HC Deb 27 April 1949 vol 464 cc187-237
It shall be the general duty of the Corporation so to exercise their powers as—
(a) to promote the efficient and economical supply of the products of the activities specified in the first column of the Second Schedule to this Act, and to secure that those products are available in such quantities, and are of such types, qualities and sizes, and are available at such prices, as may seem to the Corporation best calculated to satisfy the reasonable demands of the persons who use those products for manufacturing purposes and to further the public interest in all respects: and
(b) to avoid showing undue preference to, and exercising unfair discrimination against, any such persons or any class thereof in the supply and price of those products, but without prejudice to such variations in the terms and conditions on which those products are supplied as may arise from ordinary commercial considerations or from the public interest. [Mr. G. R. Strauss.]

Brought up, and read the First time.

3.7 p.m.

The Minister of Supply (Mr. G. R. Strauss)

I beg to move, "That the Clause be read a Second time."

This first new Clause is in substitution for Clause 3 of the Bill as it now stands. As hon. and right hon. Members who were on the Committee will appreciate, the Government have throughout been most anxious to meet as far as possible all the points which were put forward by the Opposition, so long as the general framework of the Bill was preserved. We were also very anxious to meet the arguments put forward by representative bodies who approached the Government about various points which were worrying them. This new Clause is an attempt to meet the criticisms and suggestions made during the Second Reading Debate about this important Clause, which lays down the general duty of the Corporation. It meets to some extent the Amendments put down on the Order Paper by the Opposition during the Committee stage. It meets, I believe fully, the fears and worries which were disturbing the main bodies of consumers of iron and steel.

The Clause as now drafted is sound, and sets out in a more precise way than did the original Clause what the general duty of the Corporation shall be. The major change is in paragraph (b), where it is specifically stated that the Corporation must avoid undue preference. During my Second Reading speech I stated that we did not anticipate—in fact we were confident—that the Corporation would not exercise undue preference between one consumer and another, and if by any chance they did so the Government have ample powers to stop them. Nevertheless, fears continued to be expressed by various people, including some of the main consuming industries that such undue preference might be shown. To make abundantly clear what Parliament intends we have inserted this provision in paragraph (b) in words which are sound and practicable and acceptable to the representatives of the main bodies of consumers. I therefore commend this new Clause to the House, and shall subsequently move the deletion of the present Clause 3.

Mr. Oliver Lyttelton (Aldershot)

Let me acknowledge straight away that we regard this new Clause as a considerable improvement on the original words used. I do not think that I need detain the House about paragraph (a). But under paragraph (b) the Minister has added words which are not, for example, in the similar Section of the Coal Industry Nationalisation Act. I refer to the words: …without prejudice to such variations in the terms and conditions on which those products are supplied as may arise from ordinary commercial considerations… So far I am with him, but then it goes on: …or from the public interest. Those words enable the Minister to do almost anything. One of the most naive contentions which the Minister has put upon these matters is that the Corporation are to be the sole judge of the public interest. As a matter of fact, legis- lation about almost anything would be very simple if one could always be sure where the public interest lay. These words: …or from the public interest would enable the Minister to ride very wide on the matter of preferences.

The Minister no doubt will correct me if I am wrong, but I think the words are there because some undue preference may be required for the export trade. In trying to cover that point, I consider that he has unnecessarily widened the Clause. We on this side of the House will not divide against the Second Reading of this Clause which we regard as an improvement on the original, but at the same time I think that the words: …or from the public interest are too wide. When we come to discuss the Amendments, if they are called, the point will arise again. Perhaps I had better confine my remarks to saying that this is an improvement and that we shall not divide the House. The points about which I have given notice will arise on the Amendments.

Mr. Selwyn Lloyd (Wirral)

I wish to ask the Minister if he will throw a little light upon the various mental processes that have been gone through before this Clause reached its present form. The right hon. Gentleman will remember that we had no opportunity in Standing Committee of discussing Clause 3 owing to the falling of the Guillotine. At a later stage, when considering a new Clause put forward by the Opposition, the Minister gave an undertaking that he would endeavour to incorporate that portion which is comprised in paragraph (b). In the notice given on 28th March of the new Clause which the right hon. Gentleman proposed to move, paragraph (a) was in the same form as it is now. But paragraph (b) which he then proposed to put before the House read: to avoid showing undue preference to, and exercising undue discrimination against, any consumer or class of consumers in the supply and price of those products. At that stage he was not including the further sentence which appears in the present new Clause, but there was this proviso: Provided that the duty of the Corporation under this section shall not be enforceable by proceedings before any court or tribunal. I have no doubt that the right hon. Gentleman considers most carefully before he puts a new Clause upon the Paper. I should like to know why upon the first consideration it appeared in the form to which I have just referred, and why he has added this extra proviso and deleted that with regard to the duty of the Corporation not being enforceable by proceedings before any court or tribunal. We are endeavouring to deal with something which I presume is the considered opinion of the Minister. I have no doubt that the form of words tabled on 28th March was the considered opinion of the Minister also. It would be interesting to know why there is such disparity between the new Clause now before us and the one suggested earlier.

3.15 p.m.

Mr. Peter Roberts (Sheffield, Ecclesall)

Could the Minister give a little more explanation about the words in the second line: to promote the efficient and economical supply of the products. These words first appeared in the Coal Industry Nationalisation Bill, and at that time a great deal of discussion took place upon what the Minister thought was meant by the term, "efficient and economical." The Secretary of State for War, who was then the Minister of Fuel and Power, said on 12th February, 1946: I am bound to say that if the Board are able and are competent, they are bound to be prudent and they are bound to safeguard the community against waste."—[OFFICIAL REPORT, Standing Committee C. 12th February, 1946; c. 994.] Since then we have had some examples of how these boards of nationalised industries consider that they are dealing with waste. I can give instances where the moisture content of coal has gone up by 4 or 5 per cent. compared with previous allocations. I do not think that that is being economical or efficient, yet that is taking place under these very same words in a previous nationalisation statute. I would also refer the Minister to the Electricity Act where the same words appear. Yet we find that the cost of electricity has gone up considerably in a great number of cases. In Sheffield it has increased by nearly 60 per cent.

Does the Minister consider that the words, "efficient and economical" cover those large increases in prices and the great deterioration in quality? If he is satisfied that that is the best practice, I certainly am not. We should tighten up this wording. Up to now, these words have not proved efficient in making the Boards carry out their duties. I am not satisfied that the explanation given by other Ministers of the meaning of the term, "efficient and economical" is satisfactory. We should not pass this Clause until we have an explanation from the Minister of what he means by the term.

Mr. Emrys Hughes (South Ayrshire)

Will the powers given to the Corporation under this new Clause supersede the powers the Minister now has of allocating steel to certain industries? I put that question because of the attitude of the Ministry towards the supply of steel for steel houses. In the Report of the Department of Health for Scotland this year we are told that the supply of steel for this purpose has completely ceased. We in Scotland have a grave grievance. We believe that the supply should be continued. In this new Clause there are the words: to further the public interest in all respects. I should like to know whether the Corporation will have power to secure a more reasonable allocation of steel for the places where it is most needed.

Mr. Nigel Birch (Flint)

The Minister made a very bland speech—one which we always get on nationalisation Measures—in which he said that he was confident that he had settled the worries of the consumers. If he is really confident of that, he is confident of something which is most remarkable. If you will look at these words, Mr. Speaker, you will see why people are so extremely worried. This Clause lays a duty on the Corporation to supply steel at such prices and qualities as may seem to the Corporation best calculated to satisfy the reasonable demands of the persons who use those products… We have examples of what is happening under nationalisation. For instance, there is the example given by the Chairman of the Cunard Company last week in which he pointed out that bunker coal in New York is 61s. 3d. a ton and in London it is 98s. a ton. I should like to know from the Minister whether the Corporation would think that they had carried out this Clause if there was in their prices such a disparity as is now evident in the prices of coal produced in this country compared with world prices. If he is satisfied about that, all I can say is that no consumers of steel will be satisfied. If he thinks that history is going to repeat itself, we may as well pack up world trade altogether.

Mr. G. R. Strauss

May 1, by leave of the House, answer one or two of the points which have been raised? The hon. Member for Ecclesall (Mr. P. Roberts) dislikes the words "efficient and economical supply," and suggests that they should be tightened up. I do not think he can have read very carefully or followed fully the proceedings during the Committee Stage, because those words were not in the original Clause put down by the Government, but they were in the Amendment put down by the Opposition, and it was in order to meet the views of the Opposition on this point that I incorporated the words of their Amendment into this new Clause. It is strange for them now to complain of words which I have only incorporated because the Opposition wanted me to do so.

Mr. P. Roberts

I was not complaining of the words. I wanted to know what interpretation the Minister put upon them. These words have been in other nationalisation statutes of which we know, and what I wanted to know was what the Minister understands by these words now that he has incorporated them in is own new Clause.

Mr. Strauss

I think that is a point which should be further pursued on Third Reading, and perhaps hon. Members of the Opposition, who suggested these words, will say why they wanted them incorporated in the Bill. That duty rests firmly upon them.

I can assure the hon. Member for South Ayrshire (Mr. Emrys Hughes) that this Clause will in no way interfere with any steel allocation scheme operated by the Government. The allocations under the present scheme are the Government's responsibility, and that responsibility will not pass from the Government. The third point raised was on the question of a possible disparity of prices which it is suggested might arise, and which worried the hon. Member for Flint (Mr. Birch). One cannot say what disparity of prices may or may not arise, but the duty is put upon the Corporation to see that prices are as reasonable and fair as can be. The hon. Member will realise that if the prices did appear to be out of line with world prices, there is ample machinery through the Consumers' Council and through Parliament, because the Minister has a responsibility here to see that those prices are not allowed to go too high. I do not think that we need worry about that matter under this new Clause.

Mr. Jennings (Sheffield, Hallam)

The Minister has still left the interpretation of these words very vague. I think the right hon. Gentleman ought to pay some attention to the fact that, in regard to other nationalised industries and particularly coal, the quality has got worse and the price has gone up. Is that his interpretation of the economical running of the industry, because, if so, it is not mine? If we take the case of electricity prices, the same thing exists, and I do not think there is an hon. Member in the House who has not had complaints of the fact that electricity charges have risen very steeply. Only this morning I received a letter from the chairman of an Area Gas Board telling me that he is willing to answer any questions I should like to put, and informing me that it may be that, in some cases and some parts of the country, gas charges are likely to go up. If this is what the Minister understands by nationalisation, let him say so openly and tell the House that prices are likely to go up.

Mr. Michison (Kettering)

Will the hon. Gentleman allow me? I received a similar letter, and I wonder if his said, as did mine, that that rise in prices would have happened nationalisation or no nationalisation?

Mr. Jennings

I am used to that phrase, because when the product of any nationalised industry goes up in price, it is always stated that it would have gone up under private enterprise.

Mr. Chetwynd (Stockton-on-Tees)

Is it not a fact that the Liberal National Party have said that the price had gone up even before the product was nationalised?

Mr. Jennings

The hon. Member must not blame me for what the Liberal National Party says. I am speaking for myself alone, and I say without hesitation that, if the nationalisation of industry which we have experienced up to now is any criterion of what is going to happen to iron and steel, the consumers of iron and steel can now look forward to increased prices, poorer quality and less quantity, and if that is what is understood by the economical running of the industry, then it is up to the Minister to say so. Since the Minister has accepted the words suggested by the Opposition, he must have some idea of his own interpretation of them, and I want him to tell the House what he understands by them. It may be a very different thing from the interpretation that we put upon those words. If the industry is not economically run in the true sense and in the best interests of trade and industry, I say that the nationalised industry is already doomed to destruction.

Mr. Charles Williams (Torquay)

I was delighted to hear that the Minister had accepted the inclusion of the words "efficient and economical supply," and I am glad that he has had the courage to allow some of the ideas of the Opposition to percolate into this Bill. I was not in the least surprised that he was quite unable to explain them to the House at this point, which would seem to be the only point at which he could do it properly, or that he could not say what is the meaning of those words. If he had been able to do so, he would have been much better briefed than usual, because every one of us, and particularly hon. Members on the other side, know that, in the running of the nationalised industries so far, the last thing which the Ministers have ever done has been to run them either economically or efficiently. I thank the Minister for the bland way in which he explained his ignorance and lack of knowledge of the meaning of these words. This is merely another illustration of the way in which this Government are plunging into these difficult matters and trying to run one of the most efficient and economical industries of this country into complete inefficiency and complete incompetence.

