Clause 4. (PROVISION OF PRODUCTION FACILITIES.)

HC Deb 11 February 1953 vol 511 cc431-521

4.15 p.m.

Mr. G. R. Mitchison (Kettering)

I beg to move, in page 4, line 40, to leave out "additional."

When we were discussing Clause 3, there were many attempts on this side of the Committee, alas unsuccessful, to give the Board some additional powers and to extend somewhat the scope of their duties. This Clause does give some duties and some limited powers to the Board or to the Board and the Minister in conjunction. Subsection (1), with which we are particularly concerned at the moment, places a duty on the Board to consult from time to time the iron and steel producers and others with a view to securing the provision and use by iron and steel producers of such additional production facilities in Great Britain as may be required for the efficient, economic and adequate supply of iron and steel products. I take it that all of us will agree that an efficient, economic and adequate supply is required. We are agreed, also, that it is the duty of the Board to review the whole productive capacity of the country for that purpose, as is provided for in Clause 3, and to promote the supply in exactly the terms which I have mentioned and which are repeated in Clause 4 from the previous Clause.

There is no doubt that the Board have a general duty to review and supervise in these matters, but for the purposes of this Clause they are at present limited to consultation merely with regard to additional production facilities. Though I agree that in Clause 31 (2) those words are widely defined and that they can cover … the reconstruction or adaptation of, or making of additions to, existing production facilities, … it remains a fact that the review is limited to the purpose of securing some additions, whether by way of entirely new plant or by way of additions to existing plant.

We say that there ought to be a wider purpose in the review. There is no question, of course, of providing what is already there, but the review at least ought to comprise the proper use of what is already there. It is substantially for that reason that we regard this Amendment as of some importance. Indeed, we go further and say that if we are to review merely with a view to securing additional facilities, even with the addition by the definition that I have just mentioned, then we are really looking at only one-half of the problem and looking at it from a wrong and limited point of view.

I suggest that that is very strongly borne out if one considers what will happen under the next subsection of this Clause. I am not going into that subsection in any detail, but it broadly provides that if after that consultation production facilities seem to the Board to be inadequate and they cannot obtain facilities in any other way, then the Board may report to the Minister and the Minister, under certain conditions, may take steps to provide or supplement or use properly those facilities himself. How can a decision on that sort of matter be made unless the Board keep in mind not merely the question of additional facilities but also, as part of the same question, the proper use of the facilities that are there already? I am not certain, but this may be nothing more than a question of language. It may very well be that the Minister himself, at any rate on considering the matter in the light of this Amendment, will feel that the language of the Bill puts on the Board at present an impossible task to consider what should be added without considering the proper use of what is there. That is the substantial point of this Amendment.

It is quite clear from what I said earlier and from the language of Clause 3 that the Board have to review not only the extent but also the use of existing production facilities. It would be rather absurd if the Board, in reviewing those matters and supervising the industry in that respect, were limited as is suggested by the present language. I see no difference—and I suggest that the Committee will find little if any, difference—between the wide field of the supervision and review in Clause 3 and the scope of the purpose that ought to be attributed to the Board when making these consultations. Therefore, to improve the Bill, to give the Board the job they ought to have, and to enable them to take into consideration and to secure, so far as they can, the proper use of existing facilities, I commend this Amendment to the Committee.

The Minister of Supply (Mr. Duncan Sandys)

I do not think there is any great difference between us on this point. However, it is a good thing that it was raised so that we can be quite clear about the intentions behind this Clause.

I understand that the purpose of the Amendment is to ensure that the Board's consultations with the industry on development shall embrace not only additions to existing plant but also modernisation, adaptations and so forth which do not necessarily involve the construction of additional plant.

Mr. Mitchison

The use and the proper use.

Mr. Sandys

The use and the proper use is the second point. The first point is that we want them to consider not only the construction of new plant but also the adaptation and modernisation of existing plant. The second is the question of the best and the most effective use of plant which exists, not necessarily involving new construction or work at all.

We are now discussing the duty of the Board to consult, not the question of the actual provision of additional plant which is covered by the duty of the Board under Clause 3 (1, a) to keep under review the productive capacity of iron and steel producers. That, we consider, is a general instruction to the Board to concern themselves with the efficient production of iron and steel. I should like to draw the hon. and learned Member's attention to page 26 of the Bill, where he will find subsection (2) of the interpretation Clause —

Mr. Mitchison

I apologise for interrupting the right hon. Gentleman, but I should just like to thank him for mentioning this, and also to remind him that almost the first thing I did was to call the attention of the Committee to what he is now about to mention.

Mr. Sandys

If I have duplicated what the hon. and learned Gentleman said, I ask his forgiveness, but as part of my explanation I should like to emphasise that that subsection specifically states that; References in this Act to the provision of additional production facilities shall be construed as references to the provision of new production facilities and to the reconstruction or adaptation of, or making of additions to, existing production facilities…. I think that this interpretation meets the wish of the hon. and learned Gentleman to ensure that the consultation shall cover the adaptation or modernisation of existing plant. Clause 3 (1, a) covers the general duty to discuss with the industry the problems of the most efficient use of existing plant. That is certainly our intention.

I have consulted Parliamentary counsel on this point and I am assured that, in fact, the Bill as now drafted fully covers the two points made by the hon. and learned Gentleman. Therefore, this Amendment is really not necessary. Nevertheless, in order to make it plain, if it is desired, not only to the hon. and learned Member but also to laymen, I am willing to accept this Amendment.

Amendment agreed to.

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

I beg to move, in page 4, line 42, after "supply," to insert "under competitive conditions."

Would it he convenient, Sir Charles, to discuss at the same time the Amendments in page 5, line 1, after "supply," insert "under competitive conditions." and in page 5, line 16, after "ought," insert: for the efficient, economic and adequate supply under competitive conditions or otherwise."? They all really relate to the same point.

The Chairman

Yes.

Mr. Simon

I hope that I shall find my right hon. Friend in the same complacent mood as he was when replying to the hon. and learned Member for Kettering (Mr. Mitchison).

The purpose of this Amendment is to make sure that in the consultation of the Board with the industry in the sphere of production facilities, in the Board in turn reporting to the Minister, and in respect of the Minister's residual powers, there should not only be considered "the efficient, economic and adequate supply of iron and steel products," but the consideration of competitive conditions. We on this side of the Committee believe in the advantages of competitive enterprise. Obviously, if workers are insufficiently organised, competition can press very hardly on them, but by and large we believe that competition is of value in that it rewards efficiency. Indeed, it demands efficiency as the price of a profit and rewards greater efficiency with greater profit.

4.30 p.m.

I am glad to think that I have my right hon. Friend the Minister of Supply entirely on my side in this matter. In the Committee stage he said it far better than I could ever hope to put it here. He said:

We are considering an industry returned to free enterprise, where competition will be one of the consumer's main safeguards. We are not resting on that alone. In addition to the wider and freer competition which we firmly believe will be created as a result of this legislation, we have decided to provide some specific safeguards for consumers. Later on he said: What is quite clear is that we wish to restore, as fully as possible, conditions of free enterprise and free competition within the industry."—[OFFICIAL. REPORT, 28th January, 1953; Vol. 510, c. 1059.] I should like to make it plain that when we use the word "competition" we mean real competition and not what the right hon. Member for Vauxhall (Mr. G. R. Strauss) means by it. He said on the Second Reading, and his hon. Friend the Member for Sheffield, Park (Mr. Mulley) repeated it in Committee because he was so pleased with it, that there could be competition under nationalisation and there was nothing to prevent the various producing units in the nationalised industry from competing with one another. Of course there is not, any more than there is anything to prevent a couple of Chelsea pensioners from racing each other around Trafalgar Square, but it is a very unlikely thing to happen. There is no possible incentive or profit to be derived by one unit under nationalisation from competition or from being more efficient than other producing units.

Mr. A. C. Manuel (Central Ayrshire)

Does the hon. and learned Member understand the full implications of the Schuman Plan and the difficulty there would be for the steel interests in this country to have internal competition in face of the united front of steel interests on the Continent?

Mr. Simon

I shall not allow myself to be led off into the subject of the Schuman Plan when I am trying to persuade my right hon. Friend to accept my Amendment. Competition can obviously be limited in a number of different ways. It can be limited if there are only one or two producers in the market—I think that was the point made by the hon. Member for Sheffield, Park, who is not here today —because they can influence the price and make a profit. We can also have a sellers' market, which would limit effective competition, and finally we can have artificial monopolies constituted by restrictive practices.

The Parliamentary Secretary last week pointed out, and we accept it fully from him, that restrictive practices are covered by Clause 3, because it was the specific function of the Board to supervise the industry so as to ensure the efficient, economic and adequate supply under competitive conditions of iron and steel products, and that involved the duty of oversight of restriction practices. We had the ultimate sanction of the Monopolies Commission.

That is only part of the problem. My hon. Friend the Parliamentary Secretary recognised that when he said on 29th January in Committee that both sides saw that there is an advantage in having competitive conditions in the industry."—[OFFICIAL REPORT, 29th January. 1953; Vol. 510, c. 1267.] If that is so, and if one has to ensure that there are no artificial restrictions making artificial monopoly, it is clear that we have to see that there are sufficient producing units in the market. If it is desirable under Clause 3, where there is a general duty to keep under review the productive capacity of the industry with a view to promoting the efficient, economic and adequate supply under competitive conditions of iron and steel products, it must be desirable in Clause 4, where there is to be consultation with a view to securing the provision and use by iron and steel producers of such additional production facilities, as may be required. My hon. and learned Friend the Solicitor-General is here now. I am sure he would tell us that a change of wording in a formula in an Act of Parliament has a quite particular significance. Where one finds in Clause 3 the words under competitive conditions and finds they are missing from Clause 4, that has a significance quite its own.

The object of the Amendment is to ensure that part of the duty of the Iron and Steel Board in respect of development plans is to see that a condition of competition is provided, and that there are production facilities for the efficient, economic and adequate supply.. of iron and steel products.

Mr. Austen Albu (Edmonton)

The Minister accepted the first Amendment moved from this side of the Committee on the ground that it would make for greater clarification and would make the Clause more acceptable to the lawyers who, after all, have to interpret the Bill. I should have thought it was extremely important in a Bill of this type not to insert words whose definition is extremely doubtful, making interpretation difficult for the lawyers. I think it was my hon. Friend the Member for Sheffield, Park (Mr. Mulley) who, on the last occasion we were in Committee, when I was unfortunately unable to be present, drew attention to the ambiguous nature of words of this sort.

I remember the industry before the war only as a customer. I was in the engineering industry, but I do not remember that one could purchase material for the engineering industry under competitive conditions, whether it was steel, nonferrous metal or whatever else it might have been. There were, it is true, one or two firms outside the trade association, but their output was so small that competitive conditions could not in any way be considered to apply to iron and steel products, such as sheet and strip. One sometimes got better service from one firm than from another, although if one were a small buyer, as I was, one frequently or generally got inferior service from the large firms. There was nothing like competition. To say that there was anything like effective competition, either as commonly understood or as a lawyer would understand it, would be an exaggeration.

Will the insertion of these words in the Bill in any way assist in creating competition conditions'? I suggest that they cannot in any way. Nor, I believe, is it the intention of the Government that that should be the case. During the next few years the pressure on the industry from consumers, from the engineering industry, will be very great indeed, and it is, therefore, necessary to have some control over the prices of final products.

There is in the Bill provision for the control of prices. It is quite likely that prices will not only be controlled, but somehow, as they have been for many years, levelled out as between one firm and another, so that there are not likely to be competitive price conditions. Nor, in an industry whose resources are so immobile, and whose plans of development have to be worked out over such a long period, could any Government, even the present one, accept the conditions of a competitive market for capital. There is, therefore, not likely to be that sort of free competitive market.

Plans are to be developed for the industry, and the Government assure us that it will be subject to the same sort of supervision, but I must admit that we have some doubts whether that supervision will be entirely in the public interest. Certainly we would like what I would call free conditions of capital supply, but anybody who knows anything about the industry, the size of the equipment required, the length of time it takes to develop it, construct it, build it, and plan the raising of the capital, knows that it cannot exist.

The industry, quite apart from its control by Steel House before the war—of which at the moment I make no criticism—was getting less and less like a competitive industry. We all know that the concentration of the industry was growing the whole time. When the Iron and Steel Corporation took over the 298 companies, it in fact took over only 80 companies directly, the remainder being all subsidiaries of the main companies. Even of those 80 companies, 20 were partly owned by other companies. Looking at the directorships and shareholdings of even the remaining companies, we find there were very close links. In fact, the 10 largest companies owned something like half of all the subsidiaries, and I think I am right in saying that they had an output equal to about 80 per cent. of the total output of the industry. When one considers the interlocking of directorships and of share ownership, in addition to the physical difficulties of free competition from the point of view of purely physical assets, one realises that the words "competitive industry" have no meaning in this context.

I suggest that to insert words which are misleading to the public, and which are quite incapable, if I may say so with deference to the hon. and learned Gentleman, of interpretation by lawyers in the courts, is to add to the burdens and difficulties of those who will have to interpret this Bill in the future, and will do nothing to assist in efficiency or output, or the reduction of prices of the products which the industry will make.

Mr. Gerald Nabarro (Kidderminster)

I take the opposite view from that of the hon. Member for Edmonton (Mr. Albu). Though I am no lawyer, I would not personally experience very much difficulty in giving a reasonable explanation of what would be meant by the words "under competitive conditions." Surely if there is more than one buyer and more than one seller, then reasonably competitive conditions must exist. That may be carrying it ad absurdun. In fact, in this country there are several hundred suppliers of steel, many more suppliers of iron castings, which also come into this Bill, and literally thousands, if not tens of thousands, of purchasers.

On a former Amendment dealing with consultative councils, I made the point that the purpose of this Bill is to demonstrate that we believe our iron and steel industry can operate more favourably, more successfully and more satisfactorily, in the interests of manufacturers and consumers, in a freer economy, rather than in the more rigid economy imposed on it by the right hon. Member for Vauxhall (Mr. G. R. Strauss).

4.45 p.m.

Mr. Roy Jenkins (Birmingham, Stechford)

Under the hon. Gentleman's rather surprising definition of "competitive conditions," namely, the existence of more than one buyer and more than one seller, would he explain why in no case investigated by the Restrictive Practices and Monopolies Commission—which is supported by hon. Members opposite— are there less than a certain number of sellers?

Mr. Nabarro

I have no doubt that that is so, but I think it would be strictly out of order if I were to stray into the question of the purposes and functions of that Commission. I only rejoin this to the hon. Gentleman. If he really believes in the purposes of that Commission, why did he and his party refuse to refer to it the machinations of the National Coal Board, the classic example of malignant monopoly?

To return to the Amendment, I believe that the insertion of these words will be helpful. I do not take the view of the hon. Member for Edmonton that no competition existed in the supply of steel in pre-war years. I, too, was a consumer of steel in pre-war years. I, too, was in the engineering industry buying steel; and I, too, bought the particular material to which he referred—cold rolled strip. In pre-war days, cold rolled strip could be bought from five or six different companies with rolling mills, and under reasonably competitive conditions, with fluctuating prices according to qualities and specifications and the quantity, or bulk, that the consumer required. I am not suggesting, due to the over-all control of Steel House, that there was a completely free market; but there was a reasonably free market, and a very much more successful basis of operation than the monopoly control of the Iron and Steel Corporation such as the right hon. Member for Vauxhall sought to clamp on it.

Mr. Mitchison

I am fascinated by the hon. Gentleman's views on competition. Could he tell us whether these sellers ever charged different prices for the same product? I am not referring to differences of quality, but strictly similar products.

Mr. Nabarro

The hon. and learned Gentleman evidently knows very little about the Iron and Steel Orders issued by his right hon. Friend, for had he studied them he would have found different prices for the same product based on differing quantities supplied within a given period.

Mr. Mitchison

That is a very disingenuous remark.

Mr. Nabarro

There is nothing disingenuous about it. It is one condition of a contract—

Mr. Jack Jones (Rotherham)

rose—

Mr. Nabarro

I cannot give way again. I have no doubt the hon. Gentleman will be able to catch the eye of the Chair in due course.

I like these words "under competitive conditions" because they will be very largely the conditions which will obtain by the time this Bill reaches the Statute Book. A moment ago the hon. Gentleman referred to the pressure of demand for iron and steel products in the course of the next few years. I hope that that is so. But it will undoubtedly be matched by the increasing production of the iron and steel industry, which, I remind him, last month produced at a record high level equal to an annual output of 18 million tons. That rate has never previously been achieved.

Mr. Jones

That was under nationalisation.

Mr. Nabarro

Not because of nationalisation, but because of the prospect of freedom again as a great incentive to rising output. What will undoubtedly happen in the course of the next few months is that not only shall we have a relatively free market in iron and steel products, but the supply of many grades of iron and steel may be in excess of demand. [Interruption.] It is because of rising production facilities—and it shows how the hon. Gentleman the Member for Edmonton has insulated himself against the conditions that obtain in engineering today—that at this moment salesmen from iron and steel companies are lining up to sell their products. In fact, we are approaching a free market and the competitive conditions that my hon. and learned Friend's Amendment suggests. The sooner those fully competitive conditions return—and I believe it will be within a matter of a few months —the better I shall be pleased.

Mr. Albu

While, of course, I agree with the hon. Gentleman that production in this country is falling rapidly, may I ask him whether he thinks that the increase in the next five years of 17 per cent. in the supply of steel products is really going to be sufficient for the engineering industry in this country to get itself out of the conditions we are in at the present time?

Mr. Nabarro

It will be an increase of more than 17 per cent. I have not a slide rule here with me, but last year's production was nearly 17 million tons— and the hon. Gentleman will use his slide rule to check my figures, perhaps—and as production within five years is anticipated to be 20 millions tons there will be an increase of approximately 18½ per cent., corrected to the nearest ½ per cent. However, the point I am making is that we are entering a phase in the iron and steel industry, which will come in the course of the next few months, which we have not seen since pre-war days, with the prospect that there will be a surplus of certain iron and steel products.

I hope that my right hon. Friend, in considering this Amendment and the words "competitive conditions," will bear in mind that factor, and I and many of my hon. Friends hope that he will deration the great majority of iron and steel products at present subject to the allocation system at a very early date. The continuance of that rationing system for even a few weeks too long could have a very harmful effect on iron and steel production. I like the Amendment of my hon. and learned Friend. I hope it will be possible to embody it in the Bill, for although the conditions of a free market in fact may be achieved within a few months, I should like to see the words written into the Bill as a tribute and monument to the intentions of my party.

Mr. John Hynd (Sheffield, Attercliffe)

The hon. Member for Kidderminster (Mr. Nabarro) has based his argument on two points. First, he would like to see the words in the Bill. He likes the words "under competitive conditions." Then he said that the purposes of the Amendment are to demonstrate that we believe that producers, manufacturers, can operate better and more efficiently under a competitive economy. But what he seemed to overlook is that the whole purpose of the Clause which he is seeking to amend is to demonstrate that the Government have no faith that producers and manufacturers will operate better and more efficiently in a free, competitive economy.

What is the purpose of the Clause? It says very clearly that where manufacturers fail to produce under competitive conditions the Minister himself shall be empowered to intervene to impose, or by arrangements with others to ensure, that those very productive facilities which private enterprise fails to produce, shall be produced, irrespective of profit, irrespective of commercial conditions, in the general interests of the nation.

That is the whole purpose of the Clause, and it is, as I say, an admission by the Government of their want of faith, and I think that hon. Members on the other side of the Committee must feel very uncomfortable about all this. This is a monument to their recognition of the fact that in an industry like the iron and steel industry competitive conditions will not produce the goods, and that today the country is in a position in which we can no longer afford to ignore the national consideration and leave our fate entirely to private enterprise.

I should like to remind the hon. and learned Member for Middlesbrough West (Mr. Simon) and the hon. Member for Kidderminster—I feel rather sorry for them, because they like to talk about competition—of what was pointed out from this side yesterday—that the Tory Party are not a party who really believe in competition: they are a party who believe in profits. The whole purpose of the Bill, of course, is to enable private enterprise and private industry to make profit out of an essential national industry, and the purpose of this Clause is to make it still possible, in spite of that fact, that the national interest shall be served up to a point, where private enterprise fails.

