HC Deb 23 October 1952 vol 505 cc1274-406

3.44 p.m.

The Minister of Supply (Mr. Duncan Sandys)

I beg to move, That this House approves the policy of Her Majesty's Government in regard to the Iron and Steel Industry as set out in Command Paper No. 8619. In presenting to the House the Government's proposals in regard to the future of this great industry, we have two main objectives. The first is to restore conditions of independence, initiative and enterprise in the iron and steel industry, which, I may say straight away, we do not consider to be possible under State ownership. The other objective is to provide effective means for the supervision of the whole of the iron and steel industry and so bring to an end the arbitrary division which was created by the 1949 Act.

The present organisation set up by that Act possesses all the usual and fundamental weaknesses of any system of nationalisation. Despite the well-meaning—I am not suggesting that they were not sincere—references in that Act to the desirability of de-centralisation, it is clear that the continuance of a system of nationalisation, if it is to be a reality, must mean the progressive tightening of central control in the steel industry.

It must mean control of the finance of the steel companies by the State Corporation and, through that, control of the major policy of each one of those companies. The fact that the steel companies are accountable to the State Corporation, which, unlike an ordinary body of shareholders, is in continuous session and has its own staff of experts, must inevitably sap the individual initiative of the companies and create among them an over-cautious and bureaucratic outlook. [HON. MEMBERS: "Nonsense."] That cannot really be denied unless, of course, nationalisation is not to be a reality but is to be just a façade and the Corporation is to put its rubber stamp on practically anything that any of the companies may propose, in which case it creates among the companies and upon their boards an attitude of financial irresponsibility and is a direct temptation to them to put forward extravagant schemes.

Another result of the 1949 nationalisation has been to create a vast State monopoly, a monopoly outside the purview of the Monopolies Commission and one which provides no adequate protection for the consumer. It is true that there is a Consumers' Council, but I submit to the House that this form of indirect consultation is no substitute for the direct participation of the consumers on the supervisory Board which we now propose.

Furthermore, nationalisation has created a very serious anomaly. In the process of nationalisation, the State was inevitably obliged to take over extensive engineering and other extraneous activities outside the steel industry because they happened to form part of the undertakings of the companies which were nationalised. It is altogether inappropriate that a state steel corporation should control and finance large businesses in other industries which are not nationalised, like bridge-building and chemicals, both at home and abroad.

The purpose of the Iron and Steel Act of 1949 was to nationalise large sections of the steel industry and not to introduce all sorts of extraneous activities and bring them under the control of the State. It is interesting to note that, although the profits from these outside sources have undoubtedly helped to swell the revenue of the nationalised industry, the State Corporation in its recent report thought it worth while to suggest that it might be desirable to consider making other arrangements for carrying on these outside activities.

But perhaps the most unsatisfactory of all the features of the present system is that it has resulted in splitting the industry arbitrarily into two, into a private and a public sector. The 1949 Act did not provide in any way for the supervision of the industry as a whole, and the job of reconciling the differences between the various interests in the industry which overlap the rather haphazard boundaries delineated by the 1949 Act now falls to the Government, which means to the Ministry of Supply. We do not consider this to be desirable.

That is by no means a theoretical point. In the last 12 months I have seen for myself that the Government have had to be brought in on a number of occasions to resolve all sorts of differences between various branches of the iron and steel industry both in the public and private sectors—for example, over the question of the distribution of coke and pig iron as between the steel makers and the foundries. In fact, I am convinced, that, even if nationalisation were to continue, a radical change in the present organisation would be necessary. Some new body, divorced from the responsibility of ownership, would have to be created to handle the common problems of the iron and steel industry as a whole, and I have no doubt that hon. Members opposite, coming fresh from their party meeting this morning, will be the first to appreciate the advantage of having one body whose authority extends over the whole field, including the private sector.

Mr. I. Mikardo (Reading, South)

Comic cuts.

Mr. Sandys

The basic defects of principle and organisation to which I have referred in the existing system would be serious in any industry. They are doubly serious in an industry which is responsible for providing the basic raw materials for about half of our export trade.

I thought it right to explain at the beginning of the debate why we do not feel able to leave things as they are. The changes which we propose in the White Paper flow quite naturally from our criticism of the present system. We published our proposals in considerable detail because we wanted to give an opportunity for considered criticism and constructive suggestions for the improvement of the scheme before the introduction of the Bill. I think I may fairly claim that the reception given so far to the White Paper has been encouraging. There has been very little unfavourable criticism of an objective character. Even the reactions from the party opposite have been very mild. Apart from a few half-hearted growls. they have really hardly reacted at all.

Mr. C. R. Hobson (Keighley)

Just wait.

Mr. Sandys

So far they have hardly reacted at all. The truth is that the White Paper has come as a big disappointment to the party opposite because it has turned out to be far less controversial than they had expected and hoped.

Mr. Hobson

See what Cleveland says.

Mr. Sandys

Also, it seems that they have been rather put off their stroke by finding that some of our proposals bear a certain similarity to the scheme worked out between the British Iron and Steel Federation and the late Government—a scheme which was toyed with for some time by right hon. Gentlemen opposite before they decided upon nationalisation.

To carry out our two objectives, we propose to set up two distinct bodies, a Board to supervise the industry and an Agency to take over and dispose of the assets now owned by the State. The Agency will act on behalf of the Treasury in a dual capacity, as a holding company and as a disposals organisation. It will be financed by the Treasury and any money it receives over and above its current needs will be paid into the Exchequer. We propose to give to the Agency very wide discretion in the planning and timing of its selling operations, and we propose to give it power to effect amalgamations and modifications of capital structure in the companies before offering them for sale.

Mr. Mikardo

Job lots for the boys.

Mr. Sandys

All these operations, including, of course, the question of the actual terms of sale, will require to be approved by the Treasury, who will be answerable to Parliament in regard to them. They will also be required to seek the approval of the Iron and Steel Board for their proposed amalgamations.

The question of the terms of sale has been discussed a great deal and we propose to do our best to see that fair prices are calculated. We have not got the advantage which hon. Members opposite had at the time of nationalisation of having Stock Exchange quotations, but we intend to do our best to calculate a fair price in each case, fair to the investor and fair to the public purse. A variety of factors will have to be taken into account in deciding what is a fair price. These are set out pretty fully in the White Paper.

Investors will be able to present iron and steel stock in payment for steel shares. I have seen it suggested that iron and steel stock should be accepted from former shareholders not at their current market values, but at par. I think there would be some justice in that claim if the price which was to be asked for the steel shares was to be rigidly related to the compensation values; but since the prices will be based upon current values—and that is the only fair basis that we can take—I think it is quite right that Government stocks should be valued on the same footing.

These large and complicated selling operations are bound to take some time. We have said quite frankly in the White Paper that they may take some years. It is much better not to underrate the difficulty which we shall have in undoing the harm which was done by hon. and right hon. Gentlemen opposite. There is some fear, which I have seen expressed in different quarters, that during the transition period the plans for the expansion and modernisation of the steel industry may be held up by lack of finance. There is no danger of that. Once the companies are returned to private enterprise, it will, of course, be the responsibility of their boards of directors to find finance for development. But so long as they continue to be held by the Agency, that body will be able to seek from the Treasury the finance needed to carry through modernisation and development schemes.

Mr. Mikardo

Public finance for private profit.

Mr. Sandys

The hon. Gentleman did not hear what I said, which was that so long as the companies continue to be held by the Agency, this is to say, continue to be State-owned, they will continue to receive financial facilities from the Treasury which are now open to them. In other words——

Mr. Mikardo

In order to create capacity which will make them a profitable thing to sell. That precisely makes my point. This is the use, currently, of public finance in order to create future private profit.

Mr. Sandys

That is a distortion of the position.

Mr. Mikardo

That is exactly what the right hon. Gentleman said.

Mr. Sandys

If additional capital is invested in these businesses before they are sold, obviously their value will increase and the prices to be asked for them will be put up.

I have seen some anxiety expressed in connection with one point which I should like to mention in passing. The Bill will include a Clause providing compensation in appropriate cases for employees of nationalised companies who may suffer as a result of amalgamations or in other ways. Here I should like also to say a word about a point not mentioned in the White Paper, the question of supervision of monopolistic practices. The late Government, in accordance with their policy exempted the nationalised industries from the operations of the Monopolies Commission. As the steel companies return to private ownership they will, of course, automatically come within the scope of the Commission, but we also propose to provide that, even while the companies continue to be held by the Agency, they will be made subject to the same rules as everybody else and will not, just because they are State-owned, be given a privileged and sheltered position.

Mr. Austen Albu (Edmonton)

Does that mean that the Monopolies Commission will have the right to investigate the reasons which led the Ministry of Supply to raise the price of steel?

Mr. Sandys

That has nothing to do with the point, which is that if these companies individually engage in anything in the nature of restrictive practices, they will come within the competence and scope of the Monopolies Commission. We will put in a Clause which will not make them subject to any reproach from the fact that they happen to be held by the Agency, but which will ensure that all the individual companies will be subject to the same scrutiny by the Monopolies Commission as private companies.

I do not propose to say anything about what has become known as "the Strauss threat," except to make it clear—[Interruption.] I am sure that the right hon. Member for Vauxhall (Mr. G. R. Strauss) knows quite well to what I refer, the remarks made in his speech a year ago.

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

To call it a threat of mine is, of course, ridiculous. I was just expressing my own personal opinion.

Mr. Sandys

I should like to say a word about that in a moment. No threat of any kind will deflect us from our purpose to restore the steel industry to private ownership. The right hon. Gen- tleman said that he was not speaking for himself.

Mr. Strauss

I was speaking for the party.

Mr. Sandys

It is good to know that, because since then a much more carefully considered statement of Socialist policy has been issued, in the pamphlet called "Facing the Facts." It is just worth noting what is said there. [An HON. MEMBER: "Read it."] I will read it. It is quite short. It says: Labour pledges itself, wherever the public interest requires, to restore to public ownership those sections of the transport and iron and steel industries which are sold to private buyers. This is a much more equivocal statement than the one which the right hon. Gentleman made. The operative words clearly are "wherever the public interest requires," and I have no doubt that that phrase took quite a lot of working out and that it covers quite a wide divergence of view. At least it has one merit, that it still leaves the issue open. [An HON. MEMBER: "Oh, no."] It does. It qualifies it by the words "wherever the public interest requires."

Mr. Mikardo

The City will not be kidded by this.

Mr. Sandys

Of course, it was not explained in what way the public interest required the nationalisation of the steel industry in the first place. The right hon. Member for Lewisham, South (Mr. H. Morrison) made an admirable remark in 1945, when he was still fresh at the beginning of his term of office, that the onus of proof is on the nationalisers. I do ask——

Mr. Herbert Morrison (Lewisham, South)

Can the right hon. Gentleman and anybody else opposite never finish this quotation? I said that, and say it again. I think I am going to say it this weekend. Why does not the right hon. Gentleman finish my quotation? It was: and the onus of proof for capitalist ownership is on the anti-nationalisers.

Mr. Sandys

I have here what the right hon. Gentleman said, but I think he made a revised version of it later. He said: I agree that, in the argument about nationalisation, there is the onus upon the party that is proceeding to nationalise, to prove that the nationalisation is in the public interest.

Several Hon. Members

Read on.

Mr. Sandys

Of course I will read on: I agree that the party in power proposing these things ought not to do it for political or doctrinaire considerations."—[OFFICIAL REPORT, 6th December, 1945; Vol. 416, c. 2637.]

Mr. Morrison

That is quite all right. It is sensible and I adhere to it. It arose in the course of debate. If I remember rightly, the original statement was made in Canada. [HON. MEMBERS: "Oh!"] I am not departing from that at all; I adhere to it most firmly; but I said then, and I said it persistently, that there is a deeper obligation upon the antinationalisers to prove their case. Surely that is reasonable?

Mr. Sandys

I think that is a very weak way out of the difficulty. What I want to know is what proof was ever provided that it was in the national interest to nationalise the steel industry? What proof was there? The industry was working smoothly and efficiently. It was beating every production target set by the late Government.

Mr. Jack Jones (Rotherham)

It still is.

Mr. Sandys

It was constantly being praised by Labour Ministers for that. It was actively expanding its production capacity up to the very limit.

Mr. Jones

It still is.

Mr. Sandys

Its prices were almost the lowest in the world. Its labour relations were exemplary. I think the hon. Member for Rotherham (Mr. Jack Jones) has testified to that on more than one occasion. It was co-operating closely with the Government——

Mr. Jones

It still is.

Mr. Sandys

That was the case against the steel industry! Clearly the public interest required that it should be nationalised! I am sorry to quote the right hon. Member for Lewisham, South again, but he makes some very apposite remarks. He once said in the same connection that the steel problem is not in its essence a matter of party politics at all, it is, in its essence, a business matter. Again we can agree with the right hon. Gentleman. That is what we have been saying all along. Yet I think the House will agree with me that party politics is the only explanation we can find for the nationalisation of the steel industry. If I may adapt the right hon. Gentleman's phrase, I would say that it is our intention as a matter of practical—[An HON. MEMBER: "Party politics."]—as a matter of practical business to undo the wrong that was done as a matter of party politics. [An HON. MEMBER: "You are making heavy weather."]

Let me move into calmer waters. The Bill is divided into two parts. One deals with the transfer of ownership and the other with the supervision of the industry. On the supervision of the industry, while we may have differences as to organisation, the acute issue of ownership does not arise. It may be convenient if I go into some detail in explaining the functions and the powers which we propose to give to the new Board.

In considering the formation of this new Board, we naturally took account of the valuable experience gained under the two previous bodies set up earlier to supervise the iron and steel industry. First, there was the Import Duties Advisory Committee before the war and then the Iron and Steel Board set up by the late Government in 1946.

The views of the Import Duties Advisory Committee were set out in their report of 1937, from which I want to read one extract to the House. It is this: Not the least important of the developments which have taken place is the acceptance both by the industry and by public opinion of a general oversight of the policy of the industry by an independent body looking to the public interest in its widest sense…. It is, we think, desirable that the industry should be encouraged to continue to work out its own organisation and frame its own policy in co-operation with some body representative of the State so that there may be a full and fair trial of the possibility of combining individual responsibility and initiative on the one hand with co-ordinated action and full recognition of national interests on the other. The Board set up by the Labour Government in 1946 was just the kind of organisation which had been envisaged by the Import Duties Advisory Committee. I think it is agreed on all sides that this Iron and Steel Board often known as the Forbes Board, was an outstanding success. Although it was brought to an untimely end by nationalisation, it survived long enough to demonstrate beyond all doubt that it was possible to combine effectively the advantages of private enterprise with the safeguards of public supervision.

Our plan is to carry forward this successful constitutional development from the point where it was interrupted by the party opposite. Ignoring the irrelevant interlude of nationalisation, we shall recreate an Iron and Steel Board, but this time we intend to make it a statutory body with statutory powers of its own.

One of the most important duties of the new Board will be in regard to development. Here there are two main problems. One is to ensure that necessary schemes of modernisation and expansion are carried through to meet the requirements of the consuming industries. The other is to prevent ill-conceived development schemes which would waste national resources on a large scale and would unbalance the structure of the industry.

Normally the Board will, I expect, exercise its influence upon the industry by discussion and persuasion, and I have no doubt that it will recognise the importance of carrying the opinion of the industry with it.

Mr. Emrys Hughes (South Ayrshire)

Will Herr Krupp be invited to join the new Board?

Mr. Sandys

I think I can leave that question to the hon. Member to answer. He is probably more familiar with the gentleman than I am.

Mr. Hughes

Your side is.

Mr. Sandys

As I have said, the Board will normally, I imagine, exercise its influence by persuasion and discussion. Nevertheless, we are providing in the Bill two statutory powers in regard to development—one of them negative and the other positive. On the negative side the Board will be empowered to require that major schemes of development shall be submitted to it, and will have the right to withhold its approval in the case of large schemes which in its opinion are likely seriously to prejudice the balanced development of the industry. Since we regard it as a serious thing to interfere with the right of companies to spend their own money in their own way and to take risks as they think right, we shall also provide a right of appeal to the Minister against the decision of the Board.

Mr. Sydney Silverman (Nelson and Colne)

These are obviously matters which must affect the whole community. Will the Board be in any way responsible to Parliament for its decisions?

Mr. Sandys

The Board will make an annual report to Parliament and will publish its accounts.

Mr. Silverman

The answer then, is "No."

Mr. Sandys

To that extent the Board's affairs will be subject to discussion by Parliament. In addition, the Minister will be provided with certain powers in the Bill, which are referred to in the White Paper, and, of course, he will be answerable to Parliament in respect of them. We have put in as few Government powers as possible, but nevertheless they cover a number of important spheres. There will be the necessary Parliamentary supervision at the points which matter most.

I have dealt with the negative side. I now come to the positive. It will be the duty of the Board to keep under regular review the production facilities and to ensure the provision of such additional or more up-to-date capacity as may be needed to meet the requirements of the metal-using industries and of our export trade. If, in the opinion of the Board as a result of its review, it comes to the conclusion that additional capacity and facilities are needed over and above what the industry is already planning, then the Board will ask the industry to provide it.

The question arises, of course, as to what can be done in the exceptional case—and I believe that it will be a very exceptional case—where a scheme proposed by the Board is regarded by the industry as being uneconomic and no firm can be found which is willing to undertake it.

Two alternative suggestions have been made. One is that a company should be compelled to undertake a scheme which the Board consider desirable. I think that the House will agree that it would be not only wrong but quite impractical to ask a company, using its shareholders' money, to carry out a scheme which it thinks is unsound. Nor would the company have any hope of raising new money for it.

The other suggestion was that the Board itself should have the right to set up works and to operate them.

Mr. Albu

At the taxpayer's expense.

Mr. Sandys

That is a suggestion which has been widely made. At first sight it has some attractions, but we felt obliged to reject it; for we felt that, if the Board itself were to start up in competition with other works, its position as an impartial arbiter over the whole industry in respect of prices and other matters would be greatly impaired. We therefore came to the conclusion that in a case of this kind it must be the Government who undertake the scheme and we are therefore providing that power in the Bill.

Mr. George Chetwynd (Stockton-on-Tees)

Can the right hon. Gentleman say why it is unfair for shareholders to take on an uneconomic venture but it is right for the taxpayer to take it?

Mr. Sandys

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 often occur. It certainly does not arise now. The Corporation has no obligation to carry out uneconomic schemes. It has, in fact, an obligation under the 1949 Act to make both ends meet. The Government are not now able to direct the Corporation to carry out schemes which they consider are going to run at a loss. We are not therefore introducing any very novel principle.

We are giving this power to the Government because we have to foresee all possible eventualities, however unlikely. But 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. In that case it is quite right that the Government should bear the financial responsibility.

Mr. H. Morrison

I am sorry to interrupt the right hon. Gentleman, but I do not think he has referred to paragraph 18 of Cmd. 8619. I wonder whether he would be good enough to explain how he interprets it. The paragraph states: The Bill will provide that all producers of iron and steel shall be deemed to have entered into a contractual obligation with the Board to observe their decisions in relation to development and prices. The Board's decisions will thus be enforceable by civil proceedings for an injunction. Is there a positive power or is it entirely negative? I read it at first sight as if it could be both positive and negative.

Mr. Sandys

I was going to say something about that later, but I will refer to it now if it suits the right hon. Gentleman. We are faced with the problem of how the Board is going to enforce its decisions in regard to prices and development. The question of raw materials is a slightly different problem, as the right hon. Gentleman realises.

There are two ways in which it could be done. One is through the process of criminal law and the other is through civil proceedings. Of course, the prices orders which are now issued by the Government are backed by the criminal law, but we did not feel that it was right to give a body which is not directly answerable to Parliament the power to create, by its decisions, what amount to criminal offences. Therefore, we decided that enforcement should be through civil proceedings.

The procedure which will be incorporated in the Bill is that every iron and steel company which comes within the purview of the Board will be deemed to have entered into a contractual obligation with the Board to abide by its decisions in regard to prices and development. I know that this business of "deeming" is a queer one. I believe that it was Lord Macmillan, a distinguished judge, who said that Acts of Parliament are constantly bidding us to deem something to be what it plainly is not.

I have no doubt that this will be another case, but it will certainly not be the first time that that procedure has been resorted to in legislation. I believe that the procedure of civil injunction will be effective and it will avoid invoking the criminal law.

Mr. Roy Jenkins (Birmingham, Stechford)

Will the right hon. Gentleman allow me to go back to something which he said a moment ago? He stated that he wanted to deal with any possible eventuality. There might be a difference of opinion as to what is an economic proposition and what is not. The Government may say something is economic and a company may say that it is not and refuse to do it. If the Government then undertake the proposition and it turns out in fact to be perfectly economical and makes a reasonable profit, what happens then? Do the Government continue to run it or is it then to be sold to private shareholders?

Mr. Sandys

That is a decision for the Government of the day to take. The question is whether the Government want to be permanently engaged in iron and steel. I cannot conceive that the Government would ever have to carry out a scheme of this kind unless it was not a commercial proposition. If the need for a particular undertaking ceased, then the Government would have to decide whether to close down the works or sell or go on manufacturing—there are already many Government factories, such as ordnance factories. I cannot say now exactly what decision would be taken in the circumstances envisaged by the hon. Gentleman.

The second major responsibility of the Board will be in regard to prices. Supervision may be necessary for two reasons. It may be necessary to prevent makers of iron and steel from charging excessive prices. On the other hand, it may be necessary to prevent speculators outside the industry in time of shortage buying steel and re-selling it on the black market. Those are quite separate and distinct problems. The task of curbing 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.

No doubt before long the House will have to consider what permanent powers are to be provided for dealing with racketeers of all kinds when the present emergency legislation comes to an end, but that is clearly outside the scope of an Iron and Steel Bill. In normal times the task of ensuring that iron and steel makers do not charge excessive prices is best undertaken, not by the Government, but by an independent body such as this new Board which includes both consumers and producers.

However, we also propose to give a reserve power to the Government to override the Board on prices if this is necessary in the national interest. Many may say that that is quite an unnecessary power and they might be right, but we feel nonetheless that, in view of the great importance of the iron and steel producing and consuming industries, it is right to provide this final safeguard.

A very important function of the Board, in addition to the supervision of prices and development, will be in regard to the supply of raw materials. One of the main problems in the years ahead clearly is going to be to buy from abroad sufficient raw materials, and in particular high-grade iron ore. Since the war the iron and steel industry has been buying its foreign ore through its own central buying organisation.

Mr. Jack Jones

In bulk.

Mr. Sandys

Yes. We on this side of the House have never objected to bulk buying. [HON. MEMBERS: "Oh!"] What we object to is State bulk buying, which is quite a different thing. [HON. MEMBERS: "Oh!"] This system has worked smoothly and efficiently. I want to emphasise that nothing in our proposals set out in the White Paper will prevent the continuance of those arrangements should they be desirable.

The Board will, however, have the duty of keeping the supply of raw materials for the industry under review. If the industry should at any time fail to assure adequate supplies of raw materials, the Board will have the power to make other arrangements.

In this connection there is a point in the White Paper which seems to have given rise to some misunderstanding. I refer to the provision that imported materials may, with the consent of the Government, be re-sold below cost and the difference recovered by means of a levy charged on the iron and steel producers.

Mr. Jack Jones

Will the right hon. Gentleman allow me to interrupt for one second?

Mr. Sandys

No, I am sorry; I have given way quite a lot. That, of course, is the present system. It has undoubtedly helped to maintain stable and relatively low prices for steel. Nevertheless, it possesses all the disadvantages of any system of price averaging in that it masks real costs and interferes with the healthy operation of normal economic forces. But it would be quite impossible to end that system overnight without very serious disturbance to both consumers and producers.

On the other hand, I am sure that that is the direction in which we must try to move. In fact, I took the first step the other day when I authorised an increase in the maximum price of pig iron so as to enable the price of imported ore to be raised to somewhere nearer its true cost. Since this enabled the industry to reduce the levy charged on the steel producers, the prices of steel did not have to be raised. In fact in some cases they were reduced.

I have spoken of the duties and powers of the Board. I come now to the question of the extent of the Board's sphere of responsibility. Our aim is to provide a system of public supervision which, by and large, will embrace the whole of the iron and steel industry and at the same time will not extend beyond it. As the right hon. Member for Vauxhall knows as well as I do, it is no easy matter to decide precisely where to draw the line as between the iron and steel industry, on the one hand, and the engineering industry, on the other.

I can assure the House that it was after much thought and many consultations that we compiled the list of processes set out in the appendix to the White Paper. This list comprises, in the main, basic processes of iron and steel production. The remainder have been included for two reasons, first to ensure their supplies of raw materials, and secondly, to make the supervision of the Board over the basic processes fully effective.

Before drawing up this list, I naturally consulted very thoroughly the principal organisations representing the sections of the industry concerned. I am glad to be able to say that, almost without exception, those included have expressed their approval.

I am, however, aware that there is a certain amount of uneasiness among certain sections of the founders, particularly the steel foundries and what are called the tied foundries which are linked with engineering works. I understand they are afraid that the Board will use its powers to interfere with the day-to-day running of their businesses. I honestly believe that their fears and anxieties are not justified. The foundries came under the supervision of the Iron and Steel Board in 1946 and, so far as I know, there was no friction then. I see no reason why there should be friction now.

As I have already explained, the Board will have powers relating to three specific subjects—development, prices and materials. As regards development, there is, of course, no question of every little foundry expansion scheme having to be submitted and argued out before the Board. The Board will only have power to control major schemes which are of such magnitude as to affect the balance of the industry and I believe that few, if any, foundry development schemes will come into that category. If any do, it is surely reasonable that they should be subject to scrutiny.

As regards prices, experience over the last 12 years has shown that most castings are not easily susceptible to detailed price control and I have no doubt that the Board will recognise that fact. On the other hand, there are certain types of castings, in particular the mass-produced products, where price control has been necessary in the past and might be necessary again. As for the tied foundries, the issue of price control is, of course, largely academic, since the bulk of their output passes directly into the engineering workshops of the same firms and is not sold outside.

There remains the question of materials. It is mainly because the founders use the same materials as the steel producers that they must be regarded as an inseparable part of the iron and steel industry. I think the House should bear in mind that the iron and steel founders together consume no less than 5½ million tons of pig iron and scrap a year. If they were left outside the scheme, the Board would have no direct responsibility for looking after their supplies of raw materials. I am sure, therefore, that, both in their own interest and in the general interest, the founders should be included in this scheme.

A year ago, when in this present Parliament we first debated this question, I stressed the importance which the Government attached to obtaining a lasting settlement of the steel problem. However the party opposite may vote tonight. I hope that they will be fair enough— and I am sure that they will—to recognise that we on this side of the House have made a sincere effort, not only to be constructive, but also to be conciliatory.

Mr. Jack Jones

What about finance?

Mr. Sandys

In July last when the White Paper was published, the right hon. Gentleman the Member for Leeds, South (Mr. Gaitskell) was good enough to say that the Government had offered an olive branch; and I think that the hon. Member for Reading, South (Mr. Mikardo), in more flippant vein, said we had offered not just an olive branch, but a whole grove of olive trees.

Mr. Jones

What about the olives?

Mr. Sandys

The fact is that this White Paper and the proposals in it fully and faithfully implement the principles and policy which the Conservative Party enunciated in opposition, and which were set out in our Election Manifesto. On the other hand, the Labour Party can, I think, justly claim that our proposals contain a number of features which they may consider were in part inspired by the Board which they set up in 1946, and by the T.U.C. Report of 1950. If so, we on this side of the House have no desire to be petty-minded. We are quite prepared to share with hon. Members opposite the credit for the paternity of this fine child.