Mr. William Shepherd (Bucklow)

I was surprised to hear the Minister say that the new Clause would dispose of the fears of consumers. I do not know any consumers who are satisfied with this Clause which allows such power in the hands of the Steel Corporation, and I think we should try to seek a more desirable form of words. What are these words in paragraph (a) but pious hopes? What sanction is there behind any of these aspirations? What is going to happen after a year or so? This Board will go exactly the same way as any other nationalised industry under a State monopoly. It does not matter a tinker's cuss what motto is stuck on the wall of the State monopoly; it is going to go exactly the same way, whatever the motto. While we seek to do what we can to tie the Corporation up, we fully realise that there are inherent evils in State monopolies, and we should be very mindful of such aspirations as are contained in the wording of this new Clause.

Mr. Pickthorn (Cambridge University)

The right hon. Gentleman has suggested that the sanction behind this new Clause was the sanction of Parliamentary control through the Minister. I should like to ask him a simple though I think not very easy question. Is it his expectation that questions put on this point would be in order in the normal and ordinary way, or would such questions be written off as being attempts to inquire into day-to-day administration, and therefore a matter for the Corporation and not the Minister? It was the Minister who advanced the argument in favour of the new Clause that there would be the sanction of Parliamentary inquiry, and I think he owes it to the House to tell us whether he expects that such questions would ordinarily be in order.

3.30 p.m.

Mr. Scollan (Renfrew, Western)

should like to put one or two points to the Opposition. Is it not the case that in pre-war days the big steel firms of this country showed undue discrimination in regard to prices and supplies? That is one of the points which has been dealt with in paragraph (b). With regard to the words in paragraph (a), the Opposition have accused the Minister of displaying his ignorance and lack of knowledge of the subject; but when hon. Members opposite continue to say that they do not understand what is meant by the words: "to promote the efficient and economical supply of the products… they display their ignorance and lack of knowledge of the subject. Is it not obvious that so long as this industry was left in the hands of private people and this House or any public body had no control over it, or any say in it—

Mr. Lyttelton

I wish to intervene only for a moment to correct the hon. Member on this point. Since the Import Duties Advisory Committee, which was set up in 1934, regulated all the prices to the steel industry and the Ministry of Supply, through the Iron and Steel Board, have done it since that Committee ceased to exist, I think the hon. Member is stretching his imagination rather more than usual when he says that there is no public control over the privately-owned steel industry.

Mr. Scollan

It is perfectly true that the consumers of the products of this industry did have to come to this House and lobby hon. Members in order to get a particular Measure passed by Parliament to give them some protection against the people who are now squealing about nationalisation. That is perfectly true; I admit that, and I am not stretching my imagination. The reason they came and asked successive Tory and Liberal Governments for that protection was because of the rapacity and the unconcealed greed of the steelmakers of Great Britain. In the first place, therefore, we must not forget that this was only a section of an international cartel which agreed on prices and on the markets to be divided among them. They agreed that if people wanted certain commodities produced by the steel industry they would have to go to particular makers to get them. Consequently, the consumers had to compel Tory and Liberal Governments to give them some protection against the steel manufacturers of their own country. Now the Opposition say that they do not understand the meaning of the words: to promote the efficient and economical supply of the products… As a matter of fact, if the steelmakers of Great Britain had had the welfare of the nation at heart and had entered into competition with other countries, we should have had our 14 million tons of steel in 1935 instead of in 1949. That could have been done quite easily, but they did not do it. Why? The answer is that the only things about which they were concerned were the international cartels, their monopoly, and their own greed. Therefore, to say now that they do not understand what this Clause means shows that they are either too stupid or too naïve.

Mr. Mikardo (Reading)

In my short membership of this House, I have many times been grateful for the fact that I am not a Minister, but never more markedly than this afternoon because, in considering the comparatively simple new Clause in the course of this very short Debate, my right hon. Friend has been asked by the Opposition to do four quite different things. Some hon. Members opposite have merely asked for a definition of certain terms used in the Clause. The hon. Member for Ecclesall (Mr. P. Roberts), unsatisfied with the definition, wants these terms to be got rid of and replaced by something else. The hon. Member for Bucklow (Mr. Shepherd) wants no more than to tie up the Corporation, to use his own words, which is apparently his method of setting the people free. Finally, the hon. Gentleman the senior Burgess for Cambridge University (Mr. Pickthorn) asked the Minister to give a Ruling on a point of Order which, I understand, Mr. Speaker, only you would be competent to rule upon. I repeat that I am more than ever grateful for the fact that I am not the Minister in charge of this Bill, and that I have not to deal with such a disorganised and disparate Opposition.

Question put, and agreed to.

Clause read a Second time.

Mr. Osbert Peake (Leeds, North)

beg to move, as an Amendment to the proposed Clause, in line 1, after "powers," to insert: and of each subsidiary of the Corporation so to act. After that little preliminary canter, perhaps we may now get back to an endeavour to improve this very indifferent Bill. The new Clause proposed by the Minister purports to do two things; it purports, in paragraph (a), to replace Clause 3 as it at present stands in the Bill, and in paragraph (b) to deal with the suggestion made by the Opposition in the Committee stage regarding undue preference. But the opening words of the Clause are: It shall be the general duty of the Corporation so to exercise their powers as"— to produce these two objects; first, to promote the efficient and economical supply of the products, etc., and, secondly, to avoid showing undue preference to, and exercising unfair discrimination against… In order to make this Clause effective, we propose to insert after the word "powers" in the first line, the words: and of each subsidiary of the Corporation so to act. The opening words would then read: It shall be the general duty of the Corporation so to exercise their powers and of each subsidiary of the Corporation"— that is, of course, the 106 companies whose names are set out in the Third Schedule to the Bill— so to act as to carry out the objects described in the Clause. Hon. Members will, of course, want to know what are the powers of the Corporation which it is the general duty of the Corporation so to exercise as to produce these results. But hon. Members who have not been with us throughout the Committee stage might, in their simplicity, imagine that the powers of the Corporation were those set out in Clause 2 of the Bill, which bears the title "Powers of the Corporation." However, they would he mistaken, because the Minister has now decided virtually to scrap Clause 2 of the Bill as well as Clause 3, and, in order to find out what are now to be the powers of the Corporation, hon. Members will have to turn to pages 1668 and 1669 of the Amendment Paper and look at the marshalled list of Amendments set out thereon to find what are the words which the Minister now proposes to introduce in place of the two first subsections of Clause 2 as printed for the Report stage.

The Minister's new Clause makes a complete revolution in the proposed powers of the Corporation. To put the matter in a single sentence, it now appears that the main, if not the only, power of the Corporation is to act as a holding company. During the Committee stage, we had a great deal of discussion upon the question whether the Corporation were themselves to become producers of iron and steel, and so forth, or whether they were merely to act in the capacity of an investment trust company. It now appears from a study of the proposed new Clause on page 1668, and a comparison of that Clause with Clause 2 as it at present stands in the Bill, that the Minister has now finally come round to the view that the main, and probably only, object of the Corporation should be to act as an investment trust company, to hold the shares of the 106 companies whose names are set out in the Third Schedule, to exercise pressure upon those companies only by virtue of being the sole shareholder in them, and to leave those companies to carry on their operations in the normal way, subject only to any guidance they may obtain on questions of policy from the sole shareholder, which will be the Iron and Steel Corporation. In order to carry hon. Members with me and to show the immense change made in the powers of the Corporation by the Minister's new proposal, I would ask them, first, to look at Clause 2 as it now stands and to read the opening words, which are: …the Corporation shall have power to carry on any of the activities specified in the first column of the Second Schedule to this Act"— and those, broadly speaking, are the production of iron ore and steel— and any other activities which any publicly-owned company…is for the time being authorised by its memorandum of association…to carry on: All lawyers know that in drafting a memorandum of association one makes it cover every conceivable possibility and that a modern memorandum of association contains powers to do absolutely anything. The original proposal in the Bill was that the Corporation should enjoy the same powers as those which each of its 106 subsidiaries enjoyed by virtue of their memoranda of association.

If hon. Members will now look at the proposals of the Minister, which are to be substituted for the first subsection of Clause 2, they will see that they are as follow: The Corporation shall have power—

  1. (a) to hold such interests in companies as vest in them under Part II of this Act…
  2. (b) to form, or take part in forming, any company for the sole or main purpose of the carrying on by the company of any activities which any publicly-owned company"
can carry on— (c) to exercise all rights conferred by the holding of interests in companies"— —that is to say, to exercise what is the ordinary power of the shareholder.

Under subsection (2) of the Minister's proposed new Clause: The Corporation shall have power— (a) to conduct research… and to provide for the publicly-owned companies…services which…can conveniently be provided as common services… The second power of the Corporation, as now proposed, is to conduct research upon a joint basis and to furnish common services if it is Convenient so to do, and it is only under subsection (3) of the proposed new Clause that The Corporation shall have power…to carry on any other activities which…any publicly-owned company is authorised…to carry on. Let hon. Members note that the Corporation can go outside the powers laid down for holding shares and for conducting research and providing common services only with the consent in writing of the Minister. Only as an exceptional matter and with express Ministerial consent can the Corporation enter into any direct trading operation of any sort or kind. It is for that reason that we seek, in order to make the new Clause now before the House effective, to make it binding not only upon the Corporation but upon the 106 companies whose names appear in the Third Schedule and the many others, hundreds I think, of subsidiaries of this Third Schedule number, because it is obvious, for example, that it is no good laying down a general duty upon the Corporation to exercise its powers so as to avoid "undue preference to" any class of consumer if all the Corporation is to do, in effect, is to be an investment trust company and to hold shares in these 106 companies. Clearly, the obligation as regards "showing undue preference" or "exercising unfair discrimination" should and must be laid upon the 106 companies which will actually be conducting the trade and supplying the products.

Mr. Scollan

I want to be clear on this point. We quite understand the change to be made by the Corporation becoming a holding investment company, but I cannot understand how the Amendment would affect subsidiary companies. We cannot make them holding companies within themselves.

3.45 p.m.

Mr. Peake

I am sorry. The hon. Member has not quite followed the argument. Under the Bill we have the Iron and Steel Corporation. The 106 companies whose names appear in the Third Schedule—diminished, I think, from 106 by about half a dozen exclusions made by the Minister in recent months—will become 100 per cent. subsidiaries of the Iron and Steel Corporation, and our Amendment now before the House seeks to impose upon them these obligations in regard to promoting the efficient and economical supply of the products"— and securing— that those products are available in such quantities, and are of such types, qualities and sizes…as may seem to the Corporation best calculated…to further the public interest.

Mr. John Lewis (Bolton)

I take it that the right hon. Member for North Leeds (Mr. Peake) is not using the word "subsidiary" as it is used in industrial circles, because a subsidiary of a company is a company in which the holding or parent company has a majority of the shareholding, whereas in this case the same set-up does not exist.

Mr. Peake

I am much obliged to the hon. Member. In point of fact, the only companies whose shares will be held by the Iron and Steel Corporation are the companies whose names appear in the Third Schedule to the Bill and in point of fact, also, the Iron and Steel Corporation will hold 100 per cent. of all the shares of those companies. It is quite clear, therefore, that the word "subsidiary" in our Amendment will apply to the companies whose names appear in the Third Schedule to the Bill.

I submit with confidence to the reason of the House that it is not much use putting obligations upon the Corporation to promote the efficient and economical supply of those products and to put obligations upon the Corporation to avoid…undue preference and…unfair discrimination… when the Corporation itself is now to be merely an investment trust company holding the shares for these various 100 or more producing companies. I submit with confidence that these obligations which the Minister clearly considers desirable and necessary—since he has promoted the Clause—should be laid upon those who will be in a position to carry them out and not merely upon the Iron and Steel Corporation, whose only effective power will have to be exercised by virtue of its holding the shares and holding all the voting power at the annual general meetings of these 106 companies.

