Skip to main content

Aircraft And Shipbuilding Industries Bill

Volume 375: debated on Monday 18 October 1976

The text on this page has been created from Hansard archive content, it may contain typographical errors.

8.6 p.m.

House again in Committee.

moved Amendment No. 85:

Page 9, line 16, at end insert ("and any other person who, or organisation which, appears to it to be representative of a substantial proportion of its employees or of those of any of its wholly owned subsidiaries.").

The noble Lord said: This is another Amendment which deals with the large and difficult subject which we now call, "industrial democracy", and as I said towards the end of the discussion on the Amendment which we took immediately before our break in this business, much that was said on that Amendment really overflows into this Amendment. I should first like to pick up something said by the noble Lord, Lord Melchett, last Thursday evening when I apologised to him for not being here to hear his reply, because on that occasion I spoke just before the dinner interval and I could not be back quite as promptly as I am tonight.

I want to say this because I think it is central to the differences between us. The Amendment to which I spoke just before the dinner interval last Thursday was a probing Amendment to remove from the Bill the words "industrial democracy of a strong and organic kind". I made it clear that it was a probing Amendment to discover what the Government intended by those words, and I see that in his reply the noble Lord made the point that what form industrial democracy takes should be left to the people involved. I want to assure him that of course we agree with that very strongly. There is no difference between us on that point. The noble Lord then went on:

"In fact, when noble Lords ask us to define precisely what we mean by industrial democracy what they are either consciously or unconsciously saying is: 'You must lay down what form industrial democracy is to take in these particular industries at this particular time'."—[Official Report, 14/10/76; col. 568.]

I want to make it clear to the noble Lord that this is precisely not what we want to lay down. This is not the issue between us. Indeed looking ahead to what action the Government might take following the Report of the Bullock Committee which is expected towards the end of this year, my concern is lest the Government should introduce legislation which will do just that. It would fix a rigid pattern for the development of industrial democracy. What I believe is necessary is a diverse series of experiments in different industries and different companies, anyhow for some years, until we see what forms are the most suitable; but even with that experience I suspect that what is most suitable for one industry or one firm may not necessarily be what is wanted by the workers in another industry or another firm. The difference between us and the Government most certainly is not that. I repeat, we do not want to lay down precisely what form industrial democracy shall take in this or indeed any other industry.

Our concern is a very different one. It is that it should indeed be democracy. This was why, since the Government had not themselves defined it in the interpretation clause of the Bill, I went back to the dictionary and drew the attention of the noble Lord to the fact that democracy is something to do with Government by all the people, the concern of all the people in the community. My complaint against the Government was that they were not making it the concern of all the people in the community. On the contrary, they were deliberately and specifically making it the concern of only some of the people in the community. This seems to me to be seriously wrong.

Moreover, I also drew the attention of the noble Lord to the fact that among the many meanings of the word "organic" which is used in the Bill, the one which seemed to me the most apposite was that which involved some systematic organisation, some systematic connection between the different parts of the whole. So when the Government say they wish there to be the development of a strong and organic industrial democracy, they really must, if their words mean anything at all, mean a strongly organised form of democracy which not only affects but involves all the employees in these industries. Alas! this is exactly what the subsequent provisions in this Bill fail to do. Hence the reason for Amendments Nos. 50 and 51 which we dealt with last Thursday and carried. Hence the reason for this Amendment, and hence the reason for some Amendments still to come.

In considering this matter, we have to distinguish very sharply between consultation, on the one hand, and collective bargaining, on the other. I think most of us know that custom and practice in British industry is much stronger than the effect of law in British industry, but the very widespread and deeply ingrained custom and practice in British industry on the part of both management and trade unions is to make a sharp distinction between consultation and collective bargaining. Indeed, some of the consultation which goes on in British industry via works councils and so on does so satisfactorily only on the assurance that the joint consultative machinery will not overstep the boundaries in collective bargaining, and will not concern itself with those matters which are the proper concern of collective bargaining between trade unions and employers.

Here in this Clause 5 we are dealing with consultation. When we come to Clause 6 we shall be dealing with collective bargaining and there the issues are different although closely related; but here we are dealing consultation. The case I am making to the Government is this: that at least where we are dealing with consultation as opposed to collective bargaining it makes an utter mockery of the word "democracy" if the consultation is not to include all those involved in the industry. Of course, I accept that if there are 100,000, or even 10,000, or even 1,000 people involved in an industry and none of them chooses to organise themselves, it is a practical impossibility to consult with 1,000, let alone 100,000 or 200,000 separate individuals. So I accept the point that, if people want to be consulted, they have some duty of self-interest, if no other, to form themselves into organisations. Clearly if consultation is to be effective the Corporation will have to be able to pick out organisations with whom they should consult. That I accept.

However, I do not accept that everyone should be pressurised to join an organisation. I accept that if they wish to be consulted, they should normally reckon to join some organisation. What I am really saying to your Lordships is that the organisations which are consulted should not be limited in any way. It may be necessary—and we will come to this in the next clause—to limit the organisations with whom collective bargaining takes place. But we ought not to limit these organisations with which consultation takes place and that, I am afraid, is what this Bill does as at present drafted. It is wholly wrong, and it is grossly unfair.

I was delighted to hear one of my noble friends just before dinner, when speaking on the last Amendment, using the word "fair". The word "fair", I know, is a word which can be abused, but it is an extremely important word. It is not fair to single out those employees in those companies who may perhaps be about 70 per cent. of the total, in other words the majority of the employees, but to leave out a substantial number, probably amounting to about 30 per cent., simply because they do not belong to organisations the colour of whose eyes are acceptable to the TUC. If we "cut the cackle" this is what it is all about. At the moment the Government are saying one can only put a duty to consult on those organisations which happen to find favour with the TUC. This is a most depressing and sad situation to be in.

When I look back I think of long before I was even born or before any of your Lordships were born, of the role of the unions which now form the TUC, when some of them (others were not even formed in the days I am talking about) were fighting for the right to associate, to be consulted. They were fighting for the right to organise. And today we see those unions which have now achieved those rights selfishly trying to exercise a tyranny on those who have not yet achieved them. This is a sad day in British industrial history. There are some people, like Mr. Clive Jenkins, who like to call some of these bodies about whom we are now talking "sweetheart organisations"—I think that is the phrase. It really is insulting in the extreme because the groups of workers he now represents, had this Bill been introduced a comparatively few years ago, would have been on the wrong side of the blanket as he now defines it. I find it thoroughly objectionable that those who happen to have reached a certain point in their historical development should now try to have a monopoly in these cases.

When we come to the question of collective bargaining we have a much more difficult problem—I agree it is a very much more difficult problem—to consider. But

when we are talking about the right to consult, it is wrong, on any basis of natural justice, to exclude those organisations which at the moment are not relevant trade unions in the narrow definition of that phrase contained in the Bill. So I hope that the Minister will address himself seriously to this Amendment. I know he has told us, and I know other Ministers have told us, that of course the Corporation will talk to anyone. All right. But he must accept that there are many people who do not believe that, who fear that that will not be true, who fear that the noble Lord, Lord Beswick, has already come under pressure not to consult with certain people. In any case, even if there is no truth in those fears at all—and I certainly hope there is no truth in them—what justification is there for singling out certain organisations which must be consulted with, and leaving out the others?

The truth is that if industrial democracy is to mean anything in this country, all organisations representing any significant number of workers in industry must have the right to be consulted. Let me once again underline that when one comes to the question of collective bargaining one is in a much more difficult position. Whatever might be the perfect ideal to aim at, we probably cannot reach it because of the natural failings in human nature. At least we cannot reach it easily and quickly. But when we are only talking about consultation, there is no reason in the world why an equal right should not be given to all significant, proper, independent organisations to be consulted. That is what this Amendment asks, and I very much hope the Government will take the case very seriously, because if they do not I am afraid they will be convicted of gross hypocrisy so far as their concern for industrial democracy is concerned. I beg to move.

I seem to remember that, during the discussion on the last Amendment, the noble Lord, Lord Melchett, said that one of the difficulties would be to decide which organisations should be consulted. Of course, the difficulty is even greater now that the list has been enlarged. But could not that be overcome by leaving the decision to the Corporations themselves, by simply inserting the words, "and if they so choose with any other person", et cetera?

Can we be told more precisely what really is the meaning of the word, "relevant" in this context? What does or does not make a trade union relevant? I can well understand that "independent" has something to do with this, but what is "relevant" in this context?

In his opening reply to the last Amendment the noble Lord, Lord Melchett, no doubt choosing his words very carefully, referred to "independent and organised trades unions", and he then went on to speak of the difficulties in identifying professional organisations. Since he cannot—and I do not imagine ever would—seriously suggest that there are not independent and organised professional organisations, nor that they have an equal right to represent their membership in any consultations, as have the trade unions, the noble Lord can only have been pinning his argument to the word, "relevant". That will not do, because the word "relevant" is in the Bill, surely, for the purposes of identifying the trades unions. If we can identify the trade unions, we can identify the other organisations which might be concerned, whether they are within the narrow confines of the last Amendment or the broader areas of the Amendment proposed by my noble friend Lord Carr. Any responsible body could well come within this.

The noble Lord, Lord Melchett, when he spoke on the last Amendment—I make no apology for referring to that because the arguments could be equally applied here—referred to the question of size, the small numbers of people who might be represented if we included other organisations. But in the Bill the words are, "any relevant trade union". There is no qualification of how many members that union should have. Not only is this whole proposition from the Government distinctly undemocratic, and singularly unsuitable, I would suggest, in a clause specifically referring to industrial democracy, but if the noble Lord is serious in his argument surely he should go back and delete that word "any" from the Bill. This undemocratic attitude as to who may or may not be consulted simply will not do.

8.25 p.m.

My noble friend Lord Carr of Hadley has expressed the fears of so many of us on this side of the Committee with infinitely more precision, accuracy and force than I could hope to do; but I should like to emphasise the point that he made by reference to a matter which was raised on an earlier Amendment, and to which, to my mind, the noble Lord, Lord Melchett, gave no satisfactory reply. That was the case of the British Association of Aerospace Staffs; I think I have that name correctly. I was not personally involved with that, but the matter was originally raised by my noble friend Lord Ferrers.

It was quite clear that that association had been denied the right to make their case to the Organising Committee for the Aerospace Industry, and that that denial had been caused, it seemed to us, by pressure from other sources. All that took place last week, and I hope, therefore, that the noble Lord, Lord Melchett, will have been able to look into that particular matter with more care than he was able to do standing at the Dispatch Box and can give us a helpful answer on that point tonight.

It is, I believe, a fundamental cornerstone of our arguments and our complaints about this particular clause of the Bill that the will to consult seems so feeble and has been so inadequately written into this Bill. I hope, therefore, the noble Lord, Lord Melchett, will listen very carefully to the points we have made. I also hope that my noble friend, Lord Carr, and others on the Front Bench will not he too easily persuaded by any answer that the noble Lord and his advisers may give. I think we should stand very firm on this Amendment and divide upon it if necessary.

There was a song in the Eurovision Song Contest a few years ago called "Puppet on a String". What I am asking noble Lords opposite is whether they are acting as collective puppets on strings. I want to find out—and I am sure noble Lords opposite can give me an answer—whether the TUC or the relevant trades unions, which I am sure they can define, have made representations to Her Majesty's Government on this particular subject. If they have said, "We do not want anybody else being consulted by law under this Bill except us", then from the noble Lord, Lord Melchett, right up to the right honourable gentleman, James Callaghan, they are acting as puppets on strings. I think that is a very undignified position for Her Majesty's Government to find themselves in. It is very distressing to see this particular performance.

If, as is so frequently the case—I am sure Her Majesty's Government and Her Majesty's Government's spokesmen here can advise me on this—peradventure, I am wrong, and the TUC and the relevant trade unions have made no representations to Her Majesty's Government, then there is no possible argument against consulting everybody else. The only argument that there can be for not consulting the remaining 30 per cent. is that the 70 per cent. do not want it. If the 70 per cent. do not want it, then that is industrial democracy my foot! It is not; it is tyranny of the majority over the minority. I am sure that the noble Lord, Lord Melchett, would rather resign than countenance tyranny.

8.30 p.m.

First, may I answer the direct point put to me by the noble Baroness, Lady Seear. I understand that "relevant trade union" is defined in Clause 56. In effect, the definition is in two stages. First of all an independent trade union, and it will be certified as such under the Trade Union and Labour Relations Act, and the second leg as formally recognised by the Corporation, or a wholly owned subsidiary of one of the Corporations, for the purposes of collective bargaining, again as defined in the Employment Protection Act. I shall be mentioning the relevance of the definition to those two previous Acts in a moment.

As the noble Lord, Lord Carr, made clear, these Amendments directly parallel Amendments Nos. 50 and 51 to Clause 2, which we have already discussed at some length. They seek to achieve the same result as those Amendments, but in relation to Clauses 5, 6 and 7 instead of Clause 2.

May I intervene to say to the noble Lord that I specifically went out of my way to say that I recognised that Clause 6 was in a different category. It is important to recognise that difference, because Clause 6 is to do with collective bargaining and the others to do with consultation.

I apologise to the noble Lord. I did not make that point, which he made quite clear. I explained on Clause 2 why the Government consider that relevant trade unions are most suited to act in the interests of all employees. I pointed out that in practical terms the Amendments would have little effect since the Corporations may he expected to recognise unions which they consider represent substantial proportions of employees. Moreover, the provisions suggested by noble Lords opposite could, as again I pointed out on the earlier Amendments, lead to damaging recognition disputes and so create very difficult industrial relations problems for the new Corporations.

I apologise again, but with great respect I think that the noble Lord is muddled up. Recognition disputes arise over recognition for industrial relations recognition, for collective bargaining recognition. It really is a custom and practice in wide areas of British industry that consultation can be on a wider basis than collective bargaining.

I accept that there is some force in what the noble Lord says, but I still think it is the case that if we did not follow the existing industrial relations legislation in this Bill we would leave these two Corporations facing very difficult problems in making the decisions which I think, to reply to the point made by the noble Lord, Lord Somers, are in their hands already, as to which organisations shall represent and which organisations not represent. What we propose by linking in these industries to our general legislation on collective bargaining and proper employee representation at least has the merit of providing a means of resolving disputes between rival groups in claiming to represent employees. I pointed out on the previous Amendment the role that ACAS would play in that case.

I should also like to point out that in practical terms some organisation must be assumed to be representative, otherwise consultation gives rise to damaging delays. We might differ about which organisations the Corporations should be obliged to consult, and I can only repeat our view that we regard relevant trade unions as the most appropriate organisations for that particular purpose.

I specifically asked the noble Lord two questions just before he rose to speak. I know that he is a highly clever chap, and I am sure that he has not forgotten what I said. It may not have been absolutely right. But could he answer whether he has had, or Her Majesty's present advisers have had, any representations made to them by the TUC or the relevant trade unions on this particular point of the Bill?

I had hoped that the noble Earl would see something in what I said as an answer to that point, but I apologise for not answering it in terms. I was trying to make clear that the definitions in the Bill follow the general industrial relations legislation passed by this Government, and therefore are in line with our thinking, and it did not need representations from relevant trade unions or anybody else to convince us that this was the correct course to follow.

8.36 p.m.

I think we are in a slight difficulty here because the noble Lord says that this Amendment would have little effect as he anticipates that the Corporations would consult these people anyhow. But he then says that if we put it into the Bill it will run counter to the Government's policy on collective bargaining and employee representation. I do not think one can have it both ways. This is obviously nothing to do with collective bargaining. What we are doing in this clause is saying that after British Aerospace or British Shipbuilders have made their report, before they take any action at all on what they propose to do as a result of making a report on what they find, they should consult with various people.

I find it difficult to consider that the people whom they should consult should be tied up with those people with whom they do their collective bargaining. Obviously if, as a result of this wide-ranging review which is going to be undertaken as soon as this Bill becomes law, the two Corporations are going to take some fairly drastic action, it is quite right that they should consult with those who are going to be affected. It is quite right that they should consult with the trade unions; it is quite right that they should consult with those people with whom they do their collective bargaining, but it is also quite right to consult with those people who may not be members of trade unions.

But, as my noble friend Lord Carr said, you cannot consult with everyone. If they are to be consulted, they must get together in some form of union in order to identify the various people, or the various bodies, who should be consulted. The noble Lord, Lord Cooper, said on the previous Amendment—and I can understand it; after all, his knowledge of trade union practices is widespread and is greatly respected—that there are many trade unions, and really it is reasonable to expect people to join those bodies who are already known and associated with consultation; that if they want to be involved, let them join the trade union. That is an understandable point of view, but it is equally the very one that we on this side are frightened of because there are many people who do not want to join those trade unions. There are many people who do not want specifically to join the trade union they would need to join if, under Lord Cooper's argument, they were to be consulted.

Because there is a large body of people who do not want to join any trade union, who wish to be independent, who because of this legislation find that nevertheless they are being forced into some kind of association, is where the danger lies, because they are being obliged to do that which they do not want to do, which is to join an association. The noble Lord, Lord Cooper, says, "Well, this is one step further. If you are going to join an association, then there are those already there which you should join." It is because there are so many people who do not want to do this that we feel very strongly that they ought nevertheless to be consulted in some form or shape. I would hope that this would be done. We are on the subject of industrial democracy, and it is something that is bound to rear its head on several occasions, because after all it is one of the fundamental parts of this Bill, and one of the fundamental parts on which the Government have laid great stress, that there should be industrial democracy.

I said the other day and I do not mind saying again that I view this with a great deal of apprehension, not because consultation should not be undertaken, because it should, but because of the idea that managements and businesses should be run not by people who are the right people to run them, people who should be expert at doing it—they may very well be people from the shop floor and plenty of people have come from the shop floor to positions of management by their own ability; that is absolutely right and I admire and respect it—but because they have been elected to do it. I believe that this is something that, not in the immediate future but in the long-term, could run us into many industrial problems.

I say that for the simple reason that those who run any business, in the same way as those who are test pilots, engineers or aero-dynamics experts, are in positions of management because they are experts, and if they are not they should not be there. I hope that those people will retain their positions of management and authority because of their ability to do so and not because they have been elected to do so.

I hope that the Government will consider this matter again. I appreciate that the noble Lord, Lord Melchett, said that it runs counter to their policy at the moment. Nevertheless, I hope he will be prepared to look at it again because, as drafted, the Bill means that many people will not be democratically consulted; either they will not be consulted or they will be forced into a collusion of people with whom they would rather not be forced to be with. I hope that even now Lord Melchett will say that he will reconsider the matter.

I hope that if my noble friend Lord Melchett is tempted to give way by the power of persuasion of the noble Earl, Lord Ferrers, he will have another look at the words which the noble Lord, Lord Carr of Hadley, and his noble friends have suggested because it seems that they are as nearly meaningless as any words could be. The Government may be wrong, but at least they know what they are doing; they say that the relevant trade unions shall be consulted and we all know what a trade union is for. On the other hand, Lord Carr does not want to do that. He wants the clause to read:

"… any other person or organisation which appears to it to be representative of a substantial proportion …"
A substantial number of people engaged to do what? It would be possible inside a firm to have an organisation with a substantial membership to propagate the idea that the earth is flat. On the basis of Lord Carr's Amendment, the flat earthers, representing a substantial proportion of employees, would have a right to be heard. The same would apply to a body of Jehovah's Witnesses or even a football club. The words in the Amendment are in no way associated with the noble platitudes that have been ennunciated from the Conservative Benches.

Is the noble Lord aware that one of the main purposes of some of the relevant trade unions is to propagate Socialism? If that is not as out of date as the belief that the world is flat, what is?

I am delighted to know that trade unions are engaged in propagating Socialism, which is a noble cause. I have no doubt that the Jehovah's Witnesses and the Flat Earth Society regard their causes as noble. We are not discussing nobility, but the noble Lord's Amendment. It is obvious that the noble Lord's heart has run away with his head. I am simply saying that, even if the argument is sound, the words are wrong because they do not mention collective bargaining or trade unions.

If the wording of the Amendment is defective, I am sure that my noble friends would be happy to take it away and ask the Government to redraft it, provided the Government agree to listen to the principle that 30 per cent. of the people in the aircraft and shipbuilding industries who are not represented by relevant trade unions can in some way be consulted. That is the kernel of the argument.

I am not saying whether there are 30 per cent., 40 per cent. or 50 per cent.

