NATIONALISED UNDERTAKINGS (SALARIES AND ALLOWANCES) (Hansard, 14 July 1947)

§ Wing-Commander Hulbert (Stockport)
I am raising a matter which is causing no little public disquiet throughout the country. I do so following questions I have put to the Lord President of the Council. He is not here tonight, but has very courteously sent me a message that the state of his health and public business prevent him from being here. I refer to the appointment and remuneration of members of national boards, and the corporations set up to nationalise the great industries. The Lord President of the Council, in his previous answers to me, has stated that he sees no reason for disclosing to Parliament and to the public the salaries paid to the executives of these organisations, because in his view no public funds are involved. If ever there was a misleading answer given to this House, that is one. The Government of the day might equally well decline to disclose the salaries of civil servants and other employees of His Majesty's Government. Certainly one result of the attitude of the Government can be seen in the claims which are being made by the Civil Service today for increased remuneration, commensurate with the salaries paid to those who have so recently joined the Government service in these nationalised bodies.
Never before has any Government refused to disclose the salaries they paid to public servants. As the right hon. Member for Horsham (Earl Winterton) said a few days ago, until this Government came into office it was only the Secret Service which had immunity for the payments made to them, and rightly so. Today we find that the Coal Board, the Electricity Board, and the proposed Transport Board, are being created, and a great number of appointments are being made. In "The Times" a few days ago, there was an advertisement for an educational officer for the Coal Board. The first and foremost education of the Coal Board should be to see that more coal is produced. These boards would rover had come into existence except for the money voted by Parliament to acquire 186 undertakings which had previously been conducted very efficiently, and which today, from what one hears—and certainly in the case of the Air Boards—are being conducted with little regard for economy or efficiency. Today, no one knows the losses which are being incurred by the Government-owned airways corporations. We know nothing of the activities of the National Coal Board, except that we see a large number of motor-cars running round London bearing the insignia of the National Coal Board. We know little or nothing of the passenger miles flown today by the aircraft of the Government-owned airways corporations as compared with the corporations which were run by private enterprise. But, alas, we know that under the National Coal Board, coal production is slowly going down, and down and down. But it is to the salaries, and the remuneration in other ways, of the senior executives of these Boards to which I would like tonight to draw the attention of the House.
On 12th June, the Lord President of the Council, replying to a Question of mine, stated that these Boards should have the same functions and the same freedom of management as other commercial organisations; but here I would like to emphasise that if I were a shareholder of a public company and I inquired of the chairman what was the remuneration of the executives of that particular company, he would be an unwise and stupid chairman if he refused to disclose that information; and especially would that apply if the company were not doing well, as is a very well-known fact in regard to our nationalised industries today—and which will get worse and worse as more and more industries are taken over by this doctrinaire Government with which this country is saddled today.
I would like to remind the Paymaster-General, who is to reply, that under the Companies Bill, which is based on the report of the Cohen Committee, which the Government have more or less wholeheartedly accepted, a very full and complete disclosure is required. So, as this Government so often prides itself on giving a lead in so many things, despite the fact that most of the good things it has done were initiated by the Coalition Government, surely it will take a lead in this matter, and be a model of clarity, and in that belief make a full disclosure 187 to the shareholders in these corporations. The shareholders in these cases are the British public and British taxpayers who have become shareholders willy-nilly, not through any desire of their own, but through its being forced upon them by the Government. If the Government will make this disclosure, they will at least show to the public that they are not afraid to reveal the success or otherwise of the undertakings which they have taken over. The air of secrecy and the hush-hush policy which the Government are adopting today naturally give rise to some kind of suspicion. Ministers often take refuge in saying that they cannot interfere with, or are not responsible for, statutory undertakings; but the right hon. Gentleman the Minister of Transport has said in the House that if one has responsibility for a job, one must see that that responsibility is carried out. Ministers have said from time to time that they do not think it right to disclose certain information to Parliament, or, alternatively, they have said that they cannot obtain that information.
My right hon. and hon. Friends on this side of the House seek only that a Minister who has statutory powers to acquire certain information from undertakings, should certainly disclose that information to the House unless, of course, it is against the public interest to do so. In the Transport and Electricity Bills, Ministers concerned have taken unto themselves power to appoint members of the executives. As we see it, this clearly means that they have taken power to appoint executive officials at such salaries, and with such fees and allowances as the Ministers may, with the approval of the Treasury, agree. If this is not an expenditure of public money for which there is Ministerial responsibility, I do not know what is.
The creation of these Boards has given the greatest power of patronage that any Government has ever had in this country. We know that two or more jobs in the National Coal Board have been given to members of the party which forms the Government of today. We now know that one is in receipt of a salary equal to, or even more than, the income of a Cabinet Minister. In addition, there are expenses paid; motor-cars are provided. We also know that one of these jobs is held by a former right hon. Member of this House 188 whose conduct as Minister of Food was certainly not all that could have been desired. We even know that houses are provided, and, what is more, we know that one has been burned down. The Lord President of the Council has said that he could not give the information we seek. I would only remind hon. Members that Section 3 (4) of the Coal Industry Nationalisation Act states that: The Board shall afford to the Minister facilities for obtaining information with respect to the activities of the Board, and shall furnish him with returns, amounts and other information with respect thereto, and afford him facilities for obtaining information.… in certain detailed requirements, etc. If a Minister, by an Act of Parliament, is to be provided with this information, then why on earth cannot that Minister give the information to the House and the country? I would like to suggest to the Prime Minister, through the hon. Gentleman who is going to reply, that, in order to avoid suspicion which Ministers have attracted to themselves by this policy of hush-hush and secrecy, he should make a clear disclosure to this House, and to the country, of the salaries and other emoluments paid to members of these nationalised boards, and when future appointments are made that full details should be given, terms of employment, remuneration and the other emoluments by way of houses and motor cars and all the rest of it, because by doing that, the Government will be doing no less than is expected of commercial undertakings in future and by so doing they will convince the public that there is no hush-hush patronage in these strange methods of appointment.

