House of Commons Hansard Debates for 23 Apr 1991

Mr. Lang : Knowing the hon. Gentleman's history as a former president of COSLA, I can reassure him that I look forward to further consultations with that organisation on these proposals and to the opportunity to discuss the proposals that we announced on 21 March, following which I went to the COSLA annual general meeting the next day.

As for the vultures, they flew away from the rooftops as soon as the Labour party abandoned its roof tax proposals, recognising that that system was not viable. The hon. Gentleman can rest happy : there is no question of the vultures reappearing against the background of these extremely effective and efficient proposals.

Mr. James Wallace (Orkney and Shetland) : In the past, the Secretary of State has said that local accountability is an important feature of a local tax. How does he see local accountability operating in the islands areas, when his illustrative bills show that there will be no local tax and when, regardless of the size of house in which they live, people will still have to pay 2.5 per cent. more in a national tax in an area in which the cost of living is already among the highest in the United Kingdom?

Mr. Lang : The hon. Gentleman always draws attention to the fact that the situation in the islands is different--as it is in this case. Spending in the islands is below assessed need--a lesson that I wish many other local authorities would learn. Our present grant distribution assumptions mean that there would be no council tax in those islands, but I think that the hon. Gentleman will recognise that that should be dealt with, in the interests of equity. We shall be willing to discuss the matter in the course of consultations to try to achieve a system that is fair.

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Mr. Gordon McMaster (Paisley, South) : Is the right hon. Gentleman aware that his credibility is at an all-time low following his humiliating U-turn and the mess that he has created and announced today? Does he realise that there is an easy way to get some of that credibility back? It is to announce today that he will abolish the 20 per cent. rule, which affects so many pensioners and unemployed and disabled people, and that he will consider rebating them for the extra year that they have paid the poll tax.

Mr. Lang : I have no announcement of any sort to make about that. We are contemplating a new kind of tax and a new kind of arrangement for it. It is the Labour party which would lose credibility if ever it sought to implement its proposed return to unfair rates, not least because of the impact that that policy would have on the business community in Scotland, for which the Opposition propose to remove the harmonisation progress that we have achieved in the past few years--progress towards a uniform rate and the reduction of business rates all over Scotland. The Labour party's policy would allow local authorities to let rates rip, to the extreme detriment of business throughout Scotland.

Mr. William McKelvey (Kilmarnock and Loudoun) : The Secretary of State must realise that the millionaire living alone, perhaps in Eastwood, might be content to wait until he receives his 25 per cent. rebate--lonely money. But there are many lonely, poor people who cannot afford to pay the poll tax and who never have been able to afford it and who have run up debts, thereby contributing much to the £600 million arrears faced by Strathclyde. What will he do to assist Strathclyde with its massive arrears bill and to help people caught in the poverty trap who cannot afford to wait until 1993 for an easing of their pain?

Mr. Lang : The hon. Gentleman is fully aware of the fact that under the community charge system rebates are paid up to 80 per cent., and that the remaining 20 per cent. for which people are liable is taken into account when calculating income support. The difficulty facing many people on income support is that many hon. Members in the Labour party, and in the Scottish National party until recently, encouraged non-payment. That created difficulties for local authorities such as Strathclyde and for people who took the advice proffered to them so irresponsibly ; and the responsibility for those problems lies with many hon. Members in the Opposition parties.

Mr. Gavin Strang (Edinburgh, East) : Does not the Secretary of State see that, by insisting on retaining a link with the poll tax through the personal discount, he is building in some of the same problems as existed with the poll tax? The fact is that many people who live in two-person households will register elsewhere so that their households can get a discount, and they will be able to register with households containing two or more people without adding to those households' bills. The right hon. Gentleman must appreciate that the tax will be discredited from day one because of that possibility of evasion.

Mr. Lang : The hon. Gentleman has a mind which seems to seek out methods of evasion. It will be up to local authorities to ensure that there is no evasion ; in any case, there will be little incentive for evasion, because this is a fair tax which will be well imposed at a reasonable level.