In that case I wish she would not interrupt from a seated position. Whether the percentage is 30 or 60, the words of the Amendment written into the Bill would render it meaningless. I repeat that, while the Government may be wrong, at least we know what they are wrong about. The Opposition's proposed words are linked to a person or an organisation "which appears to it," which are the sort of imprecise words which should not be included in a Statute because, as has been argued, they could be the cause later on of dispute and great trouble. What we need here is clarity of thought and precision of expression. The Amendment is neither and I hope for that reason that the Government will stand firm. On the other hand, if Lord Melchett has been converted by the arguments of noble Lords opposite, I hope he will get up and say so. At the moment I am not dealing with conversion but with the lack of clarity in the wording of the Amendment.

I, too, hope that the noble Lord, Lord Melchett, will look at this matter again, and I ask him to do that for somewhat different reasons from those advanced by the noble Lord, Lord Wigg. From the answers Lord Melchett gave it seemed with respect as if the distinction between negotiation and consultation was not quite clear to him in the way it is put in the Amendment. It is one thing to say that one will negotiate only with certain unions. It is quite another to say that there are positive mutual advantages in consulting with a much wider range of groups, and this does not conflict with the trade unions and labour relations legislation. The advantages are two-fold.

First, from the point of view of the organisation, whether or not the Government like it, there are a number of individuals at all levels who are not going to join existing trade unions. They will be unable to have the contact which consultation would give them unless something of this kind is included. They will be very bitter. It cannot help these new industries if one starts with quite sizable groups of people who not only are excluded from the industrial relations and industrial negotiating process—which, whether or not one likes it, one accepts—but are also excluded from consultation. The ability to have consultation would alleviate this bitterness. Secondly, many of these people have knowledge and information and it is the purpose of consultation to get that knowledge and information across in a very complex new industry, because it will be newly organised, which will have many new problems to face. It is surely extreme folly not to tap all sources of knowledge, information and ideas that are available by extending consultation which would not cut across the negotiating procedures. There would, therefore, be this double advantage.

I wish to add a brief word of support for my noble friend Lord Melchett. It seems to have been overlooked in this discussion precisely what Clause 5 aims to do, and that is to impose a statutory obligation on the Secretary of State to consult with certain bodies. For this purpose, therefore, one must have very clearly defined the precise bodies with which the Secretary of State must consult, not bodies which he would possibly and desirably consult because he can consult with anybody he likes and I have no doubts that he will consult with a wide range of people.

I interrupt the noble Lord simply to remind him that it says that the Corporation, not the Secretary of State, shall consult.

I am grateful to the noble Earl; I should have been referring to the Corporation. It is the Corporation that is bound to consult and I think the point is exactly the same because the statutory obligation is there. In the case of a relevant trade union, this is a clearly defined concept. I have forgotten the provision, but we have the definition clause in the measure and that is precise. It defines precisely what is meant by a relevant trade union. But when you consider the situation of the Corporation, which may have a variety of employees—solicitors, accountants, architects, all sorts—does that mean that if you have some general expression such as a "relevant organisation", there is to be a statutory obligation to consult with the RIBA, or with the Law Society, or the Bar Council or whatever it is?

This is a clearly defined body, related to a specific group, but in the case of all the different sorts of people who may be in this organisation, they belong to professional organisations. It would be an absurdity that the Corporation should be expected to consult with every representative professional body that may in some sense or another be regarded as the representative of small groups of people within the organisation. Therefore, it seems to me that if we are to impose a statutory obligation, what we must have is a clearly defined group of organisations. These Amendments, as I understand them, do not even begin to qualify from that point of view.

I should like to refer back for a moment to what I was saying earlier about the Bristol Channel Ship Repairing Company, who set an example with their quarterly meetings at which they consult with all groups in the firm and explain what is going on. As the Bill is drafted, it seems obvious that there will be meetings between the management and the relevant unions and that consultation will take place at those meetings where all the points will be thrown to and fro. After that meeting the management would—presumably, almost in secret—have to go along to the associations and consult with them, not in the presence of the unions. This must be an extremely divisive arrangement if the results are different from what the unions were led to believe during their own meetings.

As regards the importance of consultation, I should like to refer back to a point on a question put by my noble friend Lord Trefgarne about British Aerospace. When I raised this point on Friday the noble Lord, Lord Melchett, was quite heated and asked me to withdraw. I said then that I thought that if he would refer back to Hansard the point at issue—the importance of consultation—was there. I would refer the noble Lord to column 589 of Hansard for Thursday, 14th October, where he said:

"They"—
the chairmen designate of the Corporations—
"are both perfectly willing to talk to anybody who wishes to talk to them, and I know that my noble friend Lord Beswick has met groups of people, among which have been both members of trade unions and also people who are not members of trade unions."
I merely refer to that because I was making the point that if he had talked in the past, he would presumably talk in the future. I was trying to put the situation right and I was not, as the noble Lord suggested, deliberately trying to make trouble. I should just like the noble Lord to take that point in the spirit in which it was meant.

8.53 p.m.

I must take up your Lordships' time for a moment more because I feel that the Government ought to pay more serious attention to the points we are making. When we get on to Clause 6 which deals with collective bargaining, we shall be on much more difficult ground and I may find myself not altogether at one with some of my noble friends on that issue, because what is ideal and what is practicable in the field of collective bargaining machinery may differ quite considerably. In my view, one can only move towards the ideal by rather slow and sometimes rather painful steps.

However, when it comes to the question of consultation, there is not the same resistance or rigidity, nor ought there to be. I was very glad to hear the noble Baroness, Lady Seear, support me on the point of the difference between consultation and negotiation, because there is a difference not only in kind but also in industrial relations practice, in the custom and practice in British industry. I notice that the noble Lord, Lord Cooper, shakes his head and I must be careful because, clearly, the noble Lord, Lord Cooper, from his great experience in the past, knows more about this than I do. However, I do know something about it. No doubt it varies from one part of industry to another, but I know whole parts of industry where what is permissible and acceptable in terms of the consultative constituency is different and wider than the negotiating constituency.

I really believe that the noble Baroness, Lady Seear, said wise words when she asked the Government to consider the bitterness and frustration that will arise if we start these new Corporations in the situation where some 70 per cent. of the employees have a legal right to consultation and the other 30 per cent.—and we are only guessing the percentage, but I do not think that I am exaggerating, and certainly in the aircraft industry it is a full 30 per cent. and may be more—are not given that legal right. As I say, when we come to the more difficult question of collective bargaining, we shall be on more difficult ground and I accept—though not all my noble friends will do so—that we may have to be more restrictive and that it may be necessary to be more restrictive. However, when we are at the consultative stage, for goodness' sake let us consult as widely as we can!

The noble Lord, Lord Melchett, opened his rejection of this Amendment by saying that the relevant trade unions as at present defined were the most suitable for all employees. With due respect to the noble Lord, that is palpably not the case. The relevant trade unions predominantly represent the shop floor employees. That is absolutely right and necessary. They are the largest number in the industry and they and their unions must have a full right to consultation. That is absolutely agreed and we are not trying to disagree with that. But to say that the large numbers of people in the managerial and technical grades who, though they may be smaller in number, contribute equally to the welfare of these organisations and their contribution to the national interest should not be represented, is wrong. They really have an equal right to this legal right of consultation. I beg the Government to think about this more seriously because it is nonsense to say that the relevant trade unions as at present defined are the most suitable for all employees.

The noble Lord, Lord Lloyd of Hampstead, made the point that we needed to define precisely who was entitled. I think I should remind him that when this Bill started out the phrase in the equivalent clause to the present one referred to "independent trade unions". As, again, the noble Baroness, Lady Seear, said in her first intervention in this debate, there is some point in referring to "independent trade unions". I can see the point that one should not give a legal right of consultation to organisations which are dominated by the employer, but, where there are organisations which are independent and are certified as independent, it seems to me that they ought to be consulted. In other words, the Bill as it started might just have been acceptable, although only marginally so, but the word "relevant" means that the union must be both independent and recognised for collective bargaining purposes. By including that extra condition the Bill has now become much more restrictive than when it started life. Whatever may be necessary for good order in collective bargaining, it would be disastrous if we agreed to confine it in this way over the process of consultation.

If I may turn to the noble Lord, Lord Wigg, if the wording of this Amendment is too sloppy, I take that criticism. It is always difficult, as he knows as well as anybody, for Private Members and Oppositions to get their wording right, but of course we will willingly consider any suggestions from the Government to tighten up our wording, to be more precise in our definition, because I do not want people of the Flat Earth Society to be consulted on this matter because they are the Flat Earth Society. I am sure we could alter our Amendment with due thought to make it relevant to the purposes we have in mind. I beg the Government to think about this a little more fully. We may come to an unbridgeable divide when we get on to the collective bargaining side, but I do not believe we need to be on opposite sides of the chasm when we are talking about consultation. If the Government would only address themselves to this and not go on repeating their previous position, I think some good might come of it.

What the Government seem to be saying at the moment to some 30 per cent. of the employees in those Corporations—and I am sorry if my last words appear to be rather harsh ones—is that some people, some superior persons, are entitled to the legal right to be consulted and that legal right shall be solemnly enshrined in the Statute but that the remainder, the inferior people, the peasants, if you like, have no legal right which can be enshrined, although as a matter of grace, of paternalistic benevolence, they may be consulted. That is thoroughly insulting to the 30 per cent. of the employees in this industry, and I beg the Government to think again.

I should just like to explain why I was shaking my head at the noble Lord when he spoke of this distinction between collective bargaining and consultation. That used to be the case. I think that the TUC reports are carefully prepared and well-documented. On the question of consultation they say—and this is in their pamphlet on industrial democracy—that the situation has become blurred. It is true that if you go back a decade there is a very clear distinction between consultation and negotiation but, as the Donovan Report brought out, there are two systems of industrial organisations in this country; that is, the shop floor and the national bodies. Very often they are at odds with each other. This is a problem for the trade union movement but, because of the power of the shop floor—power, incidentally, brought about by the development of British industry, the high concentration of industry and the situation created by industry—where a few men can stop a line, the old conception of consultation has become blurred and negotiations take place that at one time were national or regional.

So there is this situation. The very thing we are discussing illustrates a very different development from ordinary consultation, because this is talking about the Corporation preparing a review, and the only reference to consultation is that when they have prepared that review they must refer it for consultation to the relevant trade unions. I say this because, as the noble Lord, Lord Carr, has said, we do not want to get at odds with each other, I will not mention the facts, because you cannot generalise in this situation. All situations are different, but in many situations where you have consultation—this again is the attitude of the TUC; I do not say it is wrong; it is an attitude I support—where the relevant trade unions have made the consultative machinery, then, of course, they regard this in a sort of partially possessive way, that this is their machinery.

When the question was asked about what consultation had taken place between the unions and the Government, that was indeed a naive question to ask, because, as the noble Lord, Lord Carr, knows, the trade unions nationally will negotiate with any Government. We negotiated with the Conservative Government. I played my own part in that. We negotiate with the Labour Governments. Governments have come to the point of view that any legislation touching upon industrial relations shall be discussed, and very properly I think, with the CBI and the TUC. I thought I would say this because I agree with the noble Lord, Lord Carr, that a decade ago there was this clear distinction between consultation and negotiation. I do not think that prevails any longer.

9.5 p.m.

I wonder whether I could be allowed to say this to the noble Lord, Lord Cooper, because clearly he speaks with more knowledge and experience of these matters than certainly anyone present in this Committee at this moment. He is at any time equal to anyone in this House. I accept that there has been a change in the last 10 years and I am also prepared to say that the change has gone further than perhaps I had realised. But, if that is so, then there really is a burden of obligation on the TUC unions also to soften their attitude as to who they bring in and who they do not. May I just draw the noble Lord's attention, and of course the Government's attention, to the sort of matters which this comprehensive review is to cover; it is to cover the decentralisation of management. Surely, if the review is to cover the decentralisation of management, then management in the Corporations really ought to be consulted about that. They are not properly represented in those trade unions which at the moment qualify as relevant trade unions in the terms of this Bill.

Then, if we look a bit further, we see, particularly in relation to shipbuilding, decentralisation of the management and decision-making to separate profit centres. Not only is there the need to consult with management generally but when we are talking about profit centres and, later on in another clause, about corporate planning, all the specialists in management—for example, accountants, in the widest sense of the word, cost- and work accountants, management accountants, as well as the more technical sort of accountants, all the systems analysts, all these people—really need to be consulted. This is the guts, not the whole guts but part of the guts, of the review. The relevant trade unions as at present defined simply do not, and if they are honest cannot, claim adequately to represent those grades of staff.

I submit to your Lordships' Committee that to have this comprehensive review to look at all these things and to fail to give a legal right to consultation to the people most concerned with some of the aspects I have just mentioned is not only an injustice to them but madness in terms of the future efficiency with which these Corporations are expected to operate as written into this Bill.

Again, I beg the Government not to treat this in some partisan, political manner. There really is a matter of the future efficiency of these Corporations at stake, and getting the right organisation. There is also a matter of future good will of large numbers of their staff. I am always saying in speeches that in the end democracy is about the will of the majority and, although minorities must be carefully considered and have great rights to be heard, in the end the will of the majority must prevail. In this case the will of the majority is being allowed to prevail without the minorities being given a fair crack of the whip in having their say in arriving at a collective judgment; and I believe that that will not lead to future good will and harmony and efficiency in these organisations.

9.9 p.m.

On Question, Whether the said Amendment (No. 85) shall be agreed to?

Their Lordships divided: Contents, 85; Not-Contents, 42.

CONTENTS

Airedale, L.Ferrers, E.Orr-Ewing, L.
Amherst of Hackney, L.Gainford, L.Penrhyn, L.
Amory, V.Gisborough, L.Redesdale, L.
Ashdown, L.Gore-Booth, L.Remnant, L.
Balerno, L.Gray, L.Rochdale, V.
Balfour of Inchrye, L.Gridley, L.Ruthven of Freeland, Ly.
Beaumont of Whitley, L.Hacking, L.St. Aldwyn, E.
Belstead, L.Hampton, L.St. Davids, V.
Berkeley, B.Harmar-Nicholls, L.Sandys, L. [Teller.]
Birdwood, L.Hives, L.Seear, B.
Bridgeman, V.Hornsby-Smith, B.Selsdon, L.
Brookeborough, V.Hylton-Foster, B.Sempill, Ly.
Brougham and Vaux, L.Ilchester, E.Shuttleworth, L.
Burton, L.Inglewood, L.Simon, V.
Byers, L.Inverforth, L.Stamp, L.
Campbell of Croy, L.Kemsley, V.Strathclyde, L.
Carr of Hadley, L.Killearn, L.Strathcona and Mount Royal, L.
Chelmer, L.Kimberley, E.Swansea, L.
Colville of Culross, V.Lauderdale, E.Teviot, L.
Cork and Orrery, E.Lloyd of Kilgerran, L.Tranmire, L.
de Clifford, L.Lyell, L.Trefgarne, L.
De Freyne, L.Mancroft, L.Vickers, B.
Denham, L. [Teller.]Monson, L.Ward of North Tyneside, B.
Deramore, L.Mottistone, L.Wardington, L.
Drumalbyn, L.Newall, L.Wigoder, L.
Elles, B.Northchurch, B.Windlesham, L.
Elliot of Harwood, B.Nunburnholme, L.Young, B.
Elton, L.O'Hagan, L.
Falmouth, V.Onslow, E.

NOT-CONTENTS

Blyton, L.Janner, L.Pitt of Hampstead, L.
Brimelow, L.Kirkhill L.Popplewell, L.
Brockway, L.Llewelyn-Davies of Hastoe, B.Raglan, L.
Champion, L.Lloyd of Hampstead, L.Sainsbury, L.
Collison, L.Longford, E.Segal, L.
Cooper of Stockton Heath, L.Lyons of Brighton, L.Stedman, B.
Davies of Leek, L.McCluskey, L.Strabolgi, L. [Teller.]
Davies of Penrhys, L.Maelor, L.Taylor of Mansfield, L.
Elwyn-Jones, L. (L. Chancellor.)Melchett, L.Wallace of Coslany, L.
Evans of Hungershall, L.Morris of Kenwood, L.Walston, L.
Greenwood of Rossendale, L.Murray of Gravesend, L.Wells-Pestell, L. [Teller.]
Harris of Greenwich, L.Oram, L.Wigg, L.
Hirshfield, L.Pannell, L.Winterbottom, L.
Jacques, L.Peart, L. (L. Privy Seal)Wynne-Jones, L.

Resolved in the affirmative, and Amendment agreed to accordingly.

9.14 p.m.

moved Amendment No. 88:

Page 9, line 23, after ("interest") insert ("or is against the commercial interests of the Corporation.").

The noble Lord said: On behalf of my noble friend, I beg to move Amendment No. 88. I should perhaps make clear at the outset that this is essentially a probing Amendment on the issue of national and commercial security, but it raises some fairly wide issues which have cropped up in this House before and I shall be referring to these in a moment.

It is no coincidence that the increase in Government involvement in industrial affairs leads to demands for more information. What we are concerned about here is essentially that this can be construed as being what one might call "snooping" powers in furtherance of interventionist legislation.

I have to confess that the last time we were talking about this issue we were dealing with a particularly interventionist Minister in talking about the Energy Bill, but nevertheless the general point remains true and the noble Lord, Lord Lovell-Davis, made a perfectly fair point, which illustrates my point also, when he said that without information it would be impossible to make any soundly based decision. The principle that we are trying to get at here is conceded in an earlier clause in this very Bill that we are discussing today where it stipulates that where the Secretary of State gives the general direction to either of the two Corporations under Clause 4(2) he shall lay a copy of that direction before each House of Parliament within 28 days unless he accepts the Corporation's advice that it would be against the Corporation's commercial interests to do so.

I think it would be common ground between us that one would hope it was quite exceptional for the Secretary of State to seek to override the opinion of the management of either Corporation as to whether a particular matter is contrary to its commercial interests. Indeed, earlier on we had quite a debate about what happens when the Secretary of State is at variance with the chairman and the Board of either of these Corporations. But, of course, it is also the reality of the situation that a number of commercial agreements which are entered into in the ordinary course of business impose strict limitations on the right of a company to disclose confidential information outside those in their employment who need to know such information for the purposes of the contract. The Secretary of State cannot override any such legal restraints upon the Corporations, although clearly it is likely that, in the case of future contracts, the Corporations will have to seek to preserve the right to communicate freely with the Secretary of State. I think I should perhaps at the very outset have mentioned that I am really speaking to two virtually consequential Amendments, which are Nos. 111 and 114, so I hope it will not be said that I am speaking too wide of the particular point here.

One of the worries which inevitably create disquiet, I think, is that under this clause there is a power to demand a mass of information which could be highly sensitive and confidential, and I do not think everybody in this Committee would necessarily concede that it is always in the public interest that information should be available to Government Departments in all circumstances. In that connection, at the Committee stage of the Energy Bill I moved, and the Government accepted, an Amendment which had the effect of ensuring security of information as between the customer and the supplier—

this was in col. 2128 of the Official Report—but the veto on the disclosure of information was given to the company which supplied that information. This Amendment, as I say, was accepted by the Government as being an essentially reasonable limitation. If the Government were extracting sensitive commercial information from a company, it seemed to us, and apparently it was accepted by the Government, that it was reasonable that, before the Government disclosed that information to any outside party, they should seek the agreement of the company which had to supply the information: and I do not think that is totally irrelevant to the issues that we are discussing here this evening.

Let me make another, purely practical point in this way. The Government and their Departments have a great capacity to process information and they employ many people who are expert at doing precisely this. There is very little constraint on a Government Department about demanding information from companies. It is very easy to ask for information, and I have no doubt that Ministers may at times say that that is certainly true of the Opposition, who can make themselves a nuisance by demanding information which appears to be totally irrelevant and unnecessary and which is time-consuming and demanding to provide. Therefore I say to them, let them remember that it is very easy for a Government to say, "Let us ask for all sorts of information from a company". It is worth bearing in mind that one would hope that most executives in companies have rather better things to do than spend their time supplying information to the Government.

I do not want to broaden this into a general argument about the malaise which affects small companies but, as has often been said, small businessmen feel that they spend half their time filling in forms for the benefit of the Government. I would say that it is worth bearing in mind that it is easier to demand than to produce. It is liable to be an onerous task they are placing on companies if they make what the companies consider to be unreasonable demands for information. Let them remember that when they ask for information, this is, at the very best, bound to be an onerous task placed on companies.

