Commons Sitting of 2 May 1949

Preamble
The House met at Half-past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  WEST BROMWICH CORPORATION BILL
  As amended, considered; to be read the Third time.
ORAL ANSWERS TO QUESTIONS
  MINISTRY OF WORKS

    New Buildings (Government Leases)
    Mr. Derek Walker-Smithasked the Minister of Works how many premises consisting of offices are being erected or have been licensed for erection on the understanding that, when completed, they will be let or leased for use by a Government Department or by a nationalised industry or undertaking.
    The Minister of Works (Mr. Key): Nineteen buildings are being erected for lease to the Government as offices and two more have been licensed. One building for lease to a nationalised industry has been licensed.
    Mr. Walker-Smith: Can the Minister say what conditions are imposed as to the terms of these leases, and whether an economic rent is paid in all cases?
    Mr. Key: I cannot, without notice, give the exact terms of the leases, but I understand that in all cases an economic rent is paid.
    Mr. Marples: Will the Minister say what percentage this building is of the total office building which is taking place in London?
    Mr. Key: I cannot do that without notice.

    Factory, Feltham
    Mr. Piratinasked the Minister of Works whether he can now make a statement on the future of the factory of
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    General Aircraft, Ltd., Feltham, Middlesex.
    Mr. Key: Consultations are still continuing and I am not in a position to make any statement at present.
    Mr. Piratin: Can the Minister say what kind of consultations are taking place; and at the same time can he refute the statement which has been made recently that this factory is to be taken over by the American authorities?
    Mr. Key: Consultations are taking place between myself and my colleagues. I can make no further statement on other matters.
    Mr. Keeling: Does the Minister agree that it would be a pretty poor piece of planning to convert a factory in which many hundreds of locally resident skilled mechanics have been employed into a mere store for his Department?
    Mr. Key: As consultations are taking place, I cannot make any comment.

    Hyde Park (Bathing)
    Mr. Boyd-Carpenterasked the Minister of Works why he attempted to prevent bathing in the Serpentine, at Easter.
    Mr. Key: The normal date for opening the mixed bathing season in Hyde Park is the last Saturday in May, and there has been no demand in previous years for earlier opening. Safeguarding the lives, health and property of bathers necessitates a number of arrangements, including the recruitment of a staff of attendants, erection of canvas shelters and chlorination of the water. These arrangements take about three weeks to make.
    Mr. Boyd-Carpenter: Will the right hon. Gentleman give an assurance that in future years he will take to heart the lesson which he was taught rather forcibly this year, and make the necessary arrangements in time for the first public holiday?
    Mr. Key: No, Sir. I think that it would be absolute waste of money to make these arrangements three weeks in advance and then for no use to be made of the service.
    Earl Winterton: Surely the Minister realises that in this exceptionally warm

    625
    weather the public are entitled to bathe? Does he think that anyone but a Government Department would give such a ridiculous answer?
    Mr. Key: I am not preventing anyone from bathing. All I am saying is that it would be unwise to make these preparations more than three weeks before the date which has been the normal date for the opening of the bathing season.
    Mr. Skeffington-Lodge: Could not members of the public who wanted to bathe have been allowed to go in at their own risk? What is there to be said against that?
    Mr. Key: I do not know that any people have been stopped. All I say is that preparations for mixed bathing could not have been made in time.

    Richmond Park
    Mr. Boyd-Carpenterasked the Minister of Works whether he is now in a position to say when the road in Richmond Park between Robin Hood Gate and Pen Ponds carpark will be re-opened to motor traffic.
    Mr. Key: The road between Robin Hood Gate and the Pen Ponds carpark was opened to motor traffic on Saturday, 23rd April.

    Requisitioned Premises, Bristol
    Mr. Awberyasked the Minister of Works if he will give an approximate date when the Ministry of Food will vacate the premises 39–45, Victoria Street, Bristol; and if he will arrange to erect temporary premises on the spare ground adjoining these premises if he is unable to find alternative accommodation, so that the offices and showrooms can be returned to the owners who have been denied the use of them for seven years.
    Mr. Key: Proposals are under consideration for a new building to house the Ministry of Food office. Until negotiations are completed I shall not be able to give a date for the release of the premises at 39–45, Victoria Street. It has not proved possible to lease the adjoining land in order to erect a temporary building.
    Mr. Awbery: Will the Minister do all that he possibly can to hurry up the evacuation of these premises so that the owners can use them for their legitimate purposes?
    Mr. Key: Yes, Sir.

  ELECTRICITY CONSULTATIVE COUNCILS
  Colonel Clarkeasked the Minister of Fuel and Power why he has invited the Standing Joint Committee of Working Women's Organisations, which acts as an advisory committee to the executive committee of the Labour Party, to make nominations for the Electricity Consultative Councils; and what representatives of other political parties have been invited to make similar nominations.
  The Parliamentary Secretary to the Ministry of Fuel and Power (Mr. Robens): Because it represents a large body of working-class women. My right hon. Friend has not invited any representatives of political parties to submit nominations. Although the Standing Joint Committee acts in an advisory capacity to the Labour Party on women's questions, it is not a party organisation. It has been consulted by successive Governments on a number of women's questions since its foundation in 1916 and has acted in an advisory capacity to a number of official bodies and Government committees.
  Colonel Clarke: May I ask the Minister why, if he considers it inappropriate to ask political parties to put forward nominations, he has invited this organisation, which I understand annually presents a report to the Labour women's annual conference, and whose chairman is the chairman who presides at that conference, and whose members are drawn from a number of Labour political organisations?
  Mr. Robens: It may well be that those who are associated with other women's organisations that have been invited are also prominent members of other political parties, but that does not make the Standing Advisory Council a political body.
  Miss Bacon: Is my hon. Friend aware that this body represents 2½ million working women, and as such is fully representative of the working women in the country in giving advice on these matters?
  Mr. Robens: It is for that reason that we invited them.
  Mr. Keeling: Is the Minister aware that this is one of several cases in which women members of the Labour Party with a well-known political bias have been given preference by the Government on advisory bodies?
  Mr. Robens: I do not accept that at all, and the hon. Member will recollect that successive Governments of all political colours have from time to time consulted this organisation.

  COAL INDUSTRY

    Opencast Mining, Tankersley
    Major Legge-Bourkeasked the Minister of Fuel and Power why Rough Warren Site, Tankersley, Yorkshire, is being requisitioned for opencast coal mining despite 10 acres of it having recently been planted with hardwoods and 15 acres comprising mature hardwoods; what is the quality of the three seams, Flockton Thick, Joan and Lidgett, which will be worked on this site; and what is the expected yield.
    Mr. Robens: This site is expected to yield 79,000 tons of good and fairly good coal from Flockton Thick and Joan seams. Lidgett seam is not to be worked. The mature hardwoods are ripe for cutting and the saplings have been planted so recently that their sacrifice represents a small cost compared with the value of the coal to be won.
    Major Legge-Bourke: Is not the hon. Gentleman aware that in the report of the Select Committee on Estimates, just published, in paragraph 33 the committee state that they were assured that care was taken to preserve woodlands and other amenities near urban areas. How does the hon. Gentleman reconcile that statement with what he has just said?
    Mr. Robens: Because, as I have said, the mature hardwoods are ready for cutting, and would be cut in any case.
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    There are about five acres of saplings planted, and the sacrifice of those five acres is worth while in view of the enormous amount of good coal which will be obtained.

    Scottish Coalfield (Developments)
    Mr. Prydeasked the Minister of Fuel and Power if any statement on development in the Scottish coalfield will be made in the near future.
    Mr. Timmonsasked the Minister of Fuel and Power if he will make a statement as to his policy in regard to the proposed pit closures in Lanarkshire.
    Mr. Robens: The important developments that are taking place in the Scottish coalfields, involving the expansion of production in the Fife and Lothian areas to take the place of pits in Lanarkshire where the coal reserves are exhausted or which are hopelessly uneconomic have been fully described in the statement issued by the Scottish Divisional Coal Board on 28th January last. The general plans drawn up by the Board to promote these developments have been approved by my right hon. Friend.
    Mr. Timmons: Will my hon. Friend again consider the question of the great economic upset that this means in the life of Lanarkshire? It is not correct to state that the coal reserves in Lanarkshire are entirely exhausted, since there are over 600 million tons of coal in Lanarkshire. The more closures that take place, the greater the menace becomes to the workers. Will the Minister therefore consider the question of discussing this matter with the local authorities of Lanarkshire and the National Union of Mineworkers?
    Mr. Robens: We realise the implications of this on the social life of the people. As I had said, my right hon. Friend did approve the general plan of the Coal Board, but I ought to emphasise that the timing of the particular closures, and the other matters of detail, are for decision of the National Coal Board after they have consulted the workers, their union and other interests affected. We are of opinion that these matters have been fully discussed, but there is nothing to prevent any interested party from having a discussion with the Coal Board as to the timing of this change-over.
    Mr. Pryde: Will the Minister bear in mind that miners' families do not exist by coa1 alone and that the local authorities who will be the receiving agents for those displaced, require to have other industries installed in their areas in order to employ the other members of the miners' families.
    Mr. Robens: I can appreciate the anxiety of my hon. Friends in this matter, but I think it is fair to say that under private enterprise these pits would have been closed without reference at all to anybody and without any of the consideration we are now showing.
    Mr. Mathers: Will the Minister say if the representatives of the workers, that is, the trade union officials, approved the closures, and, if they did, why opposition is now being expressed?
    Mr. Robens: As I see it, when the statement was first made there was general approval by the National Union of Mineworkers, and they consulted with the Scottish Board in order to provide an arranged programme of timing this matter, and also to bring it to the notice of the people concerned. I should imagine that hon. Members are anxious about this matter because obviously there is bound to be some social unrest by reason of this very great change-over.
    Mr. Timmons: May I again ask the Minister whether he is aware of the position in Lanarkshire at the moment? Is he aware that officials of the National Union of Mineworkers have prevented a huge strike, and that the Coal Board have entirely ignored them and only last week went back on a previous decision which they had taken with the union?
    Mr. Robens: I cannot accept that the Coal Board have done that. They have not gone back on any decision. The fact does remain that whereas the average output is 15 cwt. per manshift in Lanarkshire, there are pits in the other counties capable of producing 30 cwt. per man-shift, and that is the most economical use of manpower in Scotland.
    Mr. Timmons: I beg to give notice that I shall endeavour to raise this matter on the Adjournment at the earliest possible moment.

  LEASEHOLD COMMITTEE (REPORT)
  Mr. Ronald Chamberlainasked the Attorney-General whether, in view of the urgency of the matter, he will now publish the interim Report of the Committee on Leasehold Reform, and state what action the Government propose to take in connection with it.
  Mr. George Thomasasked the Attorney-General whether he will publish as a White Paper the interim Report of the Committee on Leasehold Reform.
  The Solicitor-General (Sir Frank Soskice): I am not yet able to make any statement on the Government's intentions regarding the interim Report of the Leasehold Committee, which is still under consideration. Its publication and a statement of the Government's intentions will not, however, be long delayed.
  Mr. Chamberlain: Is my right hon. and learned Friend aware of the concern on the part of shopkeepers and small traders at this continued procrastination in the matter? Does he know that they are worried, not only because of the many cases of suffering in connection with their leases, but also because they realise that, in the unlikely event of the Opposition becoming the Government in a year's time, they would have no hope of redress at all?
  The Solicitor-General: I am well aware of the great concern about this matter.
  Lieut.-Colonel Lipton: Is not it possible for the interim report to be published forthwith and the Government statement thereon to be made at a later date?
  The Solicitor-General: It is still under consideration and, as I have said, it will be published shortly.
  Mr. Boyd-Carpenter: Can the right hon. and learned Gentleman say when the Report was received by the Lord Chancellor?
  The Solicitor-General: It was received on 14th March and is still being considered.
  Mr. Chamberlain: May I ask my right hon. and learned Friend to use every effort to expedite the matter, because it is of real urgency? Individual traders and shopkeepers are suffering greatly.
  The Solicitor-General: The contents of the Report are matters of great public interest and its publication will not be long delayed. I do not think that I can add to that.

  FOOD SUPPLIES

    Maize
    Mr. David Ecclesasked the Minister of Food whether maize will be included in the list of United Kingdom requirements to be obtained with the second annual instalment of Marshall Aid.
    The Parliamentary Secretary to the Ministry of Food (Dr. Edith Summer-skill): The programme for spending dollars received by the United Kingdom in the second year of Marshall Aid has not yet been settled, and I regret that I cannot, therefore, answer the hon. Member's Question.
    Mr. Eccles: Would not it be a very good thing to include maize instead of buying pork, which must be a very much more expensive way of using our dollars?
    Dr. Summerskill: We will certainly consider that.
    Sir Ronald Ross: Will the right hon. Lady bear in mind the vital importance of having maize, and having it early in the year, for pig breeding?
    Dr. Summerskill: Yes, Sir.

    Fish Friers (Fats Allocation)
    Mr. Walter Fletcherasked the Minister of Food what improvement there has been during the last financial year in the supply of fats to fish friers; and whether he expects any increase in the present financial year.
    Dr. Summerskill: During the last financial year arrangements were made whereby no fish frier now receives less than four cwt. of fat for each eight week period. In addition more than 3,000 new licences were granted. There is no prospect of any further increase in the next few months, but consideration will be given to the needs of new housing estates.
    Mr. Fletcher: Is not the right hon. Lady aware that, even with the improvement that there has been in the industrial areas, there is a very great feeling that
    632
    the present ration is quite insufficient, and will she again review the subject with the idea of increasing the ration?
    Dr. Summerskill: We are always looking at it. I, of course, realise that every area would like a little more fat for fried fish.
    Mr. J. Langford-Holt: Can the right hon. Lady tell us who are her advisers as to local requirements in these cases? Are they from the local food committee?
    Dr. Summerskill: We have local committees.
    Air-Commodore Harvey: in view of the shortage of meat and the desperate need for more fried fish and chips, is it not possible to purchase more fats from other countries like New Zealand, where I understand they are available?
    Dr. Summerskill: I can assure the hon. and gallant Gentleman that we look at every country where we believe that there is fat available.

    Retail Licence (Sweets)
    Mr. Hollisasked the Minister of Food whether he will grant a licence for the sale of sweets to Mr. V. A. Larkman, Bank Road Post Office and Stores, Bank Road, Devizes, in view of the public demand for it, concerning which he has received correspondence.
    Dr. Summerskill: My right hon. Friend grants new licences for the present only where the existing shops in an area are not able to meet the needs of the public: There are two shops selling sweets within 300 yards of Mr. Larkman's premises and we should not therefore be justified in giving him a licence.
    Mr. Hollis: Might I ask the right hon. Lady, first, whether she listened to the broadcast of the Lord President of the Council the other night, when he stated that the policy of the Socialist Party was to grant freedom to retail traders; and secondly, whether she is aware that, though there are those two shops, it is the evidence of the local inhabitants that those shops are not able to provide a sufficiency of sweets for the people?
    Dr. Summerskill: I think that if the hon. Gentleman goes round his constituency he will discover that there are 40 sweet shops in the Borough of Devizes.

    Algerian Wine
    Mr. Hollisasked the Minister of Food how much Algerian wine has been Withdrawn from bond since 5th April, 1949.
    Dr. Summerskill: No figures of withdrawals of wines from bond since 5th April, 1949, are available.
    Mr. Hollis: Does that reply mean that they are unknown, or that it is not in the public interest to give them?
    Dr. Summerskill: If the hon. Gentleman had a little more information on the subject, he would know that the figures are published in the Trade and Navigation Returns in the following month.
    Mr. Norman Smith: Is it not a fact that Algerian wine is good only for salad dressing?
    Dr. Summerskill: I am prepared to try it.
    Lieut.-Colonel Sir Thomas Moore: As the right hon. Lady has not been able to answer a previous question, could she perhaps tell us how much of this wine was actually drunk and with what result?

    Enforcement Inspectors (Visits)
    Commander Maitlandasked the Minister of Food whether he is aware that farmers in Lincolnshire have been visited by inspectors on Sundays and whether he will make it clear to his Department that these visits are giving offence, and give instructions that such inspections and visits should be limited to weekdays.
    Dr. Summerskill: No complaints have been received about such visits. For enforcement duties to be carried out efficiently enforcement inspectors cannot work to a rigid timetable, and therefore I am afraid I am unable to give the instructions suggested by the hon. and gallant Member.
    Commander Maitland: Is it not really horrifying that these people should be visited on Sundays; they object to it, and surely there are six days when the inspectors could do their work, and ought they not to leave the seventh day alone?
    Dr. Summerskill: Does the hon. and gallant Gentleman believe that the potential illicit slaughterer is not prepared to practise on a Sunday?
    Commander Maitland: Yes.

    Agricultural Workers (Meat)
    Commander Maitlandasked the Minister of Food what is now the value of the allowance of meat made to British and foreign agricultural workers who live in hostels; what is the equivalent allowance made to workers in heavy industry who live at home and who take one main meal a day at a factory canteen; and what is the value of the allowance of meat to agricultural workers who live at home but who have no canteen available.
    Dr. Summerskill: The weekly allowances are as follow: Agricultural worker living in hostel and taking 12 main meals a week, 2s. 6d.; Industrial worker using canteen for five main meals a week, 2s. 5d.; Agricultural worker without canteen, 1s. 1d.
    Commander Maitland: Does not the right hon. Lady think that it is extremely unfair on the agricultural worker who has not got a canteen to which he can go?
    Dr. Summerskill: The hon. and gallant Gentleman knows that I have answered this question on many occasions. We recognise that the agricultural worker should have his ration supplemented. That is why we give him an extra 12 oz. of cheese and extra allowances including butter and sugar during certain seasonal operations, and, of course, extra sugar and tea for hot drinks.
    Commander Maitland: Will the right hon. Lady consider offering the agricultural worker the opportunity of having either the cheese or the extra meat, and then see what happens?
    Dr. Summerskill: The meat supply at the moment does not warrant that.
    Colonel Gomme-Duncan: Has the right hon. Lady ever actually seen the amount of cheese which the agricultural worker gets each day, and is it not really a perfect mockery compared with what workers in other industries get?
    Dr. Summerskill: No, Sir.

    Retail Prices
    Mr. Sparksasked the Minister of Food to state the main uncontrolled items of food, fruit and vegetables the retail prices of which have fallen by comparison with any convenient period in 1947.
    Dr. Summerskill: Recent prices of a number of vegetables have shown sub-

    Item

    Unit

    Approximate average prices during seven week period to end March

    Approximate reduction in price

    1947

    1949

    s.

    d.

    s.

    d.

    d.

    Rhubarb

    …

    …

    …

    …

    …

    1b.

    1

    9¼

    1

    4¾

    4½

    Turnips

    …

    …

    …

    …

    …

    1b.

    3

    2¼

    ¾

    Swedes

    …

    …

    …

    …

    …

    1b.

    2¾

    2

    ¾

    Parsnips

    …

    …

    …

    …

    …

    1b.

    4½

    3

    1½

    Savoy cabbage

    …

    …

    …

    …

    …

    1b.

    7¼

    3

    4¼

    Other cabbage

    …

    …

    …

    …

    …

    1b.

    7½

    4½

    3

    Cauliflower/Broccoli

    …

    …

    …

    …

    …

    1b.

    1

    2¾

    8

    6¾

    Brussels sprouts

    …

    …

    …

    …

    …

    1b.

    1

    1

    6¾

    6¼

    Leeks

    …

    …

    …

    …

    …

    1b.

    7½

    4¼

    3¼

    Lettuce

    …

    …

    …

    …

    …

    Head

    1

    0

    10

    2

    Watercress

    …

    …

    …

    …

    …

    Bunch

    6½

    6

    ½

    Celery

    …

    …

    …

    …

    …

    Head

    7½

    6

    1½

    Potatoes
    Mr. Lambertasked the Minister of Food what steps he is taking to remove potatoes, which have been purchased by his Department, which are in clamps so sited as to make the proper cultivation of the land difficult.
    Dr. Summerskill: Preference will be given to the movement of such potatoes provided the loading of deteriorating stocks is not hindered. If the hon. Member has any particular case in mind, I will gladly look into it if he will send me details.
    Sir Waldron Smithers: What is the loss on last year's potato crop?
    Dr. Summerskill: I should want notice of that question.

  TRANSPORT

    Forth and Clyde Canal
    Sir William Darlingasked the Minister of Transport what plans for the future of the Forth and Clyde Canal he has under consideration.
    stantial reductions as compared with corresponding period two years ago. With permission I will circulate the details in the OFFICIAL REPORT. I regret that information is not available to show whether there has been a fall in the uncontrolled prices of any foods other than fresh fruit and vegetables.
    The following is the list:
    The Minister of Transport (Mr. Barnes): The Forth and Clyde Canal is vested in the British Transport Commission, who are responsible for its future.
    Sir W. Darling: Does not the right hon. Gentleman share with me a certain curiosity about its future, and would he care to surrender to the temptation and make some inquiries?

    Riccarton, Roxburgh
    Sir W. Darlingasked the Minister of Transport if he is aware that the village of Riccarton, in Roxburgh, with a population of about 100, has no road communication; and when he proposes to provide a grant to the county council to make this possible.
    Mr. Barnes: Yes, Sir, and it is for the Roxburgh County Council as highway authority to decide whether a road should be built here. I could only consider a grant from the Road Fund if it could be shown that the road would be suitable for classification.
    Sir W. Darling: Is the Minister aware that these 100 residents of Riccarton are in the main employees of the railways

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    and that they have no road communication with the surrounding country, and would he not move in this matter and encourage the county council?
    Mr. Barnes: I can only repeat that the representations of the hon. Gentleman should be directed to the Roxburgh County Council which must take the first initiative in this matter.
    Mr. Mathers: Is the Minister aware that these conditions make this village unique but not unhappy?
    Sir W. Darling: Are we to understand that a community which has no roads—nothing connected with the Ministry of Transport—is unique and happy?

    C Licence Vehicles
    Mr. David Rentonasked the Minister of Transport whether he will take steps to have a thorough analysis made of ownership of C licence vehicles showing, in particular, how many are held by local authorities, public utility undertakings and nationalised industries, respectively, so that hon. Members and students of transport may have the information necessary to form opinions as to the advantages or otherwise of the C licence system.
    Mr. Barnes: No, Sir. The labour involved would not be justified at the present time.
    Mr. Renton: Is not the right hon. Gentleman aware that on both sides of the House there is a great thirst for knowledge about this matter and that he alone can cause these figures to be produced; therefore, will he say why the effort is not worth the satisfaction that would be given by the possession of that knowledge?
    Mr. Barnes: I have already taken considerable steps to obtain information about C licences and that is available, but in this case the proposal would mean the diversion of labour from more important work.

    Road Safety (Grants)
    Mr. Skeffingtonasked the Minister of Transport whether in view of the fact that grants to local authorities for road safety campaigns have been considerably less than the approved estimates, permission will be given for the balance to be
    638
    spent on actual road safety improvements, such as the provision of refuges.
    Mr. Barnes: As these grants are made under Section 115 of the Road Traffic Act, 1930, they cannot be utilised for other purposes.

    R.S.P.A. (Expenditure)
    Mr. Skeffingtonasked the Minister of Transport what was the total expenditure of the Royal Society for the Prevention of Accidents for the financial year 1948–49, analysed under main headings.
    Mr. Barnes: This information is not yet available.
    Colonel Gomme-Duncan: Cannot the right hon. Gentleman give us some statement, as we in Scotland are particularly interested to see the proportion which goes there as opposed to that which goes to England and Wales?
    Mr. Barnes: I assume that the organisation waits until the accounts are audited, and then it publishes them in the ordinary way.

    Buses (Standing Passengers)
    Mr. Boyd-Carpenterasked the Minister of Transport what alterations he intends to authorise in the number of people permitted to stand in buses in the Metropolitan area.
    Mr. Barnes: The order governing the carriage of standing passengers in public service vehicles applies to the whole country and is permissive. It is for agreement between the London Transport Executive and the Union what arrangements within the terms of the order shall apply in London. I have so far received no representations asking that the order should be varied.
    Mr. Boyd-Carpenter: Will the right hon. Gentleman give an assurance that, before consenting to any further alteration, he will satisfy himself that grave hardship would not be caused to a very large number of people who travel in these vehicles during the rush hours in the Metropolitan area?
    Mr. Barnes: I have already indicated in my reply that the order, in the first instance, is permissive, and that I must await the negotiations, if they take place, between the two bodies to which I have referred.
    Brigadier Medlicott: Is the Minister aware that a certain minority of bus conductors seem to take a delight in keeping people off their buses, and could something be done to bring home to this minority the fact that they are paid for conveying the public, and not for leaving them standing on the pavement?
    Mr. Barnes: I do not know whether the hon. and gallant Gentleman is making a general allegation regarding the whole country or is referring only to the London Transport area, which is largely involved here. If the latter, I am sure that representations to the London Transport Executive would receive proper consideration, and that the unions and the men themselves would not endorse a policy of that kind.
    Mr. W. Fletcher: Would the Minister consider appointing a consumers' council of users of Government transport and getting their views?
    Mr. Barnes: As a matter of fact, the reply to one Question today will indicate that steps are being taken to establish one in London.

    Users' Consultative Committee, London
    Mr. Albuasked the Minister of Transport whether he is yet in a position to announce the names of the Transport Consultative Committee for the London area.
    Mr. Barnes: In reply to a Question by my hon. Friend on 21st February, I said that I was considering the setting up of a Transport Users' Consultative Committee for London. I have now decided to set up such a Committee to cover both passenger and goods traffic, in the area of the London Transport Executive. Steps will be taken shortly to consult representative bodies regarding the appointment of members, under the procedure prescribed in Section 6 of the Transport Act. 1947.
    Mr. Albu: Can my right hon. Friend give an assurance that among the bodies to be consulted will be the North London Traffic Facilities Committee, which is representative of North London local authorities?
    Mr. Barnes: No, Sir, I cannot at this stage give an undertaking on what bodies
    640
    will be consulted, but if they represent local authorities as such they would certainly have representation.
    Mr. Peter Thorneycroft: When this body is set up, will it be consulted about the number of people who can travel in buses?
    Mr. Barnes: The hon. Gentleman, who was a Member of the Standing Committee on the Transport Bill, knows very well that that was one of the purposes for which these committees are being established.

    Railway Bridges (Road Surfaces)
    Mr. Goochasked the Minister of Transport whether he is aware of the bad condition of the road surface on many bridges over railways; and what steps he is taking in co-operation with the local authorities concerned for their maintenance.
    Mr. Barnes: I am aware that road surfaces on such bridges are not always in a satisfactory condition, and the parties concerned are aware that it is my wish that they should make use of the provisions of the Bridges Act, 1929, that enable responsibility for the maintenance of such road surfaces to be transferred to highway authorities. Assistance from the Road Fund is then available to them in accordance with the classification of the road.
    Mr. Gooch: Will the Minister continue to use his good offices in an endeavour to effect an agreement between the local authorities and the Commission, and thus lead to the improvement of many miles of road surfaces in all parts of the country?
    Mr. Barnes: Certainly.

  ARMED FORCES (RECRUITING APPEALS)
  Sir W. Smithersasked the Prime Minister if he will take the necessary steps to ensure that no Minister or hon. Member be asked to make any form of appeal for recruits for His Majesty's Services, unless they themselves have served.
  The Prime Minister (Mr. Attlee): No, Sir.
  Sir W. Smithers: Does the Prime Minister realise that appeals from the Lord President of the Council and the Chancellor of the Exchequer do more harm than good, and can he say why these two right hon. Gentlemen have given up their pacifist ideals?
  The Prime Minister: I think the hon. Member is misinformed.

  MINISTERS AND OFFICIALS (SALARIES)
  Sir W. Smithersasked the Prime Minister if, in view of his appeal made on 4th February, 1948, for the restriction of dividends, profits and wages, the Government will set an example to the country by reducing the salaries of Ministers and the salaries of highly-paid officials appointed by the Government in nationalised industries and other posts.
  The Prime Minister: No, Sir.
  Sir W. Smithers: In view of the fact that, since the Prime Minister made his appeal on 4th February, 1948, for a reduction of profits, dividends and wages, wages have increased by nearly £100 million a year, does he realise that the real masters of this country are the T.U.C.?
  Mr. Chamberlain: Would it not be better if the hon. Member persuaded his friends of the Federation of British Industries to observe the spirit as well as the letter of this arrangement?
  Sir W. Smithers: Has not the Chancellor of the Exchequer acknowledged on more than one occasion the co-operation—
  Mr. Speaker: Order.

  H.M. SHIPS, CHINA (AIR SUPPORT)
  Mr. A. R. W. Lowasked the Prime Minister what air support was available for His Majesty's ships in the River Yangtse area on which the Flag Officer, Far East, could have called on 20th, 21st and 22nd April; of what strength could it have been; and what distance had the aircraft to fly before reaching the vicinity of H.M.S. "Amethyst."
  The Prime Minister: It is not usual to provide air support for H.M. ships proceeding on their lawful and peaceful occasions, and none was available in the Yangtse area on 20th April. When our ships had been attacked, Sunderlands were sent up from Hong Kong. One of these reached Shanghai on 21st April and a second on 23rd April. In addition, a Dakota with supply dropping gear was ordered to Hong Kong. The nearest R.A.F. fighter aircraft were in Malaya, some 2,000 miles away. It was the decision of the Flag Officer, which I support, not to call upon them.
  Mr. Low: Is it not a fact that, in the middle of the 20th century, one Fighting Service is of very little use without another, and that H.M. ships ought not to be exposed to danger without air support being available somewhere near?
  The Prime Minister: The hon. Gentleman, of course, is right with regard to operations of war, but in this case the ship was going up the river for a perfectly peaceful purpose, and there was no suggestion that on this occasion there should also be an offensive air force accompanying it.
  Earl Winterton: Does not the right hon. Gentleman acknowledge that when he sends H.M. ships on dangerous missions into war areas, it is right to provide them with all possible protection?
  The Prime Minister: I do not deny what the right hon. Gentleman has said, but the point has been made abundantly clear that this ship was carrying out a peaceful mission in accordance with a practice which had been carried on for some time, and without any suggestion of forcing a passage up the Yangtse. As the whole matter is to be discussed this week, perhaps hon. Gentlemen can develop their strategic and tactical ideas then.
  Vice-Admiral Taylor: Although the right hon. Gentleman's statement that the ship was proceeding on a peaceful mission is quite correct, was not the whole situation altered immediately "Amethyst" had been shelled by the Communists, and was it not very necessary to provide air support for any other British ships proceeding up the Yangtse?
  The Prime Minister: In the judgment of the commander on the spot, the right thing was to send this ship up as soon as possible in the hope that they would be able to get "Amethyst" off under peaceful conditions.
  Commander Galbraith: Is the House to understand from the right hon. Gentleman's statement that the Admiral commanding had aircraft placed at his disposal? If so, when; and when could he expect them to be in his vicinity and available to him?
  The Prime Minister: The Admiral commanding could have asked for aircraft if he desired them. The nearest aircraft were then between 36 and 48 hours' transit time away.
  Commander Galbraith: But were they actually placed at his disposal? After all, an Admiral there does not consider aircraft in Malaya as being at his disposal.
  The Prime Minister: I have already informed the hon. and gallant Gentleman that the Admiral could have asked for aircraft if he had said that in his opinion it was desirable to have them.
  Mr. Emrys Hughes: If aircraft had gone with the ship, and if the Chinese population had been bombed, how would that have helped the British subjects whom this ship was being sent to help?
  Mr. Speaker: We cannot discuss the whole situation now. The Question only asked what air support was available, what strength it was and what distance it had to fly—not what the Admiral might say.
  Air-Commodore Harvey: In view of the difficult situation existing in China, is it not an extraordinary thing that no land-based aircraft were available in Hong Kong?
  Mr. Speaker: That is quite another question from that on the Order Paper.

  BRITISH COMMONWEALTH AND EMPIRE

    Official Designation
    Mr. W. Fletcherasked the Prime Minister what steps he took to secure the agreement of His Majesty's Governments in other parts of the British
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    Commonwealth and Empire to the progressive substitution in official usage of the term "Commonwealth," for the term "Empire"; and how far it is the intention of His Majesty's Government in the United Kingdom to put an end to the official use of the expression "British Empire."
    The Prime Minister: Terminology, if it is to be useful, keeps step with developments without becoming rigid or doctrinaire. All constitutional developments in the Commonwealth, the British Commonwealth, or the British Empire—1 use the three terms deliberately—have been the subject of consultation between His Majesty's Governments, and there has been no agreement to adopt or to exclude the use of any one of these terms, nor any decision on the part of His Majesty's Government in the United Kingdom to do so.
    Mr. Fletcher: Will the right hon. Gentleman, being aware, as he is, that the use of the words "British Empire" is held in high respect throughout the British Empire by a great many people, see to it that they are not by daily use pushed out of the picture, and other phraseology adopted in their place?
    The Prime Minister: The hon. Member knows that opinions differ in different parts of the British Empire and Commonwealth on this matter, and I think it better to allow people to use the expression they like best.
    Colonel Gomme-Duncan: If, as the right hon. Gentleman has said, His Majesty's Government have taken no decision, why do they take every opportunity to cut out the words "British" and "Empire"?
    The Prime Minister: They do not.

    Commemoration Date
    Mr. Collinsasked the Prime Minister if he will give consideration to the provision of suitable arrangements for the future commemoration of 27th April as Commonwealth Day.
    The Prime Minister: I agree that the 27th April has become a notable date in the history of the Commonwealth, but I doubt if it would be appropriate to add another to the occasion on which the association of the countries of the Commonwealth is already celebrated.
    Mr. Collins: Does not the Prime Minister think that an event which the right hon. Member for Saffron Walden (Mr. R. A. Butler) once said would be the greatest act of statesmanship in the history of the world is worthy of commemoration, and that such a day would, generally speaking, be more appropriate than 24th May?
    Vice-Admiral Taylor: Does not the right hon. Gentleman still consider that Empire Day is an appropriate day for commemoration?
    The Prime Minister: I have suggested that we should make no change in the date.

  PERSONAL INCOMES, COSTS AND PRICES
  Mr. Viantasked the Prime Minister whether he has any statement to make on the Government's policy on personal incomes, costs and prices.
  The Prime Minister: The White Paper of February, 1948, was based on certain principles which broadly can be summarised as follow: (1) that it is essential that there should be no further general increase in the level of personal incomes whether from profits or earnings without at least a corresponding increase in the volume of production; (2) that every effort should be made to reduce prices wherever possible; (3) that if remuneration is increased in any class of employment contrary to the intention set out in the White Paper there can be no presumption that the resulting costs will be taken into account in settling controlled prices, charges or margins or other financial matters requiring Government action.
  The improvement in our state of affairs last year was undoubtedly due in large measure to the response on all sides to the plea for restraint in the White Paper. The need for that restraint is as great today as it was a year ago, and the principles of the White Paper remain as an essential and important element in the Government's economic policy. It is equally important that action should be continued to reduce prices wherever possible. I feel sure that the Government will continue to receive the wide measure of co-operation on all sides in
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  this policy which they have been accorded over the past year.
  Sir W. Smithers: Will the right hon. Gentleman say why he has given way to the T.U.C. to allow wages to rise on an annual basis of £100 million since he made his appeal on 4th February, 1948?
  The Prime Minister: As I explained in my reply, there has, as a matter of fact, been great restraint exercised on all sides, but certain long-standing demands for increases have been met. As was explained at the time of the White Paper, it was not intended, in certain cases, that it would be possible or desirable to put an absolute bar on all changes.

  QUEEN'S HALL (REBUILDING)
  Major Tufton Beamishasked the Lord President of the Council whether he will now make a further statement about the proposal to rebuild the Queen's Hall, London, and the nature of the facilities to be afforded by the Government.
  The Financial Secretary to the Treasury (Mr. Glenvil Hall): I have been asked to reply. The facilities which are required and will be afforded by the Government to enable the Queen's Hall to be rebuilt are, first, a renewal of the lease of the site, which is Crown Land; second, a war damage payment in respect of the destruction of the old hall by enemy action; and, third, a building licence. Discussions are proceeding about the arrangements for providing concerts in the hall when it has been rebuilt.
  Major Beamish: When there are new developments in this direction, will the right hon. Gentleman bear in mind that several hundred thousand of the music-loving public subscribed to the Henry Wood Memorial Trust—there is very great interest in this matter—and will he undertake to keep the public informed of new developments?
  Mr. Glenvil Hall: We realise that there is a great deal of interest in the rebuilding of this hall, and we hope that it will not be long before the work can be started.
  Mrs. Ayrton Gould: Can the right hon. Gentleman say whether the new

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  Queen's Hall will be built as a national concert hall, and, if so, what kind of governing body there will be?
  Mr. Glenvil Hall: Not without notice.

  FOREIGN OFFICE (REGISTRY CLERK)
  Mr. Piratinasked the Secretary of State for Foreign Affairs why Miss Lilian Hemsley has been dismissed from his Department; what post she held; and whether she has been transferred to another Ministry.
  The Under-Secretary of State for Foreign Affairs (Mr. Mayhew): Miss Hemsley has not been dismissed from the Foreign Office. She is an established clerical officer employed as a registry clerk in the Archives Department. The question of her transfer will arise if action now being taken in her case in accordance with the Prime Minister's statement of 15th March. 1948, shows this to be necessary.
  Mr. Piratin: Is the Minister aware that the confidential nature of the work which Miss Hemsley was doing consisted, to a large degree, in posting whisky to diplomatic missions abroad, and, further, that she applied for a transfer to the Ministry of Education as long ago as early last year? That being so, can the Minister explain the reason why she is being removed at this stage, and for what reason?
  Mr. Mayhew: I have said that she is not necessarily being removed; my answer explained that. As to the whisky, I cannot accept that as a description of the work she did, but I must make it clear that it is not possible to make a clear distinction between secret and non-secret work in the Foreign Office.

  GERMANY

    Western Frontier Adjustments
    Mr. Skeffington-Lodgeasked the Secretary of State for Foreign Affairs how many Germans have been transferred to the Low Countries under the new frontier arrangements; and what number of these has applied to move into German territory.
    Mr. Mayhew: The population of the areas provisionally transferred to Belgium and the Netherlands is approximately 9,000. It is not yet possible to give figures for those who have applied to move into German territory, since the returns from a large number of the localities concerned are still awaited.
    Mr. Skeffington-Lodge: Is my hon. Friend aware that among these 9,000 people he has mentioned, there is a considerable number now unemployed, and as they are suffering some considerable hardship, will he, if at all possible, give priority to those of them who apply to come back into Germany with the object of being re-employed there?
    Mr. Mayhew: I should like to look into that when we have the full returns.
    Mr. Skeffington-Lodgeasked the Secretary of State for Foreign Affairs to what extent the local inhabitants were consulted before the German frontier adjustment with the Low Countries was approved and applied; and if he will refuse to sanction any further changes until a peace treaty has been signed with Germany.
    Mr. Mayhew: The local inhabitants were not consulted before the frontier adjustments were put into effect. In doubtful cases they may, however, present their views on the definitive line of the frontier, as far as technical considerations are concerned, to the Demarcation Commissioners who will finally determine the provisional frontier. The present adjustments are provisional only, and subject to confirmation or modification at the peace settlement. His Majesty's Government will not consider any further changes prior to the peace settlement.
    Mr. Skeffington-Lodge: While I am glad to have the assurance contained in the last sentence of my hon. Friend's reply, does he realise that what has already happened represents in the minds of many Germans a bit of backstairs diplomacy, and, because that is so, does he not recognise that real democracy is brought into disrepute as a result of these new arrangements, which seem to have been achieved as the result of pressure on the part of people outside Germany?
    Mr. Mayhew: No, Sir, I cannot agree that this is a backstairs arrangement. These changes, are, as I say, small and provisional.

    Unemployment
    Mr. Skeffington-Lodgeasked the Secretary of State for Foreign Affairs what degree of unemployment there is in Western Germany; and which trades and industries are most affected.
    Mr. Mayhew: The provisional estimate of unemployment in the Bizone for mid-April is 1,176,446. This represents about 8.5 per cent. of the wage and salary earning force. The principal trades and industries affected are building and related industries, commercial and administrative classes, metal and related industries, unskilled workers, and agricultural workers.
    Mr. Skeffington-Lodge: In view of the serious situation which those figures disclose, will my hon. Friend use his influence to secure that those Germans who want to come to this country—where British workers will not be adversely affected as a result—will be allowed to do so for employment here? May I have an answer to that Question?