§ Colonel Clarke (East Grinstead)
I wish to support what has been said by the hon. Member for Stockport (Wing-Commander Hulbert) and to make these two brief observations. First, if it is not possible to give the individual salaries of these members of the boards, can we be given the total of all the salaries, as is done in the case of limited companies where one knows how much money is voted? Secondly, is the Minister of Mines really satisfied with what has been done in the appointments and in the salaries of the divisional boards under the Coal Industry Nationalisation Act, and, if so, why is he taking powers under the Electricity Bill to choose members of these boards himself?

§ The Paymaster-General (Mr. Marquand)
The hon. and gallant Member for Stockport (Wing-Commander Hulbert) spoke in successive sentences about members of the boards and about the executives of the boards. I can hardly imagine that he himself is in doubt about the difference between these two, but perhaps I had better make it clear, for the sake of record, that there is a significant difference between members of the board and the employees of the board. Where the Minister appoints, there is no question at all that he is responsible for the salary paid and the information as to the salaries has been, and will be given, to this House. The salaries paid to the boards of the three air corporations and to the Board of the Bank of England and the National Coal Board have been given, and it is the full intention of my right hon. Friend, who will be responsible when the other legislation is passed, to give similar information about the members of the British Electricity Authority, the Transport Commission and the transport executives which are to be appointed by the Minister. I think, perhaps, for the sake of clearing up exactly what he did say, I should quote what the Lord President of the Council sad in the exchange of Questions and supplementaries on Thursday, 12th June, which have been referred to. He said It is clear that if public money—I am talking about money voted by Parliament—becomes involved, then Parliamentary accountability arises."—[OFFICIAL REPORT, I2th June, 1947; Vol. 438; c. 1339.] He went on to say that in the case of employees of the boards, the question of public money did not arise. All these are corporations carrying on business. They are public corporations, but they are business corporations, and in creating them we have sought to impose public control in the public interest without rigidity or bureaucracy. We feel that these corporations are less likely to act with vision and enterprise if the staff and the directors are to be constantly subject to inquiry. We have been told on other occasions that we have not gone far enough in releasing these corporations from detailed control by Parliament. The right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson), on 18th December, said: I warn the right hon. Gentleman that, by reason of Parliamentary and Ministerial 190 control, he will have just the same over-elaboration, the same multiplication of crosschecks, the same tendency to curb enterprise and deaden initiative as has been so often charged against that admirable body of men who constitute the Civil Service."—[OFFICIAL REPORT, 28th Dec. 1947; Vol. 431; c. 2003.] Having been told by the right hon. Gentleman that we have not gone far enough in this direction, we have been told tonight that we have gone too far. The boards must be answerable to Parliament for their policies. They must be run in a way which is compatible with national economic policy, and they must be subject to direction by the appropriate Minister as to their policy. This is not the same thing as laying it down that the Minister must prescribe, or that the House of Commons should demand to know, all the details of their management. The choice, promotion, dismissal and payment of employees, are responsibilities of management. Those are things which management have to do in carrying on their undertaking.

