HC Deb 11 February 1948 vol 447 cc416-516

5.43 p.m.

Colonel Lancaster

I was endeavouring to show that it was the duty of hon. Members to attempt to analyse some of these words which we use in these days in connection with schemes of this nature, and I have dealt for a little while with "complementary" and "standardised." We pass from there to the word "integration." Integration has considerable virtues, and no one on these benches denies it. An industry such as gas arrives at a stage in its evolution where integration is desirable. Where we join issue with the Government is in the matte' of the means to the end. We do not consider that integration requires a scheme of nationalisation, and we are not satisfied that the case put forward by the Minister yesterday, which I think was amply met by both my right hon. Friends, has proved to the satisfaction of the House that, through nationalisation, the claims which have been made on its behalf will, in fact, materialise. Once again, this afternoon the Parliamentary Secretary has trotted out the very specious "Let us face the future" I seem to remember that claim being made at a time when it was said, "If you nationalise the gas industry, you will have cheaper gas," but nothing that has been said so far in the Debate can have influenced the House on that vital score.

I read quite recently an article by the hon. Member for Central Bradford (Mr. Webb), who, I believe, occupies an important position meanwhile in the Labour Party movement, in which he said that, although, of course, it was desirable that nationalised industries should show satisfactory costs, that was by no means the first purpose of nationalisation. Therein lies a very dangerous field of thought. If we are to rely merely on service to the public, the public, in the last resort, are going to be the judges of that.

We are dealing today, not with something which is a mere monopoly to this country, but with a young, vigorous chemical industry which requires to sell its goods in the world markets; and, if costs, whether in the gas industry or in these complementary industries, in coal, or in the provision of raw materials, are on such a level that they represent a service to the community but do not represent an economic level of costs, we shall stifle this industry at its birth. This matter of costs is one which is so interconnected with nationalisation that I feel that, unless the Government are able, in making their case, to satisfy hon. Members on that score, their case will fall to the ground, on that count if on no other. In all these matters, we have to attempt to hold the balance.

There are certain propositions being put forward at this moment to which there would be general assent. I think we are all agreed now that size, for its own sake, has very little to recommend it. I believe that, equally, it is fair to put forward the proposition that, whereas the State might be able to handle some things more drastically than can be done by other means, nevertheless, when the State is taking over and running an industry, it brings to it certain disadvantages. I think that what we have to do is to balance the advantage of quick integration and standardisation which the State can do against the eventual disadvantages which come when the State attempts to run an industry of this nature—disadvantages of a scale and size which are inevitable in State participation. I believe that hon. Members should honestly weigh these factors one against the other, no longer being led away by mere verbiage, or, indeed, approaching this problem from the psychological aspect. On this occasion, there is no great necessity to do so.

It has been generally conceded on all sides that the labour problem does not loom very large in this connection. If we discard these generalities and make an honest attempt to discriminate in this matter on the issue of whether this is going to be for the benefit of the nation, of whether, thereby, we are going to produce cheap gas, of whether we are going to carbonise coal in such a manner that we shall give this industry the opportunity it requires, then, I believe, we shall come to the conclusion that the case has not been proved. Although this is an old industry, in certain respects it is quite a young one. The whole field of its chemical products is in quite early stages. I never remember looking on the gas industry as being antiquated or lacking vigour.

I had an intimate connection with the coal industry and the electrical industry. My connection with the gas industry was merely as a customer, and, in a certain way, as a competitor. As a customer, the gas industry was a keen buyer. That was a sound thing; the very keenness of their buying made the producer of their raw materials concentrate on producing his wares to suit the market. From the competitive angle, I found them vigorous, efficient, and keen. It has come as a surprise to me to hear from the Minister that he considers this to be an antiquated, old-fashioned industry which, if lacking the inspiration of Government control, would tend to sink into obscurity. That seems to me to produce a picture and an impression which is wholly different from my experience, and, indeed, from the facts and figures which have been produced in the course of this Debate.

The gas industry is, and has been, making great strides. What we have to decide today is whether, by virtue of passing the Second Reading of this Bill, we shall help this industry on its way, or whether, by this act of nationalisation, which inherently will discard from the field of this industry the vital factor of competition, we shall be acting in its best interests. I believe that we shall not. I shall go into the Division Lobby against the Second Reading of this Bill with those doubts in my mind, and I believe that many hon. Members opposite will go into the Lobby for the Ayes with the same doubts.

5.54 p.m.

Mr. Oldfield (Manchester, Gorton)

As a rule, the speeches made by the hon. and gallant Member for Fylde (Colonel Lancaster) are worthy of consideration. He speaks as one with great experience in connection with the main product with which the gas industry is most vitally concerned. But I feel that, in many ways, whilst he has condemned this Bill, yet, nevertheless, by the way he was developing his thoughts and his speech, there was the possibility that, under certain conditions, he might have come with us into the Lobby tonight. Before I go any further, I want to congratulate my hon. Friend the Parliamentary Secretary upon his speech. It is the first time that he has delivered a speech of such importance and, magnitude. As a first trial, as it were, I though he conducted himself very finely indeed, and, what is more, presented a very good case.

I was delighted that he made special reference to the position of the worker in the industry under the new structure. As one who has been in the gas industry for at least 20 years, I know something of this structure. In fact, if hon. Members will do me the honour of reading a speech which I made in the last Parliament, at the time that we were meeting in Church House, in the Debate on the Coalition's White Paper on Full Employment, they will see that I said something to this effect.

I had three reports in my hand during that Debate. The first was that of the Gas Council which had just been issued in response to the then Minister of Fuel and Power, the right hon. and gallant Member for Pembroke (Major Lloyd George). It had been my duty as Chairman of the Manchester Gas Committee to go thoroughly into that Report. I knew something about the set-up and the background, and many of the interesting personalities who had drawn up that Report. The second report was that of the municipal corporations in relation to their attitude towards this important question. Having dealt with that, I then produced a book which had been issued by the Labour Party in relation to the whole problem of nationalisation. I concluded by saying that, of the three, from the standpoint of stability, so far as the industry was concerned, the book issued by the Labour Party was, in my opinion, the best solution to the problem, and the best solution to the problem of full employment.

Today we are discussing this very important Bill. I hope I shall be pardoned if I make a quotation which to me is applicable to the situation today. It is from a book entitled "On a Planned Economy" by Mr. E. Lipson. The author gives a paragraph from the point laid down by John Morley, who wrote: Great economic and social forces flow with a tidal sweep over communities, and"— this is the point I would emphasise— wise statesmen are those who foresee what time is bringing and endeavour to shape institutions and to mould men's minds and thoughts and purpose in accordance with the change that is silently surrounding them. As one who has been connected with the gas industry, it is my humble opinion that this Bill is in the right direction along the lines of that quotation.

One of the most amusing things in the council chamber of Manchester City Council was the antagonism between two of its leading members. One was the chairman of the Electricity Committee and the other was the chairman of the Gas Committee. If ever anyone wanted a good afternoon at the Manchester City Council they should have heard these two good men—they were thoroughly good men and I am not criticising them, for they have played a great part in local administration, even though they are not of my party. I can hear at this moment the chairman of the Gas Committee saying: "What do you get from a ton of coal after you have produced so much electricity? You get only something like 23 per cent. out of every ton of coal. Where is the other going?" The council always ended up in laughter. He used to say, "It goes up the chimney, but where does it go in the gas industry? Out of every ton of coal that is used, 90 per cent. goes to some purpose—it either goes in carbonisation or in one way or another it goes in the residuals which come from that source."

As the House may be aware, the Manchester Corporation was one of the first in this country to develop municipal gas undertakings and it has played, and is playing today, a very important part in the industry. Today Manchester is producing 31 million cubic feet of gas per day. It is also producing something like a million gallons of petrol. I am one of those who believe—and I am sorry it is not in the Bill—that the Government should have gone further than they have done. I would like to see more and more development of the by-products of tar, the residuals, etc. I am not one of those who say that the gas industry is bankrupt of ideas, either municipally or in private enterprise. It is useless to make a statement that such is the position, because it is not so. My experience goes into many walks of life in private enterprise in this industry and I consider that it has played a very important part.

I was one of those present when that great meeting tock place in the Central Hall. I was asked to move a resolution, and I want to quote it because it shows what was on the carpet at that time. I was asked to move this resolution by one of the members—I think he has since passed away; he played a great part in the gas industry and he was a very fine man, indeed, in that connection. He asked me to move this resolution and I asked him why he wanted me to do it. The reply was that I was the chairman of the largest undertaking in the North and that the North has a very virile place in this country. We are proud of it, and were proud of it at the General Election. This resolution said: While noting the consistent and notable progress which has been achieved by the gas industry, its sound financial structure, its cordial relations with organised labour and with its own employees, and the great benefits which it has conferred upon the community, nevertheless agrees that a measure of reorganisation is required in order that the progressive development of the industry in the national interest may be ensured and expedited; that the interest of the community and of consumers, to whom every gas undertaking owes its first duty, would be best served by allowing the industry itself, through the medium of the British Gas Association, with the assistance of the Minister of Fuel and Power, to continue to develop by evolutionary methods. That was what I was asked to move. Naturally, being a good Socialist, I could not conscientiously move it and, therefore, I turned it down. So did the meeting. In fact, that meeting saw pandemonium such as I had never experienced in the whole of my political career.

What happened as a consequence? That was an historic period, and it was an historic meeting, considering the constitution then of the Gas Council and the ideas prevalent in the industry. There is nothing like attending a meeting and arguing things out and making decisions and going away to carry them out—so long as they are good ones in which one sincerely believes. As a consequence of that meeting things did begin to happen. The Association of Municipal Corporations was set to work on the matter. I sat on a committee which dealt paragraph by paragraph with the report. We dissected it. The result was that it was recommended that the industry should be taken over under public ownership.

That is what we are doing now—taking the industry under public ownership. I do not see why the right hon. Member for Bournemouth (Mr. Bracken) should get excited about it at all. He is a fellow I rather like. I have always said so, in the last House and in this. He was knocked out of Parliament, and I cannot say that I was sorry; nevertheless, he is welcome back. He is always humorous and full of satire, but I do not think he did himself justice in his speech yesterday. Nine-tenths of the people who are really interested in the development of the gas industry are behind the Heyworth Report, and favour the nationalisation of the industry. I have talked with scores of them. I know what the people in the industry say.

One of the most necessary things to be done, which can be expedited under public ownership, is research to improve the working conditions in the industry. Ministers talk a good deal nowadays about the necessity of doing important although unattractive jobs. Some of the most unattractive jobs there are have to be done in the gas industry. I have often asked myself how in the world a man can get his living day by day in a gasworks. It passes my comprehension. I remember seeing a purifying box emptied. I hope that hon. Gentlemen opposite have seen that done. I stood beside the purifying box and 12 men were working in it, and I could not see one of them. I turned to some engineers who had taken me to the box and said to them, "If you, with your intelligence and brains, cannot develop a different method of purification I would not pay you in washers."

Some of these dirty jobs can be avoided. There is a plant running in Manchester today—with my name attached—which does away entirely with the dirty labour. It needs a man to go to look at the chart in the morning and again at mid-day. It saves men from doing dirty work and it produces much valuable sulphur. The price we can get for the sulphur, which is in great demand, will make this plant a paying proposition in a few years' time. Steel is of great importance today. In the liquid purifying plant which Manchester has erected, the steel is 64 tons, the connections 10 tons, the iron and steel five cwt., the castiron 41 tons. The total amount of steel used is 122 tons. In the old plant 416 tons of steel were used. From the point of view of saving steel this new plant is invaluable, and I trust the Minister will consider having similar plants used elsewhere.

The structure proposed in the Bill is very good, and I believe it will work. I must stress, though, the importance of keeping in contact with the consumer. In the minds of hon. Members on both sides of the House there is the feeling that under nationalisation the consumer will be left high and dry. In all my election campaigns—and I have fought as many as anyone, for I never had a walk-over—I have never been asked a question about the gas department. That apparent lack of interest by the consumer is overemphasised, and should not be carried too far. As long as consumers are supplied with gas nothing much can be said; and although occasionally there may be complaints about a stove, and this, that or the other, there are not very many complaints from consumers on the general running of the industry. Nevertheless, I want to feel that in future the consumer can go to a place near his home, where he can make his complaints and have them attended to quickly and efficiently. I am in favour of the Bill, but I am convinced that it can be improved in Committee, and in that respect I trust that the House will do its duty.

6.22 p.m.

Colonel Clarke (East Grinstead)

I have listened with great attention to the speech of the hon. Member for Gorton (Mr. Old-field), and I cannot believe that such an enthusiastic supporter of the Manchester gas department can willingly see it disappear, as it will do. I believe that in his heart of hearts, failing seeing all other gas concerns put into one municipal enterprise, he would rather it were left alone. I hope he will be on the Committee and will help to improve the Bill, as he apparently helped to improve the purifying apparatus of his municipal gasworks.

At the outset I must declare an interest. I am not a director or stockholder, but I have what I think Erskine May would call a remote interest. On reading this Bill, my first impression was that much of the seed-corn sown by the Opposition during the passage of the Electricity Act has now been gathered and resown by the Government in this Bill. In both Chambers, the Opposition obtained a number of Amendments to the Electricity Act, which have all materialised in this Bill. However, there is room for much further criticism, and I hope we shall again have a favourable reception for constructive suggestions.

The remarks of the Parliamentary Secretary in regard to integration reminded me of something the Minister said yesterday. He said that one could refer to a report by the Association of Gas Corporations in 1946. I think it a pity that he did not do more than say he could refer to it, and actually do so. Had he done so he would have found in that report answers which would have saved him saying enough to fill at least six columns of the OFFICIAL REPORT, particularly with regard to the powers of integration, on which the report makes a recommendation at page eight. I hope that later on the Minister will find time to look at the report in question.

A number of hon. Members opposite have already referred to the Opposition's hostility to nationalisation. My name is on the Order Paper supporting the rejection of this Bill, and I will say no more on nationalisation at present. Instead, I approach the Bill from the point of view of its effect, if passed, on our national economy and on the gas industry itself in particular.

First, let me deal with the national aspect. The main importance of the gas industry to our national economy is that it provides the most effective way of using our most precious asset—coal. Our prosperity was founded on coal, and can be maintained only on coal. The supply is reasonably ample, though certain coking coals are becoming in short supply. Output is a problem, and we shall always have to economise by guarding our reserves of coking coal in gasworks. Fewer tons of coal produce a given quantity of usable heat than any other known method, in addition to providing many hundreds of by-products. In comparison with the electricity industry, which deals only with manufacture and distribution, and coal which is produced as a raw material, the gas industry is much more complex, and is a highly scientific manufacturing concern. But I am afraid that if it is housed under the same roof as electricity and coal it is likely to be the Cinderella of the family and not the "leading lady," as I believe it should be. For many years the miners have desired to obtain the profits of all carbonisation to augment and support their wages; and they are the power behind the throne in the coal industry.

The proposed Gas Board has a weak structure. It looks as if the Minister has been criticised for making the Coal Board too strong, with too much power at the centre, and has gone to the other extreme and produced for the gas industry a Board which is practically spineless. Clause 48 regulates contact between the Gas Area Boards and the Coal Board, and puts the Gas Boards in an extremely weak position. The Coal Board, strong and integrated, and an administrative body, is negotiating with a number of Area Boards at a lower level. A Central Board is negotiating with Area Boards—one against 12. That is a very weak position, particularly with the great influence there is behind the Coal Board in this House and in the country. I think that the policy should be exactly contrary. I should like to see that part of the carbonisation industry which comes under the Coal Board handed over lock, stock and barrel to the gas industry. I believe that that would be the right way to approach the matter. The Coal Board would not like it, but the nettle should be grasped firmly. The gas industry has been one of the greatest pioneers in chemical research. It has fostered and extended research in every direction. We find that there are only 15 lines—platitudinous lines, if I may say so—devoted to this subject in this 100-page Bill. Again, I say that the industry is not being fairly treated. It is being treated as the Cinderella.

In referring to the effect of the Bill on the industry, I am referring to it in its widest sense, not only from the point of view of the manufacture of gas and byproducts, but from the point of view of those whose lives are wrapped up in the industry, namely, the workers, consumers and proprietors.

There are some 130,000 people who work by hand or brain in the industry, in addition to the consumers. The three elements in the industry are the consumers, who may also be shareholders, the shareholders, who may be also workers and consumers, and the workers, who may be either of the other two. It will be seen that no hard and fast line can be drawn between the three. One of the reasons why the industry has given such good service, is because those who serve in it are liable to be criticised at all times by their own families, and by those among whom they live and serve.

This is an old and honourable industry, where sons have followed fathers for generations, both among the directors and the workers. This has crystallised experience into tradition and has been responsible together with co-partnership for the happy labour relations in the industry. Those who own this industry look upon it more as the peasant farmer looks upon his land, and that is with a certain sentimental interest and not just as an investment. The compensation which is to be given will not be adequate. In one company a shareholder will get only £3 5s. as income as compared with the £5 which is received today. The feeling that you own a 58 millionth part of all the gas companies in the country is not a very good alternative to owning a share in your local gas works, which you have seen develop and in which you perhaps worked.

The Minister, in speaking of the Area Boards yesterday, said: They are the main intruments through which the benefits of the reorganisation of the industry under public ownership and into larger areas will accrue to consumers, so that better and cheaper gas and coke will be available than would otherwise be the case."—[OFFICIAL REPORT. 10th February. 1948 Vol. 447; c. 228.] I am glad to hear that, but I notice that in the Bill the only reference to anything in the nature of cheapness occurs in Clause I (7), where it is stated that Area Boards shall reduce, so far as practicable, the price of gas and coke. That seems in marked contrast with the fulfilment of the promise in "Let us Face the Future." Public ownership of gas and electricity undertakings will lower the costs. That is very different from "reducing as far as practicable." Incidentally, I would point out that these words were included in the Electricity Act as a result of an Opposition Amendment which was rejected the first time it was moved, and that now they have been reproduced in this Bill. My reason for saying that the consumer is not likely to have cheaper gas is because of what has happened in the case of the other industries which have been nationalised. What, for example, has happened in the case of coal? There has been much talk about what Lord Citrine said about the future price of electricity. I believe that he does not now seem to have said the whole of it; but, at any rate, I am certain that he will not say that he did not say any of it. Yesterday the hon. Member for Brigg (Mr. Williamson) hoped that there would be a review of the wages and conditions within the gas industry. What is the object of such a review? Is it in order that wages shall go down, or that they shall remain at the same rate? Is it so that the wages shall go up?

Mr. Walker (Rossendale)


Colonel Clarke

We have the answer, and I would remind the House that wages are largely responsible for the price of gas. Competition between electricity and gas has been removed. The Heyworth Report, upon which the Minister so closely relies, was most insistent that such competition should remain. Mr. Heyworth based half his argument on the continuance of competition between gas and electricity, but, personally, I thought that when electricity was nationalised and competition no longer took place, the Heyworth Report was holed and might be considered a total loss. May I make two other comments on the Heyworth Report? Never have I seen a report which went so wide of its terms of reference: also it was not a very good prophet when it said that if the industry did what the doctor said, it might increase its output by to per cent. by 1955. In October and November, last year, which is only two years later, the industry had already increased output by 14 per cent., and without taking the doctor's advice. I fear that with the removal of competition and price control, the chances of the price of gas falling are very small.

I wish to say another word on the human aspect, and that is about directors. If the suggestion is correct that all will be discharged without any form of compensation on the vesting date, a great hardship will be done. In this industry there are many senior, retired officials who were put on these Boards instead of being given pensions. They have rendered valuable assistance. They will lose everything under this scheme. There are also engineers who gave up jobs to become consulting engineers and directors of a number of these companies, and they have been getting their living in that way. They are to be thrown out.

Mr. Edward Porter (Warrington)

Private enterprise has done that.

Colonel Clarke

That is not the case. When directors were removed by private enterprise on the amalgamation of companies, they were given seven years' compensation by the consent of the Minister opposite. Why is he so inconsistent when, in this greatest amalgamation of all, he departs from that principle?

Mr. E. Porter

That may apply to the directors, but the workmen were sent to the employment exchanges.

Colonel Clarke

There was no better treated body of workers than the workers in the gas industry, until they were stirred up by the hope of getting more out of the consumer by nationalisation. The Minister has spoken of the Heyworth Report, and suggested that integration was discovered by the Heyworth Report. I know that hon. Members opposite are always discovering things—they discovered the British Commonwealth of Nations the other day. However, they give Mr. Heyworth the credit of having discovered the principles of integration.

It was actually in 1926 that the National Gas Council submitted to the Board of Trade a memorandum asking for greater facilities for co-operation between their undertakers, and that was followed by the setting up of a committee which was distinguished by having as its chairman a Member of the Party opposite and the President of the Mining Federation, Mr. Frank Hodges. Both these committees reported in favour of integration, and the industry from that time has been working on those lines. The history of the great companies in London—the Gas Light and Coke Company, and the South Metropolitan Company show that physical inte- gration has proceeded apace. Since 1932, there has also been functional integration through the gas corporations, or, as I prefer to call them, group companies for fear of mixing them up with the municipalities. In many cases, that functional integration has led later to physical integration.

I heard the Parliamentary Secretary say just now that this was a good, clear, sensible Bill. I say it is a bad Bill. I think that in its 100 pages it contains many human failings and few human virtues. It is an unscholarly production. The Minister has obviously only read one Report although he referred to the existence of others. That is a pity. I expected more scholarship and more research of a leading scholar of Winchester, New College and the London School of Economics. I thought that the author or authors were lazy. They took the machinery of the Electricity Act and applied it without adequate attention to a totally different industry. The machinery of the Electricity Act was meant to deal with an industry that simply manufactured and distributed electricity. The chemical side of the gas industry appears to have been almost totally ignored. It is a short-sighted Bill. While it was pleasant to see members of the Fabian Society and the trade unionists agreeing on something for once—in this case on the opportunity which it gave of delivering a death-blow to co-partnership—I think that they could have agreed on something which was wiser and more sensible. I do not think that they begin to realise the troubles that are in store for them as a result.

I think that it is a dishonest Bill. The Government have put forward every possible argument to justify it, except the real one. I believe that I have the real one here. To get it, I visited the Fabian Society bookshop. I had great difficulty in finding my way there; people kept giving me wrong directions as if they did not wish me to find it, and I spent nearly 20 minutes walking round Westminster before I found it. There, I bought a book called "The British Gas Industry—Present and Future"; Fabian Publications, Limited, Research Series 103. On page 21, I found what I wanted. It states: The main arguments for this policy"— that is a plan for the gas industry— are based on much wider grounds than the health of the individual industries themselves. The gas industry must be organised in such a way that its development can be effectively controlled to the extent that the national investment policy justifies. They do not want one industry which can show the others up, or that can be used as a standby if others fail the country. I think this is a malignant Bill, that is breaking down a live, organic unit, quite regardless of the ensuing disorganisation, at a time when efficient fuel services are vital to British industry. We get to the bottom of the sterling stocking next June, and this Bill will not have received the Royal Assent by then. I think it is unnecessary.