There is no scheme, however it may be devised, which will give complete satisfaction to everyone. But I sincerely believe that the proposals contained in the White Paper do offer a fair basis for a workable solution, and it is in that spirit that I commend them to the House.

4.43 p.m.

Mr. Herbert Morrison (Lewisham, South)

We are all obliged to the right hon. Gentleman for his exposition of the Government's case. We do not agree with it, but we thank him for his patience in explaining their point of view, and the patience with which he accepted certain—I hope not too rough—interventions from this side of the House. I should like to mention, because I think the House ought to know, that the right hon. Gentleman has made his speech under conditions of considerable physical pain. We are all very sorry about that, and I am sure that all of us on both sides of the House would express our sympathy to him in having to make a speech under those conditions, and the hope that he will soon be completely restored to absolute ease and comfort.

Mr. Sandys

Thank you very much.

Mr. Morrison

This Motion gave us cause for consideration. We came to the conclusion that, rather than put down what is often called a reasoned Amendment—and if we put it down the House may be sure of it being a reasoned Amendment—the better course would be that we should directly oppose the Motion. Therefore, we shall vote against it in the Division Lobbies.

I should like the right hon. Gentleman to understand that he must not walk away with the idea that our opposition to this course of policy is half-baked or weak. It is full-blooded; it is strong, and he must expect the most vigorous and determined opposition to the Bill throughout its consideration by the House of Commons in due course; because we think this policy is bad, we think it is wrong.

The right hon. Gentleman did make a conciliatory offer at the end of his speech, to the effect that this White Paper was their child and the Bill would be their child, but that he was perfectly willing to share the paternity of it with the Opposition. Well, I have heard of bigamous marriages; I have heard of applications in the courts for affiliation orders; but I really think it is a little cool for a gentleman to produce a baby and then say, "Now you shall be the father." I do not think that that is a fair or a reasonable proposition. In any case, we refuse to take any responsibility whatever for the infant. While I will not go so far as did the Prime Minister himself about a Trade Union Bill produced by an earlier Labour Government, when he said, "Take the beastly thing upstairs and wring its neck"—I would not like to say that about any baby, not even the right hon. Gentleman's baby—nevertheless, we feel something of that kind of spirit about it.

The right hon. Gentleman said that nationalisation meant a persistent tightening of central control, and that that was the trouble. If I may say so, if ever there was a public ownership Measure which did not over-do central control it was the Iron and Steel Bill of my right hon. Friend. In fact, one of the charming things about the Labour Government was that all these nationalisation Bills with which I was personally much concerned as we went along, together with the Departmental Ministers, was that none of them were alike. They were all different, and their administrative structure and organisation was varied to meet each case according to the physical circumstances and requirements.

But when we came to iron and steel, the right hon. Gentleman is quite right, we spent a long time coming to a conclusion—and we did come to a conclusion in the end—as to what were the beginning and the end of the industry. Where does it begin; where does it end; what are the physical limitations upon it? It is a difficult thing to decide, and that is why all these matters are taken in, and what he has called extraneous industries or services, which we would not agree with, arose. In the case of this industry, therefore, we decided that the individual undertakings should remain individual undertakings, subject to the co-ordinating and supervising authority of the Iron and Steel Corporation of Great Britain; which in time might well have re-grouped and re-organised many of the undertakings. Indeed, I think that was an essential part of their work.

But it was to be gone about carefully, and therefore if ever there was a case where decentralisation was envisaged it is this. I warn the right hon. Gentleman that if he is not careful, under the policy which he is pursuing, he will get more bureaucratic centralisation and interference under this Board—and remember it is the Board plus Steel House—[HON. MEMBERS: "Plus the Agency."]—plus the Agency—[HON. MEMBERS: "Plus the Ministry."]—yes, plus the Ministry—I think that is about the lot—all of them floating about with powers of intervention of one sort or another. I warn the right hon. Gentleman with great sincerity that if he is not careful he will get a state of bureaucratic interference—checks, balances, starts and stops—which will be even worse than he has imagined is the case with the British Iron and Steel Corporation.

Therefore, the suggestion of tighter central control was untrue, but, even as to what the right hon. Gentleman calls the extraneous part of the industry which we took over, my right hon. Friend, in some cases, where he himself came to the clear conclusion that they were extraneous and unnecessary, made the decision which excluded them, and he left the power to the Corporation to hive off others where it was considered to be appropriate.

Merely saying something and quoting instances does not settle the matter. We may well disagree with the Government as to what should properly be left in and what should properly be hived off, but, with the elasticity of the scheme, the power to hive off was considered to be necessary. However, as we went along, the power was there, and in some cases, that power was exercised.

As to my right hon. Friend's so-called threat, he did not make it as a threat, and it was not as a personal threat. He made the "threat" responsibly on behalf of the Opposition, but it was not really a threat, and that is not a fair word to use. The right hon. Gentleman said what a pity it was that we had announced that we will re-nationalise the industry, but what a great pity it is that he announced the Government's intention to denationalise it—I think, for political and doctrinaire reasons.

I fully agree that the whole business is controversial from start to finish, whoever does anything. I understand that, but we at least did a constructive job, and the Government are doing a destructive job. It is a destructive job that will haunt them and any other Government for many years to cone, unless another Government comes in to put things right.

In these circumstances, it is not fair, as they are the major aggressors in this case—[Interruption.] Oh, yes, they are; they are undoing a constructive Act which was operating. If we merely restore the situation as it was, it is not fair to say that we are playing ducks and drakes with the industry. [HON. MEMBERS: "Of course it is."] No, it is the Government who are playing ducks and drakes with the industry, and they had far better either have left it alone or applied their own constructive ideas, if there be any, in order to make nationalisation a success. That is what they ought to have done, but, as I shall show in due course, they are going to create a more chaotic situation.

As to what proof there was of the need for nationalisation, let me say that if the right hon. Gentleman will read the debates on Second Reading, Committee and Report stages, Third Reading and elsewhere, as well as in the country, I think he will really have to admit that there was a positive and constructive case made for the course recommended to Parliament by my right hon. Friend.

There is one other point to which the right hon. Gentleman has referred, and to which I ought to pay a moment's attention. It is the old story about the Trades Union Congress finding itself in a position whereby the Government could say, "We are doing what the T.U.C. recommended us to do." I dealt with that at the time when I was Lord President, and I thought I completely demolished the argument.

The truth is that the Trades Union Congress, in one of a series of very valuable constructive reports on economic and industrial policy which it has produced for a number of years past, give illustrations as to the various forms of exercising public control. They gave the illustration of outright nationalisation, of which the T.U.C. has never been afraid; indeed, the last Congress went a little further than the General Council wanted them to do in that respect.

They said that there was outright nationalisation, and there was the exercise of economic planning powers and controls. They said, "There is this, that and the other, and many other expedients in practice, or there may be a case for setting up a board, as has been done in the case of the Iron and Steel Board." These were illustrations of alternative methods of enforcing public control and supervision. That was all, and they were illustrative, possible alternatives.

By the way, we did not disband the Iron and Steel Board exactly. There really was a strike on the part of important non-Labour members of that Board. Therefore, to assume that we disbanded it is not right.

The conclusive proof of the T.U.C. attitude is to be found in an introduction, which appeared in May, 1951, to a report called "Public Control of Industry." The General Council in its introduction, says: In political debate, passages in the report referring to the former Iron and Steel Board have been construed as meaning that the T.U.C. disapproves of the nationalisation of the iron and steel industry. This is, of course, not the case, for the Board was mentioned merely as an example of a form of control which could be exercised in appropriate cases in an industry. It was not suggested that its revival was appropriate in the iron and steel industry. I hope, in these circumstances, that we shall never hear any more of the story that the T.U.C. is out of step with——

Mr. Peter Roberts (Sheffield, Heeley)

Will the right hon. Gentleman allow me? I should like to ask him this question. Does he say that the T.U.C. has not repudiated the report they made, or that this was an alternative method of approach?

Mr. Morrison

I do not think the hon. Member could have been listening to me. They really had no need to repudiate the earlier report, I can assure him. What they did was to confirm my interpretation of the report and of what was intended by the General Council.

Mr. Spencer Summers (Aylesbury)

Would the right hon. Gentleman allow me to remind him that the statement from which he has quoted does make the matter quite plain, because the T.U.C. at that time used the words "deserves further consideration." That rather alters the implication which the right hon. Gentleman puts upon it.

Mr. Frederick Lee (Newton)

Will my right hon. Friend also allow me to interrupt him? If he will look at the T.U.C. report for this year, page 249, he will see that, in the letter which was sent to the Minister by the T.U.C., they pointed out that the T.U.C. had for many years advocated the public ownership of the iron and steel industry, and had given full support to the Iron and Steel Act, 1949. They go on to regret wholeheartedly that this Government are to change it back to private enterprise.

Mr. Morrison

I think that, with the aid of my hon. Friend the Member for Newton (Mr. Lee), who functioned as expert witness, our case is completely made out on that point. Moreover, I am reminded that, in the 1950 report of the General Council to the Congress, they refer to the form of control by a statutory board of control, and, in this report, which may well be the one that is in mind, they said: This method has already been used by the Government, for a short period, in the iron and steel industry with the intention of securing a measure of control, pending the transfer of the industry to public ownership. It is not a matter of terrible importance, but it is a pity that there should be a somewhat persistent effort to misrepresent the attitude of the T.U.C.

Hon. Members have had an opportunity of seeing the report of the Iron and Steel Corporation of Great Britain. It is the first annual report, and, therefore, it cannot necessarily take us very far. Moreover, it is something of a compromise report, for two reasons. One is that the Corporation had a change of chairman in the middle, in circumstances with which we are familiar. First was the chairman of a socialised industry who was trying to protect the consumer. Mr. Steven Hardie; and that did not meet with the approval of the Government. I rather like a chairman of a public corporation who tries to protect the consumer, because I am a good consumer's man. However, there was a change, and that made an interruption in the supervision of the Corporation.

Then, there was a change of Government, and a violent change of policy. Therefore, this report has obviously been written and approved by the Board, and signed by the new chairman, Sir John Green, in circumstances of some difficulty, as was bound to be the case. I think we can all agree that even though it is only the first annual report, and for a limited period, the result is encouraging.

The financial results are reasonably good. There is a profit, and let us not be ashamed that a public industry makes a profit. Unfortunately, there is sometimes a feeling of guilt if it does. I rather like it to do so, because the money is useful for future development, particularly in an industry of this sort. On the other hand, one does not want to encourage it to make excessive profits, because that can lead to shortages and excessive prices.

I think that in the circumstances of the case the results are good, and, moreover, production is pretty good. The industry has got on fairly well, and though we were told by the Minister of Supply that in his judgment nationalisation had not been a success, I say—and I say this with all reservation, because the period is short—that it has been a success. Even the Prime Minister in a recent speech stated—he did not say under nationalisation, but the fact is true—that home production was running at the rate of nearly 500,000 tons more than in 1951 and that output was expected to increase by an even greater amount next year.

When the financial result is good and growth in the output is reasonable, and when the process of transferring to public ownership has been achieved, it really is too bad that the Government should come along and upset the apple cart and make all these changes and difficulties. In the White Paper three main duties are imposed upon the Board—the first is development, the second, looking after raw materials, and the third, prices. As to development, one really wants to know what is going to happen.

It is no good the right hon. Gentleman saying that when we nationalised the industry it had a long record of great and useful public service. It had not. I admit there had been some improvements in recent times, but not enough. Indeed, at the beginning of the war our national security was imperilled by the fact that the output of British iron and steel was inadequate; it was not as much as it ought to have been, and not as much as it could have been.

It is the case that in the 30's—we all remember that period; Jarrow, South Wales, Sheffield, and other places remember it well—there was in the hearts and minds of the private owners of the steel industry a desperate feeling that if they went in for a policy of more production they would burn their fingers.

Consequently, it was definitely, and almost by public confession, a policy of go slow, of restrictive output, and it was not until the Government said to the industry, "If you want protective tariffs"—which is what it wanted in order to get easy protection—"you must shake yourselves up; if you do not shake yourselves up, we will take away the preferential tariffs." That was said by a Tory Government.

These were the circumstances of the iron and steel industry. If the right hon. Gentleman says, "Do not worry about that; it is quite a time ago," I would point out that it was not so long ago. It was at the beginning of the war that this industry was letting us down. I not only say that, but also that if this industry goes back to private ownership, to the quasi cartel and monopolistic control of Steel House, there can easily be once again a reversion to restrictive practices in the industry.

Mr. P. Roberts

We must be accurate about this. It is a fact that in 1938 there was a service capacity of 2 million tons above the demand.

Mr. Morrison

The hon. Gentleman and I can only disagree about it. I think the facts I have asserted are within the recollection of the House, and I warn the House that if we are not careful we shall return to that situation. Even under the somewhat improved efforts of the iron and steel industry during the war, when we pushed them along—I was Minister of Supply for a few months and we got a good bit of co-operation—the results not only of nationalisation, but the coming of nationalisation, had some beneficial consequence on the private industry.

I admit that there were some improvements, but, even so, the relative increase of production in the United States in recent years is substantially more than it is with us. The same is true of the Soviet Union, and Germany had to start absolutely from scratch at the end of the war, or near enough from scratch, and she has made a very substantial increase. While our iron and steel industry has improved its production, partly under private ownership and partly under public ownership, the fact is that it has not reached the rate of progress of the United States, of the U.S.S.R. and of Germany.

In view of the fact that iron and steel production is one of the essentials of our future prosperity for home requirements and a vital element in the engineering industry for our export trade, we really cannot be indifferent to the possibilities of slackness in production. How are the Government going to see that the right development takes place? I asked the right hon. Gentleman what was meant by a certain paragraph in the report.

It is the case that quite a number of people inside this industry, or in industries upon its fringes which are covered in the Appendix to the White Paper, are very alarmed at Paragraph 18. I am not entirely in sympathy with all their reasons for being alarmed, but it should be understood that a lot of these people have not been nationalised and have been left a substantial degree of freedom. They are now going to come under a high degee of control.

In this paragraph—and despite my encouragement the right hon. Gentleman did not explain it—it says: All producers of iron and steel shall be deemed to have entered into a contractual obligation with the Board to observe their decisions in relation to development and prices. The right hon. Gentleman said that to give the Board more power to require the industry to spend more money and to incur additional capital liabilities would be unreasonable. But that paragraph either means that that is what is contemplated, or it does not.

I appreciate what the right hon. Gentleman said, that it is not an easy matter for an external authority to require a private concern to spend money. It may be possible—and I do not exclude the possibilities—if, for example, a depression is coming—indeed, it may well be necessary—to require a public industry, and, as far as one can, a private industry, to spend money on capital expenditure, and so on, with a view to mitigating or avoiding the depression.

Mr. Sandys

I should like to clear up a misunderstanding here. Paragraph 18, which deals with the arrangements for enforcing the Board's decisions, obviously applies only to decisions in respect of which the Board have powers. As I explained in my remarks, the powers of the Board in regard to development, apart from their general duty of keeping the industry under review, is an executive power to prevent undesirable schemes from being pursued. Positive power, as I explained, is given to the Government, and, therefore, this process of enforcement does not apply to that.

Mr. Morrison

I am much obliged to the right hon. Gentleman. If I have misunderstood it—it was not an illegitimate misunderstanding—it was as a result of the wording of paragraph 18, which does not distinguish between positive and negative powers. We are now clear from what the right hon. Gentleman has said.

But where does that take us? It takes us to this point: that the Board's power of control and direction is a negative power. I quite agree that in the exercise of economic controls and so on there have got to be some negative powers and some negative directions, but I am bound to say that I do not like them. It is not a happy way of looking after industries to say, "Do not do that" and, "You must not do the other." I would sooner get on with the positive and say, "Come on, boys, let us pull together and build something up." I should not only say that to industry either, but that is by the way.

That is a negative power, as the right hon. Gentleman says. Therefore, to where has he degenerated? He has now got to the point that for the constructive efforts of public ownership he is substituting the negative, destructive bureaucratic powers of direction under the State. This is not what the Prime Minister said when he said, "Set the people free." He said, "Away with all this bureaucracy, away with all this bureaucratic interference." He made smearing references to what my right hon. Friend the Member for Battersea, North (Mr. Jay) is alleged once to have said. I forget just what it was, but it was something about the gentlemen of Whitehall knowing best. I do not know whether it was my right hon. Friend or somebody else, or even whether he said it, but that is what they say.

Having made all these speeches about "Set the people free" and against bureaucratic interference, and especially against negative bureaucratic interference—the "Thou shalt not" type of interference—the right hon. Gentleman now comes and says officially, "This is the power of negative control." That is nothing for a Tory to be proud of. I do not think it is anything for a Socialist to be proud of either. I would sooner get on with the positive and constructive field.

"But," says the right hon. Gentleman, "there is the reserve power to the Minister to be constructive." Now, what is that? It is that if in the circumstances of a particular undertaking he wants them to engage in development, progress and expansionist policy, and, therefore, they must have the money, if the industry is in private ownership—the right hon. Gentleman will correct me if I am wrong—the Minister can, I gather, jump in and find the money and see that the development takes place. If the industry is still in the hands of the Agency—the disposal agency, a sort of body of receivers—the Agency can spend money upon it.

But where does that take us? It takes us precisely to where my hon. Friend the Member for Reading, South (Mr. Mikardo) was indicating earlier: namely, that where there is money to be made, private capitalism shall make it, but where there is money to be risked and lost, John Bull is going to carry that burden. That seems to me to be an utter anti-social conspiracy, and I think that it is pretty shameful.

The basis of the Government's policy is a doubtful effort to extend control, coupled with de-nationalisation, and the extension of control, especially the negative control, is not in accordance with the principles that they have said they will stand for; neither is it in accordance with our principles. Moreover, it is liable to give us the worst of both worlds. It will not be easy to persuade firms to act and to accept financial responsibility, and, therefore, we get a situation which is very unsatisfactory from every possible point of view.

Paragraph 13 is an intriguing paragraph, for it would appear from it that there is power to the Board to restrain a company from putting forward a major scheme of development. Let us see what the paragraph says—this is on "Development": If a company should put forward a major scheme which in the opinion of the Board would seriously prejudice the efficient and economical development of the industry, the Board will have power to restrain that company from embarking upon such a scheme. Companies dissatisfied with the Board's decision will have the right of appeal to the Minister of Supply. I can conceive that in certain circumstances a company might be going haywire and wanting, perhaps, to go too far—I do not know; but it is curious to find in this document that a separate paragraph is actually set out in order to stop a company from doing the big thing. The whole spirit of the White Paper is alarming in that respect.

The Paper seems to me to contemplate a whole series of difficulties, therefore, between the private undertakings in the industry and the bureaucratic machinery of the Board, whilst the Board is doing its best without real power to solve them. As I have said, private industry is not bound to do the job—in fact, the Minister has specifically told them so this afternoon—and if it does not do it, it is the Government, public money, possibly even the taxpayer, who has to come in and foot the Bill.

As these questions illustrate, in the whole field of development, physical changes in the industry and increased production, we know where we are under public ownership; we can have a deliberate policy, we can deliberately do things by the real planning of the industry; but under the White Paper policy, if it can be called a policy, we do not know what is going to happen in the future of the British iron and steel industry.

It is admitted—I think it is stated in the report; certainly it was stated in the development scheme that was put up to the Labour Government by the Iron and Steel Federation—that many millions of new money will have to be invested in the industry if it is to do the real job that we want of it. [An HON. MEMBER: "£300 million."] The right hon. Gentleman has not told us where that money is coming from. He has not indicated that it will come very easily from private investment. He has indicated that the State may have to put its hand in its pocket to put up this money, or part of it, for private industry. The White Paper ought not to leave us in doubt as to where this essential large sum of money is to come from in order that good development may take place in the industry.

Let us come to the policy of denationalisation. I submit that the Board will not be able to do an adequate job for the industry. Where would denationalisation take us? There is this holding and realisation agency. It sounds like a body of receivers calculated to produce a most unsatisfactory result. How can an industry be successfully run with a body of receivers in temporary nominal control of the whole series of undertakings, with a notice in the window, "Will somebody come and buy us out because we want to get rid of ourselves as quickly as possible"? One cannot run a successful business upon that basis.

I am arguing this to show that the process of nationalisation was a relatively smooth, constructive affair. This, however, is going to be a painful dragging out affair lasting over many years, as is ad- mitted in the White Paper. What therefore, is the picture of things which the White Paper holds out? It is the picture of an industry a part of which, possibly the profitable part, will be sold to private investors, who may be steel men—they are just as likely to be banks and insurance people, who know no more about steel than anybody else does.

We may get the de-nationalisation of iron and steel becoming the bankerisation of iron and steel. We might get that done and then have another series of undertakings which were not quite so profitable, with no willing buyers, which would be left in the hands of the disposing agencies—whom I call the receivers—and so, whereas we were getting a coherent industry under nationalisation we would be getting a deliberately divided industry which is all over the place and which has no real coherence about it.

This may go on for years, and whatever may be the theoretical arguments about public ownership for iron and steel, I submit that, as a practical matter, it having been done and the job being on the way, it is really most unwise deliberately to create this chaotic situation which is envisaged by the White Paper. In paragraph 32 the White Paper indicates that we may have to continue for many years a long drawn out policy of division and uncertainty instead of a clear decisive policy of progress as contemplated by the Iron and Steel Corporation.

I understand the Conservative objections in regard to nationalisation, although I do not agree with them; but this policy of destructive dislocation which is to last a long time is indefensible and contrary to the public interest. The more we study the White Paper the more we feel that the Government is leading Parliament to what we might call the graveyard of de-nationalisation. The right hon. Gentleman referred to what my right hon. Friend the Member for Vauxhall (Mr. G. R. Strauss) said about our future policy as a Labour Party. My right hon. Friend made it clear earlier on that the next Labour Government will re-nationalise this basic industry. We shall take back into public ownership the units that we need and we shall not pay again for what has already been paid for by the previous process of nationalisation.

That can and will be called a threat by some people. It was not meant as a threat by my right hon. Friend and it is not said by me as a threat but, as I said on the transport debate, if we had said nothing about this everyone would have tended to assume that when we came back we should leave things as we found them—as they were left by this Government when it went out of office, and if we then proceeded to re-nationalise people would say: "It is not fair; it is a breach of faith. You should have told us what you were doing to do." They would have a particular grievance if we had in mind financial reservations as to compensation and did not indicate where we stood. Therefore, this is not a threat; it is an act of decency. We are doing the right thing.

Some people may disagree with us, but if we intend to do this it is right, it is decent, and it is proper that we should say so. Therefore I say again today what my right hon. Friend said and what we have said more than once that we intend to do about transport, and we shall pursue that policy not as an act of spite or vindictiveness but because we believe that it is a policy which the public interest requires us to pursue.

It is for these reasons that we are opposed to the policy set out in this White Paper, and it is for these reasons that we shall vote against the Motion when it is put from the Chair tonight.

5.25 p.m.

Mr. Spencer Summers (Aylesbury)

I am grateful for having been called now, because it puts an end to the self-control which I was doing my best to exercise to avoid challenging the right hon. Member for Lewisham, South (Mr. H. Morrison) on the persistent distortions of the position to which we have just listened.

I shall deal first with the last remarks he made in regard to threats. During the course of the speech of my right hon. Friend who opened this debate he drew attention to the latest words which have been recorded of the Opposition's views and their future course of action, and he noted that their decision whether or not to undo what is now proposed would be judged by what seemed to them to be in the national interest. The right hon. Gentleman has just told us that he is going to pay no attention to the experience of the new regime in steel, but that he has already made up his mind that some years hence he will take a certain sort of action in the public interest, irrespective of what has happened in the interval between.

If that is not calculated to make quite plain to all and sundry that it is not the welfare of the industry which his party have at heart but the lust for power, I do not know what is.

Mr. M. Follick (Loughborough)

On a point of order. Is it not a tradition of this House that when an hon. Member has an interest in the subject about which he is speaking he is supposed to declare it?

Mr. Deputy-Speaker (Sir Charles MacAndrew)

I do not understand what the hon. Gentleman means. Would he explain it?

Mr. Follick

The hon. Gentleman who is now speaking has an interest in the steel industry, and he should declare that interest at the beginning of his speech

Mr. Deputy-Speaker

That is not so. A Member may not vote on any question in which he has a direct financial interest, but there is no necessity to make any declaration about it.

Mr. Summers

The hon. Gentleman may wish to know that thanks to nationalisation I have no financial interest whatever in the industry. I think it is probable that the hon. Member who raised this point knows perfectly well what is the position. If I omitted anything I should have said I am sorry. Let us get on with what is more important.

The right hon. Member for Lewisham, South took it upon himself to issue a grave warning—I think those were his words—to the Minister, lest the proposals which he had in mind should lead to over-centralisation, quite contrary to the expectation that we heard from the initial speech. I would point out that the form of supervision of the industry which is now proposed—with a few additions, to which I shall refer in a moment—is not dissimilar to that which was established in 1946.

There was then no charge of over-centralisation. The only reason why we have not had over-centralisation in the last two years, under nationalisation, is because it has not got going on what it intended to do. It has barely lost its amateur status—and it is a very good thing for the industry that that is the position. The right hon. Gentleman then went on to enunciate a most remarkable doctrine. He has been in this House very much longer than I have, and I do not want to pursue this point at great length, because his experience might stand him in good stead, but to me it is quite unthinkable to argue that when there is a change of Government, because the new Government has a precisely opposite view from the previous one they should, for some constitutional reason, be debarred from putting that view into effect.

He charges us with the responsibility of putting the clock back and adopting a tit-for-tat attitude, but if he came back into power he would do that self-same thing. To me it is a perfectly proper prospect and, indeed, a duty of a new Government to put into practice those promises which they have made plain to the electorate.

Mr. Frederick Mulley (Sheffield, Park)

What my hon. Friends complain about is that when the party opposite change the status quo it is in the public interest but that when we do it it is revenge. If it is reasonable for a Conversative Government to change the status quo of the industry now, it is also reasonable for us to restore that status quo when we return to power.

Mr. Summers

There is no need to pursue this point at great length. It is obvious that the right hon. Gentleman was trying to take to himself some super right to which the next Government would be entitled and which he denies the present Government.

He went on to allude to the experience in the steel industry in the thirties as some reason why nationalising it was proper. He said that the Tory Government of that day had had to exercise a threat to the industry to put its house in order, and had said that if they did not do so the tariff would be reduced. I submit that that is a complete distortion of the fact. What happened was this. The industry appealed to the Government of the day against unreasonable competition from overseas, and the tariff was granted on condition that certain improvements were made, which is a very different thing from a threat.

To make the point quite clear, such threat as was made, such as a change of tariff, was made to our overseas competitors who were told that the tariff would be increased if they were unwilling to come in and make the arrangement which finally was made.

The right hon. Gentleman went on to say what a shocking thing it was that there was not more steel available when the war broke out. He must know, as a member of the Cabinet of that day, that no Government orders throughout the war fell down for want of the proper delivery of steel. He must know, too, that it ill behoves the critic from an Opposition, which in those days did their level best to prevent re-armament, to complain that there were not enough steel resources.

He alluded to the contrast in the development of steel capacity in this country since the war with what has been happening in America. What he failed to make plain to the House was that in America arrangements had been made for new steel capacity to be paid off out of current profits before taxation over the space of five years—a prospect which is a very strong inducement indeed to go ahead with capital expenditure, which is not available in this country.

