SOCIALISED INDUSTRIES

HC Deb 25 October 1950 vol 478 cc2795-919

3.37 p.m.

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

I beg to move, That this House notes the steps which have been taken to give effect to the responsibility to the community (including consumers and workpeople) of the socialised industries, and will welcome any further measures to increase their public accountability, consistently with the duty of the Boards to manage the industries with maximum efficiency in the public interest. This Motion, with regard to socialised industries—

Hon. Members

Nationalised.

Mr. Lennox-Boyd (Mid-Bedfordshire)

Is the right hon. Gentleman ashamed of it?

Mr. Morrison

The hon. Member has a right to his opinion, but he has no right to dictate adjectives to me. I do not know what this quarrel about nomenclature is. I think hon. Members opposite ought to have a course at the Marx-Lenin Institute and find out what it is all about. They are not really experts on these Socialist terms. We know far more about them than they do.

Captain Crookshank (Gainsborough)

On a point of order. Will it be competent in the Debate to discuss coal, which is specifically a nationalised industry by statute, and not a socialised one?

Mr. Speaker

I am sorry. I did not hear what the Lord President said. Did he say we could not discuss coal?

Captain Crookshank

No. I understood he was talking about something called "socialised" industries.

Mr. Speaker

I do not know. Some words mean the same things or different things amongst various people. I do not set myself up as an authority on the difference between the two words.

Mr. Morrison

I do not gather that this is at all serious, Mr. Speaker. It is really a way in which the right hon. and gallant Gentleman enjoys himself; and it is a free country and there is nothing to stop him doing it.

I ought to say in the first place that there was a suggestion made that we might on this occasion also discuss—and, perhaps, this has some relevance to the last bit of humour—"Party Manners" and the British Broadcasting Corporation. I was asked to see if the Motion could be shaped so that that would be possible, but, on thinking over it—[Laughter.] I must say that on this last day in this Chamber the mood of the Opposition is somewhat hysterical. It is all very understandable, and only demonstrates what a human place the House of Commons is. But I did think, on reflection, that—[Laughter.] What is the matter with hon. Members opposite? They are like a lot of giggling girls. [An HON. MEMBER: "At odd times the right hon. Gentleman reflects."] I am sure that the Parliamentary writer of the "Manchester Guardian," who is very expert on the moods of the House of Commons, will have a most interesting article tomorrow on the introspective character of the House of Commons from time to time.

I thought upon reflection that there was amongst serious Members on both sides of the House—I am not talking about the gigglers but about the serious ones—a desire to have a full discussion about the publicly-owned industries. That is a nice neutral term which I hope will pass. If we were to get into a discussion on particular items of broadcasting programmes such as "Party Manners" on television I am sure that we should find it awfully difficult to get out of it, because it would be a very tempting subject to continue. I therefore apologise to the House, but I thought it best not to invite discussion on that subject today. Who knows, possibly it will arise on some other day.

Today the House can have, if it so wishes—as I hope will be the case—a Debate of a non-party character about the general administration and organisation of publicly-owned industries, their accountability to Parliament, their accountability to the public, relations with consumers, the question of joint consultation as far as workpeople are concerned, and various other matters which have been discussed from time to time. I think it is the case that up to now, except for one Debate which related primarily to Parliamentary Questions, we have debated particular socialised industries rather than these general over-all matters in connection with them. There have been representations made to us from my hon. Friends of a group in the Parliamentary Labour Party which interests itself in the nationalised industries, and from hon. Members opposite from time to time, that such a discussion would be useful.

I suggest that there is really no party politics in this matter and that it would be valuable if the House were to discuss this apart from party political considerations, which indeed hardly arise. It is a fact that a whole series of industries are publicly owned. That was a controversial decision argued out by this House and another place at the time. Well, they have become public concerns, and I would hope that it is the wish of all of us that they should be successful, and that we should assist them to be successful. One of the ways of assisting them to be successful is for suggestions to be made, for criticisms to be offered and changes to be urged. But there they are, and I think the House would wish this afternoon to debate this matter in the spirit of all of us making as good a contribution as we can to the problems that arise in the way I have indicated.

In addition to the discussions of my hon. Friends in the Nationalisation of Industries Group of the Parliamentary Labour Party, there have been serious contributions from a number of hon. Members opposite, and the General Council presented to the recent Trades Union Congress a most valuable report on the public control of industry, which has indeed been mentioned in the course of our Parliamentary discussions. The Fabian Society, the Institute of Public Administration, Nuffield College, Oxford, and the British Institute of Management have all, for example, made contributions to this not only interesting but exceedingly important matter.

It is obviously desirable that none of us, whether Government, Opposition or members of the boards, should close our minds to possible modifications and changes in organisation, administration, the forms of public accountability, and so on, because we shall obviously learn as we go in the work of this very extensive experiment in the organisation and management of publicly-owned industries. In addition to the discussions I have mentioned, I have, with colleagues responsible for the publicly-owned industries, had discussions from time to time with the chairmen of the boards.

In the first place, it is desirable that the House should try to make up its mind as to the basis upon which it desires these commercial undertakings to be run. It is a perfectly fair case for argument whether a publicly-owned industry should be vested in a Minister and allocated to ordinary State departmental management.

Mr. Oliver Lyttelton (Aldershot)

Like the Post Office.

Mr. Morrison

Like the Post Office. That is a fair point to argue. I think it is fairer in some cases than others. For example, it is arguable whether gas and electricity could not have been adequately managed directly by the Minister of Fuel and Power rather than being placed under a public corporation, or what now amounts to a series of public corporations because of the area boards.

Certainly I think most of us would agree that the Post Office, whether under Labour or Conservative Postmasters-General for a good time, is a well-managed undertaking. It is efficient. Although I have no doubt it is also open to criticism on various points, as a whole it is well run. It is, therefore, a legitimate field of argument whether these undertakings should be State Department managed or whether they should be managed through public corporations, but I do urge upon the House that we cannot very well have it both ways. It is desirable to make up our minds, and having made up our minds we must take the consequences of having pursued a certain course.

The argument is this as between the two policies. I have paid my tribute to the Post Office, and indeed we are all admirers of a good deal of State Departmental administration; but it is often urged that when it comes to the sheer business of commercial matters the machinery of a State Department necessarily works slower than that of an ordinary commercial concern. There is truth in that, not because of any inherent incompetence in the Civil Service or of State administration, but precisely because Ministers are absolutely responsible to Parliament for everything that happens in their Departments. And that is right; that is as it should be.

But the consequence necessarily is that when civil servants are doing things, either with the specific authority of a Minister or in accordance with the policy he is presumed to have approved, and probably has, or in ordinary day to day affairs where policy does not arise, there is in the minds of the civil servants inevitably the consideration: Is there likely to be a Parliamentary argument about this? Is there likely to be criticism in the Press? Is the Minister likely to find himself in disagreement with his colleagues in the Government? Or is there likely to be in any form bother and trouble about it?

Consequently, the Civil Service machine, with minutes going to and fro, must inevitably be cautious and careful because of the possibility of Parliamentary trouble, trouble with the public, criticism in the Press, and so on. One does not want to discourage this too much, because a healthy respect for Parliament by the civil servants in the State Departments is a good thing. If ever they get into a mood of assuming that Parliament does not matter and treating this House with indifference or contempt, that would be a bad thing. It is an inevitable consequence that because the State Department realises the responsibility of the Minister to Parliament, and has the instinct that it must try to keep its Minister out of trouble, we get caution, checking and counter-checking in a way that is not in accordance with commercial practice or with the speed of decision which is desirable in business undertakings.

Therefore, there is a series of economic or industrial or commercial concerns in which it is appropriate that they should be managed by public corporations rather than by State Departments. When we set up a public corporation what are we trying to do? We are trying to get the best of both worlds. After all, that is half the art of politics, of Parliament and of public administration. This House has often tried to get the best of both worlds, and it has often succeeded.

We are trying to do this: First, we have a public concern—a public authority—in which is invested the public ownership of certain economic undertakings, and there are channels of accountability, of Parliamentary argument and of discussion. Secondly, we try to graft on to that basis a commercial or business management capable of acting with speed, capable of rapid decisions, and a business concern which is in a situation whereby it can make mistakes from time to time without causing an immediate Parliamentary crisis or furore, or great criticism or embarrassment for the Minister.

Indeed, it is argued by the champions of private enterprise—and I understand these arguments—that in private enterprise mistakes can be made without all the consequences of political upset and trouble, whereas, it is argued, a State Department must not make mistakes, and, therefore, they are over cautious. That is the argument as I understand it. It follows as a consequence that, if we have a public corporation, in order to get the advantages of commercial management and in order to free it from other meticulous Parliamentary and political control, the House must take it that, in those circumstances, the details of Parliamentary questions and the details of Ministerial management, supervision and control have to be foregone.

I think that in some of our discussions the House has been tempted again to want the best of both worlds by preventing Ministers having a meticulous power of interference with these forms, and, at the same time, seeking to hold Ministers responsible and answerable for everything that happens within the sphere of the boards. Up to now, Parliamentary questions on these matters have been based on the doctrine enunciated in Erskine May. The doctrine is perfectly well known and perfectly simple. It is that a Minister is responsible to the House for anything that he has done, and he is responsible to the House for anything that he could have done but has not done.

That is the general basis of the eligibility of Parliamentary Questions, although there are many other rules about Parliamentary Questions which I am certainly not going into this afternoon. I think that, broadly speaking—there are instances and exceptions—a Minister cannot be held responsible for matters which he has not done or for matters which he could have done but has refrained from doing.

Mr. Pickthorn (Carlton)

The right hon. Gentleman means the other way round.

Mr. Morrison

I mean that he cannot be held responsible for matters which he had no power to do. I hope that is right. At any rate we understand each other. Let us hope that we get it resolved in print. That is the position. Consequently, in the examination of Parliamentary Questions and their acceptability that test must be applied within this sphere, as it is in regard to other spheres of Parliamentary Questions.

Therefore, the eligibility of the question depends upon the nature of the statute and the powers which the Minister has got, as to whether they are permissible or not. This sphere is pretty wide. It includes, for example, the appointment, salaries and conditions of service of board members; programmes of research and development; programmes of education and training, borrowing by the boards, which, I think, includes capital expenditure; the form of accounts and audits; annual reports; pensions schemes; compensation for displacement; and various matters concerned with the consumer councils.

So that is the very wide sphere in which there is, or can be, ministerial responsibility, and within which questions can be put. In addition, Sir, you gave a Ruling on 7th June, 1948, which, I think, I can shortly indicate a meaning that if some exceptional matters arise of very wide public interest, even though they are within the day to day management powers of the board, you would reserve the right to admit questions on such matters if, in your judgment, the public interest was of a sufficiently substantial character. I think that decision was welcomed by the House and loyally accepted by us on both sides.

If, of course, meticulous political interference were permitted, then we must face certain consequences. This argument which I will now put to the House applies to the proposition that there should be a Select Committee to whom boards should in some way be accountable or at any rate could be summoned and by whom they could be examined at such length as was thought appropriate. When in 1930 or 1931 I introduced the London Passenger Transport Bill, it was a milder version of public ownership than the one introduced by the Labour Government since 1945. That is very understandable. In the first place, we had to learn, and, in the second place, we had not a majority in 1930 or 1931.

The Bill went to a Select Committee of three Labour Members out of 10, and it was a most miraculous thing that it got through the Select Committee. But it did, and I owe a great debt of gratitude to the late Mr. Wilfred Greene for the brilliance of his advocacy in Committee. The powers of Ministers in the case of that Bill were much less than the powers of Ministers in relation to the public ownership Bills which we passed through the Parliament of 1945. As the Bill was finally amended by the National Government which followed the Labour defeat in 1931, they took out the power of the Minister to appoint the Board and substituted trustees.

It pointed to the doctrine that the last thing they wanted in London Passenger Transport was Ministerial and presumably Parliamentary interference. That was the idea, and that was why the Amendment was made. I remember certain observations which were made about the Bill. The complaint then was not the inadmissibility of Parliamentary questions and not the insufficiency of the degree of political control, but that the degree of political control was excessive and dangerous. Sir Philip Cunliffe-Lister, on the Second Reading of the Bill, called it a "tremendous Socialist experiment." He said that it was "all nonsense" to suggest that with the method of appointment proposed—that was the appointment by the Minister in the original Bill—the London Passenger Transport Board would be removed from politics.

The inference was that the Board ought to be removed from political interference and control. In the course of the Debate Colonel Ashley said that if the right hon. Gentleman—that was myself—was going to answer questions with respect to what the Board did, that meant that it was a Government Department. Someone else—whether in Parliament or on the London County Council, I forget which—counted up the number of times that the Minister of Transport was mentioned in that Bill. It was a fair number, and they were all shocked. The basis of the argument was that there ought not to be political interference. I did not accept it, and I do not accept it today. But it is curious that, as time has gone on—I am doing my best not to be controversial, because this is not a Debate in which we need be controversial—Parliament has tended to wish that the power of the Ministers should be increased rather than diminished. As a whole, we have reached a pretty good balance on the degree of interference by Ministers or by Parliament.

Suppose we accept the "whole-hog" doctrine that a Minister has to be answerable to Parliament for everything a board does, and that members of boards must be liable to be summoned before a Select Committee for annual examination at some length. The inevitable consequence follows that there will develop in the minds of the members of the boards, their officers and their commercial employees the same sort of spirit as in the Civil Service—that they will look over their shoulder and be exceedingly careful, because they may be pulled up by a Parliamentary question or by a Select Committee of the House of Commons. We shall have evolving within the management of these boards the same spirit that we have in the Civil Service, something that is quite good in its own sphere but that would not be good in the case of these boards.

Therefore, if the boards were functioning in a way that every action could be subjected to Parliamentary question, we should suffer in business efficiency. On the other hand, I do not want to go too far the other way. There is this other point to be considered, that if questions can be put down about anything connected with the business of these boards, the chances of Members having their questions reached by 3.30 will be materially lessened. That may be a somewhat selfish appeal, but it is, nevertheless, a real point for consideration.

There is, however, a wide sphere for questions. I do not think the House has yet fully exploited the possibilities in relation to these undertakings. I think that more could be done, and Members will, no doubt, become more ingenious as they gain experience in putting down questions. In addition, there are opportunities when the House can discuss these matters in greater detail and over a wider sphere than is possible in relation to Parliamentary questions. There can be, and there have been, debates on the Adjourn- ment on biggish and quite small things in relation to the work of these socialised industries.

The Government have also agreed to special days for debates on the work of the boards, and the Opposition have in some cases contributed a Supply day, or Supply days; and there can be Debates on the Address if that is desired. There are, therefore, wide opportunities for debating these affairs. I took the initiative in regard to the Government giving appropriate time to the House for discussion of the work of these very important undertakings. It is right that the House should discuss them from time to time, and it is good for the souls of members of these boards that they should know their work can be debated in the House from time to time.

There is one further consideration, that the wider public ownership becomes, the more important it is for Parliament to be able to discuss, criticise and make suggestions. In shaping the legislative programme as the years go on, account must be taken of the desirability that these facilities should be available. The Opposition will, no doubt, from time to time make a contribution with Supply days and by other means. Therefore, there is a considerable sphere for debates on the Adjournment, as well on these special days, on Supply Days and. possibly, on the Address.

One public corporation, at any rate, the British Transport Commission, apparently finds it almost inevitable that it has to promote a Private Bill every year, and just as the House used to have wide debates on the Second Readings of railway Bills, so it will have wide debates on Bills promoted by the Transport Commission. My right hon. Friend often has to deal with first-class debates on these occasions. That is another occasion for Parliament to use the opportunity to discuss these undertakings. If that public corporation needs to promote Bills, the same thing may presumably arise with other corporations. The House can also discuss regulations relating to the publicly-owned industries.

The Government have not only given three days this year for the discussion of these matters, but, if we count today's Debate and the Debate on the Colonial Development Corporation the other day, we find that we have had five days to discuss them. During the past 12 months there have been 18 debates on transport, counting the proceedings on the Transport Commission's Bill, on subjects ranging from the Annual Report and charges to particular aspects like non-smoking restaurant cars and passenger traffic in Dorset. The Government propose to allocate three days for this purpose next year, and additions can be made by other ways under the procedure of the House for further debates.

I come now to the suggestion, which has been made in more than one quarter, that a Select Committee or Select Committees should be set up to examine the publicly-owned industries from year to year and report to the House on their conduct. Members who have made this suggestion have realised that it would be necessary to provide the Select Committee with an official, who would presumably need a staff, so that the Committee could get adequate and competent advice, giving them the raw material on the basis of which appropriate questions could be put.

The suggestion has been made for the appointment of an official, something like the Comptroller and Auditor-General, but perhaps with special commercial and business experience, to advise the Committee in the same way as the Comptroller and Auditor-General advises the Estimates Committee and the Public Accounts Committee. That is an idea and a possibility, but we are rather against it for the reasons I have already indicated. It would take up a good deal of the time of the chairman and the other members of the board and their principal officers. It would take them away from their business, and it would tend to make them nervous throughout the year about appearing before the Select Committee.

While none of us here would mind appearing before a Select Committee—some of us have done it and stand up to it as best we can—because we have Parliamentary experience and skill, it is another matter for men drawn from the commercial community and used to running their businesses in a commercial way suddenly to find themselves sitting within a half-circle of Members of Parliament, all having their pet views and putting them through a certain amount of cross-examination. Generally speaking, the Committee would be fair-minded, but on occasions these people might find themselves in the middle of what appeared to be a party argument between the two sides of the Committee.

That would be a trying experience for these board members. If Members opposite who run big commercial undertakings—and those of them who do not run anything—were suddenly brought before a Select Committee and put through a third degree examination on their capitalist interests, they would not like it. They would not be anxious to do it. Of course, if it is to be done in the case of these industries there is something to be said for doing it in the case of private industry. I think it would not be the right thing to do. It would be worrying for the people concerned, and it would have the effect of diminishing initiative and enterprise in the running of these concerns so that those responsible would become over cautious. Therefore, we are disposed to think it would be unwise.

That is not to say there should not be periodical reviews of these great economic undertakings, which are of such great importance to the nation. We are disposed to think that we might here follow—and I have the agreement of the chairman of the boards to this course—the procedure which has been adopted in connection with the periodical inquiry into the British Broadcasting Corporation. They are inquiries by citizens who hear evidence from other people, pay visits, and make a report, which, in due course, is available to Parliament and the public.

In the case of the B.B.C. the principle of ten years was well established. It must not be too often. I think that something in the nature of a seven-year period would be about right for the public corporations. If they are held too often, there is the disadvantage that the men running them would get nervous and be looking over their shoulder. I think about seven years would be right. It would be right to include a limited number of Members of Parliament as was done in the case of the B.B.C. Inquiry. It would be a valuable element, and would give an association with the Parliamentary institution without the disadvantages of the Select Committee.

We have discussed this with the chairmen of the boards and they are agreeable in principle to this being done. I am happy to say there is agreement about it. The object would be to conduct an examination not so much of a technical character but broadly, and to make recommendations on policy and structure. This is really a move forward in the matter of public accountability of a character that would not interfere with the commercial efficiency of the boards.

Next is the problem of efficiency in management. One of the ideas of the Select Committee with the appropriate equivalent of a controller and auditor-general is that there might be an efficient audit conducted under the auspices of a Select Committee of Parliament. This problem of an instrument for obtaining efficiency is a very important one. One can imagine the gentlemen of these boards sitting round their table with reports coming in from time to time revealing that something is wrong, that in some particular part of the undertaking economy is not effective or that efficiency is not sufficiently high. They can ask for a further report from the departmental manager, and it will come, and they may be satisfied with it or not.

However, it is desirable and necessary that there should be at the disposal of the board people of a quasi-independent character, who could be used for the purpose of investigating particular problems of economy and efficiency in the management of the undertakings. There has been a contribution here by the part-time members of certain of the boards. For example, the Coal Board now includes as part-time members Mr. J. H. Hambro, Sir Geoffrey Heyworth, and Sir Godfrey Mitchell, all men of considerable business and commercial experience. I am sure that the addition of these gentlemen to the Coal Board as part-time members has been of help to the full-time members and to my right hon. Friend the Minister of Fuel and Power.

It is thought and accepted by the boards that from time to time outside consultants should be used. There is, of course, no exact science of management and the quality and character of industrial consultants varies. It is desirable to exercise discretion in making a choice, and moreover some are useful in some class of undertaking and not so useful in others. The boards assure us that they are anxious to increase the efficiency of management in their industries, and to this end all the national boards are using and will continue to use the help of outside consultants.

In addition, they are proposing to become members of the British Institute of Management. By so doing they can avail themselves of the services which the Institute can render in the improvement of management methods and can participate in this side of British management generally. The Minister of Supply tells me that the Iron and Steel Corporation also proposes to act in the same way by calling in outside consultants from time to time and also to join the Institute of Management. I recommend a similar course to a good many private industries; it would be an improvement and an extension of their enterprise.

Another element of public accountability is the operation of the consumers' councils and consumers' interests. [Interruption.] The right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) will have an opportunity of making a party speech later on. In the meantime, we might get on as peacefully as we can. It is profoundly important that the rights of the consumer should be affirmed, ventilated and upheld. With publicly-owned industries we have by statute set up an organisation to which the consumers can complain. There are the consumers' councils or similar organisations. I do not know of any case in private industry where that is so. [Laughter.] This is where the bias comes out. Private industry, including industries that are rings and trusts with which some hon. Members opposite are very familiar, are perfect and public industry is bound to be imperfect. [An HON. MEMBER: "Hear, hear."] That just shows what a collection of dogmatists and doctrinaires are sitting on the benches opposite.

This is a new development of British industry, and it is a proper development. It is right that the public should have somebody to whom complaint can be made, and if I have any criticism to make at all about the consumer it is that he or she is not loud enough in making his or her voice heard in relation not only to these undertakings but to all other undertakings both public and private. Anything we can do—[Interruption.] Is there any point in these interruptions taking place, as though we were at a general election meeting in Clapham? It is rather cheap when one is trying to make a serious contribution to this subject that these electoral interruptions should take place, which have no real significance on the question. It is profoundly necessary that the voice of the consumer should be heard and that somebody should raise it.

If consumers have some particular interest in these undertakings, which are highly organised, it is legitimate that their influence should be felt. It is curious that on the whole the voice of the consumer does not get adequately heard nor adequately expressed. It is not because the Government have not provided the machinery. In connection with these publicly-owned industries, we have for the first time provided, by statutory compulsion, for consumers' councils or similar bodies in relation to these industries—with the exception of the Railway Rates Tribunal for the various railways before the war, but that was hardly a consumers' council—

Mr. Peter Thorneycroft (Monmouth)

Would the right hon. Gentleman consult his right hon. Friend the Minister of Transport, who will no doubt inform him that, apart from London, there is no consumers' council set up at all in that industry, from South to North or from East to West, anywhere?

Mr. Morrison

My right hon. Friend says that it is in process of formation. Anyway, it is typical of the hon. Member for Monmouth (Mr. P. Thorneycroft), and is just the sort of point I would expect him to make. [HON. MEMBERS: "Oh!"] Yes. What the hon. Member said is true, but it will not be true in a short time. That does not in any way upset the principle I have established that, in the case of these industries, we have provided for such bodies by statute, and that is not the general run in the case of private industry.

It is therefore important that the consumer should use them. I agree that it is equally important in a board to accept them, and to recognise that the board shall encourage the public to use the appropriate machinery for ventilating grievances. Obviously, it is best for the consumer who has difficulties to take them up in the first instance with the local office or showroom, as the case may be. It is up to the boards to put things right on receiving complaints, if they are satisfied that there is something to put right. The consumers' councils are there, and the public can appeal to them.

Mr. Profumo (Stratford)

It is not true.

Mr. Morrison

The hon. Gentleman is interested only in transport. I am interested in rather wider things. He is interested only in the things that his party permits him to talk about from time to time. He is hanging on to his point, but the House understands that it is a typical bit of his style of Parliamentary controversy. The consumers are provided for and the bodies are there, or they will quickly be there. They are available to the public for these purposes.

I am anxious also that local authorities shall take an interest in these matters. There is nothing to prevent local authorities from making representations, complaints and criticisms. There is no finality yet, and we shall keep learning. No doubt improvements can be evolved from time to time. It is of the most profound importance that the voice of the consumer should be increasingly heard in these matters and should be taken note of, and heard not only in these publicly-owned industries but in private capitalist industries too. The House can be sure that in due course His Majesty's Government will take care of that as well. [HON. MEMBERS: "Ah!"] After all, I am being encouraged and urged along this path, so I hope there will be no complaint if, in due course, these things occur.

The other point which has been provided for in the statutes, for the first time I think, is that the boards are required to have machinery for joint consultation with workpeople employed in the undertakings. It would be fair to say that considerable developments and improvements in this matter have taken place, whereby there is discussion of conditions of employment outside those normally negotiated with the trade unions, promotion and encouragement of improvements affecting the welfare of employees, and discussion of matters of common interest, including efficiency of operation. In the case of the National Coal Board the last annual report tells us what the position is in that instance, The Coal Board Report says, on pages 89–92: There is a national consultative council, consultative council in each division, and councils in most areas. Nearly every colliery has its own consultative committee. The National Consultative Committee and its three sub-committees … met 15 times in 1949. They discussed almost every aspect of the industry's operations, and played an important part in the drive for increased production. … They considered coal exports, loss of output through strikes, juvenile recruitment, procedure for consultation about closing uneconomic pits, the Board's 'scientific control' organisation, absenteeism, housing,"— and so on, right down the line. This is an encouraging development of partnership between the workpeople in industry and the management. Let me say, in fairness, that there are quite a number of private concerns who are exceedingly progressive in the matter of joint consultation and have taught us a good deal. I want to be quite fair on this side as I expect hon. Members opposite to be fair on that.

We are really only at the beginning of this era of industrial democracy, whether in public or in private industry. This is one of the important new chapters of democracy, this element of industrial democracy and I will say one or two things about it. It is important—I think this is accepted by the boards—that if workpeople make suggestions on the consultative councils between managements and labour, it is not good enough for the management side to forget them, or to take no further action on them, or to say "No." It is important that the suggestion which has been made should be fairly examined. If it is not adopted, or even if it is adopted, a report should go to the next meeting. If it is not going to be adopted, reasons should be given. Otherwise, the democratic spirit will be frustrated, which would not be a good thing.

The other point is that it is desirable that both managements and trade unions should be as helpful as possible to workers wishing to improve their knowledge, their quality and their ability. It is important that trade unions should take a part in this matter, as, indeed, they are increasingly doing. Unless the workman has a sense of responsibility—as managements should have upon their side—and unless he tries to educate himself as far as possible on a basis of equality with the managerial side, the business will fail. There will be a sense of frustration on the workmen's side. Consequently, there needs to be education of the workers' representatives, and of managements as well. The proper working of this machinery very largely depends upon the ability of the managerial side to work it in a good spirit. That is equally true of the trade union side.

I would like now to say a word about public relations, in which it is profoundly important that the boards should do a good job. We often discuss public relations in this House. I am afraid that the term "public relations," like other phrases that are not objectionable in themselves, has become a subject of some controversy, though it is not a bad term. It is often thought that public relations consist of newspaper advertising, bill posting, Press conferences and newspaper hand-outs. These are all part of the mechanism of public relations and publicity, and are important. The annual reports of the boards are in a way a form of public relations. Indeed, these annual reports are much fuller than has been customary in the sphere of industry, fuller than the chairmen's reports which are given at the annual shareholders' meetings.

Moreover, apart from the full annual reports presented to Parliament, the boards have published popular versions and some of them special versions, which they circulate extensively among the employees of the undertaking, and that is all to the good. They have manifested considerable enterprise in the sphere of public relations, but there is something in this sphere wider than the ordinary devices of commercial publicity, and that is the personal relationship between the board and the people with whom the board deals.

I remember that when the Labour Party won the London County Council one of the things which I said to the Council's messengers—those nice chaps in uniform whom we meet at County Hall was "Do remember that when anybody comes to County Hall you will be the first people they will see. You are the Council as far as they are concerned. If you make a good impression they will think that the Council is good and if you make a bad impression they will think that the Council is a bad lot." There is a great deal of truth in that as regards the personal relationships of the public with the people who call to read the gas and electricity meters, the people at the gas and electricity showrooms, and so on. It is most important that the staff should be courteous, considerate, completely lacking in any bureaucratic tendency at all times and even willing to suffer fools gladly, because they will have to do it—and, after all, we all have to do it somewhere or other sooner or later.

Perhaps one of the greatest tests of a public official, an official in a private company or an officer in one of these undertakings is whether when he encounters someone who is very annoyed, he can keep his temper; and it may be that the other will go away sweet. When I was a grocer I had an employer who taught me something about public relations. I will not say with what result, because I am not going to finish the story. [HON. MEMBERS: "Do."] No, I have my reasons. There was a lady who used to buy coffee every week. One afternoon she came in and looked at me very hard. "Young man," she said. "I said 'coffee.'" I said, "Yes, Madam. I have sold you coffee." She said, "You are a liar. You have not. It is not coffee. It is coffee and chicory." I said, "I assure you that it is pure coffee." She said, "Do not talk to me. I know that it is coffee and chicory. Do not do it again." I said, "Very well, Madam." I knew that the customer was always right. The next week I sold the lady pure coffee again, and she came in with precisely the same complaint. The week after that I again sold her pure coffee and again she came in with the same complaint. The boss said, "Herbert, there is only one thing to do. If you give her coffee and chicory she will be happy." [Laughter.] Well, that is what he said.

All this is part of the business of public relations and of the customer being right, and I put the point that these wider considerations are just as important as, if not more important than, commercial advertising, and so on. The staff itself must be taught to have good relations with the undertaking. If the staff is happy, that will improve the efficiency of the undertaking enormously; if the staff is unhappy and frustrated, that will damage the efficiency of the undertaking. We want them to be proud of the under- taking. I remember the late Mr. Emil Davies, father of the present Under-Secretary of State for Foreign Affairs, telling a story about the London County Council Parks Department. The park keepers were told to be proud of working for the London County Council, the greatest municipality in the world, and they were told that the Council's parks belonged to the people of London. One day in one of the parks an old lady said to a keeper, "Tell me, does that flower belong to the primula family?" The keeper drew himself upright and said "No, Madam. It belongs to the London County Council." That is civic pride. That fellow was an asset to the Council, though I admit he ought to have said that it belonged to the citizens of London. There it is. Therefore, let these wider considerations of public relations be taken into account.

I think I have dealt with the various phases of the matter and fairly well covered the ground. I repeat that I have been provoked into a few observations which would not be acceptable in all political quarters. I really was breaking my neck to behave myself this afternoon. I hope I have not gone very far off the line of non-party considerations because, after all, this is a question of what is the best organisation and what is the best way in which the boards should be run and we have all a responsibility, whether we are Tories, Labour or Liberals, to make our contribution to the discussion of these affairs.

I hope that in the matters with which I have dealt and other matters, for example, the structure of the boards and their organisation, we shall keep our minds open and be ready to be adaptable. I can assure the House on behalf of the Government and the boards that that is the case as far as we are concerned. I trust that the House will have a valuable Debate and that it will be the first of a number of Debates from time to time in which we shall review the organisation and work of these great and powerful bodies.

4.37 p.m.

Mr. R. A. Butler (Saffron Walden)

It is somewhat difficult to define "controversy" and somewhat difficult to go into detailed questions concerning the running of the nationalised industries after the speech of the right hon. Gentleman the Lord President of the Council. We have been aided by some ideas—forerunners of his final biography, to which I shall look forward, and I hope that he will vie with my right hon. Friend the Member for Woodford (Mr. Churchill) in bringing out a variety of volumes of his reminiscences. At any rate, we have started well this afternoon. We have learnt what "consumer choice" means, and we have understood that the right hon. Gentleman, in his capacity as the greatest public relations officer that the Labour movement has ever put forward, has been selling us coffee and chicory instead of real coffee for many years. So the Debate has already had some psychological value, even if after an hour's Debate and more we are little wiser about the public corporations than when the right hon. Gentleman rose.

I was saying that I found it extremely difficult, after the right hon. Gentleman's remarks, including his extraordinary quip as to why some hon. Members on this side of the House were not running anything, to know what "controversy" is. Are there not hon. Members on the other side of the House who are associated with capitalist undertakings and some who run nothing, and is it not perfectly honourable for an hon. Member to attend to his duty and try to run something outside as well?

Let us leave aside these quips and details because I must confess that I have come to the Debate in a mood of making certain criticisms and suggestions, as is suggested by the Motion on the Order Paper, which, first of all, asks us to take note of certain developments, which we do not think have come about as quickly as they should have, and, second, to: … welcome any further measures to increase their public accountability, consistently with the duty of the Boards to manage the industries with the maximum efficiency in the public industry. On the understanding that we accept the Motion in that spirit with a view to making criticisms and suggestions, I can say to the right hon. Gentleman that we shall hope to have a Debate in which we shall put forward the maximum number of constructive ideas and of critical suggestions.

I want to make it quite clear that we do not regard this Debate as a beanfeast for the right hon. Gentleman, out of the material of which he can make up the next Labour Party programme. He said that the Debate had been instituted by a group of hon. Members on his side of the House who were interested in the nationalised industries. In view of the form of propaganda hitherto put out by Transport House, I think it is important for me at the outset—whatever I may say later about the operation of these Boards—that we accept absolutely no responsibility for having set up the public corporations for coal, transport, electricity and gas far too rapidly and without adequate preparation.

I want to make it absolutely clear, also, that the Opposition have stated frequently that a halt must be called to the whole nationalisation programme, that we propose at the earliest possible date to repeal the nationalisation of steel and to restore the Liverpool Cotton Exchange, and to restore progressively a measure of freedom to road transport. I am making that absolutely clear because, otherwise, in view of the right hon. Gentleman's amiable frame of mind—at any rate during the concluding part of his remarks—some of our attitude might well be misunderstood. [An HON. MEMBER: "What about coal?"] I have plenty of time to make some constructive suggestions about coal.

Mr. John Hynd (Sheffield, Attercliffe)

That will be a pleasant change.

Mr. Butler

The hon. Gentleman has no need to be offensive. It will not be the first time I shall have been constructive in this House. If we are to proceed in a reasonable spirit we must be allowed to make our own speeches in our own way.

The right hon. Gentleman the Minister of Defence said in Edinburgh on 2nd May, 1948, that the whole of the Government's nationalisation schemes had been prepared with far too little detailed preparation. He said: We found ourselves with legislation that had to be completed without the necessary blue prints on which we could have proceeded much more expeditiously in the right direction. He further said: When the mining industry was nationalised … this had been on the Labour Party programme for 50 years. We thought we knew all about it. The fact of the matter was, we did not. He also went on to say: Now that the administration is being run by a public board, still more difficulties are being exposed. And he concluded by saying: We must be extremely careful that these difficulties do not ultimately succeed in destroying the whole conception, making it impossible to proceed further in the direction of nationalisation. Those are hard words. They represent the absolute truth about the entire preparation of the nationalisation schemes up to date. The final words of the right hon. Gentleman also make quite clear the difficulties in which the Government stand at the present time. He said that they might make it impossible to proceed further in the direction of nationalisation. All I can say is that if a better account cannot be given of nationalisation than has been given hitherto, it will be impossible even for this Government to be elected again if they go forward with a policy of nationalisation.

Bearing out what the Minister of Defence said, I have a reference here to the address given by Sir Arthur Street to the Institute of Public Administration, in 1947, in which he said, in a more picturesque way, exactly what the Minister of Defence had said, namely, that they had to make honey before properly building their hive. That has been the weakness of all these nationalisation schemes. We, on our side, are convinced that as we are likely before long to be entrusted with the Government of the country we have been right, as I propose to indicate in my remarks, to go into these matters perhaps a little more carefully and with a little more leisure than has been vouchsafed to right hon. and hon. Members opposite. The more we have examined these schemes, the less we have liked them and the more definite we think is the necessity, in view of the economic situation of the country, that we should not shirk the existence of vital problems but make some vital changes in the administration of these monopolies.

I therefore propose to devote my remarks to three main aspects which cover all the points that have been raised by the right hon. Gentleman. The first aspect concerns questions of size and decentralisation of control. The second point I want to deal with is what the right hon. Gentleman referred to at some length and with considerable experience, the question of accountability to the public through Parliament and the position of the consumer councils. In the third place I want to deal, perhaps not at quite such length but with sincerity, with questions involving the well-being of workers in the nationalised industries.

When we look back on the history of these various schemes as they have been introduced, we see a gradual but definite trend from a centralised to a looser structure. We see at the same time a most regrettable tendency—which is to be seen in private industry but is even more marked in publicly-owned industry because it has been deliberately created—the great danger of size with all the inhumanity and inefficiency that size brings in the administration of any single undertaking. This is an evil of private enterprise in some cases, and those responsible are attempting to mitigate it, but there has been no such case of amalgamation in the private sector as the deliberate amalgamation of the four railway systems when, before that took place, it was well known that one of them was of a size which was much more efficient than all the four put together.

This tendency to go away from decentralisation started after the passing of the Coal Industry Nationalisation Act, which was concerned only with vesting the entire coal industry in a single Board, with no proper statutory provision for decentralisation. The Transport Act, did provide for a division of functions between executives concerned with different forms of transport, and the Electricity and Gas Acts did place emphasis rather more on the appointment of area boards. The Iron and Steel Act goes even further and leaves companies and operating units subject to what may be described as the operation of a holding company.

Then we go even further—if we read the T.U.C. Report on the public control of industry, to which the right hon. Gentleman referred—to a statement included in the Report as follows: It is certain that there is still a great deal to be done to improve the structure and operation of the publicly-owned industries, and common sense indicates that at the present time the efforts should be concentrated on making such improvements. This tendency, therefore, has gone right through, and the point I want to put now has the blessing of the T.U.C. itself, namely, that it is a duty of the Government at the present time to make some definite improvements in the administration of these public boards.

I take up here the points mentioned as concessions to public opinion by the Lord President of the Council. The first related to the suggestion that these industries should be reviewed every seven years, rather in the same way as a review of the B.B.C. is taking place now. In so far as that is a concession made in the spirit that the right hon. Gentleman is not satisfied with how things are going, we welcome it. However, I want to say quite firmly that it in no way represents the needs of the moment. There are reforms which must be made immediately in the structure of the nationalised boards, particularly coal and transport, if we are to have efficiency and if we are to save the national economy. If the Government or the right hon. Gentleman think that by waiting for a seven year period, until an inquiry takes place they are doing the right and constitutional thing about these boards, they are gravely mistaken and should turn their minds at once to substantial amendments of the structure of these corporations.

Mr. Morrison

I said nothing whatever to justify that observation. The suggestion is that the Government have invented this in order to avoid doing things that need to be done. This will not avoid things being done at all. The right hon. Gentleman should not make that observation, because I made no such suggestion in my speech.

Mr. Butler

The right hon. Gentleman, as we observe, and as he drew to the attention of the "Manchester Guardian" correspondent in the opening part of his speech, is very touchy this afternoon. He is concealing, under his touchiness, mingled occasionally with a little sly humour, the fact that he has not very much to say. If I may say so, it is an extremely good thing to answer back the right hon. Gentleman, who answers people back quite enough himself.

I made it quite clear that I accepted the spirit in which the right hon. Gentleman put forward this suggestion. But this suggestion is of no value, either to the economy of the country or to the efficiency of the corporations or public boards, or whatever we call them, unless the Government set about making certain concrete alterations in the structure of these boards at the earliest possible moment. Whatever the right hon. Gentleman says, I propose to stick to my point and I have no desire to misrepresent his.

The Lord President made other concessions to opinion: that these boards would call in consultants and that they would join, in the case of the Steel Corporation, the British Institute of Management. In so far as those steps will be effective we welcome them, but it seems to me that unless these fundamental alterations in structure are made, any number of new consultants called in will not solve the economic problem of these industries. In the case of attachment to the British Institute of Management, that is in itself very valuable because it is a natural focus of opinion and collects together, as we all know who have been associated with it, all the latest information. Any contact with a body of that sort, however, cannot be a substitute for really efficient management in the concern itself, and that is what we are really concerned with today.

In view of this need for some fundamental alteration in the structure of the corporations, we have been particularly disappointed by the trivial Coal Industry Act of 1949. The only legislative amendment of the structure of the coal industry included in that Act was to raise the membership of the National Coal Board from nine to 12 members. That does not deal with the fundamentals of the situation. We believe that the structures of both the coal and the transport industries are open to fundamental objection and we believe, as stated in a document which has the authority of my hon. and gallant Friend the Member for Fylde, South (Colonel Lancaster), that certain radical alterations are necessary in the whole structure of the coal industry.

We consider, in short, that some 20 to 30 autonomous area boards should be set up in which full executive control would vest with their general managers, that the divisional boards should be abolished and that the functions of the National Coal Board at the centre should be confined in scope to the questions of the raising of capital, major financial and development plans, such questions as national wage negotiation, co-ordination of selling prices, and such common services as research. What we are aiming at is not a functional structure of the board, either in coal or in transport, under which a sort of skewer order goes right through from the top to the bottom. We are aiming at a policy board at the top, with autonomous, or virtually autonomous, units, subject to the general considerations I have just enunciated about the structure of the central board.

Our conception, therefore, is of autonomy in day-to-day running and a chance of measuring standards as between one area and another—it is difficult to measure prices, in view of what I have said about the price considerations which have to be taken into account by the central board—but that general guidance should be given from the centre and autonomy be established in the units. We believe that in this way we should get better technical results and would restore to managements that sort of independence which they must have if this industry is to be run efficiently.

In the case of the transport services we take a rather more drastic view. Let us examine what a national transport service should exist, or does exist, for. It must make available, first, the cheapest and most efficient form of service. It must encourage new forms of transport so that the maximum contribution is made to the economic life of the country. It should protect the principle of consumer choice and, in these difficult times and always, strategic interests must be safeguarded. We consider that the transport monopoly which have been set up by the Government is ill-calculated to further either of the first two of these objectives—that is, a cheap and efficient service, and the encouragement of new forms of transport—and that the last two aims are not achieved because we do not have alternative choice in transport and we do not get alternative choice for strategic reasons. That being so, we consider that it is time to end public monopoly of transport and to reorganise the whole industry in a different way.

In the course of our Debates on the nationalisation Measure, only the most minor concessions were made to the point of view expressed by us and others; namely, there was a concession to C licence holders—and we regard it as essential that their independence shall be maintained. Meanwhile, however, we notice hanging over local buses and trams the threat of further nationalisation. We shall remove this threat. We notice, also, that A and B licence holders are being driven out of business because of the small mileage area which they are allowed to cover and that they are, therefore, forced statutorily to be unable to meet the demands of their clients. They have now to go to their own competitors, the Road Haulage Executive, for permits to go outside the 25 miles radius. We are getting endless pleas from them that the Executive often refuse their requests and then do the job themselves at something like a 20 per cent. higher cost. We do not regard that as being in the public interest; we regard it as an abuse of the present nationalisation system.

There is a distinct inhumanity in the way that these little road services are now being administered by the board. There is in my district a village area, not very far from a town, from which I have recently received a representation, which is all the more serious and piquant because it comes from the local Labour Party, complaining that the services of the private carrier are being done away with and that something inhuman and. as they regard it, inefficient is being put in its place. This is the plea I get, which shows the need for greater humanity in administering the services of these boards, especially on the road transport side. This is how it reads: There has grown up a very close and intimate relationship between the proprietor and his customers, with the result that he regularly carries out services which one could not expect in normal circumstances, such as doing the family shopping, getting the N.H.I. prescription made up and other personal services of that sort. This local Labour Party then urge me to do all in my power to ensure a closer examination of this particular case, and the continuance of this private proprietor's services. That is typical of the human reaction which we are getting, irrespective of politics, from people who see an inhuman machine being imposed upon their village life; and this must be happening all over England.

As I have said, in approaching the problems of road transport, we think that a drastic alteration in the constitution of this monopoly must be made so as effectively to break it up. In its place we have suggested, for example, that the British Railways should be reorganised into an appropriate number of regional railway systems, each with its own pride of identity and co-ordinated as to broad policy alone by a central body. That, therefore, follows for the railways the same sort of approach that we have made in regard to the coal industry. That is to say, that there should be a central board for guidance, and autonomy, with all that that means in efficiency of management and independence of character, in the regions.

In the case of road transport I cannot go into great detail. As I have said, it is our view that this should be progressively restored to private enterprise. We do not underestimate the difficulties of such a course. Things are bound to be difficult in view of the great scrambling that has been done, but we have announced in our own policy statements that we propose to try to restore to free enterprise those sections of the road haulage industry which have been nationalised. New entrants will have to prove that business is available and that it cannot be as cheaply and as effectively handled by existing carriers of goods, whether by road or rail. The limitation of distance on private road hauliers should be progressively eliminated.

We believe that we can proceed towards these lines and perhaps even make a little progress on the very difficult subject which some of us thought was one argument in favour of nationalisation, namely, the question of co-ordinating road and rail fares. I should like to ask the Government, as this is a vital feature of the whole nationalisation project, what progress has been made with the charges scheme and whether this is not a matter of fiscal policy which might well be the concern of the Minister rather than the concern of the Transport Commission. At any rate, it is high time the public had some news as to why there has not been further progress made with this vital matter.

Mr. Monslow (Barrow-in-Furness)

How are we to have a policy of coordination which is economically sound if we take the road section out?

Mr. Butler

We have already worked out schemes whereby we could probably make more progress than has been made by the Government in bringing the relationship of road and rail closer in dealing with this question of charges. If the hon. Member asks that, I would like to ask why his Government has not tackled the question of co-ordination of road and rail charges, which we always thought was a feature of nationalisation?

Mr. A. Edward Davies (Stoke-on-Trent, North)

I presume that the right hon. Gentleman is not overlooking the promise of the Minister of Transport, last week, that before August of next year, by which date a charges scheme should be worked out, we shall be hearing something, as against the much longer period when the railways were taken over into the four main line companies.

Mr. Butler

This matter has been before the public a very long time, the Government have been in power for more than five years and transport has been nationalised a considerable time, but we are still waiting news of this vital matter, which is of first-class importance for road and rail.

I have described the difficulty of having a purely functional board and I need not go into that in any more detail in regard to the railways or to coal but, I want to deal for a moment with the question of the monopoly characteristics of the public boards. Perhaps this is the most serious aspect, from the point of view of the liberty of the individual, that the Government, who in their statements so often oppose monopoly in one form or another, should, in the constitutions of these boards have set up absolute monopolies.

We consider that the extraneous activities of these boards should be hived off. We do not think the public boards should be, like the White Knight in "Alice," cluttered with assets of one sort and another. We do not see why the Coal Board should run farms and dairy rounds and why the railways should run hotels. We believe these activities should be hived off, to the great advantage of the public boards themselves. We also think that competition which takes place between these public boards and private industries or shops, particularly, for example, in the electricity industry where a big board, subsidised out of public funds, undercuts a small proprietor in electrical undertakings, is extremely unfair.

We consider that the whole activities of the public boards should be submitted to the Monopolies Commission just as much as private industry is subjected to the activities of the Commission. If the right hon. Gentleman says that the Government are now planning a scheme whereby a consumer council can be attached to private industry, I would only tell him that if the consumer councils were effective in the nationalised industries his remarks would have a great deal more meaning. We think that if the Monopolies Commission are to range over private industry they should have the right to range over the scope of the public boards as well.

There is not only the danger of monopoly but, to use a word of the economists, there is a danger of what they describe as monopsony, namely, the sole right to buy. One of the dangers of the public corporations at present, again in the electricity industry, is that standardisation, for example, of electricity plant through a monopoly in buying may drive other firms manufacturing a variety of ranges of electrical goods out of the market. This lack of variety on the part of the buyer is one of the weaknesses of the whole public monopoly system.

We believe that one of the problems of the public boards today is that they have no external standard by which to judge their activities and efficiency cannot come unless there is some competitive standard against which efficiency can be judged. We do not agree with the Secretary of State for the Colonies, who said at Margate: Socialists know that the final and only fully effective way of controlling surpluses is by public ownership. We do not believe that the records of the publicly-owned industries indicate that there are surpluses but, in fact, that they disappear. The respective cumulative deficits of the airways and transport will come to more than £40 million by the end of 1950. Indeed, unless we can bring back into the public sector some competitive spirit the economy of the country will be in a very bad way. When we reflect on the difficulty the coal industry is having in competing with the foreigner at present we see the need for a drastic reduction in costs which can only be done by the efficiency which is brought by some sort of competitive standard between one undertaking and another.

I will not detain the House with a long series of remarks about our proposals for devolution in the case of Scotland but it is our view that there must be devolution of public boards in regard to their application to Scottish questions.

I want to deal with what the right hon. Gentleman said about the accountability to the public through Parliament and to say a word about the consumer councils. The right hon. Gentleman referred to your enlarged Ruling of 7th June, 1948, Mr. Speaker, when you said that Questions affecting public importance would be passed by the Chair. We accept that Ruling naturally, in the spirit in which it was given. Public importance is one of the tests for Motions on the Adjournment under Standing Order No. 8 and, if this principle is incorporated in the way we understand, we shall certainly wish to take full advantage of this opening to discuss matters affecting the corporations. As an ordinary parliamentarian, I am certainly of the view that the simple method of asking Questions is far more effective than that of setting up committees outside this House itself, whether a Select Committee or any other.

The present Under Secretary of State for Foreign Affairs had a thoughtful article on these matters in the "Political Quarterly" when he made a case that it was the avoidance of the use of their directional powers, particularly under the Coal Industry Nationalisation Act, that enabled Ministers to escape Parliamentary responsibility. If I understand his case aright, he would seem to say that a rigid use of directional powers is the only way to ensure Parliamentary responsibility, but that cannot be the best way. In fact, we welcome the cordial relations which should be, or have been, set up between Ministers and these corporations and any personal method they adopt in making contact with the corporation for which they are responsible for control. But I do not think that a restoration of the rigid direction giving power should be the basis of Parliamentary Questions.

Let me examine what we could do to improve accountability by the use of any of the Committees of this House. I think probably something could be done almost immediately with the Public Accounts Committee. We said in our "Industrial Charter," which deals with these and other matters, that: Accounts must be subject to audit by the Comptroller and Auditor-General so that the Public Accounts Committee of the House of Commons can investigate and report upon the efficiency of the undertakings as it does upon Government Departments. I think that may be rather difficult to carry out and we have since read in the Reports of the Public Accounts Committee for 1948 and 1949, on page 407, that a proposal has been made that these corporations should employ their own auditors. In that way the reports of those auditors could be laid before the Public Accounts Committee. That seems to me a preferable method and I hope some progress along those lines can be made because it would be extremely valuable if the general reports, before they come to Parliament could be screened and pointed so that hon. Members could pick up the main issues and discuss them in Parliament.

I notice that a suggestion was put forward in another place that an advisory council should be established, and the right hon. Gentleman has referred to the possible appointment of a Select Committee. On this, I agree with him; I do not feel that a case has yet been made for the appointment of a Select Committee, and that we require further experience of the operation of these boards before we adapt our Parliamentary procedure to that extent.

I wish to make the point which is vital to our case, that a further decentralisation within the structure of the boards will mean a less immediate urgency for Parliamentary control because with a restoration of the autonomy of area boards and encouragement for those boards to be run on a commercial basis what the right hon. Gentleman himself said about the inadvisability of daily Parliamentary interference would be valid. We accept his point of view on that.

The question of the consumer councils raises a very big question. Our objections to this are first, as my hon. Friend the Member for Monmouth (Mr. P. Thorneycroft) has said, that in the field of transport they have not been properly established; and where they have been established they do not yet seem to have acquired sufficient reputation for independence or for being effective. They have produced reports which are of an unconscious banality. For example, one which I have read about the dust which comes with coal reads as follows: We realise that the presence of dust due to the exceeding friable nature of most domestic coals, is often a source of trouble to consumers who find the dust inconvenient to burn even though it may be of a high quality. We recognise, however, that having regard to the scarcity of coal the removal of more of the dust by merchants would reduce total deliveries to householders and be liable to cause some to be without coal from time to time. That is from the Domestic Council Annual Report for the year ended 30th June, 1949. That sort of banality is at present associated with the consumer councils, and if these are to be successful then not only must it be acknowledged that valuable public service is done by some thousands of people but this work must be rendered effective.

In so far as advisory consumer councils are to serve a useful purpose their existence must first be known to the public, which is not at present the case. They must have local associations so that they really represent localities. They must be readily accessible. In their methods of appointment they must be independent of the nationalised boards. They must be representative and must be manned without too much difficulty.

One further suggestion I have to make is that it might be desirable that they should be connected with some organ of local government. For example, it may well be decided that the local town hall should establish some connection with a consumer council so that the citizens of the borough or districts concerned would know where to go to get into contact with the consumer council.

I conclude by a reference to what the right hon. Gentleman said about the need for improved labour relations in the public corporations. It may be due to the lack of time that these boards have been functioning, but it is absolutely clear that the labour relations within the nationalised industries are less satisfactory at present than those within private enterprise. [HON. MEMBERS: "Nonsense."] If hon. Gentlemen do not agree with me I can give them statistics indicating the nature of industrial disputes which have taken place within the sector of public industry. I need only refer to the recent dislocation of the gas supply to many consumers by a strike, and ask whether the gas industry is more happy than was the case under the profit sharing schemes and the excellent relations with the former employers, which have been destroyed by nationalisation.

The position within the national boards must be that the best pattern of what the right hon. Gentleman described as industrial democracy must be introduced. In certain cases progress has been made, but it is undoubtedly the fact that labour relations have not yet been established within the public sector on as satisfactory a footing as they should be either in view of the intending further steps of mechanisation or in view of the need for the spirit which we ourselves have advocated in our own espousing of the cause of industrial democracy. I do not believe that the omission of the Aeronautical Engineers Association from the National Joint Council for Civil Air Transport is encouraging the best sort of relations in the civil air industry. In the field of labour relations there is a great deal of leeway to be made up. I say seriously to the Government that particularly in the coal industry they must watch this side of the work if we are to compete effectively in foreign markets, and if we are to reorganise the coal industry in this country.

This is a Debate on fundamental questions, and in such a Debate it is impossible for us, when our convictions against the whole principle of nationalisation are so clearly known and have been so clearly expressed, not to express them again. But we do so, and I have done so, with sincerity. I pass over the asperities or the humour of the right hon. Gentleman opposite, and ally myself with him in saying that I hope that the Debate will reveal, as I have tried to reveal, what is the attitude of individual Members on both sides of the House on these matters.

I have attempted to put forward some constructive alternative proposals in connection with the re-organisation of the Coal Board and the national transport monopoly. I have not time to go into further details, but those are the lines on which the minds of those of us on this side of the House are at present working. We are only at the beginning of what must be a fundamental reconstruction of a piece of work which was carried out too rapidly and with too little thought. The whole question of how our industry is to be organised in the future is still uncertain.

We on this side of the House remain convinced that the private enterprise structure, humanely run, and the motive force of the urge of efficiency, competition and consumer choice is the most efficient way to maintain our productivity in this country. But if we are to open our minds to new ideas, as we should, and as any one reading the T.U.C. report must do, in view of its very reasonable approach, I would say that any future attempts to work private enterprise in the national interest should be based on schemes made by the industries themselves. That is to say, do not let us have a blind development council or any other method, but let the industry itself put forward ideas for associating experts, workers or others with its conduct of affairs. I notice that the wool industry has taken a notable initiative in this direction recently. Our main aim is that industry, whether controlled or free, should adopt a code of behaviour which removes the sting from selfishness and yet retains the urge which enterprise alone can give.

5.18 p.m.

Mr. Ronald Williams (Wigan)

The right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler) will perhaps forgive me if I do not follow him in all the points and arguments he put. In regard to most of what he said. I feel that I can leave him to the tender mercies of my right hon. Friend the Minister of Fuel and Power, but I cannot allow to pass without question one or two observations which he made concerning the structure of the National Coal Board.

If I followed the right hon. Gentleman correctly, I understood him to indicate that the structure of the Coal Board would be altered in the regrettable event of the right hon. Gentleman's party coming into power in this country. I can only say, in relation to the particular forms of alteration to which he referred in his speech—the establishment of autonomous areas and the creation of competition in and between the areas—that that must clearly result in the national agree- ments which have been entered into between the National Union of Mineworkers and the National Coal Board being jeopardised and prejudiced.

I am convinced that there are many of those agreements which would be ineffective except on the basis of national negotiation, and if the right hon. Gentleman thinks that he is going to carry out these proposals in the event of his party coming to power I can only say he will do it in the teeth of the resistance of the mine workers of this country. If his object is to improve labour relations I tell him quite frankly that I cannot imagine anything likely more to bedevil labour relations in this country than for him to interfere and intermeddle with the affairs of the coal industry, where labour relations are better and sweeter now than they ever were in the history of the industry.

Mr. Osborne (Louth)

Nonsense!

Mr. Butler

Does the hon. Gentleman imply that I wish to dispute the wisdom of having any method of wage negotiation on a national basis? I deliberately said that we intended to leave that as a central matter.

Mr. R. Williams

The right hon. Gentleman must forgive me if I do not enter into his motives. I will not take up with him whether or not I am of opinion that he wishes to do something. Notwithstanding the provisos or safeguards which he suggests should be used—and I am speaking with a not very short and a quite intensive experience of this industry—the inevitable result of what he proposes would be to jeopardise national agreements.

I am saying that one of the inevitable results of what he proposes would be to create a very serious state of bad labour relations in the coal industry. Even the ingenuity of the right hon. Gentleman could not now make the relationships as bad as they were when the industry was taken over. That would be impossible even so far as the Opposition are concerned. But I am satisfied that the relationships which obtain today would be seriously jeopardised and prejudiced, and I beg hon. Members to resist to the utmost the attempt of the right hon. Gentleman to pursue that argument. I am convinced that if his sugges- tions as to the alteration of the structure of the National Coal Board were put into effect it would lead to national disaster. I put it as firmly as that.

I am very interested indeed to learn that the proposals which were put forward by another hon. Member on the other side of the House have at last reached his own Front Bench without amendment. When the same proposals which fell from the lips of the right hon. Gentleman the Member for Saffron Walden were originally put forward I remember holding up for the inspection of hon. Members in this House a leaflet issued by the Central Office of the Conservative Party in which they made it clear that this was an interesting individual contribution to this subject; leaving them in the position of being able to confirm or deny it in the event of their coming to power. At last it seems that the Front Bench of His Majesty's Opposition have been convinced on this point, but I can assure the right hon. Gentleman that we in the mining industry are certainly not convinced.

I draw the attention of hon. Members to a less controversial matter. I must apologise to the House for having found it necessary to make reference to these very controversial matters. My excuse is that I was bound to, in the light of the right hon. Gentleman's statement. When one studies this Motion, one sees there are certain points which are clear from its terms so far as the relationship between public accountability and managerial efficiency is concerned. When one considers the fact that there is a field of public accountability, one must at the same time bear in mind that if we accept to the full the claims of public accountability and if we allow great increases in public accountability, we can do so only by restricting the field of management. An advance in respect of the one must result in a retreat on the part of the other.

Public accountability and completely independent management are basically incompatible terms, and I rejoice that the Motion in its terms quite clearly recognises the order of priority as between these two concepts; that managerial efficiency must come first, that public accountability can be extended only so far as it does not conflict, only so far as it is consistent with efficient management.

The difficulty is that if we want efficient management we must allow scope for initiative, and to the extent that one adopts the attitude of questioning everything that is done by management, one comes to the point at a certain level of managerial efficiency where initiative is killed. On the other hand, the terms of the Motion quite clearly recognise the need for extending public accountability; and although the Motion clearly recognises the limits within which it can be extended, the Motion also quite clearly calls in question the present extent of public accountability. It is right, therefore, that we should examine the existing methods of achieving public accountability and ask ourselves why it is that they are not regarded in the Motion as being satisfactory.

As I see it, there are six principal ways in which it is possible to call the boards to account, and of those I suppose by far the most important two will be Parliamentary Questions and the Debates on the Annual Reports. Personally, I regard Debates on Supply Days as being subsidiary, however important they may be. I do not think that if it were to be said that public accountability was not fully provided for, it would be an answer to say that if Supply Days were always used for the purpose of achieving public accountability everything would be all right. I regard Supply Days as being a subsidiary method of achieving public accountability.

Debates on the Annual Reports are of vital importance, but they suffer from the defect that they are necessarily discursive, and it is extremely difficult to have a Debate on a clear issue on such a complicated document. In fact, it may almost be said that to the extent that a nationalised industry may achieve public accountability, in the sense that it discloses everything, analyses everything and argues everything, it increases the difficulties of debating it. One can talk about this or that aspect of it, but it is extraordinarily difficult to have a Debate in relation to it. One Member will get up on one issue about which he is an expert, and he will be followed by another who is an expert also but in another field and who will also make a perfectly relevant speech in the Debate.

The result is that we have, as it were, a succession of supplementary reports delivered by experts in the course of the Debate, and I do not think that it may be said that the result is entirely satisfactory from a Parliamentary standpoint. But, of course, it is difficult to see what one can do to remedy that. Obviously, it would be wrong not to have Debates on the Annual Reports, but it must be recognised that the Debates on the Annual Reports serve only a very limited purpose in achieving public accountability.

The other point I want to mention at this stage is the Parliamentary Question technique. It is obvious that there is, first of all, a legal difficulty. That arises because these boards are legal entities. Therefore, in regard to the day-to-day management of their affairs, they have matters under their control. The form of the Nationalisation Acts has resulted in that state of affairs. It follows from that that if one excludes the question of the Minister exercising his directional power, there is only a limited field in which it is possible to ask Parliamentary Questions.

The difficulty of enlarging that field involves a consideration not only of the legal issue in the sense that one would have to determine how far one could transfer the managerial responsibilities from the board to the Minister. One would be obliged to do that if one were to make a Minister responsible for answering Questions on day-to-day affairs. One would also meet the practical difficulty that one would probably have on the Order Paper almost every day of the week perhaps 300 or 400 questions.

There are other arguments which I have taken the trouble to summarise and which I submit to my right hon. Friend because I suggest most strongly that he should resist any attempt to extend the field within which Parliamentary Questions can be put. There is the point with which I dealt, the preliminary legal point, that the Minister is not responsible for day-to-day management. Then there is the second point—namely, the discouragement of initiative. I do not think that too great stress should be laid on that in relation to Parliamentary Questions. I believe that, as far as experienced managers are concerned, probably their attitude would depend upon the political climate. If we had made up our minds that nationalisation was not a controversial party issue, then perhaps something could be done by extending this field of Parliamentary expression, but while the quarrel remains between the parties on the fundamental issue, then, of course, the boards in general will be hotly defended on this side of the House and as hotly attacked on the other.

The boards would set up internal organisations for answering questions and, far from achieving a greater degree of public accountability, one would arrive at the point where it would be felt that it was probably far more frustrating than ever because of the number of questions and because of the fact that the skilled staffs inside the nationalised industries dealing with questions would necessarily be concerning themselves with seeing where the catch was in the question and circumventing the effect of the advocacy of the anti-nationaliser expressed through the question. I do not think that the cause of public accountability would be advanced in the circumstances. Then I put it to my right hon. Friend that in local matters there are other sources of information and that in matters of public interest the Parliamentary Question is available. All that amounts to this: it is most undesirable in my view, which I submit as strongly as I can, that there should be any extension whatever of the Parliamentary Question technique.

Another point of vital importance on the question of public accountability is the suggestion that there should be a Select Committee. I want to put one point before my right hon. Friend straight away in asking him to resist this if the suggestion is pressed, particularly at the present time. For all his engaging manners and charming behaviour, it is clear from the observations of the right hon. Gentleman the Member for Saffron Walden (Mr. R. A. Butler) that he was, to say the least of it, not very enthusiastic about the nationalisation schemes. He said that he did not like them. [HON. MEMBERS: "Hear, hear."] I can understand that point of view, given the degree of political prejudice which is shown on the other side of the House.

There are certain consequences which must ensue from it, one of which, surely, is that one cannot possibly succeed in carrying out the work of a Select Committee if the subject with which one is dealing is one of acute political controversy. It is obvious that an objective all-party investigation becomes impossible. Frankly, I feel most strongly that it is pointless and might be very mischievous to have a Select Committee unless it is done on the basis of an objective examination and investigation apart from political party controversies. If one did not do that and one had a Select Committee and it met in the heat of party political controversy, obviously the members of the boards would come along, not to give an account of what they were doing, but to defend themselves against the attacks of those who were determined to discredit nationalisation whatever the circumstances might be.

Then there is a further objection which I put to my right hon. Friend. It is that in those circumstances the Select Committee would necessarily be a fault-finding organisation. It would be there to concentrate upon the things which were wrong. That would be a very bad situation indeed. [Interruption.] If the hon. Member wishes to intervene, I shall be delighted to give way.

Mr. Pickthorn

That is the whole essence of accountability and responsibility.

Mr. Williams

The hon. Member when he says that discloses his almost complete ignorance of the significance of allowing initiative to enable efficient management to be provided. The essential point about giving every scope to enable a manager to exercise initiative is that he shall have the right to make mistakes, and despite the thousands of things he would do right, the hon. Member and his hon. Friends would be concerned only with those which he did wrong. They would be concerned only with an investigation of those actions and the headlining and high-lighting of those mistakes. That is all that the hon. Member would be concerned about.

In other words, here again my right hon. Friend will not miss the fact that the point of the hon. Member's intervention clearly indicates that he is not interested in public accountability. He is only interested in producing a situation where the faults and the mistakes shall be allowed and where these same mistakes shall then be publicised, however successful the management may be in other respects. That would be a shocking state of affairs. The important point about this is that it would necessarily give a distorted picture. That is perhaps the greatest objection of all.

We have two fundamental objections. First, the fact that this sort of work cannot be done in the atmosphere of political controversy; and, secondly, that there is no question that the result would be a distorted picture and not a true picture. I say that public accountability has no meaning at all unless the whole picture can be shown, and not merely an emphasis laid on the distortions and weaknesses. Then, further, the findings would necessarily be superficial, because quite obviously, however carefully hon. Members might put their heads together, they could only deal with this among a number of other matters. Any suggestion that in those circumstances a serious judgment could be given on the question of managerial efficiency is really too obviously absurd to argue.

Another point to which I should like to call the attention of hon. Members concerns the question of the external efficiency audit. It has been suggested that perhaps it would be helpful if managerial consultants were called in and dealt with various aspects of managerial efficiency, and advised the board upon the steps which should be taken. If this were done on a voluntary basis, I think it would be as good in the public enterprise sector as in the private enterprise sector. There are some firms who carry on their work in the private enterprise sector and do not call in managerial consultants. I think the same ruling should apply in the public sector, and that much good would probably come as a result, but I would ask my right hon. Friend to oppose any suggestion of a compulsory external efficiency audit, and to oppose any suggestion that, because these are nationalised industries, the boards, whether they like it or not, must therefore be subjected to scrutiny by managerial consultants. I hope my right hon. Friend will say that, useful as are these techniques, they are useful only when employed on a voluntary basis. Here I would put three points.

I would say, first of all, that if compulsory efficiency audits were applied, there are not enough consultants, and that they have a lack of experience of the size and complexity of problems. I would also agree very strongly with the views ex- pressed in a paper written by Mr. F. C. Hooper and read to the British Institute of Management in May, 1949. I am sure that there will be hon. Members on the other side of the House, as there are on this side, who would respect the views of Mr. Hooper on questions of management. I am not pretending that everybody would agree with them, but I am saying that, in general, hon. Members opposite, who know him or know of him, would say that, when he makes pronouncements on matters of this sort, they are worthy of attention.

In this paper, Mr. Hooper addressed himself to the question whether there is need for independent management audit services for the nationalised industries, and he came down very solidly on the negative side of that proposition, saying that, if that meant an audit conducted upon the nationalised undertakings by some groups of persons wholly outside it, however well qualified and impartial, his short answer was "No." He went on: On that, I have no doubts whatever. It is the essence of a management audit that it is a fault-finding body. I commend that observation to the hon. Gentleman who intervened earlier. Its job is, above all, to find out what is wrong and point the way. A management audit is, and in my view ought to be, a day of judgment. It is right that this should be so, if it is voluntary, but quite wrong that it should be so if it is imposed. I see that some hon. Members opposite are amused, and I wonder if they will be amused at this. Mr. Hooper went on: The plain fact is that a nationalised undertaking is so big a thing that no audit from outside could hope in the time at its disposal to master the undertaking's intricacies from first-hand knowledge and observation. The auditors cannot but rely on the undertaking itself to show them the way round, and largely to educate them in the details and problems that underlie every fact and figure. I commend to the right hon. Gentleman the Member for Saffron Walden, who I regret to see is not for the moment in his place, Chapter 10 of the Annual Report of the National Coal Board for 1949, where, I believe, he will see the complete answer to the points he made regarding the alteration of the structure of the nationalised industries.

Finally, I rejoice in the observation made by my right hon. Friend in opening the Debate, when he said that the Govern- ment would agree to a form of inquiry rather like the B.B.C. inquiry which has been proceeding under the chairmanship of Lord Beveridge. I wholeheartedly support the view that such an inquiry should be put in hand. I am not quite convinced as to fixing a time-limit. I can see circumstances where seven years might be quite wrong. I can see that such an inquiry might be used once in the lifetime of each Parliament, on the assumption that it would run its full course, but I do not know. I would prefer the approach that, having made the inquiry, there should be no time-limit. The fact that an inquiry might subsequently be made would be sufficient to deal with that situation.

5.47 p.m.

Mr. Molson (The High Peak)

The speech of the hon. Member for Wigan (Mr. R. Williams) left on my mind the impression that he was so uneasy about the administrative record of the National Coal Board that any kind of scrutiny or criticism appeared to him extremely dangerous and undesirable. Indeed, the whole of his speech seemed to me to illustrate the disadvantages of nationalisation.

In regard to the remarks that he made in criticism of the proposals for the reorganisation of the National Coal Board which have been put forward from this side of the House, I do not propose to say anything upon that matter, but, if my hon. and gallant Friend the Member for Fylde, South (Colonel Lancaster) were so fortunate as to catch your eye, Mr. Speaker, he would have something to say in reply, since he was largely responsible for making these proposals.

This is not the first occasion on which the Lord President and I have discussed this matter. The last occasion was in a more academic atmosphere at Nuffield College about a year ago, and I am glad to know that, since then, he has taken a small step forward. Certainly, I am glad that he did not show the same reluctance to have scrutiny of the nationalised industries as was shown by the hon. Member for Wigan.

There are, I think, four quite definite and non-controversial reasons why it is necessary that these industries should be subjected to special scrutiny. I say it is hardly controversial because I am largely indebted to Professor G. D. H. Cole for the four reasons advanced. The first is because they are monopolies, and it is therefore easy for them to raise prices unjustifiably. The second is because the whole of the industry is unified, and, therefore, inefficient units which may be working at a loss are carried on the profits of more efficient units, and it is impossible for Parliament to distinguish between the efficient and the inefficient.

In the third place, the country has spent a large sum of money in acquiring these investments, and naturally wants to know how its investments are doing. Fourthly, and this is an argument which applies exclusively to hon. Gentlemen on the other side, one of the main reasons advanced in favour of nationalisation is that these industries and services are of such great national importance that it is wrong that they should be in private hands. Therefore, it surely follows from that that they would not wish industries and services of great importance to be left in the hands of irresponsible administrators, even if they had been appointed in the first place by the Government. Therefore, it seems to me, for these four reasons which Professor Cole has advanced, that it is a necessary and wise thing that Parliament should try to subject these corporations to careful scrutiny.

The first attempt made in this House to make the Corporations accountable was by means of the Parliamentary Question. That matter was fully discussed on 3rd March, 1948, when my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) made a statement on behalf of this party, and, on 7th June, 1948, Mr. Speaker made a new Ruling which, I think, represented a compromise between the two extreme views held on this matter and which has, I think, commended itself to the great majority of hon. Members. Personally, I do not feel that the Parliamentary Question is an effective way for probing the administration of nationalised industries. Those of us who have some experience of asking Questions and reading the answers know how skilful Ministers and their advisers are in eluding the particular point they desire to evade. Clearly, it is not the best way in which to arrive at facts which the Government or the board are anxious to conceal.

I welcome the fact that the Government have given some days for Debate upon the public corporations, and it would be ungracious not to express thanks for the days that have been given. At the same time, I doubt whether anyone feels that those Debates have been extremely fruitful. Perhaps the only part of the speech of the hon. Member for Wigan with which I was in complete agreement was when he said that those discussions have been too wide and too general. There has been so little continuity in them that there has been no meeting of minds, and it has been almost impossible for anyone to gather what was the opinion of the House upon any special issue.

I suggest that this House is at its best when it is legislating. The reason for that is that on Second Reading hon. Members have to deal with the general principles, and on the Committee and Report stages they all have to address their remarks to some particular issue and the Minister responsible is then under an obligation, which he sometimes discharges, to reply to the points of criticism which have been made. In the case of a general discussion, whether it be upon foreign affairs or upon these nationalised industries, it results in hon. Members making speeches upon particular aspects of the matter with which they are familiar, and then, as happened on so many occasions in the Transport Debate last week, the next hon. Member who rises to address the House says, "I hope the hon. Gentleman who has just resumed his seat will acquit me of any discourtesy if I do not reply to his points, but I now propose to deal with the one subject with which I am familiar and in which I am interested." It is for that reason that I think we must try to think out some new procedure for dealing with the matter.

In the first place, I think it is necessary for the Debate to be partitioned into subjects, and, secondly, for those subjects to have been carefully examined previously by a Select Committee or some other body able to arrive at the facts. In the case of the Transport Debate last week, one hon. Member referred to coal prices, another to restaurant cars, someone else to C Licences on the road, and then steamers to Ulster came up, and, finally, interest rates and the Hotels Executive were mentioned.

I venture to suggest that there are a number of very important issues of administration which individual hon. Members can hardly be expected to raise for two reasons, partly because they would not have the information upon which to make an authoritative speech, and often because if they did know about them they would be issues so highly controversial that they would be rather dangerous to raise. The kind of matters to which, I think, Parliament ought from time to time to address its mind is, for example, the slowness of the Coal Board in closing uneconomic pits and the reluctance of the Railway Executive to close uneconomic railway lines, both matters which, of course, arouse very strong feelings, but both of which do greatly increase the cost of administration of those boards, and the burden of which is spread over the whole of the country because these corporations enjoy a monopoly position. Then there is the matter of the decrepit old men who, I understand, are still working in the docks and drawing full wages.

I believe that before the House begins to consider the annual reports of these boards, it is desirable that there should be an opportunity for a committee to see representatives of the boards and to ask penetrating questions. I am not at all opposed to the suggestion which the Lord President made today that an inquiry of this kind should be held, not by a Select Committee of this House, but by something in the nature of a departmental committee or the kind of committee which periodically considers the administration of the B.B.C. What I do want to emphasise is that when this House desires to obtain accurate and detailed information, it is impossible for it to gain it by a large number of speeches being made on the Floor of the House. Whenever it desires to arrive at accurate information, it sets up a committee or calls upon some individuals to hold an inquiry.

The Lord President spoke about the third degree methods of Select Committees of this House. I repudiate the suggestion that Select Committees of this House ever indulge in third degree methods, and I do not entirely agree with the right hon. Gentleman that inquiry by a Select Committee would have all the same disadvantages as admitting every kind of Parliamentary Question. I believe that men like the Comptroller, who is responsible for the finance of these boards, would be by no means reluctant to answer questions that were asked about the financial future and prospects of these boards, and would welcome the opportunity of being able to explain to representatives of this House what are the difficulties with which they are confronted and say what they are endeavouring to do.

I am quite sure that, from the point of view of this House, it is extremely desirable that there should be an opportunity of asking questions about how these boards expect to emerge from their present financial difficulties. I believe that the only way in which it would be possible for the House to have reliable information upon matters of that kind would be if there had been an examination by some committee or another of those responsible for the policy of these boards.

My suggestion is twofold. It is, first, that there should be this preliminary inquiry, in order that the really important issues which are revealed, or concealed, in the annual reports of these boards should be fully investigated. Secondly, that any committee of that kind should then present a brief report to this House in which, for example, it would refer to what might be the half-dozen most important issues, upon which there would be a Debate. I entirely agree that a one day's Debate upon matters as wide as the whole complex of industries which are within the responsibility of the Minister of Fuel and Power is not enough. I would like to see something like a three days' Debate, and I should like to see Motions framed a little bit upon the analogy of legislation, so that the Chair could require all hon. Members speaking to address themselves to the same particular aspect of administration or particular difficulty of the board. At the end of a few hours' Debate it would be possible then, if necessary, for there to be a Division in order that the opinions of hon. Members, and the general consensus of opinion of the House itself, could be taken upon each one of these matters.

I believe that it is only by the development of some procedure broadly upon those lines that it will be possible for us to get away from these wide and discursive discussions, and for the House to take a real decision upon the policy to be followed by these boards, and to make certain that the administration of those vital industries, which it is not the intention of this party to de-nationalise when they come into power, shall be administered efficiently and in the interests of the country as a whole.

6.3 p.m.

Mrs. Eirene White (Flint, East)

I am sure all of us, on both sides of the House, are very glad, indeed, that we should have the opportunity today of discussing the general principles which should govern our publicly-owned industries. We should not become too much involved in particular points of controversy on any particular industry. It was rather regrettable, if I may say so, that the right hon. Member for Saffron Walden (Mr. R. A. Butler), in the first part of his remarks, made a series of potted speeches—if I may so describe them—on individual nationalised industries. He raised points such as the decentralisation of the Coal Board, on which there is a very great deal of loose talk among people on the opposite side.

If we are to go into this kind of detail, just exactly what would hon. Members opposite do with an area like South Wales which, owing to lack of capital development in the past, is consistently "in the red" financially? How do they propose to decentralise that without closing every pit in South Wales altogether? But that is beside the point in a Debate of this kind, because we are concerned with general principles.

I am much too fresh and new a Parliamentarian to wish to enter into the question of responsibility and accountability to Parliament. I would rather leave that to those who are very much more experienced than I am in the working of Select Committees, the Committee of Public Accounts and other such bodies. I wish, therefore, to turn my attention to the other two groups mentioned in the Motion before us, namely, responsibility to consumers and to the workpeople in the industries. It is the first time we have had, in this country, a situation in which the public has a right to know what is happening to the industries on which its livelihood most substantially depends. And the first obligation in accountability to the public which rests with any of the nationalised industries is to keep the public informed.

The public has a right to facts and to have them presented, as far as possible, in a form which the public can understand. To those of us who may seem a little pessimistic about the rate of progress made in the publicly-owned industries, surely it can be said that we have, in the annual reports of these industries, something we have never had before; and those members of the public who are interested can obtain, in a concise and, on the whole, a very clear form, considerable information as to the progress which is being made on their behalf in these great national concerns.

But admittedly, only those most closely interested would read the long annual report. So I come to the question of public relations in their wider sense and, if I may say so as a former journalist, relations with the Press. Although we do sometimes complain about our treatment by journalists, it is more usually the proprietors who incline journalists to sin. But a great deal depends upon facilities afforded to journalists in their day-to-day work. I should like to pay this tribute to the nationalised industries—that, on the whole, they have taken the responsibility seriously. I do not wish to make invidious distinctions but, as a former working journalist, I should say that the National Coal Board, in particular, has taken very considerable pains to make available to the Press the information they require. They have often put themselves out to find local details and have set a very high standard in public relations work.

While I can say that of the national organisation in London, I think it is true that in the Provinces it is not always so easy to obtain information. Nor are local organisations always alive to the need to keep the Press accurately and efficiently informed. It is quite true that where one has Press misrepresentation of industry, it is more likely to be in the national Press. I would urge upon those in charge of public relations in nationalised industry to reflect upon the great importance of local newspapers which are read, very largely, in most parts of the country. I urge them not to despise those papers because they have no great national circulation, but to remember that the aim of public relations in nationalised industries is to make all people feel it is their industry. And the closer home one comes to people, the more they will have that very proper feeling of respon- sibility for and interest in the industry. When, in the Motion on the Order Paper, we use the term "socialised industry," to which objection was taken on the other side, it is partly because we have in mind that we wish people to feel that these are their industries, that they are responsible for them and that they have an interest in them.

We have had several contributions this afternoon, and in Debates on individual nationalised industries, on the question of representation of the consumer. As the Lord President pointed out, we have consumers' councils in each one of the Statutes setting up these publicly-owned industries. There are four main criticisms of the consumers' councils, as they function at present. One is that they are remote from the public, in the sense that each is a nominated body, although, as far as gas and electricity are concerned, it is true that the Minister considers suggestions made by associations of local authorities. But there is no member of the consumers' council directly responsible to any organisation in this country and, in particular, responsible to any popularly-elected body. That is something we ought to consider carefully.

Following this criticism of remoteness from the public is that of the inadequate publicity of these bodies. I believe they know that the public is not aware of them and are doing their best to overcome this ignorance. But it seems to me that the two criticisms are really part of one and the same thing. If there were a more close relationship with a popularly-elected body, I think we should find that lack of publicity would be overcome, because the public is interested in the activities of its popularly-elected representatives, and the representatives themselves have a quite peculiar interest in seeing that the public is aware of their activities. Therefore, I think we should find that we could possibly solve both problems if we had some quite definite link with the local government machinery of this country. I may say that I made this point before in a Debate on the electricity Report, and I have been interested to see that by this time it has penetrated to the consciousness of the right hon. Member for Saffron Walden.

There are other criticisms made of these consumers' councils. For example, I have been asked what is the use of a consumers' council which consists of amateurs only, which has inadequate specialist knowledge and which is unable to stand up to the officials of the boards concerned? There we have two problems. The consumers' council is primarily an instrument of what we may call public relations, to keep the consumers in an area informed of what the board is trying to do, and to give the board an opportunity of consulting representative consumers as to the probable results of certain action which it may propose to take. I think the consumers' councils should be able to carry out those duties adequately, especially if they are consulted by the board in proper time before the decisions are actually made. For example, I have heard criticisms of a particular consumers' council who, I was told, were presented with a decision by a board on hire-purchase arrangements but were not consulted before those decisions had been reached. That is obviously a lack of proper use of the consumers' council.

I do not think, however, that we should have in our minds the idea that a consumers' council is ever likely to be from its very nature a body which can protect the consumer or can judge for the consumer on the policy of the board in matters of price or efficiency. A consumers' council is not that kind of body and could never be. It is true that as at present constituted, the consumers' councils are not able to bring in outside experts if they wish to criticise the price policy of a particular board. They have to accept the board's information and judgment on that matter. I do not think it would be sensible to try to turn consumers' councils into a body of that kind. On the other hand, the public does require some kind of independent judgment as to whether it is, in fact, having the best possible service at the lowest possible price.

In the case of railways, we have a tribunal to which the Executive must refer any proposed changes in fares. But even that tribunal, while it can judge the accountancy of the Railway Executive and can ask questions on broad policy, is not, of course, fitted to go into the whole question of whether, in fact, the fares proposed to be charged need necessarily be charged if certain reorganisation were made in the workings of the industry. It is a very difficult question, and we in Parliament have the duty of deciding what is the best method of acting as judges for the consumers in matters which are too highly technical for any consumers' body to deal with. As I say, I am not competent to judge whether the House in its own procedure can deal with this matter adequately. I should have thought that it would hardly be possible for us to do so.

I am inclined to agree with the proposal of my right hon. Friend the Lord President, that, at any rate for the meantime—because in all these matters we are far too inexperienced to know what is the best ultimate solution—we should follow the policy which has been adopted in the British Broadcasting Corporation of having a very thorough investigation from time to time in which the services of outside experts can be used. It is clear that we need some provision of that kind, which up to the present we have not got.

In the few minutes which I have left, I wish to say a few words about accountability not just to the public in general but to the workpeople in the industry. I think we have a very difficult job indeed in the organised labour movement of this country, because we have had, and still have, a very considerable educational task. We have never been renowned in this country for clarity of dogma, and I think that is true in this matter of the relationship of workers in the publicly-owned industries as it is in other fields. We have had reference to syndicalism from time to time; we have had talk of workers' control, workers' participation, joint consultation and so on. All I would like to say on that subject is that I think any of us who have taken a close interest in this matter have been encouraged to see how seriously most of the unions concerned in these publicly-owned industries have been tackling a very big job of public education. I do not pretend that the work is by any means completed, but they have at least made a serious effort to discuss these matters of important principle—not just matters of detail and day-to-day experience—in the trade unions and adult education circles in this country.

If I may declare an interest in the matter, I myself have written a small pamphlet on the subject of workers' control, 5,000 copies of which have been ordered by one of the largest unions in the country. At least, we have some evidence here and there that efforts are being made to bring an understanding into the minds of our own people of the very difficult problems which are raised in their new relationship in publicly-owned industry. To many people who may be too pessimistic in this matter, and who talk glibly about industrial unrest in these industries, completely forgetting the proportion of industrial unrest in those very industries pre-war with which we compare very favourably indeed—to those pessimists I would say: look at least at the best of what can be done; take, for example, an area such as the northern district of the Coal Board, Durham and Northumberland, where there has been an excellent example of leadership in this matter. What can be done in one area by some outstandingly good leadership is not impossible in others.

This accountability to the workers is something which is making progress in the nationalised industries. One aspect of accountability to the workers which has been recognised more fully in the nationalised industries than in most others is the responsibility to every worker that his own abilities shall be used to the full. Anyone who reads even the very brief accounts of the educational proposals for the nationalised industries will recognise that many of the workers in those industries for the first time will have a chance of using their abilities to the full and will not be dependent upon the accident of the type of firm for which they happen to work, as is the case in private industry. The Report of the Electricity Board, for example, states that, when they looked at the provisions for education and training in that industry, they found that there was a variety of opportunities amongst the multitudinous organisations concerned, but no governing standard. It was necessary for them to establish a comprehensive scheme for the whole industry which would give everyone a chance of getting to the top, if he had the ability.

If I may say so, that is something which very much attracts the workers in the steel industry, some of whom have very good opportunities—because they happen to work with undertakings which have paid some attention to the subject and have been willing to spend some money to train even the lower-grade workers—but others of whom belong to undertakings which have paid very little but lip-service to the question of using to the best advantage the ability of the men in the industry. Without in any way being complacent, I think we can congratulate ourselves on the attitude adopted by the boards of the respective industries in recognising their accountability in this matter to their own workpeople.

I end on this note: while we have, indeed, very much to learn and very serious problems to face, those of us who are in touch with the workers in these industries know that we also have cause for congratulation, both to the management and to the workers, in that we are making some real progress in turning these industries into socialised industries of which we can be proud.

6.22 p.m.

Lord John Hope (Edinburgh, Pentlands)

The Lord President of the Council seemed determined, at the outset of his speech, to set a pace—if one can use that word in connection with his speech—which would have meant that nothing definite would be said either for or against the subject which we are supposed to be debating. He gave a name to his theme—the expression "non-party."

At the beginning of what will be a very short speech indeed, I want to point out that it is all very well to accuse the other side of party politics when what you really mean is that you do not want them at that moment to criticise what you yourself have been doing. The Lord President knows perfectly well that nationalisation has always been the classical linchpin of Socialism. He knows equally well that, when the results of nationalisation are compared with what had been expected of it by its supporters, it has been a complete failure.

In those circumstances it hardly surprised me that he was very anxious that he and his party should not be attacked by our party during the Debate but that the whole thing should go along in a friendly spirit, like the vicar's tea-party, with the Government getting away with it and with the Lord President, as usual, getting away with what appears to be moderate Socialism. But that will not do. I rejoice that, since the Lord President spoke, there has been some detailed criticism by my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) of what the Government have been doing.

The same introductory remarks might apply to what was said by the hon. Lady the Member for Flint, East (Mrs. White) who said she regretted that we were going into so much detail. I do not see how we can get down to what we all want to discuss without going into detail. It is so easy to make platitudinous speeches slightly for or slightly against the nationalised industries, but I am sure that the House ought to do something more than that, and wants to do something more than that, on an occasion of this sort.

I want to bring an extremely important principle to the attention of the House. I mean the independence of the area boards and the duty of the Minister in connection with them. The example I shall give concerns the disposal of the general reserve funds of the former local authority undertakings in South-East Scotland. It was a large sum of money—over a million pounds—consisting of investments and cash which, as a result of the Minister's refusal to intervene, have been filched from the South-Eastern Electricity Board and left in the clutches of the central Electricity Authority. This is causing a great deal of serious dissatisfaction in Scotland.

It is true that these assets vested in the central Authority by virtue of the Act, but in connection with that I want to read to the House a statement which the Minister issued on 20th April, 1949, after a meeting on this question between himself and the Lord Provost of Edinburgh. It is a statement of vital importance. It was: As regards the destination of the reserves of the former Edinburgh City undertaking, the Minister explained that these were vested in the central Authority under the provisions of Section 14 of the Electricity Act, but the Act did not determine the ultimate destination of the assets vested under this Section. So much for what the Minister said about ultimate destination. In other words, nothing on that issue was to be determined purely because of the vesting of these reserve funds in the central Authority's hands. Letters were written between the South-Eastern Board and the Authority and, ultimately, the Minister. This went on for some time until the question came to a head with what I can only describe as a thoroughly discreditable letter from the Ministry, written at the end of September of this year, in which the boards' claims for retaining possession of these reserve funds were turned down on several grounds, the chief of which was that the Act meant nationalisation and not regionalisation. That was the cardinal point in the Ministry's refusal.

The answer to that trick—and that is all it was—is this: in fact, distribution in this industry has been de-centralised, regionalised if hon. Members prefer it, to 14 area boards, each of them responsible for its own area. If that is not regionalisation, then I claim that the original appointment of these area boards was a swindle and is quite meaningless. Secondly, the central Authority provides for variations in each area of the unit charge in respect of the cost of fuel. I want to know why a different principle should hold in dealing with the general reserves of the local authority.

It cannot have been the intention of the Electricity Act that savings accumulated by the people in any area, by means of good management, should, after vesting day, be dissipated to the detriment of those whose money it was in the first place. I claim that it cannot have been the intention of the Act that there should be confiscation without compensation, for that is what this is. The area board have asked the Minister that he should use his powers under Section 5 (1) of the Act to direct the central Authority to give full credit for all local authority general reserves to the area boards in whose area these reserves arose, and it is in order to try to enforce similar claims by any area board, as far as I am able, that I have given in some detail the example of what has happened to one area board.

I want to make one more comment about this rather dingy case. Throughout his speech just now, the hon. Member for Wigan (Mr. R. Williams) mentioned politics. Of course, he is bound to accuse us of bringing politics into nationalisation. Actually, we have spent several years in warning people that if nationalisation came politics could not be kept out of it. Now the Minister's letter accused the South-Eastern Board in Scotland of having political motives for bringing up this case. I will not weary the House by quoting it, but the House may take it from me that that was written categorically in the Minister's letter. All I want to say about that sort of thing is that it merely shows up the barrenness and weakness of the rest of one's case. If there should be any question of my fair-mindedness over this particular part of the issue, I should like just to tell the hon. Member and the House that it was a Socialist member of the consultative council who first publicly suggested that there should be direct intervention in Parliament over this matter.

What I ask in this case—and I ask it in principle on behalf of all boards—is that justice should be done by the Minister; not only that, but that justice should be seen to be done, for otherwise we shall get nothing but discontent and disquiet over a wide range of industries where no one wants those qualities to obtain.

6.31 p.m.

Mr. P. Bartley (Chester-le-Street)

There are just two or three points I wish to make in this Debate. I note—I think rightly so—that the principle of nationalisation is not now a matter of argument. It is admitted by the right hon. Member for Saffron Walden (Mr. R. A. Butler). He admits that, if, his party should unfortunately come to power again in this country, they would not denationalise, particularly the mining industry. The principle of nationalisation is socially sound. The industries and services which have been nationalised are of a social character. They are of such magnitude that it would be totally wrong that they should depend on or give power to individuals deciding matters affecting very large sections of the community. So we are not arguing the principle.

The Motion particularly refers to responsibility to the community, and mentions the workers and the customers. It becomes a matter of the extent to which we have established and ought to establish industrial democracy in this country. I believe that in our criticism of the practice of industrial democracy, we ought to bear in mind that success first of all depends on arousing and building up and maintaining interest in the industrial electorate. We must remember the years it took this country to build up a political electorate. It was not done in two, three or four years, but only in many decades. It was many decades before we had made any success of political democracy.

Three or four years ago we suddenly extended democracy to industrial matters—extended it, some say to the individual workmen in industry, and to the individual consumers by means of the machinery of consumers' councils. We should, as a further step, by educational facilities, by publicity, arouse this industrial electorate to make fuller use of the machinery which has been established since nationalisation. Trade unions can do something to help, and so can our social organisations, the Press. It could also be done through literature; but by all means let us be patient and not expect a fully operative industrial democracy within a matter of a few short years. Progress has been made.

It is suggested that labour relations in the nationalised industries are worse now than they were prior to nationalisation, but I can assure the House, from my personal and yet extensive experience, that that is not so. Just a few months ago, in one of the chief industries that has been nationalised, the mining industry, I was able to see that that statement about labour relations was very far from the truth. Through the means of conciliation, through the consultative machinery, there are very good relationships in that industry. Managements and workmen are much nearer to each other now than they were a matter of 10, 15 or 20 years ago in that industry. There is a wider and deeper sense of responsibility as between the managements and the workmen towards each other, in that industry.

Some hon. Members may have noticed, two days ago, a Question of mine on the Order Paper asking about this national plan which, I understand, has been prepared by the National Coal Board, and which sets out the pits to be worked and those to be closed in the coal industry. The reply was that it is being printed and will be ready in the middle of next month, and will be submitted to the Minister for his general approval. Furthermore, we, as Members of Parliament, will get a copy of the national plan. That is a degree of responsibility to the community which did not exist under private enter- prise. Pits—districts—were very often closed on a decison made by a person in the coal trade without any prior consultation with the workers. Such a decision was often operative within a very few days. I have experienced such a thing personally. I declare that, as between workmen and managements there is a greater sense of communal responsibility than ever existed in the past.

I agree to a large extent with the right hon. Member for Saffron Walden that the consumers' councils are not working satisfactorily. Sufficient is not known about this facility—the method and procedure whereby a consumer can submit complaints to a council. I agree something more should be done to make this facility known to the public, and to draw the attention of the public to the procedure. Very often there is the general idea that a question can be considered at a very high level, but people do not know what steps should be taken to get a complaint sent there. The facility is not as well known as it should be, and more could be done to make it better known.

The right hon. Member for Saffron Walden referred to the idea of decentralising the organisation within the Coal Board. I think that is mere shadow boxing, because in the industry there is quite a substantial amount of authority at pit and area levels at present. The matters which he mentioned, I would agree, should be dealt with at national level; but they are now, within the organisation, dealt with nationally—wages, research, development. As I have just indicated, there is a national plan agreed at national level by the Coal Board. Those matters are of common interest throughout the industry, and are already dealt with at national level by the Board—and not dealt with in any autocratic manner, but after a series of consultations at pit, area, regional and national levels before final proposals are put forward; and then there is not a final decision until after consultation with the National Consultative Committee.

I say, quite emphatically, that there is no lack of authority in the organisation or machinery in the industry. There are some people who will not exercise responsibility and authority, but who refer the matter to someone else to settle. That is not a fault in the machine. It may in some respects be a fault in the person. Whatever system we organise, it depends on human beings; and human beings do not respond perfectly, however good the machine. Some matters in which authority can be exercised at pit level are not settled because those who have that authority and responsibility do not exercise it. I can say from experience of pre-nationalisation days and recently that there is now more authority at pit level than there was under private enterprise. The manager has authority to settle many problems peculiar to his pit. On wages, piece-rates and general consultation he can, if he so desires, exercise authority to a much greater extent than was possible under private enterprise.

I wish to emphasise that under nationalisation there is an increased responsibility on the workmen and the consumers, and we ought to welcome further steps to increase their sense of that responsibility. We are attempting to introduce a system of democracy which has never been successful in any other country in the world. None has combined economic and political democracy successfully, but we are doing it. We are to a substantial extent succeeding. Whatever the Opposition may say, there is now in the nationalised industries a much happier relationship than ever there was in the past. [HON. MEMBERS: "Nonsense."] I have worked in the coal industry both in recent years and in the very worst days of depression when there was social injustice in that industry. There is no social injustice now, but a happy human relationship and a general disposition to deal with difficulties which naturally arise when dealing with human beings.

Nationalisation has proved to be a sound social principle. Under private enterprise social considerations had no importance, but now they are of the utmost importance. For instance, our redundancy schemes are not settled merely on narrow economic considerations, but on wider considerations; transport, living accommodation and other social matters of importance to the workmen are taken into account. It is fitting that we should be considering this Motion, appreciating the progress that has been made, and welcoming suggestions for further progress in our nationalised industries.

6.43 p.m.

Sir Ian Fraser (Morecambe and Lonsdale)

It is a little ungenerous of the hon. Member for Chester-le-Street (Mr. Bartley) to pay so little tribute to private industry, when we remember that the money to pay for the nationalised industries has come entirely from either private industries, or the savings of the past, or from American capitalism. He will forgive me if I do not follow him further in his ecstasy but turn very briefly to the matters I want to include in my 10 minutes' ration of speaking time, for which I am grateful.

The normal checks on efficiency in industry are those occasioned by the existence of shareholders who desire profits and customers who desire services. In the nationalised industries there are no shareholders, and so we must recognise that that check has gone. It is very important to consider the handicap under which an industry must suffer if one of its supports to efficiency is taken away. The customer is the other check. He has not gone; he is still there; but his right to make a choice has gone, and, therefore, his effectiveness as a critic has gone. When the customer was able to choose which of two or more sources of supply to go to for the thing he wanted, and was able to choose whether this alternative or that suited him best, he was an automatic and effective check. That check has now gone.

My own belief is that it must now be accepted that a very large part of the national effort that has been brought under public control and ownership must remain. It is, therefore, very important that we should devise ways and means of checking the operations of these vast enterprises, otherwise they will cost so much that the community will not be able to afford them. If it is intended, as it seems to be by hon. and right hon. Gentlement opposite, to increase the field in which this system operates, we shall have to be careful lest we bankrupt our nation. My own belief is that the judicious introduction of competitive alternatives is really the right way to make sure that the nationalised and socialised industries are maintained at an efficient level.

In Russia there is only one party. In Spain there is only one party. They are not so sympathetic to their customers as we are in this country. Why? Simply because we have two or three political parties competing for votes. That fundamental consideration is so deep-rooted in human nature that it can only be ignored at great peril. If we on this side of the House should come into power, we intend to introduce competition in, for instance, the transport system. I believe that we must also introduce competition in the B.B.C. There was a time when we were all agreed that a complete monopoly there was the most desirable thing. The technicians used to tell us that competition was impossible in this small island, but they much exaggerated that, even in the early days, and it is now no longer true. Modern systems would make it possible for regions, or even cities, to have broadcasting systems either of their own or of a private character. Only if there is this competition between the nationalised and publicly-owned enterprises shall we get that lively service which the customer wants.

There is another aspect of competition to which I want to devote two or three minutes, and that is the well-being of the staff. I refer now more particularly to the executive, administrative and artistic staff, particularly in the setting of the B.B.C., which is familiar to me, because I was a member of the Crawford Committee 26 years ago, a Select Committee of this House which set up the B.B.C.—the first of these great experiments in public corporations—and I supported the principle involved. I was also a governor for some 10 years. I observe that many of the staff at the middle level of executive, administrative and artistic control are extremely uneasy, the reason being that they have no one else to employ them. A man of spirit, ability, intelligence and courage of the best type, whom we would seek to manage our affairs, is bound to have a row with the man above him from time to time; he is bound to stand out against a decision of which he does not approve; he is bound to take an independent line. If that should lead in the case of an employee of the B.B.C. such as I have mentioned—

Mr. Deputy-Speaker (Colonel Sir Charles MacAndrew)

I do not think the B.B.C. comes within the scope of this Motion. It is not a socialised industry. It has a Royal Charter.

Sir I. Fraser

May I ask the Government and the House to address itself to a great problem which now faces us. In the vast new sphere of enterprise which is to become public, we shall have many men of spirit and enterprise working in a situation in which they have only one master and no opportunity of changing masters. There may be examples, such as the one I have mentioned in the B.B.C., where there is simply no alternative accommodation for them in this island.

If one is employed on a newspaper, one may quarrel with one's editor in a perfectly just quarrel, which is human and understandable and probably right on both sides, and one can get a job on another of ten or twenty newspapers. [An HON. MEMBER: "Perhaps."] Did an hon. Gentleman say "rats," because it is not "rats."—Oh, I am sorry, apparently the word was "perhaps."—No doubt most of the journalists in this House will know, and all Fleet Street will know, that it is a common practice that after a few years one may be tempted away to another newspaper which likes one's writings, or that an editor may get a bit tired of one, or that one has a row with the editor, and off one goes to another paper. That is proper freedom for a man of spirit, and it is inevitably denied when there is complete and absolute monopoly of employment of certain skills. That is a very dangerous thing. The solution is to introduce the element of competition on lines which I have mentioned.

My last word—and I have promised to limit myself to 10 minutes—is this: We have no shareholders and no profit motive. That is a terrible loss considering what a spur that was to activity and effort. We have no customers' choice. That is replaced by newspaper criticism or limited Parliamentary criticism and advisory committees. These are poor substitutes, and I think that competition, at some time, must be introduced. In some cases it will be competition from overseas. Then we must have all the facts, in order to see that our export prices are not being obscured by subsidies on the home prices. Where there is no foreign competition, we must try to contrive some human competition; otherwise, with the possibility of this field of public enterprise being increased, we shall find that we have so overloaded the earning side of our economy, which is the private enterprise side, and where the wealth comes from that pays for all the things that we want in our various spheres, that it cannot do its job, and it cannot pay.

6.54 p.m.

Mr. Champion (Derbyshire, East)

I want to say a few words about what I regard as one of the major problems facing the nationalised industries at this time. I want to address my remarks particularly to the nationalised industries, because I feel that in the industries which I wish to talk about industrial democracy can lead industry as a whole and may be able to lead the world in a matter which is of tremendous importance and significance.

In the railway industry much of the demand for nationalisation came from within that industry, particularly from people who felt frustrated in their jobs, who did not like their boss and who rather hoped that nationalisation would provide a way in which they could become their own masters. That was understandable in the circumstances, but it is these very people who now feel the greatest amount of disappointment and disillusionment. [HON. MEMBERS: "Hear, hear.] I can well understand hon. Members opposite cheering anything said from this side which appears to be against nationalisation, but they fail to realise that private enterprise, since the industrial revolution of 150 years ago, failed to solve these problems, and, indeed, produced the bad conditions that we had in that disastrous period between the two world wars. The Opposition have very little on which to congratulate themselves in this respect.

What we have to do is to try to ensure that we are creating conditions within the nationalised industries which will remove this disillusionment and disappointment. It is true that some of the people who have mentioned these very things to me—and I met it only last week-end—had not thought back to some of the conditions which existed between the two world wars and some of the conditions to which we should undoubtedly have returned had we not nationalised transport but returned to the old situation in which the workers were caught between the upper and nether millstones of road-rail competition.

That being so, I believe it is important, now that we are in nationalisation, to apply our minds to the task of trying to cure the psychological illness which is affecting most industries. I believe that it is unrealistic to expect overnight, merely because there has been an Act of Parliament, a change of attitude and a change of habit. I do not believe that is possible. Neither is it sound sense to expect men who have been reared in generations of industrial struggle to become industrial democrats merely by the act of giving them a new piece of consulative machinery.

It is quite clear, however, that the nationalised industries must make the running in this matter. This job of trying to secure industrial democracy has to be done, and it should be tackled with energy, with perspiration and if possible with a touch of inspiration. I believe that to be necessary if we are to prevent the bad habits of generations crystallising within the new nationalised industries. It is vital that managements and workers should bring to their new relationships an attempt to secure active and willing cooperation.

I do not mean the sort of co-operation which has existed in the past and which arose very largely from the threat of unemployment which caused men to give enough to get them through, but positive co-operation which could add enormously to our national income. I do not suggest that there is an easy way of securing these new relationships. I do not believe that this is just a matter of canteens. Neither is it a matter of welfare only. It is certainly not a matter only of joint consultation. Nor is it a matter only of more trade union representatives on the boards of the nationalised industries. Workers control alone will not give it, and I am sure, too, that it is not merely a matter of high wages, although it is a fact that low wages which are unjustly and manifestly low are an obvious obstacle to satisfactory relationships.

It is not any one of these factors; it might be all of them, but plus something else. There has to be something over and above all these things—the feeling that the men engaged in the industry enjoy a measure of personal freedom, responsibility and opportunity, and that they have a real say in the framing of the laws relating to the conditions under which they work. I believe these things to be absolutely necessary.

I have no abracadabra or some other incantation to solve the difficulties of in- dustrial relations that are bedevilling both nationalised and private industries. We have to try to find out by research, by constant trial and experiment, the causes of the trouble, and then apply the results of our researches. We are at present spending some £60 million per annum from private industry on research into technical and associated matters, to which a further £60 million is being contributed by the Government. This £120 million is being devoted to the task of trying to secure technical efficiency, but we are devoting only £500,000 to research into social science and those other things we really want to discover about satisfactory industrial co-operation. It is not to be wondered that technical efficiency has long outstripped the human and perhaps even more important side of industry.

We should set about training management in these matters of human relationship—they can do with plenty of education of that sort—and encourage the trade unions to study and educate their members in anything which will contribute to satisfactory joint consultation. We have to train people for supervision. That means getting hold of men who are capable, with training, of becoming what I would call "grass-root leaders." Research and yet more research is absolutely necessary. In all this the nationalised industries can give a lead. The British people were the pioneers of the Industrial Revolution and in the social revolution. Surely they are capable now of being the pioneers in the human relations revolution.

7.2 p.m.

Colonel Lancaster (South Fylde)

Later on in my speech I shall attempt to follow what was said by the hon. Member for Derbyshire, South-East (Mr. Champion), particularly in the matter of disillusionment, which is, I think, permeating a wide field of our nationalised industries. Before coming to the main part of my speech, I should like to take up two points that were made by Members opposite. The hon. Member for Flint, East (Mrs. White) assumed, rather unreasonably, that because we proposed to introduce a degree of autonomy in the coal industry, it would mean the closing down of pits in South Wales. I am sure she knows that in the second quarter of this year South Wales was in the happy position of making a profit of almost 2s. a ton. We should, therefore, be very stupid to do anything of the kind. What we intend to do, however, is to bring about a sensible sub-division of the anthracite and bituminous sectors of the industry, which is quite a different matter.

The hon. Member for Wigan (Mr. R. Williams) raised a doubt that assailed him regarding the effect of autonomy at the periphery on the wage structure of industry. He put that point of view to me on a previous occasion, and my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) has had the advantage of listening to him on this occasion. There does not seem to be any more validity in his assumption on this occasion than on the last. What my right hon. Friend said today about decentralisation was not the first time it has been said. It formed part of my party's programme at the last election, and it gave the new Chancellor of the Exchequer an opportunity of saying that it was the work of an embittered doctrinaire.

It is impossible to range over the whole field of this complex question in the short space of time available to one, and I shall therefore devote myself to one aspect of the matter, and the effects which flow from it. I shall try to deal with the matter of the corporation, national board, or call it what you will. The difficulty with which most of us who have studied this problem were confronted before nationalisation appeared was that we really had very little experience to go on. There had been this vast experiment in Russia, but on this side of the Iron Curtain there had not been anything of a sufficiently definite nature on which to come to any precise conclusions.

Experiments in nationalisation have occurred in different parts of the world, and they have had very varied results, but nothing conclusive has occurred on which we could base any exact data. In these circumstances, we had to conjecture what we thought might occur. We had to attempt to hold the balance in nationalisation between the obvious advantages of financial resources and of monopoly, on the one hand, against the disadvantages of inflexibility and loss of competition, on the other. The picture was by no means clear. To the Labour Party, however, the picture seemed to be unusually clear. In their propaganda in "Let us Face the Future," they said that after a short period of hard working the whole thing would be justified, and the millenium would be round the corner. Of course, nothing of the sort has occurred, and at this moment nationalisation is still not only in its experimental stage but on trial.

I understand that the Minister of Fuel and Power is to wind up this Debate. I wish that he were in his place, because I have two pieces of advice I should like to give him. For the first time since nationalisation, the Minister has had a bad technical Press. The Parliamentary Secretary to the Admiralty, who wound up the Transport Debate the other day, prayed in aid a technical transport paper to substantiate his particular claims. Technical papers in the mining industry are of greater importance than those of the transport industry. They have a much wider circulation both in this country and overseas. Almost universally, they condemned the new Minister of Fuel and Power, firstly for his facile optimism about the future of this industry, and secondly, for the tendentious nature in which he produced his first report.

I hope likewise we have heard for the last time this claim that Lord McGowan is the sole judge of whether or not nationalisation was necessary. I wrote to Lord McGowan a little while ago and asked him specifically on what he based his claim that during the period of the sellers' market there would be a loss of output amounting to one million tons a week. I was doubtful whether I should get a very satisfactory reply, because I was not aware that Lord McGowan had had any experience of this industry. Of course, in his reply I got nothing but generalities. Let us drop that one.

All Governments are at a disadvantage in setting up these national boards. They have the very difficult task of bringing together very quickly a variety of individuals of varying abilities and experiences, and attempting to bring them into an harmonious whole within a very short time so that they can operate effectively. The tendency in those circumstances is to avoid individualism and to play safe. All Governments, and possibly more so a Socialist Government than even a Conservative Government, have the great problem of the particular political com- plexities of the individuals whom they may be considering. It may well be that something like two-thirds of the possible occupants of positions on the national boards are ruled out on the score that they are not politically sound. That is quite understandable. We saw in the case of the Steel Board that something like 99 per cent. were ruled out.

It adds to the difficulties of the setting up of a good board. [Interruption.] I am trying to discuss the difficulties that confront any political party. I said that in the Socialist Party it may be two-thirds are ruled out and one-third in the case of my own Party. Those figures can be varied a little. The difficulty remains of trying to bring together individuals who are going to work harmoniously together, and limited to those who have not been eliminated because of the political factor. Inevitably the Government must fall back on what is a happy compromise and introduce individuals who have got a respectable pedigree of competence and presumably some general knowledge of industry as a whole. But a good result is not achieved.

What is the result of the compromise? Not having got the best result a standard is set which is not the best standard, and that inevitably has its effect on the industry over which the public board is going to hold sway. These things require saying. It may appear that one is desirous of criticising individuals. I think one would be wrong if one did that. No one on either side of the House has got the slightest doubt that members of these public boards have acted, within their own capacities, in a most selfless manner, and in many cases are men of quite considerable ability. But we should be wrong in saying that they were the right men in the right place. I do not think that they are.

I do not think that in the two major productive industries that have been nationalised it is for one moment reasonable to assume that ideal boards have been set up. Both these productive industries—coal and steel—lack in great measure the men who have the essential experience necessary, that is, the experience of productive administration. They took two such men into the National Coal Board, and one left after a short time. Productive administration is some- thing which cannot be learned overnight. It is the result of long experience and requires possibly a generation to acquire.

Mr. Proctor (Eccles)

Does not the hon. and gallant Gentleman think that this is the first time in our industrial history that a political party has attempted to prevent qualified men from serving their country, and has he not read the resolution passed at the Conservative Party conference in 1947, in which they actually threatened to remove those men who have come forward and offered their service to the national boards?

Colonel Lancaster

What the hon. Gentleman says does not detract from the problem I am posing. There are these difficulties, and I say that as the result of the difficulties we have boards which are not by any means ideal boards. This is a problem which is going to concern every party, and one of the great disadvantages which is beginning to show itself in the whole field of nationalised or, as the Lord President of the Council likes to call them, Socialised industries. These are two examples, the coal industry and the steel industry.

There was a great deal of wisdom in the attitude of the present Minister of Defence towards the coal industry. He took the precaution of getting rid of everybody with administrative ability with the exception of two, whom he placed on the board, so that the board he set up would not have to start giving directions, or enthusing and guiding people who knew possibly a great deal more about the industry than they did themselves. On the Iron and Steel Corporation it is the other way round. We get the lesser attempting to lead the greater. If the purpose of this corporation is not to provide leadership, it can serve no good purpose. If they attempt to do it, it is the old revolutionary doctrine of putting the corporals in charge of the regiment. It is not going to work.

Mr. Jack Jones (Rotherham)

What would be the hon. and gallant Gentleman's opinion, in the event of a public corporation or a control board being set up under a Tory Government, if the leaders of the trade unions adopted the same attitude and said they would not play ball?

Colonel Lancaster

It is not a question of anyone playing ball, but a question of the Government of the day attempting to get the right men in the right place. I am explaining one of the problems which nationalisation has raised, and it is one of the things to which very little thought was given before 1945. If we are going to discuss this thing sensibly this evening, we ought to recognise the difficulty, and one of the great difficulties in the setting up of a corporation or board is to get the right men to serve on it. I have shown by two examples that up to date we have not been very successful.

Now I come to the result. Here I hope in some small measure to follow the hon. Gentleman the Member for Derbyshire, South-East, who preceded me. As my right hon. Friend the Member for Saffron Walden has shown, the effect of this is beginning to reveal itself in the coal industry. Two factors are beginning to rear their heads there. Firstly—and I have mentioned this before—the best type of young technicians, for the first time, anyhow, in my experience of the industry, are beginning to look outside for a job if they can find it. If anything of a similar nature by way of wages and the rest is offered to one of them in any part of the world, he is very ready to look at it and he is beginning to look at the ancillary industries as well. That never operated before but it is operating today, because he is being disillusioned by the inflexibility of the organisation which has been erected.

No one can be satisfied with the production figures in the coal industry, despite all the mechanisation that has occurred and the not unreasonable advance in O.M.S. We are getting very little more today than a year ago, and it is beginning to have a very disturbing effect. On the top of that we all realise that men are leaving this industry at an alarming rate, and there must be something more than the wage factor affecting them. There must be somewhere a sense of disillusionment. Many of these are young men and it must be creating in the minds of the Government at this moment a very disturbing factor.

Mr. Ivor Owen Thomas (The Wrekin)

The hon. and gallant Member has referred to a tendency in the mining industry for technical staff to seek appointments outside the industry. Would he inform the House upon what information he bases that statement? Has he any statistics to prove it?

Colonel Lancaster

It is not a matter of statistics. I can tell the hon. Gentleman, if he cares to talk to me, of a number of men from the National Coal Board who put in for a job in Nova Scotia recently. I know that a number also put in for jobs in Natal.

Mr. Thomas

Did not men go abroad before?

Colonel Lancaster

I have made my point, and, as I say, I am prepared to discuss it with the hon. Member. I cannot go back over it. I believe that the facts which I have been discussing this evening can be traced to a sense of disillusionment. These young technicians looking elsewhere, this loss of output, this failure to obtain figures we might otherwise have looked for, can, I believe, be traced to the inflexibility which nationalisation has created.

Recently, as we all know, there has been emphasis on reorganisation and mechanisation. It was both understandable and desirable, but those of us who had experience of introducing mechanisation and reorganisation knew that we were treading on very delicate ground and that unless we handled the thing very carefully the emphasis went towards mechanisation at the expense of labour relationships. It was possible under private enterprise for the lag to be taken up and for the equilibrium to be readjusted, but in a nationalised industry, doing those things on a vast scale and in a standard fashion, there is inevitably rigidity. I believe that is the very reason why men are leaving the industry. That process of mechanisation and reorganisation is perfectly reasonable, but it is taking place at the expense of labour relationships and it is beginning to make itself felt.

I have tried to put forward some of my views constructively. It would be wrong for hon. Members to believe that we accept the principle of nationalisation. In certain fields we recognise that to denationalise the industry wholesale would disorganise the nation unnecessarily, but to say that we accept the principles of nationalisation would be wrong. We have said what we propose to do in the case of steel and the Liverpool Cotton Market, and for decentralisation of the railways. My right hon. Friend the Member for Saffron Walden has emphasised this evening the steps we propose, as far as coal is concerned, to bring about a degree of decentralisation by which alone, I believe, as do most reasonable persons, this industry may be enabled to play its full share in national recovery.

7.24 p.m.

Mr. Albu (Edmonton)

The hon. and gallant Member for Fylde, South (Colonel Lancaster) has made some rather serious statements about the quality of members of the boards of the nationalised industries and about the attitude of technicians within at any rate one of the nationalised industries, the coal industry. There are many factors which may lead to young technicians applying for posts abroad. The salary standards may be higher. Opportunities are being provided by the present Government in Colonial development which may have enlarged the number of positions of that type which are at present being advertised. I would add that we are also educating and training a very large number of young engineers and technicians, more than were being trained before the war. I do not think that the hon. and gallant Member's argument by itself is any criticism of the structure of the industry or of the morale within the technical staff. The hon. and gallant Member may certainly know of individual cases of frustration.

Colonel Lancaster

I was at some pains to point out that the emoluments were on the same standard abroad as in this country. If, as the hon. Member has just suggested, there had been the attraction of higher wages, there would have been no basis for my argument. I specifically said that they were on the same level.

Mr. Albu

The fact that there are the opportunities I have mentioned is to some extent an answer to the criticism that is made by hon. Members opposite that in this country the spirit of adventure, of pioneering and of wishing to go abroad and do things, is being lost. [Laughter.] Hon. Members may laugh, but this Government is expanding the opportunities. There is a very great shortage of many kinds of staffs required for the Colonial Service.

I do not know the details which the hon. and gallant Member had in mind relating to the boards, but it is a serious matter when anybody with a knowledge of these industries makes such accusations against men who are carrying out a very difficult job. I suppose that no board in private or public industry is perfect. I am certain that a very large number of second-rate persons are on boards in many private industries throughout the country. What we have to get in this country, over a period of years, is a change of attitude, whereby the best qualified persons, whatever they may be and whatever their qualification, are as willing and anxious to serve the community as they have been willing in the past to serve private profit-making industry.

I want to draw the attention of hon. Members to another factor. Some hon. Members on the other side of the House always argue as though there were a broad, clear-cut division between private industry on the one side, working in relatively small units, making profits and responsible to shareholders or to themselves as owning the industry, and, on the other hand, nationalised industries working as public corporations under boards appointed by Ministers. That is complete nonsense. The fact is that a very large number of our industries are managed by boards which are self-recruiting, and are, and have been in the past responsible to nobody. That applied not only to statutory monopolies but also to a large part of private industry. The problem that we are discussing, as the right hon. Member for Saffron Walden (Mr. R. A. Butler) said—and this was almost the only part of his speech with which I agreed—is one of size in the management and control of large undertakings. These problems apply equally to very large monopolies and semi-monopoly undertakings in this country, with tensor hundreds of thousands of shareholders and over which there is absolutely no control.

Let us, therefore, forget this rather simple argument as between nationalised industries on the one hand and private industries on the other, because, in fact, not only were some of the industries taken over statutory monopolies, but in other cases they were large public companies over which there was absolutely no control.

Nor is there one iota of evidence in support of what hon. Members opposite have said, that the efficiency of the industries taken over has gone down. There is no evidence whatever. Hon. Members opposite hope, by continuing to repeat that statement, to get people to believe it, but the absolute opposite is the truth. The fact is that these industries are suffering many of the difficulties from which the country is suffering due to economic conditions. They are being managed for the first time in conditions of full employment, which hon. Members opposite never experienced when they were in charge of those industries. This means that conditions of management are very different indeed. The main change that has been made in these industries and statutory monopolies compared with the large companies in whose hands they often previously were is that no longer does the surplus revenue belong to the shareholders and no longer are they free from all control.

Turning to the question of public accountability, which is supposed to be the subject of the Debate, I should like to refer to a very interesting paper read to the British Institute of Management by the hon. Member for Bath (Mr. Pitman). He pointed out that there are two aspects of control which interest Parliament. There is Parliament's interest as representing the consumers and its interest as representing the owners of the enterprises. As the owners of the enterprises we can have Debates on the reports and accounts and, quite rightly, we can question the Minister on policy directions. As hon. Members have pointed out, we do, in general, from time to time have a fair amount to say in the general policy of the enterprises. The interests of the owners are the maintenance and expansion of the enterprises, investment questions, the increase of efficiency, and so on.

We cannot avoid—I see no way that we could or should try to avoid—our responsibilities as representing the consumers because we shall inevitably get complaints and so on from our constituents. We have all had that experience, and the chairmen of the corporations or area boards have treated us with great courtesy and given us great assistance in these matters, and I am sure that that will continue. Like many hon. Members, I am a believer in decentralisation. Here I would like to scotch another myth created by the Opposition. They are trying to make the case that they alone are the decentralisers, that they alone believe in the decentralisation of management to the lowest possible level. That is untrue. Hon. Members on this side are as interested as hon. Members opposite that management shall be decentralised as far as possible. That is evident from the changing structure of the boards which have been set up under the various Acts and the changes taking place in the Coal Board.

Hon. Members opposite, and the right hon. Gentleman the Member for Saffron Walden in particular, really live in the past if they do not know the changes that have taken place, particularly in the Coal Board, in the degree of decentralisation. I was speaking recently to the production director of one of the divisions and he assured me that it is absolutely untrue that there has not been a very great deal of decentralisation not only to divisional but also to area level. When one realises the frightful mess the coal industry was in when it was taken over it is not surprising that in the early stages there had to be this centralisation of control to get the industry into planning hands before being able to decentralise the management structure.

Nevertheless, I believe that we should find it easier to exercise Parliamentary control if further day-to-day management and even some policy making were decentralised, and we could bring the management boards nearer to ministerial level. I cannot see why the Minister should not be the chairman of at least some of the boards. I do not see why he should not be the chairman of the Transport Commission, the Gas Council and the British Electricity Authority. That assumes that an ever greater part of the day-to-day policy and day-to-day management is decentralised to the regional organisations of those industries. I believe that that is the tendency that we shall see over a period of years as these industries become less and less within the field of continual political controversy.

I do not believe that it is possible to control the efficiency of management by outside bodies. I am not a believer in the Select Committee as a method of controlling efficiency. To begin with, a Select Committee has obvious limitations. It can deal with a fairly narrow part of a Department of State, and even there today, as we are all finding, when it comes up against great trading Departments it is almost impossible to keep political controversy out of the Committee. This ruins it as a proper committee for studying the day to day administration of the Department or enterprise.

I should like to refer to the extremely interesting speech made by the hon. Member for The High Peak (Mr. Molson). Because he speaks in a rather quiet and perhaps slightly academic way his speeches do not always make an impression on the House like those of some hon. Members who indulge in rather more robust political controversy. His suggestion of a preliminary inquiry by a Select Committee as to what matters should be debated in the House and then a series of Debates on those matters is an extremely fruitful one. His suggestion slightly resembles the Select Committee on Statutory Instruments. I see a political difficulty. The Government would always have the majority on the Committee and, therefore, might tend to try to prevent discussion of matters which they were attempting to defend on behalf of the Boards. However, it is a very interesting suggestion and perhaps the most fruitful one in the Debate.

If we are not to have external efficiency audits, Select Committees, and so on, which I do not believe would work, the boards should have their own teams engaged in continual efficiency audits, operational research teams or whatever we may call them. Hon. Members who have read the booklet on productivity produced by Lever Brothers will know the value of having teams of that sort operating in a series of enterprises under a single control. Whether such operational research teams should be a central service for all the nationalised industries or not I am not quite certain. On the whole, I believe that each of the industries should have its own operational research team, containing technical representatives and representatives of various sciences, including the social sciences. I believe we should soon find that these would form an association of operational research workers. A small club of that nature already exists. There would then be a great cross-fertilisation of ideas on the administration of these enterprises. Such a club or association might well be established under the joint auspices of the British Institute of Management and the Institute of Public Administration.

These are some suggestions on the control of the boards as a whole. In the end, we must have a final hard and fast test, and I do not believe that there is a better one than the revenue and expenditure—I will not refer to the profit and loss—accounts. That, of course, involves some method of price fixing. I should like to see set up for all these industries a permanent price tribunal which should also have the duty of controlling prices in private industry where the degree of competition is insufficient or where competition is undesirable. I believe that the decisions of that price tribunal might then be debated in the House, although I am not sure of the constitutional correctness of that or quite how it would work. Once that was done, I believe that we should then have some sort of fixed target in the revenue and expenditure accounts on which we could judge the efficiency of the industry so that we could debate it.

I should have liked to say a little more about consumers' councils but there is not time. I would say only one thing to my right hon. Friend who will reply. On Monday I asked him, in a Question, why he had turned down the application of the Eastern Electricity Council to admit the Press to meetings of the local consumers' committees and he answered that the chairmen of the district councils had agreed that they did not want to do so. I believe that the Eastern Council originally wanted it and that they were told it was better to have a uniform system. I cannot see why it is necessary to have a universal law about whether the Press is or is not admitted to local committee meetings. I agree very much with my hon. Friend the Member for Flint, East (Mrs. White), that the more one can get publicity in the local Press, which will come chiefly from the local committees, the more we shall encourage consumers to use these committees and councils in a way they are not doing now. It is no good complaining that the councils are not used, and that the public does not know about them, if the Press are not admitted to their meetings. The way to encourage consumer democracy is to encourage the fullest discussions at the committees and the councils, and the fullest reporting of them in the Press.

7.41 p.m.

Mr. Grimond (Orkney and Shetland)

I find myself in agreement with one point made by the hon. Member for Edmonton (Mr. Albu), that is the complexity of the problem that faces us, that we cannot draw a clear division between private industry and publicly controlled industry. However, I am not sure that I draw the same conclusions from that as he does. For instance, I would have said that it is not true today that private industry, as it is generally called, is uncontrolled. It is firmly controlled by the Government but, apart from that, we can see every year that it gets more and more influenced not only by shareholders but by public opinion.

Cynics like the Lord President of the Council may say that this has come about owing to the threat of nationalisation. Whatever the reason for it, one has only to open any paper to see the joint stock banks vying over the comfort of their offices, the friendliness of their managers, and their services to the public. Quite clearly, they are responsive to the opinion which the public holds about them. So it is not true to say that it is only since industry was nationalised that it has come out into the open, published its accounts or paid attention to public opinion. The accounts of most public companies are widely publicised now.

There are two or three other points which many speakers have emphasised with which I agree. First of all there was the suggestion made by the hon. Member for The High Peak (Mr. Molson) referred to by the hon. Member for Edmonton, that there should be a preliminary sifting of data from the accounts of nationalised industry. Certainly, it would be invaluable to rather inexperienced Members such as myself. Secondly we should all like to see the independence and the prestige of the consumers' advisory councils increased, and many valuable suggestions have been put forward, for instance bringing in local authorities, making them more democratically elected, and so on. My third point is that referred to by the hon. Member for Flint, East (Mrs. White), that there has been a lack of imagination in the launching of some of the nationalised indus- tries, that more could have been made both to the people working in them and to the public of this great joint effort which has launched some of them.

To return to the complexity of the matter, I feel that many of the problems facing us in this Debate are not specifically connected with the nationalised industries but arise from the general trend of the entire industrial development of this country. I am sure the hon. Member for Abingdon (Sir R. Glyn) must have met several of the problems, such as the scale of organisation and of relations with workpeople in the big railway companies before nationalisation was heard of.

Under the old dispensation the free market in theory did what the consumers' councils or Parliamentary control is supposed to do today. The idea was that the consumer should have 10s. in his pocket and then make up his own mind whether he wanted Bovril or Oxo. After looking at the price he made his purchase, and there was a free consumer choice which acted as a Gallup Poll, and as a spur to industry, and which, indirectly, through the markets, enabled profits to be made and new capital to come forward. The business which they are now trying to set up by hand was, in theory at any rate, done automatically by laissez faire.

Prima facie that is a retrograde step. In most branches of science the tendency is to go from the hand-made to the automatic. We are going from what is meant to be an automatic system back to a system dictated by human aims with all the fallibility which that means. Why do we do that? Surely for the reason that we could not be sure under the old dispensation that the purchaser had 10s. We found that wealth was not distributed in accordance with the conscience of the country, and furthermore, we set ourselves certain social and moral aims which were not met by the completely free play of the free market. Therefore, the Government intervened, but not for economic reasons. I have never thought it could be proved that Socialism is economically more efficient than the free market. I do not believe that can be done. The argument for nationalisation, to my mind, was a political or moral argument.

My point is that in so far as we are trying consciously to direct our economy that is a business for Parliament. Take the body running transport. It may be desirable that cheap rates for transport should be brought in, for instance, in the Highlands of Scotland. Again, for strategic reasons we may have to keep open our lines to a certain part of the country. That is a decision which it does not seem to me can be left to a nationalised board. That is a decision to be taken at some point by a democratically elected assembly. In other words, on those decisions Parliament must intervene. We hope it will intervene, not on behalf of one section of the people but on behalf of the general well-being of a wide area, if not of all the people.

Then we come to the economic consideration, the consideration of efficiency. I still feel, however imperfect as it may be today, that competition is extremely important. It exists between road and rail transport, it exists between gas and electricity. It seems to me important that we should not unduly so twist our economy that for purely economic reasons we attempt to put, say, road transport out of business for the sake of rail. We may do that for social reasons, but not for economic reasons. I believe we should allow as much competition within that field as we can. We should decide our social aims and, having decided those, we should leave as far as we can the play of the market to look after the economics.

But that in itself is probably not sufficient today. I think we are all agreed that further decentralisation is highly desirable. Of course, in America I imagine there is a far greater degree of interference by Congress in certain directions than we have ever tolerated here. I think I am right in saying that Congressional committees can demand the attendance of almost anyone. I do not think we want to go as far as that, but it shows that it is not impossible to carry on a democracy and yet have considerable interference by the legislature with outside bodies. As I say, we should not go as far as America but we should not be frightened of the Parliamentary Question. One argument against that is the question of time. I do not wish to introduce a new matter of controversy in this Debate, although the Lord President was optimistic in supposing that even on the last day in our old home we should all be united on the subject of nation- alisation. Clearly, this lack of time and lack of control by Parliament is an argument for devolution. There are many arguments against that I know, but some devolution would go a long way towards solving this problem and should be considered.

Again, I do not think it is a problem concerning only the nationalised industries. To my mind control over the Post Office or, for instance, adequate discussion of the Colonies, is equally difficult when Parliamentary time is so short. That, again, is part of the general problem which faces administration and the whole Government of the country today.

My hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser) raised the very important point that if a man lost his job in a nationalised industry which was also a monopoly he had no other means of livelihood open to him. I do not know the solution to that, but I think that such a man certainly should have the fullest recourse to having his case brought up in, say, Parliament and fully investigated. I do not suppose that that eventually has ever arisen, nor do I suggest that it would, but the mere state of affairs under which it could happen is dangerous.

Promotion in an industry is vitally important, and workers should be able to feel, not only that a ladder is open to them, but that in the higher technical ranks there can be exchanges between industries. As we start to plan our economy more and more we must plan the use of our manpower; and we may come to the day when we have something akin to the Military Secretary's Branch in the Army for looking after our skilled manpower.

I feel even more diffidence than the hon. Member for Flint, East, in entering these discussions "where angels fear to tread," about how or where Parliament can control the nationalised industries; but we should not be afraid to raise our voices, particularly where we wish to give an industry a conscious direction.

7.52 p.m.

Sir Ralph Glyn (Abingdon)

I want to raise only two matters which, I think, are germane to this discussion and which, strangely enough, have not been mentioned. I was a member of the Select Committee on Estimates when it was first set up in this House in 1919—a very long time ago. We tried then the experiment of having an assessor, as has been suggested today; somebody rather on the lines of the Comptroller and Auditor-General. That method was a great failure, however, and the present Estimates Committee no longer adopts that procedure.

The point of this Debate, surely, is whether Parliament is willing to surrender its control over expenditure. So far as I know, nobody today has drawn attention to the fact that there are certain public industries which are maintained by a subsidy from Parliament. The air services are public, nationalised bodies and are dependent on subsidies. Transport is not; it is to be organised in such a way as to operate independently. All the nationalised bodies, however, if they want to raise funds, have power under the Acts which were passed by this House to go to the Treasury and get a guarantee before they make an issue—that is, public money. I was rather distressed when the Lord President, of all people, seemed to ignore the chief duty of the House of Commons as the guardian of public expenditure. If we do not carry out that duty, we give up one of our main functions.

There is a distinction which has to be kept in mind. The Public Accounts Committee is set up, as the House knows, under a Standing Order of the House; the Estimates Committee has to be appointed whenever there is a new Parliament or a new Session. Our procedure is evolved by trial and error—there is no other way of doing it. I have been on the Estimates Committee for 20 years, and I do not think that the Lord President ought to assume that witnesses who appear before that Committee are treated rather harshly. During all the years that I have had the honour to be chairman of various sub-committees we have had unanimous reports, and as a rule we have been told by witnesses that we have been helpful.

It is quite possible for hon. Members of different parties to be able to take an objective view of these things and to eliminate party feeling if they are desirous of helping an organisation. Indeed, the hon. Member who has just addressed the House was himself once a witness before a Committee over which I presided, and I have yet to see anybody less intimidated than was the hon. Member. I hope, therefore, that the hon. Member will be able to convey to the Lord President his views that it is not necessary for witnesses to be intimidated.

It is very important that people who run a great industry should have the opportunity themselves of explaining what they are doing. What other opportunity will there be for those charged with heavy responsibilities in nationalised industries to explain their policy and what they are doing unless they have the opportunity of giving evidence before a Select Committee? I support the hon. Member for The High Peak (Mr. Molson), and I believe that a solution of this problem will be found by trial and error. We could, for instance, set up a new Select Committee; a new one would be necessary because the Estimates Committee are overloaded, and the Public Accounts Committee deal with matters at a rather late stage and they also are overloaded.

Surely we are all agreed that means have to be found of maintaining Parliamentary control over expenditure and of forwarding on their way these great basic industries, which have come to stay; of encouraging those who are charged with responsibilities within the industries and making them feel that they must be on their toes, otherwise people will begin to wonder what they are doing. Nothing is more discouraging to the officials of any great organisation, whether transport, coal, or anything else, than to feel that, in spite of their daily drudgery, no one knows what they are doing or why they are doing it.

We in this House represent the owners of these industries; they are owned by the public, whom we represent. It is our business to encourage and help them, and not to ignore them. I wish that more hon. Members would read the reports which are brought out by the Select Committees and the Public Accounts Committee; the proportion of hon. Members who study those reports is, I regret to say, very small. If more people were to read them, our Debates on these matters would be more concentrated on the things that matter instead of being loosely spread over a wide field.

I beg the right hon. Gentleman who is to reply to say frankly whether the Government think that a nationalised industry which directly or indirectly has the use of public funds should be removed from Parliamentary control over expenditure. That is the issue now facing us. Already, as hon. Members will know, there are large blocks of expenditure, amounting to very nearly £200 million, which are never inquired into. In the Estimates Committee we have been told that it is not in the public interest that even we, who have a duty to the House, should go into those matters, and I accept that; but is the House now to add vast extra blocks of expenditure which are not to be under the review of Parliament?

If so, we should let the country know, because there are people who believe still in the old tradition in which I was brought up when I first came into the House, that it is our duty here to see that public money is properly spent. It is our business to see that people who are charged by this House to spend that money have an opportunity of explaining what they are doing. It is no use abusing them after something goes wrong; instead, they must be encouraged and stimulated with the assurance that we recognise their troubles and are anxious to help them to go forward.

I think that a great distinction should be drawn between those nationalised industries which are productive and the two big organisations which are connected with civil aviation. I see on the Government Front Bench the Parliamentary Secretary to the Ministry of Town and Country Planning, who for a long time was responsible for replying to our Debates and Questions on civil aviation. I think it is quite obvious that if there had been more time and opportunity for explaining why that amalgamation was brought about, there would have been greater interest and greater enthusiasm in those two great organisations. We have an example there of a direct subsidy paid by the taxpayers of this country which has never been properly reviewed. We have entrusted ourselves to the Minister of Civil Aviation, the matters have been hardly debated in this House and there is no machinery to enable those responsible for those operations to say what they have done, why they have done it and what their difficulties have been.

We have a twofold duty to recognise if Parliament sets up these bodies. We are Members of Parliament for the time being, because we are all transitory—we are here and others may come to supersede us—but those whom we have appointed to these jobs remain. Therefore, I think it is of the greatest importance that the right hon. Gentleman, in replying, should give consideration to the suggestion made by the hon. Member for The High Peak. There was nothing said by my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler) which would be in opposition, except that he said he did not like the idea of a Select Committee. I think we ought to be quite clear that when public money is being spent, without a Select Committee working in the way suggested, we are giving up what is one of our prime duties—the guardianship of public finance.

8.2 p.m.

Mr. MacColl (Widnes)

I have been very interested to hear the Liberal Whip wrestling with his conscience. Although I had some difficulty in following the trend of his argument, as it seemed to be edging him inch by inch across the Floor in favour of a policy of public ownership, I would not want to interfere at all with the somewhat tortuous process of reasoning with which he was performing that operation. But I would reject altogether his approach. It seemed to me to rest on what is a false dichotomy, that there is a difference between the economic aims of an industry and what he described as moral and political questions.

We are discussing this evening something which is quite new and which is a thing in itself, that is, the recognition that a publicly-owned industry is being run and can only be run for the benefit of the community as a whole. The only objection I have to the Motion before the House is that it seems again to make the same mistake by contrasting public accountability with efficient management in the public interest. After all, one may make a very attractive shoe, but if it pinches one is not much of a shoe-maker. The real test of the success with which we manage public industries is not their profit or loss, but the degree to which they are providing a service which not only objectively seems to be fulfilling a public need, but is recognised as fulfilling that need by the people using that industry. It therefore seems of tremendous impor- tance that we should have an adequate system of consumers' representation in these industries.

I have had an opportunity of serving on two consumers' councils. One is the body which has already been the subject of rebuke by the right hon. Member for Saffron Walden (Mr. R. A. Butler) for its banality, the domestic coal consumers' council, and the other the London electricity council. I think it would be fair to say that those councils are not working as effectively as one would have hoped. That in part is due to the nature of the situation in a time of transition when the problems of taking over the industry are great and the problems created by full employment are great. There is not very much left for a consumers' council to do. That is one of the problems. Some Members have criticised the lack of Press publicity, but it is not much use encouraging the Press to take an interest in the council if it has not much work to do. The work may seem to be more effectively done if no one knows how barren is the agenda. That is in the minds of a great many members of consumers' councils.

There are also very important mistakes in structure and this particularly applies to the earliest of the consumers' councils, the coal consumers' council. That consumers' council made a mistake, and I must take collective responsibility for that mistake, in that it never set up any local body. It is bound to be ineffective as far as day-to-day problems and complaints are concerned because it is out of touch with what goes on in the country. It sits in London, never moves, and does not know what is happening in the provinces.

It is not likely to be more successful with broad questions of policy, because it is bound to be dominated by the representatives of the National Coal Board and the representatives of the coal merchants. If the representatives of the National Coal Board, the coal merchants and the Ministry of Fuel and Power agree on any particular policy there is not very much that the lay members of the consumers' council can do. I suggest we should approach this problem from a very different standpoint from any that existing consumers' council have reached. There are two distinct problems which have to be kept separate. There is the general problem of policy. It may well be that a nationalised industry in a monopoly position may be building up reserves, or paying out high salaries and not giving the consumers' the benefit of reduction in cost that ought to accrue to them. That kind of issue ought to be settled at a national level.

I was very glad to hear what the hon. Member for Abingdon (Sir R. Glyn) said, because it seems to me that the right body is a Select Committee. When my right hon. Friend the Lord President of the Council said, as a criticism of the idea, that it might make the leaders of nationalised industry nervous, that seemed a very strong argument for doing it. It would be a very good thing for the heads of the nationalised industries to be nervous in the face of the consumers. I do not think the solution will be found by means of question and answer because there is something very individualist about Parliamentary Questions—a very fruity scandal is picked up and then forgotten. That method is not effective in the day-to-day problems and difficulties of the industry.

I should think a Select Committee of people like the hon. Baronet the Member for Abingdon would be bound to function with great efficiency and effectiveness and a body of that sort could focus a very considerable effective criticism, not on the details of efficiency, but on the general national question of consumer interest. The day-to-day problem of management and day-to-day difficulties and breakdowns of supplies in particular areas, suggestions of discrimination between one town and another—all those are local problems which should be dealt with on a local level. The obvious body to do that is the local authority.

The difficulty at the moment, until we get local government reorganised, is that our system of local government is not effective enough to fulfil the task as it should be done owing to the differences in areas. It may be that one can get over those difficulties by joint bodies made up by grouping local authorities, but I am certain that the effective contact with the public must be through people in day-to-day contact with the public and not merely by specialists. That is not done by picking out someone from the W.V.S. for example, and saying "There is a representative housewife." She may be that, she may be a very valuable and hard-working person, but I do not think that she has the all-round contact with the local public which an elected representative of a local authority has. The core of a consumer body of that kind should be directly elected members of the local authority.

Secondly, these local consumers' councils should be multi-purpose. I do not think that there is need of a local coal council and a local electricity council. There should be one consumers' council, taking the community as the unit, and within that community looking at all the nationalised industries and integrating their problems, looking at them as a whole and seeing that grouped together those industries are providing a really effective public service. One great danger of our public ownership is that we are so obsessed with the capitalist idea of profit, of making gas compete with electricity, coal with electricity, etc. I do not want to see the nationalised industries perpetrating some of the worst deficiencies of private enterprise. The aim should be to concentrate on giving the consumer a balanced service. Local consumer bodies, looking at the problem as a whole, could perform a very effective function in safeguarding individuals' interests as consumers and citizens affected by the different industries.

8.12 p.m.

Mr. Summers (Aylesbury)

I find myself in considerable agreement with much of what the hon. Member for Widnes (Mr. MacColl) said. The Lord President of the Council, in opening this Debate, took great pride in the fact that he had seen to it that consumers' councils were associated with each of the nationalised industries, in contrast, he pointed out, to what occurred in private enterprise. He completely omitted to realise that the remedy which the consumer has in the private enterprise sector of industry, namely, freedom of choice, renders it quite unnecessary to consider a formal channel for the putting forward of complaints by the consumer. It is the very absence of that freedom of choice which makes it necessary to consider in some form or another an outlet for the consumer.

It is quite true that there has been great criticism of consumers' councils, and I wish to stress particularly the completely false position into which most of them appear to have got themselves. In the last report of the Domestic Coal Consumers' Council, that body describes itself as something of a long-stop. I do not know whether hon. Gentlemen recall their more active days of cricket, but I can remember two things about long-stop. One is that one generally put there that member of the team who could do less harm there than anywhere else. The other is that I never saw any batsman caught out by long-stop. It is evident that most of these consumers' councils have approached the matter from a point of view entirely different from that which at least it was expected they would follow. It is not, therefore, surprising to find such comments in the Press as, for example, the following, which I quote from "The Times": It is, in fact, the consumer of all people, who comes out worst in these reports: the councils, which exist to put forward his reasonable complaints, seem to be persuaded that in a sellers' market his complaints are unreasonable. Then we have the "Economist" telling us: The council was intended to listen to representations from consumers and to suggest action to the Minister, but it seems to have-neatly reversed the procedure. Finally, I would quote from a document which it cannot be maintained is hostile to the Government, the Fabian pamphlet entitled "Nationalisation and the consumer," which says about consumers' councils: It is hardly surprising that these reports should be limp and platitudinous documents … as an instrument for scrutinising the operations of the Coal Board, in order to protect the interests of the consumer, the Council cannot hope to succeed. It is quite evident that a situation has arisen very different from that which was intended. I believe it to be not only a question of structure and composition, as has already been mentioned, but very largely a question of the approach to the problem, to which I have already made reference. It seems to me completely false to imagine that a consumers' council can do justice to its responsibilities if, sitting amongst its members, it has representatives of the body against which it is set up to protect the consumer. We find that the vice-chairmen of the boards are themselves members of the consumers' councils.

In a great many cases these meetings are held very infrequently, and the people on the councils have necessarily only a superficial knowledge of the duties which they are called upon to perform. There is a great danger that the public will, as a result of various well-intended suggestions for strengthening the consumers' councils, be ready to believe that they can, under this monopoly production system, have adequate protection by means of a series of committees. I am satisfied that so long as there is that absence of competition, at all events in a sellers' market, there is really no protection to be expected for the consumer from a committee, however intelligently that committee be composed.

Experience to date is quite clear—that in this sellers' market the consumer is told that his complaints are inescapable and that there is no remedy for them; while in a buyers' market there is no need for the consumers' councils. A little pressure on the producer in the form of difficulty in selling his products and the restoration of the freedom of choice will do far more than any consumers' council can do to ensure that the consumer gets a fair deal.

Whilst it may be necessary to eliminate the defects to which I have referred in the attitude and the composition of the consumers' councils, do not let anyone imagine that such councils are any substitute for proper incentives in the form of competition or a buyers' market; and they can never really provide adequate protection against vast monopoly powers or mismanagement. It has been suggested we should build up a much greater structure, so that such councils can be more effective. In that lies the great danger of creating two bodies equally knowledgeable, each checking the other but only one of them having the responsibility for the job.

It is all very well for the Lord President of the Council to pride himself on the channel for complaints, but the consumer is much more interested that there shall not be grounds for him to complain about. It is much more important that we should have clean coal than that there should be adequate channels for complaint that coal is dirty.

8.19 p.m.

Mr. Tomney (Hammersmith, North)

The hon. Member for Aylesbury (Mr. Summers) has made some play with the position of the consumers councils. I think he has failed to realise that the consumers are now expecting a higher standard from nationalised industries than they formerly got from private industries. There is also a bigger demand and greater competition for the available goods on the market due to the Government's policy of full employment. That fact has to be faced and admitted.

I wish to deal primarily with the issues in regard to the Liverpool Cotton Market. The right hon. Member for Saffron Walden (Mr. R. A. Butler) went through the whole list of the other nationalised industries, but he omitted any specific reference, except in his opening remarks, to the Raw Cotton Commission. He stated that it is the intention of the Conservative Party, if and when they are returned to power, to do away with the Raw Cotton Commission. That is a very serious statement for the Lancashire cotton industry, and it should not pass without notice that this statement has come from the principal "back-room boy" of the Conservative Party.

Hon. Members who have a knowledge of the Lancashire cotton industry will remember the disastrous effects from 1920 onwards upon the industry which were due in no small measure to the wild gambling in cotton futures on the Liverpool Cotton Exchange. In the last five years the Lancashire cotton industry has made wonderful strides, due mainly to the stability which the industry has enjoyed under the Raw Cotton Commission. The Commission itself has had difficulties in world purchases and supplies and other difficulties, but, nevertheless, it has done a sound job. It is, in my opinion, a Commission which should be continued in the interests of the cotton industry of this country. If it is not continued we are faced with the possibility of unstable conditions throughout the whole industry, due to uncertainty with regard to supplies and the price of raw cotton. The reputation of the Lancashire cotton industry for high-grade goods has no parallel throughout the world; but it cannot perpetually sustain itself on its reputation for high-quality goods.

The large Far Eastern markets which will develop as world conditions become stable should be made increasingly available to the cotton industry. It may well be that before the war we lost ground in taking too much profit out of the industry and not ploughing back anything in re-capitalisation and new machinery. The Japanese industry, on the basis of inferior goods, has a vast rate of production. Whatever Government is in power will have to face the question of re-mechanisation and re-capitalisation of the whole cotton industry. No sensible Government would undertake that programme if there is gambling on the Liverpool Cotton Exchange. I think it should go on record that what the Conservative Party envisages for the cotton industry, if and when it wins an election, will bring utter chaos and ruin to this stable industry of Lancashire.

8.25 p.m.

Mr. Niall Macpherson (Dumfries)

I do not propose to follow the hon. Member for Hammersmith, North (Mr. Tomney), because I prefer to focus the attention of the House particularly on the question of public accountability. There has been a great variety of interpretations of the term and what we really want to get from the Government is what they mean by "public accountability." It is all very well to speak airily. The Lord President did so in his broadcast on Saturday night in drawing a comparison between public corporations—meaning the nationalised boards—and private limited liability companies in that the public corporations are responsible to the nation. He drew a distinction between them and referred to powerful directors working for private profit. He added that they came from the privileged few, which is far from true, and that many of them were able men but not responsible to "John Bull."

It seems to me that the whole purpose of this Debate is to determine who is "John Bull." He is a fairly substantial character in caricature, but he is a very shadowy character indeed as a personification of British character when it is a question of being responsible to him and not responsible to the Crown, to Parliament or to the electorate. We must determine what we mean. After all, public accountability surely means, if it means anything at all, the responsibility of the steward to the master; and we must know where sovereignty lies and how accountability is to be controlled. It is easy to say that public boards are now responsible, as in a sense they are, to consumers' councils. I agreed with a great deal of what was said by the hon. Member for Widnes (Mr. MacColl) and the hon. Member for Edmonton (Mr. Albu). They were both infinitely more constructive than was the right hon. Gentleman who introduced this Debate. He put forward only one suggestion of any consequence, apart from the drawing in of outside industrial consultants, and that was that there should be a seven-yearly review by a Royal Commission.

What are the functions of a public corporation that has no competitors? How can we judge how it is carrying out those functions? Who can judge, for example, whether the quality and price is as favourable to the consumer as it should be? Is the efficiency audit or a Parliamentary Select Committee an adequate substitute for consumer choice? That is the Whole essence of a Debate about nationalised industries. Is there a means of substituting responsibility apart from consumer choice? Of course, the other side of that is the results in the balance sheet; because the ordinary industrial company is in competition with other industrial companies and the measure of its success or failure is the measure of the service it renders to the public. If it renders good service it will flourish, but if it renders bad service it will gradually decline and vanish altogether. The whole question is what substitute can there be for that system? I have failed to detect any satisfactory substitute which has been put forward.

I agree with the hon. Member for Abingdon (Sir R. Glyn) when he says that there should be some system for accounts to be rendered of expenditure of public moneys by those corporations which are receiving annual subsidies from this House. I agree also with the general conception put forward by the hon. Member for The High Peak (Mr. Molson), supported by the hon. Member for Edmonton, that there should be some method by which the annual reports of the corporations could be sifted, and that the members of the executives and the boards should be brought before a body in order that the House might have the whole of the report put into focus. I think that is very important, and I would suggest to the right hon. Gentleman that perhaps the best way of doing that would be to set up a Select Committee, and that the reports as soon as they were laid on the Table of the House in dummy should be circulated to the Committee who should start work on them. In that way the attention of the House could be focused on the salient points and on the matters of policy arising.

Then there is the matter of Questions. It seems extraordinary that if a food office, for example, is closed the matter can be raised on the Floor of the House, that a Question can be asked about it, but that if a whole railway line is closed nothing can be done. My hon. Friend the Member for Fife, East (Mr. Stewart), tells me that he has been trying for a long time to get a Question past the Table on that particular subject. Then we have the general attitude of the boards themselves. I had a case which I did manage to get past the Table, and which the right hon. Gentleman was good enough to answer, concerning the question of short delivery of coal. The Coal Board merely replied that the wagons had been tared and had been found to be correct. It so happened that the merchant in question was able to get them re-tared at the place of delivery and found that they were not correct. He could not bring the railway official who did the re-taring to come forward and give evidence; I have no doubt that he would not have come.

I asked the right hon. Gentleman what should be done about it, and he referred me to the 1948 Report, suggesting that the matter should go to the domestic consumers' council about which the hon. Member for Widnes has spoken. What would have happened then? They have no power to settle the matter; they could only recommend. There is no public accountability within the consumers' councils. It is one thing to give accounts in the sense of writing reports or telling a consumers' council what is happening, and getting its advice and its reactions on the policy which is proposed to be adopted by the board. That is utterly different from calling for an account and having the right to exact that account. That is what this House alone can do. But we have seen from experience that it is too difficult for it to do this effectively.

I will not enlarge on what has been said about the discursiveness of the Debates on these subjects and the difficulty of getting Questions put down. The House, so far, has failed to assert itself as the accounting authority, and it is idle for the Lord President to say that as time goes on Members will become more and more adroit and astute in getting Questions down, and that they will be able to increase the accountability in that way. That is not the way in which it can be done at all.

The real essence of this Debate, as I see it, is this: we are in the position that we have nationalised a certain number of industries. At the moment they are experimental. For example, I do not agree with the hon. Member for Chester-le-Street (Mr. Bartley), who said that the principle had now been accepted. That is what the Lord President wants us to believe. For the last five years he has been adopting a general softening-up process of the country as a whole, trying to make out that nationalisation is inevitable, that it is the only course. He hopes that, because they believe it is inevitable, people will range themselves on the side of the big battalions. But the British nation have shown that they are made of stronger stuff than that and the majority, at any rate, ranged themselves on the other side at the last election.

We have now reached the nationalisation of iron and steel and the question of accountability, as far as that industry is concerned. Quite clearly, the Government have here had the very greatest difficulty in getting a board together. What is the conclusion to be reached? Surely it is that the softening-up process has failed. The attitude of the country as a whole is hardening against the nationalised industries and against further nationalisation. That is why we are having this Debate today. The Lord President wanted to represent to the country at large that nationalisation was something which was universally accepted so that the Government could push on with it a little further, quite apart from any question of de-nationalising what has already been nationalised.

As has been suggested by many hon. Members, many improvements can be made in the system of consumers' councils, in answering Questions and arranging Debates in this House, and in matters like that of the Select Committee, but the note upon which I want to conclude is that the House should regard nationalisation as something which has not yet shown how it can protect the consumer and protect the workers. Until it can be made really accountable, certainly no further steps should be taken. In the protection of the consumer there has not yet been any substitute for consumer choice and, until that substitute can be found, nationalisation can be regarded only as a last resort.

8.38 p.m.

Mr. Hamilton (Fife, West)

In the course of this Debate quite a lot has been said about the consumers' interests in the nationalised industries. Very little has been said about the workers' interests, and I maintain, as I think most of my hon. Friends would maintain, that the first charge on any industry should be the welfare of the workers within it.

Lord John Hope

The hon. Member realises, of course, that the workers are also consumers. It is no good dividing the two.

Mr. Hamilton

I am not as dull as the noble Lord would suggest. I know that the workers are also consumers, but I still maintain that the welfare of the workers within any industry, whether privately controlled or publicly controlled, should be the first charge upon that industry, and one of my main criticisms of our nationalised industries is that that has not been the case. We have had enormous improvements in the coal mining industry but even so the welfare of the workers has not come before that of the private owners who have got rid of the property. I have no practical experience within the mining industry, but I come in very close contact with the mining community, having been born and bred in it, and in that respect I think hon. Members on this side of the House have an advantage over hon. Members opposite. I wonder how many miners there were at the Tory Blackpool conference. In that respect we have an advantage over them, because we are intimately in contact with the people who should be the first charge on the industry—the miners within that nationalised coal industry.

I want to give my impression of what the miners think about the nationalised coal industry. Their grievances, I think, are three in number. They have got other lesser grievances, but I think the three main ones are these. First, they allege—whether it is true or not is open to opinion—that the old gang are still in control. The Opposition come back at us and say that we are manufacturing jobs for the boys. Both sides are wrong. But the Opposition are getting converts because of the lack of publicity by the National Coal Board. If the National Coal Board would publicise more the qualifications of all members of the National Coal Board and publicly advertise every job that is going under the Board and let the workmen at the face see that the men appointed are properly qualified, that would largely dispose of that grievance.

The second grievance, which I at any rate find in the Scottish coalfields, is the question of the compensation to the private owners. I am not an economist, and I fully admit that I cannot explain in detail to them what the compensation proposals mean in terms of £ s. d. every week or every month or every quarter; but the miners within the industry know that in the National Coal Board's Report every year there is a matter of £12 million or £13 million or £15 million of compensation paid to the former owners, and naturally they come back to us and say, "the £5 a week man or the £5 15s. a week man has got a better claim to whatever is going in the industry than the former owners who made such a mess of it." We agree, of course, with the principle of compensation; but I think a case can be made for compensation being paid the other way about—to the miners who suffered so much in the years of private enterprise.

I feel that the only way in which this grievance can be eliminated in the mining industry is again to publicise the facts in some kind of pamphlet that the mining community can understand. They are not economists. I think they have more political awareness than most sections of the working community in the country today, but they certainly do not understand—and I am certain that the majority of hon. Members in this House do not understand in detail—the principles and the various facets of the compensation proposals within the nationalised coal industry. If the miners could get that into their heads, then it would largely remove their second grievance.

Their third grievance is, I think, that they still feel—and I think this applies in the other nationalised industries, too—that there is a large measure of remote control, and they link this up with the fact that the old gang are still in control. Of course, we had from the Lord President the fact that consultative committees had been set up, and that we have joint production committees, committees at pit level, and so on. However, the large proportion of those bodies have not any kind of executive power at all. They are talking about canteen facilities, absenteeism, and so on. They cannot go beyond making recommendations.

Mr. Lyttelton

May I ask the hon. Gentleman whether he is in favour of joint consultative committees dealing with matters like wages and working conditions?

Mr. Hamilton

My point is that the worker at the lowest level feels that whatever committees are set up they do not put him into closer contact than hitherto with the men at the top. To remove that feeling is a matter of education and publicity. Indeed, I go so far as to say that the whole problem of nationalisation is a question of educating the workers in the nationalised industries and the consumers outside them.

The hon. and gallant Member for South Fylde (Colonel Lancaster) and the hon. Member for Dumfries (Mr. N. Macpherson) referred to the difficulty of getting men with the necessary ability to serve on the boards of these nationalised industries. So long as there is a section of the community willing to accept political democracy but not economic democracy, so long as there is a body exerting power on individuals to make them desist from serving on these boards, so long shall we have to put up with a certain measure of inefficiency within those industries. It is people who do not believe in economic democracy who are forcing us, in some measure, to get perhaps less experienced men on these boards. It is no good the Tories creating a problem and then complaining because the Government are not solving it. That is the logical outcome of the pressure the F.B.I. put on the steel bosses when the Steel Corporation was set up.

We must show the workers and the consumers that we believe in the desirability of political democracy, and to make that political democracy practicable we must have with it economic democracy, which to me is the fundamental basis of the whole argument in favour of nationalisation. The right hon. Member for Saffron Walden (Mr. R. A. Butler) quoted at length my right hon. Friend the Minister of Defence who had said on an occasion in Scotland that the Labour Party had not a blueprint of nationalisation for the coal industry. Of course they had not. They had nothing which savoured of rigidity in nationalisation. We are still in the experimental stage. Mistakes are being made and will be made, but to suggest that those mistakes are an argument for de-nationalisation is just not facing present-day problems.

8.48 p.m.

Mr. Redmayne (Rushcliffe)

It is perhaps typical of a nationalisation Debate that we should skip so much from what, with all respect, I would call one hobby-horse to another. We have strayed very much from the particular subject of tonight, which is accountability. I respect the hobby-horse of the hon. Member for Fife, West (Mr. Hamilton) as much as any; his viewpoint is the viewpoint of the worker. But when discussing accountability one has to consider it under three separate headings considered as one—the user, the owner and the worker. If that is not done, one does not get a fair picture of what we are trying to talk about.

In my opinion, accountability is not necessarily made to the same authority in each rôle. Equally, accountability is not necessarily best made to Parliament, for the very reason of the changing and conflicting loyalties such as we have had in the last few minutes, which tend to bias the opinion of Parliament on this matter. Management is essentially "of the earth, earthy," and the successful corporation, whether it is national or private, is that which by decentralisation maintains contact with the earth right down to the product and the consumer. To my mind, that is the whole secret behind this rather jargonish sort of word "accountability." We shall not find these things by seeking the voice of the consumer in the comparatively rarified atmosphere of Parliament.

If we have to accept accountability to Parliament as one of the things to discuss, either accountability to the House or to a Select Committee, I suggest that we might well, on any one occasion, discuss only one heading of accountability. Let us discuss the user which is the price and quality of the product, or the worker, which is pay, conditions, safety, health and other things, or the owner, which is policy, finance and organisation. That is very much the line suggested by my hon. Friend the Member for The High Peak (Mr. Molson).

I think that unless we try in this House to narrow our discussions when we are talking about a nationalised industry, we shall always stray from pet subject to pet subject and never attain our objective, which must be the efficiency of any particular industry or of nationalisation itself. When discussing nationalisation as a whole, we must discuss it as a whole—owner, user and worker together.

I should like to make a point, to which I will return in another connection, that the problems of the user or of the owner or of the worker in regard to nationalisation are common to many nationalised industries. It might, therefore, be quite profitable—and I put this particularly to the Minister of Fuel and Power—to discuss the user aspect of coal, electricity, gas and transport together. In that way we should manage to keep to a reasonably narrow limit. It would perhaps be a more coherent subject of debate than taking even coal by itself, because we all know how far we can stray from that subject. I pass from that, leaving out Questions in Parliament, because to my mind the burden of Parliamentary discussion and Parliamentary Questions could probably be very much lightened by better handling of the consumer problem. The proper handling of the consumer problem, which in fact is management, might avoid the need of Parliamentary discussion and Parliamentary Questions altogether.

It is a fallacy, to my mind, to say that discussion on nationalisation is a report to the shareholders. Shareholders in industry are not, in the main, interested in the report; they are interested in the dividend, and the dividend of a nationalised industry is the price and quality of the product. Let us not forget it. The dividend for some time now has been sub- ject to limitations. I agree that there is a class of preference shareholder, who is the worker, but often his benefits have proved illusory in some of these industries; and in the long run the ordinary shareholder, unless he sees benefits and by way of dividend in the price and quality of the coal, is going to see the company wound up. If he sees a nationalised company wound up, that will be the end of nationalisation, and that may well come about in due time.

If that is to be avoided—and let us hope that it is to be avoided—it will only be avoided by providing a proper outlet for the voice of the consumer, in regard to which the Lord President was so insistent, not in Parliament but at the point of service or the point of sale of the product. It was said in another place, in the earlier part of this summer, that consumers' councils are an entirely new conception of public accountability; that there is nothing to be compared with them in private industry. Indeed, there is not, because there is no need; they are the unnatural children of socialisation.

The public is the consumers' council of private industry. It either buys the product or it does not, and the report of the consumers' council is in the sales figures of the industry. In the case of nationalised industries, the public cannot express its disapproval by not buying the product. Therefore, we must provide the public with an efficient means of disapproval. The means that appeals to me is the means which use an existing system. In discussing any existing system, we should bear in mind that the user of nationalised products is a common user between many industries.

It is difficult to think of an existing system by which we can give the user a better chance to express his approval or disapproval; but I remember that if I want to complain about my local 'bus, I complain to the local council. I confess that I do not complain about my local 'bus service because in my opinion it is the best 'bus service in the country, and as yet is unsullied by the levelling hand of nationalisation. I suggest, therefore, that there might be something in having a common user officer in every local authority whose one job would be to receive all the complaints about nationalised industries from all the people in his area. He would, no doubt, be a busy man. I doubt whether any man could stand the blistering flow of comments that might come to him; but we are a tough nation and the hour would find the man. If hon. Members do not like the name, we could call him a "nationalisation salesman." which would probably appeal more to Members opposite.

Perhaps it is the counsel of perfection that we could have such a man on the local authority level, but we could have him at the county or county borough level. I see these officers receiving all the information that comes in and passing it on, either to the consultative council, which would be the common users' council, or direct to the nationalised industry concerned, at their own level for action and to report back at their own level. It would, of course, be expensive, but it would be efficient, and the efficiency of this experiment in nationalisation is the most important thing we should consider. I ask the House to note that it is a horizontal principle, and therefore it lends itself to that system of decentralisation which I support as much as anyone on these benches. What we want to see is pride in the product of nationalisation, or else no nationalisation. It is the product that is important, not the principle.

9.0 p.m.

Mr. Oliver Lyttelton (Aldershot)

I think that everyone has welcomed this Debate and the opportunity to raise these wide problems. The Lord President, who, I am sorry to say, is not in his place, began his speech with a sort of admonition that we should not engage upon any party points. I shall endeavour not to do so, and where I find myself in agreement with him I hope he will be suitably gratified. Where I am not, he is at liberty to say whether I am making a party point; but the fact remains that I am going to say exactly what I think. In this Debate the House of Commons has shown itself uneasy on this subject, and in September, in another place, there was also uneasiness. The resolutions of the T.U.C. at Brighton show uneasiness. I am thinking of those that are in the report on pages 11 and 12. This uneasiness is overdue, because the way in which the nationalised industries are being run now should be the cause of anxiety to everybody who has the national interest at heart.

I do not think anyone in any party is convinced that we have yet evolved the beginnings of a workable system for these nationalised industries. The plain fact is that they do not work today, and I shall say why we shall have to make a completely new start for most of these national boards. I want hon. Members opposite to believe me when I say I am not at the moment—this is not the time—trying to knock down the whole system of public ownership. I am only showing the way in which the work of these national boards is completely unsatisfactory. We shall have to make a new start. That does not necessarily mean that we will do away with public ownership. There are industries which I think should be denationalised, and there are others which I think it is impracticable and too late to denationalise, but we must make a new start.

The course of the Debate has shown that we are not discussing nationalisation as a concept; I do not think this is the occasion to do it. The subject divides itself quite easily under four heads. One is the accountability of the national boards to the Minister and to Parliament; the second, the protection of the consumer who has to draw many of the necessities of life from these industries, whether he is an industrial consumer buying coal to heat his furnaces, or a domestic user buying a scuttle of coal to heat the home, or a private or industrial user of gas or electricity. The protection of the consumer is an important subject. Then there is the third question, that of administrative efficiency, and, lastly, there is the subject of labour relations.

It would indeed be wrong to consider that we have made any advance under any of these four headings. Why is that so in a country which is rich in administrative ability? The real reason is that, quite apart from the theory of the nationalisation of industry, under the present set-up these boards cannot function. The Lord President knows they cannot function and I think he is uneasy. That is why I particularly welcome this Debate, and will try to make some contribution though it will be highly critical.

Before I come to discuss the difficulties in detail let me say at once that those who wish for greater Parliamentary control, like my hon. Friend the Member for Abingdon (Sir R. Glyn), those who wish for greater protection for the consumer, like many hon. Members who have spoken, and those who wish for decentralisation—three subjects which have been widely ventilated during the Debate are really attacking the very theory and principle of nationalisation.

First of all, let us look at Parliamentary control. The plain fact is that the structure of government, considering the way it has arisen and the duties and responsibilities of this House, cannot be satisfactorily geared to a corporation engaged in day-to-day business. We can patch up here and there, and we must try to do so. We can patch up here and there by palliatives and mitigations, and try to get a little further away from the total absence of responsibility, behind which Ministers can hide if they so wish. In the long run we cannot gear a day-to-day business with a legislative assembly, and all attempts to do so are doomed to failure.

Secondly, where a public monopoly is operated with all the force of authority of this House and of Ministers who are responsible to this House, there can be no satisfactory protection for the consumer. I commend the speech of my hon. Friend the Member for Morecambe and Lonsdale (Sir I. Fraser) on this side of the House. I do not think any of us could have put the case with greater force or clarity than he did. The third point is that when we come to administrative efficiency we must find that decentralisation, which is widely advanced as the cure, notably by my hon. and gallant Friend the Member for Fylde, South (Colonel Lancaster), is entirely the opposite of the theory of nationalisation. Decentralisation means giving autonomy, or very nearly, to local bodies, whether local authorities or local boards. It has often been pointed out how necessary it is to restore a sort of local patriotism.

My point is that to localise, which is what decentralisation means, is exactly the opposite of nationalisation. Nothing could be more ironical than that believers in nationalisation should say that the cure for all these administrative difficulties, and they are massive, lies in decentralisation. The exponents of nationalised or socialised industries say just this, "It should lie within the power of a central body to judge at a given moment where the public interest lies." Any system of nationalisation must be antagonistic to local authorities, local boards and local autonomy, because of its very nature. Local individuals are far away from the superior beings who know where the national interest lies.

Let me say, in passing, that if it was within the competence of any of us, even of right hon. geniuses opposite, to determine infallibly, at any given moment, where the national interest lay, it would be unnecessary for the House of Commons to meet at all. We should merely come back here once every quarter to pass votes of thanks, praising Ministers for their infallibility. In fact, we are here to try to determine where the public interest lies, and it will not have escaped your notice, Mr. Deputy-Speaker, that there is sometimes considerable difference of opinion on the subject. If there is any merit in nationalisation it must be to prevent inferior beings like myself doing things which the superior arbiter, whether it is the Prime Minister or the Lord President of the Council, judges to be against the public interest. None of us is infallible, not even the youngest of us.

Centralisation is the very idea and core of nationalisation, which claims that it can impart a uniform impulse to the whole of an industry. It does not permit and would not like to permit a road haulier to take traffic away from the railway; would not like to give to a bona fide traveller within the meaning of the Act the right to buy his glass of beer at any hotel except the nationalised hotel managed or mismanaged by a right hon. Gentleman. It would like to prevent a traveller from London to Newbury travelling at a cheaper price than a traveller going from London to Ashford. It would very much like to have the worker in the position where he either works for a nationalised industry, or cannot work for any other employer.

That is the whole idea of the thing. When someone says—many hon. Members have done so—that decentralisation is the administrative cure for the mounting evils of nationalisation, what he is really saying—and he is right—is that nationalisation does not work and that the only way to make it work is to make it look as little like nationalisation as possible not by giving the right to control these industries to national people like these Ministers but by giving local people like a local authority or a local board the power to decide what are the local needs. In my vocabulary and in that of most other people "local autonomy" is the antithesis of "nationalisation" or "central authority."

When we talk about safeguarding the interests of the consumer we are really underlining the fact that a public monopoly, managed however remotely and with all the supreme authority of the Government and the eloquence of Ministers to support it, has the consumer completely at its mercy. There are no means by which the public can be protected from a public monopoly. Public monopolies are the Frankenstein monsters of universal suffer-age. The consumer has only one course open to him, and that is to turn the Government out at the polls. Under our electoral system this recourse may occur to him only once every five years and even then, in turning out a certain Government because the consumer is being distressed by one of these nationalised industries, he may commit himself to a foreign policy which he does not like. These difficulties are inherent in the problem. The consumer's only recourse against the public monopoly is the ballot box. If, under a Conservative Government, I happen to be knocked about as a coal consumer I might have to vote for this lot—and yet all I want is some sympathy. We ought to recognise that decentralisation and protection of the consumer are both against the very concept, theory and foundation of nationalisation.

Very many things have been said about labour relations, and private enterprise has been very much knocked about by hon. Members opposite. I have no fears in relating a special case. I have in my company more than 3,500 people who have been in the company's employment for over 30 years. There is no particular salvation in nationalised industry; the thing that matters far more than anything else is human relations. When we create one of these inflexible boards with the sort of shadow of a Minister hanging over it, the labour relations become very difficult because, first of all, the business is of a vast size and, secondly, everybody is afraid of what the next man above him may say.

An hon. Member opposite said that there was widespread disillusion in many sections of nationalised industry—I am not making a political point—and he was telling the truth. The workers expected something better. I say that they are entitled to get something better. The labour relations of these nationalised industries, largely because of the size of the industries, are not what they should be and we must be prepared to improve them.

Provided that hon. Members opposite accept that we have now to retrace our steps, and as long as the supporters of nationalisation recognise that the very milk of the word is becoming sour and that the very theoretical foundation of their beliefs is being eroded, we must try to examine the practical aspects of the subject. I turn, first, to the matter of accountability. I do not suppose that anyone who has thought long on the subject considers it other than a very intractable problem. The Lord President of the Council put the problem in extremely fair and clear terms. If the day-to-day administrative details are to be the subject of day-to-day questioning across the Floor of this House, then I give my opinion, for what it is worth, that administration will become practically impossible. Apart from the time that would be spent in answering questions upon administrative detail, there is also the psychology which is built up.

All of us who have been Ministers, and many of us who have not, are aware of the splash with which a Parliamentary Question falls into the Ministerial pool, and how the Civil Service is engaged upon trying to prevent the ripples from spreading. These Questions arrive in a Government office rather as the broker's man or a bailiff arrives in the house of the debtor, or the man wanting an instalment on the refrigerator who knocks at the door. The whole technique of the Civil Service is at the disposal of the Minister to try to prevent the hon. Member who has put the Question on the Order Paper from finding out what is really going on, covering up the mistakes. At long last, if a concession has to be made to an intrusive Member, the Civil Service very rightly tries to localise the effect and to prevent the concession from becoming a precedent.

This psychology has many disadvantages in the ordinary administration of Acts of Parliament, but it would be quite fatal—and I think the Lord President agrees with me on this—if it were applied to national boards in day-to-day industry. It would act as a brake to the whole effort. If hon. Members ask the Minister of Transport why the cod on the 6.30 from Waterloo once again tastes like cold, damp cotton wool, the task of the right hon. Gentleman, which is clearly far beyond his or anybody else's powers already, would become quite impossible. I think this is common ground but, on the other hand, and speaking more seriously, vast sums of public money have been invested in these industries. The idea of a Minister disclaiming responsibility for this investment is repugnant to the ideas of Parliamentary control of expenditure and cuts across the control of the purse which, both actually and historically, is the first sanction in the hands of this House.

I venture to say with great respect that an annual Debate upon accounts of any corporation is an insufficient solution of the problem. Nor are these septennial inquests or inquisitions upon a corpse, which has long ago gone cold, a satisfactory solution. Yet it is the only one the Lord President has offered. Every seven years we shall find out why the patient died—and the inquest may be extremely unpleasant for reasons which I will not dilate upon at this hour. I really do not believe that any Debate upon the state of the stable door seven years after the horse has been stolen will be regarded as a satisfactory solution or as a proper discharge of our responsibilities. [HON. MEMBERS: "Corpse, not horse!"]

I find the subject a difficult one and I can do no more that suggest some steps towards a solution. I believe that Ministers have to accept responsibility for much more questioning upon these national boards and that they have to exercise the right, which they have, of not answering the questions if, in their judgment, these apply to trivial administrative details. The House of Commons will be an extremely good judge of whether this refusal is being used in the public interest—a favourite phrase of hon. Members opposite—or as a cloak to conceal administrative incompetence.

Let me turn to another subject. There are many hon. Members who think—and we have all been indebted to my hon. Friend the Member for The High Peak (Mr. Molson)—that a Select Committee on public corporations might be a useful piece of machinery. Expressing my personal point of view, I have grave doubts about it. Of course, a committee is a sort of modern witch-doctor. It is always advanced in the 20th century as a solution which an individual cannot find, for a problem. I feel very doubtful whether a Select Committee on public corporations would be the least effective without being too intrusive. To do its job properly, such a committee must not be far away from controlling and monitoring the day-to-day work of the corporation.

I should find it extremely difficult to run my own business if I had a committee of shareholders in perpetual session ready to pounce upon any decision that I might make. Of course, the general success or failure, the mistakes or wisdom, of my decisions are now measured by the yardstick of whether the business of the company is carried on at a profit—I hope I am not being indelicate; profits are without honour in our country, apparently. That, however, is the yardstick which is applied.

Then there are the consumers of my products. Are they growing in numbers, and are they satisfied with what I give them? No such yardstick exists in a public monopoly. I can only offer a very tentative and, if hon. Members prefer so to call it, a very hesitant suggestion of a palliative of one of the inherent difficulties which nationalisation brings: that is, to allow much greater latitude than the asking of Questions of the Ministers who assume responsibility and then recognising that in many cases Ministers will exercise their undoubted rights of refusing to answer the Question.

Now I turn to one of the grimmest and dimmest parts of the subject: the consumers' councils. "The Economist," always a very urbane journal, describes them as "worthy, windy and weak." I really think that that is one of those English understatements. I think that these councils are mere camouflage; they are a mere facade which conceals the impotence which dwells behind them. They have no teeth, and they are powerless. We hear that the domestic council in coal has had less than 100 complaints since the National Coal Board started selling non-combustible material to the housewife. If they had been up to their job or anybody knew that they had existed, they would have had hundreds of thousands of complaints. It is time that Ministers recognised that once we have a public monopoly which operates with all their power behind it and with all the force of Parliamentary authority, however remote, then the consumer cannot be protected. This is one of the directions in which we have to retrace our steps.

The last subject to which I come is administration. All public Departments tend to act upon what I call the cantilever system of responsibility, by which each and every unit of the affair leans upon the other, so that when the whole structure collapses it is easy to prove that nobody has been responsible. The dishonourable practice of passing the buck, the building up of files which prove that no one is to blame, is the abiding sin of bureaucracy; and this sin is evident in every aspect of these nationalised boards. Such a system has something to commend it when it deals with policy—it is wise not to rush into major changes of policy without seeing where one is going; but such a system is the death of administrative business and of day-to-day affairs.

I make the accusation that whatever defence has been put up—for example, in another place—every one of these nationalised industries is becoming more and more a home of paper—another word is often used—overhead expenses, and centralisation. I am making the accusation with absolute sincerity and I believe, from a not inconsiderable knowledge of the facts that the National Coal Board and the Transport Commission are monuments of administrative incompetence and industrial arthritis.

The organisation of the Coal Board is unsound from top to bottom. The most important feature in which it is unsound is the divorce between the director of production and the director of labour. The coal industry of this country is in a very vulnerable position. Will it surprise hon. Members to know that at this moment the Coal Board's prices in Scandinavia are being undercut by shipments of coal from Lourenço Marques which are subject to a freight of 60s. a ton? Will it surprise them to know that the meetings of these divisional boards would be ludicrous, if they were not tragic, and that a long summer's day is not enough to get through the business, the mass of statistics, the unsoundness of the organisation, the cantilever system of responsibility? These are your interests and ours. We must retrace our steps, or face a national disaster. Opinion in Scandinavia has been shocked by the progressive repudiation of or falling down on our contract with their countries. We face a very serious coal situation this winter.

Administrative expenses of these boards continue to mount, while productive labour continues to fall and this is one of the well-known signs of administrative incompetence. The number of administrative and non-industrial staff rose from 30,143 in January, 1947, to 38,000 at the end of 1949, a rise of 28 per cent. During the same period the average number of wage earners, which in January, 1947, was 694,000, rose to 708,000, an increase of little over 2 per cent. Twenty-eight per cent. in the non-industrial non-productive staff and 2 per cent. in the productive staff. These are two things I spend my life in trying to prevent happening in my own business.

Mr. Harold Davies (Leek)

I agree with a lot of what the right hon. Gentleman has said, but what is the cost of administrative staff in nationalised industry in monetary terms of output compared with that in private industry?

Mr. Lyttelton

It is infinitely higher, much more. I would be very glad to give the figures, but I have not got the comparison in the case of the Coal Board. I can give them about the Electricity Authority. Under the British Electricity Authority the works costs per generation rose from 0.515d. to 0.552d., which is not a very large increase for generation.

The Minister of Fuel and Power (Mr. Philip Noel-Baker)

Will the right hon. Gentleman give the years?

Mr. Lyttelton

I think that between 1948 and 1949 it was 7 per cent. Other expenses rose from 0.267d. to 0.305d. I am making the point, with great seriousness, that one of the things His Majesty's Government have to look at is the increase in the ratio of non-productive staff to productive staff, because this is going to strangle the whole of these nationalised industries. Hon. Members opposite will be distressed because their favourite theories will have been stultified and I shall be distressed because I shall have to pay for them. I think it high time we got together and tried to stop this administrative incompetence.

I have reached the conclusion that nationalisation in its present form cannot work and that if some of our most important industries are not to be ruined we shall have to retrace our steps and start again. I would beg hon. Members opposite not to believe that I am trying to make the point, which, I know, would be unacceptable to them, that we have to banish the idea of public ownership from our minds. There are some industries where I think it has come to stay and others where, I make no bones about it, this party would retrace the step entirely and go over to private enterprise.

Mr. Dodds (Dartford)

Where they make a profit?

Mr. Lyttelton

Yes, where they make a profit—to make a profit, which would be necessary to pay for the losses of some of the nationalised industries. It may be that public ownership should not be disturbed in some cases, but let no one think that nationalised boards will, at the end of any reorganisation, look very like what the nationalisers think that a nationalised board ought to look like.

I say, with all the force I can command, that the present situation of these boards should cause acute anxiety to every Member of this House who has the national interest at heart. An entirely new start has to be made, with the good will of both sides of this House; otherwise, we shall face a national disaster. The object of organisation is to present people with problems which they can solve. To look at these nationalised industries one might think that just the opposite was the case. I end by reminding hon. Members of a very old adage which we were taught when we were young soldiers. It was used by Colonel Henderson, who said: Centralisation the last refuge of administrative incompetence. We have reached the last refuge, and it is time that we retraced our steps.

9.31 p.m.

The Minister of Fuel and Power (Mr. Philip Noel-Baker)

Hon. Members in all quarters of the House have asked me many questions to which, to my regret, I shall not be able to answer. I refer to such matters as the electricity reserve fund in South-East Scotland, the subsidies given by Parliament to the Airways Corporations, the anxiety we all feel about the output of coal and the fall in manpower and a large number of criticisms about which I am not at all complacent, and which I hope we will discuss at greater leisure another day.

I do not propose to discuss tonight the merits of the policy of nationalisation. I have done it before and hon. Members opposite have complained. I will do it again. In fact, the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) compels me to say that I believe that in every industry which has been nationalised the nation has made a great gain. In the case of coal and transport we have been saved from national disaster. The right hon. Gentleman knows perfectly well that when we nationalised coal we were getting an output, in 1945, of 174 million tons a year, and everything—manpower and output—was going down. He knows that the O.M.S. has consistently improved since then. He knows that costs had been rising in a steady curve for 15 years. In 1948 they were checked, last year they fell, and this year they are again falling.

I do not intend to discuss the merits of nationalisation tonight. [An HON. MEMBER: "Why?"] I shall discuss the subject of today's Debate—the further public accountability and the efficiency of the corporations we have set up. All parties have created public corporations; all parties have a common interest that they should be made to work. It is in that spirit that I shall speak tonight, and it is in that spirit I welcome all the constructive proposals that have been made, from whatever quarter of the House. I venture to think that in considering public accountability, and even more the present efficiency of public boards and corporations, we should not treat so lightly as some hon. Members have done the instruments we have got.

We must remember that these boards and corporations are at the very beginning of their task. I.C.I. is our largest private industrial corporation. It was built up by the amalgamation of scores of firms, and took 30 years. The Coal Board has had to amalgamate 800 firms in three years: gas 1,000, and in that case the boards have had 18 months. In the case of electricity it was over 500, and they have had two years. Of course, it will take a long time for them to do their job. It will take us a long time to find by trial and error the most effective methods of establishing the public accountability of the boards. I am in full agreement with the right hon. Member for Saffron Walden (Mr. R. A. Butler) that we have not yet got the answer, but I think the right hon. Member for Aldershot under-estimated the very considerable value of Parliamentary Questions and Debate.

A good deal has been said about the limitation of Questions that can be asked. Occasionally, but not very often, an hon. Member comes to me and tells that he has not been able to get a Question past the Table; but under the present Rules, since March of this year, 343 Questions addressed to me have got past the Table, and about 250 of them were on the nationalised corporations and on allied questions of administration. They have been about output, manpower, investment policy, the amount of coal exported, dirty coal, winter stocks, power station programmes—all the chief questions of major policy with which the boards deal, and upon which their efficiency depends.

We have had a lot of Parliamentary Debates; the Lord President said today that there were 18 in the last 12 months. I have tried to do the sum for this Parliament. Since March, apart from Bills and discussions at the end of Business, on Prayers or on the Adjournment, this is the eleventh Debate that we have had on the nationalised industries. On Adjournments and on Prayers we have had 18 other shorter Debates on some aspects of their affairs. We have had two Bills in which certain aspects of the boards have been discussed. I think it wrong to under-estimate, as did the right hon. Gentleman, the effects of these Questions and Debates.

Of course, Parliamentary discussion is not adapted for the control of day-to-day administration. None of us wants it to be so, but the discussions do exercise an immense influence on those concerned. The right hon. Gentleman said that he knows the effect produced at the receiving end by a Parliamentary Question. It stirs up everybody tremendously. I do not speak only from my experience in my present Department. For more than three years I was at the Ministry of Transport, during the war when we were controlling the whole transport system of the country and shipping. I had 30 or 40 Questions every week and constant Debates in the House. Of course, it was different from now, because in a sense we were controlling the day-to-day administration. But I drew this lesson which I am certain still applies—that Parliamentary supervision over those three years was a major factor in promoting efficiency; in removing or mitigating hardship; in bringing home to transport workers their duty to the nation; in keeping management on their toes; in making the nation understand the difficulties which the transport workers and management had to face. Some hon. Members, and above all the right hon. Gentleman, have been too defeatist about the efficacy of Parliamentary Questions and Debate.

Perhaps there is more that we can do. I am not at all opposed to the idea put forward by the hon. Member for The High Peak (Mr. Molson) that we should have a better ordering, a better arrangement, of our Debates. In any case, I am sure the time will come when we shall debate at more frequent intervals every annual report of every corporation every year. But nobody is more conscious than right hon. Gentlemen opposite of the danger which too much Parliamentary supervision may involve. Why is the Civil Service a bureaucracy? Why must every civil servant, before he makes a decision or takes any action, be pretty certain he is to be covered or supported from above? Because his Minister is answerable to the House of Commons for everything he does. No one wishes to make the Minister answerable for everything done by these corporations. That would involve them in bureaucracy which would destroy the freedom upon which the whole philosophy of public corporations has been based.

I believe that every hon. Member in every party will certainly desire to safeguard that freedom against ministerial interference and bias. We have to get the best men we can to run the Corporations and then let them do the job. That kind of thing is certainly consistent with the sort of Parliamentary supervision that we are beginning to evolve. It is certainly consistent with the seven-yearly inquiries which, as the Lord President said, the Government have decided we shall have. I think that when the right hon. Gentleman reflects tomorrow, he will not think that he has done full justice to this proposal of the seven-yearly inquiries.

Mr. Molson

May I interrupt the right hon. Gentleman, because this is very important? The Lord President of the Council indicated that he was thinking in terms of something of that kind and that he had consulted the chairmen of the boards. Are we to understand that this is a definite announcement of Government policy and that there is to be an inquiry every seven years?

Mr. Noel-Baker

Yes, Sir, it is. It is not in itself enough for the purpose which we have in view, but it is one more instrument, and we think it will be important, as it is proving to be important in other things to which it is being applied.

I think that the necessary freedom for the boards is perfectly consistent with the effective voicing of consumers' views. I agree with hon. Members on both sides of the House who have said that not enough is known about the work of the consumers' councils. More than 40 councils are in existence today. Perhaps I may speak of the 28 appointed by my predecessors in my present office. Those 28 councils have had critics who have suggested that they are simply "stooges" of the board. The right hon. Gentleman went very near to saying that tonight. I am sure the councils can be improved, but I am sure that his broad picture is not true. These 28 councils, for gas, electricity and coal, have about 600 members. The members belong to all parties. They are not appointed for political reasons. Some hundreds of them, including many of the chairmen, are certainly Conservatives; some hundreds are Labour, and some scores are Liberal or Independent. Two-thirds of them, or very nearly, are elected members of local authorities. All of them have personal experience of public work. They know they have been appointed to be the mouthpiece of consumer opinion. If they behaved like stooges to the boards, it would be un-British in the extreme. [Laughter.] Of course, it would. Britons who are elected to a public job to do a task of public importance carry it out.

Since the vast majority of these boards meet with the Press present, they will very soon be found out if they act as stooges. I have noted the suggestions made by hon. Members about them. I shall be very glad to discuss them with hon. Members. I hope we can debate them on another occasion in the House. It is my conviction that in the one, two or three years which these councils have been in existence—and many of them are only just getting going today—they have begun to do the work of dealing with complaints. They need far more public attention. Like the Government, they are resolved that their work shall be a reality and not a sham.

What else can be done to promote the efficiency of the boards? They can apply the efficiency techniques worked out in other large-scale organisations. They have, in fact, brought in the system, first used, I believe, in large-scale private business, of budgetary control of administrative tasks. That is particularly important in coal, where some mines can make easy profits and others make a loss which at present they cannot avoid. Budgetary control is also applied to wages costs. It acts as a check to waste and a test of and an incentive to efficient management.

Budgetary control or what, in that connection, is called standard costs, is not so easy to apply to actual productive operations. I know that the right hon. Member for Aldershot has great experience of it, because he used the system of standard costs very widely and with great success in munitions contracts during the war. He will recognise that standard costs are harder to apply to coal mines than to engineering, because in coal mines working conditions vary so widely, but the Board are seeking to apply the method of standard costs to their mining operations.

They have called in a leading firm of costs consultants, Robson and Morrow. Mr. Robson is a past-President of the Institute of Costs and Works Accountants; Mr. Morrow led the costing team sent by the Anglo-American Productivity Committee to the United States. This firm has been doing intensive work in the coalfields all this year. They hope to produce a system of standard costs for mining which will be of wide application throughout the coal mines of the Board. They hope to bring it in next year. The right hon. Gentleman will agree, I am sure, that this may be a development of major importance. It goes to the roots of efficiency in the coal industry. If it succeeds, as Robson and Morrow believe it will, it may lead to great results, and in any case it is one illustration of the way in which the boards can and do call in outside consultants with the hope of good results.

I believe—and here I take up the point mentioned by the right hon. Gentleman—that budgetary control, and what the Treasury call O & M, is leading now to economies of personnel. Of course, the staff of the Coal Board increased after vesting day. They took on specialists of all kinds whom previously the colliery companies had called in from outside—lawyers, architects, surveyors and many more. They have doctors and nurses, they have special staffs for education, health, training, safety and many other things. Does the right hon. Gentleman deny that those things were urgently required?

The right hon. Gentleman said that the comparison between the Coal Board and other industries was very bad. What is spent on salaries in the Coal Board is four per cent. of the proceeds from coal. What is spent in other industries—manufacturing, building and so on—is, on the average, not four per cent. but 12 per cent. [HON. MEMBERS: "NO."] The right hon. Gentleman can check the figures. Of course, the Board would be the first to admit that they have a lot more to do. But they are making progress. This year, by budgetary control, they made a saving of £20,000 in their headquarters alone, and they think that next year they will save more. Their divisional and headquarters staffs cost only 1¾d. per ton.

The right hon. Gentleman spoke of electricity. Again, the increase is largely on paper. Fifteen thousand people who were not counted in before vesting day were counted in afterwards. They decided on a 44-hour week, and that meant 7,000 more. But the personnel are increasing in a smaller proportion than the rate at which electricity is being sent out, and if the right hon. Gentleman will check the figures he will see that electricity is a very rapidly expanding industry. Of course, the number of the personnel increases, but efficiency is increasing every year. The railways reduced their personnel by 23,000 last year.

Mr. Lyttelton

I think the right hon. Gentleman is a little unfair. What I complained about was the increase in the ratio of non-productive administrative personnel to productive personnel, and he has not addressed himself to that at all.

Mr. Noel-Baker

If I may quote from the "Gas Service," a technical non-party paper; they said: To cope with the vast amount of administrative and planning work to be done, the Boards commenced their task with staffs so small as to be almost unique in British industry. In civil aviation in three years passenger miles flown have doubled, costs per passenger mile have fallen by 30 per cent., and personnel has been reduced by 25 per cent. I think the right hon. Gentleman must admit that the boards and corporations are all aware of the danger of inflated numbers of personnel, and that the present trends are what Members of all parties desire.

I come to de-centralisation, of which the right hon. Gentleman said so much. This charge of over-centralisation really relates to transport and coal—to them alone. Nobody thinks that gas, electricity, civil aviation and steel are over-centralised. No one suggests that for a moment. I confess that I was mystified by a good deal said today by the right hon. Gentleman the Member for Saffron Walden. On transport he spoke against monopoly. He proposed to de-nationalise road haulage and hotels, which are not monopolies, but he would keep the railways nationalised, although they are a monopoly. On coal he said he would abolish nine existing regional boards and would create 30 new area boards instead. In so doing, of course, he would largely destroy the very great responsibility and power which the 47 area general managers possess today.

I have studied very carefully the points put forward by the Opposition for decentralising coal. I am ready to consider all that the right hon. Gentleman and the hon. and gallant Gentleman the Member for South Fylde (Colonel Lancaster) has said today. I have never heard any answer to the arguments put forward by the Coal Board in Chapter 10 of their Annual Report for 1948. I have never understood how we can have areas that are financially independent while we have 55 million tons of coal—coal we have to have—which is being produced at a loss, as it must be in some old and ill-equipped mines today. While many pits and some whole areas are uneconomical, I do not believe we can have financially autonomous area or regional boards. I think the thing is impossible. It would force us either to the closing of pits which we have to keep open, or back to the old, evil system of district wage agreements, against which the miners fought so long. In any case, I do not see the answer to that Chapter 10. Certainly no one has suggested it today.

Of course, the Coal Board have always intended that the areas and not the divisions should be the truly executive operational units—the units which employ the labour, and mine and sell the coal. Certainly, as I go round the coalfields it seems to me that the area general managers act as men who, in practice, have a great deal of responsibility and power. Last week my hon. Friend the Parliamentary and Financial Secretary to the Admiralty quoted Mr. John Elliot, whom many will remember as a very able and enthusiastically loyal officer of the Southern Railway, for the view that a chief regional officer on the railways today has more power than the general manager of a railway company in the old days. He quoted Mr. David Lamb, the well-known editor of "Modern Transport," who denounced the centralisation of the Transport Commission, and who now admits that he has wholly changed his views.

Perhaps I may quote an opinion of Mr. Drummond, who used to be the managing director of the Ashington colliery in Northumberland—a famous coal mine. Mr. Drummond said in public not long ago: It will be argued, I know, that nationalisation has reduced the authority and scope of the managers. That, I submit, is nonsense. In any case, right hon. Gentlemen opposite and their supporters made both the Coal Board and the Transport Commission acutely conscious of the problem of centralisation before they started. The boards were themselves acutely conscious of the need to de-centralise. They have adopted budgetary control of administrative and wages costs and standard cost operations largely because it permits de- centralisation to be pushed extremely far, and the right hon. Member for Aldershot knows that that is true. They can change their organisation under the Acts whenever and however they desire. They have changed it already in most important regards, and I think we may feel some confidence that if there are rigidities and errors there are constant pressures to put that right. The boards are intensely conscious of the public demand that they shall be efficient. If I had time I would try to show that they have made progress, but I hope to do it on other days.

I end by saying this in all sincerity to every hon. Member. O and M, business methods can give a real result, but in these great basic national industries two other things are more important still: the application of scientific research and the improvement of labour relations. I hope that hon. Members, while not forgetting the other points of which they have spoken, will keep their eyes fastened on these two vital things. In my view, labour relations come first.

There is still very much to do, above all in the coal industry. I have been at a good many pit consultative committees, and I do not agree with the strictures passed upon them by my hon. Friend. These committees discuss output, absenteeism, accidents, dirty coal, the introduction of new machinery and the closure of pits. They discuss the things that affect their life from day to day. The avowed purpose of the committees, declared by the Coal Board and the N.U.M., is that they shall give to workers a say in the affairs of their daily life and bridge the gap between social and industrial democracy. The work has, of course, only just begun. In some places in some regards it is disappointing; but there is already a tremendous change in the spirit of the coal industry, and nobody who knows the industry can doubt that that is true. It is the vital thing that matters.

In all these basic industries we need for the nation a new spirit, which I think is beginning to emerge—a spirit of team co-operation. The Chairman of the Gas Council, Sir Edgar Sylvester, who was well known as a former head of the Gas Light and Coke Company, speaking of what happened in the gas industry in the first 18 months after vesting day, said not long ago: After vesting day all the old parochial bonds were broken down. Before, one undertaking could not work with the next. All that has gone almost by the stroke of a pen almost overnight. Something entirely bigger, a bigger conception, has come. Men of all views and all parties are working in these corporations, striving valiantly to make them a success. I believe that hon. Members of all parties will want to give them the support and the encouragement which they deserve.

Question put, and agreed to.

Resolved: That this House notes the steps which have been taken to give effect to the responsibility to the community (including consumers and workpeople) of the socialised industries, and will welcome any further measures to increase their public accountability, consistently with the duty of the Boards to manage the industries with maximum efficiency in the public interest.