If the Government would only face the present they would see that in trying to avoid the effects of the mistakes which they have already made, and in trying to avoid being shown up by one or two industries which still remain under private enterprise, they are making even bigger mistakes. The dead hand of bureaucracy is laid on a real, live, vital industry, an efficient industry, and an industry which, even at the time of the greatest national strain, never failed the country. Earlier in the Debate, there was talk of tragedy. I find that the dictionary definition of tragedy is "Drama with an unhappy ending," and to many of us who know and respect the gas industry such a definition seems to sum up this Debate quite appropriately.

6.51 p.m.

Mr. Walkden (Doncaster)

If I do not pursue the arguments put forward by the hon. and gallant Member for East Grinstead (Colonel Clark), it is not because I am failing in my respect for him. Rather is it a desire for brevity which I will do my best to attain. Yesterday I was particularly impressed by the passage at the end of the speech of my right hon. Friend the Minister of Fuel and Power. I thought it was an excellent speech. I should also like to say to the Parliamentary Secretary how glad I was to hear him tackle so effectively a very difficult job this afternoon in delivering what was to me his first main speech from the Despatch Box. It was a magnificent performance on his part and as an old colleague I was delighted to hear it. The Minister, at the end of his speech, used these words: The logical step of transferring these three great industries to public ownership has at last been taken and the basis has now been laid for the efficient planning in the interests of the community of our great fuel and power resources."—[OFFICIAL REPORT, 10th February, 1948; Vol 447. c. 239.] How very true that is. How very necessary it was to tackle this particular job. The Minister is quite right to take particular pride in producing such a businesslike, sensible and reasonable Measure, which is an essential piece of social legislation This morning I was ruminating over odds and' ends and bits and pieces of speeches I had collected over the last 30 to 35 years. I discovered some notes which I had taken of a speech delivered 35 years ago by the late Lord Leverhulme. I heard him say this: Whatever is common in social needs should be commonly developed under common ownership. He was, of course, a progressive radical, and for that generation certainly a very good employer. He stimulated much thought in the minds of folk like myself and he certainly was a great teacher of social and economic issues of every kind.

In the Explanatory and Financial Memorandum to this Bill, we are told: The purpose of the Bill is to provide for the organisation, under public ownership, of the gas industry in Great Britain. It is not merely because we believe in nationalisation that we believe in that principle. It is because social needs must come first and social development and progress must be maintained. These demand a Measure of this kind, and furthermore, an efficient guaranteed economic system of gas supply for the whole of the homesteads of Britain. I should like at this stage to say that I am very pleased that the Lord President of the Council is to reply this evening, because, while commending and sincerely believing in the Bill, I want also to offer a word of criticism, which I believe will be constructive.

The Minister and the Parliamentary Secretary referred to research, particularly in by-products. I have not heard one hon. Member mention, nor do I find in the Bill, any reference to the valuable source of gas supply which has been wasted in Britain for many years. Most of it comes from the sewage systems and the sludge digestion works which have been developed in recent years. I refer to methane gas. We have in many of our modern sludge digestion plants some concrete examples of where private enterprise has not only failed, but has been a miserable failure in relation to this particular problem. The average daily yield in the country from sludge digestion works runs into millions of cubic feet of gas, and I was reading only this morning that in some German towns—I believe Essen is one good example—four or five per cent.—and in one particular German town before the war up to 7 per cent.—of the town's gas supply comes from the surplus gas produced at the sludge digestion plants.

It is remarkably interesting and true that local authorities control this system of sludge digestion works. In the town where I have lived for the last 20 years private enterprise runs the water and makes it a very profitable business, as it has done for generations, and has always run the gas and electricity undertakings, but it has left the sewage farm alone. It could not make a profit out of that, otherwise it would have run that as well. The point is rather interesting because here in Britain, mostly because of antiquated restrictions, we are not allowed to use methane gas because it comes from the sewage farm, though it is allowed to burn away in flames or pollute the heavens.

In one of London's largest hospitals, where I had the honour to be chairman for many years, we were desirous of using this gas. In the days before the war there was a considerable waste of this gas from the West Kent Sewerage Board Works. Before the war something like 250,000 cubic feet of gas every day were being extracted from the sludge works at the West Kent Sewerage Board, and that amount of gas was just rising to the heavens. We suggested at the hospital that we should like to become customers and use the gas. The Sewerage Board said we could have it, but owing to some antiquated restrictions or regulations the London County Council, with all the good will in the world, were unable to permit us to do so. This gas was going to waste at the outbreak of the war and, although it would heat the hospital, cook all the meals and do everything we required, we could not become customers for it.

The same applies in the town where I live and where I have resided for 20 years. We have a modern sewage plant, and I would say, in fairness to the Wandsworth Gas Company, that they were willing to receive, collect, store, clean and sell this gas from the modern sludge digestion plant in Surrey. Owing to some restrictions, the details of which I cannot remember, the Wandsworth Gas Company were prohibited from taking from the Borough Council 60,000 cubic feet of gas per day which ought to be used. Unfortunately, it could not be used by the Corporation, nor has permission to use it been available since then.

I must show the comparison with the progressive city of Birmingham, for whose municipal enterprise we can have respect in many ways. I am sorry that the hon. Member for Edgbaston (Sir P. Bennett) is not here. I discussed this matter with him many years ago. Birmingham has experimented with methane gas and has been running buses and other vehicles with it, as well as using it in various enterprises. I commend what Birmingham has done to the notice of hon. Members. I envisage, as a result of the new regional sewage boards, many offers coming of millions of cubic feet of methane gas. I suggest to the Lord President of the Council that there appears to be nothing in the Bill giving power to the Boards to permit development in this direction.

We cannot afford any longer to listen to the Tories who are crying "halt" to these schemes of social betterment. The Government must in no circumstances accept the suggestion that their schemes of social legislation should be halted. We must go forward with development plans of public ownership of all kinds in the life of this Parliament. I would mention to the Lord President of the Council the public ownership of cold storage plant; legislation to deal with this is long overdue. The same applies to grain storage, the flour milling industry, water supplies and other enterprises which are absolutely necessary to the people and homesteads of Britain. I believe that the people of Britain will back up the Government if the Government are vigorous, determined and businesslike in their approach to these matters. I believe that is how the Government have approached the matter dealt with in the Bill, and I will give the Bill my heartiest support. I shall certainly go into the Division Lobby to back them up.

7.4 p.m.

Mr. Wadsworth (Buckrose)

This Debate has special significance because it deals with the last Measure of nationalisation which the Government put into their programme in 1945. Steel was not then mentioned. We have had nationalisation of the Bank of England, coal, electricity and, alas, transport, and now gas.

I do not think that most people are very unhappy about the situation regarding gas, in spite of the speeches that I have heard from the Opposition. The right hon. and gallant Member for the Scottish Universities (Lieut. - Colonel Elliot) said that this was rather a dull Debate and that there was not enough enthusiasm, apparently even from the Labour benches. That is because most people have accepted the nationalisation of gas as a right step at this moment. The Liberal Party—and I am speaking now on behalf of the Liberal Party—[HON. MEMBERS: "Where are they?"]—I cannot say that I have considerable support at this moment. The Liberal Party represents six million people in the country. Speaking on behalf of the Liberal Party and of six million people in the country, I say that we are quite happy from many points of view that there should be nationalisation of gas.

We feel that there is in the gas industry a certain amount of monopoly There is no competition between one gas enterprise and another in any particular district. We also believe that there has been, in the Heyworth Report, a conditional support of nationalisation. The Report did, in some measure, consider that nationalisation should be applied to the whole industry. The directors of gas companies are not unhappy about the situation, to judge from what some of them have said to me. The market is right at the top to sell anything. If the Government had waited another 12 months perhaps they could have bought the assets at a much lower price than they will pay today. The directors look back over their shoulders at difficult periods before the war when there was a good deal of competition and many losses were suffered by gas companies. They look ahead to rather difficult periods, and think, "Perhaps we had better get out this time, rather than face the future." The workers are happy, too, because they feel—this is wrong, of course—that when the industry is nationalised there will be fewer hours of work, judging from the nationalisation of coal mines, and higher pay. I hope they are correct in that assumption, but I think it is a fallacy. Hon. Members on this side of the House have, in private conversations, agreed with me that perhaps nationalisation of the gas industry is not a bad thing if you examine—[Interruption.]

Mr. Thornton-Kemsley (Aberdeen and Kincardine, Western)

That is a monstrous statement.

Mr. Wadsworth

They oppose nationalisation of gas on principle.

Mr. Nigel Birch (Flint)

If we are to make use of private conversations, it might be stated that private conversations with the hon. Member's own party have revealed nothing whatever conducive to agreement with nationalisation of the gas industry.

Mr. Wadsworth

After all, perhaps we had better leave these private conversations out of the Debate. I am not convinced that the present gas industry is very efficient. Like the hon. Member for Gorton (Mr. Oldfield), I have served on a gas committee for a town of medium size with a large gasworks. My experience, after visiting many gasworks in the country, is that many of them are very much out-of-date. We must recall that the land was bought for the original works in some cases in the middle of the 19th century. There may have been re-organisation of the works since that time, but the directors have never felt like laying out a completely new plant. They have brought in new equipment from time to time upon the old lay-out.

Most gas engineers will agree that to bring greater efficiency into the gas industry will often mean re-siting works and building entirely new works. Yorkshire has a good old word "thoil," which may be understood by my Yorkshire colleagues. Many of the directors in the re-organisation of gasworks which has taken place from time to time, would never "thoil" pulling down the old buildings: they always made use of the existing buildings, with the result that many gasworks are still very inefficient. The right hon. Gentleman the Member for Bishop Auckland (Mr. Dalton) referred during the Committee stage of the Transport Bill to the assets of the railway com- panies as a bag of bones; he would have referred to many of the gasworks as a bag of rusty nuts and bolts. Nationalising an industry does not mean that there can immediately be greater efficiency. It is a long-term plan, and a good deal depends on the courage with which the Government rebuild and increase the efficiency of the gas industry. There are one or two points to which the Government will direct their attention. The first is research, which is important. The hon. Member for Gorton dealt with the emptying of the purifying boxes. I have seen that process taking place. In many other respects within the industry, research can improve conditions.

I would also refer to the type of research which is quite outside the internal economy of the gasworks, such as that which the Russians have tried, in applying newer methods of manufacturing gas. I understand that the Russians have successfully produced gas by burning coal in the ground itself; that is by igniting the coal—it may be deep-seated coal of a poor quality—driving air under control to that coal and then pumping the resultant product of combustion to the top of the shaft and purifying it there, thus producing a very cheap form of gas. I would like the Minister to consider that suggestion. It has been talked about widely in this country, but I am not sure that anything has been done about it.

Perhaps he will also consider whether it would be possible to re-site many of the present works at the pithead. At present the coal is taken from the pit with a double handling charge, whereas in many cases, though not in every case, it might be possible to demolish the present gasworks in existing towns, particularly in the West Riding of Yorkshire, manufacture the gas at the pithead and pipe the gas to those towns. Some years ago, I tried to persuade a committee on which I was sitting that it would pay them to sell the works to the United Kingdom Gas Company. If they had done that then, I am certain that the gas which was produced at the pithead by the United Kingdom Gas Company could have been piped at a cheaper rate than the town itself could manufacture it.

The question of co-partnership is very important, and I stress this particularly because this may be the last nationalisation Measure which will take place in this Parliament.

Mr. George Hicks (Woolwich, East)

Wishful thinking.

Mr. Wadsworth

The attitude of many members of the trade unions was referred to by the hon. Member for Brigg (Mr. Williamson), who said that his opinion was that co-partnership in an industry, and particularly in the gas industry, was a bad thing and would be fought by the trade unions. I do not want to be controversial. Trade unionists will agree that the Liberal Party has, in the past, done a great deal to help trade unionism in its early formation and has brought into existence many Bills to help trade unionism. I, therefore, hope that what I now say will be treated in a spirit of friendliness. It appears to me that when we bring large numbers of men into a nationalised gas industry, we shall have to attempt to bring in some incentive so that those men shall give of their best. The time has now come for the trade unions to cast off the old attitude of mind of merely being a protective organisation and to take a fuller part in the development of industry.

The trade unions represent the largest opinion in the country and can help this country over the stile ahead. More responsibility rests on their shoulders than on any other section of the community. They should now attempt to bring out a new charter whereby the employees work in closer co-operation with the employers and are paid more on results than on a standard wage. I hope they will consider that idea favourably in the very near future. In the case of the gas industry, what is wrong with the men employed in an industry accepting part of the profits because it has made good profits? I am confident that if only the trade unions would help in that way, we should have more chance of getting out of our economic difficulties.

It is essential that coal and electricity having been nationalised all indigenous fuel resources of the country should be unified under national control. Provided that the Government tackle the reorganisation of the whole industry with courage—I am a little afraid of that—and do everything in their power, whatever it may entail, to carry out their full programme, we shall have a more efficient gas industry. The gas industry plays a very important part in the industrial life of the country, and unless the gas industry is efficient, we shall not get out of our economic difficulties.

7.19 p.m.

Lady Grant (Aberdeen, South)

I must confess that the subject of gas is not one on which I always feel a great Burning enthusiasm, but I am compelled to make certain remarks on behalf of the consumers and also to examine the Bill as it affects local authorities, particularly in Scotland. I must, first of all, disagree with the hon. Member for Buckrose (Mr. Wadsworth) who said that my hon. Friends are opposing the Bill on principle alone. That is not so. We oppose the Bill primarily because we believe that the nationalisation of gas is inefficient. After all, there are over 11 million domestic consumers in this country, and the first question they must ask themselves is whether the nationalisation of gas will give them a supply which is cheaper, more efficient, more reliable and of better quality. On studying the provisions of this Bill and on an examination of yesterday's OFFICIAL REPORT, I cannot see that nationalisation will have that result. The hon. Member for Buckrose has mentioned the Heyworth Report. That Report said specifically that centralised direction and management were most impracticable in this industry, and that it was most important that there should be competition between all the fuel and power industries. To bear that out, may I quote from the Report? It said that Competition between the fuel industries is the main stimulus towards efficiency, on which these proposals depend. This is important for the gas consumer but it is equally important in the national interest that the other fuel industries, electricity and solid fuel in particular, should be stimulated to the maximum extent by competition from gas. Therefore, one maintains it is obvious that competition gives a stimulus to efficiency as well as being a reliable safeguard to the consumer against rising costs. I notice that only two days ago the Gas Council said they felt that the nationalisation of this industry would cause only delay, confusion and difficulty at a time when, above all, we must have co-operation and development. If this is the opinion of responsible experts, I suggest that opinion will be echoed heartily throughout die country by all consumers, and particularly by the housewife who, unorganised, feels herself impotent against the reorganisation of a great industry upon which she is very much dependent. I may say that I am not speaking on behalf of any vested interests because in my own house I have neither gas nor electricity.

The Gas Council also remarked that they were perfectly prepared to enter into open competition with the electricity industry, and it seems odd that the Minister is chary of allowing them to do this when he said in his opening speech yesterday that the industry was antiquated. One wonders, therefore, whether it is as antiquated as he suggests. It has been shown to be technically efficient, to give stable employment, to give good labour relations, particularly in co-partnership. It has been shown to be increasing its production up to 41 per cent. in 11 years, and the Heyworth Report only suggested that it could increase up to 20 per cent. in 10 years, while the Bill is completely silent on the matter. Therefore, one cannot help wondering whether, perhaps, the Minister is afraid of competition from the gas industry. If all the fuel and power industries come under the responsibility of one Minister, surely the efficiency of one industry can be carried over to tide over the inefficiency of another?

I would like to follow the remarks of hon. Members who have spoken in this Debate regarding the question of price, which is so important to the consumer. It has been shown already that with the nationalisation of the coalmines the price of coal has gone up by 6s. 6d. a ton, and we have up to 10 per cent. of dirt or slate in the coal, which anybody can find in their own grates whenever they like. However, I am informed that the cost of coal represents 20 per cent. of the cost of gas, and therefore it means a great deal to the ordinary working household. We have also seen how the rise in the price of coal has affected the price of gas to the consumer in Statutory Rule and Order No. 2242, where the Minister authorised that all gas undertakings were to have an increase in their price.

I am interested in this question of price particularly as it affects my own city of Aberdeen, and I hope the House will forgive me if for a moment I am quite unasnamedly parochial. Our gas undertaking in Aberdeen has been run by a local authority since 1871 and has been acknowledged generally to give a supply that is both cheap and efficient. Over 190,000 people are supplied. If anyone would care to visit that great city he will find that, if he goes on a prepayment meter, he can get 22 cubic feet for the large sum of 1d. Therefore, one must see that this in an efficient local authority. We on the board are extremely interested to know whether the nationalisation of the gas industry will increase the price of gas and thus mean a raising of rates.

Now we come to the question of compensation. In Aberdeen it is assessed that the gas undertakings are valued at £1,222,535. They are to be acquired by the State, apparently, by payment of principal and interest of outstanding debt which amounts in our case to £269,000 in round figures. Now, the free assets, as shown in the town's accounts, amount to £781,000. I noticed in the Debate yesterday that the Minister said he had issued an Order recently prohibiting the disposal by local authorities of their assets—in other words, prohibiting them from giving a "parting gift to the consumer." Therefore, it seems, as far as the city of Aberdeen is concerned, that we are to have a direct loss of £781,338, to be exact. Furthermore, the gas department contributes towards local administration the sum of £7,600, and it is presumed that under State control much of this will be lost as local revenue against local rates. I ask the Minister whether this is so, because if it is, it means that we are bound to have a rise in rates up to 3d. or 4d. in the £. I put it to the Minister that it is most unfair that thriftless local authorities are to have all their debts paid by those municipal authorities which have been careful.

With regard to the administration of this Bill as it affects Scotland as a whole, over the Border we have 64 local authorities which are responsible for 85 per cent. of the gas undertakings. Those are very scattered organisations. Under the structure of the Bill it appears that the whole of Scotland is to come under one Area Board, but the Bill is quite silent as to the structure beneath that level. I find at home that the local authorities do not know whether they will continue to be responsible for the administration. In passing, one might mention as an example of rushed legislation that the Bill was not in the hands of the corporation's officers unit last Saturday. Therefore, it is important that local authorities should have their position made clear, particularly as it affects us up in the North. I must confess that our local council is rather silent on this matter because we have perhaps been so unwise as to elect a Labour City Council. I myself am very much against this idea of forging a link between local authorities and the centralised control in Whitehall because, however sincere a local man may be in his desire to work in the best interests of his own people, nevertheless he is bound by a national political party programme which has no relation whatever to the ratepayers' interests.

In conclusion, I would say that I consider this Bill is ill-timed, ill-conceived And unnecessary. I feel that the country should have the opportunity now to examine the results of some of these experiments in State control and that we should not proceed further in the direction of a centralised authority. I think it can be truly said that it is the Achilles heel of Socialism that it always concentrates on the problem of distribution rather than on the problem of production, and it is therefore almost a platitude to a weary public to remark that a Government cannot run commercial business. It is for this reason that I intend to vote against this Bill tonight.

7.30 p.m.

Mr. Rankin (Glasgow, Tradeston)

I am sure the Labour majority in the City Council of the city which the hon. Lady the Member for South Aberdeen (Lady Grant) represents so well, will be highly gratified at the very high compliment she has paid them tonight in telling them that, as a Labour authority, they run their gas undertaking not only efficiently, but cheaply. It would seem, therefore, that her argument that what a Labour majority can do for the city of Aberdeen is something which a Labour majority in this House cannot do for the whole country savours of extreme contradiction. I think she may rest assured that the Labour majority in this House of Commons is just as effective in its action as the Labour majority in the city Which sent her here. I was rather interested in her statement that we would not, or could not, have competition between the different factors in our fuel and power industry if we nationalised them. I do not think she can be very familiar with the structure of the system of society she would like to see in existence today.

I might put a pertinent question to her, and I hope she will not take it as an impertinent one. I wonder if she uses "Oxydol" or "Persil," or some of those other substances which are largely advertised in the Press, in order to produce the necessary whiteness in certain garments. We are assured that "Oxydol" is infinitely better than "Persil," and "Persil" infinitely better than the third hi the trinity; but it is not pointed out that the three of them are all owned and produced by exactly the same monopoly combine. Within monopoly capitalism itself we have competition going on in order to assure the ladies of this country that "Oxydol," produced by I.C.I., is much better than "Persil," produced by I.C.I. Exactly the same philosophy can be applied to this Bill. Under national ownership, if necessary, competition could be induced and achieved between gas, coal and electricity if we wished to work it that way.

There is nothing inherently impossible in attaining under nationalisation what the hon. Lady would like to see obtaining in this country. That being so, I hope she will be able to follow us tonight into the Lobby in support of this Bill. The general argument, however, is merely a shaking of dead bones. I have followed the Debate fairly closely, and have listened to most of the speeches, and I must say, with all due respect to the hon. Lady, that neither she, nor any other hon. Member who has spoken from the Opposition Benches, has shaken a single individual on this side of the House in his decision that nationalisation of this industry is the only possible way in which to deal with it.

Mr. Jennings

How does the hon. Member know that?

Mr. Rankin

Therefore, if the hon. Lady will forgive me, I shall not pursue her any further—tonight, at any rate.

I wish to turn to the speech of another compatriot of mine, who is ornamenting the Front Opposition Bench which he often distinguishes, the right hon. and gallant Member for Scottish Universities (Lieut.-Colonel Elliot). I thought that, while he did not make an effective contribution against the principle of the Bill, nevertheless he threshed out very successfully indeed one point which disturbs Scottish local authorities very much, namely, the question of compensation. I thought he was quite effective on that point. I was very glad to hear the Parliamentary Secretary say that in his reply the Lord President of the Council will have a word to say on the question of compensation. I suggest to the Minister of Fuel and Power that perhaps it will be possible to tell us how the figure of £2 million compensation to the local authorities has been arrived at.

Under the Electricity Bill £5 million was given as compensation to the local authorities for loss of their undertakings. They supplied three-fifths of the electricity of the country. Under this Bill £2 million is being given to gas undertakings under public control for compensation for severance. On a basis of sales, they supply something like a third of the gas consumed in the country. The Minister said that the procedure to be followed here would be the same as it was in the electricity Measure, and I calculate that if he had followed that procedure closely, the amount of compensation for severance would have been nearer £3 million, than £2 million. If I am wrong, perhaps he will show how the figure of £2 million has been arrived at.

