HC Deb 20 June 1939 vol 348 cc2055-112

4.21 p.m.

Mr. A. V. Alexander

I beg to move, in page 7, line 22, to leave out "or any other person."

The Minister will, of course, know the purpose of this Clause, and so does every other hon. Member. He will observe that in Sub-section (1) a reference is made to "the Minister or another Government Department." I do not think that I or my hon. Friends have the slightest objection to the general principles of the Clause or to the fact that instructions may be given or requests may be made by the Minister or by a Government Department, but when we come to the words "or any other person," we begin to wonder what is meant by them. Who are the people whom the draftsman had in mind when he inserted those words in the Bill? I can see no possible reason for the empowerment of any one but the Minister, or such Government officer as may be performing the duties on behalf of the Minister or a Government Department, to undertake these functions. I cannot see any reason for the words of which I complain. Unless we get a satisfactory explanation of those words, I shall ask my hon. Friends to see what they can do in the Division Lobby.

4.24 p.m.

The Minister without Portfolio (Mr. Burgin)

There must be some misunderstanding here. The words are put in, of course, to include a contractor asking a sub-contractor. By far the largest field of supply is spread, broadly speaking, through sub-contractors. The Minister does not have direct control of subcontractors. He gives notice to the main contractor and it must be this contractor who gives the notice to the others. The words are completely innocuous. They mean that the contractor may give information and direction to a sub-contractor. They are of the essence of the Clause, and without them it would be stripped of the greater part of its value.

4.25 p.m.

Mr. Silver man

I think everyone can understand that in a system where there is such a network of sub-contracting there must be power to hand on directions, but why is it necessary to have words as wide as these, which would include almost everybody? Would it not be possible to limit them in some way?

Mr. Burgin

I hope not. It is quite impossible to define who may be, or in future may desire to be, a sub-contractor.

Mr. Silverman

I gather that the right hon. Gentleman is proposing to allow anybody at all, with no authority other than that given by the Clause, people with no contracts themselves and no interest of any kind, to come along and give directions and to require somebody else to enter into a contract. I am certain that that will never happen, but I am pointing out that the words are wide enough to enable it to happen. I suggest that it would have been possible to allow the Minister himself or the Department to give these directions. If the contractor required it and could not win consent voluntarily, and it was necessary for him to have these wide powers, all he would have needed was to go to the Minister and say: "In order to enable me to get on with my job I require such and such a contract," and if the Minister or the Department thought he did, they would require the proper person to enter into that contract. There is not the slightest need to use wide words of this kind which might conceivably go far beyond the scope intended by the Minister. Surely it is not past the ingenuity of the right hon. Gentleman or those who are working with him to devise some form of words suitable to carry out the purpose which he requires, without the dangers which these words obviously have.

Mr. Lewis

What is the objection to inserting after the word "person," the words "authorised by the Minister"? The passage would then read: The Minister may give directions to any person who by virtue of any contract, whether made with the Minister or another Government Department or any other person authorised by the Minister.… It would mean that the contractor who desired to give these instructions to a subcontractor would get authority from the Minister to do so. Has; my right hon. Friend any objection to that course?

4.28 p.m.

Mr. Burgin

I do not know offhand whether the words would have any limiting effect, but I cannot conceive that under any sensible administration, with such words as "fair and reasonable," which appear a few lines further down, anybody would enter into a contract which appeared to the Minister not to be fair and reasonable. On any of the powers in this Clause difficulties may arise. I am most anxious not readily to assent to wording which may take away the tremendous power that I desire with regard to sub-contractors. I do not want to limit the contractor who is called upon to do national work in his choice of subcontracting, either in whole or in part. Therefore, there must be power for the main contractor to call for the main subcontractors, and right on, down the line. The words "authorised by the Minister "would apply only to the first rung of the ladder, and further down the line you would have the sub-contractor talking to sub-sub-contractors; these may be persons whom the Minister does not know. I do not want to detain the Committee over this sort of case, but the idea that all subcontractors must come within the Clause is fundamental. The words used to express it are relatively immaterial, and I would willingly consider words during this, the Committee stage; but I would point out my difficulties to the Committee. I think the words "authorised by the Minister" might be too limited, but I might consider between now and the Report stage, whether the words "or any other person" might in some way be linked with the contracts of the main contractor. I hope I have conveyed to the Committee what is the intention, and I am willing to look at words to express that intention.

4.30 p.m.

Sir Richard Acland

I hope the Minister will look at the matter again. We are in an absolute orgy of giving the Minister every sort of power that he asks for, and these words seem to me to include the possibility that in a certain temper, for example, what have been known as the 12 dictators might simply give orders to everybody dealing in commodities of every conceivable kind as to precisely what they were to produce and at what times. 1 cannot see any real difficulty confronting the Minister in the way of leaving out these words altogether. He says he wants them in in order that con- tractors may give instructions to subcontractors and so on. By the very terms of the Clause, the Minister or his office have to be satisfied that the terms are fair and reasonable. Therefore, the Minister's office will not be entirely ignorant of what is going on Every order which is given under this Clause by a contractor to a sub-contractor will have to go to the Minister's office. How else will he be satisfied that the terms are reasonable? The Minister must be satisfied that the terms are reasonable, and he cannot be so satisfied if neither he nor anyone else in his office has seen the terms. I hope the Minister will tell me how he is to be satisfied unless he or someone on his behalf does see the terms, and unless he can clear that up, I must assume that someone in his office will see that the terms of the order are reasonable.

If that is so, I think the order should in fact come from the Minister or his servant, so that we may have someone in this House who is responsible for the order and so that we shall not find, in two or three years' time, with the present march of Government by institutions outside the control of this House, that we have some men, we know not whom, taking complete control of every manufacturer—and you might extend it to the smallest people—and ordering them exactly what they are to produce, with no control in this House at all. I hope that unless some satisfaction is given on this matter between now and the Report stage, the matter will then be taken up and challenged more vigorously.

4.34 p.m.

Sir William Davison

The matter is comparatively small, although certainly there is a distinct issue here. It is pointed out that these words "or any other person" are much too general and vague, and I am inclined to agree. It was pointed out by the Minister that it will cause difficulties if he has to authorise a whole line of subcontractors. What we want to secure is that there is no person who is not concerned in the matter who shall be able to make this; request. If we put in the word "concerned" after"person," would that not secure what all parties desire? If it is upon the request of the Minister or another Government Department "or any other person concerned," that would mean that Tom, Dick, or Harry would not make requests, but that he must have a contractor "or any other person concerned" making the request. I think that that would meet the views of all sides.

4.35 P.m.

Sir Irving Albery

It seems to me, from what has been said, that this matter requires further careful consideration; and there is another point that arises. This Clause conceives of the possibility of a contractor not being very desirous of undertaking a particular contract, and I wonder whether such a contractor might not seek to hand over the job to another contractor as soon as possible. If the Minister is going to hand this power over to every kind of sub-contractor, I do not know where we shall get to, because the sub-contractors again may farm out the work that they do not want to do to somebody else.

Mr. Naylor

One suggestion leads to another. Would not the case be met by altering the wording to "responsible person"?

4.36 p.m.

Mr. Burgin

I told the Committee that I would be prepared to look at the words, and I also told the Committee the reasons for these words being proposed. The word "sub-contractor" is not an expression of art, but I want to limit the Clause to people who may in fact be sub-contractors. Will the Committee look at Clause 7, Sub-section (1), which states: The Minister may give directions to any person who by virtue of any contract, whether made with the Minister or another Government Department or any other person … We have the words there that the contract may be made either with the Minister or another Government Department or any other person. Power is taken there to give directions to anybody who by a contract made with the Minister or another Government Department or any other person—

Mr. Lewis

Directed by the Minister.

Mr. Burgin

Certainly. The class of people to whom he may give directions is anybody who has a contract made either with the Minister or another Government Department or any other person. All that I am trying to do is to follow that out through the rest of the line. This is a Clause that provides various exceptional powers and sanctions, and one of the sanctions is that if a contractor has failed to enter into a contract, directions may be given that he be obliged to enter into that contract. That is the purpose of the Clause. To whom are directions to be given? They are obviously to be given either to the person at the head of the line who is the contractor to the Department or to another Government Department, or to the person who, at any stage down the line anywhere, has entered into any arrangement with anybody forming part of the whole. That is the idea behind the Clause, and how to express it is a matter of drafting. I am perfectly willing to give the Committee an assurance that, now that I am seized of the doubts in the Committee's mind and now that the Committee has heard from me exactly what the Clause is intended to cover, I will look at the words again to see whether it would be appropriate to prevent what one hon. Member called Tom, Dick, or Harry interfering. I have no wish that Tom, Dick, or Harry should interfere, but I do not want to put in words which will in any way limit the chain of subcontractors, because in these armament contracts there is, from the raw material and merchants and brokers right through, a tremendous chain, long before you get to manufacturing anything, and all these persons must be included in the list of people to whom notice may be given.

4.39 p.m.

Mr. Silverman

Surely there is all the difference in the world between the words "or any other person" in Sub-section (1) and the words"or any other person" in the Sub-section that we are now discussing. In Sub-section (1) the Minister is taking power to give directions to any other person, and that is all right—no one objects to it—but in the Sub-section that we are now discussing the Minister is proposing to give to any other person very wide powers that would be exercised by that other person and not by the Minister. There is all the difference in the world between giving wide powers to the Minister to give directions, and giving wide powers to a large class of undefined persons to give directions to a wide class of other undefined persons. I suggest, therefore, that the purpose which the right hon. Gentleman has disclosed would be better served if he accepted the Amendment to leave out "or any other person." All that would happen would be that the contractor, or the sub-contractor, or someone further down the line would enter into negotiations; in most cases they would agree, and there would be no difficulty at all. It is quite right that if somebody was recalcitrant, or awkward, or obstinate, there should be some power in someone to compel him to enter into a contract that was fair and reasonable, but what is suggested is that that power ought to be in the Government, in the Minister, and not in anybody else. All that would then happen would be that the sub-contractor would come to the Ministry and say, "This is what I propose as fair and reasonable, but So-and-so will not agree. You require him to agree." I do not think the Minister requires these words at all, and they are certainly dangerous.

4.42 p.m.

Mr. Spens

I may be very stupid, but I am bound to say that I think that under Sub-section (3, b) the only person who could come in and give any directions at all is the Minister. As a read Sub-section (1), the position is that the Minister may give directions to any person, not to any other person, who has any contractual relation either with the Minister, or a Government Department, or any other person, that is, another contractor. The Minister there can give directions either to a head contractor, or to a sub-contractor, or to a sub-subcontractor, to do something where there is an existing contract. Under Subsection (3), as I read it, the position is that where there are persons who are in a position to enter into a contract and who are unwilling to enter into such contract or such sub-contract, you may have either a person who would be a head contractor, or a sub-contractor, or a sub-subcontractor, a person who ought to enter into a contract and who has refused to take up a contract offered to him either by the Minister, another Government Department, or a head contractor. What happens when that person or that other Department complains to the Minister? For the first time the terms of the offer are seen by the Minister, and here I would suggest that the hon. Member who spoke from the Liberal benches had not got the matter quite right. The Minister's Department then makes up its mind on the questions, Was that a proper offer; were the terms fair and reasonable; had the person who refused to do that necessary work any right so to refuse?

Mr. Silverman

That is not it.

Mr. Spens

With great respect, the hon. Member who interrupts has spoken three times already. I have spoken only once, and I should like to be able to make my remarks without interruption. If the Minister concludes that the terms are fair and reasonable, he is entitled to give directions to that person who has refused to do the work to do it. What the Committee has to make up its mind about in a Bill of this description is whether it is right to give to the Minister power, where a complaint is brought before him,, where a contractor complains of a subcontractor or a sub-contractor complains of a sub-sub-contractor, to give directions that that work shall be done by that man on those terms. In my submission that is the whole purpose of the Clause, and that is the point on which the Committee must make up its mind.

4.45 p.m.

Mr. Alexander

I always like to listen to the elucidations of the hon. and learned Member. I recognise that there is only one person who in the end can give the direction, and in the event of a person refusing to obey he would be liable to a charge. What I am pointing out is that in Sub-section (3) it falls upon somebody else than a Government Department or, behind the Government Department, the Minister, to make the request. Therefore, the powers given in the Clause are far too wide, and I am seeking to lessen them. I have listened very carefully to the Minister and I welcome the spirit in which he approached the discussion. If I felt sure that he was going to meet my point on the Report stage, I should be inclined to ask leave to withdraw the Amendment, but I am not sure that he is convinced. There is no mention of contractor in the Clause. The generality of the word covers something much more than a contractor.

