause 3(1)(a) without (b) as well I might go along with the noble Lord, Lord Melchett, and say that the Liberal Amendment which we are discussing is perhaps unnecessary. I do not feel I can take that view because of the existence of Clause 3(1)(b) which opens up entirely unknown and much wider possibilities.
I am inclined to say, therefore, that this is an Amendment which ought to be supported. Against that, however, I wonder whether the Affirmative Resolution procedure is necessary in all such cases. This might in itself be going too far and 1 am in rather a difficult position, therefore, of believing that something is needed but not wholeheartedly being able to recommend that we should press the Amendment proposed by the noble Lord, Lord Lloyd of Kilgerran.
What I should like to say to my noble friends is that I would not advise them to support this particular Amendment, but I should like to consider whether or not at Third Reading we could get an Amendment in place of this one which could give us some Parliamentary control to ensure that great new departures outside the field of activities which we know these Corporations can take on at the moment under Clause 3(1)(a) should be subject to Parliamentary control. If we could be satisfied that they could not depart into wholly new fields without some form of Parliamentary control, then we might be satisfied. But at the moment I cannot wholeheartedly support the Amendment

1027
as it stands. I should like to advise my noble friends, if they can be so persuaded, that we should see whether before Third Reading we can agree on some more limited form of words which might perhaps impose control on any activities under Clause 3(1)(b) and leave Clause 3(1)(a) as the Government wish.
Lord LLOYD of KILGERRAN: My Lords, I am very grateful to the noble Lord, Lord Melchett, for having considered what I said in Committee, he having read Hansard. I know how busy he is, and I do not propose to delay the House very much further. I was delighted to hear the noble Lord, Lord Melchett, use phrases like, "speed of reaction", "freedom—for—commercial—activities", desirability of expansion of activities and "speed of commercial response" in relation to the activities of these Corporations.
I take the point raised by the noble Earl, Lord Onslow, and also accept that we are in a difficult area. Having heard the noble Lord, Lord Carr of Hadley, it may be that the affirmative position which has been taken up in this Amendment is not the right course and, therefore, with the leave of the House I should like to withdraw this Amendment while reserving my position for Third Reading.
Amendment, by leave, withdrawn.
10.15 p.m.
Lord CAMPBELL of CROY Lord CAMPBELL of CROY moved Amendment No. 41:
After Clause 3, insert the following new clause:
None of the functions conferred by this Act upon the Secretary of State or British Shipbuilders shall be construed as authorising or requiring British Shipbuilders to repair or maintain ships except by or through the companies referred to in Schedule 2 to this Act.
The noble Lord said: My Lords, this is the first of the Amendments to delete the ship repairing companies from the Bill and it enables us to debate now the whole question of the removal of the independent ship repairers from this Bill. There are two principal reasons why the removal of these firms would make a significant improvement to what is a bad and a damaging
1028
Bill whose only relevance to the state of our economy is that it reduces confidence in the Government's ability to tackle the real task facing the country.
The first reason is that it is clear that ship repairing was included in the Labour Party's nationalisation proposals for shipbuilding on the mistaken assumption that it was part of the same industry, and was engaged in similar activities. It is not. It is a separate service industry, not a manufacturing industry, and it operates on entirely different lines.
The second reason for its removal is the arbitrary way in which firms have been picked out for nationalisation. Part of the industry is included in the Bill, the remainder being left out. Out of over 100 companies which comprise the industry, 12 are named for nationalisation in Schedule 2. That this selection has been manipulated by the Government is plain from the fact that the criteria for inclusion have been altered several times since the original proposals were published. The companies in the list to be nationalised have changed during that period as the Government have juggled with the criteria. This absurd division of the industry according to a crazy formula—one that was still being tinkered with by the Government while the Bill was proceeding—has naturally generated strong feelings that injustice was being done. The best and quickest way of putting this situation right is to carry out a neat excision and delete ship repairing from the Bill. Nothing the Government have yet said on the subject has advanced any serious or relevant argument in favour of nationalising the ship repairers named in the Schedule.
One pretext put forward is that the Labour Party had committed itself to take ship repairing into public control. That is not a reason in itself on the merits of the case. It is only a reminder of recent history and of the fact that those who drew up the programme of the Labour Party were suffering under the misapprehension that repairing ships and building ships constituted the same Industrial activity. That was the same kind of mistake as that made by Transport House and Labour's National Executive Committee over nationalising selected insurance companies and banks. Even the Prime Minister has described that as

1029
an electoral albatross. It is of course the second albatross: the first is the present Bill, as the Government will discover in the by-elections on Thursday.
So much for the feeble argument that the Government are committed to nationalising these ship repairing firms whether or not it makes sense. There is a further identifiable excuse for this folly that has been employed in your Lordships' House. The noble Lord, Lord Melchett, said that a coherent strategy was needed for these 12 companies out of the 100 or so in the industry. Let us look at other industries that are nationalised. What about steel? The last Chairman of the Steel Corporation tried to work out a coherent strategy in his 10 year development plan. His difficulty was that the Government tried to change it and have seriously delayed it together with the investment in modernisation which was entailed.
Next, let us consider the railways. I invite noble Lord opposite to study the statements by the last Chairman of British Rail, Sir Richard Marsh, since he retired and to decide whether he was allowed to pursue a coherent strategy for British Rail. Ship repairing is a service industry that has to be available in various different places round our coasts to undertake many small tasks at short notice. Of course the same firms have to be able to perform major repairs also.
To be successful, these companies must have a close relationship and good understanding with their individual customers, the shipping firms. Decisions have to be taken quickly on the spot, and business depends also on reliably swift action to follow. The shipping industry, consisting of the customers, has made it clear through its representative body, the General Chamber of British Shipping, that it is opposed to nationalising ship repairers. It predicts loss of efficiency and knows that its own interests will suffer. The ship repairing industry cannot be condemned for its performance; the British industry has been doing well compared with its neighbours. In North-West Europe it has, in the past two years, been increasing its share of the business as a whole. It has been enterprising and successful and has not placed burdens on the taxpayers.
No one can contend that we on this Bench have not given the Government
1030
plenty of time to explain their proposals or to withdraw them. The extraordinary way in which a line is being drawn between the companies to be nationalised and those not to be nationalised has prompted apprehensions about possible hybridity. Again, we have given the Government ample time to try to clarify the criteria and their application to individual companies. There is always Parliamentary concern if it seems that unfairness may arise because companies in the same category are being treated differently without recourse to the proper procedure, including opportunities of providing evidence to a Select Committee. My noble friend Lord Colville of Culross has addressed himself particular; y to this subject and is eminently well qualified to do so. Questions have been put to the Government, but each reply—and there is yet another one available this evening—with its interpretations of the terms in Schedule 2, and the circumstances of individual companies, has simply raised yet more points of ambiguity.
The idea of nationalising part of the ship repairing industry simply because the Government wished to nationalise shipbuilding was misconceived. The attempt to apply the idea in this Bill has shown itself to be a mistake. It was suggested earlier today that there is no difference between taking the ship repairers out of the Bill and the aircraft industry, except in degree. With respect, I submit that there is. The Labour Party did not decide to nationalise the ship repairers on their own. The Labour Party policy people did not wake up one day and announce that they had decided to nationalise the ship repairers. They were included in the original proposals only because of the Labour Party's policy on shipbuilding and their mistaken assumption that ship repairing was inseparable from shipbuilding. Even then, only a part of ship repairing is to be included on an arbitrary basis. Ship repairing was thus dragged into the Bill on the coat tails of shipbuilding. The Labour Government now need help in saving themselves from the result of this misconception. It is very different from the aircraft industry, where unfortunately the Labour Party took a definite decision to nationalise the industry and made this a policy matter, and it is now indeed half the purpose of the Bill.
I hope that your Lordships will see fit to agree with the Amendment and to remove the ship repairers. Indeed, the Government may well benefit later this week, when the IMF team are here, from the disappearance of these particular proposals from the Bill. They may interpret this as a sign that the country is coming to its senses. Of course, the confidence of the IMF and the value of the pound would both be fortified dramatically overnight if the whole Bill were to be dropped, but this at least would be a significant step to indicate that in Britain we have not completely lost our heads or our sense of proportion.
Lord LLOYD of KILGERRAN: My Lords, I rise briefly to support this Amendment on behalf of those on these Benches. Noble Lords have heard argument over many hours as to why the ship repairing business should not be included in the scope of this Bill. If I may say so, I have listened with very great care to what has been said from the Government Benches, but I must say that I agree with the noble Lord, Lord Campbell of Croy, when he says that no relevant argument has so far emanated from the Government Benches. I have heard no argument of industrial, commercial or technical significance to justify the ship repairing business being included within the scope of this Bill, and I therefore rise briefly to associate my Party with the noble Lord, Lord Campbell of Croy, in the submissions he has made to this House.
10.26 p.m.
Lord MELCHETT: My Lords, this Amendment, together with what I take to be consequential Amendments to Schedule 2 to the Bill but which the noble Lord, Lord Campbell of Croy, did not mention in particular, seeks to delete ship repair from the Bill. The noble Lord, Lord Campbell of Croy, mentioned at least twice in his speech, if not more, or at least implied, that ship repairing had been included in the Bill because the industry was put in the Labour Party Manifesto by mistake. The noble Lord said that it had been dragged into the Bill on the coattails of shipbuilding. During the Committee stage, on the 11th October, at column 187, I went to
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some length to disprove that very allegation, and I am sorry that the noble Lord does not appear to have taken in what I said then. However, I should like to repeat what I said at the Committee stage because it makes absolutely clear that, whatever else is the case about the inclusion or exclusion of ship repairing, it is not true to say that it is included in the Bill by mistake or has been dragged in on the coattails of some other industry.
As I said at Committee stage, there were two specific commitments to nationalise the ship repair industry in both of the Election Manifestoes of this Party in 1974. The commitment was quite distinct from the commitment to nationalise shipbuilding. That commitment arose from the report of a joint Labour Party/CSEU/TUC Working Party report which was published in 1973, when we were in Opposition. This joint Working Party recommended that the proposed Corporation should acquire control of all significant companies in the shipbuilding, ship repair and marine engine industries; and that recommendation was endorsed by the 1973 conferences of all three bodies. So at that stage, in 1973, there was a quite separate and distinct mention of the ship repairing industry, and that has been the case in my Party's policy ever since. I hope that, whatever other arguments we may have about ship repairing being in or out of the Bill, people will not say that it simply slipped in at the last minute by mistake.
Lord CAMPBELL of CROY: My Lords, I am grateful to the noble Lord for giving way. I was not suggesting that it was slipped in at the last minute. I was suggesting that, if it had not been for shipbuilding, ship repairing would not be in. I do not think there was any stage where the Labour Party put forward a proposal that ship repairing should be nationalised. It was simply when shipbuilding, as he has just mentioned, was to be nationalised that the marine engine industry and the ship repairers were dragged in, too.
Lord ORR-EWING: My Lords, I have the Manifesto here. I wonder whether the noble Lord could draw my attention to how it occurred. From what he has just said there was apparently

