My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords, following the consultants' review of water authority budgets in February, the authorities were asked to look at possible ways of moderating the increase in charges proposed for 1981–82. As a result, the total of water rates to be collected in England and Wales in 1981–82 will be some £91 million lower than had been planned.

My Lords, while congratulating my noble friend on succeeding in making water cheaper—as a slight offset, perhaps, to making whisky dearer—may I ask him whether the need for this kind of action by the Government is not a rather vivid illustration of the lack of machinery for consumer representation in the water industry?

That may be an interesting point to consider, my Lords, but we should have to look at the procedure that exists at present in the water industry, at what it was the Government did to try, if you like, to persuade the industry themselves—because it was they who called in the outside people—and the effect that that had.

My Lords, will the £91 million that is being saved be spread over the whole country or will some sections get a lot and the others get none?

My Lords, it will be spread over the whole of the country. It will of course vary according to each separate authority.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords, there will be consultations before the review is completed, and we are currently considering what form of consultation would be most appropriate.

My Lords, does the noble Lord recall, or does he have a note of it in his brief, that his noble friend Lord Trenchard told me on 22nd October that the Minister expected the report by the end of the year? His noble friend said then that it had taken rather a long time. Could the noble Lord say how much longer we shall have to add to that long time?

I am afraid I cannot be precise, my Lords, but I can tell the noble Baroness that it will not be very long.

My Lords, I was not clear from the Answer whether the paper will be published and whether we shall then have an opportunity to discuss it in Parliament as well as outside. If not, what is the procedure to be?

My Lords, the Government have not decided what form this document should take and how it should be published, but whatever we decide I have no doubt the noble Baroness will find a way of raising it in your Lordships' House.

My Lords, is my noble friend aware that the consumer councils attached to the nationalised industries are of vital importance? Having been a member of one, I know that the main way in which consumers of nationalised industry products can make their position felt is through those consumer councils. Is my noble friend aware, therefore, how vital it is that these councils should be kept in being, and will he take note of this point?

My Lords, I certainly agree with my noble friend that it is vital that nationalised industries should be made aware in the most effective way possible of the views of their consumers. It was with a view to improving arrangements for this that this inquiry was originally set in train.

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords, there are 56 units or other special facilities for the treatment of narcotic drug addiction within the National Health Service in the United Kingdom, including four units for in-patient treatment only. Other National Health Service hospitals may sometimes use beds for the treatment of drug misuse, but information on this is not available centrally. Information on the number of patients over the last 10 years is not available for all parts of the United Kingdom. However, the number of patients in England and Wales rose from an annual average of 1,104 in 1971 to 1,713 in 1980, an increase of 55 per cent.

My Lords, while thanking the Minister for that reply, may I ask him whether the number of deaths due to drug addiction is on the increase, and would he agree that the closure of any facilities for the rehabilitation of those with drug dependence must be a cause for national concern, in view of the limited number of facilities available for this group of people?

Indeed it is a cause for national concern, my Lords. The figures of deaths from drug addiction, I must stress, are available only up to 1979. The available figures show that there were 38 deaths from drug dependency in 1971 and 111 in 1979, the last year for which figures are available. Those include deaths where the cause or underlying cause of death is recorded as drug dependency—that is, from any drug, not only opiates or barbiturates but also analgesics and tranquilisers, including overdose cases.

My Lords, are the Government fully aware of the change in the nature of this dependency in the last few years, away from personal characteristics which would render particular people liable to become addicts, to the general stress and sense of loss of useful occupation, which has meant in many of the places where they have been cared for a need for greater attention to be paid to rehabilitation after the preliminary drying out has been secured?

My Lords, the Government are aware of that, and in the debate on an Unstarred Question in this House on 30th October 1979 that fact was made very clear by noble Lords who took part.

My Lords, has the success rate of the clinics been monitored?

My Lords, the success figures are monitored to the extent that one could say that a success rate of 30 per cent. could be thought to be a maximum in present circumstances, but it is an extremely difficult figure to calculate.

My Lords, how many units in the National Health Service are scheduled to be closed as an economy measure?

My Lords, so far as I am aware no unit is at present under immediate threat of closure. The noble Lord may be referring to the Ashdown ward of Bexley Hospital. That is under consideration now and I am glad to say that the regional health authority and the area health authority are trying to find ways by which it may remain open.

My Lords, the noble Lord was good enough to give the House figures of drug addicts who attend as in-patients in hospitals. Can he say, so far as the second figure is concerned, how many of them are patients who have already been in hospital, have been discharged and have had to return? I understand the difficulty one is in when talking about success, but may I ask the Minister to say, when he says it is estimated that the success rate is about 30 per cent., what aftercare and supervision there is, so enabling one to form some sort of judgment as to the yardstick which is being used?

My Lords, I think that the yardstick is an extremely difficult one. This is no more than a "guesstimate". With regard to the aftercare situation, I fear that I am not able to give the noble Lord an answer to the first part of his supplementary question.

My Lords, bearing in mind the great extent of the incidence of drug smuggling in the last few years, has the noble Lord any information regarding the apprehension of offenders in this light? Is this not one system that should be tightened up and brought under stricter control?

Yes, most definitely, my Lords; but that is beyond the ambit of this Question.

My Lords, would not the Minister agree that all the figures that he has produced are really "guesstimates", bearing in mind the vast number of people who are not registered drug addicts and who are not known to the medical profession or to ordinary members of the public as being drug addicts?

My Lords, perhaps I may refer to what my noble friend Lord Belstead said, as reported at column 363 of the Official Report of 30th October 1979, which is most relevant:

"Perhaps the most scientific indication that we have had of the possible size of this unknown grey area of narcotic addiction is contained in studies which were carried out by Dr. Hamid Ghodse into the drug problems dealt with by 62 London hospital casualty departments".

My Lords, can my noble friend give the House any reassuring figures? It is within my knowledge that the amount of drugs coming into this country has escalated enormously, possibly since the figures referred to were given. Does my noble friend agree that it is vitally important, through both the DHSS and voluntary organisations, to encourage the setting up of as many drug assessment centres and rehabilitation centres as possible? Does my noble friend also agree that some young people take to drugs more than they take to smoking or to drink, and this is harmful to their future? Will he please encourage voluntary organisations, as well as the DHSS, to set up as many drug centres as possible?

My Lords, with regard to the number of addicts, the number notified to the Home Office rose to 2,815 on 31st December 1979. Provisional statistics for 1980 show a continuation of the upward trend of the past few years. Of particular concern is the rise in the number of newly-notified addicts from outside London and the Home Counties. Provisional figures for 1980 suggest that such notifications are 41 per cent. up on the 1979 figures. With regard to the point about the clinics, I do not think I can add to what I have already said; but the Government are very well aware of the increasing trend of the figures.

My Lords, will the noble Lord agree that if the tax on alcoholic beverages were not so high, more people might be inclined to be satisfied with the mild stimulation of those beverages without being driven to buy drugs?

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

My Lords, Her Majesty's Government do not propose at this stage to increase the number of 33 districts and London boroughs which are currently designated for registers, but it is expected that the scheme will be extended later in the light of experience.

My Lords, I thank my noble friend the Minister for that Answer. In the light of the proposals of Her Majesty's Government for the use of vacant and under-used land, and bearing in mind the importance of the land registry offices concerned, is there any likelihood of difficulties arising from the fact that land registration is so specialised a profession that it is almost an esoteric mystery to the outsider? Will any obstacles to administration arise from the fact that, where land has changed hands a number of times, some of the land registry offices are in danger of becoming mausoleums of parchment?

My Lords, I should have thought that one of the objects of the legislation is to ensure that the mausoleums to which my noble friend refers are opened up and air is allowed in, so that one can see exactly what is available. With regard to the first part of his supplementary question, the scheme is in its relatively early days. Indeed, the registers are not to be published until April, and so we want to see what experience is gained after the scheme comes into operation.

My Lords, with the leave of the House, at a convenient moment after 3.30 p.m. my noble friend Lord Gowrie will repeat a Statement that is to be made in another place on International Computers Limited.

It may also be for your Lordships' convenience if I announce that dinner will be available this evening at the usual time.

It is proposed that the Committee stage of the Companies (No. 2) Bill be adjourned at approximately 7 o'clock for approximately one hour. The Committee stage of the Water Bill will be taken during the adjournment.

My Lords, on behalf of my noble friend the Leader of the House I beg to move the Motion standing in his name on the Order Paper.

My Lords, on behalf of my noble friend Lord Cockfield I beg to move that this Bill be now read a second time.

My Lords, I understand that no amendment has been put down either to this Bill or to the next three Consolidation Bills in my name on the Order Paper, and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee on any of these Bills. Unless, therefore, any noble Lord objects, I propose to move that the Order of Re-commitment in respect of each of these four Bills be discharged.

I beg to move that the Order of Re-commitment in respect of the English Industrial Estates Corporation Bill be discharged.

My Lords, I beg to move, for the same reasons as were given in regard to the previous Bill, that the Order of Re-commitment in respect of the Public Passenger Vehicles Bill be discharged.

My Lords, for the same reasons beg to move that the Order of Re-commitment for the National Film Finance Corporation Bill be discharged.

My Lords, for the same reasons I beg to move that the Order of Re-commitment for the Film Levy Finance Bill be discharged.

My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:

• Gas Levy Act,
• Consolidated Fund Act,
• Redundancy Fund Act,
• Industry Act,
• House of Commons Members' Fund and Parliamentary Pensions Act,
• European Assembly Elections Act.

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

had given notice to move Amendment No. 60:

After Clause 22, insert the following new clause:

moved Amendment No. 62:

Hear, hear!

I am much obliged to have that support. He indeed suggested that noble Lords who were opposing the Government's proposals were (to use his words) overlooking,

"perhaps naturally, the deficiences of the existing system".—[Official Report, 26/2/81; col. 1202.]

His use of the phrase "perhaps naturally" as an aside in all these circumstances would, if I had the time and real incentive, tempt me to indulge in a careful analysis of its likely significance. "Perhaps naturally" does not apply to me, because I am well aware of the deficiencies and the advantages of the register in the course of my experience in international trade mark matters. The noble Lord went on to say, however, that

"the Government recognise the reality of confusion in the current situation".

That certainly seemed to me to be a step forward. It may therefore be—and I am always an optimist—that the phrase which he used, "perhaps naturally", indicated that the Government may be willing to think again, perhaps quite naturally in the face of the furore aroused from and on behalf of industry in regard to their proposals to repeal this Act.

Confusion of trade names is of great commercial significance. This confusion can arise accidentally; and remarkable coincidences arise in the course of trade where a new company adopts the trade name of another one which has been in business for some time. I have personally been concerned with a large number of these cases; but the confusion is often caused deliberately and fraudulently. I think I can say positively that there is an international industry today where people set out to trade under names deliberately chosen to be like the trade name and trade marks of some well-known businesses. They deliberately set out to deceive and cause confusion so as to mislead potential customers into the belief that their goods are connected with the business of another person or firm. This is known as trading on the goodwill of another company, and is a well-known fraudulent business operation.

