HC Deb 20 June 1939 vol 348 cc2129-33

8.28 p.m.

Mr. Hely-Hutchinson

I beg to move, in page 11, line 6, to leave out paragraph (c).

I do not think I need advance any argument in support of the Amendment beyond reading out the paragraph that it is proposed to delete: In carrying on the business or that part of the business the controller "— that is the person authorised by the Minister— shall be deemed to be acting as the agent of the undertaker"— that is the person whose business is to be taken over— except that the undertaker shall not have any right to control the business or that part of the business. I think people generally will submit to almost any infringement of their so-called rights provided that they are left with a sense of justice. I do not think any manufacturer who reads that paragraph can be left with such a sense of justice, for when his business is taken over, under the powers conferred on the Minister by the Act, the manager or owner of that business will not have committed any crime. He may have refused to accept a Government contract. The question of whether or no the refusal is reasonable or not is to be decided at the uncontrolled discretion of the Minister, and no sort of judicial proceedings will be necessary to decide whether the Minister shall issue a direction that the business shall be so taken over. In deeming the controller to be acting as the agent of the undertaker, we may recall Abraham Lincoln's phrase that "to call a sheep a hog doesn't make him one." There can be no doubt that the controller in charge of the business is the agent of the Minister, and to take away the control of the business from the undertaker and hand it over to a representative of the Minister, who can do anything he chooses to that business, is surely an injustice which cannot be contemplated. I hope my right hon. Friend will consent to the deletion of this paragraph.

8.31 p.m.

The Chancellor of the Duchy of Lancaster (Mr. W. S. Morrison)

I have every sympathy with the motives that have inspired my hon. Friend to move this Amendment. I think his action is perhaps the result of a misreading of the paragraph that he wishes to delete. In the first place, I would recall to the Committee the fact that Clause 10 deals with the last step that can be taken by the Minister if all other measures to get production of some article vital to the public service have failed. There are in Clause 7 provisions which enable the Minister to give directions in the case of a refusal to execute a contract and these powers are hedged about with all sorts of safe guards. It is only when, first, the delivery fails, and then the direction fails, and there appears to be wilful obstruc- tion on the part of some supplier, that this Clause comes into operation at all. The Clause being of that nature, designed for that last extremity, it is not surprising if it is framed in a way not specially favourable to the defaulting contractor. Indeed, when the purpose of the Clause is considered, I think my hon. Friend will agree that it is not wise to insert Amendments designed to make the way of the transgressor less hard.

Actually, the position with regard to the paragraph is this: The controller, when he is in, is deemed to be the agent of the undertaker. That is in order to put him in the legal shoes of the undertaker, and to enable him to carry on contracts of service with the workpeople as though he were really vested by the undertaker. The principle is borrowed from similar provisions with regard to a receiver in the case of bankruptcy. Where a bankruptcy order is made, the receiver is not the agent of the creditors but of the firm. Similarly, if it is necessary for this extreme power to be taken—when all other measures of persuasion on the one hand, and direction on the other hand, have failed—and to put in a controller, it is necessary to vest the controller with the requisite legal power. I think that, on reflection, my hon. Friend, if he accepts the background of the proposition—which is a penal provision not designed for the ordinary case, but for that, as I believe, very rare contingency where there has been something in the nature of wilful obstruction—I think he will agree that it is necessary to vest the controller with the requisite legal authority to act for the man who has been displaced because he will not deliver goods essential for the public service.

8.34 p.m.

Mr. Hely-Hutchinson

While thanking my right hon. Friend for his information on the Clause, may I say that the very words he used strengthen my argument? He used the words "defaulting contractor," and he spoke of it being unwise "to make the way of the transgressor less hard''; also he spoke of this as a "penal" paragraph. My whole point was that the undertaker—perhaps more appropriately to be called the corpse— does not reach this position under Clause 10 by any sort of legal process. There has been no sort of judicial pro- cedure to establish that he is a defaulting undertaker or that he is properly subject to any penalty. If there had been judicial procedure, no objection could be taken to such a Clause as this, but the Minister is given powers solely at his discretion to make conditions, and there is no provision for arbitration of any sort or kind on whether or not the business should be taken over. Therefore this Amendment, with all respect to the judicial qualities of my right hon. Friend, goes to the very root of the case where a man is judged without trial to be a criminal, where the words "transgressor" and "penal" are used against him before any sort of judicial proceeding has taken place against him.

Amendment negatived.

Mr. Hely-Hutchinson

I beg to move, in page 11, line 10, at the end, to insert: (2) Where, under the powers conferred upon him by this Act, the Minister authorises a controller to carry on the whole or any part of the business of an undertaker, it shall be incumbent upon the controller, as the agent of the Minister, to maintain the assets of the business or of that part of the business which he has been authorised to carry on, in the same condition of repair as that in which he took them over, and nothing in this Act shall empower the controller to sell or otherwise dispose of any of the land, plant, machinery, or other fixed assets of the business., nor to discharge any employés without the consent of the undertaker. I will not weary the Committee with the same arguments, which lie behind this Amendment. I assume that my right hon. Friend will again advance the kind of argument that the powers of this Clause are to be used only in so-called penal cases. The purpose of the Amendment is perfectly clear. It is that where a controller is appointed to take over the business of an undertaker, the controller shall conserve that business and not conduct it in such a way that, when he hands it back to the original owner, its earning power or value is impaired. I have no special preference for the particular way in which the Amendment is drafted, but the purpose of it is perfectly clear. It is only justifiable to seek an Amendment of this kind because the undertaker under Clause 10 has not had his business taken over under any sort of judicial proceeding.

8.38 p.m.

Mr. W. S. Morrison

It is due to the moderation with which my hon. Friend has advanced his argument that I shall endeavour to say only a few words in reply to the Amendment, which is, to substitute the Minister for the undertaker and to make the controller the agent of the Minister. The argument on that point has already been dealt with. It follows the procedure in bankruptcy where the receiver is deemed to be the agent of the person whose business is taken over. The second point of the Amendment would have the effect of limiting the power of the owner in the management of the business which has been taken over. It is the view of the Government that this Clause will very seldom be invoked, and only in an extreme case of obstinacy will it be taken into account. In these cases it will be put into force only if the articles required are vital to the public service. It is part of the temporary provisions of the Bill to meet a particular emergency, and I hope that my hon. Friend will see the overriding necessity of retaining the Bill as it is.

Mr. Higgs

Is it the intention of the Minister at any time to take over factories for the manufacture of any particular article which they are not producing at the time they are taken over? Would the Minister consider taking over a factory manufacturing machine tools for the purpose of manufacturing, say, jigs and gauges? If he were to exercise powers of that description —

The Deputy-Chairman

I really do not understand what this has to do with the Amendment.

Mr. Higgs

The Minister, during part of his speech, referred to the taking over of factories, and at the time referred to the commodities that particular factories manufactured.

The Deputy-Chairman

That has nothing to do with the Amendment. Amendment negatived.

Clause ordered to stand part of the Bill.