Mr. G. R. Strauss

I suggest that this Amendment is quite illogical. We are, under this Bill, setting up a new body, the Corporation, and in doing so Parliament must, of course, say what its powers and duties are to be. We are not interfering with the companies which are to come under public ownership; they remain ordinary public companies with normal obligations and the normal duties laid upon them by their articles and memoranda of association. There is no direct relationship between Parliament and these publicly-owned companies—none whatsoever. If we placed duties upon these companies, therefore, we should have no direct method of seeing that those duties were carried out. What we are doing is setting up a new body and imposing certain duties upon this new body.

By far the most important of the duties which we impose upon the Corporation are those derived from the power which it will possess, as sole shareholder in these companies, to order, broadly speaking, their affairs—to see that there is reorganisation and rationalisation, and to carry out those economy measures we have talked about on previous occasions. In that responsibility the Corporation will have full powers over these companies—not in matters of detail, of course, in which it will not want to interfere—but in all matters of general importance. We can, surely, logically give these duties only to this new body which we are setting up under this Bill and not to the various subsidiary and sub-subsidiary bodies with their continuing directorships, whose shares the Corporation are to hold.

We must tell the big holding body what Parliament expects it to do, and, therefore, we give it powers under Clause 2 to do certain things, and under the new Clause general duties and instructions which we want it to carry out. It will be the Corporation's responsibility; and it, and not the publicly-owned companies, will be responsible to the Minister and Parliament. This Corporation will be responsible for carrying out the duties which are imposed upon it, and it will have to see that the various companies whose shares it holds carry out the general duties which Parliament imposes—though these will be implemented, of course, through the companies whose shares it holds. Therefore, it is wholly right to put the responsibility on the Corporation, and it would be wholly wrong to put the responsibility on the many subsidiaries.

I am not quite sure what the word "subsidiary" covers here. I think it would cover much more than the 100 or so companies in the Third Schedule. Even if it were only these companies, it would be quite wrong to put the duty on their boards of directors, with some of them, it may be, interpreting the directions laid down by Parliament in different ways, with, perhaps, considerable dislocation and difficulty as the result. There might be chaos. That is not the way to proceed here. The duty must be put on the body we are setting up to run the steel industry in the public interest. We are putting that duty on the Corporation. I think the wording, "general duty," is wise. As I say, it has been agreed by the representatives of the consumers.

It would be wholly wrong, I suggest therefore, to try to put this duty doubly on the Corporation and on those various different companies, with whom we shall have no relationship whatsoever, over whom we shall have no direct control, and over whose behaviour neither the Minister nor Parliament will be able to exercise supervision, except through the Corporation. The Corporation must have the power, and alone must have the duty, of carrying out Parliament's intentions. I suggest, therefore, that we should reject this Amendment, and that, indeed: it is wholly illogical and unnecessary.

Mr. Lyttelton

I have seldom heard a more extraordinary amalgam of arguments than this to which we have just listened. I pick out the first—"Quite impossible for the boards of 100 companies to interpret the obligations laid upon them by this Amendment." Of course, it is perfectly easy, in the Minister's opinion, for the boards of 100 companies to understand those general duties if they are told them by the Corporation. That argument does not hold water for a minute.

Mr. Strauss

I am sorry if I did not make the point quite clear. The Corporation will be able by direction and discussion to elaborate and set out in detail what it expects these various companies to do. It will be in relationship with these publicly owned companies. Parliament will not. The Minister will not.

Mr. Lyttelton

That is the second tier to the argument, to which I am now coming. The first part of the argument, to which I have just referred, has no validity at all. Of course, if a general duty is laid down by Parliament for the 100 companies, it will require, no doubt, some interpretation, and the companies may require some help from the Corporation; but to argue that because the duty is laid upon the actually operating companies that smelt iron ore and produce steel to carry out these provisions with no discrimination, they will not understand the duty unless it is laid upon them by the Corporation—to argue that they will have no understanding of a duty unless it is a general duty laid upon them by the Corporation—is to ask us to accept an argument of so tenuous a nature that I think that it is hardly worth discussion. I concede the Minister this, that it is quite clear that the 106 companies, in this relationship to one another which the Bill will cause, will have to have help from the Corporation, in the matter of exercising this duty. So much I give to him, but his main argument, to my mind, entirely falls to the ground.

The next contention that the Minister made was one of the most extraordinary I think I have heard—that Parliament has no relationship with the companies.

Mr. Strauss

No direct relationship.

Mr. Lyttelton

No direct relationship. Very good. There might well be solace for us on this side of the House if we had the least idea of what Parliamentary control is to be exercised over the Corporation through the Minister. We met on all sides of the Committee acceptance of the fact that, whatever one may think about it, it is quite clear that the relations of this House of Commons with these nationalised corporations is still—shall I say as politely as possible for the benefit of the hon. Member for Western Renfrew (Mr. Scollan)?—at least in a high state of fluidity. Nobody knows how far it will be possible to say to the Minister that on 15th July the prices of angles or of fluxes are too high. Nobody knows. I personally am optimistic enough—or foolish enough, if hon. Members prefer the term—to believe that one day we shall have to have that duty, but it certainly has not been worked out yet.

What the Minister says is, "We shall see that one day Parliament will exercise sor[...]e control through me of this Corporation, and that some day that Corporation, having been supervised in an uncertain manner by the House of Commons, will work in another way, which I do not propose to specify because the House of Commons is not concerned with its investments; and the Corporation will then be able to secure that the general duty that the Clause tries to lay down is in fact carried out." But everybody knows that this kind of cantilever system of responsibility will certainly not work, and the only control which Parliament, under the Minister's proposal, will one day get over these matters will be that of looking into all the various things that will have happened—perhaps, as much as six months after they have occurred.

We are to be put into that position of locking a very uncertain stable door long after the horse has gone. I really honestly think the Minister has made a great mistake in not accepting this Amendment. Agreed, that the exercise of these non-discriminatory powers is a matter of some delicacy when there are 106 companies concerned. However, why not lay upon them the duty directly? Thus we should get nearer to the centre of events than we are allowed to under the Minister's proposals.

Mr. Scollan

Before the right hon. Gentleman sits down, may I ask him a question? He wants to amend the new Clause by bringing in "each subsidiary of the Corporation." Would he not extend his proposal by including in the Amendment, after the word "Corporation," the words "and all the managements and employees thereof," and so include all, right down to the fellows chucking the coal into the furnace or chucking the steel into the furnace? Obviously, the thing is ridiculous.

Mr. J. Lewis

I always listen very carefully to the right hon. Member for Aldershot (Mr. Lyttelton) because, although I disagree with his political views, I think it is generally accepted on both sides of the House that he knows something about industrial organisation. What I think is most annoying about his remarks today is that they involve the conclusion that no one on this side knows anything at all about industrial organisation. Therefore, he has put forward an argument which he knows in his own sphere of operations is quite without foundation. As he said, when asking my right hon. Friend to do certain things, private monopolists, such as Imperial Chemical Industries and Unilever, have very large shareholdings dispersed throughout the country. These private monopolies from time to time have purchased interests in other companies. They have literally hundreds of subsidiaries spread throughout the country.

4.0 p.m.

The general policy of these subsidiaries is laid down by the parent company—by Imperial Chemical Industries—but no one is going to suggest that shareholders in I.C.I. have any direct relationship whatsoever with the shareholders of the subsidiary companies. In fact, the policy of the subsidiary companies is guided directly by the parent company, and exactly the same position obtains in the circumstances which we are now discussing. The Iron and Steel Corporation is the parent company and owns the shares in the subsidiary companies, and upon the Iron and Steel Corporation must be imposed those duties which it is expected that the subsidiary companies should carry out. This does not work in any other way in private enterprise, and I do not see why the right hon. Gentleman should expect it to work in any other way in the case we are now discussing.

Viscount Hinchingbrooke (Dorset, Southern)

When listening to the Minister's remarks, I wondered whether he had recently read his own Bill. He appears to assume that Parliament has no power over publicly-owned companies, and that the only relationship that exists is between the Minister and Parliament and Parliament and the Corporation, and that, somehow, these publicly-owned companies are all in the blue. I would draw attention to the Clause in the Bill where there is directly laid down ministerial direction over public companies, and where actual legislation is foreshadowed by which Parliament directly intervenes with respect to these public companies.

Clause 18 states: Where any company specified in the Third Schedule to this Act…has without the approval of the Minister made…payments of interest or dividend on any of its securities… to various people, the Minister is given powers to intervene. Clause 21 states: Where it appears to the Minister that any company specified in the Third Schedule"— that is one of the publicly-owned companies— does not fulfil the following condition… then certain consequences result. The Third Schedule itself lays down the various public companies which are to be nationalised and incorporates them into an Act of Parliament. It puts Parliaments in direct touch with these companies and instructs them to prepare themselves for nationalisation.

Finally, in Clause 51, we have the very words which my right hon. Friend has tried to incorporate into this new Clause, and to which the Minister objects, where it says that it shall be the duty of every company specified in the Third Schedule to this Act to furnish information to Parliament. That is a duty. Why does the Minister say that Parliament has no direct relationship with these publicly-owned companies? It is here set out in his own Bill, and all that we are seeking to do is to repeat the same principle in the Amendment.

Mr. Jennings

I am very much alarmed by what the Minister has said. To turn round here, with millions of public funds to be put into the companies of a Corporation who are buying out the controlling interest in those companies, and to tell the House bluntly, as he has done this afternoon, that we have no direct touch with these publicly-owned concerns is, in my opinion, not treating public funds with the care with which they should be treated. If we have not some direct connection between Parliament and these publicly-owned companies, I think that, as Members of this House of Commons, we ought to see that we have, and that we have the same right to see what is being done with regard to the instructions to be carried out under this Bill.

It is an alarming situation when the Minister can say what the Corporation can do, but cannot express a view as to what these publicly-owned companies do, and when there is no direct touch with them so far as Parliament is concerned. I think that is a very alarming statement for a responsible Minister to make on a question in which nationalisation figures so often.

Mr. J. Lewis

Would the hon. Gentleman say what direct relationship there is between the shareholders of Unilevers and the companies which are subsidiaries of Unilevers?

Mr. Jennings

The hon. Gentleman does not seem to realise that there is a vast difference between private enterprise shareholders and public funds which are fleeced from the public to put into these nationalised industries. The shareholders in any of these large concerns are at liberty to sell their shares and to get out if they are not satisfied. I am told that I have a share in some of these nationalised industries. My share is going very cheaply to any Member of the House, if he likes to buy it.

The position is not apparently appreciated by the hon. Gentleman. Here we are dealing with public funds, and we have to get that into our heads. Private enterprise can do what it likes, provided that it complies with the Companies Acts and the shareholders are prepared to put up funds for subsidiary companies, but if the shareholders are not satisfied, they can get out and sell the shares. Here the general public are tied for life in these nationalised industries. It is an alarming statement for the Minister to say that he can control the Corporation or give these instructions to the Corporation but he has no power to give them to the publicly-owned concerns. I think that he ought to see that he does give these instructions, otherwise the proposed new Clause does not mean half what it is suggested to mean.

Mr. Mitchison

I wonder if the Opposition have read their own Amendment. I notice that one of the things that each company would have to do if the Amendment were accepted would be to secure that products were available in such quantities and of such types and at such prices as may seem to the Corporation best calculated to satisfy the reasonable demands of the consumers. I find it very difficult to see what the position is of the individual companies if each of them has to carry out this obligation, not according to their own views and not according to any abstract principle, but according to the views of the Corporation.

Moreover, when I look at the rest of the Amendment I see that if these obligations were accepted, each one of the companies would have to promote the efficient and economic supply of the products of what I might call the Second Schedule activities. In fact, when one looks at these subsidiary companies some of them are carrying on a general business and others are carrying on specialised business. What is the point, and what is the sense, in putting on an iron ore mining company, such as some of these are, the obligation with regard to supplying finished or semi-finished steel. It seems to me to make complete nonsense of the proposed Clause.