What he appears to have completely ignored is that the capacity for steel making in this country since the war has been the outcome of plans submitted to successive Governments, beginning with the end of the war-time Government and following with the Government that came into office in 1945, and the rate of the expansion of the steel industry is the direct responsibility of the Government that was in office until the autumn of last year. If hon. Members opposite do not think that that expansion has been large enough, they have only themselves to blame for the figures that they now criticise.

We heard comments during the preceding speeches from the right hon. Member for Lewisham, South and the hon. Member for Reading, South (Mr. Mikardo) that by this policy which is inherent in the White Paper, in the event of the industry being unwilling to finance some projects thought necessary by the Board, it would be competent for the Minister to come in and do it. It has been represented that this proposal was intended to leave the cream of the industry to the private industry and to give the sour milk to the public sector. I do not think it has been appreciated how this element in the White Paper has come to be there, or perhaps it does not suit the Opposition to see it in this way.

Former proposals for supervising the industry were criticised by the Opposition on the grounds that the only form of supervision intended was a negative one. There might well be, in their view, instances where it was necessary in the public interest that certain things should be done, but because of the powers then in existence they could see no positive way by which they could be done, and we were unwilling to force a reluctant Board to do them. It was precisely to meet those criticisms of the lack of some positive weapon to get things done which the public interest required, and which it appeared would not otherwise be done that the power of the Minister so to act has been included in the Bill.

Mr. Mikardo

The hon. Gentleman is making what I think is a valid point so far as it goes, but he stopped short of the end of it. Is he really saying that if they wanted to do it they could not find some way in which the industry could be levied to cover an uneconomical enterprise just as industries are levied to cover uneconomic imports? Of course they could, and the fact that that is not being done invalidates the hon. Gentleman's point and makes it clear that the intention is for profitable development to go to the privately owned sector and for unprofitable development to be done out of the taxpayers' money.

Mr. Summers

The hon. Gentleman charges me with having stopped short. I merely stopped out of courtesy to give way to his intervention. What he has entirely overlooked is that if, in the view of the Government, there is need for some form of project to be developed which no one in the industry at the time is willing to do, it is almost certain that it is for some strategic reason. There is no reason why the remedy proposed by the hon. Gentleman to meet any commercial loss that might result should be carried merely by the consumers within the steel industry. If there is a strategic decision for such a measure, it is surely a measure the financial responsibility for which should ultimately fall on the whole nation. Therefore, in my view, it is quite proper that this instrument—which I do not believe will ever be used—should be in the hands of the Minister, and it is relevant that we should discuss it since it is in the White Paper.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

I remember an interesting speech made by the hon. Gentleman when the matter was first discussed, in which he pointed out that the people would only buy the cream from this industry and the Government would be left with the skimmed milk on its hands. At that time, if my memory serves me right, he advocated that the industry would have to levy the cream sold by the Government to compensate for what was left on the Government's hands. I take it from what he is now saying that he has rather revised that view and he feels that the Government should accept the whole responsibility without charging the main industry.

Mr. Summers

The right hon. Gentleman is mixing two points which are perfectly valid for discussion. I am speaking of the power of the Minister to create new capacities which others are not willing to do. What was implicit in the right hon. Gentleman's point was: what is to be done with those plants for which, at any rate temporarily, it is not easy to find a buyer. Those are two completely distinct points which have no direct bearing with one another.

I shall deal shortly with the point that has just been raised, but meantime I want to point out how unreasonable it is to represent the position to be created now as almost a swindle, when it is the outcome of criticism from those self same benches opposite that there was no positive power in the hands of the Minister. I think the right hon. Gentleman was referring to the speech I made on this subject on 12th November last year. I have taken the precaution of having a copy of it with me. It makes gratifying reading now in the light of what has happened.

Mr. Jack Jones

What did the hon. Gentleman say?

Mr. Summers

The hon. Gentleman can read it. Among other things, I said that there were certain cases where, in my view, it would be unreasonable for the Corporation, which will now be the agency, to sell back plant to the private sector if they knew quite well that the plant would never operate or should never operate because it had no useful life. I am still of that opinion, and let me say in passing that if the Corporation set up by the late Government had done its job properly, the problem of redundant plant would be much less acute than it is at the present time.

The position is that there will be some plants which ought not to be sold back but which ought to be scrapped, and I suggest that the proper way in which that problem should be dealt with is for those who continue in the industry to pay a levy to compensate the Agency for any loss which they might otherwise sustain by not selling these plants and receiving only the cash and the value of the scrap. But that has no bearing on the previous point I made.

In conclusion—for I know that others wish to speak in the debate—I think neither the right hon. Gentleman nor the hon. Gentleman did themselves justice. In particular, the right hon. Gentleman did not do justice to his talents, which we have seen displayed before, when he sought to justify the view which he expressed on behalf of his party merely by repeating the word "construction" six or seven times in relation to nationalisation. He went on to speak of a coherent industry which would follow from nationalisation, but he knows quite well that the outcome of nationalisation was to split the industry clean in half and that the constructive outcome of the White Paper policy, in contrast to that of nationalisation, is, far from having a dividing effect, to have a uniting effect, with control covering the whole gamut of the industry and from which, I am quite certain, the national interest will derive the greatest benefit.

5.42 p.m.

Mr. Frederick Mulley (Sheffield, Park)

We have heard a great deal from the hon. Member for Aylesbury (Mr. Summers) and the Minister about the accelerated desire on their part to take advice from this side of the House, and I think we can sum up our advice, which is both constructive and negative, by saying, "Why do you not drop the whole project to denationalise the industry?" That is con- structive from the nation's point of view, and it is negative from the point of view of the harm which it would prevent the Government from doing to the industry.

In the time available, I cannot, of course, comment on the whole of the Minister's speech, but I do not wish to be discourteous when I say that he gave more away in an aside than he did in his detailed exposition of the case for denationalisation. When he said, "It is not bulk purchase which we are against, but State bulk purchase," I understood perfectly what was in his mind in presenting this White Paper to the House because, quite frankly, this is not an issue between private enterprise and nationalisation. Control of some sort, or supervision, which is only the same word looked at from the opposite angle, is agreed between us. All we on this side of the House are worried about is whether the control proposed in the White Paper will be effective.

The Minister spent a long time in talking, on the one hand, about the independence and initiative which this proposal would leave to the private companies in the steel industry, and then, on the other hand, he went on to talk about the reality and façade of nationalisation. Before he considers using words like initiative and independence in the same speech as that which contains an exposition of control, I suggest that he should ask himself about the realities and the façade of the supervision which he is proposing to impose upon the industry; because, quite clearly, we cannot have a satisfactory system of supervision and control and, at the same time, have all the independence and initiative and all the rest of the clap trap which he pretends private enterprise gives us.

The issue is really a simple one: it is the issue of ownership. In a previous debate—and I do not intend to repeat my previous speech—I said—and "The Times" did me the honour of quoting it in a leading article—that the real issue in this matter is the matter of ownership; and that is confirmed by the White Paper.

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. There is nothing very surprising about that, because it is exactly how private industry and the steel companies themselves have operated. When they wished to control a subsidiary, when they wished to make sure of the sources of their raw material and they bought a coal mine, they saw to it that they had 51 per cent., or a controlling ownership, of the industry. They were not prepared to have boards which were not backed by financial control.

Quite clearly, all the arguments between now and next Christmas will not disguise the fact that the issue in this controversy of iron and steel is, who shall get the profits from this very profitable industry? Hon. Members need not simply take my word for the fact that free competition will not emerge if an Act is based upon this White Paper. "The Economist" of 2nd August said of the White Paper: Whether it promises truly competitive private enterprise in the steel industry is distinctly doubtful. When the Minister first addressed the House on iron and steel, we made allowances for his lack of knowledge of the industry, as he had only recently taken office. On that occasion he talked a lot about free enterprise, but today in his speech he sought to make a virtue of the small point which he was putting forward and talked about the desirability of these proposals in that the industry could come before the Monopolies Commission. But at the present rate of progress it would take the Monopolies Commission 50 years to look into the monopolies which already need to be investigated.

It is admitted on both sides that the steel industry will have to be quasi-monopolistic in order to be efficient. The issue is whether it shall be a public and responsible monopoly or whether it shall be a private monopoly calculated to turn over to private interest the profit from it.

We have also heard about the need for public money. I will not go into the controversy of the Clauses of the White Paper, but clearly no one envisages that the industry will be able to develop at the rate necessary to our economic requirements without public money being spent to assist in its development. Is that public money likely to go into the industry and, either immediately or in the future, produce private profit? No business man will put money into the industry unless he thinks that he has some control over the profits which the investment may bring, but the British taxpayer is apparently expected so to do, and, of course, Conservative Governments in the inter-war period frequently made gifts or investments from public funds to private industry.

Hon. Members opposite ought to consider this vital question: what help or hindrance will these proposals contribute to our economic situation? It is admitted on both sides that at the present time the over-riding problem is our economic solvency, and I think that any proposal of an economic nature which is put to the House ought to have some relevance to our main economic problems.

Those problems are, if I may summarise them, first of all the need to meet our balance of payments difficulties and to promote exports; secondly, the need—which again is making up a deficit of consideration in the past—to re-equip our industry, and the control of investment, which is also linked with the problem of employment; and thirdly, the problem of defence. All these three objectives which we need in a national economic policy throw a terrific burden on the iron and steel and engineering industries. How are these proposals going to help those industries to play the part which the workers in them want the industries to play?

It has been said that nationalisation is not relevant to our economic problems, and it would be out of order for me to discuss the general question, but clearly the nationalisation of iron and steel is very relevant today. Already a great deal of harm has been done to the industry by the threat of denationalisation and the actual prohibition on the part of the Minister of the regrouping and development that the Corporation would otherwise have done.

There is a big difference between the threat of nationalisation and the threat or promise of denationalisation, because the threat of nationalisation had the effect of keeping the industry on its toes, so that it could present a very good case when its hearing was called, but the nationalised Corporation under sentence of death has no power whatever to do anything about it, because the Minister in this case stops the nationalised undertaking from doing the job it was set up to do, and at a time when the nation is facing a very serious economic situation, I say that is very foolish.

Mr. Sandys

The hon. Member said I have prevented some action by the Corporation. What I did was to issue a direction saying that I wished certain matters to be referred to me for my approval, which is quite a different thing, and I gave, in an earlier debate, a complete analysis of such matters as had been referred to me, and explained which ones they were. I think there were only two, as far as I can remember speaking from memory, where I did not give my consent, and they were quite minor points.

Mr. Mulley

I thank the right hon. Gentleman for that intervention, but I think he will agree that no nationalised undertaking, knowing it has got to get the Minister's consent for development or regrouping schemes, will go to the trouble of preparing those schemes and putting them before the Minister knowing that if the action makes it more difficult to denationalise the industry he will not agree. No one will waste his time or the Minister's in preparing schemes he knows in advance will not be accepted.

Mr. Sandys

I should not like to pass uncorrected for a moment the suggestion that I have been stopping development. There has been no interference at all on my part. On the contrary, I have been urging that an increase should be made.

Mr. Mulley

I also spoke of regrouping, which is also important from the efficiency angle. However, I do not want to take up too much time on that point. I think the Minister will allow that it is not stimulating to an industry to have to wait for the White Paper proposals for a year, and still another year before an Act of Parliament can be passed to decide what is to be done.

There is another point, that the country, despite the good production record of the industry, is still short of steel. It is not the fault of the steel workers, of course, that we are short of steel. They are not responsible for the lack of modernisation in the industry after the war, nor for the fact that the private steel companies decided wrongly, and in contrast to the steel industry in other European countries, to base their programmes after the war on German scrap. The proposals we have in the White Paper are not going to give us an extra ton of steel.

Mr. Summers

Will the hon. Gentleman allow me to correct an impression which I think must be very misleading that may arise from what he says? The major cause of reduced output last year was lack of iron ore, brought about by having to divert shipping to take care of the coal crisis.

Mr. Mulley

I cannot go into a complete discussion of the coal industry as well as of the steel industry, for that would be out of order, but I say categorically that the proposals in the White Paper will not produce an extra ton of steel, but they may well jeopardise the production of the extra steel that we need, and certainly I think that for a Government who appeal for unity, a Government who talk about economic crises, to concentrate their efforts on the financial arrangements—and that is what all this debate and the White Paper are about: the financial arrangements—of an industry is a very serious indication of their lack of capacity to govern the country.

What the Government should be doing—and I was glad to hear from the Minister that it is his view of the matter—is this—it should be concentrating on maximum output, and I cannot be persuaded that this White Paper is going to produce any extra output in the foreseeable future. I would remind the Minister who talks about the "long run" that Lord Keynes said that in the long run we are all dead. By the time these complicated financial arrangements have been gone through, even if—which I challenge—they produce a greater output, the country may be in a very serious economic situation.

I know that the Government are not particularly anxious to pay attention to the views of the workers in an industry. They like to quote the T.U.C. when they think they can pick out a little paragraph and twist it to their advantage. But I can tell them, because I represent one of the Sheffield constituencies, there is grave concern among the workers about the arrangements proposed in the White Paper. I can tell the Minister that the workers of Sheffield are very satisfied with the experience they have had of the nationalised industry, and have no desire whatever to go back to the previous system.

I do think, as my right hon. Friend said, that to bring these proposals forward at this time is a doctrinaire method for private party ends, and has no relation whatever to the national economic situation or to the needs of the country, and I would appeal to the Minister—the Prime Minister is not here—to withdraw this scheme. There is plenty of time between now and the Queen's Speech for the necessary alterations to be made. After all, it will not be the first time, nor, I suspect, the last, that this Government have changed their minds, and on this occasion, if they change their minds, they can be assured that we on this side of the House will realise that they are at last interested not only in their own but in the nation's interests.

5.57 p.m.

Mr. R. Jennings (Sheffield, Hallam)

I am very pleased to follow the hon. Member for the Park Division (Mr. Mulley), as I also represent one of the Sheffield divisions. I remember that in the great city of Sheffield we made big efforts in the war. I was sorry that the hon. Gentleman did not take the opportunity to pay a compliment to Sheffield for its great efforts during the war. The right hon. Member for Lewisham, South (Mr. H. Morrison) did indicate that there was some lack of effort at the beginning of the war. [HON. MEMBERS: "No."] I can assure hon. Members that had it not been for Sheffield's steel industry we should have been very badly off in the war.

Mr. E. L. Mallalieu (Brigg)

My right hon. Friend said no such thing. What he did say was that there was not enough steel at the beginning of the war. An hon. Member opposite was saying that there was surplus capacity—in other words, more steel could have been produced.

Mr. Jennings

The implication of what the right hon. Gentleman said was that there was some suspicion on the industry. [HON. MEMBERS: "Not at all."] It was not fair. He indicated that, at any rate, to ordinary thinking people—that there was something of a critical nature, something to be criticised, with regard to the steel industry at the beginning of the war. My hon. Friend the Member for Aylesbury (Mr. Summers) did go so far as to say that lack of steel had no bad effect on the war because the steel industry did a magnificent job in the war. I think he was perfectly right.

There are two things that I should like to say, and we can speak quite openly and frankly with regard to them. When the White Paper first came out there was some criticism and some apprehension as to the scope of the proposed Bill and of what parts of the industry were to come within the scope of the Bill. There was a good deal of that criticism in Sheffield. The Minister reassured the House that there was no need for any apprehension, and that the Iron and Steel Board had no intention of interfering with the day-to-day carrying on of the various parts of the industry.

What I should like to impress upon the Minister is that the new Board should have the greatest possible flexibility and be able to give advice and help to the various sides of the industry governed under the new Board. I am led to make that statement by a criticism I read of Government control in the "Sheffield Telegraph" of 17th October, 1952, in which the export sales manager of John Bedford and Sons Ltd., of Sheffield, a Mr. Watt, said in a letter—I am only giving this as an instance, although it has no direct reference to the Iron and Steel Board as it is—that the allocation of the steel quotas had had the effect of cutting down exports to the South American countries, in this particular case to 6 per cent. of what it was, and asked for a freer and greater flexibility operating between the Board of Trade and the Ministry of Supply so that the greatest possible use of the steel allocations could be made and sent to countries where we shall get the greatest possible value from them.

We on this side of the House fully agree with the Minister in carrying out the de-nationalisation of this industry. In spite of what was said by the hon. Member for Sheffield, Park, there has been a great deal of enthusiasm in Sheffield for the carrying out of this policy, and I can assure him that any opposition he may have found has been purposely fanned for political purposes.

Mr. Mulley

Could the hon. Gentleman tell me where I can find this enthusiasm among the workers in Sheffield for these proposals? I should be very glad to know it.

Mr. Jennings

If the hon. Gentleman will write to me I will make an appointment to meet him in Sheffield and take him to see people who are glad that the Government are carrying out their promise, and doing everything that is right and proper and in the best interests of the country and of the iron and steel industry.

I was glad to hear the Minister say that the Board would control this industry and the various sides of it by persuasion and discussion. That, I think, is the right attitude, I commend him for taking that view. I feel that in the best interests of the country we shall get a unified iron and steel industry if we get a flexible Board, a Board determined to help every side of the industry. I am certain that this is in the national interest, and that we are doing the right thing.

6.4 p.m.

Mr. Donald Wade (Huddersfield, West)

I should have been happier if we had been discussing a Bill rather than a White Paper. It is 12 months since the announcement was made that legislation would be introduced, and those 12 months have added to the suspense from which the industry has been suffering. I hope that when the proposed Bill is introduced, there will not be very much further delay. If this is to be done it is better that we should get on with the job.

In the main, I and my colleagues are in favour of supporting the White Paper, although there are some aspects on which we should like further clarification. I suppose it is inevitable that the attitude of hon. Members to this White Paper should reflect their views on nationalisation. Those who believe in nationalisation for its own sake will naturally be opposed to the proposals in the White Paper.

Mr. Woodburn

The hon. Gentleman has just made a very important declaration for his party, that they are going to support the White Paper. Did not his party formerly make a very solemn declaration that once nationalisation had taken place they would regard it as a complete act and would not be in favour of disturbing the industry by reversing the process?

Mr. Wade

I have here the statement made in January. I shall not trouble the House by reading out the statement. [HON. MEMBERS: "Read it."] The statement made in January of this year?

Mr. Mikardo

At the time the Bill was going through.

Mr. Wade

I remember the occasion to which the hon. Gentleman refers. I appreciate the point he is making. It was in the last Parliament. A statement was made, and I had something to do with drawing up that statement. So far as that Parliament was concerned, we felt that there had been enough time spent on debating this subject. The statement only applied to the duration of that Parliament.

Mr. Percy Collick (Birkenhead)

Oh, no. Let us have the statement.

Mr. Wade

I have not got that statement here, but I recollect it. I should be only too pleased to get the statement in due course. I did take some part in drawing it up and I am certain that it related to the duration of that particular Parliament. We felt there had been a sufficient number of debates during that Parliament. It is well within my recollection.

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

Does the hon. Gentleman really suggest that the Liberal Party were making a futile declaration that for the duration of that Parliament, in which there was a Labour majority which had carried the Measure, they would be so good as to desist from having the Measure rescinded? Is the Liberal Party reduced to that kind of thing?

Mr. Wade

I do not want to take up a long time debating this point. The subject had been raised on a number of occasions by the Opposition and we felt, rightly or wrongly, that on that occasion, having debated it again, we had debated it enough during that Parliament. That was the point and the whole point. Then in January of this year a statement was issued putting forward our views, which we hold quite sincerely, although Labour Members may not agree with us. In many respects the White Paper we are debating today follows the statement issued in January of this year.

Mr. Collick

How long does that last?

Mr. Wade

I appreciate that the attitude to the White Paper depends to a large extent on hon. Members' views on the whole issue of nationalisation. When the right hon. Member for Lewisham, South (Mr. H. Morrison) opened for the Opposition, he made the statement that he and his colleagues would vote against this Motion. I think it would have been better if that statement had been made at the end of the debate, for it would at any rate have created the appearance that the arguments in a debate have some effect on the decision that is taken at the end of the debate.

Personally, I hold the view—and I have always held that view—that State ownership should be limited, and that so far as possible commercial responsibility and risk bearing should be left to individual privately-owned firms. But I agree that that reason alone is not sufficient to justify supporting the White Paper. There are other considerations. As I have just said, some of the proposals in the White Paper follow the statement made by the party to which I belong in January of this year, and there are other points in favour of it. The over-riding national interest is recognised in the setting up of the supervising Board. By setting up this Board, the Government have avoided the error of combining ownership with general over-all supervision, and I think that that is a point in its favour.

There is also to be an end of the artificial distinction between the nationalised and non-nationalised sectors of the industry, which at present constitutes such a serious anachronism. The Board will exercise supervision over the whole output of particular products within a definite range. I think that is an improvement, although I have some doubts about the inclusion of certain processes, for instance, iron casting. I can think of hundreds of iron foundries in the West Riding of Yorkshire alone where some concern is likely to be felt as to the extent of the interference there may be by the new Board.

The need for large-scale development is recognised, and provision is made for the possibility of one firm not being able to raise sufficient capital on its own to embark on such development, and also there is provision for developments which in the early stages may not be commercially profitable. With reference to this, there is one question that I should like to ask. Supposing, for purely political reasons, it is thought desirable to start some new concern in an area which is not economically suitable, will the Board attempt to keep up prices all round in order that one concern set up in an uneconomic situation shall make a profit?

Continuing with the items on the favourable side of the balance sheet, all sectors of the industry will, as the Minister has pointed out, be brought within the purview of the Monopolies Commission. I should like to make a few observations on that point later. Finally provision is made for the promotion of research, for training and for the publication of statistics. For all these reasons, I think that the White Paper should be supported, but when all has been said that can be said in its favour, there are still many questions left unanswered, and many gaps which have not been filled, even after the admirable opening speech by the Minister of Supply.

I often feel that when a debate takes place on a White Paper, it would be helpful if a completely unorthodox procedure were followed, and if, beforehand, the Minister held a sort of Press conference at which Members of Parliament were present instead of representatives of the Press, and we had a couple of hours in which to shoot questions at him. We might then be in a position at the beginning of the formal debate of being better informed as to what is the Minister's intention, and perhaps more enlightened than we are merely by reading the White Paper. I realise, of course, that there is not much chance of that unorthodox procedure being followed.

There are some questions which I should like to put to the Minister, and I hope that there may be time for some of them to be answered. Can we have a clear definition of the general objective and the kind of conditions that are envisaged for this industry? Is the intention merely to return to pre-war conditions—because personally I do not feel entirely happy about the conditions which existed before the war.

I see that in the introduction to the White Paper reference is made to the reorganisation of the iron and steel industry under free enterprise. The Minister did not use the expression "free enterprise"; he referred to enterprise and initiative. I cannot find any further reference in the White Paper to free enterprise. Is it the intention that the Board should encourage free enterprise, and does that mean competition in prices? One does not often find a Board encouraging a competitive state of affairs. The effect of a Board's activities is generally otherwise.

I should like to know what are to be the functions of this Board and what are the underlying objectives. I think that this is important for many reasons. It has a bearing on our relationship with the Schuman Community. I have the Schuman Treaty here, and so far as the aims and objects are set out, it is clear that it is intended that there should be a large measure of competition. I do not propose to weary the House by reading the first five articles of that Treaty. I do not know whether they are to be upheld in the future, but I hope that they will be. It is clear that it is hoped that discriminatory practices should be avoided, and that the Schuman Community should ensure the maintenance and observance of normal conditions of competition, and that direct action to interfere should only be taken in an emergency. Is it the intention of the Board to adopt a similar policy in this country? If it is, I think that this may have some important bearing on the development of the Schuman Community.

There is a reference in paragraph 13 to restraint. How is restraint to be exercised on companies embarking upon new schemes? Reference has been made to that, but I think we might have some more enlightenment on that question. It may prove to be a very dangerous proposal and become a precedent for the kind of restrictive practices which the Monopoly Commission is intended to prevent.

So far as additional works are concerned, referred to in paragraph 14, it would be of help to know, supposing the Minister set up some new companies, whether, in due course, he will sell them to private enterprise, or will they be permanently carried on under public ownership. Will new entrants be encouraged? In the Liberal statement there is reference to the need for the encouragement of new entrants into the industry. Will the Board encourage new entrants and discourage practices designed to stop new concerns being set up?

There are so many questions arising out of this White Paper that I must apologise for taking up so much time. Then, again, in regard to joint consultation, surely the wording of Clause 9 is somewhat vague: The Board will have the general duty of supervising the industry … in particular to keep under review … arrangements for joint consultation between management and employees on matters of mutual interest … Surely there is now a golden opportunity for embarking on some radical experiments in the sharing of ownership, profits and responsibility. Even if we do not accept the view that conditions should be imposed on the selling of shares to private enterprise, even if we do not accept that view, the Board could do a great deal by bringing both sides of the industry together and working out general principles of co-partnership, and trying to get the whole industry to accept new schemes based on those principles.

I should like to know a little more about the levy. I understand that it is tending to get out of hand. Will there be in the Bill any limit imposed, and will there be powers for the Minister or the Board to restrict the extent to which this levy may be imposed on the industry.

Lastly, with reference to monopolistic practices, what will be the relationship between the Monopolies Commission and the new Board? I do not think that point has been cleared up by the Minister. Supposing evidence is brought before the Monopolies Commission to show that there are restrictive practices, and the President of the Board of Trade feels that there is a case for intervention, and supposing the new Board goes to the Ministry of Supply and says, "We are getting on very nicely; we do not want to be interfered with; please will you stop him from intervening?" Who is going to win, the President of the Board of Trade or the Ministry of Supply?

Mr. Mikardo

That answer is self-evident. The present Government have taken no action at all on any of the reports they have received from the Monopolies Commission.

Mr. Wade

I have already expressed my own views in debates on previous occasions about the need for reform in the case of the Monopolies Commission, and I hope that there soon will be some reform.

To sum up, surely it is most important that the Bill should define as clearly as possible the powers of the Board and the powers of the Minister, for two reasons. One is because, as a nation, we should know where we are going, and the second is in order that prospective investors in this industry should know the conditions that are going to prevail and the extent to which firms will be interfered with by the Board, so that they will know the chances of success of a venture in which they are going to invest their money.

The White Paper appears to have been accepted with comparative calm in the country. This arouses in me mixed feelings of concern on the one hand and hope on the other. I am concerned lest this comparative calm implies that the desire to safeguard the interests of the industry will over-ride the need for looking after the consumer. On the other hand, in spite of what the right hon. Gentleman the Member for Lewisham, South and other Opposition hon. Members have said, I hope that the state of uncertainty and the period of political controversy will be brought to an end.

I agree wholeheartedly with the statement of Mr. Lincoln Evans, who said: What is deplorable is that an industry so vital to our national economy is expected to conduct its day-to-day operations, provide capital to plan its future development and seek markets for its products in all parts of the world in a highly charged atmosphere of bitter political controversy. Whatever may be one's views on the merits or demerits of nationalisation, surely we all agree that this prolonged controversy is harmful to the industry. I sincerely hope that the controversy will be brought to an end and that when the final legislation is put on the Statute Book those affected by it, both employers and employees, will be allowed to get on with their task of developing this vitally important industry.

6.22 p.m.

Mr. J. E. S. Simon (Middlesbrough, West)

I am very pleased to be able to follow the hon. Member for Huddersfield, West (Mr. Wade), because I represent an iron and steel-making division with a very great Liberal tradition; and at the last General Election but one the Liberal candidate pledged himself and took his stand firmly against steel nationalisation. I believe that very many of the Liberals who voted for him then voted for me at the last General Election.