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The discount is expressed as a proportion of the property element and is thus a progressive tax : the personal element will increase the higher the band.

Mrs. Ray Michie (Argyll and Bute) : Can the Secretary of State explain why a house with two people and only one income has to pay more than a house with only one person and one income?

Mr. Lang : If she looks at the figures, the hon. Lady will see, when she has had the chance to study them carefully, that the system is a fair one which takes account of the difference in the burden that falls on a house with two or more occupants and the burden that falls on a house with only one occupant. The 25 per cent. discount is a fair way of taking account of that difference, against the background of a rebate scheme.

Mr. Mike Watson (Glasgow, Central) : I should like some clarification from the Secretary of State. The consultation paper seems to reject the idea of capital values as a basis for assessment and speaks of bands expressed as a percentage of the average national property value. What is that average national property value? Will it be set at a United Kingdom level or a Scottish level? Is there a distinctive Scottish element to the proposal? If so, what form will it take?

Mr. Lang : Property bands will be based on values of properties within a Scottish context. Those valuations will be different from valuations in Wales and England. We are going for capital values because they are banded and their impact is thus dampened ; the impact of the capital value of a house on what a person has to pay is modified. That is a more sensible, fairer and more realistic way of proceeding than reverting to the notional rental value basis used under the old domestic rating system.

Dr. John Reid (Motherwell, North) : Does not the Government's ignominious retreat today show that they do not even know how to retreat in good order? Have they not forgotten the first law of Healey--when in a hole, stop digging--and staggered from one tax which was unfair and unjust to another which is unfair, unjust and complicated, with this band, that band and the next band? Every day will be 12 July for the next few years in local government. Why are we discussing today how to raise tax for local government, in what form it will be raised, how it will be capped and how it will be spent when it has not yet been decided when to issue the consultation paper on what form local government in Scotland will take?

Mr. Lang : I made it clear to the hon. Gentleman that our first consultation paper on the structure of local government will be issued in a few weeks' time and it is not necessary or desirable to rush that process either in the preparation of the document or in the consultation period that will follow. We intend to consult widely on the structure of local government because we intend to get it right. We have considered carefully the system for the funding of local government and once the hon. Gentleman has become more familiar with it, he will realise that it is not nearly so complicated as he thinks it is at first glance and that it will work effectively.

Mrs. Margaret Ewing (Moray) : The Secretary of State has referred to possible changes in water charges, which will be of particular interest to fish and food processors in the Grampian region who pay the highest water rates in

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the United Kingdom. What steps will he be taking to ensure that the industrial voice is heard in the consultations, and does he expect that the charges in water and sewerage charges will be implemented at the same time as the council tax?

Mr. Yeo : The proposals on which we are consulting concern personal water and sewerage charges. In the past, sewerage charges have been absorbed within the community charge system, whereas water charges were separately billed as a community water charge. Therefore, we have to take account of the need to reform that as well as reforming the community charge. We shall consult on that and the hon. Lady will have every opportunity to study the paper, and, if she wishes, to submit her views.

Mr. Tam Dalyell (Llinlithgow) : In the consultation paper, will there be an appendix or a specific explanation of those points where Ministers now think that the Wheatley report was wrong? Will there be a full explanation of the amount of compensation that will have to be paid to officials in Strathclyde, Lothian and elsewhere if there are to be changes?

Mr. Lang : I will obviously consider the hon. Gentleman's suggestions. We have not yet written the consultation paper, but we will bear in mind his suggestion that we should make reference to the Wheatley commission, possibly in an appendix or in the body of the paper. With regard to compensation, it is certainly part of our purpose to ensure that any change to any new system of local government structure in Scotland should achieve that changeover with a minimum of expense, disorganisation and disruption, learning the lessons that we should all learn from what happened last time.

Mr. Alistair Darling (Edinburgh, Central) : Is the Secretary of State aware that a couple in modest circumstances owning a small house in Gorgie in Edinburgh will find their house in the same tax band as a large three or four-bedroomed house in rural Scotland owned by a single person who may well receive the 25 per cent. rebate? Where is the link with ability to pay, and why should most houses in Edinburgh find themselves in the top three bands in the new tax system?