The business names register affords a source of information as one means of helping to limit confusion in the course of trade, as well as fraud and malpractices. I hope your Lordships will allow me on this important matter to go into some detail about the Registration of Business Names Act. Your Lordships may not, all of you, be familiar with it. I apologise if I take up a certain amount of time, but I have here in my hand—and I must confess an interest here—the 38th volume of Halsbury's Laws of England, edited by a Lord High Chancellor of Great Britain, the late Lord Simonds. It is dated 1962 and I am very familiar with it.

Your Lordships will allow me to say that I am the author of the several hundred pages in Volume 38 dealing with trademarks, trade names and design section. May I say at once that the book cannot be an authority because, under the legal jargon, a legal textbook can only be an authority if the author of it is dead. Now that I have confessed that I have in my hand a book largely written by myself, I am quite sure from the smile and the look of happiness on the face of the noble and learned Lord, the Lord Advocate, remembering his distinguished career at the Bar, that he is happy to find that he has another opponent who has written a book. We all at the Bar are delighted if we come on to a case where the opposing counsel is the author of a book. May I turn to page 627? I shall be brief about this.

Hear, hear!

This is a very important matter. If your Lordships' applause means that you are unanimously in my support then I shall sit down immediately; but I am not so sure that the applause was as great from the Front Benches of the Government; and it is to them and not to other Members of the House that I am directing my attention.

Under this Act, every firm having a place of business in the United Kingdom and carrying on a business under a business name which does not consist of the true surname of all partners who are individuals and the corporate names of all partners who are corporations, without any addition, must register with the Registrar of Companies. There is a similar duty to register imposed on every person having a place of business in the United Kingdom. The duty to register is also imposed on every company carrying on business under a name which does not consist of its corporate name without any addition—and so it goes on. There is a procedure for registration. It is very simple. The remarkable thing in this age is that the fees for registration and the fees associated with the registration are minute by present-day standards: £1 for registration; 25 pence for certain other formalities. It is about time that realism in some monetary sense was introduced into the finances of registration.

There are set out penalties for default of registration; and I say at once that there have been deficiencies in the system because there have been many defaults, hundreds who have not registered; and these have not been pursued. There is a penalty for false statements, for the disability of defaulters; and then it goes on to say how appeals can be made from the decision of the registrar—not to the High Court, the expensive High Court, but to what is known in the section as the "Board of Trade" but which is now the Department of Industry. Then there can be the removal of the name from the register by the registrar. It is a simple procedure and it should be self-financing. In my view, it would be simple to make it self-financing.

May I give another example which has not yet been raised where the absence of a business register of this kind can affect United Kingdom trade? It is desirable for a trader before selecting a business name or a trade mark to make a proper search through all the available sources of information to see whether he is free to proceed. Business names, therefore, are potential obstacles to proposed new trademarks, and clearance searches would be less effective if the functions of the business names register were to disappear. It would definitely increase expense and may increase delay and produce frustrations which could damage the export potential. Again, the absence of a business names registry would mean that large companies would have to maintain a watching service for new names—which is expensive and time consuming. The proposals put by the Government as to how they can deal with this problem are, in my view, quite futile. This would not help industry to keep down prices.

Several commissions or inquiries during the past 20 years have reported to the Government on this matter. There is the well-known Jenkins Committee on Company Law in 1962, which recommended the reorganisation of the business names registry by increasing the fees. Then there was the Mathys Committee in 1973 investigating trade names and trademarks, which emphasised that the services in the registry were of considerable help to industry. The gentleman who chaired this committee was a distinguished chartered patent agent and deputy chairman of Courtaulds. To conclude: to abolish the business names register will leave companies with virtually no protection against a new business using a name confusingly similar to their own, whether this name has been adopted accidentally or deliberately. Overwhelming commercial arguments for retaining this registry have been presented to the Government. I urge the Government in the strongest possible terms to reconsider their proposals. I beg to move.

I should like to support the noble Lord, Lord Lloyd of Kilgerran, in moving this amendment. It is a paving amendment for the deletion of Clauses 28 and 29 and the substitution of Clause 29 by Amendment No. 102 and also for Amendment No. 158, which deletes the reference to the repeal of the Business Names Act. The noble Lord, Lord Lloyd of Kilgerran, has given a lawyer's point of view of the effect of the abolition of the registry. I think it can be said clearly that if the registrar is abolished there will be no central register of unincorporated businesses. This means there will be no access to information about a business other than from the business itself. The point has been made already that there is no reason why the registry should not become self-financing, and there have been many indications from businesses themselves that there would be no objection to a considerable increase in the size of the registration fee and a considerable increase in the amount of search fee which at present is only five pence and could easily be substantially increased.

One may well ask why the Registry of Business Names is so important. One comes to look at the sort of problems which the consumers face. For example, one can take the case of somebody who has paid a deposit of £100 for the re-covering of a three-piece suite. This is an actual case reported by the Consumers' Association. When the customer returned to the shop the shopkeeper said that the business had changed hands, that he had no record of the deposit and would not accept the previous owner's receipt. The shopkeeper demanded full payment for the work before he would return the suite. The customer appealed to the local consumer advice centre who consulted the Register of Business Names. This enabled the customer to prove that the business was still owned by the same person. The customer was then able to take action to get her suite back in return for payment for the work, less a deposit. This is the sort of case which is well documented, where there is very real use for, and protection for the consumer provided by, the existence of the Registry of Business Names.

Great concern has also been expressed in many other quarters that people register a name, such as the name of a whisky, and then use it as a trade name. This can cause great confusion and many problems. We know that in the past there has been a low level of compliance with existing requirements of the registrar, but this has been considerably improved over the past few years now that banks demand that registration certificates be produced by those opening accounts. I understand that the level of compliance is up from some 50 per cent. to 80 per cent. I do not wish to take too long in speaking in support of the noble Lord, Lord Lloyd of Kilgerran, but I am sure that the proposal to retain the registry is something worthy of the support of this House.

The noble Lord, Lord Lloyd of Kilgerran, has said that this is an all-party amendment. Certainly I am speaking from these Benches with great conviction and experience in this subject, having been a chairman of the Consumer Council. I can also speak for the noble Viscount, Lord Hanworth, who unfortunately could not be here. He and I were together on the original Consumer Council and I do not think that he would disagree with anything I have to say. In this amendment, and on this occasion, we have a group of all-party people. How many people on this side of the Committee are going to support me I cannot tell until the vote, but I am speaking with absolute conviction when I say that I do believe that what has been said by the noble Lords, Lord Lloyd of Kilgerran and Lord Ponsonby of Shulbrede, is absolutely correct.

Since the Second Reading, when I spoke on behalf of the Consumer Council, I have received a mass of correspondence and information from a variety of societies; from the consumer groups, of course, because they were the ones I was speaking for—but also from the Law Society, complaining about the abolition of the Register of Business Names. I have also received documents from the Consultative Committee of Accounting Bodies, from the CBI, from a company named Dun and Bradstreet which is a firm dealing with business information services. There are a great many organisations deeply concerned about this.

The Consumer Association runs a service based on giving help and advice to people with consumer problems, and at least half the inquiries which come before it have involved tracking down the company through the Register of Business Names. Another point is that a great deal of direct selling goes on involving goods bought by the consumer direct from a small company or trader, and, without the Register of Business Names, certain transactions could not take place. If the trader is dishonest the only way that the consumer has of tracking down the company is through the Register of Business Names. I believe one of the most important things of all is that anybody who wishes to start or run a small business and who wants to open a bank account has first to obtain a registered number. All these things are absolutely necessary.

I think it is quite unnecessary for this service to cost the Government any money at all. The noble Lord, Lord Ponsonby of Shulbrede, has pointed out that only a ridiculously small sum of money is asked for at the present time. I would say that this register is so important that an assessment should be made of what it really costs, and any company that wishes to be registered and wants to open a bank account would be able to do so if it pays the fee. If we all had to pay, as we do now, £70 to licence a motor car, I am perfectly certain that most people would pay for a licence for their business without any difficulty at all.

I should like to quote from two letters, the first from the National Federation of Consumer Groups:

"We represent voluntary consumer groups in towns throughout the country, whose members are well aware that it can be extremely difficult but absolutely crucial for an individual consumer to find out who is the responsible person in a firm with which he or she is in dispute. It must be made as easy as possible for consumers and for those who act on their behalf to enforce the rights which have been given to them in both civil and criminal laws. While this register is by no means perfect, abolishing it would not improve the situation. We would very much like to see it centralised using modern technology, made self-financing and enforced".

Another letter I have received makes the point:

"If it were not for this register, there would be no central register of unincorporated businesses. There would be no access to information about a business other than that available from the business themselves, yet objective information is vital to trade creditors in protecting themselves from the risk of dealing on open credit terms with a business they know nothing about".

I do not think that this need cost the Government anything if they will look at it in a perfectly straightforward manner and charge people what it is going to cost. Certainly I think that anything which makes it impossible for honest people to deal with dishonest traders is something we should not allow. If we do insist on this and improve it—and of course there is room for improvement—it will provide a vital service to both consumers and traders, and to the whole business conception in this country. I hope very much that all will support this amendment and that we shall not do away with what is a vital matter.

I shall take only two minutes. It must be realised that this on no account imposes a burden on small businesses. If that argument is being put forward, it does not hold water. Somebody who knows a little about the commodity market and the modern use of telex will know that that can—as it does in the case of commodity prices—increase the word of a man; his word in a telex, and on the telephone internationally, is his bond. It makes it much easier to maintain the integrity of companies when the register is there and available as it has been up to now. Anyone who has listened to BBC radio on Monday morning will have heard the Checkpoint programme, which looks into fraudulent cases all over the country in which cowboy firms, without setting up business names and everything else, diddle people and destroy their happiness, sometimes even leading to suicide; these are people of small means who have been involved with bogus companies. I hope to heaven that the noble Lords opposite do not see this as a piece of "clean legislation" which will improve business. Here they can help by insisting that the register is kept. I said that I would take only two minutes and I have!

May I first deal with the amendment which the noble Lord, Lord Lloyd of Kilgerran, has moved and then come to the more general point of the register itself, which really hes at the heart of the noble Lord's amendment. The amendment itself would involve an enormous extension of the controls on names which have been applied in the past under the Companies Acts and the Registration of Business Names Act. It has never been unlawful, nor indeed has it ever been considered undesirable, to allow a company to be registered by the name of an unincorporated business. The index which the registrar maintains at present, and against which the names of new companies are checked, includes about 860,000 entries covering the names of those bodies which it is proposed in future to cover in the statutory index. This index has never included business names registered under the Registration of Business Names Act, of which there are now some 2,600,000.