Therefore, it must be quite untrue to say that the steel workers themselves, at any rate in a division like mine, were opposed to steel denationalisation. It was a prominent issue in the General Election; and, as the hon. Member for the Park Division of Sheffield (Mr. Mulley) very finely said in a previous debate, there is in any case no need to make iron and steel an issue, because it is the very livelihood of the workers in our constituencies.

There has been much debate today on the subject of whether we should preserve the status quo. The right hon. Gentleman the Member for Lewisham, South (Mr. H. Morrison) said, "Whatever we may think about nationalisation, it is done now, but let us preserve the status quo." That has always been the plea of anyone who has disturbed the status quo. It is what is said by any aggressor. An aggressor says: "Now that I have succeeded, let us shake on it. Do not disturb the peace. Accept what has happened."

There is one over-riding reason why we should, and are entitled to, de-nationalise in some measure, as we propose to do; and that is that at the General Elections of 1950 and 1951 a majority of the voters of this country supported parties which were opposed to the nationalisation of iron and steel and said so in their manifestos. We are under a duty to take some measures to implement the pledges which we then gave—I certainly gave them—to the electorate.

We are also under a further duty, which was referred to by the hon. Member for Huddersfield, West, and that is to introduce a Measure which will, as far as we can secure it, bring peace into this great industry. I am certainly not entitled to speak for the workers of the iron and steel industry in the same way as are hon. Gentlemen on both sides of the House who have given a lifetime to the service of the industry. But in the short time that I have been associated with Middlesbrough, I have observed a characteristic, which I cannot help noticing in hon. Members who represent the workers in the industry, and that is that they have the sort of qualities which have built up this great industry.

They are very fine qualities which are developed partly by the nature of their work; it is arduous work, but I should imagine that it is intensely satisfactory in achievement. We owe it to them to introduce a scheme which as far as possible exemplifies neither the extremes of nationalisation nor the extremes of uncontrolled private enterprise. It is because the scheme in the White Paper largely fulfils that condition that I give it my wholehearted support.

Reference has been made to the iron and steel industry having elements of monopoly. That is true. Surely there are all kinds of degrees of competition. It all depends how many one can group together in competing units and on the size of the units. When we build up our big industries as they tend to be built up these days, it is into large units, which are necessary for a great many reasons of technical efficiency; and we mitigate the competitive element and introduce an element of monopoly. However, it is unreasonable to proceed from that to argue that because one has an element of monopoly one should, therefore, introduce a complete monopoly.

There are two more reasonable ways of dealing with the situation. The first is to break up the monopoly; and the second is to introduce such a measure of control, and only such a measure of control, as is necessary to mitigate the evils which are inherent in any monopoly. Because the White Paper does that, too. I give it my support.

That brings me to the question of the control of prices. It is by control of prices that the supervisory Board can really do its best to control monopoly and to promote competition. The price policy operated in the past has to a large extent militated against the small iron and steel companies; and it is by regulating the prices that the supervisory Board can do a great deal to promote competition in the industry. I hope the Minister will consider specifically writing into the legislation the duty on the part of the Board to promote competition and to mitigate monopoly.

I see no reason why the Board itself should not be able to perform the functions which at the moment, I gather, it is intended to give to the Monopolies Commission, which is a large and, to some extent, unwieldy body. The Board will be in a better position to carry out those functions and will have a greater amount of material at its disposal.

Finally, I plead that whatever position we may have today, however closely we may examine the Bill, when it is introduced and passed into law we shall leave this great industry, supervised as we propose that it should be in the public interest, to work out its destiny in peace.

6.30 p.m.

Mr. Jack Jones (Rotherham)

I do not propose to follow the hon. and learned Member for Middlesbrough, West (Mr. Simon) too closely, but I should like to state that if he thinks the steel workers of Middlesbrough are for de-nationalisation, then he and I can have a public debate on the matter, and when as a result of the vote one of us loses, then the loser should resign his seat in Parliament.

I have examined this White Paper very carefully and I have listened to the Minister today. May I say from the back benches on the Opposition side that we wish him well in his illness. I thought he was suffering from something other than a physical disability today, the disability of having to make a bad case look plausible and acceptable to the House and the country.

I should like to ask him a straight question. Which of the two recent statements is the correct one? Is it the one made by the Prime Minister at Scarborough that the industry had been saved from disaster in the nick of time by the return of the Tory Party, or the one the Minister made 48 hours previously at Troestre, South Wales, when he said that we were now producing more steel than ever in the history of this country and we hoped to do even better next year? They cannot have it both ways, and I suggest to the right hon. Gentleman that he and the Prime Minister, to whom he is related, should get together and decide who is right.

Having looked at this White Paper, it seems to me that the main objective is, first, to skim off the cream. Do not let us make any bones about it. The new Welsh Corporation is apparently to be the first to come under the hammer, then probably the great United Steel Corporation to be followed possibly by the Summers set-up and the Lancashire Steel Corporation. By that time the sharks would be fairly well satisfied. I understand that the industry to be bought out would represent something like £240 million. That is somewhere about the figure paid for it by the public of this country. I understand there are blueprints for development of the industry to the nature of £250 million to £300 million.

We are anxious to learn where this money is to come from to buy the industry out. Who is going to buy out the industry that the Government took over? I happen to be a shareholder in things like the Prudential, so that my wife will be able to give a decent husband a decent burial when the time comes. It appears to me that in the final analysis the pennies of the poor will be used to buy out this industry for the purpose of private profit.

Mr. Chetwynd


Mr. Jones

That is a good term, but I cannot use it as well as my hon. Friend the Member for Stockton-on-Tees (Mr. Chetwynd).

Under the proposals the cream will come off the industry, and then we come to the part of the industry not too easy to sell but which it might be possible to sell. Next comes the part which the Government claim is efficient, but which everyone knows is inefficient and will be difficult to sell at all. That will remain with the realisation Agency for and on behalf of the public. Finally, we are going to have the new plants for which private enterprise cannot or will not find the money, and the Minister of Supply will have to work this himself. This means that there will be four sections of the industry; firstly, the cream to be skimmed off; secondly, the part which may be difficult to sell but possibly will be sold; thirdly, the part that cannot be sold; and, fourthly, the new portion that will have to be set up for and on behalf of the Ministry. These four will be competing with each other for raw materials, and so on. Who will get priority of supply?

The present Corporation has done a good job of work. When the present Government were in opposition and the nationalisation proposals were put forward, they said that there would be chaos, disruption, lack of production and all the rest of it in the industry if it were nationalised. There has been nothing of the sort. There has been a healthy decent uprising in production, and a continuance of the good relationships between the employers and the employees. The directors in the main are satisfied. I admit that a few have been removed, but they should have been removed long ago. These guinea-pig people were replaced in the main by young, efficient persons. In my own constituency I know of young, efficient fellows who were brought up in the industry and knew it, and they have been advanced to directorships in place of these guinea-pig people who were eliminated.

The Minister in his speech today failed to point out anything in any shape or form which suggests that there has been lack of production or where in the activities of the Corporation the public interest has suffered. The whole thing boils down to pounds, shillings and pence. The Government are prepared to supervise and do everything but share the swag. They intend to hand back the most lucrative parts of the steel industry to private enterprise at a time when this nation can least afford private profit to be made out of it at the expense of the public.

I want to ask the Minister another question, and I hope that a reply will be given to it by whoever winds up this debate. A sum of £34½ million has been made available for the benefit of the Industry. Would this sum have been available if private enterprise had the disposal of it? The reason I put that question is that in essence the difference between nationalisation and private enterprise is just the difference between what the stockholders are getting in interest as against what they hope to get if and when the industry returns to private enterprise.

This is a grave problem. I want to state here and now where the steel worker stands. I have heard till I am sick of what Mr. So-and-so said. Let us face the fact that Mr. So-and-so, who may be the official of some trade union, may not put forward the views of the executive council of the trade union. Twelve months last November the executive of my trade union had a two-day debate on the de-nationalisation proposals. We were presented with a two-page document full of reasons, collected from North, South, East and West; possibly from Steel House and Shell Mex House, urging that we ought to give this thing more consideration. It was torn to shreds paragraph by paragraph and the result was that a unanimous decision was come to by the executive of my trade union to have nothing to do with it. That unanimous decision was reaffirmed not many weeks ago when the White Paper was published.

We stand where we stood in 1932—no supervision of the industry in the interests of private shareholders, but public ownership and control in the interests of the nation at large. The Minister talked today for a long time about the provision of raw materials. He said a lot about ore from abroad, but he did not say anything about the provision of coal for the industry, though he mentioned coke. One of the most remarkable things about this White Paper and about the Tory Party is that here nationalisation is being denounced and at the same time the Government are paying lip-service to the one industry which has been nationalised the longest, the coal industry. What is wrong with giving to the steel workers what has been so good for the miners of this land?

The steel industry will depend primarily upon the nationalised coal industry. It is with the coal of this country that we will buy the ore from Sweden, Spain, Chile, North Africa and all the rest. The Minister knows it. It is a remarkable phenomenon of politics. We have the denunciation of steel but not a word about coal. Why? Because the Government know that the suggestion to return that industry to private enterprise would be the death of the survival of this country. Our economic survival would be jeopardised.

I do not want to take up unduly the time of the House, but I submit that under the Steel Corporation things have gone very well indeed. There have been difficulties, but there have been great developments. The Minister knows nothing at all about steel production, but I want to help him all I can. The workers in this industry are patriots and democrats. They will not, do as certain members of the Steel Corporation did, walk out. They will not go on strike. They will subscribe to the law of the land and they will work in the interests of the nation, knowing that subsequently the industry will go back to where it belongs.

Steelworkers believe The earth is the Lord's, and the fulness thereof. That does not mean the Lords who sit in another place. I am talking in a spiritual sense. We intend that the raw material of this country—the iron ore, limestone, coal, fluor spar, and the refractories, all of which the Almighty gave to the nation for the benefit of the nation shall be used for the nation's benefit.

The Corporation did a good job. They went ahead with research, education and development. They did a great big job with only half a Corporation. I want to say one word to my own Front Bench. When we do get back to power, do not let us have any messing about with what sort of Corporations we set up. Do not let us leave vacancies for those people who do not want to play ball. Set up a corporation of people who are determined, in the interests of this country, that the geological wealth of the nation shall be used for the nation's benefit.

One word more about what is going to happen. We shall have a period of transition, and probably a period of attrition. The circumstances of this nation are such that we cannot afford to lose one ingot-ton of steel. Subsequent speakers may say that the price of steel has gone up since nationalisation. It has, and who was the prime cause of its going up? The Prime Minister. He went to America and bought steel of a type that I do not want to talk about. As a steel maker I should be ashamed to think that I had produced some of it. He bought it at a very high price. We could have used our copper and aluminium to buy the raw materials. We had the men in this country who could have produced the steel. The result was that up went the price of British steel by something like £2 14s. per ton. The first thing he did when he became Prime Minister was that he went abroad and made the purchase which I have described.

The Government will be wise to drop these suggestions, which can do no good but only irreparable harm. I hope and trust that, as a result of the debate, the Government will think twice, think wisely and think well about this proposal. They should not take it upstairs and cut its dirty throat but consign it to the flames—where I used to work—and burn this damned thing overnight.

6.44 p.m.

Mr. Robson Brown (Esher)

It is always a pleasure for me to follow the hon. Member for Rotherham (Mr. Jack Jones) because if there is anyone in this House who has a personal right to speak for steel, it is he. I listened with the greatest pleasure to the vigour and the force of his argument, but I felt that the speech was not in line with some of his previous speeches, because it had not got a basis on which to attack this particular White Paper. All hon. Members on the Opposition side have found themselves presented with a comprehensive, well-thought-out and well-planned White Paper—[Interruption.] Oh, yes—dealing seriously on a long-term basis with one of our greatest industries.

Mr. Mikardo

It is a pigs' breakfast.

Mr. Brown

I appreciate the personal difficulty and dilemma of the right hon. Member for Lewisham, South (Mr. H. Morrison) and I thought that in the circumstances he made a very dignified and charming speech. The truth was that he could find no real grounds for honest criticism of the steel proposals. He drew a great number of red herrings across the path, and I propose in the time at my disposal to deal with some of them.

The first was his allegation that before the war the steel industry was not making itself efficient or keeping up-to-date. Clear evidence is there, and it has been repeated many times. In the five years just previous to the war the industry spent no less than £30 million on modernisation. Expressed in money of present value, that sum is of the order of £100 million, spent on new development. I must say that the industry had very little encouragement from the Socialist Government of the day.

One other claim which was made, and will be repeatedly made from the Floor of this House by the Opposition and in the country, is that the new works which have come into operation and the steady increase of output are due to the influence and operation of the new Steel Corporation, which has only existed for a short time. Nobody who knows anything about the matter——

Mr. Jack Jones

I did not say that.

Mr. Brown

The hon. Member for Rotherham did not claim that, and I give him credit for it, but it was claimed by his own Front Bench. Some of the new plants were projected as long ago as five or six years, and they have only now come into operation.

The right hon. Member for Lewisham, South and others made the suggestion, and it came even from the hon. Member for Rotherham, that the Conservative Government, the men on these benches and the party in the country, would deal dishonourably with the financing and the disposal of these undertakings. I give them all the lie positively and direct. They and the country will find that we shall dispose of these assets in a way that wilt be beyond criticism. There are men on this side of the House who will pledge their word that that will be done. There will be no skimming of the cream. There will be no leaving behind the dregs. The assets will be disposed of intelligently, wisely and fairly.

Another point concerns paragraph 13 of the White Paper, which was referred to by the right hon. Member for Lewisham, South, regarding powers to prevent a particular company from erecting works or taking up development in a particular situation or part of the country. Those powers are born of necessity out of the experience of the past. We in this House know that, for social and economic reasons, persuasion, and in some cases pressure, have been brought to bear on companies in the steel industry, as in other industries, not to put particular plants or extensions of plant at certain places. That is good, and it is desirable that it should continue.

I have listened to all the steel debates in this House for many years, and I think the country is getting somewhat tired of steel debates. On this side of the House we are determined to put such Measures before the country that nobody will ever seek to disturb them again. The people know that this is a good industry, that it is efficient, that its prices are competitive with any in the world, even with high-cost raw materials, and that its quality is second to none.

I have to make these assertions because they lead to one other. People have been impressed with the rising steel record but have not always known what lay behind it. I want to pay a tribute, as did the hon. and learned Member for Middlesbrough, West (Mr. Simon) and the hon. Member for Rotherham, to the workers in the industry in this long and difficult period. There has been high quality of leadership between men and management in the industry.

What the country probably does not know—and I conceive it my duty to tell people tonight—is that the greatest hidden damage has been caused to the industry by six years of political disputation. Plans for vital plant extensions and for new plant and machinery, and for the carrying out of urgent modernisation have been unnecessarily delayed as a result, and that procedure has been unnecessarily protracted and complicated. [HON. MEMBERS: "Where?"] I say that if this industry had not had that political interference during the last five or six years, and had not been compelled to look over its shoulder all the time to see what was happening in Parliament and what Parliament would decide in the next few months——

Mr. Mikardo

What rubbish.

Mr. Brown

I suppose the hon. Member is speaking from a profound knowledge of the steel industry? I say that if the industry had been allowed to develop normally in the past six years, we should have had another two million tons of steel a year.

Mr. Mikardo

Who stopped it?

Mr. Brown

The interference of the Socialist Government for six years.

Mr. Albu

What was the figure put forward by the Iron and Steel Federation as the proposed output for the steel industry?

Mr. Brown

The Federation has always put forward figures higher than those of the Government of the day and has always beaten every target set by the Government. I am talking about the productivity plans projected three or four or five years ago which only now could swing into operation if we had that two million tons of steel at this time for the canning of food, for the erection of new factories or homes, for new ships, for every branch of engineering and, in particular, for the export trade. What golden opportunities have been lost because of unsatisfactory dates of delivery or the inability to deliver at all. It is impossible to estimate accurately what has been the effect of all this upon the economy of the country——

Mr. Mikardo

Why not leave it alone then?

Mr. Brown

No responsible person would deny that it has been nothing less than calamitous. The only people who have come out of this with any credit has been the top management of the industry and the responsible trade union leaders. Management and men have grimly carried on with absolute efficiency, with absolute loyalty, the day-to-day production in spite of uncertainty and frustration. For those reasons, we have brought forward this White Paper to foreshadow an iron and steel Bill which will put an end to this uncertainty and frustration.

Mr. Mikardo

How can hon. Members opposite decide?

Mr. Brown

The answer is that we are the Government of the day. In addition to overcoming the ordinary handicaps, I want to pay credit to the industry for the way in which during the last 12 months it has been able to solve the scrap shortage position which otherwise would have seriously reduced the total overall production of the country. It demonstrates more clearly than ever the capable and good hands in which the industry is placed.

The hon. Member for Rotherham paid tribute to the fact that, in spite of political interference, the good relations of the industry have continued. Yet there are many in this House who would have wished it the other way, who would have liked to see the same unrest and bitter- ness in the steel trade as we found at one time in the coal trade. My opinion, from personal observation, is that neither management nor men will do anything to interfere with the decisions of this House. They did not do it on the other occasion and they will not do it now. De-nationalisation will not cause a ripple in the industry, for the men and the management put their loyalty to the trade and to the community before that of any political party.

Much has been said during this debate about the nationalised Steel Corporation. In the short period it was in office, it did the very things that many of us were so frightened it would do. It spent most of its time not in considering short or long-term plans for the development of the industry, but ways and means by which it could get concentration of power into the hands of one man—inexperienced hands at that. In another 12 months it would have turned the industry upside down.

We in the industry know perfectly well that there were already plans before it for the wholesale breaking up of the individual character of the historic companies, which the industry had understood would remain under the Act, and the setting up instead of bulky, unworkable regional organisations. The industry is to be united again and an end is to be put to the foolish, impossible position where the trade has been part bound and part free. We want to give real freedom to everybody.

So much for the position up to the present. With the publication of the White Paper, the public and this House want to know what the Convervative Government propose to do. When we had the last debate on steel, I was amazed at the threat that whatever we planned would be cancelled out, and this before we had revealed a single word or line of our intentions. The presumption was that we would bring forward a retaliatory, reactionary piece of party legislation. In other words it was anticipated that our proposals would be Socialist in character. The fact is that this White Paper, and the Bill which we intend to bring forward, is a good, sound, realistic facing up to all the facts of the case. It will take steel out of politics and, more important still, it will take politicians out of steel.

Anybody examining the White Paper with an unprejudiced mind will readily accept that we propose not the denationalisation of the industry, a negative act which I would not support, but the rationalisation of the industry, which is much more important. When we come to consider the Bill line by line, I believe it will be the judgment of politicial commentators and historians that it will be one of the finest industrial Measures ever introduced on the Floor of this House.

Mr. Coldrick (Bristol, North-East)

That is going some way.

Mr. Brown

It will carry it some way because it has to be carried some way. We have to make absolutely sure that what we do is in step with public opinion and that this industry shall be answerable to Parliament in a way that it has never been in the past. We shall give extensive and positive powers to the new Board. We shall set up a steel Board with teeth that can bite if necessary. We are drawing on 20 years' experience of some form of control or other in the steel industry, a thing which some of our Socialist friends conveniently forget.

The proposals have been accepted by the leaders of the industry. Further, in spite of the challenges that have been made, they are in general line with the proposals made by the T.U.C.

Mr. Mikardo

That is a lie.

Mr. Brown

That may be the opinion of the hon. Member. He can argue it out with the T.U.C.

Hon. Members


Mr. Speaker

If the hon. Member used that expression, he ought to withdraw it.

Mr. Mikardo

Certainly, Sir. Earlier in the debate a point was made that the T.U.C. had decided certain things. My hon. Friend for Newton (Mr. Lee) produced a T.U.C. report—I think while you were out of the Chamber for a short while, Sir—and read what the T.U.C. had said. In the light of that, it was universally agreed in the House that the matter had ended. The hon. Gentleman now chooses to repeat a totally false statement. [HON. MEMBERS: "Withdraw."] I cannot say that what he is saying is true. If it is not true, then it must be untrue.

Mr. Speaker

Hon. Members on both sides of the House frequently have differences of opinion with each other, but the assumption on which we conduct these debates is that hon. Members believe that what they are saying is true. It is quite contrary to Parliamentary practice to accuse another hon. Gentleman of telling a lie, which is a different thing altogether. The hon. Member must withdraw it.

Mr. Mikardo

Certainly, Sir. I withdraw having said it is a lie. It is just totally untrue.

Mr. Brown

I accept the apology in the spirit in which it has been given. It happens to coincide with my next observation, namely, that only people who are blinded by party prejudice and opposition could see any of the evils which have been suggested across the Floor of the House in regard to this White Paper.

I believe that it is a White Paper of a form and kind that could be well applied to our other basic industries, because it preserves the right balance between individual enterprise, which must be encouraged if we are to survive, and central responsibility and collective accountability by the industry to the nation, which has to be recognised and accepted by all industries. It is my earnest hope that the Bill will not be long delayed and that the new Board, which will be composed of competent men, will be quickly set up and that the industry can quickly swing forward into action with confidence and catch up with the long years of delay.

How serious this lag has been is clearly demonstrated when I give the following figures, which I draw to the attention of the whole House. Between 1937 and 1951, production in the U.S.A. went up from 50 million tons to approximately 100 million tons. That figure has often been quoted in the House, but what is much more alarming and intimidating is that during the year 1949–50 production in the U.S.A. rose from 69.62 million to 86.36 million tons, a no less increase in that one year than 16 million tons, which is equivalent to the total output of our own country. No one can deny how startling these figures must be.

One of my hon. Friends has made it perfectly clear that one of the reasons for this increase in America was the tax attitude of the United States Government. I do not propose to take up the time of the House on that, but there will have certainly to be adjustments in our own ideas. How many of us received a shock the other day when we read of the fact that German steel production has now reached a point where its output is passing our own. Every nation is striving to increase its steel output, because this is the steel age, and the world production of steel has risen from 133 million tons in 1937 to an estimated figure of no less than 223 million tons in 1953. In the light of all this, our own figures are not as good as I should like to see them.

The startling thing is that Russia of all places, which is not often quoted in relation to steel production, has increased its production from 17,500,000 tons in 1937 to an anticipated 34 million tons of steel in 1953. We have got to reach a point in the House when we must put away party issues and face the problem and the future of this great industry of ours in the national interests and in the national way.

During the same period, production in this country went up only from 13 million to 16 million tons, a 3 million tons increase. We valued it, we welcomed it, we were proud of it, but when it is related to world figures it does not look to be quite so important.

It is the delays that have been occasioned in the erection of new plants and, even more desperately now, in taking our fair share of the raw materials of the world that are to blame. We can build all the steel plants that we like and make them as modern as ever we wish, but without access to the raw materials we should have poured our money down the drain. It is the question of access to raw materials which disturbs me very much. Every day there is keener competition in the world for steel, and competition in the battle for raw materials is duplicating itself in the same way.

It is disturbing to think that the exports of steel from this country, instead of going up, fell last year from 1,423,000 tons to 1,271,000 tons, at the very time when everybody in the country desired that exports should go up. The reason was very obvious because we were not able to fill the steel gap.

As far as the long-term basis is concerned, there is another thing that must be said in the debate tonight. In some quarters there is a tendency and a feeling that we should for financial reasons review the development and the expansion of industry in general, and a feeling that perhaps there is an optimum figure related to continental production and that we ought to mark time. I do not share that view at all. We have got either to expand or to get out. As we put down the equipment and if we find that the demand is there, well and good. If we find that the demand has decreased, there is quite a lot of second-rate and out-worn machinery that could be put out of operation. I have not the slightest fear in saying——

Mr. Albu

Did not the hon. Member say at the beginning of his speech that the steel industry always had a target far ahead of the Government and far ahead of what most people thought was necessary? Is he not now saying exactly the opposite, that opinion in the steel industry is extremely conservative on the prospects of the industry?

Mr. Brown

I am not suggesting anything of the sort. It is a matter of comparison. Some people think of a figure of 18 million tons. I should like to see the figure 20 million tons during the next period, and then to be reviewed again.

Mr. Summers

Is my hon. Friend not aware that the figure of 20 million tons is already, so far as I am aware, an agreed figure to which the present capacity should be expanded?

Mr. Brown

Yes, that is a new target which has just been brought out in the last few months. I would not want any dispute with hon. Members on my own side. I am saying that there is that feeling in some circles and I repeat it. This is not the view of the steel trade.

Here is another interesting figure. When considering the consumption of steel, we find that in the U.S.A. the consumption per head of the population is approximately 1,250 lb. In our own country it is only 630 lb., which amply illustrates the reason for the increase in the demand for steel.

The first of two further points that I wish to make is in regard to the Schuman Plan. More than once I have warned the House about the Schuman Plan and its implications. I have suggested that we should get closer to it in the early stages before it got too rigid, to find out what was happening and to give them the benefit of our advice. On the other hand, I am also alarmed by the still increasing productivity in the U.S.A. These are complicated matters, which require the urgent attention of the new Board, because sooner or later there will be suggestions that we should relate the production rate of British steel to that of other countries and that we should limit our expansion. That is part of the answer to my hon. Friend the Member for Aylesbury (Mr. Summers). The same argument applies to the access to raw materials. I want to see us in a position to state our position as quickly as ever we can.

One further question arises out of the Schuman Plan. It would be naive to imagine that we could send committees or observers to sit in at their deliberations without sooner or later finding ourselves in some way involved in a manner that we may not desire. While the general ideas behind the Schuman Plan are good, their too rigid constitution is not suitable for us in this country. In my opinion, a high steel export policy is an absolute necessity for Great Britain—and that may not agree with the Schuman ideas. We cannot permit Continental interference with the domestic affairs of the steel industry of this country, because there is a tremendous amount of development to be done.

Finally, I should like to make one or two observations regarding the financial terms. Throughout the debate there has been emphasis from the Opposition that we were going to de-nationalise and finance the industry in a dishonest fashion. I think I have given that the lie direct, and I give it again, and I hope that my hon. Friend the Parliamentary Secretary, when winding up at the end of the evening, will be just as categorical and emphatic on this.

I know that the Government are determined to carry out this Measure on a clean, honest and straightforward basis, and desire that it shall be beyond criticism by any reasonable person. In other words, we wish it to be a first-class Conservative Measure. The country will judge us by our actions and will decide our political future by our behaviour. I do not believe that there is any objection at all in having a measure of State money and private money in the industry, certainly for the period, with no excessive profits for either.

I hope that when the articles of association of the various companies are drawn up, they will be drawn up in agreement with the Minister and will have certain clauses in them which will protect the interests of the working men within the industry, and that they will also incorporate some of the elements of our own Workers' Charter and also give those inside the industry some opportunity of taking a financial interest.

We shall be in office for the full five years and we shall go to the country confident that the Bill, as outlined in the White Paper, will give the industry the stability and security which it deserves. I believe that when the time comes, the Opposition will think twice of putting in their election manifesto the blank cheque threat which they uttered that they would re-nationalise irrespective of what happened. That was a threat and a party manoeuvre before the Opposition had even seen the Bill and before they were able to judge how it would work.

Nationalisation of steel, so I am told, was put forward as a down payment to the right hon. Member for Ebbw Vale (Mr. Bevan) to stay in the Government of that day. I hope that a re-nationalisation threat is not going to be another down payment to get him back again. My final word to the Opposition is that if they introduce the threat to re-nationalise the industry in any election manifesto, that in itself would cancel their opportunities of being returned to power.

7.10 p.m.