Indeed, if the hon. Gentleman will read on. to subsection (5), he will see that there is no anticipation whatever on the part of the Government that it will be possible for additional productive facilities to be provided under normal competitive conditions, because subsection (5) specifically provides that in this case the Minister shall be in a position to charge the public with necessary subsidies to enable them to be carried on in spite of the impossibility of competitive conditions.

Therefore, I submit, without any criticism, implied or direct, of the Chair, that my reading of the Amendment is that it is a direct negative of the Clause and the direct negative of the purposes which the Government are seeking to achieve by the Clause. I do not criticise the Chair in any way, but I do draw attention to the fact that the Conservative Party are again on the horns of a dilemma. They are trying to destroy the machine which, as the hon. Member for Kidderminster said, has produced the goods—and produced the goods for the first time, under nationalisation.

It is no good the hon. Member talking in terms of this not being the result of the nationalisation of the industry, but of the anticipation of freedom, because, as he himself said, this is a record production, which we have never achieved before; and it has always been in conditions of freedom that we have fallen short. It was precisely for that reason that nationalisation was undertaken. I therefore hope that the Minister will stand firm in rejecting this Amendment and say, in spite of the price we have to pay private enterprise, that the national interest shall, nevertheless, be served.

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

Perhaps it would be convenient if I intervened in this discussion now. I think the Committee will not expect me to enter into some of the controversy that has been raging for a short while about nationalisation, only, as it were, on the border of the matters dealt with by Clause 4, to which this Amendment, moved by my hon. and learned Friend the Member for Middlesbrough, West (Mr. Simon) relates.

I ought, I think, just to clear up a point referred to by the hon. Member for Attercliffe (Mr. J. Hynd) and my hon. Friend the Member for Kidderminster (Mr. Nabarro) about production in the past year. I do not wish to correct my hon. Friend the Member for Kidderminster, but he did slightly overstate the case in mentioning the figure of 17 million tons, and, therefore, the percentage calculation in which he joined with the hon. Member for Edmonton (Mr. Albu) was slightly incorrect.

On the point made by the hon. Member for Attercliffe, I must say that the main reason why production has gone up in the last year is because of the plant, the new plant, planned and provided by the industry before it was nationalised.

Mr. J. Hynd

The plant was laid down by the iron and steel industry in an attempt to evade nationalisation. It was the first time that they had laid down a production programme, and it was carried out only by public investment, and would never have been carried out on this scale without it.

Mr. Low

We do not want to get off the point, but the hon. Gentleman must know that that is not strictly correct at all.

5.0 p.m.

I come to the Amendment. The Government attach every bit as much importance to there being competition in the iron and steel industry as does my hon. and learned Friend. I am sure that he is aware—in fact he referred to it—that the words under competitive conditions "apply to the general duty of the Board and, therefore, will colour their approach to all the problems which face them. They have to see that conditions in the industry are conditions in which manufacturers can compete. The duties of the Board are, as it were, to do their best to remove barriers to competition.

My hon. and learned Friend said that as the words have been used once in Clause 3, immediately after the phrase efficient, economic and adequate supply, we ought to use them on this occasion and on another occasion in this Clause. If he is fortunate in catching your eye, Sir Charles, he will suggest that we might use them in Clauses 7 and 8 also.

I am not a learned hon. Member and cannot give the Committee advice on all these legal points, but, as a layman, I would draw the attention of my hon. and learned Friend to the danger of using the same words in different contexts and referring, in particular, to quite different problems. I think he is asking us here to do something out of the best of motives, but my right hon. Friend and I find we cannot advise the Committee to accept the Amendment. It would surely be agreed by the Committee that although, in the sense to which I referred a moment ago, conditions should exist in the industry in which manufacturers can compete, the words are quite irrelevant and unnecessary in relation to the tests to be applied by the Board when considering and consulting about provision or use of production facilities or plant.

To make sense of them here we must interpret them, as I think my hon. and learned Friend did, as meaning that the duty of the Board in this connection is to try to influence industry to set up additional capacity just for the sake of promoting competition. I cannot think that the Committee would want to accept that purpose. I cannot think that my hon. and learned Friend will want to pursue his Amendment or really intends that, or, if he intends that, he does not intend the natural consequences of that.

We certainly here do not intend that the Board should have a duty to create competition by hoping to create competitors for the sake of competition. [Laughter.] I ask the Committee to treat this matter quite seriously. We had not the advantage of the presence of the hon. Member for Edmonton on the previous occasion and I was interested to hear his views on this occasion. They were not very surprising to me, because I had read what he had written in other spheres.

This Clause is concerned with the positive functions of the Board and the Minister in relation to development. By their influence the Board are to encourage the right amount and type of development and its proper use. They are given three tests, and that is important. The tests are that capacity should be adequate, plant should enable production to be as efficient as possible and plant should be able to earn enough to justify its cost. That is laid down in the Bill by the words,

efficient, economic and adequate supply. I thought that the hon. Member, who has studied these matters so much, would have appreciated that.

We submit that to add as a fourth test —that is what it would mean if we included these words as we are dealing with production facilities, the physical premises, plant and machinery—that the plant should increase, or at least not reduce, competition would be wrong. Such a test might require the Board to discourage the expansion of larger plants, for example, because such expansion might threaten the plant of existing competitors with extinction because their plant was not as efficient. In that way the inclusion of the words would, in fact, defeat the very purpose which my hon. and learned Friend has in mind—to gain for the consumer and the nation the benefits which an iron and steel industry, working under competitive conditions, could give. We would be stopping competition having its effect just at the point where that effect was becoming most valuable.

I would ask my hon. and learned Friend to reconsider this matter and to decide whether he would not like to withdraw the Amendment. I am certain that he knows my right hon. Friend, the Government, and I attach great importance to the inclusion of these words in the general duties of the Board and to the logical consequences of that inclusion. I am certain that he would not wish, by including the words in a different context, to undo all the good work the Government, with his support, have done earlier in the Bill. For that reason, I hope he will withdraw the Amendment.

Mr. Simon

I recognise with very great regret that this Amendment has found few friends in the Committee. My hon. Friend flattered my motives, but controverted— although not to my satisfaction—my arguments. It is only right that I should accept the shining example of my hon. Friend the Member for Kidderminster (Mr. Nabarro), with all of whose arguments I entirely agree. I could not help feeling that if he had been the hon. Member for Sodom and Gomorrah the Cities of the Plain might still be standing. Recognising that we are alone in this Committee, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The Temporary Chairman (Mr. George Thomas)

I think it would serve the convenience of the Committee for the next Amendment, in page 4, line 45, in the name of the right hon. Member for Vauxhall (Mr. G. R. Strauss) to be taken with the three Amendments in page 5, line 3, line 6, and line 9.

Mr, Jack Jones

I beg to move, in page 4, line 45, after "that," to insert: the amalgamation or co-ordination of certain iron and steel producers or certain. The first of these Amendments is, in our opinion, a very important, yet, at the same time, a very simple one. We cannot understand why it has been left out of the Bill; the need is so obvious. We are hoping that the Minister will agree that this escaped the notice of the wise men who advised him and that it was their original intention to have these, or similar words, inserted.

We are very anxious, as has been mentioned by my hon. and learned Friend the Member for Kettering (Mr. Mitchison), to make certain that the Board in their duties shall be sure that they are guaranteeing to the nation in the public interest—to use the words of Tory propaganda—the fullest possible use of existing facilities. I could talk for a long time, although I do not intend to do so, about works which, even today, under the Iron and Steel Corporation, and despite all the co-ordination which has taken place and the technical amalgamation which took place before the Corporation came into operation, do not use the existing facilities to the extent of 100 per cent.

Those of us who have been in the industry know what is meant by "using fully and completely." There are plants in this country which because of lack of orders for a particular type of commodity cannot have a long run and cannot use 100 per cent., all the time, the facilities which they have at their disposal. By a system of amalgamation that could be obviated, and we hope that before the Board recommend to the Minister— because that is all they are able to do —additional plant at a very high cost, they will make certain that there shall be, by amalgamation or co-ordination, the fullest possible use made of existing facilities.

The Minister may ask what I mean by amalgamation, and what is the difference, in my mind, between amalgamation and co-ordination. To a practical layman the difference is quite simple. Amalgamation means getting one's money mixed up for all time with other fellows' money, and then one amalgamates. It means, in the case of a company amalgamating locally, taking on one board of directors as against two or three. That is my explanation of amalgamation — when companies join forces and fuse their technical facilities and finance. Coordination is where companies remain viable units in themselves but can coordinate for certain purposes.

I could take the Committee to certain parts of the country where there will be, if the Government have their way, four or five competing companies within very close proximity to each other. I use the word "competing" in the spirit in which the hon. and learned Member for Middlesbrough, West (Mr. Simon) would have used it. We could have a system whereby companies could co-ordinate, not amalgamate, in such things as research. I think that it is a waste of good money, facilities and time for smaller companies not grouped together to set up a research department on their own, or to have an educational system in one particular works. By co-ordination, instead of half a dozen apprentices in one works attending classes, there could be 24 or 25 from different works with one tutor, and overheads would be saved.

Mr. Simon

Does the hon. Gentleman think that that would be covered by Clause 3 (1, d), where arrangements for education and research are expressly dealt with?

Mr. Jones

It would be covered if we could get our Amendment inserted, and in a much more effective way. It is the method laid down that I object to—this spreading of our facilities and knowledge over too wide a sphere.

I do not want to go into technical details, but I can assure the Committee that by a system of amalgamation, which is the important thing, and the technical regrouping—I do not say so much about geographical regrouping—of companies in this country, a tremendous amount of plant could be run in long runs, with immense saving in costly operations. We could get companies co-ordinating on matters of common services to themselves. There is a word, which is never used in these debates, but which has a tremendously important bearing on this great industry. It is the word "refractory." One of the most important things connected with the great iron and steel industry is the production of the right type of refractory—that is, in simple language, the fire brick used in the construction of the lining of the furnaces— which I am glad to remember and not be present at now.

There can be amalgamation and, indeed, co-ordination in that respect. I know of companies which have their subsidiaries and ancillaries dealing with this particular type of product. Those who were engaged with me when I was in the Ministry know something about the preparation of the magnesite brick. By co-ordination or amalgamation in regard to that one particular raw material, there could be a tremendous saving and help given, particularly to the small company, the less efficient company, and particularly to the company left with the Realisation Agency which will be in the greatest need of help.

Mr. Robson Brown (Esher)

On the question of co-ordination, would the hon. Gentleman include increased efficiency by combined allocation of orders suitable for certain mills?

Mr. Jones

That is one of the things which I mentioned—the allocation of raw materials. I only mentioned one— refractories. On this question of allocation, co-ordination and the use of services in various geographical areas, transport could be co-ordinated and a tremendous saving in many ways could be effected.

Mr. Robson Brown

And orders, too.

5.15 p.m.

Mr. Jones

I mentioned that; I said that small runs are a sheer waste of time. energy and efficiency. Many of us know of works where that has happened in the past.

I now come to the second part of the Amendment—the question of reporting to the Minister when the Board—and I have mentioned this before report that they cannot secure agreement with the companies concerned to do what they think in the public interest should be done. We suggest that this is a very important part of the Amendment and should be put in the Clause.

We want this Board, as we have said so often before and continue to say, to be able to do things. We want a Board that can recommend, go round and make observations, prepare plans and do ail that is necessary in the public interest in supervising those companies which are not prepared to play ball in the public interest. We want the Board to have some power in their recommendations to the Minister to see that the things that they recommend to be done are done.

I know that the Minister and the Tory Party do not like words such as, "By order." They do not like the use of compulsion. We believe that it is necessary in the public interest that, having gone carefully into the whole of the considerations affecting the various companies, and then having decided that in the public interest such a thing should be done, and having failed to get these things done, the Minister should have power to decide by order that they shall be and must be done.

Mr. Spencer Summers (Aylesbury)

Would the hon. Gentleman apply that to the direction of labour?

Mr. Jones

Yes, if necessary. I know that the direction of labour was not objected to even by those who did the labour. [An HON. MEMBER: "In war-time."] We ourselves operated the scheme. I was chairman of the Manchester board that did directing of labour —not in peace-time. If direction of labour was necessary in peace-time—I know that I am completely out of order —I personally would give careful consideration to it. It is no use directing raw materials unless we can, to some extent, direct the persons engaged in the use of them, in order to get the best results in the national interest.

We do not ask the Minister to do all this without consultation. The Amendment lays down that there should be consultation with the appropriate representative bodies, workers and employers, concerning suggested plans of co-ordination and amalgamation. We suggest that they should have the right to be heard. If the Minister, as the final arbiter in this matter, were of the opinion that in the public interest certain things should be done, this Amendment would give him the power to have them done. There is no political motive behind this. I am glad to observe that in this debate we are applying our minds to technical and objective things rather than to politically venomous matters, which will never at any time produce a ton of steel.

I have put this Amendment to the Minister in a serious vein and I ask him to give it serious consideration. At some other time I could give him some details about the things that we technical people have in mind. However, for the reasons which I have given, and for many others, I hope he will accept this and the other Amendments in the spirit in which they have been offered.

Mr. Aubrey Jones (Birmingham, Hall Green)

The hon. Member for Rotherham (Mr. Jack Jones) seemed to me to be dissociating himself from the general hymn of praise about the virtues of competition which we heard on the last Amendment. I sympathise with him in that. I agree with him that a certain amount of amalgamation in an industry such as this is desirable. As it works out in real life, competition does not necessarily bring about amalgamation quickly enough. Some pressure from outside is necessary, and that is one of the purposes of the Bill.

I believe, however, that, in seeking to apply compulsory amalgamation, the hon. Member for Rotherham went too far. I have two objections to his proposal, one a practical one and the other on grounds of principle. To the best of my recollection, there is only one precedent for the proposal for compulsory amalgamation, and that was embodied in the Coal Mines Act, 1930. The Coal Mines Reorganisation Commission was endowed with the power of compelling amalgamation where desirable amalgamations were not brought about voluntarily. The judgment of history is that that attempt at compulsory amalgamation was a failure.

Why was it a failure? Hon. Members may say that there was an unhappy atmosphere in the coal industry at that time. That is true, but there was a much more important reason. If two parties, A and B, fail to amalgamate voluntarily, it is because, in the judgment of one or the other, no fair and equitable arrangement is possible. Under the Coal Mines Act, 1930, and in accordance with the proposal in the Amendment, an outside authority then steps in and tries to compel amalgamation. Clearly, it cannot impose an amalgamation which is unjust to either party. Therefore, there has to be written in the condition that the amalgamation must be fair and equitable to both parties.

Previously, both parties did not consider that any fair and equitable arrangement was possible. Yet the outside authority has to find such an arrangement. That has been found, in practice, to be a task of the utmost difficulty, and those with experience of the work of the Coal Mines Reorganisation Commission came to the conclusion that an attempt to apply compulsory amalgamation, whatever may be said for it in principle, was bound to fail in practice. That is the objection in practice.

There is also a serious objection in principle. I should be the first to say that company A, which does not wish to amalgamate voluntarily with company B, may well be wrong. I go further and say that the individual competitive point of view must be complemented by some central point of view, but, equally, the central point of view need not necessarily be right. I have known cases where the central authority has thought that a plant should close down and its life be ended, but the firm has not subscribed to that view, has staged a remarkable recovery, has vindicated itself and proved the central authority to be wrong

There is the problem. The whole purpose of the Bill is to retain a certain power with a central authority, but not too much. That is the essence of the difference between the Bill and the Act which it is intended to displace The 1949 Act gave all the power to the central authority; the Bill gives some power to it, but also attempts to redress the balance. Amendment after Amendment from the Opposition has no other purpose than to pull the rope once more towards the central authority. In this case there are great dangers of principle in that.

Lastly, I believe the Amendment to be unnecessary. The context in which it is to be placed is quite different from the context of the similar provision in the Coal Mines Act, 1930. Part I of that Act provided for production quotas between pits and for minimum prices; in other words, it was very well calculated to keep the uneconomic unit in being. To prevent the survival of the uneconomic units, in Part II of the Act the Coal Mines Reorganisation Commission was given power compulsorily to amalgamate uneconomic units with more efficient ones.

All that does not apply in this instance. Under the Bill the Board has two very important powers. The first power is to fix maximum prices; and I consider that the prices should be so fixed as to make it very difficult indeed for the uneconomic unit to continue in existence. The second power is that of vetoing development schemes. If an uneconomic unit came forward with a grandiose development proposal, the Board could veto it under these powers.

Mr. Peter Roberts (Sheffield, Heeley)

Would the Board be allowed to veto a scheme because the firm was inefficient or because, in the national interest, production was not required?

Mr. Jones

The condition laid down in the Bill relates to the upsetting of the economic balance of the industry. That condition would be fulfilled if an uneconomic unit were trying to bloat itself uneconomically.

My three reasons for saying that the Amendment should be opposed are, first, that I believe it to be impracticable; secondly, I see dangers in it in principle; and, thirdly, in the light of the other provisions of the Bill, it seems to me to be entirely superfluous.

5.30 p.m.

Mrs. Eirene White (Flint, East)

I followed with attention the argument of the hon. Member for Hall Green (Mr. Aubrey Jones), knowing that he has experience in the industry, but he seems entirely to have failed to reply to the arguments put forward by my hon. Friend the Member for Rotherham (Mr. Jack Jones). The lion. Member drew an analogy with the Coal Mines Act, 1930. That does not seem to be a very valuable one, because the conditions appear to be entirely different, and I should also have said that nobody associated with the steel industry would like to have an analogy drawn with the coal mining industry of 1930. I cannot see that the hon. Gentleman followed in his argument the line on which he started his speech.

The hon. Gentleman indicated that there were circumstances in which amalgamations of undertakings were desirable on economic or technical grounds. He himself said that they were unlikely to take place voluntarily as rapidly as might be desirable in the general interest, but he then seemed to leave that argument in the air and he failed entirely to show what were the additional pressures which he hinted were in existence.

He mentioned some of the powers which the Board possess to deal with proposals for new development which might be uneconomic, but I am still in the dark about where in the Bill he supposes that the Board, or the Minister for that matter, have powers to exert the sort of pressure which he himself indicated should be exerted to hasten processes which are generally considered to be desirable by those taking an objective view, although they may not be so obviously desirable to the parties concerned. The parties concerned may have all kinds of considerations in their minds, sometimes considerations of a purely personal nature —not necessarily from dishonourable motives, but from the motive of looking after their own interests and position.

Everybody knows that, when it comes to a question of amalgamation, personal position and prestige, not to mention fortune, are very much in the minds of those who may be called upon to negotiate. It is precisely because that kind of private consideration is bound to be present in those circumstances, human nature being what it is, that those of us who support the Amendment believe it to be in the national interest that there should be some power in the hands of a public body to reach decisions if those concerned are unable to reach them for themselves.

I agree that compulsory amalgamations should be used only as the last resort and not as the first resort; we are not suggesting that they should be the first resort. Our suggestion is that there should be ample consultation. One presumes that, in practice, compulsory amalgamation would be seldom, if ever, used, but the existence of the power as a final sanction seems to us to be of material importance. It is precisely for reasons of that kind that we on this side of the House are putting down Amendments to the Bill which would restore to the Board at least some of the powers contained in the existing Act and put in the existing Act because we thought they were necessary. In fact, the speech made by the hon. Member for Hall Green was one of the most persuasive arguments for public ownership that we have heard this afternoon.

Turning to matters of a lesser degree, where complete amalgamation is not suggested, my hon. Friend the Member for Rotherham gave one or two very good examples of circumstances in which coordinated action by firms which are either geographically adjacent or technically related might be in the public interest. In such circumstances, as we well know, we often get one or two, or perhaps three, to agree, but we have the awkward chap, the odd man out, who will not agree.

We have examples in every Department. For instance, there are one or two of the agricultural provisions which have been carried on by the present Government, and in which, if a certain number of people have agreed but someone else is being awkward about it or is putting his own private interest before what seems to be the public interest, powers exist to bring into the scheme the awkward or recalcitrant person.

It seems to me that these powers would be used very seldom in practice. Indeed, it would be a sign of failure of administration if they had to be used frequently. Nevertheless, it is desirable that they should exist and should be used, on occasion, if necessary. Without going into further detail—there are others here who are more competent to do that—it seems to me that, in principle, if a Bill of this kind is serious in its intentions to take responsibility for the well-being of this industry, then it cannot be operated without the addition of some such powers as are indicated in the Amendment.

Mr. Summers

As this is the first opportunity I have had of intervening in this debate during the Committee stage, perhaps I may be allowed on this occasion to state a personal interest—a statement which perhaps will carry me through any other contribution I may be fortunate enough to make. I hope I need not say anything beyond that.