Taking the figure of £2 million as correct, what is it supposed to cover? We can understand that it covers loss for severance of the services of the town clerks' department, maintenance of municipal buildings, and centralised collection of accounts. But does it cover the liabilities incurred by the superannuation funds? This is a point of importance. In embarking upon a superannuation scheme a local authority has to make contributions to cover that period of a member's work or engagement with the local authority before the fund was inaugurated, that is, for a non-contributory period. When that member of the fund is transferred under the Bill, will the local authority be left to continue paying that non-contributory part without any compensation? Is that covered under the £2 million which is devoted to compensating the local authorities for this severance, or is there to be a separate treatment, in addition to the £2 million, for the liability incurred under the superannuation funds which exist today.

Those are the points upon which I should be grateful if my right hon. Friend, in replying to the Debate, could see fit to give some guidance at this moment, because I believe it will help towards a speedy and smooth passage of this Bill into an Act. I conclude by echoing the words of the Parliamentary Secretary. This is a good and sensible Bill and it will make a notable contribution to the industrial efficiency of the country.

7.42 p.m.

Mr. Jennings (Sheffield, Hallam)

I am one of the Members of this House who believes that the acid test of this Bill, like that of the Coal Industry (Nationalisation) Bill, is whether the product, in this case gas, can be economically produced at an economic price to the consumers, household, commercial and otherwise. If gas cannot be produced at an economic price, it will mean that the price to the commercial user will have to be raised at the expense of industry, and may cause a great deal of unemployment. I should have thought that the Minister would have come to the House and said, in support of this nationalisation Bill, "Look at the coal industry—what a huge success that has been. Look at the Electricity Bill, look at what we are going to do there. Look at the socialisation of the airways." What a great acid test we have had there of nationalisation. Every one of them is a complete failure, and the Minister is afraid to put them forward in support of his case.

My great concern is whether a nationalised industry produces gas economically at a fair and proper price. I listened to the speech of the Parliamentary Secretary this afternoon, I heard the same things said in connection with the Coal Industry (Nationalisation) Act about consumers' councils and how they were to ensure a proper deal, and that if there were any complaints they would be put right. All that the consumers' councils have Done up to the present, as far as I can find, has been to allow a price increase for domestic coal on two occasions. Private enterprise, had it supplied that quality of coal, would have had to take it back and return the consumer his money, or be sued for selling goods by false pretences. That is the acid test of the coal industry. We see there are big jobs and big expenses in the running of that industry. I greatly fear that we shall get the same thing in the gas industry.

We now have an efficient gas industry. We have technical people, gas engineers, chemists, etc., in the industry and there are good relationships with the employees. These are not the people who are to have the responsibility for the supply of gas in the future. It has been said that there will be competition between electricity and gas. That to me sounds like utter nonsense because if there is to be competition between gas and electricity on proper lines, as private enterprise sees it, one or other is bound to go to the wall. Which is it to be? An illustration has been given about the products of a private enterprise firm and my hon. Friend the Member for South Aberdeen (Lady Grant) was asked about choosing between "Oxydol" and one or two similar proprietary lines. There is no relevance in that argument. Here the Minister is taking over, in this Bill, the development of the gas industry. If it is to be run on proper lines, electricity and gas will compete for the same consumers to a large extent, but I fail to see how any Government can guarantee that there will be competition between the respective supplies. Is it a physical impossibility, and we are living in a fool's paradise if we believe assertions such as that.

Of grave concern to me at the present time, as I think it is to everybody inside and outside this House, is the apprehension whether our food supplies, in this country are to be maintained over the next six months. If the Chancellor's speech is correct—and I know that it is true—we are in a parlous position today so far as our industries are concerned. I submit that the Government are badly advised to disturb any industry today so as to have a retarding effect on the supply of any commodity which is used for the export industry. We are in a serious position, and I am alarmed. I see accounts of various industries—it is part of my profession to see the costings and the export and home market sales figures in various industries—and I can tell hon. Members that our situation today is extremely serious, and if we disturb another industry we shall do untold harm to it. What we want today is a pulling together of industry and of every section in the community, not a cutting adrift, as this Bill is doing, the creating of a feeling of suspicion, of looking to see who is to be put into this or the other job to run the gas industry.

We shall have a structure pulled down for no reason whatever except a partisan political point of view. I am absolutely satisfied in my own mind that the one thing which has led the Government to bring forward this Bill is a purely party political reason. Let no one get any other idea in his head. That is exactly the position today. The party opposite are doing that. They are prostituting politics at the expense of people outside this House. Many millions of people are today living in a state of apprehension. They read the speeches of Ministers—those of the Food Minister, the Chancellor of the Exchequer, the Lord President and others, and they say to themselves, "We are in a dreadful situation. What is to happen to us?" I meet these people every day; they are very ordinary people. Then the Government bring forward a Bill to spend millions of pounds which, in my opinion, is all bluff because they cannot spend one-tenth of that sum immediately. There will he no immediate results from this Bill. It is only in the dim and distant future that we shall get anything, if at all, as a result of the Bill.

I say that the Bill is ill-timed If the Government want the country to pull together—and tomorrow we are to have an important and far-reaching Debate—to bring in a Bill of this nature, a Bill which is purely one of party politics—there is no other excuse—is so much eyewash. This is part of the Government's programme. The Parliamentary Secretary said so from the Despatch Box today; he said, "This is what we promised the country." The country should be told that this Measure will create an upheaval in the gas industry, and that it may affect production, the export trade and even our food. Let us get down to some common sense and sound reasoning. The Government should get away from their Alice-in-Wonderland policy. They have been carrying it on for two years, and where is the country?—down and out. Industry today is apprehensive and is wondering what will happen. There have been exhortations from Ministers to the working people to work hard and produce more, and to the industrialists to go out and get the export markets. Two years after coming into power the Government say to the country, The are not producing as hard as we ought; the prices of our products are rising and we are in danger of losing our markets." The nationalisation of our industries will increase the cost of our products.

Let us have some sense. If the Government continue in this way, the destruction of this country will come about sooner than they think: I am satisfied that if we are not careful and do not stop this partisan legislation, and if we do not try to encourage the people in every section of the community to work together, before very long we shall get into such a condition industrially that Solomon himself would not be able to help us. The masses of the people have been shouldering difficulties, and they are now being asked to bear more. I say to the Government—face the future; you have run away from the future for two years. This industry is being taken from people of experience, who have proved their worth and who have grown up with the development of the industry.

The Heyworth Report is good in its way, but I suggest that if one asks for a report on any industry there will be found something that is wrong and which could be improved. The Heyworth Report has not revealed anything new. The industry was already aware of everything that is contained in the recommendations of that Report. The industry has been suffering from the effects of 2,000 Acts of Parliament and is being choked. It should be the job of the Government to release them from any further controls so that they can get on with the job. I would never believe that any Government Department could run an industry efficiently and well. We have had proof of that when we have asked questions about losses. We have had no explanation of the millions of pounds which have been lost in those industries which are already nationalised. Ministers do not answer questions, because they do not know what to say. They hedge and say it is not their responsibility. Many people are watching the situation, and they are not happy about it. The country is apprehensive. I am anxious about the future of the basic industries in the great City of Sheffield. [An HON. MEMBER: "How are they now?"] If we continue to get the sort of legislation we are getting, they will be in a desperate situation.

I hope I have not been discourteous to the Minister, but I do feel that what we on these Benches have to say must be said with some force. We have had enough bluff and nonsense. At a time when, according to the Chancellor of the Exchequer, industry is striving to export at a proper price, and, bearing in mind the high cost of coal, to introduce such a Bill is as bad as giving an eviction order to a man fighting for his life on his deathbed. That is the situation. [Interruption.] Hon. Members opposite do not like it; nevertheless, it has got to be said, because the country is very apprehensive. I say to the Government: if this is the best you can do, either get out or blow yourselves up.

7.56 p.m.

Mr. A. J. Irvine (Liverpool, Edgehill)

We have just listened to a remarkably eloquent utterance by the hon. Member for Hallam (Mr. Jennings), but it was an utterance gilded with a great number of outstanding fallacies, and the sooner those fallacies are exposed and denounced in this House the better it will be.

I wonder how much longer we on this side of the House are to hear the argument that if we advocate the nationalisation of an industry it is base party politics, but that if we advocate that an industry should not be nationalised it is not party politics? Hon. Members who believe that that argument can carry any weight with our people at the present stage of our affairs have very little to which to look forward. I, with other hon. Members on this side of the House, welcome wholeheartedly the general principle of this Bill as another instalment in the process of introducing economic common sense and social justice into the administration of our country's economy and industry.

I want to speak for a few moments on what may appear to be a relatively minor aspect of this legislation, but it is an aspect to which I and others attach importance. I want the Government to be sure that they are not caught napping by any of the preparatory manœuvres which are in progress before a Measure of this kind is put on the Statute Book. There is no doubt whatever that preparatory manœuvres do occur, and the danger is that when vesting day arrives people are not watching what is being done and the preparations which are being made. Even when a Measure of this kind is passed, there is a danger that the full consequences which Parliament desire will not be effected, because preparatory manœuvres will have taken place. By way of illustrating that point, I would draw attention to something which is happening in the city, a division of which I represent. I only bring it forward because it illustrates the kind of preparatory manœuvre which the Government ought to watch. I am as parochial in this matter as the hon. Lady the Member for South Aberdeen (Lady Grant), who recently defeated me at a Parliamentary by-Election. As she spoke of the situation in Aberdeen, so I wish to speak of the situation in Liverpool. I wish to draw the attention of the House to the Liverpool Gas Company, which is responsible for the production and supply of gas in that City, and which had, until recently, a highly trained and valued direct labour pool of gas fitters. These men had been specially trained in that work, which is skilled work, had attended classes and lectures, and had gone into the job with all the thoroughness and zest of which the British artisan is capable. The Company employed this pool of men to work in and around the City. What has been happening? One by one the employees of this Company have been discharged. Of a total direct labour pool of 160 skilled gas fitters well over 100 are no longer in the employment of that Company. It is true that some are now being employed in gas fitting work by outside contractors to whom the Liverpool Gas Company have transferred this work.

What is the consequence of a manoeuvre of that kind, if it is a manoeuvre? It is simply and easily explained: we on this side of the House are bound to the principle that the opinions of working-class people in an industry are of paramount importance. Now these men are profoundly dissatisfied with, and distrustful of, the whole procedure, and they have made representations to me and to others of my hon. Friends who sit for constituencies in the City of Liverpool. I say, frankly, to the House that some of their suspicions and doubts are, in my opinion—for what it is worth—perhaps not warranted, but that does not alter the fact that these men have these suspicions, anxieties and doubts. It is undesirable, as the vesting day approaches, that employees in an industry of this character should have any doubts or suspicions in their minds at all. One of their anxieties, constantly expressed to me and to others of my hon. Friends, is their belief that this is a manoeuvre to increase the claim eventually to be made for compensation after the vesting day. I do not comment upon that, except to say that that suspicion and doubt exists and that it is not desirable, in the interests of the industry, that it should exist.

Another anxiety which has been expressed, and which, I believe, has much more substance in it, is that pending the vesting day the Liverpool Gas Company is farming out as much as possible of this work so that when the industry is nationalised a smaller proportion will be taken over by the State than would otherwise be the case. They believe, and I think they are correct in that belief, that the purpose of this Company, in farming out this gas fitting work to independent outside contractors, when it has its own direct labour pool of skilled men to do the job, is to reduce the field and scope of the industry which will be nationalised. They fear that the consequence may be that, after the vesting date gas fitting work which, traditionally, has been within the competence and activity of the company, will be treated as not belonging to the company at all and will, therefore, be outside the net and scope of nationalisation.

I am here to express the anxiety of those employees, and to ask the Government to bear in mind, as the vesting day approaches, as the time draws near for this industry to be nationalised, the importance of ensuring that no escapes of the kind I have attempted to describe may be made. I want the State to take over the whole of the industry, and not to allow any exceptions or loopholes to occur unnoticed. If that policy is adopted in full there will be reinstatement of the direct labour pool for gas fitters in Liverpool. That will mean that the men who have been trained and equipped will be employed in the State nationalised industry to do the job which they should have been doing all the time. Having mentioned that matter, and having asked the Government to see that no loopholes occur, it only remains for me to say, again, that I wholeheartedly welcome the general principle of this Bill.

8.9 p.m.

Mr. Thornton-Kemsley (Aberdeen and Kincardine, Western)

As one who has also crossed swords with the hon. Member for Edgehill (Mr. Irvine), not altogether to my dissatisfaction, I would like to cross swords again with him this evening, but in the short time available to me I wish to devote my remarks to one aspect of this Bill—co-partnership. I want to challenge the fundamental assumption that the system of co-partnership is not appropriate to nationalised industries.

This is no new question. Many years before the first world war there arose within the Co-operative movement an association which had as its object the promotion of co-partnership in the productive enterprises of that movement. The great movement which Robert Owen started in the back streets of a Lancashire cotton town became the Co-operative Society of Consumers. Here was an attempt to start a co-operative society of producers. That association later became the Labour Co-partnership Association, which was the forerunner of the present Industrial Co-partnership Association. In 1917 the Labour Co-partnership Association submitted a memorandum upon co-partnership after the war to the Reconstruction Committee which had been appointed by the Lloyd George Government. That memorandum, a copy of which I have in my hands, provides to quite a remarkable degree a relevant background to the conditions today, and to the matter which is now under discussion. I do not propose to quote much of it, but I would like to quote a few sentences. It says: As an alternative to the present industrial system it is sometimes suggested that the industries of the country could, with advantage, be owned and run by the State, being organised, like a great army, from the centre. To us it seems that such a system would fail because no one would have any direct interest in economy: no one would be responsible for inefficiency in the sense of suffering direct loss: there would be no local or decentralised initiative: it would be wasteful and it would be demoralising and deadening because it would not stimulate the great mass of people to put forth their best exertions. It is impossible to expect from such an organisation that steady progress in economical production on which depends the hope of a great improvement in the material condition of the mass of people. The industrialideal … continues this document: … which we set before us is rather that of a decentralised system in which each factory or workshop or at least each industrial company or association comprising several factories or workshops, is run in the interest not of a few owners but of the whole of those concerned in the work of the factory or workshop, whether as providers of capital, providers of labour or consumers of the produce. It goes on to say that it desires to see the units to a large extent independent and self-controlled, bearing a full responsibility for profit and for loss, for success or for failure and, therefore, enjoying complete initiative: And we desire to see these advantages and responsibilities shared in by every worker of character and industry in his degree. The memorandum accepted the fact that the change from the industrial and wage system of that time was inevitable, and it quoted with approval a statement which had been drawn up by a well-known trade unionist. Without quoting much of it, I would like to draw the attention of the House to one or two short paragraphs in that statement. This trade unionist said: It may be safely affirmed that amongst thoughtful workmen the wage system is felt to be inadequate to satisfy their desires for a higher industrial standard. The labour problem is more than a question of hours and wages Some changes in the immediate future are inevitable and any attempt to adhere to the old order in its entirety is doomed to failure and may have serious consequences. Employers must be prepared to abandon the untenable position of proprietorship for that of equal parties to a contract. Industrial relations must move towards partnership in some form or degree. … The real claim of co-partner-ship … says this trade unionist: … is that the worker is entitled to more than his wages. He should have a share in the whole product of the concern in which he is engaged and carried to its full development participate in its gains and losses. Without this it is futile to take about industrial democracy. That statement was made in 1917. It is rather striking that it uses the words "industrial democracy," which is the title of the latest publication of the Labour Party. I hope it is not significant that in the whole 8,500 words of this Labour Party pamphlet upon industrial democracy there is not one single word upon the subject of co-partnership, which seems to me to be of the essence of industrial democracy.

What I would ask is where does the Labour Party stand about co-partnership? In the old days, when I was a student, I used to go to conferences at Toynbee Hall and places like that. Gentlemen belonging to the hon. Member's party talked to us about co-partnership as if it were one of the great ideals of the Labour Party. It was always being held up as something for which everyone ought to work. But those were the days when the Labour Party was young, vigorous and enthusiastic, when it had ideals and a human concern for the improvement of relationships in industry. Now the Minister says that he has "no hostility to co-partnership schemes." He says it will be open to the bodies concerned, in consultation with the workers' representatives to draw up incentive schemes of various kinds. We want more than that.

The Government is about to bring under State control an industry in which co-partnership has developed into a great institution with a record, which is now nearly 60 years old, of continuing and increasing good will and identity of interests between employer and employed. The Minister makes a point that less than half of the employees in the industry are covered by co-partnership schemes. Co-partnership schemes cover about 50,000 employees in an industry which gives direct employment to 130,000 employees. Of these, about one-third are workers in municipal undertakings. Leaving aside the municipal undertakings, partnership schemes cover more than half the employees in the gas industry.

Others have spoken of the extent of these schemes, and of the fact that the stock held by employees in respect of co-partnership schemes exceeds £9 million, about half being held by co-partners, and the remaining half invested in gas undertakings in respect of superannuation and pension schemes. The hon. Member for Tiverton (Mr. Amory), in his speech yesterday, reminded us that, between the wars, the total sums which had been distributed as pensions approached £6 million. I think that the real test came in the war years from 1939 onwards. Although the financial benefit during those years was in many cases negligible, the loyalty and the understanding shown by co-partners has never been greater.

I could give many examples. I will give one. In one gas undertaking a co-partnership war fund which was established in 1939, soon after the war broke out, and maintained by the employees of that company by their own voluntary contributions, to augment the Service allowances of their married colleagues in the Forces, realised £187,636, 80 per cent. of the employees having contributed. Here is a movement and a spirit which provides the answer to the immediate needs of His Majesty's Government and the requirements of the Chancellor of the Exchequer. It provides for a fair and basic wage to labour, a fair price in return for the use of capital, a fair price to the consumer, and an incentive to all three to reduce costs in the interests of all. His Majesty's Government ought to leave us in no doubt about where they stand. Instead of what I thought to be the active hostility of the Parliamentary Secretary or, at best, the lukewarm support of the Minister—this attitude of "leave it to the trade unions and the Gas Council to decide"—the Government ought to come out wholeheartedly in support of a continuation of co-partnership within the framework of nationalised industries.

Here is a wonderful chance to try out a few pilot schemes in one nationalised industry to see whether they cannot be extended—and I think they can—to other industries. There would be no insuperable difficulties about that. It does not follow that because an Area Board is not run primarily for profit, because it does not show a profit and loss account and a dividend, co-partnership is not applicable. I would like to quote a few more lines from the Report of the Reconstruction Committee in 1917: Wherever waste is possible on the one hand or economy on the other, labour may be given a direct interest in producing economy rather than waste: wherever workers receive the results of such economy they can be encouraged to accumulate rather than spend what they receive; and wherever industry is carried on those who work may be given some voice in regulating the conditions under which they work. During the last three quarters of a century the effect of the Joint Stock Acts has transformed the position of the middle classes. No longer is industry conducted by and for a few great industrialists. It is conducted very largely by a system of joint stock companies who have formed the vehicle for the investments of vast amounts of capital, in which almost every middle-class family has had a share laid by as a safeguard against the time of old age or trouble. It is my belief and my hope that the system of partnership in industry—as yet in its infancy, but which I know from my own experience to be a system which provides complete identity of interest between the management and the managed—could do just exactly the same for the rank and file of the industrial army.

8.24 p.m.

Mr. Harold Davies (Leek)

I listened with interest to the hon. Member for West Aberdeen (Mr. Thornton-Kemsley) speaking about co-partnership schemes in industry. If he believes that we can so revitalise nationalisation by this 50 years' old experiment of co-partnership, I hope that when the Division takes place tonight he will come into our Lobby. One of my hon. Friends has been working out how much money was distributed per head, according to the figures given by the last speaker. He calculates that, over 20 years, each member of a co-partnership scheme has received something like £120. I suggest that we should compare that £120 with the profits of speculators or directors in other forms of industry. I admit that the joint stock company attracts many people, but one of the troubles of that type of company is that there is no democracy in it. If he reads our pamphlet on industrial democracy and compares it with the idea of co-partner-ship, the hon. Member for West Aberdeen will find that we are driving at a completely different idea in modern industry from the old co-partnership idea. We want to run this industry on an entirely different basis from that on which it was run in the past.

The right hon. Gentleman the Member for Bournemouth (Mr. Bracken) said that we did not want any councils of puppets. No, but I have looked at industry throughout the past 25 years. I can give to the House an example of a tycoon of finance as a puppet of a council. I remember a famous cotton king being asked what he knew about cotton. He replied, "Buddy, I know nothing about cotton. The only thing I know is that when a girl bites me I dip a piece of cotton in peroxide to stop the bleeding." That is a typical example of a puppet making money in industry. Our object is entirely different from the idea held by right hon. and hon. Gentlemen opposite. I heard the hon. Lady the Member for South Aberdeen (Lady Grant) speak about the interest of hon. Members opposite in the housewives of Britain. When they speak about antiquated domestic appliances, they should think of the gas appliances that have been in the homes of Britain for the last 30 or 40 years. Until agitation was started by the women of the country through the consumers' councils, the industry never considered their needs. The attitude of hon. Members opposite was proved earlier this week by the hilarity they showed when a Minister had to defend a questionnaire about cooking ovens.

Hon. Members opposite remind me of a man who was struck by the Almighty with two afflictions at the same time—rheumatoid arthritis and St. Vitus dance. Every time he moved he suffered mortal agony. Hon. Gentlemen opposite are exactly like that. They do not put forward any constructive suggestions. They merely offer negative criticism of every nationalisation scheme which we put forward. One hon. Member opposite said that since the nationalisation of coal the price had gone up by 6s. 6d. a ton. If I had the time I could prove that we had to spend £1 million in the mining industry in North Staffordshire to remedy the neglect of hon. Members opposite in years past. We are sinking capital hand over fist in that industry now because of the incompetence of private enterprise. Then hon. Members opposite say, "Can we not have an example of nationalisation being a success?" We have had power for two years. Hon. Members opposite expect a new heaven, a new earth, and a new Jehovah in that short period of time.

We are accused of introducing this Bill for the sake of party politics. This was part of our programme for the integration of the fuel and power industries. Far from it being for reasons of party tricks that they put this Bill before the country, the real reason for it is that it is essential to integrate the fuel and power resources throughout the country, and it is more the case that it is hon. Gentlemen on the other side of the House who are using party tricks about this Bill.

I would like to draw the attention of the Minister to one particular point. This industry is going to grow, because it is next door to the chemical industry, and it will be linked up with atomic energy and nuclear physical research, and it is our duty to see that it is linked up with those industries so that we have a first-class scheme for training the technicians for the future. If we do not prepare a scheme for training technicians coming from all ranks—and I am not concerned in which Party these individuals are found at the moment—we may not make a success of this industry, and the future of our country is at stake after two great wars.