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a behind-the-scenes agreement among the TUC, the NEC (was it?) and someone else. Was this published, and was it verbatim in the Manifesto? Because I cannot find it in the Manifesto. It says, "take into public ownership"; but I may have missed it in a rather long document.
Lord MELCHETT: At Committee stage—and it is at column 187 of Hansard of 11th October, if the noble Lord wishes to refer to the detail—I quoted from the joint working party report. That Working Party report was not quoted verbatim in the Manifesto; I am not sure that Working Party reports very often are. But, as the noble Lord has said, the commitment to take the industry into public ownership was contained in both Election Manifestoes, and that is something which I am now repeating.
Lord ORR-EWING: But I did not think it said ship repairing, which is what we are on at the moment. I thought it spoke in the Manifesto of shipbuilding and aerospace being taken into public ownership. We are now discussing ship repairing. I may have missed it; it is a complicated document.
Lord MELCHETT: I think that the noble Lord has missed it. I do not have a Manifesto in front of me, and I do not have the time to read it to find a particular reference. There might be time for some noble Lord who in a particular corner of the Chamber happens to have a Manifesto and it would be admirable if he were able to find the reference. However, I have the joint statement drawn up by the Working Party to which I referred. The noble Lord will see that it was published; and that is, at least, an answer to one of the questions he has asked me.
May I go on to make absolutely clear the reasoning behind the Government's proposals to nationalise ship repair. The Government's intentions are to take into public ownership the major ship repair companies situated on the main estuaries. The definitions in the Bill were drawn up with this objective in mind. I should like to come back to definitions in a moment.
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Our reasons for nationalising ship repair are clear. Ship repair in many cases is closely integrated with shipbuilding. Let me give your Lordships some examples. Vosper Thornvcroft has a separate ship repair division but here, as in many other cases, shipbuilding and ship repair complement each other. At Vosper's, there is interchange of labour in that the ship repair division has done outfitting work on ships built in their building yards. At Hall Russell, a new ship repair dock has been provided alongside the shipbuilding facilities. At these yards and at others there is close integration between shipbuilding and ship repair. It is therefore illogical to treat the two as separate entities. That is why it is included in the nationalisation Bill. It was done for sound industrial reasons and not, as the noble Lord, Lord Campbell of Croy, has suggested, simply because it was pulled in on somebody's coat tails. As I have said before to your Lordships at least twice and perhaps on three or four occasions, this close link is evident in many of our major competitors, and I have given evidence of this and mentioned it again in connection with Japan, one of the world's leading shipbuilding nations.
There are also sound industrial reasons for nationalising ship repair. The Industry is urgently in need of rationalisation as on some rivers there is wasteful competition. This means that, although as the PA Consultants' report pointed out, new investment is needed, as the industry is now structured that investment will not be forthcoming as it would not produce an adequate return. Nationalisation will enable new investment to take place and at the same time enable some restructuring of the industry on a more coherent basis. Already our nationalisation plans have stimulated one logical proposal for greater integration of facilities. The consultants report also referred to the poor labour relations in the industry. I believe that as nationalisation results in a more efficient, better organised industry, labour relations will improve. Certainly without modernisation, employment in the industry is likely to continue to decline as it has over the last ten years.
A great deal has been said about the definitions of ship repair companies used in Schedule 2 to the Bill. I have said that this was something to which I would return because the noble Lord, Lord

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Campbell of Croy, mentioned it in some detail. Some people say the definitions include companies that are too small to be nationalised. Others say they do not include enough companies. There have also been some allegations that the criteria have been deliberately framed to include particular companies for vindictive reasons on the part of the Government. This last allegation is complete nonsense.
The criteria used in Schedule 2 for the nationalisation of ship repair companies were drawn up with one objective in mind. That was to nationalise the major ship repair companies situated on the major estuaries. The public ownership proposals embraced these major companies because they were the companies necessary to plan a coherent strategy for the industry.
The selection of the companies listed in the Schedule was therefore made for good industrial reasons and the definitions were framed to include these companies and to omit others which were not relevant to the Government's proposals. For example, the shiprepairing subsidiaries of British United Trawlers Group (one of whom, Humber St. Andrew 's Engineering Company Limited, has already been mentioned in the course of these debates) were mainly engaged in carrying out repairs to the Group's own trawler fleet and their facilities consisted of slipways used for this purpose. It was decided that public ownership of these companies would not be appropriate or relevant to the strategy for the ship repairing industry as a whole. Although the companies met the turnover definition, they were excluded from the Bill as they did not meet the definition on drydocks. On the other hand, Scott Lithgow Drydocks Limited, which owns a large and important drydock facility on the Clyde and which is closely integrated with the shipbuilding activities of the Scott Lithgow Group was considered an essential part of the nationalised ship repair division and the turnover definition was therefore set to include this company.
Another example is given by the two Merseyside shiprepair companies, J. B. Howie Limited and Western Shiprepairers Limited. Again, these companies own and operate major drydock facilities on Merseyside, and together with other associated ship repairing companies in the Laird Group, they constitute a major
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shiprepairing activity. But because neither company on its own made the turnover definition, the concept of aggregation of turnover with associated companies was brought in to include these companies in the scope of the Bill.
My Lords, the Government remain convinced of the strength of the case for nationalising the shiprepairing industry. We believe it is necessary in order to maintain the close links which already exist between shiprepairing and ship building and that it will only be under public ownership that we can create a strong ship repairing industry providing good prospects of employment for the future. We will strongly resist this Amendment.
10.37 p.m.
Baroness VICKERS: My Lords, I should like to add a few words to this Amendment. Noble Lords may ask why I should take a particular interest in this, having represented Devonport for nearly 20 years, which was a national industry. When it came to Elections I generally had to point out that it was not a nationalised industry, it was a national industry. In other words, like the Fire Service or police, there to protect our country. We had to have ships ready all the time. I should like to make it clear that I consider this to he a complete difference. I realise that they have had an excellent record, over 300 years. I should also like this to be remembered: they are there for the protection of the country, not to make a profit, whereas we wish that the nationalised industries would pay their way. What worries me is the fact that ship repairing yards will now get into the category of the political arena. I know perfectly well that when there was an Election, or when there was a change of Minister, there was anxiety in the dockyards, and there will be anxiety in many of these yards. I will give an example. When 1-EMS "Ark Royal" was having a £33 million refit, we had great anxieties about whether this would continue. One Recess I was rather worried, so I sent a telegram to the then Minister, Mr. Healey, and asked him to send a reply by 2 o'clock because I wanted to go out. At 1.59 I received a reply:
"No decision made. No cows are sacred".
Honestly! That was not very helpful to the hundreds of men who were working