Mr. Jack Jones

What about the future?

Mr. Summers

The hon. Member for Rotherham (Mr. Jack Jones) asks me about the future. He knows no more about that than I do.

I hope the Minister will resist this Amendment. It deals with two aspects of the functions of the Board—amalgamations and co-ordination. I take the view that it is very easy grossly to exaggerate the benefit to be derived from amalgamations. The hon. Member for Rotherham referred to instances of unnecessary changing in runs which added to cost and decreased efficiency. But amalgamations are not necessarily needed to remedy such defects.

The hon. Member for Flint, East (Mrs. White) referred to the personal aspect of negotiations, and her argument was that, human nature being what it is, an impartial body should come along from outside and compel amalgamation against the will of individuals when they themselves would not or could not produce the amalgamation. I should have thought that that argument was an argument for the exact opposite, by reason of the fact that we cannot overlook human nature and we cannot, therefore, expect a compulsory amalgamation, an amalgamation which is not wanted by the parties concerned, to work efficiently and harmoniously afterwards. Human nature will continue to operate.

In my view, therefore, if an impartial body suggests to two firms that they could amalgamate with advantage, and those concerned do not see the advantage to them of the amalgamation, there seems to be no merit in forcing amalgamation upon them as the Amendment suggests.

Mr. Jack Jones

The hon. Gentleman suggested that there was some other method by which the loss of efficiency and the increase in cost could be avoided. Would he mind telling us what he proposes that method should be?

Mr. Summers

I was coming to that. I was dealing with the two things separately—with the question of amalgamation and with the question of what the Amendment calls co-ordination. I take it that by co-ordination he means drawing attention to what might be improved methods of working by closer association between the policles of firms which are about to be Tun under separate management.

I take the view that if a survey and review of this industry by the Board reveals that there are uneconomic practices which could with advantage be eliminated, then reasonable people, having put before them the case for the change which is recommended, will see the virtue of the proposals made, in their own self-interest if for no other reason, and we shall not need the compulsory element to bring about the change.

I would go as far as to say that if those who are reviewing the industry are not able to convince the firms concerned that advantages can be derived from closer co-ordination and from working together, then I shall be somewhat sceptical of the advice which has been tendered to those firms. After all, if the recommended change is to produce greater efficiency and to reduce costs, it will obviously be in the interests of those firms that the change should be made.

What the hon. Gentleman is seeking is available to him already by the supervision of the Board who will, by their very position, be able to take a broader view of the situation than might be possible to individual managements concerned primarly with their own affairs. But, having taken that view and having shown the individual companies that there is something to be gained in the general efficiency of the industry by taking such advice, I think we can safely leave it at that. I would suspect any advice which was tendered to them and which was driven through on the basis of an Amendment such as this because individual companies would not accept it, For that reason, I hope that the Minister will hesitate before he puts any words of this kind into the Bill.

Mr. Mitchison

I want to ask the hon. Gentleman one question. I do not necessarily agree with what he is saying about the amalgamation of two reluctant concerns; but supposing one concern wanted amalgamation and the other did not, and it was in the national interest that the two should be amalgamated, what action does he suggest should he taken in such a case?

Mr. Summers

The hon. and learned Gentleman is basing his ideas on certain assumptions which are very unwise to accept at their face value. If it is in the national interest that two firms should amalgamate, one of which does not wish to do so, I am not at all sure that it is possible to assert that such a compulsory amalgamation is in the national interest. That is the basis of the case I am putting forward.

The weapon of compulsory amalgamation is one which I think it would be as well for the Board not to wield in the years to come. If they cannot produce the results which they wish by other methods, it is unlikely that they could achieve results by using such a compulsory weapon. It is open to the Realisation Agency to effect certain amalgamations before they sell the assets which will presently fall into their possession. Therefore, some of the instances of possible amalgamations which might occur to the mind of the hon. Member who moved the Amendment could be brought about, if it were thought the right thing to do, through the medium of the Realisation Agency, before the assets were sold to private enterprise. So it is only in regard to the future—after such new arrangements have been made—that this Amendment will have any validity. Much of what this Amendment seeks to do can be done beforehand.

Mrs. White

If the hon. Member thinks that at this moment the amalgamations which may be carried out by the Agency are desirable—and they are possible only through the happy accident of the Labour Government passing the nationalisation Bill—why does he imagine that there will be no other point of time in the future when an amalgamation might be desirable and that powers to secure this amalgamation should be available?

Mr. Summers

I am saying that there is another instrument which is available to those who wish to see amalgamation proceeding at a faster rate. The Realisation Agency can achieve this amalgamation by reason of the fact that it possesses all the shares at the moment. I distinguish between the present day and the future in the use of such an instrument because I ran see that there will need to he a certain closing down of works, which might be done with less social dislocation if it were associated with the resale of assets of some of the smaller companies, which are less able to look after their employees than the larger ones.

Mr. E. L. Mallalieu (Brigg)

The hon. Member for Aylesbury (Mr. Summers) seems to think it is quite impossible for the interests of the country and the interests of different steel masters to be at variance. Even if they were at variance he seems to think that it is quite impossible for the steel masters themselves to act in a way which is harmful to the national interests. There are many on this side of the Committee, at any rate, who do not share that view.

Mr. Summers

I said nothing that could possibly be interpreted in that way.

5.45 p.m.

Mr. Mallalieu

I am sorry if I have misinterpreted the hon. Gentleman. I shall certainly read with great care tomorrow what he has said. At any rate, that was the very definite impression he left in my mind—perhaps wrongly.

But even if there are interests of steel masters who are thought by some impartial authority to need amalgamation, the hon. Member is of opinion that the steel masters should be the judges in their own case. Our case is that there should be some impartial authority which should decide between the national interests and those of the steel masters, if such should appear to be in conflict in any way. The hon. Member for Hall Green (Mr. Aubrey Jones) attributed to us the motive of wanting merely to keep in being the powers of the central authority in the steel industry.

Mr. Aubrey Jones

It seemed to me that the difference between the two Measures which we are discussing is that in the 1949 Act all the power rested with the central authority, and the purpose of this Measure is to redress the balance while still leaving a modicum of power with the central authority.

Mr. Mallalieu

Exactly. The hon. Member said that all our Amendments seem to seek to keep the position as it was under the Corporation. That may or may not be true; but in this case I suggest there is an entirely different reason —one which he should consider very carefully. The Government have stated quite plainly, in Clause 4 (1), what is their intention with regard to the steel industry.

I give them every credit for being absolutely sincere in this matter. They say that they want this industry to be efficient and economic, and to produce an adequate supply of steel. We all want that. Here we have an authority which is claimed by the Government to be an impartial one, and let us assume for the sake of my argument that the Board is to be impartial. All our Amendment seeks to insert into the Bill is a provision that if that impartial authority says that certain amalgamations are necessary to achieve the very object which the Government say, in Clause 4 (1), they intend to achieve—an efficient and economic industry which will give adequate supplies—those amalgamations should take place.

In other words, we want to do precisely what the Government say they intend to do in Clause 4 (1). If a Board with such authority as this Board should have were to say that every steel master should paint his face green in the interest of having an efficient and economic industry. I should have thought that the Government would have leapt at it and said, "By all means let them do so if it is in the national interest." I have taken a rather stupid example, but even in such a case, if the Board recommended such a thing the Government should be pleased to back them up.

In this case, we suggest that if the Board recommends something which, on everybody's argument, will be necessary in the future—some degree of amalgamation and co-ordination—the Government should accept their recommendation. That is all we are trying to put in the Bill. I hope that the Government will very seriously consider accepting the Amendment.

Mr. Low

We have had a valuable debate and I want to thank the hon. Gentleman the Member for Rotherham (Mr. Jack Jones) for the spirit in which he opened it. We are fortunate to have had the hon. Gentleman speaking for us at the outset from his experience and also my hon. Friend the Member for Hall Green (Mr. Aubrey Jones) who has experience of a different nature in these matters. I want also to thank my hon. Friend the Member for Aylesbury (Mr. Summers) for his helpful speech.

These Amendments are aimed at providing for compulsory amalgamations. In the course of this debate we have had to discuss seriously the general desirability of amalgamation and co-ordination inside the industry, but the purpose of the Amendments is to make provision in the Bill for compelling those who are unwilling to amalgamate. In our view such coercion is contrary to the spirit of the Bill. Having said that, I want the Committee to bear with me while I explain why in our view it is unnecessary as well as wrong, to make provision for compulsory amalgamation.

There is no doubt that some amalgamation and co-ordinations may be good because they may lead to more economic and efficient use of plant or to the creation of more economic, efficient and productive plant. There is no doubt that this has happened in the past both in this country and in others. History shows that our steel industry, like many other industries, has developed in exactly that way. However, I agree with my hon. Friends that in the matter of amalgamation, on the one hand, and independence, on the other, it is necessary to keep a balance, just as it is necessary, in the words of my hon. Friend the Member for Hall Green, to keep a balance between control and complete freedom inside the industry.

In our view, that balance is kept in the Bill. The consultation duty of the Board under this Clause is concerned primarily with the physical capacity, with physical plant and so on, but in the course of carrying out their duty they will discuss and consult about organisation. However, organisation, and particularly amalgamation and co-ordination, are only some of the means whereby better use can be made of productive capacity in this industry. It would be wrong for that reason to introduce one method into this Clause. Incidentally, this is an argument which I remember the right hon. Gentleman using in his previous Bill.

The question we have to consider is the best way to secure desirable amalgamations. This Amendment is carefully drawn and is a reasonable way of introducing coercion, if coercion has to be introduced. In this Amendment the Opposition are saying that if consultation fails the best way is to provide for compulsion. In our view, the best way is to rely upon the ordinary economic forces of competition helped by the guidance which the Board can give the industry. That is the best test of the desirability of amalgamations and the best spur to amalgamations.

The hon. Lady the Member for Flint. East (Mrs. White) referred to the Productivity Report on the Iron and Steel Industry. I thought we might have quotations from it in the course of this debate. I do not know whether the hon. Lady noticed that in referring to the United States industry the compilers of the report say on page 9 that intensive competition has stimulated both the amalgamation of firms and investment in sources of raw materials. There is no doubt that under competitive conditions amalgamations take place, and that competition may well be a spur to amalgamations which are desirable from the point of view of efficiency.

Mr. Mitchison

The hon. Gentleman is agreeing with Karl Marx.

Mr. Low

I am not certain what the hon. and learned Gentleman is joking about, but no doubt we shall have the benefit of his humour after my speech.

Mr. Mitchison

I was only congratulating the hon. Gentleman on agreeing with Karl Marx.

Mr. Low

I am delighted to have given some pleasure to the hon. and learned Gentleman. I was saying that many amalgamations and co-ordinations have taken place in the past in our own iron and steel industry. The hon. Member for Rotherham will know the history of the Lancashire Steel Corporation.

Mr. Jack Jones

Indeed, I do.

Mr. Low

Many of the famous names of our steel industry have so arisen— United Steel, Colvilles, Bairds and Scottish, Dorman Long, Richard Thomas and Baldwins, The Steel Company of Wales and many more. Therefore, it cannot be said that the history of the steel industry discloses that it has been slow to amalgamate in the past.

Equally I ought to emphasise a point which I made earlier. It should never be forgotten that in our country small firms have a most important part to play, both to supply short runs, to supply special steel and to meet special needs.

Mr. Jones

indicated assent.

Mr. Low

I note that the hon. Gentleman is nodding his head. When we are thinking about the problem of achieving a balance between amalgamation and independence, it is as well that we should note the views of the Import Duties Advisory Committee. In their Report of 1937 they said that in their view it was necessary to take steps: to secure the full advantage of modern plant developments and of plant production. This can be done either by the grouping of existing individual undertakings in amalgamation or by co-operation between independent undertakings in the setting up of new plant or in the correlation of different stages of production…. It has been suggested to us that there should be power to compel amalgamations where these are proved to be desirable, but while we attach great importance to amalgamation in appropriate cases as a factor in achieving a balanced and efficient organisation "— I want to emphasise the following words: we are satisfied that the full benefits only accrue where it represents a natural alliance based on community of interests, and we doubt whether for this industry, looking to its individualist tradition and the steps it is now taking along the path of co-operation, any advantage would be gained by the creation or use of such powers. Today we hold exactly the same view. In the succeeding words to those I have read out, the Committee said they were satisfied that: the Federation organisation will foster a spirit of co-operation. In addition to that, under the Bill we now have the Board to help to foster any spirit of amalgamation or co-ordination if that should appear desirable from their point of view.

6.0 p.m.

I am deliberately replying somewhat fully to this important diseussion and I hope that the Committee will forgive me. Reference was made by my hon. Friend the Member for Hall Green to another example of compulsory amalgamation under the Coal Mines Act. I agree with what he said. In practice, I am told, all the schemes that were prepared fell foul of the terms of the Act that required the scheme to be fair and equitable to all persons affected thereby.

The hon. Lady the Member for Flint, East tried to draw a distinction between the conditions under that Act and the conditions which we are now dealing with under the Bill. The hon. Lady may well have been right in seeking to draw that distinction, but I must point out that, I believe, exactly the same words are used in the last of the Amendments that we are discussing and in that Act; so that the point made by my hon. Friend is a good one despite any distinction that the hon. Lady may be able to see.

Mrs. White

The distinction I was attempting to draw was not in the terms of the Act but in the state of the two industries, and in respect of the quality of management even of the two industries, in coal mining in 1930 and in the steel industry today.

Mr. Low

One of the difficulties—in fact, the main difficulty—to which my hon. Friend referred applies with equal force to these Amendments, because exactly the same words have been used.

There is one other point that I ought to make. I do not know whether the Opposition realise that, as the Amendments are drafted, they would relate only to horizontal amalgamations and would not cover the vertical amalgamations, about which the right hon. Gentleman is on record on a number of occasions, which are, or may be, equally or possibly more desirable; that is, the introduction of finishing processes into steel works.

I should remind the Committee that the Productivity Report, in referring to the size of units and so on, drew attention on page 96 to the desirability of that type of amalgamation, which would not be covered by the Amendments.

Mr. G. R. Strauss (Vauxhall)

Why not?

Mr. Low

Because the Amendment relates to iron and steel producers, and the finishing processes are not included in the Bill under the definition of "iron and steel producers." I am always willing to give way to the hon. and learned Member for Kettering (Mr. Mitchison) on a matter of law or of interpretation of statute, however, and I will certainly look at the point again; but I am advised that that is so and perhaps, therefore, the hon. and learned Member will take it from me and will look at it rather closely.

Therefore, in our view, not only would it be contrary to the spirit of the Bill to accept the Amendments, or any of them, but it is unnecessary to do so—and unnecessary for the purpose which the hon. Member for Rotherham, at any rate, who moved the Amendment, had in mind. I am sure that when he moves an Amendment which makes it easier to have amalgamations, he wants only to see desirable amalgamations and co-ordinations. In our view, the economic forces, coupled with the advice of the Board, will do all that. The Board can persuade and encourage co-operation by their control over prices if those prices are not competitive. They can see that only those manufacturers who are efficient earn a profit and, therefore, can keep business, and if it so happens that amalgamations are desirable in particular products it is even possible for them to see that nobody is getting away with an unamalgamated plant inefficiently because the prices are too high.

They have all those weapons and, finally, they have the good sense of the steel industry. There is also the fact that the steel firms will be competing one with another and will be desiring to see that their plants are efficient and profitable. For that reason, we ask the Committee to reject the Amendment, but also for the reasons I have given we are grateful for the spirit in which the debate has been conducted and for the discussion of this most important matter.

Mr. G. R. Strauss

I regret, but I am not surprised, that the hon. Gentleman, who has explained the Government's situation very well, as he always does, has rejected this Amendment which was moved by my hon. Friend the Member for Rotherham (Mr. Jack Jones). I say straightaway that the hon. Gentleman's arguments have not convinced us in the slightest. They are a continuation of the front which the Government have put up, based on the idea that the industry is perfectly all right and that if it is given a supervisory Board without any powers whatsoever, all will be for the best in the best of all possible worlds.

We do not believe that everything is perfect in the industry. We accept the view of the party opposite that conflicts have arisen and are likely to arise in this industry between private and public interests. Otherwise, the Government would not say that there is a need for any public or Government supervision of the industry. We accept that. We say that if there is a case for public or Government supervision of the industry, the supervisory body must have some authority to do something when it is convinced that things are radically wrong or contrary to the public interest.

The Government say that they are going to put on the Board reliable, responsible business people, leaders of the steel industry, independent leaders of industry from outside, people with great knowledge on the industrial side, one or two independent people and a number of trade union representatives. It is to be a body of people whom the Government are to choose from leaders of industry. But the Government say that they are not going to trust these people with even the elementary powers of acting when they think that something is seriously wrong and is damaging the public interest or if they think that there should be coordination or correlation in production between two or three or more iron and steel works, or, maybe, amalgamation.

What is happening? The Clause allows for the provision by the Government, if necessary, of additional production facilities, if required in the interests of the nation, to ensure that the supply of iron and steel products is adequate, and efficiently and economically produced. It is proposed that in certain circumstances the Government should be entitled themselves to build further production facilities. But it is just as important to see that the existing production facilities are being properly used.

It would be madness and wasteful of our national resources if the Minister were to proceed with the building of new production facilities of any sort unless he had not only the knowledge that existing production facilities were operating at 100 per cent., but, if they were not, had the power to do something about it. How much better it would be—it would save millions of pounds, perhaps, of our resources—if the Minister were to be able to say that, instead of building certain additional facilities in order to increase the production of a particular type of iron or steel product by a certain amount, he were able to increase the productivity from existing plant by correlation between certain manufacturers, or by amalgamation.

It is significant that every hon. Member on the other side of the Committee has admitted in some form or other that some amalgamation or coordination in this industry is necessary or desirable. The hon. Member for Aylesbury (Mr. Summers) put it at its lowest and said that the case for amalgamation could easily be exaggerated—that is accepting that there is a case for amalgamation in certain instances. The hon. Member for Esher (Mr. Robson Brown), in an interjection, seemed to be very favourable to the idea of the need—I am sure he is perfectly right—of some co-ordination in the placing of orders, so as to get long runs in the mills, and so on. The hon. Member for Hall Green (Mr. Aubrey Jones) went so far as to say that amalgamation in an industry such as this is continuously desirable. Incidentally, it is interesting to notice that all those Members opposite who a few minutes ago had been demanding greater competition in the industry, were not present when the other Members on the benches opposite were demanding more and more amalgamation.

From my information about the industry, which is not as much as that of some of the other hon. Members who have spoken on either side of the Committee, a great deal could be saved in the industry, and a substantial increase in efficiency and production achieved, by a wide degree of correlation in production where it does not exist today. There is much overlapping and much could be saved, for instance, in the transport of pig iron from one part of the country to the other. One of the next steps which the Iron and Steel Corporation had in mind was to carry out a survey of the industry to see where such economies could be made. It was easy for them to do that without interfering with anyone's personal or private interests or profits because the whole thing was in one hand. There was one financial kitty for the whole show.

It having been agreed by hon. Members opposite that amalgamation and coordination are desirable—it may be we disagree on the extent—what is the argument against our proposals? It is that co-ordination cannot be forced on people who do not want it, and still less amalgamation. In other words, the personal and private interests of the individuals who are at present in control of the iron and steel plants should be superior to the national interests if those individuals say that they do not want co-ordination, or do not like amalgamation, or do not like the people with whom they would have to amalgamate, or do not want to lose their independence—or for a hundred and one other reasons.

The position seems to be that if amalgamation is unacceptable to a board of directors for any of the reasons I have outlined, then, even if it is in the public interest that such co-ordination or amalgamation should take place, nevertheless the will of those people who are in charge of the private companies is to prevail over the public interest. The view of the Minister and the Board, composed of people of the highest quality chosen because of their immense knowledge of the industry, is not to prevail; the view of those who are concerned with private and personal interests is to be paramount.

We say that that is wholly wrong and a wicked sacrifice of public to private interests. If the public interest is to be looked after as we on this side of the Committee want it looked after, this supervisory Board should be given some authority in the matter. We are told that the situation will be dealt with by persuasion. But the Board may not be able to do it that way. The Minister, in reply, said that the Board will have the power to fix maximum prices. That will not affect the situation. It may be argued by hon. Members opposite that firms making good profits should be left alone. But those firms may nevertheless be inefficient and may be wasting the national resources. Price control, in our view, is not the thing which can be used where there is a prima facie case for co-ordination or amalgamation.