Mr. Lang : The problem that Edinburgh faces is that it has a high- spending district council. The solution to the problems that are faced in Edinburgh lies in the hands of the local authorities, both district and regional.

Mr. Menzies Campbell (Fife, North-East) : The Secretary of State knows that there is more than one way in which to arrive at the capital value of a property. What principles of valuation will be used by the Inland Revenue in deciding into what band particular houses should fall? If a householder embarks on improvements such as installing double glazing, central heating or a new bathroom, will that take the house from one band into another, thereby incurring additional cost?

Mr. Lang : The precise details of the basis of valuation will obviously be part of the consultation process, but essentially it will be the market value that arouses the interest of the valuation office. It is most unlikely that in the vast majority of cases changes such as the installation of central heating which the hon. and learned Gentleman mentioned would lead to a change of valuation banding. Only a substantial change in the nature of a house would

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lead to an upgrading from one band to another. But even if there were such an upgrading, the relative movement in terms of the extra burden of local government tax would be small because of the existence of seven bands and the gradation which exists within them.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley) : As we know from the statement made by the Secretary of State for the Environment that he believes that a commission is necessary to carry out the review of local government in England, and as on the last occasion that there was a major review of local government in Scotland it was carried out by the Wheatley commission, how can the Secretary of State honestly believe that a review of local government can be carried out systematically and, above all, fairly without an independent commission in Scotland ? Will it not be yet another political gerrymander by the Secretary of State ?

Mr. Lang : No, there will be no question of any Conservative Member contemplating gerrymandering of any kind. The very existence of the Wheatley commission and the work done by it gathered together a large amount of information that will prove a useful quarry as we review the reform of local government. The local government commission contemplated by my right hon. Friend the Secretary of State for the Environment will be an advisory body and my right hon. Friend made it clear that the Government would decide what changes to make and what form they would take.

It is proposed that the local government commission will replace the local government boundary commission in England and undertake its work on a long- term, gradual, area-by-area basis, taking account of the wide diversity of local government structures in England. In Scotland, we have a much greater cohesiveness and coherence in the system and I believe that it will be possible, without haste and without lack of consultation, to move to a single tier process that will win general acceptance.

Mr. Ron Brown (Edinburgh, Leith) : The Secretary of State has admitted little today, but he has admitted that the poll tax has been a mistake. Why should the low-paid in Scotland pay for the Government's mistake ? Why should working-class people pay for their mistake ? Surely there should be an amnesty. Even Charlie Gray, the leader of Strathclyde regional council, has argued for that. Mr. Gray is not a left-winger--I understand that he is a moderate--so surely his views should be taken into consideration. I understand that they reflect the general consensus within COSLA. Will the Government listen to reason in Scotland ? Clearly, many feel that the only alternative to the Government is a Scottish Parliament with proper economic and political powers so that the Scottish people can run their own affairs.

Mr. Lang : I always listen with great care to anything said by the leader of Strathclyde council, although it is intriguing to find him forming an axis with the hon. Gentleman. Whether that is a reflection of the way in which the Labour party is going, I do not know. Suffice it to say that I am sure that the hon. Gentleman, like everyone else in Scotland, will, once he has digested the proposals, find them a good, sound and secure way forward for local Government funding.

Mr. John Maxton (Glasgow, Cathcart) : Does the Secretary of State not understand that the people of

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Scotland, who have suffered under the poll tax and seen their local government dive into crisis as a result of it, expected today to see some sense of shame and regret that the tax had been imposed on them by the right hon. Gentleman who, as a Minister, served on the Standing Committee that considered the Bill which introduced it? After the humiliating climbdown that we have seen, the people of Scotland expected to see the Secretary of State and his Ministers announce their resignations today. Why is he allowing the crisis that is now facing local government in Scotland and the poverty that is facing so many people there to continue for at least another two years instead of, with our support, introducing legislation that would bring back the rating system on 1 April 1992, abolish the 20 per cent. minimum payment, backdate rebates and get rid of the poll tax once and for all and do it efficiently and quickly.

