IRON AND STEEL BILL

HC Deb 27 November 1952 vol 508 cc643-754

Order for Second Reading read.

Motion made, and Question proposed, "That the Bill be now read a Second time."—[Mr. Sandys.]

4.30 p.m.

Mr. John Freeman (Watford)

I rise to pursue the somewhat chequered course of the debate on the Government's Iron and Steel Bill. I cannot help admitting to a certain feeling, which some hon. and right hon. Gentlemen on the benches opposite will certainly share, of mixed irony and nostalgia as I stand at this Box, very much as a "country member," to debate once more the proposed nationalisation or de-nationalisation of iron and steel.

I do not expect that anybody can stand at this Box without feeling certain qualms about what is to take place, but I am comforted by the reflection that I can hardly say less than the right hon. Gentleman the Minister of Supply, who moved the Second Reading in another debate two days ago, and secondly—and in a sense this is much more important—by the further reflection that it can hardly be necessary to say more than was said by my right hon. Friend the Member for Vauxhall (Mr. G. R. Strauss).

The Minister of Supply based his advocacy of this Bill on the following propositions. He said: This Bill has two main objectives. The first is to establish a comprehensive system of public supervision embracing the whole iron and steel industry, and so bring to an end the extremely harmful split created by the 1949 Act. The second is to restore independence, initiative and financial responsibility to the companies and so ensure that they have the strongest possible incentives to produce as cheaply and efficiently as possible."—[OFFICIAL REPORT, 25th November, 1952; Vol. 508, c. 266.] Thirdly, not as one of his essential propositions, but as a point on which he laid great emphasis during the course of his speech, he said: Public ownership is, I submit to the House, the most unpractical and the most cumbersome method of exercising public control that has ever been devised."—[OFFICIAL REPORT, 25th November, 1952; Vol. 508, c. 269.] I should like to comment on these propositions, because, in so far as the Minister's speech had any content, it seemed to me that it was based upon them.

What is the position now? Broadly speaking, it is this. There is a single central point of control in the industry, that is to say, ownership, over about 95 per cent. of the steel producing capacity, and that means, effectively, a control over the whole industry. That control, though there may be political objections to it, is administratively a control of the simplest possible kind; that is to say, ownership. It is clearly defined, and it is, within statutory limits, absolute, and there is no doubt about it. Everybody knows exactly where he stands. Policy can be laid down with a long view and be implemented. The public interest, which naturally in the statute is undefined, is, in fact, supreme.

Over the Corporation—which is the owner of the shares and which is the central point of control—is the Minister. His task, again broadly speaking, is to referee between the Corporation and the private sector, to fix prices, and, above all, to establish for the Corporation what the public interest is, either, conceivably, and in certain circumstances, by direction or, more usually and probably, by liaison.

The Minister seemed to me in his speech two days ago to complain about the difficulty of his position, theoretically. I agree that the precise way in which the Minister will influence the Corporation in determining the public interest can be said to be open to theoretical difficulty, but, in fact, it is not so. We never found it so, and I do not believe that the present Minister has found it so. Where there is a difficulty is if we have an outside power like Steel House seeking to obstruct the Corporation, but if we do not have that, there is simply no difficulty; and I affirm this not without experience of the problem of the relations between the Minister and the Corporation.

I claim that, as a piece of organisation, administratively that is a simple system, and that, if we are going to substitute for it something else, it must be something very good. What, in fact, are we offered in place of the present system? First of all, a dispersal of ownership, so that perhaps half the publicly-owned sector of the industry will revert to private ownership, while the other half remains, as the Minister admits, for the time being at least, in public ownership. On that point, perhaps the Minister has read, though others may not have done so, the comment on the probability of a quick sale of the public companies in the leading article in yesterday's "Financial Times." This leading article, after a brief, personal and, I think, rather offensive reference to my right hon. Friend the Member for Vauxhall, which I am not going to read because it is totally irrelevant to the point I am making, goes on to say: On the other hand, Mr. Sandys himself is making but an uneasy defence of an uncertain measure. He must by now be only too acutely aware that he is proposing a Bill to sell the steel industry when there are few signs that many want to buy it. That is what the "Financial Times" said, and no doubt the Minister will also have seen the remarks of the Chairman of the Staveley Coal and Iron Company, who gave his shareholders no assurance that his company was proposing to buy back its shares—indeed, his remarks make it seem a very unlikely eventuality.

The first effect of this Bill will be to remove the central point of control over 95 per cent. of steel-producing capacity; and we are asked to set up, in place of that control, a different system in which we shall have the present private sector, plus the potentially profitable part of the public sector, in private ownership, and the remainder of the public sector in public ownership.

We shall, by that means, split the industry far more seriously into two than it is at the moment, and what on earth happens to the Minister's avowed object of ending the "extremely harmful split" which he alleges exists at the present moment? When we have that ugly and untidy situation, the ownership of the public sector is now going to be vested—I should say with considerable consequent difficulty—in an agency of Treasury receivers. The task of that agency will be to sell it as quickly as possible.

What sort of people are these receivers going to be? Are they officials of the Treasury, or people capable of running the industry, because, so far as I can make out, they will have to spend quite a long time in charge of some of it. What is to happen to the receivers? How are they going to match their judgments and decisions with the needs of steel production, when they have a statutory duty to sell the industry back to the private sector as quickly as possible?

What is going to happen—this is perhaps the most important question of all—when, for at least some considerable sector of the industry, no bidders come forward? Is the agency to remain permanently in control of this sector? Is the Ministry of Supply going to run it, in much the same way as they run the Royal Ordnance Factories? High as is my regard for these factories, I do not think that is the right kind of organisation for this industry. We ought to have from the Minister some indication of his views on this problem, because we have not had it so far, and I therefore hope that the Parliamentary Secretary, for whom we all have a high regard, will be able to clear up these points.

Side by side with this agency of receivers, which is going to sell the publicly-owned industry, and over the private sector of industry, a far wider range of the private sector than we thought necessary when we nationalised, sits the new Board. The duty of that Board, which is set out in words that at least are quite clear in the Bill, is to supervise. But it has not got adequate powers to do so; nor has it adequate responsibility. This Board, as far as one can deduce from reading the Bill, is totally unequipped to carry out its job of supervision, if that is meant to be any more than a sham.

It has no effective power to prepare or to carry out any effective raw material plan. In so far as it has powers—and on my reading of the Bill it has certain powers in raw material matters—it can only bring them into play once the need becomes urgent and inescapable, and it will then be too late. Yet this is absolutely vital. This is the most urgent deficiency which the Corporation itself discovered when it took over the industry, and any plan which does not allow for effective public control in the matter of raw material purchases and supply is a plan doomed to failure from the start. It is supposed to stimulate development. Yet it has no power whatever to ensure any kind of compre- hensive development plan. It can do nothing in this field except veto, and even there it can veto only a major investment, when it conceives it to be against the public interest.

The Board cannot carry out the work, which I think every sensible person examining this industry feels ought to be done, of regrouping it, in places and where necessary, into more highly integrated units. It cannot undertake investment which seems socially or, indeed, in the broadest sense, economically desirable, but which is not profitable to particular private interests; and, in so far as the power of veto which the Board has applies only to the biggest projects, which may change the whole balance of the industry, it may very well have the effect of stimulating and encouraging a lot of minor discursive investment at the expense of integration. That, I should think, everybody would agree is diametrically the wrong trend at the moment.

There is another point. The Board has no power, as the hon. Member for Aylesbury (Mr. Summers) hinted the other day, to exercise authority in the field of marketing arrangements—at least, I cannot find it. It cannot, as far as I read the powers given to it under the Bill, veto a marketing plan, and this is very important.

There is sometimes a lot of argument in this House about whether my hon. Friends on this side are right or wrong in bringing up the pre-war record of this industry. Steel masters in recent years have not worried very much about over production. They did not worry during the days of the Labour Government when we had a buoyant and somewhat inflated economy. Of course they have not worried because, for once, the interests of the steel masters and of the national economy marched exactly side by side.

It has been profitable to be patriotic. But the old restrictive attitude is no doubt still there. Indeed, their very language is already beginning to change, now we have a Tory Government who, to some extent, are deflating the economy. The hon. Member for Aylesbury the other day spoke almost longingly about the Schuman Plan. He described the cartel arrangements of the past with continental producers, in almost caressing terms.

Of course, what is likely to happen now is that the steel interests of this country will become more and more interested in re-entering the same sort of cartel arrangements with the units which go to make up the Schuman pool as they did before the war. Supposing that is so, and supposing they seek to enter into a restrictive cartel and supposing—here I will give the right hon. Gentleman opposite something—that happened to conflict with the policy of the Chancellor of the Exchequer? I do not agree with some of my hon. Friends who think that the Chancellor is seeking intentionally to ride this country into a slump economy. What I think he is trying to do is to let unemployment increase to 800,000 or 900,000 and to hold it there. If so, we could easily have a case where a major investment industry of this kind came into sharp conflict with the policy of a Chancellor was was seeking to do just that.

What are the Government going to do? They can give a direction to the Board, but the Board has no power whatever to impose its policy on the industry if this Bill is passed. One cannot veto such a cartel if it happens to be against Government policy and if the industry decide to carry it out. It is an ironical point. For when the Minister of Supply advocated, as I remember he did in the earliest days, full membership for this country of the Schuman pool in its original conception, he must have envisaged full Government control over the industry in this respect. But the very Bill he produces today does not do that.

The power which the Board does possess is the power to fix prices, and I doubt very much whether it should have that power. It is a debatable point now, just as it was arguable in the case of the Corporation itself. I am inclined to the view that in the public interest the Minister cannot evade this responsibility. Two days ago the Minister appeared to suggest that this was a duty which as a routine matter he found onerous and intolerable. I can only suggest to him that if the present Minister cannot accept the duty, hon. Members could find one, even from the benches opposite, who can.

But even in the matter of price control there is some confusion. Under the Bill, the Board certainly has certain power to obtain information from producers, but it has no power to obtain information from purchasers of iron and steel products, from metal merchants, from importers of raw materials, from trade associations, and not even from the Federation itself which controls the two great importing agencies. And now at the first whiff of grape shot from the foundries the Minister talks about limiting the powers he has taken for price fixing. What a commentary that is on the substance of the whole of his plan.

It is perhaps a small point—though I am sure worth mentioning—but could anybody in his senses, even if he sat up all night trying to think of it, devise a more ridiculous way of enforcing price control than by the process of injunction such as appears to be contemplated in the Bill? It would mean, presumably, that a Chancery judge would have to be brought back from his holidays every time a steel company is thought to be overcharging. What a fantastic scheme.

I do not envy this Board at all, and indeed, I doubt very much, if it comes to be set up, whether anyone will be found to serve on it except men of straw and possibly a cadre of intriguers from Steel House. This is a perfect example—if I may turn Lord Baldwin's famous dictum the other way round—of responsibility without power. And if we can follow Lord Baldwin's somewhat sordid analogy, I suppose that is the prerogative of the eunuch.

In one respect at least this Board is to have power. It can raise a levy in order to meet its costs, to cover imports, research, its own salaries and its own administrative expenses. But what is more, it can levy also—and I do not think the Minister qualified this in his speech the other day—not only from that sector of the industry which is at present under public ownership, but from all over the 2,400 companies described in the Third Schedule of this Bill.

I do not suppose that the foundry men or the people who share the views of Sir Alfred Herbert are particularly keen on paying the levy to meet the salaries of the Board. But the important factor here is imports. In my judgment the Board have not been given adequate powers to follow a successful or constructive policy of imports. The Board may from time to time itself have to undertake imports.

They may very easily—and it would be no reflection on the personalities of the Board if this happened in the present state of world markets—make a grave financial miscalculation. When that happens the only way in which the Board can recover their losses is by levying on the industry. One may have a situation when a levy will be needed on 2,400 firms because of the miscalculation of a body who have no financial responsibility for those companies, a levy of who knows how much—perhaps £1, £2, £3 or even more per ton.

There, if I might once again quote Lord Baldwin, is the more orthodox picture of power without responsibility—the harlot. The Board have no financial responsibility for these companies and the Board may very well involve them in expenditure which will mean a substantial levy. In one half of their ditties the Board have responsibility without power and in the other half power without responsibility; and if any logician on the benches opposite seeks to suggest that these two definitions cancel one another out I hasten to add that the fields in which they operate are different. A marriage between the harlot and the eunuch is an unsavoury arrangement, which one associates with the underworld, and it does not become any more respectable when it is procured in Steel House.

Over this very curious body, the Board, sits the Minister, and he has power, as far as I can see, to prevent the Board doing almost anything that they otherwise would be allowed to do under the Bill. His powers are very ill-defined and very wide. They are certainly undermining to the authority of any self-respecting Board. I think that they are unfair to the Minister and the very able officials who serve him. If he adheres to the complaint which he implied the other day, that his present responsibilities are too onerous and invidious, I can assure him that under this Bill they will be a great deal worse.

Hon. and right hon. Members opposite have made a great deal of play about the only positive power for planning that they can find contained in this Bill. That flows from the Minister. It is to be within his power to undertake investment where he is satisfied that it is in the public interest and where the privately owned steel companies will not touch it because it is not profitable. Hon. Members opposite have made great play of that. That is exactly what they were intended to do. That provision is pure propaganda. It is designed to obscure the very weighty charge repeatedly brought by my right hon. Friend the Member for Vauxhall that this Board will be a brake on the industry and not an accelerator.

As this provision is propaganda to deal with that charge, it is scarcely worth arguing about and it can be dismissed with three comments. First, it will never happen short of war. We have the Minister's authority for saying that, because he said the other day that he could envisage only the most improbable circumstances in which such a power would ever be used. It will never happen under the Tory Government, and the system would not exist under Labour. Secondly, if it did happen, why should necessary investment in this vital industry be made in this absurd and inchoate fashion, with the private investor taking all the profit and the taxpayer bearing the loss? What an arrangement to ask Parliament to agree to. Thirdly, even if these propositions were rejected, the Minister has no power under Clause 4 to re-equip or remodel existing plant so long as the owners of that plant find it profitable to keep it in operation.

Mr. Spencer Summers (Aylesbury)

To put matters in proper perspective, the hon. Gentleman should add that in the private sector the State takes half the profit but that if there are any losses the private sector has to meet them all.

Mr. Freeman

That is not a proposition of which we are unaware. I was making a point on Clause 4, which I think is a substantial one. Supposing my first two propositions are not accepted by the House, the Minister under Clause 4 still has no power that I can see to re-equip or remodel existing plant so long as the owners find it profitable to keep it in operation. He can compel people to keep in operation plant which it was intended to close down, but I think that that is all that he can do. But the remodelling of existing plant will almost prove the commonest need which the Board will find confronting them in coming years.

Finally, we come to the Realisation Agency. The Minister has no power over that at all. It is answerable, I presume, to the Chancellor of the Exchequer or to the Financial Secretary to the Treasury. Suppose that the agency and the Board really do try to do their job and to do what the Government say they are going to do. There will certainly be innumerable clashes between them. Each presumably will report to its own Minister. The Board will report to the Minister of Supply and the agency to the Chancellor of the Exchequer.

I myself have been inside a Government, and I can imagine what will happen. There will be Departmental conferences and arguments. Sometimes one or the other will give way, but not always. There may be a row in the Cabinet, even about some perfectly obscure industrial matter which the Cabinet cannot be expected to understand, and before we know where we are we shall create a situation where the Prime Minister tries to intervene in the steel industry. Here I give a solemn warning. If anybody in the steel industry does not know what happens when the Prime Minister interferes in an industry, let him ask those engaged in transport and he will hear about it in very striking language.

I ask the Minister to reflect upon the words with which he introduced this Bill: … a comprehensive system of public supervision embracing the whole iron and steel industry, and so bring to an end the extremely harmful split created by the 1949 Act. Then again: … to restore independence, initiative and financial responsibility to the companies … My goodness! And finally: Public ownership, is, I submit to the House, the most unpractical and the most cumbersome method of exercising public control that has even been devised."—[OFFICIAL REPORT, 25th November, 1952; Vol. 508, c. 266–269.] I can only presume that the person who wrote the Minister's speech did not in fact read the Bill.

This great sprawling cobweb of bureaucracy set out in this Bill is really too bad to be true; and, of course, it is not exactly true as I have described it. The right hon. Gentlemen opposite are not all fools and they know well enough that my right hon. Friend and I, in speaking of this Bill, are painting a somewhat exaggerated picture of what in fact will happen. This is what would happen if the Bill were ever to work; but it will not work and nothing will happen, except a reversion to the private empire of privately-owned semi-monopoly, directed from Steel House. We are simply going straight back to what existed prior to nationalisation.

The agency alone is real. The agency's job is to sell off what it can as soon as it can. That is real. But the Board is pure camouflage. Tory propaganda over the years has been driven to acknowledge that this industry must be publicly controlled. The whole apparatus of this Bill is designed to convince people that private ownership of the industry can be reconciled with public control. If this organisation is the best that the Government can do, then it is itself the clearest possible proof that those two propositions are incompatible. The scheme will work all right in the private interest of Steel House—it will not work in the public interest.

I do not want to ascribe motives. One finds a certain distaste in the perpetual bandying of motives across the Table of this House, and I do not intend to ascribe motives now. But I should like right hon. Gentlemen opposite to reflect objectively upon what the Bill does. It hands back to the friends and political supporters of right hon. Gentlemen opposite the greatest concentration of private economic power in Britain and the profitable parts of one of the nation's most profitable industries; at the same time keeping in public ownership the unprofitable parts, for which the public has to pay, and also very substantially protecting private investors in steel from most of the risks which private capital ought to bear.

The Minister talked about independent initiative and financial responsibility. When the facts are looked at objectively, it really is not necessary to ascribe motives. What I have described is to happen. The Minister has made no serious attempt to argue the case at all for de-nationalisation as such. He states that enterprise is stifled and that the industry has no incentives under public ownership. Then he replaces public ownership by this muddle of public interference.

The "Financial Times," which is certainly no friend to the party on this side of the House, said yesterday in its leading article: It would be the very top of absurdity if the final result of a Bill to denationalise steel was to be the extension of monopolistic Government control. Has the Minister any evidence at all to substain the charges—if they are charges—and assertions that he has made about the effects of public ownership of this industry? Can he give an instance of nationalisation's having damaged a single unit in the industry? If he can—he may be able to, but I doubt it—can he point to one single problem of organisation, planning or finance which could not be solved by constructive discussion within the framework of nationalisation?

Of course the existing arrangements could be improved, and improving them would be a constructive and worthwhile job. Indeed, if the Government had come to us at the beginning of the Session, or at the beginning of this Parliament, and said, "We accept that there is now a status quo in the steel industry, but we are still anxious to see what can be done to improve the organisation which you created and which we do not regard as perfect," my hon. Friends and I would have looked at the Government's proposals on their merits, with every desire to co-operate with them in strengthening the steel industry. But the Government have not even tried.

Once again the industry is to be thrown into uncertainty—that was the basis of the Conservative Party's charge against us in 1949 and 1950—because the Government insist on denationalising without even the most perfunctory attempt to prove the need. That is why we accuse them of playing politics with a vital industry, and that is why we cannot tolerate the Bill.

Holding the opinions that we do in this matter, it is not a threat—of which we have so often been accused—but the sheer necessity of straight dealing that we should warn the industry and the country where we stand. This solution is not acceptable, and under a Labour Government the industry will be returned to public ownership as quickly as possible. Let no one be in any doubt about that. Public ownership is necessary for two very broad reasons. It is necessary be- cause effective national planning, economic and social, is not really possible without it; and the ineptitude of this Bill proves that. It is also necessary because in modern industrial society the real power rests with the big corporations, and a democracy has to choose whether these great economic empires are to be subject to public accountability and control or whether they are to be answerable only to themselves.

I should like the House to listen to words which Sir Stafford Cripps used during the Second Reading of the Labour Government's Bill to nationalise the industry. There are hon. Members here now who were not in the House then. Sir Stafford Cripps said: A half-way house may be perfectly feasible in an industry which is not so fundamental to our whole stategic and industrial policy but it is not, in my view, possible or practicable in the iron and steel industry. And this is particularly so when the owners of the industry happen to hold political and economic views the very opposite of those of the Government, as evidenced by the fact that the head of the Steel Federation sits on and speaks from the Front Opposition Bench. That refers to Sir Andrew Duncan, who has since died. This position is not unlike that between this House and another place. … When that other place shares the views of the Government as expressed in this House, all is well and everything works smoothly. Quite the contrary is the case when the other place does not share the Government's views. So one might compare the Steel Federation to a sort of Second Chamber in the steel industry which can bring to nought any national policy decided upon by the Government, and that even without any public argument or disclosure of its reasons. The time is past when that sort of position can be tolerated by any intelligent democracy. …"—[OFFICIAL REPORT, 16th November, 1948; Vol. 458, c. 324.] The history of Parliament has been largely concerned with securing for the people from time to time the effective power in the community. That battle is still being fought today, in the economic circumstances of the 20th century. In the end Parliament must win it if democracy is to survive; and Parliament will prove itself, as it so often proved itself before, sensible and imaginative enough to find ways of dealing with the, admittedly real, problems which follow from this inevitable transfer of ownership.

The Minister's so-called "moderate middle course"—I quote his words—is no such thing. It offers no basis of even partial agreement between the parties. The Bill is one of two things. It is either foolish and unworkable or workable and dishonest. We suspect the latter, and we ask the House to reject it.

5.8 p.m.

The Parliamentary Secretary to the Ministry of Supply (Mr. A. R. W. Low)

I should like to start by saying that it is nice to see the hon. Gentleman the Member for Watford (Mr. J. Freeman) back at the Box again. The last occasion on which he addressed us from the Box—it was from this side—was on the question of iron and steel. At the end of his speech today he charged us with once again throwing the industry into uncertainty. That is at least an admission from the hon. Gentleman that the industry was thrown into uncertainty by the action of the Government of which he was a Member. The burden of his speech on the last occasion was that he had not thrown the industry into uncertainty. I am glad that he should have admitted the converse to us today.

I must congratulate the hon. Gentleman on some good wit and some not such good wit. I am also glad that he was able to acknowledge that it has been profitable to be patriotic, for his hon. Friend the Member for Stockton-on-Tees (Mr. Chetwynd) told us on Tuesday that it was now patriotic to be profitable. The hon. Gentleman inevitably concentrated most of his remarks, as he should do, on the main difference between the two sides of the House about the industry and the difference as to the means by which the public interest in the iron and steel industry shall be safeguarded. We know the Opposition's case. In their view, the only effective way is to take over the ownership of companies which produce a major part of the iron and steel products of the country. I propose to deal with what we think is the only effective way to safeguard the public interest over the whole of the iron and steel industry.

Clearly the public has a first interest, that this industry should produce economically, efficiently and adequately. No one argues that this industry is not a basic industry. No one argues that it did not voluntarily organise itself as a national industry long before it was nationalised. The special position of the industry in the national economy gives the public a special interest in the development of its capacity, in the modernisation and improvement of its plant, and in the supplies of its raw materials, on which I shall have a word to say later. This special position in the economy, and the fact that in the nature of large parts of the industry there has to be a measure of co-ordination, gives the public a special interest in the prices charged for those products. It is, therefore, on development and on prices that the arguments about the public interest and the means to safeguard it have been concentrated.

The right hon. Member for Vauxhall (Mr. G. R. Strauss) and the hon. Member for Watford charged my right hon. Friend with having argued little, and the right hon. Gentleman said that he asserted much. I will come to the hon. Member for Watford in a moment, but the right hon. Member for Vauxhall overlooked altogether the fact that in the middle part of my right hon. Friend's speech he went very thoroughly into a comparison of the public safeguards in the 1949 Act and in this Bill. The right hon. Gentleman found it convenient to overlook all those arguments, because he had no intention—and, indeed, I think he had no means—of contradicting them.

The hon. Member for Watford went one further. He said that there were no points at all in my right hon. Friend's speech, and then immediately afterwards produced three very main propositions and principles behind this Bill. We all know the debating tactic of saying that the man whom it is one's lot to answer has made no point. The right hon. Gentleman and the hon. Gentleman stand convicted of the invalidity of their point out of their own mouths.