  SPAIN (GOVERNMENT POLICY)
  Mr. Francis Noel-Bakerasked the Secretary of State for Foreign Affairs what instructions have been sent to the British Delegation to the United Nations regarding the proposals now before the United Nations to rescind their earlier resolutions which excluded Spain from all United Nations agencies and organisations.
  Mr. Mayhew: So far as I am aware, no proposals to rescind the recommendation of the United Nations Assembly of 12th December, 1946, have as yet been put before the present meeting of the Assembly. I would, however, like to reaffirm that, if a move is made to rescind the United Nations' recommendation about the withdrawal of Ambassadors or the exclusion of the present Government of Spain from the specialised agencies, we do not intend to support it.
  Mr. Noel-Baker: Could my hon. Friend give the House a categorical assurance that if any decision is taken to admit Spain into any technical international agencies, that will not represent the beginning of a move to include Spain in the United Nations, Western Union, the Atlantic Pact, or any of the other arrangements made between the democratic nations of Western Europe?
  Mr. Mayhew: That is a hypothetical question and concerns many other Governments besides His Majesty's Government. What I can say is that we should oppose a move to include Spain, under her present régime, in the Council of Europe, the O.E.E.C., the Atlantic Pact, or the United Nations.
  Vice-Admiral Taylor: Is the hon. Gentleman not aware that these proposals in the first place were a direct interference with the internal affairs of Spain, whether we agree with them or not?
  Mr. Mayhew: No, Sir.
  Mr. Benn Levy: While appreciating my hon. Friend's announcement in his first reply that our representatives will not support the inclusion of Spain in United Nations agencies and organisations, will he make it clear that this does not presage neutrality but that we will positively oppose the inclusion of Spain?
  Mr. Mayhew: There is no change in our policy.
  Mr. George Jegerasked the Secretary of State for Foreign Affairs what consultations have taken place with the Government of the United States of America recently regarding action on Spain.
  Mr. Mayhew: No consultations have taken place recently, although the two Governments keep in touch on this as on other subjects through the normal diplomatic channel.

  AUSTRIA (ASSOCIATION OF INDEPENDENTS)
  Mr. Piratinasked the Secretary of State for Foreign Affairs whether he is aware that the newly-formed Association of Independents in Austria is a neo-Fascist organisation, whose appeal is directed to former Nazis; and what steps he is taking to prevent this revival of Fascism.
  Mr. Mayhew: The Association of Independents has not applied to the Allied Council for recognition as a political party, and, so far as I know, none of the Occupying Powers in Austria has proposed that any action should be taken against the Association on the ground that it is a Fascist organisation.
  Mr. Piratin: Although this organisation may not have applied for recognition as a political party, does not the Minister recognise that this is nothing but a political party, and is he not aware that a number of newspapers of a Right wing nature in Austria are supporting this organisation? Will he look into it?
  Mr. Mayhew: The organisation has not offended any Allied Council directive. If it does so, it will be firmly dealt with.
  Colonel Gomme-Duncan: In view of the fact that the Communists call everybody Fascists who are not Communists, will he refuse to take any notice of this nonsense?
  Mr. Mayhew: We distinguish between organisations called Fascist and organisations called Fascist by Communists.

  U.S.S.R.

    Service Attachés, Moscow
    Mr. Emrys Hughesasked the Secretary of State for Foreign Affairs what was the total expenditure incurred by the military, navy and air attachés in Moscow last year; and what is the nature of their duties.
    Mr. Mayhew: I understand that the total expenditure for the financial year 1948–49 was approximately £28,000. The duties of the Service attachés in Moscow, as at other posts, are to keep in the closest possible touch with the naval, military and air Services of the country in which they are stationed, to advise His Majesty's Ambassador on all mattters affecting the Armed Services and to represent their respective Service Departments as required.
    Mr. Emrys Hughes: Is the Minister satisfied that this expenditure is justified? Could not economies be effected?
    Mr. Mayhew: It is justified. It could be more valuable if there were greater facilities for the Service attachés.
    Captain Marsden: Can the hon. Gentleman say whether sufficient opportunities for obtaining information are given to our attachés up to the same standard as the opportunities which we give to the Russian attachés in this country?
    Mr. Mayhew: No, Sir, I cannot give that assurance.
    Sir Wavell Wakefield: What steps have been taken to ensure that reciprocal facilities are granted so that our representatives in Russia get the same facilities as the Russian naval, military and air attachés get in this country?
    Mr. Mayhew: We have not overlooked that, but it is a different question.

    "British Ally" (Mr. A. P. Johnstone)
    Mr. Thurtleasked the Secretary of State for Foreign Affairs if any inquiry was made into the political views of Mr. A. P. Johnstone, until recently editor of the paper printed in Russian called "British Ally," before he was appointed to this post; and what reports had been received, before his resignation, as to his suitability or otherwise for the position of editor of the paper in question.
    Mr. Wilson Harrisasked the Secretary of State for Foreign Affairs on what grounds Mr. Archibald Johnstone was appointed to the staff of the paper "British Ally"; what were his functions; what was known of his political views at the time of his appointment; and what report has been received in regard to them since.
    Mr. Mayhew: Mr. Johnstone had good technical qualifications and experience. His functions were those of technical editor and he was in charge of the preparation of the paper for printing. He was not responsible for its editorial policy, nor was he in a position to influence its political content. Reports on his performance of his duties during the two years since his appointment were satisfactory.
    At the time of his appointment, Mr. Johnstone's personal political views were known to be somewhat extreme, but there was no sign of his having any Communist associations or tendencies. Nor, according to my information, was there any indication of any change up to the moment when he absented himself from the Embassy and his letter appeared in "Pravda."
    Mr. Thurtle: Is my hon. Friend aware that the most exhaustive inquiries ought first to be made before anyone is

    653
    appointed to such a responsible position as this? Is he also aware that this man, by the manner of his resignation, has completely betrayed the interests which he was sent to Russia to promote?
    Mr. Mayhew: The answer to the first part of the question is that since the statement of my right hon. Friend the Prime Minister last year inquiries are made about the loyalty of applicants for such posts. On the second point, my answer is "Yes, Sir."
    Mr. Henry Strauss: Is the hon. Gentleman aware that it was well known in Fleet Street at all material times that this man was a notorious Communist fellow traveller, and can the hon. Gentleman account for the fact that what was well known in Fleet Street was not known to the Foreign Office?
    Mr. Mayhew: I should dislike holding against a man what Fleet Street says of him.
    Mr. Norman Smith: Would my hon. Friend agree to substitute the word "reactionary" for "extreme" as applied to Mr. Johnstone?
    Mr. Mayhew: That is a very suitable alternative adjective.
    Major Beamish: Since the dividing line between Socialists with Marxist views and Communists has never been definable, was it not most unfortunate that a man known to have Marxist views should have been appointed to this position? Further, is the Minister of the opinion that this is a good example of the Left working with the Left?
    Mr. Mayhew: I am well aware of the political backwardness of hon. Members opposite, which makes it impossible for them to distinguish between Communists and democratic Socialists.
    Mr. Harold Macmillan: Would the hon. Gentleman regard it as extreme to thank the Communists for helping hon. Members in their election?

  BOMBER AIRCRAFT (PRICES)
  Mr. Emrys Hughesasked the Minister of Supply what steps he is taking to satisfy himself that the price paid for the latest type of long-distance bombers
  654
  is not excessive in regard to their performance.
  The Minister of Supply (Mr. G. R. Strauss): Aircraft delivered in accordance with contract specifications are paid for at a fair and reasonable price, based on estimates of the cost of efficient manufacture.
  Mr. Emrys Hughes: Does the Minister consider that £250,000 is a reasonable price?
  Mr. Strauss: I am not aware of what contract the hon. Gentleman is referring to.

  CATERING WAGES ACT (ORDERS)
  Mr. Orr-Ewing: Mr. Speaker, may I ask you a question of which I have given you private notice? Would you give a Ruling as to whether it is in Order to debate orders made under the Catering Wages Act affecting certain types of catering and residential businesses while draft orders or proposals affecting other types of such businesses are being considered by a wages board and have not yet been submitted to or endorsed by the Minister of Labour?
  Mr. Speaker: It is difficult for me to give a definite Ruling on what seemed to me as I read it a somewhat indefinite question, but I can promise the hon. Member that nothing will stop a Debate on these matters. As far as I am concerned, every case must be considered on its merits as to what orders there are or not under discussion at the time. If the hon. Member chooses on some Adjournment to try to raise it, I can assure him that the matter will be judged by the Chair on its merits. I cannot go further than that.
  Mr. Orr-Ewing: While thanking you for that general Ruling, may I ask whether I can take it that there would be no objection at some early date on an Adjournment to my raising the question which I tried to raise on the Easter Adjournment but which was objected to by the Minister of Labour as being out of Order?
  Mr. Speaker: I ruled it out of Order because I was in very considerable doubt as to whether it was sub judice or not, but I have decided that the matter can be raised on an early date.

ORDERS OF THE DAY

  IRON AND STEEL BILL
  As amended (in the Standing Committee), further considered.
  [3RD ALLOTTED DAY]

Clause 20.—(POWER TO ACQUIRE SECURI- TIES OF CERTAIN ADDITIONAL COM- PANIES.)
3.30 p.m.
The Solicitor-General (Sir Frank Soskice): I beg to move, in page 23, line 10, after "owns," to insert:
"the whole, or a substantial or essential part of."
This Amendment goes with the Amendment in line 17. These two Amendments are designed to improve the drafting and to remove some ambiguity in the Clause to which hon. Members opposite drew attention during the Committee stage. They re-arrange and re-group the words which describe the part of the works taken over by a company from a third Schedule company, the result of which proceeding gives rise to the right which has been given to the Minister under Clause 20, subsection (1). It is simply a matter of drafting. It is designed to clarify the wording used in the original form and to remove certain rather ambiguous language which was then in the Clause.
Mr. Oliver Lyttelton: I am much obliged to the Government.
Amendment agreed to.
Further Amendment made: In line 17, leave out from "activity," to "were," in line 22, and insert "and."
The Minister of Supply (Mr. G. R. Strauss): I beg to move, in page 23, line 26, to leave out from "time," to "serve," in line 27, and to insert:
"before the general date of transfer or within the period of three months beginning with that date."
This is one of a series of drafting Amendments which have been put down to meet the views expressed in Committee by hon. Members opposite. We think that this Amendment, with other Amendments which follow, on balance improve the drafting.
Mr. Lyttelton: On balance!
Mr. Strauss: I shall explain what I mean by "on balance." Quite frankly, we think that in one or two cases it is very doubtful whether the Amendments are necessary. They certainly do no harm and, as hon. Members opposite think they are necessary and that they do improve the Bill, we are perfectly happy to accept them, in case they may be right. This Amendment without doubt does clarify the wording and we recommend its acceptance.
Mr. Lyttelton: I am much obliged to the Government.
Amendment agreed to.
The Solicitor-General: I beg to move, in page 23, line 36, to leave out from "transactions," to "any," in line 37, and to insert:
"entered into after the said day resulting directly or indirectly in the transfer or grant to the first-mentioned company of rights of ownership in, or rights in respect of the user of."
This is another Amendment which is designed to improve the drafting, but it also has a further object. It was pointed out by the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) that it was possible that the wording originally used might include certain types of change which we did not intend to include. For example, as the proviso was originally worded, it could be argued with some possible degree of plausibility—although we thought it could not be sustained—that a mere change in the managerial personnel might come within the wording used. The hon. and learned Member pointed that out and, in an endeavour to meet the point he made, we have chosen this amended wording which we think removes any possible room for doubt.
Mr. Selwyn Lloyd: I agree with the right hon. and learned Gentleman that he has resolved the difficulty which I tried to point out in Committee. With respect however, I think that as a result he has got himself into further trouble, because the first two Amendments on the Order Paper today were designed to clear up the muddle which the Opposition pointed out in this Clause with regard to works and parts of works. This Amendment will mean that the proviso will read:
"Provided that this subsection shall not apply in a case where the Minister has

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approved in writing for the purposes of this subsection, either before or after they were effected, all transactions entered into after the said day resulting directly or indirectly in the transfer or grant to the first-mentioned company of rights of ownership in, or rights in respect of the user of any of the said works…"
I should have thought that the Solicitor-General ought to have had in the Clause "works or parts of works." Without that, he might find himself in certain difficulties.
The Solicitor-General: I must ask the permission of the House to speak again. The word "works" is a plural word and it includes any individual part of a works. I do not think it is necessary to use the additional words suggested by the hon. and learned Member for Wirral.
Mr. Selwyn Lloyd: May I ask a question on that? If that is the view, why was it necessary to include earlier the words, "substantial or essential part of" the works?
The Solicitor-General: That was a simple matter of artistic re-arrangement. We doubted whether the Amendment was really necessary at all, but because of the very exacting test applied by hon. Members opposite we thought we would defer to their views.
Amendment agreed to.
Further Amendments made: In page 24, line 1, leave out "that date," and insert, "the said day."
In line 5, leave out from "time," to "serve," in line 6, and insert:
"before the general date of transfer or within the period of three months beginning with that date."—[Mr. G. R. Strauss.]
The Solicitor-General: I beg to move, in page 24, line 38, to leave out "or," and to insert:
"and not being earlier than."
This, again, is purely drafting. It makes clearer the wording which we used previously, and can leave in no doubt whatever what is intended.
Amendment agreed to.
Mr. Lyttelton: I beg to move, in page 25, line 6, to leave out:
"and is not withdrawn or revoked."
I think it may be for the convenience of
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the House if we discuss with this Amendment the next three Amendments:
In page 25, line 7, leave out from "apply," to second "to," in line 8.
In page 25, In line 8, after "company," insert:
"with respect to transactions entered into after receipt by the company of the notice of acquisition."
In page 25, In line 10, at end, insert:
"Provided that, if the notice of acquisition is withdrawn or revoked, those provisions shall be deemed never to have applied to the company."
Mr. Speaker: That would be convenient.
Mr. Lyttelton: These are more than an "artistic rearrangement," which were the words of the right hon. and learned Gentleman. They are designed in order to try to prevent the infliction of what we consider to be an injustice. At present, as the Bill is drafted, it is possible for a company, or the directors of a company, to commit actions which afterwards turn out to be subject to penalties or, even if not subject to penalties, to be undesirable—yet they may commit them before they know the company is to be acquired It seems to us to be very vicious if the retro-active provisions of the Bill apply to transactions entered into before the service of the notice of acquisition.
It seems to us to be quite unfair that any Third Schedule company, unaware that they could be included, should have their transactions called into question before the service of the notice. The Minister in Standing Committee said that the new owner ought to be fully aware of the situation. That is not really the point at all. There is a considerable matter of principle involved, and the area of uncertainty which is spread by the Bill will be widened considerably if companies are to remain in anxiety lest what they are now doing, before any notice of acquisition is served on them, may be called into question after that notice is served.
Mr. G. R. Strauss: I hope that the House will not accept this Amendment. The position is not unfair or unreasonable in any way. The Clause applies only to works which are making at least the amount of iron and steel products stated in the Second Schedule, or to wholly owned subsidiaries of the Third

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Schedule companies. Therefore, it is ridiculous to say that a company that acquires such works producing more than 20,000 tons of pig iron or steel, or a company that acquires a wholly owned subsidiary of a Third Schedule company, could be ignorant of the situation, or unaware that the works which have been acquired will be brought back into the possession of the Corporation, unless the Minister has previously given an undertaking that that will not happen. Therefore, it is perfectly right that an acquiring company should be put in the same position as a Third Schedule company. If, having acquired iron and steel works producing more than 20,000 tons of pig iron or steel or hot re-rolled products they should then proceed to dissipate the assets of the company, or enter into what I call funny contracts—
Viscount Hinchingbrooke: "Funny, ha, ha."
Mr. Strauss:—which can be challenged and reversed under Clause 13, the company should be liable for all the penalties that may arise if they proceed to dissipate those assets. There can be no possible argument that the acquiring company is unaware of the situation, nor that it does not know that these big steel works are likely to come under the Corporation, because all big steel works producing over 20,000 tons are coming under the Corporation, and all the subsidiaries—the wholly owned subsidiaries —of the Third Schedule companies are also coming under the Corporation.
This would apply only where, for some peculiar reason, the present owning company, whose name is stated in the Third Schedule, parts with these works to some outside company. It is perfectly right that such penalties or retro-active action should apply as from the date of the publication of the Bill —because everybody had notice then—and not from the date when the Minister issues to that company a special notice of acquisition. Otherwise there would be a serious risk of a leakage. It may be that during that long period a company which, quite plainly, is to be acquired under the Bill may have its assets dissipated, and may be put into a weakened position, and neither the Corporation or anybody else, would be able to take any action to put the matter right
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or to protect the Corporation. For these reasons I suggest it would be wholly unreasonable to accept the Amendment.
Mr. Lyttelton: The arguments advanced by the Minister seem to me to be very extraordinary. If it is quite certain that a company is being acquired, why is that not stated? Of course, it is just the cases on the borderline which are exactly the ones called into question. It is not at all certain, in some cases, whether a company is to be acquired or not, because it depends on the hiving-off provisions. Where it was quite certain I should be prepared to agree with the Minister; but it is not certain. The fact that it is not is proved by the insertion of these words in order to protect the Minister. The Bill is drafted throughout so that the onus shall be put on to other people. If it is certain that a particular company is to be acquired it ought to be stated.
3.45 p.m.
Mr. Strauss: By leave of the House, I shall answer that question. There is no uncertainty here. This applies only to iron and steel works whose products are greater than those set out in the Second Schedule—as stated in subsection (1, a)—unless the hiving-off provisions have been agreed to by the Minister, in which case he states his reasons in writing. There can be no possible uncertainty.
Mr. Hugh Fraser: Surely, this refers only to firms specified in the Third Schedule or the Second Schedule? It does seem to us that this is just an escape Clause, so to speak, so that the Minister can put right any error he may commit. It must be clear to him which firms he proposes to acquire. I cannot understand his point.
Amendment negatived.

Clause 21.—(REMOVAL OF COMPANY FROM THIRD SCHEDULE IN CONSEQUENCE OF TRANSFER OF IRON AND STEEL WORKS.)
Amendment made: In page 25, line 43, leave out "still."—[Mr. G. R. Strauss.]

Clause 22.—(PROHIBITION OF TRANSFER OF IRON AND STEEL WORKS.)
The Solicitor-General: I beg to move, in page 26, line 45, to leave out from the beginning, to the second "any," and to insert:
"enter into any transaction transferring or granting to any person."

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This is an Amendment designed to meet an argument propounded by the hon. and learned Member for Daventry (Mr. Manningham-Buller). He was concerned that the wording at present in subsection (1, a) of this Clause might be sufficiently wide to include a number of operations which were not intended to be included. He instanced the case of the termination of a lease by operation of law. He thought that the words as they appear in the Clause might include a case of that sort and render the consequent transfer void. That, of course, is not intended, and, accordingly, we have now selected, and seek to insert by this Amendment, wording which will make it perfectly clear beyond peradventure that what is struck out is a transaction which is actually entered into by some particular person, or, in this case, a company. The wording we have chosen would exclude any such automatic transfer effected by operation of law, such as that instanced by the hon. and learned Gentleman. This Amendment goes with the next on the Order Paper, in page 27, line 11, by which the same wording is sought to be introduced into that part of the Clause as is here sought to be introduced in this part of the Clause.
Mr. Manningham-Buller: I should like to thank the Solicitor-General for the way in which he has met the point I raised in Committee. I agree with him that this alteration of the wording will improve the Bill and will avoid the consequences which, in my opinion, would have flowed from the original draft.
Amendment agreed to.
Further Amendments made: In page 27, line 11, leave out "transfer or grant." and insert:
"enter into any transaction transferring or granting to any person."—[The Solicitor-General.]
In page 25, In line 15, leave out from beginning, to "or," in line 16, and insert:
"general date of transfer or within the period of three months beginning with that date."—[Mr. G. R. Strauss.]
The Solicitor-General: I beg to move in page 27, line 30, to leave out from "to," to end of line, and to insert:
"require the transfer, surrender or grant of rights in respect of the works or part of the works in question to a publicly-owned company."
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This is slightly more than a drafting Amendment but not much more. It enables the approval which is referred to in the proviso to subsection (1) of the Clause to be in rather different terms from that in which it appears in the Clause as drafted. Approval can be given, as the Clause stands, subject to conditions, enabling the Corporation to get back the rights transferred or granted. The conditions which it is desirable to include in the approval may be less extensive, and it may be required simply to preserve some particular interest in the rights transferred or granted. The words which we seek to introduce enable the less stringent condition to be imposed, instead of making it necessary to impose the drastic condition referring to the full rights granted or transferred.
Amendment agreed to.
The Solicitor-General: I beg to move in page 27 line 33, after "transaction," to insert:
"and the parties to any subsequent transaction relating to the same works."
It was pointed out by the hon. and learned Member for Daventry (Mr. Manningham-Buller) that in cases where transactions were void under Clause 22, it may be that third parties had already acquired rights. The property which was transferred may have been the subject of a further transfer to some third party. In those circumstances, it was the hon. and learned Gentleman's argument that the third parties should also be concerned in the subsequent arbitration proceedings. The Amendment provides that the parties to any subsequent transaction relating to the same work, that is to say, some third party, as instanced by the hon. and learned Gentleman, could be regarded as concerned in the transaction and subsequently made parties to the arbitration.
Mr. Manningham-Buller: The learned Solicitor-General says that they will be made parties to the arbitration. Does that carry with it the possibility that they may be made liable to pay compensation to the Corporation by order of the tribunal if action is taken under subsection (3)?
The Solicitor-General: That is answered by reference to the wording at the bottom of page 27, that the persons who could be made liable are all parties to the transaction, but does not include

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parties to a subsequent transaction. It refers to the transaction whereby the property is transferred which is voided in the present circumstances.
Mr. Manningham-Buller: I do not think that covers the point. The Solicitor-General has said that the effect of the Amendment is to bring within the area of this Clause transactions subsequent to the original ones entered into with third parties, and he said that these parties would be served with the notice of the arbitration and brought before the tribunal. I am asking the right hon. and learned Gentleman for information. I am not sure what the answer is, but I think that this is a matter which requires to be answered. Are these third parties then brought within the scope of subsection (3) and rendered liable to have orders made against them for the payment of penalties to the Corporation under subsection (3)? I must ask him for a specific answer to that question. As I understood what he said when moving the Amendment, it would appear that the third parties to which he has referred are now brought within the scope of subsection (3), but the matter ought not to be left in doubt, and we ought to know where we stand with regard to it before we consider, as we shall do shortly, the effect of subsection (3).
The Solicitor-General: I think that reference to subsection (3) shows that technically such third parties, if they were parties to the application, could be brought within the ambit of an order requiring damages to be paid. In point of fact, in subsection (3) there is a very considerable safeguard, because all that can be done is that an order can be made against any of the parties to the application as the tribunal thinks just, having regard to the extent to which those parties were respectively responsible for the transaction or benefited by it. Although technically the third parties can be said to be within the purview of that subsection it is not easy to imagine a case in which a third party was responsible for the original transaction or benefited by the original transaction; but if we can imagine such a case—and I suppose it is possible—where there is some sort of collusion between the third parties and the transferee, then, in a case like that, where there was some sort of col-
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lusion or, indeed, in the case where the third party had benefited by the original transaction before the transfer, an order could be made against the third party.
There is always the safeguard that an order could only be made that the arbitration tribunal, bearing these circumstances in mind, thinks is just. I cannot conceive that an arbitration tribunal, faced with the question of whether it should award damages against an innocent third party which had not been in any way a collusive agent in the original transaction and had not benefited by it, would consider it just to make an order against such a third party. On the other hand, I think that the hon. and learned Gentleman would agree it not inappropriate, if it could be shown that there was something in the nature of collusion which had resulted in advantage to a third party—it depends on the circumstances—that an order should be made against the third party.
Mr. Manningham-Buller: I should like to pursue this matter a little further. The Amendment raises a question of some importance so far as third parties are concerned. The right hon. and learned Gentleman says that the matter can be safely left to the tribunal to determine. That leaves the possibility of liability being in effect cast upon third parties. The effect of the Amendment is, therefore, considerably to widen the provision of subsection (3). The right hon. and learned Gentleman has made many references to collusion between the third parties and the parties of the original transaction. Of course he is aware that subsection (3) does not have any reference in it whatsoever to collusion, and the sole test which the tribunal will have to apply in determining who shall be responsible for making payments to the Corporation is the test of responsibility for a transaction or benefit from the transaction.
It may well be, I should have thought, that a third party might be shown to be a party which benefited from the transaction. Surely we are entitled to know from the Government whether it is their intention that third parties should be liable, as a result of this Amendment, to have the penalties imposed upon them under subsection (3), or whether it is not their intention that that consequence should flow from it. Should that not be their intention, then I suggest that some

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further words will be necessary to make that quite clear. I ask the right hon. and learned Gentleman to say what is the Government's intention in this matter.
4.0 p.m.
Mr. Selwyn Lloyd: As I understand it, these arbitration proceedings may begin when a notice of acquisition has been served and there is some dispute as to whether a transaction purporting to effect such a transfer should be brought in. The Clause is now widened to include these third parties, and I should like a quite definite assurance that these third parties have the right to initiate proceedings before the arbitration tribunal if they think fit.
The Solicitor-General: I should say that the third parties have a right to initiate arbitration proceedings under this Amendment.
Amendment agreed to.
Further Amendments made: In page 27, line 34, after "Act," insert, "between the Corporation and those parties."
In page 27, In line 39, after "shall" insert, "subject to any such agreement as aforesaid."—[The Solicitor-General.]
Mr. Manningham-Buller: I beg to move, in page 28, line 16, at the end to insert:
"Provided also that no order shall be made under this section against any director of the company in respect of whom the tribunal is satisfied that the transaction was entered into without his knowledge or without his consent."
We have already had a few words to say about subsection (3), and this afternoon the degree of suspicion, and entirely unjustified suspicion, that the Government hold in relation to the companies to be affected by this Bill has already been made perfectly apparent. Under subsection (3) we find further provision for the imposing of penalties upon persons affected by this Measure. It is provided that if one of the transactions made illegal by Clause 22 is entered into and the Corporation suffers damage by reason of that transaction, then all parties to the transaction and all persons who were directors of the company at the time can be brought before the tribunal and may be ordered to make such payment as the tribunal thinks just. The material words are:
"having regard to the extent to which those parties were respectively responsible for the
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transaction or benefited from it and to all the circumstances of the case."
I ask the House to consider first the position of a director of a company who at a board meeting voted against entering into one of the transactions made illegal by this Clause. It could clearly not be said that he was responsible for that transaction, because he would have taken the only step that lay within his power to prevent that transaction being entered into. Nevertheless, in consequence of that transaction he might indirectly have benefited. If that be so he would be brought within the scope of this subsection and be liable to have an order made against him for the payment of a penalty to the Corporation, although in no moral sense could any blame be attached to him.
That is one case with which our Amendment seeks to deal by making it quite clear that a director who opposes entering into a prohibited transaction shall be under no liability to pay any penalty to the Corporation because of that transaction. The Government may say that all this can be safely left to the tribunal, that the tribunal will only do what is right having regard to the extent to which the parties were respectively responsible for or benefited from the transaction, and that we can safely rely upon them. That is the sort of argument we have just had from the right hon. and learned Gentleman, but it is not satisfactory or sufficient.
What is the intention of the Government in this matter? Do they or do they not intend directors who oppose the entering into a transaction of this sort to run the risk of the tribunal making an award against them? If they do not intend such directors to be under any such liability they can have no objection to that part of this Amendment. On the other hand, if they oppose this Amendment, it follows that they want directors of these companies to have to run the risk of having orders made against them, even though they have voted against the particular transaction being entered into. This Amendment would make it quite clear that there shall be no liability whatsoever upon a director in respect of a transaction entered into without his consent. I can see no reason why any liability or risk of liability should be placed upon the shoulders of a director who voted against entering into the transaction, although he may perhaps have received some indirect

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benefit because he was out-voted. I can see no ground for placing him at the mercy of this tribunal and exposing him to the risk of having to pay a substantial penalty to the Corporation. So far I have confined my observations to the last part of this Amendment.
The Amendment also seeks to exclude from the risk of having to pay this penalty directors who satisfy the tribunal that the transaction was entered into without their knowledge, Do the Government really wish a director to be held responsible if it be clearly established that the transaction was entered into without his knowledge? I should have thought there was no ground for saying that, and that all the Government wanted was to ensure that the directors responsible for the making of these transactions were liable to have these penalties imposed. If that be all the Government want I can see no argument for their refusal—if they do refuse—to accept this Amendment.
If the Minister says that he is not prepared to accept it, it must follow that he thinks it right, just, and equitable that directors who have no knowledge of the transaction and directors who have opposed the transaction being made should be liable to have penalties inflicted upon them by the tribunal. As I see it, that is an entirely wrong thing. On this matter the Government must come down on one side or other of the fence. It is not sufficient to say that it can all be left to the tribunal to do what they think is just. The right hon. Gentleman should have a mind of his own upon this matter, and he should make the Government's intention quite clear.
As far as I can see, acceptance of the Amendment would in no way weaken or wreck the provisions of this extremely bad Bill; but it would at least try to create some small degree of equity so far as directors are concerned.
Mr. Speaker: I had better inform the hon. and learned Member that I did not intend calling the Amendment in page 28, line 16, at end, insert:
Provided also that no order shall be made under this section against any director of the company in respect of whom the tribunal is satisfied that in relation to the transaction he acted in good faith and with the intention of duly performing his duties under the company's memorandum and articles of association or charter and any relevant enactments including this Act.
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because I think that it covers the same point, although the circumstances are slightly- different. I do not know whether the hon. and learned Member would also like to address himself to that Amendment.
Mr. Manningham-Buller: With great respect, Mr. Speaker, the point is somewhat different: although, having moved this Amendment, I could speak also to the other. I hope, however, that you will be able to call the second Amendment, because it raises the difficult question of the duties of a director under the Companies Acts as affected by this Bill. I think it might be more convenient to deal with the Amendments in separate compartments.
Mr. Speaker: I am quite happy if it is clearer to deal with the Amendments separately, although I thought it would he easier to deal with them together.
Mr. Selwyn Lloyd: I beg to second the Amendment.
I wish to make three points. First, although the Clause has in the margin the impressive title,
"Prohibition of transfer of iron and steel works,"
when we look at the earlier part we see that it also deals with much lesser affairs. I quite agree that if a company were disposing of an iron and steel works it is difficult to imagine that a member of the board would not know anything about it, but this Clause also deals with
"any rights of ownership in, or any rights in respect of the user of, any works or part of any works…sed for the carrying on of any of the said activities."
Therefore, it brings within its purview a whole mass of contracts into which a board might conceivably enter, such as the granting of licences for people to use part of the works, arrangements for leasing part of the works and a hundred and one other contracts entered into by the board which are in no way exceptional but which at a later stage may be brought under review.
What we say is that in regard to a great many contracts of this sort it would be quite inequitable to bring in any director who did not know of, or did not consent to, a particular contract. I expect the answer that will be made to that submission is, "Oh, but the tribunal need

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only order such a person to contribute such sum as they think just towards the loss." In my submission, that is putting an intolerable burden upon the tribunal. The tribunal is given no guidance at all as to how it shall operate. The words which appear are that the tribunal
"shall make such orders against any of the parties to the application as they think just, having regard to the extent to which those parties were respectively responsible for the transaction or benefited from it and to all the circumstances of the case, for the payment by them to the Corporation of sums sufficient to enable the loss, or such part thereof as the tribunal think just, to be made good."
How is the tribunal to carry out that responsibility? Suppose that there is a loss of £10,000 about which some director did not know but the tribunal thinks he should have found out in time to take action. What order is to be made against him? Will it be £9,999, £999 or £99? What guidance has the tribunal got in assessing this responsibility?
4.15 p.m.
I see the hon. Member for Reading (Mr. Mikardo) sitting in his place. He is always very helpful in these matters, and perhaps he will be able to intervene to suggest how the tribunal should carry out this very difficult jurisdiction. I should have thought it very much easier to deal with the question of costs, because that is a matter where tribunals are usually given discretion. I say that because the matter is decided to some extent by legal precedent, and it is a matter upon which it is much easier to exercise discretion. But here, where we are dealing with anything from £1 to £1 million, how is the tribunal to discharge its jurisdiction under these very vague terms? The right hon. Gentleman has never given us any indication as to how the tribunal is to deal with this matter. It seems to me it is putting far too much upon them.
The third point I wish to make in regard to the Amendment is that the burden of proof is upon the director. It is not a case in which the Corporation have to come along and prove that the director knew or consented. It is a case in which the director who seeks to escape any responsibility will have to prove to the tribunal that he did not know and did not consent. That is a safeguard which should be there, having regard to all the circumstances.
Mr. Mikardo: I find it very difficult to resist the charming invitation of the hon. and learned Member to intervene in this Debate. We debated this point in Committee, though not in quite these terms, at not inconsiderable length, and the reply that was given to the representations of Members opposite was the one which they have already anticipated this afternoon. It was that the Clause as drafted gives a directive to the tribunal to the effect that in assessing penalties put upon individuals, including directors, they shall take into account the extent to which these parties were respectively responsible for the transaction.
As I read the Amendment, it is superfluous in the light of the passage I have just quoted, because all it seeks to tell the tribunal, as a directive, is firstly, "You have been told that in assessing penalties you shall take into account, in fixing the amount, the degree of responsibility" and, secondly, "If you find that the responsibility is nil, then will you please say that the penalty is nil?" I should have thought that the second of these two things followed automatically from the first. I should have thought that if we say to the tribunal, "Will you please make the punishment fit the crime," we are automatically saying, "If there is no crime, please inflict no punishment." That seems to me to be a reason why the additional wording suggested by Members opposite does not add anything to the Clause.
Mr. Selwyn Lloyd: Will the hon. Member say exactly where in the Clause the crime is defined?
Mr. Mikardo: We had an argument about this in Committee when my hon. and learned Friend the Member for Kettering (Mr. Mitchison) got involved. I was using the words "punishment" and "crime" in a general sense to illustrate my point. It is not a question of crime at all.
Mr. Selwyn Lloyd: Perhaps I did not make myself clear. Using the word "crime" in its colloquial sense, will the hon. Member say where the offence is defined in the Clause?
Mr. Mikardo: I should have thought that almost the whole of the earlier part of the Clause laid down a long list of potential offences or crimes.

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The Opposition's Amendment does raise one fresh point, that is, that it exonerates from the "crime" altogether any director who did not know about the transaction. The Solicitor-General for Scotland, when speaking on this matter upstairs, pointed out that there were conditions in which lack of knowledge could itself constitute an offence. We know that with the great majority this would not happen, that we are legislating for only a fraction of 1 per cent.—for the people who act abnormally—but a director might say, "You have circulated a paper on a transaction which might violate the provisions of the Iron and Steel Act. I do not propose to read this paper, so that if there is any question about it afterwards I can plead ignorance of it." Such an attitude itself constitutes an offence.
The hon. and learned Member for Daventry (Mr. Manningham-Buller) drew attention to the case of a director who had voted against action being taken which was afterwards found to have constituted an offence. It is possible for a director to say—and one has seen it happen at all sorts of meetings—"I know this resolution will be carried even if I vote against it and, therefore, I will vote against it to clear myself of any responsibility for it, although I know that it will be carried and that I shall participate in any benefits arising from its being carried." So far as the great majority of honest people are concerned, the Amendment adds nothing to the Clause and in any case we do not want to add to the Clause for the dishonest minority. After all, we are not a society for the protection of guinea-pig directors. If they accept remuneration for some nominal duties, they should see that they take proper responsibility for those duties.
Colonel J. R. H. Hutchison: I should like to portray yet a third aspect of what I consider might be the evil effect of this Clause without the Amendment. Apart altogether from my agreement with my right hon. and hon. Friends about the undesirability of imposing on a person the obligation and responsibility to prove his innocence except in the most exceptional circumstances, I should like to refer to the kind of situation which the hon. Member for
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Reading (Mr. Mikardo) has tried to picture. If we look at the definition of "part of any works," under the definition Clause, we see that it not only goes as wide as my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) said, but a good deal further. It embraces any machinery or equipment installed in any works. That might include such things as a small shed, a Lister tractor or a piece of welding plant. Directors' duties are varied and manifold and quite often the officers of a company, the managing director, secretaries and so on, carry through sales of that type of equipment without bringing it to the notice of the board. Under the Clause as drafted, the fact that such action can take place without the knowledge of a director does not in any way exonerate him from responsibility if it can be held afterwards that that has done any damage to the Corporation.
I believe that the instance quoted by the hon. Member for Reading (Mr. Mikardo) will not stand examination, because a director who behaves in that way would be failing in his duty as a director in the interests of the shareholders and, probably, under the Companies Act. In any case, he could be held to have had knowledge of the matter under consideration, even if he had said, "I do not want not to have knowledge of it." That does not preclude him from having had knowledge. What are directors likely to do to protect themselves during the long time which will elapse before they are out of the wood? They will say to the officers of the company, "You must sell nothing which comes under the definition of this Act without consulting us."
Directors are sometimes whole-time and sometimes part-time, and if a company has to bring forward and then hold up every kind of minor transaction of that kind, the flexibility which the Minister said was so desirable will be absent. The general effect will be a slowing-down of the successful working of the industry at a time when it is essentially important to the country. This is a classic example of day-to-day interference with the running of a company. We know how much the Government dislike any day-to-day interference, by means of Parliamentary Questions, with the running of any of the

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nationalised industries, yet here they are imposing for quite a long time almost an obligation on directors to interfere with the day-to-day running of their company. In addition to the points made from this side, I should like the Minister to consider the Amendment favourably from the point of view which I have just put forward.
Mr. G. R. Strauss: The hon. and learned Member for Daventry (Mr. Manningham-Buller) asked me to express clearly the Government's attitude to this Amendment, and to the penalties which may fall on directors as a consequence of the provisions of the Clause. I have no doubt at all as to what should happen, and I think it is clearly expressed in the Clause. Like my hon. Friend the Member for Reading (Mr. Mikardo), I believe that the Amendment would not only be unnecessary but would be damaging to the interests of the Corporation, and certainly would be contrary to the views which I hold and which I hope the House will accept.
The Clause says, first of all, that it shall not be lawful, after the passage of the Bill, for the companies concerned to part with iron and steel works or parts of an iron and steel works. It goes on to say that if, nevertheless, in spite of that declaration of illegality, a steel works is sold, or part of a steel works is sold, and the Corporation suffers damage as a result, then those responsible for that illegal act and for the damage shall be held responsible financially according to their responsibility and to the amount by which they themselves have benefited from it.
That is a perfectly reasonable proposition. If, in spite of what is said in the Clause, a board of directors takes such action, I think it is only reasonable that they should be personally responsible. It has been argued for the Amendment that a director may not know about the proposed transaction, or may have opposed it, and that he should not therefore be responsible for any damages which may occur. My answer is that if a director has benefited, as a result of an illegal transaction—even if he was ill when it took place, or opposed it at a board meeting—to the tune of, say, £100,000—
Mr. Harold Macmillan: Not as a director, as a shareholder.
4.30 p.m.
Mr. Strauss: They may be shareholders as well. They would not benefit if they were purely salaried directors. Nevertheless they might by virtue of the ownership or part ownership of the works benefit by substantial sums of money. If they have benefited by these illegal transactions why should they not be asked to repay the amount of money they have got away with either in whole or in part? Is that unreasonable? If they have not benefited then the arbitration tribunal would take all matters into account and only ask them to repay such money
"having regard to the extent to which those parties were respectively responsible for the transaction."
If they were not responsible in any way for the transaction and if they have not benefited in any way they will not be asked to indemnify the Corporation for any of the damages which the Corporation has suffered.
I suggest that the Clause as it stands is completely fair. It protects the Corporation in a proper way. It only asks for repayment to the Corporation of monies which the Corporation has lost as a result of actions either deliberately carried out by people with their eyes open and knowing what the result is going to be, or by people who have not been aware of these transactions but have, in fact, benefited by them. I suggest that the Clause is reasonable and that the Amendment, if accepted, would prevent the Corporation from obtaining damages from people who in equity should pay those damages, because they have either been responsible for inflicting damage on the Corporation or they have benefited personally by that illegal transaction, or both. In view of that I suggest that the House should reject this Amendment.
Mr. Selwyn Lloyd: Clause 24 deals with the dissipation of assets and is very similar to this Clause. At the end of that clause there is this proviso:
"In the case of a company other than a company specified in the Third Schedule to this Act, the tribunal shall not make an order under this subsection against any director of the company or other person who satisfies the tribunal that he did not know and could not reasonably have expected that the company would come into public ownership under this Part of this Act"
If that formula is good enough in one