Mr. E. L. Mallalieu (Brigg)

I was rather amused when I heard the hon. Member for Esher (Mr. Robson Brown) inveighing against the Steel Corporation because it was about to reorganise certain companies, and also because it was using the names of old historic companies. I can remember how in the debate on what eventually became the Iron and Steel Act we on this side were accused almost of fraud because we took those old historic names, kept them, and used them to do the business of the Corporation.

Mr. Robson Brown

I think the hon. and learned Member has misunderstood me. What I said was that they were going to destroy the historic names of the great companies by wholesale regionalising of whole areas in different parts of the country.

Mr. Mallalieu

I certainly accept the correction the hon. Member has made, but surely there is nothing sacrosanct about the name of a company. All sorts of mergers habitually take place, and very often parts of the names of old companies are incorporated in the name of the new company. Who is to say that that will not happen here? The hon. Member waxed very eloquent about the catastrophic effects which, in his estimation, have followed from political interference with the steel industry. Political interference with any industry is likely to have some sort of ill effect, but the hon. Member did not give any evidence for the statements he made.

Mr. Jack Jones

Fairy tales.

Mr. Mallalieu

Who is interfering with the industry now? I am glad to see the hon. Member for Aylesbury (Mr. Summers) back in his place. He was suggesting that it was perfectly proper procedure for any Government just to reverse the action of its predecessor. I submit that that is very improper. I do not suggest that there is any statute against it, but is is definitely contrary to the custom of our constitution that that sort of thing should take place. If this White Paper had been introduced by a party which had never had any responsibility in office and introduced in a country where democracy was a very young and tender plant, it would have been regrettable almost to the point of tragedy, but at least it would not have been unforeseeable.

Mr. Raymond Gower (Barry)

Would the hon. and learned Member agree that responsible hon. Members from his side of the House have actually said in the country that, should the Government denationalise the industry, their party would re-nationalise it without the payment of compensation, which is not merely contrary to the constitution of this country, as he has suggested, but, I believe, contrary to the constitution of the Labour Party?

Mr. Mallalieu

It is not by any means necessary for me to go into the question, because a statement has been made in this House this evening, which is within the recollection of hon. Members, a perfectly proper statement, by my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison). That this White Paper should have been introduced in this Mother of Parliaments, with all its history, and by the party which in all probability is the one which has the longest experience of office in the world, shows a wanton disregard for tradition. It shows a complete partisanship such as we have never seen before. I think it also shows a lack of faith in the future of this country, which is utterly deplorable in men who claim to understand and to follow the interests of our country as a whole.

Nobody who has any connection with the steel industry, even if it be a completely outside connection like that I have the honour to have, can fail to have observed with what pride those who are engaged in this industry regard it. They have pride, as has been said in this debate, to a certain extent in the conditions in many of the plants in the industry, pride in the output both in quantity and quality, pride in the unions and pride, in the absence of industrial disputes and, let it be said in all fairness, in some of the managements. I do not want to over-sentimentalise what is thought by some people whom I represent in Scunthorpe. We know that most people are in the industry because they earn their daily bread in it, and that is a proper reason for being in an industry.

I agree most wholeheartedly with my hon. Friend the Member for Rotherham (Mr. Jack Jones) when he said that, no matter whether the industry is nationalised or de-nationalised, it will certainly have the hard work of those engaged in it, of all the men in the industry, to just the same degree. But, if it is denationalised, those men will know that, whereas under nationalisation they were working for the good of the country as a whole, now there will be a suspicion in their minds that they are working for the private profit of a small section.

Mr. Summers

Does not the hon. and learned Member realise that it is perfect nonsense to say that men are actuated, in whether they work or not, by the question of what person or persons are to get the fruits of their labours in a political sense, but that they work for the good of their families?

Mr. Mallalieu

I was just making that point myself. I was saying that they were there because of the money they were earning, and that is a perfectly proper feeling. What I am now adding is that henceforth, if this industry is de-nationalised, the men who are working in it will have in mind that a large part of the object for which they are working is the private interests of a section. I think that is a very undesirable state of affairs.

Mr. P. Roberts

Does the hon. and learned Member relate that also to the farming community, and is he going to talk about nationalising the land on the same principle?

Mr. Mallalieu

No, the hon. and learned Member is not talking of nationalising the land, nor has he ever done so, nor does that question seem to have anything to do with the matter. What I say is that, in order to satisfy their doctrinal considerations, the Conservative Party are quite prepared to sacrifice these excellent and nationally valuable feelings which undoubtedly exist in the steel industry. They are, by the presentation of this White Paper, making the first move in what may become a game of political shuttlecock by reversing an entirely justifiable and entirely mandated piece of Labour legislation.

If it does happen that this industry becomes a political shuttlecock, the responsibility will lie very heavily indeed on the shoulders of the right hon. Gentleman and his hon. Friends who have introduced this White Paper. As has been said this afternoon, it is not even as though the nationalised industry had been a failure. On the contrary, it has been an extremely successful venture doing quite as well as, if not better than, the industry which existed before. The only difference, of course, is that there has not been quite so much ballyhoo in the capitalist Press about the records which have been made.

Although the Corporation has been in power only a very few months it has, in fact, made considerable developments, continued developments which were begun before, and made savings in expenditure. It has heaps of plans for continuing the organisation and development which, in spite of what the right hon. Gentleman said earlier, he is in effect stopping by the mere fact that now permission has to be obtained and it is known that many such permissions will not be given if they are in certain directions of which he disapproves. I think they have been receptive of new ideas. In a small way I have personal experience of ways in which the Corporation has welcomed suggestions from men working in the steel industry and acted upon them in an entirely democratic and nationally useful way.

Now we have the dead hand of the right hon. Gentleman clasping this industry clammily, if a little unsteadily. And I suppose we shall have the Prime Minister, who not very long since talked about "tired Tims and weary Willies," eulogising the men in the hope of winning them over to his scheme of handing them over to some of his more wealthy friends. So really this plan which has been put forward can be riddled for its absurdities. I think it is rotten with jobbery and replete with impracticability. All these things can be said of it with perfect truth.

But, of course, it may well take some years to complete. In other words, the Government have not the slightest chance of bringing it to a completion; and the only thing which they have a chance to do is to create further disturbance and uncertainty in this extremely valuable industry. That part of the industry which is not bought over—of course some of it will be bought—but that part which is not bought by the privateers will face a somewhat uneasy future waiting for execution until such time as the back bench hordes of the Conservative Party—if there are any hordes of it by that time—have clamoured to end the period of Treasury management and control; for that is quite plainly the control which is to operate.

There will be this Board set up to supervise the industry; a harking back, as it seems to me, to the rather ill-fated attempt to supervise the steel industry which was inaugurated by the Chamberlain and the Baldwin Government—the Baldwin Government first, of course. They took that new and blushing bride, the Import Duties Advisory Committee and put it into bed with the steel magnates to see what could be produced in the way of sheltered profits, monopoly and the exploitation of the consumer; with disastrous results, as many of us think, for the country as a whole.

Now, of course, there is an effort to show that there is something a little new, and the Government are saying that the whole industry is being put under supervision, as distinct from only part of it as under nationalisation. That may be true, but we want to see what this supervision is. And is there any doubt in the minds of any of us that that supervision, in effect, will be purely negative? There is much paraphernalia, court proceedings and all that, which I do not think will ever have to be used; for the simple reason that if there were any kind of major development proposed I doubt whether the steel magnates of the time could produce sufficient funds, even with their great wealth. Steel development takes enormous money, and I doubt whether they could produce sufficient funds for any substantial development with which the Government was in disagreement.

As for the positive side, about which we have heard quite a lot from the right hon. Gentleman, the only thing one can say about it is that it is positively amusing. The Minister of Supply is to provide and operate works—State control with a vengeance. What has happened to this private enterprise, which is supposed to be so robust, if, when a little difficulty comes along, the Minister must step in and "provide and operate"? I suppose it is just not fair to ask the steel barons to take on the rough with the smooth?

But that is not all of my criticism. Supposing, for the sake of argument, that a particular development which was required was an increase in blast furnace capacity. The right hon. Gentleman is to provide and operate the new works if no one else will. He is to provide and operate new blast furnaces. Where is he to do that? In a vacuum? Is he to buy his own premises and set up his blast furnaces in them? In that case he will be liable to some considerable criticism, surely, on the ground that he is ignoring the advice of technicians, that integration is rather good for the steel industry? Or is it that he is to put these blast furnaces down in someone else's already existing works there to work and operate them? Whichever he does, it seems to me absolutely fantastic to think that there is any real possibility of either being carried out in practice.

So what we clearly have, then, is a negative control to stop bad development, with no really effective positive control to enforce good development. There has been a great show made from the other side of the House about how necessary it is for this Board, which they propose to set up, to be impartial. The fantasy of this alleged impartiality of this Board is shown when we come to the provisions in the White Paper about the control of raw materials. If the control of raw materials means anything, it means that the possibility is there that the controller of the raw materials will have to take some raw materials from one company and give it to another. That, in fact, has been done by the Steel Corporation, as it can very well be done when the whole industry is owned centrally by the Corporation which is doing the controlling. Of course it can be done then. But how can this Board be impartial as between independent companies if it is to do just such things as that under this so-called control?

I think it also interesting to note in passing that if by any chance the steel masters have been able to obtain their raw materials—poor little things—the Board will do it for them. Where is this robust private enterprise which is supposed to be put back in the saddle by the right hon. Gentleman and his friends? I notice also in the White Paper that the Board is to be entitled to buy foreign steel and to sell it below an economic price, and to take a levy from the companies—presumably that means all the companies—in order to make good its losses and, incidentally, its ordinary expenses. They are to have consultation with the companies. Is it now the view of the Conservative Party that we can have taxation, not with representation, but just merely with consultation?

There is an endless vista of wrangling and haggling set up before our eyes by this proposal that they shall consult as to the levy they are to take from the individual companies on such matters as this recouping of themselves for the buying of foreign steel. And as for the transfer to the Agency of the ownership of the nationally owned steel, I think they are really being a little naïve about that; because it is all to be done by an agency appointed by the Treasury.

I suppose, at first sight, the Treasury is probably the institution best suited to deal with this matter, in that those who buy nationally owned steel are entitled to pay for it in Government stock, and the Treasury is supposed to know something about Government stock. But also this Agency is to be responsible for the efficient running of that part of the steel industry which still remains unsold. So we come to this, that it is the Treasury which is ultimately responsible for the efficient running over what may be a very long period of time of what may prove to be a large section of the steel industry.

However all this may be; however naïve, however inept and cynical—even Machiavellian—the authors of this White Paper may be, we can all agree about one thing. I think we are all agreed about the profundity of the truth expressed in paragraph 32, which says that this operation of disposing of the nationally owned steel industry may very well take some years to complete. I think most of us will agree that before those years have expired the authors of this White Paper, if they are in this House at all, will be sitting in a totally different situation—on the Opposition side—whereas on the Government Front Bench there will be a row of men who know a Tory racket when they see it, and who are themselves devoted selflessly to the service of their people.

7.30 p.m.

Mr. William Shepherd (Cheadle)

I have listened very carefully to the remarks made by the hon. and learned Member for Brigg (Mr. E. L. Mallalieu). I do not feel that he himself really believed very fully what he was saying. The little burst of synthetic feeling at the end of his speech did not make up for the entire lack of conviction which he showed in dealing with this question.

I am not at all surprised. I am amazed that hon. Gentlemen opposite can stand up and condemn these proposals, because these were the proposals, or virtually the proposals, which the right hon. Member for Lewisham, South (Mr. H. Morrison) agreed to a few years ago.

Mr. Mikardo


Mr. Shepherd

Perhaps the hon. Member who said "Nonsense" will invite the right hon. Gentleman who is to wind up for the Opposition to say in what respect there is a material difference between the Government's proposals in this White Paper and the agreement reached between the representatives of the steel trade and the right hon. Member for Lewisham, South.

Let us hear tonight, when the winding-up speeches are made, what is the material difference between these proposals and the agreement which was reached by the right hon. Gentleman. These proposals which are now condemned are ones which a short time ago received the assent of Members of the Labour Cabinet, and which were not proceeded with because, as one of my hon. Friends has already said, the Labour Cabinet had to pay the price demanded by the right hon. Member for Ebbw Vale (Mr. Bevan). Therefore, I am surprised that they have——

Mr. Mulley

The hon. Member is giving the House a lot of very interesting material. Will he tell us where we also might find the material?

Mr. Shepherd

I am merely asking the representative, of the Opposition Front Bench to request their spokesman who will wind up the debate on their side of the House, and who has some experience in this matter, to tell the House precisely where there is a material difference between these proposals and those originally accepted by the right hon. Member for Lewisham, South.

We have heard a lot today about the position of the workers in the industry, and the hon. and learned Member for Brigg, who represents a constituency which has a substantial interest, asked how they could work for the steel industry when they realised that the fruits of their labour were going to the capitalist class. Is not that nonsense?

Can one conceive, for instance, from a purely social standpoint—let us consider the purely social standpoint and ignore the question of economic efficiency—that it is more desirable to have an organisation like the Iron and Steel Corporation, lifeless and soulless and central in its direction, or an organisation like United Steel, which had 30,000 employees and 30,000 shareholders? From a purely social point of view, is it not more in the interests of the nation to have an organisation with a local direction and with a huge number of individual owners than this huge State organisation?

If hon. Gentlemen think that vast organisation, with its central direction and with its negation of ownership, because what is owned by everybody is owned by nobody, is socially more desirable, they have a very jaundiced idea of what is either desirable——

Mr. E. L. Mallalieu

The hon. Member mentioned remarks which I made. I certainly did not say that United Steel or any other corporation did not do very good work; but I do say that it is by no means localised. It is a vast concern with no life in it. I say that the Iron and Steel Corporation has, to my knowledge in my constituency, proved itself to be much nearer to the workers there than any of the local manufacturers.

Mr. Shepherd

The hon. and learned Member cannot really tell me that the Iron and Steel Corporation is a more human organisation than United Steel. Neither can he tell me that the head figure of the Steel Corporation was any better liked by the employees of United Steel Ltd. than was Sir Benton Jones. The hon. and learned Member is not really being honest if he tries to persuade the House along those lines.

I should have preferred to have had free competition in this industry. I am a believer in free competition when it is practical, but I am perfectly satisfied that it would not be practical in this industry to operate free and unrestricted competition, and that the national interest demands a set-up such as that which the Government have proposed.

The Government's proposals meet all the really valid objections which hon. Gentlemen had to the pre-war era. The objection to the Iron and Steel Board properly lay in the fact that it had no positive powers. There has been an attempt this afternoon to ridicule the positive powers to be entrusted to the Board, but these positive powers are very real and will be very effective.

An hon. Gentleman connected with the steel trade said he did not think that those powers would be used. Neither do I. I think that if anything is needed in the interests of the nation, the steel industry will, at the behest of the Board, do what is necessary. They might even be prepared to levy themselves to secure what is necessary in the national interests.

One of the great features of the last 20 years, and which I urge hon. Gentlemen not to decry in any way, is the growing trusteeship of those who operate our industries, the growing responsibility and sense of public service which actuates those in charge of our great industries. I am satisfied that this positive power will be adequate, though it may not actually be used in practice.

Hon. Members opposite have asked why we should de-nationalise the steel industry. "Why not," they say, rather like the burglar who has got away with the swag, "now leave us in peace?" I think there is a more profound issue here than has perhaps been generally raised today. The efficient conduct of a great industry is a vitally important matter, much more vitally important than its ownership.

I hope that hon. Gentlemen opposite will get that into their heads some time or other, because this confusion in the minds of Socialists between ownership and control is really a most unintelligent one, which they should have grown out of by now. It is no use thinking of dealing with problems of the 20th century with a 19th century outlook. That is precisely what hon. Gentlemen opposite are trying to do.

This issue of nationalisation in connection with the steel industry is important because it will be setting the pattern for the conduct of certain industries in this country for many years to come. I say that because we—both parties—are agreed that some industries should be nationalised; we—both parties—are agreed among ourselves that a certain number of industries should be run under private enterprise. But there are some industries, of which the steel industry is one, about which there is a difference of opinion, and which might in this connection be described as marginal.

I suggest to the House that it is quite wrong to confuse ownership and control. I go further and say that it is probably easier, in the national interest, to control an industry when the State does not own it than when it does. Once a State organisation becomes involved in the job of running an industry, or has a direct or indirect responsibility, it is less capable of controlling that industry in an objective manner.

Without wishing to make a party point here, I urge hon. Gentlemen to look very closely at what I consider to be their old-fashioned ideas about ownership, because effective control of industry in our modern economy and with modern techniques can be obtained without actual ownership. The right hon. Member for Lewisham, South tried to deal, I thought very ineffectively, with this question. Condemning what he had approved a few years before, he said that the Board which it is at present proposed to establish will interfere with the industry more than the existing set-up.

Some of my hon. Friends have already indicated that this is by no means accurate, and it is a fallacy to believe that we can saddle the chairman of a great corporation with overall financial responsibility for an industry and deny him the right to say what he is going to do. It is absolute and utter nonsense to have a man sitting in London or elsewhere and undertaking entire responsibility for an industry, and, at the same time, allowing people at a lower level to do exactly what they like. Only a child would believe that that was possible.

Moreover, it is perfectly true to say that the longer that industry goes on, the more will be the tendency for the control to be centralised. Every time there is a mistake or something goes wrong, we shall have a regulation to deal with it. If there is a trade recession, there will be more directions, and the whole tendency will be to confine and cabin the industry as time goes on.

The House may ask what are the advantages which we say will accrue to the form of organisation which the Government propose to adopt, and I am quite prepared to deal with the question. We are not offering, and we cannot offer, complete and unbridled competition, but there are advantages in this sort of organisation.

The first is that we retain an element of competition. When someone talks about fixing prices, let the House remember that the prices to be fixed are the maximum prices, and if, as I assume is the case, these companies will be subjected to the attentions of the Monopolies Commission, it will probably be illegal in a relatively short time in this country to try to get collective agreement to fix prices. It is quite clear that, in this system, we can have something which we could not have under our present system—the ability to compete.

Moreover, we have consumer choice. I believe that consumer choice is a very vital factor in preserving and maintaining efficiency. Hon. Gentlemen opposite believe in the damp squib of the consumer council. I do not; I think that the ability to go from one to another for what you want, instead of to a monopoly, is the best way of shaping industry. Therefore, under this system, we have competition and the right of consumer choice.

We have also an important thing which hon. Gentlemen opposite may seek to deny. We have responsibility to shareholders, and I think it is an important thing to have responsibility to shareholders. It keeps directors on their toes. If one is responsible only to a great mass of people unknown to one, then one is inclined to get a little slack, but if you are responsible to a body of shareholders, that acts as a stimulus to your own efforts. Therefore, the responsibility to shareholders which this system gives is of value.

It also has the effect of retaining individual directors who are responsible for the business of the company. I think that is a vital advantage over the system which operates at the present time. It is quite impossible to imagine a great organisation which is run centrally and in which the great impetus at the centre permeates to the perimeter. The great snag of all nationalised concerns, however forceful the central direction, is that it becomes less as it reaches the perimeter, and it is much better to have private enterprise, with a series of impulses which are local, and from which we get a higher degree of efficiency.

All these things are advantages, but, superimposed upon them is an absolutely certain, fixed and positive method of public supervision. That is the method of allowing the maximum private enterprise and competition which is conceivable in the circumstances, together with effective control in the public interest, which is the right method on which to run industries of this kind. The methods adopted by hon. Gentlemen opposite were old-fashioned, inefficient and do not work, and, if they give this particular method four or five years of operation, they will see that their ideas in the past were really wrong, and that this is the method by which these great industries ought to be conducted.

7.45 p.m.

Mr. D. L. Mort (Swansea, East)

Many aspects of this question have been dealt with in the debate so far, but I shall confine myself, in the short time at my disposal, to only one aspect of the problem.

I go back to the first main question, and I think that I shall be interpreting the spirit of the operatives in the engineering shops when I ask the Minister and his supporters why they are going to de-nationalise steel. I would say to the Minister and to the House that, from my own experience, I consider that the man who has a great stake in this question of steel production, and to whom reference has been made in complimentary terms today, is the man who works in the shop, and I can say that his impression of the action which the Government are taking is that this is a demolition Government.

It is a very dangerous principle in national life that we should have one Government which establishes in the State a venture as large and as important as the nationalised steel industry, and a successive Government which comes along and considers that it possesses a mandate, given during the General Election in which it was returned with a small majority, but without a single steel centre in the country fully supporting it, to undo the work that has been done by the previous Government in the nationalisation of a great industry.

Does anyone dispute that we had full democratic sanction in 1945 to carry out this mandate on behalf of the people? Nobody can dispute that, and now, when we hear the Labour Government being charged, as the hon. Member who spoke last charged them, with thinking in 19th century ideas, I must say that that it is the first time I have ever known the principle of nationalisation to be classified as old-fashioned. Possibly some hon. Gentlemen will recall some historical incidents and may suggest that it happened in the Garden of Eden, but, to me and to people generally, the nationalisation of industries is a very new idea. However, I will not pursue that.

The man in the workshops of the steel industry—and the Minister himself will understand this after his recent visit to South Wales—know that the great idea in the steel industry now is that of the continuous mill. The Government are not adopting that modern idea, and, if they denationalise the steel industry, they will be going back to the old reversing mill.

Let us not under-estimate the effect of the Government's action on the steel workers, because the steel worker, after all, is the father of the idea of steel nationalisation. It was in 1932, that the Iron and Steel Trades Confederation, the trade union of the industry, first tried out the idea. For years it was discussed, and then it was approved at branch meetings and at conferences, until we persuaded our movement to adopt the idea, after years of propaganda. When this industry was nationalised, the workers in steel then realised the benefits of their long years of agitation, and said, "We have come into our own."

Do not measure the steel worker's appreciation of our actions by the amount of talk. He is not loquacious; but he is a deep thinker, and he will look upon the Government's action as a working man looks upon someone who has let him down and will say, "They are not men of their word." A workshop saying about someone who can be trusted is, He is a man of his word and we can trust him."

We can rest assured, as my hon. Friend the Member for Rotherham (Mr. Jack Jones) said, that the worker in the steel industry will deliver the goods. He voluntarily worked a seven-day week—the Government did not have to ask him to do so—and he is also a man who will glory in the opportunity that must come when we on this side of the House will be returned once more as the Government of this country of re-establishing this great principle in this industry.

Why do we want to nationalise the steel industry? Every student of economics and of industrial history knows that the steel trade is not just a trade for making steel. It is the linchpin of trades, not only on the industrial side, but on the financial side as well. Who is going to be pleased over the action of the Government?

There are three sections of the industry, and I put the management and the men in one section. They are the people who produce the steel. But there is another section which looks upon the industry merely as a means of financial gain, as a milch cow for the financiers of the country. It has always been so in the past and will become so again. We fully realise that fact.

But the worker pleaded, argued and agitated, and he saw the principles which he advocated established in this country. He is looking forward to the day when another Labour Government will put right what the present Conservative Government are trying to undo. Production is the main thing, and at the present time every steel worker is doing his best to aid production. I want the Government to realise that their action will necessarily have a bad effect.

What was the complaint about the nationalised steel industry? Where was the trouble? Was the industry in a ferment? Were there disputes? Was there any slacking? No. Under nationalisation the industry was doing a really good job from every point of view. Yet the Government come along, not with a democratic mandate, and propose to denationalise the industry.

The Government and the Prime Minister know that they have not got the country behind them. If there were a General Election now, the Prime Minister and hon. Members opposite all know that they would lose it. Yet, despite all that and with only a very narrow majority, they propose to do this thing. We on this side of the House were taunted for many years because when we were the Government we had only a small majority, and we were taunted by the present Prime Minister that we had no mandate from the country. Hon. Members opposite have no mandate to do this, but they are going to do it.

I come back to my previous simile of the mill. I like a continuous working mill. The Government propose to put into effect a reversing mill. But it should be remembered that a reversing mill works both ways, and on the next occasion when we are the Government we shall restore to the steel trade and to the people generally the position that operated before the present Government came into power. We have told the people of this country that we shall do so, and I am sure the workers in the industry will say amen to our action.

7.55 p.m.

Mr. Aubrey Jones (Birmingham, Hall Green)

I wish to preface what I have to say by making the customary declaration of interest. There are two aspects of this White Paper. There is, first, the alternative to nationalisation, and, secondly, the method of achieving that alternative. In the main, this discussion has been concerned—I think perfectly rightly—with the alternative. The speech of the hon. Member for Swansea, East (Mr. Mort) fell into that category and I for my part shall be happy to follow the precedent.

Before doing so, however, I want to refer to one or two observations which have been made on the method. The hon. Member for Rotherham (Mr. Jack Jones) was guilty of one or two very picturesque phrases—such as "Skimming the cream" and "Sharing the swag." I would at the outset lay down this very general principle. I think it is accepted on both sides of the House that in an act of nationalisation due regard should be paid to the rights of individuals. I would equally affirm that in any act of de-nationalisation due regard should be had to the economic and financial interests of the State.

I agree with the right hon. Gentleman that that principle would be transgressed if, in point of fact, one skimmed off the cream first of all. That should not be so, and I do not think it need be so. This is a developing industry, and in every such industry there is a shift of production from the older to the newer concerns. It is in everybody's interest to facilitate and expedite that shift, and the best way of doing that is by linking the older with the newer concerns. That is desirable in itself, quite apart from this operation, and if that is done I do not think there need be any skimming of the cream or any uneconomic holding by the State.

Mr. Jack Jones

Would the hon. Gentleman be able to guarantee that the United Steel Corporation, who are now managing the Barrow works on behalf of the steel Corporation, will include the Barrow works when the assets are sold?

Mr. Jones

I can give no such guarantee. I am a mere modest back bencher and am only expressing what I think is desirable. There should be no skimming of the cream.

I turn now to the primary question, the nature of the alternative. The gravamen of the charge against nationalisation was, I thought, put very well by my right hon. Friend. The very fact of establishing one owner subjected the 80 to 90 nationalised firms to one single central will. My right hon. Friend described the price which has always been paid throughout history for any great expansion of central power, and that is the ebb of vitality from the circumference. When he did that, a tremor of scepticism passed along the benches opposite.

I would remind the hon. Member for Swansea, East that exactly the same problem exists today in the trade union world. There are those who advocate a wages policy and those inside the trade union movement who very stoutly resist any such proposals. Why do they resist? They resist because they fear that any such move would place the trade unions under the tutelage of one single central will and that, as a result, the vitality of the trade union movement would ebb away.

The principle of the problem is exactly the same in this case. Nor is this a price which becomes apparent in a day, but in the long term it is apparent. Why did the party opposite proceed to the nationalisation of the steel industry? The answer has come out today in speech after speech, and in the speech of the hon. Member for Swansea, East. The answer, fundamentally, was one of mistrust. It was thought that if these 90 odd nationalised firms were left to their own devices and pursued their own ends they would set the ends of society at naught.

This is the fear, the mistrust. But merely because one may fear the abuse of freedom one does not eliminate freedom. One tries to channel or guide it. Unless we can do that there is no hope or future for us as a free society. We may as well, all of us on both sides of the House, throw up the sponge. I should have thought that that general principle was unassailable, and it is because this White Paper seeks to apply that general principle in miniature to the segment of the steel industry, that I believe in it.

The proposals in the White Paper, it seems to me, do two things. By restoring these 80 or 90 firms to separate sets of owners they restore a power of independent action and the tug of competition. At the same time they set up a Board to perform—if I may so paraphrase it—three functions; first to check abuse, secondly to temper the individual considerations of profit with wider public considerations, and thirdly—I would underline this—to act, as I conceive it, as a spur or a prod.