The right hon. Member for Vauxhall objected to the inclusion of the phrase "under competitive conditions" in Clause 3. He, of course, has always claimed that there could be competition within his monopolistic State Corporation, and he claimed it again the other day. Yet the main virtue that he and his hon. Friend claimed for the Corporation was that in its area its control was absolute. I can understand the right hon. Gentleman's purpose in making these inconsistent assertions at fifteen minute intervals, but I do not think he really expected to get away with the claim that there is real competition within a State corporation. On Tuesday night my hon. Friend the Members for Birmingham, Hall Green (Mr. Aubrey Jones) and my hon. and learned Friend the Member for Middlesbrough, West (Mr. Simon), in notable speeches—and I must express my own regret that my hon. Friend the Member for Hall Green was interrupted in his speech—argued the advantages for competition and financial autonomy in a co-ordinated and supervised steel industry.

I want to deal now with the argument that, immediately this industry organised itself in its various parts under private ownership competition was removed as a spur to improvement; and the argument goes on to say that competition must remain removed as a spur to improvement, even under public supervision. The determination of maximum prices does not, of course, prevent price competition, as my hon. and learned Friend the Member for Middlesbrough, West argued on Tuesday. It certainly does not prevent competition in reducing costs.

The system by which the Federation, and more recently the Government, have considered the development plan of the industry as a whole certainly attempts to co-ordinate development in the national interest, but this does not remove competition to increase production and reduce costs by improving plant. For the last 20 years steel companies have improved their plant and have altered their pattern of production in competition with each other, and the right hon. Gentleman knows that perfectly well. Finally, and possibly most important of all, there was full competition as to quality of products between individual firms.

The industry in organising itself and the Government in supervising the industry from 1934 until 1951 have developed conditions in which the advantages of both co-ordination and competition could accrue to the nation and to the industry. In short, there must in this industry be both freedom and order. Now there was clearly room for a difference of opinion as to the amount of freedom and the amount of order, but the approach of the party opposite seems to be based on the theory that once co-ordination and public supervision in an industry as important to the national economy as the iron and steel industry are accepted, one had better remove all freedom, stifle free enterprise and set up a large Government monopoly. This Bill, on the other hand, seeks to destroy that monopoly; and it also seeks to provide the conditions in which the industry will be able to work under competitive conditions with a proper amount of co-ordination and public supervision.

Spokesmen of the party opposite—and the hon. Member for Watford said it again today—have always laid emphasis on the importance of development in the iron and steal industry. We agree with him.

Mr. G. R. Strauss (Vauxhall)

I am reluctant to interrupt, but the hon. Gentleman went at great length to answer the point I made, and which I asked the Government to answer, but he really has not touched the point at all. Perhaps he could just add a sentence or two. The question I asked was: What additional competition is expected in the industry as a result of this Bill that does not exist at the moment under the Corporation? Secondly, in what way, if any, was competition stifled by the Corporation compared with what existed before the Corporation came into existence?

Mr. Low

I am afraid that I have wearied the House for 15 minutes by answering that question. [HON. MEMBERS: "No."] I answered it satisfactorily to myself. I thought I dealt with it in this way. I first of all proved, to my own satisfaction, and I thought to the satisfaction of my hon. Friends, that there was no competition and could be no competition in a State Corporation where there was, in the right hon. Gentleman's own words, absolute control. I then went on to prove that there had been in the past, and there could be in the future, competition in the iron and steel industry under private ownership and public supervision; and if there was competition then—and there can be in future—that is clearly better than the situation today where there is no competition.

Perhaps I can now go on to deal with development, because we all agree—I do not think there is any dispute about it—on the importance of development in the iron and steel industry. The party opposite have argued quite consistently since 1946, except for a short flirtation in 1947—nearly an important and beneficial flirtation—that the iron and steel industry will only carry out a development plan that is essential to the national interest if the iron and steel industry is publicly owned.

That was the argument they used in May, 1946, in relation to the Post-war Development Plan. The late Government's assertion then was that, faced with the necessity of carrying out this vast scheme, a divorce of ownership from control just would not work."—[OFFICIAL REPORT, 27th May, 1946; Vol. 423, c. 845.] The fact is, of course, that the divorce of ownership from control worked exceedingly well up to 1951. A great deal of new plant was installed. It takes a long time to make this plant—for example, four years for a blast furnace—and plants coming into production now were planned then and ordered long before the Corporation came to life.

Capacity was increased, production was increased. Some schemes in that plan were not proceeded with for various reasons, and one was the shortage of houses near Corby. Other schemes which were not in the plan were introduced. But what matters is the production and capacity created, and it matters that all the production targets were in fact reached or exceeded—and nobody has challenged that statement. Let me read again the extract from the wholly impartial and objective report of the Anglo-American Productivity Team on Iron and Steel, which I read to the House in the White Paper debate: … the British iron and steel industry has since 1945 been engaged on the construction programme to the full extent of the resources available to the plant manufacturers. Our solution is that a supervisory Board should discuss with the industry the general plan for its development, as it is required to do under Clause 4. The Board's approach to development will thus be positive, and, on top of it is the Minister's power to undertake development in the circumstances set out in the Bill.

I dealt last time with the hon. Gentleman's argument about the positive powers. My hon. Friends have dealt with them in the first part of the debate, and I do not think it necessary to weary the House again with the answer. The right hon. Member for Vauxhall made a point on Tuesday when he said: Normally the most useful way of increasing capacity is by modernising existing plants, and not in building new ones."—[OFFICIAL REPORT, 25th November, 1952; Vol. 508, c. 291.] He made the point that this is not covered in the Bill. I must tell him that it is covered in the Bill, and because we agree with him we have provided for exactly that point. The functions of the Board and the Minister in Clause 4 are to secure the provision of additional production facilities. If the right hon. Gentleman will look at Clause 31 (2) he will see that those words are to be construed as including the reconstruction or adaptation of, or making of additions to, existing production facilities. I want now to come to raw materials. The Board will also have responsibility for keeping under review the arrangements made by the industry for the supply of their raw materials. The hon. Member for Watford seemed to be arguing that they would not be able to look ahead in this matter and that the Bill was so worded that they could not anticipate. If he reads the Bill again I think he will see that he has made a false point on the wording of the Bill. The Bill refers to the arrangements made by the industry for the supply of their raw materials.

Mr. Jack Jones (Rotherham)

Is the hon. Gentleman now telling the House that, in addition to the Clause to which he refers, the Minister has the power to erect additional plant on existing sites for which he himself will be responsible?

Mr. Low

I am not telling the House that. I am dealing with the right hon. Gentleman's point, but I should be very happy to deal with the point made by the hon. Member if I were speaking after him. I am dealing with the right hon. Gentleman's point as I understood it. It was that we referred only to new production facilities and new developments and did not refer to the modernisation or replacement of existing plant. If I have misunderstood the right hon. Gentleman we can deal with the point later; but I have dealt with that point I think quite satisfactorily.

Mr. Strauss

I think there is another misunderstanding. I said it was either not in the Bill or certainly not practicable for the Minister himself, if he wants development to take place, to come along and do it. It is clearly not the practical way to expand or improve or modernise existing plant. Obviously he cannot go into an existing big plant and start modernising it himself and building bigger blast furnaces and so on. It is not practicable as long as the plant remains under private ownership.

Mr. Low

The right hon. Gentleman is developing the point which he made. He is now making an extension of the simple point to which I have referred. He had the power, when he was Minister of Supply, to deal with the sort of thing he has in mind.

But we have in mind that this sort of thing will never be necessary, as some of my hon. Friends argued the other day. I am sorry to detain the House again with this argument, but is it not quite clear that if the industry were as bad as the right hon. Gentleman keeps on making out, then this is one of the ways in which it might be persuaded to modernise its plant—if it were reluctant to do so—because of the fear that my right hon. Friend would set up a competing plant nearby or in some other area. If the competing plant were successful, then obviously the recalcitrant firm would go out of business. That is a point which my right hon. Friend made in the White Paper debate and it was made by me in my winding up speech; and it has never been met at any time. I thought that once we had dealt with the point we might get on to some new points—and one of the new points was raw materials supply.

It has been argued that the industry has been backward in making arrangements for the future supplies of raw materials. As far as I am aware, no overseas raw materials plan has been held up for lack of finance from the steel industry. The steel industry made an investment in French West Africa in 1948, as the right hon. Gentleman knows, shipments from which will begin next year. As an example of how they have not been backward in coming forward, I must remind the right hon. Gentleman that in 1949 the industry were anxious to participate in another raw materials scheme in Newfoundland, but his Government felt unable to sanction this because of dollar difficulties. I am not arguing that point with him, but at least it proves that the industry were not backward about their raw materials supply.

Both the right hon. and the hon. Gentleman pointed out that under the Bill as at present drafted the Board has no direct power to obtain information from B.I.S.C. or B.I.S.C. (Ore). We were already considering this point and we will try to deal with it at Committee stage. The right hon. Gentleman will know that the point has been made by others; it was made in "The Economist" on 15th November, as perhaps he read.

In our opinion, raw materials supplies will be one of the major problems facing the industry for many years. If that argument is accepted, then clearly it is important that there should be a constant comprehensive review covering the needs of those who use the raw materials and the arrangements for the supply of the raw materials. Indeed, the right hon. Member on Tuesday admitted that even under his scheme there would have to be co-ordinating machinery for this and other problems. But he did not provide the co-ordinating machinery. This Bill does provide it.

My right hon. Friend explained why it was that the casting of iron and steel by any process is included in paragraph 4 of the Third Schedule of the Bill and why we cannot accept the suggestion from some quarters that foundries should be left out of the scheme. The right hon. Member for Vauxhall did not deal with that argument at all. Instead, he treated the proposals as giving him an opportunity of throwing out another threat.

Let us examine the arguments behind the threat. He seemed to be arguing the merits of his Act which resulted in the haphazard nationalisation of some foundries, covering only about one-fifth of foundry output, just because they happened to be parts of integrated concerns. I ask him this question. Does this mean that the Labour Party did not in 1949 consider that there was any need for public supervision of the foundry industry? And what are their views about that point now? I remember hearing the views of the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith).

I wonder why the Government of which the right hon. Gentleman was a member included foundries under the supervision of Sir Archibald Forbes' Board in 1946. Is it not a fact that that Board supervised the raw materials of the foundry industry and even supervised the development plans of the industry and some foundry prices? Did the right hon. Gentleman not find that satisfactory? The right hon. Gentleman should be open with the House and let it know that, in fact, he considered then that the Iron and Steel Board very effectively supervised the iron foundry industry itself.

Mr. Ellis Smith (Stoke-on-Trent, South)

Will the hon. Gentleman forgive me for a moment? We will be open on this. We can all learn from experience and mistakes.

Mr. Low

I do not quite see the point of the hon. Gentleman's argument, because I understood that he asked my right hon. Friend to keep foundries in the Bill—rather differently from the right hon. Gentleman.

Mr. Ellis Smith

I am admitting that we did not bring them in. It was a mistake. We can all make mistakes, but we should profit by mistakes, and put them in next time.

Mr. Low

I am grateful to the hon. Gentleman. I wanted to give him a chance to make it quite clear that the right hon. Gentleman, in his opinion, had made a mistake, and was probably making a mistake in his argument last Tuesday.

Mr. Ellis Smith

I did not say that.

Mr. Low

The right hon. Gentleman said on Tuesday that if and when the Labour Party are returned to power they will take account of the views expressed by us on the comprehensive supervision of the industry. Perhaps he will take account also of the views of his hon. Friend behind him. We are flattered, certainly, that he should now take some account of our views, but were no views about providing comprehensive supervision for the iron and steel industry expressed throughout the debates on the Act of 1949? Of course they were. In fact, I do not think that the right hon. Gentleman believes one single word of what he said on Tuesday about the foundries. He merely sought, by confusing public opinion, to find another opportunity of stirring up trouble to try to prevent the Government from carrying out their intentions. He rejected nationalisation of the foundries in 1948 for very good reasons, and I am quite confident he will always reject their nationalisation.

In the light of the points so clearly made by the right hon. Gentleman on Tuesday and not in the light of these bogus threats, the House will, I am sure, agree that the foundries ought to be in the Bill. There have been, unhappily, many misunderstandings about the effect of the Bill upon the foundries and some others, and, at my right hon. Friend's request, I have been seeing trade associations who wish to see me, and I shall continue to do so, with the object of explaining the Bill to them and listening to their special problems. As the right hon. Gentleman knows, there are special problems which cannot be discussed until a Bill is published.

We have sought to establish a system of comprehensive supervision that will be workable. As we have often explained, this supervision relates to specified activities by whomsoever they are performed. We have given much thought to the definition of these activities. My hon. Friend the Member for Altrincham and Sale (Mr. Erroll) on Tuesday brought up special points on the definition of rolling and forging. We shall try to define rolling so as to exclude bending and any fabricating operation which does not alter the cross-section of the metal. The forging point may be more difficult, but we shall consider this carefully between now and the Committee stage. We shall be grateful for all suggestions on these technical points of definition.

The other side of public supervision relates to prices. There has been in this debate very little comment on the price control Clauses. The right hon. Gentleman the Member for Vauxhall argued that the power to control prices should rest with the Minister, but that was not the case under his Act. But in this Bill it is the case, and it seemed an odd criticism. In this Bill, as Clause 8 shows, the Minister is given a reserve power over prices. The powers in the Bill, of course, do not extend outside the industry. As my right hon. Friend told the House on 23rd October: The task of curbing the black market operations outside the industry has nothing to do with the iron and steel industry itself. It calls for Government action backed by the sanctions of the criminal law."—[OFFICIAL REPORT, 23rd October, 1952; Vol. 505, c. 1295.] The Board's power in this Bill to determine maximum prices will enable it to protect the consumer where the ordinary play of competition does not provide him with protection.

I should like now to say a word about the Board. I am sorry that the right hon. and learned Gentleman the Member for Montgomery (Mr. C. Davies) is not here. On Tuesday he said: The key of this Bill is the Board with its power of supervising and seeing what is happening, the fact that it will gather information and make that available and, through the Minister, will be responsible to the House."—[OFFICIAL REPORT, 25th November, 1952; Vol. 508, c. 317.] The members of the Board will be drawn from both sides of the iron and steel industry, from consumer industries, and from independents. Producers will be in a minority, and this is the answer to the assertion that Steel House will run the Board. Consumers will be members of the Board and will protect the consumers' interest much better than a consumers' council could. That is the answer to the right hon. Gentleman the Member for Middlesbrough, East.

Since it will neither own nor manage any part of the industry, the Board will be able to provide the broad supervision in the national interest which an owning or managing board of a corporation cannot give. On the Board trade union leaders will be enabled to take part in the general policy of this vital industry without having to cross the industrial floor and become employers. The effectiveness of this kind of board will depend primarily, in our view, on the respect it comes to command rather than on the specific powers which it is given. The industry will look—

Mr. Ivor Owen Thomas (The Wrekin) rose—

Mr. Low

I should like to get on. I have been interrupted a great deal. The industry will look to the Board as the policy maker, and will, as we are sure it will, co-operate with it. To assist in this we are giving the Board specific powers as the House knows, which will affect vital points, and we are providing for the Board two general sanctions of great significance. First, the sanction of Parliamentary and public opinion. The Board's annual report will obviously be most carefully scrutinised in this House and outside. Second, the Board is to be consulted over any modifications in import duties—and that is the answer to the hon. Member for Islington, North (Mr. Fienburgh), who seemed to have overlooked paragraph 27 of the White Paper.

The right hon. Gentleman the Member for Vauxhall asked me if I would give some information about the Government's intention concerning the membership of the Board, and asked some questions about the Agency, too. The right hon. Gentleman wanted to know what proportion of the Board would be full time and what proportion part time members. A similar question had been put to him—I do not know if he will remember this—in the course of the Committee stage of his Bill when he was Minister of Supply, and he answered: I feel that the real wisdom at this stage … is not to lay down hard and fast rules."—[OFFICIAL REPORT, Standing Committee C; 9th December, 1948, c. 145–6.] We agree with the right hon. Gentleman, and we can best answer his question by saying that we intend that there should be both part-time and full-time members of the Board.

Mr. G. R. Strauss

Apart from the Chairman?

Mr. Low

I think I have answered the right hon. Gentleman's question. We leave it at that. The same argument applies to questions on the Agency, but I can say that the members of the Agency will be, as is set out in the White Paper, persons possessing the necessary qualifications and experience for the duties of the Agency. But they will not be Treasury officials.

Mr. Jack Jones

Before the hon. Gentleman leaves this question of the membership of the Board, would he be good enough to quote the authority on which he says that the trade unions will take part in this Board? What authority has he for making that statement?

Mr. Low

I think my statement was that they will be invited. [HON. MEMBERS: "No."] Obviously, nobody has been invited yet. We have to wait until the Bill becomes law.

Mr. I. O. Thomas

Arising out of that—

Mr. Low

I want to get on. The right hon. Gentleman made an extraordinary comment about the duties of the Iron and Steel Board which was set up by his predecessor, and for which he was responsible. He told the House that the Forbes Board "had to operate within a narrow compass. Those were his words. How narrow I will leave the House to judge when I tell them that these were their duties—

Mr. Strauss

Before the hon. Gentleman goes any further, I think he is misquoting me. If he is not, I said something that I did not mean; but I think I said that they were operating within a narrow compass. Their terms of reference were as wide as the world, but they operated within a very narrow compass and the duties they performed, although important, were very small.

Mr. Low

I do not quite understand what the right hon. Gentleman means, but perhaps I can help the House by letting them know—

Mr. I. Mikardo (Reading, South)

Do not worry about it. Keep to your brief.

Mr. Low

The hon. Gentleman is famed for his lack of courtesy in speaking without bothering to rise, and also for the number of columns of HANSARD he takes up without ever getting up at all. He has written a good deal about the iron and steel industry from time to time and a great deal of it has been very inaccurate. I am doing my best to try to deal with these matters as accurately as I can, and if he thinks that I carry about in my head the exact definition of the duties of the Iron and Steel Board—imposed on them not by my right hon. Friend but by the former Government—he is certainly a very remarkable person.

Mr. Mikardo

Since the hon. Member has said that much of what I have written is inaccurate, would he be so good as to quote one single thing I have written which he thinks is inaccuratae—or must he stick to his brief all the time?

Mr. Low

I can remember at least one gross inaccuracy that the hon. Gentleman perpetrated at an earlier date, when he argued that the 1945 Plan of the industry was made only as result of pressure from the Socialist Government. There have been other inaccuracies in his observations since then. I have usually got an equable temperament, but I am sorry to say that the hon. Gentleman's interventions from a sitting posture have put me off my stroke for the moment.

I was referring to the duties of the Board. This is an important matter because, as we have often made it clear, the Iron and Steel Board from 1946 onwards was in our opinion a valuable development in the history of supervision of the iron and steel industry. Their duties were to review and supervise programmes and development; to supervise the industry in current matters, which means in everything, including the position of raw materials; to advise on general price policy and, as the right hon. Gentleman knows, the Board were to administer on his behalf certain powers of direct control which he had over the industry, including powers over production, the distribution of raw materials and imports. They covered effectively all the 2,400 firms mentioned by the right hon. Gentleman on Tuesday. Where, then, was this narrow compass in which they were operating?

Mr. Strauss

I have looked up that part of my speech to which the hon. Gentleman has referred. I said that the Board had to operate in a narrow compass. I stand by that. They had to operate in a narrow compass because they had hardly any powers to do anything else. They had certain advisory powers, but their actual powers to interfere in the industry or to do anything at all in the industry were very narrow indeed. They had not any powers whatsoever to do anything beyond very confined limits.

Mr. Low

They were backed by all the powers that the right hon. Gentleman had. He knows that very well.

Mr. Strauss

They were not.

Mr. Low

The right hon. Gentleman made a reference to the size of the staff about which I should not have bothered the House if he had not referred to it. The staff of the Board was in fact the staff of the Iron and Steel Division of the right hon. Gentleman's Ministry. It numbered 68 when it started in 1946 and 112 when it finished in 1949. The right hon. Gentleman always takes pride in the smallness of the Corporation's staff, but he never adds that the industry as a whole to all intents and purposes remained the responsibility of his Ministry after Vesting Day and that the Iron and Steel Division of the Ministry remained about as large as it was before.

A very important question has been referred to by the right hon. and learned Member for Montgomery, by some of my hon. Friends including the hon. Member for Aylesbury and the hon. Member for Rutherglen (Mr. Brooman-White), the right hon. Member for Middlesbrough, East (Mr. Marquand) and by the hon. Member for Watford. They asked what would be the liaison with Continental countries under the Schuman Plan. The United Kingdom has established working relations with the Schuman High Authority by means of a strong Government delegation. Experts to advise the delegation have been appointed from both sides of the industry and it is our intention to associate the new Board with the work of the delegation; but we did not consider it necessary to make any mention of this in the Bill and we still do not consider it to be necessary.

Mr. Freeman

That is not quite the point. I quite appreciate that it is not necessary to mention it in the Bill. But has the Government any power over the industry if the industry proceeds to follow a course which conflicts with Goverment policy?—because under the Nationalisation Act there almost certainly is such power.

Mr. Low

That is a matter into which we might go more thoroughly at another time. It is a most important matter, as my hon. Friend the Member for Aylesbury and the hon. Member for Watford mentioned in their arguments, but I should certainly like to consider it further before answering the hon. Gentleman's question.

On both the previous occasions in this Parliament when we have debated the Government's policy on iron and steel we have made it clear that we are seeking a common sense solution to an industrial problem—a solution which will be generally accepted and will therefore take this industry out of the political arena. Ultimately, whatever we do here, it is the management and the workers in the industry who will make the iron and steel. As other hon. Members have said, though we talk here about organisation and principles we are all thinking of the human problems at the back of it all. It is our job to provide the conditions in which that work can best be done.

On Tuesday the right hon. Gentleman tried to dash the hopes of the country that there would result from this Bill a fair and lasting settlement by emphasising to the House that he and his friends would never approve of the scheme in this Bill. I am not surprised that the right hon. Gentleman does not approve of the Bill, but I should be very surprised if, in their innermost hearts, some at least of his friends did not approve of the system to which the Bill gives effect. By no means everyone agrees with the right hon. Gentleman that the scheme is technically unsound. The hon. Member for Watford also argued that the scheme is technically unsound.

Mr. Freeman

Not at all.

Mr. Low

I am very glad to hear that the hon. Gentleman was not arguing that; but it was certainly the argument put forward by the right hon. Gentleman on Tuesday; so at least we have another example of dissension on the Front Bench opposite. It is suggested to me by my hon. Friends who have some knowledge of these things that that is a question which should be decided on the second ballot.

I want to read to the House an extract from the "New Statesman and Nation." It says: … there is no technical reason why this plan should not work adequately. The reason why I wanted to be quite certain whether the hon. Member for Watford agreed with that was because I knew that he had some connection with the "New Statesman and Nation"; but I have now established that at least he considers that the scheme is technically sound.

Mr. Freeman

We need not have any real discussion about this. What I said was that the Bill was either foolish and unworkable or that it was workable and crooked, and I thought that the second alternative was true.

Mr. Low

That is one way out of the hon. Gentleman's difficulties, but it does not seem to me to add up to an agreement with his right hon. Friend, who argued at some length on Tuesday that the Bill was establishing a scheme that was technically unsound. Despite what the right hon. Gentleman the Member for Vauxhall has said and what the hon. Member for Watford has said, we still believe that the system outlined in the Bill will work, and that it will be generally recognised by both sides of the industry and by the country that this system best safeguards the public interest. For that reason, we ask the House to vote for the Bill this evening.

5.50 p.m.

Mr. A. C. Manuel (Central Ayrshire)

I hope that the Parliamentary Secretary will forgive me if I do not follow him too closely in what he has said. I was rather dismayed by what appeared to be his superficial knowledge and shallow understanding of the real issues involved. In one part of his speech, he built up a case for the great necessity of competition in the steel industry here in Britain. Surely, in 1952, we should be recognising that the main issue is outside competition, and that we have had the great idea of a Schuman Plan. We have America, with her great industrial potentiality, drawing to herself a proportion of the raw materials available, which makes it very difficult for the industry in this country to compete as between one steel master and another.