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case why is a similar formula not used in this Clause?
Mr. Strauss: In those circumstances the individual must not have benefited.
Viscount Hinchingbrooke: I do not think the reply from the Minister is satisfactory and we ought to exact a further statement from him, otherwise it may be necessary to divide upon this Amendment, as we sought to do in Standing Committee. It seems to me that there are two separate issues here. On is the benefit by the directors from the transaction and the other is the way in which they are responsible. The words
"in all the circumstances of the case"
go with the responsibility rather than the benefit.
Mr. Strauss: Both.
Viscount Hinchingbrooke: It may be both, but I should not have thought so. I cannot make up my mind how a director can benefit from a transaction of this kind. It is the question of the dissipation of the assets, like the selling of a steel works or part of a steel works or, as my hon. and gallant Friend the Member for Central Glasgow (Colonel Hutchison) said, a shed or a piece of machinery, thereby depriving the Corporation of the chance it might otherwise have had of getting a steel works intact. Is it suggested that the directors receiving money from the dissipation of the assets are benefiting by the transaction, because that could be dealt with under the ordinary Company Law and I do not understand why the right hon. Gentleman should now proceed to legislate for it anew? On the other hand, is it suggested that they should pay a dividend which they have no right to pay in view of impending legislation, and then as shareholders benefit from that dividend to which they are not entitled? I do not understand in what precise way the directors would benefit from the transaction part of this Clause. I hope we may get an explanation about that from the Solicitor-General.
With regard to the transaction as such, if the assets are dissipated and sold and the directors benefit from an illegal act, the right hon. Gentleman rightly says redress should be had against them. In our Amendment we put forward an additional viewpoint. If these things go on without the knowledge and consent of
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any one of the directors we say that that particular director should be freed from all consequences of the adverse decision by the tribunal. That surely is absolutely right. Anyone of the directors might be ill or abroad. He would not be present at the board meeting at which one of these transactions was decided upon. He would never know about it. When the arbitration tribunal investigated the circumstances, it would be pointed out that a particular director was abroad or ill at the time.
Then the arbitration tribunal might say that the circumstances of the case, which ought to be taken into account, are such that this director is not liable for the transaction. It might say that, but it is not clear from the Bill. It might take the view that there is a kind of collective responsibility of the Board, and a director, even if abroad or ill, should have been informed or should have asked the Secretary what had taken place. We want to make it specific and clear that if a transaction takes place without his knowledge and consent a director shall not be liable. The Amendment may be superfluous, but it is only superfluous if the arbitration tribunal interpret the words:
"all the circumstances of the case"
precisely as we want them interpreted. They may not do that. If they do not, this is not a superfluous Amendment and I do not see how the hon. Gentleman the Member for Reading (Mr. Mikardo) can maintain it is.
Mr. Lyttelton: There is one question which I wish to put to the Minister, and it arises out of the answer he gave to my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd). He said that the difference between these two Clauses was that in the second case the provision was put in because there was no question of benefit. He has not read subsection (4). I suggest that the same benefits arise under the two Clauses, and yet the Government permit these words in one Clause and seek to reject them in another. I am only using this as an illustration. On page 31 in Clause 4 it says:
"…having regard to the extent to which those parties were respectfully responsible for the transaction or benefited from it…"
The circumstances are exactly the same, and I should like to hear from the Government why what is logical in one case is illogical in the other.
Mr. G. R. Strauss: I agree that I did not give the full answer. I had not time. I wanted to answer the hon. and learned Member for Wirral (Mr. Selwyn Lloyd). One difference is that Clause 24 deals with dissipation of assets any time after the introduction of the Bill. The Clause with which we are dealing talks about disposing of steel works or parts of steel works after the passing of the Act, when it will have become illegal to do so. There is a considerable difference.
Mr. Manningham-Buller: The distinction that the right hon. Gentleman has sought to draw between Clause 22 and Clause 24 is purely one of time, and has no relevance whatever to the question under consideration. It can make no difference to the principles which have to be applied, so far as directors are concerned, whether it is done before the passing of the Act or after the passing of the Act. What we have asked the right hon. Gentleman to explain is the difference in treatment meted out to directors under these two Clauses.
I must say that I think the defence given by the right hon. Gentleman of the Clause is most unsatisfactory. He really has not sought to meet the point that we on this side of the House have attempted to raise. The hon. Member for Reading (Mr. Mikardo) seemed to think that the Amendment was unnecessary because, as I understood his speech, he thought that, as the Clause now stands, a director who had no knowledge of the transaction or who opposed the transaction, would not be liable under this subsection.
Mr. Mikardo: I did not say that. I said that I thought that the Clause would no be necessary in the case of honest ignorance or opposition. There clearly would be no penalty if the tribunal were satisfied that there was no responsibility.
Mr. Manningham-Buller: The hon. Gentleman limited his observation to the honest directors, but the honest directors —if I may use his phrase—are certainly the vast majority. The hon. Gentleman's argument was that the Amendment would make no difference. The right hon. Gentleman made it clear that he wanted the honest director to be liable under the Clause even though the transaction was entered into without his knowledge and
678
without his consent. The right hon. Gentleman made that point absolutely clear. In my opinion, that contention is indefensible. The right hon. Gentleman said that under the Clause certain transactions are rendered illegal, and therefore it was right that the Corporation should be entitled to receive compensation for damage sustained by them as a result of such transactions.
Let us accept for the moment, for the purposes of argument, that that could be done under the Clause. The tribunal has the right under the subsection to order repayment by the parties that benefit. Those parties include companies; so that if a company has transferred some valuable asset in breach of this Clause, compensation may be made to the Corporation by that company, as a result of an application to the tribunal. One has to bear that fact in mind in considering the obligations that are cast upon directors under the subsection.
4.45 p.m.
The right hon. Gentleman sought to contend that the entirely innocent director should be liable under the subsection if he benefited as a shareholder. He cannot suggest any other way in which an honest director, acting properly, could benefit, except as a shareholder. Why then should the honest director be singled out for this treatment where he has no knowledge of the transaction or where he voted against it? Why should he be treated differently from all other shareholders?
Mr. Mikardo: Because it makes him dishonest.
Mr. Manningham-Buller: It does not make him dishonest. The director who is abroad on duties for the company may have no knowledge of the transaction that is entered into. A director at home may have voted against it. It does not make either of them dishonest.
Mr. Mikardo: The hon. and learned Member has omitted my second point. A director who voted against a transaction because he believed it to be illegal and a breach of this Clause, but who nevertheless takes into his pocket the benefit of it, ceases to be an honest man.
Mr. Manningham-Buller: I should be able to follow the hon. Member's point much more clearly if he would indicate

679
how the director takes into his pocket the benefit. The right hon. Gentleman talks about directors getting away with it; how does he suggest that an honest director gets away with it? Surely only by dividends as a shareholder. By what other method?
Mr. Mikardo: There are all sorts of possibilities of which I am sure the hon. and learned Member has experience that I have not got, as, for example, the renting of a part of a company's premises to a director below the economic rent, and all sorts of combinations of that sort of thing.
Mr. Manningham-Buller: Really I think the hon. Member is getting into very deep water. I shall not follow him into it. I want to get back to the point, which is: Why should a director who has no knowledge, an honest director who
has not consented, be placed under this liability because, as a shareholder, he receives or might receive a benefit like all other shareholders? The other shareholders will be penalised only if an order is made against the company. There is power to make an order against the company, but I see no reason at all why the Government should insist upon retaining power under this subsection or penalising the perfectly innocent director. The Government have given no indication or justification for the different treatment under Clause 24 to the treatment under Clause 22. In those circumstances, all we can do further to indicate our view on the matter is to vote in favour of our Amendment.
Question put, "That those words be there inserted in the Bill."
The House divided: Ayes, 115; Noes, 241.

Division No. 115]

AYES

[4.50 p.m.

Amory, D. Heathcoat

Head, Brig. A. H.

Morrison, Rt. Hn. W. S. Cirencester)

Astor, Hon. M.

Henderson, John (Cathcart)

Nicholson, G.

Beamish, Maj. T. V. H

Hinchingbrooke, Viscount

Noble, Comdr. A. H. P.

Birch, Nigel

Hogg, Hon. Q.

Odey, G. W.

Bower, N.

Hollis, M. C.

O'Neill, Rt. Hon. Sir H

Boyd-Carpenter, J. A.

Holmes, Sir J. Stanley (Harwich)

Orr-Ewing, I. L.

Braithwaite, Lt.-Comdr. J. G

Hudson, Rt. Hon. R. S. (Southport)

Peak, Rt. Hon. O.

Buchan-Hepburn, P. G. T.

Hulbert, Wing-Cdr. N. J.

Peto, Brig. C. H. M

Bullock, Capt. M.

Hurd, A.

Ponsonby, Col. C. E

Butcher, H. W.

Hutchison, Lt.-Cm. Clark (E'b'rgh W.)

Poole, O. B. S (Oswestry)

Butler, Rt. R A (S'ffr'n W'ld'n)

Hutchison, Col. J. R. (Glasgow, C.)

Prior-Palmer, Brig. O.

Byers, Frank

Jeffreys, General Sir G.

Roberts, H. (Handsworth)

Carson, E

Keeling, E. H.

Roberts, W. (Cumberland, N.)

Conant, Maj. R. J. E.

Lambert, Hon. G.

Ropner, Col. L.

Cooper-Key, E. M.

Langford-Holt, J.

Ross, Sir R. D. (Londonderry)

Crosthwaite-Eyre, Col. O. E

Legge-Bourke, Maj. E. A. H.

Savory, Prof D. L.

Crowder, Capt. John E.

Lennox-Boyd, A. T.

Spearman, A. C. M

Cuthbert, W. N.

Lindsay, M. (Solihuff)

Stanley, Rt. Hon. O.

Darling, Sir W. Y.

Linstead, H. N.

Strauss, Henry (English Universities)

Davies, Rt. Hn. Clement (Montgomery)

Lloyd, Selwyn (Wirral)

Studholme, H. G.

De la Bere, R.

Low, A. R. W.

Sutcliffe, H.

Digby, Simon Wingfield

Lucas, Major Sir J.

Taylor, C. S. (Eastbourne)

Dodds-Parker, A. D.

Lucas-Tooth, S. H.

Taylor, Vice-Adm. E. A. (P'dd't'n, S.)

Donner, P. W.

Lyttelton, Rt. Hon. O

Teeling, William

Dower, Col. A. V. G (Penrith)

MacAndrew, Col. Sir C.

Thorneycroft, G. E. P. (Monmouth)

Drayson, G. B

McCorquodate, Rt. Hon. M. S.

Thorp, Brigadier R. A. F

Drewe, C.

McFarlane, C. S

Touche, G. C.

Dugdale, Maj. Sir T. (Richmond)

McKie, J. H. (Galloway)

Turton, R. H.

Eccles, D. M.

Maclay, Hon. J. S.

Tweedsmuir, Lady

Eden, Rt. Hon. A.

Macmillan, Rt. Hon. Harold (Bromley)

Wakefield, Sir W. W.

Fletcher, W. (Bury)

Macpherson, N. (Dumfries)

Walker-Smith, D.

Fraser, H. C. P. (Stone)

Manningham-Buller, R. E.

Ward, Hon. G. R.

Fraser, Sir I. (Lonsdale)

Marlowe, A. A. H.

Wheatley, Colonel M. J. (Dorset, E.)

Gage, C.

Marples, A. E.

Williams, Gerald (Tonbridge)

Galbraith, Cmdr. T. D. (Pollok)

Marsden, Capt. A.

Young, Sir A. S. L. (Partick)

Gates, Maj. E. E.

Marshall, D. (Bodmin)

Gomme-Duncan, Col. A

Marshall, S. H. (Sutton)

TELLERS FOR THE AYES:

Grimston, R. V.

Molson, A. H. E.

Commander Agnew and

Hannon, Sir P. (Moseley)

Morris, Hopkin (Carmarthen)

Brigadier Mackeson.

Harvey, Air-Comdre. A. V

Morrison, Maj. J. G. (Salisbury)

NOES

Albu, A. H.

Awbery, S. S.

Barton, C.

Allen, A. C. (Bosworth)

Ayles, W. H.

Battley, J. R.

Alpass, J. H.

Bacon, Miss A

Bechervaise, A. E.

Anderson, A. (Motherwell)

Balfour, A.

Benson, G.

Attewell, H. C.

Barnes, Rt. Hon. A.

Beswick, F.

Austin, H. Lewis

Barstow, P. G.

Bing, G. H. C.

Blackburn, A. R.

Irvine, A. J. (Liverpool)

Robinson, K. (St. Pancras)

Blyton, W. R.

Irving, W. J. (Tottenham, N.)

Rogers, G. H. R

Bowden, Flg. Offr. H. W.

Janner, B.

Royle, C.

Braddock, Mrs. E. M. (L'pl. Exch'ge)

Jay, D. P. T.

Sargood, R.

Braddock, T. (Mitcham)

Jager, C. (Winchester)

Scollan, T.

Bramall, E. A.

Jeger, Dr. S. W. (St. Pancras, S.E.)

Segal, Dr. S.

Brook, D. (Halifax)

Jenkins, R. H.

Shackleton, E. A. A

Brooks, T. J. (Rothwell)

Jones, D. T. (Hartlepool)

Sharp, Granville

Broughton, Dr. A. D. D.

Jones, Jack (Bolton)

Shinwell, Rt. Hon. E.

Brown, T. J. (Ince)

Keenan, W.

Shurmer, P.

Bruce, Maj. D. W. T.

King, E. M.

Silverman, J. (Erdington)

Burden, T. W.

Kinghorn, Sqn.-Ldr. E.

Silverman, S. S. (Nelson)

Burke, W. A.

Kinley, J.

Simmons, C. J.

Castle, Mrs. B. A.

Kirby, B V

Skeffington, A. M.

Chetwynd, G. R.

Lang, G.

Skeffington-Lodge, T. C.

Cluse, W. S

Lee, Miss J. (Cannock)

Skinnard, F. W.

Cocks, F. S.

Levy, B. W.

Smith, Ellis (Stoke)

Collins, V. J.

Lewis, A. W. J. (Upton)

Smith, H. N. (Nottingham, S.)

Colman, Miss G. M

Lipton, Lt.-Col. M

Smith, S. H. (Hull, S.W.)

Cooper, G.

Lyne, A. W.)

Snow, J. W.

Corbet, Mrs. F. K. (Camb'well, N.W.)

McAdam, W.

Solley, L. J.

Corlett, Dr. J

McEntee, V. La T.

Sorensen, R. W.

Cove, W. G.

McGhee, H. G.

Soskice, Rt. Hon. Sir Frank

Crawley, A.

Mack, J. D.

Sparks. J. A

Crossman, R. H S

McKay., J. (Wallsend)

Steele, .

Daggar, G.

Mackay, R. W. G. (Hull, N.W.)

Stewart, Michael (Fulham, E.)

Davies, Edward (Burslem)

Maclean, N. (Govan)

Strauss, Rt. Hon. G. R. (Lambeth)

Davies, Harold (Leek)

McLeavy, F.

Stross, Dr. B.

Davies, Haydn (St. Pancras, S.W.)

Mainwaring, W. H

Stubbs, A. E.

Davies, S. O. (Merthyr)

Mallalieu, E. L. (Brigg)

Summerskill, Rt. Hon. Edith

Deer, G.

Mailalieu, J. P. W. (Huddersfield)

Swingler, S.

Diamond, J.

Manning, C. (Camberwell, N.)

Sylvester, G. O

Dodds, N. N.

Manning, Mrs. L. (Epping)

Symonds, A. L.

Donovan, T.

Marquand, Rt. Hon. H. A

Taylor, H. B. (Mansfield)

Driberg, T E. N.

Mathers, Rt. Hon. George

Taylor, R. J. (Morpeth)

Dugdale, J. (W. Bromwich)

Mellish. R. J.

Taylor, Dr. S. (Barnet)

Dumpleton, C. W.

Messer, F.

Thomas, D. E. (Aberdare)

Ede, Rt. Hon. J. C.

Middleton, Mrs. L

Thomas, George (Cardiff)

Edwards, John (Blackburn)

Mikardo, Ian

Thomas, I. O. (Wrekin)

Edwards, W. J. (Whitechapel)

Millington, Wing-Comdr. E. R.

Thurtle, Ernest

Evans, Albert (Islington, W.)

Mitchison, G. R.

Timmons, J.

Evans, E. (Lowestoft)

Monslow, W.

Tolley, L.

Evans, John (Ogmore)

Moody, A. S.

Tomlinson, Rt. Hon. G

Ewart, R.

Morley, R.

Turner-Samuels, M.

Farthing, W. J

Morris, Lt.-Col. H. (Sheffield, C.)

Usborne, Henry

Field, Capt. W. J

Morris, P. (Swansea, W.)

Vernon, Maj. W F

Follick, M.

Marrison, Rt. Hn. H. (Lewisham. E.)

Viant, S. P.

Foot, M. M.

Mort, D. L.

Wallace, G. D (Chislehurst)

Forman, J. C.

Moyle, A.

Warbey, W. N.

Ganley, Mrs. C S

Murray, J. D.

Watkins, T. E.

Gibbins, J.

Naylor, T. E.

Webb, M. (Bradford, C.)

Gibson, C. W.

Neal, H. (Claycross)

Weitzman, D.

Glanville, J. E. (Consett)

Nichol, Mrs. M. E. (Bradford, N.)

Wells, P. L. (Faversham)

Greenwood, A. W. J. (Heywood)

Nicholls, H. R. (Stratford)

West, D. G.

Granfell, D. R

Noel-Baker, Capt. F. E. (Brantford)

White, H. (Derbyshire, N.E.)

Grey, C. F.

Oliver, G. H.

Whiteley, Rt. Hon. W

Griffiths, D. (Rother Valley)

Orbach, M.

Wigg, George

Guest, Dr. L. Haden

Palmer, A. M. F.

Wilcock, Group-Capt. C A. B

Gunter, R. J.

Parkin, B. T.

Wilkins, W. A.

Gay, W. H.

Paton, Mrs. F. (Rushcliffe)

Willey, F. T. (Sunderland)

Hale, Leslie

Paton, J. (Norwich)

Willey, O. G. (Cleveland)

Hall, Rt. Hon. Glenvil

Pearson, A.

Williams, D. J. (Neath)

Hamilton, Lieut.-Col. R.

Peart, T. F.

Williams, Ronald (Wigan)

Hardman, D. R.

Popplewell, E.

Williams, W. R. (Heston)

Hardy, E. A.

Porter, E. (Warrington)

Willis, E.

Haworth, J.

Porter, G. (Leeds)

Wilson, Rt. Hon. J. H.

Henderson, Rt. Hon. A. (Kingswinford)

Proctor, W. T.

Wise, Major F. J.

Hicks, G.

Pryde, D. J.

Woodburn, Rt. Hon. A

Holman, P.

Pursey, Comdr. H.

Wyatt, W.

Holmes, H. E. (Hemsworth)

Randall, H. E.

Young, Sir R. (Newton)

Horabin, T. L.

Ranger, J.

Younger, Hon. Kenneth

Houghton, A. L. N. D.

Rees-Williams, D. R.

Hoy, J.

Reeves, J.

TELLERS FOR THE NOES:

Hudson, J. H. (Ealing, W.)

Reid, T. (Swindon)

Mr. Collindridge and

Hughes, Emrys (S. Ayr)

Rhodes, H.

Mr. Richard Adams.

Hynd, H. (Hackney, C.)

Ridealgh, Mrs. M.

Mr. Lyttelton: I beg to move, in page 28, line 16, at the end, to insert:
"Provided also that no order shall be made under this section against any director of the company in respect of whom the tribunal is
682
satisfied that in relation to the transaction he acted in good faith and with the intention of duly performing his duties under the company's memorandum and articles of association or charter and any relevant enactments including this Act."

683
The arguments for this Amendment are in many respects similar to those which we advanced on the Amendment which has just been negatived, but they are not all the same. This is a parallel rather than a complementary Amendment. The Government have not yet done full justice to the fact that the Amendment covers the transactions set out in subsection (1):
"It shall not be lawful…at any time before the date of transfer, to transfer or grant to any person any rights of ownership in, or rights in respect of the user of, any works or part of any works used for the carrying on of any of the activities."
This covers a very wide field. The Amendment seeks to protect a director who in good faith does what he considers to be his duty in disposing of part of the works as described in subsection (1) to a third party at a price which appears to him to be high and beneficial to the shareholders only to learn afterwards that the Corporation considers that it has been damaged by the action he has taken. We seek to establish that if he has entered into that transaction in good faith he shall be free of damage afterwards.
I imagine that the answer which the Minister will seek to give is that in the circumstances which I am setting out, the company ought to come to the Minister for his approval. That is the only conceivable answer the Minister can give in reply to the Amendment. I want to ask in what way the Clause is damaged and in what way the Clause is not improved by the inclusion of the Amendment, which I regard as adding to the safeguards of the directors. I cannot see any disadvantage to the Ministry or the Government in including the words, but I can see in certain circumstances very great protection for the directors.
5.0 p.m.
The only argument which can be adduced against the Amendment is that it is open to the companies to seek the approval of the Minister. That, however, is not a sufficient answer because, when dealing with the small part of the transactions covered in the beginning of the Clause, one may be dealing with an opportunity which is fleeting enough to make it impossible to get the assent of the Minister. Those who have had correspondence with the Ministry of Supply or, indeed, with any Government Depart-
684
ment, know that the usual course of things is that after two or three days there is an acknowledgment saying that the matter will be looked into and, then, after a couple of "chasers" one may get the matter dealt with.
These transactions may not be able to wait as long as that, and it is not a sufficient answer for the Minister to say that his approval can be sought unless he at the same time can establish that the Clause is worsened in some way which he thinks vital to his purposes by the inclusion of the words which we seek to include. If he confesses, as I think he must if he looks at it, that the Clause is not badly affected from the Government point of view in any way, why not include the words and give the individual the extra protection which he would like?
The Solicitor-General: It is difficult to imagine any case in which a director could find himself in the situation described by the right hon. Gentleman. One has to bear in mind what this Clause does. To start off with, it applies to Third Schedule companies and to works which they use for their Second Schedule purposes, and it applies only as from the date that the Act comes into force. Any director of a Third Schedule company after the Act comes into force, when dealing, with the works as defined later on in the Bill—and hon. Gentlemen will see that the definition of "works" means something substantial, not every small trifle—
Mr. Lyttelton: If I may interrupt the right hon. and learned Gentleman, is he suggesting that the words:
"or grant to any person any rights of ownership in, or rights in respect of the user…"
are overruled by the words later in the Act? That is not how I read the Clause.
The Solicitor-General: No. What I am suggesting is that after the passing of the Act a director knows perfectly well that he is within the danger period and is dealing with the period between the time of the passing of the Act and the general transfer, so he must bear in mind that he cannot transfer or grant rights of ownership or rights of user in respect of works or part of works used for Second Schedule purposes. "Works" are defined as a factory, a mine, a quarry or something of the sort.
Therefore he knows, or should know if he exercises his judgment upon the

685
matter, when he is in that period that he must not lease out the works which the Third Schedule company requires for the purpose of the production of steel or Second Schedule activities. He cannot be left in any doubt. He knows that the Act is passed, he is clear as to his obligation, and he cannot be in the least doubt, I respectfully submit to the House, that if he proposes to sell a factory which the Third Schedule company uses for the purpose of its scheduled activities, he is doing something which the Act says is unlawful.
What the Amendment seeks to do is to say that he should not be penalised if the Act, as it were, conflicts with his duties under the Companies Act. I do not see how he can be. He could be proceeded against under the Companies Act if it can be shown that in winding up he was guilty of misfeasance. How can he be guilty of that if he simply refrains from doing something which an Act of Parliament says is unlawful? No court would listen to a complaint against a director, even if one could conceive of his being proceeded against for misfeasance in winding up, to the effect that he was guilty of misfeasance because he had not done something which a subsequent Act of Parliament told him in terms he was not to do. I submit respectfully that this Amendment is completely unnecessary; and not only unnecessary but meaningless, because it could not apply to circumstances of which one could conceive.
When discussing the last Amendment hon. Members called attention to the contrast in the wording of Clause 24 and asked why we should not adopt wording of that kind. I suppose those arguments are somewhat relevant but that Clause deals with an entirely different set of circumstances. To start with, Clause 24 applies to the time which elapses before the Act is passed, it relates to the period after October, 1948, onwards. That is the crucial contrast between that Clause and this Clause, and in consequence, under Clause 24, the following circumstance might arise.
There might be a subsidiary or a sub-subsidiary of a Third Schedule company, and a director of the subsidiary might genuinely take some step in ignorance of the fact that the subsidiary was the subsidiary of a Third Schedule company and, in consequence, might become subsequently a publicly owned company.
686
There one really would have the case of a director who, having every reason to be completely ignorant of the possibility that the company might become publicly owned, did something which he could not be expected to know would infringe the provisions of the Act. That is why, when one looks at the proviso to subsection (4) of Clause 24 one finds special protection for that class of director.
Hon. Members will see that that proviso begins:
"Provided that, in the case of a company other than a company specified in the Third Schedule…"
Those words are designed to limit the application of the Proviso to subsidiaries of Third Schedule companies. That is why in that Clause there is special protection for directors, but that is not by any stretch of the imagination required for the protection of directors when one is considering what Clause 22 is dealing with, that is to say, post-Act operations—operations after the Act comes into force, operations by a director who is a director of a company specified in the Third Schedule, or a company to whom such a Third Schedule company makes a transfer, and he is dealing not with plant that the company uses for some purpose other than Second Schedule purposes but with plant which is used for Second Schedule purposes.
That director really does not require any more protection than he is given. He is given really two sorts of protection. If he can genuinely show that he feels some doubt, he applies to the Minister to resolve his doubt and the Minister under the proviso to subsection (1) can licence or approve of a transaction either before or after it is carried out. In the alternative, supposing he has done something and the transaction in question is not one that has been approved by the Minister, then he has the protection given him under subsection (3)—the tribunal only makes orders when it is just to do so. It considers all the circumstances and it makes an order having regard to the degree of responsibility of the individual director.
I do not want to repeat arguments relevant to the previous Amendment but only to refer to them so far as they are relevant to this Amendment. To start with, the director requires much less protection, he requires scarcely any protection because no duty of his to his shareholders can require him to commit an illegality.

687
It is inconceivable on the face of it. However he has the protection that an order can only be made against him if the tribunal thinks it just to do so having regard to his individual responsibility, and he cannot be under a responsibility for not doing an illegal act; he could be under responsibility for doing an illegal act, but he cannot be under a responsibility for failing to do something which the Act in terms says is unlawful, or if it can be shown that he has benefited in some way. Undoubtedly, therefore, there can be no case for the Amendment.
It is impossible to conceive of a director who is faced with any conflicting duty of that sort. He must realise that the prohibition imposed upon him by the Bill when it becomes an Act must override any other duty which he may have as a director. Therefore, he really cannot be in any position of doubt, but if he were in a position of doubt he can have it resolved by making application for approval. If he does not do any of these things he has the additional protection of the general wording of subsection (3), the words of which afford guidance to the tribunal about how it is to act in adjudicating upon a particular case where damage has been caused to the Corporation.
Mr. Lyttelton: If I follow the Solicitor-General in the course of his arguments, he agrees that the words in Clause 24—and, consequently, our Amendments to Clause 24, if we reach them—have very considerable force. We do not concede the point that the present Amendment is any less important, and we shall certainly adduce the same arguments on Clause 24 when, I understand, the right hon. and learned Gentleman will then be prepared to accept our Amendments.
Mr. Selwyn Lloyd: The right hon. and learned Gentleman, as always, put forward a very reasonable argument. He said, "Here you have a director of a Third Schedule company. After the passing of the Act he knows what his position is and, of course, if he enters in any such bargain or contract he ought to be very careful to get approval before he does so." If the Clause covered only such people as these, there might be considerable force in the right hon. and learned Gentleman's argument, but as I understand it there is power under the
688
Clause for the tribunal to make orders against all sorts of other people.
Leaving aside for one moment the vague terms of subsection (3) about what the tribunal may or may not do, and the weakness or the strength of the Clause, let us consider the persons against whom they can make an order. They can make an order against persons on the board of a disposing company, a receiving company, and a company which has received from a receiving company.
The Solicitor-General indicated dissent.
Mr. Selwyn Lloyd: The right hon. and learned Gentleman shakes his head, but I thought that in our earlier argument that point was agreed to.
The Solicitor-General: I referred to a company which was acting in collusion with the receiving company. I do not think I made clear what I meant to convey. Subsection (3), as hon. Members will see, envisages a fresh application by the Corporation. If the Corporation suffers damage by reason of any transaction which is unlawful by virtue of subsection (1), then arise the rights to make an order to pay damages against the persons involved in the transaction. That transaction—I refer now to the last two lines on page 27—must be the transaction between the transferor and the transferee company.
Mr. Selwyn Lloyd: Then it appears to be quite definite that the transaction, in that sense, cannot relate to a transaction between the transferee company and some third party. If the discussion has produced nothing else, it is useful to have that made quite clear.
Having dealt with the board of the disposing company and the board of the receiving company, then, as I understand it, another category of persons is brought into the Clause by virtue of the fact that it covers notices of acquisition served under Clause 20. We have gone through these very complicated Clauses at such speed, both in Committee and here, that I should be the last person to suggest that I understood them, but I think I am right in saying that Clause 22 covers notices of acquisition which are served under Clause 20. A notice of acquisition which is served under Clause 20 can, surely, bring within the ambit of the

689
tribunal all sorts of other persons who may be made subject to these orders. I suggest, therefore, that the very pleasant dismissal of the Amendment by saying that the only people to be affected are directors of Third Schedule companies, who must know their position, is not good enough. For that reason I commend the Amendment to the House.
Amendment negatived.
5.15 p.m.
Mr. Osbert Peake: I beg to move, in page 28, line 16, at the end, to insert:
(4) The costs of any person who is made a party to an application under this section and against whom no order is made shall be paid by the Corporation unless the arbitration tribunal for some special reason otherwise order.
The Government have just refused to accept Amendments designed to protect the director who acts in good faith and the director who has no knowledge of a specific proposal which falls within the mischief of the Clause. What we seek to do by this Amendment is to provide that there shall be an onus upon the tribunal to discharge from liability in costs any person against whom no order is made by them unless there is some specially good reason for mulcting such a person in costs. It seems to us that the only wise thing that any director of any of the Third Schedule companies can do from now onwards is to attend every board meeting so that it can be said that nothing has taken place without his knowledge; and, when he gets there, to negative every proposal brought forward for any positive action of any kind. In that way he will achieve personal security—and also complete stagnation for the industry.
It would be all wrong that the Corporation, having initiated proceedings against directors, many of whom will have acted with no knowledge of the proceedings, and many of whom will have acted in good faith, and the tribunal having decided to make no order, if such a man could be mulcted in costs, unless even in such an exceptional case, the tribunal can find some special reason for deciding that he ought to be so liable.
Mr. G. R. Strauss: I must again ask the House, I fear, to reject the Amendment. This is an issue which we discussed
690
very many times in Committee. The principle, which was always the same, was this. Hon. Members opposite suggested that when the arbitration tribunal came to decide who should pay the costs the bias should always be in favour of the director or the third party and against the Corporation, so that there would be, in fact, a sort of direction to the tribunal that the Corporation were to pay the costs unless there were some very special circumstances which justified them in saying that the other party should pay them.
It was argued over and over again by the Opposition that that was fair and reasonable. We always gave the answer—and I stick by it—that when an arbitration tribunal is set up as we propose here—a very formal affair, properly appointed by the Lord Chancellor, and so on—we must, as a matter of principle, leave it to that tribunal to decide in the light of all the circumstances that come before it where the costs should lie and who should bear them. It is entirely wrong to give any direction at all to that tribunal as to where its bias should lie or which side it should ask to bear the costs. One cannot accept that principle. We think it should be left solely to the discretion of the tribunal to decide and, therefore, the Government cannot accept this Amendment, or similar Amendments, which seek to give a bias to the discretion of the arbitration tribunal in this matter.
Mr. Nigel Birch: It seems to me that right hon. and hon. Gentlemen opposite always look on directors, if not as criminals, at any rate as potential criminals and the hon. Member for Reading (Mr. Mikardo) puts that forward particularly. We have the picture of these directors in their last days behaving rather like Scunthorpe Council and Lord Quibell.
Mr. Mikardo: I do not know whether the hon. Member's misquotation of me was deliberate, but I was at pains to point out that we were here legislating for an insignificant minority and that the sort of behaviour we were talking about was that of less than a fraction of 1 per cent. of the people concerned. How the hon. Member can represent that as my saying that all directors are potential criminals, he can explain only out of the distortions of his own mind.
Mr. Birch: I do not know why the hon. Member should pay such a glowing tribute now, but that is not the general line taken by hon. Members opposite in regard to directors when discussing nationalisation Measures in this House or in the country, although they may be watering it down a little today.
The Minister said it would be wrong to give directions to the arbitration tribunal, but, if he reads our Amendment, he will see that we do not seek to do that. What we say is that no costs should be awarded against anyone against whom no order is made. Prima facie that is right, because if no order is made, presumably the person has done nothing wrong. We go on to say that the tribunal can make an order if there is some special reason for it. That seems perfectly fair. If a person is called before a tribunal and there is no reason why he should be taken there and he incurs costs there is no reason why he should be liable. I do not know why the tribunal should be left free to inflict this injustice. It does not seem to
us to make sense, but shows that bias which, whatever the hon. Member for Reading may say, exists among hon. Members opposite. It is something which affects the lives and liberties of the subjects and I hope that, the public will notice that the Liberals, who say they protect the rights of the subject, have not attended or spoken once on this Report stage. I hope the Press will notice these things. They never do any work here at all.
It seems perfectly clear that if there is a tribunal before whom someone is hauled and it is proved that he has done nothing wrong, it is an injustice that he should pay largely out of his pocket. That may well discourage people taking matters to the tribunal when they ought to be taken there and I hope we shall stand by this Amendment.
Question put, "That those words be there inserted in the Bill."
The House divided: Ayes, 122; Noes, 262.

Division No. 116]

AYES

[5.26 p.m.

Agnew, Cmdr. P. G.

Henderson, John (Cathcart)

Noble, Comdr. A. H. P

Amory, D. Heathcoat

Hinchingbrooke, Viscount

Odey, G. W.

Astor, Hon. M.

Hogg, Hon. Q.

O'Neill, Rt. Hon. Sir H.

Baldwin, A. E.

Hollis, M. C.

Orr-Ewing, I. L.

Beamish, Maj. T. V. H

Holmes, Sir J. Stanley (Harwich)

Peake, Rt. Hon. O.

Birch, Nigel

Howard, Hon. A.

Peto, Brig. C. H. M.

Bower, N.

Hudson, Rt. Hon. R. S. (Southport)

Ponsonby, Col. C. E.

Boyd-Carpenter, J. A.

Hulbert, Wing-Cdr. N. J.

Poole, O. B. S. (Oswestry)

Braithwaite, Lt.-Comdr. J. G

Hurd, A.

Prior-Palmer, Brig. O.

Buchan-Hepburn, P. G. T.

Hutchison, Lt.-Cm. Clark (E'b'rgh W.)

Rayner, Brig. R.

Bullock, Capt. M.

Hutchison, Col. J. R. (Glasgow, C.)

Roberts, Emrys (Merioneth)

Butoher, H. W.

Jeffreys, General Sir G.

Roberts, H. (Handsworth)

Butler, Rt. Hn. R A. (S'ffr'n W'td'n)

Joynson-Hicks, Hon. L. W.

Roberts, W. (Cumberland, N.)

Byers, Frank

Keeling, E. H.

Ropner, Col. L.

Carson, E.

Lambert, Hon. G.

Ross, Sir R. D. (Londonderry)

Clarke, Col. R. S.

Langford-Holt, J.

Sanderson, Sir F.

Cooper-Key, E. M.

Legge-Bourke, Maj. E. A. H.

Savory, Prof. D. L.

Crosthwaite-Eyre, Col. O

Lennox-Boyd, A. T.

Smithers, Sir W

Crowder, Capt. John E.

Lindsay, M. (Solihull)

Spearman, A. C. M

Cuthbert, W. N.

Linstead, H. N.

Stanley, Rt. Hon O.

Darling, Sir W Y.

Lloyd, Selwyn (Wirral)

Strauss, Henry (English Universities)

Davies, Rt. Hn. Clement (Montgomery)

Lucas, Major Sir J.

Studholme, H. G.

De la Bere, R.

Lucas-Tooth, S. H.

Sutcliffe, H.

Digby, Simon Wingfield

Lyttelton, Rt. Hon. O.

Taylor, C. S. (Eastbourne)

Dodds-Parker, A. D.

MacAndrew, Col. Sir C.

Taylor, Vice-Adm. E. A. (P'dd't'n, S.)

Donner, P. W

McCorquodale, Rt. Hon. M. S.

Teeling, William

Dower, Col. A. V. G. (Penrith)

McFarlane, C. S.

Thorneycroft, G. E. P. (Monmouth)

Drayson, G. B

Mackeson, Brig. H. R.

Thorp, Brigadier R. A. F.

Drewe, C.

McKie, J. H. (Galloway)

Touche, G. C.

Dugdale, Maj. Sir T. (Richmond)

Maclay, Hon. J. S.

Turban, R. H.

Eccles, D. M.

Macmillan, Rt. Hon. Harold (Bromley)

Tweedsmuir, Lady

Eden, Rt. Hon. A.

Macpherson, N. (Dumfries)

Wakefield, Sir W. W.

Fletcher, W. (Bury)

Marlowe, A. A. H.

Walker-Smith, D

Fraser, H. C. P. (Stone)

Marsden, Capt. A.

Ward, Hon. G. R.

Fraser, Sir I. (Lonsdale)

Marshall, D. (Bodmin)

White, J. B. (Canterbury)

Gage, C.

Marshall. S. H. (Sutton)

Williams, Gerald (Tonbridge)

Galbraith, Cmdr. T. D. (Pollok)

Mellor, Sir J.

Wiriterton Rt. Hon. Earn

Gates, Maj. E. E.

Molson, A. H. E.

Young, Sir A S. L. (Partick)

Gomme-Duncan, Col. A.

Morris, Hopkin (Carmarthen)

Grimston, R. V.

Morrison, Maj. J. G. (Salisbury)

TELLERS FOR THE AYES:

Harvey, Air-Comdre. A. V.

Morrison, Rt. Hn. W. S. (Cirencester)

Major Conant and

Head, Brig. A. H.

Nicholson, G.

Colonel Wheatley

Albu, A. H.

Granfell, D. R.

Nicholls, H. R. (Stratford)

Allen, A. C. (Bosworth)

Grey, C. F.

Noel-Baker, Capt. F. E. (Brantford)

Alpass, J. H.

Grierson, E.

Oliver, G. H.

Anderson, A. (Motherwell)

Griffiths, D. (Rother Valley)

Orbach, M.

Attewell, H. C.

Guest, Dr. L. Haden

Palmer, A. M. F.

Austin, H. Lewis

Gunter, R. J.

Pargiter, G A.

Awbery, S. S.

Hale, Leslie

Parker, J.

Ayles, W. H.

Hall, Rt. Hon. Glenvil

Parkin, B. T.

Ayrton Gould, Mrs. B

Hamilton, Lieut.-Col. R.

Paton, Mrs. F. (Rushcliffe)

Bacon, Miss A.

Hardman, D. R.

Paton, J. (Norwich)

Balfour, A.

Hardy, E. A.

Pearson, A.

Barnes, Rt. Hon. A. J

Haworth, J.

Pearl, T. F.

Barstow, P. G.

Henderson, Rt. Hon. A. (Kingswinford)

Popplewell, E.

Barton, C.

Hicks, G.

Porter, E. (Warrington)

Battley, J. R.

Holman, P.

Porter, G. (Leeds)

Bechervaise, A. E

Holmes, H. E. (Hemsworth)

Price, M. Philips

Benson, G.

Horabin, T. L.

Proctor, W. T.

Beswick, F.

Houghton, A. L N. D

Pryde, D. J.

Bing, G. H. C.

Hoy, J.

Pursey, Comdr. H

Blackburn, A. R

Hudson, J. H. (Ealing, W.)

Randall, H. E.

Blyton, W. R.

Hughes, Emrys (S. Ayr)

Ranger, J.

Bossom, A. C.

Hughes, H. D. (W'Iverh'pton, W.)

Rees-Williams, D. R

Bowden, Flg. Offr. H. W.

Hynd, H. (Hackney, C.)