A business name is no more than a trading convenience. Throughout the country there must be countless instances in which different businesses are trading under the same name. For example, the Castle Tea Shoppe or Phoenix Garage. The Registrar of Business Names has power to refuse to register an "undesirable" business name, but has never held that a name of this sort is undesirable simply because it is already in use. The broad purpose of the Registration of Business Names Act 1916 was to enable the public to identify the true owners of a particular business, whatever the name it used. It was not, and has never been, the effect of that Act to preclude two businesses from using the same name.

In the same way, there has been no legal obstacle to the registration of a company by a name on the Register of Business Names. There is no cross-check between the two indices. The name of a company, on the other hand, identifies its corporate personality. As such, it is important in legal processes and the registrar has always sought to secure that no two companies are registered by the same name, and under the Government's proposals this will be prohibited by the combined effect of Clauses 22 and 23.

I am afraid that the noble Lord's proposal would be quite impracticable without considerable investment and extra staff. To start with, it would involve a combination of the existing indices of companies and of business names, to produce a massive index of upwards of 3½ million entries. Thereafter, the noble Lord is proposing that on a continuing basis the user of any business name should be required to send it to the registrar. How could such an obligation be enforced in the absence of a registration requirement? Even under the present system, we know that the Register of Business Names is largely defective. The outcome would be a vast and unreliable index. It would severely restrict the area within which companies are free to select their names and it would not serve the purpose of either of the registers which are at present maintained.

The noble Lord, Lord Lloyd of Kilgerran, made it clear that the amendment relates only to the names of businesses within the meaning of the Registration of Business Names Act; it does not require that that register be maintained. The present Registry of Business Names does not seek to avoid confusion. Many names are duplicated, as I have already said, solely to identify who owns which business. It must not be confused with the Companies Registry or the Trade Marks Registry. Putting all these names on the companies register would merely confound the position.

May I turn now to some of the more general points in relation to the Register of Business Names? The reason for closing the registry is that since its operation cannot be made wholly effective under legislation, the Government, in assessing their priorities, have decided that it is preferable to admit this fact and, by the closure, save 65 staff and put public spending in line with Government policy to reduce their demand on national resources.

Clause 28 defines the circumstances in which persons will be considered to be carrying on a business under a business name, and specifies the conditions under which certain business names cannot be used without the approval of the Secretary of State. The Government, while believing that a central registry can no longer be maintained, recognise the need for details of the ownership of a business, particularly for the purpose of legal proceedings, to be available to the public. A consultative document published by the Department of Trade in April 1980, accordingly proposed that a new legal requirement should be introduced; namely, that the names and addresses of the proprietors of businesses carried on under a name other than that of the owners should be displayed at the place or places of business and on business communications. In addition, customers should be given a legal right to require such information in writing in cases where they would not normally have access to the firm's place of business; for example, in the case of doorstep sales.

My noble friend Lady Elliot made a number of points, particularly on the financial implications of these proposals. Other noble Lords (I think the noble Lord, Lord Ponsonby) referred to the possibility of putting up the cost of the present registration arrangements. That matter was also referred to at Second Reading. Several noble Lords have suggested that if the charge were raised to, say, £6 or a higher figure, that would cover the present costs. So it might; but the fact is that the scale of operation which is presently relied upon is wholly inadequate. I have referred to the number of staff who are presently employed on this business. The fact of the matter is that if the system is to be made effective, we should have to increase the number of staff very substantially. Thus the figure of £6 or so, to which noble Lords referred, would be wholly inadequate to cover what we believe would be necessary if the scheme, as noble Lords envisage it, were to be made to operate on the present basis.

It is the case that 40 per cent. or so of the entries in the present Register of Business Names are thought to be defective for one reason or another. If we were to eliminate all those defects, that means something upwards of 1 million of the present entries would need to be investigated, their errors rectified and, if necessary, the perpetrators of those errors taken to court. Is it really thought that the cost of all that operation should be placed upon the shoulders of the small businesses involved? Remember, we are dealing only with the owners of small businesses who are trading under names other than their own. It is the case that the Register of Business Names has never sought to be a comprehensive register of unincorporated businesses, it is only a register of unincorporated businesses trading under a name other than that of the proprietor himself. The suggestion that we are doing away with what is a comprehensive register is not one that can be sustained. I believe that these difficulties and drawbacks are sufficient to justify the Government's policy in this matter, and I hope that your Lordships will reject this amendment.

May I pick up a point raised by the noble Lord? On the basis of 65 staff it would appear that the average staff costs would be, approximately, under £500,000. In 1980 there were 144,504 new registrations. On that basis, a fee of £3·50p would cover the staff costs, and that is not taking into account any additional income from inspection charges which could raise a considerable additional amount.

The noble Lord is no doubt quite right. The present level of staff could be covered in terms of cost by increasing the fee to £4 or £5, whatever the figure may be. What I have endeavoured to explain is that the present level of staff is wholly inadequate for the purpose which we see as being contained in the thoughts of the Opposition in this matter. They seek to maintain this register as it is—as an effective register. I have sought to suggest that the present register is not effective. At least 40 per cent. of the present entries are believed to be in error in one way or another.

The noble Lord, Lord Ponsonby, referred to the case of somebody who had paid a deposit on the repair of a piece of furniture. When he took his receipt back to the shop, the shop had changed hands and it was not possible to locate the old owner because the new owner disclaimed reponsibility for what happened to the deposit. Under our proposals, the receipt which the householder had received for his deposit would bear the names of the previous shop owner. Thus it would be unnecessary to institute a search at the Register of Business Names. If our proposals had been in force at the time the affair, which the noble Lord related, occurred, then that customer would have been much better protected than he was.

I do not propose to keep the Committee much longer in view of the important business to follow, particularly as, when moving the amendment, I addressed the Committee at length. The reply from the noble Lord the Minister once again emphasised that the Government do not fully appreciate the value of the registry's function which I outlined. We have talked about fees and administration. The administration, as was so ably pointed out by the noble Baroness, Lady Elliot of Harwood, can easily be done under modern technology, which would save an awful lot of time, trouble and staff. I could not understand the Minister's reference to certain figures but, if I may detain the Committee for a few moments more, I understand that a number of new registrations in the Registry of Business Names dealt with so ably by the registry in 1980 was of the order of 144,000. That was an increment of about 7.5 per cent. over the previous year. The number of changes that arose as a result of the operations of the registrar were just over 5,000. The number of cessations was 4,000—

I wonder whether the noble Lord would allow me to intervene? He referred to, I think, 5,000 changes of particulars recorded last year. I referred only to the fact that there were 2,600,000 entries. Is the noble Lord really suggesting that only 5,000 of those had changes to report to the registrar?

I am not sure whether I can answer the noble Lord the Minister on that. All I know is that they made in that year 5,000 changes. The registrar must have considered, and indeed certainly did consider, the large number of names that were on the register at that time: he must have done in order to make those changes in relation to the new registrations. Again, he issued 50,000 copies of certificates; there was an inspection of 34,000. Therefore the total activities in regard to copies of certificates and inspections were of the order of 100,000. This is quite a large matter and therefore the operation of this business registry cannot be so difficult to administer as the noble Lord has suggested. I do not propose to delay your Lordships any further, and I beg to press the amendment.

I beg to move that the House do now resume.

My Lords, with the leave of the House, I should like to repeat a Statement being made in another place by my right honourable friend the Secretary of State for Industry, on International Computers Ltd. My right honourable friend's Statement reads as follows:

"With your permission, Mr. Speaker, I wish to make a statement about International Computers Ltd.

"The House will be aware that the Government is a user on a substantial scale of ICL computers with equipment to a value of more than £300 million supporting vital operations in some 20 departments including defence, revenue assessment and collection, agriculture, health and social security. Because of this dependence upon ICL's products we have therefore shared the concern expressed by the company's chairman at the annual general meeting on 3rd February about the deterioration in its tradign position. In reporting the results for the year ta 30th September 1980 he indicated that there had beeo a sharp drop in profit in the second half of that yern, that the company was currently trading at a loss and that adverse trading conditions could continue well into the current year. However, given a revival in markets, the chairman said that ICL expected a significant improvement in the profitability of its operations.

"The trading position of the company is of course essentially for its management, its shareholders and its bankers and it is to the banks that ICL looks primarily to maintain its credit facilities on a world wide basis. However, the Government have a special interest in ICL as a substantial customer for its products. To protect this special interest we have, therefore, given a positive response to a proposal that the Government should provide a limited, temporary measure of support for ICL. This support for ICL, in addition to a contribution towards R and D which could be available under existing criteria, should give the company the chance to review its longer-term business opportunities. I am glad to be able to say in this context that the company's principal banks are continuing their support for the company in an amount of £70 million.

"I therefore intend to seek from the House at the earliest opportunity its authority to provide a guarantee for further facilities to be provided by banks for ICL under Section 8 of the Industry Act 1972. The terms I will be proposing to the House will be for a guarantee of up to £200 million for a period of up to two years. Such a guarantee will not lead to any public expenditure unless it is called. I emphasise that it will be a limited amount and for a limited time".

My Lords, that ends my right honourable friend's Statement.

My Lords, I thank the noble Earl for the Statement and, given the facts as set out in it, the Government would seem to be taking the right decision. I am sure that the House will be especially interested in this decision as another case when the non-interventionist dogma just does not fit in with the realities of the modern world. May I ask the noble Earl to refresh our memories of the date on which the National Enterprise Board were instructed to sell their interest in ICL; and, with hindsight, may I ask him—I am sure he will think it is a fair question—would it not have been better for this support to have been provided by the NEB? Is that not what the board was for?

May I also ask the noble Earl whether, in making this not inconsiderable sum available, the Government have satisfied themselves about the future strategy of the company? Is there, for example, any question of collaborating with any other companies, perhaps in Europe? Finally, arising out of that last question, if this Statement is to be taken as a proof, and a welcome proof, of a determination to maintain a United Kingdom position in this modern, high technology growth business can we take it now that there is no question of allowing American companies to take a dominating interest in ICL?

My Lords, while we also welcome this Statement, and the continuing support that it affords for what we consider to be an essential national enterprise, should it not have been accompanied by some admission on the part of the Government that the number and the scale of the commitments which they are now making to rescue industry from the consequences of the Government's own policies are incompatible with past declarations that they have made, such as that of the right honourable lady the Prime Minister on 21st April last, when she said:

"Loss makers must be free to do what is needed to get rid of their losses"?

Does the Minister also recall the Prime Minister saying that it was assumed that no large enterprise could be managed successfully without the help of the State?

Is it not true that as a result of the Government's policies and, particularly, their maniac adherence to high interest rates and the unrealistically strong pound, most of the key industries of this country are, in fact, bleeding to death and requiring the kind of help which the Government are now forced to announce? Where they have not plummeted into the red since monetary extremism began to rule, have not many companies been forced to reduce their research and development staff and to close laboratories in a desperate attempt to cope with their cash flow problems, so that when the recession comes to an end it will be that much more difficult for them to recover against the competition which they face from the United States and Japan?