To me it appears that the Tory Party's policy in connection with steel is in line with what they are trying to accomplish in respect of the transport of this country. It appears to me that the Government's yardstick is that those portions of the industry which are lucrative should go back to private enterprise, and the profits emanating from them should go into private pockets, whereas those portions—and this applies to transport as well as to steel—which are not making a profit and which are not as modern as they might be or which, for some other reason, are incurring loss, should remain within the orbit of State management, and the losses incurred should be borne by the taxpayers.

The ideology which the Tory Party have supposedly held for many years against nationalisation appears today to have undergone a change. They are really not against nationalisation as such at all, but are only against nationalisation where it has transferred profits from private pockets to the public purse. We ought, therefore, to recognise that the Tory Party have changed in their outlook, because they used to argue very forcibly against any nationalisation whatsoever. The Tory Party do not take that line today. So far as steel is concerned, I think they are not de-nationalising the industry at all. What they are de-nationalising are the profits emanating from it.

I think that this Bill can cause great harm to the steel industry, particularly the industry as I know it in my constituency, and I want to talk chiefly about Scotland and my own constituency rather than about the general position throughout the country.

I have seen in Scotland and in my own constituency a settling down of this industry since its nationalisation. Since the passing of the 1949 Act, there has been more confidence created. As one who has lived his life near to the workers, I think that the men, women and children in the steel towns enjoy more happiness today than ever they have had before. There is more real contentment. I think that we ought to regard very seriously anything that will tend to put that spirit of contentment and goodwill, resulting in better productive output, in jeopardy. We ought to regard anything that will disturb that position with the greatest suspicion.

This goes far beyond the actual men and families directly working in the industry. I am thinking of the towns of Kilburnie and Glengarnock, in my own constituency, where the traders are enjoying a far greater security and far better returns for their work than ever they have had before. I feel that there is a great danger in this Bill for Scotland. I believe that if we are to get greater production in this industry, we must modernise existing plants. I think that we should be very careful not to destroy areas where the life of the people has been allied to steel for a long period of time and to see that we do not take prosperity away from them when we are talking of integration and thinking of the future.

I should like to know what is to happen to the plants that the Minister and the Agency are not able to sell—the plants that are not going to make a profit. Is there a possibility that they may be closed down, and is there a possibility that we are going to revert to what happened in the 1930s when steel making went down, and privation and suffering were caused to many thousands of our people? I know that the Minister has indicated that he has power to take over and operate a plant, but he indicated in his speech of 23rd October that this was very unlikely to happen. In the House on 23rd October, he said: I do not believe that that power will often be needed or used, except in very rare cases where it is needed on strategic grounds. He said earlier, If the Government wish to undertake a scheme which is uneconomic, then it is up to the Government to pay for it. I personally do not believe that this kind of case will happen."—[OFFICIAL REPORT, 23rd October, 1952; Vol. 505, c. 1293.] But it does appear, if circumstances arise in which plant cannot be sold and the present steel masters think that it is going to be an uneconomic proposition, that, according to what the Minister said, there is the greatest danger that the community will be deprived of that plant because it will not be operated. I think that in Scotland we must take particular care about this eventuality.

During the last two years, progress has been held up, and steel production has dropped to a certain extent in Scotland. I know that there has been lack of scrap, and I know that there has been to a certain extent a lack of coking coal. I am pleased to see the hon. Member for Rutherglen (Mr. Brooman-White) here, because I think that he was rather ungenerous the other day when he put the onus of that on the Coal Board. I think I can show that that condemnation was not really necessary, and that the Coal Board are cognisant of their responsibility to the steel industry in Scotland.

We should try to utilise the raw materials that are in existence in Scotland rather than go outside Scotland for them. In Lloyds Bank Review of July of this year, the following passage is to be found on page 47 under the heading "Coal and Steel": From the first two charts on page 58 it will be noted that while the trend of coal production has been upwards for the last two years, that for steel output has tended to decline since the summer of 1950. This refers to Scotland. If increased supplies of raw materials are forthcoming however, in particular iron ore and coke, it is hoped that the steel production in the latter part of this year should rise above the 1951 level. That shows definitely that steel production has been affected because of the lack of raw materials.

The Report on Industry in Scotland for 1951, at page 7, rather underlined that point. It says in paragraph 2: The expansion of manufacturing output was impeded by shortage of materials, especially steel. Paragraph 4 of the same document says: The production of steel in Scotland fell by 13 per cent. largely because of the shortage of raw materials, particularly scrap, foreign supplies of which dwindled to a fraction in the latter part of the year. Output of pig iron, on the other hand, increased by 7 per cent. That is very important.

I am concerned with the position in Scotland because one of the main industries in my constituency is Colville's Steel Works at Glengarnock. I am concerned for the future of the people in my area; I am concerned for the future of the steel workers if this Bill becomes law. A decline in the production of steel in that area will hit my people vary hard, and we have long memories of what happened in the past.

I may say that Ayrshire has a great record in coal and ironstone production, and a great mining industry. Vast quantities of ironstone have been produced in the past in Ayrshire. That industry collapsed many years ago, and great privation and suffering were caused to many thousands of miners and their families because the steel owners at that time preferred to make steel the easy way. They preferred to make it the cheap way. They preferred profits to the wellbeing of the Scottish people.

The main reason for the decline was that they obtained scrap, and in obtaining that scrap the blast furnaces went down and the ironstone mines in my area went out of use, with the result that thousands of men were thrown onto the scrap heap. At that time there was no provision at all to cushion the blow that occurred.

Mr. R. Brooman-White (Rutherglen)

Since the hon. Member has been referring to a point that I made, perhaps I might explain that I was concerned with development since the war. It has been suggested that the steel industry in Scotland has not developed as fast as it should to meet the raw material difficulties which the hon. Gentleman has rightly emphasised. I was simply arguing that if the National Coal Board were standing by now with a sufficient supply of coking coal, it would be a good example of greater foresight by nationalised industry.

Mr. Manuel

Perhaps I may quote from "Industry in Scotland, 1951," which says at page 31: The National Coal Board are at present investigating the possibility of developing reserves of coking coal which are situated near Glasgow.

Mr. Brooman-White

They may be considering it, but they should go ahead with it.

Mr. Manuel

I want to discuss something which may be of importance to the steel industry and certainly of importance to Ayrshire in the future. In the past, we had blast furnaces producing pig iron at Glengarnock, Dairy and Kilwinning in Central Ayrshire. We also had them at Ardeer in North Ayrshire and at Lugar, Muirkirk and Waterside in South Ayrshire, and blast furnaces at Hurlford in the Kilmarnock constituency.

These blast furnaces were supplied—this is going back many years—from ironstone mines in Ayrshire, many of them in my constituency. These mines were operated in my constituency at Dairy, Stoopshill No. 9, Glengarnock No. 6, also Birsieknowe and the Dockra in the Barrmill district. These are actually in my own constituency.

These pits were not worked out. I want to quote from the "Geological Survey of Scotland, 1920" which shows the position that exists in North Ayrshire at the moment and the amount of ironstone and iron ore that are still in the ground. This document is by M. MacGreggor, G. W. Lee, and G. V. Wilson, concerning the Dalry Clayband ironstone reserves in North Ayrshire, including Lochwinnoch, and states that in the district of Lugton and Caldwell there is an area of one square mile with a probable reserve of 3,500,000 tons. At Kilbirnie and Lochwinnock, which is adjacent, there are 4½ square miles with a probable reserve of 12 million tons. At Dairy and Glengarnock and the Barrmill district adjacent to that, again there is an area of 13 square miles with a probable reserve of 38,500,000 tons. This gives a total of probable reserves of 54 million tons.

The Survey indicates that in addition to these there is a similar area known as Logans Bands, with a possible reserve of 31 million tons. Also in the Lugar and Dalmellington area there are reserves of black band ironstone of 25 million tons. These are all in Ayrshire.

I want to put this question to the Minister. The Third Schedule commences with these words: The quarrying or mining of iron ore or the treatment or preparation of iron ore for smelting. The Minister has indicated that he is taking these powers. Am I to understand from that Schedule that the Minister can, on his own initiative, give instructions for the extraction of iron ore if necessary in Scotland, in my constituency or anywhere else, if it is proved, according to a geological survey of the iron content, that it is worth while? I cannot imagine that with the industry reverting to private hands we shall have this extraction of mineral content in Scotland carried on as it would be if the industry were publicly owned and operating for the public weal. I maintain that there is the strongest possible case for the utmost research into this matter, with a view to the utilisation of these deposits of ironstone in North Ayrshire.

I know the problem of the supply of coking coal, but surely we have made great strides forward in smelting techniques from the time when these ironstone mines were last operated. It is anything from 50 to 100 years ago since they were operated, and I think further extraction ought to be considered, despite the problem of coal. We must take into consideration the fact that many of these pits were operated a long while ago and extraction methods of that period do not compare with the methods employed today. In those days there was no mechanisation as we know it. We cannot allow decisions reached then to decide the issues now.

We are not getting the scrap or ore supplies which we need today. Iron ore from abroad is no solution, in my opinion, particularly if we have ore at home which can be worked. I am con- vinced that this is worth the utmost research. I am told that there is sufficient iron content in these deposits, and surely we can have a figure to ascertain whether that is so or not.

Remember the analogy in food production. There are subsidies for this, that and the other in agriculture. I am not against that, but if we are boosting home productivity in agriculture by giving subsidies for ploughing, for calves, for hill farming, to do all that we can to save shipping space and create a better balance of payments position, surely we can use similar methods in this matter with a view to achieving the same economies. We should go into this with the utmost care, because I am certain it would mean a very great return if it could be effectively worked. It would also be of great advantage to North Ayrshire and to Scotland.

I believe we have never looked at our export and import policies in the real way. Many of the things happening today are completely ridiculous. Is it not ludicrous that scrap and ore are being taken from Europe to America to make steel, and then the steel is sent from America to Britain? But it goes even further than that. From the steel that we get we make cars that are exported to America. I have here the returns for the month ending October which show that in value the cars exported for that month came to the value of £10,657,333.

Surely in these days we should not be talking about competition among the industries within Great Britain, and instead of raw materials being taken from Europe to America, we ought to be thinking in a wider sphere altogether, namely, that of sharing raw materials among the nations. The perfecting of the technique of production has made output very much better in spite of this ludicrous position. I spoke of motor cars being exported to America, but I know of occasions when the cars sent to America were then returned to Britain because of a decreasing demand, and had to be sold in the home market. There is no one in this House prepared to justify a position such as that.

I believe if this Bill becomes law there is no possibility of the kind of development which I have tried to outline during my speech. It will leave the position in the steel industry in my constituency dreadfully insecure. That industry at Glengarnock is splendidly sited with good rail facilities and near the Port of Ardrossan, which can take the largest ships that come in with scrap, and has everything to hand for the moving of steel. There is uncertainty and doubt at Glengarnock, and I want that cleared away.

My people are continually asking me about the future of Glengarnock and Colville's and what is likely to happen to the present prosperity being enjoyed by the people there. I cannot tell them, and if this industry is going to be thrown back to the steelmasters, there will not be any more information about what is going to happen to that industry than there is now.

If it is merely to be a question of profits deciding policy and not the effect on the lives of the men, women and children bound up with the industry, then it is going to be a bad day for my constituency, for Scotland, and indeed for Britain. We should always recognise that the well-being and prosperity of men and women and their families are bound up with this great industry. There is no greater industry in Britain than the steel industry, and I charge the Government to be careful with this industry with which they are tampering, for they should not do anything that would destroy the many lives associated with steel and the future security of the industry.

6.17 p.m.

Mr. Aubrey Jones (Birmingham, Hall Green)

Having apparently so effectively succeeded in emptying the House the other night, I would not wish to detain it for long today, but perhaps I might elucidate the argument I was putting when I was cut short with such devastating consequences. I had suggested, in contradistinction to the hon. Member for Ayrshire, Central (Mr. Manuel), that the present nationalised undertaking, the Iron and Steel Corporation of Great Britain, was being unduly cautious in its conception of future development.

I gave reasons why, in my judgment, this Board and this Bill should conduce to greater boldness, and I suggested that the Board had adequate powers against any possible restrictionism. I was endeavouring to meet the subsidiary argument advanced in particular by the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) that there was no point in de-nationalising this industry because capital was short and there was no one to provide new capital.

Capital is short and nationalisation can certainly give an industry a privileged claim on such capital as there is, but only at the expense of making others go shorter. It is not, however, the only method of doing it. In America preferential treatment for capital purposes is given to the steel industry by way of special tax allowances and special depreciation provisions. I am sure it is not beyond the wit of the Treasury to devise similar methods here.

I estimate that to achieve a target over the next five years of 20 million tons of steel the industry in this country needs to raise in the outside market at the maximum a sum of £25 million a year. That is not in excess of the capacity of the market. If capital is short, the answer is not nationalisation. The answer is to co-operate with my right hon. Friend the Chancellor of the Exchequer in measures to increase the supply of capital, and I should be happy to witness that spectacle.

The only other aspect of the Bill on which I would comment would be the very difficult question of boundaries. This is the boundary question, as shown in the Third Schedule. When dealing with a complicated manufacturing industry like this, the problem always arises, although it is more acute in a nationalisation Measure, where we are transferring blocks of property, than in a Measure to provide supervision. The essential purpose of the Bill is to supervise the development of the heavy steel industry. Unfortunately, no authority can do that properly unless it has some broad cognisance—I emphasise the word "broad"—of the development plans of other users of exactly the same materials. Conversely, if this is the authority responsible for development it is the authority in the best position to determine the claims of the rival claimants for the same raw materials.

That is the only purpose and the only reason why the foundries should be included in the Measure. The powers of the Board should be applied with less rigour to them than to the heavy steel firms, but that is a matter to which we shall have to turn our attention when the Bill is in Committee.

The right hon. Member for Vauxhall (Mr. G. R. Strauss), with considerable glee, touched on the real reason for the alarm expressed by some iron founders at their inclusion in the Third Schedule. They fear his return to the position of Minister of Supply. They fear that if he comes back they, in turn, will be swept into the maw of nationalisation. When he made that point the other day, the benches behind him were swept with a great gust of exultation. Hon. Gentlemen opposite should ponder this fact very carefully: in 1945, the then Labour Government had a double industrial programme; for certain industries, nationalisation; for others, development councils. In the light of history I think it will be judged that the Industrial Organisation Act, 1947, has failed, not because of any defect in the conception but because people feared that the development council was the thin end of the wedge of nationalisation.

Again, it is desirable to associate the steel industry of this country with ore development overseas. The hon. Member for Rotherham (Mr. Jack Jones) may not agree, but it is a fact that those responsible for ore development overseas are terrified, rightly or wrongly, of having anything to do with a nationalised undertaking, lest they be drawn into the orbit. The hon. Gentleman may dissent, but it is a fact, and that fear has to be taken into cognisance. The alarm of the founders is of exactly the same pattern.

Mr. Jack Jones

Is the hon. Gentleman telling the House that overseas producers of iron ore are terrified of having as a customer the representatives of a nationalised industry?

Mr. Aubrey Jones

That is precisely what I am saying. It is a fact, and the hon. Gentleman must accept it as a fact.

When de Tocqueville wrote his "Democracy in the United States," he was impelled to do so by contemplation of the fact that throughout the centuries power and influence had been broadening down from class to class. He remarked that the more precipitately that extension had been attempted, the harder the reaction provoked in those holding power and, in the upshot, much desirable reform, instead of being furthered, had in fact been delayed.

I suggest that the lesson is essentially applicable here. My hon. Friend the Member for Altrincham and Sale (Mr. Erroll) expressed the other day some laissez faire opinions. Those opinions I do not share. If we are to stop short of complete nationalisation, there is only one thing to do, to retain the best qualities of private enterprise while bringing to bear upon private enterprise legitimate considerations of State. That is a reform in which I believe.

Hon. Gentlemen opposite, however, must be warned. The more loudly they shout for nationalisation and re-nationalisation, the more certain it is that they themselves will frustrate rather than facilitate a reform which they should be the first to desire.

6.26 p.m.

Mr. Arthur Palmer (Cleveland)

Unlike the hon. Member for Hall Green (Mr. Aubrey Jones), I would not claim any expert knowledge of the steel industry. By training and profession I am an engineer, but my engineering experience is outside the iron and steel industry. My credentials for taking part in this discussion are two: the first is that in a previous life in this House I followed very intently the affairs of the nationalised industries. The second, perhaps more important, is that I now represent a well-known and important steel constituency in the North Riding. In the recent by-election, which attracted a certain amount of attention on all sides, I had the unanimous support of the iron and steel trade unions for my candidature.

I have been listening to this debate from the beginning, and I shall probably hear it through to the bitter end. I have noticed differences of opinion, not only between the two sides of the House, as one would expect, but interesting differences among supporters of the Government. There are hon. Members who, like the hon. Member for Hall Green, the hon. Member for Aylesbury (Mr. Summers) and the Parliamentary Secretary, take the view that the Bill is a sort of half-way house between the extreme of nationalisation on the one hand, and unbridled competition, on the other, and that it will give almost perfect public control, nicely balanced, while avoiding bureaucratic stagnation. I hope that is not an unfair statement of the position of some hon. Gentlemen opposite.

Other Conservatives, including the hon. Member for Altrincham and Sale (Mr. Erroll), take a different view. The hon. Member stated that the greatest merit of the Bill was that it repealed the 1949 Act. To him, that was its most outstanding achievement. He was frank enough to say that the new public control Board proposed—these were not his exact words but this was the drift of his argument—was merely a bending to the clamour of current political opinion. He went on to argue—and I think it is reasonable in that context—that the less control the Board exercised the better pleased he would be. He said that the Bill could be accepted only by those who accepted private enterprise or the private monopoly principle.

I believe that this, the second Tory point of view on the Bill, is correct and certainly the honest view. The Bill is not a half-way house. Hon. Gentlemen opposite, even on the Government Front Bench, know in their heart of hearts that the Bill is not a half-way house. It is not an olive branch, because for an olive branch to succeed it must bear some kind of practical resemblance to the tree. The Bill is not a compromise but a repudiation.

No one who professes to be a constitutional democrat would deny—and I certainly do not—the right of this or any other Government to do that in which they believe. If hon. Gentlemen opposite really believe it is vital that the iron and steel industry should be in private hands, they are perfectly entitled to drive the Bill through. But in those circumstances they must not complain if they come into a head-on clash with the party on this side of the House. We have fought for many years for what is to us the equally valid principle that this basic industry should be publicly owned.

I do not believe in the theory of exact mandates in a representative political democracy. I do not think that a nice balancing, a nice calculation of electoral advantage on particular issues ever makes sense. When voters cast their votes it is for the broad principles and general tendencies expressed by political parties. It is well known to the people of this country, and it has been for as long as there has been an organised Labour Party, which is nearly half a century, that we have a different conception of the organisation and nature of industry from the party opposite.

If we are looking to the future, I would put it this way: that we in the Labour Party see the industry of Britain as a mixed economy for quite a period ahead. We say that private industry still has an important and representative part to play, but, as part of the normal political evolution of this country, especially under future Labour Governments, we see the public sector steadily expanding as experience is gained in the management of publicly-owned industries. If that conception is accepted, surely hon. Gentlemen opposite must see that the public ownership of iron and steel is fundamental to it.

I would summarise my argument by saying we believe that the public ownership of iron and steel is certainly good in itself, but that it is also important as a starting point for a wider conception of community planning which future Labour Governments will of necessity have to operate. If we were to accept the so-called compromise of the Bill we should at the same time have to repudiate all those ideas which we have for the future organisation of British industry in general. Therefore, I believe that this further fight for the soul of the iron and steel industry, unfortunate as it may be from some points of view, is really a struggle of principle, even though hon. and right hon. Gentlemen opposite may conceal that fact under the pretence that they are concerned only with the efficiency and the effectiveness of the industry on empirical grounds.

Speaking as an engineer but with no expert knowledge of iron and steel as such, and taking on its face value the argument that they are concerned merely with the efficiency and effectiveness of the industry, I want to put a question to hon. Gentlemen opposite, a number of whom are closely in touch with its problems. I do not suppose that the needs of the steel industry differ fundamentally from the common needs of British industry in general. What does British industry need today? It needs increased production, not only absolutely but relatively. We want more electrification of our industries if our production figures are to improve. We want more mechanisation. We want a concentration of production in the most effective units. We want maximum out- put at lowest cost. We need more technical research, and education and training on the widest scale. We need suitable rewards for good management, high wages if we can get them, and security of employment.

I think that would be common ground between us. This is my question. In relation to the iron and steel industry, how will the re-introduction of the now discarded private shareholder bring about any of those things? I have great difficulty in seeing that. The engineer, the technician, the administrator and the worker in the industry, provided they are backed by the resources of the State and have the good will of Parliament, can do their job without the private shareholder again in this industry, whether he be the genuine article or just an aspect of the Prudential. I am not arguing that in some sectors of the economy the private shareholder is not still essential; of course he is; but not in the iron and steel industry these days, where technical needs, management qualities, inescapable monopoly characteristics, State policy, good or bad, and price fixing are bound to dominate.

I would not pretend that we have reached the ideal organisation as yet in any of our nationalised industries. We are only at the beginning of that road. We have been blamed for not being able to see ahead every problem connected with the nationalised industries, but we could not hope to do so in a world dealing with human beings. We are only at the beginning of the proper organisation of publicly-owned industries.

I have not read the particular work of the famous French political philosopher mentioned by the hon. Member for Hall Green, though I have read several others of his, in good English translations I must confess. Will he consider this point on the theory of political change? If nationalisation once done is accepted as common ground between the political parties, conserving and reforming parties alike—and if accepted for the coal industry, surely there is no fundamental reason why it should not be accepted for the iron and steel industry—it still leaves plenty of room for development and modifications in the light of experience. If, therefore, hon. and right hon. Gentlemen opposite had allowed the 1949 Act to settle down, if they had allowed the Steel Corporation time to consider, to act and to report, the Government might well then have brought forward consequent changes within the general framework of nationalisation with advantage, and there might have then been room for genuine argument on methods and organisation between the two sides of the House.

Because, however, they have introduced this Bill, which is not a half-way house but a repudiation, there is no opportunity for genuine argument on methods and organisation between the two sides of the House. I believe the public would have preferred the solution of an amending Act if necessary, but one which, at the same time, did not go back on the principle of public ownership. Sir Alfred Herbert, whose letter in "The Times" a few days ago was referred to with but little praise by hon. Members opposite, is not alone in the view that it would be far better from a practical industrial point of view if the principle of public ownership of iron and steel were now to be finally accepted.

I sum up the point by saying that it would be good for everybody and would put an end to these constant political controversies in the matter of iron and steel if hon. Gentlemen opposite would do in relation to iron and steel what they have done in relation to coal, gas and electricity: that is to say, to accept the implications of the peaceful revolution of 1945. Let them steal our clothes if they wish, but they must wear them.

I was nearly interrupted a short while ago about the result of the recent Cleveland by-election. Of course, I calculated the decimal fractional change in that constituency vote just as anyone else did, and I was gratified to think that there were hon. and right hon. Gentlemen opposite who felt that they have been saved from the electoral scaffold on the evidence of a vulgar fraction of one per cent.

But at that by-election at Cleveland, which is an iron and steel constituency, the question of nationalisation or de-nationalisation of iron and steel was not a matter of burning controversy. As I said in an interruption to the speech of the hon. and learned Member for Middlesbrough, West (Mr. Simon), my Conservative opponent took good care to say very little indeed about the glories of the de-nationalisation of iron and steel. The reason he kept very quiet was either that he was a sensible man or that he was sensibly advised.

The steel workers, not only in Cleveland, but throughout the country, take the wisdom of national ownership for granted. To them, nationalisation spells security, and they fear that a return to private ownership means insecurity. [Interruption.] The hon. Member for Kidderminster (Mr. Nabarro) seems to scoff at that, but that was the experience of the steel workers in the past, and there is no reason—

Mr. Nabarro (Kidderminster)

I have steel works, iron foundries and so on, in my constituency, and I am closely in touch with the electorate, but there is no evidence whatever to suggest that the workers believe that any additional security is derived from nationalisation.

Mr. Palmer

All I can say is that the hon. Member's experience is different from mine.

Mr. Jack Jones

How much steel is there in Kidderminster?