Mr. Bracken

May I interrupt the hon. Gentleman? I entirely agree with what he has said, but does he realise that nuclear energy, instead of being under the control of the Ministry of Fuel and Power, to which it really belongs, is tied up with the Ministry of Supply, which has nothing whatever to do with fuel and power?

Mr. Davies

I do realise that, but I would rather not take up the point now. I am making a plea for unification of the technical resources in all these avenues. There is one other matter which is worth noticing. I would like to know whether this nationalised gas industry is going to make a little further research into the vital problem of the methane gas that goes to waste every day in this country. In June, the Minister told us that there is something like 200,000 cubic feet of methane gas from sewage works in this country, but the real available amount is about 28 million cubic feet of this gas, which could be used for generating power at sewage works. Is this new nationalised industry going to branch out into that avenue and take complete control of research into this question of the gas produced at the sewage works?

We have set up a central organisation, with 12 Area Boards, and I believe that this House must take into consideration the very backward industrial areas like South Wales, North Staffordshire and other parts of the country, where the people live in smoke and grime, and suffer, in the mining areas, from mining subsidence. I believe that, contrary to the intensive competition between these areas, there should be some unification of rates and costs throughout the various parts of the country, rather than give complete competitive power to areas which cannot make a successful proposition of it. I believe that what we might lose on the roundabouts we should gain on the swings, and I think it is very necessary that we should have a uniform price of gas throughout the country for the British housewife wherever she may be.

I realise that we are trying to discover a new scheme of social economics. I believe that nationalisation of certain basic industries will have to be accepted by everybody, and that, whatever Party may be in power ultimately, it will be their duty to keep the industries of overwhelming importance, like the three we have now tackled, out of the control of private individuals, because they would have the opportunity to blackmail the whole country. It is the duty of the entire House to make a success of this scheme, and. I suggest that, instead of hon. Gentlemen both above and below the Gangway on the other side of the House constantly criticising our nationalisation schemes, it would be far better if they would put forward some constructive questions rather than the pettifogging criticisms which we now hear seeking to denigrate these schemes in the eyes of the public for cheap political party purposes.

Nationalisation of these industries has come to stay, no matter which party may be in power, and we have to discover a new way of sailing them through these difficult seas of the aftermath of war, and of constituting a new form of social economics If some of the orthodox economists, like the gentlemen who write every week in the "Economist," would spend a little more time on research on this question of the new social economics they might help, not only the Labour Government, but the whole country to preach the theory of nationalisation a little more clearly than it is put by the hon. Gentlemen opposite. It will give me great pleasure to go into the Division Lobby to support this third great nationalisation scheme brought about by the Labour Government.

8.36 p.m.

Mr. Nigel Birch (Flint)

The hon. Gentleman who has just sat down referred to the economists and what they have done. At any rate, they knew exactly where we were going, and if hon. Gentlemen opposite had paid them a little more attention we might not now be entering these great difficulties which we are about to meet. The hon. Member also talked about blackmail. I would like to know what gas concern has ever blackmailed the people in the past, though I would venture to predict there will be a considerable amount of blackmail in the future.

The great objection to this Bill is that it brings our whole fuel resources under one large State monopoly. Competition, I think, has always had the effect of stimulating other industries, as in the case of plastics and crockery or gas and electricity, and the argument that the gas industry has been stimulated by the electricity industry has never been seriously challenged. But now we have got to a situation in which the consumers' interests are being put in the twilight. We are told that the consumers do not know what they ought to have, just as it is said the doctors do not know what their own health scheme should be, but, surely the whole purpose of production is to satisfy the consumer. But that is precisely what will not happen under this monopoly.

The Minister says that the consumer's choice may be returned to him, but that it will be a long-term proposition. Under this Bill, it will never come back. We have Lord Hyndley offering us dear and dirty coal, and Lord Citrine offering us dearer electricity but the fount of honour is not dry, and no doubt some other nobleman will come along to offer us clearer coke and gas. Does anyone believe that the consumers' councils will be any protection to the consumer? If anyone goes to a consumers' council and says "You charge a big price and send me coal which is half slate," does anyone think that they will get better coal next week? Of course not; it is no protection whatever. It is within the Minister's power to reduce everybody in this country to the same sanitary habits as himself.

Of the two main reasons why this Bill has been introduced the first is the fear of odious comparisons. The Government do not want a nationalised coal industry and a nationalised electricity industry doing badly, when we have got a free gas industry doing well. It is not without significance that the only nationalised branch of an industry so far proved successful—the South American Air Lines—has just sacked the man who produced the profits. He was not playing fair with the racket, and out he goes. The object of all this is to allow these monopolies to sink back into comfortable lethargy. The public should be in no doubt as to the result of this Bill which will be that they will pay more for less service, and will have the privilege of paying for the losses, and this at a time when I do not believe that a single person in the whole world, with the possible exception of the Lord President of the Council, really believes that we are rounding recovery corner.

Mr. H. Morrison

I suppose the hon. Gentleman is well aware that he has misquoted me?

Mr. Birch

Perhaps the right hon. Gentleman will take the opportunity, when he comes to reply, of quoting himself correctly.

Mr. Morrison

If the hon. Gentleman thinks I am going to waste my time correcting his misrepresentations, he is mistaken.

Mr. Birch

We may then take it that the right hon. Gentleman said it. The second reason why this is brought in is the dislike of trade union officials for profit sharing—[HON. MEMBERS: "Rubbish."]—which was most clearly expressed by the Parliamentary Secretary.

Mr. Robens

I said very clearly that there was nothing in the Bill, with the exception of the acquisition of shares, that prevented all the things which co-partnership gives to the workers.

Mr. Birch

I think the hon. Gentleman was extremely severe on profit sharing. The hon. Member for Brigg (Mr. Williamson), who is higher in the hierarchy than he is, denounced it even more yesterday, and the hon. Member for Warrington (Mr. E. Porter) also did so. In many trade union rule books the words appear, "There are only two classes, the employing master class and the producing working class, and these two classes are always antagonistic to each other."

Mr. David Jones (The Hartlepools)


Mr. Birch

No, I will not give way. The whole difficulty of profit sharing is that it goes against the Marxist thesis which says that every year the worker gets poorer and poorer, and the employer richer and richer. If the employee gets more shares each year, it is very difficult to preach Marxism, and that is why they do not like it, and why they are going to get rid of it.

8.42 p.m.

Mr. Raikes (Liverpool, Wavertree)

Earlier in this Debate, it was pointed out, not without significance, that the vesting of the electricity industry in the State was to happen on All Fools' Day. It is, perhaps, no coincidence that we are finally discussing this rather miserable Measure on Ash Wednesday, at the beginning of that period of Lent when we have to face things that are unpleasant and mortifying to the soul.

The Lord President's definition—and I do not think he will accuse me of misquoting him—of the way to approach nationalisation is that the nationalisers have got to prove their case, and that the anti-nationalisers have to show that things will be all right if they stay as they are. He does not deny that, but that is typical of the sort of debating weapon which the right hon. Gentleman uses. In the gas industry, it is not a question of either having nationalisation, or leaving things precisely as they are. The question is whether, for the future progressive advancement of the gas industry, we should approach it by means of nationalisation or by means of an improvement of the private machinery, which has already played a very great part in keeping that industry going in the past.

Mr. H. Morrison

I want to be quite fair about the quotation. I did say—and I stick to it—that it is up to the nationalisers to prove the public advantage of nationalisation, and that it is up to the anti-nationalisers to prove, either that it is better to leave things alone, or that they have alternative proposals on the basis of private ownership which would be as beneficial as, or more beneficial than socialisation.

Mr. Raikes

I note that the right hon. Gentleman gives a fuller explanation than the one he gave in the House yesterday. I always like to take it at the closest possible time, because yesterday, when tackled on that, he rose and very properly added that he qualified it by the words I have just quoted—no more and no less.

Mr. Morrison

Quite right.

Mr. Raikes

We will leave it there for the time being.

I now wish to make some observations on one or two points made in the very good-humoured speech of the Parliamentary Secretary earlier today. He poured scorn on the suggestion about gas commissioners made by my right hon. Friend yesterday, and which had, indeed, been produced by the industry itself as far back as 1946. The argument he used against gas commissioners was that they would not be able to bring about amalgamation. He said that if we had gas commissioners, we should have something like the coalmines commissioners, who got only a very little way in regard to amalgamation because the owners were opposed to it. But the hon. Gentleman knows, or, at least, if he does not know, he should know, that in the gas industry the whole demand for amalgamation has come from within the industry itself. Demand after demand for integration has been held up, as I shall show in a few moments, and has been checked by the rather cumbrous Parliamentary machine which has existed in regard to the promotion of gas Bills. We have not had people trying to stop it, but people demanding amalgamation. If we set up commissioners with powers to enforce that amalgamation with the good will of the industry, we should be facing a totally different position from that indicated in regard to coke.

The hon. Gentleman then went on to make two further points. He said, with some pride, that this Bill would safeguard the industry against a price ring. It sounded awfully good, but in this Bill every existing restriction in favour of the consumer is swept away, and not one restriction is placed upon these boards against increasing prices at any time. Finally, in regard to the Parliamentary Secretary, he asked, I thought, rather an innocent question of the hon. Member for Ecclesall (Mr. P. Roberts). He said that the hon. Member had stated earlier on that this Bill did not embody the Heyworth Report. Why did he state that? What was his object in saying it? His object was surely the very simple one that the Heyworth Report itself laid down, whether we like it or not, that if it was to come into operation, it had to come into operation as a whole. No one could pretend that this Bill is the Heyworth Report. It is what the Heyworth Report says we cannot have.

The hon. Gentleman, and also the Minister of Fuel and Power, referred to co-partnership. I want only to make one passing comment on that, because it has been dealt with a good deal in the course of this Debate. The Minister emphasised that the Gas Light and Coke Company had a co-partnership scheme which was not co-partnership, but was really a question of bonus shares. He said that the Boards which he was going to set up could, in point of fact, if they wanted to do so, give just the same sort of production incentive to the workers as they have under a number of the profit-sharing schemes; but what he left out—I will say this for the hon. Gentleman, that when he spoke this afternoon, he did refer to it—was the difference between a bonus incentive in cash and a bonus incentive in the shape of shares, which ploughs back more into the industry, which encourages a confidence in management, and which, in effect, is just what is needed at a time when the Savings Campaign is being demanded more than ever before. That is the difference between even the mildest profit-sharing scheme and what the right hon. Gentleman suggested could be done, although we have no assurance that it will be done under this Measure. I am not going further into that, although I want to emphasise that money paid as bonus in incentives to these people is not profit sharing as we know it and has none of the great advantages which profit sharing possesses.

Let me come to the case for the nationalisers. We have seen two great fuel industries nationalised in the course of this Parliament—coal and electricity. In both these industries different reasons were advanced for their nationalisation. In the case of coal, we were told that, in view of the embittered labour relations, the technical inefficiency of the industry and the fact that there was no alternative, coal must be nationalised. None of the arguments advanced in connection with the coal industry apply to gas. In the case of electricity, a different argument was put forward. We were told that undertakings were always liable to compulsory purchase; the late Minister made great play of that. It was said that there was the expiring franchise, ineffective financial controls, and the ability to pay excessive dividends. These arguments do not apply in any form to the gas industry. In passing, I would say that the case against the nationalisation of electricity was stronger than the case against the nationalisation of coal, but even so it was not so strong as the case against the nationalisation of gas. I have been in all three battles.

What is the position over gas? We have an industry which, it is admitted, has achieved within its limits technical efficiency; where there are the most harmonious labour relationships of almost any existing big industry; and which has been increasing its output in a most remarkable way in the course not only of the prewar years but even in the period at the end of this war. If the right hon. Gentleman, in his reply, sweeps aside the efficiency of the industry by saying that the increase since the war is due to the fact that gas is unrationed whereas coal is rationed, then I ask him to remember that gas appliances are rationed today and that the great increase of 13 per cont., in the course of the last year, has been achieved at a time when gas appliances are almost impossible to obtain.

The increase in output during the course of the last year or two could only have been achieved in an industry which had enormous adaptability and which had men prepared to make use of anything which came to hand, and to improvise. In the last 11 years we have had an increase of as much as 42 per cent., or double the increase the Heyworth Committee hoped to achieve if their proposals were implemented at the time they were put forward. We have none of the difficulties over the expiring franchise, nor over excessive dividends. In fact, as we know, financial controls in this industry are as strict as financial controls can be, and it has to be remembered above all else—and this is the most important thing of all—that the industry all through has favoured integration from within.

There was a part of the speech of the Minister of Fuel and Power yesterday which I thought was a little disingenuous. He referred to the "vague" proposals of the Gas Council of 1943. They were vague. I agree with him there, but he made no reference whatsoever to the report of the Association of Gas Corporations in 1946, which not only was not vague but in fact was the very reverse —it was more definite in its scheme than this Bill. No one who heard the speech of the Minister yesterday would have realised that a comprehensive scheme, very much on the lines of what my right hon. Friend put forward yesterday, had been advanced, not in 1948, but in 1946. The Minister said not one word about it. Let us go a stage further into this question of integration. The House is fully aware that, owing to the difficulties of promoting Gas Bills, amalgamations are extremely difficult to accomplish. Yet amalgamations and mergers have been got through in the most remarkable way, even under the difficulties that this industry has had to face.

Let us take the Chepstow case as an example. It is worth calling the attention of the House to that amalgamation. As far back as 1938, the small gas company at Chepstow desired to amalgamate with another small gas company at Caldicot. The order has been held up for ten years. Efforts were made to get it through the Board of Trade, and, during the war, through the Ministry of Fuel and Power. That order has never become operative. Unless the gas industry really knew its job, Chepstow and Caldicot would be in a miserable position today.

What happened was that a gas corporation stepped in, and gave both these small companies common management, interconnected supplies and bulk supplies of gas. In addition, it connected these two small companies with the larger company at Newport. What has been the result of that co-ordination? Since 1939, there has been a reduction in price per therm of the gas produced at Chepstow of 26.65 per cent., a reduction at Caldicot of 20.13 per cent., and a reduction at Newport of 41.28 per cent. That was done, not only by private enterprise, but by private enterprise fighting against Government control. How can the Minister stand up and talk about this industry as being antiquated in form, when it is able successfully to achieve things of that character?

Let me pass on to one or two other matters which indicate the vigour of the gas industry. The Minister told us, and he was almost over-kind, that it would not be right or possible to allow the gas industry in its antiquated form—I am trying not to misquote him but to use his words so far as possible—to compete the whole time against the great power of nationalised electricity. He said that it was not fair, and that it is impossible for them to do so. Hon. Members opposite have always claimed that private owners have a jolly good idea of their own interests, and can look after themselves. Is it not rather odd that the gas industry, far from running after nationalisation, has boldly announced its confidence that it can not only hold its position in any competition, but hold its own without any great difficulty in competition against a nationalised fuel industry?

I shall come in a moment to the question of what nationalisation can give to the consumer. The main defect of the Heyworth Report was that it failed entirely to respond to its terms of reference. The House will recollect—this is a matter of fact and not of argument—that its terms of reference were to advise what changes were necessary to develop and cheapen gas supplies to all types of consumers. The Committee, in their Report, merely claimed to give the maximum opportunity for the further development of the industry, which is rather a different thing from the cheapening of supplies to the consumer. Nevertheless, the Heyworth Committee emphasised with great vigour the need for competition between gas and other industries, especially electricity. Although it has been read before, I might read the relevant passage once again: Competition between the fuel industries is the main stimulus towards efficiency on which these proposals depend. This is important for the gas consumer, but it is equally important in the national interest that the other fuel industries—electricity and solid fuel in particular—should be stimulated to the maximum extent by competition from gas. We contend that the nationalisation of electricity kills that stimulus when gas is nationalised, too. The Minister himself made a reply to that and it was, broadly, that he proposed to set up separate boards which would maintain competition, but that competition must be restricted in certain ways. Later on, he stated the ways in which he would restrict that competition. What the right hon. Gentleman failed to realise is that if competition is to be an incentive, it must be based on the risk and loss which arises if a firm does not supply the goods or fails to hold its own with its competitors. That is the stimulus of competition. Under this set-up there is no stimulus of profit or loss. If the Boards are run at a loss they are recouped by the central authority. It is utterly different to the form of competition Which inspires additional effort, and which we know exists in the country to the benefit of both industries and the public.

I tried to think of an analogy to this position of gas and electricity under nationalisation and it came to me in the early hours of this morning. It is the only analogy I know. In the early days when the greyhound racing tracks started there were certain small tracks which caused considerable scandal, because, apparently in the free competition between the dogs, the wrong dog always seemed to win. Inquiries were set on foot, and it was discovered that although the dogs ran under the name of fictitious owners, in point of fact on all these tracks the management owned all the dogs. The result was very clear. Here the Minister of Fuel and Power owns electricity, coal and gas; he is behind the scenes, and can manipulate them just as easily.

I will pass on from that. I want to ask the Lord President of the Council to devote some of his reply to why and how the consumers will benefit under this nationalisation plan. I object to many of the Clauses on compensation which I think are unfair, but the most important thing of all is that the consumer should receive fair and good service from the State. We have seen coal nationalised, and in the course of the last year the cost of coal went up by 6s. 6d. a ton, while we have seen at the beginning of January of this year another rise of 2S. 6d. a ton. We have seen warnings of an increase in the price of electricity. We have seen the effect of nationalisation of gas and electricity in France—high costs and high losses. It was interesting to note that the pet Socialist State of the right hon. Gentleman—the most efficient of the so-called Socialist States within the Commonwealth—New Zealand, has been wise enough never to nationalise gas in that Dominion. In view of the rising costs in the coal industry and in other nationalised industries, there is no assurance that we shall not be faced with the same sort of rise in the nationalised gas industry, particularly when we bear in mind that there is no defence for the consumer to be found in any part of the Bill.

The real reason why the Bill is being brought forward is very different from that which has been adduced from the other side of the House. The real reason is political cowardice. Far from the Minister being afraid that the poor gas companies will have a rough time under their present structure in competing with electricity, he and the Government are terrified at having any free industry with the power to compete in the same field as electricity. Was not that the reason why road transport was nationalised when the railways were nationalised? The Government dared not leave road transport free. In the same way the gas industry must be tackled in order that its competition shall not be allowed.

There is another reason, and perhaps it is the gravest of all. It is a different one from that which the Lord President of the Council is expecting it to be. The Minister of Fuel and Power has very considerable tasks at the present time. He has a pretty big job dealing with the National Coal Board, without taking anything new on to his plate. Let us look at what happened last year. The then Minister of Fuel and Power was engaged in piloting the Electricity Bill through the House of Commons. Before he did so he must have spent a great deal of time preparing the Bill in his Department. That took his mind off coal stocks in 1946. What was the result?—the biggest fuel blunder in our history. [Laughter.] Hon. Gentlemen opposite cannot laugh that fact away.

With coal there is the advantage, which exists in practically nothing else, that we can judge by stocks a year ahead whether we are likely to have a crisis or not. On that occasion the stocks were not properly watched, and we had a crisis, through which we lost £200 million of exports, vital to our country. Being naturally charitable, as hon. Members opposite know, I am prepared to assume that the error made by the previous Minister was partly due to natural folly on the part of the Minister, but it must have been partly due to the fact that he was being overworked. Now we have this gas business coming on, in addition to the difficulty which the Minister has over the Coal Board in dealing with the possibility of new resignations and their replacement. It is most unkind to launch this Measure upon him, because it is totally unnecessary. He should be left to get on with his real job of seeing that cheap coal is produced in sufficient quantity.

I do not intend to be drawn into commenting upon the wages of miners, but the House knows full well that before the mines were nationalised the industry was given, as a result of the Portal award, a tremendous rise in wages. Nobody objects to a decent wage for decent production. I must not say too much about the National Coal Board, or even you, Mr. Deputy-Speaker, with your benevolent eye, may find it necessary to intervene, but it is a fact that the administrative charges and incompetence of the National Coal Board have largely led to an increase in coal prices. [Interruption.] I know the Minister does not like it, but I am not here to say the sort of things that the Government would like.

I want to make one passing observation in regard to local authorities. The Minister did not tell the House that in regard to the local authorities he has left his beloved Heyworth Committee completely out in the cold again. The Hey-worth Committee recommended an independent tribunal for companies and local authorities alike. Under this scheme the local authorities are to be paid back their net outstanding loan, whatever the assets may be. I will quote one figure, an instance which could be multiplied. The figures at Wigan may be rather interesting in view of what is happening at Wigan at present. The capital value of the Wigan gas undertaking is £626,638 and the net outstanding loan is £83,296. In Wigan alone the Government will make a profit of £543,442. [HON. MEMBERS: "Shame."] These are the sort of figures which will make the electors of Wigan think more than once.

We are opposed to this Measure, first of all because we believe it is totally unnecessary; secondly, because we believe that it endangers the consumer and endangers a cheap supply—alas, we have every cause from all the evidence we have had to suspect that to be the truth; thirdly, because we are afraid that the passing of an unnecessary Measure like this will take the Minister's mind off more important matters; and fourthly, because we regard the compensation as being totally unjust. This Bill was conceived in folly, brought to birth in undue time, and it already shows every sign of sterility and impotence.

9.13 p.m.

The Lord President of the Council (Mr. Herbert Morrison)

It is always a pleasure to listen to the hon. Gentleman the Member for Wavertree (Mr. Raikes). He always seeks—I must be careful what I say—and sometimes succeeds, in part at any rate, to put before the House a reasonable case from the point of view he holds, and I am very glad that the Opposition Front Bench did him the honour of arranging for him to wind up the Debate today in a speech with much of which I do not agree but of which I will say that he put his case very competently and very reasonably.

The interesting thing about these Debates on the socialisation of industry, as the process of transformation from capitalist private industry to socialised industry goes on, is that each piece of socialisation seems to go through the House more quietly than the one before. One would think that the more that was done in this direction, the bigger the row would become. Take this Debate. Nothing could have been quieter and more sedate than this has been. It has been almost as quiet as the Debate on the Parliament Bill. My explanation for this very interesting and significant development is that, as the Debates go on, the Opposition are steadily being converted to the point of view that on the whole we are right and they are wrong.

Mr. Bracken

If the right hon. Gentleman believes that, he will believe anything.