When are the Government going to start listening to the cries of agony that are arising from the industrial heartland of this country, and recognise that unless there is a prompt and substantial reduction in interest rates, accompanied by a lowering in the value of the pound, there will have to be many further rescue operations of this kind, with the result that the public sector borrowing requirement will not be under control, but will be incalculable because of the scale of commitments, such as the present one, which they will have to enter into?

Is it not highly damaging to a company such as ICL to persist with a policy of indiscriminate cuts in public spending, which means that, while it is being made impossible, because of the strong pound, for the company to compete overseas with the Americans and the Japanese, the orders which were the vital basis of their prosperity in the home market have dried up? So should not Government departments be given authority during the present recession to increase their orders for computers, so that, first, companies such as ICL which are in the business of information technology—which is, after all, an essential business of the 21st century—are in a position to compete once we emerge from the recession; and, secondly, the public administration would benefit from the use of computers which ICL could provide? I have in mind my noble friend's Registry of Business Names, which is a perfect example of where computers can help.

What is the contribution towards research and development which is mentioned here? Is this an industry Act provision? Has ICL submitted proposals for assistance under that Act and, if so, how much has it asked for, on what date and when do the Government expect to reply? The guarantee is for £200 million compared with the borrowing of the company, at the moment, of £70 million. Is it, therefore, anticipated that the cash flow of the company will deteriorate to the extent of £130 million during the current year? Finally, may I ask the Minister whether the company is now in a position, as the chairman hoped at the annual meeting, to sustain as far as possible levels of investment in key areas of business, so that they can remain competitive and be in a position to respond when demand returns?

My Lords, perhaps the noble Lord, Lord Beswick, will forgive me if I take the questions in reverse order, as it were, as the noble Lord, Lord Avebury, asked me so very many. I cannot tell the noble Lord, Lord Avebury, about the applications by the company for research and development assistance outside this contingency rescue fund. If I may, I will write to him about that, or if he cares to put down a Question for Written Answer and the House is interested I will, of course, answer that.

On the general issue, I think that both noble Lords are, perhaps, overstating the position a little. The bankers of this company, which has been affected strongly by the world recession and the fact that, inevitably, expensive investment in hardware suffers during a recession, are prepared to continue funding the company to the degree of £70 million. But this was not sufficient. The Government's contingency reserve for this purpose will cover the needs of the company during this limited period.

I cannot accept the arguments about monetary extremism because they are so circular. The noble Lord, Lord Avebury, wishes us to bring down interest rates and thereby, by proxy, the pound; but simultaneously he wishes us to borrow more money. Those two things are not compatible. The more money which the Government borrow, the higher interest rates are liable to be and the higher the pound is liable to be. Obviously the company has been hit, as other companies have been hit, by high levels of sterling, though it is the lower demand for orders which has probably hit them most. I do not know whether the noble Lord, Lord Avebury, has suggestions to make to us as to how sterling should artificially be brought down, but it would involve Government expenditure on a quite massive scale. I do not see how one could equate that with aid to companies or lower interest rates.

The noble Lord, Lord Beswick, asked me whether it would have been better to keep this company in the hands of the National Enterprise Board. I do not accept that. We are not yet clear whether this contingency fund will be called on, or to what extent. I am glad to be able to say that the company has placed major orders internationally in the last few days. It may be that it will be able to pull itself up by its own bootstraps, so to speak. We should all wish to see that.

Both noble Lords were interested in our continued commitment to high technology industries. Of course I am happy to say that we have made such a commitment. This is clearly the way that industry in this country must go. It is because we are so heavily involved in this particular industry as a purchaser that we have made the facility available. I would say to the noble Lord, Lord Avebury, that the Government are, as the Statement suggests, still placing major orders with ICL, and that can only help its position.

Finally, the noble Lord, Lord Beswick, asked me about any foreign involvement in the country. No one to my knowledge has expressed an intention to make an offer for the company. If there were to be any approach, our attitude as the Government would depend upon the particular circumstances, the nature of the approach and, of course, upon where any such approach came from. I shall have to rest on that.

My Lords, I asked the noble Lord a specific question as to the date upon which the NEB was instructed to sell its interest in this company. Looking back, is it not inconceivable that the Government did not know of the difficulties which would arise in a business of this kind where investment is so high and where lead times are so great? In the circumstances, would it not have been advisable to have left it with the NEB? Does not the noble Earl recognise that in an industry of this kind one has to have Government involvement?

My Lords, the date which the noble Lord is seeking is December 1979. At that time the company looked very healthy. However, as the noble Lord is well aware, the recession has deepened since that time and the position has deteriorated since then.

My Lords, may I press the noble Earl? There is a case on major national grounds for getting some European industry into this computer business. If there is to be any collaboration, is the noble Earl telling me that there is to be no endeavour to find a suitable European partner?

My Lords, the future is all before this company. The noble Lord is going too fast for the Statement. The Statement refers to the provision by the Government of a limited amount of funds for a limited period of time to ease the company over a severe cash flow problem. The Government are doing that for this particular company because of two things: first, as I said to the noble Lord, Lord Avebury, because of our commitment to high technology industries, and secondly because we are substantially involved in this company as a major purchaser and placer of orders in a number of sensitive areas, including the revenue and defence areas. That is the reason why we have made available this contingency liability. What happens now that the acute cash flow difficulties of the company have been eased is a matter for the company, though of course the Government will take a very close interest in any suggestions which are made to them.

My Lords, is the noble Earl aware that the traditional method for regulating exchange rates throughout the 19th century and, indeed, this century has been through variations in interest rates? If the Government really wish to bring down the exchange rate, the normal method is to bring down very substantially the interest rate, which makes the country a less good place to lend in and a better place to borrow from. Is the noble Earl also aware that there is nothing whatever in the Government's argument that a higher public sector borrowing requirement requires higher interest rates, because that is offset by higher private sector lending requirements, which bring down interest rates. All the historical evidence tends to suggest that the times when the nation's borrowing requirements were highest—as, for example, during the Second World War—were the times when interest rates were particularly low and when medium and long-term borrowing took place at very low rates.

My Lords, during the Second World War, as the noble Lord with all his experience is well aware, the world was not awash with "hot" money looking for favourable rates of return. If the Government increased their borrowing at the present moment in time and in present market conditions, they would have to compete in the money markets of the world for that money. At the moment the prime rate in America is, I think, 18 per cent. That would be very uncomfortable competition in which to have to engage.

My Lords, are the Government supporting this company also by using their very considerable influence throughout the public sector by securing that bodies in the public sector place their purchases with a British computer manufacturer and not overseas?

My Lords, the Government not only are doing this but have been doing it for some considerable time. It is because the Government are so involved in this company as a purchaser or placer of orders, as I said, that they have made available this tide-over provision.

My Lords, would the Government bear in mind, in applying their policy, that however desirable it may be to maintain a strong British-based company in this industry, there are a number of overseas-owned companies with substantial manufacturing operations in this country which give considerable employment, notably in a number of the regions?

Yes, my Lords, I am well aware of that.

My Lords, I thank the noble Earl.

moved Amendment No. 62A:

We can see the merit of this amendment which the noble Lord has proposed and we should like to consider it further.

I am very much obliged to the noble and learned Lord the Lord Advocate for agreeing to consider this amendment, and, in those circumstances, I beg leave to withdraw it.

moved Amendment No. 63:

Page 30, leave out line 40 and insert ("do not appear to the registrar not to have a place of business in Great Britain.").

I should like to question the noble Lord a little on this amendment. If this amendment is carried in the form in which it is now set down and the entire line 39 is eliminated—because that is what the amendment says, "leave out line 39".

No, line 40.

I am sorry, but I have line 39 on my Marshalled List. I refer to page 2 of the second Marshalled List of amendments, where it says, under Amendment No. 63,

"page 30, leave out line 39 and insert ('do not appear to the registrar not to have a place of business in Great Britain')".

If those words as printed are inserted in the text of the Bill, with the greatest possible respect, the subsection makes no sense at all, aside from the question of the double negative which has already been referred to.

I may be able to help, because in the first Marshalled List it was line 40 and not line 39. There is quite clearly a printing error of some kind.

I apologise to your Lordships for the slight pause. I hope that the main substance of my amendment made some sense but we are grateful for the detailed scrutiny given by the noble Lord, Lord Bruce, and indeed the eagle eye of the noble Lord, Lord Lloyd of Kilgerran. I understand that it might be in order if I ask leave of the Committee to amend the Marshalled List, because I understand that it is a misprint and that if the amendment were amended to read "page 30, leave out line 40", as I have on the amendment, then I hope what I mentioned to the Committee would make some sense.

Withdraw Amendment No. 63!

In view of doubt about the line number, I beg leave to withdraw Amendment No. 63.

I beg to move as a manuscript amendment that Amendment 63 on the Marshalled List should read "page 30, leave out line 40 and insert"—the words as printed. I beg to move.

I hope I am not detaining the Committee, but I rise only because I am looking at line 40 and I am trying awfully hard to delete line 40 and make sense of this amendment. I find myself confused beyond confusion. I am perfectly sure that the noble Lord, after further reflection, will wish to withdraw the amendment that he has now moved after having withdrawn the amendment that he previously moved.

I am afraid we are too late at this particular stage, but if the noble Lord, Lord Mishcon, were to examine the amendment that I moved and were to insert the words which are in the Marshalled List at the end—to delete what is now in line 40 and to insert the words in the manuscript amendment—I think then the particular paragraph would make some sense because the paragraph would read,

"and which do not appear to the registrar not to have a place of business in Great Britain".

That is the double negative and that is very much the gist of the main amendment that I moved.

Would my noble friend help me by reading out the words which it is proposed to delete because in my copy of the Bill the figures "40" are opposite a blank space neatly equidistant between subsections (2) and (3). I am genuinely at a loss to know whether my noble friend is conducting the sleight of hand of leaving out a blank space or whether he is leaving out some words, and if so, what are the words?

Is my noble friend referring to the Bill or the amendment?

To the Bill.

I think there are different prints of the Bill. The Bill I have been working from tallies with what I have moved this afternoon.

Would the noble Lord read out the words he wants to leave out?

Yes, certainly. The words I want to leave out are:

"for the time being carry on business in Great Britain".

Perhaps it would help if I read subsection (2):

"In subsection (1) above 'oversea companies' means companies which have complied with Section 407 of the 1948 Act (delivery to the registrar of statutes of company, etc.) and which for the time being carry on business in Great Britain".

The amendment I proposed was to leave out the words,

"for the time being carry on business in Great Britain".

and to substitute,

"do not appear to the registrar not to have a place of business in Great Britain".

I hope my noble friend was here when I explained that double negative and explained that the registrar might well not be able to ascertain whether an overseas company had ceased to have its place of business in the United Kingdom.