As regards the effect of it, surely it is clear to everyone that the Corporation controlling these subsidiaries has power to carry out this obligation and is, indeed, the only body that can carry it out, for it is a general obligation and not one appropriate to these particular companies. As regards the relations between this House and the subsidiaries, it is interesting to note that hon. Gentlemen opposite desire a degree of Parliamentary control and interference which surprises me. The hon. Member for Hallam (Mr. Jennings) has just asked, if I understood him rightly, that Parliament should have power to control and interfere with the ordinary day-to-day workings of these companies. If he did not say that, I really do not know what he meant.

Mr. Lyttelton

I think that the hon. and learned Gentleman is misstating our point of view. I went so far as to say that the relation with regard to day to day business, and so on, between this House and these companies remains still entirely undefined. I think that is an extremely difficult matter. I do not think for one moment that this House ought to surrender a power to look into day-to-day matters. On the other hand, too great an exercise of that power would make the workings of these Corporations impossible. These, however, are arguments against nationalisation, but not against the general proposition.

Mr. Mitchison

When making those remarks the right hon. Gentleman ought to have turned round and addressed them to the hon. Member for Hallam, who was sitting just behind him, and to whose speech I was referring. I am well aware that hon. and right hon. Gentlemen opposite have very different views of these matters, that some of them want one thing and some another but what I was saying was directed to the remarks we have just heard from the hon. Member for Hallam. I repeat, with respect to him, that I am surprised to hear from his lips this wish for Parliamentary interference, as I understood it, in the day-to-day activities of these companies.

Mr. Jennings

The hon. and learned Member is misquoting me. I never, in any part of my speech, mentioned anything about day-to-day activities. I hope he will withdraw that remark.

Mr. Mitchison

I would not for worlds misquote the hon. Gentleman. All I can say is that if what he put forward did not mean and imply what I have said, I am afraid that I, for one, entirely failed to appreciate his point, and I think that feeling may well be shared by other hon. Members.

Surely the sense of this business is that, under Clause 4 this House has, through the Minister, control over the workings of the Corporation. That must be the right way to do it. It is quite impossible for a body such as this House to supervise, by means of Parliamentary control, the operations of some 100 companies, some of them large and some of them small, carrying on every sort of activity connected with this technical and multifarious industry.

Mr. Peake

Before we proceed to a Division on this Amendment, I should like, as the mover of it, to say a few words in reply to one or two of the arguments advanced against it, particularly those advanced by the hon. and learned Member for Kettering (Mr. Mitchison). The hon. and learned Gentleman always comes to the rescue of the Government when they are trying to defend an indefensible position, and he usually succeeds in making the position even more indefensible than it was before. In this case he completely answered his own first argument by producing his second argument. His first argument, as I understood it, was that it would be very unwise to lay upon one of these 106 companies in the Third Schedule—which he, for some reason or other, imagined would produce nothing but roadstone, or something of that sort—

Mr. Scollan

Ironstone.

Mr. Peake

Well, ironstone, if the hon. Member prefers it.

Mr. Scollan

My hon. and learned Friend said ironstone.

Mr. Mitchison

Perhaps I might remind the right hon. Gentleman that iron is made out of ironstone, not roadstone.

Mr. Peake

I am obliged to the hon. and learned Member. Let us then take his example of ironstone. His argument apparently was that this Amendment would lay upon a company which produced only ironstone a duty for the efficient and economical supply of all the three or four activities listed in the first column of the Second Schedule; but he went on to point out that the quantities, types, sizes and prices have to be those as seem to the Corporation best calculated to further the public interest. Of course, if a company supply nothing but ironstone the Corporation would not be likely to deem it in the public interest that that company should supply finished steel in certain quantities, of certain sizes, and at certain prices. Therefore, the hon. and learned Gentleman's second argument completely abolished his first argument.

The hon. and learned Gentleman does not seem to have noticed that this new Clause of the Minister's was put upon the Order Paper very late in the day, after there had been another new Clause in very similar terms on the Order Paper for something like a month. That new Clause which was on the Order Paper for so long, in providing that there should be no undue preference or discrimination exercised by the Corporation, went on to say in a proviso that these provisions against undue preference should not be enforceable in any court of law. It was a most surprising new Clause to put down, because the whole object of provisions about undue preference is so that they shall be enforceable in a court of law.

4.15 p.m.

I ask the right hon. Gentleman: if somebody suffers from unfair discrimination, or if somebody is granted undue preference by one of these 106 companies in the Schedule, does he believe or think that under his new Clause as it is now drawn any effective legal action could be taken in the courts against the Corporation? I do not myself believe, where there is a complaint, as to either supply or price, and where the person who has supplied is one of the 106 companies listed in the Third Schedule, that any right of action could possibly exist against the Corporation under this new Clause, because it will not be the Corporation which has been responsible for either fixing the price or giving the supply.

I believe that this new Clause has been drawn in this way, amongst other things, so as to give a pretence of protection against undue preference or unfair discrimination, and to avoid any possibility of there being a right of recourse to the courts by any injured party against the Corporation. One of the objects of our Amendment is to lay a duty in this matter upon the companies named in the Third Schedule, so that consumers may achieve some real protection by being able to take proceedings in the courts against those companies if they suffer at the hands of those companies. As we are quite dissatisfied, not only with the arguments of the hon. and learned Member for Kettering but also with those of his right hon. Friend the Minister, we propose to divide the House on this Amendment.

Lieut.-Commander Gurney Braithwaite (Holderness)

Those of us who did not have the privilege of serving on the Standing Committee must naturally, to a certain extent, be seekers after knowledge at this stage of the proceedings, and I wish to put to the Minister a matter which is puzzling me somewhat. Just now the hon. and learned Member for Kettering (Mr. Mitchison) said—and I hope I am quoting him correctly—that Parliament, through the Minister, will be able to exercise control over the Corporation. Now, when the new Clause was under discussion a few moments ago, my hon. Friend the senior Burgess for Cambridge University (Mr. Pickthorn) asked the right hon. Gentleman—who I think overlooked the question in his reply—to what extent he envisages that control being exercised.

As is known, we are now working under a new and experimental procedure as regards the questioning of Ministers on the subject of nationalised industries, and we have to conform to the general statement made by the Leader of the House. It would help if the Minister could give some indication of the scope of Questions which he proposes to accept—because, after all, that is the procedure. We have had some difficult problems in other Acts now operative, such as those dealing with coal, electricity and transport. Let me give an example which I think is relevant. A few months ago some unfortunate passengers travelling on the British Railways suffered from a severe attack of food poisoning after taking lunch on board a restaurant car. I endeavoured to find out the details about this lamentable incident by tabling a Question, only to be informed that it was a matter of day-to-day administration. Since then, whenever I have been travelling I have felt myself in grievous peril on entering a restaurant car.

It would help a great deal in discussing this Amendment if the right hon. Gentleman would give some indication of the sort of Questions with which he expects to deal. It is no good the hon. and learned Member for Kettering comforting us with the thought that we have this Parliamentary protection—and there is no greater Parliamentary protection than Question Time—if we are to find that the large majority of Questions are to be refused on the grounds that they are matters of day-to-day administration. It is rather difficult if those of us who did not participate in the very lengthy, but not sufficiently lengthy, discussions upstairs, are not able to find out on Report stage the answer to so simple and important a matter as this. Before the steel industry companies come under public control, let Members be told what Questions can be asked in this House.

Mr. C. Williams

I always listen with very great interest to the hon. and learned Member for Kettering (Mr. Mitchison). I have heard him make several speeches during his sojourn in the House, and I always wonder which speech is the most confusing in thought to Members of the House. When he makes a speech I always look at Members on the Government Front Bench to see the expression of wonder on their faces that anyone could possibly so misread their Bills. The hon. and learned Member apparently got extremely mixed up about what was wanted in devolving the powers under this Bill. As I understand it, the Government devolve the powers entirely on the Corporation and the Corporation have the power, because they are the only shareholder, to deal with the 100 companies.

We do not wish to interfere unnecessarily with the affairs of the Corporation and with the working of these companies. The attitude the House should take in this respect is precisely the same attitude as is adopted in the case of local authorities. We give certain powers to local authorities and they all come to the central authority of Parliament. In other words, we have the powers of the purse, and, having granted them their authority, we help them in one way or another. Although we do not interfere with their ordinary administration, there are certain matters which must occasionally come before the House of Commons. That is the correct procedure to adopt in this case.

I hope that the Government will think again, because it does not seem from the answer the right hon. Gentleman gave that the new Clause will work properly without this Amendment. Attention has already been drawn to Clause 51, and it is only right that the Government should tell us what is the guiding principle of that Clause in connection with this new Clause, and particularly in connection with the Amendment. When we look at the proviso, it seems as if it might completely upset the Minister's intentions. Those who have spoken from the other side have succeeded only in confusing the position. I am sorry to speak of them in this way in the presence of the Patronage Secretary, who is looking at me very severely.

It is impossible for the Minister to ride off and say that we have no powers over these 101 companies, because he knows perfectly well that we have the full powers of finance over each one of them. The real difficulty is that the Corporation is the only shareholder, because otherwise there would be more freedom for the companies. This must be an exceedingly dangerous position, when we bear in mind that some of these companies have very limited powers and others vast powers. It would be a grave dereliction of duty if we did not make it perfectly clear that these powers should be limited, and that at the same time there should be limited powers of discretion for the House of Commons.

4.30 p.m.

Colonel J. R. H. Hutchison (Glasgow, Central)

We come for the first time in this Clause to some very important words, which are becoming quite commonplace in our considerations nowadays and about which I should like to have some enlightenment from the Minister. The words are "the public interest." What is meant by those words? Not everybody will agree about what is, in fact, the public interest, and a great many people will wonder by what standard the public interest is to be measured. Almost everyone uses iron and steel or their products at some time, and no doubt all such users would feel very happy if all prices were reduced by half. Could that be regarded as being in the public interest, or is the public interest to be judged by the prosperity of the Corporation and their subsidiary companies? How will the public interest be decided?

This question becomes all the more important by virtue of the words which felt from the Minister, who stated that there was no direct relationship between Parliament and the publicly-owned companies, so that presumably we would be precluded from asking Questions about the conduct of these publicly-owned companies and whether or not their conduct was in the public interest. Consequently, some form of definition as to what is the public interest becomes all the more necessary since we are muzzled in our attempts to discuss the matter in Parliament. Who judges the public interest? According to the Clause, it is the Corporation. Has the Minister power to intervene and to say that what the Corporation are doing is or is not in the public interest? I presume the right hon. Gentleman has that power, but suppose he himself is wrong; does the matter then go to the Cabinet? If the Cabinet are wrong there is no court of appeal, and I say there should be some court of appeal to decide whether the public interest is or is not being pursued as a result of a certain course of action. Otherwise, the public interest merely passes behind another iron curtain. The matter is decided unilaterally by the Minister, and the public have no chance to decide whether or not the public interest is being followed. The Amendment, although leaving the public interest undefined, does link up companies with the publicly-owned Corporation and make them subject to the same yardstick of measurement.

Mr. Selwyn Lloyd

I want to address the Minister on a fairly narrow point. In Committee, we always found the right hon. Gentleman's answers both courteous and comprehensive. In the Debate on this Clause I asked the right hon. Gentleman why, in his first draft, he left out a proviso that its provisions should not be enforceable in a court of law. The right hon. Gentleman did not answer me—for good reasons, I suspect—and although I did not pursue the matter further then, I think we should come to it again now, in the Debate on this Amendment. If there is meant to be any meaning at all in paragraph (b), with regard to showing undue preference and exercising undue discrimination against certain persons, it must be enforceable in a court of law. I take it that the purpose of deleting the original proviso was to make it enforceable in a court of law. If the right hon. Gentleman agrees thus far against whom is it to be enforced, because it will be quite impossible or proof against the particular company which was selling the product?

If it is simply left as a general duty of the Corporation the consumer will not be able to prove that the Corporation are exercising that duty. We do not know in what way the Corporation will deal with directors of boards it will therefore be impossible for any consumer to enforce these provisions, which are meant for his protection, against the Corporation. The only body against whom it will be possible to enforce the proviso will be the company which has sold the product, and which has shown undue preference or discrimination. That is the whole reason for inserting in the new Clause a provision which includes the subsidiaries of the Corporation. There may be some point as to whether it should be confined to wholly-owned subsidiaries, but I should have thought that so far as they were concerned it would be impossible for the right hon. Gentleman to dispute logically the validity of what I have said.