Reeves, J.

Braddock, Mrs. E. M. (L'pl. Exch'ge)

Irvine, A. J. (Liverpool)

Reid, T. (Swindon)

Braddock, T. (Mitcham)

Irving, W. J. (Tottenham, N.)

Rhodes, H.

Bramall, E. A.

Isaacs, Rt. Hon. G. A.

Ridealgh, Mrs. M.

Brook, D. (Halifax)

Janner., B.

Robinson, K. (St. Pancras)

Brooks, T. J. (Rothwell)

Jay, D. P. T.

Rogers, G. H. R.

Broughton, Dr. A. D. D.

Jeger, G. (Winchester)

Royle, C.

Brown, George (Belper)

Jeget, Dr. S. W. (St. Pancras, S.E.)

Sargood, R.

Brown, T. J. (Ince)

Jenkins, R. H.

Scollan, T.

Bruce, Maj. D. W. T.

Johnston, Douglas

Scott-Elliot, W

Burden, T. W.

Jones, D. T. (Hartlepool)

Segal, Dr. S.

Burke, W. A.

Jones, Jack (Bolton)

Shackleton, E. A. A

Castle, Mrs. B. A.

Jones, P. Asterley (Hitchin)

Sharp, Granville

Chetwynd, G. R.

Keenan, W.

Shinwell, Rt. Hon, E.

Cluse, W. S.

Key, Rt. Hon. C. W.

Shurmer, P.

Cocks, F. S.

King, E. M.

Silverman, J. (Erdington)

Collick, P

Kinghorn, Sqn.-Ldr E.

Silverman, S. S. (Nelson)

Collindridge, F

Kinley, J.

Simmons, C. J

Collins, V. J.

Kirby, B. V.

Skeffington, A. M.

Colman, Miss G. M.

Lang, G.

Skeffington-Lodge, T. C.

Cooper, G.

Lee, Miss J. (Cannock)

Skinnard, F. W.

Corbet, Mrs. F. K. (Camb'well, N.W.)

Levy, B. W.

Smith, Ellis (Stoke)

Corlett, Dr. J.

Lewis, A. W. J. (Upton)

Smith, H. N. (Nottingham, S.)

Cove, W. G.

Lindgren, G. S.

Smith, S. H. (Hull, S. W.)

Crawley, A.

Lipton, Lt.-Col. M

Snow, J. W.

Crossman, R. H.

Lyne, A. W.

Solley, L. J.

Daggar, C.

McAdam, W.

Sorensen, R. W

Dalton, Rt. Hon. H.

McEnlee, V. La T.

Soskice, Rt. Hon Sir Frank

Davies, Edward (Burslem)

McGhee, H. G.

Sparks, J. A.

Davies, Harold (Leek)

Mack, J. D.

Steele, T.

Davies, Haydn, (St. Pancras, S.W.)

McKay, J. (Wallsend)

Stewart, Michael (Fulham, E.)

Davies, S. O. (Merthyr)

Mackay, R. W. C. (Hull, N.W.)

Strauss, Rt Hon. G. R. (Lambeth)

Deer, G.

Maclean, N. (Govan)

Stress, Dr. B.

Diamond, J.

McLeavy, F.

Stubbs, A. E.

Dodds, N. N

Macpherson, T. (Romford)

Summerskill, Rt. Hon. Edith

Donovan, T.

Mainwaring, W. H.

Swingler, S.

Driberg, T. E. N.

Mallalieu, E. L. (Brigg)

Sylvester, G. O

Dugdale, J. (W. Bromwich)

Mallalieu, J. P. W. (Huddersfield)

Symonds, A. L

Dumpleton, C. W.

Manning, C. (Camberwell, N.)

Taylor, H. B. (Mansfield)

Ede, Rt. Hon. J. C.

Manning, Mrs. L. (Epping)

Taylor, R. J. (Morpeth)

Edwards, John (Blackburn)

Marquand, Rt. Hon. H. A.

Taylor, Dr. S. (Barnet)

Edwards, Rt. Hen. N. (Caerphilly

Midland, H. M.

Thomas, D. E. (Aberdare)

Evans, Albert (Islington, W.)

Mellish, R. J.

Thomas, George (Cardiff)

Evans, E. (Lowestoft)

Messer, F.

Thomas, I. O. (Wrekin)

Evans, John (Ogmore)

Middleton, Mrs. L.

Thurtle, Ernest

Evans, S. N. (Wednesbury)

Mikardo, Ian

Timmons, J.

Ewart, R

Millington, Wing-Comdr. E. R.

Tolley, L.

Fairhurst, F.

Mitchison, G. R.

Tomlinson, Rt. Hon. G

Farthing, W. J.

Monslow, W.

Turner-Samuels, M.

Field, Capt. W. J

Moody, A. S.

Usborne, Henry

Fletcher, E. G. M. (Islington, E.)

Morgan, Dr. H. B.

Vernon, Maj. W. F

Follick, M.

Morley, R.

Viant, S. P.

Foot, M. M.

Morris, Lt.-Col. H. (Sheffield, C.)

Wallace, G. D. (Chislehurst)

Forman, J. C.

Morris, P. (Swansea, W.)

Warbey, W. N.

Freeman, J (Watford)

Morrison, Rt. Hn. H. (Lewisham, E.)

Watkins, T. E.

Ganley, Mrs. C. S

Mort, D. L.

Webb, M. (Bradford, C)

Gibbins, J.

Moyle, A.

Weitzman, D.

Gibson, C. W.

Murray, J. D.

Wells, P. L. (Faversham)

Glanville, J. E. (Consett)

Naylor, T. E.

West, D. G

Gooch, E. G.

Neal, H. (Claycross)

While, H. (Derbyshire, N.E.)

Greenwood, A. W J. (Heywood)

Nichol, Mrs. M. E. (Bradford, N.)

Whiteley, Rt. Hon. W.

694

695

Wilcock, Group-Capt. C. A. B.

Williams, Rt. Hon. T. (Don Valley)

Wyatt, W.

Wilkins, W. A.

Williams, W. R. (Heston)

Young, Sir R (Newton)

Willey, F. T. (Sunderland)

Willis, E.

Younger, Hon. Kenneth

Willey, O. G. (Cleveland)

Wilson, Rt. Hon. J. H.

Williams, D. J. (Neath)

Wise, Major F. J.

TELLERS FOR THE NOES

Williams, Ronald (Wigan)

Woodburn, Rt. Hon. A.

Mr. Joseph Henderson and

Mr. Richard Adams.

It being after Half-past Five o'Clock, Mr. DEPUTY-SPEAKER proceeded, pursuant to Order, successively to put forthwith the Questions on the Amendments moved by the Government of which notice had been given to that part of the Bill to be concluded at Half-past Five o'Clock at this day's Sitting.

Clause 23.—(RECOVERY OF ASSETS TRANS- FERRED BY A COMPANY WHICH COMES INTO PUBLIC OWNERSHIP.)
Amendment made: In page 28, line 26, at end, insert: "entered into any transaction which."—[The Solicitor-General.]
Amendment proposed: In page 29, line 8, leave out "or surrender of those rights," and insert:
"Surrender or grant of rights in respect of the works, invention or registered design in question."—[The Solicitor-General.]
Viscount Hinchingbrooke: On a point of Order. Can we not have an explanation?
Mr. Deputy-Speaker (Mr. Bowles): No. There can be no discussion.
Viscount Hinchingbrooke: Why not?
Amendment agreed to.

Clause 24.—(DISSIPATION OF ASSETS BY TRANSACTIONS INVOLVING PAYMENTS, DISTRIBUTIONS, ETC., TO MEMBERS OF COMPANY.)
Amendments made: In page 30, line 39, leave out "conditions," and insert "condition."—[The Solicitor-General.]
In page 31, line 10, after "transfer," insert "or grant."—[Mr. G. R. Strauss.]
In page 31, In line 11, leave out "of," and insert "by."—[The Solicitor-General.]

Clause 29.—(ACTIVITIES IN SECOND SCHEDULE NOT TO BE CARRIED ON EXCEPT UNDER LICENCE.)
Mr. G. R. Strauss: I beg to move, in page 35, liné 9, to leave out "shall," and to insert "may."
This is a drafting Amendment, the intention being to make this part of the Clause quite clear.
Amendment agreed to.
Mr. Lyttelton: I beg to move, in page 35, line 10, to leave out from "fit," to "conditions," in line 11, and to insert "not being terms or."
We are now turning, after seven undiscussed Clauses, to the battlements and portcullis of State monopoly. The arguments which are generally brought against monopolies are those concerning the prices which they may be able to charge by virtue of the extent of the hold which they have over the market and those concerning the powers which may be exercised about the entry of new firms into the industry over which the monopoly is said to exist. Speaking for myself, I think there is a great deal in those arguments. The use of those powers has to be watched extremely carefully. It is for that reason that we on this side of the House supported, in the main, the principles which lay behind the Monopolies and Restrictive Practices (Inquiry and Control) Act.
When, however, we see how the Government propose to deal with the industries which are coming into their power, we find a very different story. A complete Clause is written into the Bill designed to carry out perhaps the most criticised of all restrictive practices, namely, that relating to the entry of new companies or the continuance of old companies in the industry without a licence. The object of this Amendment is to deprive the Minister of the power to impose in a licence the conditions which are specifically enumerated in the subsection. I must discuss what must be the effect on steel companies who tried to enter the industry or continue in it if these conditions could be imposed.
First of all, the Minister is entitled, by paragraph (a), to limit the period for which the licence is to be in force. We have a separate Amendment on that subject. At the moment I am addressing myself to the fact that I wish to get rid of these conditions altogether. Paragraph (a) limits the period for which the licence is to be in force. The slogan today,

697
given out by all Ministers—and I think rightly given out—is that we must do everything we can to increase production. Yet we find in this Clause nothing but restrictive practices to prevent new production from taking place.
The first limits the period for which the licence shall run. That is highly restrictive because anyone intending to invest money in a new steel process, or for the production of a new steel alloy, obviously must have more to go on than the whim of a Minister and a Department which shows day by day less and less knowledge of the day-to-day conditions of this industry.
It is not enough to have, simply at the whim of the Ministry, a licence which may or may not he renewed, because it would then be possible for capital expenditure to be incurred on a large scale and a licence to be terminated, when all the capital expenditure would—for the purposes of those who put it up—be lost in the period during which that capital expenditure may reasonably be expected to amortise. The period may well extend to 15 years. In fact, on some of the heavy types of plant the rate of depreciation allowed in the Inland Revenue is 12½ to 15 years. In other words, for the purposes of taxation a period of 12 or 15 years is not an unreasonable period to calculate for the purpose of amortising or depreciating to nothing expenditure which has been undertaken. Yet by this particular Clause we are asked to invest moneys in this industry without any knowledge beforehand of how long the licence may run. The first of these conditions therefore is highly restrictive. It leaves at the mere wish of the Minister the length of period during which the undertaker may expect to amortise his capital.
Not content with that, paragraph (b) limits the extent to which any of the said activities is to be carried on. So that not only is the period, the time factor, in the hands of the Minister, but he is also given powers to limit the extent of production. That is surely rather a curious act by a Government which, at long last is finding out that a higher standard of life, or any standard, can only be maintained by higher production. The Government are saying, "We shall only allow this to the extent that you do not become an inconvenience to the State monopoly." If
698
any one else tries to upset the Government in any way they have to get a licence before they can proceed very far.
Now we come on to democratic planning. Paragraph (c) states:
"imposing restrictions as to the persons to whom they may be sold…"
In case the net is not thrown widely enough, the net which enables the Minister to limit the period for which a licence may be given and the tonnage over which it may be applicable, it is proposed to restrict the sales. At his wish restrictions may be imposed:
"…as to the persons to whom they may be sold, and in particular for conferring on the Corporation an option to purchase any such products."
This is a very restrictive practice which I think is rightly criticised very severely by everyone when it applies to anything like a private monopoly. But, not content with the other two things, if a company is carrying on a business, limited as to tonnage and as to period by the Minister, that company is not free even then from the restrictive practices. The Minister seeks to give the Corporation an option to purchase any such products. That, of course, is intended to carry on the monopoly from the production of the actual product to the sale of it, and to prevent the more efficient and convenient private operators from undercutting, in this particular case, prices which the Corporation —taking, of course, one year with another—are able to charge under their monopoly.
5.45 p.m.
Not content with these three limitations a fourth is added, rather "under the rose."
"…before issuing a licence under this section, the Minister shall consult with the Corporation."
That means that before fixing either the period, or the tonnage, or the nature of the option which the Corporation are to receive, the Minister has to consult with the only body with which the person who seeks a licence will find himself in competition. I do not know whether this is an inadvertence. There are many other cases when we have insisted that the Corporation should be consulted. But in this particular case it is something very like an insult to suggest that the Minister must get the advice of a principal competitor before he limits the period or

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tonnage. He goes to the Corporation and says, "Do you think you could stand the competition of A. B. and C. for five years?" The Corporation says, "All right, because nobody could possibly amortise the cost of this new steel alloy in five years. You can safely give the licence for five years, and go to the House and say, 'The Government were very forthcoming, they offered to give the company a licence for five years and they would not take it, so that is that.'"
With regard to the tonnage, the Minister says to the Corporation, "Do you think you could stick 10,000 tons? Would it be very inconvenient?" And the Corporation say, "Well, 10,000 tons; that is half of one per cent. of the total output; all right, we can manage." But if the company should follow the Government slogan about increasing production, and should get beyond a nugatory quantity like 10,000 tons they might be stopped, because the edifice of the monopoly of State production might be threatened. So that the last insult to the applicant for a licence is that the person to be consulted is the only person who is really affected by his competition.
It is for those reasons that we move this, the first of several Amendments. I should have thought that it is highly desirable when one is setting up a State monopoly which, according to the Government will increase the efficiency with which steel is produced, to see whether there are any occasions when that prediction turns out to be true. If that is true, and if this ill thought out scheme—ill thought out from a production point of view—is by some miracle to lead to greater efficiency, what has the State monopoly to fear from competition from the private sector of the industry? Apparently nothing. Yet here, as we had over the question of the vesting date, there is a lack of confidence on the part of the Government who say we are only to carry on if the Minister has plenary powers to limit the period over which competition can take place, limit the tonnage which may be produced and even after giving a company a small tonnage, only the Corporation is to be allowed to sell it. I suggest that this Clause has written into this Bill some of the most restrictive practices that people of experience can think of, and I
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hope that the Government will see their way to accept the Amendment.
Mr. Deputy-Speaker (Mr. Bowles): Mr. Speaker would like this Amendment discussed together with those in lines 15, 16 and 17.
Mr. G. R. Strauss: I thought that this Amendment was one which created a very considerable amount of interest and controversy, and I hesitated to rise because I thought that other hon. Members would like to express their views before I replied so that I would be able to deal with all the arguments put forward at the same time. However, as nobody else rose, I will proceed to answer the arguments put forward by the right hon. Member for Aldershot (Mr. Lyttelton). We must appreciate that this Bill seeks to put on the Corporation the responsibility and duty for the economical and efficient production of iron and steel and the products specified in the Second Schedule. They are responsible for its production. It is their job to see that there is ample quantity and no wastage in the production of these materials.
For that purpose, we are setting up this Corporation, we are taking over all the major steel works, and we say that new entrants can come into the iron and steel field by permission of the Minister who has to consult the Corporation. But the Minister naturally has the power if he so desires to refuse such an application.
Brigadier Thorp: Why naturally?
Mr. Strauss: I shall say in a moment. The Minister has power to refuse such an application or to impose certain conditions. I use the word "naturally," because it is the policy of His Majesty's Government to see that our resources are not wasted and that they are properly planned in the best possible way. [Interruption.] I know that policy is not accepted by the Opposition. They think that the policy is all wrong and that there should be no planning. They say, "Let everybody pull their weight and we shall have the same happy situation as we had in the pre-war years." That is not our policy. We are determined to plan our resources and to see that they

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are not wasted. We have not sufficient resources to be able to afford to waste them. [HON. MEMBERS: "Hear, hear."] I am glad that there is agreement about that. To ensure that there is no waste of resources and that they are not devoted to the creation of steel making capacity which is unnecessary, we say that anybody who wants to enter the iron and steel field can only do so as part of our general plan, and by permission of the Minister after consultation with the Corporation on whom the responsibility and duty has been placed by Parliament to see that there is sufficient steel economically produced.
In view of that set-up and in order to prevent any waste of resources and any unbalance in the industry, which it is always the object of the leaders of the industry to prevent as far as possible; in order to prevent any unbalance, I say —for example, having too much of a certain finishing capacity—it is wholly reasonable in our view that the whole iron and steel industry should proceed to flourish and prosper according to a general overall plan. If we said that any newcomer could come in and use the resources of the country in building up vast plants which would be out of balance with the rest of the steel making capacity or which would duplicate existing capacity, that would be contrary to the national interest. It cannot be done.
Therefore, the decision lies with the Minister or, in other words, with Parliament, because the decision of the Minister in this respect can be challenged by Parliament at any time. It can be discussed here and if necessary the decision of the Minister can be reversed. It is for that reason that we say generally that the Minister must step into the picture in order to prevent possible waste. He steps into the picture by the power given by this Clause to issue licences to newcomers. Here we are only dealing with newcomers and not with existing firms which may at the moment be producing substantial quantities of iron and steel and which are dealt with by another Clause.
I hope that no one will go away with the idea that newcomers want to rush into this field and that they are likely to want to put up substantial plant. The number of newcomers who have entered this industry on a big scale in the last 10 or 20 years has been very small indeed. It
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is only likely to be an unusual request, for example from some important group which has a particular project in mind. We say that if they have such a project in mind we must be sure that it fits in with the general planning which the Corporation have decided upon, and with other arrangements which may be elaborate and planned on a long-term basis, which would be wholly upset if some outside organisation, which may be ignorant of the long-term plan of the Corporation, entered the field without having its plans vetted and accepted. If it is accepted by hon. Gentlemen opposite—I am sure that it is not, but it is almost the basis of our policy—that a permit must be obtained by anyone who desires to enter the steel industry on a large scale in future, then surely it is reasonable and proper that the Minister might lay down certain conditions for the issue of a licence under which the company which gets the licence would be forced to operate.
The right hon. Gentleman criticised in detail the conditions set out in this Clause. Let us see whether they are unreasonable. The first is that there may be a condition limiting the period for which the licence is to be in force. Is that so unreasonable? An applicant might want to be assured that he will be able to continue production for a certain length of time to make it worth while for him to put up an extensive plant. It is right that the planning authority should be able to say, "According to our plans we are perfectly prepared and happy to see an independent, outside plant being set up for 25 years and making this type of product, because that does not in any way interfere with our long-term planning. After that, we shall have to think again." It may well be that the Minister will accept advice from the Corporation and say to a certain applicant for a licence, "Yes, you can carry on and produce your products of steel or whatever they may be for 25 or 30 years. After that we must look at it again." I suggest that is quite reasonable once one accepts the general principle of the necessity for a licence.
Then it is suggested that the next condition, which limits the extent to which any of the activities are to be carried out is unreasonable. Surely, it is essential. If we said to some newcomer to the industry, "You can build works and produce products of unlimited quantity—of one or

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two million tons—never mind what the products are; you can have a general open licence," we might just as well have no licence at all. If we are to plan this industry at all, in which case licensing is necessary, we must have power to limit the total output or capacity of a new plant in order to fit in with the general plan.
Mr. Lyttelton: Might I ask the Minister to deal with the other aspect? In his argument he seems to say that there are no natural checks at all upon anyone building a steel plant of any size he likes. How does he think these results are to happen and the new entrants get his plant financed? Does he think that the shareholders will tumble over one another in order to make an unbalanced and uneconomic industry?
Mr. Strauss: It may be that some speculator or a group of speculators will think that a profit could be secured by building a plant and turning out a certain type of steel for a number of years. They may think that that will be wholly to their advantage. They may be right or wrong in their speculation and in their view of the market. It may be desirable for them to do it, and the Minister may give a licence. On the other hand, it may mean a substantial waste of resources, because it may be contrary to the long-term planning and development schemes of the Corporation, and it may mean a duplication of capacity which is undesirable.
6.0 p.m.
We say in this Clause that an applicant must submit his case. The Minister will consider it together with the proposals of the corporation for their development schemes, and it will be accepted or rejected according to what seems to be right. On this point—the question of limiting the extent to which any of the activities could be carried on—it is quite obvious that, if we are to have a licensing system at all, we must be able to say that, while it is reasonable that a new works could be set up to produce 50,000 tons a year of a certain material, it would be unreasonable to allow a works to be set up to produce half-a-million tons a year, because that would upset the whole organisation of the steel industry.
The third condition suggested is that the licence may impose restrictions as
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to the persons to whom the products may be sold, and may confer on the Corporation an option to purchase any such products. I think that is a reasonable provision. In time of shortage, it is essential that the products of certain works should go to certain factories or consumers who are doing work of national importance, either for defence purposes or, it may be, the export trade. The whole purpose of this condition is that the Corporation may be able to tell the licensee that he must direct his production to certain desirable consumers as against others in a time of shortage, and that is the whole purpose of the subsection.
Mr. Hopkin Morris: May I ask the Minister a question? The Minister has said that without these conditions, a general open licence would be no use, because it would be like having no licence at all. Is it not a fact that the Amendment which the Minister moved a short time ago will have the effect of such a general licence?
Mr. Strauss: It is perfectly true that it is the effect of the Amendment which I have just moved that it will make it possible for a general licence to be issued in certain cases. It could be done, and it is one of the results of that Amendment; but my argument is that, if we are to issue general licences in every case, then there is no point in having this Clause at all. What this Clause says is that a newcomer must have a licence. It is possible that there may be a general licence, but it is exceedingly unlikely, and in order to make the licence really effective, the Minister may impose certain conditions, which are set out in the Clause.
Mr. Hopkin Morris: If the effect of the last Amendment is to provide for general open licences, does the Minister distinguish between the case for a general licence and that for a licence which has to have conditions?
Mr. Strauss: The hon. and learned Gentleman has read rather more into the Amendment which I moved than should be there. The purpose of that Amendment was to make the matter quite clear in one respect. If the Amendment had not been made, the Minister might have had to issue a licence in all circumstances and could not refuse it. It was partly for

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that reason that I moved the Amendment to make the matter quite clear. As the hon. and learned Member has said, one could issue a general open licence, but I think it is very unlikely that the Minister would ever want to do so.
The condition described in paragraph (c) would only be imposed in times of shortage, when it was necessary to direct the products of the licensee to some consumer who, in the view of the Government, was an important consumer in the national interest. As regards the last condition to which the right hon. Gentleman opposite objected, that the Minister should consult the Corporation, I do not think anyone could possibly object to that. I cannot understand how anybody who understands what this Bill is about or who has any sympathy with its purpose could object to that proposal. Let us not forget that Parliament is putting a very grave responsibility on this Corporation, and on their success or failure will depend to a very large extent the prosperity of a very large part of our engineering industry.
Mr. Selwyn Lloyd: That is why it is a scandalous Bill.
Mr. Strauss: We have to ensure that the Corporation are given every support and facility to operate successfully, and we must not detract from those responsibilities by allowing things to happen which might seriously interfere with their chance of success. Having given them these responsibilities for planning and organising the whole industry, and making them responsible for the Second Schedule products, at prices which are reasonable and in the quantities that are required, we have to see that nothing that happens outside in the iron and steel industry will seriously interfere with their policy or with the duty which Parliament has put upon them.
It is surely right that the Minister in his responsibility, before he grants a licence to anyone, must consult the Corporation and see to what extent the applicant for a licence is concerned with a duplication of what the Corporation are already doing, and to what extent this might interfere with their general planning of steel production. I should have thought that was obvious common sense, that it was necessary to have that provision in the Bill and that any Minister would be mad if he granted licences to applicants of this sort, and particularly
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if they were licences of any size, without consulting the body on whom Parliament has placed the responsibility for looking after the organisation and efficient running of the iron and steel industry of this country. Therefore, I ask the House to reject the Amendment, which would make it impossible to impose any conditions on the licences applied for by new applicants who want to enter the industry.
Mr. Frank Byers: The Minister says he has been talking to us for about 15 minutes about planning, but, of course, he has not. The whole burden of his speech had nothing to do with planning whatever; it was a lecture on protection. I believe in planning, but I do not believe in protection, which is exactly what the Minister has been seeking to persuade the House to undertake. If that is the Minister's idea of planning, I have no hesitation in saying that, if that is the mentality that is going to run the Corporation, then this great iron and steel industry is doomed to disaster.
The Minister said that the Bill seeks to put the duty on the Corporation for the efficient and economic production of iron and steel and to ensure that there is no wastage. Who is to be the final judge of efficiency, if there is to be no competition? Who is to be the judge of wastage, if there is no competition? The Minister gave the impression that these newcomers were people who might wake up one morning and say, "I have a jolly good mind to build an iron and steel works," and that they reached that decision for no other reason. That is not how business happens. What happens is that people foresee a demand which has to be fulfilled—
Mr. Follick: And then start to put a factory?
Mr. Byers: Yes. They believe in their own capacity to fulfil that demand. The hon. Member for Loughborough (Mr. Follick) ought to confine himself to spelling, and leave iron and steel alone. If the hon. Member or the Minister thinks he can really plan 25 or 30 years ahead and see better than the consumer exactly what is going to he required, he is setting himself up as a judge of what people ought to have and not of what they want. That seems to me to be the fundamental

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basis of Socialist planning. It is extremely dangerous to set up a Corporation and protect it in this way so that nobody else can come in and chance his arm to try to fufil a demand which he can foresee, but which might never come off. After all, he will risk his own capital and take the risk, and if there is to be no competition and if the whole scheme is to be restrictive and protective, what sort of a measuring rod are we going to have? We are not going to have any measuring rod of efficiency, of economical production, or of wastage.
Quite frankly, I think it is a very dangerous thing. We are going to get into the same position into which we have already got wherever we have created licences. We are protecting the vested interests. We have only to look at the fish and chip shops and see the way in which the food committees behave when they have people on them who do not wish to have any more competition. One has only to realise the difference in the service one gets from garages in this city in 1949, now that there is competition, compared with the sort of service, or rather the disservice, one received in 1945 when they were protected because there were so few to serve people's needs. That is the essence of the competitive system which gives far better service.
Mr. Attewell: Is the hon. Gentleman suggesting that there will be no competition; that there will be no firms operating as well as the Corporation?
Mr. Byers: I am suggesting that it cannot be called competition when firms producing the same product are doing so on the sufferance of the main Corporation, and are tied by restrictions which prevent them from doing what they think is the right thing.
We have heard about the Monopolies Act. The Minister's Government produced that Act, and we, very rightly and properly, supported it. The principle that there should be no vast monopoly which had the power to exploit and protect themselves against the competition of other firms is right. But, supposing that I.C.I. came to this House and asked for this same power, would the Government give it to them? Would the Government give them power to say, "You can only
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operate in the same field as us on our conditions; you will be licensed for a certain period." Would the Minister give I.C.I. a licence?
Mr. G. R. Strauss: I do not know whether the hon. Member really wants an answer to that question. He knows as well as we do that there is a vast difference between the two. The I.C.I. is a company out to make profit for its shareholders; there is no Minister responsible for I.C.I. in this country.
Mr. Birch: We only make losses for the country.
Mr. Strauss: The Steel Corporation are set up by Parliament; they are a public body whose primary interest is to serve the public, and not to make money for anybody. There is a Minister in this House responsible for them, and Questions and Debates can be raised about them in Parliament. There is no analogy whatsoever between the two proposals. Surely the hon. Member knows that.
Mr. Byers: In other words, the Minister has no objection to monopoly in principle; it is only a question of who owns it, because that is what it amounts to.
Quite frankly, this Clause which we are seeking to change, is a complete protection which will give the steel industry no measuring rod. It will not result in efficiency, and, to my mind, it has one of the most objectionable aspects, that is, in paragraph (c) where restrictions may be imposed
"as to the persons to whom the products may be sold, and, in particular, conferring on the Corporation an option to purchase any such products."
What will happen is this. A firm may get a licence and it will then operate at low cost and be very efficient. At least, that is what it will intend to do. But, before it gets the licence, an agreement can be made with it by the Corporation to take all its products at, perhaps, the same price at which the Corporation are making similar goods. The Corporation may take the products at something just above cost price, and then sell them at whatever may be the ruling price of their monopoly, and can thus make tremendous profits out of this small firm. They have the power, as I see it, to prevent the firm from operating except on the conditions

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of the Corporation. That is neither competition nor private enterprise.
6.15 p.m.
Mr. Strauss: The hon. Member is mistaken. The object of paragraph (c) is to prevent a firm from profiteering in times of shortage and selling their goods at well above the price at which the Corporation are selling them because, say, of a temporary shortage, thereby doing damage to certain consumers. This condition is inserted so that, in those circumstances, the firm can be told that they must sell their products to the Corporation at the Corporation's price, not in order to damage the firm, but to prevent profiteering. When that matter was explained during the Committee stage, it was suggested by the Opposition that those words went far too wide, and that under them all sorts of things could be done. I said that I did not think that was so, but that if any better words were submitted by hon. Members opposite, I would consider them. But no alternative words were submitted. I think that the existing words cover the situation very well. They are inserted for the purpose I have indicated, and not for the purpose which the hon. Member has in mind.
Mr. Byers: That may be so, but the words cover both aspects. There is nothing to prevent the Corporation going to the courts and getting the other interpretation put upon them. If the Minister genuinely means that he is not going to allow the Corporation to exploit a small private firm, then let him, in another place, have words put into the Bill to safeguard that position. Surely it is wrong to give to a State monopoly powers which are not to apply to a private monopoly? That is avoiding a principle which we as Liberals have attacked for many years. I thought that the Labour Party were against the principle of monopoly.
We ought to take warning from the Minister's refusal to meet us on this Amendment. I understand that in the new pamphlet, "Labour Believes in Britain," there is the suggestion that the Government—perhaps the Minister could inform his henchman the hon. Member for Reading (Mr. Mikardo) what he wants him to say when I have sat down; no doubt when he gets up he will be adequately briefed—will in future enter into competition with private enter-
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prise. That may be a good suggestion, but is this the principle on which that competition is to be based? I do not call this competition; I call it protection. I do not call it planning; I call it craziness.
Mr. Mikardo: I do not know why the hon. Member for North Dorset (Mr. Byers) should flatter himself by thinking that anyone would require a brief from the Minister, or anyone else, to reply to the rather infantile stuff he has just put before the House. I want to say, however, how much I welcome the somewhat belated intervention of the Liberal Party in the discussions which have now reached the third day of their progress on the Report stage of this very important Bill.
Mr. Byers: The hon. Member has no right to criticise the Liberal Party on that point, when his party is responsible for the Guillotine which cut out three new Clauses proposed by the Liberal Party.
Mr. Mikardo: That is a thesis which is quite consistent with the sort of arguments the hon. Member was using before, because what he is now saying is that the reason why the Liberal Party have not come here to speak is that they have not had much time in which to do the speaking. I should have thought that was a reason which would have brought them here rather than kept them away, and if the hon. Member wants to be consistent he ought not to have been here at all during the whole of the Debate. But there it is. The Liberal Party exposes the complete woolliness of its thinking on the subject of the relation of public and private sectors of our economy by this thesis, long outworn and now not accepted by any serious thinkers on this subject, that one can consider monopoly quite apart from the question of the purpose, and, indeed, the ownership of the monopoly.
The hon. Member for North Dorset is a distinguished soldier. Does he object to the fact that the Army is a monopoly? Would he like to see a situation in which, free from licence, we reverted to the conditions of a few centuries ago when any private baron could get himself a private little force in competition with the State?
Mr. Hopkin Morris: In that event, is the hon. Gentleman's object to make all industry like the Army?
Mr. Mikardo: That is not what I was saying; it is nothing like what I was saying. The hon. and learned Member knows very well that the point I was making was that there are some situations, of which the Armed Forces is one of many examples, in which monopoly is inevitably in the public interest, and everybody except the Liberal Party has come round to understanding that many years ago. Would the hon. and learned Member for Carmarthen (Mr. Hopkin Morris) for example, consider that there should be two or three alternative suppliers of water in the City of Westminster, each running its mains round Parliament Square and each taking turns to pull up Parliament Square in order to repair its mains?
The Liberal Party concurred in the arrangement under which public utilities gradually took unto themselves monopoly powers, and if they had not forgotten that they concurred in those arrangements, the Chief Whip of the Liberal Party, who has not been "whipping" awfully well during the last two or three days of the Debate, would not have made the points which he has made this afternoon. He sought to convince the House that there is some inherent quality in monopoly as distinct from the purpose, the nature and the ownership of the monopoly. Of course, it is nonsense to argue and nobody but a Liberal would argue—
Mr. Byers: Does it not follow from the hon. Gentleman's argument that we should create a Socialist Commonwealth in which there is common ownership of the means of production, distribution and exchange?
Mr. Mikardo: I am a Socialist; that is why I sit on these benches. If that is what the hon. Gentleman wants to know, I am glad to tell him.
But perhaps I may go on with the point which I was making. He asked whether the Minister would be willing to concede to I.C.I. the powers which under this Bill he is asking for the Corporation and for his Ministry. That question has been answered a long time ago. It must have been answered during the long periods when the hon. Gentleman's party was in a state of coma and, therefore, was not listening. The institution represented by this House, and the public accountability
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which this House provides—and no Member of this House will deride the powers and purposes of this House—answers the hon. Member's question as to why one is willing to do something for a public instrument which one is not willing to do for a private instrument. One must take into account this question of accountability and the question of purpose. When it is possible for the hon. Gentleman to put to the Chairman of I.C.I. questions to which he has got to give an answer in public, then the hon. Gentleman might be right in saying that we can think of this Corporation in exactly the same terms as we think of I.C.I.
Mr. David Eccles: I am not familiar with this Bill, but I am moved to speak for the first time by having listened to the arguments. More particularly, I wish to support the hon. Member for North Dorset (Mr. Byers). The hon. Member for Reading (Mr. Mikardo) has shown that the whole Clause is mere humbug. He has argued for a tight monopoly in rather cruder terms, as one would expect, than the Minister, but it is the same argument. The Minister said, "The Corporation is responsible for the steel manufacturing of the United Kingdom. We are determined that nobody else shall have any say in this business at all." Therefore, he says there are to be no newcomers who are not approved by the Corporation. What that means is that there is no point in having any newcomers at all. Why have the Clause? The whole thing is mere eyewash, just as the passage which was quoted from "Labour Believes in Britain" is also eyewash.
It is not possible to square Socialism of the kind advocated by the hon. Member for Reading with this sort of mixed economy where we have some private owners and a Government Corporation. Hon. Members opposite must choose between the two. What is so dishonest is to pretend to the floating voter that it is possible to back both these horses. It is absolutely impossible to do so, and I should think that Clause 29 will go down in our political history as one of the pieces of dynamite which will blow "Labour Believes in Britain" out of the water.
The obvious fact is that the Socialist Party do not want any competition in the

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steel industry at all. That runs through all their philosophy. At Question Time today my hon. Friend the Member for Devizes (Mr. Hollis) asked about sweet shops in his constituency, and the Parliamentary Secretary to the Ministry of Food said, "There are 40 sweet shops in Devizes. Is not that enough?" That is a new view of protecting the consumers. What the Socialist Party are saying is that they can plan for the consumer, whereas we on this side of the House say that without a little breath of competition, the consumer will never get a square deal.
When the hon. Member for Reading says that it makes all the difference because a Government monopoly is accountable to this House, and Ministers always behave perfectly properly and are always fair as between one consumer and another, I say to the hon. Member that we recall what the Minister of Food did when he had to allocate sugar. Was he fair as between one consumer and another? Why should the Minister of Supply be any more fair as between one consumer of steel and another, or one would-be new entrant and another? We recall what the Chancellor of the Exchequer did for foreign exchange when he was allocating between one request to send £5,000 to France and another. We are not content with the accountability of Socialist Ministers. We have seen it in practice. Therefore, it is absolutely unconvincing to tell us that the issue of these licences will be done on any principle other than that which suits the Minister then in office. I believe that if the party opposite wish this to be an honest Bill setting up a monopoly, which is what they desire—a real piece of Socialism—they will say to their Minister, "Take the whole of this Clause away."
Mr. S. N. Evans: Apropos of the last remarks of the hon. Member for Chippenham (Mr. Eccles), I have seen Labour Ministers at work and I have seen the Iron and Steel Federation at work, and on balance I prefer Labour Ministers. The argument to which we have been listening is the old argument which we had in Committee. It is that something which is desirable and in the national interest when an industry is owned by a limited and privileged minority of the population, is wrong when the ownership of the industry is
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transferred to the nation. All the speeches from the opposite benches proceed on the hypothesis that there has been competition in this industry up till now, whereas, as everyone knows, that test of efficiency in capitalist society was abandoned in the 1930's and there has been no competition since.
6.30 p.m.
A Ministry predominantly Conservative in the 1930's, dealing with an industry which was privately owned, did just those things for which my right hon. Friend is asking power in this Bill. The Opposition ask that people shall be given leave to open up steel-producing plant, rolling mills, etc., in competition with the State-owned industry. In the 1930's a law was introduced in this country which prevented anybody from taking a public service vehicle—a bus, a charabanc or a lorry—on to the roads for the purpose of earning a living. It was said that the industry possessed all the facilities necessary to provide a service adequate to the nation's needs and, therefore, a predominantly Conservative Administration made it impossible for ex-Service men, for instance, who wanted to start up in business on their own, to buy a lorry and to operate that lorry on the roads of this country. The argument was that the facilities already in existence were adequate for the nation's needs and that anything in excess of the existing organisation would be surplus and wasteful. That was the argument applied by a Conservative Administration to the transport industry in the 1930's.
Colonel Dower: What Bill was that?
Mr. Evans: The hon. and gallant Member must be aware that courts of traffic commissioners were set up throughout the country and that any person who wanted to operate a vehicle on the roads of this country had to apply to them. I might add that if he were so fortunate as to be given a licence it was strictly limited in time—in fact, he was granted a licence for only three years.
Mr. Orr-Ewing: Surely the hon. Member is not suggesting that the traffic commissioners were interested bodies? Unless they were interested bodies they provide no analogy at all with the proposals in this Clause.
Mr. Evans: Here was an industry which was owned, as the steel industry is owned, by a minority of the people, and yet it was thought that, even though that were so, a monopoly industry was in the national interest. What else could it be called but a monopoly industry? No new entries were permitted.
Colonel Hutchison: The fallacy of the argument which the hon. Member is adducing, and which is constantly adduced from the other side of the House, is that the only form of competition in steel is the competition of price. As a steel user I know perfectly well that there are a great many other forms of competition which may be equally valuable—service, quality, and so on. Is the hon. Member trying to argue that there was not that form of competition in the 1930's?
Mr. Evans: I am grateful to the hon. and gallant Member because he has provided me with a magnificent argument, destroying the arguments of his colleagues against the nationalisation of this industry. The Opposition, on the one hand, say there will be no competition. Here we have the hon. and gallant Gentleman coming along and saying that there will be competition in terms of quality and other considerations.
Colonel Hutchison: The hon. Member has got it all wrong. I said there was competition in the past.
Mr. Evans: This industry has been a closed shop for many years and it would make nonsense of the proposals contained in this Bill, especially having regard to the generous terms of compensation, if, the industry having been bought on behalf of the nation, unrestricted competition were then to be permitted. That would make complete nonsense of the whole of the Government's proposals.
Colonel Gomme-Duncan: I shall not follow the hon. Member for Wednesbury (Mr. S. N. Evans) into the rather maze-like arguments which he adduced but, not having spoken on this Bill previously and not having been a member of the Standing Committee, I should like to take this opportunity of saying that, really and truly, for sheer, arrant and utter humbug this is probably the greatest Measure which has been produced in this Parliament. Of course we know the reasons
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behind it, although I am not entitled to go into them in the discussion on this set of Amendments. We have in other industries which have been nationalised most pathetic examples of what will happen to this industry. Always we find the Minister saying, "I intend to have powers to take over anyone likely to offer the slightest competition with my show."
In this Bill the Minister sets up the Corporation. Goodness knows who is to be on the Corporation. Consumers have practically no protection—they have a phoney consumers' council. Here, the Minister intends to say when anybody contemplates setting up in opposition to him, "I am just not having it, because they might make a profit and show up my show." Practically no nationalised industry in the world has ever shown a profit. Why should this be different? This Clause, dealing with powers to license smaller men—that is, smaller by comparison with the big, State Corporation—is inserted solely for the purpose of making absolutely certain that if there is to be any form of profit at all it will go to the Corporation. The same thing happened in the Civil Aviation Act. If there were any operations in which the Charter Companies were likely to be successful, then they were immediately earmarked to be taken over by the State. That is what will happen here.
I hope we shall press these Amendments. Obviously the very small man cannot compete with the Corporation. The bigger outfits might want to compete, but they will only do so if there is a reasonable chance of making a fair profit. It is because they think there may be a chance of making a fair profit that the Minister has his eye on them and says, "We shall decide; we shall not have competitors except on our own terms." As the hon. Member for Northern Dorset (Mr. Byers), who has now left the Chamber, pointed out earlier, the only object of this Clause is to make absolutely certain that a complete monopoly is established. I maintain that all complete monopolies are a mistake and are radically wrong.
Mr. Sydney Silverman: What, all of them?
Colonel Gomme-Duncan: Except, of course, things like the Army and Navy.
Mr. Silverman: That is, all except those you like.
Colonel Gomme-Duncan: If the hon. Member prefers that there should be private armies perhaps he will tell his party so, because they are not quite so keen on them. It is absolutely absurd to suggest that Armed Forces and things like that should be in private hands. If a private monopoly is bad, then a State monopoly is worse, because it adds to the vices of the private monopoly that of inefficiency and hon. Members Opposite will, at least, not suggest that inefficiency has been a vice of what they call the steel monopoly up to date. If we see any signs of a nationalised industry, with a complete monopoly, being a profitable concern and being efficient we shall have the surprise of our lives; it has never happened before and is not likely to happen in the future.
Mr. Attewell: I had hoped that the Liberal Whip, the hon. Member for North Dorset (Mr. Byers), would have remained in the Chamber, because I wish to direct my remarks particularly to the points that he made. I appreciate that it is not always possible for a Member always to be in his place, but, as a Member of the Tory Party has already drawn attention to the lack of attendance by the Members of the Liberal Party, I may, perhaps, be forgiven for referring to the hon. Member's absence now.
The hon. Member seemed to make the point that there would be no competition in the industry after the passage of the Bill and that the State would own a monoply. That will not be so. Even were it to be so, what would be wrong about it? There would be no sense in this Government's going to all the trouble and difficulty of passing through Parliament a Bill to bring under public control the iron and steel industry, and then allowing businesses to make iron and steel and to grow to such an extent that they could destroy the very foundation of the nationalised industry. That would take us back to the period when we had surplus capacity, when works were shut down and people unemployed.
However, there is not to be a monopoly. There will be businesses concerned with the winning of iron ore and with the smelting of ore, and in the rolling of finished steel. They will be
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able to operate without a licence. What is more, newcomers to the industry, if I read the Bill correctly, can come in and operate without licences.
Viscount Hinchingbrooke: Up to 5,000 tons.
Mr. Attewell: It does not matter about the amount at the moment. It has been argued today that no one will be able to come into this industry unless he has first of all received a licence from the Minister. Now, Members of the Opposition are admitting that that is not a correct statement of the facts, and that people can come into the industry without licences, and without asking for them. The point was made that competition would be necessary so that we could judge whether the State undertaking was efficient. I suggest that the undertakings that will be able to operate under the Bill, and within the limits imposed, will be able to demonstrate whether the nationalised undertaking is running efficiently or otherwise. A licence is required only when the producer is producing more than a certain tonnage. So far as the winning of iron ore is concerned, the amount is 5,000 tons. With his licence he can produce up to 49,000 tons a year, and it is only when he produces 50,000 tons that he will be in danger of being taken over.
Viscount Hinchingbrooke: That applies only to the working and getting of iron ore.
Mr. Attewell: That is perfectly true. I was dealing only with iron ore. Let us consider the smelting of iron ore. Any person can smelt ore without asking for a licence until he produces 5,000 tons, and then with a licence he can produce up to 19,000 tons without being taken over. I submit that such activities will be enough to show whether the State concern is being operated efficiently or not. The value of these small undertakings will be that they will be able to fit into the national scheme. Were we to allow those firms to grow and to produce more than the maximum amounts laid down, the time spent in passing this Bill would go for nought. [HON. MEMBERS: "Why?"] Because the reason for bringing the iron and steel industry under public ownership is that it is essential to the life of the country, and so the control of it must be within the control of the people of