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there from day to day, wondering whether they had any work to do in the future.
I have in the course of 20 years travelled round and seen a great many dockyards, both naval and private, in Malta, the Far East, Northern Ireland and in Britain, too. I should like to suggest that ship repairs are completely different from shipbuilding. Refits and repairs are considerably more difficult. The repairs need a great deal of patience, initiative and sometimes imagination in order to get the pieces back in the right place. I remember seeing some repairs being carried out with pieces taken out of ships which had been in place for 13 years. They were made as good as new. This is not the kind of work which is done by the shipbuilders. In all yards, whether private or naval, the men were extremely helpful, teaching me about their work. I took a great interest in what they were doing and I made it a special interest in my Parliamentary work in another place.
On 2nd December, in column 1461 of the Official Report in another place, the Minister stated:
"Our proposals … are part of the Government's programme to instigate and encourage new investment, to restore British industry to a competitive position in world and home markets."
I should like to suggest that we do not need the Government to do that. The ship repairing yards are getting on extremely well on their own. I do not think they will do as well when they are nationalised, and they are certainly un-likely to make a profit. Nor do I think they are likely to be happier places for the workers. The Minister added in column 1462:
"… the Bill helps to fulfil our aim of bringing about a fundamental and irreversible shift of povier"—
and I particularly want to emphasise this—
"in favour of working people and their families."
My Lords, has that happened in any other nationalised industry? It will be a miracle if it happens in this one. I remember, when the railways were nationalised, going to Waterloo Station and seeing lots of people there about to be moved on by the police. They protested and said, "But we own this place now. "Of course, they found that was a great mistake. And, of course, one also has to realise that the current loss on nationalised
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industries at the present time is about £1,000 million a year.
In view of the fact that thousands of employees have shares in the firms where they work and the compensation to be offered to them will affect their pensions adversely, I suggest that in terms of the Bill they would lose rather than gain. As I understand it, there are about 140,000 people who may be transferred from the private to the public sector. They will not know what their future is to be, because they will be controlled politically.
I should like to ask noble Lords: does this part of the Bill contravene Article 102 of the Treaty of Rome? That Article advises, as I understand it, that a member State, before enacting any legislation which is likely to cause distortion compared with conditions in the EEC, must consult the Community's governing body. I should like to ask whether that has been done. In 1964, the Commission ruled that State monopolies were acceptable only so far as they applied to service industries, although I understand that there are widely differing interpretations of the EEC clause. However, there is an indication that this United Kingdom legislation might contravene that Article.
When the Minister talked about the shift of power to the working people, did they get it in steel, in the railways or in coal, for example? I have visited a great many yards and found that a great many people in them supported the present Government. But the Government will not be making themselves any more friends if they take this action, because those people are now worried about what is to happen to their future. I think in most places there is a tremendous spirit of working together and they are happy at the present time. Strikes are few. In one yard I understand that there has been no individual dispute for eight years.
I think some of the independent yards will be lost if all goes to the headquarters on the Tyne. Some yards are small and will probably close, because this large enterprise that is to be created probably will not want to be bothered about the small yards. I do not think that Welshmen or Cornishmen will ever want to leave their homes and go elsewhere. The Welsh, for example, have seen steelworks, coal mines and railways closed under nationalisation and they will not wish for another

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take-over. Private yards send experts who have been thoroughly trained in how to market their wares. In other words, there are many ships in our yards now that come from overseas.
Special training is needed for these jobs. Recently, against competition from the Dutch farmers, Silky Cox & Company Limited announced conversion work of £1 million for four gas turbine powered container ships chartered by Seatrain of New York. This is going to employ 1,200 workers. How will the people of Cornwall, for example, fare when they are taken over? On 25th June the Minister in another place said:
"A ship repair capacity will be retained at all major estuaries including the Severn. I can give an assurance that the construction of the two industries resulting directly from acts of nationalisation will not lead to losses of jobs."
However, on 5th July, a junior Minister, Mr. Huckfield, said:
"We cannot give specific guarantees about the yards.".
Who are we to believe, the Minister or the junior Minister?
I suggest that the workers will not be better off; they will not have any more power and they may lose their jobs. As I said before, they will come into the political arena which will not make for future security in this work. Any ship repairing firm which wants to continue to be independent should be allowed to do so. It must be remembered that in a great many of these yards there are many trade unions. I know one yard in which there are 17 different trade unions. I should like to know what consultation has been given to all these trade unions. They have members whom they wish to look after, and therefore I hope that due consideration will be given to accepting the Amendment so ably moved by my noble friend.
Lord GOODMAN: My Lords, I had not intended to take part in this debate, but there is something of importance which I think needs to be said. Some very intelligent and persuasive arguments have been presented on behalf of the Opposition in a very reasoned and moderate fashion, and I do not believe they are getting the respect and attention they ought to receive. In my view this is for the rather unhappy reason that the people
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engaged in presenting the Bill do not have the expert knowledge of this matter which is essential if they are to deal with this in a proper and informed fashion. I believe that the Government spokesman probably knows a shade more about ship repairing than I do, which is almost nothing, but when one comes to serious matters of this kind it is of the greatest importance that the arguments should be presented and be heeded to by people with informed knowledge. It is disrespectful to this House that parrot cries should be uttered about good industrial reasons. We have not heard a single good industrial reason advanced as to why this nationalisation should take place.
I should like to put the matter on a rather broader basis. I believe very firmly, as I think most of the Members of this House believe, in a mixed economy. We are not averse to nationalisation. I do not think that any sane man believes that government can be conducted successfully without a measure, even a large measure, of nationalisation, but if we are to live contentedly together so that our philosophies are not at war there must be recognition that you do not nationalise for its own sake; you nationalise for the sake of efficiency. There is no evidence to suggest that the nationalisation of the ship repairing industry is a matter of efficiency. There is nothing to suggest that it is, remotely in need of capital that cannot be provided in the ordinary way or through the Government agencies that already exist.
There is obviously a feeling here that this must be included for some doctrinaire reason. This is extremely unfortunate. We ought to nationalise when nationalisation is necessary. A cogent case can be made for nationalising shipbuilding. I do not know about the aircraft industry because I know very little about it. I am satisfied that no cogent case has been made out for nationalising ship repairing. There may be one, but I have not heard the faintest suggestion of it yet emerging from the Government Benches. I would continue to urge the Government to think again. It is most important that the impression should not get about that they are nationalising for the sake of netting the lot. It is of the greatest importance that the impression should get about that, where there are reasoned cases made out to them, they are prepared to defer to