Mr. Morrison

Certainly, if I am as capable at believing as the right hon. Gentleman, I am capable of believing an awful lot. The hon. Member for Waver-tree said that the industry had demonstrated that it is capable of amalgamating, and that a good deal of amalgamation has been done. It is true that some has been done, but I will give figures in a minute showing the composition of the industry and the numbers and sizes of the undertakings. However, if the City of Liverpool had had a municipal gas undertaking, and he had wanted to get that undertaking amalgamated with some private company outside, or with a series of private companies, he would have had his work cut out. The truth is, as was argued by the right hon. Member for Bournemouth (Mr. Bracken), that the Parliamentary checks, and the fights between the interests, and the difficulty of squaring them up before a special order or a private Act could be secured, make it exceedingly difficult for these amalgamations to march. And the right hon. Gentleman said that the improvement in the organisation of the industry had been strangled by perhaps an excessive degree of Parliamentary control. There is a good deal of truth in that, and that is why we now think that we should do better to have a clean, straightforward, constructive policy and make a real job of work of the whole affair.

The hon. Gentleman and other hon. Members said that this Bill is not the Heyworth Report. What they do not say is, if the Bill is not the Heyworth Report—and that is the ground on which they object to it—whether they accept the Heyworth Report. To that we get no answer.

Mr. Bracken

Yes, we gave it.

Mr. Morrison

Do the Opposition accept the Heyworth Report?

Mr. Bracken

I thought I made it quite clear yesterday that, in the view of the Opposition, the Heyworth Report is good in parts; that it is the kind of report that, if, for the sake of illustration, an eminent member of the gas industry, accompanied by a chartered accountant and a trade union official, were asked to make it on Unilever, would certainly be as unacceptable to Mr. Heyworth as it is unacceptable to the gas industry.

Mr. Morrison

The problem of the organisation of Unilever is a totally different one from the organisation of the gas industry.

Mr. Bracken

Hear, hear.

Mr. Morrison

Quite so. I am surprised that the right hon. Gentleman, with all his expert City knowledge of men and—what is the interesting paragraph I read sometimes?—"Men and Memories" or is it "Men and Affairs"?—I am really surprised that he should think there is any analogy whatever between the British gas industry and Unilever.

Mr. Bracken

Hear, hear.

Mr. Morrison

That is fine. Then why does the right hon. Gentleman want to make it?

Mr. Bracken

Why quote the Heyworth Report?

Mr. Morrison

I say that my right hon. Friend the Minister of Fuel and Power has followed substantially the Heyworth Report—[An HON. MEMBER: "No."] Oh, yes, and the points that have been quoted are not material points It is perfectly true that the areas are, on the average, somewhat smaller, but that is not a fundamental point. That is a concession to the "Manchester Guardian" which I am most happy to make to that great and distinguished newspaper. It is true that the basis of compensation is somewhat different from what was contemplated, but that does not go to the root of the technical scheme, and I say that the technical scheme in this Bill is substantially that of the Heyworth Report. And it is so because we agree with the Heyworth Report. If we did not agree with it, we might have taken another course. I quite agree there is no obligation upon the Opposition to agree with the Heyworth Report; only I wish to goodness I knew what they did agree with, because they have given us so many versions of what they would like to do.

The hon. Gentleman said also that the industry was an efficient one. It is no part of our case to make abusive allegations against the British gas industry and I like to be fair to the industries in our country, whether they are privately or publicly owned. I would say that this is a fair judgment: that some of the undertakings are very well managed and have given electricity a pretty sharp run for its money, which has taken a bit of doing in the highly competitive period through which they have passed. There are a fair number of gas undertakings, both private company and municipal, which are highly efficient, within the technical limitations under which they are working. There are others, however, which are not so good, and others which are bad, partly because the unit is so small that they cannot afford to get good management, and partly because the undertakings are so small that, even if they had a good management, they could not get the best out of them.

That is broadly true of gas, and it is equally true of electricity. If the electricity supply industry as a whole—perhaps I am biased, I would say especially the companies, but I would also say some muni cipalities—had been as efficient as it might have been, the gas industry would have had a more difficult fight for survival than it has had. It is true of the electricity supply industry as a whole that some of the companies—I think most of them are municipal—are good, some not so good, and some are bad.

The issue before the House, however, is not that the Government have to prove that this is an utterly inefficient industry before they socialise it. That would certainly strengthen our case, if it were so. But although, as I say, some of it is inefficient and some very good, we have no obligation to prove that the whole of this industry is inefficient, or that that is the only reason to touch it. The onus on the Government is to show that there are good grounds for believing that the technical reorganisation contemplated in the Bill will make it possible to make the industry better than it is at the present time. That is the perfectly fair test to apply to the matter.

The hon. Gentleman rather proved part of my case in his illustration in regard to Chepstow and others where the amalgamation was delayed on a small affair for 10 years. He is quite right; it was, and if the right hon. Gentleman's commissioners had been there, it would probably still have taken 10 years or more to get these warring neighbours to agree to amalgamate with each other. If we add the problem, as some hon. Members evidently want to do, of persuading municipalities to merge their undertakings with company undertakings, believe me we should have our work cut out. It is an exceedingly difficult thing to do.

The right hon. Gentleman says that under this Bill there will be no stimulus of profit and loss. I do not agree with him. Competent men employed on the boards of these undertakings—officers who, I hope and believe, will be competent officers are in the gas industry already, and we want more as time goes on—do not want to make their industry succeed for what they get out of it. Personal dignity and reputation are involved. That is the real motive.

How is it that some of these municipal undertakings, which have been praised by hon. and right hon. Gentlemen opposite, have achieved the success of which they have been boasting? It is not because the engineers in charge are paid by results, although, of course, as the prosperity of the undertaking goes up, they might have the chance of a rise. It is that the municipal gas engineer, or the company gas engineer, wants his fellow gas engineers, his neighbours, and his friends, to say, "You see that chap? He is making a first-class success of the So-and-So undertaking." A word of praise from the municipal gas committee, or the mayor, at an exhibition gives them, believe me, no end of encouragement. That is why I always think it so rough when hon. Members opposite, and sometimes hon. Members on this side, get thoroughly "snorty" and abusive about civil servants, instead of giving them a pat on the back now and again. How the Civil Service survives all the abuse it gets is a mystery of life, and great proof that the public service can triumph over the more evil traits of human nature.

The hon. Member for Wavertree had a dream last night—at any rate it was something of which he thought in the dark watches of the night—a story about dogs. I thought I followed it, but I will not comment. I am so terribly ignorant, not of dogs but of "the dogs" that I cannot go into the point or I shall be out of my depth. I would sooner talk about gas. The hon. Member wants to know how the consumer will benefit. I cannot give the House a balance sheet of this Bill and figures to show how the consumer will benefit. I only say to the House that the case that we seek to prove is that what we are doing gives the industry the best chance to be efficient and economical. That being so, it must be in the consumers' interest—if it is so—that it should be done.

The protection of the consumer under the existing arrangements is very difficult; it is somewhat illusory. Government after Government have tried to make this sliding scale between dividends and charges work in the gas industry. It really does not work, and as the industry has developed, it has made it more and more impossible for it to work. We have scrapped the lot, all this regulatory control, which has sometimes, well meaning though it was, impeded the technical progress of the industry itself. On this matter the right hon. Member for Bournemouth was talking common sense. It was amazing how much he was putting my case without knowing it. I am grateful to him. We say, let it go, all this bureaucratic red tape and formulae and what not, all these artificial regulatory powers and highly legalistic definitions. These things are foreign to the whole spirit of the Labour Party. Let them go and let us, in substitution for them, see first that we get the best technical organisation we can; secondly, that the constitution of the body is such that it will seek to further the public interest; and thirdly, that we constitute consultative councils which are watchdogs of the public, on which the local authorities will be adequately represented.

Watch those local authority chaps, the men who have been chairmen or members of the gas committee. These men will look for every opportunity to say that the new show is not as good as the old one. Let them grumble and criticise as much as they like. They will be observant, critical, and will be looking for trouble. Then there is the Press. God bless the Press, it is always looking for trouble, and although I think it is a bit rough on us now and again, that is one of the purposes of the great British Press. It, too, will be on the look-out and whenever a gas board slips up, we shall see a splash headline in one of the newspapers, "Socialism fails again." That is all right. There will be Parliamentary Debates and, within the limits of the rules of Order, there will be Parliamentary Questions.

Finally, on the application of one of these consultative councils, or without such an application, the Minister can order an inquiry to be instituted into the working of the Area Boards, prices or anything else he likes. That is not bad machinery for the protection of the consumer, and I submit it is far better than the bureaucratic regulatory power which has been equally condemned by the right hon. Member for Bournemouth and myself.

The hon. Gentleman also said, and it has been otherwise argued—it is an interesting argument—that we are to socialise electricity on 1st April—and that one will not notice much change for the time being, but it will come in due time—

Mr. Bracken

The price is going up.

Mr. Morrison

One cannot go to bed under capitalism one night and wake up next morning under Socialism. I have had to teach my Left-wingers that for years. Have I got to start on hon. Gentlemen opposite? The point was put by the hon. Gentleman opposite that having socialised coal, and electricity being on the way to being socialised, why could we not leave gas alone and let it compete with electricity and electricity compete with gas. That argument is not without its attractions. It was worth thinking about. I, personally, thought about it. It may have been a naughty thought from the point of view of classical doctrine, but one had thought of this. The future of gas was not assured or definite. Was it a wise thing to put it under public ownership? On the whole we thought it was. If we had socialised electricity, and not socialised gas, I believe—and I am not saying this with any rudeness to the gas people, for whom I have a great admiration and respect—that with an efficiently conducted socialised electricity industry as against a privately-owned gas industry, especially if it was left much as it is now, electricity would win, and win decisively. I believe that the gas people know that.

What one has to study is whether it was better to have a triumphant socialised electricity business, and gas undertakings that were in trouble and going down hill—[HON. MEMBERS: "Tripe."] Is that the position? Do they want that? [HON. MEMBERS: "Yes."] I do not believe it. I know the gas boys. Some time ago, when they used to call me "the electrical fiend," many of them told me privately that it would not be fair for the State to undertake the organisation, stimulus and creation of a highly efficient electrical industry, with State credit—[HON. MEMBERS: "State subsidy."] No, State credit—and let the gas people struggle along on their own under the difficult conditions which they would meet, and they are quite right. Therefore, being fair-minded people, we did not want to put the gas industry into difficulties.

Mr. Bracken

We are aware that the right hon. Gentleman knows the gas boys well—in fact, Mr. Leslie has provided him with his gas for years—but this I do say. If he really feels like that, why does he not allow the gas industry to try out its independence?

Mr. Morrison

On the first point, may I respectfully suggest to the right hon. Gentleman that even humorous observations bordering on a personal attack on a civil servant who cannot answer back—even though he may be a temporary one—do not come well from the Opposition Front Bench. On the other point, I honestly think that it would be rough on the gas industry if a highly organised, socialised electricity undertaking, with public guarantee and credit behind it, put the gas industry in great difficulties. It would not be fair. I believe it is in the public interest that the gas industry should be taken over in the way that we propose. Therefore, it is not a question of our being afraid of competition—not in the least. If electricity were socialised—as it is being—and gas were left where it is, I, as a Socialist, would not be afraid of the result. I know that a socialised electricity business would come out on top.

Let us get back to first principles, and the general case for the Bill. If, in so doing, I miss some of the detailed points of criticism, hon. Members will forgive me. I shall, as I go along, no doubt, pick up, at any rate, many of the principal points of criticism that have been made. Let us have a short technical examination of the structure of the industry, and what I think should be done about it; about which there is a lot of agreement, on purely technical propositions, apart from the issue of public ownership. In the present structure of the industry there are 752 private undertakings and 270 local authority undertakings. The companies are in the great majority. The curious thing is that the municipal undertakings are mostly in the North. As one comes South, there are fewer municipal undertakings. In addition, there are five joint boards. The fact that there are five joint boards is itself indicative of how difficult it is to get joint working between neighbouring authorities. There are only five of them.

Look at the nature of the undertakings. There are only 33 undertakings with an output of over 10 million therms per annum. There are 37 with over 5 million and not exceeding 10 million therms per annum. There are 140 with over 1.25 million and not exceeding 5 million therms. There are 162 with over 0.5 million and not exceeding 1.25 million, and there are 566 with not exceeding 0.5 million therms per annum. It will be seen that the number of undertakings enormously advances as the size of the undertaking diminishes. An industry of that structure, with that enormous proportion of small undertakings, cannot be doing the best that is possible for the gas consumers of the country, though it has all the goodwill in the world.

Let us consider the problems of gas undertakings. It is perhaps even more true of gas than of electricity that the quality of their service depends on good commercial and service managers—the men who are looking for trouble, those to whom the public can go when they are in trouble, men bursting to serve and to come around and help. I do not say that none of the small undertakings have that service. I daresay that they have. But the modern form of the provision of service—the quick remedy of defects, getting people out of difficulties—is one of the advantages of large-scale undertakings in both gas and in electricity. Take science and research. It is perfectly true that the gas industry has done very good work in the field of research as a whole. It is perfectly true that the State, through the Department of Scientific and Industrial Research, for which I am responsible, is giving a grant-in-aid to the Gas Research Organisation. We are happy to do that. They have done good work. But one cannot successfully apply research to this industry so long as there is such a high proportion of exceedingly small undertakings.

Almost everybody agrees that there should be integration. That was argued yesterday, though I have seen some observations from the other side of the House which rather pull the other way. On the whole, everybody agrees that there should be integration, that is to say, amalgamation, with larger units of organisation and management. There is no big dispute about that. Indeed, it was referred to by the right hon. Member for Bournemouth and the hon. Member for Bath (Mr. Pitman), though it was rather thrown over today by the right hon. and gallant Member for the Scottish Universities (Lieut.-Colonel Elliot) who became a great defender of the existing municipal gas trading undertakings. Apparently he did not wish them to be disturbed. I gathered that that was what he meant by his argument. If the right hon. and gallant Gentleman wants the municipal gas undertakings to be left where they are, he is in fundamental disagreement with the right hon. Member for Bournemouth, the hon. Member for Bath and others, who want integration.

I am bound to say that, listening to the speech of the right hon. and gallant Member for the Scottish Universities, I said, "Here is the old Fabian come up again." It was a great and powerful defence of municipal trading, and I shall look with interest to the next edition of the Tory Industrial Charter to see whether the old Local Authorities' Enabling Bill, which the Labour Panty used to bring regularly into this House, has been adopted by the Tory Central Office as part of their programme.

There is, of course, some disagreement as to the areas, and the White Paper has explained why we have taken some different areas from those in the Heyworth Report. The Bill itself provides for the maximum decentralisation, and I think that is right. There have been, again, some contradictory arguments whether we have not over-decentralised, because it has been repeatedly stated that this gas organisation is going to be the Cinderella among the distinguished family of children who live under the protection and parentage of my right hon. Friend the Minister of Fuel and Power. That argument, surely, means that, because electricity has got a somewhat heavier and more powerful national organisation, and because the coal industry has got a still more powerful national organisation, the gas industry is being treated badly because it has got a looser and less powerful national organisation. At the same time, the Opposition have been identifying themselves with the "Manchester Guardian," which used the argument, unjustly, I think, against my right hon. Friend that we have not decentralised enough. The fact is that we have decentralised deliberately under this scheme in regard to Area Boards.

If I might take the analogy of the United States Constitution, not as it is working now, but as it was in the days of Washington—[Interruption.] Certainly, why not? It had its points, and it has got its points now, though I am bound to say I would much sooner live under ours. If one may take the analogy of the primitive state of federal government which then existed, the Area Boards are the sovereign states. They really are sovereign states, subject to specific reservations in the hands of the Minister, and certainly some specific cooperative powers on the part of the new Gas Council. It is because we wanted the Area Boards to have substantial autonomy that we made this loose character of the Gas Council and constituted it almost wholly of the chairmen of the Area Boards, with the addition of a chairman and deputy-chairman, impartial and independent, appointed by the Minister. So this is a co-operative instrument of the Area Boards and the very people who can help the Minister by giving him independent advice. The executive power is really in the hands of the Area Boards.

So here we have a new model of administrative organisation of a socialised industry. The fact is that, deliberately, not one of these socialised industries is an exact pattern of the one that went before it, and I hope it will always be so. The Tory Party may believe in a dull level of uniformity, but the Labour Party believes in variety and in giving attention to the particular needs of a particular case. The Labour Party will never cease considering and reconsidering what is right, because we are the party of lively progressive initiative, instead of the attitude of stick-in-the-mud which is associated with hon. Gentlemen on the other side.

What do the critics want? They all agree or nearly all of them agree—I must except the right hon. and gallant Member for the Scottish Universities, who is the Jock who is out of step with the rest of the Army—that there should be greater integration; that is to say, a greater extent of amalgamation and larger units of management and administration. If that is so, they really ought to have given us further particulars. It is too late now. If they want extensive amalgamations, do they want amalgamations between municipal and company undertakings? If so, who is going to be on top in the amalgamations, the local authorities, or the company undertakings? That is an awkward one. It is, in fact, so awkward that it is also why the McGowan Report on electricity was never implemented.

But it is really too late now; they will have to consider it. As I said, if you try and merge the Manchester Corporation Gas Department, the Birmingham Corporation Gas Department, and the Glasgow Corporation Gas Department with a whole lot of companies around, especially if the companies turn out to be on top in the amalgamation, those great corporations, irrespective of their politics, will fight you to the death before they will let it be done. We are having trouble with them now, but that would be very much worse. So that point was never faced in electricity.

What is the alternative? Is it the creation of a series of private monopolies, subject, of course, to a proper degree of Ministerial supervision, and that very Parliamentary control which the right hon. Member for Bournemouth told us yesterday had been something of a nuisance—and I agree with him? If you get these private monopolies subject to a high degree of Parliamentary supervision and control, the management is cribbed, cabined and confined. It has no elbow room, and has not that degree of enterprise and individuality which we say is vital to the successful conduct of industry. That is bad; that is the way to bureaucracy, the way to red tape.

With regard to joint authorities, as they are sometimes called, I can only say that I have sat on some of them. I have sat on the Joint Electricity Authority and Joint Planning Authority, the joint this, that, and the other thing. My complaint about them all, as I have said before, is that there is too much joint, and not much authority. It does not work, and I think that hon. Members who have had experience of joint authorities will agree with me that it does not work. But they have another alternative, the private invention—although his hon. Friends have been associated with it—of the right hon. Member for Bournemouth. He proposed the appointment of commissioners, commissars, State commissars, who are to boss this industry about, order amalgamations here, and instruct them to do this, that and the other, and so on.

I am surprised at the right hon. Gentleman. Nobody would think he had written one of those hooks which were complained about from time to time a long time ago. They were written by some Labour people—I will not mention their names—in which this kind of thing was mentioned. You see, he is slipping up all the way. The trouble is he agrees with what some Labour people thought 20 or 30 years ago. If I could only bring him up to date to agree with what we have to do, but that will come in the course of the next 20 or 30 years. He wants these commissars to boss, direct, and interfere with those great gas undertakings, municipal and private. Believe me, if those commissars went round those proud municipalities in England and Scotland—London has not got any municipal gas, so there is no trouble; we are a long-suffering, submissive people in the capital city—they would have a rough time. Believe me, they would not do much merging, regulating, or instructing. Those proud authorities would best them every time, and would enjoy themselves in the process. He has great ideas, too, about the commissioners. He says let them not be the mere creatures of the Ministry of Fuel and Power; let them have a high degree of independence, and not be subject to the Minister fooling about with them, and interfering with them.

Having said that, and told the Minister not to play about too much, the next thing he is asking is that Parliament shall be playing about as often as it likes and with great vigour. The words are on record: he can assure himself of them.

Mr. Bracken

Stir them up.

Mr. Morrison

There would be little effective "stirring up" if the Minister had little or no responsibility over the commissioners. It is typical of the confusion which the Opposition is in on the question of Parliamentary discussion. They argue time after time that all these schemes have too much meticulous, political interference and that politicians may he going out of their depth and messing about with business. I followed that point of view with sympathy, because I know the limits of politicians, but having demanded that the power of politicians should be limited and having asserted, in this Debate, that the Minister can do too many things, in the next breath they come to the House and complain because every conceivable question they want to put about these bodies may be out of Order in the customary usage of the House of Commons.

I do not know where they are, nor do they. The truth is that these commis- sioners are merely an evasion of the issue and that when the Conservative party does not know what to do about the reorganisation of an industry, it goes for the appointment of commissioners, as it did in the Coal Commission, to which the Parliamentary Secretary referred earlier in the Debate. That Commission was not a bad body of people. It had a very able chairman in Sir Ernest Gowers, one of the ablest public administrators in this country, who was an admirable Regional Commissioner in London during the blitz. Yet there were very few amalgamations in the coal industry—which it was their job to effect—and as my hon. Friend has rightly said, there were no important amalgamations achieved by them at all. When these commissions are appointed, this kind of thing somehow will not come off, because the interests and the obstinacy of people are too great.

The Caretaker Government made the same proposition as the right hon. Member for Bournemouth and it was announced by the right hon. and gallant Member for Pembroke (Major Lloyd George) who, I think, should be rescued from his obscurity on this Gas Bill. I think it is rough that he has not had a go on it. He is a director of a gas company, but if he had declared his interest, the House would have been happy to hear him. As Minister of Fuel and Power he appointed this Committee; he is the proud father-in-law of this Report, and I wonder he has not got up to boast of his association with it and told us what he thought. I must confess I do not know where he is getting to. I never know whether he is a Liberal sitting on the Tory Front Bench or a Tory sitting somewhere else, but I think he should have had a go in this Bill and told the Government where he is. On 29th May, 1945, he announced in connection with coalmining that In so far as the grouping or amalgamating of collieries is necessary for this object, it will be carried through voluntarily if possible but otherwise by compulsion."—[OFFICIAL REPORT, 29th May, 1945; Vol. 411, c. 87:] That, no doubt, was in principle the same proposition as that made by the right hon. Member for Bournemouth in respect to this Bill. The same idea was put by the McGowan Committee on the electricity supply industry. There were no local amalgamations into substantial, something like regional concerns, although the Electricity Commissioners were to see that it was done. That scheme never came through. There were Conservative Governments after 1931—Conservativedominated Governments—which could have done it. I never meant to do it, when I was Minister of Transport. I am not sure whether, I appointed the Committee, but I did discuss the matter in a preliminary way with technical advisers. I thought it was a bad thing. It was reported to the Cabinet, but it did not act and I do not believe it could have acted. The difficulties would have been so troublesome, and if someone on the Front Bench opposite says it was accepted, then they did nothing about it. Anyone can accept a thing and do nothing about it. That is another Conservative policy with which we are very familiar.

The Heyworth Report is one of the ablest, most constructive, most logically argued Reports I have ever seen. What did it do? [Interruption.] This is true. The right hon. and gallant Member for Gainsborough (Captain Crookshank) is in a very bad temper tonight. I always expect good cheer and tolerance from him; but he is getting quite bad tempered. How did this Report proceed? It proceeded without the slightest political predilection. It was, indeed, not a political committee, it was a committee of technicians and experts, with one trade union leader who is not particularly active in politics, so far as I know. They started on the basis of asking themselves a series of questions. Having got the answers, they added them up, and this is where they lead to. If anyone reads that Report, he will see that this is how it worked out. I think that it was one of the most impartial and objective examinations of an industry that I have ever read.