Mr. Spens

The question is that of entering into a contract.

Mr. Alexander

That may be so, but it may not be a sub-contract.

Mr. Spens

Or a sub-contract.

Mr. Alexander

Let me put a hypothetical case, which probably would not arise. Suppose an organisation that I know very well, the Co-operative Wholesale Society were asked to undertake a very large supply of clothing or boots and shoes and the Co-operative Wholesale Society said to some other large manufacturer: "We request you to supply an x quantity of this particular commodity," clothing, or boots and shoes. The manufacturer might say: "We do not mind doing work for the Government, but we are not going to do it for the Co-operative Wholesale Society," and they refuse. I dare say they might object very strongly to an organisation like the Co-operative Wholesale Society requesting them, with statutory powers behind them, in Subsection (3), which makes them an appropriate body to make the request. I should equally feel inclined, if some other firm made such a request to the Co-operative Wholesale Society, to say that I objected. That right is inherent in Sub-section (3), and that is something that the Minister has to get over. I have no objection and my hon. Friend the Member for Nelson and Colne (Mr. Silverman) has no objection to Clause 7 (1), but there is not the slightest reason why any other person should make that request except through the pursuance of some subsequent purpose of a contract which he holds. The words which we seek to leave out are very much wider than that, and unless the right hon. Gentleman can clear it up for us by the Report stage I shall have to press the matter.

4.49 p.m.

Mr. Burgin

I think we are getting to an understanding of our respective points of view. What I am concerned about is that I shall in no way lessen the width of the possibility of the area of subcontracting. I must have power for the contractor to talk to the sub-contractor, for the sub-contractor to talk to the sub-sub-contractor, and so on all along the line. Provided that my words "any other person" can be limited to mean what I mean, without excluding what I desire to obtain, I am willing to consider their limitation. I will consider that between now and the Report stage, but I want to make it clear that my intention is that the power to require an entry into a contract shall extend not only to the Minister and the main contractor but from that contractor to "any other person" capable of supplying, or likely to be required to supply any single article to enable the head contractor to fulfil his contract with the Government. That is the point. If the Co-operative Wholesale Society had entered into a contract with the Government to supply large quantities of boots it ought to be possible for the Co-operative Wholesale Society to say to a supplier of leather: '' You shall supply so much leather."

Mr. Alexander

The point that we have to guard against is the possibility of contractors in such circumstances shifting part of their contract as a whole in order to maintain, for their own particular purpose, such measure of their own civil production as will suit themselves best, but not perhaps to suit the other party best. You must be careful what powers you give, and if you have to mobilise national productive capacity for national purposes, then the direction should come from the Minister or from a Government Department.

Mr. Burgin

The Minister cannot know the sub-contractor within the time that is necessary for this purpose. I am perfectly willing to look at the words, but the Committee must understand that subcontracting without limits is of the very essence of supply.

4.52 p.m.

Mr. A. Edwards

If I happen to be a sub-contractor and I am having some-difficulty with a sub-sub-contractor, and I come to the Minister and tell him of my difficulties, he has to be convinced first, under the Clause. Cannot the Minister of the Department issue a request for that other sub-contractor to give me my supplies? In that case, the right hon. Gentleman does not require these words. Without these words he has all the powers that he asks for.

Mr. Burgin indicated dissent.

Mr. Edwards

If I am a sub-contractor and someone asks me to supply certain goods and I object to doing so, the Minister has power to request me to do so. I can go or another sub-contractor can go to the Department and ask the Minister to make the request for the delivery of the goods. I do not see that the Minister adds to his power in the slightest degree by having these particular words.

4.53 p.m.

Mr. McEntee

A point occurs to me in connection with this Clause which arose from our discussions on a Bill last week. There may be in this connection, as there was in the Bill we discussed last week, conscientious objection. Suppose the Minister requires a contractor or a subcontractor to enter into a contract, and the contractor or the sub-contractor says: "I do not want to enter into this contract, because I have a conscientious objection to making munitions of any kind." That is a perfectly legitimate objection. Surely, of an individual has the right, as he will have when the Bill we discussed last week becomes law, to refuse to take any part in the production of anything for war purposes, a person who is asked to carry out a contract ought to have an equal right to a conscientious objection in that respect. It may be all very well for the Minister to have power of direction, but if "any other person" is to give the direction I am afraid it may lead to very grave trouble in the future. Therefore, I hope the Minister will put in some other words which have not the application of these particular words.

Mr. Lewis

I should like to put this question to my right hon. Friend. Does he contemplate that it would be a proper thing for a contractor to accept from the Minister an order to supply something far greater than the productive capacity of his business warrants; then that contractor goes to other firms with whom, perhaps, he has never done business of the kind and insists upon them supplying him with the surplus which he himself cannot supply? Does the Minister consider that that would be a proper action on the part of a contractor?

4.55 p.m.

Mr. Burgin

I do not want to exclude that possibility. I want sub-contracting without any limit at all. I want it to be within the Minister's power to say— whether the sub-contracting principle is a desirable one or not—that the field of sub-contracts shall be unlimited. I do not want by any wording in the Statute to limit in any way whatever the area of possible sub-contracts because it is of the essence of supply. The mobilising of the national productive capacity means utilising to the full all our sub-contracting powers. Although I am willing to look at the words, I must make it clear that the essence of the Clause must give me complete power of sub-contracting, without limits.

Mr. Edwards

Will the right hon. Gentleman point out how it is incomplete without these words?

Mr. Burgin

Without these words no contract made by a contractor with a sub-contractor is included in Sub-section (3).

Mr. Edwards

If a contractor comes to the right hon. Gentleman he must convince him that it is fair and reasonable, and it is then a formality for him to issue the direction.

Mr. Burgin

I do not want to keep popping up like a. jack-in-the-box, but the hon. Member has not done justice to the words. The Minister comes in only after there has been a failure to enter into a contract. I agree with my hon. and learned Friend the Member for Ash-ford (Mr. Spens) in his explanation of the Clause. He was entirety accurate. The Minister only comes on the scene to give directions after the events contemplated in the Sub-section—after unwilling ness to enter into a contract.

Mr. Silverman

The failure.

Mr. Burgin

Not quite failure— a refusal. A failure to agree. There might be a letter from a firm, saying: "We would rather not do this business. For one reason or another we do not propose to do any Government work." It might be that for some reason or other a firm with the machinery, the labour, the management and with the productive capacity, who have been invited to do something, write a letter or intimate their unwillingness to enter into the contract. It may be nothing to do with price. It may be for the reason that the right hon. Member for Hillsborough (Mr. Alexander) has suggested, that they want to keep their civilian business, and that, despite national needs, they do not want to do Government work. That may be after they have been asked not only by the Minister or the Government Department or—

Mr. Silverman

There is nothing to stop the Government from asking anybody.

Mr. Burgin

The hon. Member does not follow me. I am arguing whether it is necessary to put in any other words. The sanctions contemplated by this Subsection cannot operate until the events described in the Sub-section have occurred.

Mr. Silverman

That is not so.

Mr. Burgin

I think I probably know my own Clause. The Minister may have asked a firm, a Government Department may have asked a firm, a contractor may have asked a firm, or a sub-contractor may have asked a firm, and the draftsman instead of saying "contractor" or "subcontractor" has put in the words "any other person." The Committee now suggests that those words are too wide. I am perfectly willing to consider whether they are too wide, but while I am willing to examine them and to see whether they are too wide, I intend that the provision shall include any other person who may sub-contract.

4.59 p.m.

Mr. Messer

With due respect, I do not think that there is the degree of importance in the Amendment that appears to be attached to it. I do not see how in the Clause you are going to specify all the people you want to include. That being so you have to find a form of words that will prevent the possibility of there being an abuse of the phrase "any other person." The difficulty might be got over by dropping the word "any." In addition to a Government Department, a contractor and a sub-contractor, there are people who are agents and who are liaison officers. In the constituency which is fortunate enough to be represented by me there is a very big cabinet works, and in that cabinet factory there is a great deal of miscellaneous work being done, some of it probably the construction of hospital lockers for the Government. They may be entrusted with the task of seeing that the Government order is capable of delivery, and they may be unable to do it unless they can say to a firm supplying timber or some commodity that may be required that they have got to supply it. It is obvious that you have to have something wider than the specified term of Government Departments, contractors, and sub-contractors; at the same time I do not think that "any other person" ought to be there, because it means that you can have people who will set themselves up and will be quite irresponsible to anyone who may then be able to instruct because they are "any other person." Having shown that the instruction that they have given is for the purpose of the successful carrying out of a contract, they will be entitled to compel the firm to proceed. 1 hope the Minister's suggestion will be accepted, but that he will frame words which will prevent the possibility of abuse, because that is what is required. It is not a question of principle so much as a question of the right form of words.

5.2 p.m.

Mr. Silverman

The Minister has been trying to explain why he needs these words. It was suggested to him that he had all the powers that he wanted without them, and that these words only gave rise to a number of difficulties and were really of no value to him. If it is reported to the Ministry that some contract could not be entered into, the Ministry can request the awkward person to enter into the contract, and if he still refuses, the Minister can compel him whether "any other person" is in or not.

Mr. Burgin

That is true. I could, and that would have the precise effect of delaying the whole thing.

Mr. Silverman

It would have no such effect at all. There would be no more delay than under the Clause, because before the Minister can intervene at all the man has to come along and say, "This is my scheme. These were the terms. You must satisfy yourself that they are fair and reasonable," and at the same time that the Minister is satisfying himself about that he may be requesting the person who will not agree to enter into it. There is no difficulty about it. It does not lead to any further delay. The Clause without the words "any other person' gives him all the power that he is contending for, whereas with the words in you have the possibility of all sorts of dangers, including the danger that some employer can go to an individual workman and require him to make an individual article in his own time without any collective bargaining of any kind.

5.4 p.m.

Mr. Edwards

The Minister told me that I was not doing justice to the words before me. I do not think he is doing justice to himself. He is putting in words which are absolutely meaningless. The final sanction is with the Minister, who may give the person directions, and he has that without these words. What he is trying to impress on the sub-sub-contractor is that if he does not accept instructions from another contractor there may be an appeal to the Minister. The Minister is suggesting that the sub-contractor can enforce it and that the man who refuses to do so may be reported to the Minister, who must satisfy himself that the contract is fair and reasonable.

Mr. Burgin

Must satisfy himself that the sub-contractor has refused or"failed," in the past tense, to enter into it.

Mr. Edwards

"Which appear to the Minister to be fair and reasonable." If I say a contractor has asked me to accept a sub-contract which is not fair to me I have an appeal to the Minister, who decides whether it is fair or not. It is implicit in the Clause without these words at all. The words are redundant. The right hon. Gentleman cannot find any meaning in them whatever.

Mr. Alexander

The Minister now offers that if I will withdraw the Amendment he will be prepared to insert the word "concerned" after "person," which would to a large extent limit the words. It does not wholly meet my major point but if the Minister will insert the word "concerned" I am prepared to withdraw my Amendment.

Mr. Burgin

I shall be very happy to meet the wishes of the Committee by inserting the word "concerned," to indicate that "any other person" is not completely at large, but that it is someone avowedly having something to do with it.

Amendment, by leave, withdrawn.

5.7 p.m.

Mr. Pickthorn

I beg to move, in page 8, line 14, after "given," to insert "and the material conditions."

The Minister has said on the last Amendment that contract or other arrangement might very well go off on some matter which has nothing to do with price. We are now on the only, or at least essential Sub-section which provides for arbitration, under (a) in contractual cases and under (b) where the arrangement arises or is sought to be made to arise out of a request. In both cases the words as they stand seem to me to limit the right of arbitration very strictly to the question of price or remuneration. It may be that that is; the intention and that the Committee ought to acquiesce in it. I have put down the Amendment in order that I and perhaps others in the Committee may be more clear whether that is the Minister's intention and whether it is the desire of the Committee that that intention should be on the Statute Book.

5.9 p.m.

Sir Herbert Williams

I hope the Minister will give sympathetic consideration to the principle of this Amendment. The terms of a contract are not only the price, but quantities, the dates at which they are to be delivered, and the rates of delivery. A direction might be given to a manufacturer involving him in a task beyond his scope and he might have a legitimate sense of grievance. He might be treated roughly. I think the power of arbitration ought to go beyond the question of price and bring in the question of delivery, or any other considerations which are important in any contract.

Mr. Burgin

I had no intention originally that the only matter of arbitration should be price, and the Bill as drafted is not intended to limit the arbitration to price. If my hon. Friend will allow me between now and the next stage to consider whether any revision in drafting is requisite, I shall be happy to deal with the matter on those lines.