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them. If this House is to serve any purpose at all, I think that it can serve a purpose only if the arguments that are addressed to the Government are heard by informed ears, listened to respectfully and considered with respect as well.
10.51 p.m.
Lord ORR-EWING: My Lords, may I support this Amendment? I declare an interest again, I think for the sixth time in these debates, in that I am a director of Richardsons Westgarth, one of whose subsidiaries is the Humber Graving Dock, which is one of the listed ship repairing units. Therefore, for that reason I shall not vote if one occurs. But I speak from the heart and with some knowledge of this subject, having been closely connected with it for many years.
Ship repairing is a totally different industry from shipbuilding. It is a service industry, and is a very personalised industry. It depends utterly on the relationship between the firm which is operating the ships, and the firm which is to repair the ships. That relationship underlies everything, and the confidence with which people deal with you. It is interesting that the North-East coast ship repairers have already gone "bust" a nationalised industry—in the last two years, because they did not attract customer confidence. This is, therefore, basic to the viability of this industry. We are concerned with an industry which will cost another £50 million of public money, 12 companies with 15,000 people, none of whom appears to wish to be nationalised, with a turnover of £100 million. It is not a big industry, with only 15,000 people, is smaller than many individual firms and is scattered around our coastline, as any study of geography will show.
In the Second Reading debate, Mr. Varley, the Minister, made a grave error which showed just how little the Government know about what is going on, when he said that six out of 12 of those ship repairers listed in Schedule 2 were closely integrated with shipbuilders, which just is not true. The noble Lord, Lord Melchett, the Minister, tonight named, I think, three that might be closely integrated. But because 25 per cent. of the industry might be allied with some shipbuilding, why should the whole industry
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be taken over in what is clearly a dogma attitude?
It is believed, whether rightly or wrongly—and I must say that I find it very strange—that because a collection of Labour people get together and publish a pamphlet, it is right many years later, in a totally different situation, when public expenditure is under grave pressure, when the IMF are about to arrive on our shores to ask how we can reduce public expenditure and not have to go on borrowing from overseas, for them to stick to saying, "Well, it was written. There were some people who got together and published a pamphlet." Is that not right?
Lord MELCHETT: My Lords, that is so. But that is not the reason why the ship repairing companies have been included in the Bill. I merely gave the instance today, and did the same in the Committee stage, to counter the argument which the noble Lord, Lord Campbell of Croy, used, that we had done this by mistake in some way, that these firms had been dragooned into the Bill, because somebody muddled them up with shipbuilding and got them in by mistake. I merely gave that little history on Labour Party policymaking to get it clear to noble Lords, if I could, that this had not happened by mistake.
Lord ORR-EWING: My Lords, it seems to me strange, because I have examined and reexamined the Manifesto, which, presumably, is the result of all these studies behind the scenes by various Fabian groups and the like, that the Manifesto said that there would be no incomes policy, but there would be free collective bargaining. Have the Government ever heard of that? They turned a bloody somersault on it! "But ship repairing? No, we cannot change that. That is the pure Gospel being handed down in the Tablets from above". Abolition of the nuclear deterrent—I remember that being mentioned in previous Manifestos. Thank God!, that has gone down the drain. They really should not be tied to certain dogma which is put into Manifestos at various times, and which is totally inapplicable and inappropriate to the present industrial position of our country, and, above all, to the present financial position of our country.

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We are told that restructuring is necessary for good industrial reasons, and I am so glad that the noble Lord, Lord Goodman, took this up. What are the industrial reasons which make it necessary to take over 12 firms with a total employment of 15,000 people? These are scattered in small numbers all over the country, are very flexible and are meeting the needs of the industry. Is this a good industrial reason? I am afraid that most of us will be sceptical about that. We shall think that the reason for the takeover is dogma and prejudice.
Ship repairers are extremely flexible. At times they are overloaded; many people are trying to get into their docks and are asking for service. At other times they are lightly loaded. In my own instance, Humber Graving Dock takes on maintenance work for the oil refineries which are close by. Apparently this maintenance work is also to be nationalised. It has little to do with ship repairing, by the way, but the Minister has said, "No, we must take over the whole lot; of course we shall extend it". Recently I was looking at ship repairers in Florida. What did they do? When they were lightly loaded they were making refuse machinery for churning up hundreds of tons of refuse which arrived every day because they wanted to level out the load on their manpower and capital investment.
It is true to say that many years ago ship repairing was an offshoot of shipbuilding, but the two industries have steadily and remorselessly diverged in their techniques and technology and in their application and type. Very often shipbuilding takes four years from conception to delivery. Ship repairing, on the other hand, can take four hours from the order arriving and the ship being turned round and despatched from the dock. It is a totally different concept. I cannot understand what are the good industrial reasons for the takeover. These are the industrial facts of life.
I am sorry for the Minister; I suppose that they will go on dishing up this information to him in his brief, but I wish he would take an opportunity to go out and look at some of these little ship repairing firms. The report of PA Consultants suggests that United Kingdom ship repairers are losing trade.
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It is true that over the years 1968 to 1973 they lost over 3½ per cent., but our competitors in Western Europe lost not 3½ per cent. but 6 per cent. every year; so our ship repairers are doing almost twice as well as Western Europe. The PA Consultants report also states that our prices are lower than those in Western Europe. Is that any justification for taking over and disturbing this little industry? The United Kingdom has steadily expanded its work for overseas customers. It was 14 per cent. a few years ago; now it is 26·8 per cent. Therefore, whatever criteria you look at you will find that this small, flexible industry is doing extremely well by European standards.
Sometimes it is argued, "Ah, but you have had Government support". Even this argument will not run. The industry has received no special support whatsoever and many of these small companies are not in development areas and have not even had the premium that is payable in those areas. I regret to say that this is the one aspect of the Bill for which there is no justification whatsoever. The people working in those companies do not want it; the industrial strategy does not want it. These companies are flexible and small and the longer they remain that way the more likely they are to retain the confidence of their customers both at home and overseas.
I hope that after all the hours we have discussed the different aspects of the Bill the Government will not be so prejudiced that they will not give way on this point, since all logic demands that these companies should be left out of the Bill, thus saving public money. They should go on servicing the industry to which they are dedicated. At the same time it would delight most of the people who are working in that industry.
10.59 p.m.
Lord AUCKLAND: My Lords, the importance of ship repairing is that the jobs should he done quickly. As has been said several times in the debate, these are small companies largely employing local labour, often in relatively rural areas where labour relations are exceptionally good. I wonder how much consultation has taken place with the ship repairing industry itself. We seem to have had very little in the way of answers to that from

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the Government in either House. Also I happen to have had some personal experience of management consultancy. I do not wish to run down management consultants—many do a good job—but one wonders how long P.A. Consultants, Booth-Allen and other management consultants spent with the ship repairing industry. It is no use spending two or three days with an industry like this. It is an industry which needs very careful study, and careful study by those who are well versed, not only in the industry but in the area concerned. The hour is late and it is time a decision was taken on this, but it is quite clear that the vast majority of people in this country, and certainly those concerned with the shipping industry, wish to see this provision deleted from the Bill.
The Earl of HALSBURY: My Lords, I support the Amendment, arising out of a deep conviction based upon experience. This is not an issue where an Independent like myself can listen to both sides of the case and sometimes incline one way and go into one Lobby and at another time go into the other Lobby—and I have done both in the course of this evening. I have spent 10 years in a nationalised industry—the gas industry. I know its strengths and its weaknesses. I am not in principle opposed to the nationalisation of public services. The nationalisation of the gas industry is a logical consequence of modern technology in gasmaking, and during my 10 years the industry went through two revolutions. First, the substitution of coking processes by hydro-carbon forming, and secondly the exploitation of natural gas, and it could not have been carried through on less than a national scale.
Also in the course of my industrial experience I have been responsible for the affairs of a dynamo and motor repair organisation, and nothing in greater contrast with a nationalised industry producing a public service like gas could be imagined. The degree of private initiative and the capacity for improvisation that one needs in running a repair business is not comparable with the qualities necessary to run what of necessity is a large bureaucratic organisation like a nationalised industry. Although in a homogeneous industry like the gas industry one can hold the degree of bureaucracy to a certain extent within
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limits, I must at this stage remind the noble Lord, Lord Melchett, of a Fabian essay written by his right honourable friend Mr. Anthony Crosland, in which he said that the private sector is the public's guarantee against bureaucracy. That is why I support the Amendment and shall be prepared to follow into the Division Lobby if the House is divided.
11.3 p.m.
Lord STRATHCONA and MOUNT ROYAL: My Lords, there are one or two things I ought to say. First, I said earlier that we want to see British Ship-builders flourish and this Amendment does not seek to preclude British Ship-builders from going into the ship repairing business. What it is doing is seeking to stop them from coercing the independent shipbuilders from being swept into the maw of the public sector.
The noble Lord, Lord Melchett, made much play of the close links which exist between the shipbuilding and the ship repairing industries and he spoke about the Government's desire to maintain close links, but what he did not do was to deal with the question of those companies which do not have such links at the present time. A number of my noble friends, and indeed noble Lords from all sides of the House, pointed out that some of the more successful parts of the ship repairing industry are small companies; it was said a number of times, and in particular by the noble Earl, Lord Halsbury, who uttered a striking phrase, contrasting the difference between the private initiative and improvisation that is needed for this type of industry with the bureaucratic type of organisation. It is possibly unfortunate that the word "bureaucratic" has become a rude word because it need not be. That is typical of what is required for a major industry like the gas industry.
Secondly, we have spoken about the time-scale; a number of noble Lords have spoken about that, notably the noble Lord, Lord Orr-Ewing. It is true. At this time of night I do not think it is worth labouring the point. Anybody can understand that if a ship comes in in a damaged condition, it is simply not the same kind of situation as if you are quoting for building a supertanker; to compare the two seems quite irrelevant.