I am not sure that the Government sufficiently appreciate all the issues involved in the growing tendency to demand private information. I believe it is proper for Parliament to challenge this tendency which seems to be an inevitable concomitant of the wish to intervene and the wish to nationalise. In moving this, I am saying, first, that there is a fear that the Government could, and if they could it is possible they would, impose a number of onerous duties on companies; and, secondly, and more seriously, there is a fear that confidential information will leak via "the grapevine" into quarters in which it would be highly undesirable for it to find its way. Government by leak has been something we have become increasingly used to. I will not put a time limit on that, otherwise it will sound too deliberately Party contentious; but most people will agree that Government by leak is a technique increasingly used in recent years. It would be reasonable to say that some of the information existing in the industries we are discussing—and particularly the aircraft industry—is of a highly sensitive nature. I think that the onus lies on the Government to see that what they are demanding is necessary. This is basically the purpose of these Amendments. I beg to move Amendment No. 88.

9.28 p.m.

I should like from these Benches to support this Amendment. I do not want to follow the noble Lord, Lord Strathcona and Mount Royal, along the path he was pursuing. I am bound to say that he seemed at intervals to be getting wide of the Amendment. My feeling about this is simple. What is essential is that there should be complete frankness between the Corporation and the Secretary of State. The Secretary of State who, whether we like it or not, is going to have a number of powers to take action on these matters, should have an absolutely clear picture from the Corporation of the situation as they see it.

It seems to me that if there is not some provision that the Secretary of State has the power to remove from any report made to him items that: may affect the commercial interests of the Corporation, the Board of the Corporation will be chary about making their reports to him. They will try to make little twists here and there to conceal information that they do not want him to publish. It would be better to say: let the Corporation make absolutely frank reports, after they have had this review, to the Minister and indicate to him that "paragraph x or y of our report is something which we feel should not be disclosed because it will have an effect on our commercial position". If the Secretary of State is satisfied that that is the case he should be empowered to remove it from the document as published. That is the only basis on which I rise to support this Amendment.

There is one question that I do not begin to understand and I am not sure that I can read the problem. It is that the Corporation will be involved with many other private companies, in many techniques, secrets, or whatever you like to call them, some of which are national secrets. They are easy to deal with. However, the Corporations will be involved in commercial secrets. What protection is there against a dislcosures? How will representations be made known to the Secretary of State as opposed to the Corporation because by law the Corporation is required, and the Secretary of State is not required, to talk to its partners on a question of disclosure. I do not understand that but I may have misread the problem.

I think that these extra words should be accepted by the Government on the basis of the argument used by Government spokesmen so far on other clauses. The noble Lord, Lord Melchett, said that the general idea behind one of the other clauses was to make the Government's intentions clear. I believe that these words should be added in order to make their intentions clear that they do not want the general relationship between the Corporation, the Government and the smaller subsidiaries to which the noble Viscount, Lord Brookeborough, has just referred, to be disturbed by any uncertainty.

It may not have reached the point where it could be proved to be against the national interest, but if it is against commercial interests, that may be the first step towards reaching the point where it would be against the national interest. If, in framing what eventually will be an Act, it is passed, the general intention, as I said at the beginning, should be made clear; that is that they do not want anything against the commercial interests to be disclosed if, in the view of the Secretary of State, it would be injurious to that level. Something would not become detrimental to the nation's interest before, first of all, going through the phase where it would be against the commercial interests of not only the Corporation and the work it does, but of the subsidiaries which will have to work with it.

I accept absolutely the points made by the noble Viscount, Lord Simon, that unless "this intention is made clear", to use the noble Lord's own words on a previous clause, it could well be that there will be lack of frankness because when executives prepare their reports, or when executives in charge even of medium-sized organisations (much less ones as big, important and as embracing as this would be) believe that they have no protection against the interests of what will be their daily bread in terms of the Corporation's efficiency, it may well be, as the noble Viscount, Lord Simon, said, that they would deem it to be their duty not to disclose certain details which they otherwise would if this general intention was made clear by accepting these words.

I should have thought that it can only strengthen the good working of the Corporation if this safeguard is made quite clear by these words being included. At the end of it all, when people are running an organisation their first interest is in the immediate success of the organisation. In doing that, many commercial risks must be taken and many commercial decisions must be made which, perhaps, with hindsight, would not have been made. That sort of thing must be taken into account. By adding these words one is virtually instructing any future Secretary of State that, before he is impelled to do something in what is called the national interest, he must take the preliminary precaution of safeguarding also the commercial interests of the Corporation in its earlier stage. It is for that reason that I hope that these words will be accepted. They can only strengthen what I hope was the Government's intention when they first prepared the Bill.

9.35 p.m.

I feel that one ought to support the argument of the noble Viscount, Lord Simon. When my noble friend was speaking just now, I was sorry to observe the noble Lord, Lord Melchett, shaking his head in a negative sense because there are moments when one wonders whether the Government have not taken a phrase out of Lord Cudlipp's literary performances, which we enjoy at weekends, and that they have been answering with the chattiness of an uncooked clam. They have not been responding very much. The noble Viscount, Lord Simon, made the point which is a very serious and real one, particularly in the light of recent experience, that there must be total frankness between the Corporations and the Secretary of State. Let us think of some recent cases where nationalised industries—or at any rate their chairmen—have been reduced to a point where there is no frankness. What about Sir Richard Marsh, former chairman of British Rail? Some of the things which lie has had to say about the Government have suggested that frankness withered away until the chairman of British Rail and the Government were at daggers drawn. What about Sir Monty Finniston? The same thing again.

What is absolutely essential is that there should be real frankness. What has happened in the past is that State corporations have been established and then they have grown further and further apart from the Government. This is what must be avoided. The noble Viscount, Lord Simon, addressed his very astute mind exactly to the point. There is a procedure well known in Select Committee work where evidence of a confidential nature is subject to what is known as "side-lining". Surely it is proper that the Corporation should have some kind of protection, and should know they had some kind of protection, before they talk frankly with the Government. Unless they have that protection they will not talk frankly. It may be said, after things that were mentioned earlier in the debate today from this side and other parts of the Committee, notably the Cross-Benches, about Parliamentary control over what goes on, that there might be a certain contradiction here because we are now suggesting that the Secretary of State should be vested with a requirement to delete certain things from reports which will eventually come before Parliament. We are concerned with making sure that the system works. We want Parliamentary control to the fullest extent but within limited responsibility and understanding which is well known in this Chamber and even down the road.

We have to make sure that there is a proper balance between the information that is necessary for Parliamentary scrutiny and the legitimate, proper and serious requirements of commercial security which, if they are protected, will of course make possible frankness between the Corporations and Government. We know very well in Parliament how often a Minister has to answer on a delicate matter and says to the House, "I hope noble Lords will not press me", or to the other place, "I hope honourable Members will not press me." When that is said we never press the matter because we understand that there are matters which it would be against the national interest to bring out in public. When we plead, are concerned for and, indeed, will fight for, proper Parliamentary scrutiny, we are none the less also saying that the matter to be scrutinised must be properly protected. In this case we are saying that the Corporations must be absolutely satisfied that their own secrets revealed to the Government are not then blabbed all over the place, or leaked—to take another rather disagreeable contemporary phrase.

Reverting to the point made by the noble Viscount, Lord Simon, we believe that it is most important for the confidence between the Corporations and the Government that they should be protected in this manner. Therefore, I hope that the Government will perhaps really open up. Let them now be a "cooked clam" for a change and say something that will be to the delight and taste of us all!

I should like to raise a point which came up in Standing Committee D in another place. In Part I, column 719 to 721, a volume which makes War and Peace look positively thin—

That only goes to show how extensively the Bill was considered in another place.

I am so glad that the noble Lord said that. Perhaps he will, at a later date, reply to something I asked him when discussing a previous Amendment which he did not answer. I am sure that I shall receive an answer as regards that matter later.

On this great tome which, as the noble Lord says, shows how very well the matter was considered, I wish to raise one point. Mr. Warren in another place spoke about the number of agreements which apparently consist of something like 400 arrangements between BAC and Hawker Siddeley with other corporations, countries, et cetera and whether they are multilateral or whatever. They are extremely complicated, as are the star and the mesh consortia arrangements. When this was considered the point that has been raised by my noble friend was raised. On considering it Mr. Carmichael stated on Clause 18(2):
"There are further safeguards. Without commitment I am prepared to consider the matter further, perhaps with a view to seeing whether the formula of Clause 18 can be incorporated into Clause 5."
I wonder whether we might get a further instalment of that particular saga?

I am sensitive to the point made by the noble Lord, Lord Strathcona and Mount Royal, who suggested that this Amendment and, I think, Amendments Nos. 111 and 114 give the Government the opportunity to explain some of their thinking behind this section of the Bill. I think that the noble Viscount, Lord Simon, as indeed did other noble Lords, bore upon this point.

When an Amendment similar to this was debated in Committee in another place my honourable friend the then Parliamentary Under-Secretary of State undertook, without commitment, to consider whether there might be grounds for amending Clause 5 on these lines. Indeed, the noble Lord, Lord Redesdale, has made mention of that point. We gave further thought to this matter. However, we remain unconvinced of the need for the Amendment. We therefore resisted a similar Amendment at Report stage in the other place.

The reports on organisation under Clause 5 will not set out detailed individual commercial dealings. I must emphasise that point. They will examine questions of general organisation—for example, what sort of regional function the Corporation should engage in and what type of maintenance of identity of subsidiary companies should be engaged in. Any exceptionally major and sensitive contract would be considered within the corporate plan.

Generally it is clearly in the public interest that there should be maximum disclosure of the contents of the reports which affect the livelihood of many people. In the Government's view it would be undesirable to build in too many loopholes for non-disclosure. Perhaps I should say a little more about why we do not think it appropriate to insert a provision which would enable the Secretary of State to withhold publication of the organisation report or part of it on the grounds that it is against the commercial interests of the Corporation. The Government do not foresee how the likely contents of such a report could give the Corporation's competitors any commercial advantage.

Again, I would emphasise that the kind of information which they might find useful—for example, about contracts, about the Corporations' research plans and about their marketing strategy—will not be in any report on organisation. The kind of questions covered are whether the Corporations will be organised on regional or functional lines, whether the vesting subsidiaries will retain their identity and to what extent, and so on. It follows from that that we know of no compelling commercial reasons for not disclosing what the organisation of the Corporations will be.

The noble Lord, Lord Strathcona, brought within his comprehensive statement questions on Amendments Nos. 111 and 114. Amendment No. 111 seeks to lay down in Statute that the Secretary of State may not require a Corporation to disclose something which it is not legally entitled to disclose. Amendment No. 114 seeks to prevent the Secretary of State from directing a Corporation to publish some information, if publication would be against the national interest or the commercial interests of the Corporation. This clause is precedented. I am advised that it follows Section 4 of the Railways Act 1974, and to some extent Section 6 of the Iron and Steel Act 1975. We believe that the national interest and the interests of the Corporations are therefore adequately safeguarded.

It is unacceptable to imply that any Secretary of State would knowingly use Clause 8 to require a Corporation to break the law, and therefore we consider that prohibition is unnecessary. As the provisions in the clause covering publication are not automatic but operate at the discretion of the Secretary of State, it must be presumed that he will act in the national interest as he conceives it. As the clause is drafted, before publication the Secretary of State must consult the Corporation. If the Corporation were to indicate that publication was against its commercial interests, it can be assumed that the Secretary of State would insist upon publication only in the unlikely event that some reason of national interest overrode the Corporation's commercial interests.

Finally, I should add that this clause dispenses with the need for provisions comparable to those in Schedule 2 to the Iron and Steel Act 1975, requiring the publication of information about diversified or ancillary activities. I know that noble Lords opposite are always anxious in the interests of fair competition, and properly so, that public corporations should publish adequate information about their activities, and Clause 8 in its present form would allow the Secretary of State to ensure that this was done in the unlikely event of any reluctance on the part of the Corporations.

The noble Lord, Lord Strathcona, posed a question as to the protection of sensitive defence information. I am advised that the Corporations, and those working in them, will be subject to the Official Secrets Acts and arrangements related to those which at present cover the vesting companies. The noble Earl, Lord Lauderdale, mentioned the national interest versus the commercial interests of a Corporation. En the Government's view, the national interest would normally subsume the commercial interests of the Corporations. Therefore, under this clause as drafted the Secretary of State could withhold such information from publication—

Might it not be in the general interest for that to be spelled out in the Bill? Of course I take what the noble Lord says. I always take what he says, and I always admire the manner in which he expresses it. But could that not be in the Bill? We have had assumptions on this Bill and on other Bills, and if this were spelled out our fears would be put at rest.

Of course I cannot say that the explanation which I give could not in more legalistic terms be drafted into the Bill. But my explanation is, at the very least, on the record and the noble Earl will have to be content with that at this stage.

As he frequently does, the noble Lord, Lord Redesdale, posed a question to which I have not fully replied but which I touched upon in my opening remarks. To be fair, there is a question of judgment involved and to be equally frank in reply I would say it turns upon a matter of judgment from the Government point of view as to whether amendment might have taken place under the aegis of Clause 18(2). Although I am straying from the question immediately before us, the thinking behind that sort of clause suggests that, against the national interest to do so, the Secretary of State accepts the intention of the Corporation that it is contrary to the commercial interests of the Corporation. We have considered that fact, but upon a balanced view feel that the need to amend as outlined does—

In his opening comments the noble Lord said that these reports, which he is suggesting should be added to would be organisational. I cannot find any guarantee that they would be organisational reports only. Is it not possible that, even inadvertently, something which would affect the commercial future of the Corporation would creep in? If these words were added, it would add some little protection and would go some way to answering my noble friend Lord Lauderdale. If it cannot be guaranteed to be purely organisational, if there is even a half a risk that there would be some commercial interest that could slip into these reports, ought we not to give the protection of these extra words to try to minimise any danger of that happening?

I am advised that that which has commercial impact will not form part of the organisational reports. I made the point that that would form part of the corporate plan. I can give no more firm assurance than that.

If I heard the noble Lord aright, he said that if the Corporation were to include in the report a matter which affected their commercial position, they could ask the Secretary of State to exclude it and that he would do so. Is that right?

I certainly suggested that if the Corporation made that clear, the Secretary of State would give it every consideration.

As I see it, the difficulty is that without this Amendment the Secretary of State would not have the right to do that. He would be bound to publish because he has no right to exclude matters of commercial concern. This seems to me to be the nub of the problem. Although these reports are basically organisational, I can conceive circumstances where, for instance, they might say, "We think this particular part of our undertaking had better be dealt with in this or that way because, talking quite frankly to the Secretary of State, at the moment their position is rather rocky and we want to nurse them through a difficult period". That is something which does not want to be published but is something which, to my mind, if the Corporation is to be frank with the Secretary of State, ought to be said.

I re-emphasise that in the Government's view the detailed commercial dealings of the Corporation will be matters for the corporate plan. At one point one might argue that the Amendment is technically unsatisfactory because in the Government's view the Secretary of State is not the most appropriate judge of the commercial sensitivity of the Corporation.

Is that not a very good reason why those words should be in? I think it is right that he would be a layman in this sense, but if these words were added he would be more likely to seek advice as to whether it would be in the commercial interest. Otherwise I use the word "inadvertently": he may inadvertently do damage because we have not given him the hook on which to hang his hat and take an extra precaution. I should have thought that the final words of the noble Lord made this wording essential.

Noble Lords cannot have an assurance of the addition. Noble Lords have at least, I trust, had as full an explanation as I am capable of giving to them.

Before I go into the wider issue, may I ask the noble Lord to make clear one point. Here we are referring virtually to a one-off operation. When vesting takes place and British Aerospace and British Shipbuilders are set up (I speak as an ex-industrial consultant) a kind of consultancy review is to take place—what we used to call a management audit. This will result in a report and I hope I am right in thinking that it is to this report that this operation refers.

I am grateful to the noble Lord because some of us had possibly been imagining that we were talking about a continuing process: a series of reports which would go on rolling out.

If one reads subsection (1) of Clause 5 one sees that the phrase "from time to time" appears; but in my view subsection (5) relates very clearly to subsection (3) and to the reference to subsections (1) and (2) which is contained in subsection (3).

9.57 p.m.

I am not at all sure that I am not more confused than I was at the start. The noble Lord makes his way about the Bill rather better than I do, but I do not know that it necessarily affects the general conclusion. The noble Viscount, Lord Simon, raised a very broad issue which has been frequently debated. I find myself slightly surprised to be saying that here I am talking about non-disclosure to a certain extent. In the context of the advice of civil servants to Ministers being published, endless arguments about disclosure have taken place.

I do not want to widen this into a philosophical discussion, but I believe that this is what we are speaking about. There is no great difference that I can see between the kind of report which will be submitted to the Minister by the Corporation and the kind of advice which is submitted by civil servants to a Minister. This is precisely the point which the noble Viscount, Lord Simon, is making. If the Corporations do not feel that any particularly sensitive information will be respected by the Secretary of State, clearly this places them in a grave difficulty about submitting reports. Happily, for once I do not believe that we are on a Party matter and I find myself possibly arguing against disclosure leading to Parliamentary control. However, the fact remains that we have to keep coming back to what are the commercial interests of these Corporations, and the great concern on this side of the Committee is that, although we do not want these Corporations, if we are to have them we want to give them the best possible chance to succeed. This Amendment is a lead-in to the next Amendment where we shall return to the issue which we have already discussed once during the course of the Bill; namely, the power of the Minister to interfere.

It would be fair to say that our big worry is to make sure that the Corporations can "do their thing" without undue intrusion into their affairs. To that extent I find that it is reassuring that the Minister is able to say that the commercial security of the Corporations is adequately safeguarded. What one would be worried about would be if a report started to take the form of playing to the gallery so that one could have an exchange between the Corporation and the Minister which was not really a dialogue between the two of them but was, strictly speaking, designed for outside consumption. What we are seeking to do here is to try to get a meaningful way in which information can be exchanged between the Corporation and the Minister, while the possibly extremely sensitive information—or comment, indeed—would be totally secure and the person submitting this report would know that it would be secure. I think that is the essential point.

The Minister said, in a particularly hopeful moment, that at this stage he did not want to make any further comment about the matter. I thought that was a hopeful opening in that it conceivably indicated that he might be prepared to think further about the matter, although not that he will come back to us on this issue. I shall read with interest what he has said, and particularly when he referred forward to Clause 18 and to the other subsections in this particular clause.

I apologise for my interruption to the noble Lord's very reasoned response. Upon reflection, I think I somewhat misled him in my earlier reference to subsections (1) and (2). Reflecting upon it afterwards, I think that my initial response was rather more correct than my subsequent qualifying remarks. I thought I should just say that for the record.

My immediate reaction was that this is essentially a "one-off" procedure, but I do not think that that means necessarily that it may never happen after the "one-off" occasion.

Let us get this matter clear. I really do not think that the Minister is right. Subsections (1) and (2) lay upon each Corporation the duty (a) to undertake a review, and (b) to make a report and this is to be done "forthwith" and "from time to time". So there we have a whole series of reports going on for ever and the subsection that we are discussing talks about "a copy of any report". So we are discussing copies of all sorts of reports and not just one.

I do not at all disagree with what the noble Lord has just said. I was merely attempting to say that the phrase "from time to time" may mean that a subsequent report—or reports—will occur. I would not personally think that that was a likely course of events, but I do not disagree and that is why I came back to the noble Lord, Lord Strathcona and Mount Royal, because I did not want to mislead him on that point.

I am grateful to the Minister, and I accept that he is doing his best—as I am sure he accepts that we are—to clarify what we are all agreeing or disagreeing about. If I may just go back to where I began, what essentially concerned us somewhat here is that the Government appear to be saying one thing in the previous clause; namely, Clause 4(5), where they mention the fact of it being against the Corporation's commercial interest, and yet under this clause they appear to be saying that they do not think that that is a relevant consideration. I think we have had a good discussion about this. We have got into a certain amount of complication; we have referred forward and we have referred back. I shall read what the noble Lord has said, but at this stage I beg leave to withdraw this Amendment and, if necessary, refer to it later.

Amendment, by leave, withdrawn.

10.5 p.m.

The noble Earl said: This Amendment also deals with the report. As Clause 5 says, immediately after vesting date and from time to time thereafter, the two Corporations have to undertake the review, which was what we were discussing in the previous Amendment. Then they make a report to the Secretary of State, saying what they find and what they propose to do and how they propose to do it. That is fine.

Then the Secretary of State lays the report before Parliament so that everyone can know what these two public bodies are going to do. That is fine. But then, in the latter part of subsection (5), the Secretary of State is given powers to tell the Corporation not only what to do, but how to do it. He can tell them—indeed, the words are that he can give them directions what to do in order to ensure the greatest efficiency in the management of those activities. The actual words that this Amendment seeks to delete—and they are important—are that the Secretary of State can

"give to the Corporation such directions as he considers appropriate for securing that the general principles upon which the activities of the Corporation and its wholly owned subsidiaries are organised are calculated to produce the greatest efficiency in the management of those activities."