Mr. Lang : Far from regret, I feel a sense of pride that we have achieved a new system of funding local government which is infinitely better than the domestic rating system of the community charge. My involvement in the Committee to which the hon. Gentleman referred was, as he recalled, primarily concerned with the standard community charge and the introduction of the new arrangements for business rates. I believe that what we have done for business rates in Scotland is widely welcomed and will be greatly to the advantage of the Scottish economy. It is clear that, at the next general election, the Scottish electorate will have a choice between our new, simple, easy-to-collect and fair council tax, or returning to the old rating system under Labour. I have no doubt which they will choose.

STATUTORY INSTRUMENTS &c.

Ordered,

That the draft Representation of the People (Scotland) Amendment Regulations 1991 be referred to a Standing Committee on Statutory Instruments, &c.-- [Mr. Boswell]

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Garden Supplies (Sunday Trading)

5.59 pm

Mrs. Marion Roe (Broxbourne) : I beg to move,

That leave be given to bring in a Bill to amend the Fifth Schedule to the Shops Act 1950 to make lawful the sale of garden supplies on Sundays.

As the House may know, I am not only chairman of the Conservative parliamentary horticultural committee and the parliamentary consultant to the Horticultural Trades Association, as is shown in the Register of Members' Interests, but I have a large number of garden centres in my constituency. I am therefore delighted to have the opportunity to introduce this Bill, which has the aim of making one small improvement to the way in which Sunday trading laws operate.

It forms no part of my purpose to rehearse the arguments for and against wholesale reform of the Shops Act 1950. Those arguments have been made on several occasions over the past decade or so--most recently, last month, when my hon. Friend the Member for Hendon, South (Mr. Marshall) introduced new proposals relating to the vexed issue of Sunday trading. I am delighted to reassure right hon. and hon. Members that I have no intention of embarking on a discussion of the complex arguments involved in the wider debate on Sunday trading. That would be far too major and wide-ranging a debate for an occasion such as this.

The measure that I propose should be seen for what it is : a tiny change that is designed to reflect contemporary reality. My Bill has little bearing on the wider debate about the future of the 1950 Act, which will have to wait for some time yet. The Bill suggests that garden supplies should be added to the list of exemptions that are contained in schedule 5 to the Shops Act 1950, to make lawful the sale of garden supplies on Sunday. The Bill would set no precedents, nor would it trigger any controversy over Sunday trading laws, and it could be implemented immediately. It is not the thin end of the wedge.

Throughout the ages, part of the strength and richness of our national life has stemmed from the special status that Sunday holds. The best safeguard of that status is not to be found in legislation, but in good sense and contemporary custom. People, not laws, make Sunday special.

Part of the pleasure of Sunday is that it is a time to reflect, worship, rest, and enjoy oneself. One way that millions of British people enjoy themselves on Sunday is by gardening. It is something of a national obsession. Napoleon called us a nation of shopkeepers, but today we are a nation of gardeners. It strikes me as perverse that one of this nation's most innocuous creative hobbies, which is enjoyed by countless millions on one day more than any other in the week, should be hampered by the exclusion of garden supplies from the list of goods that shops are allowed to sell on Sunday.

In an age in which the law allows people to relax and enjoy themselves in countless other ways on Sunday--by attending any number of sports events, visiting the park or local cinema, or walking around a stately home or castle--it is peculiar in the extreme that the law hampers us from indulging in that most British of pastimes--gardening.

Every time the Sunday trading issue is raised, the House has great fun comparing and contrasting the anomalies that exist in current legislation. Under current law, selling

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plants, flowers and vegetables is legal, but selling trowels, spades, hoes, and pots is not. Who would have thought that it would be illegal to sell a common or garden watering can on Sunday? Sunday is the busiest day of the week for garden centres, when as much as 40 per cent. of their weekly turnover is achieved. Around 2, 000 centres open each Sunday, and many depend on Sunday sales for their very existence. Only a handful stay closed. People want to garden on Sunday, and to buy the supplies that they need on that day too. As the majority of garden centres open on Sunday anyway, my Bill would not mean more Sunday openings ; it would just mean more legal Sunday openings.