We say that this Board, which is to be set up to protect the public interest, has not been given any power so far to do anything worth while. If it is not to be allowed to draw up plans for the industry, in this limited sphere it should surely be given power to act, particularly in cases where the Minister's advisers are convinced that co-ordination or amalgamation should take place. If there are objections to it, obviously the local people will reveal them, and if so, no one will want to force it through: but where the objections are not sound—and they will not always be, because in some cases it will be found that people are unwilling to co-ordinate because of certain idiosyncrasies, such as that they have been independent all their lives, or for other selfish reasons —and where the Minister and the Board nevertheless say that it is desirable and essential in the public interest that amalgamation or coordination should be effected, then it should be done.

We cannot understand what the Government are afraid of and why they should continue to adhere to the principle that in no circumstances whatever, even where the public interest is endangered, are they going to interfere in the steel industry, but prefer to leave it to those in control—the interests of private profit—to be the sole arbiters.

In that context the reply of the Parliamentary Secretary is perfectly logical, but we take the opposite view. We say that where it is proved to the Minister and to Parliament that private interests are holding up the public interest, then someone—either the Minister or the Board, possibly after Parliamentary discussion—should be able to say that the public interest must prevail over private interests in this important basic industry. It is for that reason that we have moved this Amendment which we think is a great improvement, and I advise my hon. Friends to support it in the Lobby.

6.15 p.m.

Mr. Robson Brown

I am only going to intervene for a short time to answer the right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss), because the whole of his argument was directed to the suggestion that the Board could not and never would be able to deal with such a situation as has been envisaged in the Committee this afternoon. This we on this side of the Committee definitely repudiate. The Bill provides all the moral authority necessary. There is no question whatever that in certain circumstances some form of amalgamation may be desirable in the public interest, and in the short time that I want to speak I should like to separate these two questions of amalgamation and coordination.

Amalgamation of a physical and financial nature of two or more companies can generally be required for two specific purposes. One is because there is a substantial shortage of orders which necessitate, for efficiency reasons, the closing down of one or more plants. The hon. Member for Rotherham (Mr. Jack Jones) shakes his head.

Mr. Jack Jones

Is the hon. Gentleman suggesting a repetition of what happened in the past when companies were amalgamated and the tradesmen were thrown out of work and got nothing from the industry, while the directors of the companies which were amalgamated continued to receive emoluments from the company in being?

Mr. Brown

The hon. Member for Rotherham knows very well that I am not suggesting anything of the sort in any shape or form. On the contrary, I want to ensure that such a situation does not arise, because arbitrary compulsory judgment by outside persons is not always the right judgment. The hon. Member was quite right when he said that frequently the position arose where national or international trade was at a particularly low level and all the arguments were in favour of closing a certain works, but, on the other hand, local conditions demanded that they should remain open. Then somehow or other the circumstances changed, the life of the works continued, and the work people and their employment were protected.

Mr. Jones

rose—

Mr. Brown

Let me develop the other point. The other reason for these amalgamations is when there is an increased demand for a product and it would appear that the productivity of the company is not rapid enough and it may be desirable to extend capacity. This Clause as it stands provides for such a situation, for it deals with additional production. The power of the Board and, through the Board, of the Minister, is clear and specific, and the persuasion they can exercise is very considerable. There are considerable financial facilities to assist development in progressive firms, and in a changed position any stubborn or obdurate firm which refused to cooperate would be virtually put out of business in a short space of time and its competitors would develop at its expense.

Such powers are very powerful factors which the Board can bring to bear, and I think that my hon. Friends on this side of the Committee believe that that kind of thing is far better in the end than the compulsory power envisaged by the Opposition about which we have heard so much during this debate.

If I may add one thing at this juncture, I feel that, even if there is a company whose works are somewhat out of date and whose economy may be behind what is expected, it should not be arbitrarily refused the opportunity of submitting recommendations and applications for development. I do not think one could arbitrarily say, because a particular works has, up to a moment in time, perhaps not been as efficient as it might be, therefore it is to be cut out from any opportunities to develop. If I misunderstood my hon. Friend the Member for Hall Green (Mr. Aubrey Jones) I will give way.

Mr. Aubrey Jones

I must repudiate that misinterpretation of my words. It is far from the spirit of the Bill, and if my hon. Friend will read my speech tomorrow he will see that it is far from what I said.

Mr. Brown

I am glad that my hon. Friend has put my doubts on that matter at rest, but that was how I understood him as he was speaking.

I wish to deal with what the hon. Member for Rotherham said about coordination being desirable and that there were many instances where it would be very effective and most useful. He knows perfectly well that the whole tone and tempo of the industry today, throughout the industry, is to co-ordinate wherever it can on every subject it can for the general benefit. To take the spheres of research and education, there are divisional committees in regard to education, and in the case of research we are operating in much the same way. Over a broad field the industry is moving in the most progressive way possible, and in that respect there should be no fear whatever.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 226; Noes, 249.

Division No. 86.]	AYES	[6.22 p.m.
Acland, Sir Richard	Benn, Wedgwood	Brown, Rt. Hon. George (Belper)
Albu, A. H.	Benson, G.	Burton, Miss F. E.
Allen, Arthur (Bosworth)	Beswick, F	Butler, Herbert (Hackney, S.)
Allen, Scholefield (Crewe)	Bing, G. H. C	Callaghan, L. J.
Anderson, Frank (Whitehaven)	Blackburn, F.	Carmichael, J.
Awbery, S S.	Blenkinsop, A.	Castle, Mrs. B. A.
Bacon, Miss Alice	Boardman, H.	Champion, A. J
Baird, J.	Bowles, F. G.	Chapman, W. D.
Balfour, A.	Braddock, Mrs. Elizabeth	Chetwynd, G. R.
Barnes, Rt. Hon. A. J	Brockway, A. F.	Clunie, J.
Bartley, P.	Brook, Dryden (Halifax)	Coldrick, W.
Bence, C. R.	Broughton, Dr. A. D. D.	Colliok, P. H.
Corbet, Mrs. Freda	Irving, W. J. (Wood Green)	Pursey, Cmdr. H.
Cove, W. G.	Isaacs, Rt. Hon. G. A.	Reid, Thomas (Swindon)
Craddock, George (Bradford, S.)	Janitor, B.	Reid, William (Camlachie)
Crosland, C. A. R.	Jay, Rt. Hon. D. P. T.	Rhodes, H.
Cullen, Mrs. A.	Jeger, George (Goole)	Richards, R.
Daines, P.	Jenkins, R. H. (Stechford)	Robens, Rt. Hon. A.
Dalton, Rt. Hon. H.	Johnson, James (Rugby)	Roberts, Albert (Normanton)
Darling, George (Hillsborough)	Jones, David (Hartlepool)	Roberts, Goronwy (Caernarvon)
Davies, Ernest (Enfield, E.)	Jones, Frederick Elwyn (West Ham, S.)	Robinson, Kenneth (St. Pancras, N.)
Davies, Stephen (Merthyr)	Jones, Jack (Rotherham)	Ross, William
de Freitas, Geoffrey	Jones, T. W. (Merioneth)	Shackleton, E. A. A.
Deer, G.	Keenan, W.	Shinwell, Rt. Hon. E
Delargy, H. J.	Kenyon, C.	Short, E. W.
Dodds, N. N.	Key, Rt. Hon. C. W.	Shurmer, P. L. E.
Dugdale, Rt. Hon. John (W. Bromwich)	King, Dr. H. M	Silverman, Julius (Erdington)
Ede, Rt. Hon. J. C.	Kinley, J.	Silverman, Sydney (Nelson)
Edwards, John (Brighouse)	Lee, Frederick (Newton)	Simmons, C. J. (Brierley Hill)
Edwards, Rt. Hon. Ness (Caerphil[...]y)	Lewis, Arthur	Stater, J.
Edwards, W. J. (Stepney)	Lipton, Lt.-Col. M.	Smith, Ellis (Stoke, S.)
Evans, Albert (Islington, S.W.)	MacColl, J. E.	Smith, Norman (Nottingham, S.)
Evans, Edward (Lowestoft)	McGhee, H. G.	Sorensen, R. W.
Evans, Stanley (Wednesbury)	McGovern, J.	Soskice, Rt. Hon. Sir Frank
Ewart, R.	McInnes, J.	Sparks, J. A.
Fernyhough, E.	McLeavy, F.	Steele, T.
Fienburgh, W.	MacMillan, M. K. (Western Isles)	Stewart, Michael (Fulham, E.)
Finch, H. J.	MacPherson, Malcolm (Stirling)	Strachey, Rt. Hon. J.
Fletcher, Eric (Islington, E.)	Mainwaring, W. H.	Strauss, Rt. Hon. George (Vauxhall)
Follick, M.	Mallalieu, E. L. (Brigg)	Summerskill, Rt. Hon. E
Foot, M. M.	Mallalieu, J. P. W. (Huddersfield, E.)	Sylvester, G. O.
Forman, J. C.	Mann, Mrs. Jean	Taylor, Bernard (Mansfield)
Fraser, Thomas (Hamilton)	Manuel, A. C.	Taylor, John (West Lothian)
Freeman, John (Watford)	Mellish, R. J.	Taylor, Rt. Hon. Robert (Morpeth)
Freeman, Peter (Newport)	Messer, F.	Thomas, David (Aberdare)
Gaitskell, Rt. Hon. H. T. N.	Mikardo, Ian	Thomas, George (Cardiff)
Gibson, C. W.	Mitehison, G. R.	Thomas, lorwerth (Rhondda, W.)
Glanville, James	Moody, A. S.	Thomas, Ivor Owen (Wrekin)
Gordon Walker, Rt. Hon. P. C.	Morgan, Dr. H. B. W.	Thomson, George (Dundee, E.)
Greenwood, Anthony (Rossendale)	Morley, R.	Thurtle, Ernest
Greenwood, Rt. Hn. Arthur (Wakefield)	Morris, Percy (Swansea, W.)	Tomney, F.
Grenfell, Rt. Hon. D. R.	Morrison, Rt. Hon. H. (Lewisham, S.)	Turner-Samuels, M.
Griffiths, David (Rother Valley)	Moyle, A.	Ungoed-Thomas, Sir Lynn
Griffiths Rt. Hon. James (Lianelly)	Mulley, F. W.	Viant, S. P.
Griffiths, William (Exchange)	Murray, J. D.	Weitzman, D.
Hale, Leslie	Nally, W.	Wells, Percy (Faversham)
Hall, Rt. Hon. Glenvil (Coins Valley)	Neal, Harold (Bolsover)	West, D. G.
Hall, John T. (Gateshead, W.)	Oldfield, W. H.	Wheatley, Rt. Hon. John
Hamilton, W. W.	Oliver, G. H.	Wheeldon, W. E.
Hannan, W.	Orbach, M.	White, Mrs. Eirene (E. Flint)
Hargreaves, A.	Oswald, T.	White, Henry (Derbyshire, N.E.)
Harrison, J. (Nottingham, E.)	Padley, W. E.	Whiteley, Rt. Hon. W.
Hastings, S.	Paling, Rt. Hon. W. (Dearne Valley)	Wigg, George
Hayman, F. H.	Paling, Will T. (Dewsbury)	Wilcock, Group Capt. C. A. B.
Healey, Denis (Leeds, S.E.)	Palmer, A. M. F.	Wilkins, W. A.
Herbison, Miss M.	Pannell, Charles	Williams, David (Neath)
Hewitson, Capt. M.	Pargiter, G. A.	Williams, Rev. Llywelyn (Abertillery)
Hobson, C. R.	Parker, J.	Williams, Ronald (Wigan)
Holman, P.	Paton, J.	Williams, W. R. (Droyleden)
Hudson, James (Ealing, N.)	Plummer, Sir Leslie	Winterbottem, Ian (Nottingham, C.)
Hughes, Cledwyn (Anglesey)	Popplewell, E.	Winterbottom, Richard (BrIghtside)
Hughes, Emrys (S. Ayrshire)	Porter, G.	Woodburn, Rt. Hon. A
Hughes, Hector (Aberdeen, N.)	Price, Joseph T. (Westhoughton)	Wyatt, W. L.
Hynd, H. (Accrington)	Price, Philips (Gloucestershire, W.)	Yates, V. F.
Hynd, J. B. (Attercliffe)	Proctor, W. T.
Irvine, A. J. (Edge Hill)	Pryde, D. J.	TELLERS FOR THE AYES:
		Mr. Pearson and Mr. Bowden
NOES
Aitken, W. T.	Bennett, F. M. (Reading, N.)	Butler, Rt. Hon. R. A. (Saffron Walden)
Allan, R. A. (Paddington, S.)	Bennett, Sir Peter (Edgbaston)	Campbell, Sir David
Alport, C. J. M.	Bovine, J. R. (Toxteth)	Carr, Robert
Amory, Heathcoat (Tiverton)	Birch, Nigel	Carson, Hon. E.
Anstruther-Gray, Major W. J	Bishop, F. P.	Cary, Sir Robert
Arbuthnot, John	Black, C. W.	Channon, H.
Ashton, H. (Chelmsford)	Bowen, E. R.	Churchill, Rt. Hon. W. S.
Assheton, Rt. Hon. R. (Blackburn, W.)	Boyle, Sir Edward	Clarke, Col. Ralph (East Grinstead)
Baldock, Lt.-Cmdr. J. M	Braine, B. R.	Clarke, Brig. Terence (Portsmouth, W.)
Baldwin, A. E.	Braithwaite, Lt.-Cdr. G. (Bristol, N. W)	Cole, Norman
Banks, Col. C	Bromley-Davenport, Lt.-Col. W. H	Colegate, W. A.
Barber, Anthony	Brooke, Henry (Hampstead)	Cooper, Sqn. Ldr. Albert
Barlow, Sir John	Browne, Jack (Govan)	Craddock, Beresford (Spelthorne)
Baxter, A. B.	Buchan-Hepburn, Rt. Hon. P. G T	Cranborne, Viscount
Beach, Maj. Hicks	Bullard, D. G	Crookshank, Capt. Rt. Hon. H. F. C
Beamish, Maj. Tufton	Bullus, Wing Commander E. E	Crouch, R. F.
Bell, Philip (Belton, E.)	Burden, F. F. A.	Crowder, Sir John (Finehley)
Bell, Ronald (Bucks, S.)	Butcher, Sir Herbert	Crowder, Petre (Ruislip—Northwood)

Darling, Sir William (Edinburgh, S.)	Johnson, Eric (Blackley)	Prior-Palmer, Brig. O. L.
Davidson, Viscountess	Johnson, Howard (Kemptown)	Profumo, J. D.
Digby, S. Wingfield	Jones, A. (Hall Green)	Raikes, Sir Victor
Dodds-Parker, A. D.	Joynson-Hicks, Hon. L. W	Rayner, Brig. R.
Donaldson, Cmdr. C. E. McA	Keeling, Sir Edward	Remnant, Hon. P,
Donner, P. W.	Kerr, H. W.	Renton, D. L. M.
Doughty, C. J. A.	Lambert, Hon. G.	Roberts, Peter (Heeley)
Douglas-Hamilton, Lord Malcolm	Lambton, Viscount	Robertson, Sir David
Drayson, G. B.	Langford-Holt, J. A.	Robinson, Roland (Blackpool, S.)
Drewe, C.	Law, Rt. Hon. R. K.	Robson-Brown, W.
Dugdale, Rt. Hon. Sir T. (Richmond)	Leather, E. H. C.	Rodgers, John (Sevenoaks)
Duncan, Capt. J. A. L.	Legge-Bourke, Maj. E. A H	Roper, Sir Harold
Duthie, W. S.	Legh, P. R. (Petersfield)	Ropner, Col. Sir Leonard
Eden, Rt. Hon. A.	Lennox-Boyd, Rt. Hon. A. T	Russell, R. S.
Erroll, F. J.	Linstead, H. N.	Ryder, Capt. R. E. D.
Fell, A.	Llewellyn, D. T.	Sandys, Rt. Hon. D.
Finlay, Graeme	Lloyd, Rt. Hon. G. (King's Norton)	Savory, Prof. Sir Douglas
Fleetwood-Hesketh, R. F	Lloyd, Rt. Hon. Selwyn (Wirral)	Schofield, Lt.-Col. W. (Rochdale)
Fletcher-Cooke, C.	Lockwood, Lt.-Col. J. C.	Scott, R. Donald
Fort, R.	Low, A. R. W.	Scott-Miller, Cmdr. R.
Foster, John	Lucas, Sir Jocelyn (Portsmouth, S.)	Shepherd, William
Fraser, Hon. Hugh (Stone)	Lucas, P. B. (Brentford)	Simon, J. E. S. (Middlesbrough, W.)
Fraser, Sir Ian (Morecambe & Lonsdale)	Lyttelton, Rt. Hon. O.	Smithers, Sir Waldron (Orpington)
Fyfe, Rt. Hon. Sir David Maxwell	McAdden, S. J.	Spearman, A. C. M
Galbraith, Rt. Hon. T. D. (Pollok)	McCorquodale, Rt. Hon. M. S	Speir, R. M.
Galbraith, T. G. D. (Hillhead)	Macdonald, Sir Peter	Spence, H. R. (Aberdeenshire, W.)
Gammans, L. D.	McKibbin, A. J.	Spans, Sir Patrick (Kensington, S.)
Garner-Evans, E. H.	McKie, J. H. (Galloway)	Stanley, Capt. Hon. Richard
Glyn, Sir Ralph	Maclay, Rt. Hon. John	Stevens, G. P.
Godber, J. B.	Macleod, Rt. Hon. lain (Enfield, W.)	Stewart, Henderson (Fife, E.)
Gomme-Duncan, Col. A	MacLeod, John (Ross and Crornarty)	Stoddart-Scott, Col. M
Gough, C. F. H.	Macpherson, Niall (Dumfries)	Storey, S.
Graham, Sir Fergus	Maitland, Comdr. J. F. W. (Horncastle)	Strauss, Henry (Norwich, S.)
Gridley, Sir Arnold	Maitland, Patrick (Lanark)	Summers, G. S.
Grimond, J.	Manningham-Buller, Sir R. E	Taylor, Charles (Eastbourne)
Grimston, Hon. John (St. Albans)	Markham, Major S. F.	Teeling, W.
Grimston, Sir Robert (Westbury)	Marlowe, A. A. H.	Thomas, Rt. Hon. J. P. L. (Hereford)
Hal[...], John (Wycombe)	Marples, A. E.	Thompson, Kenneth (Walton)
Harden, J. R. E.	Maude, Angus	Thompson, Lt.-Cdr. R. (Croydon, W.)
Harrison, Cot. J. H. (Eye)	Medlicott, Brig. F.	Thornton-Kemsley, Col. C. N
Harvey, Air Cdre. A, V. (Macclesfield)	Mellor, Sir John	Tilney, John
Harvey, Ian (Harrow, E.)	Morrison, John (Salisbury)	Touche, Sir Gordon
Harvie-Watt, Sir George	Mott-Radclyffe, C. E.	Turner, H. F. L
Hay, John	Nabarro, G. D. N.	Turton, R. H
Heald, Sir Lionel	Nicholls, Harmar	Tweedsmuir, Lady
Heath, Edward	Nicholson, Godfrey (Farnham)	Vane, W. M. F.
Higgs, J. M. C	Nicholson, Nigel (Bournemouth, E.)	Vosper, D. F.
Hill, Dr. Charles (Luton)	Nield, Basil (Chester)	Wade, D W.
Hill, Mrs. E. (Wythenshawe)	Noble, Cmdr. A. H. P.	Wakefield, Edward (Derbyshire, W.)
Hinchingbrooke, Viscount	Nugent, G. R. H.	Wakefield, Sir WaveII (St. Marylebone)
Hirst, Geoffrey	Nutting, Anthony	Ward, Hon. George (Worcester)
Holland-Martin, C. J	Odey, G. W.	Ward, Miss I. (Tynemouth)
Holmes, Sir Stanley (Harwich)	O'Neill, Phelim (Co. Antrim, N.)	Waterhouse, Capt. Rt. Hon. C.
Holt, A. F.	Ormsby-Gore, Hon. W. D.	Watkinsen, H. A.
Hopkinson, Rt. Hon. Henry	Orr, Capt. L. P. S.	Webbe, Sir H. (London & Westminster)
Hornsby-Smith, Miss M. P.	Orr-Ewing, Charles Ian (Hendon, N.)	Wellwood, W.
Horsbrugh, Rt. Hon. Florence	Orr-Owing, Sir Ian (Weston-super-Mare)	Williams, Rt. Hon. Charles (Torquay)
Howard, Gerald (Cambridgeshire)	Osborne, C.	Williams, Sir Herbert (Croydon, E.)
Howard, Greville (St. Ives)	Peake, Rt. Hon O.	Williams, R. Dudley (Exeter)
Hudson, Sir Austin (Lewisham, N.)	Perkins, W. R. D.	Wills, G.
Hudson, W. R. A. (Hull, N.)	Peto, Brig. C. H. M	Wilson, Geoffrey (Truro)
Hurd, A. R.	Peyton, J. W. W.	Wood, Hon.R
Hutchison, Lt.-Com. Clark (E'b'rgh W.)	Pickthorn, K. W. M	York, C
Hutchison, James (Scotstoun)	Pilkington, Capt. R. A.
Hyde, Lt.-Col. H. M.	Powell, J. Enoch	TELLERS FOR THE NOES:
Hylton-Faster, H. B. H.	Price, Henry (Lewisham, W)	Major Conant and Mr. Kaberry.