Those are extremely wide powers to give to a Secretary of State. They are giving the Secretary of State powers to tell the Corporations what they are to do in order to achieve the greatest possible efficiency.

Here, we come back to what is efficient. The noble Lord, Lord Melchett, and I had a discussion about this the other day, as, indeed, did a number of other noble Lords, too. But if the Secretary of State is going to give instructions to the Corporation as to what to do in order to achieve efficiency, he must know what efficiency is. Does it mean turnover? If so, the Secretary of State can give them certain directions to that end. Or does it mean he can give them directions so as to secure increased profits, or to secure a higher return of assets? Here again, one has the word "efficiency" which the noble Lord, Lord Melchett, rather brushed aside saying, "We all know what efficiency is." I suggest we do not know what efficiency is.

A noble Lord: They do not!

I daresay they do not. It will come up again in another Bill next Wednesday. The whole thing gyrates round "efficiency". It is a word that sounds very important and very impressive, but nobody actually has determined what it is; yet we are giving the Secretary of State these powers to intervene in the Corporations. They are very substantial powers, because the Secretary of State could easily say, "I am going to give you, the Corporations, instructions as to how you select your management because I do not think your management is efficient enough."

The Secretary of State could even give instructions with regard to the funding of pensions in order that that could be more efficiently done. So what happens to the trustees of the pensions fund? He could give them instructions as to how to budget their business if he thought it was not being budgeted properly. Or he could even go to a greater extent and say, "If in fact you have all your offices open-plan, they will run very much more efficiently". He could even say that members of the Corporation should not have individual secretaries, and that it would be much better if they were to dictate all their letters into a dictating machine and have a pool of secretaries. He could say this was more efficient. It may be the view of the Secretary of State, but it is quite intolerable that it should be even possible that he should have this kind of power.

I am trying to follow the noble Earl, Lord Ferrers, but I am not sure that I am doing so. I assume the noble Earl is still talking about the part of the Bill which says that the Secretary of State can give

"such directions as he considers appropriate for securing that the general principles upon which the activities of the Corporation.…",
and so on. Am I right in thinking that the noble Earl is saying that the way the office is organised is one of the general principles on which the Corporation is being run?

The noble Lord, Lord Melchett, is entirely right. I am on that point. It could well be that the Secretary of State could say, "This is the principle on which I want to see the thing run". That is a very considerable power. But if the noble Lord is worried about that, can I put the point to him in this way: that the Secretary of State could say that he believes the Harriers should not be made at Kingston but at Preston, because then the factories will be reorganised so that they will work more efficiently. I believe these to be powers which are far too great. I suggest we should ask ourselves what in fact is the true role of the Secretary of State here.

In my judgment his proper role is to monitor the country's investments in both Corporations. He should ensure that the return on the investment is adequate. If it is inadequate, then he should tell the Corporations that they are not doing what they should do and that the return is inadequate. It should not be up to him to tell them how to make it adequate. Mr. Carmichael has said perfectly clearly:
"Those who will be responsible for managing and running the two new Corporations should do so within the broad parameters set by the Bill and shape the organisation in the way that will best enable the Corporations to carry out their functions."
That is a very broad direction. I believe it is quite right. He said on another occasion:
"The Government wish both Corporations to operate on an independent and commercial basis and they wish to lay down only a broad strategic framework."
Yet here in this part of the Bill the Secretary of State is given very considerable powers of intervention in order to tell the Corporations how to run themselves efficiently. We have all seen cases of intervention by the Secretary of State in other nationalised industries which have been to the detriment of the industries working on a commercial basis. We have had referred to already the comments which Sir Richard Marsh made about the intervention of the Secretary of State in running British Rail. We have also referred to the fearful row that went on a short time ago when Sir Monty Finniston wished to reorganise the Steel Corporation so that it would run, in his opinion, more efficiently. He was prevented from doing so, for reasons which may be entirely understandable, by the intervention of the Secretary of State. In order to avoid similar mistakes being made over these new nationalised industries, I suggest that we ought to remove the interventionist power of the Secretary of State as it is set out in the Bill at the moment, where it refers to very considerable detail. If your Lordships look again at these words, you will see that the Secretary of State has power to intervene in the day-to-day management to a degree which is really wholly inappropriate. I beg to move.

Perhaps before the noble Lord, Lord Melchett, fires off his first salvo I may fire a tracer bullet or two—armour piercing, as my noble friend says. It was Lord Melbourne who among his memorable aphorisms included this one:

"Nobody ever did anything foolish except for some strong principle".
The strong principle that we are given in this case is the principle of efficiency. First, is it or is it not in the interests of the industry whose efficiency the noble Lord seeks to promote that there should be more or less Secretary of State's interference. That is the first question. Noble Lords opposite like a lot of Secretary of State intervention. Chairmen of nationalised industries like as little as possible. Two cases have been cited, very dramatic cases, during, this evening's debate. On our side the case is consistently put that the less the Secretary of State intervenes in a nationalised industry, the better. Noble Lords opposite think otherwise.

Would my noble friend allow me one minute? He was quoting Sir Richard Marsh, who said what trouble he had had with the then Secretary of State. But I think it is important to point out that Sir Richard Marsh had not got the courage to resign. He ought to have resigned, as some others have done. Not at all. He fiddled along with it until the railways got into a worse and worse position.

The noble Baroness always puts her finger on the nerve. with a gentler touch, try to avoid doing so. However, there is the issue for more or for less Secretary of State intervention. Our philosophy is that if you have to have nationalised industries at all, the less the Secretary of State intervenes the better. In this case his intervention is to be maximised in the interests of efficiency; and to the concept of efficiency I shall gladly return. I am not quite sure whether the Front Bench have any reply to that at all?

The noble Earl made a reference before. I was taking particular care to listen to every word he was saying, and was not having any conversation with my noble friend.

I do know that when the two noble Lords converse the conversation is always so seductive that it might mean that he was distracted. Lord Jacques's wit is never to be resisted. I take what the noble Lord, Lord Melchett, has been good enough to say. The first issue is for more or for less Secretary of State intervention. We are for less, and they are for more. But there are Secretaries of State and Secretaries of State. The present Secretary of State for Industry is an ambitious and meddlesome person. There are others who are less so; either less ambitious or less meddlesome. We do not know who the Secretary of State will be. It might well be a Tory one. I think it very likely will be in a matter of months if this Bill goes through, and he could be quite as meddlesome. I have criticised Secretaries of State on my own side. It is not really a Party issue here. It is really a question of whether we are to keep the meddlesome potentialities of the Secretary of State of whatever Party—it might even be a Liberal; it might be my noble friend Lord Lloyd of Kilgerrant— to a minimum.

The trouble about this passage in the Bill is that it is an open-ended invitation to the Secretary of State of the day, of whatever Party, to meddle, and meddle, and meddle. That really means to muddle as well as to meddle. We have always taken the view—and in this the Conservative Party, inconsistent in many things, has at least been consistent—from 1945 onwards that if there has to be nationalisation, at any rate let the management manage. We have been consistent on that, and it does not lie in the mouths of noble Lords opposite to accuse us in that matter of being less than absolutely consistent for 30 years or so.

We say let the management manage, and this is what we want to ensure. If there has to be a nationalised management, let it at least manage. Let us take the past experience. What about the record of BAC or Hawker-Siddeley? Surely the evidence of their performance is that their management is good, but had it been muddled about and meddled about and interfered with by Secretaries of State, it would have been of a very different order. Probably the top chaps would have been away to America, Germany, Sweden, or whatever country would employ their talents with better reward and respect. Those are the general issues.

Then there is the question of efficiency. Apparently the Secretary of State is to have power to tell the Corporation certain things, as one of my noble friends on the Front Bench said. For the moment I forget which of my noble friends it was.

I knew it was one of my noble friends with an elegant smooth haircut when viewed from behind, and I am pleased to know exactly who it was. My noble friend said that the Secretary of State would be able to tell the Corporation not only what to do but how to do it. What indeed does efficiency mean? It could mean many different things. It is to be looked at in the national interest. Then efficiency must at least embrace efficiency from a defence point of view. Or it might be efficiency from the point of view of the moneymaking capacities of the Corporation; that might be efficiency in terms of tax avoidance. It might be that efficiency is to be in terms of non-overmanning. My goodness! if there is one problem that blots the scene of British industry today it is the problem of overmanning, and everybody knows it.

Might it be that efficiency in terms of manning or overmanning will be the criterion? Again, it might be fiscal efficiency; in other words, not tax avoidance from the State but the provision of tax rewards to the State. Either could be an element, indeed the guiding star, where efficiency is concerned. It might be managerial efficiency, and that could mean many things. It might mean having very few managers but that they are very dictatorial or it might mean having many managers who are very consultative. Whatever it is, managerial efficiency might be the test.

On the other hand, I feel sure that the evening will hardly pass without something being said from the Benches opposite to the effect that it might be social efficiency. One can hardly blame a Government of the mixed colour that they are, producing a Bill for nationalisation and pushing all sorts of social theories such as woolly ideas about industrial democracy at the same time. That is to be expected; we have learned to take the rough with the smooth, the Right with the Left, the Marxists with the Social Democrats and so on, but I feel sure that the term "social efficiency" might well arise. What will that mean? Will it mean providing and creating jobs? Will it mean overmanning? I was amazed when, not long ago, Mr. Kaufman gave evidence to a Select Committee of this House, of which I was chairman on that occasion, about the aircraft industry in relation to Europe. What concerned him most—I was shattered to hear him say it; it is on the record because it was published in our 52nd Report—was how many jobs would be created or preserved for the aircraft industry. Thus, I ask: is employment to be the criterion? Is that what is to be meant by social efficiency?

Having wondered whether it will be managerial efficiency, fiscal efficiency, tax avoidance efficiency, overmanning efficiency, defence efficiency and so on, and the fact that efficiency can mean absolutely anything, I return to the point I made at the outset, that some of the worst things are undertaken with the best motives, and I would never credit the noble Lord opposite with anything but the best motives.

At the heart of the sentence we are discussing are the words, "general principles calculated to produce the greatest efficiency". Any draftsman who uses the word "calculated" in a Bill is courting disaster because it can have one of two separate and distinct meanings; sometimes it means "likely" and sometimes if means "intended" and one should use one or other of those words to explain what one means. However, in this context I do not think it means either. I believe that what is intended here is general principles which "shall" produce the greatest efficiency, and perhaps we can think about that with a view to an Amendment at the next stage.

10.25 p.m.

Perhaps it will save time if, before the noble Lord replies, I draw attention to a comment he made during my noble friend's opening remarks. When my noble friend said that this open-ended instruction could interfere with detailed day-to-day management. the noble Lord got up and said, "But it is made quite clear that it is only if it is on a general principle". He said that as though the "general principle" meant that that automatically ruled out any interference at a day-to-day level. But because it is so open "general principle" means just the opposite. That phrase can give the excuse to say anything about everything. If it were confined to the point where it said that the Secretary of State can give directions but not on matters of day-to-day interest, I believe that I could accept that. But to try to give the impression that the phrase "general principle" means that it is restricted as to what can be done is, to my mind, a complete misuse of the English language.

If the noble Lord means that he wanted to confine this to what he called "matters of general principle affecting the general efficiency", he must find words other than "general principle" standing alone. He must define what he means by that sort of general principle, and unless he is prepared to add words excluding interference on day-to-day matters, this open ended instruction can only allow what my noble friend called a "meddlesome" Secretary of State to intervene in a way that can do nothing but harm. This will undermine confidence and do the very opposite of increasing the general efficiency which is apparently the general principle that the noble Lord wants. I thought it right to intervene at this stage so that the noble Lord can correct the impression that he has given so far. If, in correcting it, he says that he is prepared to add words which will certainly exclude what I should call day-to-day management, I shall be happy.

Before the noble Lord rises, perhaps I may throw something into the pool to make matters more difficult for him. It seems to me that this phrase, if it is harmless, as I suspect the noble Lord will say, is a monstrous cliché. "General principles to produce greatest efficiency in management"—what on earth would any manager want to do except produce greatest efficiency? So why is it necessary to put this in the Bill? If the noble Lords opposite and the Government have arranged to provide good management, as I believe they have, they do not need a phrase in the Bill to tell that management what to do. I am sure they will say, "Of course we shall not use this; it is obviously a sort of safeguard". But, if it is just a safeguard, what is to prevent some rather less understanding Secretary of State misusing it in the future? It seems to me that we do not need to argue this: it is a nonsense; it is not necessary. Why should we have it in the Bill? It would be very much easier for everybody, including the Government, if they accepted that this was not here.

Before I sit down, 1 should like to suggest that this is one clause—and noble Lords have been arguing throughout the evening about others that are similar—which gives away the fact that it is understood by the Government that previously nationalised industries have been a failure. The Government must know that in their hearts. None has been successful as a business enterprise. There are all sorts of reasons for this and some of them are understandable hut, as business enterprises, they just do not stand up to the major free enterprise companies. That is a fact of life and I suspect that, in producing before Parliament this draft which is called a Bill, instead of saying to themselves that perhaps the reason they have not been successful is because, on the whole, previous Acts of Parliament have given Ministers too much power to interfere, it would have been better if they had said to themselves that the answer might perhaps be to give Ministers less power to interfere.

In fact there is a fundamental, underlying "Auntie Government", interfering sort of theme: "It's all right, old boy. We'll not use it. It's just useful to have it there". And there are all sorts of paragraphs and clauses in this Bill which really cannot stand up to being regarded as something absolutely essential for the proper control of a State enterprise, which has to look after the public money, and all that sort of thing. It really does not live up to that. I would suggest to the noble Lord that a nice thing to do—it is half-past ten—would be to say, "This is a clause which we are terribly sorry about. It slipped in, and we do not want it."

Before the Minister rises to speak, I feel we should have a clearer definition from the Government on this question of efficiency. I am very pleased that my noble friend Lord Lauderdale raised the point, because it was only on Friday that we questioned the noble Lord, Lord Jacques—I am not quite sure whether my noble friend bowled him out by his remarks or whether he had a premonition that his name was going to be mentioned—on what was "efficient performance" on the Dock Work Regulation Bill. We asked him, " Is it the same as cost effective?" He was not prepared to answer. Now we really must have an answer as to what the Government consider to be efficiency on this.

The noble Lord, Lord Kirkhill, a few minutes ago quoted as an example a regulation or an Act governing British Rail. I do not know if they consider that British Rail are either cost effective or efficient. I think we really must have something clearer on this, and I completely agree with what my noble friends on this side have said.

Maybe I could first of all, hopefully, put the minds of the noble Lord, Lord Harmar-Nicholls, and the noble Earl, Lord Ferrers, at rest by making it quite clear that the term "general" means exactly what it says in the example which the noble Earl gave, of making the Harrier at Preston rather than somewhere else. It is not a matter which would be dealt with by specific direction under Clause 5, the power of direction which we are discussing, because of the limitation to general principles. "General" is defined—and this may help the noble Lord, Lord Harmar-Nicholls—I am advised, in this phrase in the same narrow way as when it is used in the term "general directions" in the Bill, and in all Acts of Parliament. This Amendment would remove the power of the Secretary of State to give directions.

I am sorry, but if the noble Lord is leaving that point, could he explain—I would seek his guidance on this point—why he says that the example of the Harrier being moved from one place to another could not be given under this clause? Because under this clause surely the Secretary of State has powers to give the Corporation directions which he considers would make it more efficient; and if he considered it would be more efficient for that to happen, surely he would be entitled to give them directions?

Because I do not think it would be a general principle. My advice is quite clear on this. It would not be a general principle which would make it more efficient. if I could be allowed to make my speech, then no doubt noble Lords will all come back at me and make any points they like, but we have had quite a long debate on this Amendment and I would be grateful for a chance to say a word at least.

I am very grateful to the noble Earl, Lord Lauderdale, for his permission to continue. We believe the Secretary of State must have power to give,

"such directions as he considers appropriate for securing that the management of the activities of the Corporation and its wholly owned subsidiaries is organised in the most efficient manner."
The power is well precedented in the most recent nationalisation legislation on which, as we have already made clear on the various Amendments on the Bill, the broad theme of this legislation is based. For example, the power was included in the Iron and Steel Act 1967, the Civil Aviation Act 1971, and the Gas Act 1972, and it does not need me to remind noble Lords opposite that these were two Acts passed by noble Lords opposite when they were in power—

I am much obliged to the noble Lord for giving way. I am trying to make a helpful intervention, as always. Can the noble Lord be specific about the Civil Aviation Act 1971? Which power of direction is he referring to? There are several powers in that Act.

It so happens that I cannot be specific because what I have in front of me is the Gas Act 1972, not the Civil Aviation Act 1971. But I will come to the Gas Act in a minute, if the noble Lord will permit me to continue my speech, and I will no doubt be able to give him the reference in a moment.

Both these industries are of vital national importance, and it would surely be imprudent if the Secretary of State, who is responsible for them, were powerless to act in the face of an obviously unsatisfactory organisation. To be able to act in such circumstances, the Secretary of State needs this power, as has been recognised in previous Statutes. The intention is to provide the Secretary of State with a reserve power, but one which could be effectively used should circumstances require it. As I have said—and I emphasise again—it is not a power to permit interference in detail. That is why the directions may cover only "general principles", and that, as no doubt noble Lords opposite will have realised, is a change made between the first and second prints of the Bill and a departure from the precedents set in some of the earlier legislation, for example, the Gas Act—this is why I happen to have it in front of me—where in Section 4(3) more or less exactly the same wording is used, except that "general principles" is not included. So no doubt that gave the Secretary of State much greater power to interfere in matters of detail. We have included the words "general principles" to make it absolutely clear that the Government's intention in passing the Bill is not to give the Secretary of State unnecessary power to interfere in matters of detail, but only to allow him to give an opinion on matters of general principles to the two Corporations.

The noble Lord, Lord Carr of Hadley, said on an earlier Amendment that it was quite clear that the Government were saying one thing and doing another in the Bill. I would suggest to him that this is a good example of somewhere where we have broken away from the precedents, including those of the legislation of Governments of noble Lords opposite, by making it clearer than it ever was in the past that Secretaries of State, in these circumstances, should not interfere in the kind of detail about open plan offices and so on, which the noble Earl, Lord Ferrers, gave as an example—

I am grateful to the noble Lord for giving way. He will recall that when we were debating Amendments to Clause 2, he specifically confirmed that under that clause the Secretary of State would have power to order the appointment of a particular person as sales director or as director of research and development, or to particular positions. I do not quite see how that is a general principle. It is all very general here, but it is all very particular somewhere else. This is one of our great troubles with the Bill.

Were I to return and make the same speech as I made on Clause 2, I am sure that noble Lords opposite would accuse me of filibustering, which is the last thing I should want them to accuse me of.

I should like to raise a point before the noble Lord sits down. He has sitting beside him a Law Officer from the Scottish Office. The noble Lord has tried to suggest to me—if I have got it right—that the term "general principles" is restricting, and he tried to give the impression that in legal terms "general" meant that it was narrower than it would be if the word "general" had not been included. I wonder whether the Law Officer from the Scottish Office could give any legal basis for showing me where, even in legal terms, the word "general" has made the position narrower than it would have been if that word had not been included?

With great respect to my noble friend, I am not sure that I need his advice on this occasion, although doubtless on many occasions I will benefit very greatly from it. As I have said to the noble Lord, "general" is defined in this instance in the same way as it is in other circumstances in similar Bills and similar Acts of Parliament, and that is quite firm advice that I have.

The only "general" I should find acceptable at the moment would be a General Election.

We are getting into a most extraordinary position over these Amendments. On the last Amendment we discussed we had the Government refusing to add a few words which could not have been damaging and which, in the opinion of many noble Lords, would have been beneficial to protect the commercial interests of the Corporation. But, no, we could not add a few words. Now the Government are refusing to remove six lines of gobbledegook. It drives us to desperation.

I must remind the noble Lord of something I said very much earlier this afternoon, and that was that if we wanted to make progress—and presumably the noble Lord and his colleagues want to make progress—it would help us to make progress if instead of this stonewalling and sticking to everything in the Bill word for word, there was a bit of give and flexibility from the Government side. The more rigid the noble Lord is the longer the pressure will go on to try to get some concessions from the Government, and the noble Lord must not grumble if it takes a very long time, because it is nonsense that we have to argue for over an hour in order to get a refusal to add what were quite harmless words. Even if the Government did not think they were positively beneficial, they could not conceivably have done any harm. We are now having to argue for a long time because of these words of gobbledegook, and they really are gobbledegook—unless they are sinister, and Ministers are trying to assure us they are not sinister. I do not know.