I say to those who argue that legalising the Sunday trading of garden supplies would adversely affect the work force by taking away their one day of rest, that most garden centres encounter no difficulty in recruiting weekend staff, even for Sundays. Many people are happy to work that day in exchange for another day off during the week. In that way, they can earn overtime pay on Sunday, as well as have another day off in the week free to run errands or to shop themselves on a day when stores are far less crowded than they are on Saturdays.

No one goes to work in a garden centre in the expectation that it will close on Sunday. That would be like going to work in a national museum on the assumption that it will close on Sunday--the very day that most of the public actually have a chance to visit it. People do not complain about the Sunday opening of garden centres. In fact, it is generally assumed that they are legally open that day--which is not surprising, given that public demand has led to garden centres opening on Sunday. For many, a Sunday afternoon visit to a garden centre is a family outing. There is no outcry over the lack of law enforcement in closing garden centres on Sunday. In fact, enforcement of the law in that regard is notoriously patchy and unfair. Some local councils turn a blind eye to Sunday trading ; some enforce it here and there, and others actively encourage it. Schedule 5 to the Shops Act 1950 identified goods and services that were then needed on Sundays in the ordinary course of life. I am sure that schedule was not meant to be cast in stone, never to be changed. I imagine that, had

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garden centres existed in 1950, the wording "fruit, flowers and vegetables" that schedule 5 currently contains would have read, "garden supplies, flowers, fruit and vegetables."

Forty years ago, it was recognised that the list of exemptions would need to change, to keep with the times. The fact that thousands of garden centres, employing thousands of people, open on Sundays is testimony to the need for change. To the best of my knowledge, no organised group opposes trading by garden centres on Sunday. The Bill makes a modest addition to the list of goods that can be sold in shops on Sunday, and will relieve many people who run garden centres of the fear of prosecution. It will ensure that Britain's gardeners have a chance to buy the supplies that they need, when they want them. The Bill will not alter Sunday's special status. I venture to suggest that it will probably enhance it, and, crucially, will not impinge on the rights of those who work in Britain's garden centres. I hope that right hon. and hon. Members will give the Bill their support.

Question put and agreed to.

Bill ordered to be brought in by Mrs. Marion Roe, Mrs. Rosie Barnes, Mr. Roland Boyes, Mr. Patrick Cormack, Dame Peggy Fenner, Mr. Simon Hughes, Mr. Allen McKay, Mr. Austin Mitchell, Mr. Cecil Parkinson and Mr. Timothy Raison.

Garden Supplies (Sunday Trading)

Mrs. Marion Roe accordingly presented a Bill to amend the Fifth Schedule to the Shops Act 1950 to make lawful the sale of garden supplies on Sundays : And the same was read the First time ; and ordered to be read a Second time upon Friday 3 May and to be printed. [Bill 140.]

Sir Nicholas Fairbairn (Perth and Kinross) : On a point of order, Mr. Deputy Speaker. My hon. Friend the Member for Broxbourne (Mrs. Roe), whom I thoroughly support in this matter, referred to Britain's gardeners. May I remind her that section 5 of the Shops Act 1950 has never applied to Scotland, which is a Calvinist country? We have never had any difficulty. We garden on Sundays, and we welcome it. After all, religion started in the Garden of Eden, and I think that she should copy the example of Scotland.

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Orders of the Day

Ports Bill

As amended (in the Standing Committee), considered.

New Clause 2

Financial assistance for proposals to maximiseemployee participation in equity of successorcompanies

.--(1) The power under subsection (2) below--

(a) is exercisable by a body which is a relevant port authority in any case where that body proposes to form or has formed a company in pursuance of section 1 above ; and

(b) is exercisable by a body which was such an authority immediately before the transfer under section 2 above to a company formed by that body of its property, rights, liabilities and functions ;

and references below in this section, in relation to any such body, to the relevant company are references to the company it proposes to form or has formed (as the case may require).