Mr. G. R. Strauss

The hon. and learned Gentleman is wrong. The Corporation are definitely responsible under the new Clause. If anyone wanted to proceed he would be able to proceed against the Corporation, who would be responsible for any undue preference which they might give and which was considered to be contrary to the public interest.

Mr. Lloyd

The right hon. Gentleman says "they might give."

Mr. Strauss

Which might be given by the individual company.

Mr. Harrison (Nottingham, East)

Would that apply to partially-owned companies?

Mr. Strauss

It is not just 100 companies who will be responsible; approximately 300 companies will be responsible for carrying out the duties which are imposed upon them.

Sir Arnold Gridley (Stockport)

I am interested in this matter as a not inconsiderable user of steel. Suppose, if the companies come under the ownership and control of the Corporation, that I place a contract for a supply of sheet steel with, say, Dorman Longs or Baldwins. That contract will be directed to them. Suppose I find out, subsequently, that someone else has been given preferential terms or better deliveries. Against whom have I got a remedy? The Minister has just said it will not be against the company with whom I have contracted, but that it will be against the Corporation. It is impossible for me to argue a point of law like that, but it seems absurd that if I make a contract with Baldwins, and they subsequently default, I should ignore them and go to the Corporation. If business is to be carried on in the ordinary way surely an Amendment of this kind, which puts the onus of responsibility on the public company concerned ought to be accepted.

Mr. Walter Fletcher (Bury)

Would it be necessary when a contract is being made with, say, Baldwins for it to be stated on the contract that they are acting as agents for the Corporation? If that does not appear there can be no cause of action against the Corporation, because there is no contract to be broken unless the subsidiary company acts as the Corporation's agent and that is stated on the contract.

Mr. Lyttelton

Rather than that we should divide I would ask the Minister to look at this point again. No matter of principle is involved or, at least, no matter of great principle. I believe the right hon. Gentleman is after the same object as we are, but I do not think he will achieve it by what he has proposed so far. The argument that recourse is against the Corporation appears to me to rest on a legal supposition of the most extraordinary character. We would rather not divide the House if we can get a promise that the matter will be put right.

The Solicitor-General (Sir Frank Soskice)

The remedy would lie against the Corporation, which could be proceeded against on this basis: that it was their duty not to show undue preference and in as much as they would be a governing factor in publicly-owned companies because they controlled, through their shareholdings in those companies, their activities. If the publicly-owned companies showed undue discrimination proceedings would lie against the Corporation, to prevent them from showing undue preference in causing the wholly-owned public company to show, or not stopping it from showing undue preference. Action would not lie against the company itself, but against the Corporation.

Mr. Lloyd

Suppose the Corporation exercises control, and has every intention of stopping the subsidiary company from taking certain action but the board of that company do enter into a discriminatory contract. Could it be said that the Corporation would then be liable in those circumstances?

The Solicitor-General

It would have to, be established that the Corporation had not used the powers which it possessed as the sole shareholder in the publicly owend company to prevent the publicly owned company from exercising undue preference against a particular person. I can quite conceive that it would be impossible to deal with that in a particular contract, but it would depend on the circumstances. If it could be shown that the Corporation did not exercise its powers over a publicly owned company in such a way as to prevent that company showing undue preference in its supply of a particular commodity, then it would render itself liable to proceedings.

Mr. Scollan

In Clause 10 it very definitely states: The Public Authorities Protection Act, 1893, and section twenty-one of the Limitation Act, 1939, shall not apply to any action, prosecution or proceeding against the Corporation, or for or in respect of any act, neglect or default done or committed by a servant or agent of the Corporation in his capacity as a servant or agent of theirs. Would that not exempt it from being sued by someone, who felt he was not getting the proper service that it had contracted for?

The Solicitor-General

No, Sir, I do not think it does.

Mr. P. Roberts

The Solicitor-General has demolished the Government's case and made the case for the Opposition, because now what the Government intend this Clause to do is this—the Corporation will give general instructions that there should not be any undue preference. We will assume that it issues the instructions in accordance with the Clause, but in a subsidiary there may be a group of men who decide to go against those instructions. They do so and injury is felt by a consumer because of an undue preference. The consumer has no remedy against the Corporation, because the Corporation can prove that it has taken every possible precaution. Nor will he have any right against the directors themselves. It may be that the Corporation will say to the directors that they have been proved wrong and they will be sacked, but that does not help the consumer who has been hurt. This seems to be a most clumsy way to deal with the thing. I would ask the Minister to reconsider the whole matter. The answer given by the Solicitor-General is no doubt a way by which it can work, but it is an unsatisfactory way. I am quite certain that after this Debate when the Corporation comes into existence it will be quite clear in its instructions to the wholly owned subsidiaries. What we are trying to get at is that someone in the wholly owned subsidiaries might act against those instructions, and if that is so, no action will lie.

Mr. Erroll (Altrincham and Sale)

I do not wish to add unnecessarily to the length of the discussion, but could we be told what are the objections to the words we are discussing? Would they do any harm? Why not insert them if they avoid doubt or ambiguity?

Mr. J. Lewis

Would the Solicitor-General tell us if, in fact, a contract which is entered into with a subsidiary company may be regarded as a contract with the Corporation, or is the Corporation mentioned in the contract?

Mr. C. Williams

I should like to ask a question on a point of law. I always understood that under the present law it was a company which was sued and not the shareholders. The shareholders may be put into one person and be the Corporation, but it is still the company as I understand it. I am not a lawyer and we have not a lawyer of any distinction—

Mr. Deputy-Speaker (Mr. Bowles)

The hon. Gentleman has exhausted his right to speak, and in asking his question he is going rather wide.

Mr. Williams

I shall not go any wider. As I understand it, under the present law it is not the individual shareholders who are responsible, and even if all the shareholders are in one body called the Corporation surely the company is still responsible. What is going to be the position of a small man dealing with a company who has to go right through the whole of this procedure in dealing with the big Corporation?

Question put, "That those words be there inserted in the proposed Clause."

The House divided: Ayes, 146; Noes, 208.