Sir H. Williams

I am glad to hear what the Minister has said. If he reads paragraphs (a) and (b) I think that, as they stand, it is clear that they limit the arbitration to price.

Mr. Hely-Hutchinson

A little later on it is laid down that the arbitrators shall have regard to all relevant considerations. That opens up very much wider questions which many of us who would like to support the Amendment would like to see.

Mr. Pickthorn

I understand that the Minister thinks other elements in the contract besides price are already covered and that if they are not the Minister will see to their covering at a later stage.

Amendment, by leave, withdrawn.

5.13 p.m.

Sir Arnold Gridley

I beg to move, in page 8, to leave out lines 22 and 23, and to insert "to be selected as hereinafter provided." I should like to ask you, Colonel Clifton Brown, whether it would be for the convenience of the Committee if this Amendment and a subsequent one to leave out similar words in. page 9, line 42, and the new Clause setting up a panel of arbitrators were all discussed together?

The Deputy-Chairman

They are both consequential on the first Amendment, and the next Amendment on the Paper in the name of the hon. Member for Duddeston (Mr. Simmonds) would also fall into this Amendment.

Sir A. Gridley

I feel now that the Committee has arrived at a point on which there may be a vital difference between the Minister and ourselves. Under the powers which the Bill seeks to give on arbitration, apparently the Minister can appoint all the arbitrators who will sit on his panel and he can then decide which of these gentlemen may constitute an arbitration tribunal. I have the very strongest objection to a man having it within his own power to decide, through some third party whom he has appointed, whether he is in the right or in the wrong. In other words, I object very strongly to the Minister being the judge in his own case.

Let us consider the very complete powers which the Minister will have over industry. Under Sub-section (3) the Minister has power to command firms, whether they are willing or unwilling, to enter into a contract for the delivery of such articles and the carrying out of such works—these are the important words—on terms which appear to the Minister to be fair and reasonable; and, if such a firm refuses to enter into a contract, or to accept any terms that may be suggested, it may be compelled to carry out the work. With that I do not disagree, but, if a dispute arises, the firm is at the mercy of an arbitrator appointed by or through the Minister himself. The very fact that the House intends, rightly, to give to the Minister very wide powers in the circumstances with which we are faced, is the strongest possible reason why he himself should not be open to any possible shadow of suspicion that he is interested in any dispute or that he can control in favour of the Ministry any decision that may be given. I am sure that, if firms can feel that there is a completely independent arbitrator or arbitrators to whom disputes may be referred, there will be far less hesitation, if there is any hesitation at all, in carrying out any work which the Minister may instruct them to do.

If the Minister agrees in principle that he and his Department should have no responsibility whatever for deciding who the arbitrators are to be, if he accepts the principle, my hon. Friends and I are not particularly wedded to the exact suggestion of our Amendment. Those of us who have been engaged in business have at one time and another entered into commercial and engineering contracts of varying kinds, and are accustomed in those contracts to arbitration clauses. In the case of engineering contracts, for instance, it is customary for the arbitrator, failing agreement between the parties, to be appointed by the president of one or other of the learned engineering societies. Very large and important matters may be at issue, some on engineering points, some on financial points, some, possibly, on points of legal interpretation of contracts; and where a dispute was sufficiently large to justify the appointment of three arbitrators, I myself, if I were engaged in such a dispute, would have complete confidence in three, one being a barrister recommended by the President of the Law Society, another a man of experience in engineering appointed by the President of the Institution of Civil Engineers, and, if any involved question of accountancy were concerned, such as what is or is not usable or redundant capital in carrying out a large contract, I should have complete confidence in an arbitrator appointed by the President of the Institute of Chartered Accountants. It is for these reasons that we have suggested the particular form of tribunal set out in the Amendment.

I should like to point out, also, that we provide for assessors. The chairmen of the panel of arbitrators may in certain cases decide that the dispute justifies one arbitrator only, and it may be that the Minister, or the firm with whom he is in dispute, does not particularly like that arbitrator. In such a case it would be open to either party to the dispute to appoint their own assessors, and then they can be quite sure that their respective interests will be properly looked after. I notice that the Bill is silent as to who, if an arbitration takes place, should bear the costs of the arbitration. My hon. Friends and I have not attempted in this Amendment to deal with the question of costs, because the Bill leaves it an open question, but, if arbitration has to be resorted to, I would suggest to the Minister that some new Clause should be incorporated in the Bill providing that the Arbitration Acts shall apply. If there has been an omission, wittingly or unwittingly, by the draftsman, I suggest that that is a point which should be looked into.

May I now say one word to hon. Gentlemen opposite? I hope they will see their way to support the Amendment, if not in the form in which it stands now, in some such form. I would base my argument on this hypothetical supposition. Suppose that I, as a manufacturer, decided that I would put up a new factory in which to carry out Government work, and that I said to 500 men in the locality, "I am going to build this factory, and I am going to employ the whole lot of you; but the wages you are going to be paid we will settle hereafter. You need not worry about it now, because, if we cannot agree, I will agree to its being decided by an arbitrator, but that arbitrator must be drawn from a panel appointed by me." That is the position under the Bill as it stands. I cannot see hon. Members on the other side, whether connected with trade unions or otherwise, agreeing to put themselves in a position of that kind. I certainly would not do so. On these grounds I venture to hope that hon. Members opposite will see fit to join with us in getting a reasonable adjustment made of the present proposals for arbitration.

5.24 p.m.

Mr. Herbert Morrison

I respond to the invitation of the hon. Gentleman opposite to express our views on this matter in relation to the wording of the Amendment and the hon. Gentleman's speech. We cannot see why there should be a different procedure with respect to the appointment of these arbitrators from that, which prevails with respect to arbitrators in a number of matters that affect the interests of labour. It is already the practice of the Ministry of Labour, in connection with disputes where labour is involved, to appoint an arbitrator from a panel of arbitrators constituted by the Minister himself. Some of them, I agree, are nominated by the Trades Union Congress, but the question whether the Minister accepts them for inclusion on the panel or not is a question for the Minister, and, once they are on the panel, it is the Minister who makes the selection from the panel. I think I can say that, broadly speaking, although the trade unions do not always get what they think they are entitled to from arbitration, they would not question the general fairness of these arbitrators according to their lights and according to the purpose of the legislation they are administering.

The fact must be faced that the kind of arbitration here envisaged is an arbitration about an essentially commercial matter— a dispute as to the price which should be paid for goods or services required by the State. I should have thought that that was' not a matter in which you have to get. the type of abstract judicial fairness that you get in the High Court of Justice. I am not criticising at this juncture the kind of justice that is dispensed by the courts, which, generally speaking, have a very high reputation, though sometimes cases occur over which some of us on one side or the other feel like exploding. But the function of the High Court is essentially justice of the legal, judicial order, on the interpretation of Acts of Parliament or regulations made under Acts of Parliament. It is not that kind of justice that has to be done here, but commercial justice— justice in relation to the broad accepted facts of the commercial situation. It is an administrative or commercial fairness as between the State on the one hand and the suppliers of goods or services on the other. Knowing how State Departments work, knowing how Ministers are always encouraged to be fair in these matters in the appointment of arbitrators, and how very difficult it really is for a Minister to be grossly unfair, even if he wanted to be, I should have thought that the constitution of a panel of arbitrators by the Minister concerned, and the appointment of arbitrators from that panel, is really calculated to do substantial justice between the State and the person concerned.

There is another danger of which we must beware, and into which we can easily fall, and that is why it is so important that these men should be men of fairness on the one hand and common sense on the other. They need, for the proper discharge of their administrative or quasi-judicial functions, to be fair-minded, to be objective in their thought; but they need also to be men of common sense and of a practical frame of mind. It happens now and again that the value of land as between a local authority that wants to buy it and the vendor who is required to sell it has to be assessed, and there is a type of arbitrator engaged in that work who just does not earn his money. He takes the claim of the local authority as to what the price ought to be, and he takes the claim of the vendor who is being compelled to sell his land as to what he thinks the price ought to be; and this type of arbitrator thinks he has done his job when he fixes his award about midway between the two. That type of arbitrator exists, and I say that he is not doing his job. His function is to fix a value which he thinks is fair, but if he does it in that way he is simply not earning his fees, and the result is that local authorities and owners of land, after some experience of this kind of mathematical foolery, both manipulate their figures in order to try to get the result which they think the working of this man's mind will produce.

In arbitrations of the kind we are considering, that sort of thing might easily occur, and, if the Minister has the fear that when he goes to arbitration he will get that kind of rough-and-ready reasoning, he may be driven, as he ought not. to be driven, into coming to conclusions about prices that are influenced by the kind of conclusion that may be arrived at by the arbitrator, or the Minister may feel that he has to give way to a contractor or subcontractor who is asking an exorbitant price, because he cannot get the kind of justice that he ought to get from the arbitrator. It is of the greatest importance, not that the Minister or anybody else should manipulate the appointments in order to produce a givenresult— I am quite sure he will not do that—but that the public interest shall be protected against the type of meticulous arbitrator with an essentially legal mind, quite suitable for the courts, but not for a job of this kind which requires two qualities: fairness on the one hand, and common sense, or an understanding of commercial justice, on the other. Therefore we think that this is not an Amendment we ought to support.

5.31 p.m.

Mr. Burgin

I have sympathy with a good deal of what the Mover of the Amend- ment said and with the whole of what the right hon. Gentleman the Member for South Hackney (Mr. H. Morrison) has just declared. I will tell the Committee at once that this idea of an arbitration tribunal which could be thought by some people to make the Minister judge in his own cause filled me with some disquiet. At the same time the idea of the perfectly cold, theoretical arbitration tribunal, such as the right hon. Member for South Hackney referred to, filled me also with a certain amount of dismay, because I am quite sure that that is not the kind of arbitration that will be wanted for the disputes which will arise under this Clause. The Committee will realise, after the Debate on the Second Reading and yesterday's and to-day's Debates, the tremendous width of possible discussion that will come before these tribunals. We are dealing with supply in all its aspects, from the intricacies of wool and worsted and cotton for clothing to the highest branches of engineering. It is no good taking a lawyer or an engineer at large for deciding matters of that kind, which may depend on a knowledge of the customs of the trade, on industrial experience, or on broad business acumen for a decision. My idea in framing the Bill was to meet possibilities of that kind by having a panel which would be wide enough to include all those varieties of specialised interests. It may be said, 'If you give the Minister power to pick the actual one or three from the panel, you are going unnecessarily far."

While I cannot accept the Amendment, I will make this offer: that, while retaining the power to select the panel, I should be willing to have some provision inserted in order that the panel should be allowed to elect its chairman, and that the particular arbitrators for any dispute should chosen, not by me, but by the chairman of the panel, from amongst the members of the panel. If that commended itself to the Committee, I should be willing to make that change between now and Report. My idea of making the panel was to include specialised knowledge, and it was merely the diversity of knowledge necessary which induced me to think that the Minister should select the particular arbitrator. If the proposal I have made commends itself to the Committee, the panel would be broad enough to include representatives of labour, and I should think there would be a good deal to be said for the proposal. What I had in mind was to make a fairly large panel of appropriate people, all above suspicion, all experts in some part of the area covered by Supply, who would have power to elect their chairman, and the chairman would have power, on being told that there was a reference, to select the particular arbitrators for that reference.

5.36 p.m.

Mr. Simmonds

I am sure the Committee is indebted to my right hon. Friend for the suggestion he has made, but my hon. Friends and I—who are responsible for the Amendment to which you referred, Colonel Clifton Brown—do not think that the Minister has gone quite far enough. In substance, the proposal he has now made is that contained in the original Bill. We feel that the premises of the argument by the hon. Member for Stockton (Mr. Harold Macmillan) are correct, but those premises lead us to a somewhat different conclusion. We fancy there is something in what the Minister said—that he did not want to get the procedure too cumbersome. If he adopted a suggestion something like that contained in our Amendment, he would not have too cumbersome a procedure, and he would be free from the charge which can be laid at his door as the Bill stands. It is wise to have an arbitrator, if you can, on whom both parties to the dispute have agreed.

I think the right hon. Gentleman the Member for South Hackney (Mr. H. Morrison) thought that this worrying about who the arbitrator might be and whether he would be acceptable to the other parties to the dispute was a little hypothetical and unreal. I might tell him of a case which was brought to my notice only recently by a constituent of mine. He had a dispute with one of the Defence Departments over a substantial contract. He found, to his dismay, that the arbitrator whom the Minister proposed to appoint had until recently been the professional adviser to the Minister on the subject of prices for the type of contract in question. He never suggested that the arbitrator would not endeavour to arbitrate fairly and equitably; but everybody knows that if one day you are part of an organisation and the next day you are asked to arbitrate between that organisation and a, third party, you are put in a desperately difficulty position.