6.30 p.m.

Mr. Albu

I beg to move, in page 4, line 45, to leave out "production."

The Deputy-Chairman (Mr. Hopkin Morris)

I think it will be convenient if the Committee discuss this Amendment together with the two following Amendments in line 46, namely, after "facilities," insert "for production" and after "Britain," insert: or for the supply in Great Britain or overseas of raw material for use in the iron and steel industry in Great Britain.

Mr. Albu

These Amendments if accepted, would give to the Board, and therefore I suppose to the Minister, powers which it seems to me they certainly ought to have. Whether they ever have to exercise them is another matter, but certainly it would seem right that, within the powers given to the Board in this Clause to make provision to use facilities for the production of iron and steel, the Board ought to have the power to provide for the production of raw materials.

Clause 9 provides power for the importation and distribution of raw materials, but nowhere in the Bill is any provision made for the Board itself to undertake, or to get anyone else to undertake, the actual production of raw materials. In existing conditions in this country which, under the developing economic conditions of Great Britain are likely to continue, it is absolutely essential that the Board should have this power to develop sources of raw material. I do not think it is any secret—certainly it is not a secret in this Committee—that as recently as the early part of last year the output of the steel industry was seriously restricted by a shortage of iron ore. When the Iron and Steel Corporation came into office, its opinion was that the arrangements for the supply of iron ore from abroad were quite inadequate.

Whether the responsible authorities had foreseen the situation which arose quite suddenly from the stopping of the supply of steel scrap from Germany—which, after all, was bound to come to an end— they certainly made inadequate plans for dealing with it. It is only in this year, under the stimulus of criticism from the Corporation and of the fact of shortage, that there has been a very considerable change; and also that they have decided to build a number of ore ships and improve the ore-handling facilities at the ports.

This problem of the development of resources abroad is very important, although, of course, it is equally the case that we have been expanding the consumption of home-produced ore. In their annual report, the Iron and Steel Corporation state that they consider there is further scope for the integration of the iron-ore excavating companies of this country—they vary a great deal in size. activity and efficiency—in order that there may be more efficient exploitation of the ore fields. It may welt be that the Board would itself desire to undertake work of this sort.

The home ores are a small proportion of the total consumed and are quite inadequate for our immediate requirements, although I suppose that the final proportion of home and imported ores is a matter of fairly long-term economic planning, and may have a considerable effect on the location of industry, and so on. But if the sources of foreign ores can be increased, if sources of richer ores can be found, if further sources can be found, although they are at present likely to be in soft currency areas, it is bound to mean considerable saving for the industry in production costs.

It has been estimated that during the next five years the requirements of imported ore are likely to rise to between 15 million and 16 million tons compared with the consumption of approximately 10 million tons during the last year. I think I am right in saying that there have been recent discoveries or the exploitation of considerable new fields. I believe it is generally considered that the growing American demand will be satisfied on the American continent. But there is also a growing demand from the continuously expanding European industry. If this goes on, if expansion continues at anything like the present rate, we may again find ourselves in difficulties. I believe that at present the expansion of ore production and supplies is taking place mostly in North and West Africa, and no doubt other new sources will be discovered in the future.

The question is who will be in a position to exploit those resources. This is not a unique problem for this country. It is part of the general problem of the supply of raw materials for all our industries, and there would seem to be a general recognition of that which is not confined to any one part of the Committee or any form of political opinion. If we are to ensure that over the rest of this century we shall have adequate supplies of raw materials for our industries, particularly the metal-using industries, which it is hoped will expand at a considerable rate, it will be necessary for this country to invest in the production of raw material supplies from abroad to an even greater extent than is being done at the present. Only then will supplies be safeguarded.

The Iron and Steel Corporation stated in its annual report that it may be necessary to increase producer-ownership and control of suitable foreign ore fields. I realise that this is taking place at the present time; but it may well be that no individual company, even under the form of co-ordination or supervision which will exist when this Bill becomes an Act —if it ever does—would be willing or able to undertake this sort of work, at least not on the scale which may be necessary if we are to be quite safe in the years to come.

The question is whose responsibility it will be to see not only that there are facilities for importing and distribution, but for the actual exploitation of ore fields and for the production of the ore. We do not know yet what portion of the industry will remain in public hands. We on this side think that probably a substantial portion will so remain. It may well be that those responsible for directing the policy of the parts of the industry which remain in public hands may want to safeguard their raw material supplies. It seems to us that only the Board, perhaps in conjunction with the Minister, can take the longterm view of the investment needed and may alone be willing to undertake the investment which will safeguard supplies in future. Therefore, it should have the power to do it itself.

I have referred to ore supplies which are the most important and which I think it is right to say have caused the main bottleneck. There is also the problem of coke supplies which may again cause a bottleneck in future. I understand that in the next five years another 4,500,000 tons of coke will be required. It is true that at present responsibility is shared between the industry, the Corporation and the National Coal Board, with most of the responsibility being on the industry. In the end that will become the responsibility of the separate companies if they are sold back to private enterprise; but, again, in the long-term view the Board might be interested.

Also there is the question of the supply of the very important alloying minerals without which the steel industry or the engineering industry cannot be carried on today. These include tungsten, vanadium and molybdenum. The Perry Report, an American report on the supply of raw materials, estimated that American consumption of tungsten would go up by 150 per cent. in the next 26 years and that of molybdenum by 170 per cent. The consumption of all these minerals, as well as of most non-ferrous metals would go up by at least twice. It might be necessary to safeguard the raw material supplies of this country through some central authority. It seems to be obvious that the Board should do that, and should be able to undertake development abroad.

I have said that this Amendment compels nobody to do anything. It gives to the Board powers which we think it would be irresponsible not to give them. They may not have to use them, but it seems to me that there can be no argument for refusing to give these powers in case they should be necessary. We all face the serious problem of how to ensure supplies of food and raw materials. These raw materials are absolutely essential. Many of them may be in short supply in the years to come. I doubt whether, through separate companies or firms, we can take the long-term view which is now necessary. We ought to safeguard the interests of the country by putting these powers in the hands of the Board.

Mr. Summers

When we have debated various aspects of the problems affecting steel in the past, I have found almost invariably that I have dissented from the views of hon. Gentlemen opposite. I may well find myself compelled to do that in future debates. Therefore, it is all the more agreeable now to find myself in complete agreement with the hon. Member for Edmonton (Mr. Albu) and the idea that is behind this Amendment. I do not know that I am necessarily wedded to the actual words that he proposes to achieve his object, but in essence I agree with the intention and I hope that the Minister will find some way to give effect to it.

It would seem wrong to place the responsibility upon the Board not merely for judging the use to which existing plant is put but for assessing the need and method adopted for the provision of additional plant, unless, equally, there is placed upon the Board the responsibility for ensuring that the raw materials for the new plant they wish to see created are made available to it. Unless the raw materials are there, expenditure on plant itself is not justified.

It might be thought that the mere addition of these words might relieve the industry itself of some of the proper responsibility it ought to shoulder for expenditure on raw materials because, by the mere use of those words it could be argued that the Government would step in and do for the industry what it ought to be doing for itself. To those who fear that consequence I would point out that there are two provisions in this Clause which must be fulfilled before Government money can be spent under this Bill if it is amended in this way.

The first provision is that there must be a shortage. Secondly, the Board must have failed to get proper steps taken to remove that shortage. Only if both those conditions are fulfilled is it proper for Government money to be spent. I should like the Minister to take this matter seriously and to consider how best the situation can be dealt with. I hope that he will consider some way by which the element of partnership is provided for if any Government money is spent in the raw material field under this Clause as amended. Clearly, it would be much more convincing, both to the industry and the public, if any such development for which public funds were used were done in partnership with the industry itself, which is experienced in these matters, so that accountability for what is done would be placed not merely on the Government of the day, through the Board, but also upon the industry.

6.45 p.m.

I should like to correct one impression which the hon. Member for Edmonton gave which I do not think is justified. He gave the impression that recent increased interest in sources of raw materials was attributable solely to the pressure exerted on the industry by the Corporation during its term of office. I would suggest that the increased interest is almost exclusively due to the fact that the added capacity of the industry has to be serviced not by scrap, as in the past, but almost entirely by pig iron. That, in itself, has forced an interest to be taken in iron ore and other materials. That would not have been the case if the raw materials for increased capacity could come in part from additional scrap supplies. The fact that the raw materials are not readily available has caused the increased interest.

I hope that the Minister, whether or not he is able to accept the wording suggested. will look kindly on this Amendment.

Mr. Arthur Colegate (Burton)

I should like to support my hon. Friend the Member for Aylesbury (Mr. Summers) in pressing the Minister to accept this Amendment, whether in this precise form of words or in some other form. I think this is an occasion on which one might call attention to what has happened in the oil industry, and recall that the present Prime Minister in 1911 or 1912 took that important step in connection with the oil industry which has provided us with one of the most important raw materials for the British nation.

In the same way, anyone who is charged with the duty of interesting themselves in the iron and steel industry should take a similar forward view, having regard to what is likely to be the international situation about raw materials. More and more we have to face the fact that the powers that be, whether in the shape of a private company with Government participation or the Government themselves, are going to divide between them, as it were, the available raw materials in the world and in such proportions as they can get.

That is a field in which we think the Government are justified in helping individual firms. In that international field, we hope to take a leading part, and I think that, if these powers are taken by the Minister, by means of this Amendment or something similar, the Board will be performing one of the most important functions which it can perform to help the iron and steel industry to go ahead.

Mr. Robson Brown

I am in general sympathy with the Amendment, and, indeed, on Second Reading, I emphasised the great importance of the Board having the oversight of the raw material supplies of the industry, particularly iron ore. It has been emphasised more than once that iron ore is the most important of our raw material supplies. In fact, shortage of scrap supplies has necessitated the change from a 50 per cent. consumption of pig iron to a 60 per cent. consumption. This is a remarkable and dramatic change which necessitates an entirely new evaluation of our ore requirements. Our home ore requirements at present stand at 15 million tons, and it is anticipated that, if the five-year programme is implemented, we shall have to go up to a requirement of 20 million tons.

In dealing with the question of home ore supplies, I hope the Board will bear well and clearly in mind the necessity for some oversight of the development of orefields in a progressive way, and it seems to me that their attention should be drawn to the desirability of central ore development and ore beneficiation in the Northampton ore-field.

Figures about foreign ore have been quoted reasonably accurately by the hon. Member for Edmonton (Mr. Albu), and the figures there show quite a startling increase. When we examine the international figures relating to steel production, the dramatic increases in the forecasts and the general increases in steel production in the world, we must realise that the race for iron ore deposits will increase in intensity in the next 5 or 10 years, and we must be satisfied that in this race Great Britain will not be left behind.

I sincerely hope that the Board will appreciate, and that the Minister will realise, that the Board should have some powers—not necessarily those indicated as the Amendment now stands, but some such positive and substantial powers—to encourage the development of iron orefields overseas and some power over the general supply position of other raw materials in short supply.

I hope also that, wherever possible, this development will be carried out so far as possible within the confines of the Dominions and Colonies themselves, so that such developments may bring general well-being to the whole British Commonwealth. I hope that, therefore, the Minister will find a form of words which will give to the Board that kind of power which seems to us to be really necessary.

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

I am delighted to support this Amendment and to find that it has found supporters on the other side of the Committee as well. A very prominent Member of the House used to say that, in this country, one began advocating a reform, but that it was nearly always between 20 and 25 years before it was accepted. Month after month, in this House in 1936 and 1937. I raised this issue, and the reason I raised it was that so many of my relatives were forced to leave Britain because of the economic situation in 1911 and 1912, and went to Australia.

In Australia, at Yampi Sound, there are some of the richest iron ore deposits in the world, and in Australia they have a method of regulating their legislation on a State basis. In the State in which these iron ore deposits are to be found, it was decided that no Japanese company was to be allowed to exploit the iron ore deposits. However, we can always trust the legal people to get round anything of that kind, and a London finance company got round those difficulties by financing the iron ore development through the London company, with the result that boats travelled regularly between Yampi Sound and Japan right until the eve of the war.

Now, at last, it is recognised in this House that it is most important that we should safeguard our iron ore deposits throughout the Commonwealth. Here, we see the need for Commonwealth economic planning. There are in Canada rich iron ore deposits hardly yet tapped, but American finance companies are considering the exploitation of these deposits. The Canadians desire to co-operate with us to the maximum extent, but until now there has been very little support in this House for proposals of that kind.

The chief handicap of the Canadians is going to be coking coal. In North Staffordshire, in the bowels of the earth, there is the greatest source of coking coal in the world. Our supplies of coking coal in Durham and other parts of the country are beginning to be worked out, but preparations are now being made to sink new shafts so that we can extract from the North Staffordshire coalfield millions of tons per year of coking coal. Here, we have great possibilities, and that is why I am so pleased that we are receiving the wholehearted support of both sides of the Committee on this question, and that we are at last recognising the need to safeguard, within our own country and within the Commonwealth, all our raw material resources to keep us going.

The reason I am so concerned about this is that, in this country, in the main, we can live only by producing. It has taken a large number of people a long while to recognise that, but at last there is an increasing recognition of the fact that, unless we do something on the lines proposed here, our economic situation, serious as it is now, will be far more serious in a few years' time.

The Chase National Bank of America is to sink millions of dollars in Spain in order to safeguard American iron ore supplies from that country, a fact that shows the necessity for a proposal of this kind being incorporated in this Bill, and also for every action being taken that can be taken to safeguard the iron ore needs of the steel industry, upon which this country so greatly depends.

7.0 p.m.

Mr. Sandys

This is one of the most important issues that have been raised, and I am glad that it is being dealt with, like practically all the other matters discussed in Committee on this Bill, from an entirely objective and practical point of view, with everybody trying to arrange the most efficient organisation possible for the iron and steel industry.

As I understand, the purpose of this Amendment is to empower the Minister, on the recommendation of the Board, to undertake the development of raw material supplies both in Great Britain and overseas. The hon. Member for Edmonton (Mr. Albu) said that the Bill gives no power to the Government to provide facilities for the development of raw materials. That is not correct. The very Clause which we are now discussing enabled the Minister on the recommendation of the Board to provide in Great Britain, though not overseas, additional production facilities for any of the activities set out in the Third Schedule, the first of which is the quarrying or mining of iron ore. Therefore, it is clear that this is already covered by the Bill.

Several hon. Members mentioned the question of coke. The definition of the production facilities which the Minister can provide under this Clause on the recommendation of the Board is set out in Clause 31, which refers specifically to carbonisation. It talks about any incidental activity (and, in particular, any activity relating to carbonisation), which includes, of course, the provision of coke ovens and other facilities for the production of coke.

Therefore it would appear that the provision of raw materials in Great Britain is already covered in a reasonably satisfactory manner by the Bill. The real issue is whether those powers should be extended to the development of overseas sources of supply.

I hope that the iron and steel industry will normally be able to obtain all the coke it requires from inside Great Britain. It may happen, as it did some months ago, that relatively small quantities of coke may have to be imported in order to overcome a temporary shortage. But I think the Committee will agree that it is almost inconceivable that the iron and steel industry would ever wish to operate coal mines or construct coke ovens outside Great Britain.

The question of the production overseas of raw materials, as distinct from the purchase of foreign materials, really confines itself to the development of sources of supply of iron ore and other ore. As we all know, the industry depends to a great extent upon supplies of high grade iron ore from abroad, and I entirely agree with the hon. Member for Edmonton that this is one of the most vital problems which will confront the iron and steel industry in the years ahead.

The industry has already many important contracts for the supply of iron ore from countries in almost all parts of the world. The main sources of supply are Sweden, French North Africa, Spain, Newfoundland and Sierra Leone. There are, of course, lesser sources of supply in other parts of the world. In one or two cases the British steel industry itself is participating in mining operations overseas and in the survey of mineral resources preparatory to development.

I believe that the extensive arrangements which on its own initiative the industry is making should be sufficient to keep pace with the growing demands of our expanding steel-making capacity. There is no reason to suppose that the Government could improve on the plans which the industry is now making.

My hon. Friend the Member for Aylesbury (Mr. Summers) stressed the importance of the Government not only acting alone, but also participating with the industry in developing these raw material resources. I agree with him that the more the industry does and the less left to the Government, the better. However, should the need arise, we would certainly not be opposed to Government participation in the development of raw material supplies overseas. The Government's attitude towards the Volta River aluminium scheme is sufficient proof of that.

As the Bill stands, the Board can, of course, discuss with the industry the problems of overseas ore supplies and concern itself actively with the whole of this problem. Although the Bill does not specifically say so, there can be no possible doubt that the Board is perfectly free to make any recommendations to the Government which are in the interest of the industry. Such recommendations can, of course, include recommendations relating to the necessity for overseas development of raw materials.

The effect of this Amendment would be to give the Government power to participate in the overseas development of raw materials if so recommended by the Board. This would not, as one or two hon. Members pointed out, give a blank cheque to the Government or entitle it to incur expenditure on overseas raw material development without Parliamentary approval. Any money that was required for these purposes would have to be voted by Parliament in the usual way.

There is really no difference of principle between us on this issue. The only reason why, after some reflection, we did not include this power in the Bill was that we thought that it might be better to wait until an actual case arose where Government assistance was needed for overseas development of raw materials for the industry. The Government could then bring definite proposals for a specific scheme before the House of Commons.

Without wishing to introduce any note of controversy into our steel debates— which is the last thing in the world I would want to do—I must confess that I was a little hesitant about asking Parliament to approve the principle of more overseas development by the State, having regard to recent experience which, to put it in the most inoffensive way that I can, have not been universally fortunate.

Mr. Ellis Smith

That is no analogy whatever.

Mr. Sandys

I must admit, however, that after listening to this debate my hesitations have been dispelled by the general support which the principle of this Amendment has received from both sides of the Committee.

In the form in which this Amendment has been drafted it would not achieve the purpose which the hon. Member for Edmonton has in mind. It would give the Government power to provide facili- ties for overseas development, but only within the definition of production facilities in Clause 31 of this Bill. That is to say, the Government could provide premises, plant and machinery. I am advised that the Amendment would probably not give the Government the right to spend money on the acquisition of land, mineral rights, port facilities and rail and sea transport. As I think hon. Members will agree, all those things might well be necessary to develop overseas raw material supplies. I would therefore ask the hon. Member for Edmonton to withdraw his Amendment. If he will do so, I, for my part, will introduce an Amendment on the Report stage to give effect to the substance of this proposal.

7.15 p.m.

Mr. G. R. Strauss

We are very glad that the Minister has taken this line. We felt very keenly about this matter as we believed that the inability, or lack of power, of the Board to provide raw materials if necessary from overseas for the iron and steel industry was one of the major deficiencies of the structure of the industry as set out in this Bill. We therefore moved this Amendment on which we place great importance.

I am glad there was a revolt of the Conservative back benchers on this matter, a revolt of those who agree with us that the Bill is deficient in this way and who support the suggestions which we put forward that it should be so amended. As I have said before to the Committee, I think that all our Amendments are reasonable and deserve the support of intelligent people but it is only now and again that we get hon. Members on the other side of the Committee to take that view. I can assure them that we have other Amendments even more important than this which deserve their support as much as this one does.