Would the noble Lord for final clarification refer to Amendment No. 63 as it is in the second Marshalled List? He will find that there are brackets round,

"do not appear to the registrar not to have a place of business in Great Britain".

Will he confirm that in the amended form the brackets will no longer appear as they appeared in the original Amendment No. 63? Will he note that there has evidently been some confusion about this?

I think it is the arrangement with every amendment we move that we do put brackets round the quotation which we seek to insert. I am sorry if I did not read out in my amended amendment that the brackets should be there, but I hope it is taken that they should.

My attention has been called to the situation which seems to create the difficulty. I do not know whether the Committee knows that all the numbers on page 30 have slipped; 5 should be 6, 10 should be 11. They have slipped down, and I think this is the cause of the difficulty.

moved Amendment No. 67:

Page 31, line 14, leave out ("twelve") and insert ("four").

The particular power that we are discussing at the moment is the power of the Secretary of State to give a direction. We are not dealing with the time within which the direction must be complied with. That, unfortunately, was misprinted. We intend to leave that as it is, and a later amendment will correct that, as six weeks instead of six months. That was a misprint. But the power we are considering just now was deliberately altered from the present period to 12 months for the purpose of giving added protection to companies on the register. The reason for that is that, if the company has been put on the register the circumstance will normally be brought to the attention of the Secretary of State by the company that has been disadvantaged by the second registration. It may be some time before they get round to noticing that a registration has been entered. It may be a registration that has not been greatly publicised, or the company is a small one in a different part of the country. The company may not notice that its name has been copied by another, and it is in order to give more time for that that this period has been extended. Practical experience has been that very often these applications from disadvantaged companies come in after the present period has expired. It seems a beneficial change, therefore, in the sense for which the noble Lord was arguing, that this period should be somewhat extended.

It does not seem that there is any support for my amendment. In view of what the noble and learned Lord has said, may I reconsider the situation and look at it again at Report stage? I beg leave to withdraw the amendment.

had given notice of his intention to move Amendment No. 68:

Page 31, line 15, leave out ("six") and insert ("two").

moved Amendment No. 69:

Page 31, line 16, leave out ("months") and insert ("weeks").

I hope that I shall not be accused by the Committee and certainly not by the Front Bench opposite, of making cheap debating points. This is not meant to be that type of point at all. However, I want to point out to the Committee again the really clumsy thinking—and I must be forgiven for using the phrase—as regards the way in which the extremely important provisions in Part II have been dealt with.

I raised the question of the six months period during the Second Reading debate on this Bill. I said that I thought that it was unconscionable that six months should be allowed, or, as stated in the Bill, such longer period as the Secretary of State might specify. There was a speech in reply by the Government. In the circumstances, whether or not the Minister had even read the Bill, I am doubtful if there was an actual misprint because no explanation was given in the winding-up speech that it was in fact a misprint and that therefore the point that I had rather labouredly made was an empty point since we were merely dealing with a misprinted clause. It is regrettable, and I am only pointing out to the Committee that we must be extremely careful about these provisions on business names and companies because not a great deal of thought has been given to them—that is obvious.

I hope that I shall not be accused either of pedantry if I say how unhappy, it seems to me, is the way in which this Bill has been presented. My noble friend will recall that I made this point on Second Reading. We were presented with a number of misprints and erratum slips. Now we have reached the Committee stage and find that a really quite important provision has been misprinted and has reached this late stage before being spotted.

I do not want to take an unkind point either, but it has really been noticeable that, in particular in documents emanating from the Department of Trade, the errors are becoming very frequent indeed. We had a statutory instrument last December to which I invited attention—namely, the Companies' Charges Order—where a vital point was misprinted as to the day it was presented to Parliament. I would ask my noble friend, who now I am very glad to say has responsibility in that department, whether he will indicate that it is not treating Parliament properly to produce legislation riddled with misprints so that when we try to study these measures in advance and try to consult outside interests we are doing so on an inaccurate basis. It is very unhelpful.

I am the last man to urge that the department should increase its already very large staff, but is it not possible to recruit just one man who can read and write and who will scrutinise Bills before they are presented to this House? I know that they are printed by the House authorities, but they are presented to us on the responsibility of the department and of the departmental Minister. No one expects a busy Minister to spend his time reading through these Bills for misprints, but he has plenty of officials and perhaps just one of them could look at these Bills occasionally and see that they are right before, and not after, they are presented.

Unlike my noble friend Lord Boyd-Carpenter and the noble Lord, Lord Mishcon, I was not able to be present during the Second Reading debate. However, I have some sympathy with what they have both said. I ask my noble friends in the Government whether we are not making too much of an issue of the whole business of business names at this particular stage of the Committee proceedings? It may be that this came out earlier and that my noble friend will be able to say that the Register of Companies and the Register of Business Names are two distinct issues. Are we not allowing ourselves to get bogged down on an issue which is really less important than the objectives of the Bill?

I should like briefly to reply to my noble friend Lord Montgomery of Alamein. He has made a major point which probably would be best dealt with by my noble friend the Minister. As far as the printing is concerned, I accepted responsibility as a Lord in Waiting for your Lordships' House. The department informed me that the printing took place here although my noble friend was quite correct in saying that probably the department and indeed we ourselves should check it. I also accepted responsibility at Second Reading for the misprints. I remember my noble friend pulling my leg by saying that at least there might be one honest man who could both read and write in the department. He may have been referring to me—I do not know—in which case I was more than flattered!

However, I hope that my noble friend and the Committee will bear with me, in that, as regards the amendment which I have moved—Amendment No. 69—I take the point made by the noble Lord, Lord Mishcon. I am sure that the department and my noble friend the Minister will bear this very closely in mind. As regards the previous amendment, over which I was in considerable difficulty, I point out that I have the first Marshalled List of amendments—(72—II)—and that refers to "page 30, line 40". In the Bill that I have before me it is page 30, line 40. I apologise to your Lordships if my Bill—which I am sure has come from the same source as all of your Lordships' Bills—tallied with what I was mentioning, but other noble Lords found themselves in some confusion. I hope that that does not go down to the responsibility of the department.

I do not want to be a bore but I think that my noble friend slightly misunderstood me, in which case I am sure that it was my fault. I accepted what he said on Second Reading—namely that the printing is undertaken by the House authorities. But I hope that he will accept and confirm two matters: first, that responsibility for what we are asked to put into the law of the land is the responsibility of Her Majesty's Ministers and in particular the Ministers in the department concerned and not the responsibility of the House authorities who are responsible for printing. Secondly, I hope that he will confirm that, in the light of the experiences, particularly as regards measures from the Department of Trade, something is being done in that department to ensure that this does not happen again, at least on this scale.

I know that my noble friend was expecting that I should respond to this point and as he has specifically mentioned the department in which I serve, perhaps I should do so. I am informed that the proof-reading of Bills is not, in fact, the responsibility of the department and is not conducted by them. Indeed, they are given no opportunity to do so. On the other hand, in fairness to the printer who thus comes under my noble friend's lash, I think that it is correct to say that on this occasion, in respect of this particular measure, the draft that was presented to him for printing did contain a number of manuscript amendments to the typescript which may have caused him some difficulty. I understand also that there is considerable pressure on the Government printer at present, for one reason or another, which has no doubt added to his difficulties. Any failing of the department is, of course, the responsibility of that department's Ministers. If there is any failing in this case, then, of course, I accept the appropriate responsibility.

moved Amendment No. 70:

Page 31, line 20, at end insert ("section").

We are happy to agree with the noble Lord's suggestion.

moved Amendment No. 71:

Page 31, line 38, after ("company") insert ("(a)").

Does the noble Lord wish to move the remaining amendments en bloc?

Yes.

moved Amendments Nos. 72 to 80:

Page 31, line 40, after ("guarantee") insert ("or

(b) which immediately before the appointed day is a private company limited by shares the name of which does not, by virtue of a licence granted under section 19 of the 1948 Act, include the word "limited";

and which complies with the requirements of subsection (1A) below.

I am sure that the Committee is indebted for a very clear explanation of the group of amendments, and we have been saved several speeches. We are obliged to the Minister for that. My speech will also be very short. It is limited to the point which is made in Amendment No. 74—namely, the inclusion of the words "or any profession". I am much obliged to the Minister for indicating as an example the splendid profession of the Law Society and that of solicitors connected with that profession. I am sure that solicitors and other well-known professions are grateful to the noble Lord.

However, I think I am right in saying that there is no definition of "profession" in this Bill. I have the unhappy task of seeing the notepaper of bookmakers, hairdressers and goodness knows what referring to their "profession". I am just wondering, if we leave it like this without any definition, what it will lead to in a clause which gives a very valuable exemption indeed—a very treasured exemption; that of leaving the word "limited" out of a name even though it be a company limited by guarantee or whatever.

That is my sole point and I therefore ask whether I am right in thinking that there is no definition of "profession". If I am right in thinking that, between now and the Report stage will the Government look at this matter?—because, as I said, we used to know what was a profession; we no longer do in current language.

I should like to follow up what my noble friend has said, in that, as the noble Lord, Lord Lyell, will be aware, a charity carries certain privileges, including a zero rating for VAT. Will this also have to be extended to professions? It seems to me to be a slightly dangerous precedent to establish.

Perhaps, first, I may try to reply to the noble Baroness, Lady Phillips. I think that the matter of value added tax is a little beyond my responsibility. Perhaps I may refer her comments to my noble friend Lord Cockfield, who I am sure will read carefully what she has said. We are very grateful for the comments of the noble Lord, Lord Mishcon. I understand that the particular company to which he refers is the Liverpool Law Society and, indeed, we take the noble Lord's comments very much to heart.

I understand that there is no definition of the word "profession" in this Bill. We shall read carefully what the noble Lord has said today, at an earlier stage today and, indeed, late on Tuesday night. Perhaps I may reply to him informally later.

Just before we leave this point perhaps I may mention that the word "profession" is, I think, used in the 1916 Act without any further definition. At least for purposes up till now it has not proved too difficult to deal with that aspect of the 1916 Act, although, as your Lordships know, it raises many other difficulties.

The noble and learned Lord, Lord Mackay, will know—as will other members of the Committee—that the word "client" was understood in 1916 and until fairly recently. Now everyone, including grocers, candlestick-makers and so on, has clients; they no longer have customers. In exactly the same way, I am afraid that the word "profession" has been somewhat minimised in our vocabulary, and there are many who seek to come within that category who should never be in it. I think that in 1981 we must ensure that we know that for which we are legislating.

moved Amendment No. 81:

Page 34, line 15, leave out ("(3)") and insert ("(2)").

moved Amendment No. 82:

Page 34, line 28, leave out ("two months") and insert ("of that notice").