I think the Minister, in his own interests, would be wise to take some steps so that the party with whom he is in dispute shall agree on the arbitrator. If, therefore, he would retain his panel of arbitrators, but: adopt the procedure suggested in our Amendment, there could be no dispute as to the equity of the arbitrators. These arbitrators generally will be concerned not with minor matters —they will be settled quietly—but with cases where hundreds of thousands of pounds are involved. The Minister will put himself in a very difficult position unless he gives the other party to the dispute some say in the appointment. Even if he does not feel happy about our Amendment, I hope he will go a good deal further than the offer he has made.

5.41 p.m.

Mr. Hutchinson

The importance of this Amendment seems to be this: What we have to secure is that the parties concerned shall have confidence in the tribunal which is to be set up. If the arbitrators are to be chosen by the Minister, and by the Minister alone, although it may be that they will deal in a perfectly fair manner with the matters which come before them, they will not command that confidence from the parties whose affairs they will have to review which it is essential that a tribunal of this character should have. The right hon. Gentleman the Member for South Hackney (Mr. H. Morrison) made some observations about the arbitrators before whom the affairs of the local authorities have to come. I am quite sure he did not intend that the Committee should apply those observations to the official arbitrator who adjudicates on affairs arising under the Acquisition of Land Acts. He certainly, in my experience, commands the respect of all the parties who appear before him, and I would ask my right hon. Friend whether he would not adopt a procedure for selecting these arbitrators somewhat similar to the procedure adopted in selecting the official arbitrator. My recollection is—perhaps hon. Members will correct me if I am wrong—that the official arbitrator under the Acquisition of Land Acts is selected by the Lord Chief Justice of England, the President for the time being of the Surveyors' Institution, and the Chairman of the Law Society. Arbi- trators selected by such bodies as that will, I am sure, command the confidence of parties who come before them.

If my right hon. Friend feels that that sort of procedure is not going to produce the type of arbitrator he wants—and I agree it is desirable to have somebody with a commercial standpoint—let him be one of the persons who appoints the members of the panel, but I hope that when he appoints them he will associate with himself in the selection somebody who can be regarded as impartial, and in whose selection the public may have a greater measure of confidence than they would have in a panel selected by my right hon. Friend alone.

5.45 p.m.

Mr. Lees-Smith

The right hon. Gentleman made an appeal to the Committee to come to agreement on this problem, and he has endeavoured to obtain agreement on both sides of the Committee. My right hon. Friend the Member for South Hackney (Mr. H. Morrison) has explained that so far as his hon. and right hon. Friends here are concerned we cannot agree to a panel chosen by these various outside organisations, but that the panel should be chosen by the Minister himself. We come to the question as to how the arbitrators are to be appointed from that panel. He has made a proposal, that instead of the arbitrators being proposed by himself, the panel should select its chairman, and the chairman should appoint the arbitrators. To that there is one difficulty. The panel is merely a list of names. It is a body which does not meet together, and therefore you would have a panel without any corporate existance at all appointing a chairman. The panel would perhaps meet in a corporate capacity once in two years and appoint a chairman, and then not meet again. The whole process of appointing a chairman would have to be arranged through the various negotiations before the meeting of the panel took place. I imagine that what would happen in practice would be that the Minister would suggest whom the panel should appoint. Therefore I do not think that the method of the Minister is a happy one for the appointment of chairman.

There is a very good precedent which, I believe, might meet with general satisfaction, and that is the Industrial Court. That court settles hundreds of disputes a year in regard to wages. When I was at the Post Office we used to have millions of pounds at stake in the decisions of the Industrial Court. The chairman appoints the arbitrator. The difficulty of finding the right chairman is got over by the arrangement with the Ministry of Labour. The chairman is Sir Harold Morris. I suggest to the Minister that that would be the way to overcome the difficulty.

Sir H. Williams

Who selects the arbitrators? Are they selected entirely by trade unions or by employers?

Mr. Lees-Smith

The chairman of the panel of arbitrators selects the arbitrators.

Sir H. Williams

Who appoints the panel of arbitrators?

Mr. Lees-Smith

The panel of arbitrators is appointed by the Minister.

Sir H. Williams

In this case, the proposal is that the panel arbitrators should be appointed by one of the interested bodies. I am glad that the right hon. Gentleman has brought in the Industrial Court because they are not appointed by only one of the interested bodies, and if he will bring in an Amendment on these lines I will support it.

Mr. Lees-Smith

Undoubtedly the: panel is appointed by the Minister, and he takes into account the names suggested by employers' organisations and others. I am not discussing how the panel should be appointed, but I am pointing out that the method adopted by the Industrial Court in respect of chairmen has been one which for years has been accepted, I believe, without any criticism. If the Minister would consent to appoint the chairman in that way, we on these benches would agree to the suggestion.

5.50 p.m.

Sir H. Williams

We have had a most valuable suggestion that the Minister should appoint one half of the panel. The right hon. Gentleman will realise that his right hon. Friend advanced no arguments at all for his proposition. He merely says, in effect, that you get a gentleman to express an opinion about the value of land, and another gentleman to express another opinion. You put those opinions together, divide them by two, and the result is a form of arbitration. The value of land is always a matter of opinion. We are not dealing with matters of opinion, but with matters of ascertainment, and we want people who can use their capacity in a satisfactory manner. The Industrial Court is just what we want. The appointing Minister cannot be the Minister of Supply. Let it be the Lord Chancellor who appoints the chairman. The rest of the names could be suggested either by the trade unions, one of the interested parties, or the employers, the other interested party. Let us let the Minister appoint one-half of the panel and let some association of manufacturers, the Asociated Chambers of Commerce or the Federation of British Industries, act as nominators on behalf of the contracting firm. Then we would have a panel which everybody would trust, with a chairman appointed by an impartial person. [Laughter.] Hon. Members opposite may laugh, but it is precisely that for which the right hon. Gentleman asks. I seized on his suggestion.

Mr. H. Morrison

Is the hon. Gentleman going to forget that they are not the only elements in capitalist society? Is he forgetting the trade unions and the co-operative societies?

Sir H. Williams

In this matter the trade union interest is not involved. Between whom will a dispute lie? It will lie between a contractor and the Minister. Clearly the two interested parties will be the Minister and the contractor, and if you are to have the interested parties nominating part of the panel, they will be the right people. If a dispute brings in rates of wages, I agree that there ought to be an element on the panel nominated by the trade unions. If that is likely to arise, I accept and support most enthusiastically the suggestion of the right hon. Gentleman, which is the complete solution of the problem.

5.53 p.m.

Mr. H. Morrison

I only want to point out to the Committee where the hon. Gentleman the Member for South Croydon (Sir H. Williams) is getting himself. He is merely backing up a series of interests. The Minister is the public interest, or ought to be, and let us hope that he is, and therefore the persons that he appoints ought to be fair-minded, impartial people. The hon. Gentleman wants to weight them down with sheer capitalist interests who are there because they are capitalist interests, with interests against the State and against the community.

Sir H. Williams


Mr. Morrison

Oh, yes. I should not expect anything else from that quarter. It is the purpose of certain Members opposite to see that, above all, private interests shall have their fingers in all these pies where the public interest is concerned.

Sir H. Williams

The right hon. Gentleman the Member far Keighley (Mr. Lees-Smith) said that when he was at the Post Office he used the Industrial Court in order to deal with disputes between himself and his employés. His employés were the people trying to get more money out of the State. What is the difference in principle? There is no difference between a workman getting an extra is. an hour and a contractor getting an extra is. an hour. One: is no higher minded than the other. Let us be frank.

Mr. H. Morrison

I think that it is a totally different operation. I suggest that the Bill as drafted is right, and that it is far better that the Minister, on the advice of his officers, should select people technically competent for this work to discharge their duty fairly in relation to commercial common sense and to technical facts. I do not like the thing at all. This business of bringing in arbitration for this kind of affair is bound to have its difficulties whichever way it works. On the other hand, I admit the difficulty, if you look into this world of private interests, of resisting a third party being brought in. I am not sure, even as the Bill is drafted, that it will work as well as it ought to do from the point of view of the public interest, but I am certain the line of argument suggested by the hon. Member for South Croydon, admittedly a perfectly logical argument for him and his frame of mind, is really pernicious from the point of view of the public interest. He would have a sort of capitalist soviet to deal with this kind of thing and I want to see a bit of clean administration.

The hon. Gentleman the Member for Duddeston (Mr. Simmonds) put a terrible case, in his judgment, where a person appointed as a sort of arbitrator had previously been a technical adviser to the Minister. If it is of any comfort to the hon. Member, I know of people appointed as chairmen of tribunals where public interests were to come before them who had previously appeared as legal advocates of capitalist interests before that tribunal, but I never heard of any protest from hon. Members opposite. If that argument is to be produced it should be applied all round. The theory of these appointments is that, because a person has acted professionally in advising a Ministry, it does not necessarily debar him from advising the Minister fairly on a matter of this sort. Therefore, the Minister would be wise to leave the Clause as it is. I do not say that any solution is absolutely perfect, but on balance it is a fair procedure on these matters.

5.57 p.m.

Mr. Burgin

I am not able to accept the Amendment. I gather that we are discussing really three Amendments together, and not one of them can be accepted by me. I have told the Committee that I want something much more than impartiality, integrity and character. I agree that nominees of the Lord Chancellor, and the President of the Law Society, and the President of the Surveyors' Institute would all have these qualities, but I want more. The particular matter in dispute may be some coal or engineering matter or some question of costing and large-scale business transaction. Assessors are a quite unsatisfactory addition to a tribunal. They only lengthen its tenure of arbitration and probably add to the expense. I want a tribunal of thoroughly intelligent people, sufficiently widely chosen, so that there will be the probability that among the panel there will be somebody recognised by everybody as obviously capable of dealing with the particular dispute. I went on to suggest that if it commended itself to the Committee, I would give the panel the right to select each member of the tribunal appointed for a particular arbitration, and would leave that to the procedure of the panel itself. I quite appreciate that that would mean appointing a chairman, a secretary and, so to speak, a business committee, and presumably some inner panel, so that an engineering dispute could go to one of three, and an accountancy dispute to one of three, and so on. But I prefer the Clause as it is to the Amendment.

May I point out to my hon. Friends on the Government Benches that some of the circumstances in which this arbitration would come into existence would be in a matter of sanction where a contractor has failed? We are dealing here with what may be an instance where the contractor has let down the Government by failing to supply, and in these circumstances the Minister gives directions that the work should be done, and then there is an arbitration as to the price. In these circumstances it may be very important, while having everything for which the Committee have asked with respect to character and integrity, to have the skill which can really determine what should be the right solution for that particular arbitration.

I must ask the Committee to reject the terms of the Amendment, and I cannot accept the suggestion that there should be an agreement between the contractor in default and the Minister as to who should be the arbitrator. I cannot accept that, and I think, for the reasons 1 have given, that a tribunal consisting of nominees selected by the Lord Chancellor and other distinguished legal luminaries is inapplicable to the type of rough business justice which ought to be given by someone who, knowing the circumstances, can place himself in the shoes of the person in regard to whom the dispute has arisen. Unless the suggestion I have made, that the tribunal itself should in some way select the actual arbitrator for a particular dispute, is accepted, I think it would be in the interests of all parties that I should both select the panel and select the particular individual. If that is thought to be too much I would willingly delegate the appointment of a particular arbitrator from the panel to the chairman of the panel, but that must be a matter on which the Committee should give me some indication of its mind.

Sir A. Gridley

I must confess that I am far from satisfied with the line which the Minister persists in taking. At the same time, I know how anxious the Government are to get the Bill through as quickly as possible in view of the heavy programme in front of them. Would the right hon. Gentleman be prepared to discuss this Clause between now and Report stage with the representatives of all parties to see whether a little further discussion might not lead to an agreement?

Mr. Burgin

I do not think that any offer from myself to discuss the matter between now and Report is necessary. I must go forward with my Measure, but if on Report stage some agreement is brought before me by all the different parties concerned, a combined solution, it would have a considerable effect on my mind.