There is one other subject with which I want to deal, and that is local authority compensation. Other compensation matters have been explained and argued. It is maintained that the local authorities ought to get full value on their undertakings; that the Government is robbing them of millions of money. I do not agree. In so far as capital has been paid off by the local authorities—rightly paid off—they have paid that indebtedness out of the moneys received from the gas consumers. If the Government pay the local authority on the basis of gross capital expenditure, including that paid-off debt, the gas consumers will have to pay again to pay that capital off. That is wrong. In any private undertaking we must be fair between the State and individual persons who have invested their money. In the case of a transfer of property from one public authority to another, it would be utterly wrong and contrary to good public policy that the first public authority should make substantial profits out of that transfer—profits which could only be made out of the consumers of the commodity in which they are dealing. It is true that we have £2 million for severance, which we think is right in relation to the £5 million for electricity supply, but we add that.

However, what we say is that we take over all the outstanding liabilities of the local authority and all the assets. The local authority, broadly, therefore, neither makes a profit nor a loss. It would be wrong in a transfer from one public authority to another that such consideration should come into the matter. It would be equally true when the Ministry of Health take over the hospitals of the

local authorities; it would be wrong that they should pay them the cost of the hospitals. They take over the outstanding debts. This is a trading undertaking, and the hospitals are social services, but the principle is equally right, and the Government are unwilling to move from that idea.

My right hon. Friend the Minister of Fuel and Power and the Parliamentary Secretary have made the case for the Bill. We have had a good Debate, if a quiet one. The Government case remains unimpaired and sound, and has not been upset or damaged. The Opposition nave done their best—I always like to see men doing their best—but they have frit succeeded in demolishing the Government's case. His Majesty's Government have come out on top unanswered and triumphant, and I trust that the House of Commons will give the Bill a Second Reading by the great and powerful majority which it undoubtedly deserves.

Question put, "That the word 'now stand part of the Question."

The House divided: Ayes, 354; Noes, 179.

Division No. 75.] AYES. [10.0 p.m.
Acland, Sir R. Brown, T. J. (Ince) Deer, G.
Adams, Richard (Balham) Brown, W. J. (Rugby) de Freitas, Geoffrey
Alexander, Rt. Hon. A. V. Bruce, Maj. D. W. T. Delargy, H. J.
Alpass, J. H. Buchanan, Rt. Hon. G. Diamond, J.
Anderson, A. (Motherwell) Burden, T. W. Dobbie, W.
Anderson, F. (Whitehaven) Burke, W. A. Dodds, N. N.
Attewell, H. C. Butler, H. W. (Hackney, S.) Donovan, T.
Attlee, Rt. Hon. C. R. Byers, Frank Driberg, T. E. N.
Austin, H. Lewis Callaghan, James Dugdale, J. (W. Bromwich)
Ayles, W. H. Carmichael, James Dumpleton, C. W
Ayrton Gould, Mrs. B. Castle, Mrs. B. A. Durbin, E. F. M.
Bacon, Miss A. Chamberlain, R. A. Dye, S.
Baird, J. Champion, A. J. Ede, Rt. Hon. J. C
Balfour, A. Chater, D Edelman, M.
Barnes Rt. Hon. A. J. Chetwynd, G. R Edwards, A. (Middlesbrough, E.)
Barstow, P. G. Cluse, W. S. Edwards, Rt. Hon. Sir C. (Bedwellty)
Barton, C Cobb, F. A. Edwards, John (Blackburn)
Battley, J. R. Cocks, F. S. Edwards, N. (Caerphilly)
Bechervalse, A. E. Coldrick, W Edwards, W. J. (Whitechapel)
Belcher, J. W. Collick, P. Evans, A. (Islington, W.)
Bellenger, Rt. Hon. F. J. Collindridge, F Evans, E. (Lowestoft)
Benson, G Collins, V. J. Evans, John (Ogmore)
Berry, H. Colman, Miss G. M. Evans, S. N. (Wednesbury)
Beswick, F. Comyns, Dr. L. Ewart, R.
Bevan, Rt. Hon. A (Ebbw Vale) Cook, T. F. Fairhurst, F
Bing, G. H. C. Cooper, Wing-Comdr. G. Farthing, W. J.
Binns, J. Corbet, Mrs. F. K. (Camb'well, N.W.) Fernyhough, E.
Blackburn, A. R. Corlett, Dr. J. Field, Capt. W. J.
Blenkinsop, A. Cove, W. G. Fletcher, E. G. M, (Islington, E.)
Blyton, W. R. Crawley, A. Fool, M. M.
Boardman, H. Crossman, R. H. S Forman, J. C.
Bottomley, A. G. Daines, P. Fraser, T. (Hamilton)
Bowden, Flg.-Offr. H. W. Dalton, Rt. Hon H. Freeman, Peter (Newport)
Bowles, F. G. (Nuneaton) Davies, Rt. Hon. Clement (Montgomery) Gaitskell, Rt. Hon. H. T. N.
Braddock, Mrs. E. M. (L'pl, Exch'ge) Davies, Edward (Burslem) Gallacher, W.
Braddock, T. (Mitcham) Davies, Ernest (Enfield) Ganley, Mrs. C. S.
Bramall, E. A. Davies, Harold (Leek) George, Lady M. Lloyd (Anglesey)
Brook, D. (Halifax) Davies, Haydn (St. Pancras, S.W.) Gibbins, J.
Brown, George (Belper) Davies, S. O. (Merthyr) Gibson, C. W.
Gilzean, A. McKinlay, A. S. Silverman, J. (Erdington)
Glanville, J. E. (Consett) Maclean, N. (Govan) Silverman, S. S. (Nelson)
Gooch, E. G. McLeavy, F. Simmons, C. J.
Granville, E. (Eye) MacMillan, M. K. (Western Isles) Skeffington, A. M.
Greenwood, A. W. J. (Heywood) McNeil, Rt. Hon. H. Skeffington-Lodge, T. C.
Grenfell, D. R. Macpherson, T. (Romford) Skinnard, F. W.
Grey, C. F. Mainwaring, W. H. Smith, C. (Colchester)
Grierson, E Mallalieu, J. P. W. Smith, Ellis (Stoke)
Griffiths, Rt. Hon. J. (Llanelly) Manning, C. (Camberwell, N.) Smith, H. N. (Nottingham, S.)
Griffiths, W. D. (Moss Side) Manning, Mrs. L. (Epping) Smith, S. H. (Hull, S.W.)
Gunter, R. J. Marshall, F. (Brightside) Snow, J. W.
Guy, W. H. Mathers, Rt. Hon. G. Solley, L. J.
Haire, John E. (Wycombe) Medland, H. M. Sorensen, R. W.
Hale, Leslie Mellish, R. J. Soskice, Sir Frank
Hall, Rt. Hon. Glenvil Messer, F. Sparks, J. A.
Hamilton, Lieut.-Col. R Middleton, Mrs. L. Stamford, W.
Hannan, W. (Maryhill) Mikardo, Ian Steele, T.
Hardman, D. R. Mitchison, G. R. Stewart, Michael (Fulham, E.)
Hardy, E. A. Monslow, W. Strachey, Rt. Hon. J.
Hastings, Dr. Somerville Moody, A. S. Stross, Dr. B.
Haworth, J. Morley, R. Stubbs, A. E.
Henderson, Rt. Hn. A. (Kingswinford) Morgan, Dr. H. B. Summerskill, Dr. Edith
Henderson, Joseph (Ardwick) Morris, Lt.-Col. H. (Sheffield, C.) Swingler, S.
Herbison, Miss M. Morris, P. (Swansea, W.) Sylvester, G. O.
Hewitson, Capt. M Morrison, Rt. Hon. H. (Lewisham, E.) Symonds, A. L.
Hicks, G Mort. D. L. Taylor, H. B. (Mansfield)
Hobson, C R. Moyle, A. Taylor, Dr. S. (Barnet)
Holman, P Murray, J. D. Thomas, D. E, (Aberdare)
Holmes, H. E. (Hernsworth) Nally, W. Thomas, Ivor (Keighley)
House, G Naylor, T. E. Thomas, I. O. (Wrekin)
Hoy, J. Neal, H. (Claycross) Thomas, John R. (Dover)
Hubbard, T. Nichol, Mrs M. E. (Bradford, N.) Thomas, George (Cardiff)
Hudson, J. H. (Ealing, W.) Noel-Baker, Capt. F. E. (Brentford) Thorneycroft, Harry (Clayton)
Hughes, Emrys (S. Ayr) O'Brien, T Thurtle, Ernest
Hughes, Hector (Aberdeen, N.) Oldfield, W H Tiffany, S.
Hughes, H. D. (W'lverh'pton, W.) Oliver, G H Timmons, J.
Hutchinson, H. L. (Rusholme) Orbach, M. Titterington, M. F.
Hynd, H (Hackney, C.) Paget, R. T. Tolley, L.
Hynd, J. B. (Attercliffe) Paling, Rt. Hon. Wilfred (Wentworth) Tomlinson, Rt. Hon. G.
Irvine, A. J. (Liverpool) Paling, Will T (Dewsbury) Turner-Samuels, M.
Irving, W. J. (Tottenham, N.) Palmer, A. M. F. Ungoed-Thomas, L
Isaacs, Rt. Hon. G. A. Pargiter, G A. Usborne, Henry
Janner, B Parker, J. Vernon, Maj. W. F.
Jay, D. P. T. Parkin, B. T. Viant, S. P.
Jeger, G. (Winchester) Paton, Mrs. F. (Rushcliffe) Wadsworth, G.
Jeger, Dr. S. W. (St. Pancras, S.E.) Paton, J. (Norwich) Walkden, E.
Jones, D. T. (Hartlepools) Pearson, A Walker, G. H.
Jones, Elwyn (Plaistow) Perrins. W. Wallace, G. D. (Chislehurst)
Jones, P. Asterley (Hitchin) P'atts-Mills, J F F. Warbey, W. N.
Keenan, W Poole, Cecil (Lichfield) Watkins, T E.
Kenyon. C Popplewell, E. Watson, W. M.
Key, C. W. Porter, E. (Warrington) Webb, M. (Bradford, C.)
King, E. M. Porter, G. (Leeds) Wells, P. L. (Faversham)
Kinghorn, Sqn.-Ldr. E. Price, M Philips Wells, W. T. (Walsall)
Kinley, J. Proctor W T West, D. G.
Kirby, B. V. Pursey, Cmdr. H Westwood, Rt. Hon. J.
Kirkwood, Rt. Hon. D. Randall, H. E. Wheatley, J. T. (Edinburgh, E.)
Lang, G Ranger, J. White, C. F. (Derbyshire, W.)
Lawson, Rt. Hon. J. J. Rankin, J White, H. (Derbyshire, N.E.)
Lee, F. (Hulme) Reeves, J. Wigg, George
Lee, Miss J. (Cannock) Reid, T (Swindon) Wilcock, Group-Capt C. A. B.
Leonard, W. Richards, R. Wilkes, L
Leslie, J. R. Ridealgh, Mrs. M Wilkins, W. A.
Lever, N H Robens, A Willey, F. T. (Sunderland)
Levy, B. W. Roberts, Emrys (Merioneth) Willey, O. G. (Cleveland)
Lewis, A W J (Upton) Roberts, Goronwy (Caernarvonshire) Williams, D. J. (Neath)
Lewis, J (Bolton) Robertson, J. J. (Berwick) Williams, J. L. (Kelvingrove)
Lewis, T (Southampton) Rogers, G. H. R. Williams, W. R. (Heston)
Lindgren, G S. Ross, William (Kilmarnock) Williamson, T.
Lipson, D L. Royle, C Willis, E.
Lipton, Lt.-Col. M. Sargood, R. Wills, Mrs. E. A.
Longden, F. Scollan, T. Wilmot, Rt. Hon J
Lyne, A W Scott-Elliot, W. Wise, Major F. J.
McAdam, W. Segal, Dr. S. Woodburn, A.
McEntee, V La T. Sharp, Granville Wyatt, W
McGhee, H. G. Shawcross, C. N. (Widnes) Yates, V F
McGovern, J Shawcross, Rt. Hn. Sir H. (St. Helens) Younger, Hon. Kenneth
Mack, J. D. Shinwell, Rt. Hon. E. Zilliacus, K
McKay, J (Wallsend) Shurmer, P. TELLERS FOR THE AYES:
Mackay, R W G. (Hull, N.W.) Silkin, Rt. Hon. L. Mr. Buchan-Hepburn and
Mr. Drewe.
Agnew, Cmdr. P. G. Hollis, M. C. Peake, Rt. Hon. O.
Aitken, Hon. Max Holmes, Sir J. Stanley (Harwich) Peto, Brig. C. H. M.
Amory, D. Heathcoat Hope, Lord J. Pickthorn, K.
Assheton, Rt. Hon. R. Hulbert, Wing-Cdr. N. J. Pitman, I. J.
Baldwin, A. E. Hurd, A. Poole, O. B. S. (Oswestry)
Beamish, Maj. T. V. H. Hutchison, Lt.-Cm Clark (E'b'rgh W.) Prescott, Stanley
Bennett, Sir P. Jarvis, Sir J. Price-White, Lt.-Col. D.
Birch, Nigel Jeffreys, General Sir G. Prior-Palmer, Brig. [...].
Boles, Lt.-Col. D. C. (Wells) Jennings, R. Raikes, H. V.
Boothby, R Joynson-Hicks, Hon. L. W. Ramsay, Maj. S
Bossom, A. C. Keeling, E. H. Reed, Sir S. (Aylesbury)
Bowen, R. Kerr, Sir J. Graham Reid, Rt. Hon. J. S. C. (Hillhead)
Bower, N. Lancaster, Col. C. G. Renton, D.
Boyd-Carpenter, J. A. Langford-Holt, J. Roberts, H. (Handsworth)
Bracken, Rt. Hon. Brendan Law, Rt. Hon R. K. Roberts, Peter (Ecclesall)
Bromley Davenport, Lt.-Col. W. Legge-Bourke, Maj. E. A. H. Robertson, Sir D. (Streatham)
Bullock, Capt. M. Lennox-Boyd, A. T. Ropner, Col. L.
Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n) Lindsay, M. (Solihull) Ross, Sir R. D. (Londonderry)
Carson, E Lloyd, Maj. Guy (Renfrew, E.) Savory, Prof. D. L.
Challen, C. Low, A. R. W. Scott, Lord W.
Channon, H. Lucas, Major Sir J Shephard, S. (Newark)
Clarke, Col. R. S. Lucas-Tooth, Sir H. Shepherd, W. S. (Bucklow)
Clifton-Brown, Lt.-Col. G. Lyttelton, Rt. Hon. O. Smiles, Lt.-Col. Sir W.
Cole, T L MacAndrew, Col. Sir C. Smith, E. P. (Ashford)
Conant, Maj. R. J. E. McCallum, Maj. D. Smithers, Sir W.
Cooper-Key, E. M. McCorquodale, Rt. Hon. M. S. Snaddan, W. M.
Corbett, Lieut.-Col. U. (Ludlow) Macdonald, Sir P. (I. of Wight) Spearman, A. C. M.
Crookshank, Capt. Rt. Hon. H. F. C. McFarlane, C. S. Spence, H. R.
Crosthwaite-Ey[...]e, Col. O. E. Mackeson, Brig. H. R. Stewart, J. Henderson (Fife, E.)
Crowder, Capt. John E. McKie, J. H. (Galloway) Stoddart-Scott, Col. M.
Cuthbert, W. N. Maclay, Hon. J. S. Strauss, H. G. (English Universities)
Digby, S. W. Maclean F. H. R. Studholme, H. G.
Dodds-Parker, A. D. MacLeod, J. Sutcliffe, H.
Dower, Lt.-Col. A. V. G. (Penrith) Macmillan, Rt. Hon. Harold (Bromley) Taylor, C. S. (Eastbourne)
Dower, E. L. G. (Caithness) Macpherson, N. (Dumfries) Taylor, Vice-Adm. E. A. (P'dd't'n, S.)
Drayson, G. B. Maitland, Comdr. J. W. Teeling, William
Dugdale, Maj Sir T (Richmond) Manningham-Buller, R. E. Thomas, J. P. L. (Hereford)
Duthie, W S Marlowe, A. A. H. Thorneycroft, G. E. P. (Monmouth)
Eccles, D. M. Marples, A. E. Thornton-Kemsley, C. N.
Eden, Rt. Hon. A Marsden, Capt. A. Thorp, Lt.-Col R. A. F.
Elliot, Lieut-Col., Rt. Hon. W. Marshall, D. (Bodmin) Touche, G. C.
Fleming, Sqn.-Ldr. E. L. Marshall, S. H. (Sutton) Turton, R. H.
Fletcher, W (Bury) Maude, J. C. Vane, W. M. F.
Foster, J G (Northwich) Mellor, Sir J Wakefield, Sir W W
Fox, Sir G Molson, A. H. E. Walker-Smith, D.
Fraser, H. C P. (Stone) Moore, Lt.-Col. Sir T. Ward, Hon. G. R.
Fyfe, Rt. Hon. Sir D. P. M. Morris, Hopkin (Carmarthen) Watt, Sir G. S. Harvie
Gage, C Morris-Jones, Sir H Webbe, Sir H. (Abbey)
Galbraith, Cmdr. T D. Morrison, Maj. J. G. (Salisbury) Wheatley, Col. M. J. (Dorset, E.)
Gammans, L. D. Morrison, Rt. Hon. W. S. (Cirencesler) White, Sir D. (Fareham)
Glyn, Sir R. Mott-Radclyffe, Maj. C. E. White, J. B. (Canterbury)
Gomme-Duncan, Col A Neill, W. F. (Belfast, N.) Williams, C. (Torquay)
Grant, Lady Neven-Spence, Sir B. Williams, Gerald (Tonbridge)
Grimston, R. V Nicholson. G. Willoughby de Eresby, Lord
Hannon, Sir P. (Meseley) Nield, B. (Chester) Winterton, Rt. Hon. Earl
Harvey, Air-Comdre. A. V. Noble, Comdr. A. H. P. York, C.
Haughten, S. G. Nutting, Anthony Young, Sir. A. S. L. (Partick)
Head, Brig. A. H. Odey, G. W.
Headlam, Lieut -Col. Rt. Hon. Sir C. O'Neill, Rt. Hon Sir H TELLERS FOR THE NOES
Henderson, John (Cathcart) Orr-Ewkig, I. L. Mr. Buchan-Hepburn and
Hogg, Hon Q Osborne, C. Mr. Drewe.
Bill read a Second time, and committed to a Standing Committee.
Considered in Committee under Standing Order No. 69 (King's Recommendation signified.)
[Sir ROBERT YOUNG in the Chair]
Motion made, and Question proposed,
"That, for the purposes of any Act of the present Session to provide, amongst other things, for the establishment of Area Gas Boards and a Gas Council and for the exercise and performance by those Boards and that Council of functions relating to the supply of gas, it is expedient to authorise—
5 (a) the payment out of the Consolidated Fund of such sums as may be required to fulfil any guarantee by the Treasury of the principal of and interest on stock issued by the said Council or the principal of and interest on moneys temporarily borrowed by the said Council or any Area Gas Board, so, however, that the amounts outstanding in respect of the principal of the stock so issued, otherwise than for the purpose of paying compensation under the said Act, and in respect of any moneys temporarily borrowed as aforesaid do not at any time exceed the sum of two hundred and fifty million pounds, excluding amounts outstanding in respect of stock issued or moneys temporarily borrowed for the purpose of redeeming stock or repaying moneys temporarily borrowed;
15 (b) the payment out of moneys provided by Parliament of—
20 (i) remuneration and allowances to, and expenses of, stockholders' representatives appointed under the said Act;
(ii) remuneration and allowances to any auditor appointed under the said Act in connection with the final payment of dividends and interest to holders of 20 securities of gas undertakers;
(iii) remuneration and allowances to, and pensions to or in respect of, persons appointed under the said Act to examine gas meters or to test gas;
(iv) compensation in respect of the vesting in the Minister under the said Act of apparatus and equipment used for examining and stamping gas meters;
25 (v) fees and allowances to any referee or board of referees appointed under the said Act to decide questions relating to pension rights or compensation of or in respect of officers, and allowances to witnesses appearing before any referee or board;
30 (vi) remuneration and allowances to members and officers of the arbitration 30 tribunal appointed under the said Act and to persons to whom proceedings are referred by that tribunal, and any other expenses of that tribunal;
(vii) the administrative expenses incurred under the said Act by any Minister of the Crown or Government department;
35 (c) the payment into the Exchequer of—
(i) any moneys standing on the vesting date under the said Act to the credit of the gas fund established under the Gas Regulation Act, 1920;
(ii) any sums received under or by virtue of the said first-mentioned Act by any Minister of the Crown or Government department."—[Mr. Glenvil Hall.]

10.15 p.m.

Mr. Wingfield Digby (Dorset, Western)

I beg to move, in line to leave out "two hundred and fifty," and to insert "one hundred."

This Money Resolution in paragraph (a) gives permission for moneys to be paid out of the Consolidated Fund to the extent of £250 million for development purposes. Paragraph (b) deals with various compensation payments, such as compensation to shareholders and such things as the cost of apparatus and equipment for examining and stamping gas meters. That appears to me to be a minor point. Perhaps the Financial Secretary could tell us what cost is involved?

The purpose of this Amendment is to reduce the sum of £250 million for development purposes to a sum of £100 million. I wish to address my questions to the Financial Secretary on two grounds: in the first place, is not this sum of £250 million a lot more than is necessary and, in the second place, even assuming that that sum was necessary and desirable, is it possible that it can be spent within the near future? I have noted that in three nationalisation Bills which have passed through this House recently, borrowing in the same fashion has already been authorised to an extent of no less than £1,100 million—that is, for coal, electricity and transport. I do not know the figure with regard to airways. That figure is certainly very high when we take into account the economic situation of the country at the moment and the difficulty of undertaking any large capital expenditure for any reason, however desirable. Therefore, I wonder very much, and so do my hon. Friends, whether it is right at this moment to increase that large sum by another £250 million, making a total of £1,350 million for immediate capital expenditure on four nationalised concerns.

When we look more closely into this figure of £250 million it is difficult to see how it was arrived at. The outstanding capital of the gas industry at the present is £167 million. If we take into account the market value of outstanding capital, as set out in the Heyworth Report, this figure is increased to just over £200 million, but what in effect the Government are asking us to do in any case is to spend more on the development of this industry in the next few years than its total worth at the present. That seems to be rather a tall order, to put it mildly. In effect, if this money is to be spent, it will mean that the capital of the industry will be more than doubled. Where is the interest on that capital to come from? As a result of this Bill the amount of interest saved, judging by the Heyworth Report, will not be more than about 1 per cent., so the saving obviously cannot be made there. Therefore it seems to us on this side of the House that if the capital is to be more than doubled, the cost will have to be met by the consumer.