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this country, and its products should not be produced only from the profit motive.
6.45 p.m.
Mr. Orr-Ewing: I find some difficulty in following the argument of the hon. Member for Harborough (Mr. Attewell) to its logical conclusion. He said it would be interesting to allow the smaller concerns to compete with the State concern, because by that competition, for which he claims there will be freedom under this Clause, we should be able to learn whether the State concern was being run efficiently or not. He did not tell the House what would happen if it were discovered that the independent concerns were running more efficiently than the State concern. What, in fact, does he think would happen?
Mr. Attewell: The hon. Gentleman will remember that I was replying to the case put forward by the Liberal Whip, who said that this industry would be a closed monopoly of the State. He said that there would be no measuring rod. I was showing that it would not be a closed monopoly, and that the measuring rod would be provided by the firms that were allowed to exist.
Mr. Orr-Ewing: Let us assume that the hon. Member for Harborough is right. I do not think he is right, but let us assume that he is. If there is free competition, under what I would call a State monopoly, what happens if the individual firms prove more efficient than the State concern? I wonder if he could tell the House what would happen then? I can. I can tell perfectly well. The moment that they are found to be more efficient, the price at which they are allowed to sell—and forced to sell—their products, will be raised by the Corporation. That will be done under the powers contained in this Clause. Therefore, competition will never exist, because of the powers contained in this Clause. I really think that when the hon. Member examines the Clause more particularly he will find that nothing I have said is inaccurate.
The Minister has used on many occasions the statement that he is reasonable, that all Ministers are reasonable, and that we must assume that Ministers will act reasonably. I really think the
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arguments he used about this Amendment today entirely destroy any claims Of his to reasonableness. It is all very well to say that he is not putting forward monopoly claims, but there is nothing in this Clause which permits the full exercise of individual enterprise in this industry, and from the moment that what little individual enterprise is permitted shows any measure of success at all, the Minister can snap down on it through the Corporation and destroy any advantage which may have been gained for the people of this country. It is all very well for the Socialist Party to publish a great document saying "Labour Believes in Britain." Now that the Government have put down this Clause the name of that document ought to be drastically changed. "Labour Believes in Monopoly" would be the honest title.
We were advised that protection must be given of the most meticulous kind in order to see that the resources of the nation were not in any sense wasted in the production of unwanted steel. I wonder if the Minister really can say, with his hand on his heart, that he thinks that entrepreneurs of a private concern equipped by hundreds or thousands of people, or by one person, are more likely to produce steel to waste, steel which nobody is going to buy, than the Minister is himself. Is it not more likely that the man who puts up his own money is going to be more careful, wise and cautious in preparing the ground and seeing that his money is not misused in any way, than any Minister of the Crown who is using public funds, and who can cover up his losses by other means? When we hear arguments of that sort put forward, it destroys the Minister's claim that Ministers must always be assumed to act reasonably.
One of the gravest dangers of this Clause lies in the fact that it hits at the most efficient part of the whole of the structure of the steel industry in this country. The Minister looks surprised, but let me assure him that the greatest reputation of the steel producers of this country rests in the hands of the smaller production units who produce special steel with which this country is very well equipped, and it is the adaptability of these smaller producers which has done more than anything else in later years to maintain and increase the reputation of British steel.

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By this Clause, it is exactly those producers who will be in the greatest danger, and who will be unable to come into the picture at all without the Minister's blessing; it is exactly that class of producer who will have the cost of his product artificially raised by the Corporation if it in any way infringes upon their desires and prices.
Mr. Strauss indicated dissent.
Mr. Orr-Ewing: It is all very well for the Minister to shake his head. He has attempted to explain the Clause, the words of which mean exactly what I have said. He may not mean to use the Clause in that way, but that is what the Clause says, and he cannot deny it.
No one can now believe that His Majesty's Government are attempting to do anything under this Clause but to crush out individual enterprise in any shape or form in the industry, and to crush out any desire on the part of anyone to start any new enterprise in the steel world. Anyone who believes that the Government will encourage steel production in competition with the State is gravely mistaken. Even the Liberal Party—one of the few relics of which has now left the Chamber—have surely learned their lesson what a grave mistake it has been to support this Government for so long.
Mr. Pargiter: One would imagine, after listening to the speeches of hon. Members opposite, that this was a great free, competing industry in this country that was to be taken over, that the word "monopoly" was unknown in the steel industry; that the words "international cartel" were unknown to Members opposite. We think that it is one of the closest monopolies with which this country has ever been faced. It is a private monopoly which would fix import licences to prevent outside competition, let alone inside competition, from the steel industry, who come here and say that what the State is proposing to do is wicked and inequitable, when what the State is doing is to protect the consumer.
This is the first time, and the only time, that the consumer has had any protection at all. That is what is happening under this Bill. Hon. Members opposite talk about the profit motive. In all the nationalisation Bills which the Government have passed, the object is not making profit for any of those industries
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but to run them for the benefit of the nation. If there is any question of profit, it will be in connection with price margins and price ranges which are comparable with the cost of production. We shall be able to sell very much cheaper, from the State point of view, than private enterprise has been able to do. What has happened with regard to steel when new competitive steel industries have been set up? I think that their history is fairly well known. I think that a lot of people have learned about investing money in steel. Have hon. Members opposite heard nothing of the activities of the steel corporation which bought up plants and closed them down because they were inefficient? Were they really concerned about competition then? What they were concerned about was saving what they could from the wreck, the mess that private enterprise had made of the steel industry, in the interests of relatively few people.
Now, at this late hour, they are talking about the State wanting to create a monopoly, when in fact what is happening is that the State is taking over a virtual monopoly and, in certain instances, protecting people against coming into that monopoly unless they so desire and giving them protection within certain limits laid down in the Bill. It is obvious that if the nation's resources of iron and steel are to be used, there must be a measure of planning and control of the industry. There are two ways in which the industry can be controlled, either by the State taking it over or the State fixing the terms under which the industry should operate. The best way is to take it over. It is humbug on the part of hon. Members opposite to talk of this industry as if there was a great deal of free competition which the Government were out to destroy; that is absolutely contrary to the facts.
Mr. Birch: The hon. Member for Spelthorne (Mr. Pargiter) has put up some familiar arguments. He talks, as all Socialists do, as if a profit was something evil in itself, and that if we did away with the profit motive we would do away with any chance of exploitation of the consumer.
Mr. Pargiter: I did not say anything of the kind. I said, following on the argument of an hon. Member opposite, that the object of a public industry was not to make profit.
Mr. Birch: They have certainly attained their object. What is important, from the public point of view, is the cost of production and what they have to pay for things; not so much who makes the profits. This Bill, and particularly this Clause, is setting up a total State monopoly. Surely there are no two ways about it. It states who is to produce the steel, for how long, and to whom they are to sell it.
Mr. Attewell: Is the hon. Gentleman now maintaining that this is total monopoly after what I have pointed out to the House?
Mr. Birch: Of course it is a total State monopoly. The hon. Gentleman said that if one gets a licence one can produce up to 49,000 tons of iron ore. That is neither here nor there; it is absolutely nothing. There is no competition at all.
Mr. Stokes: Does the hon. Gentleman think that there is any competition at the present time?
Mr. Birch: There are 2,000 different firms, and of course there is competition. Supposing there is no competition, is the hon. Gentleman in favour of that? That is what he is doing; he is taking all competition away. What is being done is to make it a criminal offence to produce steel. We have had at last a Liberal speaking, and I was glad that he come forward. I would say to the Liberal Party that if they are against State monopolies they might have thought of it a little earlier. They voted for all of them —except the hon. and learned Member for Carmarthen (Mr. Hopkin Morris) who voted against them all—and it is a little late in the day now to object to them.
7.0 p.m.
I thought that the hon. Member for North Dorset (Mr. Byers) was on a good point when he compared private and public monopolies. Hon. Members opposite say that a private monopoly is something frightful, but that a public monopoly can do no wrong. For them the ordinary commercial laws do not apply. If a private trader puts sand in the sugar or water in the milk he comes before the courts; but if the public monopoly sells coal with slate in it, that is just another triumph for socialised production, and they are fully justified in
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charging a colossal price for it and refusing compensation to any one who says, "I have got nothing but stone in my coalbin in the backyard, and I want something back for it"; Socialists say that is perfectly all right, and that is the height of progress. That is exactly what will happen under this Bill.
I thought the Minister gave some very curious reasons for supporting this Clause. First he said, "We cannot take any risks. The Iron and Steel Corporation are under the obligation to produce sufficient steel." Well, how will somebody else producing steel stop the Corporation producing sufficient steel? It seems a curious argument. Secondly he says, "It might prejudice our great general overall plan." If he really thinks that the general overall plan will solve all difficulties he should be able to answer questions like these: What does he think the total demand for steel will be in 1952? What particular types of alloys or special steels will be more in demand then, and what special sorts will be less in demand? He talks as if he knew the answers to those questions. Perhaps he does; I do not know. If he does he had better tell us.
What we have seen of Government planning so far does not lead us to suppose that they do know the answers to these questions. There is the continual missing of targets. They do not even know how much coal they will produce themselves, let alone the demand. And what about the groundnuts they were going to produce? One could go on giving examples. The Government can go on making any number of general overall plans, but to suppose that a general overall plan has any connection with what is going on or what will happen is nonsense.
If nobody is to be allowed to compete with the nationalised steel industry, that is a perfectly good argument for total socialisation, and for having no kind of competition in any industry. That, as the hon. Member for Reading (Mr. Mikardo) very justly said, is Socialism and is the ultimate plan. But I think the Minister would be very wise not to say too much about it, because it is not the plan of the Lord President of the Council. It is his ultimate plan, but it is not the plan with which he is trying to deceive the country. It is interesting to read this

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document—"Labour Believes in Britain." Several hon. Members have mentioned it; I have actually read it, and it says:
"For private and public enterprise to compete fairly with each other can be good for both."
If hon. Members opposite really believe that, it is very difficult for them to resist this Amendment Of course, the Minister of Supply may well say: "Well, this is just the fake photo stuff that we put out from Transport House. It is the usual greasy stuff we put out, and we do not believe it." Of course, they do not believe it; we know that; but they are putting this stuff out, and because they are putting it out they are under some obligation to live up to the things that they say, and they will be judged in the country by their reaction to this Amendment.
In the long term the really evil thing this Bill does is to cut down on newcomers. Anyone who has studied the economic history of this country knows that all, or practically all, economic progress has been made by newcomers to industry. Looking back we find the old names dying out and new ones coming in; we find the Nemesis of success coming down on old firms. Those who were the most successful get lazy and their ideas get restricted; it is the new entrant who has always shown the way and done really big things in industry.
Mr. Jenkins: Could the hon. Member tell the House how many new firms there have been in the steel industry in, say, the last 20 years? If the answer is "No" or "very few," will he reconcile that with his statement that progress can only come from newcomers?
Mr. Birch: I think the Minister said that there were a certain number; I do not know how many. Very likely there are not very many, although there have been numbers of new subsidiaries. But suppose there had been none. Surely that is not an argument for total monopoly. Hon. Members opposite seem to think that just because a Minister is running something it is all right; that just because the Parliamentary Secretary to the Ministry of Food does not know the gestation period for cows she is fully justified in her feedingstuffs policy. They take that line, but there is really nothing in it, and I do ask them to believe that it is not a good argument. To say that
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because men have gone wrong in the past they will easily put everything right by creating total monopoly is an argument not worthy of anybody of intelligence, and wholly inconsistent with the present programme of the Labour Party.
Mr. Austin: The hon. Member for Flint (Mr. Birch) said that the country would judge the Government on their reaction to this Amendment. I am very happy about that formula, as I am sure are all my hon. Friends, because I am certain that the country is supporting the Government in their efforts to regulate this industry, which has needed regulating for so long. It hardly lies in the mouths of hon. Gentlemen opposite to rail against the restrictions on entry into industry, in view of their shameful and hideous acquiescence in the matter of Sir William Firth and the firm of Richard Thomas many years ago. If the adjective "humbug," is to be used, as it was earlier—although I do not generally believe in using such terms—I should think hon. Gentlemen opposite ought to be very careful.
To all those who referred to the shortcomings of the steel industry under nationalisation, and who seemed to indicate that we think only in terms of theory, dogma and academic knowledge, I say that my sincere view is that, as the result of empirical experience the Government have had to decide to nationalise the iron and steel industry, as they had to nationalise other industries. Can any hon. Member deny that years ago, in the years between the wars, the industry was in a state of chaos and not playing a responsible part in the affairs of the nation? Can those hon. Gentlemen opposite who are military minded and always talk about guarding the safety of the nation and its resources deny that, because of its shortcomings, the industry could not face up to its responsibilities in supplying the steel so urgently needed in wartime, so that we have to obtain from abroad a great proportion of our steel supplies for waging the war?
The worst aspect of the Debate has been the manner in which hon. Members opposite have perambulated round the outside of the argument without addressing themselves to what is relevant. My right hon. Friend, in repudiating the arguments of the Opposition, said that it would be the height of folly to allow

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the resources of the nation to be endangered by allowing free and unfettered entry into the industry. In the important years of reconstruction that lie ahead, it must be realised that our resources by way of capital goods and capital reconstruction will be limited. It would be an abrogation of its duty on the part of the Government and the height of irresponsibility to allow new entrants unlimited resources for the setting up of new capital and plant in competition with the iron and steel industry under nationalisation. I hope that when this Bill becomes law we shall go forward with a regulated industry which will not do what hon. Members opposite have believed in during the past years, link itself entirely with the profit motive, but will become a public utility functioning in the service of the nation and for the service of the nation. There can be no better ideal than that.
Mr. Maclay: It is horrifying that Members opposite can really believe in some of the things they have been saying. I will touch on only one small point, and that is the general charge they are making against the industry as it was before the war. If the hon. Member for Stretford (Mr. Austin) gets the figures of production, which have been steadily moving up during the years, and also looks at the cost of British steel today, which is something like 75 per cent. above pre-war, and then relates them to what he has just said, I think he will think again on the record of the industry. My chief reason for intervening is the fact that the Minister made an inviting gesture with his head in my direction when referring to a speech that I made last week. I blame myself very severely for having been absent from the House half an hour later, although I could not avoid it, when the Minister took up what I had said and had a certain amount of fun at my expense.
The case I was trying to make was that if there were some practices which had developed since the war that were not entirely desirable, the last possible way to cure them was to set up a State monopoly. In the case I mentioned last week, it looked at one stage as if there might be a slight preference given to one con-
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sumer over another. I would have elaborated what I then said had I thought that the Minister was going to misunderstand my argument. The whole point is that under a free enterprise system that position could not continue, and it was in fact being cured, but to set up a State monopoly, the worst of all monopolies, and then to argue, as Members opposite have done, that that is the best way to protect consumers' interests just does not carry any weight at all. Subsection (2, c) deals with the very case I was making.
Under a State monopoly we find these things happening, and what is more, it is written down that the Minister himself may impose restrictions on the persons to whom goods are sold. Will any of the people under subsection (2) be allowed to criticise the action of the Minister, and will the Minister respect any of their recommendations? What is in the public interest is not necessarily in the interests of the consumers, as we have learned from some of the things that have been happening. It has been most interesting to hear Members opposite develop their argument, because it shows that they have not realised yet that the way to cure monopoly is not to make a State monopoly. I resume my seat being extremely sad that Members opposite could possibly say the things they have been saying.
7.15 p.m.
Mr. Haworth: I want to take up the point that private enterprise will cure its own evils in regard to monopolies. I worked for a private enterprise system—the railways—for a number of years, and they were so impressed by the fruits of competition that they sought the co-operation of the trade unions to bring pressure to bear on Parliament to prevent road operators competing against them.
Mr. Selwyn Lloyd: The hon. Member will agree that the railway companies had certain statutory duties and had to provide certain services.
Mr. Haworth: Certainly, and the railway companies made themselves into a monopoly with the help of the Conservative Party in 1921. The railways were so satisfied with the privileges of monopoly that they had to come to Parliament for assistance to prevent the competition that is being extolled today by Members opposite.
Mr. Maclay: Private enterprise has certain correctives which function extremely well, and the hon. Member must realise that we were evolving an ideal form of control for the steel industry from the 1930's, such as by the Import Duties Advisory Committee, which did not remove the element of competition as this Bill seeks to do.
Mr. Haworth: I think that very little competition was left in the industry.
The hon. Member for Flint (Mr. Birch) referred to the good that private enterprise individuals have done for the community. It is quite true that most of the things that have been beneficial to the community have been initiated by the enterprise of people in various industries, but I do not think any student of industry will admit that the success or otherwise of any great industry is to be judged by its ability to prevent competition. The whole tendency is for big industries to buy up, amalgamate and to get working agreements and some overall organisation which prevents competition. I admit that that has been the primary factor in the progress in this and other countries, but where the State has to come in for the benefit of the community, is at the stage when an industry has made itself into a complete monopoly. That is what we have done in our nationalisation campaign. We have taken over those industries which have made themselves into a complete monopoly—the Bank of England, and the coal, electricity, gas and transport industries. Reference has been made to the price of steel as compared with before the war and also to the price of coal. I would point out, however, that the wages and conditions of the miners were very much below those of the steel workers before the war.
Mr. Maclay: The hon. Member will remember that British steel prices compared favourably with the prices for steel of any other country.
Mr. Haworth: I admit that. The biggest factor in the increased price for coal is that for the first time in the history of the country we have put the miner where he belongs. We have raised him to the position of being one of the highest paid workers in the country, enjoying the best conditions, which is a matter of which we have every right to be proud.
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I am very glad that Members opposite have been studying our new programme. Reference was made by the hon. Member for Flint to the desirability in some circumstances of the State competing with private industry. I suggest that when an industry has made itself into a monopoly, as the iron and steel industry has done, the time has come for the community to take it over. Further, if there are important industries which have not made themselves into monopolies, but which might be running inefficiently, then the State can step in and compete with them. During the war we set up a State enterprise as a costing control over charges made in private industry, in order that we could see what was a fair price. We said to private manufacturers. "This is what we can do it for, and if you cannot get your price down to that level you will not get any contracts from us." We are entitled, as a community, to do a thing like that; it is the natural tendency of economic development. To suggest that when an industry has made itself into a monopoly we should take it over and invite all corners to begin at the beginning again, is "Alice in Wonderland" procedure. The Amendment is a retrograde Amendment, and I hope the Government will resist it.
Mr. Henry Strauss: I listened with great interest to the speech of the hon. Member for Walton (Mr. Haworth), which contained many points which had not previously been made, with some of which I may perhaps deal in my argument. What chiefly astonishes me in listening to the speeches of hon. Members opposite is the completeness with which they have forgotten the warnings which have come not merely from this side of the House but from their own Chancellor of the Exchequer about the extraordinarily serious economic position in which the country finds itself today. We are really dealing with the question of our national economic survival. If we make a great mistake about a great export industry it may prevent that survival. The comparison that has been made between the nationalised coal industry and the iron and steel industry does not depend on any statement made by a Conservative or a Liberal statesman. It is constantly being made by the Chan-

731
cellor of the Exchequer and other Government spokesmen in this House and at Press conferences. The Chancellor has drawn the contrast between the very disappointing figures of coal output and the constantly repeated triumph of the iron and steel industry.
In this series of Amendments we do not have to consider—it would not be in Order to do so—the general structure of the Bill or the fact that the Government are setting up a new great Corporation. We are concerned simply with the question involved in this Clause; whether competition from outside is to be permitted, or whether that competition shall be wholly within the control of the Government. One hon. Member opposite said, very frankly, that the object, or, certainly, the effect, of nationalising an industry was to remove profits from it, which he regarded as desirable. I wish Socialists would make up their minds on this very simple question: are profits a good thing or a bad thing?
Mr. Stokes: That has nothing to do with this Clause.
Mr. Strauss: The hon. Member for Ipswich (Mr. Stokes), whom we are very glad to see back in his place, says that it has nothing to do with the Clause. I think he is wrong, but in any case I prefer to leave it to Mr. Speaker to decide. As I was saying, are profits a good or a bad thing?
Mr. Haworth: There is no one answer to that question. It all depends. It would be wrong to make profits out of a hospital, for instance. Also, there are many undertakings in local government in respect of which it would be wrong to make profits.
Mr. Strauss: I am obliged to the hon. Member; I was considering industries and industries that are working in competition with the world, as they very often are. Constantly we hear it said by hon. Members opposite—and I hope to show the hon. Member for Ipswich that we are much concerned with it in this Clause—that the profit motive is wrong and that we must get rid of it. What puzzles me is that the Chancellor of the Exchequer says how much better our position would be if our export trade, visible and invisible, were very much greater. He said
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that particularly about invisible exports on one occasion. That means, in other words, that he wishes that shipping, banking, insurance, and so on, were all making bigger profits.
Mr. Speaker: This Amendment deals with licences and not necessarily with shipping.
Mr. Strauss: I hope, Mr. Speaker, to show the relevance of my argument to the Amendment. We have the suggestion that the Minister should be able to prevent all competition with the steel Corporation as he thinks fit; that, subject to one limitation, it should be wholly within his control.
What is it that the Minister fears if he abandons the Clause? Has any hon. Member opposite, especially from the Front Bench, said what he thinks will happen to steel prices when this Bill becomes an Act? What happens to steel prices is absolutely vital to our survival. If they go up to anything like the extent that coal prices have increased, then our chances of recovery are reduced virtually to extinction. At what price do hon. Members opposite imagine that people competing with the new great Corporation would be producing? Would they produce more cheaply or more dearly? It is perfectly obvious that, if they were to produce more dearly, the Corporation would have nothing whatever to fear from their competition, so that the Clause would be wholly unnecessary.
7.30 p.m.
It is perfectly obvious, as has indeed been admitted in some of the speeches made from the other side of the House, that what the Government seek to prevent by this Clause is the rise of competitors who will produce steel more cheaply. In other words, they are afraid that some outside agency might do something absolutely vital to this country's economic recovery and possibly to its survival. How can such a restriction possibly be justified?
The hon. Member for Walton put forward an argument into which it would not be in Order for me to follow him, but which I appreciate. He put forward the plea that the nation might sometimes wish in the case of an industry which was mainly in private hands to have a test to ensure that the prices at which the public were receiving the products

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of that industry were right. He mentioned the possible advantages of a State shop to check the prices charged by private enterprise. Surely the converse, even on his own showing, is equally applicable. It may be very desirable indeed to have some private concern whose prices would be a test as to whether the prices of the Government Corporation concerned were right and sufficiently low. I ask him, as a fair-minded man, to consider whether that is not the exact complementary argument to that which he put forward and whether it is not equally reasonable.
It is an extraordinary thing that hon. Members opposite should be saying in effect, "We are frightened of private people outside this great Steel Corporation making profits, particularly by selling more cheaply to the public and to foreign importers." I believe that, when the statements of the Chancellor of the Exchequer and others on the seriousness of the economic position are studied, it becomes not only impossible to justify this Bill, to discuss which would be out of Order on this Clause, but especially impossible to justify this particular Clause, which prevents all outside competition unless the Minister sees fit to allow it.
Mr. Stokes: I should like to take the first opportunity possible of replying to some of the comments made by the hon. and learned Member for the Combined English Universities (Mr. H. Strauss). He twitted us with being irresponsible in that we were not sufficiently alive to the national need. I admit myself that I was one of those who thought that this was not perhaps the moment to nationalise the iron and steel basic industry. I have become wholly convinced that I was wrong, because whatever my fears may have been—and I admit I see the difficulties as a practical man of taking over one of these industries —we have no hope whatsoever of getting international iron and steel rights unless we ourselves nationalise our iron and steel industry. It would not be in Order for me to discuss that further on this Clause, but that is the short answer.
The second point made by the hon. and learned Gentleman was that the nationalisation of coal was ineffective and that if we went the same way with iron and steel disaster would follow. The hon. and
734
learned Gentleman cannot really be up-to-date in his figures, because the latest figure for coal output shows that the production per man shift for the first time is as high as it was in 1939. I am talking about production.
Mr. H. Fraser: That is not per man-year. It is still 30 tons below the 1939 figure.
Mr. Stokes: The hon. Gentleman the Member for Stone (Mr. H. Fraser) makes precisely the same mistake as the right hon. Gentleman the Member for Woodford (Mr. Churchill). He sees some change taking place, and because everything does not go right next day he complains and says that the thing is a failure. That is a childish complaint, and this is a frivolous interruption. It is what the Leader of the Opposition does, and I should have thought that even the Conservative Party would by this time have been fed up with that kind of thing.
Mr. H. Strauss: Is not the hon. Gentleman making two mistakes? First of all, when he compares the output per man-shift with 1939, is he not wholly ignoring the immense amount of additional machinery that has been put into the mines which should result in a comparable effort producing a great deal more? Secondly, is he not ignoring the fact that the Chancellor of the Exchequer, who is not a Conservative spokesman, has constantly alluded to his disappointment at the coal industry's not reaching its targets.
Mr. Stokes: Of course, and any sensible man would say the same thing. So do I, but not for the reason which the hon. and learned Gentleman gives. I agree that our coal production is not high enough to meet our needs, but I am satisfied that the steps we have taken and the progress made mean that we are within a measurable distance of reaching that target.
The third point made by the hon. and learned Gentleman was to attack us on this side of the House on the question of profits. I would call attention to the admirable speech made by the hon. Member for Ipswich about a year ago, which was highly commended by the Lord President of the Council amongst others, though practically no one else listened to it because it was late at night. It was on this question of profits, about which hon.

735
Members are rather muddled in their minds. We on this side of the Committee have no objection to making a margin on the right side. What we complain of and criticise is the method of disposal. If people make a reasonable profit and handle it properly, there is no complaint whatsoever. That is the only way industry can survive, and I have never heard anyone on this side of the House who understands industry or, for that matter, does not, making complaints about a balance on the right side. What we complain about is paying it out the wrong way.
Having dealt more or less with the hon. and learned Gentleman I should like to say something about the speech of the hon. Gentleman the Member for Flint (Mr. Birch)—[HON. MEMBERS: "He has gone."]—I know, but he cannot be expected to stay all the time. What he complains about is the Minister stopping competition. He is making his complaint a long time too late. In the industry, competition stopped years ago. I have been in the trade for a good many years now, and steel production has gone steadily in the direction of a monopoly. The Iron and Steel Federation has controlled the industry and prevented competition.
Mr. H. Strauss: I am sure that the hon. Gentleman sees some distinction between the state of affairs when there may have been in his view insufficient competition, and the state of affairs when it is a criminal offence for anybody to enter the industry.
Mr. Stokes: Yes, I am coming to that point in a moment. I am saying it does not come with very much weight from the hon. Member for Flint when he ignored the fact that competition in the industry has not existed for many years. My hon. Friend the Member for Walton (Mr. Haworth) referred to the Richard Thomas affair. I should be out of Order if I developed that, but hon. Members should not forget that when that great new mill was put into action, efforts to reduce prices were stopped. Efforts to pass the benefits on to the consumer were stopped by the British Iron and Steel Federation so that the profits would be spread amongst the less efficient people with no obligation on the inefficient firms to bring themselves up to date.
Mr. Selwyn Lloyd: But is that not exactly what will happen in the nationalised coal industry?
Mr. Stokes: The hon. and learned Gentleman walks right into the rat trap. [Interruption.] That is the trap. I am not calling the hon. and learned Gentleman a rat. That would be unparliamentary, and I apologise for slipping up but it was not meant in that way. What I meant was that he has fallen into the trap. Of course, I agree that that is precisely what could happen under the nationalised system. It is precisely what we are not going to allow to happen. We are not allowing it to happen at present.
Mr. Selwyn Lloyd: Has it not happened with coal?
Mr. Stokes: Certainly not. Our intention is to make better iron and better steel and to bring the industry up to a higher level out of whatever margin we can make. That is what did not happen under the Richard Thomas proposals.
Mr. Selwyn Lloyd: Rat trap or no rat trap, I repeat my intervention. What the hon. Gentleman complains of is, I am suggesting, exactly what is happening under the nationalised coal industry at the present time.
Mr. Stokes: There again, I do not know sufficient about the coal industry to go into details. That is not my impression and it is not what I hear in this House. This is where we ought to hear about it.
Finally, I would make some reference to what was said by the hon. Member for Weston-super-Mare (Mr. Orr-Ewing). He started along on the same tack. If I can remember what he said, he was arguing for precisely what the British Iron and Steel Federation did not do. He was complaining that the Minister seeks to put down small units and to prevent small enterprises from developing. That surely is precisely what the British Iron and Steel Federation have done for years. I cannot understand this rather belated penitence on the part of hon. Gentlemen opposite. They should have said these things donkeys' years ago, when they might have had some effect.
Mr. Drayson: The hon. Member has just led us to understand that the British Iron and Steel Federation allowed a number of small industries to continue under the Richard Thomas proposals.
Mr. Stokes: Now the hon. Member has fallen into another trap. It is true that the smaller people were allowed to exist, but only if they did what the bosses told them to do.
Mr. Drayson: The intention was to keep as many people as possible in employment. The plan which the hon. Member for Ipswich is advocating would have created unemployment.
Mr. Stokes: That is another bit of belated penitence. I saw something of the distressed areas, and I am wondering whether the people there were quite as conscious of what the hon. Gentleman is saying as he seems to be. The difference between what we are seeking to do and what has been done in the past is embodied in the Clause and it is that we shall allow the small people to go on and even allow them to come in.
Mr. H. Strauss: Under this Clause?
Mr. Stokes: Certainly, and under the Bill. The Clause does not exclude them. The Bill admits them and it even allows competition. If any of the small buyers during the last 30 years had reduced prices there would have been an awful row in Broadway. As the Bill stands, I understand that there can be competition.
Viscount Hinchingbrooke: What about the 20,000 tons?
Mr. Stokes: It is quite important. I do not know whether the noble Lord is in the industry. I use about 20,000 tons a year. I should be glad to give 10s. a ton less. I could never have done that under British Iron and Steel Federation control. Here, under the Bill, we can possibly do that, but I do not know whether I shall be successful.
Viscount Hinchingbrooke: If the hon. Member were friendly with the Minister—
Mr. Stokes: That is a very mean gibe. It has nothing whatever to do with the Minister. My approach will be directly to the people who produce the steel. The noble Lord knows better than that. Our general object is to enable us to have better steel at cheaper prices. I am confident, as I have always been, that if this Clause and the Bill are carried through, it is an object which we can attain.
Air-Commodore Harvey: Would the hon. Member explain why he would like to get steel at 10s. per ton cheaper?
Mr. Stokes: I should have thought that anybody who makes anything would always want to buy in the cheapest market. I believe that we shall get cheaper steel at better prices under nationalised iron and steel than under private enterprise.
7.45 p.m.
Mr. Hopkin Morris: I should like to refer to the licensing provisions of the Clause. What the hon. Member for Ipswich (Mr. Stokes) said was very interesting. It was also interesting to hear one side saying that monopoly is bad and the other side saying that the industry was always a monopoly and "we intend to make a further monopoly of it by transforming it from a private monopoly to a State monopoly." Between those two arguments we get somewhere near to the truth and somewhere near to the position of the Liberal Party that has been denounced so much. It was an interesting confession by the hon. Member for the Walton Division of Liverpool (Mr. Haworth) that in his view, private enterprise has been responsible for practically all the initiative. The Bill is going to pave the way for doing away with initiative. That is the object of the licensing system.
I could have understood the Clause as it originally appeared on the Paper—not that I could agree with it—and the explanation by the right hon. Gentleman that conditions must be imposed upon newcomers into the industry. If there must be a licensing system it must be capable of imposing conditions. The Minister has amended the Clause to make it possible for a general licence to be issued. He rightly observed that a general licence is equivalent to no licence at all. We might as well have no licence in that case. The Clause, as amended, oddly enough by the Minister, will enable new industries to come in without any specific—
The Solicitor-General indicated dissent.
Mr. Hopkin Morris: I think the Minister made it clear that the result of amending the Clause was that licences could be issued without conditions attached. The Solicitor-General shakes his head. That means that he and the

739
Minister are not agreed upon the Clause. If they are not agreed, how is the rest of the House to know what the Clause means?
The Solicitor-General: An open licence can be issued under the amended Clause but it could have been given under the Clause in its unamended form.
Mr. Hopkin Morris: In that case, what was the point of the argument that the open licence was equivalent to no licence at all? Apparently the Minister did not accept that position. He thought that the licence was necessary in order to impose conditions. From that follows the other argument, which is quite interesting, in relation to wastage. It is: "We want to keep monopoly because the Government, or the Corporation must make sure that the plan imposed by the Government for a number of years is not interfered with and that there is no wastage in that period." That argument presupposes a body having a clear knowledge of the proper plan and what the plan should be without wastage. The argument rests upon that supposition. Where is that body in the State? Where does that body exist having that complete knowledge? It is not even in the Bill.
One of the possibilities of the licensing system is that there might be a difference between the Minister with his expert advisers, and the Corporation. The Minister has to consult the Corporation as to the conditions to be imposed, but he need not accept the advice of the Corporation. He could issue a licence with totally different conditions. The Minister decides, because he is the absolute authority, yet the Corporation might be right. As the Corporation might be right against the Minister so a private individual might be right against the Corporation, since knowledge is diffused throughout the country and is not likely to be concentrated within some specific body. I was interested to hear from the hon. Member for Ipswich (Mr. Stokes) that he has been converted. The grounds were not the merits of the Bill or of the industry but what he finds to be the international political situation.
Mr. Stokes: Let me make that point clear. What I was in doubt about was not the Bill itself but merely the timing. I was in doubt about the timing and not about the merits of the Bill.
Viscount Hinchingbrooke: This has been a very interesting Debate turning on questions of protection and free trade and monopoly and anti-monopoly. I discern two or three trends on the other side of the House. There was the view expressed by the hon. Member for the Walton Division of Liverpool (Mr. Haworth), a view with which we dealt last week, that the Government having taken over iron and steel, there would be a process of democratisation, and that private monopoly which had been restrictive, would thereafter be put into a position to be more adventurous and to produce more iron and steel. There was the argument put forward by the hon. Members for Ipswich (Mr. Stokes), Wednesbury (Mr. S. N. Evans) and Spelthorne (Mr. Pargiter) and, in an interjection, by the hon. Member for Central Southwark (Mr. Jenkins) that the sky might be dark and black, but before the war under Toryism it was grey and that now the trend was in the right direction.
We maintain that the closed shop for iron and steel and the control which was exercised before the war was about the right level and was about the right stage of politico-economic development in iron and steel for this century; and the Socialists have made the sky extremely black in making the closed shop complete so that it will not be possible for anybody to come in and offer effective competition. The hon. Member for Wednesbury asked how many ex-Service men could come into transport in the years of Tory misrule. How many ex-Service men owning a little iron and steel business today can come in and offer serious competition to the Iron and Steel Corporation? The closed shop is more complete than ever before.
We then had the views of the hon. Member for Reading (Mr. Mikardo) who took up the remarks of the hon. Member for North Dorset (Mr. Byers) about monopolies being beneficial. The hon. Member for Reading seemed to think that certain monopolies could be beneficial and should be beneficial, and he instanced the Army. Of course the Army is a monopoly which is a beneficial monopoly. We cannot conceive of any other device being employed. Some hon. Members talked about private armies arising again in order to offer competition, but that is not the point. The point about the Army