Mr. Lewis

As the Minister has not yet made up his mind that he will give the selection of a particular arbitrator into the hands of the chairman, and still contemplates retaining that right himself, may I put this case to him? Suppose he selects a certain individual arbitrator to act in a particular case, and suppose he is very dissatisfied with the award that is given. And suppose that a somewhat similar case comes up afterwards, would he appoint the same arbitrator? If he would not, clearly he is tampering with justice. He has originally appointed these arbitrators saying that he believes they are perfectly qualified to judge, and because he is dissatisfied with a given judgment I gather that he would not appoint them in a similar case shortly afterwards. That is a very vital point and I think we should hear what the Minister has to say.

Mr. Burgin

What I understood the hon. Member to say was this, and if I have misunderstood the hon. Member perhaps he will correct me. What I thought the hon. Member said was, assuming that out of this panel of arbitrators a particular arbitrator is appointed because you think he is the right man for the dispute, and when it is decided you are dissatisfied would you in a precisely similar set of circumstances choose the same arbitrator? I should have thought not. [Interruption. ]I would still choose an arbitrator from the same panel, but I do not think that anyone should be asked to give an assurance that it should necessarily be the same one. 6.6 p.m.

Commander Sir Archibald Southby

I apologise to the Committee that circumstances beyond my control prevented my being present to hear the Amendment moved. I must confess that I do not think the Minister should be not only the judge but the selector of the jury in a case which requires arbitration. From what has just fallen from his lips in reply to the case put by the hon. Member for Colchester (Mr. Lewis) I understand that the Minister who:s to select the panel, and who is to take from that panel the arbitrator to arbitrate in a particular case, now says that if the arbitrator gives an award against the Minister then, should an exactly similar case arise he would not put the same arbitrator to judge that case-but would select someone else. Surely the Committee would be very unwise—this is no party matter at all—to put into the hands of the Minister the power to be not only judge and jury, but the selector of the jury, in any case in which the Minister is involved. I think that the old practice should be maintained in this Bill and that a panel of arbitrators should be chosen from outside. I understood my right hon. Friend to say that he was prepared to concede the point that he should not select from the panel of arbitrators a particular arbitrator but would leave it to an independent chairman of the panel. I think that as far as this Committee is concerned there is not very much in that offer. If the Minister has already selected the whole of the panel he has in fact selected the people who please him and who may not necessarily please the heads of industry or indeed the workers in the industry which may be involved in a dispute.

I would like to see a quite impartial panel set up with members of the legal profession and particularly with a member of the Trade Union Council on the panel. [Interruption.] I do not suppose that the hon. Member for West Fife (Mr. Gallacher) likes the Trade Union Council very much, knowing what his political outlook is. I like the trade union movement and I think that in many cases where there is a dispute with the Minister the point of view of the people employed in the particular firm will have to be taken into account. Not only from the point of view of the workpeople but from the point of view of everybody concerned with the dispute it will be better for someone to be on the panel who would have the confidence of those engaged in the industry. I view with great apprehension what the Minister has just put forward in answer to the question by the hon. Member for Colchester, and I beg him to give us a promise that between now and Report he will consider the suggestion to set up an impartial tribunal which will have the confidence not only of the Committee but of everybody concerned in any dispute which 1 may arise.

6.10 p.m.

Mr. Lees-Smith

May I act in the capacity of arbitrator in the dispute which seems to be going on, and may I say that certainly listening to the question put by the hon. Member for Colchester (Mr. Lewis) and the Minister's reply, it appears to me that the reply has been twisted into something which the Minister did not originally say. I understood the question was this; suppose you appoint an arbitrator who has given a decision which shows that he is a bad arbitrator—

Mr. Lewis

Perhaps the right hon. Gentleman will allow me to say what I did say. I said: if the Minister appoints an arbitrator for a given case and if the Minister was profoundly dissatisfied with the judgment of the arbitrator —

Mr. Lees-Smith

That is a form of words which is capable of two or three interpretations. It was a question put with great skill and was bound to lead the Minister into difficulty. If you say that the Minister was "profoundly dissatisfied" it would lead to the conclusion that the Minister thought the arbitration was rather in judicial in its character. The mere fact that the arbitrator found against the Minister does not necessarily mean that the Minister would be profoundly dissatisfied, and when the question is put in the form that he was "profoundly dissatisfied," it means that the Minister feels there was something wrong in the arbitration, and in those circumstances the right hon. Gentleman is justified in saying that he would think twice before he appointed the same man.

Mr. Burgin

And similarly, if the arbitration is very much in the Minister's favour it does not follow that you bring that particular man in to solve every similar dispute. You draw from the panel the man who is best fitted for undertaking the particular dispute.

6.11 p.m.

Sir Percy Harris

We have had a very interesting discussion so far and my sympathies are with the Minister. I am sure that arbitration is the right method and system, and we need to get a panel of competent, efficient and trained men who can be trusted to settle these disputes between Government Departments and private enterprise. Perhaps the reply of the right hon. Gentleman was unfortunate. It rather suggested that out of a carefully selected panel, selected by himself, if one particular case went against him, that that particular arbitrator would go on the black list.

Mr. E. J. Williams

May I interrupt the hon. Member?

Sir P. Harris

No, I should like to state the case in my own way. I think the Minister made a sensible proposal. The suggestion was that between now and Report stage we should consider whether we can devise a panel of arbitrators to select from, that they should elect their chairman and that the chairman should be charged with the duty of selecting an impartial arbitrator for the particular case which has to be decided. That was a constructive proposal, and I suggest that because it has not been received with enthusiasm he should not throw it over. He should stick to his original undertaking and consider whether he cannot draft words to meet the case.

6.13 p.m.

Mr. Bracken

I agree with the hon. and gallant Member for Epsom (Sir A. Southby) that the position at the moment is extremely unsatisfactory. The Minister, who is a lawyer, used these words: "I want to deal out rough business justice. With his handpicked tribunal I feel certain that the right hon. Gentleman will deal out rough justice, but I do not know whether it will be justice. For the Minister, who is himself a lawyer, to say that he disregards the independent nominees appointed by the Lord Chancellor and other authorities, is a Napoleonic attitude; for him to say that he is going to deal out this rough business justice through the nominees he has selected is utterly unsatisfactory. I do not think that the Committee should wait until the Report stage; they should accept the Amendment. The Minister has been given reasoned arguments for its acceptance, but he has treated them with the greatest contempt. It is true that he has the support of the Socialist party opposite, who have given their explanation of his explanation and have made things even more confused. I hope my hon. Friends will persist in their proposal. I have never heard a lawyer in this House throw away the trappings of his profession so far as to say that rough business justice is better than the ordinary settled process of the law.

6.15 p.m.

Mr. Gallacher

I had not intended to intervene in this discussion, but one or two things have been said which demand an answer. Fully appreciating the idea of business justice that is held by the business men in the Committee, I can quite well understand their being terrified at the thought of the Minister using the words "rough business justice." When he hears such a remark, every one of those representing big business immediately feels that he is going to get a dose of his own medicine. One of these representatives of big business has suddenly discovered a warm-hearted desire to help the trade union movement. Is there any hon. Member who believes that the hon. and gallant Member for Epsom (Sir A. Southby) was sincere in his talk about the trade union movement? The hon. and gallant Member made a remark to the effect that somehow or other I have some antipathy towards the trade union movement. I have always been a loyal trade unionist, and I believe that if the trade union movement and the working-class movement were given the responsibility of organising supplies, that organisation would be carried out in the most effective manner.

Sir A. Southby

The hon. Member says that he supports the trade union movement. If that is the case, is it not a pity that the trade union movement will not support his political movement, the Communist movement?

Mr. Pritt

What has that got to do with it?

The Chairman (Sir Dennis Herbert)

I do not think it has anything more to do with that than this discussion has to do with the Amendment.

Mr. Gallacher

It is no more germane to the Amendment than the opinions that have been expressed by hon. Members opposite. We are dealing with the position of the Minister in relation to the panel of arbitrators. The desire of those who support the Amendment is not to get independent arbitrators, but to get arbitrators who will represent and look after the interests of the Federation of British Industries. That is all they are concerned about. Reference has been made to the fact that the Minister is to be judge and jury in his own case. I have had some experience of judges and juries, but in this case, I am prepared to give the maximum support to the Minister, on one condition. I will make him judge and jury —

Mr. Bracken

The hon. Member will be Under-Secretary before long.

Mr. Gallacher

—in these particular matters if he will give me one pledge, and that is that on the first opportunity he will put all the members of the Federation of British Industries where they belong—in jail.

6.18 p.m.

Sir I. Albery

After listening to the discussion, I cannot help feeling that it is a pity that those of us who are interested in this Clause did not accept the offer, which I understood the Minister made, to have an independent chairman. Without wishing in any way to exaggerate the reply which the Minister gave to my hon. Friend the Member for Colchester (Mr. O. Lewis), I am sure that my right hon. Friend must realise that a case can occur in which he may find himself in some difficulty in selecting these arbitrators, if that duty is to devolve entirely upon the Minister. As he himself admitted, it is not likely to occur, but in the event of an arbitrator giving a decision which was most unsatisfactory, the Minister would, perhaps not unnaturally, think that was not an arbitrator who could be selected again. Even without such an extreme case happening, I cannot help feeling that if the Minister really wishes the Clause to be administered with a full sense of justice, he will himself agree that in all circumstances it would be far better that the particular arbitrators who are to decide different cases should be chosen by an impartial and independent chairman. I very much hope that the Minister did himself have that idea, and as there is a very general feeling in many parts of the Committee that some such alteration is needed, I hope he will again repeat his offer to consider this,

6.20 p.m.

Mr. Ernest Evans

I want to ask the Minister to reconsider the statement he made, which I think was most unfortunate. He was asked the question whether, supposing that an arbitrator gave a decision against him and another case arose which involved very similar circumstances, the fact that the arbitrator had given a decision against him would induce him to appoint another arbitrator on the next occasion. [HON. MEMBERS: "No."] I think we had better clear up this matter. As I understood the hon. Member for Colchester (Mr. O. Lewis), his question was as follows. Suppose that an arbitrator gave a decision against the Minister, and suppose that another case arose in which similar circumstances were involved— [Interruption] —would that induce the Minister, in the second case, to appoint another arbitrator? Would not there be a prejudice in the Minister's mind against appointing the same arbitrator on the second occasion? The Minister said, "Yes." the fact that the arbitrator had given a decision against me would induce me "

Mr. Burgin

I said nothing of the kind.

Mr. Evans

I am not the only one who was under that impression. As I understood the remarks of the hon. Member for Colchester, that was the precise question that he put to the Minister. It is there that my difficulty arises. I was alarmed by the Minister's statement that on the second occasion he would look for another arbitrator. If that is not what he meant, then I misunderstood him; and if it is what he meant, it is one of the most damaging statements I have ever heard.

6.23 p.m.

Mr. Burgin

As the statements I have made are in question, I had better indicate what I thought I said. As I understood it, the question was whether the same arbitrator would be appointed again in a similar dispute, and I said I thought not, meaning not that there was some prejudice, but that there was no assurance that you would appoint the same arbitrator again merely because the same point was in dispute. What I have been trying to say throughout is that you appoint a wide panel and you pick the right man for a particular case. There is no assurance that, because an arbitrator handles a dispute on a particular occasion, the same arbitrator will handle another dispute of the same kind. [Interruption.] Hon. Members can look up the Official Report when it appears. I was under the impression that the hon. Member for Colchester (Mr. O. Lewis) asked me expressly whether, if an arbitrator decided a particular case and decided in a way contrary to what the Minister had expected, the Minister would, in a similar case, appoint the same arbitrator? I said "No." [Interruption.] Hon. Members misunderstand me. What I am getting at is that there is no argument for or against a particular arbitrator being appointed again. You select the arbitrator ad hoc each time, when a dispute comes, from a panel selected a long time before.

6.25 p.m.

Mr. Lewis

I do not want to claim to have "caught" the Minister in any way, for, after all, he has a difficult job in replying to all the points that are suddenly put to him; but I would like to call attention to what actually occurred. I put to him this specific case. If he appointed an arbitrator in a given case, and the arbitrator gave his decision and the Minister was profoundly dissatisfied with that decision, if another case occurred shortly afterwards of a similar character, would he appoint that arbitrator again? The Minister gave a perfectly natural and sensible answer—"No." Anyone in the Minister's position would give that answer and act in that way. The fact of the matter is that, in those circumstances, it means that the Minister would be in the position that, having chosen this judge in the first case and having disliked the justice he had given, the Minister would choose another judge in another case. That is what we want to prevent.

6.27 p.m.