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The noble Lord made much play of industrial relations. Some of us believe that there is at least one company in the ship repairing industry which is notable for industrial relations. I have to ask the noble Lord the question: Is he honestly going to stand up and say that the industrial relations record of the shipbuilding industry is all that admirable a record that he would necessarily want to impose this on the small intimate companies engaged in the ship repairing industry? I simply cannot believe he would want to lumber them with that kind of burden. The noble Lord then referred to the need for investment. Here again, one of the reasons why some of us are against sweeping the small independent ship repairing industries into this vast organisation is that they do in fact make profits. Earlier on in the debate my noble friend Lord Lauderdale was seeking to praise profits, and I hope we shall continue to do so. I would respectfully suggest that the best way of getting investment in an industry is to make it profitable. If it is profitable, is it not a pity to "clobber" it by sweeping it into a large bureaucratic organisation?
Then the noble Lord referred to the major ship repairing companies in the major estuaries. We are possibly in danger of getting into the area of hybridity, but I would have to ask the noble Lord this. Is he really sure that in all cases we are talking about major companies? And if he is, is he absolutely certain that some equally large companies have not been excluded from the Bill? Is this really sensible? Do we not come back to saying, as (I would so call him) my noble friend Lord Goodman said, that we have not had a single good industrial reason, such as that we should be nationalising for the sake of efficiency? If the noble Lord could convince me that he was nationalising for the sake of efficiency I honestly believe, despite the prejudice I freely admit to, he might even persuade me that it would be a good idea; but he has not produced a single argument which leads me to believe this is right.
The noble Baroness, Lady Vickers, when talking about the question of
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industrial relations, emphasised the enormous number of trade unions which are involved, particularly in the shipbuilding industry. If the noble Lord wants to deploy the argument that industrial relations would he better, and this is wanted by the unions, do we not come back to the kind of argument we had on the Felix-stowe Bill? Is it not surely self-evident that at least in some cases—and certainly the evidence I have supports this—the unions in these small businesses do not want to be brought into British Shipbuilders? Therefore, it seems to me not respectable to mount the argument that either this is wanted by the unions or that it would improve industrial relations. It seems to me that the onus of proof for bringing this section of the industry into the Bill must lie with the Government, and so far they have totally failed to make the case.
Lord CAMPBELL of CROY: My Lords, as I moved this Amendment, perhaps I may say in reply to the noble Lord, Lord Melchett, that he said this was the first of a number of Amendments. When I moved it, I said it was the first but when we reached the later ones I would indicate how they fitted in. The Amendment seeks to remove the independent ship repairers from the Bill. The noble Lord mentioned Vosper Thorney-croft. But in Committee I pointed out that that happened to be a company with a large ship repairing dock which is completely separate on the other side of the Itchen, and where the management and the workforce are entirely separate. Again we will return to that in a later Amendment, so I will not go into it now. As various noble Lords, including the noble Lord, Lord Goodman, in particular, have pointed out, we have had no real reason given why this industry is included in the Bill. I would ask the House to support me in this Amendment.
11.11 p.m.
On Question, Whether the said Amendment (No. 41) shall be agreed to?
Their Lordships divided: Contents, 73; Not-Contents, 34.

CONTENTS

Amory, V.

Greenway, L.

Redesdale, L.

Auckland, L.

Halsbury, E.

Rochdale, V.

Belstead, L.

Harcourt, V.

Ruthven of Freeland, Ly.

Blakenham, V.

Harmar-Nicholls, L.

St. Aldwyn, E. [Teller.]

Bolton, L.

Henley, L.

Sandford, L.

Brougham and Vaux, L.

Hornsby-Smith, B.

Sandys, L.

Byers, L.

Inglewood, L.

Seear, B.

Campbell of Croy, L.

Kinnaird, L.

Selkirk, E.

Carr of Hadley, L.

Kinnoull, E.

Sharples, B.

Carrington, L.

Lauderdale, E.

Simon, V.

Cathcart, E.

Lindsey and Abingdon, E.

Skelmersdale, L.

Colville of Culross, V.

Lloyd of Kilgerran, L.

Stamp, L.

Cork and Orrery, E.

Long, V.

Strathcarron, L.

Craigmyle, L.

Lyell, L.

Strathclyde, L.

Cullen of Ashbourne, L.

Monson, L.

Strathcona and Mount Royal, L.

Denham, L. [Teller.]

Morris, L.

Trefgarne, L.

Drumalbyn, L.

Mowbray and Stourton, L.

Trevelyan, L.

Elles, B.

Nelson of Stafford, L.

Tweedsmuir, L.

Elliot of Harwood, B.

Newall, L.

Vickers, B.

Elton, L.

Northchurch, B.

Waldegrave, E.

Exeter, M.

Northesk, E.

Ward of North Tyneside, B.

Falmouth, V.

O'Hagan, L.

Wigoder, L.

Ferrers, E.

Onslow, E.

Young, B.

Goodman, L.

Pender, L.

Gowrie, E.

Rankeillour, L.

NOT-CONTENTS

Ardwick, L.

Harris of Greenwich, L.

Peddie, L.

Birk, B.

Houghton of Sowerby, L.

Pitt of Hampstead, L.

Brimelow, L.

Jacques, L.

Segal, L.

Castle, L.

Kirkhill, L.

Shackleton, L.

Champion, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Stedman, B.

Collison, L.

Stone, L.

Davies of Leek, L.

McCluskey, L.

Strabolgi, L. [Teller]

Davies of Penrhys, L.

Melchett, L.

Wallace of Coslany, L.

Delacourt-Smith of Alteryn, B.

Morris of Kenwood, L.

Wells-Pestell, L.

Donaldson of Kingsbridge, L.

Murray of Gravesend, L.

Wigg, L.

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

Oram, L.

Winterbottom, L.

Fisher of Camden, L.

Peart, L. (L. Privy Seal.)