§ Wing-Commander Hulbert
Does the right hon. Gentleman think it proper that a Minister should appoint a colleague to a highly-paid job with all sorts of other emoluments, and not be responsible to Parliament for that?

§ Mr. Marquand
That is a highly hypothetical question.

§ Wing-Commander Hulbert
No.

§ Mr. Marquand
—because I know of no occasion when that has been done.

§ Wing-Commander Hulbert
In the case of Sir Ben Smith.

§ Mr. Marquand
He was appointed by the Coal Board, and not by the Minister of Fuel and Power. As I was saying when I was interrupted by the hon. and gallant Member, we feel that this business of choosing employees, of deciding exactly how much should be paid to a given individual, are matters appropriate to the responsibility of management. The hon. and gallant Gentleman said that if he went to a meeting of a company of which he was a shareholder and asked deliberately for information as to the salary of some executive of the company, he would get it. Well, suppose he did get it; how often can he go to meetings of a company and ask for details of that kind?

§ Colonel Clarke
In fact, one can get the information from the balance-sheet without anyone asking.

§ Mr. Marquand
I will come to that point in a moment. What I am suggesting is that, to subject a national board to day-to-day interrogation four days a week—how much it pays to this or that person, what house he lives in, and so on—is not on all fours with a shareholders' meeting and asking for information which you might or might not get.

§ Wing-Commander Hulbert
Under the new Companies Bill—

§ Mr. Marquand
I wish the hon. and gallant Gentleman would not interrupt me all the time. I will say something about the new Companies Bill. We feel that if we were to publish all the salaries paid by all these boards to all their employees above a certain income, we should almost certainly, in the nature of Parliament, because of what it is, be discussing personalities before we knew where we were. The boards would be subject to argument, such as whether this or that person was a fit and proper person to receive a certain sum of money. They would be continually subjected to that sort of thing. Either that, or we should tend towards rigidity of salary. There is no alternative. Either we have a rigid salary scale—for example, a salary scale for a particular grade as we have for the Civil Service—or, in seeking freedom from a rigidity of bureaucratic control, we depart from a salary scale if the circumstances make it reasonable so to do. Alternatively, we would tend to lay down standard scales which would apply to the electricity industry, the Coal Board, and other industries to be nationalised.
You cannot run a trading concern from Whitehall; that is, on the whole, the assumption on which new legislation has 192 been brought in. It is not desirable to try to run more industries than we are running already, namely, the Post Office. If you cannot run industry from Whitehall, you cannot run it from the House of Commons. Salaries will be laid before Parliament in bulk, in group form, when the accounts of these boards are placed before Parliament. The exact form of accounts prescribed must be laid down by the Minister in consultation with the Treasury. The exact form for each of them has not yet been decided, but it is certainly not designed to show the salaries of individuals.
I turn to the third point made, that it we prescribe for private industry the exact disclosure of payments, surely we should impose the same obligation on publicly-owned concerns and corporations. There is some substance in that argument, but I would like to point out to the House and the hon. and gallant Member for Stockport exactly what is provided so far in the Companies Bill. All that would have to be disclosed under Clause 36 of that Bill as it now stands is the aggregate salaries of those executives who are also directors. There are members of the air corporations, as the hon. Member knows, who are directors of the corporation and at the same time are employees of the corporation. In their case, all that would be disclosed would be the aggregate salaries of all those executives who were also directors. I have some sympathy with the plea that what is prescribed for private industry might be gratuitously prescribed for public industry, and I will undertake that that point will be carefully considered if and when the Companies Bill becomes an Act of Parliament.