Division No.106.] AYES [4.47 p.m.
Amory, D. Heathcoat Harris, H. Wilson (Cambridge Univ.) Neven-Spence, Sir B.
Assheton, Rt. Hon. R. Harvey, Air-Comdre. A. V. Nicholson, G.
Astor, Hon. M. Haughton, S. G Nield, B. (Chester)
Baldwin., A. E. Head, Brig. A. H. Noble, Comdr. A. H. P.
Barlow, Sir J. Headlam, Lieut.-Col. Rt. Hon. Sir C Odey, G. W.
Beamish, Maj. T. V. H. Henderson, John (Cathcart) Orr-Ewing, I. L.
Beechman, N. A. Hinchingbrooke, Viscount Peake, Rt. Hon. O.
Birch, Nigel Hollis, M. C. Peto, Brig. C. H. M.
Bower, N. Holmes, Sir J. Stanley (Harwich) Pickthorn, K.
Boyd-Carpenter, J. A. Hope, Lord J. Ponsonby, Col. C. E.
Braithwaite, Lt.-Comdr. J. G. Howard, Hon. A. Prior-Palmer, Brig. O.
Bromley-Davenport, Lt.-Col. W Hudson, Rt. Hon. R. S. (Southport) Raikes, H. V.
Buchan-Hepburn, P. G. T. Hulbert, Wing-Cdr. N. J. Ramsay, Maj. S.
Bullock, Capt. M. Hurd, A. Rayner, Brig. R.
Butcher, H. W. Hutchison, Lt.-Cm. Clark (E'b'rgh W.) Reed, Sir S. (Aylesbury)
Byers, Frank Hutchison., Col. J. R. (Glasgow, C.) Roberts, H. (Handsworth)
Carson, E. Jeffreys, General Sir G. Roberts, P. G. (Ecclesalf)
Challen, C. Joynson-Hicks, Hon. L. W. Roberts, W. (Cumberland, N.)
Channon, H. Kerr, Sir J. Graham Robinson, Roland (Blackpool, S.)
Clarke, Col. R. S. Lambert, Hon. G. Ropner, Col. L.
Clifton-Brown, Lt.-Col. G. Lancaster, Col. C. G Salter, Rt. Hon. Sir J. A.
Cole, T. L. Langford-Holt, J. Scott, Lord W.
Conant, Maj. R. J. E. Law, Rt. Hon. R. K. Shephard, S. (Newark)
Cooper-Key, E. M. Legge-Bourke, Maj. E. A. H. Shepherd, W. S. (Bucklow)
Crookshank, Capt. Rt. Hon. H. F C. Lennox-Boyd, A. T. Smith, E. P. (Ashford)
Crosthwaite-Eyre, Col. O. E Linstead, H. N. Smithers, Sir W.
Cuthbert, W. N. Lloyd, Selwyn (Wirral) Snadden, W. M.
Davidson, Viscountess Low, A. R. W. Spearman, A. C. M
De la Bere, R. Lucas-Tooth, S. H. Stoddart-Scott, Col. M.
Digby, Simon Wingfield Donner, P. W Lyttelton, Rt. Hon. O. Studholme, H. G.
Donner, P. W. MacAndrew, Col. Sir C. Tayor, C. S. (Eastbourne)
Drayson G.B. McCllum, Maj. D. Taylor, Vice-Adm. E, A. (P'idd'tn, S.)
Drewe, C. McCorquodale, Rt. Hon. M. S. Thomas, Iver (Keighley)
Dugdale, Maj. Sir T. (Richmond) McFrlane, C. S. Thorneycroft, G. E. P. (Monmouth)
Duthie, W. S. Mokie, J. H. (Galloway) Touche, G. C.
Eccles, D. M. Maclay, Hon. J. S. Turton, R. H.
Elliot, Lieut.-Col. Rt. Hon. Walter Macmillan, Rt. Hon. Harold (Bromley) Vane, W. M. F.
Errol, F. J. Macpherson, N. (Dumfries) Wakefield, Sir W. W.
Fletcher, W. (Bury) Maitland, Comdr. J. W. Ward, Hon. G. R.
Fox, Sir G. Marlowe, A. A. H. Wheatley, Colonel M. J. (Dorset, E.)
Fraser, H. C. P. (Stone) Marples, A. E. White, Sir D. (Fareham)
Fraser, Sir I (Lonsdale) Marshall, D. (Bodmin) White, J. B. (Canterbury)
Fyfe, Rt. Hon. Sir D. P. M. Mellor, Sir J Williams, C. (Torquay)
Galbraith, Cmdr. T. D. (Pollok) Matson, A. H. E. Winterton, Rt. Hon. Earl
Galbraith, T. G. D. (Hillhead) Moore, Lt.-Col. Sir T. York, C.
Gomme-Duncan, Col. A. Morris-Jones, Sir H. Young, Sir A. S. L. (Partick)
Gridley, Sir A. Morrison, Maj. J. G. (Salisbury)
Grimston, R. V. Morrison, Rt. Ha. W. S. (Cirencester) TELLERS FOR THE AYES:
Hannon Sir P. (Moseley) Mott-Radclyffe, C. E. Commander Agnew and
Hare, Hon. J. H. (Woodbridge) Neill, Sir William (Belfast, N.) Brigadier Mackeson.
NOES
Acland, Sir Richard Bramall, E. A. Daines, P.
Adams, Richard (Balham) Brook, D. (Halifax) Davies, Edward (Burslem)
Albu, A. H. Brooks, T. J. (Rothwell) Davies, Haydn (St. Pancras, S.W.)
Allen, A. C. (Bosworth) Broughton, Dr. A. D. D. Davies, R. J. (Westhoughton)
Allen, Scholefield (Crewe) Brown, T. J. (Ince) Davies, S. O. (Merthyr)
Atpass, J. H. Burden, T. W. Deer, G.
Anderson, A. (Motherwell) Burke, W. A. de Freitas, Geoffrey
Anderson, F. (Whitehaven) Callaghan, James Diamond, J.
Attewell, H. C. Carmichael, James Dobbie, W.
Austin, H. Lewis Castle, Mrs. B. A. Dodds, N. N.
Awbery, S. S. Chamberlain, R. A. Driberg, T. E. N.
Ayles, W. H. Chater, D. Dugdale, J.(W. Bromwich)
Ayrton Gould, Mrs. B. Chetwynd, G. R. Dumpleton, C. W.
Bacon, Miss A. Cluse, W. S. Dye, S.
Balfour, A. Cocks, F. S. Ede, Rt. Hon. J. C.
Barnes, Rt. Hon. A. J. Coldrick, W. Edwards, John (Blackburn)
Barstow, P. G. Collick, P. Edwards, Rt. Hon. N. (Caerphilly)
Barton, C. Collindridge, F. Edwards, W. J. (Whitechapel)
Battley, J. R. Collins, V. J. Evans, Albert (Islington, W.)
Bechervaise, A. E. Colman, Miss G. M Evans, E. (Lowestoft)
Benson, G. Cook, T. F. Evans, John (Ogmore)
Beswick, F. Cooper, G. Evans, S. N. (Wednesbury)
Bing, G. H. C Corbet, Mrs. F. K. (Camb'well, N.W.) Ewart, R.
Binns, J. Cove, W. G. Fairhurst, F.
Blackburn, A. R. Crawley, A. Farthing, W. J.
Blyton, W. R. Crossman, R. H. S. Fernybough, E.
Braddock, Mrs. E. M. (L'pl. Exch'ge) Cullen, Mrs. Field, Capt. W. J.
Braddock, T. (Mitcham) Dagger, G. Fletcher, E. G. M. (Islington, E.)
Foot, M. M. Lewis, T. (Southampton) Scott-Elliot, W.
Forman, J. C. Lipton, Lt.-Col. M Segal, Dr. S.
Fraser, T. (Hamilton) Logan, D. G. Shackleton, E. A. A.
Freeman, J. (Watford) Lyne, A. W. Sharp, Granville
Freeman, Peter (Newport) McAdam, W. Shinwell, Rt. Hon. E.
Ganley, Mrs. C. S. McEntee, V. La T. Shurmer, P.
Gibbins, J. McGhee, H. G. Silverman, J. (Erdington)
Gibson, C. W. McGovern, J. Silverman, S. S. (Nelson)
Gilzean, A. McKay, J. (Wallsend) Simmons, C. J.
Glanville, J. E. (Consett) Maclean, N. (Govan) Skinnard, F. W.
Goodrich, H. E. McLeavy, F. Smith, Ellis (Stoke)
Gordon-Walker, P. C. MacPherson, Malcolm (Stirling) Smith, H. N. (Nottingham, S.)
Greenwood, Rt. Hon. A. (Wakefield) Mainwaring, W. H. Smith, S. H. (Hull, S.W.)
Greenwood, A. W. J. (Heywood) Mallalieu, E. L. (Brigg) Solley, L. J.
Grey, C. F. Mallalieu, J. P. W. (Huddersfield) Sorensen, R. W.
Grierson, E. Mann, Mrs. J. Soskice, Rt. Hon Sir Frank
Griffiths, D. (Rother Valley) Manning, G. (Cambenwell, N.) Sparks, J. A.
Griffiths, Rt. Hon. J. (Llanelly) Manning, Mrs. L. (Epping) Steele, T.
Griffiths, W. D. (Moss Side) Mathers, Rt. Hon. George Stewart, Michael (Fulham, E.)
Gunter, R. J Medland, H. M. Strauss, Rt. Hon. G. R. (Lambeth)
Guy, W. H. Mellish, R. J. Stross, Dr. B.
Haire, John E. (Wycombe) Messer, F. Stubbs, A. E.
Hale, Leslie Middleton, Mrs. L. Summerskill, Rt. Hon. Edith
Hall, Rt. Hon. Glenvil Mikardo, Ian Swingler, S.
Hamilton, Lieut.-Col. R. Millington, Wing-Comdr. E. R. Sylvester, G. O.
Hannan, W. (Maryhill) Mitchison, G. R. Symonds, A. L.
Hardman, D. R. Monslow, W. Taylor, R. J. (Morpeth)
Hardy, E. A. Moody, A. S Taylor, Dr. S. (Barnet)
Harrison, J. Morley, R. Thomas, D. E. (Aberdare)
Hastings, Dr. Somerville Morris, Lt.-Col. H. (Sheffield, C.) Thomas, George (Cardiff)
Haworth, J. Morris, P. (Swansea, W.) Thomas, I. O. (Wrekin)
Henderson, Rt. Hon. A. (Kingswinford) Morrison, Rt. Hn. H. (Lewisham, E.) Thurtle, Ernest
Henderson, Joseph (Ardwick) Mort, D. L. Timmons, J.
Herbison, Miss M. Murray, J. D. Titterington, M. F.
Hicks, G. Nally, W. Tolley, L.
Hobson, C. R. Naylor, T. E. Turner-Samuels, M.
Holman, P. Neal, H. (Claycross) Ungoed-Thomas, L.
Holmes, H. E. (Hemsworth) Nichol, Mrs. M. E. (Bradford, N.) Vernon, Maj. W. F
Hoy, J. Nicholls, H. R. (Stratford) Viant, S. P.
Hubbard, T. Noel-Baker, Capt. F. E. (Brentford) Walkden, E.
Hudson, J. H. (Ealing, W.) Oldfield, W. H. Walker, G. H.
Hughes, Emrys (S. Ayr) Oliver, G H. Wallace, G. D. (Chislehurst)
Hughes, Hector (Aberdeen, N.) Palmer, A. M. F. Wallace, H. W. (Walthamstow, E.)
Hughes, H. D. (W'lverh'pton, W.) Pargiter, G. A. Warbey, W. N.
Hynd, H. (Hackney, C.) Parker, J. Watkins, T. E.
Hynd, J. B. (Attercliffe) Parkin, B. T. Watson, W M.
Irvine, A. J. (Liverpool) Paton, Mrs. F. (Rushcliffe) Webb, M. (Bradford, C.)
Irving, W. J. (Tottenham, N.) Paton, J. (Norwich) Weitzman, D.
Janner, B. Pearl, T. F. Wells, W. T. (Walsall)
Jeger, G. (Winchester) Perrins, W. West, D. G.
Jeger, Dr. S. W. (St. Pancras, S.E.) Popplewell, E. Wheatley, Rt. Hn. J. T. (Edinb'gh, E.)
Jenkins, R. H. Porter, E. (Warrington) White, H. (Derbyshire, N.E.)
John, W. Porter, G. (Leeds) Whiteley, Rt. Hon. W.
Jones, D. T. (Hartlepool) Price, M. Philips Wigg, George
Jones, Elwyn (Plaistow) Proctor, W. T. Wilkins, W. A.
Jones, Jack (Bolton) Pryde, D. J. Willey, F. T. (Sunderland)
Jones, P. Asterley (Hitchin) Pursey, Comdr. H. Willey, O. G. (Cleveland)
Keenan, W. Randall, H. E. Williams, D. J. (Neath)
Kenyon, C. Ranger, J. Williams, J. L. (Kelvingrove)
Key, Rt. Hon. G. W. Rankin, J. Williams, Ronald (Wigan)
King, E. M. Rees-Williams, D. R. Willis, E
Kinghorn, Sqn.-Ldr. E. Reeves, J. Wills, Mrs. E. A.
Kinley, J. Reid, T. (Swindon) Wilson, Rt. Hon. J. H.
Kirkwood, Rt. Hon. D Rhodes, H. Wise, Major F. J.
Lang, G. Ridealgh, Mrs. M. Woodburn, Rt. Hon. A.
Lavers, S. Roberts, Goronwy (Caennarvonshire) Woods, G. S.
Lawson, Rt. Hon. J. J. Robinson, K. (St. Pancras) Wyatt, W.
Lee, Miss J. (Cannock) Rogers, G. H. R. Yates, V. F.
Leonard, W. Ross, William (Kilmarnock) Young, Sir R. (Newton)
Leslie, J. R. Royle, C. Younger, Hon. Kenneth
Levy, B. W. Sargood, R.
Lewis, A. W. J. (Upton) Scollan, T. TELLERS FOR THE NOES:
Mr. Pearson and Mr. Bowden.
Mr. Lyttelton

I beg to move, as an Amendment to the proposed Clause, in line 9, to leave out paragraph (b), and to insert (b) to secure that in relation to the home market no undue preference is shown or unfair discrimination exercised by the Corporation or any subsidiary of the Corporation in favour of or against any consumer of class of consumers in the supply or price of any products produced by the Corporation or any subsidiary of the Corporation. This Amendment is parallel to the one with which we have just dealt. If hon. Members will look at the proposed Clause they will see that the avoidance of undue discrimination or preference applies, as that Clause is drafted—I think I am right—only to Second Schedule products, if I may use that omnibus term. The object of the Amendment is to include all the products of the Corporation under the provisions which seek to prevent undue discrimination and undue preference. Acceptance of the Amendment would avoid some of the disadvantages which we think are inherent in the Minister's own draft.

The main object of the Amendment is to see that the undue preference and discrimination provisions embrace all the products which may be produced by the large number of companies and not only those products which are in the Second Schedule. It is our wish and hope that the Corporation and its subsidiaries will only engage in the manufacture of products which are specified in the first column of the Second Schedule, but as the Bill is now drafted, the activities covered by the Corporation and its 100-odd subsidiaries are so wide that it seems absolutely impossible to include all the products which are produced, let alone those in the Second Schedule.

The Corporation might show, for example, undue preference to the nationalised railways over the building of a bridge, and might prevent me from building a bridge which I must build as part of my undertaking, in order to get heavy equipment out of the works. The equipment gets heavier and heavier as the years go on and it is necessary to build a bridge, but bridge-building is not included in Second Schedule activities. I want protection to be put into the Bill so that this provision about undue preference will apply to all the products of the Minister's large family—although he is now leaving some of the children on other people's doorsteps. That is the main object of our revised paragraph (b).

5.0 p.m.

Mr. Erroll

If no discrimination is to be applied to Second Schedule products, surely it is logical that no discrimination should be possible in regard to the other products which may be manufactured and sold by publicly owned companies belonging to the Corporation. Our Amendment seeks to make that position quite clear. We regard it as a most important matter that prevention of discrimination should be carried all along the line in the home market. We are not here concerned with the possibility of having to arrange price differentials in regard to the export market where it may be necessary in order to secure foreign business, but in the home market there should be no discrimination between one class of consumers and another, particularly in those classes of non-scheduled products in which the new Corporation will have a virtual monopoly, such as steel tubes. It would be highly undesirable if certain producers of steel tubings were to be given more favourable prices than other would-be purchasers in the home market. We want the principle of non-discrimination applied just as thoroughly and vigorously in regard to all products as in regard to Second Schedule products alone.

Mr. G. R. Strauss

I really do not think it necessary to incorporate the proposed Amendment. If there is dissatisfaction that any of the principal products manufactured by the companies owned by the Corporation are being sold to one person at a price which shows a preference compared with the price to somebody else, there will be ample opportunity for such a matter to come up through the Consumers' Council and to be put before the Corporation and the Minister. Here we are trying to impose on the Corporation its broad duties and I think it is right that we should here confine ourselves to Second Schedule activities; we shall get into awful difficulties if we deal with the very considerable number of subsidiary activities or by-products which may be made and which, as has been stated on many occasions, range from steel tennis rackets to umbrella frames and all sorts of things. If we impose duties of non-preference on all these activities we shall be going further than is desirable or necessary.

I have discussed this Clause, and particularly paragraph (b), with the organisations which represent consumers' interests. I refer particularly to the F.B.I., the National Union of Manufacturers and the Association of British Chambers of Commerce. They have considered this very carefully with their legal advisers and they are satisfied that paragraph (b) meets various suggestions and criticisms which they have put forward. They are wholly satisfied with it. That does not necessarily mean that the House need accept their views; there is no reason why we should not alter this if we think it desirable to do so. It is important that the House should know that I have gone all out to meet the reasonable suggestions and criticisms of these important bodies, which are the only bodies I can talk to as representing the consumers' interests, and that they are satisfied with paragraph (b). I should be very reluctant to re-open the matter unless there was a very good reason and unless it was suggested that this was in any way unfair or damaging to the public interest. I suggest that it would be wise to leave paragraph (b) as it is and not to alter the Clause by substituting the Amendment.