The Minister was at pains to hold up to us "Let us Face the Future," in which it is said that the nationalisation of gas will lower charges. We want to know how the charges can be lowered if the capital is costing almost as much, and it is to be doubled without doubling output. Can the output be doubled? That is what we want to know. The Heyworth Committee told us that in its opinion in to years output can only be increased by 20 per cent., so it seems very clear that we are being asked to agree to something which, so far from reducing the charge to the consumer, is going to raise it very considerably. To enable us to have a little more information on this point, we might be told—I have not been able to arrive at the figures—what is the present expenditure of the gas industry for these purposes? What is the present annual expenditure, and how much is it proposed to step it up, in order to reach this fantastic sum of £250 million in the near future?

The second argument I wish to put forward is that even if it is desirable to spend this money—and there is a lot to be said for the development of the gas industry which uses coal in a most efficient manner—can the money in fact be spent? Can the raw materials and labour be diverted from other industries without doing more harm than good to our economy? We are frequently being told by the Government of the importance of curtailing very necessary capital expenditure. Indeed, I am told that at present the gas industry itself is in a very difficult position, not only as regards development which it would like to undertake, but as regards ordinary maintenance.

To give one example, authority cannot be obtained from the Government for the maintenance of ordinary service pipes, which are obviously necessary for the continued efficiency of the industry. Is that policy to be reversed immediately nationalisation comes into force, or what is the position? If it is so hard at present to maintain this industry in a suitable condition, how is it going to be possible suddenly, the day after nationalisation, to launch into this tremendous expenditure for capital development? It seems to us that this sum of £250 million on top of the £1,100 million the Government have asked for so recently for developing nationalised projects, is very difficult to justify. It would appear at first sight to be unwarrantable and we shall certainly need very much more information than we have had before we are prepared to agree to it.

10.24 p.m.

Mr. Peter Roberts (Sheffield, Ecclesall)

I wish to support the Amendment, and to make it quite clear at the outset that we on this side of the Committee are not arguing that there is no necessity for capital reorganisation in the industry. I hope that point will not be taken by the Government. The two points are the one wnich my hon. Friend the Member for West Dorset (Mr. Digby) has raised about practicability, and the other the question of the control by this House of the capital expenditure which the Treasury pays out. I think there is a misunderstanding in the Minister's mind over this, which he displayed in the Second Reading Debate. When he was tackled on this point, he said regarding the £250 million: Is it not desirable that the industry should spend that capital in any case? It is absolutely essential that it should spend that money, because of the very parlous state of many of the gas undertakings at the present time."—[OFFICIAL REPORT, 10th February, 1948; Vol. 447. c. 226.] We have heard from the Lord President of the Council his views about the "parlous state" of the industry. I am certain that the Minister does not intend all this money to be used merely to put right the "parlous state" of the industry. If he does, then half the amount asked for might possibly be reasonable. I suggest that that is not a valid argument. My hon. Friend has shown that the Heyworth Report has given a figure of £50 million in five years for capital expenditure. The White Paper issued by the Chancellor of the Exchequer referred to gas on page 26, and there it lays down that the capital expenditure envisaged is in the neighbourhood of £34 million for 1948 and £36 million for 1949—a total of £70 million. It will be seen that the figure has gone up from £50 million to £70 million, but that is nowhere near £250 million.

I wish first to ask, as did my hon. Friend, from where the material and the labour will come. I do not think that the gas industry will get it. Gas has been referred to as likely to be the Cinderella of this trilogy. I am merely speaking metaphorically now. I mean no facial discourtesy to the Minister or his Parliamentary Secretary, but it may well be that they will be playing the part of the Ugly Sisters in this matter. This doleful pantomime will unfortunately have no fairy godmother, unless it is the Leader of the Opposition, who may come in at a later stage. The money asked for is, on the face of it, much too much.

Therefore, what is the logical deduction? That the Government wish to put out of the control of this House for as long as possible the question of the Treasury guarantee. We know their views about the putting of Questions to Ministers on their responsibility. In this matter the House has a continuing responsibility for money and guarantees out of the Treasury. We have this opportunity now. Even taking the capital expenditure figure of £70 million we shall, if we agree to the Government's proposal, be putting away from ourselves the chance of deal- ing with this matter in this Committee for from six to eight years. I suggest that is not a right which we should give to the Government at this stage, especially as they refuse to answer Questions on this matter. Here is a question of direct responsibility on the part of this House, and we are asked to give it away for from nine to 10 years. Therefore, in our Amendment we suggest that when the Government have spent £100 million which, on their own figures, will last them for at least three to four years, they should then come back to this House, explain what they have done with the money and ask for more. We should not, at this stage, give them £250 million to play with when they can go away and not answer any more questions until this money has been spent.

The Government have a serious case to answer. They have to show from where the materials are coming, in complete contradiction to what the Chancellor has been saying up and down the country. Listening to what one might almost call the buffoonery of the Leader of the House just now, one would not think that we in this country were on the verge of a crisis. The Government do not seem to appreciate that it is necessary that we should watch these monetary extravagances very closely indeed. Unless we have a satisfactory reply from the Financial Secretary we shall divide the Committee upon this issue.

10.29 p.m.

Mr. Charles Williams (Torquay)

When I first read this Resolution a few days ago I thought it was pretty hot. Since then I have been reading the speeches of the Chancellor of the Exchequer in which he has been warning the country that a really terrific financial leak is going on everywhere, due to overspending both on wages and on many other matters. When I heard the light-hearted sparrow-feed which the Leader of the House gave us just now I did not see how it was humanly possible, on the basis of the speeches of the Chancellor of the Exchequer, for this Committee to be asked by any Government to advance a sum of £250 million at a time such as the present. This money has to be found at a time when the borrowing of Government money is not so easy as it was. That seems to me to be a complete reason for cutting down the sum.

As my hon. Friend who moved the Amendment pointed out, this is a sum completely out of proportion to the present capitalised value of the whole gas industry, and I cannot for the life of me see, if we are being told by this supreme financial expert of the country to cut down and reduce, why in this case the Government cannot follow their own financial leader. If they come here, in this flippant, arbitrary way, to order the House to grant £250 million for the re-organisation of the gas industry, without giving us any idea how they are going to do it, how can they expect the ordinary people outside to believe what the Chancellor says when they are pouring out money in this way? It is impossible to expect them to do so.

If I may take another point on the position at the present time, so far as I can understand, the purpose for which this money is wanted, is for setting up and financing, in the first place, the main or Area Gas Board, and secondly, for the minor boards of the gas plants. I do think that we should be told how the money is to be apportioned between these various boards. We want to know where the main expenditure is to be and why it is to be so large a sum. The representative of the Treasury may say he does not know and has not the details and all that kind of thing. I should have thought that after he has presented so many Financial Resolutions, he might some day bring in one of which he knew the purpose.

This sum has nothing whatever to do with any matter of compensation. That is clearly kept out under the terms of the Resolution, so that one of the main reasons why money may be needed immediately is ruled out. The sum is purely for future use. I would like to emphasise what has been said by both my hon. Friends. We have been told in White Papers and in many other ways that there are to be tremendous cuts in all capital developments. Surely an industry which uses coal so largely, coal which is so much more expensive than it used to be under private enterprise, so much less and so much worse, is not one where you can expect to make great capital development at the present time quickly and easily. May I also point to the various details under the sub-heads (b) (c). None of these details can command anything in the nature of £m million or £20 million. They can quite easily be covered by a reasonable estimate.

In view of the warnings of the Chancellor of the Exchequer, I do not think my hon. Friend who moved the Amendment has gone nearly far enough. I have in mind the exhortations of the Chancellor of the Exchequer. I have always thought that he was an honest man, and I cannot conceive why he is not here to say that the Government are quite wrong and that £20 million is quite adequate. This proposal is completely against the whole of the Government's latest policy, and I still think that the amount, even if it is reduced to £100 million is infinitely too big and quite unnecessary after the warnings we have had from the Chancellor of the Exchequer himself.

10.36 p.m.

Sir Hugh Lucas-Tooth (Hendon, South)

Before the Financial Secretary replies, I would like to ask him about the assets in cash or reserves which are in the hands of these undertakings on the date of transfer. There will presumably be some further substantial sums in cash. Before we pass a Resolution of this sort we ought to know the amount of cash which the Boards will expect to find in their hands. It seems to me that what we are doing in this case is to take away substantial sums in cash. I cannot see any difference between this action and some form of taxation. I want to know why, when we are apparently extracting large sums of money from the hands of subjects, this Bill is not accompanied by a Ways and Means Resolution.

Apart from the question of cash, there will certainly be exceedingly large sums which the companies, and also perhaps municipalities, have set aside by way of reserves for precisely the kind of development which is contemplated here and to which this Amendment refers. I imagine that a great deal of this expenditure will not be of a kind to be invented after the industry is nationalised. I gather from the close estimating which has taken place, that the plans are well forward, and that large reserves have been set aside. If they amount to £20 million or £30 million, that puts a very different complexion on what we are now doing.

It means that the whole of the first year's expenditure is already provided for by the mere act of transfer. Before we pass this Resolution the Committee should certainly be informed of the total amount, in cash and reserves which we are likely to find and to hand over to these Boards.

10.39 p.m.

The Financial Secretary to the Treasury (Mr. Glenvil Hall)

The Opposition is well within its rights in querying the amount which the Government in this Resolution are suggesting as reasonable. Therefore I, for one, make no complaint that this Debate is taking place or that the Amendment has been moved. The sum of £250 million is a lot of money. The Committee is entitled to know why the Government, in their wisdom, have chosen this amount. It has been asked whether the sum is not excessive, and whether, in view of the immediate situation facing the country, such an amount can be spent within a reasonable time. We have also been asked what items this £250 million covers. I will try to answer these questions. When I have done so most Members of the Committee, if they are reasonable people, will agree with me that the £250 million is a reasonable sum.

What is the £250 million required for? It is required by the Gas Council and the Area Boards for capital expenditure and for additional working capital, including temporary borrowings, which, as the Committee will see, are allowable under the terms of the Bill and within the terms of this Resolution. The capital expenditure of gas undertakings before the war at present prices was something like £25 million per year. The postwar capital expenditure which the gas industry itself envisaged was something in the region of £35 million a year. We have looked at this and have come to the conclusion that £35 million to £40 million is not an unreasonable figure for capital expenditure. The hon. Member for Western Dorset (Mr. Digby) referred to the White Paper, and those who have read it will appreciate that during the war the industry, which has been a pretty efficient industry by and large, was considerably run down. A great deal of leeway has to be made up. The White Paper on Capital Investment, in 1948, estimated the necessary expenditure at a sum of £35 million for 1948 and a like sum for 1949, a total of £70 million for those two years. Therefore, £35 million to £40 million per year for the next five years, which is the term we have in mind, is not in my submission an unreasonable sum.

Mr. P. Roberts

This point must be made. The sum of £34 million is for 1948, but this Bill will not be passed until the greater part of 1948 is over so already £34 million of that is spent. Therefore it is not five years but four or even less.

Mr. Glenvil Hall

That only strengthens my case. I had hoped before I sat down to draw attention to that fact, but the hon. Member for Ecclesall (Mr. P. Roberts) has already drawn the attention of the Committee to it. It might not be possible to spend the amount envisaged in the White Paper during the current year or next year, but I was for the moment using those figures to indicate that those who have gone into this matter, both in the industry and on behalf of the Government, have formed the view that £35 million is not an unreasonable sum. If we take £35 million to £40 million a year which are the two limits, and we multiply that figure by five, which is the number of years we have in mind, it gives us a total of something like £190 million. It gives us £190 million of the £250 million mentioned in the Money Resolution.

Mr. I. J. Pitman (Bath)

Before the right hon. Gentleman leaves the point of capital expenditure, would he make it clear whether he is also ignoring depreciation, and whether that figure of £35 million is net or gross fresh capital provided out of the running of the gas industry?

Mr. Glenvil Hall

It is capital expenditure envisaged during the next five years at the rate of £35 million to £40 million a year. If we view the five-year period as a whole, then, taking one year with another and spending sometimes less and sometimes more, we reckon that something like £190 million might be wanted for capital expenditure as such.

Then we come to the working capital and the hon. Member for South Hendon (Sir H. Lucas-Tooth) has asked a question on that. The answer is that when one takes over a gas undertaking, one takes over all assets in whatever form they may be—both fixed and movable—and some of these assets, of course, will be cash in the bank and other liquid assets of that kind, I am advised that the amount of money which gas undertakings hive placed to reserve does not amount to very much. There is no criticism against the undertakings in that. They have had to work under the law to fairly tight margins, and it has consequently not been possible for them to have very much in reserve. So far as we are able to judge what the reserves are—and until we have taken over the undertakings we cannot say definitely—we are advised that they may amount to £30 million. That, I think, is the amount which has been mentioned this evening. I do not know what the figure is; if I did, I should be very glad to tell the Committee.

The amount of reserves is not very great, but the assets will naturally pass on vesting day to the State. Therefore, it will be essential far some additional working capital to be placed at the disposal of the Area Boards. We have been advised that a figure of between £2 million or £3 million over five years for each of the Area Boards will be a right and proper um. There are 12 Boards, and that makes £25 million or £35 million in all. With the £190 million I have already mentioned, we get £225 million. The sum of £250 million which is asked for in the Resolution is £25 million more than that.

Sir H. Lucas-Tooth

There is a difference of £55 million—not £25 million. What does the right hon. Gentleman mean?

Mr. Glenvil Hall

We do not know what the figure is—[Interruption.] Hon. Gentlemen opposite will remember that I was careful to say that we wanted to provide each of the Area Boards with additional working capital, and, in our view and in the view of the Government's advisers, something like £2,000,000 or £3,000,000 per Area Board is not an unreasonable sum of money to allocate. That being so, the total which the Committee is asked to approve is £250 million. We have, therefore, in the figures I have given, come to an amount of not less than £225 million.

There are war-time arrears to be made up and it may well be impossible, as one hon. Member has pointed out tonight, for much to be done owing to the shortage of steel. It may be that the arrears which have to be overtaken will be considerable. If that be the case, it is only fair that there should be some margin over the £225 million in order to permit the undertakings, when they pass into the hands of the community, not to be hamstrung because there is a lack of capital. Although the Money Resolution states an overall figure, it does not mean that that money will be raised or, if it is raised, that it will be spent. I want to make that perfectly clear and to assure hon. Members that this is the figure which it is considered proper and fair to request.

We have to remember that what we are trying to do here is to enable the new authority to borrow money up to that amount if it should be necessary; but those who have read the Bill—and judging from their laughter, I begin to think that Members opposite have hardly done so—will realise that there will be strict control over the raising of money whether by way of stock or by temporary borrowing. Therefore, we must not run away with the idea that the £250 million is going to be raised straight away. Nothing of the kind. It will be raised as and when required.

Mr. Brendan Bracken (Bournemouth)

In view of that explanation, could not the right hon. Gentleman accept our Amendment? It fulfils all that the right hon. Gentleman has told us.

Mr. Glenvil Hall

The Amendment limits the amount that can be raised to something like £100 million. I have already indicated that something far more than that sum is essential if this industry is to carry on. I find it very difficult to follow the reasonings of hon. Members opposite. During the Debate on this Bill, speaker after speaker on that side has said what a fine industry the gas industry has been and how well and efficiently it has been managed; yet, when it has been starved of repair and equipment and new material and when we ask that it should be given adequate money to make itself even more efficient and to expand as it should expand, they turn round and wish to be parsimonious.

Lieut.-Colonel Elliot (Scottish Universities)

The right hon. Gentleman cannot have been listening to the Debate or cannot have been, at any rate, instructed in it by those of whom he asks advice. What we said was that it was impossible for the industry to expend these sums in any reasonable time. Why is it asking for sums far beyond what the Chancellor of the Exchequer says it can spend? The right hon. Gentleman has not addressed himself to that argument at all.

Mr. Glenvil Hall

I fail to follow the argument of the right hon. Gentleman. The present shortages will not last for ever.

Lieut.-Colonel Elliot

If the Financial Secretary will give us an estimate of how long he thinks the shortages will last, then we will be able to give him a cheque.

Mr. Glenvil Hall

I am dealing here with a Money Resolution. I am speaking of the terms of that Resolution and trying to explain why £250 million has been put into it. The right hon. and gallant Gentleman assumes that because there has had to be, unfortunately, a cutting down of capital expenditure at the present time, that that will apparently last for an indefinite period. We do not accept that. We say that we are legislating not for 1948 but we hope, for a very long time to come; in the years ahead, as things get progressively better under this Government, and the present shortages of raw materials, including steel and manpower, end, the gas industry will be able to go forward and expand. For that it will need capital, and if the Government have anything to do with it, they mean to ensure that it gets it. We have put down this Resolution so that this great industry shall have adequate capital to carry on as and when materials and manpower are available. The sum we are asking for is reasonable and not excessive. We are not asking that it shall be raised in one lump sum, but only as and when it is required.

Commander Galbraith (Glasgow, Pollok)

Will the right hon. Gentleman answer a question because, although I have been listening carefully, I have a difficulty. He tells us that new working capital would be required to the extent of £190 million, and he proceeded to justify that sum as well as he could. He went on to tell us that war arrears amounted to £25 million. I think that was the figure. That brings the real total capital expenditure to £215 million. I want to understand the difference in the right hon. Gentleman's mind between capital expenditure and war arrears. Are they not both capital expenditure?

Mr. Glenvil Hall

I should have thought so, most definitely. I am sorry I did not altogether understand the hon. and gallant Gentleman. I will try again. I was pointing out that before the war, the average capital expenditure for the gas industry amounted to something like £25 million a year at present prices. The postwar estimate of necessary capital expenditure is something like £35 million to £40 million a year. Later on, when I came to that part of my speech which indicated that we ought to have some elbow room and give the gas industry a certain amount of margin under its new management, I said that during the next few years it might not be possible to catch up on our war arrears. Therefore, in addition to the £35 million or £40 million—which has been en visaged as the normal rate of expenditure for capital expenditure and items on that account—there would be an amount necessary to make up the lean years of the war and possibly for this year, when a good deal cannot be done because of the shortages of manpower and material.

Commander Galbraith

What the right hon. Gentleman is now telling the Committee is that the capital expenditure is going to be £215 million and not £190 million. That really is what he is saying. There is no difference between these two items at all. They are both capital expenditure and he is now telling us that the capital expenditure is £215 million over five years and not £190 million.

10.57 p.m.

Mr. David Renton (Huntingdon)

One is surprised to find that the right hon. Gentleman's own arithmetic is so far wrong and his power to embellish figures so great that he apparently must regard pounds, shillings and pence as meaningless symbols. It seems to me, on his reckoning, that he brings himself well within the £100 million asked for in the Amendment. Clearly in the first year, that is, the current year, there is no question of the money being required, as has been pointed out. In the second year there will be a reserve up to £25 million to account for part of the expenditure of £35 million or £40 million, and two years thereafter. It seems miraculous the way the Financial Secretary makes that requirement, added to £190 million. It is inconceivable. The Minister of Education should circulate the Financial Secretary's speech as a test paper in simple arithmetic. The right hon. Gentleman is really not excelling himself tonight. He is a financial wizard tonight.

Mr. Glenvil Hall

I will try again. The average amount spent per year before the war, in 1938, not war arrears, was, I am advised, something like £25 million per year. Now we are advised, both by the gas industry and by others, who have studied this, that something like £35 million to £40 million per year will have to be spent. The middle figure, therefore, is roughly £38 millions, and five times £38 millions comes to £190 millions. We might, in addition, have wartime arrears which have to be made up and which would be in addition to the normal expansion rate of £35 millions to £40 millions envisaged by the industry and others.

Mr. Renton

That last item appears to be purely hypothetical. The Financial Secretary who is as much a guardian of the taxpayer as we are—or is supposed to be—is now coming to the House with the assurance that that amount must be included. He very quickly asks us to bear it in mind in order to tot up the total to £250 millions.

There is a third point. Apparently in order that the gas industry may be allowed to expand, the very sagacious and necessary White Paper on Capital Expenditure—with which we agree in the main, and which is mainly for the benefit of the export trades and agriculture—is to have a glorious exception made to it: a glorious exception in favour of the expansion of the gas industry when we ought to be expanding our export trade and agriculture. As the representative of a rural constituency in which there is some feeling about what is apparently the postponement of the housing programme, I feel bound to protest that the Government should seem to be so liberal toward a nationalised gas industry.

Another point which I do not think has yet been made, and which hon. Members should bear in mind, is that this figure of £250 millions is excluded from, and, therefore, I presume is in addition to, various other amounts. They are these: amounts outstanding in respect of stock issued or moneys temporarily borrowed for the purpose of redeeming stock or repaying moneys temporarily borrowed. That £250 millions has, therefore, to be added to another very considerable figure, and we have no enlightenment whatever what that figure is going to be. I would ask the Financial Secretary, or another member of the Government, if he would be so good as to give us some enlightenment on that matter.

It seems abundantly clear—and I am sure it will be agreed when the Financial Secretary's remarks are studied in HANSARD tomorrow—that the Treasury have slipped up pretty badly over this. Where is the planning if a major item of expenditure, or proposed expenditure, of this kind cannot be dovetailed with the Government's financial policy as expressed in the White Paper on Capital Expenditure? Where is the planning? I must say I am greatly disillusioned. I was beginning to think that the Government were at last beginning to face up to the realities of the situation. One wonders when faced with a situation such as tonight's whether the planners know how to plan.

There is one other important matter which should be mentioned in conclusion. If there is one thing necessary more than anything else to help and lead the people at this time, it is to inculcate in thorn a sense of the value of money. They themselves are being brought face to face with it in their own family budgets. They will have to pay increased insurance premiums. In my constituency there is a fairly all-round demand by local authorities for higher rents for council houses, and increased rates, and perhaps wisely there are to be no increased subsidies for food. I am in favour of the Government's action, so far as it has gone. Some example from the Government is vitally necessary if the people of this country are to co-operate fully, not merely with their hands but with their minds, in getting us out of our financial difficulties. It would be a fine gesture on the part of the Government—and I am sure the Financial Secretary himself, in spite of the hard words which are sometimes said about him, is man enough to make such a gesture—if they were to accept this reasonable Amendment.

11.6 p.m.

Captain Crookshank (Gainsborough)

I was astounded at the speech of the right hon. Gentleman. I was considerably surprised that he made one at all, because it has long been the established practice that the Minister who is in charge of the Bill is responsible for the Money Resolution and for explaining it to the Committee. The right hon. Gentleman has broken the tradition.