741
as a nationalised institution and a monopoly is that it is in perpetual competition with overseas armies and that its technique advances with the task. How- ever, if we nationalise the iron and steel industry, except for certain aspects of it which are in competition with overseas institutions in the same grade of iron and steel, there will be no effective competition, and in so far as the nationalisation project is directed to the internal issue, so far will it become a moribund and sterile organisation.
It is no use for the hon. Member for Walton to talk to us as if from now on the industry will go forward under nationalisation. There is nothing in the Bill except the Clause dealing with the Consumers' Council which is there to ensure that competition is effective in the future. We say that whereas it may be that certain cartels in the past were too restrictive, in the past there was that element' of competition which resulted in the industry driving forward to the position in which it was able to sustain the whole of our war effort. We greatly fear that in nationalising iron and steel the Government will produce a museum-like structure, a sepulchre, as my right hon. Friend the Member for Aldershot (Mr. Lyttelton) described it in Committee, a mausoleum where everything is frozen to the datum line, where the corpses of the individual publicly-owned companies will be stiffened and unable to compete effectively against each other because of the over-all powers of the Corporation.
As usual the Minister used some politico-metaphysical phraseology which means absolutely nothing at all. He spoke about its being necessary to ensure that there shall be no duplication of effort and he said that the iron and steel industry was best planned in the national interest, that it was the object of the Government to ensure that there was no waste of resources and that no unbalance was to occur in the iron and steel industry. Those are all absolutely meaningless phrases. Each one is as meaningless as it can be. We must have some duplication of effort in order to ensure progress and efficiency, and unless we have two companies competing against each other and to some extent overlapping and duplicating, how shall we reduce costs and prices and serve the interests of the consumers? As to the glorious
742
phrase "best planned in the national interest," we had the subject of national interest last week. I asked the right hon. Gentleman what is meant, but no one has yet told us. It may mean what is in the national interest of the Government of the day, but that does not necessarily mean that it is in the national interest of the consumers of iron and steel products.
The Minister also said that there was to be no unbalance in the iron and steel industry. In any enterprise which is thriving there must be some unbalance at some stage. A wing is shot off there and a branch of the industry is shot off here and there will be developments into some new technical process which adds to the credit of the country and redounds to the general advantage. There must be unbalance. It is because the Government constantly wish to canalise and control every activity and to see the thing developing as a great entity within that idea that they will effectively prevent new processes and new ideas coming to fruition. The hon. Member for North Dorset was right. When we take away competition, no real measuring rod is left. The Corporation and its desires become the only measuring rod, and in so far as the Corporation with the assistance of the Minister is to become the absolute controller of what is said and done, so far will it inevitably become a lazy and sterile body through the natural process of not having to tight for its livelihood against competing concerns.
Mr. Stokes: The industry does not do it now.
Viscount Hinchingbrooke: The argument that it does not do it now, is not valid.
Mr. Stokes: It has not done it for years.
Viscount Hinchingbrooke: The fact that certain things in the past displeased hon. Gentlemen opposite is not a good reason for saying that the same process should be allowed to go forward into the future at an ever increasing rate.
8.0 p.m.
There is one special aspect of this business which is particularly displeasing—the cutting out of the small units.
Mr. Stokes indicated dissent.
Viscount Hinchingbrooke: They are effectively cut out. The hon. Members for Ipswich and Harborough (Mr. Attewell) will insist that in some way effective competition is offered by the firms that are unlicensed because they are unable to produce up to 5,000 tons or, with the licensed authority of the Minister, 20,000 tons in the case of steel and 50,000 tons in the case of iron-ore. We on this side maintain that that is quite ineffective to stimulate the industry into a state of activity. The special point is that these small firms have increased their output between 1938 and 1948 at a rate much greater than the large firms—66 per cent. as against a total average increase of 45½ per cent. in ingot production. Now the Minister proposes to exert a restrictive technique on the very firms which have raised their production by the greatest proportion.
Mr. Stokes: May I ask the noble Lord this question: will he explain to the House what stimulus the British Iron and Steel Federation offer to the private producer to make him more efficient?
Viscount Hinchingbrooke: I am not seeking to defend the status quo. I hope that when we on this side of the House are placed in a position to do so, we shall seriously alter the structure of iron and steel. I am not at all satisfied with the situation as it is today.
Mr. Stokes: That is nonsense.
Viscount Hinchingbrooke: The view we take on this Clause, though I cannot answer for my right hon. Friends on the whole of the Bill, is that it should be the high duty of Government actively to aid these small producers and, if necessary, to take a restrictive attitude towards the large ones. It is through decentralisation and through forcing independent firms into competition with each other that this country will best serve the interests of the times.
Mr. Jenkins: The noble Lord's views on the organisation of the steel industry seem to develop at a rapid rate, at any rate when he is on his feet in this House, because at the beginning of his remarks he said that before this Bill was brought in we had arrived at a stage of what he called the politico-economic development of the steel industry which was just about right and, at the end of his speech, he told us that
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he was not at all satisfied with the present state of the steel industry and hoped to change it in time.
Although we have had these rather confusing points of view put forward from the benches opposite, I think this Debate has made it pretty clear to us, on this side of the House at any rate, that the attitude of the Opposition to a monopoly is this: provided it is going along under private ownership, it is perfectly all right but a monopoly becomes bad, and must be guarded against, when it is in danger of passing into public ownership. It is most curious that the Opposition should attack us at the present time for continuing arrangements which do not allow free competition in the iron and steel industry for, by doing this, we to some small extent pay a compliment to the party opposite.
We are saying that while we certainly do not like everything they did about the iron and steel industry in the years before the war, while we do not like their exact method of organisation, we recognise that the iron and steel industry is not one which is suited to free competition. If we were not to say that, what we would be saying and what hon. Members opposite are inviting us to say, is that the party opposite when in power before the war was pursuing a purely perverse policy towards the iron and steel industry. It was encouraging it to set up the Federation, it was encouraging it to become monopolistic, while what the industry needed was real competition in the industry.
We get a little tired of the way in which the Opposition completely changes its attitude to this question of a monopoly when it is passing from private to public ownership. May I illustrate my point briefly by a reference to the cement industry which hon. Members opposite who have been reading "Labour Believes in Britain" a great deal during the day will no doubt have in their minds. The fforde Committee on the cement industry, which certainly was not a Committee composed of people favourable to nationalisation or hostile to private ownership in industry, said:
"It is, however, undoubtedly the case that any outside interest which set about erecting a new cement works in the country would be faced with the situation that prospective customers, who were also dependent on the existing industry for their supplies, would…be

745
faced with the difficulty that by accepting supplies from the new manufacturer they would lose whatever rebates they were entitled to under the rebate scheme described above.
This is indeed a very strong bar to the establishment of new businesses independently from the Cement Makers' Federation."
Mr. Byers: Is not the answer to that to change the rebate system instead of nationalising the industry?
Mr. Jenkins: I was not for the moment dealing with the arguments of the hon. Member's party, which are at least consistent, even if quite unrealistic. I was dealing with the much more important arguments of the party opposite. The hon. Member for Flint (Mr. Birch), who is not now in his place, said that the whole test of efficiency in industry was getting new entrants into the industry. What is the hon. Member doing about new entrants into the cement industry at present? Is he protesting against the existing arrangement? Is he working out schemes by which they can be brought in? Is the party opposite doing anything of the kind? No, they are perfectly happy with these arrangements so long as the industry is privately owned and so long as it benefits private shareholders.
Viscount Hinchingbrooke: Has the hon. Member seen the speech of Mr. Ricketts denying that the cement industry was a monopoly?
Mr. Jenkins: In the view of the noble Lord I may be naive about this matter, but if I have to judge between the views put forward on whether an industry is or is not a monopoly by the chairman and managing director of one of the most monopolistic firms, and the views put forward by an independent committee, I am inclined to take those of the independent committee.
Mr. Walter Fletcher: Will the hon. Member tell us what he means by "most monopolistic"? What does that catch-phrase mean? One cannot be more monopolistic.
Mr. Jenkins: I am sorry, I did not follow the point of that interruption. Under this Clause we are allowing a degree of competition, but no one suggests that we are putting the steel industry into an entirely competitive state. No one takes the view that it ought to have that organisation. Certainly the party oppo-
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site cannot take that view, with its past. In a highly organised industry like iron and steel, where the outlay of vast capital sums is involved, free competition is not always desirable. We are carrying on the monopoly, but we have the safeguard that it is now a public and not a private body as was previously the case.
Mr. Selwyn Lloyd: If any one from another planet had been listening to this Debate I think he would find considerable difficulty in discovering where the truth lay, because some sweeping statements have been made from both sides of the House. If I may deal with the argument which has just been put forward by the hon. Member for Central Southwark (Mr. Jenkins), it has a distinct similarity to that of the hon. Member for Walton (Mr. Haworth). The hon. Member for Walton said that we wanted a costing control just as we had in the war in many instances. He said that if there were a costing control, according to which firms had to operate, all would be well. Yet that is exactly what exists today in the steel industry. The control of prices is in the hands of a public body and even though there is all this talk about monopoly, it is not, in fact, a true monopoly. A monopoly which has not control over its own prices is not a monopoly in the real sense of the term in that it is not dangerous to the community as a whole. If hon. Members opposite fail to point out, when they talk about monopolies, that the steel industry has not had control over its own prices since 1934, they are not telling the whole facts.
There was talk about the Richard Thomas case. We do not want to go into that story now but I first gained the impression of the Socialist view about Richard Thomas from G. D. H. Cole's book. In his second edition he had completely changed his version; he said that the facts set forward in his first edition could not be supported. I think it was the hon. Member for Stretford (Mr. Austin) who said that the steel industry was so shamefully conducted before the war that it could not face up to the tasks of the war. I think that the Joint Parliamentary Secretary can give him the answer to that remark.
In 1931, of six million tons of steel consumed in this country, three million tons were imported from abroad; that was the reason why the steel industry

747
was in such a bad way. It was not until it had the protection that was given to it before the war that it was able to operate in such a way as to integrate itself to some extent and to make its prices competitive. Between 1931 and 1939 the price at which the industry could produce its steel became competitive and by 1939 the amount of production—I think my figures are right—had gone up to 13 million tons, from something like five million tons in 1931. A great job of work had been done by managers and men and also by those who controlled the capital development of the industry. It is sheer nonsense for the hon. Member for Stretford, who is not in his place now, to say that the industry was so disgracefully managed that it could not face the very fine job of work which, in fact, it did during the war.
So far as the general purport of the Amendments is concerned, I have been much more alarmed by the course of today's Debate than I was by the course of the Debate on this Clause in Committee, because the attitude of mind of so many hon. Members opposite has been singular. When addressing the Committee on this Clause the right hon. Gentleman said—I have mislaid his actual speech and am speaking from memory—that he desired these other smaller concerns to prosper. I think that was his actual expression.
Mr. G. R. Strauss indicated assent.
Mr. Selwyn Lloyd: In fact, of course, under the terms of his Clause he is going to hedge them in with rigid control as to time, extent and development. I think he has given way to some extent about price—I am not quite sure—but he is going rigidly to control these smaller firms. The reason he gave for that course of conduct was that that system was necessary for planning, because unless a limit was imposed too much would be produced. That was what he actually said—that too much steel would be produced. This is indeed a change from the indictment of the industry we have heard in the past.
I could hardly believe my ears when he said that and when the hon. Member for Harborough (Mr. Attewell) went on to say that there must be no surplus capacity. I had to go out and get my
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library on this subject and these various pamphlets which are full of half truths and misrepresentations of one sort or another and which contain the Socialist case against the iron and steel industry: "British Steel at Britain's Service;" "Why Nationalise Steel?" by Mr. G. D. H. Cole; "Steel—the Facts," a very curious title considering the contents—by Henry Owen; and "Steel is Power—the Case for Nationalisation," by Mr. Wilfred Fienburgh, of the Labour Party Research Department. In every one of those pamphlets the case that is made against the continued private ownership of the steel industry is the fact that the steel masters intend to keep the amount of steel produced so low because they are afraid that expansion will lead to falling prices and profit. In "Why Nationalise Steel?" Professor Cole said that the steel masters or the steel industry ought to be aiming at a production of 25 million tons. The other books by Mr. Henry Owen and the others said very much the same thing.
To day we have listened to the right hon. Gentleman developing his argument in favour of this rigid licensing by saying that unless there was a limit, too much steel might be produced, and the hon. Member for Harborough saying that no surplus capacity is wanted. Does not that make complete nonsense of this case that hon. Members opposite have been putting forward all this time, that the industry, in private hands, has been trying to prevent the people from getting the steel which the people deserve.
8.15 p.m.
Mr. G. R. Strauss: I should be grateful if the hon. and learned Member would refer to the passage in which I said there was a danger of too much steel. I feel sure that it was qualified in some way. A statement like that cannot be correct.
Mr. Selwyn Lloyd: I quite appreciate that one cannot be infallible and that sometimes the wish is father to the thought, but I actually wrote down, "Unless there is a limit, too much may be produced." My note which I wrote at the time was, "What about restrictive practices," with two large exclamation marks. That is what I understood the right hon. Gentleman to say. If that is the case, and if his hon. Friend from Harborough who gave him such valuable support on so many occasions during the Committee stage, said quite categorically

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that no surplus capacity is wanted—that is a very different story from this indictment we have heard for so long and it fills me with many more apprehensions about the way in which the Clause will operate than I had before. It is very necessary that the powers of the Minister should be curtailed in the way we suggest.
Mr. Walter Fletcher: There seems to be a very simple argument in the matter of monopoly. When the monopoly is on our side—that of private enterprise—it is a bad egg; when it is transferred to the other side by some Socialist alchemy it becomes new-laid, fresh and highly desirable. That seems to be the whole argument. If the country swallow that, they will swallow anything.
I must admit that I was profoundly shocked by the Minister's speech. There was such complete unreality. We had put before us a picture of a great plan extending over 25 years, in which we were going to say, perhaps, in the 23rd year, if somebody made an application, "Miss Smith, will you bring us the blue print file for 1971? I am afraid we cannot give a licence for another firm because at that moment we shall be producing exactly this number of tons at that cost and of this quality." The Minister knows perfectly well that that is complete and utter "hooey" and that the whole of his beautiful picture which he made of his plan is exactly like a French Marshal of Napoleon III, who always said, "We have a plan," but when he was up against the opposing forces there was no plan at all.
Of course, there is no plan that can possibly, for a period of more than a very few years ahead, begin to work out what will happen in the iron and steel industry. Besides being completely unreal it is extremely unwise. I cannot understand the Minister, with his experience, not welcoming the acid test which will be provided by permitting the maximum amount of private enterprise competition. Outside the picture that was brought forward by his hon. Friend, who talked of the great value during the war of the Government setting up, in order to test the costings of private enterprise, special factories, here we can do exactly the same thing. What is the real way
750
in which he can test his costings, his progress and his efficiency? The only way is by having the maximum number of private enterprise firms.
The Minister must know that his real competitor is one which, with all the majority he has and with all this Bill, he could not possibly control; that is the efficiency of the great overseas steel industry. When we come to the position of the industry standing or falling by its exports, what is happening in the overseas producing countries will be the real test which he will be up against. The only way in which he can prepare for that, and the only way in which he can get the industry, when he has this monopoly, really put into operation efficiently is by trying out the whole time against the competition, which he should permit, of private enterprise in the maximum number of conditions and of the maximum range in this country. It is unwise and wrong from the country's point of view, quite apart from all the dialectics which there may be, not to allow that form of competition.
This is the final pane which is being fitted into the glasshouse the Minister is trying to erect over the iron and steel industry. Inside that hothouse, protected from competition, this industry, like every other nationalised industry, will weaken, dwindle and eventually fail. I respectfully ask him and his colleagues to think carefully before they allow these Clauses, which are going to atrophy and, in the end, kill the industry, which has served the country so well. There is no doubt that he fears this competition, but that fear is very bad in the country's interest. Let him face up to it, permit it and use it the whole time to see how well, or ill, he is doing and then he will tackle this problem realistically.
Mr. H. Fraser: This evening we have had a most extraordinary revelation from the Government that all the stuff put out from Shanklin by the "Shanklin shiners" is so much poppycock and "all my eye." I do not think the Minister attended the Isle of Wight Conference, but he came out quite fully in favour of a rigid monopoly with very little competition except on the borderline of the Corporation. The other thing which has come out from the Debate is

751
that all the things which the Government and Government supporters in the industry said were restrictive, have been put into the shade now that they propose a form of mass restriction.
On the point of restriction, I wish to take up the point about competition being allowed to those few firms which will be allowed to exist either by licence, or without licence, on the fringe of the Corporation. The Minister said in reference to paragraph (c) of Clause 29 that he would confer on the Corporation the option to purchase and said he would only use restriction in the case of national necessity or a great shortage of steel. But, as the Clause reads, any Minister can use the power to make it a marketing Corporation for any steel of the Second Schedule categories, manufactured outside the Corporation. He said they would not use the power so severely when there was a great shortage and when steel was needed for rural housing or rural water supplies, but surely the subsection, as worded, allows him to make use of the power if he wishes the Corporation to be a marketing Corporation for all the small firms still left outside the Corporation. I hope the Parliamentary Secretary will give an answer on that because it is alarming.
Another point is the question of the small firms making specialised steel alloys. Under the Bill, 68 per cent. of them will be under Government control, 20 per cent. will be licensed and 11 per cent. free. There is a great development going on throughout the world in steel production and a great development of new alloys which are of particular importance to British industry and to engineering. It is vitally important, we believe and I think the Minister will agree, that the smaller firms which may he going in for new alloys should be able to extend, if need be.
These small firms must have a position in the world market. Unless they can be told that if they get about 5,000 tons, the Government will step in and give them a licence for two years, five years or 10 years and will market their products, any development of these types of steel may go overseas. A certain amount of research has to be carried out, but it is possible that when a firm has a good idea it may find it worth while to go beyond
752
the control of the Government, and going beyond the control of the Government means going overseas.
By this Bill a great handicap is being imposed on the development of new lines in steel production. We have seen that development in Sheffield where, in the last 20 years, there has been great revolution. I do not believe this Bill can encourage a further revolution in the home engineering trade and the whole gamut of industry which would flow from new inventions of that sort. This Clause is grossly restrictive and it inevitably means a decline in that adventurous side of steel making which is so essential to our future prosperity.
Mr. Harold Macmillan: The Debate has covered a very wide field, but I think the House will agree that it has been a very interesting Debate, revealing great differences of view, naturally, on both sides of the House and some divergence of emphasis even within different parties—I say, of emphasis. It has opened up many bypaths which I am tempted to follow, but I will resist the temptation. In trying to collect the arguments in favour of this Amendment, I shall cover only a small part of the many points which have been raised. I hope that hon. Gentlemen will not think me discourteous if I do not deal with all of them.
8.30 p.m.
We have ranged over the whole theory of monopoly, the whole justification of profits and the rest. On this delicate question of profits I feel, in the presence of so many captains of industry on both sides of the House, that I must tread delicately. The hon. Member for Ipswich (Mr. Stokes) told us that profits were all right so long as they were properly disposed of. Unfortunately he is not here; perhaps he has gone to dispose of some. After all this great variety, what we really came down to was the speech of the Minister of Supply in resisting this Amendment. He said in effect that we must not have anything which could interfere with the great, broad general plan which was to be laid down. I quite appreciate the importance, both in the national and the international field, of having a general regulatory authority to deal with the total production and the broad strategy of the iron and steel industry of this country.

753
With some of the observations of the hon. Member for Wednesbury (Mr. S. N. Evans), I certainly agreed, as I often did in the course of the Committee stage. I do not propose to go into the whole history of the past, which has been freely discussed on both sides of the House, and I think, a little misrepresented—I do not complain of it for we are in the political field, but I do not think it is necessary for hon. Gentlemen opposite, even in the promotion of their own views, to denigrate everything which has been done in the past. What is the history and the reality of what happened in the period between the wars? Of course this industry moved out of the classic laissez-faire competition of the mid-Victorian days, and I for one believe rightly or necessarily so. It is for that reason that we did not put down an Amendment, such as that in the names of hon. Members who belong to the Liberal Party, to omit the Clause.
Let us consider for a moment what were the conditions. In 1923, the House may remember, the then Prime Minister asked the country to support a tariff policy which was calculated to allow the industry to recover from the pressure of war, and without which, he said, it would not be able to do so. Which party supported and which opposed that? Who voted against that policy, and what was the result? In succeeding years the situation grew so grave that when the great world calamity of 1931 came after two years of Socialist planning—[HON. MEMBERS: "No power."]—hon. Members say "No power"; it is worse now that they have the power.
What was the next stage, when it was necessary to take powers for the broad regulation and the broad organisation and strategy of the industry? They were taken by a Conservative Government under those pressures. I am not ashamed of that. An organisation was set up under the Import Duties Advisory Committee, by which, in return for the duties—that is a degree of protection in the home market which I think all hon. Members would now give—the Government should have, as a safeguard against blizzards beyond our control and which may assail us again, a degree of regulation and "rationalisation"—which was then the popular word—inside the industry. Are hon. Members holding that against the industry? I think it was supported by the workmen in the industry, the trade
754
unions and the country as a whole. It was felt that it was reasonable that if a protective tariff, which was necessary at that time, was to be given, the industry should go in certain broad directions under Government advice.
We are not objecting to that. We are objecting to the next step which the Government are asking us to take. Their argument is, as I understand it, that it is impossible to have the necessary authority over planning, nationally or internationally and to make agreements into which it may be desirable to enter, without taking all the additional powers which are now being debated in connection with this Clause—without national ownership. I do not think that is so. When we examine the argument we ask "If all these safeguards are there, which have been insisted upon by Conservative Governments in the past, why nationalise the industry"? Of course everyone in the House knows that the Government are doing this because it was "in the book," because it was "in the rules," because it pleased someone.
It is not necessary to have this degree of authority although some authority is admittedly required in the organisation and regulation of an industry of this size and importance in the national economy. By taking the next step of not merely regulating, but owning the industry, the Government become a biased party, terribly tied by all the financial aspects, compared with the position when the Government remained with the independent and impartial duty of trying to do what was right for the industry, for the masters and men, and what was right for the consumers. Now, of course, the Government are to be alone, and therefore it is all the more necessary to take this, which will now be not the advice and the system built up by consultation between an independent Government and the industry, but the regulative, statutory powers which are to be in the Bill to protect the ownership of the industry, to try to protect the profits. That is the purpose. We have heard of conditions where we must protect the big man from the small man. We have heard that so very often, and history has proved it. The big is often topheavy and out of balance. It was the case with Goliath, who was a typical example of the Philistine Iron and Steel

755
Board, if I may say so. He said, "Protect us against this dreadful David who may cause all this trouble"—and who did.
It is an old cry and, of course, the Minister is allergic to slings. He did not make out a case that it was necessary to introduce a form of restriction. It is impossible to escape from the dilemma inherent in national ownership. If he restricts too much, he is accused of "doing in" the industry he now owns. If he allows a little bit more competition, he may injure an interest which he has taken over. All these points require consideration. One of the most important of them was made by my hon. Friend the Member for Stone (Mr. H. Fraser).
If there are to be new people with something to add to the industry, some new process, I would rather that they started here than that they went abroad. We have no authority or reason to suppose that the Government, who are now not impartial and not unbiased—but are trying to protect, curiously enough, the profits of their own nationalised industry —will operate this licensing system in anything but a restrictive manner, and the speeches of the right hon. Gentlemen do not encourage us to suppose so.
Question put, "That the words pro-posed to be left out stand part of the Bill."
The House divided: Ayes, 263; Noes, 128.

Division No. 117.]

AYES

[8.40 p.m.

Acland, Sir Richard

Delargy, H. J.

Janner, B.

Adams, Richard (Balham)

Diamond, J.

Jay, D. P. T.

Albu, A. H.

Dodds, N. N.

Jeger, G. (Winchester)

Allen, A. C. (Bosworth)

Donovan, T.

Jeger, Dr. S. W. (St. Pancras, S.E.)

Alpass, J. H.

Driberg, T E. N.

Jenkins, R. H.

Anderson, A. (Motherwell)

Dugdale, J. (W. Bromwich)

Johnston, Douglas

Attewell, H. C.

Dumpleton, C. W.

Jones, D. T. (Hartlepool)

Austin, H. Lewis

Ede, Rt. Hon. J. C.

Jones, Elwyn (Plaistow)

Awbery, S. S.

Edwards, John (Blackburn)

Jones, Jack (Bolton)

Ayles, W. H.

Edwards, Rt. Hon. N. (Caerphilly)

Jones, P. Asterley (Hitchin)

Ayrton Gould, Mrs. B.

Edwards, W. J. (Whitechapel)

Keenan, W.

Bacon, Miss A.

Evans, Albert (Islington, W.)

Kenyon, C.

Balfour, A.

Evans, John (Ogmore)

Key, Rt. Hon. C. W

Barnes, Rt. Hon. A. J.

Evans, S. N. (Wednesbury)

King, E. M.

Barstow, P. G.

Ewart, R.

Kinghorn, Sqn.-Ldr. E

Barton, C.

Fairhurst, F.

Kinley, J.

Battley, J. R.

Farthing, W. J.

Kirby, B. V.

Bechervaise, A. E.

Field, Capt. W J.

Lang, G.

Benson, G.

Foot, M. M.

Lawson, Rt. Hon. J. J.

Bing, G. H. C.

Forman, J. C.

Lee, Miss J. (Cannock)

Blyton, W. R.

Freeman, J. (Watford)

Lever, N. H.

Bowden, Flg. Offr. H. W.

Ganley, Mrs. C. S.

Levy, B. W.

Braddock, Mrs. E. M. (L'pl. Exch'ge)

Gibbins, J.

Lewis, A. W. J (Upton)

Braddock, T. (Mitcham)

Gibson, C. W.

Lindgren., G. S.

Bramall, E. A.

Glanville, J. E. (Consett)

Lyne, A. W.

Brooks, T. J. (Rothwell)

Gooch, E. G.

McAdam, W.

Broughton, Dr. A. D. D.

Goodrich, H. E.

McEntee, V. La T.

Brown, T. J. (Ince)

Greenwood, A. W. J. (Heywood)

McGhee, H. G.

Bruce, Maj. D. W. T.

Grey, C. F.

Mack, J. D.

Burden, T W.

Grierson, E.

McKay, J. (Wallsend)

Burke, W. A.

Griffiths, D. (Rather Valley)

Mackay, R. W. G. (Hull, N.W.)

Callaghan, James

Guest, Dr. L. Haden

McLeavy, F.

Castle, Mrs. B. A.

Gunter, R. J.

Macpherson, T. (Romford)

Chetwynd, G. R.

Guy, W. H.

Mainwaring, W. H.

Cluse, W S.

Hale, Leslie

Mallalieu, J. P. W. (Huddersfield)

Cocks, F. S.

Hail, Rt. Hon. Glenvil

Mann, Mrs. J.

Collick, P.

Hamilton, Lieut.-Col. R.

Manning, C. (Camberwell, N.)

Collindridge, F.

Hardman, D. R.

Manning, Mrs. L. (Epping)

Collins, V. J.

Hardy, E. A.

Marquand, Rt. Hon. H. A.

Colman, Miss G. M.

Hastings, Dr. Somerville

Mathers, Rt. Hon. George

Comyns, Dr. L.

Haworth, J

Mayhew, C. P.

Cooper, G.

Henderson, Joseph (Ardwick)

Medland, H. M.

Corbet, Mrs. F. K. (Camb'well, N.W.)

Hicks, G.

Mellish, R

Corlett, Dr. J.

Holman, P.

Middleton, Mrs.

Cove, W. G.

Holmes, H. E. (Hemsworth)

Mikardo, Ian

Crawley, A.

Horabin, T. L.

Millington, Wing-Comdr. E. R.

Crossman, R. H. S.

Houghton, A. L. N. D

Mitchison, G. R.

Daggar, G.

Hoy, J.

Monslow, W.

Dalton, Rt. Hon. H.

Hudson, J. H. (Ealing, W)

Moody, A. S.

Davies, Edward (Burslem)

Hughes, Emrys (S. Ayr)

Morgan, Dr. H. B.

Davies, Harold (Leek)

Hynd, H. (Hackney, C.)

Morley, R.

Davies, Haydn (St. Pancras, S.W.)

Irvine, A. J. (Liverpool)

Morris, P. (Swansea, W.)

Davies, S. O. (Merthyr)

Irving, W. J. (Tottenham, N.)

Morrison, Rt. Hn. H. (Lewisham, E.)

Deer, G.

Isaacs, Rt. Hon. G. A.

Mort, D. L.

Moyle, A.

Royle, C.

Timmons, J.

Murray, J. D.

Sargood, R

Tomlinson, Rt. Hon. G

Naylor, T. E.

Scollan, T.

Turner-Samuels, M.

Neal, H. (Claycross)

Scott-Elliot, W.

Ungoed-Thomas, L.

Nichol, Mrs. M. E. (Bradford, N.)

Shackleton., E. A. A.

Usborne, Henry

Noel-Baker, Capt. F. E. (Brantford)

Sharp, Granville

Viant, S. P.

Oldfield, W. H.

Shawcross, C. N. (Widnes)

Walker, G. H

Oliver, G. H

Shurmer, P

Wallace, H. W. (Walthamstow, E.)

Orbach, M.

Silkin, Rt Hon. L.

Warbey, W. N,

Paget, R. T.

Silverman, S. S. (Nelson)

Watkins, T. E.

Paling, Rt. Hon. Wilfred (Wentworth)

Simmons, C. J.

Webb, M. (Bradford, C.)

Paling, Will T. (Dewsbury)

Skeffington-Lodge, T. C.

Weitzman, D.

Pargiter, G. A.

Skinnard, F. W.

Wells, P. L. (Faversham)

Parker, J.

Smith, C. (Colchester)

Wells, W. T. (Walsall)

Parkin, B. T.

Smith, Ellis (Stoke)

West, D. G.

Paton, Mrs. F. (Rushcliffe)

Smith, H. N. (Nottingham, S.)

White, H. (Derbyshire, N.E.)

Paton, J. (Norwich)

Smith, S. H. (Hull, SW.)

Whiteley, Rt. Hon. W.

Pearson, A.

Solley, L. J.

Wilkes, L.

Peart, T. F.

Soskice, Rt. Hon Sir Frank.

Wilkins, W. A.

Popplewell, E

Sparks, J. A

Willey, F. T. (Sunderland)

Porter, E. (Warrington)

Steele, T.

Willey, O. G. (Cleveland)

Porter, G. (Leeds)

Strauss, Rt. Hon. G. R (Lambeth)

Williams, D. J. (Neath)

Price, M. Philips

Stross, Dr. B.

Williams, Ronald (Wigan)

Proctor, W. T.

Stubbs, A. E.

Williams, Rt. Hon. T. (Den Valley)

Pryde, D. J.

Swingler, S.

Williams, W. R. (Heston)

Pursey, Comdr. H.

Sylvester, G. O.

Willis, E.

Randall, H. E.

Symonds, A. L.

Wise, Major F. J.

Ranger, J.

Taylor, H. B. (Mansfield)

Woodburn, Rt. Hon. A.

Rees-Williams, D. R

Taylor, R. J. (Morpeth)

Young, Sir R. (Newton)

Reid, T. (Swindon)

Taylor, Dr. S. (Barnet)

Younger, Hon. Kenneth

Rhodes, H.

Thomas, D. E. (Aberdare)

Zilliacus, K.

Ridealgh, Mrs. M.

Thomas, George (Cardiff)

Robertson, J. J. (Berwick)

Thomas, I. O. (Wrekin)

TELLERS FOR THE AYES:

Robinson, K. (St. Pancras)

Thomas, John R. (Dover)

Mr. Snow and Mr. George Wallace.

Rogers, G. H. R.

Thurtle, Ernest

NOES

Astor, Hon. M.

Hogg, Hon. Q.

O'Neill, Rt. Hon. Sir H.

Baldwin, A. E.

Hollis, M. C.

Orr-Ewing, I. L.

Beamish, Maj. T. V. H

Holmes, Sir J. Stanley (Harwich)

Peto, Brig. C. H. M.

Birch, Nigel

Hope, Lord J.

Poole, O. B. S. (Oswestry)

Bower, N.

Howard, Hon. A

Price-White, Lt.-Col. O.

Boyd-Carpenter, J. A.

Hulbert, Wing-Cdr. N. J.

Prior-Palmer, Brig. O.

Braithwaite, Lt.-Comdr. J. G.

Hutchison, Lt.-Cm. Clark (E'b'rgh W.)

Rayner, Brig. R.

Buchan-Hepburn, P. G. T.

Hutchison, Col. J. R. (Glasgow, C.)

Reed, Sir S. (Aylesbury)

Bullock, Capt. M.

Jeffreys, General Sir G.

Renton, D.

Butcher, H. W.

Joynson-Hicks, Hon. L. W.

Roberts, Emrys (Merioneth)

Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n)

Keeling, E. H.

Roberts, H. (Handsworth)

Byers, Frank

Kingsmill, Lt.-Col. W. H

Roberts, W. (Cumberland, N.)

Clarke, Col. R. S.

Lambert, Hon. G.

Robinson, Roland (Blackpool, S.)

Clifton-Brown, Lt.-Col. G.

Langford-Holt, J.

Ropner, Col, L.

Conant, Maj. R. J. E.

Legge-Bourke, Maj. E. A. H.

Ross, Sir R. D. (Londonderry)

Cooper-Key, E. M

Lindsay, M. (Solihull)

Sanderson, Sir F.

Corbett, Lieut.-Col. U. (Ludlow)

Lloyd, Selwyn (Wirral)

Shephard, S. (Newark)

Crosthwaite-Eyre, Col. O E.

Lucas, Major Sir J.

Shepherd, W. S. (Bucklow)

Cuthbert, W. N.

Lucas-Tooth, S. H.

Stoddart-Scott, Col. M.

Darling, Sir W. Y.

Lyttelton, Rt. Hon. O.

Strauss, Henry (English Universities)

Dodds-Parker, A. D.

MacAndrew, Col. Sir C.

Studholme, H. G.

Donner, P. W

McCorquodale, Rt. Hon. M. S.

Sutcliffe, H.

Dower, Col. A. V. G. (Penrith)

McFarlane, C. S.

Taylor, C. S. (Eastbourne)

Drayson, G. B

Mackeson, Brig. H. R.

Taylor, Vice-Adm. E. A. (P'dd't'n, S.)

Drewe, C.

Maclay, Han. J. S.

Teeling, William

Dugdale, Maj. Sir T. (Richmond)

Macmillan, Rt. Hon. Harold (Bromley)

Thorneycroft, G. E. P. (Monmouth)

Eden, Rt. Hon. A.

Macpherson, N. (Dumfries)

Thorp, Brigadier R. A. F.

Fleming, Sqn.-Ldr. E. L.

Maitland, Comdr. J. W.

Turton, R. H.

Fletcher, W. (Bury)

Manningham-Butler, R. E.

Tweedsmuir, Lady

Foster, J. G. (Northwich)

Marlowe, A. A. H.

Vane, W. M. F

Fox, Sir G

Marples, A. E

Wakefield, Sir W. W.

Fraser, H. C. P. (Stone)

Marshall, D. (Bodmin)

Walker-Smith, D.

Fyfe, Rt. Hon. Sir D. P. M.

Marshall, S. H. (Sutton)

Wheatley, Colonel M. J. (Dorset, E.)

Gage, C.

Maude, J. C.

White; Sir D. (Fareham)

Galbraith, Cmdr. T. D. (Pollok)

Mellor, Sir J

White, J. B. (Canterbury)

Galbraith, T. G. D. (Hillhead)

Molson, A. H. E.

Williams, Gerald (Tonbridge)

George, Lady M. Lloyd (Anglesey)

Morris, Hopkin (Carmarthen)

Willoughby de Eresby, Lord

Glyn, Sir R.

Morris-Jones, Sir H.

Winterton, Rt. Hon. Earl

Gomme-Duncan., Col. A.

Morrison, Maj. J. G. (Salisbury)

York, C.

Grimston, R. V.

Morrison, Rt. He. W. S. (Cirencester)

Young, Sir A. S. L. (Partick)

Harvey, Air-Comdre, A. V.

Neven-Spence, Sir B.

Head, Brig. A. H.

Nicholson, G.

TELLERS FOR THE NOES:

Henderson, John (Cathcart)

Noble, Comdr. A. H. P.

Commander Agnew and

Hinchingbrooke, Viscount

Odey, G. W.

Mr Wingfield Digby.

8.45 p.m.
Mr. Lyttelton: I beg to move, in page 35, line 13, after "force," to insert:
"so however that the period shall not be less than such as is reasonable in relation to the capital expenditure involved."
Some of the arguments in favour of this Amendment have already been touched upon during the discussion on the previous Amendment, which sought to leave out the three conditions under which licences were to be given. That Amendment having been negatived, we are now seeking to insert words to make the conditions a little more sensible and more workable.
The object of the Amendment is to oblige the Minister to take into account the amount of capital expenditure involved in the project for which a licence is asked. It seems to us to make restrictions altogether too onerous if this particular matter of the capital expenditure is not to be taken into account. I hope the Government will accept the Amendment. The Minister still has this power and can still limit the extent, as the Clause is now drafted, and it seems highly desirable that an ordinary period for amortisation of the capital involved in the new project should have to be taken into account when the Minister is considering the licence. I think I am right in saying that the Minister said he would look into this point and put it right, and I think he would agree that it would be unreasonable to limit those licences where new capital expenditure is concerned to a period over which it would not be reasonable to expect, in the ordinary course of business, the capital should be amortised.
The Solicitor-General: I hope the House will agree that this Amendment ought not to be accepted. It would not be the desire of the House, I think, that I should go over any of the ground we went over on the previous Amendment. We should approach this Amendment on the basis that it is accepted that the Minister should have power to issue licences containing such conditions and terms as are thought to be appropriate for the purposes of enabling him to discharge his responsibilities under the Bill. On that basis, what we seek to do is to include terms defining the period for which new entrants should be given a licence. The Opposition, by their
760
Amendment, seek to impose a limit on that power and take it out of the hands of the Minister to decide how long the licence shall be for.
Mr. Lyttelton: The Amendment reads "shall not be less," which is not limiting but extending.
The Solicitor-General: At the moment the Minister has power to determine for how long the licence is to continue, and what Members opposite seek to do is to say that it shall be for the courts to determine a minimum period below which the Minister cannot go in granting a licence.
The effect of the Amendment would be this. The Minister might think a particular period was appropriate for the duration of the licence, but if the Amendment were accepted the licensee could go to the courts and ask them to decide the minimum period necessary for the purpose of providing for the amortisation of the capital engaged in the venture. That would be an impossible situation. Once it is accepted that the Minister should be empowered to grant licences and those licences should contain conditions defining the scope of the new undertaking it is proposed to begin, then the Minister ought to have power to deal with the most important matter which the licence should deal with, namely, the period for which it is to be continued. That being so, it seems to us that there is very little purpose in this Amendment. In point of fact, the Minister will consider what will be a reasonable duration for a licence in the circumstances, and obviously he will take into account the amount of capital expended on the venture.
It would not be very attractive for any new entrant, if he were offered a licence which did not enable him to recoup himself in respect of the amount of capital involved in the undertaking upon which he was embarking. But it must be for the Minister to decide that, just as it is for the Minister to decide the other matters with which the licence is to deal. This Clause deals simply with new entrants. It does not deal with existing undertakings producing steel, which get their licences under Clause 30; they have the right to obtain licences, subject to compliance with certain conditions. Clause 29 simply deals with new entrants.