Mr. E. J. Williams

In this matter, I think the Committee has to be very careful that it does not give to the country the impression that the attempt on the part of hon. Members opposite in forcing the Minister to give way is for the purpose of obtaining representation for certain vested interests. I have listened to the whole of the Debate this afternoon, and it would seem to me that the pressure from the other side of the Committee is for the purpose of protecting in the arbitration certain vested interests. I think the Minister is trying to meet this matter quite clearly. In making an offer to the Committee, which he repeated a number of limes—when a large number of hon. Members now present were absent—obviously he would have met the point put my the hon. Member for Colchester (Mr. O. Lewis), but the hon. Member for Colchester at that point was not prepared to accept the offer. It was very simple to put a hypothetical case, in the nature of a kind of leading question to the Minister, in order to obtain from him the reply that was expected by the hon. Member for Colchester, apparently for the purpose of raising the heat that there has been in the Committee since. The Minister's reply was simple and straightforward. If a panel of persons are appointed as arbitrators in certain cases, one can never expect the same person to be appointed twice. No given person is appointed in perpetuity, even though the circumstances of the cases may seem to be similar. Obviously, from time to time, different persons are appointed from the panel, and the Minister was correct in his reply in that connection.

When I attempted to interrupt the hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris), he seemed to become very "shirty." Apparently he wanted to utter his words of wisdom, and was not prepared to accept an interruption. The point I wanted to put to him was whether he does not think that the Minister in this respect represents the public interest, and that being so, surely the Minister ought to be defended in a matter of this kind. There is no reason why the hon. Member for North Padding-ton (Mr. Bracken) should get heated on the subject. We are entering a sphere in which, for the first time, industry in this country is to be co-ordinated for a given purpose. For some months there has been a clamour for a Ministry of Supply. Now that a kind of enabling Bill has been initiated for the purpose of setting up an effective Ministry of Supply, the representatives of certain interests are endeavouring to obtain representation for those interests in connection with decisions which may have to be taken from time to time. I hope the Committee will accept the view put forward by the Minister. He is prepared to reconsider the matter before the Report stage. [Hon. Members: "No!"] If the Committee press him I think he would be prepared to do so, but no pressure has been brought upon him to do so. As far as we are concerned, we think the Minister is right in the stand which he has taken and I hope he will adhere to the terms of his original statement on this matter. I think it right that the Minister should have the power of selection in this case. Some of us on this side have had a great deal of experience in these matters. I could weary the Committee with instances from my own experience in the mining industry. During the last 25 years I have been involved in many problems arising out of arbitration and the hon. Member for North Paddington, who may know very little about these matters, must realise that during the last 25 years, to my personal knowledge, the miners have always had meted out to them what is called rough justice.

Mr. Bracken

Since the hon. Member himself has interrupted, may I interrupt the high tributes which he is paying to himself and his colleagues, in speaking of their experience in. these matters to say that I am objecting to the use of the words "rough business justice." I think the justice of the courts would be preferable.

Mr. Williams

I am sure that the Minister's reference to "rough business justice," meant that he did not want judicial justice, in the sense that there are certain factors entering into these matters which could not be denied in a court of law without an enormous waste of time. Arbitrators, as such, would have to exercise not only judicial functions but a great amount of common sense in dealing with all the issues involved. I think that is the correct interpretation of the Minister's statement. As I say, for years the miners have always had rough justice meted out to them and it has been very rough justice indeed in many cases. We have had experience of all kinds of arbitrations and I feel sure that in this case the Minister will be doing the right thing in retaining the appointment of arbitrators.

6.33 p.m.

Sir Annesley Somerville

Hon. Members opposite have accused hon. Members on this side of being anxious to obtain representation for vested interests. It is not so. What we want is not merely rough justice, but justice, or at any rate the best opportunity of obtaining justice, and what we object to is that the Minister who is the chiefly interested party should appoint his own judge. I suggest that my right hon. Friend would be wise to reconsider this point. It will be a standing reproach in connection with this Bill, if the Minister should deliberately attempt to force through the Committee a provision giving him power to appoint his own judge.

6.34 p.m.

Mr. Burgin

May I mention one reason which has perhaps escaped the attention of the Committee, why it might be wise to leave the power of appointment of arbitrators in the hands of the Minister? I am only doing this because I believe it to be in the interests of the Committee to bring forward every relevant point. If arbitrators were nominated by outside bodies, by distinguished judges, by the Lord Chancellor, or by the presidents of learned societies, those nominees would be free from any effective criticism in the House of Commons, whereas if the Minister responsible for carrying this Measure through, nominates the arbitrators, the matter can be raised on the Floor of the House. I also think it fair to tell the Committee that the type of tribunal which is proposed has been referred to the Prime Minister's Industrial Panel and meets with their approval in preference to the sort of tribunal which is suggested in the Amendment. I apologise if I made a mistake in the use of the words "rough business justice" but I simply meant justice as between business interests, without too much legalistic argument.

Sir A. Gridley

I am anxious to help the Committee to get on with the consideration of the Bill, but I wish to put two questions to the Minister. The first is this. Suppose the Minister asks a firm to carry out a certain contract and the firm say that they require an arbitration clause, providing that in case any dispute should ultimately develop and the parties cannot agree upon an arbitrator, that the arbitrator should be selected, say, by the President of the Institute of Civil Engineers. Would the Minister turn down that offer? My second question is this. In moving the Amendment I referred to the question of costs. I would like to know what the Minister has to say upon the observations which I then made. After the Minister has replied to those questions, I propose, with the concurrence of my hon. Friend, to accept the offer which he has made, and perhaps it will be possible to agree between now and the Report stage upon how the Clause should be amended.

Mr. Burgin

I am asked a hypothetical question. I am asked how I should deal with a contracting firm who made it a term of their acceptance of a contract that they would require the insertion of a particular arbitration clause. Under Clause 7 of the Bill it will not lie with the contractor to require the insertion of any clause. I think, therefore, the question is unlikely to arise. I can conceive cases in which you might hasten the supply of certain articles—and that is the prime reason for the Bill—by having the power to deal with disputes in such a way as was mutually agreed between the contractor and the Government but it is all hypothetical. The costs question is a minor one. Costs are always in the discretion of the tribunal itself and are dealt with as part of the matter to be decided. It is not necessary to insert either a reference to the Arbitration Act or an indication to the arbitrators as to how they are to carry out their functions. Once the issue in dispute is delegated to the arbitrators every matter pertinent to the dispute, including payment for stamps, and costs, and fees and so forth will be relegated to them. I think it would be found that their decision covered the question of costs.

The hon. Member said that, subject to the answers which I gave on these points, he would consider withdrawing the Amendment with a view to consideration between now and the Report stage. I do not wish to mislead the Committee. The suggestion of allowing the panel to appoint a chairman or deputy-chairman and of leaving it to the chairman or deputy-chairman to select members from the penal for each case of arbitration, was made in order to see whether it met with general acceptance. I think the result which is desired by the majority of the Committee- will be achieved by adhering to the Clause. [Hon. Members: "Oh!"] Let me say why I think that is so. A similar result is arrived at if the arbitrator is selected by the Minister as if he is selected by the chairman who is himself appointed by the Minister, and I think it will be found that the Clause, as it appears in the Bill, is the right procedure.

Sir P. Harris

Does the right hon. Gentleman then withdraw his offer? I thought it was a reasonable offer and a number of Members of the Committee were prepared to accept it.

Mr. Burgin

No, I am not withdrawing any offer. I am explaining what the offer was. My offer was made in the hope that it might meet with general acceptance but when we find that it does not, then I think it is better to keep to the Clause as it is in the Bill. I have pointed out why the Clause in the Bill and the offer are so closely alike. If, as the hon. Member said, the chairman is to be selected on a suggestion from the Minister, then the Minister might as well make the appointment of the chairman to start with. I think, therefore, in the light of the discussion that has taken place that we should adhere to the Clause. We have had a very fair interchange of views and I am very well seized of what the Committee desires. I think that, broadly, the sense of the Committee is in favour of a panel of arbitrators picked from men who are experienced in the industries and trades likely to be concerned in arbitrations. I think there is so little difference between the selection of the particular arbitrator being made by the Minister himself and being made by the chairman whose original appointment had been made by the Minister, that I should recommend the Committee to keep to the Bill as it stands.

Mr. Pickthorn

There is one question which has not yet been asked, perhaps because the answer is known to everybody else though it is not clear to me. The Minister's argument just now was that the Minister would be responsible and would be known to be responsible for the selection of the panel. If the Clause goes through as it stands, will the composition of the panel be publicly known from the first?

Mr. Burgin

The hon. Member says "from the first." Obviously the Royal Assent must first be given to the Bill; then there must be nomination of the panel, and I should hope that by means of question and answer in the House of Commons it would be possible to give the. constitution of the panel. If the appointment is made by the Minister, then at Question Time, or on any occasion when the Ministry Vote is down for discussion in Committee of Supply, or on Motions for the Adjournment, there will be opportunities of discussing any appointment made by the Minister which is regarded as unsatisfactory; and the Minister will be responsible to this House.

6.42 p.m.

Mr. Thorneycroft

It may be plain to everybody else but I do not understand whether the Minister's offer stands, or whether it has been withdrawn. When the Minister put forward that offer I was one of those who thought it an extremely fair solution of the problem. It might not, I thought, be satisfactory to all, but clearly it indicated that a man elected by the other arbitrators themselves, who was not concerned about which, way any particular decision went, would select the arbitrators in other cases. Speaking for myself, I am prepared to vote with the Government if that offer still stands, and I hope that my hon. Friends here will accept that offer. On the other hand, if the offer is withdrawn, I want to make my position perfectly plain. It is that I should vote against the Government and I believe that the vast majority of the Committee would do the same.

Mr. Burgin

I am asked whether my offer stands or whether it has been withdrawn. The offer was, as I say, made in order to see whether it met with general acceptance. I do not think it does. [Hon. Members: "Yes."] I do not think there is such generality of acceptance as was intended by me, and I propose, therefore, to ask the Committee to deal with the Clause as it stands.

6.44 p.m.

Sir A. Southby

I understand that my right hon. Friend has now definitely withdrawn his offer on the ground that it does not meet with general acceptance in the Committee. Speaking for myself although I do not like the constitution of this panel, for the reasons which I have already given to the Committee, I am prepared to accept the offer as I understood the Minister to make it. I think my right hon. Friend owes it to the Committee to make plain whether he does or does not stand by that offer. 1 certainly understood his offer plainly, and I thought it met with acceptance on all sides of the Committee.

Hon. Members


6.45 p.m.

Mr. Austin Hopkinson

I hope the Committee will not let this important point pass. The whole basis of our judicial system is that we appoint judges who cannot be dismissed by the Execu- tive. The Minister now wishes to arrogate to himself a power which Parliament has refused for generations to allow in the case of the judicature. In other words, the Minister suggests that if he does not like the decision of a judicial person he shall be at liberty to make arrangements by which that man shall never function again. It seems to me that this is not a mere Committee point in the ordinary sense of the word; it is one which Parliament would be failing in its bounden duty if it allowed it to pass. After all, the Minister is not immortal. We might get in his place a Minister who does not command that universal confidence which we feel in the present Minister of Supply, and Parliament must always remember the possibility of such an event in the future. No doubt it is very suitable that the present Minister should have this power, a power unknown to our Constitution for generations, but, as I say, there may be other Ministers to whom even this Committee, even those hon. Members above the Gangway, would not be willing to entrust such supreme power.

Sir I. Albery

I must express my great disappointment with the attitude which the Minister has taken up upon this matter. I cannot help feeling that throughout the whole of this discussion he- has been more inclined to say what it is his intention to do in certain events than to confine his remarks to the merits or the demerits of the Amendment. When he declares what it is his intention to do on a particular Amendment there is no fault to find with his intentions; they are entirely admirable, and we all of us have

great regard for him and his ability. We have no doubt that he will be able to administer the Bill in accordance with his intentions and, no doubt, with justice. But that is not the way in which it appears to me a Member of Parliament should regard legislation. We are concerned with the merits of the case, and not with the particular Minister who may be called upon to administer this legislation. We have had the offer which the Minister made and appears since to have withdrawn. I do not think that he has advanced any valid argument against sticking to the offer which he made to the Committee. He certainly has not put up any argument to show that it would not work, or that it was undesirable. His main argument appears to have been based on the assumption that a majority of this Committee will support him if he sticks to the position lie has now taken up. That in itself is not, to my mind, a suitable argument to address to this Committee, and is a still less suitable argument to address to Members of his own party who have loyally supported the Government; and, for my part, if I am to be put in the position of voting against the Government I wish it to be clearly understood that I do it with great regret, and I am more than a little astonished that the right hon. Gentleman should take upon himself the quite unnecessary responsibility of putting us in that position.