Mr. Shepherd

The Minister has given us the reasons why he resists the Amendment, but I feel that the arguments in favour of pressing it are very strong indeed. The Minister told the House that the products concerned are considerable and multifarious. Therefore, we are not dealing with some fairly small and extraneous item but with something of considerable moment. The Minister says that if any difficulty arises out of products not within the Second Schedule, those concerned can refer it to the consumers' council. If it has to be referred to the consumers' council, the proper thing to do is to include such provision in the Bill. If I go to a consumers' council and say that I object to discrimination in regard to x, y and z articles by a certain company, the consumers' council can say to me, "Very probably. We are concerned with discrimination and with avoiding it, but the Act says that Second Schedule products only are affected." The consumers' council would therefore be able to reject that claim. If the Minister really believes that the consumer or user has the right to complain to a consumers' council about discrimination he should empower the consumers' council to deal with that specific complaint and not, as he does in the new Clause, exclude those articles from the purview of the consumers' council. The arguments in favour of the Amendment are very strong and they are fortified by the answer which the Minister has given.

Mr. Hugh Fraser (Stone)

One is impressed by the fact that the Minister has been carrying on conversations with the F.B.I. and other interested bodies, but our Amendment goes much further than the Minister does in his Clause. The Clause refers only to products for manufacturing purposes—naturally the F.B.I. is very concerned in that—but we want to go much further down the scale to protect the consumer of the finished product. If the Amendment is accepted, it will offer protection to the consumer of the actual finished product, and such products will, of course, come from the publicly-owned companies. We consider that the Amendment should be pressed. Referring the matter to the consumers' council will undoubtedly not be efficacious—we have seen how well these consumers' councils work in other nationalised industries—and I hope that we shall press the Amendment to a Division.

Mr. Pickthorn

I hope that the Minister may, perhaps by himself or by someone else, answer now a question which he was unwilling to answer on the new Clause; that is to say he has defended his new Clause and by inference resisted this proposed Amendment upon the ground that there will be ample Parliamentary control over these things through the Ministry. The question, therefore, which I put to him and which I apologise to the House for putting again but I got, no answer on the earlier occasion, is this: Is it his expectation that in this matter of preferences and discriminations any Question not out of Order for other reasons would be ruled out of Order on the ground that it is of this kind? I hope he will not answer this by using the argument of one of his supporters from a back bench who said I was asking the Minister to give a ruling which could not come from anywhere but from the Chair. I am not asking now for a ruling and I was very careful in my language then not to ask for a ruling. What I am asking is "What is the Minister's expectation in this matter?" because unless it seems to the Minister pretty clear that Questions about alleged preferences and discriminations would be in Order addressed directly to the Minister, then his earlier argument was, no doubt inadvertently, disingenuous and his general case for the Clause and against this Amendment is that much weakened. He owes it to the House to answer that question.

Mr. G. R. Strauss

Perhaps I might answer that question directly. Any matter which affects the consumer, whether it is price, preference or anything else, which is put before the Consumers' Council and the Consumers' Council puts before me, is a matter on which I can be questioned in Parliament—if it goes through the machinery of the Consumers' Council; otherwise, of course, it would be a matter for which I would not be directly responsible. The machinery of the Consumers' Council is put there largely for the purpose of allowing direct ministerial control over detailed matters on which any consumer may complain.

Mr. Piekthorn

I am sorry to keep the House waiting but I am not fully confident—none of us who has not been on the Committee on this Bill can be—that we may not be partly asking questions or propounding arguments not quite in point, but it appears to one who was not on the Committee that from what the Minister says the effect will be that these matters of preference and discrimination will not be subject to Parliamentary Question unless they have been referred by the consumers' council to the Minister. That seems to me to take more than half the weight out of his earlier argument and to make the defence of his Clause against the Amendment considerably more difficult.

Mr. P. Roberts

There is one point I would put to the Minister on this if he will not accept our Amendment. It is not a question of racquet handles but of coke. The production of coke is a big item. Hon. Members opposite who come from mining districts will know that the Coal Board also produces coke, and that a, great number of men are employed by the Coal Board in its production. Also a large number of coke ovens will be taken over under this Bill by the Steel Corporation. The question of undue preference arises here actually because, if there is to be a surplus of coke, as there may be in a few years' time, there will be two producers of it, the National Coal Board, on the one hand, and the Steel Corporation, on the other. I see a possibility of undue preference in the sale of coke vis-à-vis the Steel Corporation and the National Coal Board. I can see the Steel Corporation wanting to unload its coke, and doing so, at prices below which the National Coal Board is selling coke and, let us say, pushing their coke and putting out of employment a large number of men under the National Coal Board.

Has the Minister considered that possibility? I think it is unwise to limit the argument of undue preference merely to the four items in the Second Schedule. I would ask the Minister to consider whether he would not increase it to include coke and other big manufacturies which are obviously to be undertaken by the Steel Corporation because the consumers themselves will not object to an undercutting in the price of coke as between one Corporation and another, and it might be very much against the national interest.

Mr. Lyttelton

I want to put two points to the Minister. First, am I right in supposing that the Clause as drafted applies only to Second Schedule products?

Mr. G. R. Strauss

indicated assent.

Mr. Lyttelton

If the Minister goes as far as that in accepting our point of view, surely he can go the whole way and say that undue discrimination and undue preference ought to apply to the whole range of products produced by those 100 odd companies?

My second point is that it is just in these things which are outside the Second Schedule where undue discrimination and undue preference is, from our point of view, of the most value. In many of the Second Schedule products the new Corporation and its subsidiaries will own and control virtually 100 per cent. of the activities. Therefore the damage which may be done will be done only on the consuming side whereas, when we come down to the other products which may be almost infinite, the State-owned Corporation is competing with the private sector of industry over a large field without the protection of this undue discrimination. It would be possible for the State—and it the Clause is not amended it is one of the things that will happen—to try to put inconvenient competitors out of business by discriminating unduly in the prices of its products against them until they die from the competition which, no doubt, will be subsidised by the taxpayer. I think it is even more important to continue the Clauses against undue discrimination into the general products than it is to confine them to the Second Schedule activities. I put that point strongly to the Minister, and I hope he will look at it again.

I really believe that the Minister and we, on this side, are trying to get at the same object, and if he will look at it again, I think he will agree that what is applicable to the Second Schedule products ought to be applicable to all the products, and particularly to those where this form of State competition with private enterprise is likely to be most acute.

5.15 p.m.

Colonel J. R. H. Hutchison

I want to ask the Minister one question. In passing, may I hope that I shall have more luck in getting an answer to this one than I did to my question about the public interest which I put on the previous Amendment? The Minister mentioned the Federation of British Industries, the National Union of Manufacturers and the Associated Chambers of Commerce, and said that they were in complete agreement with the Clause as it stands. I know that those three bodies had conversations with the right hon. Gentleman, and that their general view was that no amendment could make the Bill satisfactory. The Minister promised to consider certain representations which they made to him, and he did so, but did he ask them, after he had produced the Clause in its present form, whether it was thoroughly satisfactory to them?

Mr. Strauss

When I said that these bodies agreed with the Clause I limited myself to paragraph (b). They had some minor disagreements about paragraph (a) but we are dealing now with paragraph (b). Of course these bodies do not like the Bill. There was no need for me to say that. I said that they expressed themselves as satisfied with paragraph (b) as now drafted.

Viscount Hinchingbrooke

The point I raise is in support of my hon. and gal-land Friend the Member for Central Glasgow (Colonel Hutchison) who, on the previous Amendment, asked the Minister to define what was the public interest, and received no answer. My dislike of this phrase is now of long-standing, and I have never been able to get any assurance from the Government that it means anything at all.

What can it possibly mean unless it is what is in the interest of the Government of the present day? There is no possible yardstick which could be taken so that one could say that the general will of the people as expressed in their day to day activities could be reflected in a phrase of this kind. Therefore it must mean what the Government of the day want to do, and nothing else.

To introduce a phrase of this kind into legislation at this late stage of a Parliament is a serious thing. It is much more serious than at the beginning of a Parliament such as this, when the public interest is the Socialist theory and purpose. At the end of such a Parliament it ceases to mean that at all, because there is a prospect of a change, and it might become the Conservative theory and purpose. How conflicting that is, and how dislocating to industry. How can industry interpret a phrase of this kind when it is introduced at this stage?

I have not had satisfaction from the right hon. Gentleman either on the Committee stage upstairs or at any other time or, indeed, from the Lord President himself, who was the inventor of this vague and unsatisfactory phrase. So far as legislation is concerned, it can mean anything at all, and the Government would be well advised to take it out. Otherwise they might find that it interpreted in a very different way from what they now intend.

Mr. Maclay (Montrose Burghs)

Listening to this Debate the point which makes one realise most how necessary is this Amendment is the Minister's own answer explaining why he does not want it. He pointed out that one cannot visualise just what is to happen with all these subsidiary companies. I think that is not an unfair way of putting his reply. He said that if we extended this Clause to all the multifarious activities of ancillary companies we could not tell what the consequence would be. I could not agree more. We cannot. The trouble is that this type of legislation is new, and we had hoped that the Government had some slight idea of what its effect would be. If the Minister cannot foresee what will happen where there are wholly Government owned subsidiaries with wide articles of association and powers to do all sorts of things, the least we can do is to have some protection on this discrimination point.

One can think of some very horrifying things that could happen. Naturally, I am afraid—and I apologise for doing it—to turn to an industry with which I am connected—shipping. There are, in the subsidiary articles of association and actually in production, I think, a great many of these companies which produce component parts of ships, such as davits, lifeboats and many other things. This is a dangerous thing to say, perhaps, from our point of view on this side of the Huose, but we have known in the past rather bad practices under free enterprise, of companies with certain links giving special priorities to an individual shipbuilding firm in getting the first delivery of the available lifeboats, or whatever else it may have been,

when there has been a period of short age, as we had even before the war.

Because something slightly doubtful has happened in the past, that is no justification for doing something still worse in this Measure; because we are setting up an infinitely worse condition with this big monopolistic concern and the Government-owned companies. Surely, we ought to try to cure an evil of the past rather than perpetuate it. The Admendment would go a long way to-wards curing that evil, which is a very dangerous one in the existing form of the Clause.

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

The House divided: Ayes, 301; Noes, 146.