We are grateful to the Minister for explaining matters so fully, although we are amazed at the arguments which he put forward for hesitating to come to the House of Commons earlier with this essential power for the Board. But in view of what the right hon. Gentleman has said and his recognition that this matter is important, and the recognition on this side of the Committee—though I do not think on his part—that there have been some deficiencies in the past on the part of the iron and steel industry in not having been forward-looking enough in this matter and in view of his agreement to the need for some body outside the industry—the Minister himself, if necessary—taking powers to ensure that the industry has sufficient raw materials with which to fulfil the production quotas required by the economy of this country, I am sure that my hon. Friend the Member for Edmonton will wish to withdraw the Amendment. We shall wait with interest to see the same idea incorporated in the more effective and technically better form which the right hon. Gentleman says he will present, presumably on the Report stage.

Mr. Albu

I am not a Parliamentary draftsman and I do not know whether the alteration of the words "production facilities" to "facilities of production "might make a difference. We are very grateful to the Minister. This very short debate on the Amendment has very clearly demonstrated the very strong feeling that exists that there is a need to safeguard our raw material supplies for the future. Since I have been a Member of the House of Commons, I do not think I have known such a quick take-up of a very serious point made in a debate, and I am very glad that the Minister has agreed to bring forward an Amendment on the next stage of the Bill. In those circumstances. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The Deputy-Chairman (Mr. Hopkin Morris)

Perhaps the Committee will take the Amendment to page 4, line 10 and the Amendment following it, in page 5. line 11, together.

Mr. Ian Winterbottom (Nottingham, Central)

I beg to move, in page 5, line 10, to leave out "himself," and to insert "direct the Board to."

Before I speak on this Amendment, Mr. Hopkin Morris, perhaps you would like to extend your Ruling on the Amendments that are to be taken together. It might be for the convenience of the Committee if we took with this Amendment the Amendments in page 5. line 11, after "or," insert "to"; in line 13, leave out "Minister," and insert "Board"; in line 18, leave out "himself," and insert "direct the Board to"; in line 21, leave out "Minister," and insert "Board "; and in line 24, leave out "Minister," and insert Board."

The Deputy-Chairman

Yes, if the Committee agree with that proposal I think that they might very well be taken together.

Mr. Winterbottom

It is perhaps wise to enable us to take all these Amendments together because it enables me, in moving my Amendment and in speaking on this group of Amendments, to tie up a series of inter-linked points and to clear up the one point which I want to make. I will read for the benefit of the Committee the two subsections of Clause 4, which are affected, as they now stand and in the form in which they will appear if the Amendments are adopted. Page 5, line 10 of subsection (2) of the Bill reads as follows: the Minister may, with the approval of the Treasury, himself provide and use those facilities, or make arrangements with any persons for the provision or use of those facilities by those persons, whether as agents for the Minister or otherwise. As amended, it will read: the Minister may, with the approval of the Treasury, direct the Board to provide and use those facilities, or make arrangements with any persons for the provision or use of those facilities by those persons, whether as agents for the Board or otherwise. Subsection (3) similarly substitutes the word "Board" for "Minister."

The intention of Clause 4 is that if the Minister finds that additional production facilities are required by the steel industry which the industry itself is unwilling to provide, he can himself provide those facilities: or. alternatively, if, in the opinion of the industry, it is desirable to close down certain existing facilities which the Minister, for social or other reasons, may think it desirable to keep in existence, then he may take over from private industry and keep these additional existing facilities functioning.

Having reached this decision he will then himself use these facilities and acquire or take on lease, and use, those facilities or make arrangements with any persons for securing the use of those facilities by those persons, whether as agents for the Minister or otherwise. That is the purpose of the Clause as drafted.

It is the intention of my hon. Friends and myself to amend the Clause so that not the Minister but the Iron and Steel Board become responsible for those sections of the steel industry which the industry itself, for whatever reasons, is unwilling to operate. I think this is rather an important point, and the Minister would be wise to look at the administrative set-up that he is creating by the Bill as it stands.

The picture is a strange one. First, after a time we shall have the Iron and Steel Board supervising the most modern and commercially desirable section of the industry. Secondly, for many years to come we shall have the Holding and Realisation Agency running the other half of the industry—that section which is technically backward and which does not meet a ready response from the market when it tries to sell. In addition, the Minister may himself be administering and supervising certain marginal steel plants which the industry itself feels either in excess of normal production or so out-of-date that they are no longer a commercial proposition to keep in running order.

We have here three separate sections of the steel industry responsible to three different heads and supervised by those three different heads. I think the Minister will agree that divided responsibility is always bad because it tends to lead to confusion. Two-headed monsters always tend to get in a bit of a mess. Some may remember the Two-headed terrapin in the New York Zoo, which always quarrelled with itself at mealtimes. The organisation which the Minister is proposing to create in the Bill is even worse than that, because it is a three-headed organisation and there is bound to be collision, overlapping and confusion when the industry has to look to three separate heads for instructions and orders.

It is the opinion of my hon. Friends and myself that the Minister would be far wiser to avoid entering into the field of production in the steel industry, particularly into competitive production with existing firms, with a group of firms which he has been forced to take under his supervision and control because the general body of the industry feels that these sections of the industry are not competitive and cannot be handled in a normal commercial way.

The Minister may argue that his Department is quite capable of undertaking the supervision of a section of the steel industry. He may argue that his Department has considerable experience of manufacturing matters. It does, after all, run the ordnance factories, tank factories, and so on. But I think the Committee will agree that there is a great deal of difference between the articles which he produces and the production of steel under normal commercial competitive conditions.

The types of things that are produced by the Ministry of Supply are, on the whole, non-economic articles. They are either tanks which are produced for a specific purpose, or shells which have no normal commercial value. They are purely artificial by-products for the defence programme, and they are entirely different in their nature from the commercial production of steel which the Minister at the moment proposes to undertake.

There is another point that is worthy of consideration. Many of us feel that his Ministry is, in any case, much too big. The Parliamentary Secretary and I on one occasion served on a subcommittee of the Select Committee on Estimates which studied his Ministry. I think that as a result of our work we had produced for us one of the first administrative charts for the Ministry of Supply, and I have brought the "Christmas tree" with me here. Without turning for help behind him, can the Minister possibly tell the Committee how many departments, headed by an undersecretary, director-general, principal director or civil servant of similar rank. he has in his Department? Can he possibly tell the Committee how many he has got? I am not surprised that he cannot. It is, perhaps, a somewhat unfair question, because I have the answer in front of me and he has not.

In October, 1950, he or his predecessor had 30 departments under under-secretaries or the equivalent. He may have hived off one or two of those departments, but there is about that number of sections in his Ministry at the moment. He is responsible for such things as the whole production of atomic energy in the country, the production of guided missiles, a great range of artillery and ordnance stores, aircraft production and a number of other activitles.

Mr. A. J. Champion (Derbyshire, South-East)

What does he do with his spare time?

Mr. Winterbottom

That is the point. My hon. Friends and I feel that he has no spare time to divert to the business of manufacturing steel under competitive conditions. I think it has been said that the limiting factor to the size of any Ministry is the capacity of the Minister and his permanent secretary to pass paper backwards and forwards to each other over the desk, and, we hope, in the process to digest and assimilate its contents. We feel that the Ministry of Supply has, in fact, reached its limit in size. The work taken on by the Ministry cannot be increased if it is to be done efficiently, and the Ministry of Supply should not attempt to take on any further work.

7.30 p.m.

In our opinion it would be far better if those sections of the industry which the Minister, after consultation with the industry, may decide to take under his supervision and control were placed under the Iron and Steel Board instead of under the Ministry of Supply. As the Bill now stands he is not precluded from taking this course. Under Clause 4 (3) the Minister … may … acquire or take on lease, and use, those facilities or make arrangements with any persons for securing the use of those facilities by those persons, whether as agents for the Minister or otherwise. The Minister could, in fact, appoint the Iron and Steel Board as his agents.

He should not forget that those sections of the iron and steel industry which he proposes to take over at the moment will be the problem children of that industry. They will be those sections of the industry which are, from their nature—either due to obsolescence or because they were set up for purely strategic reasons not really economically viable. For this reason they would be difficult to run and difficult to operate commercially in competition with the existing private industry and they would provide the Minister with many severe headaches in the House. He would be wise to place a buffer between himself and the House by giving the Iron and Steel Board responsibility for supervising these marginal sections of the steel industry.

A further advantage of the arrangement we propose is that the Board would have power to call upon the whole of the iron and steel industry for advice, technical assistance, and so on, because in its day-to-day work it would be in contact with every section of the industry. From its very nature it would have great advantages which would not be possessed by the Minister—by keeping in contact with the rest of the industry, working out with the various related firms the problems raised by these marginal steel mills, and producing a solution to the problems of the industry without interference from Parliament or any other source which might question the Minister's handling of the problem children of the industry.

I would urge the Minister to accept this group of Amendments or at least to indicate that the Board may very well be his agents in this matter, and in this manner simplify the machinery of supervision of the steel industry which, as designed by him in the Bill, is so extremely complicated.

Mr. William Shepherd (Cheadle)

The hon. Member for Nottingham, Central (Mr. Ian Winterbottom) has moved his Amendment very agreeably, and he might have thought that he would be as successful as his predecessor; but I hope this will not prove to be the case, because he has ignored the most important issue of principle which is raised by his Amendment.

I do not agree for one moment with the premise on which he has based his case. I do not think that the Realisation Agency will be left with such a preponderance in the steel industry, and I should not like to say that the first items to be sold would be the recently created and heavily capitalised undertakings of a few years ago. We all agree that the Minister of Supply is a monster. I once described a previous Minister of Supply as "the bull-frog of the Thames Embankment," and there is no doubt that this Ministry has grown to an inordinate size.

If there were no other considerations than that the hon. Gentleman might have an argument; but there is one very important consideration to which I draw the Committee's attention. Here we are establishing a supervisory Board. I admit that this is a question of divergence of principle. We take the view that we should have private owner- ship with public supervision, and we regard the segregation of those elements as being vital to the success of the industry.

The difficulty of the hon. Gentleman's proposal is that this supervisory Board would be drawn into the iron and steel business in an owning and operating capacity. Once that were done, it would vitiate the whole principle on which this Bill stands. The Board could not carry out its duties as a supervisory Board as satisfactorily if it owned property and managed units as if it had no such association with the industry. While I agree with the hon. Gentleman that the activities of the Minister should not be enlarged unnecessarily, there is the greater danger that we shall do damage to the concept of a supervisory Board.

We must ensure that the word of the Board is accepted by the firms in the industry and it must be felt by them that the Board has no interest other than the public interest. If it takes over part of the industry itself, it will be creating an interest which may be other than the public interest. It must be admitted that if one is engaged in the actual business of an industry, one cannot take the detached view that one can if one has no actual managerial commitment.

That is the main reason I hope my right hon. Friend will tell the Committee that he is not prepared to accept this Amendment, much as I regret the fact that this may result in an increase in the activities of the Minister of Supply.

Mr. Sandys

I am surprised that no hon. Member opposite has risen to support this important Amendment. The hon. Member for Nottingham, Central (Mr. Ian Winterbottom) has stated the case fairly and in a balanced way. As the Bill stands at present the Government are empowered, if the need should arise, to provide additional facilities for the production of iron and steel within the definition of the Bill. They have the right and power to provide those facilities themselves—to erect works and either to be responsible directly for the running of those works or to make an arrangement with some company to run the works on an agency basis or in some other way. If this Amendment were adopted, the Government would have to direct the Board to provide any additional facilities which were required and would no longer have the right to do so themselves.

The issue is quite clear. if the Government decide that it is desirable in the national interest to expand the capacity of the industry beyond the point which the industry itself considers to be economic, the question is, who is to be responsible for building the new works and for runing them? Is it to be the Board or the Government?

The hon. Member for Nottingham, Central said that the Ministry of Supply was so big that it really could not take on any more work. I entirely agree with him. But I hope that, when this Bill becomes law, I shall have much less detailed work to do in connection with the steel industry. I shall still have the general governmental responsibility, but I hope that a great deal of the detailed work in connection with raw materials and price control will, to some extent at any rate, be taken off my shoulders. I can assure hon. Gentlemen that this will be very welcome.

The hon. Gentleman also said that the Ministry of Supply were a most unsuitable body to own and run steel works because they had not the necessary knowledge or experience. At the time when he was examining the organisation of the Ministry of Supply so thoroughly. they were, in fact, the owners of a number of steel works and were responsible for running them on an agency basis.

Mr. Jack Jones

I am sure the right hon. Gentleman does not wish to mislead the House. He is not suggesting, surely, that the Ministry of Supply, as such, directly owned and controlled the various works which come within its orbit. Is it not a fact that the Ministry of Supply appointed as their agents, in the case of Barrow, for instance, the United Steel Companies, physically to run the works? Is it not a fact that Ministry of Supply officials as such did not enter the picture as managing directors at all? I am certain the right hon. Gentleman would not want to mislead the House into believing that at the time of this examination the Ministry physically owned and physically ran these companies such as the works in Barrow.

Mr. Sandys

If the hon. Gentleman had listened to what I was saying, he would have heard me say that we were responsible for the running of these works on an agency basis. That is what I said, and I think his hon. Friend heard me say it. The arrangement was precisely that which the hon. Member for Rotherham (Mr. Jack Jones) has explained in detail. It does not follow, however, that, because the Government found it necessary to assume responsibility for providing additional production facilities, they would necessarily have to do it in any different way. The most natural and, I think, the most satisfactory way is for the Government to do it on an agency basis. Nevertheless, I am not suggesting that we should welcome the idea of the Government becoming the owner and manager of steel works. That is certainly not our desire but we have to provide for these eventualities in the Bill.

Mr. Jones

I dislike interrupting the right hon. Gentleman again, but this is a most important issue and we ought to get it right. Are the Committee being told that, as a result of negotiation with the present or potential owners, the latter having failed to provide the necessary extension to production facilities, the State would proceed to build a steel works and then would hand it over to an agency consisting of the very people who had refused to provide the extension or expansion which would have obviated the need for the new works? Would the works owned by the State be handed over to these people as Government agents?

Mr. Sandys

Which people?

Mr. Jones

Those who are at the moment in the steel industry and are capable of running a steel works.

7.45 p.m.

Mr. Sandys

I am not trying to prejudge exactly how this will be done. We have to provide in the Bill for various possible ways in which these works can be run. They may be run as an ordnance factory or as an agency factory or in various other ways, and I am sure the right thing is to consider each case as it arises. I am not trying to pre-judge how such a case would be handled, but I can assure the Committee that, in framing the Bill, we considered very carefully indeed the possibility of adopting the alternative course suggested in the Amendment, namely, that the responsibility for providing such additional facilities would be placed not upon the Government but upon the Board.

I must say that at first sight the proposal has its attractions, particularly for hon. Members on this side of the Committee, who are not fond of the Government entering industry more than is absolutely necessary. However, we felt unable to accept the proposal for two main reasons. The first is that we consider that the new Board should be a high-level, policymaking body and should not become involved in the responsibilities of management. The second reason is that, in our opinion, it is most undesirable that the Board should own and run steel works in competition with other companies in the industry.

On issues such as prices, development and perhaps also raw materials, the interests of the various companies will not necessarily always be identical. The Board, we feel, might find itself in a most invidious position if it were the owner of one or two, or even three steel companies and, in consequence, had a special interest in the prosperity and success of those firms. We feel that this would inevitably impair the position of the Board as an impartial arbiter and superviser over the industry as a whole.

For those reasons, we came to the conclusion, after very carefully considering the proposals advanced in the Amendment, that it was inappropriate and undesirable for the Board to own and run steel works and that, in the circumstances, it was preferable to place this responsibility upon the Government. I hope hon. Members will recognise the validity of the considerations I have mentioned and will not press the Amendment.

Mr. Jack Jones

The case put forward by the Minister is one with which we completely disagree. It is not, however, our intention to divide the Committee at this stage; we want to save as much time as possible, because there are important matters to discuss. Nevertheless, we are greatly concerned about the suggestion that, in the event of the Minister having to provide State money for additional facilities, the new facilities will be handed over to management by the very people who were the cause of those additional facilities having to be created. We express a hope that before the Report stage the Minister will have a careful look at this matter, and we also hope that he will assure the Committee that some alternative proposal will be brought before the House. It seems to me to be an appalling state of affairs that those who are the cause of the building of the additional facilities—for those facilities would not be necessary if they extended and expanded existing facilities—are the very people who will be called upon to manage them. As I have said, we do not intend to divide the Committee, because we have other important matters to discuss, but we are dissatisfied with the situation. I know that the Minister will take heed of what has been said and will have a further look at the proposals.

Amendment negatived.

Mr. Arthur Palmer (Cleveland)

I beg to move, in page 5, line 15, after "Board," to insert: that any existing production facilities are being used in an inefficient or uneconomic manner or. I think it can be said that quite a number of our Amendments to this Clause bear a certain family resemblance to each other in the sense that they do seek to extend always the area of public control, and I think that that is quite natural because, after all, this Clause is concerned with the development of the iron and steel industry in a very real fashion, and here, if anywhere, are to be found the positive powers possessed by this Board. But at the moment I think we can say on this side of the Committee that we have to look very closely indeed to find these positive powers of the Board as contained in the Clause.

Since I am anxious to save time, I think I can sum up the existing powers shortly in this way. If we look at the Clause and examine the powers, we find them to be first of all the power to compel consultation with the Minister on the development plans of the industry by the industry itself; and the second power, which is one rather different, is the reserve power of development by the Minister himself if the industry as such will not act—and my hon. Friend the Member for Nottingham, Central (Mr. Ian Winterbottom) just now did deal critically with a certain aspect of that matter in some detail.

The Amendment is concerned with the second—this reserve power of development. If we look at subsection (3) of the Clause as it stands, we find that the Minister has the right to take over and to operate any existing production facilities which might otherwise be closed down, and the Amendment seeks logically —as we see it—to extend this right to bring into it existing production facilities being at the moment inefficiently or uneconomically used. I used the word "logically." I do feel this is logical reasoning from the premise already in the Bill, because, after all, if production facilities are wholly shut down, that is taking the principle to the ultimate degree. We are concerned at the moment with the half-way case, where production facilities are being incompletely used or even misused. We want the Minister to have the right of intervention in a case of that kind in the public interest.

I suggest to the right hon. Gentleman and his hon. Friends that there is really no sacrifice of principle involved here on their part. I cannot see that there is anything in this fairly moderate wording and its effect that is likely to inflame the tender pride in private enterprise and the scruples of the party opposite. We know that the Conservative Party do object as a point of doctrine to what to us is a very excellent principle, that the community should, through its chosen instruments, exercise control. They say the State should just hold the ring. It is our contention that that very often amounts to leaving the State with the baby. But no doctrine is involved in this instance. If I were to continue my line of reasoning, it could be said that we do not complain here that the Bill has been born ugly and misshapen. because we wish the Bill had not been born at all.

So accepting the nature of the Bill, and the assumption that hon. and right hon. Gentlemen on the other side are bound to make, I think—the suggestion as now put forward in this Amendment, which is accepting the assumption contained in the Bill—can the powers in it be improved? I think they can be improved, as I say, without any sacrifice of principle at all by the party opposite. If the words which we suggest are inserted in the appropriate place, the effect will be to ensure that, after evidence is given to the Board that existing production facilities are being inefficiently or uneconomic- ally run, then the Minister may take over and improve those facilities, either directly or through an agent. It merely to extend the principle which already contained in the Clause—to extend it further to include uneconomic of inefficient operation of existing production facilities.

I commend this Amendment—I think it is a most reasonable one—to the right hon. Gentleman and to the party opposite. It would add another reserve power, but a very excellent power in the public interest.

Mr. George Darling (Sheffield, Hillsborough)

I should like to support the Amendment. In my view, it goes to the root of many of the troubles and weaknesses and deficiencies not only in the steel industry but generally in British industry. I think we are all agreed that if Britain is to pay her way in the world and be economically independent, and provide ever-improving standards of living for our people, our industries must become more efficient; we must have greater production—in many industries from fewer workers—we must have greater productivity all round.

That is the best way of saying that we want our industries to be run in the national interest. The output of each worker in most of our industries must be increased and the costs of production must come down. In other words, our industries must be more efficient. There are many people who subscribe to that point of view—because it is quite obvious, and, as I say, all of us agree with it—but who tend to lay the blame for the relatively low productivity in our industries on the workers, and the trade unions. Usually, they do not know what they are talking about, because it is not the trade unions that have created the industrial climate of this country. They have had to adjust themselves to it.

