HC Deb 02 May 1949 vol 464 cc695-785
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, 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 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 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 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 (Berwick-upon Tweed)

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 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 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 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 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 (Carmarthen)

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 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 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 (Dorset, Northern)

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 (Lough borough)

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 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 (Harborough)

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 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 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- 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 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 (Chippenham)

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 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 (Wednesbury)

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 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 (Penrith and Cockermouth)

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 (Weston-super-Mare)

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 (Perth and Kinross, Perth)

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 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 (Nelson and Colne)

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 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 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 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.

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 (Spelthorne)

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 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 (Ipswich)

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 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 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 (Southwark, Central)

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 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 (Stretford)

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 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 (Montrose Burghs)

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- 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 (Liverpool, Walton)

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.

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 (Combined English Universities)

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- 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 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 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 (Ipswich)

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 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. 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 (Skipton)

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 (Macclesfield)

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 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 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 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 (Southwark, Central)

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 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 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 (Bury)

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- 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 (Wirral)

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 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 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 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 (Bury)

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 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 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 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 (Bromley)

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.

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 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 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
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 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.

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 (Holderness)

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 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 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 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- 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 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
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)
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 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 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 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 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" 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
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'p[...]on, 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.
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.