We are grateful to the noble Lord for his brief explanation, but I am afraid that my reply is somewhat lengthy and a little convoluted. I shall attempt to do my best to be clear, but I understand that the requirement in Section 31 of the 1976 Act is that if a company registered overseas proposes to carry on business in Great Britain, it may be given notice requiring it not to continue to do so under its corporate name if that name is considered to be undesirable. In other words, it allows the same considerations as are applied to the names of companies registered in the United Kingdom to be applied to foreign registered companies. The subsection of the Bill seeks to provide that if a notice is issued in such circumstances, the time allowed for compliance may be extended a little beyond the two months specified in the Act of 1976. This extension would allow some flexibility for overseas companies who may not otherwise be able to meet what is, after all, a fairly tight time limit for that, or who may have to approach a designated body elsewhere should they, the oversea company, require evidence of non-objection to the use of a prescribed word in their particular name.

We believe that the amendment seeks to ensure that the time allowed for compliance shall run from the date of service of the notice. But I suggest that the wording of the clause is sufficiently clear on this point, which is that:

"An oversea company on which a notice is served … shall not at any time after the expiration of two months or such longer period as may be specified in the notice "—

and that is relevant—

"carry on business in Great Britain under its corporate name"

We do not think that the insertion of the words "from the service of that notice" after "two months" is necessary. The full amended sub-paragraph seems not to be capable of any other particular construction. That is somewhat convoluted. I hope it may go some way to satisfy the noble Lord, Lord Ponsonby.

I do not feel so strongly about this amendment that I wish to press it. I take the noble Lord's explanation, which I shall read with interest, and I beg leave to withdraw the amendment.

This Motion to leave out Clause 28 is consequential upon the decision of the Committee earlier today, and I understand that the Government accept the consequences of the vote we took then. Therefore, I beg to move that Clause 28 be left out. For the convenience of the Committee—and I am not quite certain what the correct procedure is—I would also (although it is out of numerical order) beg to move Amendment No. 102, which is to leave out Clause 29 and insert the words as printed. This is also consequential. It seems to me that otherwise we should be dealing with a number of amendments to Clause 29 which, as a consequence of the earlier vote, would not now be in the Bill. I understand that the Government have reserved their position to come back to this matter at Report stage.

Indeed we have. Furthermore, I think it is improper—I do not wish to use that in any pejorative sense—to move amendments out of order. It would not be right for the noble Lord to move Amendment No. 102 now. As for the question of whether or not they are consequential, perhaps my noble and learned friend Lord Mackay can deal with that particular point in a moment, as he will wish to address your Lordships on this particular Motion.

Supposing Ian Smith, Charles Robinson and Ian Stewart band together in a partnership, can they register themselves as ICI?

I think it might depend a little on the circumstances in which they proposed to carry on business. So far as the present law and the Register of Business Names is concerned, they would be able to get it on that register. Whether they would be able to carry on business under that name for any length of time would depend a great deal on the nature of their business. I am pretty certain that if it was anything remotely to do with business which ICI conducted they would speedily be invited to discontinue, with possibly one or two threats added about what would happen if they did not. So far as Clause 28 is concerned, it is not, strictly speaking, consequential on the amendment already dealt with. It would certainly be useful from our point of view to know the view of the Committee on this clause as it stands.

The Question is, That Clause 28 stand part of the Bill. As many as are of that opinion will say "Content". To the contrary "Not-Content". I think the "Contents" have it. Clear the Bar.

Tellers for the "Contents" have not been appointed pursuant to Standing Order No. 50. A Division, therefore, cannot take place, and I declare that the "Not-Contents" have it.

I think the correct procedure would be for me not to move all of the amendments standing in my name between No. 83 and No. 101.

moved Amendment No. 84:

Page 36, line 28, after ("letters") insert (", order forms, written material used for the purposes of creating, effecting, maintaining or increasing sales of goods or services (not being material offered or to be offered for sale)").

The Government have considered this matter again, particularly in view of what my noble friend said on Second Reading, and we have tried to see whether we could strike a better balance than we already have. It is obvious that if the full details are to be included the total amount of literature which would go out, would become a tremendous burden on such businesses. If one looks at some suggestions for this sort of provision, one can see that the proposal would go as wide as any promotional material. Our view at present is that the balance which has been struck in the Bill is reasonable and that so long as these provisions are complied with, that would be sufficient for the purposes of securing that reasonable information about the matter is giving to people who have an interest to know.

On Second Reading I made the point that an order form was of particular importance because the person to whom the order was directed was keen to know who was in charge of the business that was trying to order something from him, so that he could decide whether credit should be given and whether it was sensible to supply that business. Do the Government agree that in the Bill as drafted an order form is a document on which the particulars of the principals, and so on, do not have to appear? If so, whatever be the ultimate wording of an amendment, either on Report or hereafter, do the Government agree that order forms should be among the documents on which it should be mandatory that the particulars appear?

As matters stand there might be some doubt whether order forms are covered in the Bill as drafted, and in view of what has been said we will consider the matter further between now and Report.

With that assurance, I beg leave to withdraw the amendment.

had given notice of his intention to move Amendment No. 90:

Before I call the next amendment I should point out to your Lordships that if it is agreed to, I shall not be able to call Amendments Nos. 92 to 95.

Before I call Amendment No. 93, I should point out that it pre-empts Nos. 94 and 95.

The next amendment pre-empts No. 96.

moved Amendment No. 102:

moved Amendment No. 103:

After Clause 29, insert the following new clause:

It is.

I am obliged to my noble friend. I understand that it is easy for British Telecom to find the particulars of a subscriber merely from a telephone number. That is how British Telecom works when it goes about billing the use of a telephone. The vast majority of businessmen put their telephone number on their written business material in any case. An obligation so to do should place no extra burden, or only a minimal extra burden, on businesses. Having required unincorporated businesses to publish their telephone number, there automatically arises an easy means of identifying the businessman. So far so good.

But a link in the chain is the divulgence by British Telecom to an inquirer of the particulars of the subscriber. I understand that British Telecom is currently not required to give the name and address of a subscriber upon an inquirer quoting only a telephone number. However, surely British Telecom could easily be so required. Once it is established that businessmen must publish a telephone number, and that the particulars of the subscriber to the telephone are easily available, it remains only to provide that service of proceedings on the person whose name and address are supplied by British Telecom is due service on the businessman who publishes the telephone number. I beg to move.

We are very grateful for the clear way in which my noble friend has explained his amendment. Indeed, we all but come to expect such clarity of lawyers and solicitors, especially of my noble friend Lord Noel-Buxton. I am sure that the Committee understand and very much appreciate the intention behind my noble friend's amendment, as indeed I do, too. A number of hats descend upon me and some of my noble colleagues in your Lordships' House, and so from time to time I speak on matters relating to the Post Office or, as my noble friend so accurately said, British Telecom, as we must now call it.

The very brief answer to my noble friend's amendment is that at the moment his proposition is not feasible. The amendment would require British Telecom to disclose information about the subscriber who was listed against a particular telephone number. At the moment that does not apply. I understand that there are certain exceptions to that rule. They relate to instances of dire emergency, such as extreme illness of relatives and other such personal matters, but I do not envisage the need to pursue a rogue businessman or others as coming under matters of dire emergency.

Furthermore, it appears to us that even if it were possible from one particular telephone number to obtain the information sought, the consequence of such an arrangement would be that every company or every person carrying on a business in Great Britain, except limited companies—we spoke earlier about 2frac12; million registered names—would be required to have a telephone. It is possible that there would have to be a separate telephone for each separate business name if effective service of writs or documents were to be achieved with certainty; and that is a very important point so far as the law is concerned. We believe that to require each single business to have a separate identifiable telephone line would be an unjustifiable imposition, and I am sure that such a requirement would not be at all welcome in general, given the long waiting list of British Telecom for telephone lines.

We regard the intention of my noble friend's amendment as laudable, but we consider that it goes far beyond the scope of the Bill that is before us today, which, as your Lordships' Committee will appreciate, is concerned here with businesses carried on under names other than the names of the owners. While my noble friend was speaking a thought crossed my mind, somewhat evilly, in relation to my noble friend or any other person wishing to find out a registered name against a telephone number. We might embark upon the Chinese Box puzzle if opposite every telephone number one could find a business name. We would then return to the problems that we spoke about earlier this afternoon. That is a further point, which possibly goes too far into the realms of hypothesis. I must tell my noble friend and the Committee that while the amendment and the intention behind it are laudable, the current law as it appertains to British Telecom would not permit such a proposal to be carried out.

I am very much obliged to my noble friend for that explanation, and in the circumstances I am happy to withdraw the amendment.

moved Amendment No. 104:

Page 38, line 15, leave out ("subsection (2)") and insert ("subsections (2) and (3) ").

moved Amendment No. 105:

After Clause 34, insert the following new clause:

I should like to support, with certain reservations, the new clause moved by the noble Lord, Lord Seebohm. If in what I say I seem to stress the reservations rather than the support, this is because the noble Lord himself, it seems to me, has made out admirably the general case for the setting up of job-ownership companies; and, as he has explained, they are a different kind of company. They would incorporate some features of conventional companies and some features of workers' co-operatives; but they would be neither one nor the other. When I put forward my reservations and suggestions, it is in the hope that they may help the noble Lord improve on the scheme which he has put forward in Committee. Perhaps I should explain that I approach the whole question of enterprises owned by those who work in them from the point of view of a lifelong co-operator; and maybe I should indicate an interest in that I am the chairman of the Co-operative Development Agency, which your Lordships may know as a body set up by Parliament for the encouragement of co-operatives and which, in its first two years, has concentrated particularly on the encouragement of industrial cooperatives.

Co-operatives of all kinds, including industrial cooperatives, need to conform to a number of well-known principles of which two are of particular importance; and I stress them. The first is that the membership should be open to all who can directly benefit from the operations of the society—in the case of industrial co-operatives this means the workers in the enterprise—and the members should exercise full control over the enterprise on the principle of one member, one vote.

That is provided for in the new clause that the noble Lord has moved. It means that the member, as a person, together with his fellow-members, exercises control irrespective of the size of his own shareholding. It is on the basis of one member, one vote, This distinguishes a co-operative sharply from a conventional business and ensures that there shall be democracy in the exercise of control. The second essential cooperative principle that I would wish to stress is that profits at the end of a trading period are divided among the members in accordance with their transactions with the society. In the case of worker co-operatives this means that profits are distributed in proportion to the input of work or of skills to the operations of the enterprise. It is what they put in that is the basis for the calculation of the division of profits.

It is in the light of these two principles that I should like briefly to examine the noble Lord's new clause, because I find in respect of both of these principles that his new clause is somewhat defective, although not seriously so. The definition that the noble Lord put forward is that members are required to be employees, workers, in the enterprise. But I can find no provision—perhaps this was an oversight—that all employees should have the right to become members. In other words, there is no indication that the first co-operative principle is to be operative—that is, that there should be open membership in the sense that have defined it earlier. It seems to me that unless the noble Lord incorporates such a requirement in his proposition, it is possible that a small number of the employees could get control of the company and establish themeslves as an élite from which other workers would be excluded.