The industrial climate has been created by the industrial leaders who, for generations, in the steel industry and in other industries, have been operating with restrictive practices, with private cartels, with price-fixing agreements, with their trade associations, quota agreements, and all the paraphernalia of monopoly which has grown up in British industry and is making it impossible for it to be as productive as it ought to be. It is, in fact, the industrialists themselves who have tended to take competitive conditions out of British industry.

However, I do not want to go over the discussions we have had before on Amendments we have already discussed today, except to say that the attack upon the idea of free competition which came from the Parliamentary Secretary will give us a great deal of satisfaction before we have finished with this Bill. Of course, he was quite right.

The steel industry is by no means the worst offender in this business of taking competition out of industry, of sheltering inefficiency behind price rings and trade associations and restrictive practices, and the rest of it. The steel industry is better than most, but we have to take note of the fact that when this Bill has been passed, when the British Iron and Steel Corporation has been sacked, it will be the Iron and Steel Federation which will be again in effective control of the industry, because the supervising Board, as we have noted in all the debates so far in this Committee, will have no real authority and no real control over the industry. There is the danger that the Federation will work again as it has worked in the past—hesitating when it ought to be courageous, and marking time when it ought to be going ahead.

8.0 p.m.

We on this side of the Committee believe that private ownership of steel without effective public control is particularly dangerous, because, unless there is to be real public control, the half dozen or so big steel firms will again be in charge of the Federation and, therefore, in control of the industry so that it will be run in the way that those big firms want it to be run, in their own interests and not in the interests of the community. Indeed, "The Times "pointed out in 1948 that we were probably right in our discussions on the steel industry to assume that competitive conditions could not return to it even though it went back to private ownership.

Therefore, we say that the Board ought to be in a position to correct all weakness and remove all inefficiency which we think will arise when again the Steel Federation, Steel House, and the big firms are again in control of the industry. The Federation has never existed and cannot exist to foster competition and the enterprise that hon. Members opposite talk so much about and which they expect to come through this Bill. The Federation is necessarily restrictive in character. It must keep enterprise within the bounds of the conditions which the big firms and the Federation want to lay down. The whole purpose will be to make things easy for the average, or less than average, firms.

We agree with hon. Members opposite when they say that free competition can be a spur to enterprise, efficiency and progress. But there are two very good reasons, one of which was mentioned by the Parliamentary Secretary, why there cannot be true competition and free competition in this industry. For one thing the technical set-up today makes it impossible. Large-scale enterprises will be needed, and large-scale enterprises in some sections of the steel industry will be so large within the next few years that it will be impossible to have competitive conditions. 1t may be that in one section one plant alone will be sufficient to provide the country with all that is wanted of that particular product, and for that reason there cannot be the spur to production from free competition which hon. Members opposite want. The other reason is the one I have already given, that, through the Federation taking control, competition in the industry will be limited in the interest of the big firms.

In these circumstances, we believe that some other body ought to provide the spur to efficiency which will make the industry progress and be enterprising and adventurous. We think that spur should be provided by the Board itself. It ought to have the right, the authority and the power to step in and deal with any section of the industry where inefficiency shows itself and, in the terms of the Amendment, deal with the situation that arises when any existing production facilities are being used in an inefficient or unproductive manner.

Mr. Low

I am glad to join with the hon. Member for Cleveland (Mr. Palmer) and the hon. Member for Hillsborough (Mr. Darling) in attaching importance to efficiency. It is our view that the Board has the duty, among other things, to look to the efficiency of supply, and to help in that matter. Other sources of efficiency that we look to include the competitive conditions which the hon. Member for Hillsborough found himself referring to, quite naturally, without realising that he was agreeing with very much that we have said. I ought to say that he appears to have misinterpreted some of the things that I said this afternoon on an earlier Amendment, but I do not think that I ought to go back to that even though he entices me to do so.

This Amendment, as the hon. Member for Cleveland explained to us very clearly, would provide, on the assumption that there are no powers in the Bill of compulsory acquisition, that the Minister, under agreement with the company concerned, could take over its works on the grounds that they were being run inefficiently or uneconomically. We are going to ask the Committee to resist the Amendment for two reasons.

First, what is the real test of the efficient and economic running of a works? It is true that opinions can be formed on this matter. The Minister, through the Board, could well have an opinion, but are those opinions as good as the facts? If prices are competitive or if there is no competition in price but a maximum price has been fixed on the basis of efficient production, so that the Board will ensure that the conditions in the industry stimulate efficiency, surely the test of inefficiency is that there will be a loss by the company instead of a profit. In other words, the evidence of inefficiency will be the evidence that the plant is being run uneconomically.

This will be shown in the accounts and the first thing that will happen will be the shareholders will want to replace the directors. If this fails to restore efficiency, it may be that the true cause of the uneconomic running of the plant is the antiquated type of plant or its location, and it may then be that it will have to close down.

Mr. Palmer

That argument rationally applies to a case visualised in the Bill, as drafted, where a plant shuts down completely. If the hon. Member is arguing that the directors are the best judges of that when it is really a question of inefficiency, what about the case where they think that the plant is so inefficient that it has not to be run at all?

Mr. Low

If I could develop my argument it would be found that the Bill as drafted meets the point put by the hon. Member. I think he will find that the results from the Bill as it stands are exactly the same as those he seeks to achieve.

Once a plant is closed down or is likely to be closed down—that is the effect of the words in the Bill—the Minister's powers under this subsection then become available without any Amendment being necessary at all. During all this time the Board may well be in consultation with the producer concerned. It will have seen the annual accounts, and if these show a loss it may be aware from this or other sources of information that the plant is being run inefficiently. It will have an opportunity of using its influence to improve efficiency in the running of the plant.

Not only will the Board have had that opportunity, but so will the shareholders, and if the Board finds that the company is going to close a plant down there will be plenty of opportunities to consider the matter. In the end there is, as I have said, the Minister's powers, which become available under the subsection as drafted. Once that stage is reached, I do not think that it is likely that the company concerned, if it is finding that the plant is losing money, would refuse to sell the plant and would prefer to scrap it. I do not think that that is a possibility which we need entertain.

So it would appear that not only is the test which we are asked to adopt by the Amendment the test being the opinion of the Minister or the Board— the least good of the tests available, but the Amendment is really unnecessary to achieve the results which its mover desires. For these reasons, I suggest that the Committee should resist the Amendment.

Mr. Frederick Lee (Newton)

The difficulty m moving an Amendment to this subsection is that the subsection itself is a complete anomaly. What the Minister seeks to do is to ensure that if he is unable to sell plant which has quite a good use value he shall, by a backdoor method, attempt to keep that- plant in use, if, to quote the words of the subsection, … it appears to the Minister, after consultation with the Board, that any existing production facilities in Great Britain which would not otherwise be kept in use ought in the national interest to be kept in use…. The whole Bill is exposed as being entirely against the national interest, as these firms can be kept in use without this Bill. The Minister knows that under the provisions of the Bill there is the possibility that he cannot sell quite a number of economic units, and, therefore, he has to find some device for keeping them in use.

I should like the Parliamentary Secretary to look at this matter from another. angle. I think that both sides of the Committee are aware that because of the difference of opinion between the parties as to whether this industry should remain nationalised or be denationalised many former steel owners may well hesitate before they again take up holdings in the industry. They may contemplate that, even within a short time, they may again be faced with nationalisation, and it would, therefore, seem to us that many of the people who will, in fact, buy part of this industry will not be bona fide steel men, but speculators who will be gambling on buying a part of the industry and being able to dispose of it within a reasonably short time.

If that is so, I should have thought that the Amendment becomes of even greater importance than if the industry were to remain in the hands of the steel men who understand it. If we are to have a position in which speculators have taken over parts of the industry and then find themselves unable to dispose of them, I should have thought that it was highly probable that we should come across the position which this Amendment envisages and that existing production facilities would not be used in an efficient or economic way. For that reason, I should have thought that in their own interests the Government would accept, or at least give very careful consideration to, the Amendment which we are now proposing.

8.15 p.m.

We have had discussions on other Amendments and on the Second Reading about the job which the steel industry now has to do. We were all very pleased to see the exceptionally high level of steel production which the nationalised steel industry accomplished last month, even with the threat of this Bill hanging over it. But even that high level of 18 million tons cannot be sufficiently high if we are to expand the steel consuming interests in the way in which we are all desirous of expanding them. Indeed, the figure of some 20 million tons has been mentioned from time to time in the Committee as being the objective at which we should aim for production in the steel industry.

What will the people in the consuming industries feel if they are asked to increase their consumption of steel, if engineering and shipbuilding industries are to expand, if employers are to put in their capital, and employees to give their labour? How will they feel if there is no guarantee that even the existing plant in the industry can be properly utilised to ensure that even the present level of steel production will be available to them in the future?

I should have thought that in the interests of the steel consumers many hon. Members opposite would be now feeling extremely uncomfortable in realising that their own Government will not take over powers which are elementary to any organisation which desires to get maximum production even from the steel industry as it now is.

The Parliamentary Secretary told us that the Government rely on competition. After the disquiet expressed, to which we on this side of the Committee remained passive spectators, on an earlier Amendment, when we heard an interesting description from the hon. Member for Kidderminster (Mr. Nabarro) of what competition really is, I should have thought that the Parliamentary Secretary would have taken a lot of tempting before talking any more about competition.

If we are to get the output which both the Government, ourselves and the steel consumers require, surely this is not an Amendment which should be treated so lightly as the Government are now treating it. I should have thought that they would have sought to bring unity into these interests, which must be now very worried indeed about the future, and be feeling that they have seen that the party opposite cannot make up its mind whether it wants competition or whether it does not. They are now to be confronted with the spectacle of the Government refusing to ensure not only that an enlarged steel industry should be doing its job but that even the present units in the steel industry should be compelled to do their job. How can they have confidence in the Government or in a Bill of this sort being able to assure them the steel which is so necessary to them?

I know that the Minister is persevering and likes to go into details on these matters. I hope that he will not continue his present attitude, which seems to us to be one of saying to the people whom he wants to buy his steel industry, "We will promise you now, before you put your money down, that even if you are the most crassly inefficient person in the whole industry we will not interfere with you unnecessarily?" If he adopts that attitude he will frighten the steel consumers.

I hope, therefore, that he will accept this Amendment or at least say that he will look at the question again. It is important that there should be confidence in the steel consuming industry. The spectacle of the Government refusing to accept an Amendment like this is calculated to have precisely the opposite effect.

Amendment negatived.

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

I beg to move, in page 5. line 18, after "acquire," to insert: (by the acquisition of shares or otherwise).

The Temporary Chairman

It might be for the convenience of the Committee also to discuss the Amendment in page 5, line 21, at the end, insert; Provided that under this subsection the Board may compulsorily acquire or compulsorily take on lease facilities and in such a case the compensation or rent to be paid by the Board shall in default of agreement he determined by arbitration.

Mr. Winterbottom

Thank you, Mr. Thomas. I am sure the Minister will agree that the power of acquisition is very important and that it is essential that the matter should be thoroughly discussed. I am sure he will also agree, because the Parliamentary Secretary has already used words to the same effect, with a trade journal which described Clause 4 as containing the positive powers of the Minister and of the Board to deal with the development of the industry from a national point of view. That will probably be the limit of our agreement on the issue. It is the opinion of my right hon. and hon. Friends and myself that the so-called positive powers under the Clause are not enough. There is too much "may I, please?" and not enough "I can do" for the Clause to be as effective as it ought to be in the national interest.

Our purpose is to free the Clause from ambiguity in relation to acquisition and clearly to define, without any qualification, the power of the Minister and the Board to acquire premises, plant or equipment when it is in the national interest to do so. Under the Clause as drafted, such acquisition can take place only if the owners agree to the Minister doing so from the point of view of development or because a business may otherwise fall into decay. That is not good enough.

I have great respect for the person whose name I am about to mention, for he was a vivid personality and a very honourable Member of this house. The Clause reminds us too much of his beliefs. It is too much like the last will and testament of the late Sir Andrew Duncan, for, by modern interpretation, it means that the national interest shall be determined by Steel House and by the Federation irrespective of the conclusions reached by the Minister and the Board.

Mr. P. Roberts

It appears to me that the Amendment only means that the Board can acquire by means of "shares or otherwise," and that, if there is a dispute, there shall be arbitration. I find it difficult to follow the hon. Member's argument. I should have thought that, on the face of it, his Amendment might have been reasonable if by "acquire" he meant "acquire by shares."

Mr. Winterbottom

We go further than that. The acquisition of shares can be done on the basis of negotiation and by agreement, but we say that when agreement which is in the national interest cannot be obtained, the Minister and the Board shall have power to acquire compulsorily.

When the Bill becomes law, the industry may not willingly or voluntarily carry out developments in accordance with the national interest, and it may also be that premises, plant or equipment may be closed down even though it is in the national interest that they should continue to operate. The Clause does not compel development or continuity of operation, even if the Minister and the Board desire those things. If agreement is withheld—I can think of many excuses that owners might have for withholding agreement—the Minister and the Board will be powerless.

8.30 p.m.

Much has been said about private enterprise. The Minister's sacred gospel of private enterprise is not too pure and holy even in the private enterprise world. There is at least one precedent for powers to dispossess in relation to a major industry. The closest analogy that I can find to the issue that we are now discussing occurs in agriculture, which is probably the last ditch of private enterprise. If a farmer is not cultivating his land properly he can be evicted, and the real test of whether he shall continue to till his land or be evicted is the same test as that for which I am now arguing —whether or not he is doing it rightly or wrongly in the national interest. If he is doing it wrongly, then sanctions are imposed.

Those sanctions are imposed in the agricultural industry, which is almost wholly one of private enterprise. If they are imposed in agriculture, why not in the iron and steel industry? Why not take things to their logical conclusion? The power is not misused in the case of agriculture, there are very few cases of eviction; and I do not think that in the case of iron and steel there would be many instances. Indeed, with the present Government in power and with the present Minister in charge, it would be very improbable; and we do not need to worry about what will happen when the present Government go out of office—we shall then re-nationalise the industry.

That brings me to the simple principle which we ask the Minister to accept, namely, that when private enterprise fails to do its job from the point of view of the national economy, the Minister and the Board shall have the power to apply sanctions similar to those which apply in agriculture, and acquire by compulsion, with the necessary provision for arbitration.

It is patent to everybody not only in the Committee but throughout the country that the development of the iron and steel industry is vital to the economy of the nation and that at this stage we cannot afford to make any mistake. Out of many illustrations which I could give, I wish to refer only to two to prove my point and complete my argument on these Amendments.

The first is that, according to the statistical bulletin of the Iron and Steel Federation, it was necessary to estimate provisionally for imports of steel to this country last year of 1,800,000 tons— ingots and semi-finished steel—from the United States of America and from the Continent. The point which arises is that while we are importing steel there is still a need for development in this important industry.

My second illustration is that, according to the "Iron and Steel Review," the capital necessary to develop the industry so as to fulfil the development plan, that is, for 20 million tons within the next five years, is about £300 million. That is double the amount of capital which has been sunk in the industry since 1946. If a prospectus were put out at present asking people to invest in the iron and steel industry for future development, and the sum to be subscribed were £300 million, it would be a long time before it was over-subscribed.

That is a very big burden, but it is one that must be successfully carried if we are to provide the engineering industry with the steel needed to meet its requirements for the export drive. The industry cannot do it for itself, and it will be necessary for the Government to cooperate with the industry both in terms of planning and development and in the provision of the capital necessary to achieve the development plan.

The Government, therefore, have duties, and in fulfilling those duties, especially in the provision of capital, they ought also to have the rights corresponding to those duties. They should have the power of sanctions if the industry fails to do its job. I believe our Amendments to be wise and good and in the interests of the national economy generally. I believe that in the last analysis, if the Minister would only put aside for the moment his partisan attitude towards this Bill and his false conception of private enterprise, he would also see that these Amendments are in the interests even of the Government themselves.

The Solicitor-General (Sir Reginald Manningham-Buller)

The hon. Member for Brightside (Mr. R. E. Winterbottom) has covered a much wider field than is covered by these Amendments. I do not propose to occupy the time of the Committee with an answer to his interesting speculation—on which I do not suppose he expected to obtain universal agreement—about the possibility of securing large sums of money for the industry if and when a prospectus was issued.

Both these Amendments deal with a very narrow point and I wish to treat them separately. The first seeks to add to the methods by which the Minister can acquire production facilities. I think the hon. Gentleman will agree that this subsection goes a long way to meet his contention. He argued that if some production facilities were going into disuse, there should be power to keep them going' in the national interest. Under this subsection my right hon. Friend will obtain power to acquire, or take on lease and use those facilities if he is satisfied, after consultation with the board, that it is in the national interest that they should be kept in use. Therefore, the only issue on the first Amendment is whether we should add to the methods of acquisition by saying that my right hon. Friend should have the power of obtaining those production facilities by the acquisition of shares.

If the hon. Gentleman will look at page 25 of the Bill he will there see a definition of what is meant by "production facilities." It means, premises, plant or machinery used or proposed to be used for the carrying on of any activity "— etc. It is not very apt to say that we should acquire premises, plant or machinery by the acquisition of shares, and that is one reason we cannot accept the Amendment. If the premises in question were the sole premises of one company and that company ceased production, the Minister would have very little difficulty in acquiring them or taking them on lease and using them without taking over the company.

That is the case where the only asset of a company is one works. Take the case of a company owning several premises only one of which is to be closed down, and where it is considered that those premises should be kept in production in the national interest. If it were sought to acquire control in the company by acquiring the shares, we should be acquiring a great deal more than was necessary to achieve the purpose of the subsection. Therefore having considered this matter and the hon. Gentleman's suggestions that the powers of the Minister should be enlarged in that way, we feel that, while we welcome his suggestion, we cannot accept the Amendment.

I come to the second Amendment in page 5, line 21. The hon. Gentleman made it clear that the suggestion is that the Board should have power compulsorily to acquire or compulsorily to take on lease facilities, and so on, and pay compensation. It struck me on reading this Amendment as really most curious that, whereas the subsection itself deals with the Minister's power of acquisition, the Amendment which I am now discussing seeks to give the Board power of acquisition. We feel that that would be wrong, and that if anyone is to have the power of compulsory acquisition it should be the Minister who exercises power under this subsection. We feel that it would be wrong for the Board to engage in direct management —

Mr. R. E. Winterbottom

I think that the Solicitor-General is omitting from the first part of subsection (3) the words: If it appears to the Minister, after consultation with the Board … Therefore, the Minister is brought into the picture, though I agree with the hon. and learned Gentleman that the method of operation in the terms of our Amendment would be through the Board.

The Solicitor-General

I am not sure what the object of that interruption was —

Mr. Winterbottom

It would not be done unless it were with the approval of the Minister.

The Solicitor-General

—though I was very glad to give way to the hon. Gentleman in the middle of a sentence. The subsection gives power to the Minister to acquire, and not the Board; so this Amendment is quite inconsistent with the body of the subsection, in that the Amendment seeks to give power to the Board to acquire compulsorily. I know that the first line of the subsection prescribes that the Minister shall consult the Board, but the Minister is the person to act.

If we accepted the Amendment we should reach the odd position that the Minister who has to decide whether or not it is in the national interest that the premises should be taken over will have power to acquire voluntarily, but the Board which does not have to decide the matter will have power to acquire by compulsion. That would be the effect of accepting this Amendment.

Mrs. White

Surely the Solicitor-General understands that when Amendments are put on the Order Paper for a certain day, one has to take into account other Amendments which in fact we put on the Order Paper and which have been defeated. It was reasonable, in framing the Amendment in this way, to hope that our previous Amendment, which would have made the matter perfectly logical, would have been accepted.

The Solicitor-General

I was not making any criticism of the hon. Lady's logic or the logic of anyone who tabled these Amendments. The matter the Committee has to consider is whether or not the words of this Amendment should be incorporated in the Bill. I am advancing reasons, and that is the first one why it would be wrong in our view for the Committee to accept the Amendment.

It may be that the point on which I have just touched could be dealt with by changing the word "Board" to the word "Minister." I fully realise that. I am dealing with the various arguments against the Amendment and the first one is that it is inconsistent. Now I come to the second argument and perhaps this is the more cogent.