Let us try to take stock of the position. One thing we are quite sure about—and this must be common ground on all sides of the Committee—is that after more than a quarter of a century of experience we know now that nationalisation as at present practised does not work; that it is wholly disastrous. It is disastrous economically, and disastrous in producing a proper return on scarce capital investment, and it has certainly not brought satisfaction to the employees in the nationalised industries. All the initial claims of nationalisation which the Labour Party put forward to the country and brought in from the 1945 period onwards have been proved, after 30 years, to be false. I do not believe that anybody can contest that.

We believe we should not have any more nationalisation, but still the Party opposite is determined to go on with it. After the experience of these 30 years surely we must go one way or the other. I must remind the noble Lord that it is not just noble Lords on this side of the House who are saying that, but, to take one example among noble Lords behind him, the noble Lord, Lord Shinwell, is saying: "If I could start all over again I would do it all differently". Because he is true to his Socialist belief in nationalisation, he is not saying, as we are, that he would not have any of it; but he is saying, "Believing as I do in nationalisation, with the wisdom of hindsight I would now do it quite differently".

Therefore, I say to the noble Lord that we must go one way or the other. One way to go is back to the idea that a nationalised industry is run by a Government Department, as the Post Office was, in which case the Secretary of State is his own chairman, as I said earlier. That is one way to go. There we would at least get rid of this conflict between the Secretary of State and the chairman and board of the Corporation. We would also gain Parliamentary accountability, which many noble Peers and honourable Members in another place want. That would be one way of going.

The other way to go is to set about making these nationalised Corporations, if we have to have them, much more independent. Surely what we have learned over the last 30 years is that we are getting the worst of both worlds. We are getting the benefit of neither one form of organisation nor the other. Our constant complaint in this Bill is that the Government, with a great flourish in their Consultative Document and in some clauses of this Bill, and in what they have said in regard to the Bill, have said, "Here is a new departure in nationalisation. There will be far more decentralisation, far more autonomy; we are really going to set a new precedent." And if they were, much as we dislike nationalisation, if we are to have it thrust upon us, most of us on this side of the Committee would welcome that if it were genuine. But when we study the details of the Bill we find it is not genuine, because for every clause or subsection of a Clause which talks about more independence, more decentralisation, more autonomy, and autonomous profit centres, and all that sort of thing, there are other clauses which give the Ministers more powers of intervention than they have had in the past. It is the fact that the Government are pulling in both directions which makes us so profoundly dissatisfied with this Bill as it is at the moment.

Of course, we should like to chuck out the whole Bill, but for the moment we are concerned to see whether we can improve it, to see whether we can reduce the chances of nationalisation ruining the industries involved in this Bill. The Government must go either one way or the other and not try to go both ways at once; because, as I have just reminded the noble Lord, he is now saying that we need not bother about this clause because it is concerned only with directions about general principles. But, as I reminded him, an earlier clause of this Bill, on his own admission, gives the Secretary of State power to make specific appointments to specific important posts in the Corporations and does not leave it to the top management to do that. It is no good his trying to reassure us about its being limited to general principles here and saying that the word "general" is by custom defined so narrowly that, as his noble friend said in another context earlier, it really means that directions can scarcely ever be given; because even if that were true of this clause there are other clauses where he himself has admitted that exactly the reverse applies.

What does the noble Lord mean by this phrase "general principle"? When my noble friend Lord Ferrers in moving this Amendment spoke about office management and office design, the noble Lord, perhaps not unfairly, said that that was not a general principle, and perhaps we can understand that. But he tried to say the same to my noble friend when he spoke about a decision as to where the vertical take-off aircraft, the Harrier, and its developments, should be made. Is that really not a general principle? Is it not a general principle for the Secretary of State to say, "I believe on grounds of regional policy, of employment prospects, that this great new technological development, with so much promise for the future, should be made all in the Preston area rather than all in the Kingston area because the needs of employment in this great new technology are much greater in Preston than they are in Kingston"? Is that not a general principle?

If the noble Lord would like me to repeat myself, my clear, legal advice is that the answer to his question is, No, it is not.

It is very satisfying if that is so, but I think the noble Lord must realise that we must have some examples of what is a general principle, because if he cannot give us any example of what is a general principle then I come back to the fact that all these six words are just gobbledegook. They either mean something or they are gobbledegook. If they mean something the noble Lord must explain to us what it is.

Let me test the noble Lord out on another matter and ask him whether or not it is a general principle. Let me go back a moment. Here this great review has taken place—a review which the noble Lord I think agreed earlier was the equivalent of a management audit or a consultancy review. This, I think, was admitted by the noble Lord, Lord Kirkhill, when we were talking about the previous Amendment. All right; this great consultants' report comes forward, and no doubt this consultants' report contains recommendations about the basic structure of management—the relationship, for example, between functional services and line management. I am sure the noble Lord will know, without my going into a great lecture about managerial principles, the sort of things I have in mind.

Are those general principles? Is the Secretary of State entitled, under this provision, to say to the Corporation, its chairman and its Board members, "I have now read the results of your review, the recommendations contained in your consultants' report and all the rest of it, but I think that this is the general principle on which you must organise yourselves, I believe that these should be the powers of the functional departments and that these should be the limitations of the line management functions, and so forth; and this is the amount of decentralisation I believe in"? Is that a general principle or is it not? Because if it is, then the Secretary of State is setting himself up as the super-management expert and is telling his chairman and the chairman's colleagues on the Board how they should run their organisation; and that I do not believe to be what the Government are holding out as what they are trying to do.

If that is what the Secretary of State wants to be, the great management expert, then I go back to the earlier point and say this. Let us have this as a Government Department with the Secretary of State as his own Chairman. Let us do it that way. But do not try to go in both directions at once. If the sort of thing I am talking about is not a matter of general principle—and the noble Lord will tell us—then I come back to the thought that these six lines are gobbledegook. If they are not, I beg the noble Lord to tell us what are meant by "general principles" on which the Minister can give directions. If he cannot give positive examples, then I am afraid the whole thing is nonsense and we shall not only want to continue the debate now, and vote in the end against, but to return to it at the next stage of the Bill as well.

The noble Lord intervened to say that the matters my noble friend was talking about were not general principles. Would he admit that they are major matters? Would he concede that much if they do not come within what he defines as general principles? Would he concede that they are major matters of concern to the organisation from day to day? Or does he disregard their importance altogether?

I am not clear whether we are still talking about matters such as the organisation of office furniture.

We are talking of the general day-to-day matters. He said they are under matters of general principle. Are they major matters that ought to be given consideration to or are they unimportant? I should like an answer to that.

There is some difference between deciding where the Harrier is built and deciding where to put office furniture. They are the two examples given by the noble Earl, Lord Ferrers. There was one point which the noble Lord, Lord Carr, brushed aside when referring to these (how many?) lines of gobbledegook. It is that they clearly are drawn from previous nationalised industry Statutes passed by Conservative Governments. I gave as examples the Gas Act 1972 in Section 4(3). I now have the information asked for by Lord Trefgarne. It is the Civil Aviation Act, Sections 39(1)(a) and 39(3). The only difference between those Acts where this "gobbledegook", as Lord Carr called it, appeared and what is in this Bill is that we have inserted the words "general principles".

My legal advice is clear in saying that that means it does not refer to day-to-day matters, specific matters, such as those to which the noble Earl, Lord Ferrers, raised. We have these lines—which may or may not be gobbledegook—but noble Lords opposite happily inserted them in their legislation. We have gone further and say that in this particular instance where we are looking at the organisation, you should not have power to interfere in detailed matters but only in matters of general principle. I should have thought that that explanation ought to satisfy noble Lords.

The noble Lord did not follow the line I wanted. Would he look at the Explanatory Memorandum in his own Bill referring to Clause 5. The final sentence is:

"He may then give directions to the Corporations on major matters with a view to securing their most efficient organisation."
They did not, in the Explanatory Memorandum, call them matters of general principle, they defined them as "major matters". The noble Lord is working to his brief and I have sympathy with him; but the Explanatory Memorandum of the Bill is clear that this general principle is not matter above any day-to-day running of the organisation. They call them "major matters". 1 believe that whoever prepared the Explanatory Memorandum has a better understanding of what is meant by general principles in this context than has the noble Lord's brief.

May I press the noble Lord a little more? First let me say this about the precedent argument. All right. Something was in the 1972 Gas Act passed by a Conservative Government. I was a member of that Government and must share my collective responsibility. But I am not impressed by that argument. I think, as I said at the beginning of my remarks, that surely what we have to realise is that Governments of both Parties have tried to make nationalisation in its traditional form work and have failed. We must start from that point. That really is the truth on which many people of both Parties agree.

It is not precedents which we should be looking at. If it helps the noble Lord, I admit that 1 was wrong as a member of the Cabinet to agree that that should appear in the 1972 Gas Act, What does he say? He says that we have tried to learn from experience to a certain extent, so he has included this great phrase "general principles" but he will not tell us what he means by "general principles". He has told us that there are one or two things which are not general principles and, therefore, would not be subject to direction. When he tells me that a matter so big as where the Harriers should be manufactured is not a general principle, I am relieved, because at least he is saying that the Secretary of State will not attempt to interfere with the judgment of the chairman and his colleaeues on the matter.

What about matters such as the general structure of management, to which the noble Lord gave no answer? As a result of this review we have the consultancy report which no doubt will have a good deal to say about the general system and principle of management which the Corporation should adopt. Is that a matter of general principle on which the Secretary of State could give orders overruling his chairman and board if he so desired, or is it not? Until the noble Lord or one of his colleagues begins to give us some examples of what he means by "general principles", we are bound to continue in a rather tedious way bringing forward new examples and asking whether they are matters of general principle. So far, he has set our fears at rest on all those we have mentioned by saying that they are not matters of general principle. Perhaps he will tell us what is a matter of general principle. Then we may be able to make faster progress.

I wonder whether a new fellow might have at least one ball, not an over, to ask the Minister whether it is not possible that the insertion of the words "general principle" for which he takes credit, is the cause of all the trouble. It seems to be those two words that have rendered the clause nonsensical. Apparently, the clause requires that after considering reports which do not have to deal with general principles—and there is no indication that general principles are matters with which they are involved—directions are to be given which are solely restricted to general principles. A less effective way of dealing with the detailed report it is impossible to imagine. One arrives at the conclusion that in a desire to absolve themselves, quite virtuously, from interference in detailed matters, they have rendered the whole of this clause absolute nonsense.

I am a very simple-minded man and I believe that most noble Lords would agree that Lord Beswick will have all the top brass from the British aerospace industry in the Corporation, if and when it is ever formed. Surely they know more about the day-to-day management of the general principles and the major matters to secure efficiency than any Secretary of State in the past, now or in the future.

I hoped that we would receive an answer from the noble Lord, Lord Melchett, on what general principles are.

No, in fact he has not. He has said what they are not. He specifically rose and said that he had taken legal advice on my example of where the Harriers should be made. He said that it was not a general principle. We have not received an answer to our question of what is a general principle. The situation becomes difficult because we find ourselves in the position, frankly, of almost punching a cloud. I am not suggesting that we are trying to punch the noble Lord, Lord Melchett. However, when one asks a question, one never receives an answer. He does not answer these points of particular importance.

The idea behind this Amendment is to try to ensure that if nationalisation is to come about, which is the purpose of the Bill—and we admit that we do not like it—it must be as successful as possible. The one thing that we think ought to be done is to keep the Secretary of State out of the "hair" of British Shipbuilders and British Aerospace. As we see it, this Bill, as it is drafted, permits the Secretary of State to interfere. The noble Lord, Lord Melchett, said, regarding my question about the Harrier, that if he was to say that it should not be built at Kingston but at Preston, this would not be regarded as something with which the Secretary of State should interfere.

But supposing as a result of this nationalisation, there is rationalisation—and everyone knows that that is going to happen—and the two industries will be drawn together, and therefore there will be fewer factories. Supposing it is determined that there should not be 15 factories but 10. Is not that a general principle upon which the Secretary of State should interfere? Is he not permitted to say: "There are to be only 10 factories, and these should, in my judgment, be situated here, there and there"? I should have thought that those are points on which the Secretary of State could well interfere. We have not had a—

11.2 p.m.

May I interrupt? It strikes me that in this Bill we are discussing in an odd way two particular problems. One is the nationalised industries, and the second concerns the two companies, Short Brothers and Harland and Harland and Wolff, which are not going to be allowed to develop in isolation. I think "isolation" is the word to describe it. Where is the Secretary of State's power to come in, and where is he going to relate that to general principles if rationalisation is going to occur? If shipbuilding, for instance, is going to be cut by 60 per cent. or some such figure—that must be a general principle—how is this going to be related? Where do we go between the reduction of the national capacity by 60 per cent. involving the British Shipbuilders and Harland and Wolff as one and the other? This I find rather difficult to understand.

Is the noble Lord not going to define the boundaries? He is asking this Committee to sign a contract in the sense of allowing this to go through. If it is that one is asking people to adhere to clauses within that contract, there ought to be a plan which defines the boundaries of the area covered by the clauses in the contract. The noble Lord has said what it does not cover. I think those who are interested in the full employment of these industries and general efficiency (which is supposed to be the general principle uppermost in their minds) ought to know the boundaries

CONTENTS

Abinger, L.Falmouth, V.Onslow, E.
Airedale, L.Ferrers, E.Orr-Ewing, L.
Amherst, E.Gainford, L.Penrhyn, L.
Amherst of Hackney, L.Gisborough, L.Redesdale, L.
Amory, V.Gladwyn, L.Remnant, L.
Ampthill, L.Gowrie, E.Rochdale, V.
Ashdown, L.Gray, L.St. Aldwyn, E. [Teller.]
Auckland, L.Greenway, L.Sandys, L.
Balerno, L.Gridley, L.Seear, B.
Belstead, L.Hacking, L.Seebohm, L.
Berkeley, B.Hailsham of Saint Marylebone, L.Selsdon, L.
Bridgeman, V.Hampton, L.Sempill, Ly.
Broadbridge, L.Harcourt, V.Sherfield, L.
Brookeborough, V.Harmar-Nicholls, L.Shuttleworth, L.
Brougham and Vaux, L.Hives, L.Simon, V.
Burton, L.Hornsby-Smith, B.Strathclyde, L.
Campbell of Croy, L.Inglewood, L.Strathcona and Mount Royal, L.
Can of Hadley, L.Inverforth, L.Swansea, L.
Carrington, L.Kemsley, V.Tanlaw, L.
Chelmer, L.Killearn, L.Terrington, L.
Cork and Orrery, E.Kimberley, E.Teviot, L.
Cullen of Ashbourne, L.Lauderdale, E.Thorneycroft, L.
de Clifford, L.Lloyd of Kilgerran, L.Tranmire, L.
De Freyne, L.Lyell, L.Trefgarne, L.
Denham, L. [Teller.]Mancroft, L.Tweedsmuir, L.
Deramore, L.Merrivale, L.Vickers, B.
Drumalbyn, L.Monson, L.Ward of North Tyneside, B.
Dudley, E.Mottistone, L.Wardington, L.
Effingham, E.Newall, L.Wigoder, L.
Elles, B.Norwich, V.Windlesham, L.
Elliot of Harwood, B.O'Hagan, L.Young, B.
Elton, L.

of what "general principle" means as regards interference by the Secretary of State, otherwise it makes a nonsense of suggesting that this is going to be anything other than a fully politically controlled organisation, with all the dangers that can effect both our industry and our standing in the world.

I did not speak because I understood that the noble Earl, Lord Ferrers, was in the middle of making a speech a minute ago.

The noble Lord is on his feet; I will by all means let him answer the question, if he would like to do so. I only say this: the noble Lord has failed to answer, in a quite demonstrative way, what the general principles are over which the Secretary of State is allowed to interfere. We asked six times and on every single occasion he refused to answer. Nothing more remains other than to say that in that case we think it is wrong that the Secretary of State should have that power, and I ask your Lordships to agree to this Amendment.

11.4 p.m.

On Question, Whether the said Amendment (No. 89) shall be agreed to?

Their Lordships divided: Contents, 94; Not-Contents, 36.

NOT-CONTENTS

Brimelow, L.Janner, L.Pitt of Hampstead, L.
Champion, L.Kirkhill, L.Platt, L.
Collison, L.Llewelyn-Davies of Hastoe, B.Ponsonby of Shulbrede, L.
Cooper of Stockton Heath, L.Longford, E.Raglan, L.
Davies of Leek, L.Lyons of Brighton, L.Shepherd, L.
Davies of Penrhys, L.McCluskey, L.Stedman, B.
Elwyn-Jones, L. (L. Chancellor.)Melchett, L.Stewart of Alvechurch, B.
Gregson, L.Morris of Kenwood, L.Strabolgi, L.
Hankey, L.Murray of Gravesend, L.Wallace of Coslany, L.
Harris of Greenwich, L.Noel-Buxton, L.Wells-Pestell, L.
Hirshfield, L.Oram, L. [Teller.]Winterbottom, L.
Jacques, L. [Teller.]Peart, L. [L. Privy Seal.]Wynne-Jones, L.

Resolved in the affirmative, and Amendment agreed to accordingly-

11.12 p.m.

On Question, Whether Clause 5, as amended, shall stand part of the Bill?

I should like to come to a point of immediate topical application. It is a duty of British Shipbuilders to review and report on the management of its affairs and, as to the timing, subsection (2) states that "forthwith after the shipbuilding industry vesting date" the new Corporation shall produce its first report, while subsection (3) indicates that that must be withinsix months of that vesting date. In passing, I would ask the Government whether they can give us any news of their views on when the shipbuilding vesting date is to be after the enactment of this Bill, were this Bill to go through Parliament.

The next point is that this new Corporation will find it difficult to produce a review as soon as this, because subsection (2) states that it has to undertake a review of the affairs of the Corporation for the purpose.

"(i) of determining how the management of the activities of the Corporation and those subsidiaries can most efficiently be organised"—
and then—
"(ii)…of seeking the largest degree…of decentralisation of management and decision-taking to separate profit centres in the ship-building and ship-repairing areas of Great Britain, and in particular of Scotland and Wales".
At present, no decision has yet been taken as to where the headquarters of British Shipbuilders is to be, and unless the Minister can tell us that tonight it will still be a mystery. It will be difficult for this new national Corporation to produce a review in this short time, "forthwith after the…vesting date", when it still is not known where it is to be, whether in Scotland, in a development area in England or Wales, or in London.

There was a report in The Times of 9th September which stated:
"Government delays over the announcement of the location of the headquarters for British Shipbuilders is jeopardizing preparatory work for the planned new state undertaking.
"Members of the organizing committee and key personnel recruited over the past few months are now seriously worried at the implications of the failure of the Government to make an announcement.
"The delay is causing considerable frustration and inconvenience, and it is clear that the new corporation could suffer unless the issue is clarified within the next few weeks."
The article went on to discuss what development area in Britain might be chosen for the headquarters, and went on—
"The organizing committee itself favours London as the most desirable location, however, and wherever the new state corporation is based, its executives expect to spend a good deal of their time in London".
That is still the position today, over a month later. I would ask the Minister whether that report in The Times is broadly correct. It is going to be exceedingly difficult for the Corporation to get started and to do this kind of review if it does not know where its headquarters will be. If it is not known today and the decision has not yet been taken, can the Minister tell us when that decision is likely to be taken? Will it be taken before vesting date?

May I ask another question arising out of this clause? I do not want to reopen the discussion we had about commercial interests, but I think I heard the noble Lord, Lord Kirkhill, at one point saying something that sounded like an expression of opinion that what was against the commercial interests of the Corporation would be against the national interests, presumably because the Corporation is a nationalised body and we do not want it to fail. It struck me that that is quite a useful line of approach if noble Lords on the other side are going to give proper thought to the long debate we had on that Amendment. I wonder if I could confirm that the noble Lord, Lord Kirkhill, or perhaps the noble Lord, Lord Melchett, when replying, will say whether I heard that correctly. It seems to me that that is a possible way of getting out of our difficulties.

The noble Viscount did understand my noble friend correctly. This is one of the matters we shall be considering. I am sorry to see that the noble Lord, Lord Carr, is not here, and no doubt the noble Lord, Lord Campbell of Croy—if I may do a Lauderdale on him, if I may use that expression—will convey to his noble friend Lord Carr that we have agreed, as the noble Viscount has reminded us, to consider this matter. Perhaps he would also convey to him that, of the eight substantial Amendments we have discussed this evening, six have already been discussed extensively in another place. It may be that if we were to make a little faster progress we would come on to those parts of the Bill which were not fully discussed in another place because of the guillotine procedure where my noble friend and I would be able to be rather more forthcoming on giving consideration to Amendments made by noble Lords opposite. If I may make the point, there is a little give and take in this, and if we do not make progress there are no Amendments for us to consider. If we made rather more progress and covered more ground we would come on to Amendments where there are some very good viewpoints to be put by noble Lords opposite which we can consider.