Mr. Glenvil Hall signified dissent.

Captain Crookshank

It is no good the right hon. Gentleman wagging his head. I was Financial Secretary for four years, and I know what the traditions are which I inherited and adhered to.

Mr. Glenvil Hall

I have moved a lot.

Captain Crookshank

The right hon. Gentleman said he has moved a lot. Well, he has moved along a strange road tonight. It would be as well for the Government to accept this Amendment, and I will tell the right hon. Gentleman exactly why I say that. In the course of his explanation of the rather complicated figures, which I think I have now got right, though he took three tries to explain them, I understood him to say that the Government had no idea what was the value of the reserves which they were taking over. That seems to me to be most extraordinary.

Mr. Glenvil Hall

The question was, did I know what the value of the assets would be at the time we took them over. Obviously we do not know because the vesting day has not been fixed.

Captain Crookshank

I have heard of pigs in pokes, but this appears to me to be something of a black market pig in a poke. He asks for this unnecessarily large sum, which, on his own calculation, he says might be somewhere about £190,000,000. This is over the next five years. Therefore, he is budgeting in terms of five years.

Mr. Glenvil Hall

From the vesting date.

Captain Crookshank

From the vesting date, yes, but it may be this year or it may be any time.

Mr. Glenvil Hall

We will hurry it up for you if you want.

Captain Crookshank

That does not affect the figures I am trying to analyse. The right hon. Gentleman seems to imply that the £250 million will cover a period well over five years from the vesting day, whenever that will be. What I would like to know is why in this nationalised industry is such a policy being adopted, whereas in the one service which is in some way comparable—the Post Office—this House is not asked for borrowing powers over anything like five years.

Mr. Glenvil Hall

That is entirely different.

Captain Crookshank

We had a Bill a fortnight ago for the capital development of the telephone service, the telegraph service and to some extent the ordinary postal service, and the moneys asked by the Postmaster-General covered between two and three years.

Mr. Glenvil Hall

I am sorry to have to explain. The right hon. and gallant Gentleman once occupied my office. The difference is that we are not advancing these moneys, which will be raised in the ordinary way. All the Treasury will do is to guarantee capital and interest. The Post Office is entirely different. It is publicly owned, and the money is raised from the Consolidated Fund.

Captain Crookshank

I know it is drawn from the Consolidated Fund. In this case we are talking about raising money on credit for State enterprises which we have not had before. It is much more analagous—and I think the right hon. Gentleman on reflection will think so as well—to the Post Office than it is to private enterprise. While I agree that the technical way in which the money is to be raised is different, one fact remains—that one of the reasons why the Post Office raises money in that way is that the House is made aware of the requirements from time to time. At two or three years intervals the House has the opportunity of discussing its development; and I think it would be a wise line in this case too, if he took £100 million now which would cover roughly, on his own showing, developments for about three years. Parliament could be given an account by means of which it could look at the development of a nationalised industry of the new type. That is the real reason why I support this Amendment; it will bring Parliament in as it ought to be brought in.

The second reason why I beg the Government to look at this again is that it does make absolute nonsense of the Chancellor of the Exchequer's warnings to the nation. Tomorrow we are to debate the subject of inflation and the economic situation of the country, about which I understand there are diverging views on the other side of the House; but we will discuss it in the light, among other things, of the previous White Paper in which every form of really important and vital capital expenditure has got to be cut down—even the housing programme. With that effort being necessary on the part of the Government today—and it is largely accepted by thinking people in financial circles—we shall have to cut down and face a new situation altogether. Are we then going to afford these vast sums in order to develop the gas industry? That, as my hon. Friend has just said, does not make sense.

We do not expect the Government to be over-logical, but we do expect their announcements made within a period of a couple of months to tally one with the other. It seems to me that to put in a high figure of this kind here when the Government know perfectly well it is not possible to achieve that amount of development in the period mentioned, is really nothing but eyewash. I do ask the right hon. Gentleman to consult the Parliamentary Secretary to the Treasury, who has lately shown himself an expert in financial affairs, and he had also better consult the Chancellor of the Exchequer, who obviously cannot be here tonight.

The real point which my hon. Friends have put is one that ought to be considered by the Government. No harm can possibly be done to anybody by accepting this Amendment now because, on the Government's own showing, they cannot within a measurable distance of time expend on capital development of the gas industry anything like the figure they have inserted in the Resolution. It would be much better to have a lower figure and then, if necessary, as no doubt it may be, there should be an opportunity to come back to Parliament for discussion of further developments. That would be a much wiser line, and I hope that even now the Financial Secretary will consider that. If he cannot accept the Amendment tonight, it might be possible to postpone further consideration of this matter in order that he can consult the Chancellor of the Exchequer, particularly in the light of tomorrow's Debate, and then accept the Amendment on a day next week, because it is not necessary that it should be passed tonight.

11.15 p.m.

Mr. Brendan Bracken (Bournemouth)

Let me add my support to the appeal of my right hon. and gallant Friend. There is really no necessity for including this figure of £250 million in the Resolution. If the right hon. Gentleman will consult with the Chancellor of the Exchequer tomorrow, I feel that the Chancellor of the Exchequer will probably take the view that this figure was put into this Money Resolution a long time ago and is now erroneous or unnecessary. We all know that the Bill has been ticking around Whitehall for over 12 months, long before the economic crisis broke upon the country; and, as is not unusual in Government Departments, no attempt has been made to bring the Bill up to date. I feel sure—and I think that here the Patronage Secretary of the Treasury, who is a great mathematician, will agree with me—that the Chancellor of the Exchequer would agree at the moment to something less than £250 million, when the Financial Secretary to the Treasury himself suggests it is impossible to spend that money for a long period of years. I do beg the Financial Secretary on this occasion to show some signs of reason by meeting the Opposition's point of view.

Tomorrow we are to receive a long statement from the Chancellor of the Exchequer. We have already read the grim White Paper issued by the Government, in which it is fully acknowledged that the policy of overbuilding and all sorts of other inflationary activities has proved to be altogether wrong. Savage cuts—hon. Gentlemen ought to remember this—may be inflicted upon the standard of living of this community in the next few months merely because of our folly in the past two years in over-spending and over-budgeting. I think that both sides of the Committee can agree here. What is the sense of over-budgeting for the gas industry when we have had an assurance from the Financial Secretary to the Treasury, a most reliable authority, that certainly five years will pass before the sum is spent? This is what we may call "gasified finance." It is also an attempt to asphyxiate Sir Edward Plowden, who is the chief Government planner, because he has been struggling with a great mass of inflationary figures put into White Papers in the last two years. Yesterday the Government confessed that they grossly over-estimated the revenue to be obtained from travellers and all sorts of other people in the last 12 months. I have never read a more apologetic Paper than the one issued yesterday by the Treasury.

The Deputy Chairman (Sir Robert Young)

The right hon. and gallant Gentleman is going a little wide.

Mr. Bracken

I am altogether apologetic and I quite agree, Sir Robert. I have been so astonished by the Financial Secretary's mathematics that I have allowed myself to be led into this financial discussion. I agree that this inflationary atmosphere upsets all judgment. I ask the Financial Secretary and the Home Secretary who, I understand, is acting as deputy Leader of the House—[HON. MEMBERS: "Never mind."] When I wish respectfully to address an appeal to the deputy Leader of the House, I shall do so in proper form, without any advice from hon. Members opposite. I do suggest that this matter can be easily settled next week, if the right hon. Gentleman will agree to postpone the matter until he has had an opportunity of consulting with the Chancellor of the Exchequer. Then we shall not be forced to divide upon this Amendment. If, on the other hand, the right hon. Gentleman will not do so, then, of course, we have no alternative.

11.20 p.m.

Sir Stanley Reed (Aylesbury)

May I say a few words in support of the plea which has been put by the hon. Member for Huntingdon (Mr. Renton) and others? I assume that the calculations the Government have made were entirely fair and reasonable in the circumstances in which they were made, but it is quite obvious from what the Financial Secretary has said that this money cannot be spent except over a period of several years, and unless there is a marked change in the industrial position, they will be more years than has been arranged for in his programme. But to vouchsafe this sum today, I am convinced, is a profound psychological blunder and can have reactions on our economic condition which may reverberate for generations to come.

I hope the Government are going to ask us, because they ought to ask us, as a nation to face the fact that we are on the brink of the slippery slope that will slide us into irretrievable bankruptcy. They are making large demands on the labourers and are asking the housewives for further austerities; they are asking those who have a margin, to save everything they can for the safety of the State. How can they go to these communities and ask them to make enormously increased and unnecessary provision under this Bill. I assure the Financial Secretary that as I go up and down the country, the most distressing thing I find is the inability to make people realise the gravity of the exchange position. They can look at the internal position and see these enormous sums floating about, and they cannot link it with the exchange position. Only once in our history have we had an exchange problem.

We shall not get those sacrifices which the Government ought to ask for and which I hope they are going to ask for—and they will have my support to enforce them—so long as we create in the minds of the people the idea that huge sums are floating about and are available for expenditure. I ask the Financial Secretary to listen very carefully to the appeal which has been made. The sacrifices which they should ask for, and which we ought to be glad to make and suffer, they will not get when millions are being thrown about in this reckless way and when it is known that this money cannot be used for many years to come.

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

The House divided: Ayes, 301; Noes, 140.

Division No. 76.] AYES. [11.23 p.m.
Acland, Sir R. Evans, John (Ogmore) Mackay, R. W. G. (Hull, N.W.)
Alexander, Rt. Hon. A V Evans, S N. (Wednesbury) McKinlay, A. S.
Alpass, J. H. Ewart, R McLeavy, F.
Anderson, A. (Motherwell) Fairhurst, F. MacMillan, M. K. (Western Isles)
Anderson, F. (Whitehaven) Farthing, W. J. McNeil, Rt. Hon. H.
Attewell, H. C. Fernyhough, E. Macpherson, T. (Romford)
Austin, H. Lewis Field, Capt W. J. Mainwaring, W. H.
Ayles, W. H. Fletcher, E. G. M. (Islington, E.) Mallalieu, J. P. W
Ayrton Gould, Mrs. B. Foot, M. M. Manning, C. (Camberwell, N.)
Bacon, Miss A. Fraser, T. (Hamilton) Manning, Mrs. L (Epping)
Baird, J. Freeman, Peter (Newport) Marshall, F. (Brightside)
Balfour, A. Gaitskell, Rt. Hon. H. T. N. Mathers, Rt. Hon. G.
Barstow, P. G. Ganley, Mrs. C. S. Medland, H. M.
Barton, C. Gibbins, J. Mellish, R. J.
Battley, J. R. Gibson, C W. Middleton, Mrs. L.
Bechervaise, A. E. Gilzean, A. Mikardo, Ian
Belcher, J. W. Glanville, J. E. (Consett) Mitchison, G. R.
Berry, H. Gooch, E. G. Monslow, W.
Beswick, F. Greenwood, A. W. J. (Heywood) Moody, A. S.
Bing, G. H. C. Grey, C. F. Morgan, Dr. H. B.
Binns, J Grierson, E. Morley, R.
Blackburn, A. R. Griffiths, D. (Rother Valley) Morris, Lt.-Col. H. (Sheffield, C.)
Blenkinsop, A Griffiths, Rt. Hon. J. (Llanelly) Morris, P. (Swansea, W.)
Blyton, W. R. Griffiths, W. D. (Moss Side) Mort, D. L.
Boardman, H. Gunter, R. J. Moyle, A.
Bottomley, A. G. Guy, W. H. Murray, J. D.
Bowden, Flg.-Offr. H. W. Hairs, John E. (Wycombe) Nally, W.
Bowles, F. G. (Nuneaton) Hale, Leslie Neal, H. (Claycross)
Braddock, Mrs. E. M. (L'pl, Exch'ge) Hall, Rt. Hon. Glenvil Nichol, Mrs. M. E. (Bradford, N.)
Braddock, T. (Mitcham) Hamilton, Lieut.-Col. R Noel-Baker, Capt. F. E. (Brentford)
Bramall, E. A. Hardman, D R. O'Brien, T.
Brook, D. (Halifax) Hardy, E. A. Oldfield, W. H.
Brown, George (Belper) Hastings, Dr. Somerville Oliver, G. H.
Brown, T. J. (Ince) Haworth, J. Orbach, M.
Bruce, Maj. D. W. T. Henderson, Rt. Hn. A. (Kingswinford) Paget, R. T.
Buchanan, Rt. Hon. G. Henderson, Joseph (Ardwick) Paling, Rt. Hon. Wilfred (Wentworth)
Burden, T. W. Herbison, Miss M. Paling, Will T. (Dewsbury)
Burke, W A. Hewitson, Capt. M. Palmer, A. M. F.
Butler, H. W. (Hackney, S.) Hobson, C. R. Pargiter, G. A.
Callaghan, James Holman, P. Parkin, B. T.
Carmichael, James Holmes, H. E. (Hemsworth) Paton, Mrs. F. (Rushcliffe)
Champion, A. J. House, G. Paton, J. (Norwick)
Chetwynd, Q. R. Hoy, J. Pearson, A.
Cobb, F. A. Hubbard, T. Platts-Mills, J. F. F.
Cocks, F. S. Hudson, J. H. (Ealing, W.) Popplewell, E.
Coldrick, W Hughes, Emrys (S. Ayr) Porter, E. (Warrington)
Collindridge, F Hughes, Hector (Aberdeen, N.) Portor, G. (Leeds)
Collins, V J. Hughes, H. D. (W'lverh'pton, W.) Price, M. Philips
Colman, Miss G. M. Hutchinson, H. L. (Rusholme) Proctor, W T
Comyns, Dr. L. Hynd, H. (Hackney, C.) Pursey, Cmdr H
Cook, T. F. Hynd, J. B. (Attercliffe) Randall, H. E.
Cooper, Wing-Comdr. G. Irvine, A. J. (Liverpool) Ranger, J
Corbet, Mrs. F. K. (Camb'well, N.W.) Irving, W. J. (Tottenham, N.) Rankin, J
Corlett, Dr. J. Isaacs, Rt. Hon. G. A. Reid, T. (Swindon)
Cove, W. G. Janner, B Ridealgh, Mrs. M
Crawley, A. Jeger, G. (Winchester) Robens, A.
Crossman, R. H. S. Jeger, Dr. S. W. (St. Pancras, S.E.) Roberts, Goronwy (Caernarvonshire)
Daggar, G. Jones, D. T. (Hartlepools) Robertson, J J (Berwick)
Daines, P Jones, Elwyn (Plaistow) Rogers, G. H. R.
Dalton, Rt. Hon. H. Jones, P. Asterley (Hitchin) Ross, William (Kilmarnock)
Davies, Edward (Burslem) Keenan, W. Royle, C.
Davies, Ernest (Enfield) Kenyon, C. Sargood, R.
Davies, Harold (Lock) King, E. M. Scott-Elliot, W.
Kinley, J. Segal, Dr. S.
Davies, Haydn (St. Paneras, S.W.) Lang, G. Sharp, Granville
Davies, S O. (Merthyr) Lee, F. (Hulme) Shawcross, C. N. (Widnes)
Deer, G. Lee, Miss J. (Cannock) Shawcross, Rt. Hn. Sir H. (St. Helens)
de Freitas, Geoffrey Lever, N. H. Silkin, Rt. Hon L.
Delargy, H. J. Levy, B. W. Silverman, J. (Erdington)
Diamond, J. Lewis, A. W. J. (Upton) Silverman, S. S. (Nelson)
Dobbie, W. Lewis, J. (Bolton) Skeffington, A. M.
Dodds, N. N. Lewis, T. (Southampton) Skinnard, F. W.
Driberg, T. E. N. Lindgren, G. S. Smith, C. (Colchester)
Dugdale, J (W Bromwich) Lipson, D. L. Smith, H. N. (Nottingham, S.)
Dumpleton, C. W. Lipton, Lt.-Col. M. Smith, S. H. (Hull, S.W.)
Durbin, E. F. M. Longden, F. Snow, J. W.
Dye, S. Lyne, A. W. Solley, L. J.
Ede, Rt. Hon. J. C. McAdam, W. Sorensen, R. W.
Edwards, John (Blackburn) McEntee, V La T Soskice, Sir Frank
Edwards, N. (Caerphilly) McGhee, H. G. Sparks, J. A.
Edwards, W. J. (Whitechapel) McGovern, J. Stamford, W.
Evans, A. (Islington, W.) Mack, J. D. Steele, T.
Stewart, Michael (Fulham, E.) Tolley, L. Whiteley, Rt. Hon. W.
Stokes, R. R. Tomlinson, Rt. Hon. G. Wigg, George
Stross, Dr. B Turner-Samuels, M. Wilkins, W. A.
Stubbs, A E Ungoed-Thomas, L. Wilkins, F. T. (Sunderland)
Summerskill, Dr Edith Vernon, Maj W F Willey, O. G. (Cleveland)
Swingler, S Viant, S. P. Williams, D. J. (Neath)
Sylvester, G O Wadsworth, G. Williams, J. L. (Kelvingrove)
Symonds, A. L Walkden, E. Williams, W. R (Heston)
Taylor, H B (Mansfield) Walker, G H. Williamson, T
Taylor, R J (Morpeth) Wallace, G D. (Chislehurst) Willis, E.
Taylor, Dr S (Barnet) Warbey, W N. Wills, Mrs E A.
Thomas, D. E. (Aberdare) Watkins, T E Wise, Major F. J.
Thomas, I. O. (Wrekin) Watson, W M Woodburn, A
Thomas, John R. (Dover) Webb, M. (Bradford, C.) Yates, V F
Thomas, George (Cardiff) Wells, P. L. (Faversham) Younger Hon. Kenneth
Thorneycroft, Harry (Clayton) Wells, W. T. (Walsall) Zilliacus, K
Thurtle, Ernest West, D. G.
Tiffany, S. Wheatley, J. T. (Edinburgh, E.) TELLERS FOR THE AYES:
Timmons, J. White, C. F. (Derbyshire, W.) Mr. Simmons and
T[...]gton, M. F. White, H. (Derbyshire, N.E.) Mr. Richard Adams.
Agnew, Cmdr. P. G. Headlam, Lieut.-Col. Rt Hon. Sir C. Poole, O. B. S. (Oswestry)
Amory, D. Heathcoat Henderson, John (Cathcary) Prescott, Stanley
Assheton, Rt Hon. R. Hope, Lord J. Price-White, Lt.-Col. D
Baldwin, A. E. Hurd, A Prior-Palmer, Brig. O
Beamish, Maj. T. V. H. Hutchison, Lt.-Cm. Clark (E'b'rgh W.) Raikes, H. V.
Bennett, Sir P. Jarvis, Sir J. Ramsay, Maj. S
Birch, Nigel Jeffreys, General Sir G. Reed, Sir S. (Aylesbury)
Boles, Lt.-Col. D. C. (Wells) Jennings, R. Reid, Rt. Hon. J. S. C. (Hillhead)
Boothby, R. Joynson-Hicks, Hon. L W. Renton, D
Bossom, A. C. Keeling, E H. Roberts, Peter (Ecclesall)
Bower, N. Kingsmill, Lt.-Col. W. H Robertson, Sir D (Streatham)
Boyd-Carpenter, J. A. Lancaster, Col C. G. Ropner, Col L
Bracken, Rt. Hon. Brendan Langford-Holt, J. Ross, Sir R. D. (Londonderry)
Bromley-Davenport, Lt.-Col. W. Law, Rt. Hon. R K. Savory, Prof. D. L.
Buchan-Hepburn, P. G. T. Legge-Bourke, Maj. E. A. H. Scott, Lord W.
Carson, E Lennox-Boyd, A. T. Shephard, S. (Newark)
Challen, C. Lindsay, M. (Solihull) Shepherd, W. S. (Bucklow)
Clarke, Col. R. S Lloyd, Mai. Guy (Renfrew, E.) Snadden, W. M.
Clifton-Brown, Lt.-Col. G. Low, A. R. W Spence, H. R.
Cole, T L Lucas, Major Sir J Stoddart-Scott, Col. M.
Cooper-Key, E. M. Lucas-Tooth, Sir H Strauss, H. G. (English Universities)
Corbett, Lieut.-Col U (Ludlow) MacAndrew, Col. Sir C. Studholme, H. G.
Crockshank, Capt. Rt Hon H. F. C. McCallum, Maj D. Taylor, C S (Eastbourne)
Crosthwaite-Eyre, Col O. E. McFarlane C S Taylor, Vice-Adm E A (P'dd't'n, S.)
Crowder, Capt John E. Maclay, Hon. J. S. Teeling, William
Cuthbert, W N Maclean, F. H. R. Thomas, J P L (Hereford)
Digby, S. W. MacLeod, J Thorneycroft, G. E. P. (Monmouth)
Dodds-Parker, A D Macpherson, N. (Dumfries) Thornton-Kemsley, C. N.
Dower, Lt.-Col A. V. G. (Penrith) Maitland, Comdr. J. W. Thorp, Lt.-Col. R. A. F.
Dower, E. L. G (Caithness) Manningham-Buller, R. E. Touche, G C
Drayson, G B Marlowe, A. A. H. Turton, R. H.
Drewe, C Marsden, Capt. A. Vane, W. M. F.
Dugdale, Maj. Sir T. (Richmond) Marshall, D. (Bodmin) Wakefield, Sir W. W.
Duthie, W. S. Marshall, S. H. (Sutton) Walker-Smith, D.
Elliot, Lieut.-Col., Rt. Hon. W. Maude, J C Ward, Hon. G. R.
Fletcher, W. (Bury) Mellor, Sir J Watt, Sir G. S. Harvie
Fox, Sir G. Molson, A. H. E. Wheatley, Col M J (Dorset. E.)
Fraser, H. C P. (Stone) Morrison, Maj. J. G. (Salisbury) White, Sir D. (Fareham)
Fyfe, Rt. Hon. Sir D. P. M. Mott-Radclyffe, Maj. C. E. White, J B (Canterbury)
Gage, C Neven-Spence, Sir B. Williams, C (Torquay)
Galbraith, Cmdr. T. D. Nicholson, G. Williams, Gerald (Tonbridge)
Gammans, L. D. Nield, B. (Chester) Willoughby de Eresby, Lord
Glyn, Sir R. Nutting, Anthony York, C
Grant, Lady Odey, G. W. Young, Sir A. S. L. (Partick)
Grimston, R. V. Orr-Ewing, I. L. TELLERS FOR THE NOES:
Hannon, Sir P. (Moseley) Osborne, C. Major Conant and
Harvey, Air-Comdre A V Peto, Brig C. H. M. Brigadier Mackeson.
Haughton, S. G. Pitman, I. J.

Main Question put, and agreed to.

Resolution to be reported tomorrow.

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