Mr. Palmer

We all have different experiences and derive different conclusions from them. I, at least, have had collectively from the trade unions of the steel-working part of the Cleveland constituency a very strong request that I should oppose the Bill in the House to the best of my ability. I wonder whether the hon. Member for Kidderminster has had similar or different representations from steel workers in his constituency, and how will he act upon them?

Mr. Nabarro

I have had no representations of any description from any organised workers in my constituency either for or against the nationalisation of steel since the last Election.

Mr. Palmer

I have the advantage over the hon. Member in that respect.

Apart altogether from the more general considerations, the trade unions have every reason to regard the Bill as a step backwards. In the 1949 Act, Section 39 (1, a) gave a statutory right to collective bargaining over terms and conditions of employment. It is bound to follow from the nature of the Bill that all that will now go by the board. I do not say that the steel workers will immediately be any worse off, because they are well organised in powerful trade unions and know how to look after themselves. The fact remains, however, that by the implications of the Bill, the right given by the law of the land of statutory collective bargaining in iron and steel will be abolished.

Section 39 (1, b) of the Act is perhaps even more interesting because it deals with joint consultation on matters such as health, safety, and welfare. Again, it gives a statutory right to joint consultation and actually uses the words "safety, health and welfare." It gives also a statutory right of joint consultation on matters of everyday efficiency. But all this will go by the board when the Bill becomes law, and all that is being substituted is simply a Clause concerning the powers of the proposed new board, which is to keep under review the arrangements for joint consultation. Those are two very practical reasons why trade unionists and their leaders should regard the Bill, quite apart from any general considerations, as a definite step backwards.

This so-called public control in statutory form makes the worst of both worlds; and it is arguable, as is stated in "The Economist"—a paper which, as is so often remarked, is no friend of this side of the House—if, given genuine competition on private enterprise assumptions, a strengthened Monopolies Commission might not have done better than the Bill, should it become an Act. The new Board is a feeble window-dressing device to cover the dingy reality of the sale of public property to private investors, and all that the new Board will be able to do is to nag and prick, at best. It cannot plan and execute, because it lacks real power of any kind. It will, in fact, try to find out what other people are doing and then, if need be, tell them not to do it.

This is a vital industry. These words will have been used time after time and, no doubt, many people are tired of them, but the fact remains it is a vital industry for the country. I agree with hon. Members opposite at least in saying that this vital industry of ours has a right to see finality in the matter of political change. That is why I and my hon. and right hon. Friends will vote tonight against this misguided Measure. That also is why we shall not rest content until the industry is once again firmly consolidated in national hands.

6.49 p.m.

Mr. John Grimston (St. Albans)

One of the remarks of the hon. Member for Cleveland (Mr. Palmer) with which I find myself in agreement was when he said that he was the first to admit that all was not right in the industry at the moment. Many hon. Members, and not only on this side of the House, will agree that national ownership has not provided the permanent answer to the problem of control in the industry.

I feel that the proposal we have made is the only possible one of the three alternatives that today face the Government. Either we can try to go back to free enterprise which certainly, unsupervised, will mean a cartel unsupervised, or we can carry on as we are with common ownership, or we can go back to free enterprise, which again will become cartelised, and try to supervise that.

Where the capital value of plant is so enormous in relation to the selling price of the product, as in the case of steel, if we do not get a supervised cartel we shall simply get the plant running down. This is because it will not be possible for sufficient money to be earned to replace and modernise it. I believe that the history of this industry before the 1930's and the history of many similarly placed industries since then have proved that.

Most hon. Members will agree that the industry is too important to remain without any form of public supervision. Much was made by the hon. Member for Watford (Mr. J. Freeman) to the effect that no one on this side of the House had tried to point to matters which were going wrong under public ownership. Several hon. Members have pointed out matters of this kind and I wish to add two further examples which I think are of importance. The essence of dynamic ownership is the kind of idea which it encourages to grow up in the industry.

Many of the great men of history have been extremely difficult to work with as they were eccentric in every way. I believe that a large commonly-owned corporation is not the right organ to create an atmosphere in which genius—and eccentric genius at that—can flourish. It is necessary that there should be alter- natives in the same industry where this displaced genius can go if his ideas do not meet with ready acceptance.

Mr. Mikardo

Does the hon. Member think that a Holding and Realisation Agency appointed by the Treasury is the sort of medium in which eccentric genius can dwell?

Mr. Grimston

I am delighted that the hon. Member made that point, because it is the very point to which I am leading. I think it is most important in all industry today, in this country particularly, that there should be an experimental approach to these matters. We are not great mass producers in this country and never can be in relation to the productive capacity of the United States. Therefore, we need to have competing manufacturers, both those who want to standardise and try to produce large quantities of regular items at a low price and, on the other hand, those who produce tailor-made products—it is possible to have tailor-made products in steel as in anything else. That is why I believe that single ownership does not provide the answer and that the supervised form of cartel to which we are leading will prove the correct answer to the problem.

I do not think that this idea is such anathema as the Opposition would make it appear to them, because they have had plenty of experience in all the other metal industries—in aluminium, copper and so on—which have been working in precisely that way in all the five years the party opposite were in office. Although the right hon. Member for Vauxhall (Mr. G. R. Strauss) is not in his place, I think he would be the first to say that the national interest was fully safeguarded under the system of public supervision of private industry which operated in all those industries analagous to steel.

What I regret very much from the Opposition is the entirely unwarranted slurs which are all too often cast on the leaders of industry and on their sense of duty. It is thought that as soon as one becomes a leader in industry one must be guided by the basest of motives against the national interest. The hon. Member for Islington, North (Mr. Fienburgh) made that point very strongly the other day. I just do not believe it. In the first place, I believe that trade associa- tions are fundamentally terrified of politicians, or the majority of them are. Politicians do not realise what bad politicians leaders of industry make, while leaders of industry are well aware of what bad leaders of industry politicians make. It is a matter of being mutually incompatible and it leads to a misunderstanding of the motives which activate the other side and which, in my experience, are of the best.

The Government have to indicate to the vast majority of trade associations where the Government think the national interest lies and the associations have to fall into line. It is extremely difficult sometimes to know where the national interest does lie and it is the job of the Government always to try to see where it lies. I have given one example—the matter of standardisation. Is it always right for a firm to go on standardising its product so that that product becomes cheaper and cheaper but subsequent processes become more expensive? We all know in industry that there is a very definite limit to the length to which standardisation can be carried. There is a difference of opinion as to where the national interest lies in that particular sphere.

I will give another, more difficult, case. Is it right to sting a foreign Power for as much money as one can get for a product? Is it right to sell abroad for a higher price than one sells at home? If we ask any American, he will say it is utterly wrong to do that. Yet that is the policy, for example, which the Coal Board have been following for years and it is the policy which the Socialist Administration advised the heavy industry associations of this country to follow during all their five or six years in office. There are clearly difficulties there in deciding where the national interest lies.

My case is that supervised industry is a very good compromise. It wants to do the right thing and will do so if the Government come out clearly and say where, in their view, the national interest lies. One realises very well that different Governments will have differing ideas of what at any moment is the national interest.

My second point concerns the management of companies under the Agency. We on this side of the House must take note of the attitude of the Opposition and of what they have said about re-nationalising the industry. I do not want to engender heat over this nor to say what I think of that attitude, but we on this side of the House and the Government must take note that in that kind of atmosphere it may be very difficult, or impossible for a long time, for the Agency to dispose of its assets. It is, therefore, very important during the intervening period, which may be years, for the management of the Agency companies to be of the very best.

It will not be of the best if the Agency acts in the same way as the nationalised Corporation is bound to act—namely, as wanting to have a say in policy. I think that while companies are under the Agency, the Agency must behave as though they were a large number of private shareholders. They must not expect to be consulted on all matters of policy, but they should step in—as private shareholders always do—as an inquisition when something goes wrong; but as long as things go right, the job of the Agency is to sit back, to encourage and support the best management they can put in.

My third point concerns the position of the iron foundries. I am still very unhappy about the attitude of the Minister. He has put into the Bill six main subjects which will be supervised by the Board as they affect the iron foundries. Two of those subjects, productive capacity and prices, the Minister in his own speech said he will try to exclude. In other words, he did not think they should have been included in the first place.

Three others of those subjects, research, safety and joint consultation, are none of them suitable for supervision as regards the iron foundries themselves. They are clearly matters which either come under highly technical boards like the D.S.I.R. or something like that, or which should be included in a Bill incorporating, shall we say, the Workers' Charter for which all hon. Members on this side of the House stand. They are general industrial matters wholly unsuited to be appendages to a Bill of this kind.

That simply leaves the sixth point namely, the supervision of the raw materials of the casting industries. Those are of two kinds, pig-iron and scrap. Pig-iron is entirely produced by the industry in any case, and so the Minister has supervision of that. Does he really mean to say that he does not trust his own bodies to allocate their own output fairly? Of course, he does not mean that, and so there is no reason on earth why the allocation of pig-iron should be used as an excuse to include iron casting in the Bill.

So far as the supervision of scrap iron is concerned, the Minister will know very well that no one has yet succeeded in supervising the allocation of scrap of any kind. There is certainly no reason for including iron castings in this Bill. Eighty per cent. of the firms covered by the Bill are iron casters. The Minister will not be able to exercise any effective supervision over them, and their inclusion will greatly increase the cost of the administration of the Bill. When he is talking to iron casters, the Minister will not be talking primarily to casting people, but to the manufacturers of a whole host of other products including motor cars, electrical plant, boots, conveyors and so on.

I believe there is the strongest possible case for excluding iron casting, and probably steel casting, from the Bill. The Minister will find that that would meet a great deal of serious criticism. I believe that the Bill is well designed for the control and the supervision of the big units of the steel industry and as such I give it a welcome.

7.3 p.m.

Mr. I. Mikardo (Reading, South)

Not for the first time I find myself in agreement with a great deal of what has been said by the hon. Member for St. Albans (Mr. J. Grimston); particularly, of course, in those passages of his speech in which, with great knowledge, he exposed some of the more outrageous illogicalities of the Bill. I shall return later in my speech to make some observations on what the hon. Gentleman has said, but first may I say a word about the speech with which the Parliamentary Secretary opened the debate for his side?

He exhibited a great deal more mechanical fluency in the reading of his little lesson than mental agility in dealing with the points raised after the little lesson was handed to him. The few occasions when he allowed himself to be diverted from his brief made him inarticulate and uncomfortable and, as he himself admitted, somewhat bad tempered. His bad temper took the form of quoting against a number of hon. Members, including myself, observations which in fact they had never made.

However, he did say two or three times in his speech that his arguments and explanations were quite satisfactory to him; and I am quite sure, in view of the fact that he derived so much satisfaction from his observations, that he will be indifferent to the opinions of those whose opinions are less personal and more objective, and who perhaps thought that his speech, like that of the Minister on Tuesday, contained a ton of assertion for every ounce of argument.

The main burden of his speech was the same as the main burden of a number of speeches made the other day and today by hon. Gentlemen on the opposite side of the House. It was that this Bill is some sort of a half-way house between private ownership and nationalisation; that a half-way house is a compromise and that everyone ought to accept the compromise. There is nothing more dangerous when one is dealing with organisational matters than a loose use of the word "compromise." A half-way house is not always a compromise. One leg of a nut-cracker is not a compromise between a nut-cracker and no nut-cracker at all, and it must not be argued that if we go half-way between two solutions we shall necessarily have integrated those two solutions, which is really what we ought to do, instead of having an uncomfortable compromise between them.

The more I read this Bill—and I have read it several times very closely indeed—the more I come to the conclusion that there is only one way in which such a Bill could have been prepared. That was for someone to sit down and put on one sheet of paper all the disadvantages of private ownership, and then to put on another sheet of paper all the disadvantages of nationalisation, and then to merge the two together, and to produce something which combines all the disadvantages of public ownership with all the disadvantages of private ownership, without any of the advantages of either. That is precisely what this Bill does.

Conservatives are always supposed to be against centralised control and in favour of de-centralisation. But this Bill—if ever it is carried out, and I agree with my hon. Friend the Member for Watford (Mr. J. Freeman) that it may never be—increases the degree of central control over the industry by comparison with what it is at present, and at the same time reduces the accountability of the central controlling authorities to the Minister and, more seriously, to Parliament.

Let us look at this Bill. The way in which under it the iron and steel companies will be bound hand and foot by outside controllers—"bureaucrats" is the word, is it not?—makes utter nonsense of the Conservative doctrine that industry ought to be allowed to run itself. It makes utter nonsense of the claim of the Minister that what he is doing in the Bill is to restore independent initiative to the companies. In fact, under this Bill the iron and steel companies' boards will be much more circumscribed in their activities than at the present time.

It will not be the board of directors, but somebody else, who will decide how their plant is to be developed and expanded. It will not be the board of directors, but somebody else, who will decide what material supplies they will get, and where they will get them. It will not be the board of directors, but somebody else, who will decide what research their firms will do; what statistics they shall publish; how they will train their technicians, and what will be their relations with their workpeople. Finally, it will not be the board of directors, but in this case two other authorities—the Iron and Steel Board and the Minister—who will decide at what prices the companies will sell the goods they make.

Mr. William Shepherd (Cheadle)

I am trying to follow the argument of the hon. Member and I find it rather difficult to reconcile the enormous powers he is now attributing to the Board with the statement made by both his right hon. Friend and his hon. Friend on the Opposition Front Bench that the powers of the Board are inadequate. I can understand perhaps a difference between the hon. Member and his right hon. Friend the Member for Vauxhall (Mr. G. R. Strauss) but there should be no real difference between him and the hon. Member for Watford.

Mr. Mikardo

The hon. Gentleman, as usual, gets frightfully confused and cannot distinguish between powers and responsibilities. I said carefully, "If this Bill is carried out." One must assume that when a Government bring in a Bill they intend to carry it into law. I agree with my hon. Friend the Member for Watford that none of this may come about—[Interruption.] The hon. Member for Cheadle (Mr. Shepherd) should remember that the Parliamentary Secretary was highly censorious of people making observations while sitting down. He had better be careful or he will earn a rebuke from his Front Bench.

We must deal with the Bill as it is. We cannot guess at what the Government will do with their silly Bill when they have got it, if they ever get it. I am discussing the Bill as it is, and that is not at all inconsistent with saying that it may well be that in fact none of these things may happen. But let us look at it.

Is this Bill really restoring independent initiative to the companies? Is this really de-centralisation when they will have no independent initiative to make decisions about plant development or about raw material supplies or research, statistics or training, no independent initiative to decide their labour relations or the price at which the goods can be sold. Does the hon. Member for St. Albans think that a Board so circumscribed is a place where we may breed eccentric genius?

The only fields in which the boards will have independent initiative under this Bill are that they will be able to decide on their own account and without reference to the Minister, the Iron and Steel Board or the Holding and Realisation Agency, what should be the colour of the paint on the walls of their boardrooms, whether they will have their meetings in the morning or afternoon and what vintage of port they shall drink after lunch. It is pure hypocrisy to take away from the separate boards of companies the right to make decisions on buying, selling, technical development, labour relations, and so on, and then talk about restoring independent initiative to these companies.

I want to add to the many good things which have been said on both sides of the House about the problem of capital and technical development in the industry. Over and over again on both sides of the House it has been said, not least by the Parliamentary Secretary today, that this is the key question, the great problem which faces the industry over the next few years.

Of course, this is so. The selling price of steel enters so widely into the general price structure, and it influences the price of so many other commodities, that there is no other industry, except perhaps coal, of which it may be said that our ability to produce cheaply over the whole field of production depends upon the efficiency of this one industry. There has been a sellers' market in steel for a long time, and prices have not mattered so much. But before long they will once again matter a great deal, and in fact in some sectors of industry we are already finding difficulty in selling metal goods because of their high price.

In other countries, steel industries are being built up, some virtually from scratch, with the most up-to-date and efficient lay-outs and equipment. In Western Germany, which is the prime example, there are millions of tons of new capacity, and nearly all of it is of the highest standard. By contrast, we start with the handicap of having a great deal of our iron and steel industries wrongly located, apart from the actual inefficiency of the plant. We have pig-iron plants wrongly located in relation to their sources of supply of coal, limestone, ore and scrap, and finishing plants wrongly located in relation to their sources of supply of coal and pig-iron.

We start with the further handicap that the older part of the industry—and notwithstanding recent developments that still represents a considerable fraction of our total capacity—was so seriously neglected in the years between the two wars that most of it is badly laid out and badly equipped. The principal task of the British steel industry in the next few years is to put that condition right. We can lower our costs only if we so develop our iron and steel industry as to reduce a great deal of unnecessary travel, both travel of materials from source to the plant and between plants, and inter-operational travel within the plants themselves.

Moreover, some of our older plants need considerable capital expenditure to re-organise them on a flow basis, so that the waste heat from each operation is used to supply part of the fuel for the next operation, and in order to avoid unnecessary heating, cooling and reheating, which is the most costly and wasteful part of the whole process. To do that it will be necessary to give the most careful consideration, on technical grounds, to the future development programme of the industry.

But that is precisely what cannot happen under this Bill. I beg hon. Members to pay attention to this vital defect in the Bill. There should be the most careful consideration on technical grounds of the re-organisation of the industry, but that will not happen under this Bill because it is just at this point of future technical development that under this Bill four separate cooks come in and start stirring the same broth.

First, the Iron and Steel Board will have something to do with it under the provisions of Clause 4. Secondly, there are the individual companies themselves, who have the right to put forward schemes for development. Thirdly, there is the Minister, as always with the Treasury at the back of him, who will have a hand in the business. Of course, as my hon. Friend the Member for Watford said, the projects which the Minister will be laying out will be quite different from the projects which the companies will be laying out.

The difference is a simple one. The Minister made it clear on Tuesday that the board of each company will put forward development projects on which it thinks that it can make a good profit. But some development projects, as we have heard from both sides of the House, and not least from the Minister, though they are very much in the nation's interest, may be uneconomic. They may be inevitably unprofitable though we shall need them for defence or for export expansion, or some other reason. It is these unprofitable ones for which the Minister will have the responsibility. I suppose that is what a Conservative Government call looking after the nation's finances. They let private enterprise take on all the profitable developments and leave the unprofitable developments to be carried out by the taxpayer.

I have referred to these three cooks stirring the broth of capital development—the companies, the Iron and Steel Board and the Minister. This is a bad enough and complicated enough situation as it is, with all these getting in each other's way, but the fourth cook who comes into this broth-stirring is the worst cook of all. Here I am grateful for reinforcement by the views expressed by the hon. Member for St. Albans, who said very much the same himself.

The fourth cook is an untechnical and unqualified cook, and that is the Holding and Realisation Agency. In paragraph 2 of the Explanatory Memorandum to the Bill, it is laid down that the Agency will have the normal powers of shareholders. That means, of course, that they have the final say, and that they will say the final "Aye" or "Nay" to any scheme of capital development, in the way in which the hon. Member for St. Albans pointed out. This Holding and Realisation Agency, which has the last word in deciding whether the company shall carry on technical development or not, will not consist of technicians. It will consist of accountants and other finance men.

Clause 16 (2) of the Bill lays down that the chairman and members of the Agency are to be appointed by the Treasury, and I think it is reasonable to assume from that that the members of this Agency will be, not steel men but money men—as I put it elsewhere, not processors of ingots but jugglers of figures—and there lies the real danger. All my business experience goes to show that almost the worst way in which one can develop an industry technically is to leave the work of technical development not to the technicians but to the accountants. I dare say that the experience of other hon. and right hon. Gentlemen will reinforce my own view.

The plain fact of the matter is that this Bill, if it is passed, will put the industry into a turmoil—not for one year or two years, or even three years, but for very many years to come. We have already been told by the Government that these proposals may take some years to complete, and that means that the question whether they are ever completed at all depends upon what happens at the next General Election, and that, in turn, means that the industry is, until then and perhaps after then, to be left in a state of complete uncertainty.

It is the party here represented by hon. and right hon. Gentlemen opposite which always says, "Leave well alone." In industry today, they say, "Leave well alone." They are the ones who always profess to believe that the peace of mind of those who have the difficult job of running an important industry should not be disturbed by political action taken on purely doctrinaire grounds. Yet what the Government are doing in this Bill is precisely that—precisely disturbing the peace of mind of those who are running this industry by taking political action which has no technical or economic purpose at all but which is carried out on purely doctrinaire grounds. On that account alone, we on this side of the House are well justified in resisting the passage of this illogical Bill.

7.23 p.m.

Mr. Gerald Nabarro (Kidderminster)

I hope I may be forgiven if I do not follow directly upon the speech of the hon. Member for Reading, South (Mr. Mikardo), as there are many of my hon. Friends wishing to catch your eye, Mr. Speaker, time is short, and I propose, in the course of a very brief speech, only to allude to one part of the Bill.

In Clause 3 (3) of the Bill, the duties and responsibilities of the Iron and Steel Board are defined, and, in the Third Schedule, in paragraph 4, reference is made to— The casting of iron or steel by any process. A good deal has been said in the debate as to the wisdom, or otherwise, of including ironfounders within the purview of this Measure, and I must say, at the outset, that I am broadly in sympathy with the view expressed by my hon. Friend the Member for St. Albans (Mr. J. Grimston).

The Minister made reference in his initial speech to the fact that approximately 75 per cent. of the ironfounders of the United Kingdom had expressed assent for inclusion within the directions that may be given by the Iron and Steel Board. That may be so, if the total representation of the ironfounders is taken to be that of the Council of Iron-foundry Associations, but I very much doubt—and I say this with great respect to my right hon. Friend—whether the Council of Ironfoundry Associations is, in fact, in any way representative of the ironfounders of the United Kingdom as a whole. It may be true that the Association broadly represents three-quarters of the firms who have foundries and forging businesses solely for the sale of their products to other firms, but the Council of Ironfoundry Associations, so far as I am aware, has no responsibility in respect of hundreds, if not thousands, of engineering firms which have private or tied foundries of their own, for producing castings merely for domestic and internal uses.

The Minister of Supply (Mr. Duncan Sandys)

It is a question of fact. I have not got HANSARD in front of me, but what I did say was that the members of the Council of Ironfoundry Associations account for 75 per cent. of the output of the foundry products of this country. That includes the output from tied foundries and of firms with foundries in this country.

Mr. Nabarro

I am obliged to my right hon. Friend, but, with very great respect, I would say to him that I have spent the whole of my industrial life in the engineering industry, and have been for many years in close contact with iron foundries and their work. I doubt whether that is an accurate statement of fact. My information is that the 75 per cent. figure to which my right hon. Friend referred does not take full account of the innumerable castings and forgings produced by engineering companies for their own domestic use.

While I am diametrically opposed to the view expressed by Sir Alfred Herbert in a letter to "The Times" on 24th November, 1952—and we must regard any statement he makes as being a fairly authoritative one, to which importance must be attached—about keeping the iron and steel industry in a nationalised form, I am very much in sympathy with some of the views he expressed about including tied foundries within the provisions of this Bill. After all, my right hon. Friend knows that I am being very accurate when I say that, if one has to put into this Bill in the Third Schedule, the words— The casting of iron or steel by any process it literally means that anybody in the United Kingdom who has an engineering business and owns a sandbox, pours a little ferrous metal and makes rough castings and rough forgings and has facilities for doing a little rough fettling, whether he produces only a dozen castings a year or not, if that definition stays in the Bill, that undertaking must be brought within the provisions for the control to be exercised by the Iron and Steel Development Board. That is the difficulty which we have to surmount.

I am advised that there are approximately 2,800 privately-owned iron foundries in the United Kingdom selling their products to other firms. There is an unspecified but large number of tied foundries in the United Kingdom. The total production of all cast iron in the United Kingdom today is in the order of 3,500,000 tons, and that represents finished iron castings. The production of the steel industry, of course, is in the order of 16 million ingot tons, and only on one occasion in the last few years has there been any complaint of the allocations of the common raw materials between the steel industry and the iron foundries. The common raw materials are pig-iron and scrap.

That controversy took place some months ago, and, as a result of the intervention of my right hon. Friend, the dispute was settled amicably and without difficulty. In the unlikely event of any similar difficulty arising in the future, I can see no reason at all why that narrow issue of the allocation of raw materials between the foundries, on the one hand, and the steelmakers, on the other, cannot be settled by one or two members of the Iron and Steel Development Board without this oppressive provision of bringing all foundries, all forgers, except drop forgers, and all rolling production throughout the country, within the purview of this Bill. Iron foundries, as a whole, are a heterogeneous mass of small firms with a few large exceptions. If one goes to the Black Country, which is very close to my constituency, one finds hundreds of small iron-founding firms there.