761
As a matter of practical fact, what will happen, suppose a new entrant proposes to enter into the steel industry, is that he will ask for his licence and will no doubt endeavour to negotiate as advantageous terms as he possibly can for himself. He will know exactly what he is going to get after discussion and negotiation. If the only licence he can get is one of insufficient duration to enable him to recoup himself and draw the full advantage of the capital concerned in the venture on which he is proposing to embark, he will clearly not embark on the venture. That is the answer to the proposal contained in this Amendment. We have to draw a sharp line of distinction between the person proposing to embark for the first time on a venture and the person already engaged in the industry who can get a licence as a matter of right under the next Clause.
No real case has been made out for this change. The Minister can decide these things as the Clause stands; if he thinks it appropriate that a new entrant should be allowed to come in he can give him a licence which would make it possible for him to carry on his undertaking. If the terms offered were so unattractive to the new entrant he would not come in. [HON. MEMBERS: "Hear, hear."] I am glad we are agreed on that. My right hon. Friend said in Committee that he would consider this matter again, and I do not want the House to think that he has not fulfilled that undertaking. But, having given it the best consideration he can, and having weighed all the arguments, he has come to the conclusion that it must be left for him to decide what should be the terms of the licence. I hope therefore the House will not accept this Amendment.
Lieut.-Commander Gurney Braithwaite: The House always listens with attention to the Solicitor-General, but we must quarrel with a point of view he has just put before us. Not unnaturally, for a distinguished member of his profession, he has placed the greatest emphasis on the possibility of litigation. But when Parliament is engaged in shaping and amending Bills we frequently have to put in words in the hope of avoiding such a possibility.
The Solicitor-General: The Amendment does precisely the opposite.
Lieut.-Commander Braithwaite: If the right hon. and learned Gentleman had waited a moment or two longer he would have heard me say that it does not have the opposite effect, that it is a helpful Amendment. Over and over again in Parliamentary Bills—at least,—until the advent of this Government—it was the practice to insert words in an effort to guide those who had to administer them. By making the intentions of Parliament clear rather than obscure, litigation is often avoided.
May I put the case which we are discussing? We were told a little earlier today that this matter will be administered primarily by the Corporation, and that the Minister desires to retain powers of consultation. We were told by the right hon. Gentleman that he would decide the question of new entrants after consultation with the Corporation. The Amendment seeks to insert words which will guide the Corporation in coming to a decision. We ask that they should take into consideration the period necessary for repayment of capital or, to use the technical term, "amortisation," so that that aspect will have been dealt with and cleared out of the way by the Corporation before the Minister considers the matter at all.
I hope the Solicitor-General will agree that there is a good deal to be said for inserting words in Acts of Parliament which will act as a guide to those bodies which will have to administer them. In Acts already on the Statute Book bodies of one kind and another, such as the Unemployment Assistance Board, have to look at words which will guide them in the performance of their duties. The right hon. and learned Gentleman took entirely the opposite view, a surprising one I thought from a Law Officer of the Crown. He asked us to make the Minister, judge, jury and prosecutor in his own case. We are asked to say that when the new entrants come into the industry first of all the matter should be considered by the Corporation as the chief competitor, and then it goes before the Minister, who has declared himself over and over again in favour of this form of monopoly.
9.0 p.m.
When that case is placed before the House, what nonsense it makes of the remarks we heard from the Benches opposite a little earlier as to how the whole

763
object of this legislation is to protect the consumers. The consumer is to be protected in the same manner as the consumers of electricity and gas, confronted now with the highest bills they have ever had to pay. As soon as a breath of competition is mentioned, every effort is made by the Government to close the window. The right hon. and learned Gentleman says that this may be the most convenient way to the Government, who are anxious to operate this system. Surely, he cannnot claim there is anything here which establishes any form of justice in the way in which that word is understood by him and by the remainder of his profession. I suggest that litigation would not be more likely but less likely were these words inserted.
There is another reason behind it. The right hon. and learned Gentleman was put up with the object of placing the case before the House in his usual courteous manner, but the plain fact of the matter is that the Government do not desire new entrants into the steel industry. [HON. MEMBERS: "Hear, hear."] I am glad to hear it endorsed by Government supporters. That clears up the elaborate pretence and all the remarks about public and private enterprises going hand in hand. Away goes the Shanklin breakfast party, when a good time was had by all with the exception of the manager of the local Co-op. What of the assurance given by the Minister earlier in the afternoon that it would be possible for new entrants to come in provided this procedure is used? I, therefore, reiterate amidst the cheers of hon. Members supporting the Government, the statement that new entrants are not wanted, that this is eyewash and window dressing and that every attempt will be made to exclude them.
The hon. Member for Stoke (Mr. Ellis Smith) has cheered as well as other Government supporters and we all know where he stands in this matter. He will support me in this I am sure—if that is really the Government's intention that no new entrants are to be permitted at all, why take up the time of the House with this fatuous pretence? The right hon. and learned Gentleman has failed to convince us here. If the Government carry out the intention here they will be setting up a monopoly. No new entrants will be allowed in the industry at all, thereby not
764
expanding but cutting down the production for which the country is being asked.
Colonel Dower: I hope I may be permitted to say a few words on this Amendment which I do not approach from any party point of view. I was not on the Standing Committee which considered the Iron and Steel Bill but I am engaged in industry. Some hon. Members know that I have had a certain amount of experience in building. I cannot see why the right hon. Gentleman cannot accept the Amendment, which could not in any way interfere with the Bill that he is so anxious to get through. I have not taken up very much time on this Bill, but I should like to put it to him now, that he must realise that when an industrialist is dealing with boards or Government Departments he finds that they never quite appreciate the difficulties of the man who is risking his savings in a particular enterprise. It is vital that they should try to look at problems from his angle. I know they try to look at matters from a broader point of view. I am prepared to say that everything they do is not wrong and that everything that we do is not necessarily right.
I have dealt with the Ministry of Works as a practical builder and with the War Damage Commission. I know that hon. Members opposite are most forthcoming in their criticisms of the War Damage Commission. I have many times had to say to those bodies, "Do, please, look at this matter from the builders' point of view. If you stop this work now and say that we can start it again in two weeks' time the builder will have lost all his men. He will have to go through the highways and byways and collect men and that will throw the estimates completely out." I only use that as an illustration. I ask the right hon. Gentleman to make his boards, or his Ministry, or whatever body is to be set up, look at matters from the point of view of the man who is risking his all.
It is important for the right hon. Gentleman to try to give his attention to this matter. I ask him to realise that if his Government are returned at the next election—I shall do my best to prevent it—his greatest difficulty will be to bring into his administration an understanding of the point of view held by the people who are outside this scheme and who have to rely upon themselves. If

765
the Amendment does not interfere with the work of the Bill I cannot see why the Minister should refuse to accept it.
Mr. Orr-Ewing: I only want to draw attention to what I think is one of the very grave weaknesses in the argument put forward by the Solicitor-General. If his argument had any substance it would appear to override the commonsense which we always imagined was inherent in the activities of the Capital Issues Committee. What is that committee set up for? Does the right hon. and learned Gentleman want to exercise the strait-jacket power, which more and more he is being forced to disclose as being inherent in the Clause? Is he going to contend that there was no value at any time in the words of the Clause?
I only wish we had some hon. Members from the Liberal Party here. They show a sort of butterfly interest in the Bill. They oppose it on the wing but apparently it is impossible to oppose it on the Floor. I am not quite sure how they blend those two interests but they appear to be absent at all vital moments. I imagine that any Liberal who might happen to drop in would be horrified at the suggestions made by the right hon. and learned Gentleman. We really must assume that those who are to undertake these enterprises will approach the Corporation and the Minister from the point of view of the practical possibilities of doing something which is economical. It must be assumed that they are not madmen who will be prepared to put up £100,000 and lose it within five years.
If the words in the Clause remain as they are, it will be completely at the discretion of the Minister and the Corporation advising him to make it quite impossible for any new entrant to come into the industry. The right hon. and learned Gentleman was making humbug of ordinary common sense when he tried to work round the hard fact that if the words remain as they are he retains the power at any moment to make it economically, completely and absolutely impossible for any new entrant to come in. If we assume that we are right, and I am quite sure that no right hon. Gentleman opposite will contradict that statement, why pretend in the Bill that at any stage it is possible for any new entry to grow into anything that matters? Why not be per-
766
fectly blunt about it and say, "We want to make it quite impossible for anybody new to come in"? That is the honest thing to say. We have not yet heard that honest statement. It is time His Majesty's Government came out into the open and said that, whatever the implications, the suggestions and the possibilities in the Clause, they did not mean it to happen. The moment we pass the Clause, we leave the power completely and absolutely in the hands of the Government.
I was intrigued by the picture painted by the right hon. and learned Gentleman of his right hon. Friend balancing the matter and considering the points raised in Committee as he promised to do. I wonder if the Minister will explain to the House what he considers the balance to be on either side. There can be no balance at all, once the Government have made up their minds that no new entry will be allowed on an economic basis. No 100,000 tons on one side or the other will be allowed to upset the balance; the Minister's mind is made up. I challenge the Minister to tell the House how he can possibly have weighed the matter in the balance. With the approach which has so far been disclosed to us, no balance would have been allowed whether the orders came from the top or behind it, whether they came from the trade unionists or the extreme Left-wing. Perhaps the right hon. Gentleman will explain to the House how he finds it impossible to accept the Amendment, having weighed the matter in the balance as he says. What humbug!
9.15 p.m.
Mr. Selwyn Lloyd: I am still not altogether without hope that reason may ultimately prevail in this matter because I do not think a great deal divides hon. Members on either side, at all events those who have studied this matter. In the Committee stage we were allowed only one sitting to discuss this Clause and the one before it, and I am delighted that the Lord President of the Council should have been with us for this brief discussion. He is so interested in it that he had to go to a certain quarter in order to obtain information with regard to the matter we are discussing. However, it is quite wrong to say that we moved this Amendment in Committee. We had not time; the Guillotine fell before we could do so. I pointed out to the right hon. Gentleman

767
that there was this Amendment upon the Order Paper, and he said in reply to me:
"The hon. and learned Member for Wirral (Mr. Selwyn Lloyd) was worried about paragraph (a) and referred to a later Amendment on the Order Paper. I should not think that Amendment really necessary, because one must assume that the Minister would act reasonably—"
A certain amount of incredulity was expressed at that, and the Minister went on:
"I am sorry that that should be considered such a grotesque assumption. If hon. Members like a proviso of this sort, although I do not think the actual words of the Amendment will do, I will seek on the Report stage to put in similar words which would be appropriate and acceptable."—[OFFICIAL REPORT, Standing Committee C, 22nd February, 1949; c. 1160.]
So the right hon. Gentleman really went so far as to tell us that he would try to meet us for precisely the reason which my hon. Friend has just put forward. Although I think it is a proper assumption to make that most Ministers would act reasonably, nevertheless there is a possibility that a reasonable time would not be given. If the Minister is in agreement with us on that point, surely he is being rather obstinate in refusing to put such a phrase into the Bill?
Mr. S. N. Evans: This Amendment seems to me to be redundant. It is implicit in the Clause that if a licence is granted it is in the national interest that it should be granted. Following on from that, a licence would be granted for a sufficient time to enable the people to recover their capital outlay. [HON. MEMBERS: "No."] That seems to be implicit in the granting of the licence, and I rise merely to say in answer to the hon. Member for Weston-super-Mare (Mr. Orr-Ewing) that the Government are not paying huge sums in generous compensation to take this industry over and then allow the unregulated entry of new people into the industry. It would be nonsense. It would be an abuse of the trust that the electorate had placed in the Government. On the other hand, the Government will not issue a licence unless it is in the national interest.
I can visualise circumstances in which it would be in the national interest. For instance in the Black Country, it would be in the national interest that a small mill should be laid down to serve that market. There may be geographical reasons, reasons of transport and convenience, which make it advisable that that should be done. It is precisely because the Government realise that such circumstances may arise, that they have reserved the right to issue licences butt it is quite optional (a) whether people apply for a licence and (b) whether they accept the conditions that are compulsory.
Mr. Lyttelton: I am not completely satisfied with the explanations offered by the Government. The hon. Member for Wednesbury (Mr. S. N. Evans) said that it was implicit in the Clause, but the Minister evidently did not think so when he said in Committee that he would insert words which had this effect. I am not complaining that he has changed his mind. That, to us, knocks down the argument altogether. There is another reason. If it is implicit in the thing, why not make it explicit? The reason is not implicit at all in the Clause as it now stands.
Everything we have heard over this particular Clause underlines the fact that the Government wish to photograph this industry into a sort of arthritic position so that nothing will happen to interfere with the monopoly they are setting up. They will not listen to any condition which would make new entrants more possible. That is the Minister. At other times, however, he has sought to define his powers on the ground that he believes in flexibility. The flexibility in which he now believes is that, on no account, can anybody enter the industry or produce a tonnage greater than he himself, who is the judge in his own court, lays down. We shall press this matter to a Division.
Question put, "That those words be there inserted in the Bill."
The House divided: Ayes, 133: Noes, 265.

Division No. 118.]

AYES

[9.24 p.m.

Agnew, Clock. P. G.

Birch, Nigel

Buchan-Hepburn, P. G. T

Astor, Hon. M.

Bower, N.

Bullock, Capt. M.

Baldwin, A. E

Boyd-Carpenter, J. A.

Butcher, H. W.

Beamish, Maj. T. V. H

Braithwaite, Lt.-Comdr. J. G

Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n)

Byers, Frank

Hutchison, Lt-Cm. Clark (E'b'rgh W.)

Poole, O. B. S. (Oswestry)

Clarke, Col. R. S.

Hutchison, Col. J. R (Glasgow, C.)

Price-White, Lt.-Col. D.

Clifton-Brown, Lt.-Col. G.

Jeffreys, General Sir G.

Prior-Palmer, Brig. O.

Cooper-Key, E. M.

Joynson-Hicks, Hon. L. W.

Rayner, Brig. R.

Corbett, Lieut.-Col. U. (Ludlow)

Keeling, E. H.

Reed, Sir S. (Aylesbury)

Crosthwaite-Eyre, Col. O. E.

Kingsmill, Lt.-Col. W H

Renton, D.

Crowder, Capt. John E.

Lambert, Hon. G.

Roberts, Emrys (Merioneth)

Cuthbert, W. N.

Langford-Holt, J.

Roberts, H. (Handsworth)

Darling, Sir W. Y.

Legge-Bourke, Maj. E. A. H

Roberts, W. (Cumberland, N.)

Digby, Simon Wingfield

Lindsay, M. (Solihull)

Robinson, Roland (Blackpool, S.)

Dodds-Parker, A. D.

Lloyd, Selwyn (Wirral)

Ropner, Col, L.

Donner, P. W

Low, A. R. W.

Ross, Sir R. D. (Londonderry)

Dower, Col. A. V G. (Penrith)

Lucas, Major Sir J.

Shepherd, S. (Newark)

Drayson, G. B.

Lucas-Tooth, S. H.

Shepherd, W. S. (Bucklow)

Drewe, C.

Lytleiton, Rt. Hon. O.

Smithers, Sir W.

Dugdale, Maj. Sir T. (Richmond)

MacAndrew, Col. Sir C.

Stoddart-Scott, Col. M.

Eden, Rt. Hon. A.

McCorquodale, Rt. Hon. M. S.

Strauss, Henry (English Universities)

Fleming, Sqn.-Ldr. E. L

McFarlane, C. S.

Sutcliffe, H.

Fletcher, W. (Bury)

Mackeson, Brig. H. R.

Taylor, C. S. (Eastbourne)

Foster, J. G. (Northwich)

Maclay, Hon. J. S.

Taylor, Vice-Adm. E. A. (P'dd't'n, S.)

Fox, Sir G.

Macmillan, Rt. Hon. Harold (Bromley)

Teeling, William

Fraser, H. C. P. (Stone)

Macpherson, N. (Dumfries)

Thorneycroft, G. E. P. (Monmouth)

Fyfe, Rt. Hon. Sir D. P M

Maitland, Comdr. J. W.

Thorp, Brigadier R. A. F

Gage, C.

Manningham-Buller, R. E.

Turton, R. H.

Galbraith, Cmdr. T. D. (Pollok)

Marlowe, A. A. H.

Tweedsmuir, Lady

Galbraith, T. G. D. (Hillhead)

Marples, A. E.

Vane, W. M. F.

George, Maj. Rt. Hn. G. Lloyd (P'ke)

Marshall, D. (Bodmin)

Wakefield, Sir W. W

George., Lady M. Lloyd (Anglesey)

Marshall, S. H. (Sutton)

Walker-Smith, D.

Glyn, Sir R.

Maude, J. C.

Ward, Hon. G. R.

Gomme-Duncan, Col. A

Medlicott, Brigadier F.

Wheatley, Colonel M. J. (Dorset. E.)

Grimston, R. V.

Mellor, Sir J

White, Sir D. (Fareham)

Harvey, Air-Comdre. A. V

Morris-Jones, Sir H.

White, J. B. (Canterbury)

Head, Brig. A. H.

Morrison, Maj. J. G. (Salisbury)

Williams, Gerald (Tonbridge)

Henderson, John (Cathcart)

Morrison, Rt. Hn. W. S. (Cirencester)

Willoughby de Eresby, Lord

Hinchingbrooke, Viscount

Neven-Spence, Sir B.

Winterton, Rt. Hon. Earl

Hogg, Hon. Q.

Noble, Comdr. A. H. P.

York, C.

Hollis, M. C.

Odey, G. W.

Young, Sir A. S. L. (Partick)

Holmes, Sir J. Stanley (Harwich)

O'Neill, Rt. Hon. Sir H.

Hope, Lord J.

Orr-Ewing, I. L.

TELLERS FOR THE AYES:

Howard, Hon. A.

Peto, Brig. C. H. M.

Mr. Studholme and

Hudson, Rt. Hon. R S. (Southport)

Pickthorn, K.

Major Conant.

Hulbert, Wing-Cdr. N. J

Ponsonby, Col. C. E

NOES

Acland, Sir Richard

Cocks, F. S.

Freeman, J. (Watford)

Adams, Richard (Balham)

Collick, P.

Ganley, Mrs. C. S.

Albu, A. H.

Collindridge, F

Gibbins, J.

Allen, A. C. (Bosworth)

Collins, V. J.

Gibson, C. W.

Alpass, J. H.

Colman, Miss G. M.

Glanville, J. E. (Consett)

Anderson, A. (Motherwell)

Comyns, Dr. L.

Gooch, E. G.

Attewell, H. C.

Cooper, G.

Goodrich, H. E.

Attlee, Rt. Hon. C. R.

Corbel, Mrs. F. K.(Camb'well, N.W.)

Grey, C. F.

Austin, H. Lewis

Corlett, Dr. J.

Grierson, E.

Awbery, S. S.

Cove, W. G.

Griffiths, D. (Rother Valley)

Ayles, W. H.

Crawley, A.

Guest, Dr. L. Haden

Ayrton Gould, Mrs. B.

Crossman, R. H. S

Gunter, R. J.

Bacon, Miss A.

Daggar, G.

Guy, W. H.

Balfour, A.

Dalton, Rt. Hon. H.

Hale, Leslie

Barnes, Rt. Hon. A. J.

Davies, Edward (Burslem)

Hall, Rt. Hon. Glenvil

Barstow, P. G.

Davies, Haydn (St. Pancras, S.W.)

Hamilton, Lieut.-Col. R

Barton, C.

Davies, S. O. (Merthyr)

Hardman, D. R.

Battley, J, R.

Deer, G.

Hardy, E A.

Bechervaise, A. E.

Delargy, H. J.

Hastings, Dr. Somerville

Benson, G.

Diamond, J.

Haworth, J.

Beswick, F.

Dodds, N. N.

Henderson, Joseph (Ardwick)

Bing, G. H. C

Donovan, T.

Holman, P.

Blyton, W. R.

Driberg, T. E. N.

Holmes, H. E (Hemsworth)

Bowden, Fig. Offr. H. W.

Dugdale, J. (W. Bromwich)

Horabin, T. L.

Braddock, Mrs. E. M. (L'pl. Exch'ge)

Dumplelon, C. W.

Houghton, A L N D

Braddock, T. (Mitcham)

Ede, Rt. Hon. J. C.

Hoy, J.

Bramall, E. A.

Edelman, M.

Hudson, J. H. (Ealing, W.)

Brook, D. (Halifax)

Edwards, John (Blackburn)

Hughes, Emrys (S. Ayr)

Brooks, T. J. (Rothwell)

Edwards, RI. Hon N. (Caerphilly)

Hughes, H. D. (W'lverh'pton, W.)

Broughton, Dr. A. D. D.

Edwards, W. J. (Whitechapel)

Hynd, H. (Hackney, C.)

Brown, T. J. (Ince)

Evans, Albert (Islington, W.)

Irvine, A. J. (Liverpool)

Bruce, Maj. D. W. T.

Evans, John (Ogmore)

Irving, W. J. (Tottenham, N.)

Burden, T. W.

Evans, S. N (Wednesbury)

Isaacs, Rt. Hon. G. A

Burke, W. A.

Ewart, R.

Janney, B.

Callaghan, James

Fairhurst, F.

Jay, D. P. T.

Castle, Mrs. B. A.

Farthing, W. J.

Jager, Dr. S. W. (St Pancras, S.E.)

Chelwynd, G. R.

Field., Capt, W. J

Jenkins, R. H.

Cluse, W S.

Foot, M. M.

Johnston, Douglas

Cobb, F. A.

Forman, J. C.

Jones. D. T. (Hartlepool)

770

771

Jones, Elwyn (Plaistow)

Neal, H. (Claycross)

Solley, L. J.

Jones, Jack (Bolton)

Nichol, Mrs. M E. (Bradford, N.)

Soskice, Rt. Hon. Sir Frank

Jones, P. Asterley (Hitchin)

Noel-Baker, Capt. F. E. (Brentford)

Sparks, J. A.

Keenan, W.

Oldfield, W. H.

Steele, T.

Kenyon, C.

Oliver G. H.

Stokes, R. R.

Key, Rt. Hon. C. W.

Orbach, M.

Strauss, Rt. Hon. G. (Lambeth, N.)

King, E. M.

Paget, R. T.

Stross, Dr. B.

Kinghorn, Sqn.-Ldr E

Paling, Rt. Hon. Wilfred (Wentworth)

Stubbs, A. E.

Kinley, J.

Paling, Will T.(Dewsbury)

Sylvester, G. O.

Kirby, B. V

Pargiter, G. A.

Symonds, A. L.

Lang, G.

Parker, J

Taylor, H. B. (Mansfield)

Lee, Miss J. (Cannock)

Parkin, B. T.

Taylor, R. J. (Morpeth)

Lever, N. H.

Paton, Mrs. F. (Rushcliffe)

Taylor, Dr. S. (Barnet)

Levy, B. W.

Paton, J. (Norwich)

Thomas, D. E. (Aberdare)

Lewis, A. W. J. (Upton)

Pearson, A.

Thomas, George (Cardiff)

Lewis, T. (Southampton)

Peart, T. F.

Thomas, I. O. (Wrekin)

Lindgren, G. S.

Popplewell, E.

Thomas, John R. (Dover)

Lyne, A. W.

Porter, E. (Warrington)

Thurtle, Ernest

McAdam, W.

Porter, G. (Leeds)

Timmons, J.

McEntee, V. La T.

Price, M. Philips

Tomlinson, Rt. Hon. G

McGhee, H. G.

Proctor, W. T.

Turner-Samuels M.

Mack, J. D.

Pryde, D. J.

Ungoed-Thomas, L

McKay, J. (Wallsend)

Pursey, Comdr. H.

Usborne, Henry

Mackay, R. W. G. (Hull, N.W.)

Randall, H. E.

Viant, S. P.

McLeavy, F.

Ranger, J.

Walker, G. H.

Macpherson, T. (Romford)

Rees-Williams, D. R.

Wallace, H. W. (Walthamstow, E.)

Mainwaring, W. H.

Reid, T. (Swindon)

Warbey, W. N.

Mallalieu, J. P. W. (Huddersfield)

Rhodes, H.

Watkins, T. E.

Mann, Mrs. J.

Ridealgh, Mrs. M.

Webb, fit (Bradford, C.)

Manning, C. (Camberwell, N.)

Robertson, J. J. (Berwick)

Weitzman, D.

Manning, Mrs. L. (Epping)

Robinson, K. (St. Pancras)

Wells, P. L. (Faversham)

Marquand, Rt. Hon. H. A.

Rogers, G. H. R.

Wells, W. T. (Walsall)

Slathers, Rt. Hon. George

Royle, C.

West, D. G.

Mayhew, C. P.

Sargood, R.

White, H. (Derbyshire, N.E.)

Medland, H. M

Scollan, T.

Whiteley, Rt. Hon. W.

Mellish, R. J.

Scott-Elliot, W.

Wilkes, L.

Middleton, Mrs. L

Shackleton, E. A. A.

Wilkins, W. A.

Mikardo, Ian

Sharp, Granville

Willey, F. T. (Sunderland)

Millington, Wing-Comdr. E. R.

Shawcross, C. N (Widnes)

Willey, O. G. (Cleveland)

Mitchison, G. R.

Shurmer, P.

Williams, D. J. (Neath)

Monslow, W.

Silkin, Rt. Hon. L.

Williams, Ronald (Wigan)

Moody, A. S.

Silverman, S. S. (Nelson)

Williams, W. R. (Heston)

Morgan, Dr. H. B

Simmons, C. J.

Willis, E.

Morley, R.

Skeffington, A. M.

Wise, Major F. J.

Morris, P. (Swansea, W.)

Skeffington-Lodge, T C.

Woodburn, Rt. Hon. A.

Morrison, Rt. Hn. H. (Lewisham, E.)

Skinnard, F. W.

Young, Sir R. (Newton)

Mort, D. L.

Smith, C. (Colchester)

Younger, Hon. Kenneth

Moyle, A.

Smith, Ellis (Stoke)

Zilliacus, K.

Murray, J. D.

Smith, H. N. (Nottingham, S.)

Naylor, T. E.

Smith, S. H. (Hull, S. W.)

TELLERS FOR THE NOES:

Mr. Snow and Mr. George Wallace.

9.30 p.m.
Mr. Lyttelton: I beg to move, in page 35, line 15, after "on" to insert:
"to an output in any year of a quantity specified in the licence not being less than double the quantity specified in relation to that activity in the second column of the Second Schedule to this Act."
This Amendment has the effect of allowing new entrants a reasonable output of 40,000 tons of steel or 100,000 tons of iron ore. It is a second-line Amendment to that which has already been discussed, and I do not propose to argue the matter at length. I wish to get the Government on record every time I can on this Clause as confirming that it is restriction they are after. We intend to divide the House upon this Amendment unless it is accepted. The limits proposed are very small. If this subsection is to remain in the Bill there really must be some allowance for reasonable expansion. It will not be as embarrassing to the right
772
hon. Gentleman as he may now think. I do not intend to develop the matter any further but would remind hon. Members once again that it will have the effect of 40,000 tons of steel and 100,000 of ore iron being the upper limit of expansion.
Mr. G. R. Strauss: I wish to make it clear that we regard the future of the iron and steel industry in an expansionist light. It is our intention and purpose that the iron and steel industry of this country should expand and flourish.
Mr. Lyttelton: I think that the right hon. Gentleman has done a great deal of harm by resisting all these Amendments, and that he might undo some of it if he would now say that the Government would welcome new entrants into the industry in the future, particularly if these new entrants come from abroad and probably bring their own resources with them.
Mr. Strauss: If the right hon. Gentleman will allow me, I shall explain briefly what I mean by saying that we regard the industry in an expansionist light. We consider that primarily the expansion should come from the integrated iron and steel industry which is to be set up under the Corporation; and the great development schemes which that industry now has in, mind and which will be drawn up in the coming years will form part of the growth of the industry under the auspices, guidance and leadership of the Corporation.
The question arises as to what extent it is likely, or possible or desirable that the industry should expand in the private sector outside the main sector of the industry which is under the Corporation? I repeat what I said earlier, that it would be wholly wrong to allow a completely unregulated expansion of the industry outside the Corporation to such a degree, or in such ways, that it might interfere with the plans and development schemes of the industry, and take up resources which should be, or could be, better used in the Corporation's own development schemes, and thus waste the resources of the nation.
Therefore, we say that newcomers into the industry who propose to set up and establish new works must come under some form of regulation and survey to see that they are not wasting the resources of the country. The proper and the only person to undertake that regulation is the Minister. It obviously should not be the Corporation. The Minister is responsible to Parliament and if the Minister acts unwisely, and refuses licences to newcomers improperly, then Parliament can have its say, because the Minister is the servant of Parliament.
It was first proposed that any newcomer should have a licence automatically to create capacity of unlimited extent. That, I said, was contrary to the principles which I have stated, and obviously ridiculous. Now the proposal is made that any newcomer granted a licence should automatically get a licence which would entitle him to produce up to 40,000 tons of steel. I, as a Minister, and any Minister of Supply, will welcome a newcomer into this industry if he has anything to contribute to the strength of the iron and steel industry. If there are any new processes discovered, or anything which would be likely to be
774
helpful to the industry, it will be welcomed. No Labour Minister, at any rate, would consider refusing a licence to a newcomer if that newcomer is likely to be exceptionally efficient and able to produce steel by, shall we say, some new process which would be cheaper than those processes used by the Corporation. 'Such a newcomer would almost automatically get a licence to proceed and be permitted to go on with his work.
What is proposed by the present Amendment? It says that if a man is granted a licence he should automatically have a right to produce up to 40,000 tons of steel, including alloy steel and re-rolled products. I say that would be wholly illogical for two reasons. First, it would be ridiculous to say to all the firms who are now producing over 20,000 tons, "You are coming under the Corporation in order to form an integrated iron and steel industry under one guidance," and at the same time—having taken over every firm producing more than 20,000 tons—to allow those same people who may have been in the industry before, with the compensation money they receive, to build new works and automatically have the right to go up to 40,000 tons.
My second reason is that it may well be that a Minister might say that it would be highly desirable for a new firm to come in to produce a reasonable quantity of alloy steel or re-rolled products—5,000, 10,000 or 15,000 tons—to make up some gap in the production of the Corporation. But if everybody who came in automatically had the right to produce 40,000 tons—which of alloy steel is a very considerable amount—then the Minister inevitably would be hesitant to give a licence to anybody; because if 10 firms came along and wanted to produce, say, 7,000 tons or somewhere around that figure, the Minister might be inclined to say, "Yes, that is right and desirable, and it will fill a gap." But if he knew that each one of those 10 firms had an automatic right to produce 40,000 tons, he would hesitate because, if they all produced 40,000 tons, the whole balance of the industry would be upset. It would lead to that waste, chaos and muddle which we seek to avoid at all costs.
Therefore, firstly, because it would be illogical to permit a maximum of 40,000 tons and, secondly, because obviously it

775
must discourage any Minister of Supply from granting licences he may want to grant if he sees that a licence carries with it the automatic right to produce up to 40,000 tons, I ask the House to reject the Amendment.
Viscount Hinchingbrooke: The Minister welcomes new entrants into the industry. It is in fact a kiss of death because he has got 101 of the main companies incorporated under the Governmental umbrella and he is leaving behind a number of small companies producing between 5,000 and 20,000 tons of ingot steel who will be licensed, and an even smaller number of companies producing up to 5,000 tons. Are they the new entrants, or is he asking for somebody else to come along? Is he in fact asking for a foreign firm to come here and put up steel works? My right hon. Friend the Member for Aldershot (Mr. Lyttelton) has indicated that that would be desirable. I have held the view for a long time that there is no hope of our overcoming the dollar deficit, failing further Marshall assistance, unless we invite Canadian and United States firms to come into this country in a big way with their investments and their plant behind their investments. That is the only way, subject to a bit of improvement in the export trade to the United States, in which we shall ever get over this difficulty unless we get further assistance and gifts like Marshall Aid.
Is the Minister in his speech inviting the United States to make proposals? Is he asking the Bethlehem Steel Corporation to come over here with a new plant in order to raise production in the British iron and steel industry? Is he asking the same thing of Jones and Laughlin of Pittsburgh and the others? I hope that he is. If the Minister is asking for that, then he must put provisions relating to 40,000 tons into this Clause, because the proposition is quite uninteresting to any outside country that they should come here and toy along with the Third Schedule and the miserable third column in it which only allows them 5,000 tons without licence. If the Minister really is making a serious suggestion to get investment into this country, some figure such as 40,000 tons should be specified.
Mr. Attewell: Would the noble Lord explain to the House why in the Standing
776
Committee he and his hon. Friends opposed tooth and nail the introduction of American finance into the firm of Fords and asked that we should take over Fords? Perhaps the noble Lord will remember that I asked him then to give his views on the matter? Perhaps he will do so now?
Viscount Hinchingbrooke: That is a complete misrepresentation of any attitude I took in Committee upstairs. I have always welcomed American investment in Fords. We told the Minister that he was so frightened of offending the United States that he did not dare take Fords over. That is the truth of the matter. I want to make it clear that the investments should not only be in this country but also in the Empire, in association with those firms of ours which have large subsidiaries in Australia and elsewhere.
9.45 p.m.
Mr. Attewell: I think we should be perfectly clear on this matter. On this question of finance from abroad, we received a lecture from the main speakers for the Opposition on this particular point, and we were twitted with the fact that Fords were not going to be taken over and were told that we were creating a possibility of profit-making for American firms and denying the same right to British financiers. I invited the noble Lord to give his explanation of that matter, knowing his interest in finance, and the noble Lord said that he did not propose to speak about it but would see me after the meeting.
Mr. H. Macmillan: I am not a fisherman, at least, only a very amateur fisherman, because I have always found it tedious to throw a fly without any response from the fish, but I am bound to say that the hon. Member for Market Harborough (Mr. Attewell) is the almost ideal fish from the amateur angler's point of view. There is hardly any fly to which he is not liable to rise, no matter with what lack of skill and however harshly and hardly it may hit the water.
The hon. Gentleman recalled a Debate which we had on' this matter in Committee, and which rather divided the Government side, because one part of the Government's supporters below the Gangway hold the view that we have already been taken over by America. That is what I may call the "fellow-traveller"

777
side, or the extremist side, which is the Foreign Office expression today. The other view is that we must be very careful anyway, because we are getting such great assistance from them. In this matter, as my right hon. Friend has said, in moving the Amendment, we are not at all satisfied. We are operating under very difficult conditions, and, although we welcome the intervention of the hon. Gentleman in all Amendments because they add to the force of our arguments, they do make it more difficult for us to be able to carry out our full duties under the fantastic system which the Govern-
ment have imposed through the Guillotine. Never has the Guillotine operated worse in the time during which I have been in the House of Commons, and of all its forms, this block Guillotine, is the most ridiculous. Having said that, let me express the hope that on this occasion the House will support us in the Lobby in this reasonable and proper proposal.
Question put, "That those words be there inserted in the Bill."
The House divided: Ayes, 134; Noes, 277.

Division No. 119.]

AYES

[9.50 p.m.

Agnew, Cmdr. P. G.

Henderson, John (Cathcart)

Odey, G. W.

Astor, Hon. M.

Hinchingbrooke, Viscount

O'Neill, Rt. Hon. Sir H

Baldwin, A. E.

Hogg, Hon. Q.

Orr-Ewing, I. L.

Beamish, Maj. T. V. H

Hollis, M. C.

Pete, Brig. C. H. M.

Birch, Nigel

Holmes, Sir J. Stanley (Harwich)

Pickthorn, K.

Bossom, A. C.

Hope, Lord J.

Ponsonby, Col. C. E.

Bower, N.

Howard, Hon. A.

Poole, O. B. S. (Oswestry)

Boyd-Carpenter, J. A.

Hudson, Rt Hon. R S. (Southport)

Price-White, Lt.-Col. D.

Buchan-Hepburn, P. G. T

Hulbert, Wing-Cdr. N. J.

Prior-Palmer, Brig. O.

Bullock, Capt. M.

Hutchison, Lt.-Cm. Clark (E'b'rgh W.)

Rayner, Brig. R.

Butcher, H. W.

Hutchison, Col. J. R. (Glasgow, C.)

Read, Sir S. (Aylesbury)

Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n)

Jeffreys, General Sir G.

Renton, D.

Byers, Frank

Joynson-Hicks, Hon. L. W.

Roberts, Emrys (Merioneth)

Clarke, Col. R. S.

Keeling, E. H.

Roberts, H. (Handsworth)

Clifton-Brown, Lt.-Col. G.

Kingsmill, Lt.-Col. W. H

Robinson, Roland (Blackpool, S.)

Conant, Maj. R. J. E.

Lambert, Hon. G.

Ropner, Col. L.

Cooper-Key, E. M.

Langford-Holt, J.

Ross, Sir R. D. (Londonderry)

Corbett, Lieut.-Col. U. (Ludlow)

Legge-Bourke, Maj. E. A. H.

Shephard, S. (Newark)

Crosthwaite-Eyre, Col. O. E

Lindsay, M. (Solihull)

Spearman, A. C. M.

Crowder, Capt. John E.

Lloyd, Selwyn (Wirral)

Stoddart-Scott, Col. M

Cuthbert, W. N.

Low, A. R. W.

Strauss, Henry (English Universities)

Darling, Sir W. Y.

Lucas, Major Sir J

Studholme, H. G

Dodds-Parker, A. D

Lucas-Tooth, S. H.

Sutcliffe, H.

Donner, P. W

Lyttelton, Rt. Hon. O.

Taylor, C. S. (Eastbourne)

Dower, Col. A. V. G. (Penrith)

MacAndrew, Col. Sir C.

Taylor, Vice-Adm E A. (P'dd'en, S.)

Drayson, G. B

McCorquodale, Rt. Hon. M. S.

Teeling, William

Drewe, C.

McFarlane, C. S.

Thorneycroft, G. E P (Monmouth)

Dugdale, Maj. Sir T. (Richmond)

McKie, J. H. (Galloway)

Thorp, Brigadier R A F

Eden, Rt. Hon A.

Maclay, Hon. J. S.

Turton, R. H.

Fleming, Sqn.-Ldr. E. L

Macmillan, Rt. Hon. Harold (Bromley)

Tweedsmuir, Lady

Fletcher, W. (Bury)

Macpherson, N. (Dumfries)

Vane, W. M. F.

Foster, J. G. (Northwich)

Maitland, Comdr. J. W

Wakefield, Sir W. W

Fox, Sir G.

Maningham-Buller, R. E

Walker-Smith, D.

Fraser, H. C. P. (Stone)

Marlowe, A. A. H.

Ward, Hon. G. R.

Fyfe, Rt. Hon. Sir D. P. M.

Marples, A. E.

Wheatley, Colonel M J. (Dorset, E.)

Gage, C.

Marshall, D. (Bodmin)

White, Sir D. (Fareham)

Galbraith, Cmdr. T. D. (Pollok)

Marshall, S. H. (Sutton)

White, J. B. (Canterbury)

Galbraith, T. G. D. (Hillhead)

Maude, J. C.

Williams, Gerald (Tonbridge)

Gates, Maj. E. E.

Medlicott, Brigadier F.

Willoughby de Eresby, Lord

George, Maj. Rt. Hn. G. Lloyd (P'ke)

Mellor, Sir J

Winterton, Rt. Hon. Earl

George, Lady M. Lloyd (Anglesey)

Molson, A. H. E.

York, C.

Glyn, Sir R.

Morrison, Maj. J. G. (Salisbury)

Young, Sir A. S. L. (Partick)

Gomme-Duncan, Col. A

Morrison, Rt. Hn. W. S. (Cirencester)

Grimston, R V.

Neven-Spence, Sir B

TELLERS FOR THE AYES:

Harvey, Air-Comdre. A. V.

Nicholson, G.

Brigadier Mackeson and

Head, Brig. A. H.

Noble, Comdr. A. H. P

Mr. Wingfield Digby

NOES

Acland, Sir Richard

Ayles, W. H.

Beswick, F.

Adams, Richard (Balham)

Ayrtan Gould, Mrs. B

Bing, G. H. C

Albu, A. H.

Bacon, Miss A.

Binns, J

Allen, A. C. (Bosworth)

Balfour, A.

Blenkinsop, A

Alpass, J. H.

Barnes, Rt. Hon. A. J.

Blyton, W. R.

Anderson, A. (Motherwell)

Barstow, P. G.

Bowden, Flg. Offr. H. W.

Attewell, H. C.

Barton, C.

Braddock, Mrs. E. M. (L'pl. Exch'ge)

Attlee, Rt. Hon. C. R

Battley, J. R.

Braddock, T. (Mitcham)

Austin, H. Lewis

Bechervaise, A. E.

Bramall, E. A.

Awbery, S. S

Benson, G.

Brook, D. (Halifax)

Brooks, T. J. (Rothwell)

Irving, W. J (Tottenham, N.)

Pryde, D. J.

Broughton, Dr. A. D. D.

Isaacs, Rt. Han. G. A.

Pursey, Comdr. H.

Brown, T. J. (Ince)

Janner, B.

Randall, H. E.

Bruce, Maj. D. W. T.

Jay, D. P. T.

Ranger, J.

Burden, T. W.

Jeger, G. (Winchester)

Rees-Williams, D. R

Burke, W. A.

Jeger, Dr. S. W. (St. Pancras, S.E.)

Reid, T. (Swindon)

Callaghan, James

Jenkins, R. H.

Rhodes, H.

Castle, Mrs. B. A.

Johnston, Douglas

Ridealgh, Mrs. M.

Chetwynd, G. R.

Jones, D. T. (Hartlepool)

Robens, A.

Cobb, F. A.

Jones., Elwyn (Plaistow)

Robertson, J. J. (Berwick)

Cocks, F. S.

Jones, Jack (Bolton)

Robinson, K. (St. Pancras)

Collick, P

Jones, P. Asterley (Hitchin)

Rogers, G. H. R.

Collindridge, F

Keenan, W.

Royle, C.

Collins, V. J.

Kenyon, C.

Sargood, R.

Colman, Miss G. M.

Key, Rt. Hon. C. W.

Scollan, T.

Comyns, Dr. L

King, E. M.

Scott-Elliot, W.

Cooper, G.

Kinghorn, Sqn.-Ldr E

Shackleton, E. A. A

Corbet, Mrs. F. K. (Camb'well, N.W.)

Kinley, J.

Sharp, Granville

Corlett, Dr. J.

Kirby, B. V.

Shawcross, C. N. (Widnes)

Cove, W. G.

Lang, G.

Shurmer, P.

Crawley, A.

Lee, Miss J. (Cannock)

Silkin, Rt. Hon. L.

Crossman, R. H. S.

Lever, N. H.

Silverman, S S. (Nelson)

Dalton, Rt. Hon. H.

Levy, B. W.

Simmons, C. J.

Davies, Edward (Burslem)

Lewis, A. W. J. (Upton)

Skeffington, A. M.