If these privately owned 80 or 90 firms were to seem to be defaulting and not complying with the needs of society, there would in the last resort be a prod exercised by this Board. I would affirm that all the fears that have been expressed on the opposite benches, all the expressions of mistrust, can in fact be effectively met by this arrangement. We have heard that this Board is negative. If it is negative, quite clearly it has power to check monopolistic abuse. Where it has a power to fix maximum prices there cannot be monopolistic activities.

We heard from the right hon. Member for Lewisham, South (Mr. H. Morrison) a long and, I think, distorted history of the past—how the needs of this country dictated a capacity of X tons, and the steel industry would only furnish a capacity of Y tons, a lower figure. I do not accept his version of the past, but suppose for the sake of argument that we accept that as a hypothetical assumption. Suppose the privately owned steel industry were willing to extend only to a certain level and the needs of society dictated a higher one; what would happen? Under these proposals the Government would be able to step in with a sanction.

Hon. Members opposite who today have decried this conception have, in fact, a name for it—a very good name. They call it competitive public enterprise. The hon. Member for Sheffield, Park (Mr. Mulley) used the phrase "keeping the industry on its toes." The whole virtue of the idea of competitive public enterprise is to keep an industry primarily privately owned on its toes, and that, I would have thought, would have been effectively performed by this arrangement.

The right hon. Member for Lewisham, South said "Ah, but the State would be left with the uneconomic projects." I remember, I think just under two years ago, the right hon. Member for Lewisham, South went to Oxford to attend a week-end conference at Nuffield College. I think the hon. Member for Reading, South (Mr. Mikardo) was there too. It was a conference concerned with the problems of nationalised industries. The right hon. Member for Lewisham, South made this point; I remember it in the papers perfectly well. He said, suppose the Government, the country, in their own interests wanted a project which was uneconomical, no power could be applied to a nationalised board to undertake that uneconomical project. The nationalised board has to make its ends meet. Some other arrangement would have to be made. Exactly the same applies here.

Mr. Mikardo

I hate to interrupt the hon. Gentleman on what may seem to be merely a procedural point, but I am sure he will recall that when Nuffield College holds these conferences, speakers are invited to go and, as it were, let their back hair down, on the promise that none of the people who attend will quote the proceedings of the conference. I am sure that fact has just slipped the hon. Gentleman's mind for a moment, and I thought that he would be glad to be reminded of it.

Mr. Jones

I am sorry if I am guilty of any breach of propriety. I was not, in fact, one of the privileged people present. I merely read the reports. If I am guilty of a breach I readily withdraw.

However, it seems to me that the problem is applicable in either case, whether we have a privately-owned industry supervised in this way or a nationalised industry. Nor is this solution a hypothetical one or untried. There is, in fact, a precedent for it—a precedent in quite a different field—to which, so far as I have been able to discover, the party opposite have never demurred. The Electricity Act of 1926 gave the Central Electricity Board power to build its own generating stations if private undertakers were unable or unwilling to build them. That power was exercised, I believe, on three occasions. I think it has been generally held that that Act was a satisfactory solution of the problem of electricity generation. That is the precedent.

However, if hon. Members opposite are not particularly happy with that aspect, may I commend to them another? The hon. Member for Swansea, East spoke as a trade unionist. During and since the war there has grown up the practice of allowing the trade unions a share in the making of industrial policy. I approve that development; I welcome it. In the steel industry the trade unions played that role during and immediately after the war through a consultative committee with the employers. They played it, under the 1945–50 Government, in the old Iron and Steel Board.

Then there came nationalisation, and they lost that position. They lost it for a very simple reason, which is very well known to hon. Members opposite. The Iron and Steel Corporation of Great Britain—that is a nationalised undertaking—was not only a policy making body. It was also an employing body. The trade unions could not easily accept representations on an employing body without compromising their independence and their freedom to bargain. That is why the Acts of nationalisation merely provide for the presence of somebody with trade union experience on the Board of a nationalised undertaking. But this is different. The Iron and Steel Board in this White Paper, would not be an employing body. It would be a policy making body. On that body, for the reasons that I have given, the steel trade unions as such could accept representation.

If hon. Members opposite wish to reject the solution offered in this White Paper, let them do so fully realising that they are rejecting an opportunity which re-nationalisation could not restore to them. May I further put before them this consideration. As I understand it, as an external spectator, the industrial policy of the Labour Party rests on two pillars. For basic industries, nationalisation; and for other non-basic industries, industrial boards—to use a phrase of the T.U.C. 1944 Report on Postwar Reconstruction—development councils, competitive public enterprise.

I confess as a spectator that I have never really understood the logic of the distinction. What is basic and what is non-basic? I do not know. But surely what this White Paper promises is an industrial board or a development council armed with the sanction of competitive public enterprise. If that arrangement is suitable for some industries, why is it not suitable for the steel industry? There is not a single speech from the benches opposite today which has made any attempt to answer what I consider is the crucial question. If hon. Members opposite wish to reject this solution, let them reject it fuly realising that they are condemning and rejecting a whole half—if I may say so, the better half—of their entire programme.

The right hon. Member for Ebbw Vale wrote in the "Tribune" on the eve of the Morecambe Conference a plea for what he called a new thrust forward. I think that was the phrase used. In the course of that article he made use of what I thought was a very pregnant sentence. He said that the effective defence of nationalisation is to add to the nationalised industries. The right hon. Gentleman was powerfully right. The logic is inexorable and irrefutable. If what has been done is good, then by all means it is right to extend it, to add to the nationalised industries. But I suggest that those who are not for a policy of thrusting forward, but for a policy of consolidation, have also to face up to the logic of that sentence.

If there is doubt about extending nationalisation, equally there must be doubt about what has been done. And if there is to be found for what is now known as the private sector a solution other than nationalisation, then there is no reason why that same solution should not apply to some of the industries now nationalised—to the steel industry. What has been done is not perfect just because it has been done, and to defend it on that ground—which I suspect to be the main ground—is to defend it, if I may use the phrase without offence, from hurt pride, and hurt pride never was the wisest of counsellors nor the strongest of motives.

8.13 p.m.

Mr. Maurice Edelman (Coventry, North)

The Minister of Supply and those who followed him on his side of the House have taken as their theme that they wish to undo the harm done to the iron and steel industry by nationalisation. I waited for evidence from him of any harm that had been done. I thought that he might possibly have quoted from the Report of the Iron and Steel Corporation presented to him not long ago, but instead of that he showed an extraordinary coyness.

In fact, although the Report is actually addressed to him by Sir John Green, the new Chairman of the Corporation, I doubt very much whether the Minister of Supply can have read it, because if he had done so he would have seen that the iron and steel industry under nationalisation is in a buoyant condition, and the difficulties from which it suffers are the difficulties which are imposed upon it by private enterprise as represented by the Iron and Steel Federation, whose spokesman the hon. Member for Birmingham, Hall Green (Mr. Aubrey Jones) is in fact.

Mr. Aubrey Jones

I am afraid I am no spokesman. I am merely an executive, that is, one of the salariat, with no more direct interest in profit than any wage earner in the industry.

Mr. Edelman

I assume that the hon. Gentleman does not dissent from the general policy of the Iron and Steel Federation, and it will be my purpose tonight to try to show that it is precisely that policy which has hampered the development of the Corporation. Although for a long period there was some sort of spurious friendship shown by the Federation to the Corporation, in fact the Federation has at every point sought to shackle and hold down with its reluctant hand the progress of the Corporation.

If we look at the actual Report and Statement of Accounts, we have the picture of an industry which is in remarkably good health. Profits are running at a rate of £65 million per annum, and in 1952 the profits will probably be running at the rate of £70 million per annum. In addition, the industry has a record of development and expansion, all of which redounds very much to the credit of those who manage and those who work inside the industry. I do see one serious gap in the Report. I very much regret that those who drafted and formulated the Report did not have the good grace to pay tribute to the admirable work done by Mr. Steven Hardie, to whose credit must go the excellent results described in this Report.

None the less, the facts speak for themselves, and those facts are that the industry is buoyant and productive. Despite all the difficulties which it has had to face, the industry today is doing well, and there is absolutely no economic reason whatsoever for its de-nationalisation. I must say that among the difficulties which the industry is facing is the fact that the consuming industries in this country are asking for steel at the rate of at least 19 million tons per annum, and the iron and steel industry is producing at the rate of something like 16 million tons per annum. It is true that that may be increased this year, and possibly still further increased next year.

We have to consider: Why is it that the iron and steel industry today faces this gap between its performance, its production, and the demands which are being made on it, whereas in the world outside, as an hon. Gentleman opposite mentioned earlier, America, for example, has in a single year raised its annual output by the total amount of our own annual production, while Germany is coming into the market, and Japan, too, is threatening to become an extremely dangerous competitor not only by reason of the cheap price of its steel but also—and I, personally, am directly concerned in this matter, because I represent a constituency which lives on its steel—because the products which are made from that cheap steel are entering world markets in competition with our own. We have to ask ourselves why it is that the steel industry faces those conditions today.

Let us consider what happened in the last year, when the iron and steel industry of Britain, despite the fact that we had the productive capacity for increasing our output, was unable to do so. The reason is stated in the Report. The major reason we were unable to raise our steel output beyond the level of 16 million tons was that we could not get hold of the iron ore we needed for our industry. We might well ask: Why is it that we did not get hold of that iron ore? Was that a failure of the nationalised industry?

The answer is, "Certainly not." It was a failure of the private sector of the iron and steel industry, dominated by the Iron and Steel Federation, and controlled by the Iron and Steel Ore Company, which is under the domination of the Iron and Steel Federation.

Let me illustrate that with one example, which I personally regard as being scandalous. There was a case of the Sierra Leone Development Company, a company controlled by a British firm which was outside the limit of iron and steel nationalisation, a company which was financed in part by the Colonial Development Corporation, and which was concerned with the production of iron ore, which we in this country vitally needed last year.

In those circumstances, that being a company owned by a British firm, a company financed by the Colonial Development Corporation, it would be thought that the first call on that vitally needed ore would have been made by the British iron and steel industry and that the first supplies would have been allocated to our own industry. In fact, what happened? The major output of the Sierra Leone Development Company went to the United States and to Germany. We did not get the major resources of the Sierra Leone Company. The result was that even when the right hon. Gentleman the Prime Minister went to America in order to buy his million pounds worth of steel, which my hon. Friend the Member for Rotherham (Mr. Jack Jones) was talking about, and when he bought that steel, we had returned to us from the United States steel manufactured from the iron ore of Sierra Leone.

Is that a failure of a nationalised corporation or is it a failure of private enterprise? The answer is, surely, that it is a failure of private enterprise, and surely the failure of those who constantly resisted the attempts of the former chairman of the nationalised Corporation to bring the purchase and procurement of iron ore within the ambit of the nationalised sector of that industry.

Therefore, I would say that the first lesson of this debate is not that we should have less nationalisation, not that we should have de-nationalisation, but that, as soon as possible, we should proceed to the nationalisation of those sectors of the iron and steel industry, and in particular that sector which is concerned with the procurement of raw materials, which hitherto have escaped nationalisation. Only when that is done can we hope to have a really integrated nationalised industry, serving the nation in the way in which it has done.

The whole history of the relationship between the Iron and Steel Federation and the British Iron and Steel Corporation has been the reluctance, to put it no more strongly, on the part of the Federation to co-operate with the objects and purposes of the nationalised industry. It is one of our tragedies that when the Conservative Government came to power the member of the nationalised Corporation who most conspicuously believed in the purpose for which he had been appointed to serve the Corporation was driven out of office by the action undertaken by the present Minister of Supply.

I should like to illustrate yet further what the Minister of Supply, in conjunction with the Iron and Steel Federation, has done in order to frustrate the purpose of the Iron and Steel Act, 1949. It is perfectly true that this year the profits of the industry are running at the rate of something like £17 million per annum. As my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison) said, there are times when to make a profit of that nature may be inimical to the best interests of the country, and indeed that is happening today.

The Minister of Supply—I have alleged before in his presence, and I do it now in his absence, and no doubt his Parliamentary Secretary will report to him what I say—did arbitrarily raise the price of iron and steel against the advice of those competent to know the situation, and he did so at a time when we were entering into a most difficult sellers' market. The result is that today the motor industry of Britain and the engineering industry are facing competition of the most vicious kind, competition in which we ourselves have been hamstrung and hampered by these extra burdens which the Minister has imposed on the consumer industry by this arbitrary rise in the price of steel

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

The hon. Gentleman keeps making these charges against my right hon. Friend. I am sure that he does not want to mislead the House. He said that my right hon. Friend had done this against the advice of those who are closely concerned. Does he not remember hearing over and over again that it was not against the advice of the Corporation? Does he not remember that, and will he not acknowledge it?

Mr. Edelman

I do not want to revive old disputes, and I shall merely recall to the hon. Gentleman that that matter was left open because his right hon. Friend was unwilling to publish the correspondence between himself and the Corporation. I shall not withdraw my charge that the price of iron and steel was arbitrarily raised. Let us consider the facts, which speak for themselves.

The fact is that today the motor and engineering industries are burdened with a very large share of that £17 million profit which the Iron and Steel Corporation have made for the iron and steel industry. I would merely recall that the most responsible spokesmen of the Iron and Steel Corporation, at the time when the charges were imposed on the industry, said that those charges were excessive, uneconomic and would be harmful to the country. I repeat that today the difficulties in which the motor industry is finding itself in the export markets of the world have been increased by the intervention, the unnecessary, unmerited and unwanted intervention, of the Minister of Supply in these matters.

Now let me turn, before I conclude, to one other matter. We all recognise that the most important problem which faces the iron and steel industry today is the problem of development and expansion, and associated with that is the question of rationalising production. The rationalisation of production, if undertaken by private enterprise—and Jarrow is one example of that—in the interests of private profit can do nothing but cause resentment and bitterness among those who are rationalised out of existence; whereas, if rationalisation is undertaken according to a national plan and in the national interest, where the workers and the managers, and all those concerned in the matter realise the purpose of such rationalisation, where there is compensation provided for those who might otherwise suffer and alternative work created for those who might otherwise be unemployed, in those circumstances, when rationalisation is related to the national need, it is indeed an entirely different matter.

I venture to suggest that is the form of rationalisation and development which has already gone a long way under the nationalised Corporation. That form has proved acceptable to those concerned directly in the industry, and if that form of rationalisation and development is upset, then indeed there will be trouble in the industry.

On the question of development, there are great plans in hand which will require large sums to finance them. If the industry is turned over to private enterprise, who is going to undertake the financing of these enterprises, and who is going to undertake the financing of this development? I can quote one example of one firm with £1 million capital which today has projects to the extent of £8 million worth of development, and it is quite clear that if in fact the industry is returned to private enterprise, either that particular firm will have to have a public loan, either it will have to engage in its development by means of public finance, or alternatively it will have to allow the projected development to drop.

Both the alternatives are undesirable. If the development is dropped, the country will suffer; equally if that development is financed by public funds it will mean that, although the financing is done publicly, there will be absolutely no public control whatever of the development so financed.

So I say that on all counts the present political intervention, this doctrinal intervention by the Government in a matter which is the bread and butter of so many people throughout the country, is gratuitous, unnecessary and unwanted. We live in a very dangerous world in which competition is becoming keener every year and one in which we have seen an enormous expansion of the competitive steel industries throughout the world, but all we can say of our own industry is that we are barely managing to keep pace with the demands of the consumers. We are already priced out of the competitive steel market, and we are in danger of being priced out on the steel products on which this country lives.

Therefore, I hope the Government will have second thoughts about this matter. I hope the Government will not disturb the delicate balance of an industry which is now seen to be expanding and developing and to be full of the promise which is expressed in the Report and Statement of Accounts presented by the nationalised Corporation to the Minister of Supply. My last word to the Minister is that he should read the document, for I am convinced that if he does so he will be converted to nationalisation.

8.31 p.m.

Mr. R. Brooman-White (Rutherglen)

I am glad to be able to follow the hon. Member for Coventry, North (Mr. Edelman). I do not wish to pursue the issue he has raised about the relationship between the Corporation and the Ministry of Supply—I thought that question had been adequately answered in a previous debate—but he also referred to raw materials supplied to the industry. He represents a steel manufacturing constituency in England, and I represent a steel manufacturing constituency in Scotland, and no doubt we have both met similar problems.

The hon. Member instanced the specific case of difficulties in connection with supplies from Sierra Leone, about which I am not fully documented. The hon. Member instanced it as a failure of private enterprise. I do not know if he is right, conceivably he may be so. I do not wish to overstate my case, but the hon. Member is no doubt aware, as we all are, that if we wish to dig into the past in allocating blame for raw material difficulties the negotiations by the Socialist Government in dealing with Germany over the supply of scrap are also, to say the least of it, susceptible to question.

The views on nationalisation of the people in the industry were referred to by the hon. Member for Swansea. East (Mr. Mort). The hon. Gentleman has great experience in this matter, and I do not question his views, but when hon. Members instance the views of the workers, is it not a factor that after nationalisation the workers in the industry experienced short-time working? I do not allocate blame for that, but I merely suggest that it came as a shock to a number of people in the industry who had assumed that in future nationalisation would protect them from the dangers of short-time working and unemployment. They had unduly high hopes—I put it no higher than that—but experience did not justify them.

The lesson is obvious. The industry in future can really only be protected by competitive efficiency and effective organisation, and it is that with which we are primarily concerned. I am sure, moreover, that we all agree that when we are debating the future of the industry, that the important thing is not to emphasise the points on which we differ but to establish the points on which we agree, for if there is not a sufficiently wide basis of agreement between us the industry is not going to have any future at all.

In allocating the blame for past events, hon. Gentlemen opposite have spoken as if nationalisation was developed in the normal course of events, that there had been no question of rushing things through or of difficulty about the vesting date, and that they can now sit back in a white sheet and cast upon this side of the House the blame for having interrupted natural processes. That is a very peculiar interpretation to put on the facts. However, a point on which we agree is that some stability must be given to the industry in future. As the hon. Member for Swansea, East said, the shuttlecock process must be stopped. Everyone agrees that a settlement must be reached.

Of course, everyone wants the settlement to be strictly in accordance with his own ideas of what should be done, and if it is not strictly in accordance with his own ideas, he wants it at least to be in accordance with as much as possible of the doctrine and dogma of his side. Each side would be very glad if the other side said, "All right. A lasting agreement is necessary. We give up. Have it all your own way. We contract out." It would be most agreeable to us if hon. Gentlemen opposite would say that, but obviously we cannot expect them to do so. Neither can hon. Gentlemen opposite expect us to cast overboard all our views on the most effective way in which this industry should be organised for the future.

What faces us in the world of political realities? We are faced with the prospect of constant change leading to the ultimate ruin of the industry, or we are faced with the need for agreement and compromise. If an agreement is to be reached we must look for a basis from which to start, and I suggest that the White Paper provides such a basis. I do not expect hon. Gentlemen opposite to agree to that suggestion with howls of enthusiasm.

Mr. Mikardo

The hon. Member does not sound very enthusiastic himself.

Mr. Brooman-White

I do not, because it is extremely difficult. I am responsible, as their representative, for the future of a considerable number of steel workers who will suffer if an agreement is not reached, and the whole tenor of the debate has shown that it is not going to be easy to reach an agreement.

Mr. James Simmons (Brierley Hill)

They are not suffering now.

Mr. Brooman-White

The object of our discussion is to ensure that they do not suffer in the future. I believe the White Paper provides the best possible basis for agreement. We must recognise that there is a need for a reasonably sound and durable agreement to be reached and that neither side will concede the whole of its case. We recognise the misgivings that hon. Gentlemen opposite have about private enterprise. In the main, they claim it does not sufficiently serve the public interest, but in Part II of this White Paper, which has been fully explained by the Minister, there are extensive provisions for ensuring that private enterprise is guided by the public interest.

I do not want to repeat the points made by the Minister on this issue, but one thing which I would emphasise is that if hon. Gentlemen opposite are not satisfied with the conditions of Part II they are perfectly susceptible to amendment or change. It is right they should be. The details of these proposals are not going to be valid in all circumstances for all time, but such improvements or alterations in Part II could be carried out without interfering with the essential stability of the industry. That is a purely practical matter to meet changing circumstances and changing needs, and on that there should be no great difficulty.

The real issue comes down to the ownership of this block of shares mentioned in Part III of the White Paper. That is the real root and crux of the difficulties, but I do not believe it is nearly as large and as formidable a root as the course of the debate might make it appear. I personally am not concerned with who holds the shares, except in so far as it should affect the efficiency of the organisation and the guidance of the industry. By and large, I should like to see an increasing proportion of the shares held by those actually employed in the industry, but I do not wish to detain the House by developing that argument now.

The question of the ownership of these shares is one which has been seized on by hon. Gentlemen opposite. They had something critical to say of some remarks of my hon. Friend the Member for Cheadle (Mr. Shepherd) about 19th century thought. At least they cannot accuse us of 19th century laissez faire or the Manchester school approach to private enterprise after they have read Part II of the White Paper which deals with public supervision of the iron and steel industry. I hope that hon. Members opposite from their side will not cling with undue frenzy to those ideas originating from the 19th century about the essential need for public ownership in order to have effective public control.

We understand their misgivings about private enterprise, and to a very large measure that is met in the Part II of the White Paper. I hope they understand our misgivings about the effect of centralised, nationalised control, through public ownership. They may say that our fears of over-centralisation, of rigidity, of lack of efficiency, of weakness on the periphery of the decline of responsibility by the man on the spot to make decisions—these are all exaggerated. But they cannot be 100 per cent. sure they are right in this.

We have given assurances to offset the fears that they might have of any failure under private enterprise to protect the public interest. Can they not see our point of view and accept the measures necessary to ensure that the fears we have about the possible effects of State ownership of these block of shares will never be realised? However violent their convictions, hon. Members opposite, and particularly those from my part of the country, may well remember what Oliver Cromwell said to the General Assembly of the Church of Scotland, "I beseech you, think it possible you may be mistaken?" Hon. Members opposite should go some part of the way to meet the dangers we fear and suggest adequate provisions for that course.

I do not want to pursue at any length the issues that were raised about profits and the safeguards for the development of productive capacity set out in the White Paper. There are safeguards against any excess profits being made, and if by any chance those safeguards do not work fully or adequately in practice they can be changed or improved. That raises no question of deep principle.

On the question of the development of the productive capacity, it has been generally accepted that in exceptional products of strategic necessity it is right that the nation should carry the burden. And it is unlikely that there will be any difficulty in the industry financing the development of profitable lines or sound commercial propositions.

Mr. G. R. Mitchison (Kettering)

I have been listening sympathetically to the hon. Gentleman, and I gather that he wants to compromise on something or other. Whether that is himself or the Tory Party, or iron and steel——

Dr. H. Morgan (Warrington)

Or Oliver Cromwell.

Mr. Mitchison

—I do not know. He said that this White Paper was a compromise, but is it not the authentic policy of the Tory Party, and if not, what is the authentic policy of the Tory Party? If the hon. Member wants a compromise on parts of this document, what compromise does he suggest?

Mr. Brooman-White

I apologise to the House if I have been so extremely unlucid in presenting my argument that the hon. and learned Gentleman has not followed one single word of it. So that he may understand, I will recapitulate very briefly what I have been arguing. We have to find an agreed solution which does not change with each swing of the political pendulum. A solution cannot be reached by each side abandoning all their previous ideas. That is outside the nature of political realities. So we have to work out, in the coming debates on the steel industry, some sort of basis which is rational and reasonably durable and which we can all agree to let stand. I am now suggesting that in the White Paper there are the necessary roots for such an agreement.

That is the intention of these debates. If we do not achieve such a solution, one side or the other will lose votes; which it is will depend on circumstances and the swing of political opinion; but one thing is quite certain: the people employed in the industry will be in the gravest danger not of losing votes but of losing their jobs. That is a good deal more serious. I am confident that if we can keep these considerations in mind during the discussions in this House, we shall be able to evolve measures to meet the difficulties, and to give the industry the basis of stability which it must enjoy if it is to meet the increasing foreign competition referred to by previous speakers—the stability necessary to safeguard not only the livelihood of those who work in the industry, but the economy of the whole country.

8.47 p.m.

Mrs. Eirene White (Flint, East)

We have just heard three rather lengthy lectures on Tory doctrine relating to the control of industry, with some suggestion that we on our side of the House are not competent to carry out our own Socialist doctrines about the relationship of industry with the community. The hon. Member for Cheadle (Mr. Shepherd), who is not in his place, and the two hon. Members opposite who followed him, suggested that because some of us have given a certain amount of thought and attention to possible alternative methods of dealing with certain industries not including outright public ownership of the entire industry, and because we do not wish to apply these alternatives to the steel industry, we are somehow inconsistent and old-fashioned.

To put it very briefly, the steel industry has certain characteristics which make it entirely unsuitable for the various alternatives which have been suggested for other and minor industries in this country. The steel industry is basic in every sense of the word and of paramount importance, next only, I suggest, to coal, in the industrial structure of the country. Further than that, it has units of such magnitude financially that it is not susceptible to other types of treatment which may be appropriate for industries in which very much smaller units dominate.

Thirdly, to clear up this matter of doctrine, the steel industry of this country has been organised as a most powerful cartel and there is every likelihood that it will be so run again if it is returned to private hands. Therefore, in the view of hon. Members on this side of the House, it is not susceptible to treatment which might be suitable for other industries, for the reasons which I have briefly tried to indicate.

Hon. Members on the Government side have suggested that we are lacking in public spirit because we propose, if we are returned to power, to continue the experiment of national ownership of this industry. I put it to them in all fairness that the other method of running the industry, that of private enterprise, has had a pretty long run for several generations, some 80 or 90 years, as a modern industry in which to try out that method. Hon. Members opposite left us precisely nine months before the Minister's standstill Order to the Corporation. If they suggest to the country that this was a fair trial, they will find it extremely difficult to convince people that they have given any fair trial to the alternative method of running this industry which was proposed by the Labour Government.

Furthermore, suggestions have been made by hon. Members opposite that we on this side of the House have suggested that in the selling of enterprises back to private owners there would be something dishonest in the methods proposed to be adopted. Were we discussing transport during this debate, I would say that charge might properly be made: that there is a definite element of dishonesty in the proposals for selling back the units in the road transport industry.

What we are saying about the steel industry is not that there is the element of thoroughly dishonourable "fiddle" which is to be found in the transport proposals. What we are saying is that in the nature of things, if you are proposing to sell back a mixed industry in which some units are quite clearly much more profitable than others, it is obvious to the most ordinary intelligence that it is the most profitable units which will be taken first; that it is units about which there may be some doubt which will perhaps be left lingering in the hands of the holding Agency, the watchdog of the Treasury; that there will be indubitably certain units, including no doubt the eight units marked in this Report, as making a loss at the present time, that will remain in the hands of the public. To say that the cream will go to private enterprise first is a simple statement of fact without any doctrinaire implications.

What, in brief, are the problems facing this industry and how does this White Paper really propose to deal with them? In the first place, one great disadvantage of these proposals is that the industry for a period of years, as is made quite clear in the White Paper, will be in a state of uncertainty and we shall have the most illogical conglomeration of different types of enterprise in the industry. I will quote, if I may, not a newspaper of our side but the "Economist," which quite properly asks: Can some modus vivendi be found between privately-owned re-rollers and ironfounders,"— that is to say, ones which have not been nationalised— ex-nationalised steel makers (perhaps still part-owned by the state), a residue of nationalised companies, and conceivably some uneconomic plants owned by the Ministry of Supply? It is said that we on this side split the industry, but what kind of pattern is the Ministry of Supply offering to us in this kind of conglomeration?