Mr. Ellis Smith

They are all duplicated.

Mr. Nabarro

I do not agree with the hon. Gentleman. I think that the competition of these small foundries has in the past been very valuable, has tended to give an individual service to engineers, and, by and large, has provided castings at a low price.

I say to my right hon. Friend that I believe, as a result of long experience of these matters within the engineering industry, that we shall have far more trouble and difficulty as a result of trying to include all the iron foundries and all the forging processes as well, than if we left them out altogether. Personally, I think that the Council of Ironfoundry Associations are asking for general support of the Bill, and in their letter of 21st November, 1952, circulated to the principals of all iron-foundry firms in the country, they confirm that, by saying: The Council as the representative national body of the iron-founding industry now asks for the support of all iron-founding firms for its policy of endeavouring to secure the vital interests of the industry within the terms of this Bill, in the belief that the unity of the industry is its greatest source of strength for the future. The Associations are therefore backing the Minister in this matter; they want the foundries brought in. I think it will cause much trouble if they are brought in, in the present terms of the Bill. I beg the Minister, between now and the Committee stage, carefully to consider the following amendments which will meet his case generally for a Measure of control for the iron foundries and which would, I believe, dispose of many of the objections and difficulties that have been related so far.

Firstly, there ought to be two members on the Board representing iron-founding interests. Secondly, the Board should have no restrictive powers affecting the development of iron foundries except in cases where such development is called for in an amount of more than £250,000 as an aggregate of plant and buildings. For anything less than that amount, the Board should not have any degree of control at all. Such an arrangement would, of course, restrict the use of such powers to major schemes alone.

Thirdly, there should be no control by the Board over any foundry activities where the output of castings is less than 5,000 tons a year or £250,000 in value, whichever is the less. I have assumed here that a ton of metal would be worth about £50. The figures may not be exactly appropriate, but that is approximately the limitation of control which I would advocate.

Fourthly, no tied foundry which is part of an engineering business, that is, a foundry which is producing castings or forgings or rolling purely for departmental end use, should be included within the provisions of the control of the Board unless its total output is more than 5,000 tons per annum.

Mr. Ellis Smith rose—

Mr. Nabarro

I am sorry not to give way to the hon. Gentleman, but I promised to be extremely brief. I have no doubt that we shall have ample opportunity for discussing all these proposals in the Committee stage.

Fifthly, I suggest that there should be no extension of the existing iron castings price control arrangements. I deduce from my right hon. Friend's speech that he is sympathetic to that point of view.

Although the hon. Member for Reading, South derided the use of the word "compromise," I conceive that in the controversy which has arisen in regard to the iron foundries that recourse might be a valuable one.

Mr. Mikardo

I know that the hon. Gentleman would not wish to misquote me. I did not deride the use of the word "compromise." What I said was that if we are to have one, then let us have one. I derided things which were said to be compromises when they were not.

Mr. Nabarro

I apologise to the hon. Gentleman. What I am proposing now is a compromise in order to get round these difficulties. I think that if we can compromise on the lines of the five points I have mentioned, it will resolve most of these difficulties with iron founders and forgers. Apart from the question of iron foundries, I commend this Bill to the House. I think it is a masterful solution to a long-standing problem, and I hope it will have a rapid passage to the Statute Book.

7.36 p.m.

Mr. Cyril Bence (Dunbartonshire, East)

As a result of the General Election campaign I expected, before this Bill was published, to enter this debate in order to fight for State supervision as against private enterprise. In my constituency there are a number of consumers of various forms of steel, including a large ship-building industry which is a heavy consumer of steel plate. During the election campaign I was confronted with repetitions of speeches made by the right hon. Gentleman the Prime Minister and with broadcasts claiming that State supervision of industry would destroy initiative, would mean a monopoly, a price structure for the consumers of steel. All this was said by my opponent. He fought hard for private enterprise.

There is a famous shipyard in my constituency, the firm of John Brown, and there are several large foundries and factories, all of whom say that they want free enterprise in steel. But I have not heard one speech from the benches opposite defending free enterprise steel. From 1949 to the date of the General Election whenever this subject—State control, or the clammy hand of Whitehall, as it was called—was mentioned, it was vigorously decried. I suppose that the hand of the Minister of Supply is not clammy.

It is proposed that through the Board there should be some comprehensive supervision. For the greater part of my life I have worked on the engineering side in industry. I have actually been a supervisor, even though only in a minor capacity. I have also worked under supervisors. My right hon. Friend the former Minister of Supply says that this supervision is a sham. As I say, I have worked under supervisors, but had their supervision been a sham they would not have remained supervisors for very long.

The Government must make up their minds whether they are passing a Bill to introduce State supervision over a larger sector of the iron and steel industry than that proposed under the Bill of 1949. Are right hon. Gentlemen opposite doing that? Is this Bill to extend State supervision? Are we to have more State control or less? That is the question to which I would like an answer so that I may tell friends of mine who are small manufacturers. I was arguing with one of them at the week-end and he said, "Why, these people are worse than you." When I seemed to be getting the better of the argument, he said, "Well, you started it." That man is under the impression that the present Government are carrying on the supervision and making it wider. There we were, and I could not fight for free enterprise because I do not believe in it.

I have heard speech after speech from the other side, including that of the hon. Member for St. Albans (Mr. J. Grimston) in which hon. Members have said, "We cannot go back to free enterprise." Why did not the hon. Member for St. Albans continue and use the words of the Prime Minister and say that we must keep the clammy hand of Whitehall on the steel industry? But the right hon. Gentleman the Member for Streatham (Mr. Sandys) is Minister of Supply and it would never do for the Prime Minister to describe that right hon. Gentleman's hand as clammy. The hand goes much further in this Bill, and I am frankly amazed that the party opposite should introduce a Bill that they themselves, in denial of my right hon. Friend the Member for Vauxhall (Mr. G. R. Strauss) when he says it is a sham, argue is a positive control over the iron and steel industry.

I have to consider the problems of my constituents who are engaged in the industry, and I am very worried about Clause 9 of this Bill. Will the shipbuilding industry be free to import ships' plates, or forgings or rolled steel from any producer it desires? Or must the importation of these raw materials of the shipbuilding industry be subject to the Board and the Minister? We on the Clyde want to know that. Will the shipbuilding industry be subject to the approval of the Minister when it wishes to import ships' plates or sections or girders required from sources other than the British steel industry?

I was rather worried when I heard one hon. Member opposite say that when this Bill is an Act he hoped that Her Majesty's Government would get into conversation with the steel units of the Schuman Plan and form a European cartel. If that takes place the shipbuilding industry may find that when they go to the Schuman Plan units for their ships' plates the prices are tied up with the prices charged for ships' plates by the industry in this country.

Then, according to Clause 4 any steel manufacturer who wishes to develop new processes or to extend his plant has to consult the Board. I wish the right hon. Gentleman the Minister of Supply would give me his attention because this is most important from the point of view of the consumers and that of many large motor manufacturers. Will the British Motor Corporation—the Austin and Morris motor company—be free to set up their own forging plants without consulting the Minister? Will they be free to build their own rolling mill, just as the Ford Motor Company have integrated their motor industry. Can new entrants come into the industry? I may be wrong, but as far as I can see this Clause denies the right to any body of men to form a company for the production of steel covered by the Third Schedule of the Bill without the consent of the Minister or the Board. That seems to me to deny the right of free entry into the industry.

In view of what I have said I was rather surprised that, as it seems to me, the Government are determined to tie the industry up into a monopoly and that they are going to invoke the Monopoly Commission under one Clause of this Bill. The hon. Member for Altrincham and Sale (Mr. Erroll) suggested that the shares of this industry could be taken up by pension funds and trust funds. As far as my knowledge of these matters goes, I am under the impression, and I believe it is true of my own union, that these funds can only be invested in what are called gilt edged securities. For the life of me I cannot see our pension funds being invested in a competitive industry where the shareholders and the company are liable to go bankrupt.

We heard speeches during the election campaign and we heard some today to the effect that, with the play of competition, even efficient firms can go bankrupt. Will the firms go bankrupt under the Realisation Agency that is to be set up, and which has no time limit? The hon. Member for Altrincham and Sale thinks that probably they will not, because under a Clause of this Bill the Realisation Agency can actually go guarantor for the debts of a company. It can buy the shares, it can close one industry and it can amalgamate industries. I do not want to deal with the aspects of this matter with which my right hon. Friend dealt with so ably, but what is the position of this Realisation Agency with regard to the stock of these independent companies?

The hon. Member for Altrincham and Sale obviously thinks that the stock is pretty safe in their hands, because he suggests that pension funds and trust funds should be invested in the industry. On this side of the House we have a suspicion, which I think is very well founded, and there is grave suspicion in the country which I also think is very well founded, that in the circles in which they move hon. and right hon. Gentlemen opposite always consider that the interest of the investing element in the community somehow or other must always coincide with the national interest. From their point of view there is very seldom a clash between the national interest and the national interest as seen from the point of view of the party opposite.

I feel that, if these interests clash, then the interest of maintaining value in invested capital in steel will be protected even at the expense of the national interest. When this Realisation Agency with its rights of shareholders and the Board as supervisor of the industry to see that it maintains effective production meet, I dread to think what will happen. They might meet in a similar situation to that which arose in the case of Baldwins Ltd., in the 1930s, when the directors were on the platform and the chairman made his speech. The shareholders had seen their shares come down from 28s. to 1s. 3d. The meeting ended in pandemonium with the shareholders throwing their papers and books at the directors on the platform. We do not want to see scenes like that in the board room of this supervisory Board.

What is the good of talking about integrating the industry and accusing us of failing to do so? Our Act may have been faulty in some respects. We might have spread the net wider, but this Bill is splitting the industry in the worst way that it could be split. It is dividing responsibility for the efficient organisation of the industry and the responsibility to see that the industry provides us at the most economical price possible the best quality raw material for our other industries. It is dividing that responsibility with the responsibility that holders of stocks and shares expect to exercise in their capacity as holders of stocks.

As one who has worked in the engineering trade all my life until 12 months ago, I have seen many rows in the factories because of this clash of interests between those of us who were trying to run the factory efficiently and the chartered accountants and others who were only interested in the financial returns, and who frustrated us at every turn when we tried to do the things we wanted to do. When things were flourishing they used to tell us that there was no need to take a certain course of action because the industry was making a good return. When we started losing money we could not do it because we were broke. That was the story that I heard in small and large factories between the wars. I am very much afraid that with this splitting of the industry this clash will come again.

One hon. Member opposite—I believe it was the hon. Member for Altrincham and Sale—said yesterday that it was all right to nationalise the industry in 1930 when it was broke, but to nationalise it when it was flourishing was a tragic mistake, and heads were nodded in support of that statement. Do hon. Members opposite really believe that when an industry is going downhill it should be nationalised, and that if by some fortuitous turn of events it prospers we should de-nationalise it, and then if some misfortune occurs and it starts going downhill we should nationalise it again? I was amazed when the hon. Gentleman said that this House should de-nationalise and nationalise according to the state of the industry. I am afraid that when we go to the country—and I hope it will be soon—[Laughter.] I do indeed—

Mr. Nabarro

What was your majority?

Mr. Bence

The Parliamentary Secretary pointed his finger at my right hon. Friend and said, "You do not believe a word you are saying." I have talked with a good many consumers of steel, such as engineering employees and so on, not only in my constituency but in others as well, and I say that as a result of the propaganda on nationalisation of the party opposite in the last five years those friends of mine will never believe a word from that party in future.

7.53 p.m.

Mr. R. Jennings (Sheffield, Hallam)

I am primarily concerned with paragraph 4 of the Third Schedule. Speaking as a representative of the City of Sheffield, I must say that the iron founders have expressed grave apprehension, and I want to appeal to my right hon. Friend to exclude the iron founders from this Schedule. The words in this paragraph, The casting of iron or steel by any process are far too wide, and I feel that the iron founders have got a good case.

I have many other protests from Sheffield, and they are from the general engineering people. I should like to quote a letter from a firm who manufacture paper-making machines and who have contracts in Canada and America worth millions of pounds for the manufacture of paper-making machines. This letter states that paragraph 4 of the Third Schedule, in our opinion, need not have been in the Bill at all, as it relates to the processing by moulding, of iron and steel, and brings a measure of control into an engineering business, and I believe the bulk of the foundries in this country are part of engineering establishments. I believe there is a great deal in that case, and I think that the iron founders have a great deal of apprehension. The Minister has said that there will be no day-to-day control of iron foundries as such. That might be so, but there is the party opposite who would do anything at any time. If they ever got back into power they might interfere with the day-to-day control of the iron foundries without even bringing the matter before this House.

Mr. Jack Jones rose—

Mr. Jennings

The hon. Gentleman always interrupts me when I speak. He must like doing it.

Mr. Jones

I want to clear up one point that the hon. Gentleman has made. Incidentally, his belated appearance has been noted, and perhaps it will be noted in Sheffield, too. We have definitely not made any statement that the iron foundries would be taken over. What my right hon. Friend has said is that when we are returned to power we should have to take into consideration any virtues there may be in the suggestions put forward by the present Government.

Mr. Jennings

The hon. Gentleman has been kind enough to refer to my belated appearance. He may like to know that I am here tonight against my doctor's orders, and it is because of my great desire to support this Bill that I have come here today.

Mr. Jones

I should like to express, on behalf of all of us on this side of the House, the hope that the hon. Gentleman will have a quick recovery, and I regret that I mentioned his belated absence. I accept his explanation.

Mr. Jennings

For the last two weeks I have been forbidden to come here. I intended not to come, but I felt that in the interests of the industries in Sheffield I ought to make a bold effort to come here and do what I can this evening. My hon. Friend the Member for Heeley (Mr. P. Roberts), who has been doing a great deal of work in the last fortnight interviewing people here for me, will confirm what I have said, and I am much obliged to him for what he has done.

These iron founders undoubtedly have a good case, and I should like to ask the Minister whether between now and the Report stage he will consider the exclusion of the iron foundries from the wide scope of this paragraph in the Third Schedule. In addition, will he consider the exclusion of engineering firms to which I have referred, such as paper-making machine firms?

I believe that the effective control which he will get if they are included will be very small. It will cost a fair amount of money to try to exercise this control, and I think that the Board which my right hon. Friend is setting up should be strong enough to be able to control the foundries in the way that they think is right. If he cannot exclude them, I feel that the iron founders have a perfect right of representation on the new Iron and Steel Board, and I am glad that the Minister is prepared to give way on that, but I do beg him to reconsider paragraph 4 in the Third Schedule between now and the Report stage.

I have been one of the greatest supporters of the de-nationalisation of iron and steel, and I am very glad that this Bill has been brought forward. I shall go into the Lobby and vote in support of it tonight. I would go in with better grace if I had some hope on the points which I have asked the Minister to consider. Nevertheless, this Bill is, in my opinion, what the country has been expecting. It is part of our Election programme and we are doing the right thing in introducing it. I commend it to the House. All the criticism that we hear from the other side is purely from a party political point of view. We on this side of the House are taking the national interest into account. I commend the Minister for his courage in bringing forward this Bill at the earliest possible opportunity.

7.59 p.m.

Mr. Arthur Moyle (Oldbury and Halesowen)

It must give some real satisfaction to the right hon. Gentleman the Minister of Housing and Local Government to wind up this debate tonight. About 16 or 17 years ago I recall listening with great interest when he expounded to the Tory Party what was then a tentative political philosophy, which we dubbed "the middle road." At that time we thought there was some hope that he might come across to this side of the House. But I think his environment proved too strong for him. I always felt that his "middle road" philosophy was not so much the product of his intellectual processes as the fear of Socialism. As I listened to the Minister of Supply and his Parliamentary Secretary I felt that they were under some disability in having to expound this philosophy, which the Tory Party has now embraced after 17 years' propaganda by the right hon. Gentleman the Minister of Housing and Local Government.

If the right hon. Gentleman and the Parliamentary Secretary to the Ministry of Supply felt uncomfortable in their exposition of this Bill, let me say that it is very difficult to pursue a course which avoids sin on the one side and virtue on the other. By that I mean the sin of private enterprise and the virtues of Socialism. This Bill is a product of fear. There is no intellectual conviction about it. The Government are giving the substance of the industry to private enterprise, that is, to the old steel barons, for this Bill restores the steel industry to its former steel barons, and the Board which has been provided for in the Bill is just the confectionery, because although it is true that the Board are assigned responsibilities under the Bill, they have very little executive powers.

Democracy has wrestled with a good many barons in the political history of this country. I feel confident that democracy will eventually get rid of the industrial barons just as it stopped the political barons from playing such a major part in our history. We have tried the coal barons—who left us in South Wales, after taking the cream both above and underneath, with the skimmed milk—and we have tried the steel barons, who failed us. I would refer the Government to the opinions expressed by two leading industrialists between the wars, Lord Nuffield and Sir William Firth. We have in their declarations precisely what they thought of those who were responsible for the conduct of the steel industry between the two wars.

I want to refer to this contraption which is flamboyantly described in the Bill as the Iron and Steel Holding and Realisation Agency. What is this organisation? Am I being unfair if I say that this Agency is nothing more than a pawnbroker? By this Bill the Government places the iron and steel industry in pawn, in the hands of this particular pawnbroker, and the only way the property can be redeemed from pawn is, as the Minister says, by this Holding Agency getting a fair price.

In a speech through which seeped the psychology of private enterprise, the hon. Member for Aylesbury (Mr. Summers)—I am giving a précis of his statement—said that it would be possible to dispose of the properties provided that they have the attractiveness of cheap prices. If the prices were cheap there would be a sale. The right hon. Member for Vauxhall (Mr. G. R. Strauss) has quoted the "Financial Times." The other day the "Observer" took a very dim view of this forced sale—as it will be—of the properties now held by the Iron and Steel Corporation.

It is inevitable that if there is to be any sale by this Agency, two things will happen. Those in the market will buy the most efficient steel undertakings and the residue will be left in the hands of the Holding Agency. I have a sneaking feeling that the whole purpose inspiring this arrangement is the desire of the Government to set up a spurious relationship between private enterprise on the one side and public enterprise, as expressed by the Holding Agency, on the other—in order to produce arguments that public enterprise is totally unable to hold its own with private enterprise in the steel industry. That will be the contention of the Government in the immediate days ahead.

The Parliamentary Secretary will understand what is meant by pride of regiments. He will understand how important it is to build up the morale of the troops and that there is nothing like building up the morale of the troops by inculcating the pride of regiment. That is accepted. But can anyone imagine any South Wales steel worker or any other steel worker having any pride in this organisation, which will be their employing authority—an organisation foisted upon the industry which has no part in it except to dispose of properties? Is there anything in the nature of pride of regiment about this contraption? Of course there is not.

As a distinguished member of this House once said—applying his words to this Holding Agency—it has neither pride of ancestry nor hope of posterity in the steel industry and we cannot possibly hope to get the production we need from a lot of extraneous organisation which is being imposed upon the industry by such contraptions as the Iron and Steel Holding Agency on the one hand, and a Board which, in the language of the Bill itself, is assumed to be extraneous to the industry. The Bill talks of the Board as though it were something outside the industry and not part of it.

As the hon. Member for Kidderminster (Mr. Nabarro) knows, I have a very large steel undertaking in my constituency. The workers there were delighted when the transfer of that great undertaking took place from private to public ownership. The same people are dismayed by the impending fate to be inflicted on the industry by this Government. Here we have a body of people who are behind us in our resolve to go into the Lobby and vote against this Bill, to fight it in Committee and, if possible, prevent its passage by every constitutional means available to us. When we get back to power we shall return to the fight of removing from the industry those barons who have for far too long besmirched the industrial history of this country.

8.11 p.m.

Mr. Robson Brown (Esher)

I listened to the speech of the hon. Member for Oldbury and Halesowen (Mr. Moyle) with considerable interest and I was mystified by his reference to these strange people the steel barons. I hope he does not include me among them, although it is true that I have been engaged in the industry for many years.

Mr. Moyle

I was referring to the owners and not to the managers.

Mr. Robson Brown

Thank you very much. I have spent 30 years in the industry and I feel that on certain points I have special knowledge and experience. Both the hon. Member for Rotherham (Mr. Jack Jones) and I trod the floor of the mills. We respect the knowledge of the hon. Member for Rotherham, his experience of the industry and also his moral courage on political questions, and I hope that one day we shall see him on the Steel Board.

A few days ago the right hon. Member for Lewisham, South (Mr. H. Morrison), speaking in the debate on the Address, said this—and it has been echoed and reechoed again throughout the whole of this debate: In the 20's and 30's there was pessimism and defeatism in the steel industry—a persistent fear of producing too much … that what was necessary was to diminish the units of production, to rationalise what remained, and then we should have a more efficient but a smaller steel industry."—[OFFICIAL REPORT, 10th November, 1951; Vol. 507, c. 611.] The right hon. Gentleman no doubt genuinely believes that this was the position, but in fact the attitude of the steel makers of Great Britain throughout the whole of that period was directly the opposite, because between 1920 and 1939 they lifted the output of ingot steel from 9 million to 13,250,000 tons—an increase of 31 per cent. Where on earth can hon. Members see any evidence of restriction in that? Up to 1932, the British steel manufacturers had no tariff protection of any sort from steel dumping from the Continent. They had to put up a tremendous fight for orders for every ton of steel they could get together in every part of the world. It was a tooth and nail fight—and I know because I had to take part in it.

The hon. Member for Ayrshire, Central Mr. Manuel) asked the Minister about the future importation of steel plates and forgings. I say to him that I hope the time will never come again when we shall be faced with the dumping of foreign steel in this country. I hope that we in this country will always be able to maintain our efficiency at such a level that such a thing never occurs.

What is more remarkable—and the House and the country should know it—is that in the years 1929 to 1937 the world output of ingots and castings increased by 11 per cent., while in this country during the same period our output was increased by 35 per cent. In the same period the output of the United States of America dropped by 10 per cent. This will no doubt surprise many hon. Members who are full of the knowledge of the go-getting and hard-driving methods of the Americans. In my opinion it is to the credit of the British steel makers that they held their own before the war in the way they did, in spite of the fact that during the 15 years the average return on capital in our steel industry was no more than a meagre 2 per cent.

During the same years great expansion schemes were carried out, and I regret that the Opposition are never prepared to mention these facts. In the same years, 1932 to 1939, when there was a 40 per cent. drop in world demand for steel—I repeat that: a 40 per cent. drop in world demand for steel—and when the steel makers of this country were facing dreadful conditions and when the workers were suffering trials and tribulations second only to those of the miners in the coalfields, what happened? Was there any evidence of reaction and restriction? The Lancashire Steel Corporation in 1932 erected the largest wire rod mill in the world, the competitive efficiency of which is today second to none.

Stewarts and Lloyds have been mentioned. They came from Scotland to Corby and built what was then and still remains the outstanding integrated tube plant anywhere in the world, including the United States, and they put Great Britain in the front of the world in the tube trade. Whitehead at Newport built three or four narrow strip mills at that time—all at a time when the world demand for steel was down by 40 per cent. and when the financial returns on capital in the industry was no more than a meagre 2 per cent. Take the case of Richard Thomas, of Ebbw Vale. These may sound repetitive and monotonous statements, but they prove powerful arguments, for this firm built the greatest combined steel works and strip mill in Europe.

Mr. E. Fernyhough (Jarrow)

Of course that is true, but at the same time we had men walking the streets in Jarrow.

Mr. Robson Brown

I had intended to omit reference to Jarrow, Motherwell and Merthyr because of the lack of time, but I must say one thing very clearly. We cannot attach industries and communities to one place for ever. The force of economic circumstances often means, sad as it may be, that the industry must go to where it can survive and prosper. Jarrow is a sad case, and there were many other sad cases in the country. It was no fault of anybody in any of the industries; there was a great international slump of the most gigantic kind ever experienced. Palmers' steel works in Jarrow was completely out of date and the site was definitely unsuitable for the building of any large integrated plant. The same answer must be given about Merthyr and Motherwell.