Question put, "That the; words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 278; Noes, 33.

Division No. 184.] AYES. [6.50 p.m.
Adams, D. (Consett) Braithwaite, Major A. N. (Buckrose) Cobb, Captain E. C. (Preston)
Adams, D. M. (Poplar, S.) Braithwaite, J. Gurney (Holderness) Cocks, F. S.
Adams, S. V. T. (Leeds, W.) Briscoe, Capt. R. G. Collindridge, F.
Adamson, Jennie L. (Dartford) Broad, F. A. Conant, Captain R. J. E.
Adamson, W. M. Broadbridge, Sir G. T. Cook, Sir T. R. A. M. (Norfolk N.)
Alexander, Rt. Hon. A. V. (H'lsbr.) Bromfield, W. Cooke, J. D. (Hammersmith, S.)
Allen, Col. J. Sandeman (B'knhead) Brooke, H. (Lewisham, W.) Cooper, Rt. Hon. T. M. (E'burgh, W.)
Allen, Lt.-Col. Sir W. J. (Armagh) Brown, Brig.-Gen. H. C. (Newbury) Cove, W. G.
Ammon, C. G, Browne, A. C. (Belfast, W.) Cox, H. B. Trevor
Anderson, F. (Whitehaven) Buchanan, G. Crooke, Sir J. Smedley
Aske, Sir R. W. Bull, B. B. Crookshank, Capt. Rt. Hon. H. F. C.
Balniel, Lord Burgin, Rt. Hon. E. L. Cross, R. H.
Banfield, J. W. Burke, W. A. Culverwell, C. T.
Beaumont, H. (Batley) Butcher, H. W. Daggar, G.
Beaumont, Hon. R. E. B. (Portsm'h) Campbell, Sir E. T. Dalton, H.
Benn, Rt. Hon. W. W. Cape, T. Davies, C. (Montgomery)
Benson, G. Cayzer, Sir C. W. (City of Chester) Davies, S. O. (Merthyr)
Blair, Sir R. Chamberlain, Rt. Hn. N. (Edgb't'n) Day, H.
Boothby, R. J. G. Chapman, Sir S. (Edinburgh, S.) De Chair, S. S.
Boulton, W. W. Clarke, Colonel R. S. (E. Grinstead) Denman, Hon. R. D.
Boyce, H. Leslie Cluse, W. S. Denville, Alfred
Despencer-Robertson, Major J. A. F. Kerr, Colonel C. I. (Montrose) Rosbotham, Sir T.
Dobbie, W. Kerr, Sir J. Graham (Scottish Univ.) Ross Taylor, W. (Wood bridge)
Dodd, J. S. Kimball, L. Rowlands, G.
Drewe, C. Kirby, B. V. Royds, Admiral Sir P. M. R.
Dugdale, Captain T. L. Kirkwood, D. Ruggles-Brise, Colonel Sir E. A.
Duncan, J. A. L. Knox, Major-General Sir A. W. F. Russell, Sir Alexander
Dunglass, Lord Lamb, Sir J. Q. Salmon, Sir I.
Dunn, E. (Rother Valley) Lambert, Rt. Hon. G. Samuel, M. R. A.
Eastwood, J. F. Lansbury, Rt. Hon. G. Sandeman, Sir N. S.
Eden, Rt. Hon. A. Lathan, G. Sanders, W. S.
Edmondson, Major Sir J. Lawson, J. J. Sanderson, Sir F. B.
Edwards, A. (Middlesbrough E.) Leach, W. Sexton, T. M.
Edwards, Sir C. (Bedwellty) Lee, F. Shepperson, Sir E. W.
Ellis, Sir G. Leech, Sir J. W. Shinwell, E.
Entwistle, Sir C. F. Lees-Jones, J. Shute, Colonel Sir J. J.
Errington, E. Leonard, W. Simon, Rt. Hon. Sir J. A.
Everard, Sir William Lindsay Levy, T. Simpson, F. B.
Fildes, Sir H. Liddall, W. S. Sloan, A.
Findlay, Sir E. Lloyd, G. W. Smith, Ben (Rotherhithe)
Fleming, E. L. Loftus, P. C. Smith, E. (Stoke)
Frankel, D. Lunn, W. Smith, Rt. Hon. H. B. Lees- (K'ly)
Fremantle, Sir F. E. Macdonald, G. (Ince) Smith, T. (Normanton)
Furness, S. N. MacDonald, Sir Murdoch (Inverness) Smithers, Sir W.
Gardner, B. W. McEntee, V. La T. Somervell, Rt. Hon. Sir Donald
Garro Jones, G. M. McEwen, Cast. J. H. F. Sorensen, R. W.
Gilmour, Lt.-Col. Rt. Hon. Sir J. McGhee, H. G. Stanley, Rt. Hon. Oliver (W'm'l'd)
Gledhill, G. McKie, J. H. Stephen, C.
Gower, Sir R. V. Maclay, Hon. J. P. Stewart, J. Henderson (Fife, E.)
Graham, D. M. (Hamilton) Maclean, N. Stewart: W. J. (H'ght'n-le-Sp'ng)
Grant-Ferris, Flight-Lieutenant R. Maitland, Sir Adam Stokes, R. R.
Green, W. H. (Deptford) Mander, G. le M. Storey, S.
Greenwood, Rt. Hon. A. Margesson, Cap). Rt. Hon. H. D. R. Strauss, G. R. (Lambeth, N.)
Grenfell, D. R. Markham, S. F. Stuart, Rt. Hon. J. (Moray and Nairn)
Gretton, Col. Rt. Hon. J. Marshall, F. Sueter, Rear-Admiral Sir M. F.
Griffiths, G. A. (Hemsworth) Mason, Lt.-Col. Hon. G. K. M. Summerskill, Dr. Edith
Griffiths, J. (Llanelly) Mathers, G. Tasker, Sir R. I
Grimston, R. V. Maxton, J. Taylor, R. J. (Morpeth)
Groves, T. E. Messer, F. Thorne, W.
Guest, Lieut.-Colonel H. (Drake) Montague, F. Thornton-Kemsley, C. N.
Guinness, T. L. E. B. Moore, Lieut.-Colonel Sir T. C. R. Tinker, J. J.
Hacking, Rt. Hon. Sir D. H. Morgan, R. H. (Worcester, Stourbridge) Titchfield, Marquess of
Hall. G. H. (Aberdare) Morris, O. T. (Cardiff, E.) Touche, G. C.
Hall, J. H. (Whitechapel) Morris-Jones, Sir Henry Tree, A, R. L. F.
Hambro, A. V. Morrison, G. A. (Scottish Univ's) Tufnell, Lieut.-Commander R. L.
Hammersley, S. S. Morrison, Rt. Hon. H. (Hackney, S.) Turton, R. H.
Hannah, I. C. Morrison, Rt. Hon. W. S. (Cirencester) Wakefield, W. W.
Hayday, A. Naylor, T. E. Walkden, A. G.
Heilgers, Captain F. F. A. Neven-Spence, Major B. H. H. Walker, J.
Henderson, A. (Kingswinford) Oliver, G. H. Ward, Lieut.-Col. Sir A. L. (Hull)
Henderson, J. (Ardwick) Orr-Ewing, I. L. Ward, Irene M. B. (Wallsend)
Henderson, T. (Tradeston) Paling, W. Wardlaw-Milne, Sir J. S.
Heneage, Lieut.-Colonel A. P. Palmer, G. E. H. Waterhouse, Captain C.
Hepburn, P. G. T. Buchan- Parker, J. Watkins, F. C.
Herbert, Lt.-Col. J. A. (Monmouth) Parkinson, J. A. Watson, W. McL.
Higgs, W. F. Pethick-Lawrence, Rt. Hon. F. W. Wedderburn, H. J. S.
Hills, A. (Pontefract) Pilkington, R. Welsh, J. C.
Hoare, Rt. Hon. Sir S. Poole, C. C. Westwood, J.
Holdsworth, H. Price, M. P. Whiteley, Major J. P. (Buckingham)
Holmes, J. S. Quibell, D. J. K. Wickham, Lt.-Col. E. T. R.
Hopkin, D. Radford, E. A. Williams, E. J. (Ogmore)
Hore-Belisha, Rt. Hon. L. Ramsay, Captain A. H. M. Williams, T. (Don Valley)
Hudson, Capt. A. U. M. (Hack., N.) Rankin, Sir R. Wilson, G. H. (Attercliffe)
Hudson, Rt. Hon. R. S. (Southport) Rathbone, J. R. (Bodmin) Windsor, W. (Hull, C.)
Hunter, T. Reed, A. C. (Exeter) Winterton, Rt. Hon. Earl
James, Wing-Commander A. W. H. Reed, Sir H. S. (Aylesbury) Womersley, Sir W. J.
Jenkins, A. (Pontypool) Reid, J. S. C. (Hillhead) Wood, Rt. Hon. Sir Kingsley
Jenkins, Sir W. (Neath) Reid, W. Allan (Derby) Woods, G. S. (Finsbury)
Joel, D. J. B. Remer, J. R. Wragg, H.
John, W. Richards, R. (Wrexham) Young, Sir R. (Newton)
Jones, A. C. (Shipley) Ridley, G.
Jones, Sir G. W. H. (S'k N'w'gt'n) Riley, B. TELLERS FOR THE AYES.—
Jones, L. (Swansea W.) Ritson, J. Mr. Munro and Lieut.-Colonel
Kennedy, Rt. Hon. T. Robinson, W. A. (St. Helens) Harvie Watt.
Acland, Sir R. T. D. Griffith, F. Kingsley (M'ddl'sbro, W.) Mellor,Sir J. S. P. (Tamworth)
Acland-Troyte, Lt.-Col. G. J. Harvey, T. E. (Eng. Univ's.) Moreing, A. C.
Balfour, G. (Hampstead) Hopkinson, A. Owen, Major G.
Bracken, B. Hutchison, G. C. Perkins, W. R. D.
Courtauld, Major J. S. Jones, Sir H. Haydn (Merioneth) Pickthorn, K. W. M.
Evans, D. O. (Cardigan) Lewis, O. Roberts W. (Cumberland, N.)
Evans, E. (Univ. of Wales) Lyons, A. M. Silkin, I..
Gridley, Sir A. B. Macdonald, Capt. P. (Isle of Wight) Simmonds, O. E.
Somerville, Sir A. A. (Windsor) Thorneycroft, G. E. P. TELLERS FOR THE NOES.—
Southby, Commander Sir A. R. J. Wayland, Sir W. A. Mr. Hely-Hutchinson and Sir Irving Albery.
Spent, W. P. While, H. Graham
Tate, Mavis C. Wright, Wing-commander J. A. C.

Question put, and agreed to.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

7.1 p.m.

Mr. H. Morrison

Before this Clause is passed there is one matter of administration that I would like to raise with the Minister. The Committee may remember that when the Prime Minister announced the intention of the Government to set up a Ministry of Supply there were various questions put to the Prime Minister, and I myself put one as to whether the Bill would include within its scope powers to the Minister to purchase, on behalf of the State Department concerned, supplies for Civil Defence. The Committee will know that there have been difficulties in respect of certain supplies, notably fire brigade appliances, and the Prime Minister said that he would take that point into consideration. I think what I suggested would, subject to Orders-in-Council, be legally possible under the Bill.

But there is another point on the other side of the picture to which I wish to draw the Minister's attention. This Clause confers upon the Minister, I think rightly, very considerable powers of requiring the industry of the country to be of service to the State, owing to the necessity of securing military and other equipment in the public interest. What I would like from the Minister is an assurance that he will take into account, in making requirements upon industry, the needs of the local authorities, and of the Lord Privy Seal for certain goods and services in relation to Civil Defence, which, indeed, should be part of the purpose of this Bill. It would be unfortunate if the requirements of the State in the active branches of Defence served to prevent supplies being delivered to the local authorities in respect of Civil Defence. Apart from that, there are certain supplies which are urgently needed for the normal and essential services of local government, and while I agree that the Minister cannot be expected to go too far in that field, I should be glad if he would give an undertaking that, while he cannot promise matters of detail within the sphere of normal local government services, he would take into account the needs of local government services where they are vitally necessary in the public interest.