But more serious than that, the big problem which faces the steel industry in this country—which was underlined in the excellent Report of the Anglo-American Productivity Team and which is touched on again in the first Annual Report of the Corporation itself—is that of reorganisation and concentration of the industry if we are to be able to meet competition in steel production.

It is made quite clear in the Report of the Anglo-American Productivity Team that the size of the steel-making enterprises in this country is much too small for us to be able to compete adequately with other countries. Is is suggested in that report that the optimum size for bulk making of steel is somewhere between three quarters of a million and one million ingot tons per annum, whereas the average size of the firms in this country engaged in that process is somewhere in the region of 325,000 tons per annum.

Therefore, although it is true that we have the problem of expanding our production, we must do it selectively, and that means reducing the number of plants and increasing the size of those in operation.

I do not pretend that we can go as far in this country as they have done in the United States—that would be impracticable; but that is clearly the direction in which we ought to go. If we are to do that, it is perfectly clear that not only have we to undertake very considerable capital expenditure in certain plants and areas, but we have to eliminate a number of other plants. That, surely, is the crux of the matter.

Even in the White Paper, it is quite clear from paragraph 33 which says that— Before disposal, the Agency may effect such re-groupings of the undertakings or alterations in the capital structure of companies as may be desirable that the Government realise that even before they hand the industry back to private enterprise, some re-organisation is essential. I point out to them that even this degree of re-organisation would not have been possible had we not nationalised the industry.

I put it to the Minister of Supply that this re-organisation, which is absolutely vital, is not something which we can do now. It is necessarily a continuing process. It is not something that is done at one point of time and then is finished with for good. It is obvious in industrial history that this kind of elimination of certain uneconomic units should be done as a continuing process.

One of the troubles before the war was precisely that it was nobody's business to eliminate the uneconomic plants and units. The fact that that kind of action is so necessary, and that on the financial and the personal plane it can be achieved much more smoothly and expeditiously if we have the ownership of the industry, so that one unit can be balanced against another—if somebody is taken out of one firm because it is believed that that firm should be closed down, there would be opportunities for transfer to some other unit in the industry—is one of the very strong reasons why we believe that public ownership, and not merely control, is absolutely essential.

Mr. P. Roberts

Is the hon. Lady now arguing that she wants to retain nationalisation in order to close down firms and to move people from one place to another? If so, what firms in Sheffield, for instance, does she intend to close down?

Mrs. White

I have no intention of interfering with the affairs of Sheffield. As far as my own constituency is concerned, it has an extremely efficient steel plant, which I have no doubt whatever will not be closed down under any form of ownership.

I believe that those objections which I have already put before the House are the strongest, bearing in mind the future of the industry, but I should like very much to have far more explanation than we have had hitherto of the way in which the proposed organisation as outlined in the White Paper is likely to work.

Certain powers are placed within the purview of the Board. The great question is whether in these circumstances any board which has to face the organisation of Steel House would be in the least likely to exercise those powers. Is the Minister likely to be able to find a suitable chairman for the Board, when he will know that he will have to fight Steel House if he wishes to exercise those powers? I suggest that it would be extremely difficult to find a chairman for the Board who would be the right kind of person and who would wish to exercise the powers which theoretically are allotted to him.

In the same way, there is power for taking civil action in the courts which is given to the Board in order to enforce its decisions. But anyone who has the slightest knowledge of the great reluctance of Government Departments—and I am sure that reluctance will extend to the Board—of taking any action in the courts, and the reluctance of lawyers to advise them to take action in the courts, will realise that that power is likely to remain a dead letter.

Finally, it is clear to all of us that what will result from this White Paper, if it should be put into operation, will not be free enterprise. There is really no one who has any knowledge of the way in which the steel industry is organised who would suppose for one moment that what we shall have is a return to free enterprise which the hon. Member for Huddersfield, West (Mr. Wade), for example, no doubt in his dreams still believes might be possible. It is quite possible we shall have once again a tightly controlled monopoly in which the real control is still likely to reside in Steel House and not with the Board. I believe we shall never be able to overcome that particular difficulty until we have returned a Government which will put the industry into public hands, in which ownership will make control a reality and not just a theory in a White Paper.

9.2 p.m.

Mr. G. R. Strauss (Vauxhall)

I think the most important and strangest feature of this debate has been the revelation that hon. and right hon. Gentlemen opposite seem to believe that the proposals set out in the White Paper are regarded by us with some disfavour but no real opposition, that our dislike of this White Paper is really a tepid affair and that we do not feel very sincere or keen about it. I hope that after the speeches made by my hon. Friends today, particularly the speech of my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison), that that illusion no longer remains in the minds of hon. Members opposite.

I will deal with this matter again later on, and when I come to the end of my remarks I hope there will be no possible lingering doubt in the minds of anyone in this House as to what our views are about these ridiculous and wholly foolish proposals. At the moment, I wish to correct something which the Minister of Supply said, I am sure inadvertently, when he suggested that my right hon. Friend the Member for Leeds, South (Mr. Gaitskell) had spoken not unfavourably about these proposals, when he had called them an "olive branch" put forward by the Government.

I do not accuse the Minister of deliberately misleading the House; I am sure he did not intend to do that. I do accuse him of the grossest recklessness in making a quotation without verifying it and, in fairness to my right hon. Friend, I must read what he said on 29th July this year when he was talking about the economic position: … I think it is very regrettable that at this moment, when expansion in steel production in this country is probably the most important thing of all to provide the basis for the engineering expansion I mentioned, the Government should have seen fit to introduce their ridiculous offer for handing back the industry to private enterprise.…. I omit a few sentences for the sake of brevity. My right hon. Friend went on to say: The Chancellor held out a queer looking olive branch on that subject this afternoon.…"—[OFFICIAL REPORT, 29th July, 1952; Vol. 504. c. 1313.] Let it not be said, as I am sure the right hon. Gentleman did not mean it to be understood, that anything my right hon. Friend said was in the slightest degree in favour of the proposals now before us.

Two or three misconceptions have been put forward by hon. Members opposite, and I should like to say a word about them before I deal with the detailed proposals in the White Paper. One is that the Iron and Steel Board, which operated in the Ministry of Supply prior to the nationalisation Act, was in any way a satisfactory instrument for controlling the iron and steel industry. It was not, and it was never intended to be.

It was a body set up to advise the Minister over the two or three years which would have to elapse before nationalisation came into operation. It was a temporary arrangement, and its function—I agree it worked very well—was to review development programmes put forward by firms in the iron and steel industry and advise the Minister about them; and also to advise the Minister on certain price matters.

But neither that Board nor the Minister at the time had any powers whatever over the industry to plan, to reorganise, to tell the industry what it should do in the national interest, none whatever. And it is just those powers which we maintain the Government of this country should have, and has to-day, but will not have if these White Paper proposals are ever embodied in an Act of Parliament.

There is a smaller point I wish to make about one statement, in view of the alarm which might be created unless it is corrected. The hon. Member for Esher (Mr. Robson Brown), who I did not think was quite so unprejudiced and fair in his speech today as he usually is, said several things which were not correct. One was certainly very incorrect.

If I understood him aright, he said that the Corporation was proposing to bring about a regional re-organisation of the industry, under which the various steel companies concerned would lose their identity and their names. Let me assure the hon. Member at once that unless this has happened since I was Minister of Supply—and I think it was so far from the mind of the Corporation when I left it that I cannot conceive that that would happen—such an idea, I know, never entered the head of the Corporation.

What it was considering, and I should have liked to see the Corporation in existence for a long time so that it could carry it out, was a functional re-organisation of the industry which I think would be desirable; but not regional re-organisation or any scheme by which the firms would lose their names and reputations which they have in this country and abroad.

The next misconception which I should like to remove, if I possibly can, is one which is in the minds of all hon. Members opposite, and indeed in the minds of many people outside this House. It is that the steel industry, in the post-war years, did everything that was possible in expanding its capacity and production, and that the Prime Minister was right when he spoke at Scarborough recently and said that the great expansion of the steel industry during the last few years had been due to the careful planning and enterprise of private ownership.

I wish to make two comments on that. First, it was the Government that decided that the steel industry should have all the resources for capital development which it required, and whatever was asked for, was granted. The Government did all they could to use the resources of the country for that purpose, but the industry did not do anything like as much as it said it was going to do.

In view of what has been said, it is vital for the House to realise what happened to the £169 million development programme which the industry announced in 1945–46, saying "This great development scheme we shall carry out." Indeed, they used that as an argument against nationalisation. They said, "Look at what we are going to do. We have our own plan which will cost almost £170 million, which we shall carry out during the next five years."

When the Steel Corporation took up its responsibilities in February, 1951, they found that 50 per cent. of that work had not even been started, and that only 2½ per cent. had been completed. I wish to be fair to the steel industry. I would add that there were in many cases good reasons why a project was looked at again and why certain work set out in the 1945 programme was not carried out. It is also true to say that in some cases other work was carried out in its place.

Nevertheless, it is still true to say that a great bulk of the work promised by the steel industry in 1945 for development during the following five years was not carried out. If it had been carried out in full, or the equivalent had been carried out in full, the steel capacity of this country today would be far higher than it is. We would be in a more comfortable position and would not have had to import so much steel and semis and ingots from abroad, particularly from America, as we have had to do.

The first question I should like to ask the Government, when they bring these White Paper proposals before us today, is why they have found it necessary at this stage to bring about any change in the set-up of the steel industry at all? I ask this particularly in view of the assertions so frequently made by the leaders of the party opposite during the last few years that nothing would harm the steel industry more in this period of its development than plunging it into uncertainty.

I ask this question too because it is obvious, anyhow probable, that the process of long drawn out de-nationalisation—we are told it will take many years—which is proposed in the White Paper, will cause more uncertainty than the act of simultaneous nationalisation which, as we know, was carried out smoothly and without any disruptive effect at all. But under the Government's proposals the Boards of many, indeed it may be most, of the iron and steel companies will not know for years where they are, or who their owners are to be. I suggest that nothing could be more detrimental to the welfare and development of those companies than this lack of confidence about their future which inevitably will be engendered in the minds of their directors.

What other reason, then, is there for bringing forward these proposals now? The answer surely is not that the Government are doing it because they feel bound to carry out all their election pledges? The party opposite have shown over so many matters that they are quite ready to throw over those pledges when they think it is wise to do so. Indeed, the Prime Minister told us, I think it was during the last Parliament, that in his opinion items in the election programme of a party could be disregarded without loss of honour, if and when that party is elected to power.

Are these proposals put before the House today because it has been shown that nationalisation has in any way damaged the industry, or is likely to damage it in the near future; or that nationalisation has resulted in any falling off of output; in inadequate development; in difficulties of finance or any other inconvenience whatsoever? If so, let us be told about it. In fact, there has been no evidence supporting that contention from anybody, including the Minister, during the whole course of this debate. We are therefore bound to assume what, in fact, we believe to be true, that all the evidence shows how well the industry is doing today.

I am not suggesting that that is entirely due to public ownership; of course it is not. But I do suggest that the prosperity of the industry today is in no way handicapped, and in many ways I believe it is helped, by the unifying Act which was passed in 1949 and which has brought about very considerable benefits in organisation, in the purchasing of raw materials, in saving interest at the banks and in many other ways. There is plenty of evidence which can be produced to show the beneficial effect of nationalisation; none has been produced to show it has had any harmful effect.

Again, therefore, I ask, why disrupt the industry, as is proposed, when it can be shown that nationalisation has never had a harmful effect? One is bound to ask is one motive for de-nationalising the industry—an undisclosed motive—because of the desire of the Tory Party to transfer from public to certain limited private hands the considerable profits which this industry is making today? They were £34,500,000 profits in the first seven months of the Corporation's existence, after making a special allowance for depreciation of £5 million.

No doubt, the Parliamentary Secretary will deny that that motive, disclosed or undisclosed, lay behind the Government's decision to bring these proposals before us. Let me warn the right hon. Gentleman that, if he does deny it, we will not believe him, because, although we have the highest regard for him, and we believe that he is sincere and pure in mind, we know that, behind the Government in this matter, are the steelmasters and Steel House, and we know that their motives are not always altruistic.

Then, of course, there may be the other motive—the only other one I can think of—which has impelled the Government to bring forward these proposals to disturb the steel industry. That is the irrational prejudice of the party opposite against any form of public ownership of industry whatever. We have heard these views expressed today by a number of speakers on the other side of the House. They say that it means a centralised bureaucracy and all the rest.

Without going into the argument in detail, which we have not got time to do today, it is quite clear that they have no case whatever, because the fact is that many of the most successful industries in this country—such as I.C.I. and Unilever—are operated from a central bureaucracy, and operated very effectively indeed, and many fine and magnificent enterprises are operated most successfully by Government Departments themselves.

I do not want to labour the analogy, but I would remind the House that today we have heard from the Prime Minister words of praise about the magnificent achievement of British scientists and technicians in developing our own atomic energy project in the last few years. The whole of that business was done under a Government Department. It was done by scientists and technicians, people who need to have freedom and liberty and initiative to operate properly, and it was done under facilities, directions and guidance afforded by a Government Department, operating under Civil Service conditions and with the red tape and all the other things which hon. Gentlemen opposite like to talk about. Yet it was done exceedingly successfully.

But, of course, this great enterprise we are talking about today—the steel industry—is not going to be run, and is not being run, under a Government Department, but by a Corporation based entirely on commercial lines and acting in a commercial way. In case anybody should make the mistake which the Prime Minister made when he spoke of the road haulage industry and talked about an overhead staff of 12,000 people, let me remind the House that the number of people working in the Corporation is 61.

I now propose to summarise the essential differences in principle and approach between the scheme contained in the Iron and Steel Act, in which we believe, and the proposals set out in the White Paper, in which the Government believe, so that it may be clear, and the reasons may be clear, beyond any doubt to everybody, why we so strongly and so unshakably oppose the Government's present proposals.

The first and the most important difference is that the White Paper sets out to remove from the Government the authority that we believe is essential to ensure that this industry serves the public interest and the public interest alone, and, in particular, that the industry develops as it should do during the next few critical years. We believe that the pooling of raw materials, mining and ore handling facilities, the elimination of overlapping capacity, long-term planning and modernisation of the industry, the development of its maximum capacity with concentration of specific production in individual works, can be done effectively only if these activities are co-ordinated in a national programme under single ownership, which must be public ownership.

Today, about 98 per cent. of the entire output of the ingot steel of this country is produced by publicly-owned companies under the Corporation. These producers are subject in all matters of policy to the overall planning and direction of the Corporation which, in turn, is responsible to the Minister of Supply and Parliament. The Corporation's authority is complete as it is the sole owner of these companies.

Its organisation of the industry cannot be thwarted by the private interest of any group of shareholders or by the prejudices or obstinacy of the directors of any company. The ultimate authority of the Corporation under Parliamentary control is therefore absolute, and we say it should be so. But all this will, of course, be changed if the White Paper proposals ever become embodied in an Act of Parliament. Then neither the Board nor the Minister would have any authority over the industry at all, apart from certain negative powers. The Board will be able to restrain developments but not enforce them. It can say "Stop," but not "Go." It can act as a brake, but not as an accelerator.

The Minister may be able to fix prices, again a negative power which any Government must assume in a time of shortage, and this applies to the control of raw materials inside the industry when they are scarce. Finally, if the Minister thinks the industry is not taking adequate steps to obtain raw materials from abroad he can, under the proposals, duplicate the industry's buying agency, which appears to us quite ridiculous.

But, apart from this and the Minister's powers to undertake himself schemes of unprofitable capital development, the Board will be able to do nothing except supervise the industry.

Let us look at this supervision, because it is very important. First, it should be noted that in place of the 298 concerns which the Corporation now controls directly or indirectly, under the new setup, this supervision is to extend over 2,400 firms. The directors of some of these firms have protested vehemently. They have been asking what sort of Government this is. When they supported the Conservatives at the Election they believed they were going to do what they said they were going to do; set the people free and remove the shackles which fetter industry.

Now they are puzzled and do not know what has happened. They feel that they have been deceived and betrayed. I hope that the Parliamentary Secretary this evening will explain to these people what has happened and why these new powers and regulations, negative as they are, are going to be placed on 2,000 firms which were previously free from them. If the right hon. Gentleman feels a bit shy about telling these firms why he has taken these steps, perhaps I can help him, and I would like to put forward this explanation.

I suggest he should tell them that the new controls the Government are imposing over their affairs are purely negative. The Government, it is true, will be able to stop them developing. Although most people think this is a very bad and pernicious control, it is the only form of control the Government could impose. They had to impose some control as a sort of political camouflage so as to be able to come forward and say, "After all, there is some form of supervision over this industry." They must ask these firms to accept this control, but in compensation there will be no positive controls. The Government forgoes the right to tell these firms to do anything they do not want to do or anything which the boards of directors may think contrary to the interests of the shareholders.

I say, therefore, that supervision under these proposals means nothing whatsoever except the exercise of certain negative controls under which the companies can be told they cannot do certain things. Otherwise the Board will only be able to look at the firms, to report, and to make recommendations perhaps. After the Board have made recommendations that, for example, certain amalgamations are necessary or that certain steps are necessary to improve the efficiency of the industry as a whole, there is no authority or power whatsoever to make any of those firms carry out any of those recommendations. Indeed, if the recommendations of the Board are such that they might militate against the interests of the shareholders of the companies, the directors not only have the right but the legal duty to resist the Board's recommendations in the interests of the shareholders whose investments they have to protect.

My next objection to the White Paper proposals is that they will split the industry into two, or may be three, pieces. It is not disputed that it will be exceedingly difficult to sell all of this industry to private enterprise. We cannot think, and indeed I do not believe any authority thinks, that it will be possible to do more than sell off a few of the more profitable units in the industry. Therefore, the industry is going to be split, not on functional grounds, but on the grounds of which units have the best profit prospects.

We think it will be exceedingly bad to split the industry in this way, and particularly bad as it is bound to happen that the profitable modern plants will be those which will be more easily sold and will go into the hands of private enterprise, while the obsolete unprofitable plants will remain in the hands of the public and will probably remain a burden to the taxpayer.

It is possible that the industry will be split into three sections. It is possible that the Minister of Supply, under the powers he is taking, will be able to build a new plant of his own. I do not believe for a moment that that is likely. If Steel House said to the Government, "Do not build a new plant and expand the capacity of the industry—we think it is uncommercial to do so," it seems inconceivable to me that the Minister of Supply in a Conservative Government would build such a plant. If a Labour Government believed that it was desirable to expand the industry, to build new plant and make new developments, they would take other steps.

The next line of opposition to these proposals I had better put in the form of a question. How will the new industry—or that section of it which is going to be under private enterprise—possibly raise the £60 million a year that will be necessary for development during the next two or three years, quite apart from the £240,000,000 which will have to be raised to buy back the industry, without burdening the industry with an immensely high interest rate on preference shares or whatever security will be issued? We doubt if they can get the money. We doubt whether it will be available for investment in such amounts, and to the extent that it will be available it will only be at a high price which will militate against the development of the industry and, may even prevent it developing as it should.

I now come to my last point, and it is an elaboration of my first. Government spokesmen have said today and on other occasions that they want to take the steel industry out of politics. I am sure they are sincere when they say that, and I am sure it is in conformity with all the advice they get from Government Departments and from the leaders of the steel industry. A number of significant statements have been made on this matter by leaders of the Government.

The right hon. Gentleman the Minister of Supply today said that he thought these proposals were a fair basis for a workable solution of the steel problem. When the matter was discussed during the debate on the Gracious Speech he said that we have only got to nationalise, de-nationalise and re-nationalise an industry often enough and there would be very little left; and he hoped that he would be able to put forward a scheme which would give confidence that would be lasting.

The Chancellor of the Exchequer, when he spoke in the economic debate just before the Recess, seemed to go out of his way to make a similar reference to the White Paper proposals. On 29th July he appealed for constructive criticism and for proposals to be put forward designed to effect a lasting and accepted national settlement of the future of this great industry."—[OFFICIAL REPORT, 29th July, 1952; Vol. 504, c. 1282.] Let me now say to him and to the Government that if they think a lasting and acceptable settlement is possible on the basis of these White Paper proposals, they are living in a world of fantasy. How could we, with our unshakeable belief that the basic industries of our country must be under effective Parliamentary control and authority, and be run solely for the benefit of the nation, do nothing but regard this White Paper with unmitigated hostility? I go further and ask how any unprejudiced person, whatever his political faith, can consider these present proposals, which split the industry in the way I have just described, as anything but objectionable.

We are as anxious as anybody in the House to remove uncertainty from the minds of all those who work in this great industry, and particularly those who manage and lead it. We want them to get on, unmolested, with their job of making the steel in the quantity, of the quality and at the prices the nation requires. But now to change the structure which has been set up, which we believe was basically right, which was working effectively, and to put these half-baked proposals into effect, we think is a ridiculous thing to do, and cannot possibly have our support.

I therefore say to the Government that, so far from these proposals being acceptable, they are wholly unacceptable. They are not a settlement. They are a call to battle. They contemptuously flout the principles in which Her Majesty's Government and half the nation believe. They go against the tide of history, and are bound sooner or later to be washed away.

I finally say to the right hon. Gentleman and the Government: Take this ridiculous White Paper back. If they proceed they risk bringing about those disastrous consequences about which the Minister so correctly warned us a little time ago. We ask the Government to take this White Paper away, to tear it up, and to think again—to think free from political prejudice and the vested interest of Steel House. [Interruption.] I will repeat that, as apparently it received a welcome from hon. Members opposite. I ask them to think again free from political prejudice and the vested interests of Steel House. I ask them to think intelligently and think nationally.

9.33 p.m.

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

The right hon. Member for Vauxhall (Mr. G. R. Strauss) noticeably warmed to his task as he got off the subject of the White Paper and on to the matter of political prejudices. I should like to deal with some of the more important practical questions which are raised in the White Paper, and which have been raised in the debate, and during the course of what I have to say I hope that I shall be able to answer the specific points the right hon. Gentleman put.

Before I leave him, I should like to correct a misunderstanding that he may have created in the House on two occasions, first when dealing with the powers available to himself and Sir Archibald Forbes' Board, and secondly, when he was trying to contrast the present position of some of the firms conducting the activities which will come under the Board with their position under that Board.

He tried to convey the impression that when he held the appointment of Minister of Supply he had no powers over the steel industry. The great planning Government, it seems, had no powers to control the steel industry at all. Of course, exactly the opposite was the case. At the time of the Forbes Board, the right hon. Gentleman had complete powers over the distribution of raw materials and the allocation of steel for most of the time. He had control over capital investment; he had price control; and he called for statistics from all the firms in the steel industry.

I noticed that the right hon. Gentleman the Member for Lewisham, South (Mr. H. Morrison) fell into the same error—if I may respectfully accuse him of falling into error—when he implied, using the same argument, that the public supervision of the Board would impose completely new controls on various parts of industry—controls which they had never had before. Quite apart from the fact that neither right hon. Gentlemen seem to be able to distinguish between supervision, on the one hand, and detailed control on the other, I am sure that the House will agree with my rendering of the situation, and will agree that both right hon. Gentlemen, no doubt inadvertently, have misled us.

I noticed in the speech of the right hon. Gentleman the Member for Vauxhall that he never at any point dealt with the very cogent argument which my right hon. Friend used at the beginning of his speech, describing the disadvantages of the present set-up. Not for one moment did he deal with that matter. May I now turn to the rest of the debate?

The right hon. Gentleman the Member for Lewisham, South was in very good humour. I think that those of us who have looked at the tape know one of the reasons why he was in good humour.—[Interruption.] I am asked to look after my own business, but I did notice that the right hon. Gentleman was in such good humour that he gave the Tory Party a lesson in looking after their business, so I do not see any reason why I should not counter him. The right hon. Gentleman was in such good humour that he rarely referred to the White Paper at all. On the one occasion that he did so, he had clearly misunderstood paragraphs 12 to 14, and I think that my right hon. Friend put him right.

But he did, of course, deal, as other hon. Members have dealt, with the major difference there is between the two sides of the House upon the question of ownership. It appears from the arguments put forward today that one of the Opposition's complaints about the Government proposals is that ownership in the future will be divided. We aim at a society in which ownership is divided and dispersed, and we see positive advantages in that form of society. I was interested to read in a recent publication that there are others who think in the same way. This is what has been written. The main task of Socialism"— this is a Socialist writing— today is to prevent the concentration of power in the hands of either industrial management or of State bureaucracy; in brief to distribute responsibility and so to enlarge freedom of choice. This task was not even begun by the Labour Party. The writer of that is the hon. Gentleman the Member for Coventry, East (Mr. Crossman). On the other hand, we see a great disadvantage in the division of the power of supervision which is present in the present structure. We want to see one comprehensive supervising authority, and that is one of the main principles behind our proposals in the White Paper.

The right hon. Gentleman the Member for Lewisham, South gave what, I think, was a slightly inaccurate account of production today. He first of all indicated that the increase of iron and steel production in this country since the war was less than that which had taken place in the U.S.A. In actual fact the percentage increase is exactly the same, but what happened was that during the war the United States of America was able to expand its steel production enormously, much to the advantage of this country and other free nations. The right hon. Gentleman appeared in the course of that argument to be pointing to the merits of free enterprise.

The right hon. Gentleman also used the argument that production had increased during the last 12 months in this country. That is true, and we are glad of it, but it is also true, unfortunately, that the total production this year so far has not yet reached the level of 1950. [HON. MEMBERS: "Why?"] Those are the facts. The reasons are well known to hon. Members and I do not think I need repeat them. I am making no points either for or against nationalisation. I am correcting any misapprehensions about the right hon. Gentleman's statement of facts, which was not wholly complete.

On the question of supplies, the hon. Member for Rotherham (Mr. Jack Jones), whose interventions in these debates we always enjoy, certainly on this side of the House, attacked the Prime Minister's arrangements for the purchase of steel from the United States of America.

Mr. Jack Jones

I did.

Mr. Low

The hon. Member seemed to think that the steel which had been bought from the United States of America was no good to the steel industry.

Mr. Jones

I did not say that. I said that it was of a quality which I myself would have been ashamed to produce and that when I questioned its quality with a leading industrialist in charge of one of the biggest firms in my constituency he said, "Well, after all, Jack, we are short of scrap."

Mr. Low

We still enjoy the hon. Gentleman's interventions. His second point—he has made it before—was that it would have been better to import the raw material.

Mr. Jones

We should have paid less for it.

Mr. Low

The choice was not there. However, I will tell the hon. Gentleman that of the imports 150,000 tons were pig-iron and scrap which were raw materials for the industry in his part of the world, and of the balance one-third was ingots which were also raw materials for the industry in his part of the world and another third was semi-finished, also a raw material for a large part of the industry in his part of the world. I would also add that the agreement which my right hon. Friend the Prime Minister was able to make has played a great part in enabling so many people to be employed in the engineering industry this year.

Mr. Jones

It could have been made in England

Mr. Low

There has been a good deal of discussion about development. I thought that the right hon. Gentleman the Member for Lewisham, South gave a somewhat distorted account of the history of development in the iron and steel industry I am particularly concerned with some of the points which have been made about the success of the iron and steel industry in expanding its plant since the end of the war.

The right hon. Gentleman the Member for Vauxhall seemed to be making a serious charge against the steel industry for not having done all that it ought to have done and all that it said it would do in its 1945 plan. The facts are, as the right hon. Gentleman said and as the Corporation's Report says, that some of the schemes included in that programme had not been started by the time the Corporation took over, but the Corporation's Report added that, although in some cases other schemes had been extended as alternatives, technical development, such as the introduction of more ore preparation plants, which saved iron ore and coke, had resulted in some changes in the plan. The reasons for the postponement or alteration of some of the larger schemes are given in the Corporation's Report.