Division No.107.] AYES [5.24 p.m.
Acland, Sir Richard Cook, T. F. Griffiths, Rt. Hon. J. (Llanelly)
Albu, A. H. Cooper, G. Griffiths, W. D. (Moss Side)
Allen, A. C. (Bosworth) Cove, W. G. Gunter, R. J.
Allen Scholefield (Crewe) Crawley, A. Guy, W. H.
Alpass, J. H. Crossman, R. H. S. Haire, John E. (Wycombe)
Anderson, A. (Motherwell) Cullen, Mrs. Hale, Leslie
Anderson, F. (Whitehaven) Daggar, G. Hall, Rt. Hon. Glenvil
Attewell, H. C. Daines, P. Hannan, W. (Maryhill)
Austin, H. Lewis Davies, Edward (Burslem) Hardman, D. R.
Awbery, S. S. Davies, Haydn (St. Pancras, S.W.) Hardy, E. A.
Ayles, W. H. Davies, R. J. (Westhoughton) Harrison, J.
Ayrton Gould, Mrs, B. Davies, S. O. (Merthyr) Haworth, J.
Bacon, Miss A. Deer, G. Henderson, Rt. Hon. A. (Kingswinford)
Balfour, A. de Freitas, Geoffrey Henderson, Joseph (Ardwick)
Barnes, Rt. Hon. A. J. Diamond, J. Herbison, Miss M.
Barstow, P. G. Dobbie, W. Hewitson, Capt. M.
Barton., C. Dodds, N. N. Hicks, G.
Battley, J. R. Driberg, T. E. N. Hobson, C. R.
Bechervaise, A. E. Dugdale, J. (W. Bromwich) Holman, P.
Benson, G. Dumpleton, C. W. Holmes, H. E. (Hemsworth)
Beswick, F Dye, S. Hoy, J.
Bevan, Rt. Hon. A. (Ebbw Vale) Ede, Rt. Hon. J. C. Hubbard. T
Bing, G. H. C. Edwards, Rt. Hon. Sir C. (Bedwellty) Hudson, J. H. (Ealing, W.)
Binns, J. Edwards, Rt. Hon. N. (Caerphilly) Hughes, Emrys (S. Ayr)
Blackburn, A. R Edwards, W. J. (Whitechapel) Hughes, Hector (Aberdeen, N.)
Blenkinsop, A. Evans, Albert (Islington, W.) Hughes, H. D. (W'lverh'pton, W.)
Blyton, W. R. Evans, E. (Lowestoft) Hynd H. (Hackney, C.)
Bowden, Flg. Offr. H. W. Evans, John (Ogmore) Hynd, J. B. (Attercliffe)
Braddock, Mrs. E. M. (L'pl. Exch'ge) Evans, S. N. (Wednesbury) Irvine, A. J. (Liverpool)
Braddock, T. (Mitcham) Braman, E. A. Ewart, R Irving, W. J. (Tottenham, N.)
Bramall, E. A. Fairhurst, F. Janner, B.
Brook, D. (Halifax) Farthing, W. J. Jay, D. P. T.
Brooks, T. J. (Rothwell) Fernyhough, E. Jeger, Dr. S. W. (St. Pancras, S.E.)
Broughton, Dr. A. D. D. Field, Capt. W. J Jenkins., R. H.
Brown, George (Belper) Follick, M John, W.
Brown, T. J. (Ince) Foot, M. M. Jones, D. T. (Hartlepool)
Burden, T. W. Forman, J. C. Jones, Jack (Bolton)
Burke, W. A. Fraser, T. (Hamilton) Jones, P. Asterley (Hitchin)
Callaghan, James Freeman, J. (Watford) Keenan, W.
Carmichael, James Freeman, Peter (Newport) Kenyon, G.
Castle, Mrs. B. A. Ganley, Mrs. C. S. Key, Rt. Hon. C. W.
Chamberlain, R. A. Gibbins, J. King, E M.
Chater, D. Gibson, G, W. Kinghorn, Sqn.-Ldr. E
Chetwynd, G. R. Gilzean, A. Kinley, J.
Cluse, W. S. Glanville, J. E. (Consett) Kirby, B. V.
Cobb, F. A. Goodrich, H. E. Kirkwood., Rt. Hon. D.
Cocks, F. S. Gordon-Walker, P. C. Lang, G.
Coldrick, W. Greenwood, Rt. Hon. A.(Wakefield) Lavers, S.
Collick, P. Greenwood, A. W. J. (Heywood) Lawson, Rt. Hon. J. J.
Collindridge, F Grey, C. F. Lee, Miss J. (Cannock)
Collins, V. J. Grierson, E. Leonard, W
Colman, Miss G. M. Griffiths, D. (Rother Valley) Leslie, J. R.
Levy, B. W. Peart, T. F. Taylor, R. J. (Morpeth)
Lewis, A. W. J. (Upton) Perrins, W. Taylor, Dr. S. (Barnet)
Lewis, T. (Southampton) Platts-Mills, J. F. F Thomas, D. E. (Aberdare)
Lipton, Lt.-Col. M Popplewell, E. Thomas, George (Cardiff)
Logan, D. G. Porter, E. (Warrington) Thomas, I. O. (Wrekin)
Lyne, A. W. Porter, G. (Leeds) Thurtle, Ernest
McAdam, W. Price, M. Philips Timmons, J.
McEntee, V. La T Proctor, W. T. Titterington, M. F.
McGhee, H. G. Pryde, D. J. Tolley, L.
McGovern, J. Pursey, Comdr. H Turner-Samuels, M.
McKay, J. (Wallsend) Randall, H. E. Ungoed-Thomas, L.
Maclean, N. (Govan) Ranger, J. Vernon, Maj. W. F.
MaLeavy, F. Rankin, J. Viant, S. P.
MaoPherson, Malcoim (stirling) Rees-Williams, D. R. Walker, G. H.
Mainwaring, W. H. Reeves, J. Wallace,G. D. (Chislehurst)
Mallalieu, E. L. (Brigg) Reid, T. (Swindon) Wallace, H. W. (Walthamstow, E.)
Mallalieu, J. P. W. (Huddersfield) Ridealgh, Mrs. M. Warbey, W. N.
Mann, Mrs. J. Roberts, Goronwy (Caernarvonshire) Watkins, T. E.
Manning, C. (Camberwell, N.) Robinson, K. (St. Pancras) Watson, W. M.
Manning, Mrs. L. (Epping) Rogers, G. H. R. Webb, M. (Bradford, C)
Mathers, Rt. Hon. George Ross, William (Kilmarnock) Weitzman, D.
Medland, H. M. Royle, C. Wells, W. T. (Walsall)
Mellish, R. J. Sargood, R. West, D. G.
Messer, F. Scollan, T. Wheatley, Rt. Hn. J. T. (Edinb'gh, E.)
Middleton, Mrs. L Scott-Elliot, W. White, H. (Derbyshire, N.E.)
Mikardo, Ian Shackleton, E. A. A. Whiteley, Rt. Hon. W.
Millington, Wing-Comdr. E. R. Sharp, Granville Wigg, George
Mitchison, G. R. Shinwell, Rt. Hon. E. Wilcock, Group-Capt. C. A. B
Monslow, W. Shurmer, P. Wilkins, W. A.
Moody, A. S. Silverman, J. (Erdington) Willey, F. T. (Sunderland)
Morley, R. Silverman, S. S. (Nelson) Williams, D. J. (Neath)
Morris, Lt.-Col. H. (Sheffield, C.) Simmons, C. J. Williams, J. L. (Kelvingrove)
Morrison, P. (Swansea, W.) Skeffington Lodge, T. C Williams, Ronald (Wigan)
Morrison, Rt Hn. (Lewisham, E.) Skinnard, F. W. Williams, Rt. Hon. T. (Don Valley)
Mort, D. L. Smith, Ellis (Stoke) Williams, W. R. (Heston)
Murray, J. D. Smith, H. N. (Nottingham, S.) Willis, E
Nally, W. Smith, S. H. (Hull, S.W.) Wills, Mrs. E. A.
Naylor, T. E. Solley, L. J. Wilson, Rt. Hon. J. H.
Neal, H. (Claycross) Sorensen, R. W. Wise, Major F. J.
Nichol, Mrs. M. E. (Bradford, N.) Soskice, Rt. Hon St Frank Woodburn, Rt. Hon. A.
Nicholls, H. R. (Stratford) Sparks, J. A. Woods, G. S.
Noel-Baker, Capt. F. E. (Brentford) Steele, T. Wyatt, W.
Oldfield., W. H. Stewart, Michael (Fulham, E.) Yates, V. F.
Oliver, G. H. Strauss, Rt. Hon. G. R. (Lambeth) Young, Sir R. (Newton)
Palmer, A. M. F. Stross, Dr. B. Younger, Hon. Kenneth
Pargiter, G. A Stubbs, A. E.
Parker, J. Summerskill, Rt. Hon. Edith TELLERS FOR THE AYES:
Parkin, B. T. Swingler, S. Mr. Pearson and
Paton, Mrs. F.(Rushcliffe) Sylvester, G. O. Mr. Richard Adams.
Paton, J. (Norwich) Symonds, A. L.
NOES
Agnew, Cmdr. P. G. Donner, P. W. Howard, Hon. A.
Amory, D. Heathcoat Drayson, G. B. Hudson, Rt. Hon. R. S. (Southport)
Assheton, Rt. Hon. R. Drewe, C. Hulbert, Wing-Cdr., N. J
Astor, Hon. M. Dugdale, Maj. Sir T. (Richmond) Hurd, A.
Baldwin, A. E Duthie, W. S. Hutchison, Lt.-Cm. Clark (E'b'rgh W.)
Barlow, Sir J. Eccles, D. M. Hutchison, Col. J. R. (Glasgow, C.)
Beamish, Maj. T. V. H Elliot, Lieut.-Col. Rt. Hon. Walter Jeffreys, General Sir G.
Beechman, N. A. Errol, F. J. Joynson-Hicks, Hon. L. W.
Birch, Nigel Fletcher, W. (Bury) Kendall, W. D.
Bower, N. Fox, Sir G. Kerr, Sir J. Graham
Boyd-Carpenter, J. A. Fraser, H. C. P. (Stone) Lambert, Hon. G.
Braithwaite, Lt.-Comdr. J. G. Fraser, Sir I. (Lansdale) Lancaster, Col. C. G.
Bromley-Davenport, Lt.-Col. W. Fyfe, Rt. Hon. Sir D. P. M. Langford-Holt, J.
Buchan-Hepburn, P. G. T. Galbraith, Cmdr. T. D. (Pollok) Law, Rt. Hon. R. K.
Bullock, Capt. M. Galbraith, T. G. D. (Hillhead) Legge-Bourke, Maj. E. A. H
Butcher, H. W. Gomme-Duncan, Col. A. Lindsay, M. (Solihull)
Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n) Granville, E. (Eye) Linstead, H. N.
Byers, Frank Gridley, Sir A. Lloyd, Selwyn (Wirral)
Carson, E Grimston, R. V. Low, A. R. W.
Challen, C. Harden, J. R. E. Lucas, Major Sir J.
Channon, H. Hare, Hon. J. H. (Woodbridge) Lucas-Tooth, S. H.
Clarke, Col. R. S. Harris, H. Wilson (Cambridge Univ.) Lyttelton, Rt. Hon. O.
Clifton-Brown, Lt.-Col. G Haughton, S. G. McCallum, Maj. D.
Cole, T. L. Head, Brig. A, H. McCorquodale, Rt. Hon. M. S
Cooper-Key, E M. Headlam, Lieut.-Col. Rt. Hon, Sir C. McFarlane, C. S.
Crookshank, Capt. Rt. Hon. H. F C. Henderson, John (Cathcart) Mackeson, Brig. H. R.
Crosthwaite-Eyre, Col. O. E. Hinchingbrooke, Viscount McKie, J. H. (Galloway)
Cuthbert, W. N. Hogg, Hon. Q. Maclay, Hon. J. S.
Davidson, Viscountess Hollis, M. C. Macmillan, Rt. Hon. Harold (Bromley)
De la Bere, R. Holmes, Sir J. Stanley (Harwich) Macpherson, N. (Dumfries)
Digby, Simon Wingfield Hope, Lord J. Maitland, Comdr. J. W.
Marlowe, A. A. H. Raikes, H. V. Taylor, C. S. (Eastbourne)
Marples, A. E. Ramsay, Maj. S. Taylor, Vice-Adm. E. A. (P'dd'rn, S.)
Marshall, D. (Bodmin) Reed, Sir S. (Aylesbury) Thomas, Ivor (Keighley)
Mellor, Sir J. Roberts, H. (Handsworth) Thorneycroft, G. E P (Monmouth)
Molson, A. H. E. Roberts, P. G. (Ecolesall) Touche, G. C.
Morris, Hopkin (Carmarthen) Roberts, W. (Cumberland, N.) Turton, R. H.
Morris-Jones, Sir H. Robinson, Roland (Blackpool, S.) Tweedsmuir, Lady
Morrison, Maj. J. G. (Salisbury) Ropner, Col. L. Wakefield, Sir W. W
Morrison, Rt. Hn. W. S ([...]rencester) Salter, Rt. Hon. Sir J. A Ward, Hon G R.
Mott-Radclyffe, C. E. Scott, Lord W. White, Sir D. (Fareham)
Neill, Sir William (Belfast, N.) Shepherd, S. (Newark) White, J. B (Canterbury)
Nicholson, G. Shepherd, W. S. (Bucklow) Williams, C. (Torquay)
Nield, B. (Chester) Smiles, Lt.-Col. Sir W. Winterton, Rt. Hon. Earl
Noble, Comdr. A. H. P Smith, E. P. (Ashford) York, C.
Odey, G. W. Smithers, Sir W Young, Sir A. S. L. (Partick)
Orr-Ewing, I. L. Snadden, W. M
Peaks, Rt. Hon. O. Spearman, A. C. M. TELLERS FOR THE NOES:
Pickthorn, K. Stoddart-Scott, Col. M. Major Conant and
Ponsonby, Col. C E Studholme, H. G. Colonel Wheatley.

Question put, and agreed to.

Clause added to the Bill.