Davies, Haydn (St. Pancras, S.W.)

Lewis, T. (Southampton)

Skinnard, F. W.

Davies, S. O. (Merthyr)

Lindgren, G. S.

Smith, C. (Colchester)

Deer, G.

Lipton, Lt.-Col. M.

Smith, Ellis (Stoke)

Delargy, H. J.

Lyne, A. W.

Smith, H. N. (Nottingham, S.)

Diamond, J.

McAdam, W.

Smith, S. H. (Hull, S.W.)

Dodds, N. N.

McEntee, V. La T.

Solley, L. J.

Donovan, T.

McGhee, H. G.

Soskice, Rt. Hon. Sir Frank

Driberg, T. E. N.

Mack, J. D.

Sparks, J. A.

Dugdale, J. (W. Bromwich)

McKay, J. (Wallsend)

Steele, T.

Dumpleton, C. W.

Mackay, R. W. G. (Hull, N.W.)

Stewart, Michael (Fulham, E.)

Ede, Rt. Hon. J. C.

McLeavy, F.

Stokes, R. R.

Edelman, M.

Macpherson, T. (Romford)

Strauss, Rt. Hon G. R. (Lambeth)

Edwards, John (Blackburn)

Mainwaring, W. H.

Stross, Dr. B.

Edwards, Rt. Hon. N. (Caerphilly

Mallalieu, E. L. (Brigg)

Stubbs, A. E.

Edwards, W. J. (Whitechapel)

Mallalieu, J. P. W. (Huddersfield)

Sylvester, G. O.

Evans, Albert (Islington, W.)

Mann, Mrs. J.

Symonds, A. L.

Evans, E. (Lowestoft)

Manning, C. (Camberwell, N.)

Taylor, H. B. (Mansfield)

Evans, John (Ogmore)

Manning, Mrs. L. (Epping)

Taylor, R. J. (Morpeth)

Evans, S. N. (Wednesbury)

Marquand, Rt. Hon. H. A.

Taylor, Dr. S (Barnet)

Ewart, R.

Mothers, Rt. Hon. George

Thomas, D. E. (Aberdare)

Fairhurst, F.

Mayhew, C. P.

Thomas, George (Cardiff)

Farthing, W. J.

Medland, H. M.

Thomas, I. O. (Wrekin)

Field, Capt. W. J

Mellish, R. J.

Thomas, John R. (Dover)

Fletcher, E. G. M. (Islington, E.)

Middleton, Mrs L

Thurtle, Ernest

Foot, M. M.

Mikardo, Ian

Timmons, J.

Forman, J. C.

Millington, Wing-Comdr. E. R

Tomlinson, Rt. Hon. G

Freeman, J. (Watford)

Mitchison, G. R.

Turner-Samuels, M.

Ganley, Mrs. C. S.

Monslow, W.

Ungoed-Thomas, L.

Gibbins, J

Moody, A. S.

Usborne, Henry

Gibson, C. W.

Morgan, Dr. H. B.

Vernon, Maj. W F

Glanville, J. E. (Consett)

Morley, R.

Viant, S. P.

Gooch, E. G.

Morris, P. (Swansea, W.)

Walker, G. H.

Goodrich, H. E.

Morrison, Rt. Hn. H. (Lewisham, E)

Wallace, H. W. (Walthamstow, E.)

Greenwood, A. W. J. (Heywood)

Mort, D. L.

Warbey, W. N.

Grenfell, D. R

Moyle, A.

Watkins, T. E.

Grey, C. F.

Murray, J. D.

Webb, M. (Bradford, C.)

Grierson, E.

Neal, H. (Claycross)

Weitzman, D.

Griffiths, D. (Rother Valley)

Nichol, Mrs. M. E. (Bradford, N.)

Wells, P. L. (Faversham)

Guest, Dr. L. Haden

Nicholls, H. R. (Stratford)

Wells, W. T. (Walsall)

Gunter, R J.

Noel-Baker, Capt. F. E. (Brentford)

West, D. G.

Guy, W. H.

O'Brien, T.

White, H. (Derbyshire, N.E.)

Hale, Leslie

Oldfield, W. H

Whiteley, Rt. Hon W

Hall, Rt. Hon. Glenvil

Oliver, G. H.

Wigg, George

Hamilton, Lt.-Col. R.

Orbach, M.

Wilkes, L.

Hardman, D. R.

Paget, R. T.

Wilkins, W. A.

Hardy, E. A.

Paling, Rt. Hon. Wilfred (Wentworth)

Willey, F. T. (Sunderland)

Hastings, Dr. Somerville

Paling, Will T. (Dewsbury)

Willey, O. G. (Cleveland)

Haworth, J.

Pargiter, G. A.

Williams, D. J. (Neath)

Henderson, Joseph (Ardwick)

Parker, J.

Williams, Ronald (Wigan)

Holman, P.

Parkin, B. T.

Williams, Rt. Hon. T. (Don Valley)

Holmes, H. E. (Hemsworth)

Paton, Mrs. F. (Rushcliffe)

Williams, W. R. (Heston)

Horabin, T. L.

Paton, J. (Norwich)

Willis, E.

Houghton, A. L. N. D.

Pearson, A.

Wise, Major F. J.

Hoy, J.

Pearl, T. F.

Woodburn, Rt. Hon. A.

Hudson, J. H. (Ealing, W.)

Popplewell, E.

Young, Sir R. (Newton)

Hughes, Emrys (S. Ayr)

Porter, E. (Warrington)

Younger, Hon. Kenneth

Hughes, H. D. (W'lverh'pt, W.)

Porter, G. (Leeds)

Zilliacus, K.

Hynd, H (Hackney, C.)

Price, M. Philips

Irvine, A. J. (Liverpool)

Proctor, W. T.

TELLERS FOR THE NOES:

Mr. Snow and Mr. George Wallace.

Amendment made: In page 35, line 16, leave out "they," and insert:
"the products of those activities."—[Mr. G. R. Strauss.]
Mr. Lyttelton: I beg to move, in page 35, line 20, to leave out from the beginning, to the end of line 21.
The time allowed by the Government does not permit of argument in support of this Amendment.
Mr. G. R. Strauss: I would ask the House not to accept the argument which has been put forward, or the Amendment.
Question put, "That the words proposed to be left out stand part of the Bill."
The House divided: Ayes, 285; Noes, 140.

Division No. 120.]

AYES

10.0 p.m.

Acland, Sir Richard

Dumpleton, C. W.

Kinley, J.

Adams, Richard (Balham)

Ede, Rt. Hon. J. C.

Kirby, B. V

Albu, A. H.

Edelman, M.

Lang, G.

Allen, A. C. (Bosworth)

Edwards, John (Blackburn)

Lee, Miss J. (Cannock)

Alpass, J. H.

Edwards, R. Hon. N. (Caerphilly

Lever, N. H.

Anderson, A. (Motherwell)

Edwards, W. J. (Whitechapel)

Levy, B. W.

Attewell, H. C.

Evans, Albert (Islington, W.)

Lewis, A. W. J. (Upton)

Attlee, Rt. Hon. C. R

Evans, E. (Lowestoft)

Lewis, T. (Southampton)

Austin, H. Lewis

Evans, John (Ogmore)

Lindgren, G. S.

Awbery, S. S.

Evans, S. N. (Wednesbury)

Lipton, Lt.-Col. M

Ayles, W. H.

Ewart, R.

Lyne, A. W.

Ayrton Gould, Mrs. B

Fairhurst, F.

McAdam, W.

Bacon, Miss A.

Farthing, W. J.

McEntee, V. La T.

Balfour, A.

Field, Capt. W. J.

McGhee, H. G.

Barnes, Rt. Hon. A. J.

Fletcher, E. G. M. (Islington, E.)

Mack, J. D.

Barslow, P. G.

Foot, M. M.

McKay, J. (Wallsend)

Barton, C.

Forman, J. C.

Mackay, R. W. G. (Hull, N.W.)

Battley, J. R.

Freeman, J. (Walford)

McLeavy, F.

Bechervaise, A.E

Ganley, Mrs. C. S

Macpherson, T. (Romford)

Benson, G.

Gibbins, J.

Mainwaring, W. H.

Beswick, F.

Gibson, C. W.

Mallalieu, E. L. (Brigg)

Bing, G H. C

Glanville, J. E. (Consett)

Mallalieu, J. P. W. (Huddersfield)

Binns, J.

Gooch, E. G.

Mann, Mrs. J.

Blackburn, A. R

Goodrich, H. E.

Manning, C. (Camberwell, N.)

Blenkinsop, A.

Greenwood, A. W. J. (Heywood)

Manning, Mrs. L. (Epping)

Blyton, W. R.

Grenfell, D. R

Marquand, Rt. Hon. H. A.

Bowden, Flg. Offr. H. W.

Grey, C. F.

Mathers, Rt. Hon. George

Braddock, Mrs. E. M. (L'pl. Exch'ge)

Grierson, E.

Mayhew, C. P.

Braddock, T. (Mitcham)

Griffiths, D. (Rother Valley)

Medland, H. M.

Bramall, E. A.

Guest, Dr. L. Haden

Mellish, R. J.

Brook, D. (Halifax)

Gunter, R. J.

Middleton, Mrs. L

Brooks, T. J. (Rothwell)

Guy. W. H.

Mikardo, Ian

Broughton, Dr. A. D. D.

Hale, Leslie

Millington, Wing-Comdr. E. R.

Brown, T. J. (Ince)

Hall, Rt. Hon. Glenvil

Mitchison, G. R.

Bruce, Maj. D. W. T.

Hamilton, Lieut.-Col. R

Monslow, W.

Burden, T. W.

Hardman, D. R.

Moody, A. S.

Burke, W. A.

Hardy, E. A.

Morgan, Dr. H. B.

Callaghan, James

Hastings, Dr. Somerville

Morley, R.

Castle, Mrs. B. A.

Haworth, J.

Morris, P. (Swansea, W.)

Chamberlain, R. A.

Henderson, Rt. Hon. A. (Kingswinford)

Morrison, Rt. Hn. H. (Lew m, E)

Chetwynd, G. R.

Henderson, Joseph (Ardwick)

Mort, D. L.

Cobb, F A

Holman, P.

Moyle, A.

Cocks, F. S.

Holmes, H. E. (Hemsworth)

Murray, J. D.

Collick, P.

Horabin, T. L.

Neal, H. (Claycross)

Collindridge, F

Houghton, A. L. N. D

Nichol, Mrs. M. E. (Bradford, N.)

Collins, V. J.

Hoy, J.

Nicholls, H. R. (Stratford)

Colman, Miss G. M.

Hudson, J. H. (Eating, W.)

Noel-Baker, Capt. F. E. (Brantford)

Comyns, Dr. L.

Hughes, Emrys (S. Ayr)

O'Brien, T.

Cooper, G.

Hughes, H. D. (W'lverh'pon, W.)

Oldfield, W. H.

Corbet, Mrs. F. K. (Camb'well, N.W.)

Hynd, H. (Hackney, C.)

Oliver, G. H.

Corlett, Dr. J.

Irvine, A. J. (Liverpool)

Orbach, M.

Cove, W. G.

Irving, W. J. (Tottenham, N.)

Paget, R. T.

Crawley, A.

Isaacs, Rt. Hon. G. A.

Paling, Rt. Hon. Wilfred (Wentworth)

Grossman, R. H. S.

Janner, B.

Paling, Will T. (Dewsbury)

Daggar, G.

Jay, D. P. T.

Pargiter, G. A.

Dalton, Rt. Hon. H.

Jeger, G. (Winchester)

Parker, J.

Davies, Edward (Burslem)

Jeger, Dr. S. W. (St. Pancras, S.E.)

Parkin, B. T.

Davies, Harold (Leek)

Jenkins, R. H.

Paton, Mrs. F. (Rushcliffe)

Davies, Haydn (St. Pancras, S.W.)

Johnston, Douglas

Paton, J. (Norwich)

Davies, S. O. (Merthyr)

Jones, D. T. (Hartlepool)

Pearson, A.

Deer, G.

Jones, Elwyn (Plaistow)

Pearl, T. F.

Delargy, H. J.

Jones, Jack (Bolton)

Popplewell, E.

Diamond, J.

Jones, P. Asterley (Hitchin)

Porter, E. (Warrington)

Dodds, N. N

Keenan, W.

Porter, G. (Leeds)

Donovan, T.

Kenyon, C.

Price, M. Philips

Driberg T. E. N.

King, E. M.

Proctor, W. T

Dugdale, J. (W. Bromwich)

Kinghorn, Sqn.-Ldr E

Pryde, D. J

Pursey, Comdr. H

Smith, S. H. (Hull, S.W.)

Wallace, H. W. (Walthamstow, E.)

Randall, H. E.

Solley, L. J.

Warbey, W. N.

Ranger, J.

Soskice, Rt. Hon. Sir Frank

Watkins, T. E.

Rees-Williams, D. R.

Sparks, J. A.

Webb, M. (Bradford, C.)

Reeves, J.

Steele, T.

Weitzman, D.

Raid, T. (Swindon)

Stewart, Michael (Fulham, E.)

Wells, P. L. (Faversham)

Rhodes, H.

Stokes, R. R.

Wells, W. T. (Walsall)

Ridealgh, Mrs. M.

Strauss, Rt Hon. G. R. (Lambeth)

West, D. G.

Robens, A.

Stross, Dr. B.

While, H. (Derbyshire, N.E.)

Robertson, J. J. (Berwick)

Stubbs, A. E.

Whiteley, Rt. Hon W

Robinson, K. (St. Pancras)

Swingler, S.

Wigg, George

Rogers, C. H. R.

Sylvester, G. O

Wilcock, Group-Capt. C. A B

Royle, C.

Symonds, A. L.

Wilkes, L.

Sargood, R.

Taylor, H. B. (Mansfield)

Wilkins, W. A

Scollan, T.

Taylor, R. J. (Morpeth)

Willey, F. T. (Sunderland)

Scott-Elliot, W

Taylor, Dr. S. (Barnet)

Willey, O. G. (Cleveland)

Segal, Dr. S.

Thomas, D. E. (Aberdare)

Williams, D. J. (Neath)

Shackleton, E. A. A

Thomas, George (Cardiff)

Williams, Ronald (Wigan)

Sharp, Granville

Thomas, I. O. (Wrekin)

Williams, Rt. Hon. T. (Don Valley)

Shawcross, C. N. (Widnes)

Thomas, John R. (Dover)

Williams, W. R. (Heston)

Shurmer, P

Thurtle, Ernest

Willis, E.

Silkin, Rt. Hon. L.

Timmons, J.

Wise, Major F. J.

Silverman, S. S. (Nelson)

Tomlinson, Rt. Hon. G

Woodburn, Rt. Hon. A.

Simmons, C. J.

Turner-Samuels, M.

Young, Sir R. (Newton)

Skeffington, A. M.

Ungoed-Thomas, L.

Younger, Hon. Kenneth

Skinnard, F. W.

Usborne, Henry

Zilliacus, K.

Smith, C. (Colchester)

Vernon, Maj. W. F.

Smith, Ellis (Stoke)

Viant, S. P.

TELLERS FOR THE AYES:

Smith, H. N. (Nottingham, S.)

Walker, G. H.

Mr. Snow and Mr. George Wallace.

NOES

Agnew, Cmdr. P. G.

Head, Brig. A. H.

Odey, G. W.

Astor, Hon. M.

Henderson, John (Cathcart)

O'Neill, Rt. Hon. Sir H.

Baldwin, A. E.

Hinchingbrooke, Viscount

Orr-Ewing, I. L.

Beamish, Maj. T. V H

Hogg, Hon. Q.

Peto, Brig. C. H. M.

Birch, Nigel

Hollis, M. C.

Pickthorn, K.

Bossom, A. C.

Holmes, Sir J. Stanley (Harwich)

Ponsonby, Col. C. E.

Bower, N.

Hope, Lord J.

Poole, O. B. S. (Oswestry)

Boyd-Carpenter, J. A.

Howard, Hon. A.

Price-While, Lt.-Col. D.

Braithwaite, Lt.-Comdr. J. G

Hudson, Rt. Hon. R. S. (Southport)

Prior-Palmer, Brig. O.

Buchan-Hepburn, P. G. T

Hulbert, Wing-Cdr. N. J.

Rayner, Brig. R

Bullock, Capt. M.

Hutchison, Lt.-Cm. Clark (E'b'rgh W.)

Reed, Sir S. (Aylesbury)

Butcher, H. W

Hutchison, Col. J. R. (Glasgow, C.)

Renton, D.

Butler, Rt. Hn. R. A. (S'ffr'n W'ld'n)

Jeffreys, General Sir G.

Roberts, Emrys (Merioneth)

Byers, Frank

Joynson-Hicks, Hon. L. W.

Roberts, H. (Handswerth)

Clarke, Col. R. S.

Keeling, E. H.

Roberts, W. (Cumberland, N.)

Clifton-Brown, Lt.-Col. G

Kingsmill, Lt.-Col. W. H

Robinson, Roland (Blackpool, S.)

Cooper-Key, E. M.

Lambert, Hon. G.

Ropner, Col. L.

Corbett, Lieut.-Col. U. (Ludlow)

Langford-Holt, J.

Ross, Sir R. D. (Londonderry)

Crosthwaite-Eyre, Col. O. E.

Legge-Bourke, Maj. E. A. H.

Shephard, S. (Newark)

Crowder, Capt. John E.

Lindsay, M. (Solihull)

Smithers, Sir W

Cuthbert, W. N.

Lloyd, Selwyn (Wirral)

Spearman, A. C. M

Darling, Sir W. Y.

Low, A. R. W.

Stoddart-Scott, Col. M.

Digby, Simon Wingfield

Lucas, Major Sir J.

Strauss, Henry (English Universities)

Dodds-Parker, A. D

Lucas-Tooth, S. H.

Sutcliffe, H.

Donner, P. W.

Lyttelton, Rt. Hon. O.

Taylor, C. S. (Eastbourne)

Drayson, G. B

MacAndrew, Col. Sir C.

Taylor, Vice-Adm E. A. (P'dd't'n, S.)

Drewe, C.

McCorquodale, Rt. Hon. M. S.

Teeling, William

Dugdale, Maj. Sir T. (Richmond)

McFarlane, C. S.

Thorneycroft, G. E. P. (Monmouth)

Eden, Rt. Hon. A.

Mackeson, Brig. H. R.

Thorp, Brigadier R A. F

Elliot, Lieut.-Col. Rt. Hon. Walter

McKie, J. H. (Galloway)

Touche, G C.

Fleming, Sqn.-Ldr. E. L.

Maclay, Hon. J. S.

Turton, R. H.

Fletcher, W. (Bury)

Macmillan, Rt. Hon. Harold (Bromley)

Tweedsmuir, Lady

Foster, J. G. (Northwich)

Macpherson, N. (Dumfries)

Vane, W. M. F.

Fox, Sir G.

Maitland, Comdr. J. W

Wakefield, Sir W W

Fraser, H. C. P. (Stone)

Manningham-Buller, R. E

Walker-Smith, D

Fraser, Sir I. (Lonsdale)

Marlowe, A. A. H.

Ward, Hon. G. R

Fyfe, Rt. Hon, Sir D. P. M

Marples, A. E.

Wheatley, Colonel M. J. (Dorset, E.)

Gage, C.

Marshall, D. (Bodmin)

White, Sir D. (Fareham)

Galbraith, Cmdr, T. D. (Pollok)

Marshall, S. H. (Sutton)

White, J. B. (Canterbury)

Galbraith, T. G. D. (Hillhead)

Maude, J. C.

Williams, Gerald (Tonbridge)

Gates, Maj. E. E.

Medlicott, Brigadier F.

Willoughby de Eresby, Lord

George, Maj. Rt. Hn. G. Lloyd (P'ke)

Mellor, Sir J

Winterton, Rt. Hon. Earl

George, Lady M. Lloyd (Anglesey)

Molson, A. H. E.

York, C.

Glyn, Sir R.

Morrison, Maj. J. G. (Salisbury)

Young, Sir A. S. L. (Partick)

Gomme-Duncan, Col. A.

Morrison, Rt. Hn. W. S (Cirencester)

Grimston, R. V.

Neven-Spence, Sir B.

TELLERS FOR THE NOES:

Hare, Hon. J. H. (Woodbridge)

Nicholson, G.

Mr. Studholme and

Harvey, Alr-Comdre. A. V.

Noble, Comdr A. H. P.

Major Conant.

Resolution agreed to.

It being after Ten o'Clock, Mr. SPEAKER proceeded, pursuant to Order, successively to put forthwith the Questions on Amendments moved by the Government of which notice had been given to that part of the Bill to be concluded at Ten o'Clock at this day's sitting.

Clause 30.—(RIGHTS OF EXISTING BUSINESSES.)
Amendments made: In page 37, line 31, leave out from "contend," to "that," in line 32.
In page 37, In line 44, after "shall," insert:
"for the purposes of this section."—[Mr. G. R. Strauss.]
Further consideration of the Bill, as amended, adjourned.—[Mr. Popplewell.]
Bill, as amended (in the Standing Committee), to be further considered Tomorrow.

HOUSING (SCOTLAND) [MONEY]
Resolution reported:
"That for the purposes of any Act of the present Session to amend the Housing (Scotland) Acts, 1925 to 1946, and to promote the improvement of housing accommodation in Scotland by authorising the making of contributions out of the Exchequer and of grants by local authorities (hereinafter referred to as "the Act") it is expedient to authorise—

A. the payment out of moneys provided by Parliament of any expenses incurred by the Secretary of State in—

(1) making to a local authority or to a corporation established by an order under section two of the New Towns Act, 1946 (hereinafter referred to as a 'development corporation'), towards the annual loss determined by the Secretary of State to be likely to be incurred by them as a result of giving effect to proposals approved by him for the provision of dwellings by means of the conversion of houses or other buildings or the improvement of dwellings, an annual contribution for twenty years of an amount equal to three-quarters of that loss, or, in the case of a local authority for an area or a development corporation for a new town in the Highlands and Islands, as defined in the Housing (Agricultural Population) (Scotland) Act, 1938, seven-eighths of that loss:

(2) making to a local authority, towards the expense incurred by them in making to a person other than a local authority a grant in respect of expenses incurred by him for the purposes of the execution of works for the provision of dwellings by means of the conversion of houses or other buildings or the improvement of dwellings, an annual contribution for twenty years of an amount equal to three-quarters, or, in the case of
786
a local authority for any area in the aforesaid Highlands and Islands, seven-eighths of the annual loan charges referable to the amount of the grant;

(3) making to a local authority, in respect of arrangements made by them with a housing association or development corporation for the provision of dwellings by means of the conversion of houses or other buildings or the improvement of dwellings, an annual contribution for twenty years of an amount equal to three-quarters, or in the case of a local authority for any area in the aforesaid Highlands and Islands, seven-eighths, of the annual loss determined by the local authority, with the approval of the Secretary of State to be likely to be incurred by the association or corporation in carrying out the arrangements;

(4) making to a local authority or the Scottish Special Housing Association, in respect of a house or flat the cost of providing which has been or will be substantially enhanced by expenses attributable to measures taken to preserve the character of the surroundings, an annual contribution, in addition to any contribution payable under the Housing (Scotland) Act, 1944, or the Housing (Financial Provisions) (Scotland) Act, 1946, for a period of sixty years of such amount as the Secretary of State may determine not exceeding, in the case of a local authority, five pounds, or in the case of the said Association, seven pounds ten shillings;

B. the payment out of moneys provided by parliament of any expenses incurred by the Secretary of State in making—

(1) to a local authority or development corporation, in respect of a new building provided, or a building converted, by them for use as a hostel (as defined by the Act); or

(2) to a local authority in respect of a new building provided, or a building converted, by a housing association or development corporation for such use being a building provided or converted under arrangements made by the local authority under section twenty-six of the Housing (Scotland) Act, 1935;

an annual contribution for such number of years, not exceeding sixty, and of such amount, not exceeding the sum produced by multiplying seven pounds by the number of bedrooms contained in the building, as the Secretary of State may determine;

C. the payment out of moneys provided by Parliament of any expenses incurred by the Secretary of State in making a grant to a local authority or to the Scottish Special Housing Association in respect of—

(1) the construction of a house or flat by an experimental method, the use for the purposes of experiment of any materials in the construction of a house or flat or the installation in a house or flat, in the course of the construction thereof, of equipment or fittings for those purposes; or

(2) the incorporation or installation in a house or flat, otherwise than in the course of the construction thereof, of materials, equipment or fittings for those purposes;

787

D. the payment out of moneys provided by Parliament of any expenses incurred by the Secretary of State attributable to any provisions of the Act empowering him to make contributions in respect of buildings provided or converted for use as hostels (as defined by the Act) which become vested in local authorities;

E. the payment out of moneys provided by Parliament of any expenses incurred by the Secretary of State in reimbursing to a local authority not more than one half of any loss sustained by them under a guarantee given by them for the repayment of advances made to its members by a society incorporated under the Building Societies Acts, 1874 to 1939, or the Industrial and Provident Societies Acts, 1893 to 1928, for the building or acquisition of houses or fiats, being a guarantee as to which the Secretary of State is satisfied that the liability of the local authority thereunder cannot be greater than two-thirds of the principal of, and interest on, the amount by which the sum to be advanced by the society exceeds the sum which would normally be advanced by it without the guarantee;

F. the payment out of moneys provided by Parliament of—

(1) any increase in the sums payable under section thirty-nine of the Housing (Scotland) Act, 1930, or Part II of the Local Government Act, 1948, out of moneys so provided which is attributable to the passing of this Act; and

(2) any increase ill the sums payable under section twenty-six of the Housing (Scotland) Act, 1935, or under the Housing (Financial Provisions) (Scotland) Act, 1946, out of moneys so provided which is attributable to the removal from the Housing (Scotland) Acts, 1925 to 1946, of references to the working classes; and

G. the payment into the Exchequer of all sums received by the Secretary of State under the Act."

ROYAL DOCKYARDS
Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Popplewell.]
10.10 p.m.
Mr. Medland: I wish to draw the attention of the House to the question of the setting up of a working party for the Royal Dockyards. This matter was raised in the Debate on the Navy Estimates by my hon. Friend the Member for Devonport (Mr. Foot). He received a reply from the Civil Lord who said:
"I know it is difficult to see that every man is doing his job properly, but from my knowledge of those who are in charge I feel they are doing the job as well as it is possible for them to do.
788
I see no reason why the Admiralty should have to set up a working party within its own department because some people are complaining. Possibly they are the people who are always complaining. We have had no justification for acceding to the request that a working party should be established to go into the work being done at the Royal Dockyards. The question of civilianisation is a matter we could not deal with too lightly. It must receive most serious consideration. Whatever one may say about the admiral superintendent and commodore superintendents who have been in charge of the dockyards, these dockyards have helped materially in bringing us through two world wars. I am all for a change if I know it is to be beneficial, but I have to be certain that the change would be beneficial before I agree to it."—[OFFICIAL REPORT, 8th March, 1949; Vol. 462, c. 1139–40.]
The two points which the Civil Lord made are the two points I wish to challenge tonight. One relates to administration and technical efficiency and the other deals with naval control. I want to make two things clear. I am not raising the question of working conditions or rates of pay. I admit quite frankly to the Civil Lord that in that respect he has probably done more for the dockyards than any other man who has ever held his office, and we are extremely grateful to him and his colleagues for what they have done in that respect. The second point I want to make clear is that I agree that the main business of the Royal Dockyards is the building and repair of His Majesty's naval warships. None of us will raise any objection to the insistence which the Civil Lord placed on that in his speech.
In spite of the great technical advances and administrative alterations which have taken place in industry, the main organisation of the Royal Dockyards is precisely what it was at least 100 years ago. The responsibility for this rests with the Civil Lord of the Admiralty. As the House may or may not know, there is a Board of Admiralty charged with the duties of the Lord High Admiral in accordance with the Navy Estimates and King's Regulations. It comprises three civilians—the First Lord, the Parliamentary and Financial Secretary, The Civil Lord and seven full Admirals. They rule the Navy and the industrial establishments. The industrial establishments are put specifically in the care of the Civil Lord. I remember the time when it was in the hands of the Financial Secretary but I understand that now, two

789
members of the Board can give a decision on behalf of the whole Board, so that any responsibility whether a committee of inquiry or a working party is set up in respect of the yards is entirely a matter for the civil element of the Board of Admiralty.
The organisation which controls some 55,000 workmen and the Lord knows how many officers—
Mr. Stokes: Does the Civil Lord know?
Mr. Medland: I beg the hon. Gentleman's pardon?
Mr. Stokes: The hon. Member said "the Lord knows"; I want to know what the Civil Lord knows.
Mr. Medland: Whether the Civil Lord knows, I do not know, but "I ha'e ma doots" whether he knows how many officers there are. Of the 55,000 workmen there are about 15,000 in Portsmouth, 13,000 in Devonport, 10,000 or 12,000 in Chatham, some in Sheerness and various other places. The head of each of the departments is an Admiral Superintendent or a Commodore Superintendent. Whether an Admiral Superintendent or a Commodore Superintendent is quite the best person, after all his experience in managing warships, etc., with the aid of King's Regulations and naval discipline to put in charge of big industrial establishments in these days, I am not saying at the present time. I have known some good Admiral Superintendents and, believe me, I have known some bad ones who were much more prone to use the "on the knee" business than they were to understand industrial establishments.
It is because of this fact that we are asking for an investigation, because not only do we have that kind of overlordship but we have a series of departments. The yards are divided into, first, the Admiral Superintendent's side, then there is the Captain of the Dockyard who is second in command, then comes the shipbuilding side presided over by a civilian at the head of the Royal Naval Corps of Constructors. He rules the shipbuilding side and the various dockyards. Then there is the engineering department, ruled by a naval officer. He has commanders, all naval officers, to assist him, but I do not know how many assistants there are. It is not possible for an apprentice in the
790
engineering department ever to rise to be manager of his department although it is possible for a shipwright in the shipbuilding department to rise to be a member of the Royal Naval Corps of Constructors and get to the top rank.
That is the curious anomaly, and a reason why we ought to have this committee of investigation as to whether modern methods are being applied and this is the best method of running these establishments. Then there is the electrical department, which at present is run by a civilian but is very rapidly being navalised. We have a fear that before very long there will be no civilian elements in charge in these industrial establishments, and that they will all be run by naval officers of one description or another. We should like some information about this and to have an investigation to see whether they are the best people to run these huge naval organisations.
In his reply the Civil Lord said that he had to be satisfied in some part that this was necessary. If he had to be satisfied about this, why did he accede, on paper at least, to a demand from the Admiralty Joint Industrial Council that there should be a kind of working party, as he did in 1947? Having acceded to that request and appointed three gentlemen whose names were given to the House of Commons, why were they not allowed to carry out their work in an ordinary, normal way? What actually happened was that this committee of inquiry visited Devonport Dockyard one morning, spent the day looking round, and then discovered that the men had something to say. The Chairman was kind enough to stay overnight to see the men next morning and told them he thought his terms of reference were far too limited and confined. He had a talk with the men and left again next day. That was the working party inquiry as given to us by the Civil Lord for the establishment at Devonport.
Whatever was done at Portsmouth or might have been done somewhere else I do not know, but in 1941 the Minister of Labour, the present Foreign Secretary, was gravely concerned about the use of labour in His Majesty's Dockyards and appointed a Committee of Inquiry. He appointed a representative from Lloyd's surveyors, an admiral and one other. That one other served on the Committee, made the inquiries and spent some three months

791
in visiting the establishments. We produced a report, which has been pigeonholed, which contained recommendations about the manner in which labour should be used in the dockyards. Nothing was ever heard about that report.
It is because of the experience I gained on that Commission and my inquiries into the workings in the Dockyard that I am convinced that if we are to get a fully efficient establishment we must have a proper working party, properly authenticated and given the opportunities of making the inquiries and making it possible for us to have 100 per cent. efficiency inside the naval establishment. What on earth is the use of the Chancellor of the Exchequer or the Economic Secretary telling us that we must have more and more production, or telling us of the great benefits which have accrued from working parties in the cotton industry, in furniture making and in pottery, when the Government themselves do not practise what they are preaching to outside industries in their own establishments? The granting of this request is the least they can do in view of the criticisms that have been made.
These criticisms are not coming from the officers. "Everything in the garden is lovely" as far as they are concerned. They do not want any alterations, but the men are asking that this inquiry should be held. I am not saying that the inquiry will be satisfactory as far as the Admiralty are concerned, for they think that nothing is wrong in their beautiful establishment. But I believe that the men are right when they say that in a time like this when production has to be brought up to the maximum in industry, that should apply equally in Government establishments and workshops.
While I am not making any charges as to under-employment, I believe that many jobs are overmanned at present. The organisation is in departments and once inside one of those departments it is very difficult to transplant workmen to another. I have never understood why there should be a coppersmith's shop and a joiner's shop in the shipbuilding department quite separate from the coppersmith's shop and joiner's shop in the engineering department. They are quite distinct and the twain never meet. During the past few years things have altered materially. The trade which used to have
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the greatest demand made upon it was the shipbuilding trade, but today the emphasis has changed and the demand is on the electrical industry. In the yards the organisation was on a basis of shipbuilding and shipwrights. Because of factors like that, I ask that the Admiralty will seriously consider setting up a working party or committee of inquiry to get complete efficiency in His Majesty's Dockyards.
10.28 p.m.
Major Bruce: I should like to add my word to that of my hon. Friend the Member for the Drake Division (Mr. Medland) in asking the Government to consider setting up a working party to look into the whole organisation of the Royal Dockyards. I do not ask that in any carping spirit, because I realise, as do my colleagues, that much has been done in the last few years; indeed, much more has been done in the Royal Dockyards in the last three and a half years than in the preceding 30 years. What we are concerned about is to ensure that the money we vote in the Naval Estimates, a considerable proportion of which goes to the Royal Dockyards, is used with the utmost efficiency and that all the organisation and administration in the Royal Dockyards is conducted as efficiently as possible.
Recently we had a report from the working party on the cotton industry and learned from it that the majority of the manufacturers already considered their businesses sufficiently efficient before the working party was set up; but the working party's report, which pointed out considerable shortcomings in the cotton industry, has been taken advantage of by only 15 firms out of a considerable number. It may well be that their Lordships of the Admiralty, although they must be sensitive to certain defects in the Royal Dockyards, are nevertheless of the opinion that in the main the staff is being used to the best advantage and that the country is getting the best advantage out of it.
All one can say in reply to that, apart from pointing out some of the administrative inconsistencies to which my hon. Friend referred, is that men who are at the point of production do not think that the labour is in all cases being used to the best advantage. In these circumstances, I should have thought it would

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have been best, because the cost will not be very considerable and the administrative inconveniences will be inconsiderable, to appoint a working party from outside to ensure that the very modern machinery which is installed in all the Royal Dockyards is being employed to the best possible advantage.
I do not think it is any good having a inter-departmental committee appointed to do this, because if one gets an interdepartmental committee there is often an inhibition affecting those questioned in the course of the inquiry which makes it difficult for them to answer frankly all the inquiries made. I feel that if the people who work in the Royal Dockyards had an outside inquiry which came round on a business efficiency basis and made all the inquiries which it thought fit to make, confidence would be inspired among those in the Royal Dockyards, and their Lordships at the Admiralty would be enabled to form an accurate assessment of the position. I do not see that there would be any harm in this, and there might be considerable advantage; and it might also be of use to Members of this House when they come to vote on the Estimates in the ordinary way. I hope, therefore, that the Civil Lord will give this quite reasonable request favourable consideration.
10.32 p.m.
The Civil Lord of the Admiralty (Mr. Walter Edwards): I am very grateful indeed to my hon. Friend the Member for the Drake division (Mr. Medland) for raising this matter once again. The question of a working party for the Royal Dockyards seems to me to be cropping up rather frequently these days, despite the fact that an answer, and I think a very reasonable answer, has been given previously in regard to the matter. I will say at the very outset that I cannot claim the experience of the Royal Dockyards which my hon. Friend has had through his long service in Devonport Dockyard, but I do know a little about them, although I have not actually worked in them. I have served in ships which have had to be refitted in the Royal Dockyards, and in this House I have had the responsibility during the last three and a half years of being the Civil Lord and have thus had a fair amount of association with the Royal Dockyards both in this country and abroad. Hon. Members who have spoken tonight have obviously left in-
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sufficient time for me to answer all the points which they have raised. Out of 30 minutes, they have, I think, left me seven minutes in which to reply.
Mr. Medland: My hon. Friend can easily say "Yes."
Mr. Edwards: It is the easiest thing in the world to say "Yes," but one does not necessarily do the easy thing and say "Yes" when one is convinced that, by doing so, one would be doing a disservice to the Admiralty administration. How ever, so that it may be put on record, although I do not have to tell this to my hon. Friend or any of the other hon. Members who have Royal Dockyards in their constituencies, I must say that it ought to be clearly understood that the Royal Dockyards, at home and abroad, are in no way comparable with the shipbuilding and ship-repairing yards in this country.
A Royal Dockyard is a naval base, and we have not found yet that it has been in the best interest of the country to have civilians in charge of naval bases and naval ships. I presume that that is one of the reasons why my predecessors at the Admiralty felt that it would be in the best interests of the country if they were to have men in charge of the Royal Dockyards who are au fait with the functions of a naval base. Consequently, they felt that those men had to be naval men and in the main, as far as home dockyards are concerned, they are Admiral superintendents.
Mr. Stokes: May I ask a question? While that may be so, will the hon. Gentleman explain why he refuses to allow Members of Parliament to visit dockyards unless accompanied by all the pomp and circumstance of the Admiral Superintendent which makes a visit perfectly useless?
Mr. Edwards: In all cases we have not refused to allow Members of Parliament to go over a dockyard unless accompanied by the Admiral Superintendent.
Mr. Stokes: The hon. Gentleman refused me.
Mr. Edwards: In fact some hon. Members during the life of this Parliament have been over the dockyards which they represent without the escort of the Admiral Superintendent, and from what I gather they were perfectly satisfied

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with the way they were treated. I am sure the hon. Member for Ipswich (Mr. Stokes) would agree that, although I am not going to say that he would be placed in the category, there are some people of whom we have to be very careful in this and other countries and obviously we have to be rather cautious about it. I know that the hon. and gallant Member for North Portsmouth (Major Bruce) will agree that he was given every facility.
Mr. Stokes: He does not know anything about it.
Mr. Edwards: We find the hon. Member for Ipswich (Mr. Stokes) saying that the hon. and gallant Member for North Portsmouth does not know anything about it and then the hon. Member for the Drake Division saying that the Admiralty does not know anything about it.
Mr. Medland: I said the Civil Lord does not know anything about it.
Mr. Edwards: It is a conflict of opinion the whole time. The hon. Member for the Drake Division says I do not know enough about it. I think it will boil down to a position where we shall have to depend completely on the hon. Member for the Drake Division. We have the responsibility at the present time but it is a little bit away from the point if my hon. Friends mention the working party on the cotton industry and compare that to the administration of the Royal Dockyards. There is really no comparison, and in fact I think it is perfectly true to say that in no other Government Department during the lifetime of this Parliament has there been a request for a working party to be set up within that department.
Whether we are going to deal with this question of navalisation as against civilian control of the dockyards and whether the working party is going to deal with that, I do not know. I do not know what their terms of reference might
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be, but I am bound to repeat what I said in my speech on the Navy Estimates. I am quite certain, while I have any responsibility at all for the control of the Navy in this country, that before we make a change from naval control of the Royal Dockyards to civilian control, I must be absolutely satisfied that it will be in the interests of the nation. I am not yet satisfied, and I do not see any reason for using the Admiralty administrative staff for setting up a working party to go into matters which to us seem perfectly obvious at the present time.
Mr. Medland Mr. Medland rose—
Mr. Edwards: I must go on. I want to make this one point. I do not think the situation warrants an inquiry any more than that in any other Government Department. There was one point which was made by the hon. Member for the Drake Division. He referred to the fact that I was supposed to have acceded to a request by the Admiralty Industrial Council, and that I appointed three gentlemen to comprise a working party to go into the engineering section of Devonport and other home dockyards. I can assure my hon. Friend that there was no request from the Admiralty Industrial Council to which I acceded on that occasion; and in fact that body was appointed not by me, but by my noble Friend the First Lord. Then my hon. Friend says that the men are asking for a working party. With respect to my hon. Friends who represent dockyard constituencies, I think that if they investigated the opinion of the vast majority of men who work in the dockyards, they would find that there would be no request of that description made.
The Question having been proposed after Ten o'Clock and the Debate having continued for half an hour. Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at Twenty Minutes to Eleven o'Clock.