Resolved in the affirmative, and Amendment agreed to accordingly.
Clause 5 [Corporations to give effect to directions of Secretary of State]:
11.20 p.m.
Viscount SIMON Viscount SIMON moved Amendment No. 43:
Page 7, line 7, after ("or") insert ("any direction of a general character given to it").
The noble Viscount said: My Lords, we have now come to Clause 5 and when we were discussing this clause in Committee it was generally agreed that the Secretary of State's directions would be directions of a general nature only. But I pointed out at the time that the drafting of Clause 5(1) does not make that clear because subsection (1) reads:
"Each Corporation shall give effect to any direction given to it under subsection (2) below or under any of the following provisions of this Act …".
Subsection (2) in turn states that,
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"The Secretary of State may give directions of a general character",
and I feel that we ought to introduce a similar provision into the second part of subsection (1). That is why I propose that in line 7 after the word "or" we should insert the words:
"any direction of a general character given to it",
so that the subsection will read:
"Each Corporation shall give effect to any direction given to it under subsection (2) below or any direction of a general character given to it under any of the following provisions of this Act …".
This is simply to clarify what I understand was stated to be the intention of 1 he clause. I beg to move.
Lord MELCHETT: My Lords, the noble Viscount, Lord Simon, suggested in Committee that this subsection should refer only to general directions. Once again, we considered the points made then very carefully and I have carefully considered the Amendment, but I regret

1051
to say that I cannot accept it for it would undermine the essential purpose of this subsection. I hope that my explanation will satisfy noble Lords both that Clause 5(1) has no sinister significance and that this Amendment would have no undesirable consequences. It may be that my explanation in Committee did not achieve that, but I hope to do better tonight.
It is the normal form in nationalised industry legislation, where a Secretary of State has power to give directions (whether general or specific) to a Corporation, to have a requirement on the Corporation to give effect to those directions. Otherwise there would, as a point of law, be no obligation on the Corporation (other than an inference that where he directs, the Corporation must obey) to give effect to directions. In some legislation this is done separately for each kind of direction; in other cases, the obligation to give effect to all directions is laid down once in the Act and applies to all powers of direction in that Act. By way of example of this latter form, I would cite Section 40(2) of the Electricity Act 1957 and Section 58 of the Civil Aviation Act 1971.
In this Bill, as a matter of drafting convenience and conciseness, it was decided to put the obligation to give effect to all forms of directions into Clause 5(1); in other words, it follows the two previous Acts in having one single place when this is done. It is put immediately before the provision allowing the Secretary of State to give general directions in the national interest. But of course the Secretary of State has, in this Bill as in other legislation, certain other powers of direction; for example, on disclosure of information in Clause 9. Others are given in Clause 6 on organisation (this was unfortunately deleted by the House in Committee); in Clause 8 on omission of certain matters from the Corporate Plan; Clause 13 on terms of repayment and interest rates on loans; Clause 18 on accounting years; and Clause 48 on fair trading by British Shipbuilders. There needs to be a general obligation on the Corporations to give effect to all these, and this is the purpose of Clause 5(1), as indeed the side note to the clause itself suggests.
We could not accept any suggestion that the only effective power of direction the
1052
Secretary of State should have should be the power of general direction. In the first place, as my noble friend Lord Kirkhill—explained—in—Committee, "general" has been interpreted by the courts, as a result of its appearance in previous legislation, in such a way that it is likely that the Secretary of State could not exercise the powers of direction which the Bill expressly confers on him. That is because of the point we made at the Committee stage of the very narrow definition which the courts have imposed on the word "general". Some of the powers of direction explicitly given to the Secretary of State in the Bill would certainly not be regarded as general.
This would leave him without powers which in other contexts noble Lords opposite, certainly on the Conservative Benches, have regarded as desirable. The Secretary of State would not, for example, he able to require the omission of certain matters from the corporate plan in Clause 8, the terms of repayment and interest on loans under Clause 13, and perhaps most important to noble Lords opposite, he would not be able to direct the Corporations to stop unfair trading practices under Clause 48. The effects of this Amendment then would include preventing the Secretary of State from exercising a power conferred on him by the clause inserted following representation from the Opposition in another place.
I hope that this rather expanded explanation will satisfy the noble Viscount on the need for the clause and for the clause to refer to directions, and that to insert a reference to "general" in Clause 5(1) would relieve the Corporations from an explicit obligation to give effect to any directions under any provisions of the Bill except those that are general, and I think that noble Lords on all sides of the House would not consider that to be a desirable result.
Viscount SIMON: My Lords, I am greatly obliged to the noble Lord, Lord Melchett, for that explanation. I confess that I should like to read it in Hansard before I decide whether to do anything on Third Reading. The only thing that I was able quickly to pick up was that he referred to Clause 9(1) as an example of when the Secretary of State gives specific directions, but Clause 9(1) says that each Corporation shall furnish him with

1053
information. Therefore, another clause is not needed to say that the Corporation has to comply with his direction, because it says so in the clause itself. But I shall read carefully what the noble Lord said and, if necessary, I shall trouble your Lordships again on Third Reading. In the meantime, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 6 [Duties of the Corporations to review and report on management of their affairs]:
11.29 p.m.
Lord CARR of HADLEY Lord CARR of HADLEY moved Amendment No. 49:
Page 8, line 16, leave out ("and").
The noble Lord said: My Lords, I think that it would be to the convenience of the House if we were to take Amendments Nos.49, 50, 52 and 53 together, because I think that they all bear on exactly the same point. They all affect Clause 6 of the Bill. Your Lordships will know that Clause 6 requires both British Aerospace and British Shipbuilders to undertake a review of their affairs for the purposes of determining particularly how the management of the activities of each Corporation and its subsidiaries can be most efficiently organised, taking account of certain desirable objectives, such as the promotion of the largest degree of decentralisation, and to determine what steps are necessary in order effectively to promote the Industrial democracy which we have been discussing on earlier Amendments today and on previous days in the Committee stage.
That seems to us to be all right so far as it goes. What we are saying in these Amendments is that one of the other things which ought to be reviewed is the machinery of the industrial relations in both these industries. I think that it is well known that one of the problems in British industry is the complicated structure of industrial relations which many of our industries suffer. It is a complication and difficulty arising, not out of or deliberate trouble-making by anybody, but principally out of the age of our industrial system, the age of our managerial structures and, above all, the age of our trade union movement.
The main way in which that shows is that we in this country suffer in a way which most other countries do not suffer, and that is from the problems arising from the multiplicity of unions in each particular industry, and indeed in each particular factory. I think that both sides, if they were honest, would say that this produces very great problems indeed, and puts us in Britain at considerable disadvantage compared with similar industries in other countries. li leads to complication of negotiating structure. It also leads to the sort of leapfrogging claims and counterclaims with which so much of British industry has been beset.
When one has an established industry, custom and practice become very deeply engrained and is very hard indeed to change; and one of the advantages of making a fresh start is that it provides an opportunity for looking at all these things anew. It seems to us that the Government are seeking to take advantage of that opportunity in one or two important aspects of the affairs of these industries, and, speaking for myself at least, that I certainly welcome. But they are missing the opportunity to seek at the outset to get agreement on how we might modernise the basic industrial relations machinery in these two industries. That is why we believe that this, too, should be part of the initial review which both these Corporations are charged to undertake within a very short time (it is three months, is it not?) of being set up. Certainly they are charged to do it forthwith, I think, and possibly subsequently from time to time in the future. I hope the Government will consider this matter very carefully indeed. If the review reveals that steps are necessary to improve the machinery of industrial relations in this industry, then the details would be the subject of consultations under Clause 7; but we think it would be right and helpful for the future good health of these industries if the consultations which are to take place under Clause 7 should, as it were, be given an agenda to bite on resulting from this fundamental review of the whole of their affairs which the Corporations are charged to make under Clause 6.
Perhaps I may indicate the scale of the problem we have here. I think I am right in saying that in the shipbuilding and ship repairing industries there are