(2) The body concerned may on such terms as it thinks fit agree with any persons who at the time of the agreement qualify for assistance from it under this section--

(a) to indemnify those persons in respect of the whole or any part of any expenditure to which subsection (4) below applies ; or (b) to discharge on their behalf the whole or any part of any liability to which that subsection applies.

(3) For the purposes of subsection (2) above persons qualify for assistance under this section from any body if--

(a) each of them satisfies the employment condition as regards assistance from that body ;

(b) they have formulated a proposal for maximising participation by employees of the relevant company in ownership of its equity share capital ; and

(4) This subsection applies to any expenditure or liability of the persons concerned incurred wholly and exclusively for the purposes of the proposal mentioned in subsection (3)(b) above.

(5) A person satisfies the employment condition as regards assistance under this section from any body--

(a) so long as it is a relevant port authority, if he is employed by it ; and

(b) after it has ceased to be such an authority, if he is employed by the relevant company.'.-- [Mr. McLoughlin.]

Brought up, and read the First time.

6.10 pm

The Parliamentary Under-Secretary of State for Transport (Mr. Patrick McLoughlin) : I beg to move, That the clause be read a Secontime.

Mr. Deputy Speaker (Sir Paul Dean) : With this, it will be convenient to consider the following : Government new clause 3-- Financial assistance for proposal to maximise employee participation in equity of the company.

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New clause 12

Financial assistance for employee share ownership schemes

(1) Before inviting bids for their holding any relevant port authority under Part I or Part I of this Act shall give employees (including management) of the successor company the opportunity to put together a bid to purchase the holding, and the authority shall accept such a bid without inviting competing bids providing the following conditions are met :

(a) the amount of the bid represents at least the market value of the authority's holding in the successor company, such market value to be certified by independent professional advisers acceptable to the appropriate Minister ; and

(b) the structure of the bid must incorporate a substantial element of employee shareholding, ("substantial" in this context meaning that at least 25 per cent of the ordinary voting capital of the acquiring company should be held by, or on behalf of, employees, in addition to those held by directors and senior managers of the acquiring company).

(2) Financial assistance shall be available in respect of bids put together substantially by management and employees of the successor company and incorporating a substantial element of employee shareholding in order that those involved in preparing such bids are able to obtain the appropriate level of professional advice. Subject to the overriding discretion of the appropriate Minister, 75 per cent of fees and costs (including value-added tax) incurred for this purpose may be reimbursed out of moneys voted by Parliament up to a maximum amount (on which the 75 per cent reimbursement will be based) of £80,000.'.

Government amendments Nos. 5 to 7.

Amendment No. 53, in clause 8, page 6, line 12, at end insert-- (6A) Without prejudice to the generality of subsection (6) above, in deciding whether or not to confirm the scheme, the Minister shall have regard to the implications of the scheme for those currently employed by the relevant port authority and for their pension and employment rights, and to any proposals in the scheme designed to promote employee participation in the company.'.

Amendment No. 57, in clause 12, page 9, line 36, after (2)', insert

Except as provided for in subsection (2A) below,'.

Amendment No. 50, in page 9, line 37, at end insert

(2A) Levy shall be charged at one half of the rate stipulated in subsection (2) above, in circumstances where at least fifty per cent. or more of all the securities disposed of are transferred to employees of the relevant port authority or to a trust fund created or operating for the benefit of the said employees, except that where, within five years of the original disposal of securities, as a result of subsequent transfers inter vivos of the securities, more than fifty per cent. of the securities are held by persons other than the said employees, or trust fund, the company shall be charged a further levy of one half of the rate stipulated in subsection (2) above.'.

Amendment No. 61, in page 9, line 37, at endinsert--

(2A) In the case where the successful bidder for the authority's holding in the successor company incorporates a substantial shareholding by, or on behalf of, employees or former employees or their dependants of the successor company and its subsidiaries ("substantial" in this context meaning that at least 25 per cent. of the ordinary voting capital of the acquiring company should be held by such employees, in addition to those shares held by directors and senior managers of the acquiring company) the levy shall be charged at the rate of 50 per cent. on the consideration given for the securities disposed of.