I apologise for intervening; but in our plans every worker must be a member and must have a stake in the company.

I am glad to hear that but I suggest that it is not contained in the new clause. I suggest, therefore, that it would be an improvement if at a later stage that could be made clear. It is perfectly clear that all members must be workers; but it is not clear that all workers should have the right to be members; and that should be included.

Equally, I believe that additional thought needs to be given by the noble Lord to the question of how profits are to be divided. I can find nothing in this new clause on that point. Looked at from the point of view of a co-operative organisation, I think that that is an important thing to be taken care of. The noble Lord might say that it is not his intention that profits should be divided according to the co-operative principle which I have described. In that case, no doubt we could agree to differ as to our objectives in that respect, but I would point out to him that when the Chancellor of the Exchequer introduced his Budget only last week he brought forward a most welcome concession to industrial co-operatives. I will not detail it now, but it was an important concession; and I have no doubt that that concession will be administered according to clear precepts as to what an industrial co-operative is. I have no doubt, also, that the Inland Revenue will wish to see that the profit sharing is on a proper co-operative basis if an industrial cooperative is to benefit from the concession that he makes. Therefore, I suggest that unless the noble Lord takes care of this point, the company which he envisages might well not qualify for the concession which, in a welcome way, the Chancellor of the Exchequer brought forward last week.

I welcomed what the noble Lord said by way of description of the highly successful co-operative nexus at Mondragon, in the Basque country. But there are many other examples—in France, Italy, Denmark and elsewhere—of equal success. It is Mondragon that has caught the public eye, but there are many other examples throughout the world of the successful application to industry, to manufacturing, and the provision of services of the principles which I have described. In the Mondragon enterprises they apply the principle of admitting to membership all the workers in the enterprise and they divide the profits among the workers in proportion to their input of work and skills within the enterprise. In other words, in my judgment they are bona-fide co-operative societies. I believe it true to say that if what the noble Lord has in mind is the growth in this country of comparable enterprises it is possible (as I think the noble Lord, Lord Lyell, said at the Second Reading of this Bill) for them to be set up under the existing state of the law. But we have listened to what the noble Lord has said and it may be that a change of this kind could facilitate it. As I see it at the moment, there are the defects—which I hope that I put forward in a friendly and constructive way—and if they could be taken care of I think it would make the proposition that the noble Lord puts forward stronger than it is already.

I am pleased to have the opportunity to follow the noble Lord, Lord Oram, as my name is associated with this amendment. Your Lordships are probably aware that the Liberal Party has been closely concerned with a number of job ownership schemes, and indeed a former leader of the Liberal Party who is still a Member of the other place, Mr. Jo Grimmond, is, I believe, chairman of certain job ownership schemes. It seems to me that at the present time this kind of scheme, if it can be called a scheme, so lucidly and clearly explained by the noble Lord, Lord Seebohm, is extremely appropriate today. It provides a convenient vehicle, similar to a partnership but with limited liability, to deal with an increasing number of men and women in this country who have been made redundant in their thirties and who wish to combine together in order to work in this form. There is a lot of redundancy money in areas such as South Wales. The first reaction of many of the men and women who are made redundant and receive a large amount of redundancy pay is to have a little leisure, but they get tired of a trip to Miami or wherever it is they go, and they group together wanting to work and make things which they can market in the local area.

I am presently concerned with finding commercial outlets for men and women who have made simple inventions which they can manufacture with the minimum of tools and apparatus, and there is a demand for these simple inventions which the normal firm—large or small—would not necessarily take up. These skilled men and women know their markets, and if they can have an opportunity to get places where the rent is cheap, or where the premises are given to them without any rent being charged, then that is an opportunity for them to make a living. The question then arises, how should they form themselves? It seems to me that it is in a system of this kind that they would find the greatest opportunity.

I was very glad to hear the helpful observations made by a person so experienced as the noble Lord, Lord Oram, and I am personally grateful for the observations he made to improve this amendment. With regard to one point he raised about all employers having the right to be members of the scheme, it seems to be inherent in the amendment as it stands, as the noble Lord, Lord Seebohm, has explained, that all employees shall have the right to be members of the scheme. I should like to support this amendment very strongly, and my remarks are directed not only to Amendment No. 105 but also to Amendments Nos. 106 and 107.

It would be wrong for any noble Lord to feel that enthusiasm for schemes of this sort was confined to one side of the Committee. I believe many of us feel that in these days a variety of developments for dealing with what may be called the "we-they syndrome" in industry are required and should be encouraged. I myself thought that the noble Lord, Lord Seebohm—and I nearly said, for personal reasons, "my noble friend" because in everything except the purely technical, procedural sense I like to think he is—made a very important speech and one having a good deal of significance, perhaps, in the longer term. I do not think he would claim that in this amendment and those which follow it he has evolved a perfect scheme. I believe there was some force in the moderate criticisms which the noble Lord, Lord Oram, made, based on his own great experience. However, I think that the general proposition made by the noble Lord, Lord Seebohm, that some form of structure a little different from that of a normal Companies Act company would facilitate the growth of these worker co-operatives is very soundly based indeed.

For the reasons which the noble Lord gave—and I will not weary the Committee by repeating them—there are practical difficulties in complying with our somewhat complex company law (which we are at the moment busily engaged in making even more complex) when one is setting up an organisation of this sort and perhaps starting on a modest scale without being able to afford or obtain high-grade professional advice. The noble Lord's initiative is a very valuable one indeed. I am sure he would not contend, and if he did so contend I would not agree, that it is the only method of dealing with this problem. I happen myself to be the chairman of a company having a normal company structure which has encouraged employee shareholding to the extent that today over 90 per cent. of our employees in the United Kingdom hold shares in the company. We have been assisted in this by Finance Act legislation of successive Governments, although the tax limitations on the development of such schemes are still, in my view, unduly severe. We have certainly found, in a normal Companies Act structure, that the wide development of employee shareholding such as we have is very valuable; and, based, on strong practical experience, I would commend it strongly to the Committee.

I accept that we want varieties and that the ordinary Companies Act structure, for the reason that I mentioned earlier, is not necessarily the sole or only answer to this problem. I should be extremely interested to hear what my noble friends on the Front Bench have to say. If 1 may say this without impertinence, I hope they will not confine themselves to seeking to point out defects in Lord Seebohm's clauses, because I have not the slightest doubt that with their great abilities and with their staffs behind them they would be able to do so. With respect, I do not believe that at this stage that is what the Committee is particularly interested in. What I hope they will say is that they would like to see encouragement given to the development of activities of this kind.

They may argue, and the noble Lord, Lord Lyell, did so on the Second Reading, that there really are no difficulties under present company law. I do not think the weight of evidence would support them, and even if there was a certain amount to that argument, as there may be, I hope they will not underrate the presentational and moral advantages of putting into our law a new provision deliberately tailored to job ownership, co-operation, or whatever one likes to call it and one likely to have an encouraging effect on people who are hesitating as to whether to go forward with these proposals. It would be something more than a gesture; it would be an indication of Government sympathy and understanding and indeed of Government encouragement. I, for one, should very much like to see this. I think it is wholly in the spirit in which this Government were elected that we should seek to encourage developments of this sort, and I hope that when one of my noble friends replies from the Front Bench he will, whatever his comments on the details of the amendments may be, indicate a broad sympathy with them—and, more than that, indicate a desire on the part of Her Majesty's Government to help forward movements of this kind.

I would support most strongly the noble Lords, Lord Seebohm and Lord Boyd-Carpenter, and in particular the words used by Lord Boyd-Carpenter when he said in the latter part of his speech that this would encourage people to set up this kind of company. As the noble Lord, Lord Seebohm, has already pointed out, there has been a very great success rate with what has been called management buyouts, and this amendment would provide for employee buy-outs on a larger scale. I therefore support it strongly. I agree that there are all the advantages which the noble Lord, Lord Seebohm, put forward, and I support them strongly too.

Whilst the co-operative principle which the noble Lord, Lord Oram, put forward, is no doubt important, I believe I am right in thinking that the job ownership company involves the ownership of shares in the company by the employees. All employees have the right to participate but not necessarily all employees would be shareholders. There might be some who would not but they would have the right if they so wished. So if there were certain tax advantages of becoming closer to co-operatives, as the noble Lord suggested, then no doubt these companies could take advantage of them.

I should like to make a plea that there may well be detailed problems connected with this proposed new clause. I very much hope that we take the advice of the noble Lord, Lord Boyd-Carpenter, and look for ways of implementing it and not look for difficulties. Let the best not be the enemy of the good. This is a real opportunity—as I said on Second Reading—of moving from a property-owning democracy to a company-owning democracy. I should like to give this new clause my very strong support.

There is very little left for me to say except to make it clear that support for this kind of approach comes from every possible quarter of the Committee. I have been interested in this problem for very many years. I took part in drawing up a plan which the Labour Party considered. However, the plan has not yet reached manifesto status. I hope that it might do so at some time or other. It is a problem to which we all want to address our minds.

I subscribe to what has been said about the practising accountant and, I dare say, the practising solicitor, finding it a great and difficult problem to show the way to a group of people who want to get together and form a job ownership scheme of this kind. This is a new clause and what we are doing is giving a Second Reading to a new proposal, although in technical terms we are in Committee. This proposal would provide a fillip of the kind which is more than necessary. It would also be a clarification. It will be a great encouragement and I am sure a great success.

My anxiety is that and number of the tiny businesses that we are so anxiously pushing inexperienced workers into trying to run, might fail to a surprisingly and unpleasantly large extent. If an organisation of the kind was suggested there would be a much greater chance of such activities being successful. I do not see this merely in terms of small businesses. When in Spain one is bound to notice the fact that practically every refrigerator one sees is made by the factory within the Mondragon village. They are very successful in terms of both domestic production and sales and overseas exports. There is no reason why business should not be carried on in an increasing and extensive scale within this kind of system.

I am sure that the noble Lord, Lord Seebohm, will not object if a dot or comma is excluded. What we are anxious to do is urge the Government—and encourage people outside the Committee—to take this step forward to enable people to take in this venture. It is an excellent way of overcoming all sorts of problems. It is entirely within the development of the philosophy of the Companies Acts which we are now considering, especially in terms of buying one's own share capital, and I hope that the Government will give the idea the encouragement which our economy needs.

I had not intended to say a word. I am not sure that I should do so now as I have little of substance to add to what has been said. However, like the noble Lord, Lord Diamond, I have been enormously impressed by the degree of support that has come for this amendment from all parts of the Committee and, if I may say so, by the calibre of those who have lent it support. Like the noble Lord, Lord Diamond, I should like in these few words to add my personal support and express the hope that the Government will take these factors into account. Whatever are the defects of detail in this amendment, I hope that the Government will find it possible to speed the underlying principle of it on its way.