1055
now 12 recognised trade unions; that is, 12 trade unions with which collective bargaining has to be undertaken. That is a slight reduction from the 15 listed by the Geddes Committee in 1966, but it is still a formidable number, even though all are members of the Confederation of Shipbuilding and Engineering Unions, which of course now provides some co-ordination; and it is admittedly true to say that inter-union disputes, which used to be such a menace in this industry, have been much less frequent and trouble-some since the 1969 national agreement on procedure for dealing with these matters. So there has been some improvement in the shipbuilding and ship repairing industries in this area brought about by the co-operation, good will and determination of both sides—and I should like to stress both sides: both management and employees. But I think anybody on either side looking at this situation dispassionately would say that a good deal of further improvement could be made, and that is why we believe that it should be looked at.
If you turn to the aircraft industry—I have not got the precise numbers but I do not think I am far wrong in saying this—there are probably about 15 recognised trade unions in the aerospace companies which are going to be incorporated in British Aerospace. This, too, is an unwieldy number. How is one to deal with this? In other countries this problem does not arise. In West Germany, for example, it does not arise because their whole union structure is of recent creation. Paradoxically it was largely created on the advice of British trade unionists who saw how it should be done if only one could start from the beginning. We, thank goodness! having won the war, did not have to start from the beginning. We were able to continue in the way we had carried on for so long before. As a Conservative, I like continuity. I think, however, that we have had a little too much continuity in the structure of our industrial relations. So a country like Germany gets over it in that way.
A country like the USA gets over it in a different way. They have bargaining agent elections. A bargaining unit is set and each of a number of different unions competes for negotiating rights.
1056
They have a secret ballot and the employees in each company have the chance to choose which of the competing unions they wish to have negotiating on their behalf. When that is done, that union has inalienable rights for a certain fixed time although it can be challenged periodically. That is how they obtain the structure in the USA.
In Britain I do not believe we can attempt either of those methods. It is inconceivable that one can suddenly come down to the sort of union structure West Germany has. It is also inconceivable that one can apply the American practice here, because the number of unions competing with each other in each industry is much too great to have the possibility of getting the majority of the employees in most of the companies that we are talking about to give a clear majority to one particular union at the expense of all the others.
When I had to face this problem in drafting the Industrial Relations Bill, I and my advisers conceived the idea of a bargaining unit, as in America, but giving all the multiplicity of unions a right to form a joint negotiating committee so that all the unions would continue being able to exist but there would be one joint committee with whom the bargaining would he done. The constituent unions would give that committee a mandate to be able to negotiate on their behalf. That was another way of dealing with it. As your Lordships know, that way has been rejected along with the rest of the Industrial Relations Act. Naturally that disturbs me because I believe that this hit of it, at least, was going to the root of one of the most fundamental problems of British industrial relations. It is all very well to reject that method, but nobody so far has tried to put any alternative method in its place. If I am certain of one thing, it is that that is one of the most urgent problems needing attention in the whole of British industry in general and in British industrial relations in particular.
My Lords, I think that I have said enough to show there is a real problem here. It needs to be solved by inquiry and good will. I am saying to the Government that as these new Corporations come into being and are in a formative stage, one has what I believe

1057
it is not an exaggeration to say is a unique opportunity that will not occur again. Once these Corporations have come into being and have hardened into certain ways of doing business it will be almost impossible to change. But at the very moment of their coming to birth, it is possible, if an inquiry was gone into in an impartial, relaxed manner, that both sides could find some agreement on how they might strive to improve the machinery.
I want to stress that I am not in anything I am saying either antiunion in general or "anti" the particular 12 unions of the shipbuilding industry or the 15 unions of the aircraft industry. I am not against those unions or unions in general. I am saying, for the benefit of the unions themselves and their members and management, for the prosperity of the industries and good of the country, that here is an opportunity to get both sides to have a careful look at this and put down some yardsticks which when they come to operate Clause 7(3) will provide a useful agenda for those detailed discussions. I hope that the Government will accept the Amendments in the spirit in which they are moved, and agree that this fundamental review of their affairs, which each Corporation is charged to undertake, should include a fundamental review of the machinery of their industrial relations. I beg to move.
11.41 p.m.
Lord MELCHETT: My Lords, I have to say frankly to the noble Lord, Lord Carr of Hadley, that when l saw this Amendment it appeared to be calculated to undermine the relevant trade unions working within these two great industries, and undermine the existing long-established and carefully balanced negotiating arrangements in these industries. I accept that that is very far from the noble Lord's mind; he made that clear. In particular, he made it clear that he was not wishing to attack either the particular trade unions in this industry, or the trade unions in general. It might have been helpful if he had added to that—and no doubt he would have done so if he had thought of it—the CSEIJ, because the Amendment seems directed at the role which that organisation plays in two industries.
1058
By specifying that the organisation review must take into account problems arising from the number of trade unions which are relevant trade unions and which are involved with each Corporation, the Amendment appears not only to assume that the current position and activities of the relevant trade unions within the industry are cause for concern, but also fundamentally, and in our view completely unjustifiably, to criticise the work and role of the Confederation of Ship-building and Engineering Unions. I was surprised that the noble Lord, Lord Carr, with his considerable knowledge and experience of these problems, should set his name to an Amendment apparently calculated—and certainly this would be its effect—to disrupt established and effective industrial relations arrangements in these industries. He would agree with me that, if the Amendment had that effect, it would not be in the interests of the industries themselves. The CSEU has a vital role to play in both industries, and has played it with considerable success. I was delighted to hear the noble Lord acknowledge the role which the organisation has played.
We accept that there is a large number of relevant trade unions involved in the industries, but the existence of the CSEU provides co-ordination at both the national and local level. Furthermore, its work alleviates potential problems that might arise from the number of relevant trade unions, for the CSEU has an effective internal disputes procedure which helps resolve disputes between affiliated unions. Furthermore, the CSEU has been playing a major and forward-looking role, in consultation with the Organising Committee, in formulating the future strategy and structure of the industry. Noble Lords will agree, I hope, that the CSEU has and should have a vital part to play in the future of these industries, and I can assure them that their participation so far has been most constructive.
I am sure both noble Lords opposite and my noble friends can agree about the need for good industrial relations within these industries. We have made clear, on numerous occasions, that it is the Government's view that the identification of the "relevant trade union", as defined under the Trade Union and Labour Relations Act 1974 and the Employment Protection Act 1975, is essential for good industrial

1059
relations. It would be fair to say—if it is not getting the noble Lord in trouble with his colleagues—that we have much in common between us on this issue, although there have been other issues on consultation in particular where we have not been able to agree. We believe that this approach provides the basis on which the industrial relations can develop. I have indicated some of my worries about the practical effects of the series of Amendments to which the noble Lord has spoken. I accept without hesitation that the noble Lord did not move them with the intention of causing difficulties, but I have to say that I think the Amendments will have an effect that neither of us would wish to see. I hope that, on that basis, the noble Lord will not press the Amendments tonight.
Lord CARR of HADLEY: My Lords, I am bound to say I find that a most disappointing reply. The first obvious comment one is driven to make is this. Why must these very powerful, and rightly powerful, union organisations be so ridiculously hypersensitive? It is perfectly right that management should be looked into. We have the managements, certainly of the two aircraft companies, running a highly successful show: yet their activities have got to be looked into in this review as to how they organise themselves, and all the rest of it. I wonder what we would all be saying in this House if they said, "Don't come near us. You must not upset us, or ask what we are doing. We must not be questioned. We must just be allowed to get on with it."
It seems to me most depressing to think that in 1976, with the unions established as well and as strongly as they are, and with nobody wishing to attack them in any way, we have to say they are so hypersensitive that any suggestion that anything they do might have to be reviewed would cause disruption and trouble in the industries concerned. It really is a pathetic situation to have got into, and I very much doubt whether these unions are as un-adult as the Government seem to indicate in this matter.
If we were asking in this Amendment—which we were not, and I think the noble Lord recognised that fact from
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what he said—that the definition of "relevant trade union" should be reopened for this purpose, I can see that might he a very explosive thing to do. That is why I have been at pains in all these debates to distinguish between consultation and collective bargaining. In theory I might not wish to, but I think anybody would he an idiot if he did not do so in practical reality. But, accepting the definition of "relevant trade union" from the point of view of collective bargaining, there really is a great deal to look into. On the shipbuilding side there are a fairly large number of individual companies coming together for the first time under a single holding company, and although they are going to be run—we hope this will be so in practice as well as in theory—in a highly decentralised form, for the first time the collective bargaining machinery for the industry could be looked at as a whole in a way that has not been possible before. In the aircraft industry we have these two very big companies coming together. That, too, will create a new situation.
One of the first things to be decided is, what are the appropriate bargaining units to be which will be concerned in the negotiations taking place? It may be the same union for each different unit, but there are certain grades of workers which could he negotiated for together, while others are the subject of separate negotiations. I suggest that after all these years the present differentiation of very ill-defined bargaining units which has grown up is really in need of review. That has nothing whatever to do with the composition of those who would do the negotiating.
Much good could come out of this, and I think the Government are making a very serious mistake when they forget, for example, all the work done by the Donovan Commission on trade unions, which had a great deal to say about this subject. Some of my colleagues and I may not have agreed with the Donovan Commission in some of their recommendations about the role of law and how to achieve certain changes that they wished to see achieved, but they paid enormous attention, industry by industry, to the need to reexamine the negotiating machinery, the contents of agreements, the sort of things to be included in agreements and areas of workers covered by