Despite these alterations, the fact is that production today is running ahead of the plans made in the 1945 Report, and the right hon. Gentleman knows that perfectly well. The aim then was a steel-making capacity of 16 million tons. Production is now running at over 16 million tons a year.

Mr. Jones

Then leave it alone.

Mr. Low

Production was running at over 16 million tons a year before nationalisation. The total capacity of the industry, given more scrap, is about 18 million tons. They aimed at a capacity for steelmaking pig iron of over 9 million tons; they are now producing pig iron at 10½ million tons per annum in all, of which about 9 million tons goes to steel making.

The question is, could more have been done? All the evidence seems to show that the utmost was done during that time, and I should like to call evidence in support from a Report which the hon. Lady the Member for Flint, East (Mrs. White) referred to a little while ago, the Iron and Steel Productivity Report, signed incidentally by five trade unionists. In the Report the following remark is made: The British Iron and Steel industry has since 1945 been engaged on a construction programme to the full extent of the resources available to the plant manufacturers. Is not that evidence that everything was done that could have been done? The right hon. Gentleman ought also to know that sufficient coking coal had to be available to make these new schemes worth while, and he also knows there were general capital investment considerations affecting everybody at that time.

That, I think, disposes of the points raised in connection with actual development, but the argument has been made across the Floor of the House about the positive development powers included in the Government's proposals. It was said previously by the right hon. Gentleman the Member for Vauxhall that there is frequently a conflict between the interests of private owners in the steel industry and the national interests. When most people say that, they are referring primarily to the fact that it is in the interest of the private owner of an iron-making or steel-making company that the firm should make a profit and that it may be in the interest of the nation that an unprofitable venture should be started for some reason or another.

But in the course of the argument those people omit to say that it is also in the national interest generally for a host of reasons that the industry should be profitable—in order to replace their plant and to pay their pittance or large amount to the Chancellor of the Exchequer. But it may be for strategic or for other national reasons that the Government might think it desirable to have a new plant erected or indeed to keep an old plant going when the industry, having examined this project very carefully, considered it uneconomical and impracticable to finance.

This will be very rare, but an example was given by my right hon. Friend of the case of a strategic development, and the right hon. Gentleman the Member for Vauxhall knows that the Government have for some time had power to give capital assistance for strategic or defence reasons, because that power was in the Ministry of Supply under his control. This is no new point, and as my hon. Friend the Member for Aylesbury (Mr. Summers) said, when there is development for strategic reasons which is uneconomic and uncommercial, that is a proper thing for the Government to look after.

It appears, moreover, that the previous Government did not contemplate telling the Corporation by direction that they should build uneconomic plants. Indeed, it is clear from a study of the Act that, except in one case concerning the Consumers' Council set out in Section 6, the Minister had no power to give the Corporation such a direction. There ought to be nothing in our proposals in this respect which should surprise the Opposition. Their surprise is synthetic.

It is, however, sometimes argued that the granting of power of this sort to the Government might encourage industry to refuse to take risks and therefore be restrictive in their development proposals. This is a serious argument. It is our opinion that our solution of this problem will have exactly the opposite effect. It really is not likely that a privately owned and managed steel industry will want to have the Government setting up and controlling plants and entering into production. In case of a difference of opinion of the kind contemplated, there will be a strong incentive for the industry to adopt for themselves any proposal of this kind made to them. They will only refuse to do so if the scheme seems wholly uncommercial from their point of view.

If that is their decision, and they turn out to be right, nobody will argue that they ought to have taken the wrong risk. If they turn out to be wrong and the Government's scheme is profitable, the Government will have the profits and the industry will have learned their lesson. The truth is that this is a case where one public interest is conflicting with another. It is a case very suitable for public supervision. We are convinced that our proposals containing the machinery by which any conflict that may arise can be solved.

With further reference to development matters, the hon. Member for Coventry, North (Mr. Edelman) who, as usual made a grossly unwarranted attack upon my right hon. Friend in connection with the Corporation and other matters, referred to the development of iron ore in Sierra Leone. In fact, all he had to say was a direct attack upon his own right hon. Friend the Member for Vauxhall for not intervening. If, on the other hand I misunderstood him and he is now appealing that we should try to nationalise iron ore in overseas countries, I must say it is a very surprising policy which the Opposition Front Bench have never suggested so far.

Mr. Edelman

Is it not the point that here was a company in Sierra Leone which was owned by the British Government and financed by the Colonial Development Corporation, but none the less was selling essentially needed iron ore to the United States and Germany at a time when we were short of iron ore in this country? Is it not further the case that it was the advice of the then chairman of the Iron and Steel Corporation that this company should be brought within the ambit of nationalisation and not left outside, for private profit?

Mr. Low

I heard all that. The hon. Gentleman is knocking at the wrong door in this matter. I would refer to some points——

Mr. Edelman rose——

Mr. Low

—important points, made by the hon. Member for Huddersfield, West (Mr. Wade).

Mr. Edelman

On a point of order. I have been charged with inaccuracy by the hon. Gentleman who is addressing the House and now, when I rise to address myself to the questions he has asked, he declined to give way. Is that in accordance with the traditions of this House?

Mr. Speaker

The hon. Gentleman made one intervention, which was quite proper. At this time of night it is usual to allow the Minister to finish.

Mr. Ivor Owen Thomas (The Wrekin)

On a point of order. Is it in order for the Minister to make a statement, to assume that the statement is correct by drawing conclusions from it, and, although the statement is immediately controverted by the hon. Member whom he has misquoted, to continue his speech?

Mr. Speaker

There is no point of order in that. There is merely a difference of opinion.

Mr. Thomas

Further to that point of order——

Mr. Speaker

There was no point of order in what the hon. Gentleman said.

Mr. Low

I was about to answer some important points put to me. [HON. MEMBERS: "Answer."] I have answered twice, but I will answer again and say that the hon. Gentleman was talking about things that happened in the time of the right hon. Gentleman and I am not concerned with that. I was trying to deal with the important points put by the Liberal Party spokesman today. Those points related in particular to the Board's powers of price fixing. Those points were also covered by my hon. and learned Friend the Member for Middlesbrough, West (Mr. Simon) in his interesting speech when he referred to the importance of competition even though prices are controlled.

Let me answer two specific points. The first relates to the powers of the Minister over levies. The Minister has the power to sanction levies and that is set out in the White Paper. The second point related to whether the Board would have power to bar new entrants into the industry. Of course the Board will not have power to bar new entrants into the industry. The third point related to the question whether the Board would so fix prices that uneconomic plant was kept in operation. Their prices in general will be fixed in relation to the average good economic plants.

The right hon. Gentleman the Member for Vauxhall in the course of his argument stated that the supervision powers of the Board would not be effective. That was the burden of his argument. The burden of the argument of the right hon. Gentleman the Member for Lewisham, South was that they would be so effective that they would interfere with private enterprise. They cannot have it both ways. Of course, the right hon. Member for Vauxhall does not appreciate the co-operation which industry has shown in its partnership with the Government in industrial affairs. Yet he had plenty of it, and he should pay tribute to industrial leaders both in the iron and steel industry and in other industries. It is a fact, as my hon. Friend the Member for Cheadle (Mr. Shepherd) said in the course of his valuable speech, that over the last 15 to 20 years the leaders of the steel industry have shown a spirit of trusteeship for the interests of the nation.

As we come to the end of this debate, I must remind the House of the principles behind the White Paper proposals on which we shall be voting in a minute. We on this side of the House say that this is a basic national industry and that there must be public supervision of it. If there is to be satisfactory public supervision, that supervision must be comprehensive. That comprehensive supervision is best carried out by a board that has not got ownership responsibilities. [HON MEMBERS: "Oh!"] The Iron and Steel Board will have nothing to do with ownership or transfer of ownership.

We believe that with dispersed ownership there can be that bigger and competitive

power in the industry which will look after the needs of the engineering industries and our exports and our defence, and we have confidence that once they have been studied, and once there has been experience of them, these proposals will be treated by the country and, indeed, eventually by hon. and right hon. Members opposite as a lasting settlement.

Question put.

The House divided: Ayes, 303; Noes, 269.

Division No. 243.] AYES [10.0 p.m.
Aitken, W. T. Crouch, R. F. Hirst, Geoffrey
Allan, R. A. (Paddington, S.) Crowder, Sir John (Finchley) Holland-Martin, C. J.
Alport, C. J. M. Crowder, Petra (Ruislip—Northwood) Hollis, M. C.
Amery, Julian (Preston, N.) Cuthbert, W. N. Holmes, Sir Stanley (Harwich)
Amory, Heathcoat (Tiverton) Darling, Sir William (Edinburgh, S.) Holt, A. F.
Anstruther-Gray, Major W. J. Davidson, Viscountess Hope, Lord John
Arbuthnot, John Davies, Rt. Hn. Clement (Montgomery) Hornsby-Smith, Miss M. P.
Ashton, H. (Chelmsford) De la Bère, Sir Rupert Horobin, I. M.
Astor, Hon. J. J. (Plymouth, Sutton) Deedes, W. F. Horsbrugh, Rt. Hon. Florence
Baker, P. A. D. Digby, S. Wingfield Howard, Gerald (Cambridgeshire)
Baldock, Lt.-Cmdr. J. M. Dodds-Parker, A. D. Howard, Greville (St. Ives)
Baldwin, A. E. Donaldson, Cmdr. C. E. McA. Hudson, Sir Austin (Lewisham, N.)
Banks, Col. C. Donner, P. W. Hudson, W. R. A. (Hull, N.)
Barber, Anthony Doughty, C. J. A. Hulbert, Wing Cdr. N. J.
Barlow, Sir John Drayson, G. B. Hurd, A. R.
Baxter, A. B. Drewe, C. Hutchinson, Sir Geoffrey (Ilford, N.)
Beach, Maj. Hicks Dugdale, Maj. Rt. Hn. Sir T. (Richmond)
Beamish, Maj. Tufton Duncan, Capt. J. A. L. Hutchison, Lt.-Com. Clark (E'b'rgh W.)
Bell, Philip (Bolton, E.) Duthie, W. S. Hutchison, James (Scotstoun)
Bell, Ronald (Bucks, S.) Eccles, Rt. Hon. D. M. Hyde, Lt.-Col. H. M.
Bennett, Sir Peter (Edgbaston) Eden, Rt. Hon. A. Hylton-Foster, H. B. H.
Bennett, Dr. Reginald (Gosport) Elliot, Rt. Hon. W. E. Jenkins, Robert (Dulwich)
Bennett, William (Woodside) Erroll, F. J. Jennings, R.
Bevins, J. R. (Toxteth) Fell, A. Johnson, Eric (Blackley)
Birch, Nigel Finlay, Graeme Johnson, Howard (Kemptown)
Bishop, F. P. Fisher, Nigel Jones, A. (Hall Green)
Black, C. W. Fleetwood-Hesketh, R. F. Joynson-Hicks, Hon. L. W.
Boothby, R. J. G. Fort, R. Kaberry, D.
Bossom, A. C. Foster, John Keeling, Sir Edward
Bowen, E. R. Fraser, Hon. Hugh (Stone) Kerr, H. W. (Cambridge)
Boyd-Carpenter, J. A. Fraser, Sir Ian (Morecambe & Lonsdale) Lambert, Hon. G.
Boyle, Sir Edward Galbraith Cmdr. T. D. (Pollok) Lambton, Viscount
Braine, B. R. Galbraith, T. G. D. (Hillhead) Lancaster, Col. C. G.
Braithwaite, Sir Albert (Harrow, W.) Gammans, L. D. Langford Holt, J. A.
Braithwaite, Lt.-Cdr. G. (Bristol, N. W.) Garner-Evans, E. H. Law Rt. Hon. R. K.
Bromley-Davenport, Lt.-Col. W. H. Glyn, Sir Ralph Leather E. H. C.
Brooke, Henry (Hampstead) Godber, J. B. Legge-Bourke, Maj. E. A. H.
Brooman-White R. C. Gomme-Duncan, Col. A. Legh, P. R. (Petersfield)
Browne, Jack (Govan) Gough, C. F. H. Leunox-Boyd, Rt. Hon A. T.
Buchan-Hepburn, Rt. Hon. P. G. T. Gower, H. R. Lindsay, Martin
Bullard, D. G. Graham, Sir Fergus Linstead, H. N.
Bullock, Capt. M. Gridley, Sir Arnold Llewellyn, D. T.
Bullus, Wing Commander E. E. Grimond, J. Lloyd, Rt. Hon. G. (King's Norton)
Burden, F. F. A. Grimston, Hon. John (St. Albans) Lloyd, Maj. Guy (Renfrew, E.)
Butler, Rt. Hon. R. A. (Saffron Walden) Grimston, Sir Robert (Westbury) Lookwood, Lt.-Col. J. C.
Carr, Robert (Mitcham) Hare, Hon. J. H. Longden, Gilbert (Herts S. W.)
Carson, Hon. E. Harris, Frederic (Croydon, N.) Low, A. R. W.
Cary, Sir Robert Harris, Reader (Heston) Lucas, Sir Jocelyn (Portsmouth, S.)
Channon, H. Harrison, Col. J. H. (Eye) Lucas, P. B. (Brentford)
Churchill, Rt. Hon. W. S. Harvey, Air Cdre. A. V. (Macclesfield) Lucas-Tooth, Sir Hugh
Clarke, Col. Ralph (East Grinstead) Harvey, Ian (Harrow, E.) Lyttelton, Rt. Hon. O.
Clarke, Brig. Terence (Portsmouth, W.) Harvie-Watt, Sir George McAdden, S. J.
Cole, Norman Hay, John McCallum Major D.
Colegate, W. A. Head, Rt. Hon. A. H. McCorquodale, Rt. Hon. M. S.
Conant, Maj. R. J. E. Heald, Sir Lionel Macdonald, Sir Peter (I. of Wight)
Cooper, Sqn. Ldr. Albert Henderson, John (Cathcart) Mackeson, Brig. H. R.
Craddock, Beresford (Spelthorne) Higgs, J. M. C. McKibbin, A. J.
Cranborne, Viscount Hill, Dr. Charles (Luton) McKie, J. H. (Galloway)
Crookshank, Capt. Rt. Hon. H. F. C. Hill, Mrs. E. (Wythenshawe) Maclay, Rt. Hon. John
Crosthwaite-Eyre, Col. O. E. Hinchingbrooke, Viscount Maclean, Fitzroy
Macleod, Rt. Hon. Iain (Enfield, W.) Pilkington, Capt. R. A. Summers, G. S.
MacLead, John (Ross and Cromarty) Powell, J. Enoch Sutcliffe, H.
Macmillan, Rt. Hon. Harold (Bromley) Price, Henry (Lewisham, W.) Taylor, Charles (Eastbourne)
Macpherson, Maj. Niall (Dumfries) Prior-Palmer, Brig. O. L. Taylor, William (Bradford, N.)
Maitland, Comdr. J. F. W. (Horncastle) Raikes, H. V. Teeling, W.
Maitland, Patrick (Lanark) Rayner, Brig. R. Thomas, Rt. Hon. J. P. L. (Hereford)
Manningham-Buller, Sir R. E. Redmayne, M. Thomas, P. J. M. (Conway)
Markham, Major S. F. Remnant, Hon. P. Thompson, Kenneth (Walton)
Marlowe, A. A. H. Renton, D. L. M. Thompson, Lt.-Cdr. R. (Croydon, W.)
Marples, A. E. Roberts, Peter (Heeley) Thorneycroft, Rt. Hn. Peter (Monmouth)
Marshall, Douglas (Bodmin) Robertson, Sir David Thornton-Kemsley, Col. C. N.
Marshall, Sir Sidney (Sutton) Robinson, Roland (Blackpool, S.) Tilney, John
Maude, Angus Robson-Brown, W. Touche, Sir Gordon
Maudling, R. Rodgers, John (Sevenoaks) Turner, H. F. L.
Maydon, Lt.-Comdr. S. L. C. Roper, Sir Harold Turton, R. H.
Medlicott, Brig. F. Ropner, Col. Sir Leonard Tweedsmuir, Lady
Mellor, Sir John Russell, R. S. Vane, W. M. F.
Molson, A. H. E. Ryder, Capt. R. E. D. Vaughan-Morgan, J. K.
Monckton, Rt. Hon. Sir Walter Salter, Rt. Hon. Sir Arthur Vesper, D. F.
Moore, Lt.-Col. Sir Thomas Sandys, Rt. Hon. D. Wade, D. W.
Morrison, John (Salisbury) Savory, Prof. Sir Douglas Wakefield, Edward (Derbyshire, W.)
Mott-Radclyffe, C. E. Schofield, Lt.-Col. W. (Rochdale) Wakefield, Sir Wavell (Marylebone)
Nabarro, G. D. N. Scott, R. Donald Walker-Smith, D. C.
Nicholls, Harmar Scott-Miller, Cmdr. R. Ward, Hon. George (Worcester)
Nicholson, Godfrey (Farnham) Shepherd, William Ward, Miss I. (Tynemouth)
Nicolson, Nigel (Bournemouth, E.) Simon, J. E. S. (Middlesbrough, W.)
Nield, Basil (Chester) Smiles, Lt.-Col. Sir Walter Waterhouse, Capt. Rt. Hon. C.
Noble, Cmdr. A. H. P. Smithers, Sir Waldron (Orpington) Watkinson, H. A.
Nugent, G. R. H. Smyth, Brig. J. G. (Norwood) Webbe, Sir H. (London & Westminster)
Nutting, Anthony Snadden, W. McN. Wellwood, W.
Oakshott, H. D. Soames, Capt. C. White, Baker (Canterbury)
Odey, G. W. Spearman, A. C. M. Williams, Rt. Hon. Charles (Torquay)
Ormsby-Gore, Hon. W. D. Speir, R. M. Williams, Gerald (Tonbridge)
Orr, Capt. L. P. S. Spens, Sir Patrick (Kensington, S.) Williams, Sir Herbert (Croydon, E.)
Orr-Ewing, Charles Ian (Hendon, N.) Stanley, Capt. Hon. Richard Williams, R. Dudley (Exeter)
Orr-Ewing, Ian L. (Weston-super-Mare) Stevens, G. P. Wills, G.
Osborne, C. Steward, W. A. (Woolwich, W.) Wilson, Geoffrey (Truro)
Partridge, E. Stewart, Henderson (Fife, E.) Wood, Hon. R.
Peake, Rt. Hon. O. Stoddart-Scott, Col. M. York, C.
Perkins, W. R. D. Storey, S.
Peto, Brig. C. H. M. Strauss, Henry (Norwich, S.) TELLERS FOR THE AYES:
Peyton, J. W. W. Stuart, Rt. Hon. James (Moray) Mr. Heath and Mr. Butcher.
Pickthorn, K. W. M. Studholme, H. G.
Adams, Richard Clunie, J. Forman, J. C.
Albu, A. H. Coldrick, W. Fraser, Thomas (Hamilton)
Allen, Arthur (Bosworth) Collick, P. H. Freeman, John (Watford)
Allen, Scholefield (Crewe) Corbet, Mrs. Freda Freeman, Peter (Newport)
Anderson, Alexander (Motherwell) Cove, W. G. Gaitskell, Rt. Hon. H. T. N.
Anderson, Frank (Whitehaven) Craddock, George (Bradford, S.) Gibson, C. W.
Attlee, Rt. Hon. C. R. Crosland, C. A. R. Glanville, James
Awbery, S. S. Crossman, R. H. S. Gooch, E. G.
Bacon, Miss Alice Cullen, Mrs. A. Gordon-Walker, Rt. Hon. P. C.
Baird, J. Daines, P. Greenwood, Anthony (Rossendale)
Balfour, A. Dalton, Rt. Hon. H. Greenwood, Rt. Hn. Arthur (Wakefield)
Barnes, Rt. Hon. A. J. Darling, George (Hillsborough) Grenfell, Rt. Hon. D. R.
Bartley, P. Davies, A. Edward (Stoke, N.) Grey, C. F.
Bence, C. R. Davies, Ernest (Enfield, E.) Griffiths, David (Rother Valley)
Benn, Wedgwood Davies, Harold (Leek) Griffiths, Rt. Hon. James (Llanelly)
Benson, G. Davies, Stephen (Merthyr) Griffiths, William (Exchange)
Beswick, F. de Freitas, Geoffrey Hale, Leslie (Oldham, W.)
Bevan, Rt. Hon. A. (Ebbw Vale) Deer, G. Hall, Rt. Hon. Glenvil (Colne Valley)
Bing, G. H. C. Delargy, H. J. Hall, John (Gateshead, W.)
Blackburn, F. Dodds, N. N. Hamilton, W. W.
Blyton, W. R. Donnelly, D. L. Hannan, W.
Boardman, H. Driberg, T. E. N. Hardy, E. A.
Bottomley, Rt. Hon. A. G. Dugdale, Rt. Hon. John (W. Bromwich) Hargreaves, A.
Bowden, H. W. Ede, Rt. Hon. J. C. Harrison, J. (Nottingham, E.)
Bowles, F. G. Edelman, M. Hastings, S.
Braddock, Mrs. Elizabeth Edwards, John (Brighouse) Hayman, F. H.
Brockway, A. F. Edwards, Rt. Hon. Ness (Caerphilly) Healey, Denis (Leeds, S. E.)
Brook, Dryden (Halifax) Edwards, W. J. (Stepney) Henderson, Rt. Hon. A. (Rowley Regis)
Broughton, Dr. A. D. D. Evans, Albert (Islington, S. W.) Herbison, Miss M.
Brown, Rt. Hon. George (Belper) Evans, Edward (Lowestoft) Hewitson, Capt. M.
Brown, Thomas (Ince) Evans, Stanley (Wednesbury) Hobson, C. R.
Burke, W. A. Ewart, R. Holman, P.
Burton, Miss F. E. Fernyhough, E. Houghton, Douglas
Butler, Herbert (Hackney, S.) Field, W. J. Hubbard, T. F.
Callaghan, L. J. Fienburgh, W. Hudson, James (Ealing, N.)
Castle, Mrs. B. A. Finch, H. J. Hughes, Cledwyn (Anglesey)
Champion, A. J. Follick, M. Hughes, Emrys (S. Ayrshire)
Chetwynd, G. R. Foot, M. M. Hughes, Hector (Aberdeen, N.)
Hynd, H. (Accrington) Moyle, A. Soskice, Rt. Hon Sir Frank
Hynd, J. B. (Attercliffe) Mulley, F. W. Sparks, J. A.
Irvine, A. J. (Edge Hill) Murray, J. D. Steele, T.
Irving, W. J. (Wood Green) Nally, W. Stewart, Michael (Fulham, E.)
Isaacs, Rt. Hon. G. A. Neal, Harold (Bolsover) Stokes, Rt. Hon. R. R.
Janner, B. Noel-Baker, Rt. Hon. P. J. Strachey, Rt. Hon. J.
Jay, Rt. Hon. D. P. T. O'Brien, T. Strauss, Rt. Hon. George (Vauxhall)
Jeger, George (Goole) Oldfield, W. H. Stross, Dr. Barnett
Jeger, Dr. Santo (St. Paneras, S.) Oliver, G. H. Summerskill, Rt. Hon. E.
Jenkins, R. H. (Stechford) Orbach, M. Swingler, S. T.
Johnson, James (Rugby) Oswald, T. Sylvester, G. O.
Johnston, Douglas (Paisley) Padley, W. E. Taylor, Bernard (Mansfield)
Jones, David (Hartlepool) Paget, R. T. Taylor, John (West Lothian)
Jones, Frederick Elwyn (West Ham, S.) Paling, Will T. (Dewsbury) Taylor, Rt. Hon. Robert (Morpeth)
Jones, Jack (Rotherham) Pannell, Charles Thomas, David (Aberdare)
Jones, T. W. (Merioneth) Pargiter, G. A. Thomas, George (Cardiff)
Keenan, W. Parker, J. Thomas, Iorwerth (Rhondda, W.)
Kenyon, C. Paton, J. Thomas, Ivor Owen (Wrekin)
Key, Rt. Hon. C. W. Peart, T. F. Thomson, George (Dundee, E.)
King, Dr. H. M. Plummer, Sir Leslie Thorneycroft, Harry (Clayton)
Kinley, J. Poole, C. C. Thurtle, Ernest
Lee, Frederick (Newton) Pupplewell, E. Timmons, J.
Lee, Miss Jennie (Cannock) Porter, G. Tomney, F.
Lever, Harold (Cheetham) Price, Joseph T. (Westhoughton) Ungoed-Thomas, Sir Lynn
Lever, Leslie (Ardwick) Prector, W. T. Viant, S. P.
Lewis, Arthur Pryde, D. J. Wallace, H. W.
Lindgren, G. S. Pursey, Cmdr. H. Webb, Rt. Hon. M. (Bradford, C.)
Lipton, Lt.-Col. M. Rankin, John Weitzman, D.
Logan, D. G. Reeves, J. Wells, Percy (Faversham)
MacColl, J. E. Reid, Thomas (Swindon) Wells, William (Walsall)
McGhee, H. G. Reid, William (Camlachie) West, D. G.
McInnes, J. Rhodes, H. Wheatley, Rt. Hon. John
McKay, John (Wallsend) Richards, R. White, Mrs. Eirene (E. Flint)
McLeavy, F. Robens, Rt. Hon. A. White, Henry (Derbyshire, N. E.)
McNeil, Rt. Hon. H. Roberts, Albert (Normanton) Whiteley, Rt. Hon. W.
MacPherson, Malcolm (Stirling) Roberts, Goronwy (Caernarvonshire) Wigg, George
Mallalieu, E. L. (Brigg) Robinson, Kenneth (St. Pancras, N.) Wilcock, Group Capt. C. A. B.
Mallalieu, J. P. W. (Huddersheld, E.) Rogers, George (Kensington, N.) Wilkins, W. A.
Mann, Mrs Jean Ross, William Willey, Frederick (Sunderland, N.)
Manuel, A. C. Royle, C. Williams, David (Neath)
Marquand, Rt. Hon. H. A. Schofield, S. (Barnsley) Williams, Rev. Llywelyn (Abertillery)
Mayhew, C. P. Shackleton, E. A. A. Williams, Ronald (Wigan)
Mellish, R. J. Shawcross, Rt. Hon. Sir Hartley Williams, W. R. (Droylsden)
Messer, F. Shinwell, Rt. Hon. E. Williams, W. T. (Hammersmith, S.)
Mikardo, Ian Short, E. W. Winterbottom, Ian (Nottingham, C.)
Mitchison, G. R. Shurmer, P. L. E. Winterbottom, Richard (Brightside)
Monslow, W. Silverman, Julius (Erdington) Woodburn, Rt. Hon. A.
Moody, A. S. Silverman, Sydney (Nelson) Yates, V. F.
Morgan, Dr. H. B. W. Simmons, C. J. (Brierley Hill) Younger, Rt. Hon. K.
Morley, R. Slater, J.
Morris, Percy (Swansea, W.) Smith, Ellis (Stoke, S.) TELLERS FOR THE NOES:
Morrison, Rt. Hon. H. (Lewisham, S.) Smith, Norman (Nottingham, S.) Mr. Pearson and Mr. Holmes.
Mort, D. L. Snow, J. W.

Question put, and agreed to.

That this House approves the policy of Her Majesty's Government in regard to the Iron and Steel Industry as set out in Command Paper No. 8619.