The noble Lord, Lord Campbell of Croy, asked me two points on the vesting date. My understanding is that for each Corporation the vesting date will be as soon as possible after Royal Assent, which no doubt will be in the comparatively near future. The noble Lord also referred to a report in The Times, which I confess I did not see. Naturally I place great weight on what appears in that newspaper. No doubt he will have noted what it said in the leading article this morning about the House of Lords not indulging in delaying tactics by spending too long on particular sections of Bills.

No doubt the noble Lord will have noted from The Times how very important it was that we should do the revising job properly.

Yes, and somebody —either a noble Lord sitting on the Cross-Benches or one of my noble friends —has made the point that there have been occasions today when we have spent such a long time on Amendments which did not warrant it that it will be difficult to use time sensibly. I say frankly to noble Lords opposite that the only response which I and my noble friends can make if debates are, as it seems to us, very greatly extended beyond what is reasonable is simply to sit here and not say anything, and that cannot possibly help the process which both the noble Baroness and I would like to see of a proper consideration of the Bill. There comes a time during a debate which has gone on for a certain length of time when the only response that I feel I can sensibly make, without helping noble Lords to prolong matters, is to sit still. I do not like doing that because it is not a constructive way to look at a Bill and, with the noble Baroness, I hope that we can all use our time more profitably by addressing ourselves to the main issues.

The noble Lord asked me about what the report in the Sun said about the headquarters of British Shipbuilders. The noble Lord will have seen that in answering a question in another place last week my honourable friend the Minister of State said that, although a decision had not yet been made, it would be made as soon as possible and that the decision would be made public as soon as possible. The situation remains as it was last week when that question was asked.

11.22 p.m.

I was interested to hear from the noble Lord that after 25 hours during which we have not had a single concession from the Government he is not persuaded by any of the arguments, points or Amendments which have been made during those 25 hours but that he says he may be persuaded by future arguments.

No. I said that there are other bits of the Bill which were not so extensively discussed in another place, since they had fallen under the guillotine procedure, which we have not yet reached, whereas the bits of the Bill we have discussed so far were discussed fairly fully during both the Committee and Report stages in another place. However, we have undertaken to consider various points. As the noble Earl, Lord Onslow, will remember, we were rebuked, although I accept that subsequently he withdrew the rebuke, for offering to consider one Amendment.

I am grateful to the noble Lord for having clarified the position. It seemed to me that he was saying that so far he had not been persuaded about a single jot or tittle but that he might be persuaded in the future. I concede that we want to leave time for the Amendments which have not yet been discussed, but since July I have no doubt that the Government have been considering very carefully how they could improve the Bill and I hope that we have put forward certain suggestions which have helped them in that process. Here, however, we are discussing the Question, Whether Clause 5 shall stand part?

The Government Memorandum accompanying the Bill speaks of "the most efficient organisation". In my terms that means cost effectiveness; that is the only way that we have discovered in our modern society of measuring efficiency. You have the social consequences as well, and of course I accept that. However, I cannot believe that cost effectiveness means producing seven major Bills in your Lordships' House with seven weeks to go. It does not seem to me to be either efficient or cost effective, and if we are not giving to those Bills all the consideration that we should it is because we are being asked to revise in a hurry something which would normally take the whole of a Session in this House—because we are being asked to do it in seven weeks. Certainly it is totally against the spirit of democracy when there is a minority Government and a minority within that minority which is trying to provide Left-wing policies.

In his book Sir Ronald Edwards, who was closely concerned with the nationalisation of the electricity industry, said that "as precise a definition as possible in the Act of the tasks and duties of a statutory body is essential to efficiency". I think that is a good point and I hope that when we discuss decentralisation, as we have been doing in this clause, we shall discuss all the ways in which it can be achieved. I hope that the organisation will be encouraged to put a lot out to contract, but I am reminded of the fact that one has to remember that there is a very strong purchasing power in the hands of the chief purchasing officers of nationalised industries. As a member of the Royal Commission on Standards of Conduct in Public Life I am mindful of the fact that in some of these nationalised industries there was some slippage from the high degree of integrity which one hopes to have in all industry, and particulary in nationalised industries. So I hope we shall have no further lack of integrity in those areas.

In this nationalised industry we are dealing with something far more complicated than we have ever dealt with before. In my 20 years in another place and five years as a candidate I have watched various nationalisation measures going through, and on the whole they were dealing with simple things, like coal or gas or electricity, more or less homogeneous units. Then we had steel, which can be made in various grades and sizes—I hope all of them metric! Then we had railways and 'buses and freight. I will not go over them all because I might be accused of "spinning it out", but every single one is now making a loss. So on cost efficiency they are not frightfully good examples of how to run a business. We are now trying to concentrate our minds on how to do better in future.

Here we have possibly the most complicated nationalisation measure because we are dealing with products which are so very different. They are not simple, as were the others. In ships we have cargo ships, warships, tankers, liquid gas carriers, container ships, all sorts of auxiliary ships, tugs—a whole host of different ships with totally different technologies. If we go to aircraft it is even more so. There is the military aircraft, with its tremendous concentration on technology and its high speed characteristics, and of course its ability to fly in the most difficult environment and through nuclear clouds and through the worst of weather, and to find its way to the target and back.

We have been concentrating on decentralisation and the tasks of the Corporations. I have been looking through the Bill and it rather terrifies me because the tasks are legion. We have been told that there are to be only a very small number in the headquarters. I know the noble Lord, Lord Beswick, believes this sincerely and I am sure he will try to achieve it. But look at the tasks and remember that there will have to be the headquarters, big or small; there will have to be the regional headquarters, and presumably there will have to be local management headquarters in the various firms.

Then look at the tasks that they have to undertake. I think the whole is covered by the term "management audit". There are the management activities of the Corporations—they have to be looked into and defined in the Bill. There is the process of industrial democracy—defined in the Bill. There is the decentralisation of management. There is the decentralisation and creation of separate profit centres. There is the formulation and the implementation of an investment programme. Goodness knows! we have been told that this is a gargantuan task—the investment programme for the whole of shipbuilding, ship repairing, marine engine building, and the like. There is the manpower planning; there is the recruiting and the training of manpower, all to be done by the headquarters and the regional centres. There is the whole of industrial relations—and God knows! that is important enough and perhaps especially important in shipbuilding; and there is the financial performance.

Looking at the profit centres, I have tried to analyse the sort of profit centres there might be. There are 19 shipbuilding firms and each one of them, I would suggest, cannot have less than 10 profit centres. So that is a total of 190 profit centres to cope with. There are 12 ship-repairers. I would suggest that each one of those 12 ship repairers has at least five profit centres, making a total of 60. There are eight slow-speed diesel manufacturers, and I would suggest, again from experience, that they must have at least five profit centres. So in fact there are 290 profit centres under the shipbuilding Corporation alone, and I suggest that I am under-estimating rather than over-estimating.

Now we come to where these are to be sited. I know that there will be tremendous pressures. I am delighted to hear from the Minister that the headquarters of these two Corporations will be announced relatively soon—I hope in time to discuss it in this House or in another place. Then there will be the regional centres. Where will they be? Before the Bill finally receives the Royal Assent, perhaps we may be told at least where the headquarters will be.

I wish the Corporations well, but I am mindful of the fact that we look to see through past experience that there was going to be a small headquarters in London, and what was a small headquarters becomes Hobart House, which becomes Coal House, which becomes an enormous headquarters with an immense staff and satellite headquarters round it. Every time this intention has been declared as we nationalize—and I am sure people sincerely believe this is going to be small—Parkinson's Law begins to act, and up and up builds the snowball and more and more people sit in offices trying to control it, to monitor it and prepare reports, as is laid down in the Bill. I wish them well, but would say to any Government that they will have to watch the growth of administration desperately carefully. The whole country at present is suffering because we have 1·9 administrators on the backs of a very small industrial production, and it is that which is sinking this country financially, economically, and making the pound go lower every day.

11.32 p.m.

I rise to underline what the noble Lord, Lord Orr-Ewing, has said. I am not doing this in the sense of Fabius Maximus Cunctator, but in the hope of producing a slightly different aspect of it. When the headquarters of British Shipbuilders is announced, can we not have a guarantee from the Government that there will be no increase whatsoever in office space required? In other words, it will be announced, and some other office space owned by one of the present companies to be nationalised will be released, because it cannot make sense to have the offices of all the present shipbuilding companies, all the present aircraft companies, and then put yet another layer of office people on top of it. That must be wise. We cannot afford it, and we are really up against it financially. So it seems to me they should make it a simple rule that there will be no extra office space bought. Especially since the Government have stated there will be redundancies on the shop floor, it cannot be right to increase office space and decrease factory investment in actual productive workers. To do so would be dotty.

I certainly think the second point put forward by the noble Earl, Lord Onslow, is a very strong point. The noble Lord, Lord Beswick, has already made the point on the aerospace side that he does not see the need for new office space, and that existing facilities will be used. I will certainly put the point to my right honourable friend and honourable friends so far as the shipbuilders are concerned, but I think the noble Earl will accept that it should be a matter for the Organising Committee in the first place. No doubt they will take careful note of what he has said.

My response to the noble Lord, Lord Orr-Ewing, would be that I accept that it would be very desirable for your Lordships, before the Bill leaves your Lordships' House, to know where the headquarters will be. I will certainly convey that thought to my right honourable friend to see what we can possibly do before the Bill goes back to another place.

One merit about the Motion, That the Clause stand part, is that at least it is an amended clause. I rather detected in the earlier response of the noble Lord, Lord Melchett, a certain—I would not say impatience, but a certain sadness that we were not apparently moving as fast as he would like. I think he even said that if we persisted in discussing matters in the way we have done, all he could do was to sit tight and say nowt. He quoted The Times, and perhaps I may invite him to re-read the leader in The Times to which he referred. I quote:

"None of the Bills before the Lords is vital to the national interest at a time of great economic peril. Some will be positively damaging; others will be irrelevant. Many of them will help to confirm the impression that is so damaging to the Government in the country and abroad; namely, that they are forced to implement a portion of Left-Wing measures that are not at all to the taste of most Ministers as the price of preserving a semblance of Party unity."
The noble Lord introduced The Times leader, and I dare say it is important for the record, but for the spiritual improvement of noble Lords opposite they should be made to drink their own medicine. The leader goes on:
"The important principle is that the legislative process must not be impaired."
I do not quite know what was the inwardness of the noble Lord's meaning when he referred to time. I am not aware of any constitutional reason why this particular Session has to be ended and the next has to he started on a particular day. It is not for the convenience of the Royal Mews. Parliament can be opened by a Royal Commission. So the whole idea that we are up against a deadline, if we are, is entirely of Ministers' choosing, and it is for them to enjoy their medicine. If they are now finding it bitter, then so be it.

There were two main matters on this clause which I was concerned with and which I do not think have been properly answered. There was the whole question of efficiency. We got no answer whatsoever. It may well be that there is no answer.

The answer is that I think I am right in saying that the noble Earl was not here when we had a debate on the Amendment which covered the particular point. Noble Lords opposite who were here may well say that even then we did not get an answer, but we did discuss it at length and I did not feel it right to go over that ground yet again.

I appreciate that the noble Lord has been working so hard that he is a little myopic and does not see even my large bulk, but I was in fact here throughout the discussion of the clause we are talking about. The short point is that the term "efficiency" has not been satisfactorily explained. It is in a passage now happily eliminated from the Bill. But what one really complains about is the lack of a proper answer.

Then there is the question of decentralisation. I raised the question of shipbuilding being treated as one activity. There is Vosper in Portsmouth; there is Yarrow in Glasgow. Is either to be subject to a distinct Scottish or English division, with pricing policy? And what about naval shipbuilding? That simply was not answered. That is why—since, as I say, there is no constitutional reason why we should worry about time—I return to the matter. If the noble Lord is going to go on saying "You did", "I did not", "You did", "I did not"; if that is going to be the performance, I must say to noble Lords opposite—all of whom, so far as I know them personally, I regard as Parliamentary friends and indeed personal friends—that is not good enough and it will be resisted and fought. And it will be seen by the public, to be resisted and fought, because although our proceedings are not widely reported in the ordinary generality of events, they are when things are moving to a crisis and a clash. Therefore, I beg noble Lords opposite—and particularly the noble Lord, Lord Melchett, who, if I may say so without appearing in any way to patronise, has such a future in this House; we all admire his perfomance, we like him, he has immense ability—for Heaven's sake! listen to what the Opposition say; one day he will be leading the Opposition. We are not just trying to barrack and be tiresome. There is the whole question of industrial democracy which was not properly covered. The way it is presented by the Government, industrial democracy is for the so-called relevant trade unions only.

I quoted 1984, "Some are more equal than others". One might quote another allusion to democracy; namely, that the democratic system is Government of the people, for the people, by the people—and to hell with the people! They are proposing an industrial democracy which is to hell with a certain part, perhaps 30 per cent., of the labour force. Is this to be the democracy of the cemetery, and the equality of the slaughterhouse? We did not have proper answers on that, and that is why I draw attention to these matters, and it is important for the record because these records are going to be looked at.

The fate of this Bill is not a trivial matter. It is possibly going to be of constitutional importance. In the matter of industrial democracy we have had this large phrase used, and there is nothing to tell us, from what the Government have said today, whether that has any relevance to all workers being shareholders, to worker directors, to the basis on which they are elected, or to full disclosure of the company accounts to the work force. There are noble Lords opposite for whom we have the greatest respect, and it would be invidious and might damage their reputation if I were to identify them by name, but there are certain noble Lords opposite whom we trust and respect from the bottom of our hearts, but it is no good the Front Bench trying to brush this off and fail to meet the issue.

Before we pass this amended clause, I hope that as the days wear on, even if not as this night wears on, the Front Bench opposite will modify their stance a little. Perhaps an occasional resort to the bar will cheer them up and make them more willing to be open minded. There is no Government by sheer confrontation. It is what they have told us all the time, and what we must remind them of.

11.43 p.m.

If I may refer to my noble comrade in arms who has just spoken (on so many occasions we find ourselves in agreement), on this occasion he has offered—I am not certain whether it was spirituous or spiritual consolation, but I would take it in either sense. The arguments that are used about this Bill are quite extraordinary. I listened to the noble Lord, Lord Orr-Ewing, and I wondered whether the great firm of ICI possibly existed, because it was impossible to have such a vast organisation with a whole lot of units. ICI has 11—or is it 13?—separate divisions. It deals with an enormous mass of employees, with a range of activities far greater than that of the shipbuilding industry. It deals with a total amount of profit infinitely greater than the shipbuilding industry has ever thought of; and we are told that this is impossible, and that it cannot be done.

I was saying that the track record of nationalised industries over the last 30 years has shown that it cannot be done. I am hopeful that perhaps at some stage it can be done.

There is no nationalised industry which has consistently made a profit. I have all the records here. I would not bore the Committee by giving all the profit records over the last five years, but look at the record and that is what you will find. If you could only simulate and reproduce the competitive spirit which exists in ICI! because if they do not compete with the great chemical firms in Western Europe they will be bankrupt. They are not protected. They are not a monopoly. They are very competitive, highly geared and extremely sensitive to competition.

That is all very well, but the noble Lord quoted the number of units in the shipbuilding industry and said it was impossible to have that number brought together. I am saying that ICI has done it and I would go further and point to the mining industry.

Before the noble Lord does that, may I reinforce what the noble Lord, Lord Orr-Ewing, said, because I do not think he was referring to the possibility or impossibility of operating on that sort of scale? He was saying that it had not been done under nationalisation. If one looks at the figures of the return on capital published on Friday one sees that the return from 1970 to 1975 for every nationalised industry was such that if it had been ICI's return on capital, ICI could not have become the size it is today.

It is difficult to make a coherent argument if one is constantly interrupted. I am in the middle of making a point and I have given way twice. Unless the noble Baroness thinks that nobody else should be allowed to make a point, I hope she will allow me to complete mine. The noble Lord, Lord Orr-Ewing, referred to the size of the organisation and quoted the number of units. I am saying that the number of units is no greater than the number brought together in ICI and that therefore such an argument is not relevant to what we are discussion. If it is said that it is impossible for a nationalised industry to do it, then the noble Lord is on very strange ground.

I went to the City of Newcastle in 1947 when the coal industry was brought under national control. The first thing that happened was exactly the opposite to what Lord Orr-Ewing described; instead of there being a completely new and large organisation created, many minor organisations were brought into one. I happened to be interested in the research side. There were in the coal industry a number of minor and highly inefficient research groups, extravagantly run, and they were brought together and made into one centralised coal research organisation at Stoke Orchard near Cheltenham. This illustrates that what happens is quite the contrary to what Lord Orr-Ewing described. He spoke of the creation of a vast organisation with the dissipation of effort. The reverse happens; there is a concentration of effort and the very people who are concentrated squeak about it, saying, "Look what nationalisation has done". Noble Lords opposite cannot have it both ways. All the time, what they are doing is to say, on the one hand, that nationalisation is extravagant and, on the other, that nationalisation takes away work and destroys the number of jobs. It does. It destroys the number of jobs for their boys. The general effect, so far from being what they are suggesting, is the exact opposite.

I should like to congratulate the noble Lord on his eloquence. He clearly thinks that Clause 5 is good and ought not to be criticised. That is his point of view. It is not my view nor that of my noble friends. I should like to contest the principle that the noble Lord, Lord Melchett, has tried to maintain. What he tried to say was that because this clause had been well discussed in the other place, we ought not to discuss it at length.

No. I did not. I was merely, very quietly and I hope without creating too much fuss, trying to make the point that there were parts of the Bill that had been very extensively discussed both in Committee and at Report in the other place and other parts which fell under the guillotine at Report stage and which we have not yet reached. They concern compensation on the whole. I was merely making the point—and I did not expect very much to be made of it—that when we reached the points that had fallen under the guillotine, I would naturally expect there to be more that needed to be considered again by my noble friends and myself, more that needed to be taken back, more Amendments that needed to be accepted. That was the only point I was trying to make.

But, if the noble Lord was not saying that we ought not to take up time on Clause 5 because he thinks that it would be better to spend that time on those clauses which came under the guillotine, what was he saying?

It is entirely for the Committee how it spends its time: it has nothing to do with me.

But the noble Lord said that if we went on at that sort of length on clauses such as Clause 5 that had been discussed in the other place he would sit silent and not answer. The whole impression of what he was trying to lay down as a principle was that parts of this Bill that had been discussed at length in another place ought not to be discussed at full length in this House, whatever we felt about them, and that we ought to concentrate whatever time we decided to allocate to those parts of the Bill that came under the guillotine. I want to contest that principle and I am glad that the noble Lord has now gone to the Box to say that that is not what he meant. The reason that we and the other place have spent so much time on Clause 5 is that it seems to embody principles which we think can be terribly dangerous to an important part of the economic sector of the country.

The object of a Second Chamber—whether it be your Lordships' House as it is now constituted or any Second Chamber—is, in the light of what has gone on in the past, to emphasise that part of a Bill which both Houses deem to be important and worthy of detailed consideration. We are a revising Chamber, it is said by some who defend our position. It is our duty to try to revise the Bill and Clause 5 in some way that will make it more acceptable if we have to tolerate the danger of these industries being nationalised at all.

It may well be that, on other parts of the Bill, the noble Lord will find that those clauses upon which they spoke at length in the other place are the very clauses upon which we shall speak at length in this House. In doing so, we shall be doing no more than our duty. I am delighted to associate myself with the personal tribute paid to the noble Lord by my noble friend Lord Onslow: I think that he shows signs of having done his homework and has shown a skill and aptitude which are much to his credit. But I believe that the good reputation that he has earned up to now will be spoilt if he does not recognise that it is that part of the Bill which excited the other place which is most likely to excite this House, too. It is our duty to revise it if we cannot kill it and it does not look as if we were going to be able to do that. If we can send it back marginally better than it came to us because we talk at greater length than they did, then we shall have done our duty.

11.55 p.m.

I am very anxious to say a word or two to the noble Lord, Lord Cooper of Stockton Heath. He complained, quite rightly, because it is very annoying for people to keep on interrupting, so I did not interrupt. I wanted to get up and have a word with the noble Lord, but my noble friend behind me was not going to let me have the chance of being polite. I thought that I was being extremely polite, but it did not pay me to be so, but perhaps it did a little bit of good. It was not that I wanted to help the noble Lord, Lord Cooper of Stockton Heath; I did not. But I thought that I would be polite. I want to say one thing about the mining industry. Was the noble Lord really saying that he went to Newcastle-on-Tyne, or to Newcastle-under-Lyme?

Jolly good! It was the real one, Newcastle-on-Tyne. I do not know whether the noble Lord was concerned about his arrival in Newcastle-on-Tyne, but he spoke about what he called the advantage of nationalisation in terms of all the mines around Newcastle-on-Tyne. There are a tremendous number of mines in that area— I probably know more about that than he does—if one includes Durham county as well.

The noble Lord said that the great advantage was that all the mines were brought together, but he seemed to forget, or he did not know, that the Newcastle and Durham coalfields were established very early. Therefore they were not established with the kind of modern machinery which one finds in Bolsover, with which I had some connection for very many years. I know all about Bolsover and about the advantages which Bolsover had compared with Newcastleon-Tyne. In fact, what happened in Newcastle-on-Tyne was that most of the mines were worked out and so most of them had to be closed down. So if the noble Lord thought that nationalisation was the way to bring the mines together then he had a very funny idea about the situation.

I have spent a lot of time crawling on my front up to the coalface in the Ashington pits. It is true that the pits in the Ashington group were modern and they had reasonably good coal. The Ashington group has gone on very well indeed, and that was not at all due to nationalisation. It was due to the fact that those pits happened to have a lot of coal which had not been dug by the time the Government nationalised Ashington.

Although the miners would not really support me hardly at all, I am very devoted to them. They are absolutely grand people. I do not know how old the noble Lord, Lord Cooper of Stockton Heath is; perhaps that is a rather difficult question to ask. But I have lived a very long time, and I remember that in two world wars we had to stop the miners recruiting—

May I interrupt the noble Baroness? It is terribly rude of me to say this, but I must say, with the greatest respect to my favourite Lady on our side, that we are not discussing mines; we are discussing shipbuilding, and the Government are getting slightly cross with us for filibustering. I hate doing this, and I do not think we are filibustering, but please—

Would the noble Earl kindly allow me to make my speech? He has had a great deal to say, to which I have listened with great interest, but there is no reason at all why in this Chamber I should not answer somebody who talks about the area in which I live and which I have represented for a very long time—38 years—in the House of Commons. Therefore I know something about it, and I am not going to allow any noble Lord, whether he be on this side of the Committee or the other side, to say things about my area without getting up to say what I think. I shall continue to do that, and I say to the noble Earl and indeed to my noble friend behind me that I am just as interested in shipbuilding as most noble Lords. Wallsend-on-Tyne, which I represented, has some of the biggest shipbuilding firms in the country, and I want them to continue, although they are not so likely to continue under nationalisation. There is no reason at all why I should not speak if the noble Lord opposite is going to talk about the mining industry in support of the noble Lord, Lord Melchett, whom I think is a very nice young man. I do not think he is particularly capable. I am in a position, as an ordinary individual, to like people whatever their politics. At the same time I should like to say some of the things that I want to say and, therefore, I go back to the noble Lord, Lord Cooper.

In fear and trepidation may correct the noble Baroness, to say that I am Lord Cooper and that she is directing her remarks to another noble Lord.

I asked him whether his name was Lord Cooper and lie said it was. I am not going to talk any longer, whatever he said about mining—in support of nationalisation, I gather. I am against the nationalisation of shipbuilding. I have done as much as most noble Lords to deal with it in my own part of the world. Fortunately, my own part of the world—although they do not always like what I do or say—at least kept me in power in another place for 38 years. I do know something, therefore, of what I am talking about. I am not going to allow anybody to make comments about the miners in the part of the world which I represent, without my getting up and saying what I think about the miners. I shall not go on talking about that but I say to this Committee that if I want to speak and I want to say what I want to say, then I shall say it.

I think the noble Baroness had made that quite clear. I am overwhelmed by the compliments which have been paid to me, not only by the noble Baroness but by the noble Lord, Lord Harmar-Nicholls, and the noble Earl, Lord Lauderdale. I thank them all very much. I do not know what I have done to deserve it. I dread to think what I might have done to deserve it indeed. I apologise to the noble Earl, Lord Lauderdale—to get back for a moment to Clause 5 stand part—for the fact that I did not satisfy him on the various items which he mentioned, in particular our discussion on industrial democracy. But in fairness I think he would concede that I mentioned that two questions he asked, concerning workers owning the shares or mere consultation, were two examples I gave in my own speech on that particular Amendment, which no doubt he will remember, of the range that industrial democracy could cover.

I apologise if my explanations on the particular points have not been sufficient, but I can assure him that I am doing my best. I know my noble friends are doing much better at satisfying noble Lords opposite on points they have raised. We are certainly doing our best and can assure the noble Earl that we will continue to do so. On the two substantive points which have been raised on Clause 5 stand part—the request of the noble Lord, Lord Orr-Ewing that we should have an announcement on the location for British Shipbuilders and the request of the noble Earl, Lord Onslow, that it should involve no new offices—I have given an undertaking already to take up both of those points very seriously and to take the matter to my right honourable friend. I hope that we can now get back to Clause 5 stand part.

Would the noble Lord allow me? He raised the point that it would be helpful if we got on to the clauses which were not discussed in the House of Commons in the Report stage. I would remind him that Clauses 5, 6, 7 and on to 18 were not discussed in the Report stage, so we are on a clause which was guillotined. Perhaps therefore he would be ready to give way as he suggested he might do on those clauses which had been guillotined and not discussed.

I was happy at the end about this question of decentralisation until the noble Lord, Lord Wynne-Jones, started talking about the concentration of research. I have very little experience of research in the shipbuilding industry, but I know a little about the pharmaceutical industries, and one of the things that has been proved time and time again is the great importance of having individual centres operating almost directly in competition. I would very much feel it not to be in keeping with the philosophy of decentralisation if the first thing that is to happen on this Bill, the moment nationalisation occurs, is that all research will be concentrated. I did not hear the noble Lord the Minister deny that concept which his noble friend behind raised.

I think the noble Lord, Lord Melchett, deserves compliments, certainly so far as I am concerned. started this debate on the Question, Whether Clause 5 shall stand part?, by putting two or three questions to him about the immediate future so far as British Shipbuilders are concerned in relation to this clause. I am grateful to him, because he gave as much information as he apparently could. First of all, he told us that it was intended that the vesting date should be as soon as possible after Royal Assent if the Bill goes through; and, secondly, he said that we were still awaiting a decision as to what part of the country the headquarters of British Shipbuilders were to be located. This clause requires British Shipbuilders to produce their first report forthwith, as soon as possible after vesting date; and, therefore, he has presented us with the information, and confirmed, that British Shipbuilders will have a good deal of leeway to make up. Their first review and report will be required immediately after vesting date, and they still do not know even where their headquarters are going to be—and I do not mean what part of London: I mean what part of the country. The noble Lord also said that it was the intention of the Government, if possible, to announce where the headquarters of British Shipbuilders would be before the Bill left your Lordships' House; and, again, we naturally welcome that and are glad to know that that is the intention of the Government.

Clause 5, as amended, agreed to.

Clause 6 [ Machinery for settling terms and conditions of employment etc.]:

had given Notice of his intention to move Amendment No. 92:

Page 9, line 34, leave out ("consult ") and insert ("seek consultation with").

The noble Viscount said: This Amendment is similar to Amendment No. 84. On that Amendment, the noble Lord, Lord Winterbottom, kindly said that he would refer the matter back and look into it, and I assume that his assurance covers this Amendment as well. I therefore do not propose to move it.

12.7 a.m.

moved Amendment No. 92:

Page 9, line 35, after ("union") insert ("or professional organisation").

The noble Lord said: The purpose of this Amendment is to increase the duties of each of the Corporations by making it a duty of each of them in the context of Clause 6 that the Corporation should consult not only "any relevant trade union" but also the relevant professional associations. The arguments in favour of this form of Amendment have already been canvassed at considerable length under Clause 5 in Amendment No. 86, which this Committee carried, and I therefore do not propose at this stage to talk at any greath length about the desirability of consulting professional organisations of which engineers, designers and people of that kind will be members as employees of the two Corporations.

It may also save the time of the Government if I ask leave of the Committee to speak to Amendment No. 94, which is a consequential Amendment in relation to Amendment No. 93, and also Amendment No. 103, where, again, the purpose is to increase the duties of the Corporations by ensuring that they consult not only the trade unions but also, again, the professional organisations. The desirability of the professional organisations being consulted under Amendment No. 103, in the context of Clause 7, is even greater than it is in the context of either Clause 5 or Clause 6, because in Clause 7 a direct reference is made to the desirability of consultation in regard to research and development, in which, of course, the engineers and the designers will be closely concerned. Therefore, with that, I hope, short introduction, I beg to move Amendment No. 93.

It may be to the convenience of the Committee if I made it clear that, in view of the fact that we divided on Amendment No. 86 and it was carried, I would not oppose what seem to me to be consequential Amendments on exactly the same point; that is, Amendment No. 93, which the noble Lord has now moved, and Amendments Nos. 94 and 103.

I think there is a difference here, and I apologise to the noble Lord, Lord Lloyd of Kilgerran, if there has been any misunderstanding between us about this. In my earlier speech I drew this very sharp distinction between consultation and negotiation. Of course, here we have a clause dealing with collective bargaining.

Quite apart from what the relevant trade unions or the Government may wish, I must say to the noble Lord, Lord Lloyd of Kilgerran, that all the professional organisations that I know have, in their terms of reference, their charters, or whatever they may be, words which specifically exclude them from being able to participate in collective bargaining. I think that we should gravely embarrass the professional organisations if we write them in here—even if I thought it right; which 1 do not. I did think so in relation to consultation but not in relation to collective bargaining. I wonder whether the noble Lord, Lord Lloyd of Kilgerran, might reconsider the matter in the light of what I have said.

I am grateful to the noble Lord, Lord Carr of Hadley, for having said that there was some misunderstanding. I deliberately asked him a few minutes ago whether he was in favour of and would support this Amendment. Now that he has spoken, it seems to me that, with respect, he has misunderstood the conditions of Clause 6 in relation to these matters of consultation. It specifically says in subsection (2)(c):

"the promotion and encouragement of measures affecting efficiency, in any respect, in the carrying on of their activities by the Corporation …".
May I remind the noble Lord, Lord Carr, that the duties of the Corporation are to be found in subsections (1) and (2) of Clause 2 referring to "the efficient and economical design"—efficiency in development, efficiency in production, and so on.

Therefore in respect of all those aspects, I would remind the noble Lord, Lord Carr, that it is "efficiency, in any respect" that is referred to in Clause 6 and that the "efficiency, in any respect" includes efficiency in the matters I have enumerated and will involve the engineers and designers in their activities. Therefore it is proper that professional organisations should be added to the words "trade unions" to enable consultations to take place bringing in the engineers and designers et cetera, people who may not be members of the trade union, in accordance with the argument I have already put in respect of the other clause.

I apologise again to the noble Lord, Lord Lloyd of Kilgerran. He spoke to me and I apologise for the fact that I failed to note that this came within Clause 6. I ask him to consider the matter carefully. It is his affair; but for the reasons I have given I could not advise my noble friends to go into the Lobby with him on this occasion. Although I agree with part of what he has said, if he looks at the next Amendment in the name of my noble friends and myself he will see that there we are deliberately limiting what we want done to paragraphs (c) and (d) of subsection (2) of this clause—which are not the ones involved with collective bargaining.

It is for the noble Lord and his noble friends to decide, but if we were to be successful in getting our next Amendment accepted it could be appropriate perhaps at Report stage to move "professional organisations" into the new subsection (1A). We should then be limiting the professional organisations to the consultative parts of this clause and not to the collective bargaining parts.

What I am concerned about is that if we move it, as the noble Lord suggests, without qualifying it as our next Amendment would qualify it, we shall actually be bringing grave embarrassment to the professional organisations involved, many of whose charters specifically forbid them to enter into the sort of activities described in paragraphs (a) and (b). I did not spot this when speaking to the noble Lord earlier.

I draw the attention of the Committee to the heading of Clause 6:

"Machinery for settling terms and conditions of employment".
Clearly that is negotiation and not consultation.

May I remind the noble Lord that the heading of Clause 6 in my draft of the Bill says:

"Machinery for settling terms and conditions of employment etc"
Although the terms of employment are referred to in paragraph (a) of subsection (2), paragraphs (c) and (d) deal with other matters entirely. Therefore, the scope of Clause 6 is far wider than the noble Lord, Lord Cooper, indicates.

On Question, Amendment agreed to.

12.17 a.m.

moved Amendment No. 95:

Page 9, line 39, at end insert—
("(1A) It shall be the duty of each Corporation to seek consultation with other organisations not being relevant trade unions, as appear to it to represent substantial proportions of the persons or of any class of persons in the employment of the Corporation or any of its wholly owned subsidiaries for the purposes specified in paragraphs (c) and (d) of subsection (2) below.").

The noble Lord said: This, again, is another of our industrial democracy Amendments. We propose that a whole new range of people, in addition to those covered by the definition of "relevant trade unions" should be involved, but involved only in part of the purposes

specified in Clause 6. I should like to reinforce the importance of the word " et cetera", to which the noble Lord, Lord Lloyd of Kilgerran, has recently drawn attention in the marginal title of this clause. If the noble Lords, and particularly the noble Lord, Lord Cooper, will read subsection (1), they will see that the first objective of this clause is that there should be consultation on a number of issues. The objects of the consultation or the desired outcomes of the consultation are then defined in subsection (2). Paragraphs ( a) and ( b) are undoubtedly what I would call industrial relations matters, clear and simple. There it is proper that those should be confined to relevant trade unions. I shall return to that briefly in a moment.

Unless and until some of the other organisations, about which we talk in our Amendment, succeed in becoming relevant trade unions, I do not think that they can expect to participate in paragraphs ( a) and ( b). However, they can expect to participate in the consultation leading to paragraphs ( c) and ( d):

"(c) the promotion and encouragement of measures affecting efficiency, in any respect, in the carrying on of their activities by the Corporation and its wholly owned subsidiaries, and
"(d) the discussion of other matters of mutual interest to the parties to the agreements."

Organisations representing a great bulk of the 30 per cent. of the labour force at all levels in these Corporations that are not covered by the relevant trade unions really should be party to this. Let us take the basic terms and conditions point. Of course I accept that in many companies where the closed shop does not exist, but where there is union recognition and collective bargaining, the terms settled by collective bargaining for the union members are then subsumed into the individual contract of employment of relevant grades of those members of the labour force who are not unionised. That is very well-established custom and practice in British industry.

On consultations, those who will not have the chance at present to participate directly in collective bargaining should at least be able to participate in the consultation, as is suggested here. Secondly,

paragraph ( c), if we are to consult about the:

"promotion and encouragement of measures affecting efficiency, in any respect…"

it is absolute nonsense to have consultations about the right sort of structure for collective bargaining and not to listen at least to the views of such vital portions of the work force in these Corporations that are not at present covered by this phrase "relevant trade unions".

Many of the organisations involved have felt great satisfaction that my noble friends, I and others have put down, supported and carried Amendments to bring them into the consultative process; but they have expressed grave disappointment to me—I received a letter this morning—that we are not doing the same in bringing them into the collective bargaining process. I said to them privately, and I must say again to the Committee, that I am afraid I cannot support that because one must confine the actual collective bargaining process to relevant trade unions. They have a proper course, proper machinery, for seeking to become recognised. In order to be relevant, they have first of all to be independent and to satisfy everybody that they are genuinely independent. Having done that, they have to seek recognition. Machinery is laid down whereby they can seek recognition. I doubt whether we would or could do anything to help them other than advise them to take that course.

We should involve them in the consultation. It is right to exclude them from the actual joint consultation unless or until they become recognised. They say, I imagine, to that: "This might be all right if we had any reasonable confidence that our claim for recognition would be judged with equity and impartiality". They are sceptical about that. I must, I am afraid, say to them: "You may be sceptical; but you must first of all put the agreed procedures to the test, because I do not think that it is right for us to assume that you will not get a fair hearing and a fair judgment by the machinery laid down until you have tried it". If they try it and there is a general feeling that they are not fairly and properly considered, Parliament at some stage will have to do something about it. At this stage they must first become independent and then try the machinery laid down to enable them to become recognised. Until they have done that, I do not think that it is right for us to try to push them into the negotiating machinery.

I wish to move the Amendment, making it quite clear that it is a deliberate act, for the reasons that I have explained now and earlier, to give them only limited inclusion under this clause. On that basis, I hope that the Government this time will consider the need, if we are going to have a good spirit from the beginning in these Corporations, to allow the consultative process to go right across the field and not be limited to relevant trade unions who, whatever their mertis, do not—and they know in their hearts cannot—claim to represent adequately large and important sections of the labour force in these Corporations. I beg to move.

12.23 a.m.

Again as the noble Lord, Lord Carr of Hadley, has made clear, it seems that the Amendment covers the same ground upon which the Committee divided on Amendment No. 85, and I daresay the same thing will apply to Amendment No. 104 which is in exactly the same terms. I do not think it right for me to seek to divide the Committee again on what is substantially the same point. As the noble Lord knows, and as my noble friend Lord Cooper made clear, we would not draw the same sharp distinction as the noble Lord has drawn between consultation and collective bargaining. Since this Amendment strikes exactly the same points, I think it would be sensible to allow it to go through on the basis of the Division on Amendment No. 85.

Clause 6 is another of the clauses which was not discussed or debated at all in the House of Commons at Report stage. Also, in the Explanatory Memorandum it specifically says under Clause 6

"the discussion of matters of mutual interest…"
That was clearly the intention when the Bill started. It may have fallen by the wayside during the Committee stage.

I should also like to draw attention to the fact that the CBI submitted a serious memorandum, some 20 pages long, to the Bullock Committee. It emphasised the need for all working people to have a chance to participate in discussions about the objectives and financial positions of firms and in everything which affected the future. Therefore, I think it is important that all be included rather than separating one section from another. I hope that the Minister will make these representations. We do not, presumably, want a confrontation between the CBI's recommendation and the TUC's views. We are trying to see a modus vivendi for this new organisation. We hope that the Government will give way on this matter.

In an attempt to clarify the situation, I wish to probe whether the Government can give us some help. It seems to me that the real difficulty arises in that the Government are, in many ways rightly, trying to extend the area over which there shall be joint regulation, covering efficiency and all the other matters that have been mentioned. I think that a great many of us would support this. However, while doing this the Government, in the view of many of us at any rate, appear to be narrowing the range of people who can take part in these extended consultations. If the Government could encourage us to believe that there was a possibility that this opportunity for wider consultation and wider joint regulation would be extended to all independent unions, and if we could be told as regards the widely felt and genuine fear that this will be allowed only to those who are affiliated, that it would be for all independent unions approved by the certification officer, it would make a great deal of difference to the way that a large number of people feel about these proposals. Will the Government at least say that they will reconsider and clarify the position?

12.27 a.m.

I made it clear that I felt I must rest on what I said on the previous Amendment, where exactly the same point was discussed and on which your Lordships' Committee divided. I do not think that I could sensibly, a few Amendments later, start going back very very substantially on that course. This is a matter which has been discussed many times by your Lordships' House. I tried to make clear that the reason why, in these circumstances, we were applying the same tests as those mentioned in the Statutes as we have in previous legislation, was that we did not accept that there was a sharp distinction to be drawn between consultation and collective bargaining. I explained to the noble Baroness on the previous Amendment what the terms of the Bill meant.

I should like to correct one thing that I think the noble Baroness said, no doubt inadvertently. If I heard her aright— wrote it down—she said that the Government were trying to restrict the range of people who can take part in these discussions about the various issues that she rightly said were put very widely in the Bill. That is not the case. The Government merely said that it is the independent trade unions, the recognised trade unions, whom the Corporation must consult. They do not say that the Corporations are precluded from consulting other people. I hope I made that point clear when we were discussing the previous Amendment on the same matter.

I do not ask the noble Lord to comment on this now, but I ask him to reflect upon it before we reach the next Amendment or even before the Report stage. He must know—I do not want to labour it unduly—that certain, at least, of the relevant trade unions are making it clear to the Corporation and to the management of existing companies prior to their merging with the Corporation, that they would, to put it mildly, take grave umbrage if the new Corporation even consults some of the people whom we are talking about now. Therefore, to say that they can is really rather meaningless if in fact the Corporation is to be threatened by some of the relevant trade unions, but if it does there will be industrial trouble.

Will the noble Lord say how he visualises this consultation will take place? Does he visualise that there will be a meeting where the unions would meet the management and consult? If so, would that meeting also be attended by other than relevant unions, for example, the non-unionised people or rather the associations, or would there be a separate meeting after or before the meeting with the unions? This is an extremely important matter.

I agree with the noble Lord, Lord Gisborough, that it is important, but I would say very strongly that it must be a matter for the Corporations themselves—those people they are consulting, whoever they might be—to decide on these matters, and it certainly should not be for a Government Minister in your Lordships' House to lay down how a meeting should take place and what its form should be. In response to the noble Lord, Lord Carr, I certainly accept what he says and I know that there are real difficulties. There is no disguising that fact, and I hope that at no stage in the passage of the Bill have I attempted to disguise it. Furthermore, my noble friend Lord Beswick and the chairmen of the organising committees are well aware of the difficulties.

These difficulties have arisen as a result of general industrial relations legislation. I think the noble Lord will agree that the difficulty is particularly acute in the case of British Aerospace, because of the large number of people. Again, I accept that point and have never denied it in our discussions. The point I would make to the noble Lord, Lord Carr—maybe we can both take these points away and think about them—is this. In view of the fact that this is a general problem and is not specific to either of these industries, although it may be more acute for one industry than for some others, would it he right to pass legislation in this Bill which would, I suggest, put the organising committees in a very difficult position? They would be out of line with the general industrial relations legislation which we have passed. We should be placing on them a duty in a Statute which might be very difficult. As the noble Lord knows, legislating on industrial relations matters is not necessarily the best way of proceeding. I do not say this in any partisan way, and it is a genuine point, but it would not necessarily be the most sensible thing to do to place upon these organising committees these very general problems that would be particularised in this Statute.

I take the point which the noble Lord is making. One of the troubles arises because the Government are trying to particularise their industrial relations legislation in these industries. They are in advance of the Bullock Committee's report, and general legislation on industrial democracy. They are making these two industries a test bed, as it were, and it is because they are doing that, that other organisations are so particularly concerned. With respect, the Government are not treating this as a general problem—and I agree that it is a general problem in large fields of industry—because they are deliberately picking out these two industries and saying that they are special industries in which there will he new experiments in industrial democracy which will be written into the Bill. It is because of that that the anxieties of the people about whom we are talking are greatly multiplied. They feel that, if they miss out in this first great experiment in this year of industrial democracy, they will miss out altogether, and I hope that the Government will realise that this feeling has greatly intensified, because they are experimenting in the case of these two new Corporations.

The noble Lord, Lord Melchett, said that it is not for the Minister to decide what the Corporations should do about the question of who attends meetings. But surely he is putting them into an impossible position, because if they allow the staff associations to attend with the unions there will be total dissatisfaction, and if there are two separate meetings there will still be total dissatisfaction. I do not see how he is giving the Corporations a chance.

On Question, Amendment agreed to.

had given Notice of his intention to move Amendment No. 96:

Page 9, line 43, at end insert ("incorporated in the United Kingdom.").

The noble Viscount said: This is the same point that was raised on Amendment No. 47 and the noble Lord, Lord Winterbottom, gave me an undertaking that he would take the matter back and look at it. I am sure that that undertaking also applies to this Amendment, in which case I shall not move it.

12.34 a.m.

moved Amendment No. 97:

Page 9, line 43, at end insert ("who are members of the trade union engaged in such negotiations").

The noble Baroness said: This Amendment is very much in line with that moved by the noble Lord, Lord Carr, and it deals with the same kind of problem; that is, the rights of persons who are not represented by recognised trade unions. The purpose of this Amendment is to ensure that the machinery which is to be set up by negotiation with trade unions does not lay down what should be done about persons who are not members of trade unions. It may not be the Government's intention that negotiations should be carried on for persons who are not members of trade unions, but the Amendment is put down to find out whether it is. If it is, we want to safeguard against it by inserting this Amendment into the clause. I beg to move.

The provisions in Clause 6 of the Bill as drafted are designed to ensure a fair system whereby the industries can be ensured of stable collective bargaining procedures. It is based on the premise that any company, whether in the private or public sector, must be in a position to recognise certain unions and through them negotiate the conditions of employment of all its employees. We regard this as essential for a rational industrial relations policy. As Clause 6 stands, the Corporation are obliged to consult relevant trade unions about the establishment and maintenance of machinery for the negotiation of the terms and conditions of employment of its and its wholly-owned subsidiaries' employees.

The effect of this Amendment would be that an independent trade union, recognised for negotiation in respect of the terms and conditions of employment of a certain grade of the workforce, would not be able to negotiate with respect to all members of that grade but only with respect to its own members within that grade. On the one hand, this could mean that non-union members need not receive any of the benefits of those negotiations, yet on the other hand the Corporation concerned might feel it necessary also to negotiate with the nonunion members of a particular grade, either through an unrecognised association or perhaps even individually. Noble Lords might feel on reflection that their Amendment might not lead to the most stable collective bargaining arrangements. Different groups within the same grade would all be negotiating separately but concurrently with the Corporations. I hope that noble Lords might accept that there is no way that a Corporation could agree differing conditions of employment within a particular grade without ensuring considerable disruption of industrial relations.

The clause as it stands leaves the actual development of machinery for the Corporation to agree with relevant trade unions. There is nothing to stop there being different machinery for different grades and unions; similarly there is nothing to prevent the Corporations from not agreeing to particular machinery if the Corporation concerned considers that it would lead to undesirable consequences. For example, if the Corporation considered it undesirable there is nothing to make it agree to machinery which would give a particular relevant trade union the right to participate in negotiations over the conditions of employment of employees, none of whom were its members. I think I have explained as fully as I can the Government's reasoning behind this subsection and I ask your Lordships to resist the Amendment.

Perhaps I did not make myself quite clear. It may be that the Amendment is not particularly well drafted, but of course it was not our intention to suggest that within one grade non-members should not be negotiated for by trade unions. This is always done and it would be ridiculous that if there were non-union members in that grade they should be excluded from the results of the negotiation. This was not our intention. In putting forward this Amendment we were thinking about different grades that were not covered: that machinery should be laid down for the negotiation of terms and conditions for a grade other than the grade carrying out the negotiation. But there are categories of employees outside the negotiating unit whose method of negotiation would be determined by the trade unions mentioned—not the first set of circumstances which, I entirely agree, would be quite nonsensical.

I hope I said in the course of my remarks—and it might be worth repeating that particular section of them—that there is nothing to stop there being different machinery for different grades and unions. I have said that, and it may in part meet the point.

I think in the circumstances of the Minister's reply we prefer to withdraw the Amendment.

Amendment, by leave, withdrawn.

Clause 6, as amended, agreed to.

Clause 7 [ Formulation of the Corporations' policies and plans and conduct of their operations]:

12.41 a.m.

moved Amendment No. 100A:

Page 10, line 13, at beginning insert—
("Except in so far as it is satisfied that adequate consultation has already taken place having regard to the particular subject matter for inclusion in the plan.").

The noble Lord said: Here in Clause 7 we have come to the clause which lays upon each Corporation the duty to prepare annually a corporate plan. Let me say straight away that this is a duty which I fully support. It is absolutely right that the Corporations each year should prepare a corporate plan. But I do not know how many of your Lordships have had any experience of preparing corporate plans. I am glad to say that I have had no experience in actually working on the preparation of them but I have had experience as a director of a number of companies in considering them and trying to assess them. I can assure the Committee—and I am sure your Lordships will all feel this yourselves—that the preparation of a corporate plan for even quite a modest sized company is a substantial piece of work, if it is to have any validity to it at all, and for Corporations as large as the two Corporations we are discussing now it really is a mammoth task.

One of the difficulties about it is that if the corporate plan is to have any reality it ought to be based on assumptions which are as up to date as possible, and even in quite a small company—small at least in comparison with these large corporations—it is very difficult to prepare a corporate plan on assumptions which are made much less than six months before the beginning of the financial year to which the detailed plan will apply. Normally—and I imagine this is what the Government have in mind here—the corporate plan will be a long-term document which will try to show in considerable detail the parameters and performances expected in the immediate first year ahead and will try to set out in less finer detail the objectives and performances which are expected in years two, three, four and five. But if one is to have any real accuracy—and therefore force in helping management—in the corporate plan for the immediate year, where it attempts to set out in some detail the targets for the company, then it is important that it should not be prepared too long before the beginning of the financial year in question. I repeat that even with a moderate sized company this has to be done on assumptions which can be as much as six months before the beginning of that year. This clause lays this duty upon the Corporations and also lays upon them the duty to consult any relevant trade union.

I hope I have made it clear that I am very much in favour of consultation, but what seriously concerns me here is that if the management of these Corporations have got to prepare their corporate plans, but can only do so after consultation with any relevant trade unions, then they really will have to start the preparation of the plan and base the assumptions of the plan on data a very long time ahead of the financial year to which that plan is going to apply in detail. I believe that the Government must—I was going to say rub their noses in the reality of the difficulty. It is not any lack of wishing to consult, but the danger is that if we make the preparation of these corporate plans every year so enormously time-consuming by excessive consultation with everyone beforehand, then, indeed, we are going to run the risk that the corporate plans in the end will not be worth the paper they are written on. They will be self-defeating from every point of view, from that of Parliamentary control, management control, and indeed, from the point of view of creating that feeling in an organisation which comes from a feeling of success. Set your targets for a year and achieve them. If you set them too far ahead before you have the realities of the situation in your mind, you are liable to set false targets and you are lible not to succeed in meeting them.

Therefore, we are in some difficulty. Your Lordships will notice that my noble friends and I have two Amendments on the Order Paper, Nos. 100A and 101. Amendment No. 101 which was the first one which I and my noble friends put down, was proposing to leave out, for the reasons I have been describing, the whole idea of consulting any relevant trade union. But on reflection I had second thoughts, because if I can I want to try to reach a sensible compromise with the Government in this field. I understand the importance which they and the trade unions attach to consultation about all matters, including the preparation of a corporazte plan. I certainly fully accept the importance of getting the trade unions, as much as everybody else, committed to the corporate plan once it is made, so consultation is highly desirable.

The compromise I eventually thought out after much discussion with people in the industry and with my noble friends is expressed as well as we can express it in Amendment No. 100A. What we are really saying there is, "Yes, let there be consultation, but let us bear in mind all the other parts of the Bill where we have already written in consultation". I think this is what happens if you have consultation on everything. When the management come to prepare their corporate plan and the whole consultative process is going on in the Corporations as a network running through their whole management style and practice, in fact most of the things which go into the corporate plan will already have been the subject of consultation in some other context. Therefore, it would be unnecessary to go into another formal process of consultation all over again. That is why in Amendment No. 100A we are trying to limit the amount of consultation and perhaps therefore limit the amount of time taken for the preparation of the corporate plan every year.

So we say that, except in so far as it is satisfied that adequate consultation has already taken place, having regard to the particular subject matter for inclusion in the plan I think it makes it clear to your Lordships that with this Amendment we are trying to preserve the principle of consultation, but at the same time to seek the other great benefit; namely, that the preparation of the corporate plan should be as quick as possible and should not have to be started so far ahead of the beginning of the financial year to which it is going to refer as to make that plan less realistic and therefore less likely to be a good management tool, and less likely to set targets which the Corporation can succeed in meeting.

I should like to repeat that in moving Amendment No. 100A we are genuinely trying to reach a compromise which will preserve the important principle of consultation by making it somewhat more practical to achieve, without doing damage to the whole idea of corporate planning, which we think the Bill does as at present drafted. May I say in conclusion that I hope the Government will remember that this again is a clause which could not be debated at all on Report stage in the Commons because of the guillotine, and therefore is one of those which everybody agrees must be particularly carefully debated in this House. I beg to move.

I have at least two versions of the response to make to the noble Lord having heard his explanation. As a preliminary point, no doubt I will be advised that the Amendment is not adequately drafted for inclusion. But having heard his explanation, I think there is very little between us. I certainly agree—and I am sure that both the Corporations and the trade unions involved will agree—that it is important that the corporate plan be as up-to-date as possible; that it should be prepared without delay; that there should not be a whole new round of consultations on subjects already under discussion.

My doubt about the Amendment is that it puts the whole onus on the Corporation for deciding whether or not there has been adequate consultation; in other words, it is for them to be satisfied or otherwise, and there is no scope for the relevant trade unions to say that there may be some aspect of the corporate plan in regard to which they are not satisfied there has been adequate consultation. It seems to me that, as the noble Lord put it, in rubbing our noses in the reality of it, what the noble Lord wants to happen will be exactly what will happen under the Bill as drafted. The Corporations and the trade unions will be consulting regularly on a large number of matters, both those covered in the Bill and those which would normally be consulted about anyhow. The corporate plan will not involve a great new set of meetings with possibly different people on matters which are consulted about as part of a continuing process. Both sides will be anxious not to duplicate the work they are doing. The realities of the situation under the Bill as drafted will be exactly what the noble Lord and I seek to achieve.

Supposing this corporate plan was being drawn up in the early months of next year, what are they going to put in for expenditure? How will they allow for what will happen in Phase 3? There are many highly paid people, 95,000, I think, in one of the Corporations. The parameters are very difficult to set. It says, first, capital investment; it presumably means what you are able to generate internally from profit after tax. Secondly, research and development. There again, it is what you can make in profit, or at any rate it is strongly influenced by that. Capital expenditure in the public sector has to be sanctioned by the Government to make sure it is within the target set by the Government for the public sector. Wages would presumably come under the present incomes policy, Phase 3, since that starts in July. I think we are being unrealistic in asking them to draw up these things and discuss them with the unions before they start wage bargaining at all. Will they not give away what they have allowed for and what conditions they have set. Is it not weakening the hand of those who negotiate these very important matters?

12.55 a.m.

I do not think that to enter into consultations on things covered in the corporate plan would have the effect the noble Lord suggested. It would in fact strengthen the process we all want to see of the sharing of information and the increase in responsibility shown by both sides of industry when they mutually discuss the difficult problems which both Corporations will have to face. I would entirely agree with Lord Carr's welcome for the concept of corporate plans. It already takes place with nationalised industries as a matter of routine; the modern relationship between the Secretaries of State and the nationalised industries for which they are responsible. The innovation of the Bill is that we are putting into statutory form something which is standard practice with most of the nationalised industries. It will be difficult for these Corporations when they start up. There will he a process of getting things going, and it may well be that for the first few years or longer things will take time to settle down, but that does not detract from the usefulness of the process in which management, and unions, and Government will all be involved.

We were most heartened by the noble Lord's answer to my noble friend Lord Carr at the start. I felt that he was almost about to accept the Amendment as it stood. But after that he seemed to slide away from it. However, he paid tribute to my noble friend and they seemed to have a lot of mutual ground over the planning. Therefore, I wonder whether the noble Lord would consider this point in the way we have worded it, just to think about it at this stage, and perhaps give us an opportunity not to move it. I would be grateful if the noble Lord would think about this.

I attempted to make clear to the noble Lord, Lord Carr, that I thought that under the Bill as drafted what the noble Lord and I both wanted and expected to happen would actually happen, and the difficulty I saw in the Amendment, besides the fact that I am advised that it does not do what it says it does, is this concept of simply giving the Corporations the power to decide whether or not adequate consultations have taken place. Neither the noble Lord, Lord Redesdale, nor as yet the noble Lord, Lord Carr, have come back on that. I do not know whether they also would accept that this is the difficulty with the Amendment, and indeed whether they would accept that the Bill, as drafted, would provide the position which we both want to see. I am doing this simply because I do not want to say that I will take away and consider something when I have not a clue of the response on those two points.

Perhaps I can see whether I can move forward to get some mutual aid going in this matter. The opening words of my Amendment, which appear to be the ones which disturb the noble Lord because they seem to put the responsibility for deciding on the Corporation, were in fact chosen because I thought they would please the Government since they are the same words as the Government have written into the beginning of Clause 6:

"Except in so far as it"—
that is the Corporation—
"is satisfied that adequate machinery exists…".
I am doing no more than the Government were doing in the previous clause, so I thought I had a good precedent. That is why those words were chosen.

What I wonder whether the noble Lord would consider is this. I have to say to him that we are not happy with the wording as it stands at the moment. We wish to insert something along these lines, but I am not tied to these precise words and, as the noble Lord's preliminary view seems to be that he does not see anything objectionable in what we are seeking to do by the Amendment, I would ask him, without commitment of the outcome, to look at these words to see whether, with the aid of his advisers, he is able to return to us on Report with some different words which would overcome the main difficulty he has in mind.

If the noble Lord feels that he can do that, then no doubt he will wish to consider the rightness of the Government's own words, which are exactly the same words, at the beginning of the previous clause, and if necessary I am sure that both could be amended amicably on Report. If he would give that undertaking, we would spend the time between now and Report looking at the words to see if we could come up with any ideas, taking account of the difficulties to which the noble Lord has drawn attention. If we could reach agreement on that basis, I think that my noble friends would be prepared not to press the Amendment at this stage but to leave it there and return to the subject on Report when, with luck, we might have reached an agreed solution.

I am willing to go along with what the noble Lord suggests. I am not sure that the context at the beginning of Clause 6 is exactly the same and I see real difficulties in moving away from what is in the Bill, given that I think the Bill will provide the practical effect of what we both want to see, but I am willing to consider the matter between now and Report.

With that assurance, and remembering that we may wish to return to the matter on Report, I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

I should point out, in calling Amendment No. 101, that if it is agreed to I shall not be able to call Amendments Nos. 102, 103 and 104. I gather that Amendment No. 101 is not moved.

moved Amendment No. 102:

Page 10, line 13, leave out ("consulting") and insert ("seeking consultationg with").

The noble Lord said: 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.

On Question, Amendment agreed to.

moved Amendment No. 103:

Page 10, line 14, after ("union") insert ("or professional organisation").

The noble Lord said: I spoke about the insertion of the words "or professional organisation" when we discussed a previous Amendment. I beg to move.

This is the Amendment which I thought we were talking about earlier when I assured the noble Lord, Lord Lloyd of Kilgerran, of my support. We are now back in the area of consultation and out of the area of collective bargaining. I apologise that when we were talking earlier I overlooked the Amendment; however, I assure the noble Lord of my support on this one.

On Question, Amendment agreed to.

1.5 a.m.

moved Amendment No. 104:

Page 10, line 14, after ("union") insert ("and any other person who, or organisation which, appears to it to be representative of a substantial proportion of its employees or of those of any of its wholly owned subsidiaries.").

The noble Lord said: Here again, we are in the realm of consultation pure and simple and therefore we wish to move that we should insert the same words that we have inserted in other consultation clauses about the other bodies that ought to be consulted. I have explained this point before and there is no need to do so again. I beg to move.

On Question, Amendment agreed to.

moved Amendment No. 105:

Page 10, line 32, leave out from ("relate") to ("the") in line 34.

The noble Lord said: I think that it will be for the convenience of your Lordships if Amendment No. 106, which is on the same point, is discussed at the same time. The clause imposes wider obligations on the Corporation in respect of its corporate plan than have previously been imposed by Statute in the case of other nationalised bodies. Previous Statutes have normally required Ministerial approval of capital outlays but not of all the other matters set out in subsection (1). The provisions of the subsection are reasonable in themselves so long as the clause affects only the formulation of the plan and the period to which it is to relate. The requirement that the Corporation should in addition act on lines settled from time to time with the approval of the Secretary of State in the general conduct of its operations seems to give yet further and unnecessary sweeping powers to the Secretary of State. Here again, the Government seem to be going further than necessary and further than Governments have gone in the past.

I remind your Lordships that, at the Committee stage in the other place, the Minister, who was replying on an Amendment similar to the present Amendment, rejected it on some unusual grounds: these were that, without the words which the Amendment sought to delete, the Corporations might draw up corporate plans, agree them with the Secretary of State, but then do something entirely different. This seems an unusual thing for a nationalised Corporation to do and it did not seem a very real point. However, in order to restore any lost confidence that there may be in that context, Amendment No. 106 has been proposed. The Government's objectives in requiring agreed corporate plans would thereby be directly safeguarded without giving the Secretary of State the power to intervene in day-to-day management. So we think that the combination of the two Amendments would mean that the Secretary of State would not have unnecessary powers under Amendment No. 105, and that the unusual doubt that has been expressed by the Minister in another place is looked after by Amendment No. 106. I beg to move.

I confess that I am not entirely clear. Perhaps I can do a "Lauderdale" on the noble Lord, Lord Campbell o