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each settlement. I believe that if the noble Lord, Lord McCarthy, who, if I remember correctly, was the Research Director or Research Secretary to the Donovan Commission, was present to-night he might be agreeing with me and giving the Government from behind some expert advice on this matter, which might not he far from what I am pressing upon them.
The moment when these new organisations are formed is a heaven-sent opportunity to look at all this matter again, without challenging which union shall have the authority to negotiate but simply the structure in their negotiating pattern for the future, which ought to be covered in agreements. I repeat to the House this is an opportunity which probably will not recur in these industries. If the Government do not see that the opportunity is taken now we shall go on in this way suffering the relative inefficiency which we suffer in relation to other countries because of the complication of our union structure. We cannot simplify it by coming down to single unions. History is against us in that. It needs to be done in a more inquiring, reporting and agreeing sort of way. I suppose the noble Lord, who is now not even in this Department, is in a difficult position. It is a great pity if the Government miss this opportunity.
The noble Lord will see the way we are moving in this Amendment and that there is no political edge or partisanship in this. I believe that if the noble Lord, Lord McCarthy, were here, though he may not agree precisely with me, he would wish to urge the Government to find some way of taking advantage of this opportunity. To say that is not in any way to criticise the work done by CSEU. This is the only opportunity which is likely to arise to make things better for a long time to come. If the Government let this slip they will rightly be to blame if our negotiating structures in these industries are not as good as they should be and if they allow these industries to harden into ways that are then difficult to change.
At this time in the evening and at this stage of the Bill I cannot ask the House to force this Amendment through. I can only try to drive into the Government the importance we attach to this matter. It is our genuine wish that the Government,
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on behalf of the country, should not lose this opportunity when they are reorganising these industries to make sure that the industrial relations machinery is brought up to date at the same time. I shall not ask your Lordships to divide on this Amendment, but even if the Government cannot bring this formally into the Bill I beg the Minister to talk seriously to his more senior colleagues and at least try to bring influence to bear behind the scenes in order that this matter will be dealt with in this review. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
11.55 p.m.
Viscount SIMON Viscount SIMON moved Amendment No. 56:
Page 9, line 14, leave out ("consult") and insert ("seek consultation with").
The noble Viscount said: My Lords, this is the same as the first of three Amendments put down in Committee to leave out the word "consult" and to insert "seek consultation with". Noble Lords will remember the discussion we had in Committee. Curiously, the third of the Amendments which we put down then was, by misadventure, carried by the Committee, because I was not here and my noble friend Lord Lloyd of Kilgerran, in perfectly good faith, moved an Amendment on my behalf and said in the early hours of 19th October:
"The wording of this Amendment was fully discussed in relation to Amendment No. 84, on which there was a Division. No doubt, in those circumstances, the Amendment will be acceptable to the Committee".—[Official Report, col. 973.]
My noble friend Lord Lloyd spoke in good faith but was quite wrong, because there was no Division. But the Government then—I know it was rather early in the morning—let that Amendment go through. I am hoping, in the circumstances, that they may be prepared to accept this Amendment which I now beg to move.
Lord WINTERBOTTOM: My Lords, the noble Viscount has underlined a problem that faces one, if one goes on too late at night or into the following morning. One often makes slight slips in procedure. This is a case in point, because, if my recollection is correct, I, speaking on behalf of the Government, resisted Amendments identical to that

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which we are now discussing. But I promised to pass on to the Secretary of State the Committee's feeling that the words "seek consultation with" were more appropriate than simply to "consult". I gave that undertaking. If the noble Lord, Lord Lloyd, misunderstood me at that hour, I can appreciate his position. But what I did do was to promise to pass on to the Secretary of State the Committee's view on identical Amendments discussed during the Committee stage, and at that time I tried to explain our reasons for the present drafting.
I hope that noble Lords will not think that I am being obstinate or pedantic, if I stick to what I said originally. I am equally sure that the noble Viscount and his noble friends are also not being obstinate or pedantic. We are trying to find the best wording. But it is a simple question of semantics. Our view is that to "consult", bluntly, has the same meaning as "seek consultation with" or "to enter into consultation", and would be so interpreted by the courts, in the unlikely event of the unions declining to be consulted. We are talking of a situation where I might say to the noble Lord, Lord Carr, "You are the appropriate union. I seek to consult with you" and he says, "Go away and play". That situation is highly unlikely, because, by and large, the unions are taken to be most responsible bodies of people and if the Government, the Organising Committee or a Corporation chairman said, "I want to consult with you", of course they would consult. So that we are talking about a hypothetical situation. But if the Government send a consultation document to an interested party and that party refuses to comment, reply or even acknowledge the document, it is still perfectly clear that the Government have consulted that party. For that reason we prefer the more direct form "to consult" for two reasons.
First, as I said at Committee stage, we want this requirement to be very clear and not permit of any coyness. Secondly, we think that it is better for the Bill to be consistent. Throughout the Bill, and throughout previous legislation, there are obligations: for instance, on the Secretary of State to consult the Corporations, or the chairman, or it is specified that the
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Secretary of State may do something only after consultation with the Corporations. There has been no question whatever in other areas of our discussion that the Secretary of State should be obliged to "seek consultation with" the Corporations, nor, in both the Gas Act 1972 and the Civil Aviation Act 1971, did members of the Party opposite feel it necessary to spell out similar provisions as "after having sought consultations with". "To consult" is clear-cut and, if I may use an Americanism, "meaningful". For this reason I hope that noble Lords will accept that the balance is in favour of the wording as it now is in the Bill.
Viscount SIMON: My Lords, I am very disappointed with that reply from the noble Lord, Lord Winterbottom. The noble Lord said that he had undertaken to seek to consult the Secretary of State but he has not told us whether he did so and what response he had.
Lord WINTERBOTTOM: I did, my Lords.
Viscount SIMON: Then, my Lords, what was the response?
Lord WINTERBOTTOM: My Lords, the response was the one I have given: that the Government do not want to change the wording.
Viscount SIMON: My Lords, I find myself in a real difficulty. It seemed to be such a reasonable suggestion and I thought that it was one which had been taken up by the noble Lord, Lord Winter-bottom. Your Lordships may remember that in Committee the noble Lord quoted an amusing conversation between a certain gentleman and a certain lady, to the effect that it takes two to kiss. This was indeed very apposite. It takes two to consult. Now the noble Lord is apparently asking that one of the parties should kiss the other without the permission of the other, which I believe technically is an assault. This seems to me to be rather unnecessary. The noble Lord has said that "consult" means the same as "seek to consult". If it means the same, why should the noble Lord object to our putting "seek to consult" into the Bill?

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It seems to me that it is a more accurate wording. When the noble Lord said that it was almost impossible that anybody should refuse to consult any trade union, I think he had forgotten the kind of case I mentioned to him which I do not think is at all out of the range of possibility: the case where a dispute is going on and the trade union has refused to have any consultation with the management until that dispute has been disposed of. I do not quite know what to do. Certainly I do not want to divide the Committee at two minutes past midnight. I had better take away the Amendment and look at it again before Third Reading.
Amendment, by leave, withdrawn.

INTERNATIONAL CARRIAGE OF PERISHABLE FOODSTUFFS BILL [H.L.]
Returned from the Commons agreed to with an Amendment; the said Amendment considered and agreed to.
NATIONAL HEALTH SERVICE (VOCATIONAL TRAINING) BILL [H.L.]
Returned from the Commons agreed to with an Amendment; the said Amendment considered and agreed to.
ENDANGERED SPECIES (IMPORT AND EXPORT) BILL [H.L.]
Returned from the Commons agreed to with Amendments; the said Amendments to be printed.
  BRUNTSFIELD HOSPITAL
  BRUNTSFIELD HOSPITAL
  ELECTRICITY OFF-PEAK TARIFF
  ELECTRICITY OFF-PEAK TARIFF
  AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL
  AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL