IRON AND STEEL PRICES ORDER

HC Deb 31 March 1952 vol 498 cc1309-70

9.56 p.m.

Mr. G. R. Strauss (Lambeth, Vauxhall)

I beg to move, That an humble Address be presented to Her Majesty, praying that the Iron and Steel Prices Order, 1952 (S.I., 1952, No. 361), dated 25th February, 1952, a copy of which was laid before this House on 25th February, be annulled. This and the following Prayer— That an humble Address be presented to Her Majesty, praying that the Bolts, Nuts, &c., Prices Order, 1952 (S.I., 1952, No. 362), dated 25th February, 1952, a copy of which was laid before this House on 25th February, be annulled.— are closely related. May I have your Ruling, Mr. Speaker, whether it is possible to discuss them together?

Mr. Speaker

Yes, I think that will be a convenient course for the House.

Mr. Strauss

We desire to move these two Prayers against these two Orders, because in our view there is no good reason for making such big increases in the prices of iron and steel at the present time, because we believe that the increases are bound to have a harmful effect on our national economy and because we are convinced that the motives that have inspired these increases are political rather than economic.

We have reached these conclusions on the facts before us as we know them, and not because of any action taken by Mr. Hardie, the ex-Chairman of the Iron and Steel Corporation. Nor do we take this view because it was shared at one time by the Corporation itself, until the Minister over-persuaded them. We maintain that where there is disagreement between the Minister and the Corporation of a nationalised industry, we have to consider the matter in dispute on its merits objectively; indeed, I think that on one minor point connected with the problem—the subsidy on imported finished steel—the Corporation were wrong and the Minister right. The Minister must always be free to reject the advice of the Corporation if he thinks it is wrong, and justify his action to Parliament, and tonight we are asking him to justify certain decisions he made to increase the prices of iron and steel because, in our opinion, those decisions were wholly wrong.

I want to say in passing, in regard to the way the Minister brought the iron and steel proposals to the House, that he misled the House in his account of the discussions which led up to his statement on 25th February. He was then very anxious to show that his decision was supported by the Iron and Steel Corporation, although not by Mr. Hardie. He said: there have been, and I repeat it emphatically in the House tonight, no differences of policy whatsover between the Corporation and myself. I emphasise the word 'Corporation'."—[OFFICIAL REPORT, 25th February, 1952; Vol. 496, c. 824.] Whereupon, Mr. Hardie made a statement to the Press in which he challenged the truth of that assertion. He said: There was a clear difference of policy between the Corporation and the Minister which was expressed in my letter to him of 24th January, when I informed him, writing on behalf of a unanimous Corporation, one member being absent, that it disagreed with his policy of making any immediate increase in iron and steel prices. In view of that, a number of my hon. Friends and I pressed the Minister a little later as to the truth of this allegation by Mr. Hardie that the Minister was not speaking the truth. We pursued the matter in the House at Question time on 10th March and asked whether, in fact, Mr. Hardie had conveyed to the Minister in that letter of 24th January the fact that the Corporation as a whole, and unanimously, had at that time opposed any increase in our new steel prices.

I do not wish to read the full reply of the right hon. Gentleman. It was a long one; it was woolly and evasive. When I pressed him to say categorically whether the allegations of Mr. Hardie was correct or not, he said it was a difficult question to answer and refused to say whether it was true or untrue. Unless the right hon. Gentleman has something more to say tonight, I must state my firm conviction that Mr. Hardie was stating the truth when he told the Minister in his letter the view of the Corporation and that the Minister, to put it mildly, was not quiet honest with the House in his account of the matter.

While I think it necessary to say this, I want to make it clear once more that we are asking the House to consider this matter tonight on its merits and irrespective of the views and opinions of the Iron and Steel Corporation or Mr. Hardie at that time or any other time. We think that if the House considers it on that basis it will come to the conclusion that the Prayer we are moving is correct and that the price increases are not justified.

Before I come to details, I wish to state two principles against which it seems to me that this matter should be considered. I think they are principles which are agreed on all sides of the House. The first is that the maximum prices fixed by the Minister for iron and steel should be such as to enable the industry to pay its way and to make proper reserves. That principle may not be applicable in times of slump, when it might be desirable for the Corporation deliberately to make a loss in the national interest. But that principle certainly applies now.

The other principle, and this is all-important, is that the decision to increase prices of such basic raw materials as iron and steel must have regard to the general inflationary effects which are bound to follow, and to the extent to which they will make it more difficult to maintain or to increase our exports. This latter consideration is obviously of particular importance at the present time.

What are the facts? This is the case of the Government. The Minister of Supply told us that in this present year there will be certain increases in costs in making iron and steel which should be covered by higher prices for the products of the iron and steel industry. He said that there would be an increased cost in respect of the steel and steel-making materials imported into this country of £46 million. He told us that home costs, wages, transport, fuel and scrap would be an additional £29 million, making a total of £75 million.

The Minister said that he proposed to recover £56 million from increases in price amounting approximately to £4 a ton. The first thing I would say on this calculation is that the £46 million in respect of the import of steel and steelmaking materials relates largely, I understand, to material coming from the United States of America. But most of that material, about two-thirds of it, is coming in the second part of the year. I wish to ask the Minister whether in fact this big increase in the cost of imports amounting to £46 million is, for the most of it, to take place after July and is not taking place now. If so, it means that he is asking the industry, or permitting the industry, by increasing the price, to recover substantial costs which will not operate until later on in the year.

In regard to the home costs, which he says amount to £29 million, I am not at all satisfied whether, if the Corporation had been allowed to continue its reorganisation work, many economies could not have been brought into effect, anyhow towards the end of the year, which would have saved a good deal of that money. I have never been satisfied that the transport of steel from the Northeast Coast to South Wales, for example, which takes place today, is wholly necessary. Moreover, I am doubtful whether in that calculation full account has been taken of the economies which should be derived from all the new plant established in the last few years.

I should now like to look at the other side of the picture. The industry has been making record profits during the last year. The Minister gave figures to the House which showed that in the year ending 30th September profits were at the rate of £63 million a year. That compares with £53 million the previous year and £42 million for the year before that. I must confess that, although I was in close touch with the iron and steel industry during that time, I was most surprised, as I think most people were, at the very heavy increase in profit made by the industry last year.

It is true that part of that arose from engineering—that is accepted—but the great bulk of this came from the manufacture of iron and steel products. It was only in August last year that there came into operation an increase in iron and steel prices which I had authorised shortly before. That increase amounted to a total sum of about £66 million.

I hope the right hon. Gentleman will not use the argument, which he used the other day in the House, that because I increased the prices substantially in August he is entitled to increase them substantially today. Indeed, the reverse is true. Because I made such a big increase in August largely in anticipation of costs which had not yet operated, that is all the more reason why there should not be a further big increase today.

Mr. Spencer Summers (Aylesbury)

Would it not be more accurate to say that the Minister told the House that had he used the formula used by the late Government to deal with prices, the rise would, in fact, have been greater than that which has been announced?

Mr. Strauss

I do not deny that, but he also, I think, by implication suggested that I made big increases in prices and therefore he might move in a similar direction today.

Mr. Summers

That was not said.

The Minister of Supply (Mr. Duncan Sandys)

I never said that, so I hope that the right hon. Gentleman will not waste time on that argument.

Mr. Strauss

I am glad to hear the right hon. Gentleman say that. I thought that was implied in his statement if it was not said. I think that most people reading that statement would think so. If it was not implied, well and good. It is not an essential part of my argument. I was merely saying that I hoped that that argument would not be made tonight, and I still hope that it will not.

The point is that I made that substantial increase in August in anticipation, partly, of rises which had not taken place. That means that the high rate of profits which was being made by the industry up to the end of September is likely to be increased in subsequent months, because the new increase in prices took effect only from the middle of August. I shall be very surprised, when the new returns are made for the last three months of the year of the profits made by the industry during that period, if there is not a substantially higher rate than the £63 million of the previous year. My guess is that they will be round about £75 million to £80 million a year.

Therefore, the industry is making enormous profits today. It should not be forgotten that the value of the stock of this industry in the hands of the public—the Iron and Steel Compensation Stock—is £240 million. Interest has to be paid on that at 3½ per cent. Therefore, what the industry has to pay out in respect of this stock is about £10 million. I maintain that the industry is making about £75 million a year—an enormous figure.

The question arises whether, in view of that, the right hon. Gentleman, with Cabinet backing, as he told us, was justified in making the increase in price today such a big one, as it is bound to have a most damaging effect on the economy of our country. We believe that it would have been far better and right for the right hon. Gentleman to have waited to see what the profits figures were for the last quarter of the year, and then to adjust any price increase which then might have been necessary in such a way as to put a smaller burden and a lesser handicap on the consuming industries of this country, which, be it remembered, are largely exporting industries.

An increase in price of about £4 per ton means that our engineering industries, in their effort to maintain their exports and even increase them, as they are asked by the Government quite rightly to do, are going to face very serious difficulties. It means that the cost of making a motorcar will go up quite significantly. I do not know what the figure is, but it is probably something about £5 to £10 per car, dependent upon the type. We know that the motor-car industry is in great difficulties because of the narrowing of the Australian market. We know that there is intense competition from the Continent and that the motor-car industry is going to be further handicapped in maintaining its export markets by having a substantial increase in costs imposed upon it.

That applies, of course, to every exporting industry in the engineering field, and the same problems will arise there. If the right hon. Gentleman puts the argument—I am not suggesting that he has done so far, but it is likely to be put forward by hon. Members opposite—that the price of steel still compares favourably with the price of steel in most other countries, I would say, in anticipation of that argument, that we have had a peculiar advantage in the post-war years in having steel prices quite substantially below those in other countries.

We have done that by our controls, and particularly by our control of the price of scrap, which kept the price of steel down; and it has been very largely because of the low price of steel in this country during the last five or six years that so many of our export industries have been able to flourish and capture new markets. Today, that gap between the British price and the foreign price will be very much narrowed by the action taken by the right hon. Gentleman, and we will have lost some of that advantage which we have had up till now.

But it is not only the export trade which will be damaged. Our whole economy will be affected. There will be harmful consequences at home. The railways are big consumers of iron and steel, and this increase in price means that they will have to pay something like £2 million to £3 million a year more for the steel they buy. That will have to come, eventually, out of the fares paid by the passengers and the freight rates charged for goods, which will have a generally inflationary effect on our economy.

The armaments industry has to be paid for by the taxpayer, and it will have to pay some £3 million or some £4 million a year more for the steel it purchases as a result of these orders made by the right hon. Gentleman. That burden is borne directly by the taxpayer, and it will have to appear somewhere or other, either in this Budget or in the next Budget to be presented by the Chancellor.

I think it is clear that, in view of the effect on our industries, both export and home, it would have been desirable, and we maintain still is desirable, to avoid, if possible, any increase in the price of iron and steel more than is absolutely necessary, and we say that, in view of the very heavy profits made by the iron and steel industry today, it would have been possible to avoid placing such a heavy burden as is now proposed on the industries which consume iron and steel.

Further, we say that this increase could and would have been avoided if the major preoccupation of the Ministry of Supply at this moment were not that of finding ways to hand over this publicly-owned industry to private profit interests. That is one Election promise it appears the party opposite are determined to carry out, and it seems to be the only one they and their friends care twopence about.

In order to effect this operation it is, from their point of view, obviously desirable, and may be essential, for the iron and steel concerns to be able to present balance sheets with profits fat enough to tempt private investors. I maintain that it is largely for that purpose that this increase we are considering today has been made.

I should like to quote a few words from a very interesting leader of the "Financial Times" of Monday, 24th March. The writer was dealing with certain published accounts of the big iron and steel companies, and he said: In general, the statements have indicated a strongly rising trend of profits in the steel industry. And while the former shareholders are no doubt pleased to find that at least one nationalised industry is operating on a profitable basis, they may be excused if they now feel a fresh twinge of nostalgic regret over the expropriation of their investments. We know they feel that, and the Government are doing all they can to help put this profitable industry back in their hands. The "Financial Times" leader goes on: Richard Thomas and Baldwins has reported a profit of £5,323,000 for six months against £7,300,000 for the previous twelve months. Stewarts and Lloyds earned £8,000,000 in nine months, against £8,648,000 in the previous year. Hadfields has increased its annual profit rate from £265,000 to £404,000; and John Summers had a trading profit of £2,852,000 for nine months, compared with £3,076,000 for a full year. They are heavy increases in profits.

The leader writer then came to this conclusion, after giving some of the reasons for the increases: The increased profitability of the industry will, at any rate, tend to ease the task of the present Government in seeking a solution of the difficult problem of returning the steel industry to private ownership. I think that gentleman let the cat out of the bag, and it seems to us, as there is no other good reason for making these big increases today, the purpose is that indicated by the writer of that article. It is, in fact, to ease the task of the Government in de-nationalising the steel industry, and it is for that purpose and at the request, I assume, of Steel House that these Orders have been made. We look upon these Orders as the first step in the attempt of Her Majesty's Government to de-nationalise the industry.

In short, our view is this. This industry is today so prosperous that there is no economic need to make such big increases as are embodied in these Orders. We say, further, that these increases will have a marked inflationary effect on our economy as a whole and that they will handicap it and, at a critical moment, handicap the expansion of our exports on which the Government rightly lay such stress. We are forced to the conclusion, therefore, that in these Orders for price increases, against which we are praying, the Conservative Party are, as usual, putting private profit interest above the public interest.

10.20 p.m.

Mr. Robson Brown (Esher)

I followed with extreme interest what has been said by the right hon. Member for Vauxhall (Mr. G. R. Strauss). I would say at the outset that it is right and proper for this House at all times to consider any positive increase in the basic prices of any basic material used in industry. Steel is, indeed, a basic material for a very large number of finishing industries of the country, and what happens to steel reflects itself undoubtedly in the selling prices and the costs of other industries and also affects the export trade. Those points are well taken and are all agreed upon.

The right hon. Gentleman also developed two principles. The first was that maximum prices should be at a level and of an order which would permit the industry properly to pay its way and to make proper provision for reserves and modernisation. It is upon that theme that I intend to address my remarks this evening. I believe that in the interests of industry and of the public this question of the increase in steel prices should be thoroughly ventilated tonight, that it should be taken away from the realm of party politics and that we should discuss the figures dispassionately and fairly upon their merits. If I cannot prove by what I say that what has been done by the Minister is reasonable, then the Opposition have the right to make what they can of it as a party issue either on the Floor of this House or in the country.

In my opinion—and I am only speaking for myself in this matter—I have felt that in the last five or six years the steel trade has kept its prices at too low a general level. I believe that if those prices had been measurably increased in those days, greater profits would have accrued to the industry without any damaging effect upon the finishing industries, with greater profits earned abroad from the export trade at a time when premiums upon export trade were unlimited, and those moneys could have been well employed within the industry today for expansion and modernisation.

What worries and concerns me now is that the opportunity to reap that kind of golden harvest is fast disappearing. Therefore, I say positively that in the past steel prices have been kept upon the low side. I readily admit that that has been an advantage to many of the finishing industries, and I feel that some of them have made very high profits at the expense of steel. Much of the money that has been made in those other industries could well have been ploughed back into the steel industry.

Let me take the right hon. Gentleman's argument with regard to the breakdown of the £76 million of increased cost. He takes a figure of £46 million which is represented generally by increases of iron ore and scrap and the financing of imports of foreign steel, in particular those from the United States of America. He knows from his experience as a former Minister of Supply that iron ore costs have recently doubled, that scrap prices have doubled, and that those prices are now having to be paid at this moment for the material coming in the country.

At the same time, the right hon. Gentleman knows perfectly well that we hope in the current year that most of the steel from the United States of America will be delivered, and I do not suppose he is suggesting that because the deliveries of the steel will largely come in the last quarter—although much will come in the next two or three months—that should be financed at the tail end of the financial year, and that the prices at that time should again be increased to meet one particular contingency. I do not think he meant that.

The Minister was very wise in taking account of the cost of those charges now—he knew what they were going to be—and he applied them at the earliest appropriate moment. Let me now give some simple figures which prove conclusively the wisdom and judgment of the Minister and of the Iron and Steel Corporation. Let me take first of all the argument of the right hon. Member for Vauxhall, when he said we shall destroy the present competitive position of the steel industry. I quote the international and home trade price comparison for steel. The figures are extraordinarily illuminating at this time. I shall not bore the House with more than one or two comparisons of very vital material.

First of all, sheets. Our price is £40 2s. 6d.; United States of America, £40 16s. 0d.; France, £49 10s. 8d.; Germany, £44 2s. 1d.; and Belgium, £52 5s. 0d. Angles: United Kingdom, £27 19s. 6d.; United States of America, £35 4s. 0d.; France, £36 0s. 5d.; Germany, £31 19s. 7d.; and Belgium, £31 9s. 11d. That is compared with our figure of £27 19s. 6d. Those figures speak eloquently for themselves. [HON. MEMBERS: "Hear, hear."] Yes. It shows quite clearly that there is a margin even at this time for an increase in the price of British steel without damaging materially our competitive position with the rest of the world.

I should like to give another set of figures. These figures are the Board of Trade indices for wholesale prices and are taken for January, 1952, the latest figures available. Taking 1938 at 100 per cent., steel is only 231; coal is 297, and all other articles are 330 per cent. There again, it shows that there are ample margins to take care of these particular prices without any injurious effect. Taking the pure arithmetic of the matter, I should like to refer to the Iron and Steel Board's calculations. I am using the right hon. Gentleman's own figure and making it a round figure of £65 million instead of £63 million. I understand that in one of Mr. Hardie's letters he does quote the figure of £65 million, and for my purposes I am prepared to take that figure.

In that gross figure of £65 million, if we take into account the fact that it includes all the profits of all the ancillary plant of the great companies—bridge-building and everything else altogether outside steel-making; and also certain nonrecurring profits which will not repeat themselves in the present current financial year—and that out of this figure of £65 million we must provide for taxation and servicing of the loan which amounts to £38 million; thus we are left with a net profit of £27 million. Those are the values standing before any increase in the costs or prices.

I gather that the right hon. Gentleman has no quarrel with those figures. But the position has entirely changed. Let me take the present position, after allowing for increased costs since August. The estimated increase in cost is at an annual rate of £75 million. Again I am quoting figures used by the right hon. Gentleman. I have to add another estimated £5 million increased cost to take care of the increase in wages already agreed and increases on the cost of living scale which apply in the industry.

Mr. Jack Jones (Rotherham)

The sliding scale does not operate at all.

Mr. Brown

Agreements on steel wages are controlled by a cost of living agreement. There is nothing wrong with that. Both the right hon. Gentleman and I know these things perfectly well. That gives a figure of £80 million. The price increases only take care of £56 million, leaving a net figure of £24 million; so the real position is that the industry is being asked in this year to absorb out of current profits £24 million and, even if the ex-Minister is not correct in a presumption that there will be an increase above the figure of £65 million gross, or £19 million net it still will not absorb anything like £24 million, so that the industry is left with a loss of £24 million.

If one disregards the £5 million, we are back to a net figure of £19 million. Therefore we now have the position of a gross profit of £65 million. Deduct a loss, the £19 million that has got to be absorbed by the industry, leaving a figure of £46 million, from which has to be deducted loan charges and tax of £27 million, it means a net figure of £19 million against a figure accepted by the right hon. Member for Vauxhall of £25 million in August of last year. I leave it to the House; but I believe that the figures should be placed on record for they speak for themselves. There is no window dressing here. This is no sprat to catch a mackerel.

This brings me back to my argument that the industry has not been ploughing enough money back.

Mr. Jack Jones

Since when?

Mr. Brown

Since the end of the war.

Mr. Jones

Before that.

Mr. Brown

It has been accepted by every competent authority that at this time the industry requires to put on one side £60 million a year to take care of its present modernisation programme. So to £60 million we are presuming to make £19 million. That is £41 million short. It is the bounden duty of the Minister to take, as far as he can out of the current profits of the industry, as much as he can for development charges and costs.

The right hon. Gentleman the Member for Vauxhall argues that there should have been a delay in fixing the steel prices. In almost every commodity where prices are fixed today by the Government there is too much delay in fixing of prices. The time-lag is too long. Before an industry is allowed to take up its slack it is faced with another rise, and costing systems are thrown out of gear. How in those circumstances can we hope to develop modernisation and develop it out of current profits?

The policy advocated by the Opposition will stand in the way of progress and development, and I do not believe that is their real desire. We owe it to the men in the industry to have it as efficient as possible. We owe it to the industry itself, and those industries which depend upon it, to see that we are as modern as we can be. We owe it to the nation itself to see to it that British steel should have the capital available to develop its technical position so that we can still say in the severely competitive days ahead that British steel is the cheapest and best.

I am not sure that this is the appropriate moment to make reference to the sudden death of Sir Andrew Duncan. I will content myself, however, with saying that I doubt whether we shall see his like again, for his death will be a grievous loss to the industry and the nation.

Hon. Members

Hear, hear.

10.34 p.m.

Mr. E. L. Mallalieu (Brigg)

The hon. Member for Esher (Mr. Robson Brown) will always be listened to in the House because of his experience in steel matters. I was extremely interested to hear him say how much more cheaply we are producing steel in this poor, down and out country as compared with others. I have recently had a chance of seeing how some of these other countries, which are so much more efficient than ours according to so many people on the other side of the House, are doing when I visited steel works in Lorraine and in neighbouring parts last January. I did not notice that the efficiency of these particular steel works was greater than those I have seen in Scunthorpe, for instance.

We are here discussing the rise in steel prices. It is not unusual for prices to rise in these days. I make a present of it to hon. Gentleman opposite, that even in the days of the last Government it was not unknown for prices to rise. But the difference between what was happening then and what is happening now in the matter of rising prices surely is that whereas then prices were rising for reasons beyond the control of the Government in any one country, now they are rising far more often than not by the deliberate action of the present Government, at any rate so far as this country is concerned.

Although it is usual when prices do rise to see that explanations are given for these rises on the lines that costs have risen so prices must rise to compensate, it is a little surprising to find the justification for the rise in prices in this instance being that the costs of the industry are going to rise in the near future. I think that makes absolutely hollow the pretence of the present Government that they are really wanting to keep down the cost of living.

As has already been said by my right hon. Friend the Member for Vauxhall (Mr. G. R. Strauss), and has not been denied by the hon. Member for Esher, the profits in the steel industry last year have not only been large, but have risen enormously from what they were the year before. Surely if we wanted to keep down the cost of living in any way, as the late Government did with marked success, we should not at this time have chosen steel of all things on which to raise the price. After all, steel is basic. Is there anything we possess or use today which is not made of, or made by, steel? Almost at every moment in the lives of all of us we are dependent on something made of or by steel.

Here we are deliberately raising the price of this basic commodity and giving a most marked increase to the spiral of inflation. No reference has been made to the cost of living and its connection with wages and the steel industry. Most hon. Gentlemen know as well as I do, and no one can come from a steel constituency without knowing something of it, that wages paid to steel workers are dependent to a certain degree on the cost of living. What can be more calculated to raise the cost of living than an increase in steel prices. If these prices rise the cost of living rises, and so up go the wages and a further demand is made for an increase in the price of steel. This is a vicious circle which could, and should, have been broken by the substantial profits made in the industry being used to mop up the extra costs, thus breaking the circle instead of allowing the process to go on with increasing vigour.

It is quite evident, is it not, that the Lord President of the Council must have decided that this was to be a unique occasion on which the party opposite should attempt to fulfil one at least of its Election pledges; and the reason is obvious and plain to everybody. Why is it, having regard to these profits which have been made, that this increase in prices should have been given if not to make the industry more profitable than it is already and so to tempt investors to put money back into it?

It would not have been necessary to make that tempting offer, I suppose, if the party to which I have the honour to belong, had not made it plain that at the first opportunity this industry, if it is denationalised, would be taken back into national ownership and control. It is because of that, that they have to make the industry look even more tempting to the private investor than it would have been by merely looking at its swollen profits.

I submit that this is a callous thing to do. It means throwing aside the interests of the country and of the thousands of people who have devoted their lives to this industry. It means throwing the industry back into the cockpit of party politics and dispute. That has undoubtedly been done by the present Government. This nationalisation was carried out as a result of the nation's verdict and now the party opposite has decided to undo the nation's work—the work done by Parliament in the name of the nation.

I submit that this Order shows a callous disregard of the nation's interests and it shows that the whole business is being undertaken at the expense of the interests of the community.

10.42 p.m.

Mr. Spencer Summers (Aylesbury)

The hon. and learned Member for Brigg (Mr. E. L. Mallalieu) began his speech with a compliment to the hon. Member for Esher (Mr. Robson Brown) for the knowledge of the subject he displayed. I am sorry I cannot return the compliment to him, because it is quite evident from the speech to which we have just listened that the hon. and learned Member does not know anything about the subject. He endeavoured to argue that there was a material difference between the price increases that had taken place in recent years, which, he said, were the result of factors outside the control of this country, and the present increases which were a deliberate policy on the part of the present Government.

If the hon. and learned Member knew the facts about the industry, which is so important in his constituency, he would realise that the increases in prices till now have largely been due to the increased cost of raw materials from the nationalised coal industry and to the increased cost of transport from the nationalised transport industry. So it has been entirely within the competence of people in this country to maintain raw material prices and render unnecessary the price increases which we have had hitherto.

I shall be dealing with the other aspect of the charge in a moment—the charge that this is a deliberate attempt by the Government to put up the cost of living. Before I do so, I want to make a few comments on the speech of the right hon. Member for Vauxhall (Mr. G. R. Strauss). If I understood him aright, his first point was that it was a great mistake to saddle consumers with an increase in the price of steel now when so much of what he called the alleged justification for it was the increased cost of importing steel from abroad which would not make itself felt until the second half of this year.

Would it not have been very much wiser, he argued, to wait till later in the year to see how matters go when it might then be found possible to make smaller increases?

Mr. G. R. Strauss

It was desirable to wait for the purpose stated by me and also to see how big the profits were in the last quarter as a result of the increases I made, because they might be very substantial indeed.

Mr. Summers

I will deal with that in a moment. I will deal first with the suggestion that it would be wiser to wait and deal with the increased bill for the imported steel till later on, when it was known to be coming in. It is known that the increased cost falling on Britain on account of importing steel will be very large. It is a remarkable reflection on this whole Order that 70 per cent. of the increase in the price of steel is accountable to the expense of bringing in expensive steel from abroad compared with the cheap steel we have been making in this country.

It may well be that we can assess the cost of bringing in American steel, but everything points to the fact that the local price in America will be higher later this year than was the case when the arrangements were made by the Prime Minister at the end of last year. So there is nothing to be gained by waiting, and if we did wait there would be a much larger increase necessary then, because it would be spread over a much shorter time. It is surely wiser to have a more even flow of price changes by spreading the additional burden on account of imports over a much longer period.

The right hon. Member for Vauxhall referred to the so-called exorbitant profits of some £63 million which, he, said, was made last year. If he will refer to the statement of the Minister on the subject, when cross-examined on 25th February, he will find that said: As regards the profit of the industry, the figures—which, I would inform the House, only reached me in their final form on Friday—amount to £63 million, or rather are at the rate … Some of those figures are based only on a six-months' period."—[OFFICIAL REPORT, 25th February, 1952; Vol. 496, c. 712.] So that it is not a correct interpretation of the Minister's information to say the profits for the past year were in fact £63 million.

In dealing with this matter of whether the industry is making such large profits that they ought to be capable of taking care of the increased costs that are known to be falling upon them, two facts have not been referred to this evening, and they are relevant to a fair consideration of the matter. The first is the effect on the stocks held by all industry, and the steel industry, of course, as well, of the increase in prices due to general inflation in this country. Because as the price goes up, so there must necessarily come about a windfall addition to the resources of firms because of the increased value of the stocks in their possession. It would be quite wrong to say that the windfall should be used to keep prices of steel down, because when these stocks are used up they have to be replaced with fresh stocks at the same, if not higher, prices.

Secondly, a very large part of the profit in recent times—and here I bear in mind the examples which the right hon. Gentleman read to the House—have come from the premiums obtained in the export market. There are some who would argue that at least part of these export premiums should be taken into account when the price of British steel in the home market is considered. It is not for hon. Gentlemen opposite to argue in that way when it was, in fact, their policy to leave out of account all premiums derived from the export market in fixing prices on the home market. It is on these two accounts that a very large part of the profits, described, quite falsely in my view, as exorbitant, are derived.

The right hon. Gentleman said, so clever had his Government been in keeping the price of steel down in this country by controls, that it compared very favourably with the price of steel in other countries. I have heard hon. and right hon. Gentlemen opposite make some extravagant claims for the conduct of their Government when in office, but to take the credit for keeping down the cost of manufacture in the steel trade is really quite extravagant and unwarranted. The costs in the steel trade, so far as they have not been driven up by the cost of raw materials from the nationalised industries, have been kept down by the ingenuity of the men working in that trade.

Mr. E. Fernyhough (Jarrow)

The hon. Member should not forget that for a long time the Government subsidised scrap from abroad. Was not that subsidy reflected in the price of finished steel?

Mr. Summers

What happened about this alleged subsidy of which other hon. Members than the hon. Gentleman speak, is that the industry was supposed to have been given something by the taxpayer rather than by the consumer of steel. The taxpayer, rather than the consumer, paid the excess costs of transport of foreign ore into this country. [HON. MEMBERS: "That is a subsidy."] When hon. Members opposite talk about subsidies in this case, they quite overlook the fact that this was an additional charge made outside the country, just in the same way as the consumer had to pay more for British steel when he needed more steel than could be made in this country from the materials available; because of the expensive imported steel which had to be brought in. We really should preserve a sense of proportion in this business and realise that of the increased prices recently announced, 70 per cent. is, in fact, due to the cost of bringing steel from abroad, and only the remaining 30 per cent. is due to increased costs which the industry here has had to shoulder.

This charge made against the Government, that there is no need for prices to be put up, might have some justification if the entire increase in costs was to be made good by an increase in price and was to be charged solely to the consumer. But, no such suggestion is made. Of the increased costs which the industry is to shoulder, 25 per cent. has to be found from the resources and increased efficiency of the industry itself. That is a very different thing from placing on the consumer the whole of the increase with which the industry is faced.

The only other point I would mention is referring to the need for the accumulation of reserves by the industry for the purpose of taking care of the very heavy capital costs for modernising and maintaining the plant in the industry. The original plan in 1945, approved by the late Government, was to cost £168 millions, and it was to make 16 million tons in 1952. In passing, I cannot help but say how inconsistent is the membership of the right hon. Member for Ebbw Vale (Mr. Bevan) of a Government approving that scheme, with his saying that the steel masters had lacked foresight in preparing and producing adequately for our needs.

Mr. A. C. Manuel (Ayrshire, Central)

Is the point which the hon. Member is making that adequate amounts ought to be placed to reserve to re-equip the industry? Would he agree, I wonder, to support a proposition laying down exactly the amount of profit which should go to reserve, not having it fully distributed?

Mr. Summers

It would be a great mistake if the Government of this country, whatever its colour, sought to interfere with the proper discharge of the responsibilities of industry in the way which the hon. Gentleman suggests.

What I was leading up to was the statement that the original plan which was to have cost £168 million has cost some £250 million. Even so, the rate at which capital has to be spent within the industry to cover the need to maintain itself and keep modern, is at least £50 million to £60 million a year. Indeed, it may well be more. It is well known that the accumulation of capital in recent years, and especially the obtaining of risk capital, has been gravely prejudiced by a variety of factors which have been at work in recent times.

That being so, it is all the more important that when prices are established there should be an adequate margin over cost—as indeed was admitted in the first proposition of the right hon. Member for Vauxhall—for the creation of resources to maintain and modernise plant. When regard is paid to the amount of increased cost which is not to come out of the consumer, and when regard is paid to the amount of the burden on account of imported steel and the need to replenish resources for capital purposes, there is every justification for the increase announced by the Minister recently.

10.57 p.m.

Mr. Maurice Edelman (Coventry, North)

The hon. Gentleman the Member for Aylesbury (Mr. Summers), with his colleagues, has just been arguing in favour of a rise in the cost of living. That, certainly, is what the argument of hon. Gentlemen opposite means. There is no doubt that the Cabinet decision to increase the price of steel—for it was a Cabinet decision, as has been stated by the Minister of Supply—will hit hard every man, woman and child in this country.

Indeed, when the hon. Gentleman the Member for Esher (Mr. Robson Brown) was arguing that the price of steel has been kept too low, I could not help wishing that he had advanced that argument six months ago. Six months ago the print was not yet dry on the Tory posters saying that the Conservative Party would keep down the cost of living. Now a new proposition is advanced. It is that the Government, by wilfully advancing the price of a basic material, are, in some way or other, conferring a benefit on the community.

One fact is absolutely clear, and that is that this increase in the price of iron and steel will be inflationary. It will have repercussions not only on everything in domestic use, but also in those goods produced for the export market. I know, as a Member for a constituency which makes the cars referred to by the former Minister of Supply, that it is certain that every car, which consumes approximately one ton of steel, will be handicapped by that amount which the Government are adding as an extra charge to the price of steel.

At this dangerous time, when we are facing so many difficulties in the export market, it is certain that the advance in the price of steel imposed by the Government will be a ball and chain on our exports. It was suggested by the hon. Member for Esher that the price of British steel was still extremely low compared with the price of steel abroad. But that is not strictly true today. For example, the price of small steel bars in this country is now £49 11s. 6d. per ton f.o.b., whereas the French quotation is £47 3s. 0d., the Belgian figure is £48 4s. 0d., and even the Japanese figure is £46 8s. 0d. f.o.b. So that even in the case of a commodity which is of the greatest importance to our engineering industry, the effect of the increase by the right hon. Gentleman has been to handicap our manufacturers and to place disabilities upon our exporters.

Mr. Robson Brown

Will the hon. Member give us the source of those figures?

Mr. Edelman

The source is the "Birmingham Post," a newspaper which certainly is not known for Socialist sympathies, and which I am sure would be completely objective in this matter.

Mr. Brown

And the date?

Mr. Edelman

The date is a recent one—7th March: the House can rely upon the figures.

But I am not concerned merely with the day-to-day quotation of a particular type of steel. What I am concerned about is the whole market trend of the iron and steel industry. Looking at that trend, we see that, so far from the price of world steel continuing to rise, there is already a perceptible tendency for the price to fall. The most sensitive index is the Belgian international steel market. There we see that the price is falling.

The reason the price is still falling in the world markets is because the decision of the United States to add so much to its own production is bringing the production of world steel and American demands more or less into balance. The effect of that is to produce a decline in the world price of steel. Since Korea, the increase in the annual production of American steel has been of the order of 8,000,000 tons, and by 1953 it is anticipated that there will be a further 12,000,000 tons increase in American annual steel production.

This increase in production does not come from nothing. To a great extent this increase is at the expense of our own production. Much of the steel and the ore which we hope to get as a result of the agreement made by the Prime Minister in America derives from sources which, traditionally, should have belonged to us. It has merely gone for a joy-ride round the world to America, whence it is being returned to us after profits have been made by various middlemen on the way.

With the increases proposed by the Minister of Supply, the iron and steel industry will be seriously handicapped in facing future problems which already stand out clearly when one analyses the market trend. If I can have the attention of the Minister for a moment I shall turn to the right hon. Gentleman's dispute with the Iron and Steel Corporation. I emphasise this matter of the Iron and Steel Corporation because I want to deal specifically with the expressions of Mr. Steven Hardie on behalf of the Corporation.

The right hon. Gentleman has stated at various times in the House that he was never in dispute with the Corporation on the matter of iron and steel prices, but that it was Mr. Hardie who had this disagreement. After he had made that statement, several hon. Members on this side of the House invited the right hon. Gentleman to publish the letter of 24th January, which Mr. Hardie referred to, in which he said that, on behalf of the Corporation, he had informed the Minister that the Corporation was opposed to any increase of iron and steel prices.

When he was invited to answer that question the right hon. Gentleman replied, and I should like to quote an extract from that reply. The right hon. Gentleman said, on 10th March: … I can tell the House that the purpose of Mr. Hardie's letter of 24th January was to place on record certain arguments advanced by him in the course of a meeting on 23rd January between himself, the Deputy-Chairman of the Corporation, myself, the Parliamentary Secretary and senior officials of the Ministry of Supply, at the conclusion of which a schedule of increased steel prices had been agreed."—[OFFICIAL REPORT, 10th March, 1952; Vol. 497, c. 992.] I stress those last words.

I would not wish for a moment to promote the Corporation as a constitutional body above the Minister himself. The function of the Corporation is merely to give technical advice. But this was a technical matter and an economic question and, consequently, the advice given by Mr. Hardie was technical and economic, and Mr. Hardie would have been failing in his duty had he not given his honest advice as to what was best to be done in connection with iron and steel prices. He did so, according to his statement in his letter to the Minister on 24th January; but the Minister says that Mr. Hardie gave him a flat refutation of the statement that he had agreed to a schedule of increased new prices.

Several of my hon. Friends invited the Minister to publish that letter. The right hon. Gentleman hedged for a time and finally, in a minatory tone, said words to the effect that if my hon. Friends insisted on his publishing the letter they would probably get more than they had bargained for. That kind of pressure may be all right when applied to certain members of the Corporation, but I am certain that my hon. Friends will not yield to pressure of that kind by the right hon. Gentleman. I invite him now to say whether he is prepared to publish Mr. Hardie's letter of 24th January in which Mr. Hardie, on behalf of the Corporation, said he was opposed to an increase in prices.

Hon. Members

Answer.

Mr. Edelman

The right hon. Gentleman does not rise so I conclude, and all my hon. and right hon. Friends will conclude, that the right hon. Gentleman's refusal to do so means that it is not the veracity of Mr. Hardie that is impugned but the accuracy of the right hon. Gentleman in his dispute with Mr. Hardie.

This is not a matter of personalities. As I have said in previous debates, I have never met Mr. Hardie. I have had no communication with him and to the best of my knowledge I do not know what he looks like. I judge him by his record of public service, by the stand he took in this matter of iron and steel prices; because for the very first time we had a most dramatic confrontation of a public servant, the head of a nationalised industry taking his stand on the very principle we on this side of the House have always advanced as being the purpose and end of nationalisation, namely, to serve the public interest and to resist the demands of private profit when those demands are put in a way which would be detrimental to the public as a whole.

The result of this struggle was when it became clear that Mr. Hardie would only be persona grata with the Minister if he agreed to raise prices and, of course, then it was honourable and proper for him to resign. That is the course he took. The Minister, on behalf of the Government, invited Mr. Hardie first to dig his own grave before they shot him. Mr. Hardie very properly refused that invitation. The result is that the nation as a whole is now in a situation in which this conflict will proceed. On one side there are those who support Mr. Hardie's stand in the interests of the public, and on the other the right hon. Gentleman and the Cabinet behind him, and those associated with him who have been engaged in window dressing—for that is all that it is—of the assets of the Iron and Steel Corporation.

Air Commodore A. V. Harvey (Macclesfield)

Does the hon. Gentleman not consider it unfortunate that the British Oxygen Company did not follow the line that he has just described, from the point of view of record profits?

Mr. Edelman

I am not concerned with the British Oxygen Company. I am concerned with Mr. Hardie, and I am judging him by what he has done in this matter. I say that Mr. Hardie deserves well of the country.

I wish to conclude on this note. This argument will certainly continue, and I know that those who listen to this debate or read the report of it will know which is the party which is in favour of a rise in the cost of living and which is the party which is opposed to it. I am sure that the country will realise that this is an issue in which the two attitudes represented by the Government and the Opposition become clear.

My right hon. Friend has already quoted that very revealing leading article in the "Financial Times," which really lets the cat out of the bag. I would quote a few words from that leading article to reinforce his argument. They are: The increased profitability of the industry will, at any rate, tend to ease the task of the present Government in seeking a solution of the difficult problem of returning the steel industry to private ownership. There we have the whole aim and purpose of the right hon. Gentleman and those connected with him. He has not been governed by economic considerations. He has not been governed by any respect for the consumer or the exporter. He has not been concerned even with those industrialists who are connected with the consuming industries which depend on steel. He has merely been concerned with this single potential point of dressing up the iron and steel industry so that ultimately, when he offers it through the Stock Exchange to private enterprise, he will find ready buyers.

Whatever the near future may bring, whether the right hon. Gentleman is successful or not in steam-rolling a Measure of denationalisation through this Parliament, the day will certainly come when the public will realise that the nationalised iron and steel industry did well for the country; and when the Opposition becomes the Government of the country they will certainly take action to see that the iron and steel industry, through nationalisation, serves the country once again.

11.13 p.m.

Mr. Baker White (Canterbury)

I do not propose to follow the hon. Member for Coventry, North (Mr. Edelman) because I want to get back to what we are supposed to be discussing tonight, namely, the Iron and Steel Prices Order.

I would only follow the hon. Member on one point. I should like him to inquire into the "Birmingham Post" figures of comparative prices which he quoted. I have not the prices for small rods, but the prices which I have do not tell the same story at all. They show, after the price increase: Great Britain, £27 19s. 6d. a ton; U.S.A., £35 4s.; France, £36 0s. 5d., Germany, £31 19s. 7d.; and Belgium, £31 8s. 11d.

I do not represent an industry which produces steel, nor have I any connection with that industry. I am concerned with a constituency which is a very large consumer of steel in the form of agricultural machinery, mining machinery, pit props, housing, coast defence and tin plate. It is from that aspect that I try to look at these figures and at the reason why these price increases have been made.

The right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss) suggested that steel prices had been kept down, since the war, by control. My belief is that what kept prices down was the high efficiency of the industry and the very high standard of co-operation of everybody in it. I think it is a great pity that hon. Members opposite and the right hon. Gentleman who moved this Prayer did not probe a little more deeply into the background of these rises in price and into the rise in cost that preceded them.

After all, the prices of foreign ore rose from 60s. to 90s. a ton in the first six months of 1951. Imported pig iron rose by £11 a ton in 1951; imported scrap rose by over £20 a ton, and I think it is worth remembering that the industry carried for that time, without any increase in prices, the extra cost which resulted from the August price increase in scrap. The industry also had wage increases which were very well earned. They put £8½ million on to the industry's costs in 1951.

With regard to the costs outside the control of the industry, on 16th April last year there was an increase of 10 per cent. in railway freight, canal and dock charges.

Mr. Percy Daines (East Ham, North)

Would the hon. Gentleman read the last part of his speech carefully, so that we can all hear it?

Mr. Baker White

There was a further increase in these charges of 10 per cent. on 31st December, 1951. I am not lecturing hon. Members on the relation of the cost of coal to the cost of steel. They know as much as I do about that. But if we take 1938 as 100, the price of coal was 247. In January, 1951, it was 251 and in January, 1952, it was 297, that is to say, 46 points up last year. My hon. Friend the Member for Aylesbury (Mr. Summers) mentioned specifically the great incidence on the price increase of the increase in the price of imported steel. I think it is rather surprising that the present increases have not been larger.

With regard to the question of comparative prices abroad, I do not want to bore the House with a whole set of figures, but I am prepared to produce them to any hon. Member who doubts what I am going to say. Even with these price increases, almost every single category of iron and steel produced in this country is substantially lower, still, than the prices in other countries. The right hon. Member for Vauxhall mentioned the profits of the industry. I do wish he would look at the figures of the profits of that hard-bitten monopoly the British Oxygen Company, built up by Mr. Hardie. That company has made record profits for the past three years. It has paid a 20 per cent. dividend and the iron and steel industry is by far the largest user of its products.

Mr. Jack Jones

Does the hon. Gentleman realise that if Steven Hardie wished, he and his company could have made the cost of steel still higher than it is at the moment—and increased the profits—if he followed Tory policy?

Mr. Baker White

The British Oxygen Company made over £4 million on a capital of £6 million. I do not know what hon. Gentlemen opposite think of that. It is perfectly clear that this Prayer has been moved entirely for political reasons and for party propaganda purposes.

11.20 p.m.

Mr. George Chetwynd (Stockton-on-Tees)

The speeches we have heard so far from both sides clearly reveal the fundamental difference of approach between the two parties. From the other side we have had nothing but a balance-sheet approach, a profit-and-loss approach, a justification of the Government's Order, in the interests of those whom they hope will soon be shareholders again. We on this side have been looking at it from the wider aspect of the real national interest—and we do this clearly because a nationalised industry is and must be an instrument of national policy—whereas the Government alternative is that it should once again be in the hands of private enterprise as the instrument of private profit.

The clear intention of the Government, as declared at the last Election, was to do something to reduce the cost of living, and one would have thought when Mr. Hardie gave them this first-class opportunity of doing something about it that they would have grasped it with both hands. But, instead, they fell over themselves to get rid of the chairman of the Iron and Steel Corporation and go contrary to his advice and put into operation price increases which, through their many accumulative effects on everything else, are bound to increase the cost of living considerably.

Mr. Summers

Is it right, then, to put up the price of coal when the cost requires it, notwithstanding its effect on the cost of living, but wrong to do the self-same thing in the case of steel?

Mr. Chetwynd

No. The two things are interlocked, and the price increase in iron and steel is bound to have an accumulative effect on the price of coal, while if we had adopted the Hardie policy it would have resulted in a lower price of coal.

Mr. Summers

The hon. Gentleman has misunderstood my point. Does he draw a distinction between increasing the price of coal when the costs require an increase, notwithstanding its effect on the cost of living and criticising the self-same thing in steel?

Mr. Chetwynd

No, I shall deal with that point later. We have to take this increase in steel in conjunction with the Government's policy and promises that they were going to do something to reduce the cost of living. We now see that everything from a battleship to a bicycle clip is affected by this increase. We should remember, in judging the national interest, that under the Act the Iron and Steel Corporation did not necessarily have to show a profit every year, but was supposed to be in general balance taking one year with another. Therefore, if the national interest warranted it, there is no reason this year why it should not operate at a loss.

We also have to judge this decision against the whole world background of steel production and prices. It has become more and more evident that production throughout the world is at such a state that demand and supply are becoming nearer and nearer. Whereas we at home are completely dependent for survival on our exports—and we need an extra 315,000 tons of ingot steel to meet export commitments this year—we have to concentrate on the metal using industries to get the necessary volume of exports.

It is again clear that rising prices of iron and steel will make it more and more difficult for manufacturing industries to compete in overseas markets, in particular in the United States. The gap has been narrowed between British steel prices and those of Western Europe and America. I am going to quote the same figures as the hon. Gentleman did when he was seeking to prove that our level of prices were so much below those of other countries that our exporting trades were not jeopardised. The exact opposite is true. For angles, our current price is £27 19s. 6d. In the U.S. it is £35 4s. and in the Western Zone of Germany it is £31 19s. 7d. The American price is 26 per cent. higher than ours.

When we look at sheets, which are vitally important in our exports, we find the current prices at home are £40 2s. 6d., the American prices are £40 16s., just 2 per cent. higher than ours, and the prices in Western Germany are £44 2s. 1d., or 10 per cent. higher. If we look at rails the current price here is £28 12s. 6d., in the United States £30 12s.—or 7 per cent. higher—and in Western Germany £29 8s. 5d., only 3 per cent. higher. If we realise, on the one hand, that the more efficient methods of production in the United States and in Western Germany lower wages will cheapen their cost of production of the finished article, it is clear that we cannot compete in our export prices with prices as they are in American production or Western German production. When we have to fight tooth and nail to sell our engineering products overseas, it seems clear that this increase is placing an unnecessary burden on the exporting industry.

Mr. Summers

I only want the hon. Gentleman to bear in mind, if he is comparing export prices of sheets, that the ruling prices at home and in America and most other countries have no relation whatever to the prices ruling in the export market.

Mr. Chetwynd

I have merely quoted figures provided by the British Iron and Steel Federation, but I think my general point holds, and if we are competing on level terms, either with Germany or the United States where they have more efficient production, or in the case of Germany where they have lower production costs it seems we are at a grave disadvantage.

Furthermore, we have to consider that world production of steel increased by, I think it was, 20 million tons, and it looks as if it will increase by another 15 million tons this year. As the American steel shortage is overcome, they will not be wanting products of our engineering industry unless we can offer them at cheaper rates compared with their own. If we are to maintain our exports we have to get the basic element in the manufacturing industry, on which we depend, as cheap as possible.

The effect of the increase price on rearmament, for which we need an extra 300,000 tons of ingot steel for defence, will be that there will be an increase in costs to the Exchequer, and because of the ceilings imposed on the social services that is bound to react adversely on those services. Although we have agreed that we shall have to have guns and a certain amount of butter, I am not sure the public will take kindly to a situation where not only will we have less butter but only the same amount of guns at a dearer price. It will be so unless we can transfer that part of the steel price increase which is attributable to rearmament to the Ministry of Defence Estimates and subsidise them in that way.

So far as the principle of subsidy is concerned, it is accepted by the Government, who are still paying the duty on imported steel. The transference, I suggest, is defence estimates of increased armament prices is only an expansion of the principle. My right hon. Friend gave some good figures of the profits being made in the steel industry today, and I should like to ask the Minister to give us a more detailed account of the way prices have been fixed in this particular case. If he refers to "The Times" of 25th February he will see this statement: No doubt the difficulties involved in fixing steel prices ought to be more openly discussed. That is what we are doing now. More than once since the war the principles applied in fixing these prices have been reviewed, but never publicly. Yet these are not affairs that should be arranged between a Minister and an industry. I think that is perfectly true. One of things we have to ask tonight in discussing these large increases is that the public should have greater knowledge of the basis upon which they have been arranged. We should know what is the breakdown in the increase since August, 1951, due to increased coal, coke, wages and transport costs and how much of the increase is due to the import of finished steel from the U.S.A., which has to be met by the increased levy on home-produced ingots.

If we turn to this question of scrap and steel from the U.S.A., it seems a ridiculous way of arranging our economic life, to get things from the U.S.A.—either finished steel or scrap—which have been sent there from Western Germany at an increased price when we ought to have got these raw materials and scrap direct from Western Germany and so kept prices down and maintained our own home industry in full production.

One other thing we must ask in this: Would it not have been better at this stage to have pressed the U.S.A. to make smaller demands upon the scrap and ore available in Western Europe and allow us to get an increased quantity at lower prices and, therefore, keep our own production costs down? What we have to ask, too, is how far can the expected profits of this industry meet the increase? I think it is clear from the quotation from the "Financial Times" what high profits have been made. The steel firms could not do otherwise at a time of rearmament. The Minister should tell us how far we can rely on increased efficiency of production and better organisation of the industry to make part of this increase unnecessary.

I can only assume, as my right hon. Friend has, that this scheme of the Government to increase prices bears no relation to their Election promises to keep costs down or to the real national interest. It is done only to make the steel companies more profitable to the potential purchasers when the industry is denationalised. The Government have not made out their case for these substantial increases and I hope that the Prayer will be carried tonight.

11.33 p.m.

Mr. Peter Roberts (Eccleshall)

I have listened very carefully to the arguments put forward by hon. Members opposite and I really think that my right hon. Friend will have an easy task in winding up this debate.

There have been four main arguments put forward from the other side. The first, which was produced by the right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss), was that these prices were harmful and that they would increase the prices of other products. That I agree: we must, on both sides, accept it as regrettable that these prices have to go up—but that is not an argument in itself. We have the argument that the hon. Member for Stockton-on-Tees (Mr. Chetwynd) has produced—that this should not be put on the consumers but on the taxpayers. There may be something in that argument, though it does not get away from the reason why these prices must be imposed, whether on the consumer or the taxpayer.

Third, there was the argument of the hon. Member for Coventry, West (Mr. Edelman), that the Minister should have followed the advice of Mr. Hardie. I could not help recalling, during his speech, what his views were upon the other members of the Board who did not give that advice and I think he was a little unkind to those who remained behind when he suggested that they were not performing their national duty by not resigning as well.

Mr. Edelman

My argument was not that the Minister should have followed Mr. Hardie's advice, but that the Minister should have followed the advice of the Corporation, tendered through Mr. Hardie in the letter of 24th January, which, for some reason of his own, the Minister has been keeping secret.

Mr. Roberts

But, unfortunately, that advice was not in the end unanimous advice, and if he does not wish to cast a slur upon those who remain behind, I am glad that the hon. Member has now said so.

The fourth argument is one of political motive, dealing with the question of profits, and I think that argument was most ably dealt with by my hon. Friend who spoke first from this side of the House. Those hon. Members on the other side who listened to him must have been convinced by the figures in themselves that the profits which have been absorbed have to be reduced by something like £24 million. On those figures, the profits this year will be less than the profit which was allowed by the right hon. Member for Vauxhall during the Socialist regime. We have had no argument or answer to that question, and until we have, I think hon. Gentlemen opposite cannot believe that they have made out their case.

Now I come to the question of why these prices have had to be increased. [An HON. MEMBER: "At last.") I was suggesting as long ago as 5th February, 1951, that this would have to happen. They were increased eventually by £60 million. We did not then hear to the same extent those arguments which have been produced tonight by hon. Members on that side of the House, that the prices would have to go throughout all industry and would be reflected in the engineering industry—the argument they produce tonight.

Mr. Frederick Mulley (Sheffield, Park)

Does the hon. Gentleman not agree that when an increase has been put on prices, every further increase makes the problem much more serious, whether it is steel or anything else?

Mr. Roberts

I quite agree. Let us see what happened after August of last year. The hon. Member comes from Sheffield, and he knows the colliery areas round about; the Coal Board has imposed in the last few months one of the biggest increases in the prices of coal which have been made during the last two years. Does the hon. Gentleman also know that from coal comes coke, and that the price of coke has been increased in the last two months by as much as 10s. to 17s. per ton? All this came upon the steel makers. If this argument is to be followed out, hon. Gentlemen on that side have to say that they blame nationalisation for that. I do not think they will argue that, or that they should not have increased miners' wages, which is reflected in these increases.

Mr. Fernyhough

What would the hon. Gentleman and the rest of the hon. Members sitting on those benches have said if the Coal Board had been showing a profit as large as the Iron and Steel Corporation, and had still increased the price of coal?

Mr. Roberts

That does not further the argument at all.

Mr. E. L. Mallalieu

The argument that has been advanced from this side of the House is that these increases in cost might have been met out of the enormous profits of the industry.

Mr. Roberts

I dealt with that point when I referred the hon. Gentleman to the speech of my hon. Friend who answered that point by saying that the estimated profits for this year will be, or are to be, less than they were during the year when the right hon. Member for Vauxhall was in charge. Hon. Gentlemen must try to find an answer to that argument. They have not done so up to date.

I want to return to the point I was making before I was interrupted. If hon. Members on that side are going to attack these figures, they have to attack them at their source, which was the increase in miners' wages and the increase in the transport workers' wages, because this is reflected from them.

The second point is that in Sheffield the price of industrial gas has gone up as a direct result of the increase in the price of coal. We on this side of the House have, year after year, pointed out that with nationalisation one is bound to get these increases in price. It is, in fact, merely another example of what, I venture to say, is the coming home to roost of a trouble based on policies that right hon. and hon. Members opposite have put forward with regard to nationalisation.

Mr. R. H. S. Crossman (Coventry, East)

If the hon. Member thinks that nationalisation is the chief cause of the increase in steel prices, can he tell the House why, in the United States, steel prices are much higher than here?

Mr. Roberts

The hon. Gentleman must refer his question to the Coal Board, which is consistently putting up the price of coal.

The next question to which I refer is that of scrap. Hon. Members know that the scrap agreement of last September was the responsibility of the late Government; and an hon. Member opposite talked of scrap going to America and coming back. I wish that when we attacked that agreement from that side of the House hon. Members now sitting there had supported us. We reduced our scrap intake from Germany, and America, as a partner, took her share; the whole question is bound up directly with the late Government.

If there were time I would raise the question of iron ore because, for years, we, sitting over there, pressed for iron ore imports to be increased from Sierra Leone, among other places. Again and again hon. Members opposite took no action, and here we are, faced with a shortage of iron ore; a shortage which they could have remedied by proper action.

Of the four arguments which right hon. and hon. Members opposite have raised, not one is a valid or proper reason; and, therefore, I am quite certain that when my right hon. Friend comes to reply he will be able to assure the House that the Prayer ought not to have been prayed against—

Mr. M. Follick (Loughborough)

How does one pray against a Prayer?

Mr. Roberts

That this Order ought not to have been prayed against. I hope that right hon. and hon. Members opposite will agree not to press the issue to a Division.

11.43 p.m.

Mr. Jack Jones (Rotherham)

This debate ought not to be allowed to pass without a reference to the lamented passing of our good friend, Sir Andrew Duncan and, on behalf of the steel workers of Britain, I would wish to submit our sincere sympathy to his family in their bereavement. He was an able administrator, a man with a fine brain, and, when it came to making a settlement for or against the steel workers, he was always fair.

So far as the speech to which we have just listened is concerned, I can only say that I am amazed. Here is the hon. Member for Heeley (Mr. P. Roberts), claiming to represent the steel workers, and getting up quite nakedly—[HON. MEMBERS: "Oh."]—well, metaphorically, quite nakedly, and unashamedly, to suggest that the best interests of the many thousands of steel workers in Sheffield will best be served by watching the price of steel rise yet again without saying a word against it.

I was in Sheffield as recently as last Saturday night, on business for my trade union, and I found very grave concern about unemployment, and under-employment, particularly in the lighter industries of which, apparently, the hon. Member knows nothing; but about which he should know quite a lot. To suggest that to allow prices to rise willy-nilly, to say, "The sky's the limit," is not what the steel workers are saying.

Mr. P. Roberts

I said nothing like it. What I did say was that this increase had had to be made.

Mr. Jones

I said that the hon. Member suggested that. I did not say that he used those words.

Mr. Roberts

I said the opposite.

Mr. Jones

The hon. Member suggested that this was the correct thing to do. We shall see when we go into the Lobbies whether he supports the rise in prices or whether he is against the increase. That will be the test.

I am not so much concerned with who is right. I am not so much concerned with whether Steven Hardie, Keir Hardie or any other Hardie is right. I am concerned with what is the correct price to charge for British steel in present circumstances. A lot has been said about the effect of these increases. The agricultural industry will be affected. Every exporting community in this island will be affected. The houses to be built to attract men to the mining industry will be affected. The rents to be charged for those houses will be increased, because the houses are to be erected with steel supports as a result of the danger of subsidence caused by the neglect of hon. Gentlemen opposite who took the guts out of the ground. Everything will be affected.

I am convinced that this question is not so much economic as political. When the former Minister of Supply was in office, there was an increase in prices. That was because of the increase in the cost of coal. The Government should get it into their heads that there will be no cheap miners in future. The days have gone when hon. Gentlemen opposite can tell us that we have so much coal that we do not know what to do with it. The days of the pittance to the miner working under terrible conditions have gone.

That has had a serious effect on the steel industry. But, because of their lack of knowledge, no hon. Members opposite say anything about the decreased amount of coal which is being used. If the same amount of coal per ton of steel is used in the industry today as was used five, 10 or 20 years ago, that is a complete indictment of the efficiency of the industry.

It is completely wrong to suggest that the cost of coal per ton of steel is the same today as it used to be. I entirely agree with the hon. Member for Kidderminster (Mr. Nabarro) that more millions of tons of coal have been wasted in this country—hundreds of thousands of tons of it in the steel industry—than anywhere else in the world. The amount of coal used per ton of steel when I was making steel—and that is not so very long ago was 50 cwt. today, it is much less—

Mr. Robson Brown

I should like the hon. Member, whose views on steel I respect very highly, to note that in the increased charges this year we shall have to provide £8 million for the increased cost of coal and coke.

Mr. Jones

That is admitted. The cost of coal has increased, and everybody knows why. If there is no virtue at all in nationalisation, if nationalisation is a complete mess, what I cannot understand is why the Government do not go ahead and de-nationalise the coal industry. They cannot have it both ways. They cannot say that coal is successfully nationalised and that steel will be unsuccessful if it remains nationalised.

Let us make no bones about it. The facts are that this is the one moneyspinner of the industries left in this country, and the Government intend to take it back into private ownership. That is the reason why the prices have been increased. I do not say that that is the sole reason. I believe that there probably have been reasons for small increases.

Who will get the benefit of the increased prices? The steel workers will not. I want to put it on record that at the beginning of the last war the steel workers voluntarily "froze" their wages. They took 66½ on base rates. Today, if the steel workers were paid on a sliding scale, they would be receiving something like 100 per cent. more than they are doing in their wage packets. During the war those men also took a cost of living bonus which gave the labourer the same amount, additional to his basic wage, as the highest paid worker in the industry. The steel worker is not getting any benefit from these increased prices.

There are lots of other things which could be done rather than increase the price. The aim ought to be to keep prices down. Today, the industry is paying an enormous amount of money to non-producers. If I had the time I could prove that administrative costs alone since the war have gone up 30s. a ton in certain of our steel works. But, besides time, to prove this would involve mentioning personalities and firms.

I could prove also that on the managerial side there are three, four, even five times as many people as before the war, drawing wages of £700 to £750. That is where the industry ought to look. [An HON. MEMBER: "Has that been going on under nationalisation?"] Yes, during the brief history of nationalisation. Certain people were removed, and careful stock was being taken. But for the standstill order of the present Government, these things would have been seen to.

There is no doubt that the Tory Government are in a dilemma. They have to try to keep two promises, one of which they must break. One of those promises is to bring down the cost of living. The other is to de-nationalise this industry. They cannot do both. They cannot de-nationalise the industry because those who hope that it will be returned to them must see a better return for their money before they are ready to invest in it. Therefore, the cost of living must go up. The Government's promise to bring down the cost of living has already been shattered.

As for de-nationalisation, we shall wait and see. My forecast is that de-nationalisation will operate on the sugar and plums of the industry, and not on the whole of the industry which we nationalised. We shall wait a few more weary weeks before we find out what is to come about. My advice to the Government is to seek to do the right thing so far as prices are concerned. The American steel bargain was the worst thing in the Government's history. The hon. Member for Aylesbury (Mr. Summers), who has knowledge of the steel industry, admitted that 70 per cent. of the increased price is due to having to equate throughout the whole of our cost of production the cost of the American-bought steel. [An HON. MEMBER: "A bad bargain."] It is a terribly bad bargain for Sheffield steel workers. Two hundred thousand tons of these million tons are coming in the form of semi-finished and finished steel at terrifically high prices.

I submit that if we had used one-tenth or a quarter part of the tin and aluminium we have allowed to go at below world prices and had spent fewer dollars and had obtained raw materials instead of finished articles, Sheffield workers would be now on full time instead of working only four days a week. In addition, we would be getting the conversion value of that material by sending it out in the form of cars and motorcycles and other engineering products. That was a bad bargain. The Americans have completely had the best of it.

Scrap has gone from Germany, Spain, and Sweden. Whoever is responsible is wrong. I am not concerned with pointing a finger to this or that side of the House. I am concerned with facts. The Prime Minister, the chief commercial traveller, who was against bulk buying if the Tory manifesto is to be believed, bought millions of pounds worth of steel and made the worst possible bargain from the point of view of British steel-workers. It would have been far better if dollars had been obtained for tin and aluminium, materials of high strategic value we have in this country, and a much better bargain driven for them. But that is past history.

I appeal to Her Majesty's Government to look again at these prices. They can do no other than retard our industry, increase the cost of building and even put up the rents of council houses. These increased prices will reflect themselves in an increased cost of living. An increased cost of living will reflect itself in a discontented community, and a discontented community will not produce the exports upon which the Chancellor of the Exchequer depends for the operation of his Budget. These things are like a boomerang which comes back and hits hard. They will be further nails in the coffin of this Conservative Government which will be buried sooner or later, and heaven provide that it be sooner.

11.59 p.m.

The Minister of Supply (Mr. Duncan Sandys)

First of all, I should like to associate myself with the tribute paid by the hon. Member for Rotherham (Mr. Jack Jones) and by one or two other speakers earlier in the debate to the late Sir Andrew Duncan. He was my chief at the Ministry of Supply during the war and I know well from personal contact how much he contributed to the common victory during those years. He was a respected and loved Member of this House and, as has just been said, he was universally regarded as a fair man. We mourn his loss.

I turn now to the subject of this debate. It is well known that in political life there are many surprises, but I must say I never thought that I should find myself defending a nationalised industry against an attempt by the Socialist Party to raid its profits in the interest of other industries under private enterprise.

The right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss), who opened the debate, made four main criticisms with which I shall attempt to deal. He said there was no good reason for these price increases. In the second place, he said they would have a bad effect upon our economy. Third, he said that our motive in making these price increases was purely political. Last, and turning, in particular, to me, he said that I had not been—these were his words—quite honest with the House about my consultations with Mr. Hardie and the Iron and Steel Corporation.

Before dealing with the first three general criticisms, I would like to say a word about my consultations with the Corporation. Several hon. Members have raised this issue. I have already explained on an earlier occasion why I consider it unwise and improper to set a precedent for the publication of confidential correspondence between the Government and the board of a nationalised industry. When I made that explanation I noticed how many right hon. and hon. Gentlemen opposite nodded their heads in approval. I believe it would be an unfortunate precedent, and one only to be resorted to in the most extreme and exceptional case, to publish correspondence of this nature.

Mr. Edelman

May I interrupt the right hon. Gentleman, as this is a point which I raised'? Does the right hon. Gentleman consider it proper to impugn the honour of a gentleman and then not to put the facts on record for public scrutiny? Surely this is precisely the type of exceptional case to which he has referred as being a proper subject for the publication of the correspondence concerned.

Mr. Sandys

As the hon. Member knows well, I have impugned nobody's honour. All that I have done is to reply with considerable restraint to accusations made against me, and not least by the hon. Member himself. I think that the publication of this kind of correspondence can only have the effect of impairing the free and frank discussion and exchange of views which must take place between a Government and the board of a nationalised industry.

I am quite prepared, if I am pressed, to give to the House tonight, in detail, a chronological account of my consultations with the Corporation. I have brought full particulars with me. But unless the House presses me to do so, I would very much sooner let this matter alone. The Corporation is now settling down under its new Chairman, and I should be extremely sorry to see it thrown back into public controversy. If the right hon. Member for Vauxhall, who knows the position as well as I do, presses me to give this account I will do so, but I will leave it to him to decide.

Mr. G. R. Strauss

The only matter of dispute was this. The right hon. Gentleman has said that he has not had any dispute with the Corporation on any matter. Mr. Hardie said that in fact there was a dispute, that the Corporation, on 24th January, unanimously disagreed with the price increases. Here is a dispute between the Minister and Mr. Hardie, and I would ask for an elucidation of that. We want to know whether the Minister, in denying that there has been a dispute, was, in fact, speaking the truth. A chronological account of what happened over a long period may or may not be relevant on this matter. But cannot the right hon. Gentleman answer this simple question?

Mr. Sandys

I said frankly to the right hon. Gentleman the other day that it was extremely difficult to answer yes or no to the particular question which he put to me. If he puts it like that, I feel that I have no alternative but to go through with this account. I will make it as brief as I can.

Mr. Jack Jones

I want to be very fair. I do not want to make the position any worse. What we on this side of the House are asking for is the opportunity to clear the name of the gentleman referred to, and what we would like to hear is not the correspondence in chronological order leading up to what did happen, but the letter of 24th January.

Mr. Sandys

I am not prepared to publish the letter of 24th January without all the other relevant letters, including those which passed between the right hon. Gentleman and the Corporation. I am not prepared to publish part of the correspondence without publishing the whole of it.

Mr. Strauss

I would not mind what letters of mine were published in this matter; but they could have no possible relevance to the present increases in price.

Mr. Sandys

The right hon. Gentleman says that no correspondence between him and the Corporation could have any possible relevance to these price increases.

Let me say straight away that the first letter I would publish—because it happens to be chronologically the first one—would be one written by Mr. Hardie to the late Government on 28th September, in which the Corporation pointed out that the late Government's decision to ask for 800,000 tons of steel from the United States would bring about a trading loss to the industry of about £28 million and that it would be necessary to increase levies and, therefore, prices to that extent. It went on to say that prices would have to be increased as soon as the commitments were entered into, that is to say, last autumn.

The second letter which I would certainly ask to publish would be the reply, stating that the late Government accepted the principle that these increased costs would involve increased levies and that they would have to be passed on to the consumer in the form of increased prices.

Hon. Members

Oh.

Mr. Strauss

That has no relevance to this matter. [HON. MEMBERS: "Oh."] Hon. Members obviously did not hear my speech. I was complaining of the size of the proposed increase, which is £56 million. I said that it was too early to make any increase at all, and I stand by that.

Mr. Sandys

I did warn the right hon. Gentleman and hon. Members opposite that if they pressed too much they would get something they did not like.

Mr. Crossman

What about the letter of 24th January?

Mr. Sandys

Now we will go right the way through.

My first communication with the Corporation was in the middle of December, when, in view of the correspondence to which I have referred, I wrote to Mr. Hardie asking him for the recommendations of the Corporation in regard to steel prices. At the same time, I informed the Corporation that the new Government, like their predecessors, were not prepared to reintroduce the subsidy to cover losses on imported steel and raw materials.

Early in January I received a reply from Mr. Hardie in which he argued at some length the case for reintroducing the subsidy. He agreed, however, that, if the Government were not willing to reintroduce the subsidy, prices would have to be increased to meet the increased cost of imports. Apart from this, in the same letter Mr. Hardie said that there would have to be immediate increases in steel prices to cover the increased home costs of scrap, transport, wages, and fuel.

Furthermore, Mr. Hardie enclosed two schedules setting out in detail the price increases which he proposed. One of them provided for price increases amounting to £20 million to cover increased home costs on the assumption that the Government were prepared to introduce a subsidy to meet the increased costs of imports. The other was based on the assumption that there would be no subsidy and provided for price increases amounting to £56 million.

Just as I was on the point of submitting the question to the Cabinet in the light of the Corporation's letter, Mr. Hardie telephoned the Ministry of Supply to say that he had changed his views about the necessity to increase steel prices, and that he wished to discuss the matter with me. A meeting took place on 23rd January at which Mr. Hardie was accompanied by the Deputy-Chairman of the Corporation and an official of the Corporation; the Parliamentary Secretary and senior officials of the Ministry were also present.

Mr. Hardie told us that he had examined some of the annual accounts—he had not yet received them from all the publicly owned companies—and that he had formed the opinion that a substantial part of the increased home costs amounting to £20 million could, at any rate for a time, be met out of profits. On the other hand, Mr. Hardie put forward no suggestions as to how the increased costs of imports—amounting to between £40 million and £50 million—could be met. In consequence, after a full discussion, the conclusion was reached that since prices would in any case have to be raised to meet the increased costs of imports it would be right at the same time to provide for some part, but not all, of the increased costs of home production.

The next day, 24th January—which happens to be my birthday—Mr. Hardie wrote me the letter about which there has been so much talk.

Mr. Follick

He was wishing the right hon. Gentleman many happy returns.

Mr. Sandys

The purpose of this letter, and Mr. Hardie said so himself, was to place on record certain arguments against the proposal to increase prices, which he had himself advanced in the early part of the meeting the day before, and to ask that these views should be published at the same time as the new price order was issued.

Mr. Edelman

Will the right hon. Gentleman allow me to intervene at this point of his argument?

Mr. Sandys

I am trying to explain this.

Mr. Edelman

Precisely.

Mr. Sandys

I will give way in a moment. I replied to the effect that we were agreed only the night before about the necessity for price increases, and that I was surprised that he should now suggest publication of entirely opposite views. I asked him to confirm that it really was the wish of the Corporation that these views should be published. Subsequently, I received another letter from Mr. Hardie in which he informed me he had consulted the Corporation, and that, as I expected, they did not wish the views contained in the letter of 24th January to be published.

Mr. Edelman

I want to hold the right hon. Gentleman down to the letter of 24th January. He has been giving what I submit is a summarised and garbled version of correspondence. I want to ask him specifically. I challenge him to publish the letter in toto. It is no use referring to subsequent reversal of the statement in the letter of 24th January, because after that he himself interviewed members of the board.

Mr. Strauss

May I, before the right hon. Gentleman replies, put this point? It appears to us that he is still dodging the issue. He told us today, as he did on a previous occasion, what was the purpose of Mr. Hardie's letter. All right; we accept that. The question is: Did he tell the Minister, in that letter, that the Corporation were unanimously opposed to any price increases? That is the point about which we have never been told. If the Corporation did oppose any price increases suggested by the Minister then, obviously, the Minister and the Corporation were in conflict and his statement to the House was incorrect.

Mr. Sandys

I thought I had been clear. [HON. MEMBERS: "Read the letter."] Here is the correspondence, which shows the House the amount of paper involved. [HON. MEMBERS: "Read the letter."]

Mr. Speaker

Order.

Hon. Members

Would it not be better to read the letter?

Mr. Sandys

No. If I read the letter I should be obliged to publish the whole correspondence. [HON. MEMBERS: "No."] Let me make it clear that the letter did not convey to me—[HON. MEMBERS: "Read it."] The purpose of the letter was to place on record, as it said, arguments which had been advanced by Mr. Hardie at a meeting the day before. [HON. MEMBERS: "Why not read it?"] At the conclusion of that meeting at which Mr. Hardie and Sir John Green were present, there was agreement that the views expressed in that letter should not be acted on.

Mr. Crossman

rose—

Mr. Sandys

I cannot keep giving way. Let me continue. This is pertinent to the letter of 24th January. On 28th February—

Mr. Ivor Owen Thomas (The Wrekin)

On a point of order. The Minister is proceeding to relate the argument to what he says is contained in the letter of 24th January. Is it not essential, to enable the House to determine whether the Minister is arguing correctly or drawing right conclusions, that the letter should be read?

Mr. Speaker

As I understood the right hon. Gentleman, he could not read one letter without reading the whole lot of them. Therefore, that is not a point of order.

Mr. Thomas

On a point of order. The Minister has just stated that he wishes to convey a certain meaning to the House about the conclusions drawn from the letter of 24th January. I suggest to you that there is a duty on the Minister to enable the House to see if he is drawing correct conclusions or not, to read the letter.

Mr. Speaker

That is a point of debate and not a point of order.

Mr. Fernyhough

On a point of order. Would it not be for the general convenience of the House if the right hon. Gentleman read the particular letter in question? [HON. MEMBERS: "NO."] So far as the other letters are concerned, he can have them put in tomorrow's HANSARD.

Mr. Speaker

That is not a point of order; it is not, in fact, a point for me at all. It seems to me that the right hon. Gentleman's argument, if I followed him correctly, was that it would be misleading to read one without the others.

Mr. G. R. Mitchison (Kettering)

On a point of order. When a single letter or a series of letters of a public nature are referred to by a Minister in this way, and when the question arises whether the Minister's summary of them is correct and complete, surely he is bound to lay them on the Table?

Mr. Speaker

If the correspondence is summarised, it is not necessary to lay it on the Table.

Mr. Mitchison

With great respect, Mr. Speaker, in the present case surely the matter has gone beyond the summary. The point before the House is whether what I may term the Minister's version of this letter is correct and complete. Surely when that point arises the Minister is bound to lay the letter on the Table.

Mr. Speaker

I think the rule is that, generally, if the Minister quotes from a document it ought to be laid. On this occasion I have heard the right hon. Gentleman summarise and give the effect of the correspondence and I do not think that that result follows. Besides, I am not quite clear, as this is a new thing in our procedure, how far the old rule refers to correspondence between a nationalised board and a Ministry. It seems to be slightly different in its general bearings from the old question that we used to have on State documents, despatches, and so on.

Sir Lynn Ungoed-Thomas (Leicester, North-East)

Would you, Mr. Speaker, give your Ruling on this entirely new situation, namely, the correspondence between a corporation and the Government?

Mr. Speaker

I would have to give consideration before I gave a Ruling on a new matter of that kind and it is quite reasonable for the House to give me time to think it over.

Mr. Mitchison

I must excuse my insistence, but surely the basis of the rule is the public character of the correspondence, Sir. Is not correspondence between a public corporation and the Minister sufficiently public for that purpose? Should we otherwise be discussing it in the way we are? If the question depends on quotation, surely the mere act of verbal quotation, the uttering of a few words, cannot make all the difference? If the question really is the tenor and contents of the letter, then quotation, or misquotation, cannot be the test.

Mr. Speaker

The rule in this House is analogous to the rule in courts of law, that the tribunal—in this case the House—should have the best evidence in front of it. In that case, if the laying of one letter or citation of part of the correspondence would, in fact, give a misleading view of what has actually transpired, then it would be necessary to lay the whole of the letter or the whole of the correspondence. But in this case the old rule has been made perfectly clear and I find, since the learned Clerk handed it to me, I have quoted it from memory correctly. It is that a Minister who summarises correspondence, but does not actually quote from it, is not bound to lay it on the Table. That is the rule, and it has been the rule ever since I have been a Member of this House.

Mr. Mitchison

Further to that point of order. With respect, Sir, this is not a question of summarising correspondence. We have been given the Minister's version, letter by letter of a whole series of letters, and so as far as there is any parallel with the law courts, the question at issue is: What were the terms of the letter? That is the only question and, with great respect, what the Minister gives as his version of the letter cannot be a substitute for the letter itself.

Mr. Speaker

I am bound to say I differ in my judgment of what has transpired, and I say that, with great respect to the hon. and learned Gentleman, I have heard nothing said by the Minister beyond a summary of the correspondence, and I am within the recollection of the House.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

Mr. Speaker, is there not a point about this correspondence which differs from anything else of the kind that has been brought before the House, because the hon. and right hon. Gentlemen on this side have challenged the accuracy of the Minister's summary of the document. Since the Minister's veracity has been challenged, ought not the House to have the documents produced, so that the matter can be cleared up?

Mr. F. Beswick (Uxbridge)

If I understand you correctly, Mr. Speaker, you are saying that the Minister has only summarised the document and not quoted from it, but in column 826 of 25th February, 1952, there are two lines which appear to be a direct quotation, as I understand it, from the letter of 24th January.

Mr. Speaker

That is a point which could have been raised on the previous occasion when that was actually quoted

Mr. Sandys

With reference to column 826 of 25th February, Sir, when I said that the next point raised in Mr. Hardie's letter to me related to raw materials and he said, "I have urged steps to … that is his letter, which was published on his resignation.

Mr. R. E. Winterbottom (Sheffield, Brightside)

Has not the right hon. Gentleman in his explanation of the letter of the 24th, used at least one word by Mr. Hardie in purporting to summarise the whole of the letter? If so, does that not constitute what I would call an actual quotation from the letter?

Mr. Speaker

It may be that the hon. Gentleman would call it that, but I would not.

Mr. Chetwynd

The Minister, in giving the reasons for this correspondence, quoted what Mr. Hardie said in his letter. He said that they were the actual words used in the letter.

Mr. Speaker

I do not think that would carry the whole letter with it.

Mr. Sandys

I am afraid that these interventions have made my speech longer by ten minutes or a quarter of an hour; but I will try to carry on where I left off.

Mr. Hardie wrote a further letter to me on 28th January, in which—and this I say in fairness to him—he denied that any agreement had been reached at the meeting on 23rd January. He challenged the minutes of the meeting which were taken by an official of the Ministry of Supply. Sir John Green, the Deputy-Chairman, who was also present at the meeting, confirmed the conclusions, and agreed that the minutes were correct.

Mr. Manuel

So the right hon. Gentleman rewarded him.

Mr. Sandys

In view of this obviously confused situation, I invited the entire Corporation to meet me. This was, I thought, the right thing to do. It has been alleged that I put pressure on the members of the Corporation to change their views. That allegation is completely and utterly untrue, as I have said in the House before. I only asked the Corporation to give me clear and unequivocal advice as to whether steel prices should be increased and, if so, by how much. I was determined not to come before this House, having signed an Order increasing steel prices, and, when asked by an hon. Member opposite, "Was this done in agreement with the Corporation or not?", to have to reply, "I do not know."

That was the position after the 23rd January meeting. There was little opportunity for me to bring any pressure to bear on the Corporation members, even had I wished to do so, for, before the meeting started, Mr. Hardie warned me that if, during the meeting, I asked the opinion of any member of the Corporation other than himself, he would leave. [Interruption.] I am telling the House exactly what happened. After I had put my question to the Corporation, and asked for its advice, the members went away to discuss the matter by themselves. When they returned Mr. Hardie informed me as I have already told the House, that the Corporation by a majority, was of the opinion that prices should be increased by an amount sufficient to yield £56 million a year. Shortly afterwards, as the House knows, Mr. Hardie resigned.

I apologise for having had to go into so much detail—[HON. MEMBERS: "Not enough"]—but, having been accused of not being honest with the House, I had no option but to tell the whole story.

Mr. Chetwynd

It is an old story.

Mr. Sandys

Now perhaps I can address myself to the main issue of steel prices.

Mr. Edelman

The Minister has said that he has told the whole story, but we on this side categorically deny that. We ask him now, as on previous occasions, to publish the relevant letter of 24th January. May I repeat the challenge to him to publish, in extenso, the letter of 24th January?

Mr. Sandys

I will not continue arguing about that.

Mr. Crossman

The right hon. Gentleman has a lot to conceal.

Mr. Sandys

I want to get on to the question of steel prices.

Mr. Manuel

Read the letter. What was in the letter?

Mr. Sandys

If hon. Members go on long enough, I will, out of sheer boredom.

Mr. Crossman

The right hon. Gentleman nearly did it.

Mr. Sandys

What I have in my hand is not the letter.

I turn to the first criticisms made by the right hon. Gentleman the Member for Vauxhall. He maintains that the price increases were mostly unnecessary because when he put prices up in August he anticipated the rise in costs, or many rises in cost, which had not then taken place.

Mr. Strauss

I said "some."

Mr. Sandys

At Question time, about a fortnight ago, the right hon. Gentleman interrupted me and said that he had anticipated the rise in the cost of freight charges. I hope that I shall show the House that there is not a vestige of truth in the statement that the right hon. Gentleman anticipated to any large extent the increased costs which have since taken place in the home costs of the iron and steel industry.

Mr. Strauss

The right hon. Gentleman need not labour that. I did not say more than that I anticipated some of the costs. I did not say the bulk of them. But some of these increases in cost were taken into account, and I thought that freight increases was one of them—I may be wrong.

Mr. Sandys

The right hon. Gentleman said that he anticipated a substantial part of the increases in costs—sufficiently substantial, I presume, for the right hon. Gentleman to feel justified in making the point tonight that, in view of his having anticipated these increases, higher prices were no longer necessary.

Mr. Strauss

I never argued that.

Mr. Sandys

That was the whole gist of the right hon. Gentleman's argument. I would have been prepared to say that it was, perhaps, a slip of memory, but I do not feel that I can treat the right hon. Gentleman better than he treated me.

I must say that I consider that he has not been quite honest with the House. The price increases which the right hon. Gentleman authorised in August were calculated to yield £65 million a year. They provided for higher home costs amounting to about £30 million. With the one exception of coking coal and certain small miscellaneous charges—where the rise was imminent and occurred in September, all the increases in home costs included in the August prices had already taken place.

The largest item was an increase of £7½ million a year for wages. This arose from awards in November, 1950, and April, 1951, and corresponding cost of living adjustments. Other items allowed for in the August price increase were 3s. 6d. a ton on home scrap introduced in April. 1951, increases in the price of oil fuel in November, 1950, and April, 1951; an increase of 43s. 3d. a ton in the price of sulphuric acid in November, 1950 increases in the price of gas, electricity, refractories, and of other materials, all of which took place before last August.

As for the recent rise in transport charges, which the right hon. Gentleman said, in the course of a question, that he had anticipated, the August prices provided for increased transport costs of £4.04 million. This was the sum required to compensate for the 10 per cent. rise in railway freights introduced on 16th April, 1951, and the 2½ per cent. rise in road transport rates introduced on the 23rd April, 1951. Apart from these no allowance was made in the August price Order for transport costs. I hope that the right hon. Gentleman will be prepared to correct the statement which he made the other day.

Now I would like to say a word about the heavy increase in home costs since last August. Rail transport costs have gone up by no less than £4½ million a year; home scrap by £6 million; coal, coke and fuel oil by £8 million and other materials by £5 million. There has also been an increase in wages of £1½ million. Other cost increases, mainly due to the higher proportion of pig iron used in making steel because of the shortage of scrap, amount to £4 million. Altogether, these recent home cost increases come to about £29 million.

I say again that none of these had been taken into account in the August prices authorised by the right hon. Gentleman In view of this detailed analysis, I hope that the right hon. Gentleman, with his usual fairness, will be willing to withdraw the statement he made the other day.

Mr. Strauss

I thought I had put the situation clearly before the right hon. Gentleman entered into his argument. I said that I had taken into account some aspects. I am willing to withdraw the word "substantial." It does not alter my argument. I said in a supplementary question that whether I took into account a substantial or a smaller part has nothing to do with my argument. I am willing to accept the fact that it was a smaller part.

Mr. Sandys

Will the right hon. Gentleman tell me one single element which he took into account and which is now being provided for in these new prices? Will he tell me a single element of increased cost which occurred after September—after the coking coal which I mentioned—which he anticipated? I do not believe that there is one.

Mr. Strauss

The right hon. Gentleman quoted one himself. My statement was that I took into account certain increases in cost which had yet happened but were almost certain to happen. He himself quoted this evening an increase in wages which had not taken place, but which we knew was going to take place. I took that into account in increasing prices and the right hon. Gentleman himself quoted the sum of £7 million.

Mr. Sandys

Not at all. I said the largest item in home cost allowed for last August was, as the right hon. Gentleman says, an item of £7,500,000 for wages.

Mr. Mitchison

Is not that substantial?

Mr. Sandys

Very substantial, but it arose out of awards in November, 1950, and in April, 1951.

Mr. Strauss

I think I am right in saying that the item has not yet been implemented. We were anticipating its implementation. Is not that right?

Mr. Sandys

I am talking about the recent increases in costs. I made that perfectly clear the other day and the right hon. Gentleman interrupted me and said, "I anticipated all that." We will leave it at that.

Now I turn to the question of the increased cost of imported steel and raw materials. The August prices, which allowed for an increase of £65 million, Included £35 million for the higher cost of imports at the rate then estimated by the late Government. But that estimate was almost immediately upset by the late Government's decision to ask for 800,000 tons of steel from the United States. As I have already explained to the House, this led to a request from the Corporation for an increase in steel prices of £28 million. I am not criticising the right hon. Member for Vauxhall. He could not possibly have known that would happen, but it was the beginning of the increased costs on account of the imports of steel and raw materials.

Meanwhile, the prices of imported steel and iron ore continued to go up and the planned volume of imports has, of course risen still further as a results of the recent agreements concluded by the present Government. Altogether, the cost of imported steel and raw materials is now estimated to be about £46 million a year more than was allowed for in the August prices. This, added to the increased home costs of £20 million, makes the industry's total costs in 1952 about £75 million more than was allowed for in the August prices.

I would have thought it was as plain as a pikestaff that the industry could not bear these enormous increases without some rise in prices. However, from the speeches made tonight, it seems that the party opposite pretend that they do not recognise this obvious fact and that all these costs could be met from the profits of the industry. I say "pretend" because I think it would be an insult to their intelligence to suggest that they could be convinced by the kind of arguments they have advanced.

The right hon. Gentleman said that in view of the large increase in profits, we should not have put up prices, at any rate for the present. He quoted, in particular, that the profits of the steel industry had been going steadily upwards—£42 million in 1949, £52 million in 1950, and £63 million in 1951—a rise of about £10 million a year for the last three years. All I would say to that is that, last August, the right hon. Gentleman knew that the profits of the industry had gone up £10 million since the previous year, but he did not hesitate to put prices up by £65 million.

The hon. Member for Stockton-on-Tees (Mr. Chetwynd) asked how far the increased costs could be met out of profits. The accounts of the publicly owned companies up to the end of September showed a gross profit available to the Corporation at the rate of about £60 million a year. The right hon. Gentleman suggested at one stage in his speech that it was £75 million, but the figure is £60 million available to the Corporation. The difference between £60 million and the £63 million which has been mentioned before is that the £63 million includes inter-company dividends, dividends to outside shareholders and also the expenses of the Corporation and of the administration of Iron and Steel Stock.

This £60 million includes elements, as has been mentioned during the debate, which the late Government rightly did not take into account in fixing prices for the home market. It includes, for example, windfall profits of at least £8 million resulting from the revaluation of stocks last August, at the increased prices. It includes profits of over £10 million from extraneous activities such as engineering, chemicals and income from subsidiary companies overseas. It also includes the premium earned on exported steel. These items, which total about £30 million should not be taken into account in fixing prices for the home market. At any rate, that was the view of the late Government, and we are in agreement with it.

Even supposing, for the sake of argument, that all these extraneous and nonrecurring profits were thrown into the pool, still both ends would not meet. The right hon. Member for Vauxhall very rightly said that prices should be sufficient to enable the industry to pay its way and to set aside proper reserves. However we look at these figures, if there were not an increase in prices it is quite clear that the publicly owned companies would be faced with the impossibility of meeting increased costs of about £70 million plus the £10 million they need to service the Iron and Steel Stock out of gross profits of £60 million. That is elementary arithmetic. I hope that these figures—I felt it necessary to give them in detail—will satisfy the House that, if the industry was to remain solvent, some increase in prices was inevitable.

There remains the question of how much prices should have been raised. The method of fixing prices adopted by the late Government was to calculate the average cost of production of each steel product. To this they added an allowance for depreciation and. a margin for profit. In working out the new schedule of prices issued last month we applied strictly the formula adopted by the late Government save only in one single respect, which was that we did not maintain in full the margin of profit allowed in the August prices. To maintain the profit margin at the previous level we would have had to increase prices by £75 million. In fact, we put up prices by £56 million, leaving an uncovered balance of £19 million, which, we hope, can be met out of the earnings of the industry.

So I would say that if these new prices are open to criticism it is not on the ground that they are excessive or premature; it is rather that they are too little and too late. The right hon. Member for Vauxhall pointed out that the expected imports of steel, particularly those from America, would arrive mostly in the second half of the year. He therefore argued that our price increases should have been delayed, if they were necessary at all, until later in the year. I think that is a fair statement of the argument of the right hon. Gentleman.

Mr. Strauss

Together with the further information in relation to what I believe to be the greatly increased profits, above the £63 million, which would be shown in the last quarter of last year.

Mr. Sandys

That is an entirely different point. The right hon. Gentleman tells us that the industry's profits are to be £80 million next year. I am not prepared to venture any guess of that kind. I was meeting his point about the timing of the price increases. It is quite true, as he says, that the imports of steel as distinct from other materials, particularly from America, will be considerably larger in the second half of the year; but the bulk of the increased costs in respect of imports do not arise from imports of steel.

Out of the £46 million increased import costs only £16 million is for steel. £30 million is for iron ore, scrap and pig iron. Iron ore by itself accounts for £20 million and, as those who know the industry are aware, iron ore shipments are heaviest in the early part of the year. It is, therefore, clear that the new prices needed to be brought in now to cover imports—apart from the fact that there are £29 million of increased home costs, such as transport, coal, which have also to be met.

It was suggested by the hon. and learned Gentleman the Member for Brigg (Mr. E. L. Mallalieu) that our price increases were premature because the increases in costs which they took into account had not yet occurred. That is incorrect. We are not doing what the right hon. Gentleman said he did in August, but did not do. We are not anticipating future costs. We are taking into account increased costs, such as coal and transport, which have actually occurred. However, we are not increasing prices to the full extent of these increased costs.

The accusation has been made by several hon. Gentlemen that by raising prices we are adding to the general inflationary spiral. It is, of course, debatable whether at a time of acute steel shortage it is economically desirable to keep steel prices artificially low. Nevertheless, to make some contribution to the stabilisation of prices, we decided not to pass on the whole of the increased costs to the consumer. As I have already said, although increased costs in 1952 are estimated at £75 million, we have raised prices only enough to yield £56 million.

In those circumstances I am surprised that the Opposition thought it right to make this charge against us. I am the more surprised in view of their own record. When the right hon. Gentleman put up prices last August by £65 million he passed on to the consumer every single penny of the increased costs which had occurred since he had last raised prices in February. How does he explain that? Why did he not then practise what he has been preaching to us tonight? Is it that he has only discovered the danger of inflation since the change of Government?

I think that I have answered most of the main charges. The points can be summed up briefly. It has been said that no price increase was necessary. Costs have gone up by £75 million. Contrary to what the right hon. Gentleman has said, none of that was anticipated in the August price. If prices had not been raised the industry would have run into a heavy deficit. In any case, as I have explained, the late Government agreed in principle with the Corporation last autumn, that some further increase in prices would be necessary to meet the increased costs of imports.

We are accused of fixing prices so that the industry can make large—I think they described it as "fat profits"—in readiness for de-nationalisation. In fixing the new price—as I have explained—we adopted the same formula as the late Government except that we slightly reduced the margin of profit. If our margin of profit is excessive then the August margin of profit fixed by the right hon. Gentleman was still more excessive. If the August margin of profit was moderate then our margin is still more moderate. As a contribution to economic stability we have, unlike the late Government, not passed on all the increased costs in the form of increased prices. In fact, we have

done what we could to hold prices. At the end of it all there remains the unchallengeable fact that British steel is still far and away cheaper than that of any other of the main steel producing countries of the world.

Mr. Ede (South Shields)

I only wish to deal with one point in the right hon. Gentleman's speech. My right hon. and hon. Friends are not satisfied with the way in which the letter of 24th January has been explained. We press for its publication, and if it is necessary that with it should be published the whole of the rest of the correspondence, so far as we are concerned we have no objection to that.

Question put.

The House divided: Ayes. 174; Noes, 206.

Division No. 55.]	AYES	[1.0 a.m.
Acland, Sir Richard	Follick, M.	Morley, R.
Albu, A. H.	Foot, M. M.	Morris, Percy (Swansea, W.)
Awbery, S. S.	Freeman, John (Watford)	Mort, D. L.
Bacon, Miss Alice	Gaitskell, Rt. Hon. H. T. N.	Moyle, A.
Barnes, Rt. Hon. A. J.	Gibson, C. W.	Mulley, F. W.
Bellenger, Rt. Hon. F. J.	Glanville, James	Murray, J. D.
Bence, C. R.	Grenfell, Rt. Hon. D. R.	Noel-Baker, Rt. Hon. P. J.
Benn, Wedgwood	Grey, C. F.	Orbach, M.
Benson, G.	Griffiths, David (Rother Valley)	Padley, W. E.
Beswick, F.	Griffiths, Rt. Hon. James (Llanelly)	Paling, Rt. Hon. W. (Dearne Valley)
Bevan, Rt. Hon. A (Ebbw Vale)	Hale, Leslie (Oldham, W.)	Paling, Will T. (Dewsbury)
Bing, G. H. C.	Hall, Rt. Hon. Glenvil (Colne Valley)	Pannell, Charles
Blackburn, F.	Hall, John (Gateshead)	Pargiter, G. A.
Blenkinsop, A	Hamilton, W. W.	Parker, J.
Blyton, W. R.	Hannan, W.	Pearson, A.
Boardman, H.	Hargreaves, A.	Peart, T. F.
Bottomley, Rt. Hon. A. G.	Hayman, F. H.	Plummer, Sir Leslie
Bowden, H. W.	Henderson, Rt. Hon. A. (Rowley Regis)	Porter, G.
Bowles, F. G.	Herbison, Miss M.	Price, Joseph T. (Westhoughton)
Brockway, A. F.	Hobson, C. R.	Proctor, W. T.
Broughton, Dr. A. D. D.	Houghton, Douglas	Pursey, Cmdr. H.
Brown, Rt. Hon. George (Belper)	Hoy, J. H.	Reid, Thomas (Swindon)
Burton, Miss F. E.	Hudson, James (Ealing, N.)	Rhodes, H.
Butler, Herbert (Hackney, S.)	Hughes, Cledwyn (Anglesey)	Robens, Rt. Hon. A.
Callaghan, L. J.	Hughes, Hector (Aberdeen, N.)	Roberts, Albert (Normanton)
Champion, A. J.	Hynd, H. (Accrington)	Roberts, Goronwy (Caernarvonshire)
Chetwynd, G. R	Irvine, A. J. (Edge Hill)	Rogers, George (Kensington, N.)
Coldrick, W.	Irving, W. J. (Wood Green)	Ross, William
Collick, P. H	Janner, B.	Royle, C.
Corbet, Mrs. Freda	Jeger, George (Goole)	Schofield, S. (Barnsley)
Craddock, George (Bradford, S.)	Jenkins, R. H. (Stechford)	Shackleton, E. A. A.
Crosland, C. A. R.	Jones, David (Hartlepool)	Short, E. W.
Crossman, R. H. S.	Jones, Jack (Rotherham)	Shurmer, P. L. E.
Daises, P.	Keenan, W.	Silverman, Julius (Erdington)
Dalton, Rt. Hon. H.	King, Dr. H. M.	Simmons, C. J. (Brierley Hill)
Davies, A. Edward (Stoke, N.)	Lee, Miss Jennie (Cannock)	Slater, J.
Davies, Ernest (Enfield, E.)	Lever, Leslie (Ardwick)	Snow, J. W.
de Freitas, Geoffrey	Lindgren, G. S.	Sorensen, R. W.
Deer, G.	Longden, Fred (Small Heath)	Soskice, Rt. Hon Sir Frank
Delargy, H. J.	MacColl, J. E.	Sparks, J. A.
Donnelly, D. L.	McGhee, H. G.	Strauss, Rt. Hon. George (Vauxhall)
Ede, Rt. Hon. J. C.	McKay, John (Wallsend)	Stross, Dr. Barnett
Edelman, M.	McLeavy, F.	Sylvester, G. O.
Evans, Albert (Islington, S. W.)	Mallalieu, E. L. (Brigg)	Taylor, Bernard (Mansfield)
Evans, Stanley (Wednesbury)	Mallalieu, J. P. W. (Huddersfield, E.)	Taylor, John (West Lothian)
Ewart, R.	Mann, Mrs. Jean	Taylor, Rt. Hon. Robert (Morpeth)
Fernyhough, E.	Manuel, A. C.	Thomas, David (Aberdare)
Field, W. J.	Marquand, Rt. Hon. H. A.	Thomas, George (Cardiff)
Fienburgh, W.	Mitchison, G. R.	Thomas, Iorwerth (Rhondda, W.)
Finch, H. J.	Monslow, W.	Thomas, Ivor Owen (Wrekin)
Turner-Samuels, M.	White, Henry (Derbyshire, N. E.)	Williams, W. R. (Droylsden)
Ungoed-Thomas, Sir Lynn	Whiteley, Rt. Hon. W.	Williams, W. T. (Hammersmith, S.)
Wallace, H. W.	Wigg, G. E. C.	Wilson, Rt. Hon. Harold (Huyton)
Weitzman, D.	Wilcock, Group Capt. C. A. B.	Winterbottom, Richard (Brightside)
Wells, Percy (Faversham)	Wilkins, W. A.	Woodburn, Rt. Hon. A.
Wells, William (Walsall)	Willey, Frederick (Sunderland, N.)	Younger, Rt. Hon. K.
West, D. G.	Willey, Octavius (Cleveland)
Wheatley, Rt. Hon. John	Williams, Rev. Llywelyn (Abertillery)	TELLERS FOR THE AYES:
White, Mrs. Eirene (E. Flint)	Williams, Ronald (Wigan)	Mr. Popplewell and
		Mr. Horace Holmes.
NOES
Aitken, W. T.	Gower, H. R.	Orr, Capt. L. P. S.
Allan, R. A. (Paddington, S.)	Graham, Sir Fergus	Osborne, C.
Alport, C. J. M.	Grimond, J.	Partridge, E.
Amory, Heathcoat (Tiverton)	Grimston, Hon. John (St. Albans)	Perkins, W. R. D.
Anstruther-Gray, Maj. W. J.	Grimston, Sir Robert (Westbury)	Peto, Brig C. H. M.
Arbuthnot, John	Hare, Hon. J. H.	Peyton, J. W. W.
Ashton, H. (Chelmsford)	Harris, Frederic (Croydon, N.)	Pitman, I. J.
Astor, Hon. J. J. (Plymouth, Sutton)	Harris, Reader (Heston)	Powell, J. Enoch
Astor, Hon. W. W. (Bucks, Wycombe)	Harrison, Col. J. H. (Eye)	Price, Henry (Lewisham, W.)
Baker, P. A. D.	Harvie-Watt, Sir George	Prior-Palmer, Brig. O. L.
Baldock, Lt.-Cmdr. J. M.	Heald, Sir Lionel	Raikes, H. V.
Baldwin, A. E.	Heath, Edward	Rayner, Brig. R.
Banks, Col. C.	Higgs, J. M. C.	Redmayne, M.
Barber, A. P. L.	Hill, Dr. Charles (Luton)	Renton, D. L. M.
Baxter, A. B.	Hirst, Geoffrey	Roberts, Peter (Heeley)
Beach, Maj. Hicks	Holland Martin, C. J.	Robertson, Sir David
Beamish, Maj. Tufton	Hollis, M. C.	Robinson, Roland (Blackpool, S.)
Bell, Ronald (Bucks, S.)	Holt, A. F.	Robson-Brown, W.
Bennett, F. M. (Reading, N.)	Hopkinson, Henry	Roper, Sir Harold
Bennett, Sir Peter (Edgbaston)	Hornsby-Smith, Miss M. P.	Ropner, Col. Sir Leonard
Birch, Nigel	Horobin, I. M.	Russell, R. S.
Bishop, F. P.	Horsbrugh, Rt. Hon. Florence	Ryder, Capt. R. E. D.
Black, C. W.	Hudson, Sir Austin (Lewisham, N.)	Salter, Rt. Hon. Sir Arthur
Bossom, A. C.	Hurd, A. R.	Sandys, Rt. Hon. D.
Boyd-Carpenter, J. A.	Hylton-Foster, H. B. H.	Schofield, Lt.-Col. W. (Rochdale)
Boyle, Sir Edward	Jenkins, R. C. D. (Dulwich)	Scott-Miller, Cmdr. R.
Braine, B. R.	Johnson, Eric (Blackley)	Shepherd, William
Braithwaite, Lt.-Cdr. G. (Bristol, N. W.)	Jones, A. (Hall Green)	Smithers, Peter (Winchester)
Bromley-Davenport, Lt.-Col. W. H.	Joynson-Hicks, Hon. L. W.	Smyth, Brig. J. G. (Norwood)
Brooman-White, R. C.	Kaberry, D.	Soames, Capt. C.
Buchan-Hepburn, Rt. Hon. P. G. T.	Kerr, H. W. (Cambridge)	Spearman, A. C. M.
Bullard, D. G.	Lancaster, Col. C. G.	Stevens, G. P.
	Leather, E. H. C.	Stewart, Henderson (Fife, E.)
Bullock, Capt. M.	Legge-Bourke, Maj. E. A. H.	Stoddart-Scott, Col. M.
Burden, F. F. A.	Legh, P. R. (Petersfield)	Storey, S.
Butcher, H. W.	Lindsay, Martin	Strauss, Henry (Norwich, S.)
Carson, Hon. E.	Linstead, H. N.	Stuart, Rt. Hon. James (Moray)
Channon, H.	Longden, Gilbert (Herts, S. W.)	Studholme, H. G.
Churchill, Rt. Hon. W. S.	Low, A. R. W.	Summers, G. S.
Clarke, Col. Ralph (East Grinstead)	Lucas, Sir Jocelyn (Portsmouth, S.)	Taylor, William (Bradford, N.)
Cole, Norman	Lucas, P. B. (Brentford)	Teeling, W.
Colegate, W. A.	Lucas-Tooth, Sir Hugh.	Thomas, Rt. Hon J. P. L. (Hereford)
Conant, Maj. R. J. E.	Macdonald, Sir Peter (I. of Wight)	Thomas, P. J. M. (Conway)
Cooper, Sqn. Ldr. Albert	Mackeson, Brig. H. R.	Thompson, Lt.-Cdr. R. (Croydon, W.)
Cooper-Key, E. M.	McKie, J. H. (Galloway)	Thorneycroft, R. Hn. Peter (Monmouth)
Craddock, Beresford (Spelthorne)	Maclay, Hon. John	Thornton-Kemsley, Col. C. N.
Cranborne, Viscount	MacLeod, Iain (Enfield, W.)	Touche, G. C.
Crookshank, Capt. Rt. Hon. H. F. C.	Macpherson, Maj. Niall (Dumfries)	Turner, H. F. L.
Crosthwaite-Eyre, Col. O. E.	Maitland, Comdr. J. F. W. (Horncastle)	Turton, R. H.
Crouch, R. F.	Maitland, Patrick (Lanark)	Tweedsmuir, Lady
Crowder, Petre (Ruislip—Northwood)	Markham, Maj. S. F.	Vane, W. M. F.
Darling, Sir William (Edinburgh, S.)	Marlowe, A. A. H.	Vaughan-Morgan, J. K.
Davidson, Viscountess	Marples, A. E.	Wakefield, Edward (Derbyshire, W.)
Deedes, W. F.	Marshall, Douglas (Bodmin)	Wakefield, Sir Wavell (Marylebone)
Digby, S. Wingfield	Maudling, R.	Walker-Smith, D. C.
Donaldson, Comdr. C. E. McA.	Maydon, Lt.-Cmdr. S. L. C.	Ward, Hon. George (Worcester)
Doughty, C. J. A.	Molson, A. H. E.	Ward, Miss I. (Tynemouth)
Fell, A.	Monckton, Rt. Hon Sir Walter	Waterhouse, Capt Rt. Hon. C.
Finlay, Graeme	Nabarro, G. D. N.	Watkinson, H. A.
Fisher, Nigel	Nicholls, Harmar	Wellwood, W.
Fleetwood-Hesketh, R. F.	Nicholson, Godfrey (Farnham)	White, Baker (Canterbury)
Fletcher-Cooke, C.	Nicolson, Nigel (Bournemouth, E.)	Williams, Gerald (Tonbridge)
Fort, R.	Nield, Basil (Chester)	Williams, Sir Herbert (Croydon, E.)
Fraser, Sir Ian (Morecambe & Lonsdale)	Noble, Cmdr. A. H. P.	Williams, R. Dudley (Exeter)
Galbraith, Cmdr. T. D. (Pollok)	Nugent, G. R. H.	Wills, G.
Galbraith, T. G. D. (Hillhead)	Nutting, Anthony	Wilson, Geoffrey (Truro)
Gammans, L. D.	Oakshott, H. D.	York, C.
Garner-Evans, E. H.	Odey, G. W.
Godber, J. B.	O'Neill, Rt. Hon. Sir H. (Antrim, N.)	TELLERS FOR THE NOES:
Gough, C. F. H.	Ormsby-Gore, Hon. W. D.	Mr. Drewe and Mr. Vosper.

Question put, and agreed to.