I would ask him to go further in the field of supplies needed by local authorities for Civil Defence itself. That, of course, goes pretty far—for example, coal for the main drainage service, which will be necessary in time of war, medical supplies for the hospitals, and food for inmates and staffs of institutions. I may say that at the request of the Minister of Health the London County Council lent the services of the chief officer of supplies to purchase nearly £1,000,000 worth of supplies for hospitals and medical needs; and, therefore, the Minister will see that there are times when we are not only acting for the council but we are actually acting for the State. I am sure that local authorities generally, both in other pans of the country and in London, would wish the Minister to make some sympathetic statement that, in making these interventions in industry, requiring it to serve the needs of the State in a military sense, he will give full understanding to the needs of local authorities in the field of Civil Defence, and, so far as possible, in other essential spheres of local government administration.

7.5 p.m.

Mr. Simmonds

I would like to raise briefly a point on Sub-section (7). In that Sub-section the Bill gives cover to a contractor or other person who has failed to meet his liabilities to some third party in this country, and he is covered against being sued for default on account of the obligations which the Minister has placed upon him. It would seem to me that the Minister here has given no power to free this contractor upon whom he has placed these liabilities, from the liability of being sued in a foreign court. I would like to ask whether he has considered this point, and does he foresee quite clearly that he will cover any contractor who gets a judgment in a foreign court because this contractor has failed to meet his liabilities to some foreign citizen or foreign corporation?

7.7 p.m.

Mr. Harold Macmillan

Before the Committee parts with this Clause, which is, I think, the vital clause of Part 2, just as Clause 2 was the vital clause of Part I, perhaps I might be allowed to ask one or two questions of my right hon. Friend and to put one or two considerations to the Committee. In the previous discussion I pointed out on Clause 2 that, important as were the powers and duties that were now being entrusted to the Minister with regard to the organisation of supplies, equally important was the choice of what not to produce, as well as what to produce; and he referred me then to subsequent Clauses of the Bill, which of course I have studied. This really is the Clause, as I understand it, which gives him these powers to take over a business or industry or plant and to adapt it to the production of supplies that he requires, and, of course, it was this Clause that he had in mind.

It is clear that under Sub-section (3) a business which, in the opinion of the Minister, "is suitable for or can be adapted to producing or dealing in such articles" can be taken over. But may I follow out further what happens if that is done? What are the secondary results? Suppose, for instance, that a plant which makes printing machinery or gramophones is suitable for and can be adapted under the Sub-section for the manufacture of certain necessary supplies for the Services. The Minister has power under this Clause to take over this business, or this part of the business. But very important secondary results immediately follow. For example, assume that he takes over a large part of the gramophone plant, and adapts it to the production of munitions of war.

A first secondary result is that, if the demand for gramophones remains constant, the price of gramophones will rise, because you will have an equal demand and a smaller supply. Therefore, the taking over of this gramophone factory will mean that all the other gramophone factories will become more profitable, and therefore they will increase their production, and will begin to offer a higher price for labour and material, in order to increase their production. The only method by which the labour and materials can be re-directed into supply of those particular things which we need is by offering a still higher price for this labour and material, to direct them back again into the business of munitions. In other words, if the only method is merely to take over part of an industry and adapt it for munition purposes, without other powers to the Ministry, there is a real danger of setting up a series of events which will lead to a grave inflation of the whole price system; because there will be offered a more attractive and profitable employment, and the only method of getting the labour and material back again will be still further to raise the price, and thus you have produced again the inflationary spiral which we had in the War, and from which we have been suffering almost ever since.

I observe, also, that this power in this Clause is limited to businesses. The word "business" is slightly difficult, and I would like to ask whether it means an enterprise in the sense of a partnership or company, or one particular plant or one particular factory—because there is an essential difference between the two. You have, of course, no power to take over the workers, whom you may require more than the factories. You cannot direct the workers in a particular enterprise, rather than take the factory itself, which may not easily be conducted without them. Of course you might do that with some powers which are not in this Bill. Therefore, I still think that the Minister of Supply will sooner or later be forced to an alternative method.

Suppose that it were desirable to direct the same labour and skill and plant which are now employed in making motor cars or gramophones into making these particular kinds of supplies for military preparations, an alternative method of taking over one particular factory or business would be much more desirable. It would be to get the industry together to agree a limitation of the profits, and to have an agreed system throughout the industry, by which the production of motor cars or gramophones could be cut to perhaps 70 per cent. or 60 per cent. of the previous year's production, and, by an agreed scheme throughout the industry, the plant, labour and skill would be made available for the production of those supplies. I believe that, in effect, would be the only satisfactory way of proceeding, without setting up these undesirable secondary results over the whole economic field, which, if one particular business out of a number, or one particular part, is taken over, would be the obvious result on the competitive power and profit-making power of those which remain, in a market which is constant, and which may even rise through the general rise in the level of employment which is likely to come about as the result of this immense expenditure of money over the whole field.

I raise this point because I do not know whether the Minister will give some serious attention to it, to see whether he will require greater powers. It is one which I know is discussed and seriously considered by many people who are studying, not only the first problem with which this Bill and this Clause immediately deals—the immediate first problem of getting these essential supplies for the fighting forces—but also studying the problem of getting them under conditions which have the least injurious effects on the whole working of the economic system, and which set up the least harmful results over other parts of our social and economic structure. I have ventured before to use the phrase that our economic system is indivisible. You cannot just take the supply of munitions of war and do a lot of things with that without immense reactions upon the rest, and I do think that where you have a great industry, and particularly an industry which may be very suitable for changing its production, it will be far better to have an agreed scheme such as I have suggested.

Take an industry in which I am engaged, the production of printing machines. If that industry is directed in part of its capacity to the output of munitions, it can make its own scheme on a fair basis, without setting up all the results of an unorganised interruption of the ordinary economic life of the industry. I believe that that is the only ultimate way in which you will be able to control profits; because, as long as profits are related to prices—and they must be, if you do it in the cruder way that is suggested in this Clause—you will automatically produce the effect of increasing prices, and therefore you will be faced with the real problem of this whole question, that you are always tackling profits after they are made, instead of before, rather than controlling and preventing the undue inflation of the price level, which is the real way to deal with the problem of profits.

I have ventured to put these considerations before the Committee. Perhaps they are dull and take our mind back to matters more serious and of greater initial importance than some of the things which we have been discussing, but I would ask the Minister whether he would require larger powers, and if he does, whether he would consider the matter before the Report stage, in order to attack the problem in the way I have suggested. If he can do it without adding to his legislative powers I suggest he might consider that approach to the great industries of the country. His problem is in some ways easier than was that of his predecessor in 1915, because, at that time, British industry was far less integrated and organised into units than it is to-day. It is much easier now to approach them and to make a definite suggestion.

I am differing upon occasional details, but I realise the vast tasks which are before the right hon. Gentleman. He has a double task, of which he may achieve one, but the other task is parallel with it, and I am sure is always in the right hon. Gentleman's mind; it is, to carry out the programme with the minimum of dislocation and bringing good and not ill to the structure of our social and economic organism. I would ask the right hon. Gentleman to consider the matter from that point of view. I have made, I hope, some contribution to what seems to me the over-riding problem of the present day. It is more difficult than if we were at war when, if we made a mistake, we could clear it up; but in this twilight which is half peace and half war the problem is more difficult than in any other situation. Perhaps my right hon. Friend might be able to do a very great service if he could help to solve many of the questions to which I have referred and which are troubling many people who are looking beyond the immediate present.

7.18 p.m.

Sir Arthur Salter

In a very few words I wish to support the argument of my hon. Friend the Member for Stockton-on-Tees (Mr. Harold Macmillan). He developed much more adequately and fully a general point to which I briefly referred in the Second Reading Debate. This is that while the Bill, and particularly this Clause, gives adequate power to the Government to get the things they want themselves, it does not give adequate power, and certainly the policy indicated does not suggest that the Government are considering with a view to taking adequate steps, to deal with the secondary consequences of what the Government are doing in obtaining their own direct supplies.

That would be all very well if what the Government wanted were of such a limited scale as not to have any repercussions on the general economic system, but when the scale of the Government's actions for defence purposes is greatly enlarged, very wide and deep repercussions will take place throughout the whole economic system. You cannot inject into an economic system so great a demand for so many necessities without profoundly affecting what is happening in spheres in which you are not directly interested. I do not see any indication that those secondary consequences will be adequately dealt with under these proposals. If definite action is not taken by the Government to control and limit production in directions where it is not immediately wanted to meet the Government's demands, a patchy inflation will be created which will distort the general price structure of the economic system. I venture to press upon the Minister the point of view put forward by my hon. Friend.

7.21 p.m.

Mr. Burgin

I hope that the Committee will feel disposed to give me the Clause when I have replied to some of the points which have been put forward. The right hon. Gentleman the Member for South Hackney (Mr. H. Morrison) asked me for an assurance as to the way in which the powers conferred by the Bill will be exercised in relation to contractors supplying the needs of Civil Defence and the requirements, in certain circumstances, of local authorities. It is not possible to give a concrete assurance that no difficulty of that kind will ever arise, but, in fairness, the Ministry will do all it can to prevent such a concrete case and to settle it reasonably and equitably if it should arise. The local authorities and the contractors will find the Ministry very ready to co-operate in seeing that essential services are never interrupted, except in the last resort. National need I suppose must take precedence over local-government need. In peace time there ought never to be any clash. I hope that the right hon. Gentleman, although I have got into trouble for giving assurances in Committee as to cer tain matters, will now accept my assurance that as far as lies in our power we have no wish, in administering these powers, to interfere with the supplies to local authorities in a way that will prevent essential services being provided; still less to interfere with Civil Defence, passive, active, or whatever it may be.

My hon. Friend the Member for Duddeston (Mr. Simmonds) asked whether under Sub-section (7) a contractor was protected if he had assets in a foreign country and failed to deliver, under a contract in that foreign country, and who was condemned by the courts in that country under a judgment which could be executed against the assets in that foreign country. He is not so protected. No protection of mine can operate outside the three-mile limit. It follows that I cannot provide complete protection by a defence which may be applied in a foreign court of law. No doubt any manufacturer who suffered in that way might be able to claim some form of compensation under whatever war legislation permitted him to do so.

My hon. Friends the Members for Stockton-on-Tees (Mr. Harold Macmillan) and Oxford University (Sir A. Salter) raised points which I do not think really depend on me. The first point related to an appreciation of the problem and of the method of administration adopted. I hope that the Committee will understand that the Bill is being brought forward in peace time before any Defence of the Realm Regulations exist. When I compare any particular Clause in the Bill with its historical parallel I have to make the necessary allowance for the fact that in 1915 D.O.R.A. had already been passed and was the law of the land, and that tremendous powers had been given, such as those for the control of labour, the regulation of prices, and of movements of individuals from one factory to another, and a dozen-and-one different powers which are impossible at the present time. My hon. Friend the Member for Stockton-on-Tees called the present condition of affairs a twilight; it is indeed not peace or war, but a twilight. It may be that in a time of emergency very different powers would have to be asked for, and that there would come to the Government as a whole, by a Defence of the Realm Measure, an immense number of heterogeneous powers which, pieced together, would operate throughout the duration of the war.

I think I can satisfy hon. Members that the problem is realised and can give them some indication of the way in which I intend to deal with it. I am sorry to include this personal note, but it is the most convenient way of conveying a point of view. The idea that you ought not to disrupt industry by expecting it suddenly to produce a number of munitions and other things, meaning by that everything that is required by the public service, without having some regard to what may be called secondary consequences is of course, correct. We might achieve our purpose by talking to the industry as a whole or to the Federation of British Industries, the Industrial Panel or the Association of Chambers of Commerce, which deal with a group of industries rather than with individual firms. It is attractive that, instead of taking over one motor car works and making shells in that works, you should group together the total motor-car production of the country and say: "We think that motor-car production should come down from 100 per cent. to 65 per cent.; how best can that 35 per cent. be utilised?" It is common sense and it would lead to greater supply more quickly.

A question was put to me by hon. Members opposite whether I would say that, under the powers in Sub-section (7), there would be something in the nature of injustice done to individual firms and that one was not going to find its ordinary machinery in full use while another was carrying on in its peace-time fashion. Industry is a live organism and it must be dealt with with that in mind. I am very much alive to the benefit, in framing my Orders-in-Council, of having the advice of organised industry. I agree that the position is much simpler than it was in 1915. Immense steps have been taken to organise industry, and although there are some woeful blanks where, instead of dealing with an organised body, one has to deal with a large number of individual proprietors, I wish to utilise organised industry and its spokesmen to an extent and in a way which may be decisive. If the work can be done with some portion only of the industry, by devoting the whole output of that portion to defence I cannot think of anything which would be quicker to obtain the supply that we need. I hope that hon. Members will be satisfied with that explanation of my credo and that I have, to some extent, met the points which have been raised: and that the Clause might now be added to the Bill.