I will say this, too; both sides of the House today will accept much greater responsibility for the human beings of such towns. I was very much impressed by the speech of the Parliamentary Secretary this afternoon; he dealt effectively with many points on which I should liked to have touched, but there was one thing in particular which he said—that he was looking at the human interests behind the industry. I say that the cold statistics, output and figures of this kind, are no longer sufficient; we have to go beyond these to the communities and the homes of the people who depend on the industry.

Mr. Fernyhough

It is perfectly true that it was not the fault of Palmers' Steel Works. It was Steel House which prevented the new integrated steel works being erected in Jarrow at a time when 90 per cent. of the men were unemployed.

Mr. Robson Brown

The integrated steel works was needed, and it was developed at Consett. It was more suited to Consett and, geographically, it was at the nearest point that we could get to it.

Mr. I. O. Thomas

Would the hon. Gentleman give way?

Mr. Robson Brown

Let us be perfectly frank. In the old days there was a good deal of bumping and boring, to use a racing expression. It was because of that experience that we are having the type of Bill that we are discussing today. It was a Conservative Government in 1932 that came to the rescue of the steel industry and saved many companies from bankruptcy and the men who were working in them from unemployment.

It is remarkable that all through the speeches which we hear from the Opposition, indicting the steel makers for the position between the wars, it is clear that hon. Gentlemen have never bothered to mention, or perhaps do not even know, that good steel prices meant good steel wages. Nobody knows that better than the hon. Member for Rotherham.

Mr. Moyle

It is not the steel barons that are in the dock but the powers that they have had in the past that we opposed.

Mr. Robson Brown

I am coming to that point now. So far from the steel makers being reactionary in the past, the reverse is the case. An hon. Member said that we were very slow and dilatory in taking action on the Import Duties Advisory Committee. I will tell the House what we did. In a very short time we chose, not any independent Chairman, but the most powerful man we could get our hands on. Sir Andrew Duncan. He proved a very wise leader. He may not have been wise all the time, and sometimes he may have listened to the wrong voices, but in the end our choice was justified. We constructed an independent federation, and the record since that time has been one of wholehearted co-operation within the industry, and with successive Governments. That is why at the outbreak of the war the Government were able to take over a united and efficient steel industry. As the Minister said the other afternoon, we have had control of the right and proper kind for 20 years, yet here we are, in 1952, still arguing about it.

The right hon. Member for Vauxhall (Mr. G. R. Strauss) quoted a statement that I made. As Minister of Supply at the time of nationalisation, and in the period before it, when he had the responsibility, the right hon. Gentleman did everything he could to aid the development plans of the industry. What he did not understand and appreciate was that the fear and the threat of nationalisation held those plans up on the drawing board and that in the office of every company there was consultation going on, from one body to another, before the plans could be approved. The right hon. Gentleman can check up with the members of the Steel Board, because they and the steel industry know the truth of what I say.

Another point is about the intention of the nationalised board to go in for regional organisation on a comprehensive basis. Doubt was thrown on that, but I can only refer the House to what was said by Mr. J. H. Jolly, the Chairman of Messrs. Guest, Keen and Nettlefold's, on 19th September, 1952. The country has not sufficiently realised that the steel men, in spite of threats of nationalisation, pressed forward with their huge development projects, and there is no doubt that the greatest development of them all has been the amazing steel plant at Margam, the inspiration of Mr. Ernest Lever, who conceived the first plans for it even during the war. He is the kind of man who is responsible for the steel industry today. The industry is in good hands, with men like that. This is the kind of control which has carried the steel industry over the last 20 months during which we have succeeded in producing more than 20 million tons, not because of nationalisation, but in spite of it.

Hon. Gentlemen opposite must listen very carefully to the next thing I want to say. This House should never forget that tonnage output alone is not enough. This must be linked with efficiency and low cost. My fundamental objection to nationalisation is that its centralisation is absolutely stifling. It means loss of efficiency, bureaucratic control and, in the end, slowly but seriously, an increase of costs. I would refer hon. Members to the thoughtful document which has been produced by the late Chairman of the Iron and Steel Board. He has very interesting things to say on this particular point.

We have only to look at the mining industry. It is faced with an increase in costs, not only because of increasing wages of the miners, but because of the serious increase in the cost of mining. Every mining engineer knows perfectly well what I am driving at. Most of the pits in the country are working at a loss. It is this very state of affairs that we are striving to prevent happening in the steel industry.

Mr. Fernyhough

Who is responsible for it?

Mr. Robson Brown

There is only one way to efficient steel production at low cost, and that is by independent companies setting the pace for each other, with individual executives watching every move in the game—costs, selling prices, output, efficiency, every element—and each company being judged annually and in public upon its performance. Balance sheets can be studied and the public can see the progress and the performance of the industry, which is open to the judgment and the criticism of shareholders, workers and the public. That is the very opposite situation from all the complications and centralisations that we get under nationalisation, without initiative. There is not a man in a nationalised industry today that does not know precisely what I am talking about. If there is one thing that can be said with certainty, it is that in a nationalised industry you lose freedom of speech, because you have to watch your step.

Mr. Jack Jones

I always listen with tremendous interest to the hon. Member. He is one of the very few people in the House who know what they are talking about. I would like him to give one specific instance, just one, to show where people who are now working within the orbit of the Iron and Steel Corporation were not working for so-called private enterprise. It is rather alarming to suggest that because they were brought within the Iron and Steel Corporation they withheld their patriotic services.

Mr. Robson Brown

I always listen with great respect to the hon. Member for Rotherham, but I cannot quite get the point of his intervention.

Mr. Jones

Let me make it clear. There are people who were working in the steel companies before they were taken over nationally, and who are still there.

Mr. Robson Brown

Right. I am just going to deal with that. Thank you very much, but before I come on to it I would like to say that I was specially interested in the speech of the hon. Member for Motherwell (Mr. Alex, Anderson) who spoke with deep feeling of the social consequences to whole communities of the closing down of a steel works. That touches a very soft spot in my heart. He put out a lot of argument about the bad old days with which I could not agree, but I sensed that he had very deep feeling for his people. I suggest to the Minister that when we get down to the real drafting of the Bill with Amendments, the Board should not be able to make any decision regarding the permanent closing of a works, or be able to put it into effect, without the absolute authority of the Steel Board.

I also feel that we should consider the respective responsibilities of the Steel Board and of the Agency. There I am in sympathy with many previous speakers on both sides of the House. As it is stated in the Bill, it is the responsibility of the Agency to decide how the various organisations and factories should be broken up and what works and subsidiaries should be attached to what groups. I hold the opinion that it is a vital responsibility which should be properly placed on the shoulders of the Iron and Steel Board because, as the Bill clearly provides, the Steel Board shall be composed in the main of men with knowledge and experience of the steel industry. As the Bill now stands, it would appear that the members of the Agency will probably be men of financial experience and background—

Mr. I. O. Thomas

That is a criticism of the Bill.

Mr. Robson Brown

Of course it is; that is what we are here for. While the Bill provides that they should consult the Steel Board as to how, in their judgment, groups should be made, it seems to me that the responsibility should be with the Steel Board; or that at least they should work together at this stage where they are deciding how the grouping of the work should be worked out. The responsibility of the Realisation Agency is a financial one, and their main function should be to assess the capital value of each of the groups or companies and to carry out the necessary negotiations for the sale or disposal of the companies.

My next point is that the Realisation Agency, through their power as a holding company, are responsible for the direction of the various companies until such time as they have been disposed of by the Agency. It might be considered that the Board itself should also have that responsibility. There may be arguments which I have not yet appreciated and which will come forward in the Committee stage, but I feel on this aspect that all matters of finance should be the responsibility of the Agency and that all practical administrative matters should be the responsibility of the experienced men forming the Steel Board.

I have no doubt that a majority of this House would agree with me also that we must have a safeguard in the Bill to prevent majority holdings of any company passing into foreign ownership. That is an important point, but I will leave it there now. Then the point has already been made by many others, and I have had experience of it in past international negotiations, that it is imperative that all international negotiations in regard to the sales and the like should be dealt with by the Board in addition to any matter connected with the Schuman Plan.

I feel also that we ought to have information during the Committee stage as to the proposals of the Minister with regard to the disposal of home ore and foreign ore. We should also look carefully at the question of who is to have authority and responsibility for the purchasing, allocation and disposal of foreign ore and raw materials, for whoever controls the supply and allocation of raw materials controls the industry.

I want to swing now to another entirely different point. In dealing with the problems of carbonisation, should not the Gas Board be expected to consult with the Steel Board as well as the Coal Board regarding capital development schemes as well as general matters? Examination will show that on questions of carbonisation all three are interlocking in their interests.

I hope that during the Committee stage we shall give full consideration to the position of the workers in the industry and their relationships with the individual companies. I should like to see facilities for the availability of special shares for the workers in the industry and something in the nature of a workers' charter. With regard to the thorny question of the iron foundries, I have the feeling that the Minister is fully seized of the problem and I am quite sure that he will find a good, sound solution to the satisfaction of all.

In many speeches in this debate there has been an attempt to besmirch the record of the steel makers of the past, before the war, and to suggest that their motives now and in the future should be treated as suspect. That is most unfair and unjust, because time and time again Opposition Front Bench speakers have praised and given full credit to the leaders of the steel industry, both during and since the war. The most remarkable endorsement they could possibly have given them was to leave them in charge of the companies during nationalisation; and yet we now hear some of the Members on the Opposition side speaking of them as mysterious, wicked barons. It is because of these very men in the industry, who have been running the industry in the last 20 months, that there has been no strong evidence of any inefficiency since nationalisation. Again and again in the early part of the afternoon, Opposition speakers challenged us on this side to give that evidence.

The hon. Member for Cleveland (Mr. Palmer), I think it was, made a most remarkable statement. He said that we had only arrived at the beginning of the road of inquiry and experience and of making nationalisation efficient. He was most sincere when he said that. But the nation cannot afford that length of time and the costly price of getting that experience the long and the slow way. We have accepted the nationalisation of coal, and I think that hon. Members opposite should now give consideration to a Conservative proposal to undertake a wise and prudent Measure for the steel industry.

The purpose and intentions of the Bill are right. With suitable modifications, it should prove to be a Measure which can stand the test of time; because if it does not stand the test of time, the only alternative is to go back to nationalisation. Anybody with any responsibility in the industry knows and realises this. The Bill provides maximum flexibility in the individual companies and in the industry also. It combines with that a measure of accountability which we, in all parts of the House, consider is absolutely desirable. If we do this, we shall create the confidence and stability without which the industry cannot prosper.

8.37 p.m.

Mr. Frederick Lee (Newton)

The hon. Member for Esher (Mr. Robson Brown) has made his usual vigorous, clean and, in many ways, constructive contribution upon a subject in which he is very knowledgeable, but he completely missed one point.

I do not think that any hon. Friend of mine on this side of the House has ever talked about steel makers being reactionary. What we have talked about is steel owners, the people who are utterly divorced from the product itself and who merely consider steel production to be a vehicle by which they make their profits.

I was touched by the hon. Member's reply to my hon. Friend the Member for Dunbartonshire, East (Mr. Bence), who spoke about the importation of steel sheet. The hon. Member for Esher hoped that we would never again see the dumping of steel in Britain. I do not know whether he remembers what happened this year, when his right hon. Friend the Prime Minister became the biggest single bulk purchaser in world history by getting us about a million tons of steel from the United States of America and dumping it.

Mr. Robson Brown

The answer to that is very simple. The whole capacity of the country was fully extended. This additional steel has been a life-saver to the workers and to the industry. I was talking about when there is a surplus in this country; then, we will fight dumping.

Mr. Lee

The hon. Member said that he hoped we would never see foreign steel dumped over here. Indeed, he and his party have been responsible for the dumping which we have seen this year.

I am glad to see that a representative of the Liberal Party is present. I was extremely interested to hear the contribution of the right hon. and learned Gentleman the Member for Montgomery (Mr. C. Davies), who told us that in the days when the Labour Government were nationalising industry, he placed the onus of responsibility squarely upon the shoulders of that Government to prove that nationalisation was necessary. Most of us on this side of the House accept that onus. Indeed, we were so keen to show the people of the country the basis on which our nationalisation Bills were founded that every one of us spent weekend after weekend touring the country explaining every Clause of those nationalisation Bills and accepting the onus of responsibility. What I did not gather from the right hon. and learned Member for Montgomery when he went on to say that he supports the Bill is whether he keeps a constant line of thought and demands that the de-nationalisers shall prove their case as the nationalisers proved their case during their period of office.

The right hon. and learned Gentleman went on to say that another reason he supported the Measure was that it would mean that the Minister of Supply would answer detailed Questions on the conduct of the steel industry put by hon. Members. I ask the right hon. Member who is to reply to the debate if he will tell us whether the right hon. and learned Member was right in arguing that when this Bill is an Act of Parliament the Minister of Supply is bound to answer detailed Questions on the everyday responsibilities of the industry and whether we can put down those Questions and expect them to be answered.

I think the Minister is in most serious trouble. I have listened to practically every speech made from the other side of the House in these two days. As I heard the arguments, the main basis upon which the Minister's hon. Friends support him in this Measure is the belief that we on this side of the House will accept it as a compromise Measure. Speech after speech has been couched in those terms. Now that the right hon. Gentleman and his party know that we are not going to accept this as a compromise Measure, there is no basis for nor reason whatever why his hon. Friends should continue to support him in trying to get this Bill on the Statute Book. It is obvious that the party opposite is quite hopelessly divided and split, seeing that this side of the House refuse to accept this Bill as any kind of compromise.

The speeches of his hon. Friends have shown that they completely dislike the very supervision which, he tells us, is essential to the industry if it is not again to become a private monopoly when the Bill becomes an Act of Parliament. The fact that the supervision they suppose this Bill contains would stop it from becoming a private monopoly is the very issue that is repugnant to them. They wish to get rid of the supervision within this Bill which they believe will, in fact, stop the industry becoming a private monopoly.

The characteristics of private monopoly, as we know from grim experience, are international cartelisation and restrictions on production levels. In other words, they are the very opposite of the best interests of British economy at present. Those of us who believe in more economic integration in Western Europe will be very reticent in propounding ideas as to integration with other Western European nations now that we know that the objective of the party opposite is to put steel back into private hands, which we know would mean international cartelisation.

Mr. Peter Roberts (Sheffield, Heeley)

There seems to be a certain amount of confusion of thought. I imagine that the hon. Member is speaking of the Schuman Plan, and so on. Surely he appreciates that the Schuman Plan deals not at all with the question of ownership of the industry itself. It makes no difference whether it is nationalised or not, as the whole question does not depend on ownership.

Mr. Lee

I think the hon. Member is confused. I am pointing out that while British steel production is in the hands of the people by means of a nationalised industry, I am sure that integration could take place without it becoming again any sort of international cartel. While it is in the hands of private enterprise, I am quite certain that internationalisation of any kind would again mean the creation of an international cartel.

The Minister, in his speech, based much of his case for the Bill on the premises that we, under our nationalisation Measure, had created an artificial division of the industry. The right hon. Gentleman is quite within his rights in arguing that, but what he is not able to argue is that he should now effect a further subdivision of this industry by the delicate mechanism of an auctioneer's hammer. That is precisely what he himself agreed will happen when he told us that he knew that for quite a long time the Holding Agency cannot hope to get rid of all the units of which the industry is composed.

Therefore, in his attempts to get this industry back into private hands, the Minister is scrapping the division which he made in the industry, a division which was made after serious consideration by this House, and which was based on the creation of a viable entity both in the nationalised portion and in the private portion. Instead of that, the right hon. Gentleman is now to create two sections neither of which will be based on any scientific analysis but both of which will be based, as I have already put it, on the rise and fall of the auctioneer's hammer.

After keeping us for a complete Session waiting to discover what his great ideas were on the de-nationalisation of steel, we find that this wonderful conception he has of a re-division of steel boils down to the magical formula of the "Going, going, gone" of some auctioneer in some part or other of the country.

If the Minister is serious about wishing to obtain proper control of the industry, he must know quite as well as we do that the puny weak-kneed thing he is dressing up to look like a board is a hopeless proposition for the task. He knows quite well that it cannot possibly stand up to his friends of Steel House. One does not produce a mouse to curb the activities of a rogue elephant.

My intention in addressing the House tonight was to bring to the notice of the Government the position of the principal consumers of steel. These are, of course, the engineering and shipbuilding industries. When the party opposite have argued in opposition that our nationalisation Measures, taking place at a time when there was economic stringency, and when we could not foresee what the effects of those Measures would be, were quite wrong and would have an unsettling effect upon the industry. How does that square with their present actions in seeking to de-nationalise those industries?

Shipbuilding and engineering are two industries upon which, as both sides of the House are agreed, much of our prosperity in the future will depend. I put it to the Minister that in bringing this Bill before us now he is gambling with the jobs of millions of workers within those two basic industries. Those industries have during the past year increased their production—almost alone among the industries of Britain—by between 5 and 6 per cent., although I know that between one-seventh and one-eighth of their total production has been on defence contracts. Our hopes of avoiding economic disaster rest on our ability to expand those industries and increase our exports of their products.

I put it to the Minister that if we increase the size of these industries, and also if the output per man increases, it follows that the steel supplies must be rapidly expanded. How does the Government propose to do it? By handing steel back to private monopolies whose interests have been shown to lie in restricting of output and not in increasing it. Why should engineers agree either to help in the training of others under their relaxation agreements or to working themselves out of a job while the steel lobby uses its puppets on the Front Bench opposite to hand over the swag to the people who supported them at the last Election?

If I may switch from that topic, interesting as it is, I would say that we are all agreed that the world is still a dangerous place, with the threat of war still hanging over us. This Measure is a retrograde step, in that it gives those who live by profits a greater opportunity to exploit steel production for those ends. I believe that the Labour Party must include in its next election programme the decision to take the profit motive out of armament production. In the pre-war years, that demand grew to a remarkably high level among Liberals and Radicals as well as among Socialists.

In a period when we are in this dangerous situation so far as the threat of war is concerned, the sale of armaments is one of the methods by which the Government propose to balance our accounts, and we see Herr Krupp back in the saddle in Germany. I put it to the House, and through the House to the nation, that it is time the profit motive was taken out of the armaments industry. If this Bill should be condemned for no other reason, it should be condemned on the basis that the party opposite are giving scope to the armament kings again to have their way in a very short time.

We have heard, and doubtless we shall continue to hear, mealy-mouthed hypocrisy from hon. Members opposite about the loyalty and solidarity of our British trade union movement. As a humble member of that movement, I am proud of its loyalty and solidarity. Whenever there has been a crisis of any type facing this nation, it has always been known that the solidarity of the trade union movement could be relied on and could be used in the best interests of the nation. But I put it to the Government that qualities of solidarity are the exact opposite of those qualities which make up a collection of "drips."

There is no patriotism in allowing oneself to be used as a dumb accessory to the robbery of the national assets. Every hon. Member knows that the contents of the Bill are a secondary consideration to its authors. It is not a Bill in the sense that we have known such legislation in this House. It is a squalid plot to grab the loot of the October, 1951, victory. Along with the Transport Bill, it resurrects the Toryism of the worst part of the 18th century. Henry Fox and his companions brought the practice and usage of patronage to a fine art. The "open hand at the public Exchequer" was the order of the day during the 18th century.

Her Majesty's present Ministers are making the handing over of thousands of pounds, even hundreds of thousands of pounds, such as happened in the days of Henry Fox, look like the childish meanderings of amateurs. They are handing over public assets in the form of basic industries worth hundreds of millions of pounds to the British nation. British democracy cannot survive this type of thing, and I believe that if it continues the whole level of decency and cleanliness in British public life is at stake.

That being so, I believe it incumbent upon those of us who sit on this side of the House to oppose this Bill, because it leads to a vast extension of the system of patronage and to an extension of the understanding that if great industries will back the Tory Party financially they will get their pound of flesh when the work has been done. Therefore, believing that as we do, it is our duty to rouse the nation, to tell the people what is really contained in this Bill, as a certain way of sweeping the Government from office before they can carry out this proposal.

8.55 p.m.

Mr. Peter Roberts (Sheffield, Heeley)

In the short time at my disposal, I content myself by saying to the hon. Member for Newton (Mr. Lee) that I do not think that he did himself justice by the speech he has just made. I have heard him make much better ones. I have listened closely to this debate in which hon. Gentlemen opposite have said that to produce steel efficiently the ownership of the industry must be in public hands. That seemed to be the whole point of the speech of the hon. Member for Watford (Mr. J. Freeman) and of other speeches also.

One of the reasons I strongly support this Bill is that I believe it to be a continuation of the policy of Conservatives on this matter for the last 15 or 20 years. Ever since 1933 we, as a party, have maintained that because the steel industry is of great importance, it is necessary that the Government should have some say in how it should be run. That has been the policy of the Conservative Party for 15 or 20 years.

That policy was interrupted by the Labour Government when they nationalised the industry. By this Bill we are merely going back to the experiment which we were trying to work out in this industry so successfully between the two wars. Therefore, I say to Her Majesty's Ministers that they should press on with this experiment.

There is no reason why this form of control should not be carried on side by side with the form of control adopted in the nationalised coal industry. We are prepared to see that experiment work out, and hon. Gentlemen opposite should be prepared to see this experiment work out. Ultimately we shall discover which is the better way to run large industries of this nature.

I wish to deal with the so-called threats which we have heard from the right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss) and others, and which we may hear repeated by the hon. Member for Rotherham (Mr. Jack Jones). I wish to warn them that it is unwise and dangerous to commit themselves before the event. During the earlier debate on the White Paper, the hon. Member for Sheffield, Park (Mr. Mulley) said that in his constituency at the last Election no interest was taken in de-nationalisation. He rather suggested that that was true elsewhere.

I suggest that he might have said that no interest was taken in re-nationalisation. The general feeling in Sheffield—and I think that the hon. Member for Rotherham will agree that the same is true in Rotherham—is, "Let us take politics out of the steel industry." That is what hon. Gentlemen opposite will find if, after four years of the successful working of this Bill which I hope we shall experience, they try to go to the country on re-nationalisation. I do not believe that they will dare to go to the country offering to upset this industry all over again. Let hon. Gentlemen opposite beware what sort of commitments they make now. Those commitments may sweep them further down the polls than they are already.

I return to the speech of the Minister, on which I congratulate him, and the speech of the Parliamentary Secretary, who I thought put up a very good performance. We must press on with this Bill the main principle of which we approve, but there are three points which I would put to my right hon. Friend who is to reply.

The first is that it may well be that the net or scope has been spread too wide. Again, referring to what was said about the future by the right hon. Gentleman the Member for Vauxhall, I think he was rather smelling the political wind. I do not think he is going to be really sincere in that, because the question of re-nationalisation and the taking over of the ownership of industry is a very different matter from the question of taking over control. I do not believe that in the previous Act the right hon. Gentleman stopped his nationalisation plan where he did because of any regard for the steel rollers or the engineering industry, but simply because it was impracticable to go any further. Therefore, I say to the House that we must not take these threats very seriously.

I would say that there is certainly a feeling that some of the Clauses in this Bill are not applicable to the small firms—some of these 2,000 which are now to be brought under control—and I wish to put to the Government the suggestion that they should consider the re-imposition of a tonnage figure—in the neighbourhood of 20,000 tons a year—below which the development powers of the Board need not go.

I would also apply that to the question of giving information. I think it may be extremely dangerous to have wide powers of seeking information from a lot of small firms which are busily engaged in production. We may well be introducing a whole series of snoopers looking into facts and figures when the people who have to produce the steel might be better employed in getting on with their job.

I would also mention, in passing, that there should be greater safeguards of appeal to the Minister on the price structure. So far as I can see, in Clause 7 it is not sufficiently stated what powers of appeal there are to be for individuals who consider that they have been injured.

I end by giving this warning. There is, and there always has been, in this industry a certain section which desires large co-ordinated units, and which has for many years been trying to absorb the small individual plants. The danger that I see in this Bill is that too much power is to be given to the large co-ordinator, who will use that power to squeeze out some of the highly specialised small firms. These large co-ordinators have always looked upon the small firms as rather a nuisance, and in Sheffield we have a great number of such small firms producing high-quality steel.