I am sure that the noble Lord, Lord Seebohm, is anxious to hear what reception the Government will give to this proposal. My only reason for intervening at all is that I have visited Mondragon, as no doubt have other noble Lords. I was there about 18 months ago. The note I made in October 1979, when I returned, was:

"If the two sides of industry could be more widely dissolved on Mondragon lines and if Mondragon type agreements on rewards were to replace the clumsy ritual of free collective bargaining, that would be a great step forward in the direction of a fairer and less divisive society".

That was simply a personal note that I made on return from a three-day trip to the Mondragon complex of co-operatives.

The atmosphere there is extraordinarily impressive. There is tremendous sense of participation and dedication. It is important to point out that there is nothing wild or woolly about this scheme. The Mondragon complex is extremely professional. Before a co-operative is set up at least three years of studies go into the preparation. Once it has been accepted into the major group, it is monitored for a further two or three years. There is a very stringent rolling accounting procedure. There is absolutely nothing which could be vague or merely idealistic about this. There is obviously a basis of idealism to it but it is also profoundly and very stringently practical.

Something that attracted me about it is the ratio of rewards. The noble Lord, Lord Seebohm, mentioned that there is a general 1:3 ratio. In other words, the newest apprentice begins by getting one and the managing director does not get more than three. This differential is even narrower in practice. The apprentice speedily jumps to 1:2 in the ratio: many of the top management do not get more than 2:6 or 2:7 of the ratio, though I understand that technological requirements these days produce some variants and some outside advisers are being paid a higher wage or get a higher participation.

In terms of motivation for collaboration in industry, there is no doubt that this is a most impressive experiment. It is true, as the noble Lord, Lord Oram, has said, that there are other examples of this around Europe and Mondragon has slightly scooped the headlines. Simply on those grounds I do not think that we should turn ourselves away from the experience it can offer us.

I am not qualified to comment on the technicalities of Lord Seebohm's clause. Many members of the Committee seem to feel that in general principle it is correct, although there could be some improvement at a further stage. I hope that the Committee will give it a fair wind.

I have just come into the Committee because I was interested in this matter and I apologise for speaking. I have taken an interest in this experiment and it is rather remiss of me to indulge on the good temper of the Committee by making a long speech, having, by accident, absented myself. Nevertheless, may I record, without going into the arguments which I have read and the history of the Spanish experiment and others, that this development may be very worthwhile. Without going into it in detail, having missed the full debate, I should like to put it on record that I support this amendment and if we go into the Lobbies I shall go into the Lobbies in favour of it.

If I may come to the help of the noble Lord who has just spoken, I, too, sincerely apologise to the Committee because I missed the beginning of this debate; it was called a little earlier than I had budgeted for, and I arrived late. Like the noble Lord, I do not wish to take up the time of the Committee by doing more than recording my support for this amendment. I think that one or two bits of sandpaper could perhaps be used before Report stage, but I should like my noble friend to be assured of my support.

A great deal of support in principle for these interesting proposals has been manifested on all sides of the Committee. So far as Her Majesty's Government are concerned, they are interested to promote enterprises of this kind and to make it reasonably easy for them to promote themselves and to be continued. It is in that spirit that I approach the amendments which have been proposed by the noble Lord, Lord Seebohm. The principles he has explained and the desires he seeks to achieve are ones which we would certainly seek to facilitate.

As I think has already been acknowledged, a company which is broadly on the lines of the company proposed in these amendments can presently be set up under the Companies Acts, subject to two major matters. The more important of them is the difficulty about the purchase of its own shares by a company, and it is in order to facilitate that in proper circumstances that the Government have proposed in later amendments new clauses to provide more generally for the purchase by a company of its own shares, subject to certain safeguards. There are also questions with regard to the restrictions imposed by Section 54 of the 1948 Act to which the noble Lord, Lord Seebohm, referred and we have proposed in this Bill a certain relief in this respect.

If these later amendments to which I have referred are passed, the result would be that, subject to safeguards of detail which I would not propose to go into fully now, in the spirit of my noble friend Lord Boyd-Carpenter, the sort of company that is here proposed could be set up. However, it is important not to lose sight of the point made by a number of your Lordships: this is not the only vehicle by which the sorts of objective we are here seeking to promote can be achieved and therefore it may not be wise, or indeed in the best interests of the ultimate success of this development, that it should be singled out for very special treatment in the Companies Acts. Surely it is better to look at the obstacles to the development which have been experienced and see to what extent those obstacles can be removed, under proper safeguards. That has been Her Majesty's Government's approach and, as I say, the most important obstacle to the formation of these companies was undoubtedly the difficulty over a company purchasing its own shares. That we have sought, by the proposal of the later clauses, to remove.

I appreciate, as the noble Lord, Lord Seebohm, pointed out—and it was a point also taken up by other speakers—that the Companies Acts are apt to be a little complicated. I am not certain that I would go along with the view that we are now engaged in making the provisions more complicated: in some ways we are giving considerable help and alleviation to small and medium-sized companies in connection with the rules with which they must comply. Nevertheless, the Companies Acts are somewhat complicated and I appreciate that people to whom small enterprises might go—solicitors, accountants and possibly even members of the Bar—might not be familiar with the details of the model that the particular amendment incorporates. We would suggest that the way to overcome that is not to put this particular model, in its present stage of development, into statute but to engage in publicising it so that even the humblest practitioner will come to be aware of it. Indeed, it may be wise to circulate it in other sorts of literature apart from professional literature.

We feel that we have, by the general provisions I have referred to, sought to overcome the principal obstacles to the development of this type of company and we would suggest that the right way forward is for such companies to develop, making use of these general relaxations. We would also suggest to the Committee that it may not be in the best interests of this development, as I have mentioned, to "freeze" it at this stage into an Act of Parliament. Once it is in an Act of Parliament, as your Lordships know, it is not particularly easy to have it altered; and experience might show that in some details it could be improved in practice. Therefore, we would suggest that the objectives of these amendments can be achieved without the necessity of particular provisions of this kind. I shall not go into details of the provisions now—

I am most grateful to the noble and learned Lord for giving way. He was referring to the fact that the Government proposes to publicise methods whereby this can be achieved within the framework of the Companies Acts. Did he have in mind, for example, that there would be a new model Table A and that anyone could take the whole of that table and the articles of association and say, "This is a model of the way in which you could operate, for example, this job-ownership scheme"?

I did not mean to imply that the publicity would necessarily be undertaken by the Government, although no doubt the Government might be able to assist in one way or another in such publicity. To frame an alternative to Table A on the lines of these proposals might have the kind of difficulty I have mentioned. It would tend to put the company, in its present stage of development or in the formulation of its memorandum and articles in its present state of development, into the statute, and thus inhibit further development. Therefore, while I can see that doing so would achieve a fair measure of publicity for the form, it would have the sorts of disadvantage to which I have drawn attention and, certainly for my part, I would suggest that publicity of a more general character might be more appropriate.

I was saying a moment ago that I did not propose to go into the details of the clauses that have been proposed by the noble Lord at the present stage, because our principal view is as I have expressed it. However, as the noble Lord, Lord Oram, has mentioned it, I would say that my understanding of the clauses as they are at present is that they restrict membership of the company to the employees, but not conversely. In other words, not every employee would have a right, in terms of this memorandum and articles to be a member; but of course—

I would just intervene once more to say that it is the full intention of our scheme that every employee should be a shareholder.

I can well understand that; and I was just about to say that I can well understand that that sort of arrangement would be over and above the provisions of the memorandum and articles: in other words, it might well be a condition of part of the employee's contract on taking up the employment that he should be entitled to become a member of the company. Perhaps it would be more appropriate to have a contractual arrangement of that sort rather than to incorporate it into the memorandum and articles; and of course it does mean that this sort of proposal we are talking about would have flexibility to be used, for example, in a case where for some good reason the general co-operative arrangement to which the noble Lord, Lord Oram, referred might not be appropriate. Apart altogether from the question of development forward of this project, we would also say that in the interests of flexibility, in the interests of trying to fit this kind of scheme into a number of different situations, it is unwise to legislate about it in too much detail.

In the light of that explanation, I hope the noble Lord will feel that, while we support very much the objectives which he is seeking to achieve here, the way in which we have put it is perhaps preferable. I should be happy if the noble Lord felt that, between now and Report stage, we could look at it, possibly with him, to see whether there were any points about our general proposals which he felt required to be altered in any way to accommodate his proposal.

Before the noble and learned Lord spoke, it had never occurred to me to address your Lordships on this amendment, because I cannot match the knowledge and experience of the several of your Lordships who have spoken to it. I found the response of the Government, as expressed by the noble and learned Lord on the Front Bench, to these imaginative and potentially exciting innovations in the industrial scene more than somewhat disappointing. Indeed, I thought, in spite of the note on which the noble and learned Lord concluded, that the Government's approach to these matters tended just a little—I hope that this is not an unkind thing to say—to express the spirit of a man who has a problem for every solution.

Perhaps I might be allowed to say that I greatly regret that the noble and learned Lord should feel that. That is certainly not the spirit in which we have approached this matter—quite the reverse. I would say, particularly, that the fairly elaborate amendments which we have brought forward to provide for the purchase by a company of its own shares are a very positive response to trying to push forward the kind of proposal which the noble Lord, Lord Seebohm, has made. Far from trying to put obstacles in his way, we have sought to deal with these obstacles to some extent. I should perhaps correct one thing that I said earlier about Section 54. We have certainly made proposals in relation to Section 56. We are considering what could be done in relation to Section 54.

I certainly apologise to the noble and learned Lord if I misinterpreted the spirit in which he replied to the amendment. I readily apologise for that, but, certainly, that was the impression I gathered. But, of course, I may have been wrong.

I wonder whether, upon that note which the noble and learned Lord sounded of Government encouragement to what is a brave initiative in this field and to an amendment for which the Committee is deeply grateful—because it has been a most interesting debate—I may say this. The noble and learned Lord caught the spirit of the Committee in wanting to further the principle behind the amendment, and very correctly referred to the general policy in certain clauses of this Bill, which would make what I think will inevitably be called JOCs something better known and something practised.

But I also wonder whether, bearing in mind that the noble Lord is speaking for the Departments of Trade and Industry in connection with this Bill, he could make the Committee a little happier—and I am not criticising him for not having made the Committee happy up till now—by saying that it is the Government's intention, so welcome is this proposal, to conduct in very near months from now discussions with the Confederation of British Industry, discussions with commerce and discussions with the trade unions, and perhaps the co-operative movement, on the furtherance of this idea, so that the publicity of which he spoke, and for which, understandably, he did not want to take responsibility on behalf of the Government at this stage, is something that is likely to be fairly imminent.

Many of us know of the good intentions of the noble and learned Lord. What we are scared of is that, having had this useful debate, with all the trouble taken by the noble Lord who moved the amendment, the proposal will be lost in the labyrinths of our Official Report and not come forward once we have excluded it from the Bill. If the noble and learned Lord could help with some pronouncement of intention to further the scheme, most members of the Committee, who have spoken in favour of this amendment, would be happier.