(2B) In the event that the percentage of the ordinary voting capital of the acquiring company held by or on behalf of such

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employees falls below 25 per cent. within five years of the date of the initial transfer of securities in the successor company, the Secretary of State may require the payment by the chargeable company of an additional levy, which levy may be an amount up to 20 per cent. of the consideration given for the securities at the time of their initial transfer (or, if lower, up to 20 per cent. of the market value of the securities at the time the employee holding falls below 25 per cent.).'.

Government amendments Nos. 9 and 10, 15 to 17 and 22 and 23.

Mr. McLoughlin : First, may I draw the attention of the House to new clause 2, tabled in the name of my right hon. and learned Friend the Secretary of State. These amendments fulfil a commitment that I made to my hon. Friend the Member for Ipswich (Mr. Irvine) when I accepted in principle an amendment that he proposed in Committee to enable port authorities to repay the costs incurred by their management and employees in buying or attempting to buy the authority's successor company. The main amendment is new clause 2, which substantively gives effect to my hon. Friend's proposal. Perhaps inevitably, there are a number of changes in the drafting, but I hope that my hon. Friend will accept that the Government's amendment goes at least as far as--and in some respects possibly further than--his proposal did in providing practical assistance for management- employee buy-outs when ports come to privatise themselves under the new legislation.

I will mention briefly the other amendments grouped with new clause 2.

New clause 3 makes equivalent provision to new clause 2 for the Port of London Authority and the new Tilbury company. Amendments Nos. 5 and 6 are consequential to new clause 2. If a port authority has incurred liabilities by giving financial assistance to a management-employee buy-out team before transferring its undertaking to its successor company, those liabilities of course need to be excluded from the transfer, and remain with the former port authority. Amendments Nos. 10, 16 and 17 are drafting amendments consequential to new clause 3, in particular of the need to relate the definition of "the port of Tilbury" to that clause.

Amendments Nos. 22 and 23 define what is meant by the terms "equity share capital" and "maximising participation by employees of the company in ownership of its equity share capital", which are used in new clauses 2 and 3.

Amendment No. 9 enables an authority to offest against the proceeds of disposal on which levy is payable any costs that it may incur as a result of meeting the expenses of a bid mounted by its management and employees, whether or not that bid is ultimately successful. An amendment along those lines was proposed in Committee by my hon. Friend the Member for Ipswich when he made his important proposal, now reflected in the new clause 2, that the authority should be able to reimburse the expenses of a management and employee buy-out team. The point that my hon. Friend the Member for Ipswich made in tabling his amendment in Committee was valid. Obviously, if an authority is to pay these expenses, they must be clear at the outset how the cost is ultimately to be met, given that their own assets and liabilities will in due course be transferred to the successor company after disposal. One possibility would be to let the new owner of the successor company eventually pick up the liability. But

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that approach would mean that, if an outside bidder purchased the company, he would then be saddled with meeting the expenses of a rival bid that had failed, a result which could hardly be justified. Accordingly the Government accept that these expenses, like those that the authority incurs directly in organising the disposal, should be allowable as a deduction against the amount liable to levy. Amendments Nos. 7 and 15 further underline the Government's commitment to the encouragement of management-employee buy-outs. Amendment No. 7 fulfils a commitment that I made in Committee to my hon. Friend the Member for Faversham (Mr. Moate), when I accepted in principle an amendment that he had tabled. I undertook to table an amendment which would reflect my hon. Friend's views, as expressed in his own amendment, and he will see that the amendment now before the House is very close to what he proposed.

I hope that my hon. Friend will agree that this embodiment in the legislation of the Government's wish to encourage management-employee buy- outs is a useful addition to the Bill.

Amendment No. 15 makes similar provision to amendment No. 7 about the exercise of my right hon. and learned Friend the Secretary of State's powers concerning the disposal of the port of Tilbury by the Port of London Authority.

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