I want to be quite certain that there will not be undue pressure, through the power given to large co-ordinating influences in the industry, to try to squeeze out some of these very essential small people. I think that, by introducing some tonnage limit, that might well be avoided, as well as by introducing some form of appeal to the Minister against the actions of the Board.

That, unfortunately, is all that I have time to press upon my Front Bench. The time has now come when we are to hear the winding-up speeches in this debate, and all I can say, having spent much time in listening to and reading the debate, is that, in that continuity of policy which this Government proposes to carry out, this Bill is a constructive step forward.

The period of nationalisation which we have had has really been a period of stultification, because during that period the only really effective thing that was done was to take one or two not fully effective directors off the Boards, but otherwise the question of nationalising has never really been put into effect. The danger we have not yet seen, and will never see. I sincerely hope we shall give this Bill a Second Reading.

9.5 p.m.

Mr. Jack Jones (Rotherham)

This two-day debate to which we have been listening, and which has taken three days to conclude, has been one of great interest. It has been conducted in a very good atmosphere, and there has been an intelligent application of knowledge from those who know something about the industry. There has, of course, also been an effort made by those who know nothing about the industry, but who are anxious to see it go back from whence it came—back into private hands.

I do not propose to follow the hon. Member for Heeley (Mr. P. Roberts) too far because, unfortunately, he did not have time to develop his argument, but he did suggest that the time had now arrived when the Rotherham and Sheffield elec- torates were of opinion that this question should be taken out of politics. I agree with the hon. Gentleman, and those electorates agree with him, and nothing would give me and my colleagues on this side of the House greater satisfaction than that he should go back to Sheffield tomorrow and I to Rotherham—I am prepared to do that subject to the Whip's permission—in order to tell our constituents that the Government have taken this matter out of politics and have put this Bill behind them for all time.

I came to the House last Tuesday expecting to hear a series of devastating speeches about the parlous state in which the steel industry now finds itself. I followed carefully what the Prime Minister had to say at Scarborough. He told his constituents and the Tory customers whom he has to support and with whom he has to agree that the new Government had saved the industry from disaster, that the industry had, as it were, been grabbed back in the nick of time from going completely over the precipice.

I suggest that the test of the argument here today and at any other time is to get at the facts. This industry is the newest to be nationalised, and has had the shortest period of time in which to put its ideas—not its idealogies—into operation. It has been denounced as having failed. I have listened carefully to almost every word spoken in this debate, and I defy contradiction when I say that not one sentence has been spoken which attempted to prove that the Iron and Steel Corporation has failed to deliver the goods or to satisfy the public interest. Surely that is a fair test.

When my colleague the ex-Parliamentary Secretary to the Ministry of Supply spoke today he said that he had considerable trouble in finding something new about which to speak. After all, we did have that very fine contribution from my right hon. Friend the ex-Minister of Supply himself, and I feel that his speech had quite a lot to do with the disappearance of hon. Members opposite. They were so satisfied that the Opposition's case had been made out and so dissatisfied with the advocacy of the case put forward by the present Minister of Supply that they felt there was no object in staying much longer within the confines of this House.

When my ex-colleague in the Ministry of Supply spoke, I was reminded of a little story which is, I think, rather apt. It is the story of the Scots boy who took the Yorkshire girl for a long walk—15 miles, I think—during which neither of them spoke. Then the girl plucked up courage and said, "Jock, will you marry me?" They then walked back the 15 miles and sat in the gloaming for three or four hours, and again neither of them spoke. Once more the girl plucked up courage and said, "Jock, are you never going to speak to me again?" to which he replied, "Good gracious woman, have I not said enough?" I suggest that the speech which we heard the day before yesterday from my right hon. Friend the Member for Vauxhall and the speech that we heard today from my hon. Friend the Member for Watford have been sufficient to prove our case.

Let us examine this question of "disaster." As the House knows, I have been kept fairly well-informed about what is going on in this great industry. Week by week and month by month I have followed carefully what it is doing, what it is up to, what it is heading for and what the lads in the industry and the managements are saying and thinking. When I speak of the industry I always include those grand fellows at the head offices, not those remote people way back who control those who actually get on with the job.

What have been the effects? When the White Paper on the de-nationalisation of the industry was produced in this House, figures were published which showed that in October the production of ingot steel in this great industry was running at the rate of 17 million tons per annum—the highest figure ever recorded in history. The production of pig iron for 10 months ending in October was running at exactly one million tons more than for the 10th months of the previous year

I am not going to be so foolish as to suggest to the House that that was because of nationalisation. I would be a fool so to suggest. What I say is that the plan which the Federation brought out, which coincided with the knowledge that the industry was to be nationalised by the Socialist Government, has been implemented and encouraged. Every possible thing was done when we were in office to see that the plan fructified in the national interest. We do not claim that nationalisation of itself has brought about this very healthy state. What we claim is that the story that is put about, and the claim made by the present Minister of Supply, that somehow somewhere initiative has disappeared and there has been a withdrawal of effort, is a fallacy. The story that because of political interference some furnaces which should have produced steel or pig iron have not done so to the extent that they should have done is a complete fallacy.

It is a libel not only upon the men but upon their managements to suggest that because of nationalisation they have withdrawn their initiative and knowledge. They do not like these statements to be put about. In the main they are Tories, but as a trade unionist I feel that it is right and proper to defend those who are unable to come to this House and defend themselves. They are a grand lot of people and they have done a marvellously good job of work.

I do not want to be facetious or naughty, but when I was in industry I always felt sympathy with a man who found difficulties in doing a job because of industrial nepotism, and I have a great deal of sympathy with a man who is unable to do a job because of political nepotism. I say that quite definitely. I know that at bottom the Minister wants to see the industry prosper. I know that the Tory Party believe that this Bill is a means to that end and the way to bring about a definite conclusion of the conflict that exists between us.

But the Minister has produced nothing that convinces me that the contents of this Bill can do better for Britain in any shape or form than is done by the existing set-up. My right hon. Friend the Member for Vauxhall and my hon. Friend the Member for Watford dealt very faithfully, industriously and effectively with the Board which is full of gums with no teeth. It is gummy in the literal sense of the word, because its members have a sticky job to do—very gummy indeed.

There is to be this Board—a façade which will have a leavening of high-ranking trade unionists upon it and will try to convince this country that it is going to have real power of control. The Minister knows that it will have nothing of the sort. It can suggest; it can make connections with the industry; it can do all sorts of things other than make decisions which are effective and objective. That Board has no power to do what we would have it do. It will comprise primarily all those whose interests lie in Steel House.

We shall wait and see. I have made many forecasts in this House, including one about Saturday morning work in the coal mines. At the time, that forecast did not appear to be feasible. I say to the House that I shall be very much mistaken if I find that there is not a positive majority on this Board consisting of people directly connected at this moment with Steel House and all that Steel House means.

Then there is the so-called independent Chairman. How can a Chairman of such a Board be independent when he is expected to look after what, in effect, is really an instrument of Tory policy? The Minister himself may make every effort to appoint an independent person, but he himself is not independent. There is even the person who appoints the Minister, and his point of view will have to be borne in mind all the time in all these matters.

That Board can do nothing but recommend. I have prepared a lot of notes, but I prefer to box on without them. We find in the Bill that the Board shall consult the present set-up and whatever companies it is decided to bring into being, and, having satisfied itself that it is not possible to obtain the optimum output of steel in this country which, in the opinion of the Board and the Government, is necessary, they can go to the Minister and use words something like these, "Say Boss, we have done all that we could with these people. They refuse to move. We have no power to compel them and we recommend that you, the Minister, shall set up a steel works and run it yourself."

There we should have the spectacle of a Tory Minister of today becoming a Socialist Minister overnight, putting into being the very thing which he now denounces—a State-owned and controlled steel works. What a farcical situation. That would be contrary to all that the Tories stand for. I ask the Government to take note of what the hon. Member for Esher has just said. He with one or two others including the hon. Members for Aylesbury (Mr. Summers) and St. Albans (Mr. J. Grimston), has a great knowledge of the industry. The Board has no teeth. It can make no objective decisions and enforce them. I suggest that that in itself is far from sufficient.

I now come to the greatest racket, which is the so-called Realisation Agency. It is a disposals board—a glorified receivership—set up to get shot as quickly as possible of one of John Bull's finest assets—his steel industry. What is this Board given power to do? It can sell any plant; it can hire out any plant; it can lease any plant; it can break up any steel work or parts thereof and it can group those portions which will be easiest to sell, with no regard to technical efficiency or sociological results. It will be simply a financial agency wishing to get hold of the brass—the money.

Let me tell the House the sort of thing which I am afraid will happen. I have no need to go any further than my own constituency of Rotherham, where we have two very fine steel works. I started work in one of them as a boy. I was born within 200 yards of its fence and my father worked there for 38 years—the Parkgate Iron and Steel Company—an old-established and worthy concern. That is Plant A. Then we have Plant B—a part of that great steel organisation, United Steels. They are both in the market to be sold.

I want the Minister to take great care about this and to pay heed to what I am suggesting. I do not say that this will happen, but it might. Prospective buyers may come along and they may look at United Steels, part of a great, lucrative money-making concern. The Agency are anxious to sell. They want to get rid of it and, because of their anxiety, they can be taken advantage of, and they would be. The buyers might say: "We will think seriously about United Steels, but only on one condition, that we have the blast furnaces which the Parkgate Company have and which United Steels have not. At the moment pig iron is being brought 40, 50, 60 and 70 miles into the United Steels works."

That sort of thing could happen and that old-established firm could find itself being dismembered. For 35 years I worked for the Manchester Steel Corporation, for whom I have a great regard and who, I think, have still a little regard for the person who is addressing this House at the moment. This firm has docking facilities, unloading facilities, blast furnaces, coke ovens, a by-product plant, a very fine wire mill, a rod mill and a department making road materials.

There is nothing to prevent those who would wish to do so from making big bids for the whole or part of that organisation. Within two miles of the Manchester Steel Corporation at the moment are Petrochemicals and a great concern making gas for the Manchester Corporation. How easy it would be under this Bill for such people to satisfy the desires of the Agency to realise the greatest amount of money by inducing them to sell off that great concern piecemeal. There is nothing in this Bill to prevent that. If that happened we should find a great organisation cut about—its arms and legs cut off, and its heart taken out. It is a shocking thought.

The Minister may say that under the Bill it may look like that but that is not what is intended. I am dealing with what the Bill says. I want to ask some pertinent questions. Who are the people it is suggested may buy up these concerns? At the moment we are selling armaments to America. Can dollars be brought into this picture? Is there anything to prevent the Realisation Agency from making a deal for American dollars? I am asking this question and I want to know the answer.

British steel workers are very proud men. I stand here as a very humble man, but I am very proud of the people from whom I come. They are proud citizens of this nation who put their country before anything else. They want to know if it is possible for some unknown owner to become their new boss.

There is a shocking thing that has not been mentioned in this Bill—a deplorable thing. It lays down that penalties shall be imposed of imprisonment and fines if, without consent having been given by the new owners in writing, their names are divulged to the workers. This is a shocking thing. The party who tell the country that they will set the people free are now telling these honest and God-fearing people that, unless consent has been given in writing, they shall not know who is the new owner.

We want to know who these ghost owners are likely to be. The Parlia- mentary Secretary may shake his head, but I advise him to have a careful look at the Bill. When I was Parliamentary Secretary, doing his job, I admit freely that I had so much to do that it was difficult to do everything and to keep tag on every word. I advise him, before he gets into bed—if his conscience will let him go to bed—to have a very good look at this Bill.

I want briefly to refer to what happened. On Tuesday the orchestra assembled with all its supporters and we heard speeches across the Floor of the House. About half past twelve the next morning they had all departed, like Haydn's Symphony, except the three fiddlers on the Front Bench. They then left the fiddlers three to deal with a real "fiddle"—and this is it.

A little bit of humour is not a bad thing, for we are living in very serious times, but I speak seriously now. We have set up an organisation which is not perfect. I want nothing at all to do with anything which is perfect in this life; anything which is perfect cannot be improved tomorrow, and I want nothing to do with an organisation which cannot be improved. We set up an organisation which is not perfect. Had the Government come to the Opposition and said, "We believe this thing is worth a fair trial and we believe it should be given an opportunity to express itself," that I could have understood.

I could talk for a long time on how I believe the Government could have made a better job of this. For instance, there is the question of raw materials—a very vexed question. Why is it necessary to have provision in the Bill whereby the Board can be granted £1 million to set up a rival organisation to the present purchasing Agencies? Is there a fear that the purchasing Agencies are not as good as the Minister told us they were? The new Board may set up a purchasing Agency—but £1 million will not even look at the problem. The Parliamentary Secretary wonders; but this is in the Bill all right. I am advised that the new ships required to bring in the ore from abroad would alone cost something of the order of £5 million to £10 million.

This is a wicked Bill. It was conceived in political venom and it is immoral in its application. What the Bill seeks to do and what the Tory Party seek to do is to haul down the emblem of which we are all proud—the emblem boldly flying at the head of our steel works—not literally, of course, but it is there all the same; and it says, "A nationally owned concern." They want to haul it down and to run up in its place, to the mast head, the emblem of piracy—the skull and crossbones; they want to fly the emblem of political and financial piracy. I ask the House, with all the sincerity I can command, to reject this evil thing.

9.29 p.m.

The Minister of Housing and Local Government (Mr. Harold Macmillan)

In a long debate of this kind there must necessarily be a certain amount of repetition and re-statement of familiar arguments. By the time the last speeches are reached, almost everything that is relevant has been said, and quite a lot that is irrelevant, too. Members on both sides have by now, I am sure, decided, if not their opinions, at least how they are going to vote. I am not quite sure of the precise position of the pairs.

Therefore, neither the hon. Member for Rotherham (Mr. Jack Jones) who preceded me, deservedly popular as he is in all parts of the House, nor I, can flatter ourselves, however ably or persuasively we can deploy our arguments, that we shall have a very marked effect upon the result. Nevertheless, there are waverers, if not inside this House, then outside. It is these folk, who hold moderate opinions and who, we believe, exercise unprejudiced judgment, who are the final masters of our political faiths, and whom I shall try to bear in mind in presenting to the House a few final arguments in favour of the course which Her Majesty's Government are recommending in the Bill.

Meanwhile, I ought to welcome back the hon. Member for Watford (Mr. J. Freeman) to the dignity of the Front Bench and the Despatch Box. I thought he made a very able speech. I regretted a certain bitterness in his attacks upon Steel House. However, I welcome this opportunity to pay tribute to my old chief, Sir Andrew Duncan, at the Ministry of Supply. He served this country and its steel industry well in peace and in war. I do not know whether it is he and his type who are to be attacked in that way. All I can say is that he undermined his strength in loyal devotion to the immense burden which he shouldered for so long. We are glad to have the hon. Member back. I hope it will be permanent. I do know the precise state of the poll, but if there is any question of another ballot I think we on this side of the House ought to be allowed to have a voice. So far as I am concerned, he would have my vote.

Many details of this scheme have been dealt with over and over again in this discussion. The Government's position has been put forward with conspicuous ability and tenacity by my right hon. Friend the Minister of Supply who is in charge of the Bill. Whatever else has emerged from this controversy, the one thing that has emerged is the immensely fortified and enlarged Parliamentary reputation of my right hon. Friend. I feel sure that the hon. Member for Rotherham, when he reflects, will regret the rather mean gibe which he thought fit to make against him.

The detailed replies on many points were made in an admirable speech by the Parliamentary Secretary. At this last stage I can only deal with some of the large issues that emerge. The hon. Member for Sheffield, Park (Mr. Mulley) put it rather well and fairly during the debate on the White Paper, when he said: Quite frankly, this is not an issue between private enterprise and nationalisation. Control of some sort, or supervision … is agreed between us. All we on this side of the House"— he was speaking from the Opposition Benches— are worried about is whether the control proposed in the White Paper will be effective. I agree with that. That is quite fair. He went on to say: We say that if the industry is to be controlled, it can be effectively controlled in the national interest only if the ownership is in public hands."—[OFFICIAL REPORT, 23rd October, 1952; Vol. 505, c. 1320.] That was repeated in substance by the hon. Member for Watford and it is really the issue. It is a vital issue. It is no doubt the fundamental issue which divides, honourably enough but none the less acutely, the parties and public opinion today.

But if Governmental supervision of industry and commerce is indeed impos- sible or impracticable without Government ownership, then there is no escape from the conclusion that the Government must own all the means of production, distribution and exchange according to the sacred formula of Socialist holy writ. If banking is to be supervised in the national interest, not only must the central bank be owned by the Treasury but all the joint stock banks—[HON. MEMBERS: "Why not?"]—all the merchant banks and all the financial institutions, too.

If agriculture is to be effectively supervised, not only must the farms be nationalised but the farmers also. There will, of course, be the conventional separation between sheep and goats. The kulaks will be liquidated and all the rest will be collectivised. And then, if distribution is to be properly supervised, we must take over not only the large shopkeepers but all the small shopkeepers, too. Then, worse than that—I hardly dare mention the word—we have to take over the Co-ops. [An HON. MEMBER: "What about the barrow boys?"]

We in the Conservative Party altogether reject this doctrine. The Liberal Party rejected it too and, curiously enough, a large part of the Socialist Party rejected it also. All are becoming increasingly suspicious of it, and that explains the extreme sensitiveness about what the T.U.C. did or did not say or what happened in the Socialist Cabinet before the Act of 1949.

Now, of course, the right hon. Gentleman the Member for Lewisham, South (Mr. H. Morrison) is trying to make a stand somewhere on this slippery slope. I was particularly interested in his recent appeal. He said, "Whatever we may think of nationalisation, let us preserve the status quo." He paraphrased that for the benefit of the Tories who do not understand that term and said, "What I mean is, don't let us upset the applecart." What a strange, what a reactionary, doctrine. Not even decent Conservatism; just plain, black reaction. Or can there be another explanation? Was it just the normal plea of the aggressor, great or small, after he has secured his purpose? I must not say after he has got away with the loot. The trouble is that each demand, each act of aggression, is always to be the last and always proves to be the precursor of another.

Mr. William Hamilton (Fife, West)

What about steel?

Mr. Macmillan

In this connection the right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss) used an argument in the debate on Tuesday which I thought came rather strangely from him. He deplored the state of uncertainty which is involved in this Bill. He thought it was very important to create confidence. He said that what we must have is peace in industry. I am bound to say that this is rather a new role for him. I have thought of him in many parts but I have never pictured him as a conciliator. He really must be careful or he will forfeit his position as tribune of the people. In any case if the right hon. Gentleman and his friends feel that—

Mr. Hamilton

What about steel?

Mr. Macmillan

—the remedy—

Mr. William Ross (Kilmarnock)

Let us have the Bill.

Mr. Macmillan

If they want to create confidence, let them abstain from these foolish and irresponsible threats. I noticed today that the hon. Member for Watford carried those threats further than the right hon. Member for Vauxhall did two days ago. I do not understand quite why he did that, except, perhaps, that he has come down so definitely on one side of the ideological fence while the right hon. Gentleman is still sitting on it.

A rather more naive theory was put forward in the debate—by I think, one of the hon. Members from Sheffield, who said that the threat of nationalisation was a good thing because it acted as a spur to progress; it kept the industry on its toes. It was to hang, I suppose, for ever, like the Sword of Damocles, over the industry only to be effective if it never fell.

Then we had the final warnings. We were warned that there would be an upsurge of righteous indignation from an angry and outraged public opinion. At one time, an hon. Member warned us what we must expect. "Wait," he said, "and see. See what Cleveland will say." There was not much of an upsurge of public indignation there—not any more than there was on the first day of debate here.

I saw no upsurge of public indignation. There were four Socialists at the end of the count. [HON. MEMBERS: "There were more."] Oh, yes, we heard this afternoon that there were 100 in ambush. I suppose they have got so accustomed to the cave of Adullam that they do not know of anywhere else to stand. First, we had Cleveland, then we had the great public indignation here in the House, and then we had other upsurges as well—all this and Wycombe, too.

Meanwhile, let us examine a little more closely the argument about supervision. [HON. MEMBERS: "Come to the Bill."] There was a time when the dominant theme of British political theory was that the Government of the day should play no part, or practically no part, in the economic life of the country; that it should stand aside and let economic forces, as they were called, enjoy complete and unbridled play. This doctrine, whatever else it may have been, was never a Conservative doctrine. Disraeli said of Free Trade that it was not a principle, it was an expedient. That is really our view about the position of Government in industry: it is not a principle, it is an expedient.

Of course, in the modern world no Government can stand altogether aside from the great basic industries of the country. Of course, in the conditions of our modern economy, especially following two great and destructive wars, the Government must not merely play the role of the umpire or stand as an objective and disinterested spectator upon the side-line. It must be interested in industry, even at the risk of what some may call interference. There is little doubt about that.

But what we say—and this is the difference between us—is that this guidance, this supervision and this control, cannot be defined in absolute terms. They must be relative to the characteristics and conditions of each trade or industry. They must be exercised with proper regard to the conditions and problems of the day. But in any case, in order that they should be operated effectively, they by no means require that the actual ownership of the industry should be in the hands of the Government. On the contrary, actual ownership, with all the detailed responsibilities which flow from it—or ought to flow from it—may prove rather a hindrance than a help, not an aid but an embarrassment.

It has been said that ownership under the new plan will be in the hands of many people. We regard that as a good thing and not a bad thing. Under the present Act supervision is divided; that is a bad thing. Under the new scheme we shall restore diverse ownership, but we shall make for unified responsibility for supervision. That seems to me to make sense.

It is perhaps worth recalling—[Interruption.] I am afraid that hon. Members will have to bear it. I am sorry they have to put up with it. It is perhaps worth remarking that the Schuman Plan for the coal and iron and steel industries, which most hon. and right hon. Members opposite have thought was of too rigid a character for us actually to join, does not involve or require the ownership of the undertakings by the High Authority. Nor does it involve the nationalisation of those industries by each or any of the six countries involved in the Schuman Plan. That is an interesting fact when we think of all the fear that this system will become too rigid. They are not operating in that way.

I will go further and say that for the task of co-operation and consultation with the new Authority—if and when it comes into being, as I trust it will, for I believe it will honestly be for the good peace and happiness of Europe if it does—it will be essential from our point of view, as I think we all agree, that the proposed Board, relieved of all responsibilities of ownership and therefore of management, should provide a far better body than the Steel Corporation to advise the Government of the day upon the great problems involved.

Of course, these ideas which I have ventured to put forward are not novel. I make no such claim, but I think they are sound. As the hon. Member for Oldbury and Halesowen (Mr. Moyle) reminded me earlier, they are ideas which I have tried to preach as a help and clue to industrial peace and progress for more than the 25 years that I have been in politics. Therefore, I welcome this Bill because it seems to be to me in the mood and in the philosophy of everything I have long believed was the true basis of Conservative thought.

I believe that in the operation of such a system the dilemma posed, and honestly posed, by the hon. Member for Sheffield, Park—that we could not have supervision without ownership—can be solved by these and similar methods. The hon. Member said that we must have complete ownership to supervise an industry and he regards this new concept of nationalisation—for, after all, it is comparatively new—as an essential condition. In our view, that is crude and impracticable. It is like the old laissez faire theory, against which it is a natural reaction and of which it is, paradoxically enough, the child. It pays insufficient regard to the character of a great industry such as iron and steel and to the difficult problems involved in ownership and management of such a diverse and varied complex of undertakings.

In our view, therefore, we should eschew the doctrinaire theory rigidly applied. We should try to find what is needed in each case and then do our best to devise that kind of supervision, that character of control which will be the right instrument for the job. Judged by that test, I sincerely believe that the proposals in this Bill are sound.

This Board has three advantages over the Corporation in the task of supervision. First, it is more comprehensive. Indeed the right hon. Gentleman the deputy Leader of the Opposition, complained that it was too comprehensive. He said that there would be a greater degree of bureaucratic interference. I must say that that rather shook me for, after all, he ought to know; he is the great expert in that. But what becomes of the rival theory that the whole thing was a sham? How could it be a sham if there was to be this tight bureaucratic control?

The right hon. Gentleman failed to grasp the division of functions proposed under the new plan. It is agreed on all sides that the industry must be subject to general supervision in the national interest, but under this scheme each will play their proper role. The Agency and eventually we hope the public, will own the shares, thus ensuring the normal responsibility of management towards shareholders and the corresponding duty of owners to directors and managers and employees. The Board will exercise powers over the major matters of development, over maximum prices and over raw materials. The Minister's powers of intervention are reserve powers to be held as an ultimate safeguard in the national interest.

The hon. Member for Newton (Mr. Lee) asked me what Questions we would answer. The answer I can make is that my right hon. Friend will answer Questions relevant to the exercise of the functions of his office. [HON. MEMBERS: "Oh!"] Well, he could not very successfully answer Questions relevant to the functions of the office of the Secretary of State for War.

Mr. Lee

Will the right hon. Gentleman say whether, with the passing of this Bill into law, the limitation which there now is on our ability to ask detailed Questions will be removed, and we shall be able to ask more detailed Questions?

Mr. Macmillan

I must be a little careful. I thought that there was a Select Committee discussing this very point. I must not commit a breach of Privilege by giving their decision.

I said that the Board was to have powers of general supervision and it is just because the Board is not to accept the responsibilities of ownership, for these are temporarily entrusted to the Agency and will ultimately pass to the public, that the Board can and ought to have powers of general supervision over a wider field.

Secondly, the Board is really a constitutional growth based on the experience of the Forbes Board, as it is often called, which in turn had its origin in the Import Duty Advisory Committee. The Forbes Board worked very well. We had experience of its work, for it played a conspicuous part in advancing the production plans which are now coming to fruition. It had, of course, no statutory powers of its own, but these are now to be given, and that is one of the main objects of the Bill.

Thirdly, the character of the Board and its functions will make it a far better instrument for protecting the interests both of the men employed in the industry and the consumers of its products. As regards the labour and trade union interests it will be easier for it to look after them because of the fact that it does not own the industry. As regards the consumer it will better protect his interests because one or two independent members or perhaps more, who are consumers or who represent consumers, are worth far more on the Board than all the flimsy façade of a consumers' council.

I sympathise with the hon. Member for Dunbartonshire, East (Mr. Bence), who I think is in his place. He made a very interesting speech earlier in the debate. He was much alarmed at the powers of the Board being too great. He did not go down very well with his own Front Bench, but he talked a lot of sense. He asked whether it would not be possible that they would be able to prevent the import of sheets and angles which the shipbuilding industry required so much? He asked whether there was not a danger—and I put down his words—of tying up the industry into a monopoly? I must warn him that I think he is showing deviationist tendencies. I hope he will not suffer for this sudden harking back to atavistic reactionary views. I suspect him of once being a Free Trader and still wishing to be.

At any rate I can set his fears at rest. The Board will not have the power to control the import policy of the country. That will rest with the Government of the day. Nor will the Board be allowed to take these powers of which he fears. On the contrary, the constituent companies, whose ownership whether it is restored to the public as a whole or remains partially in the hands of the Agency, will, in our view, be better equipped for their own individual tasks. Their relationship with the Board will be a better one, and just because the ownership does not belong to the Board, their sense of individuality will be strengthened and their goodwill, which is a vital issue—vital especially in the export market—will be a reality, and not an appearance.

Their sense of financial responsibility will be strengthened and at any rate some of the features of competition restored. Thus enterprise in its proper sense can be fostered and strengthened. The principle of freedom and the principle of order have often come into conflict. The precise answer to this problem is an age-long dispute. Societies and civilisations, in an attempt to resolve it, have gone sometimes to one extreme and sometimes to another. This secular controversy is one which no doubt will last so long as human communities exist.

As regards this limited part of this immense general question, the best organisation of a great basic industry, the proposals in this Bill constitute, in my opinion and in that of my right hon. and hon. Friends, a bold, ingenious and sincere attempt to find the middle way. It therefore commends itself naturally to me. I believe it will be generally welcomed by people of moderate opinion

on both sides of the industry, even with their varying political backgrounds, and I therefore commend it with confidence to the House of Commons and to the nation.

Question put.

The House divided: Ayes, 305; Noes, 269.

Division No. 21.]	AYES	[9.58 p.m.
Aitken, W. T.	Deedes, W. F.	Howard, Gerald (Cambridgeshire)
Allan, R. A. (Paddington, S.)	Dodds-Parker, A. D.	Howard, Greville (St. Ives)
Alport, C. J. M.	Donaldson, Cmdr. C. E. McA.	Hudson, Sir Austin (Lewisham, N.)
Amery, Julian (Preston, N.)	Donner, P. W.	Hudson, W. R. A. (Hull, N.)
Amory, Heathcoat (Tiverton)	Doughty, C. J. A.	Hulbert, Wing Cdr. N. J.
Anstruther-Gray, Major W. J.	Douglas-Hamilton, Lord Malcolm	Hurd, A. R.
Arbuthnot, John	Drayson, G. B.	Hutchinson, Sir Geoffrey (Ilford, N.)
Ashton, H. (Chelmsford)	Drewe, C.	Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Assheton, Rt. Hon. R. (Blackburn, W.)	Dugdale, Rt. Hn. Sir Thomas (Richmond)	Hutchison, James (Scotstoun)
Astor, Hon. J. J.	Duncan, Capt. J. A. L.	Hyde, Lt.-Col. H. M.
Baldock, Lt.-Comdr. J. M.	Duthie, W. S.	Hylton-Foster, H. B. H.
Baldwin, A. F.	Eccles, Rt. Hon. D. M.	Jenkins, Robert (Dulwich)
Banks, Col. C.	Eden, Rt. Hon. A.	Jennings, R.
Barber, Anthony	Elliot, Rt. Hon. W. E.	Johnson, Eric (Blackley)
Barlow, Sir John	Erroll, F. J.	Johnson, Howard (Kemptown)
Baxter, A. B.	Fell, A.	Jones, A. (Hall Green)
Beach, Maj. Hicks	Finlay, Graeme	Joynson-Hicks, Hon. L. W.
Beamish, Maj. Tufton	Fisher, Nigel	Kaberry, D.
Bell, Ronald (Bucks, S.)	Fleetwood-Hesketh, R. F.	Keeling, Sir Edward
Bennett, F. M. (Reading, N.)	Fletcher-Cooke, C.	Kerr, H. W. (Cambridge)
Bennett, Sir Peter (Edgbaston)	Fort, R.	Lambert, Hon. G.
Bennett, Dr. Reginald (Gosport)	Foster, John	Lambton, Viscount
Bennett, William (Woodside)	Fraser, Hon. Hugh (Stone)	Lancaster, Col. C. G.
Bevins, J. R. (Toxteth)	Fraser Sir Ian (Morecambe & Lonsdale)	Langford-Holt, J. A.
Birch, Nigel	Fyfe, Rt. Hon. Sir David Maxwell	Law, Rt. Hon. R. K.
Bishop, F. P.	Galbraith, Comdr. T. D. (Pollok)	Leather, E. H. C.
Black, C. W.	Galbraith, T. G. D. (Hillhead)	Legge-Bourke, Maj. E. A. H.
Boothby, R. J. G.	Gammans, L. D.	Legh, P. R. (Petersfield)
Bossom, A. C.	Garner-Evans, E. H.	Lennox-Boyd, Rt. Hon. A. T.
Bowen, E. R.	George, Rt. Hon. Maj. G. Lloyd	Lindsay, Martin
Boyd-Carpenter, J. A.	Glyn, Sir Ralph	Linstead, H. N.
Boyle, Sir Edward	Godber, J. B.	Llewellyn, D. T.
Brains, B. R.	Gomme-Duncan, Col. A.	Lloyd, Rt. Hon. G. (King's Norton)
Braithwaite, Sir Albert (Harrow, W.)	Gough, C. F. H.	Lloyd, Maj. Guy (Renfrew, E.)
Braithwaite, Lt.-Cdr. G. (Bristol, N. W.)	Gower, H. R.	Lookwood, Lt.-Col. J. C.
Bromley-Davenport, Lt.-Col. W. H.	Graham, Sir Fergus	Longden, Gilbert
Brooke, Henry (Hampstead)	Gridley, Sir Arnold	Low, A. R. W.
Brooman-White, R. C.
Browne, Jack (Govan)	Grimond, J.	Lucas, Sir Jocelyn (Portsmouth, S.)
Bullard, D. G.	Grimston, Hon. John (St. Albans)	Lucas, P. B. (Brentford)
Bullock, Capt. M.	Grimston, Sir Robert (Westbury)	Lucas-Tooth, Sir Hugh
Bullus, Wing Commander E. E.	Hall, John (Wycombe)	Lyttelton, Rt. Hon. O.
Burden, F. F. A.	Harden, J. R. E.	McAdden, S. J.
Butler, Rt. Hon. R. A. (Saffron Walden)	Hare, Hon. J. H.	McCallum, Major D.
Campbell, Sir David	Harris, Frederic (Croydon, N.)	McCorquodale, Rt. Hon. M. S.
Carr, Robert (Mitcham)	Harris, Reader (Heston)	Macdonald, Sir Peter (I. of Wight)
Carson, Hon. E.	Harrison, Col. J. H. (Eye)	Mackeson, Brig. H. R.
Cary, Sir Robert	Harvey, Air Cdre. A. V. (Macclesfield)	McKibbin, A. J.
Channon, H.	Harvey, Ian (Harrow, E.)	McKie, J. H. (Galloway)
Churchill, Rt. Hon. W. S.	Harvie-Watt, Sir George	Maclay, Rt. Hon. John
Clarke, Col. Ralph (East Grinstead)	Hay, John	Maclean, Fitzroy
Clarke, Brig. Terence (Portsmouth, W.)	Head, Rt Hon. A. H.	Macleod, Rt. Hon. Iain (Enfield, W.)
Cole, Norman	Heald, Sir Lionel	Macmillan, Rt. Hon. Harold (Bromley)
Colegate, W. A.	Heath, Edward	Macpherson, Maj. Niall (Dumfries)
Conant, Maj. R. J. E.	Henderson, John (Cathcart)	Maitland, Comdr. J. F. W. (Horncastle)
Cooper, Sqn. Ldr. Albert	Higgs, J. M. C.	Maitland, Patrick (Lanark)
Cooper-Key, E. M.	Hill, Dr. Charles (Luton)	Manningham-Buller, Sir R. E.
Craddock, Beresford (Spelthorne)	Hill, Mrs. E. (Wythenshawe)	Marlowe, A. A. H.
Cranborne, Viscount	Hinchingbrooke, Viscount	Marples, A. E.
Crookshank, Capt. Rt. Hon. H. F. C.	Hirst, Geoffrey	Marshall, Douglas (Bodmin)
Crosthwaite-Eyre, Col. O. E.	Holland-Martin, C. J.	Marshall, Sir Sidney (Sutton)
Crouch, R. F.	Hollis, M. C.	Maude, Angus
Crowder, Sir John (Finchley)	Holmes, Sir Stanley (Harwich)	Maudling, R.
Crowder, Petre (Ruislip-Northwood)	Holt, A. F.	Maydon, Lt.-Comdr. S. L. C.
Cuthbert, W. N.	Hope, Lord John	Medlicott, Brig. F.
Darling, Sir William (Edinburgh, S.)	Hopkinson, Rt. Hon. Henry	Mellor, Sir John
Davidson, Viscountess	Hornsby-Smith, Miss M. P.	Molson, A. H. E.
Davies, Rt. Hn. Clement (Montgomery)	Horobin, I. M.	Monckton, Rt. Hon. Sir Walter
De la Bère, Sir Rupert	Horsbrugh, Rt. Hon. Florence	Morrison, John (Salisbury)
Mott-Radclyffe, C. E.	Robinson, Roland (Blackpool, S.)	Teeling, W.
Nabarro, G. D. N.	Robson-Brown, W.	Thomas, Rt. Hon. J. P. L. (Hereford)
Nicholls, Harmar	Rodgers, John (Sevenoaks)	Thomas, P. J. M. (Conway)
Nicholson, Godfrey (Farnham)	Roper, Sir Harold	Thompson, Kenneth (Walton)
Nicolson, Nigel (Bournemouth, E.)	Ropner, Col. Sir Leonard	Thompson, Lt.-Cdr. R. (Croydon, W.)
Nield, Basil (Chester)	Russell, R. S.	Tilney, John
Noble, Cmdr. A. H. P.	Ryder, Capt. R. E. D.	Touche, Sir Gordon
Nugent, G. R. H.	Salter, Rt. Hon. Sir Arthur	Turner, H. F. L.
Nutting, Anthony	Sardys, Rt. Hon. D.	Turton, R. H.
Oakshott, H. D.	Savory, Prof. Sir Douglas	Tweedsmuir, Lady
Odey, G. W.	Schofield, Lt.-Col. W. (Rochdale)	Vane, W. M. F.
O'Neill, Phelim (Co. Antrim, N.)	Scott, R. Donald	Vaughan-Morgan, J. K.
Ormsby-Gore, Hon. W. D.	Scott-Miller, Cmdr. R.	Vosper, D. F.
Orr, Capt. L. P. S.	Shepherd, William	Wakefield, Edward (Derbyshire, W.)
Orr-Ewing, Charles Ian (Hendon, N.)	Simon, J. E. S. (Middlesbrough, W.)	Wakefield, Sir Wavell (Marylebone)
Orr-Ewing, Ian L. (Weston-super-Mare)	Smithers, Peter (Winchester)	Walker-Smith, D. C.
Osborne, C.	Smithers, Sir Waldron (Orpington)	Ward, Hon. George (Worcester)
Partridge, E.	Smyth, Brig. J. G. (Norwood)	Ward, Miss I. (Tynemouth)
Peake, Rt. Hon. O.	Snadden, W. McN.	Waterhouse, Capt. Rt. Hon. C.
Perkins, W. R. D.	Soames, Capt. C.	Watkinson, H. A.
Peto, Brig. C. H. M.	Spearman, A. C. M.	Webbe, Sir H. (London & Westminster)
Peyton, J. W. W.	Speir, R. M.	White, Baker (Canterbury)
Pickthorn, K. W. M.	Spens, Sir Patrick (Kensington, S.)	Williams, Rt. Hon. Charles (Torquay)
Pitman, I. J.	Stanley, Capt. Hon. Richard	Williams, Gerald (Tonbridge)
Powell, J. Enoch	Stevens, G. P.	Williams, Sir Herbert (Croydon, E.)
Price, Henry (Lewisham, W.)	Steward, W. A. (Woolwich, W.)	Williams, R. Dudley (Exeter)
Prior-Palmer, Brig. O. L.	Stoddart-Scott, Col. M.	Wills, G.
Profumo, J. D.	Storey, S.	Wilson, Geoffrey (Truro)
Raikes, H. V.	Strauss, Henry (Norwich, S.)	Wood, Hon. R.
Rayner, Brig. R.	Stuart, Rt. Hon. James (Moray)	York, C.
Redmayne, M.	Studholme, H. G.
Remnant, Hon. P.	Summers, G. S.	TELLERS FOR THE AYES:
Renton, D. L. M.	Sutcliffe, H.	Mr. Buchan-Hepburn and
Roberts, Peter (Heeley)	Taylor, Charles (Eastbourne)	Mr. Butcher.
Robertson, Sir David	Taylor, William (Bradford, N.)
NOES
Acland, Sir Richard	Crosland, C. A. R.	Griffiths, David (Rother Valley)
Adams, Richard	Crossman, R. H. S.	Griffiths, Rt. Hon. James (Llanelly)
Albu, A. H.	Cullen, Mrs. A.	Griffiths, William (Exchange)
Allen, Arthur (Boswerth)	Daines, P.	Hale, Leslie (Oldham, W.)
Allen, Scholefield (Crewe)	Dalton, Rt. Hon. H.	Hall, Rt. Hon. Glenvil (Colne Valley)
Anderson, Alexander (Motherwell)	Darling, George (Hillsborough)	Hall, John T. (Gateshead, W.)
Anderson, Frank (Whitehaven)	Davies A. Edward (Stoke, N.)	Hamilton, W. W.
Attlee, Rt. Hon. C. R.	Davies, Ernest (Enfield, E.)	Hannan, W.
Awbery, S. S.	Davies, Harold (Leek)	Hardy, E. A.
Bacon, Miss Alice	Davies, Stephen (Merthyr)	Hargreaves, A.
Baird, J.	de Freitas, Geoffrey	Harrison, J. (Nottingham, E.)
Balfour, A.	Deer, G.	Hastings, S.
Barnes, Rt. Hon. A. J.	Delargy, H. J.	Healey, Denis (Leeds, S. E.)
Bellenger, Rt. Hon. F. J.	Dodds, N. N.	Henderson, Rt. Hon. A. (Rowley Regis)
Bence, C. R.	Donnelly, D. L.	Herbison, Miss M.
Benn, Wedgwood	Driberg, T. E. N.	Hewitson, Capt. M.
Benson, G.	Dugdale, Rt. Hon. John (W. Bromwich)	Hobson, C. R.
Beswick, F.	Ede, Rt. Hon. J. C.	Holman, P.
Bevan, Rt. Hon. A. (Ebbw Vale)	Edelman, M.	Holmes, Horace (Hemsworth)
Bing, G. H. C.	Edwards, John (Brighouse)	Houghton, Douglas
Blackburn, F.	Edwards, Rt. Hon. Ness (Caerphilly)	Hubbard, T. F.
Blenkinsop, A.	Edwards, W. J. (Stepney)	Hudson, James (Ealing, N.)
Blyton, W. R.	Evans, Albert (Islington, S. W.)	Hughes, Cledwyn (Anglesey)
Boardman, H.	Evans, Edward (Lowestoft)	Hughes, Emrys (S. Ayrshire)
Bottomley, Rt. Hon. A. G.	Evans, Stanley (Wednesbury)	Hughes, Hector (Aberdeen, N.)
Bowles, F. G.	Ewart, R.	Hynd, H. (Accrington)
Braddock, Mrs. Elizabeth	Fernyhough, E.	Hynd, J. B. (Attercliffe)
Brockway, A. F.	Field, W. J.	Irvine, A. J. (Edge Hill)
Broughton, Dr. A. D. D.		Irving, W. J. (Wood Green)
Brown, Rt. Hon. George (Belper)	Fienburgh, W.	Isaacs, Rt. Hon. G. A.
Brown, Thomas (Ince)	Finch, H. J.	Jay, Rt. Hon. D. P. T.
Burke, W. A.	Follick, M.	Jeger, George (Goole)
Burton, Miss F. E.	Foot, M. M.	Jeger, Dr. Santo (St. Pancras, S.)
Butler, Herbert (Hackney, S.)	Forman, J. C.	Johnson, James (Rugby)
Callaghan, L. J.	Fraser, Thomas (Hamilton)	Jones, David (Hartlepool)
Carmichael, J.	Freeman, John (Watford)	Jones, Frederick Elwyn (West Ham, S.)
Castle, Mrs. B. A.	Freeman, Peter (Newport)	Jones, Jack (Rotherham)
Champion, A. J.	Gaitskell, Rt. Hon. H. T. N.	Jones, T. W. (Merioneth)
Chapman, W. D.	Gibson, C. W.	Keenan, W.
Chetwynd, G. R.	Glanville, James	Kenyon, C.
Clunie, J.	Gooch, E. G.	Key, Rt. Hon. C. W.
Coldrick, W.	Gordon Walker, Rt. Hon. P. C.	King, Dr. H. M.
Collick, P. H.	Greenwood, Anthony (Rossendale)	Kinley, J.
Corbet, Mrs. Freda	Greenwood, Rt. Hn. Arthur (Wakefield)	Lee, Frederick (Newton)
Cove, W. G.	Grenfell, Rt. Hon. D. R.	Lee, Miss Jennie (Cannock)
Craddock, George (Bradford, S.)	Grey, C. F.	Lever, Harold (Cheetham)

Lever, Leslie (Ardwick)	Pargiter, G. A.	Sylvester, G. O.
Lewis, Arthur	Parker, J.	Taylor, Bernard (Mansfield)
Lindgren, G. S.	Plummer, Sir Leslie	Taylor, John (West Lothian)
Lipton, Lt.-Col. M.	Poole, C. C.	Thomas, David (Aberdare)
Logan, D. G.	Popplewell, E.	Thomas, George (Cardiff)
MacColl, J. E.	Porter, G.	Thomas, Iorwerth (Rhondda, W.)
McGhee, H. G.	Price, Joseph T. (Westhoughton)	Thomas, Ivor Owen (Wrekin)
McInnes, J.	Price, Philips (Gloucestershire, W.)	Thomson, George (Dundee, E.)
McKay, John (Wallsend)	Proctor, W. T.	Thorneycroft, Harry (Clayton)
McLeavy, F.	Pursey, Cmdr. H.	Thurtle, Ernest
MacMillan, M. K. (Western Isles)	Rankin, John	Timmons, J.
MacPherson, Malcolm (Stirling)	Reeves, J.	Tomney, F.
Mainwaring, W. H.	Reid, Thomas (Swindon)	Turner-Samuels, M.
Mallalieu, E. L. (Brigg)	Reid, William (Camlachie)	Ungoed-Thomas, Sir Lynn
Mallalieu, J. P. W. (Huddersfield, E.)	Rhodes, H.	Usborne, H. C.
Mann, Mrs. Jean	Robens, Rt. Hon. A.	Viant, S. P.
Manuel, A. C.	Roberts, Albert (Normanton)	Wallace, H. W.
Marquand, Rt. Hon. H. A.	Robinson, Kenneth (St. Pancras, N.)	Watkins, T. E.
Mayhew, C. P.	Rogers, George (Kensington, N.)	Webb, Rt. Hon. M. (Bradford, C.)
Mellish, R. J.	Ross, William	Weitzman, D.
Mikardo, Ian	Royle, C.	Wells, Percy (Faversham)
Mitchison, G. R.	Schofield, S. (Barnsley)	Wells, William (Walsall)
Monslow, W.	Shackleton, E. A. A.	West, D. G.
Moody, A. S.	Shawcross, Rt. Hon. Sir Hartley	White, Mrs. Eirene (E. Flint)
Morgan, Dr. H. B. W.	Shinwell, Rt. Hon. E.	White, Henry (Derbyshire, N. E.)
Morley, R.	Short, E. W.	Whiteley, Rt. Hon. W.
Morris, Percy (Swansea, W.)	Shurmer, P. L. E.	Wigg, George
Morrison, Rt. Hon. H. (Lewisham, S.)	Silverman, Julius (Erdington)	Wilcock, Group Capt. C. A. B.
Mort, D. L.	Silverman, Sydney (Nelson)	Wilkins, W. A.
Moyle, A.	Simmons, C. J. (Brierley Hill)	Willey, F. T.
Mulley, F. W.	Slater, J.	Williams, David (Neath)
Murray, J. D.	Smith, Ellis (Stoke, S.)	Williams, Rev. Llywelyn (Abertillery)
Nally, W.	Smith, Norman (Nottingham, S.)	Williams, Ronald (Wigan)
Neal, Harold (Bolsover)	Snow, J. W.	Williams, W. R. (Droylsden)
Noel-Baker, Rt. Hon. P. J.	Sorensen, R. W.	Williams, W. T. (Hammersmith, S.)
O'Brien, T.	Soskice, Rt. Hon. Sir Frank	Wilson, Rt. Hon. Harold (Huyton)
Oldfield, W. H.	Sparks, J. A.	Winterbottom, Ian (Nottingham, C.)
Oliver, G. H.	Steele, T.	Winterbottom, Richard (Brightside)
Orbach, M.	Stewart, Michael (Fulham, E.)	Woodburn, Rt. Hon. A.
Oswald, T.	Stokes, Rt. Hon. R. R.	Wyatt, W. L.
Padley, W. E.	Strachey, Rt. Hon. J.	Yates, V. F.
Paling, Rt. Hon. W. (Dearne Valley)	Strauss, Rt. Hon. George (Vauxhall)	Younger, Rt. Hon. K.
Paling, Will T. (Dewsbury)	Stress, Dr. Barnatt
Palmer, A. M. F.	Summerskill, Rt. Hon. E.	TELLERS FOR THE NOES:
Pannell, Charles	Swingler, S. T.	Mr. Bowden and Mr. Pearson.

Bill accordingly read a Second time.

Committed to a Committee of the whole House.—[Mr. Studholme.]

Committee upon Monday next.