Why should one want power of compulsory acquisition in the circumstances envisaged here? The hon. Member for Brightside spoke with great eloquence about the power of sanctions, power to take over in the national interest and power to do things by compulsion. Is it likely that compulsion will be required here? Let us consider the point. Here are premises, production facilities, which are going into disuse. The Minister comes along after talking to the Board and says that it is in the national interest to keep the premises in operation.

He says to the company, "I am prepared to buy these premises, or take over these production facilities on lease." I should have thought that it was extremely improbable, and so improbable as to render it unnecessary to take compulsory powers, that any company would act like a dog in the manger and not realise some cash value for the premises or the production facilities which they were going to put out of use.

8.45 p.m.

I therefore take the view myself that it is unnecessary here to take compulsory powers, and, of course, one does not want to take compulsory powers unless the case for them is abundantly made out. Where a company is intending to close down some part of its production facilities, I believe that, if the Minister thinks that it is right to keep them going, he will find a willing vendor and not some one who has to be compelled to sell.

Mr. G. R. Strauss

I should like to say a word or two in reply to the learned Solicitor-General, who described this as a narrow point. I think he is entitled to say that if he looks at this Amendment in isolation, and not looking at it. as we look at it, in relation to other Amendments which we have put down and about which we have been speaking. It is only when it is considered as one of a series of Amendments that our purpose becomes clear, and is then seen to be not a narrow one at all, but a very wide one. I would rather state our case on this Amendment, rather than in the discussion on the Clause, because I think it will be more convenient, and, I hope, in order.

Our view is this. First, we said that it should not be the Minister who is responsible either for new developments or taking over existing production facilities; it should be the Board. Hence the confusion which occurred over the use of those words, with the Board mentioned in the one place and the Minister in another. However, that Amendment has been dealt with, and we lost it.

Then we said that we believe that, if this industry is to be handed back to private enterprise and the House decides on that course, at least the Government should retain the power of buying out any particular firm or plant where the productive facilities were being wasted and the national resources consequently wasted, or where they were not being fully used or were likely to become even completely redundant, in which case there would equally be a waste of our resources.

In those circumstances, we thought that either the Board or the Minister, should step in and say, "We want these works, this factory "—or whatever it may be" in the national interest." It is no use saying that these works should be acquired by agreement. There may not be agreement. The owner may hold out for a fantastic price.

To take an extreme situation as an illustration, there may be works which are not doing well, in which the facilities are being only half-used; they may be inefficient or badly run. The Minister says, "We want to acquire these works, because, with the international situation deteriorating, we fear that there may be war, and it is essential that we should preserve the steel productive capacity in the country. Therefore, you must not scrap these works."

The owner asks an exorbitant figure, and the Minister, as the Bill is at present drafted, either pays that figure or allows the works to go out of production altogether. The owner of the works may believe that the pressure of international events may be such that the Government will capitulate and pay the exorbitant figure he asks for the works. There may be cases where works are to be closed down, and where the owner might sell the land and the works for some other purpose. The owner may get a very good price in selling his works for some purpose outside the industry. The production facilities would be destroyed if they were sold in that way.

We say that if works are in danger of closing down, if facilities are not being fully or properly used, or if, as we said in the previous Amendment, works are being inefficiently run or mismanaged, which is just as wasteful to the national economy as land which is not properly farmed, the Minister should be able to step in and say that the State must own the works.

That is our plea, and I think it is a reasonable one, though we are not surprised that the Government reject it. The Solicitor-General, quite rightly, pointed out only the legal and technical points raised in the Amendment. We consider this the final test as to whether or not the Government intend that there shall be effective public supervision of the industry.

There may be a case—though we do not accept it—for handing back this industry to private enterprise and for setting up a public board to supervise it. But we say that if the board is to be of any use at all, then the Minister must have the final sanction of stepping in and buying the sort of works to which I have referred. This can be done, if desired, by an affirmative or negative Resolution procedure, but the Minister must have the power of buying works compulsorily should agreement not be forthcoming from the owners.

We look upon this Amendment as one of supreme importance, because without this sanction there cannot be proper public supervision of the industry. We propose, therefore, to record our views in the Division Lobby.

Mr. P. Roberts

How far would the right hon. Gentleman develop the idea

that the Government should be able to buy compulsorily works which they may think are inefficient? He used it in regard to the steel industry. Is the right hon. Gentleman now saying that the proposal that the State should take over any undertaking that is uneconomic should be regarded as Socialist policy?

Mr. Strauss

I should be going right outside the terms of the Amendment if I attempted to answer the hon. Gentleman. I am saying that we believe that if any unit in the industry is not playing its full part in the national interest, then the State should have power to acquire it compulsorily.

Question put, "That those words be there inserted."

The Committee divided: Ayes, 220 Noes, 241.

Division No. 87.]	AYES	[8.58 p.m.
Acland, Sir Richard	Dugdale, Rt. Hon. John (W. Bromwich)	Johnson, James (Rugby)
Albu, A. H.	Ede, Rt. Hon. J. C.	Johnston, Douglas (Paisley)
Allen, Scholefield (Crewe)	Edwards, John (Brighouse)	Jones, David (Hartlepool)
Anderson, Frank (Whitehaven)	Edwards, Rt. Hon. Ness (Caerphilly)	Jones, Frederick Elwyn (West Ham, S.)
Awbery, S. S.	Edwards, W J. (Stepney)	Jones, Jack (Rotherham)
Baird, J.	Evans, Albert (Islington, S.W.)	Jones, T. W. (Merioneth)
Balfour, A.	Evans, Edward (Lowestoft)	Keenan, W.
Barnes, Rt. Hon. A. J.	Evans, Stanley (Wednesbury)	Kenyon, C.
Bartley, P.	Ewart, R.	Key, Rt. Hon. C. W.
Bence, C. R.	Fernyhough, E.	King, Dr. H. M.
Bonn, Wedgwood	Fienburgh, W.	Kinley, J.
Benson, G.	Finch, H. J.	Lee, Frederick (Newton)
Beswick, F.	Fletcher, Eric (Islington, E.)	Lewis, Arthur
Bing, G. H. C.	Follick, M.	Lindgren, G. S.
Blackburn, F.	Foot, M. M.	Lipton, Lt.-Col. M.
Blenkinsop, A.	Forman, J. C.	MacColl, J. E.
Boardman, H.	Fraser, Thomas (Hamilton)	McGhee, H. G.
Bowden, H. W.	Freeman, John (Watford)	McGovern, J.
Bowles, F. G.	Freeman, Peter (Newport)	McInnes, J.
Braddock, Mrs. Elizabeth	Gibson, C. W.	McLeavy, F.
Brookway, A. F.	Glanville, James	MacMillan, M. K. (Western Isles)
Brook, Dryden (Halifax)	Gordon Walker, Rt. Hon. P. C.	MacPherson, Malcolm (Stirling)
Broughton, Dr. A. D. D.	Greenwood, Anthony (Rossendale)	Mainwaring, W. H.
Brown, Rt. Hon. George (Belper)	Grenfell, Rt. Hon. D. R.	Mallalieu. E. L. (Brigs)
Burton, Miss F. E.	Griffiths, David (Rather Valley)	Mallalieu, J. P. W. (Huddersfield, E.)
Butler, Herbert (Hackney, S.)	Griffiths, Rt. Hon. James (Llanelly)	Mann, Mrs. Jean
Callaghan, L. J.	Griffiths, William (Exchange)	Manuel, A. C.
Carmichael, J.	Hale, Leslie	Mayhew, C. P.
Castle, Mrs B. A.	Hall, John T. (Gateshead, W.)	Mellish, R. J.
Champion, A. J.	Hamilton, W. W.	Messer, F.
Chapman, W. D.	Hannan, W.	Mikardo, Ian
Chetwynd, G. R.	Hargreaves, A.	Mitchison, G. R.
Clunie, J.	Harrison, J. (Nottingham, E.)	Moody, A. S.
Coldrick, W.	Hastings, S.	Morley, R.
Collick, P. H.	Hayman, F. H.	Morris, Percy (Swansea, W.)
Corbet, Mrs. Freda	Herbison, Miss M.	Moyle, A.
Cove, W. G.	Hobson, C. R.	Mulley, F. W.
Craddock, George (Bradford, S.)	Holman, P.	Murray, J. D.
Crosland, C. A. R.	Hudson, James (Ealing, N.)	Nally, W.
Crossman, R. H. S.	Hughes, Cledwyn (Anglesey)	Neal, Harold (Bolsover)
Cullen, Mrs. A.	Hughes, Emrys (S. Ayrshire)	Oldfield, W. H.
Daines, P.	Hughes, Hector (Aberdeen, N.)	Oliver, G. H.
Dalton, Rt. Hon. H.	Hynd, H. (Accrington)	Orbach, M.
Darling, George (Hillsborough)	Hynd, J. B. (Attercliffe)	Oswald, T.
Davies, Ernest (Enfield, E.)	Irvine, A. J. (Edge Hill)	Padley, W. E.
Davies, Stephen (Merthyr)	Irving, W. J. (Wood Green)	Paget, R. T.
de Freitas, Geoffrey	Isaacs, Rt. Hon. G. A.	Paling, Rt. Hon. W. (Deane Valley)
Deer, G.	Janner, B.	Paling, Will T. (Dewsbury)
Delargy, H. J.	Jay, Rt. Hon. D. P. T.	Palmer, A. M. F.
Dodds, N. N.	Jew, George (Goole)	Pannell, Charles
Donnelly, D. L.	Jenkins, R. H. (Stechford)	Pargiter, G A.
Parker, J.	Slater, J.	Viant, S. P.
Paton, J.	Smith, Ellis (Stoke, S.)	Weitzman, D.
Plummer, Sir Leslie	Smith, Norman (Nottingham, S.)	Wells, Percy (Faversham)
Popplewell, E.	Soskice, Rt. Hon. Sir Frank	West, D. G.
Porter, G.	Sparks, J. A.	Wheatley, Rt. Hon. John
Price, Joseph T. (Westhoughton)	Steele, T.	Wheeldon, W. E.
Price, Philips (Gloucestershire, W.)	Stewart, Michael (Fulham, E.)	White, Mrs. Eirene (E. Flint)
Proctor, W. T.	Strachey, Rt. Hon. J.	White, Henry (Derbyshire. N.E.)
Pryde, D. J.	Strauss, Rt. Hon. George (Vauxhall)	Whiteley, Rt. Hon. W.
Pursey, Cmdr. H.	Summerskill, Rt. Hon E	Wigg, George
Reid, Thomas (Swindon)	Swingler, S. T.	Wilcock, Group Capt. C. A. B
Reid, William (Camlachie)	Sylvester, G. O.	Wilkins, W. A.
Rhodes, H.	Taylor, Bernard (Mansfield)	Williams, David (Neath)
Roberts, Albert (Normanton)	Taylor, John (West Lothian)	Williams, Rev. Llywelyn (Abertillery)
Roberts, Goronwy (Caernarvon)	Taylor, Rt. Hon. Robert (Morpeth)	Williams, Ronald (Wigan)
Robinson, Kenneth (St. Pancras, N.)	Thomas, David (Aberdare)	Williams, W. R. (Droylsden)
Ross, William	Thomas, lorwerth (Rhondda, W.)	Winterbottom, Ian (Nottingham, C.)
Shackleton, E. A. A.	Thomas, Ivor Owen (Wrekin)	Winterbottom, Richard (Brightside)
Short, E. W.	Thomson, George (Dundee, E.)	Woodburn, RI. Hon. A.
Shurmer, P. L. E.	Thorneycroft, Harry (Clayton)	Wyatt, W. L:
Silverman, Julius (Erdington)	Tomney, F.	Yates, V. F
Silverman, Sydney (Nelson)	Turner-Samuels, M.
Simmons, C. J. (Brierley Hill)	Ungoed-Thomas, Sir Lynn	TELLERS FOR THE AYES:
		Mr. Pearson and Mr. Arthur Allen.
NOES
Allan, R. A. (Paddington, S.)	Dodds-Parker, A. D.	Hylton-Foster, H. B. H.
Alpert, C. J. M.	Donaldson, Cmdr. C. E. McA	Johnson, Eric (Blackley)
Amery, Julian (Preston, N.)	Donner, P. W.	Johnson, Howard (Kemptown)
Amory, Heathcoat (Tiverton)	Doughty, C. J. A.	Jones, A. (Hall Green)
Anstruther-Gray, Major W. J.	Douglas-Hamilton, Lord Malcolm	Joynson-Hicks, Hon. L. W.
Arbuthnot, John	Drayson, G. B.	Kaberry, D.
Ashton, H. (Chelmsford)	Drewe, C.	Keeling, Sir Edward
Assheton, Rt. Hon. R. (Blackburn, W.)	Dugdale, Rt. Hon. Sir T. (Richmond)	Kerr, H. W.
Baldock, Lt.-Cmdr. J. M.	Duncan, Capt. J. A. L.	Lambert, Hon. G.
Baldwin, A. E.	Duthie, W. S.	Lambton, Viscount
Banks, Col. C.	Elliot, Rt. Hon. W. E.	Langlord-Holt, J. A
Barber, Anthony	Erroll, F. J.	Leather, E. H. C.
Barlow, Sir John	Fell, A.	Legge-Bourke, Maj. E. A. H
Baxter, A. B.	Finlay, Graeme	Legh, P. R. (Petersfield)
Beach, Maj. Hicks	Fisher, Nigel	Linstead, H. N.
Beamish, Maj. Tufton	Fleetwood-Hesketh, R. [...]	Llewettyn, D. T.
Bell, Philip (Bolton, E.)	Fletcher-Cooke, C.	Lloyd, Rt. Hon. Selwyn (Wirral)
Bell, Ronald (Bucks, S.)	Fort, R.	Lockwood, Lt.-Col. J. C
Bennett, F. M. (Reading, N.)	Foster, John	Low, A. R. W
Bennett, Sir Peter (Edgbaston)	Fraser, Hon. Hugh (Stone)	Lucas, Sir Jocelyn (Portsmouth, S.)
Bevies, J. R. (Toxteth)	Fraser, Sir Ian (Morecambe & Lonsdale)	Lucas, P. B. (Brentford)
Birch, Nigel	Galbraith, Rt. Hon. T. D. (Pollok)	Lucas-Tooth, Sir Hugh
Bishop, F. P.	Galbraith, T. G. D. (Hillhead)	McAdden, S. J.
Black, C. W.	Gammons, L. D.	McCorquodale, Rt. Hon M. S
Boothby, R. J. G.	Garner-Evans, E. H	Macdonald, Sir Peter
Bowen, E. R.	Glyn, Sir Ralph	McKibbin, A. J.
Boyle, Sir Edward	Godber, J. B.	McKie, J. H. (Galloway)
Braine, B. R.	Gough, C. F. H.	Maclay, Rt. Hon. John
Braithwaite, Lt.-Cdr. G. (Bristol, N.W.)	Graham, Sir Fergus	Macleod, Rt. Hon. lain (Enfield, W.)
Bromley-Davenport, Lt.-Col. W. H.	Gridley, Sir Arnold	MacLeod, John (Ross and Cromarty)
Brooke, Henry (Hampstead)	Grimond, J.	Macpherson, Rion (Dumfries)
Browne, Jack (Govan)	Grimston, Hon. John (St. Albans)	Maitland, Comdr. J. F. W. (Horncastle)
Buchan-Hepburn, Rt. Hon. P. G. T.	Grimston, Sir Robert (Westbury)	Maitland, Patrick (Lanark)
Bullard, D. G.	Hall, John (Wycombe)	Manningham-Buller, Sir R. E.
Bullus, Wing Commander E. E.	Harden, J. R. E.	Markham, Major S. F.
Burden, F. F. A.	Harrison, Col. J. H. (Eye)	Marlowe, A. A. H.
Butcher, Sir Herbert	Harvey, Air Cdre. A. V. (Macclesfield)	Marples, A. E.
Butler, Rt. Hon. R. A. (Saffron Walden;	Harvey, Ian (Harrow, E.)	Maude, Angus
Campbell, Sir David	Harvie-Watt, Sir George	Medlicott, Brig. F.
Carr, Robert	Hay, John	Mellor, Sir John
Carson, Hon. E.	Heald, Sir Lionel	Morrison, John (Salisbury)
Cary, Sir Robert	Heath, Edward	Mott-Radclyffe, C. E.
Channon, H.	Higgs, J. M. C.	Nabarro, G. B. N.
Clarke, Col. Ralph (East Grinstead)	Hill, Dr. Charles (Luton)	Nicholls, Harmar
Clarke, Brig. Terence (Portsmouth, W.)	Hill, Mrs. E. (Wythenshawe)	Nicholson, Godfrey (Farnham)
Cole, Norman	Hirst, Geoffrey	Nicolson, Nigel (Bournemouth, E.)
Colegate, W. A.	Holland-Martin, C. J.	Nield, Basil (Chester)
Conant, Maj. R. J. E.	Holt, A. F.	Noble, Cmdr. A. H. P
Cooper, Sqn. Ldr. Albert	Hopkinson. Rt. Hon Henry	Nugent, G. R. H.
Craddock, Beresford (Spe[...]thorne)	Hornsby-Smith, Miss M. P	Nutting, Anthony
Cranborne, Viscount	Horsbrugh, Rt. Hon. Florence	Odey, G. W.
Crookshank, Capt. Rt. Hon. H. F. C	Howard, Gerald (Cambridgeshire)	O'Neill, Phelim (Co. Antrim, N.)
Crouch, R. F.	Howard, Greville (St. Ives)	Ormsby-Gore, Hon. W. D.
Crowder, Sir John (Finchley)	Hudson, Sir Austin (Lewisham, N.)	Orr, Capt. L. P. S.
Crowder, Petre (Ruislip—Northwood)	Hudson, W. R. A. (Hull, N.)	Orr-Ewing, Charles Ian (Hendon, N.)
Darling, Sir William (Edinburgh, S.)	Hurd, A. R.	Orr-Ewing, Sir Ian (Weston-super-Mare)
Davidson, Viscountess	Hutchison, Lt.-Com. Clark (E'b'rgh W.)	Osborne, C.
Davies, Rt. Kn. Clement (Montgomery)	Hutchison, James (Scotstoun)	Peake, Rt. Hon. O.
Digby, S. Wingfield	Hyde, Lt.-Col. H. M.	Perkins, W. R. D.

Peto, Brig. C. H. M	Schofield, Lt.-Col. W. (Rochdale)	Touche, Sir Gordon
Peyton, J. W. W.	Scott, R. Donald	Turner, H. F. L.
Piekthorn, K. W. M	Scott-Miller, Cmdr. R.	Turton, R. H.
Pilleington, Capt. R. A	Shepherd, William	Tweedsmuir, Lady
Powell, J. Enoch	Simon, J. E. S. (Middlesbrough, W.)	Vane, W. M. F.
Price, Henry (Lewisham, W.)	Smithers, Sir Waldron (Orpington)	Vosper, D. F.
Prior-Palmer, Brig. O. L.	Spearman, A. C. M.	Wakefield, Edward (Derbyshire, W.)
Prefumo, J. D.	Speir, R. M.	Ward, Hon. George (Worcester)
Raikes, Sir Victor	Spence, H. R. (Aberdeenshire, W.)	Ward, Miss I. (Tynemouth)
Rayner, Brig. R.	Spens, Sir Patrick (Kensington, S.)	Watkinson, H. A
Redmayne, M.	Stanley, Capt. Hon. Richard	Webbe, Sir H. (London & Westminster)
Remnant, Hon. P.	Stevens, G. P.	Wellwood, W.
Renton, D. L. M.	Stewart, Henderson (Fi[...]e, E.)	Williams, Rt Hon. Charles (Torquay)
Roberts, Peter (Healey)	Stoddart-Scott, Col. M.	Williams, Sir Herbert (Croydon, E.)
Robertson, Sir David	Storey, S.	Williams, R. Dudley (Exeter)
Robinson, Roland (Blackpool, S.)	Strauss, Henry (Norwich, S.)	Wilson, Geoffrey (Truro)
Robson-Brown, W.	Summers, G. S.	Wood, Hon. R.
Roper, Sir Harold	Taylor, Charles (Eastbourne)	York, C
Ropner, Col. Sir Leonard	Teeling, W.
Russell, R. S.	Thomas, Rt. Hon. J. P. L. (Hereford)	TELLERS FOR THE NOES:
Ryder, Capt. R. E. D	Thompson, Kenneth (Walton)	Mr. Richard Thompson and
Sandys, Rt. Hon. D.	Thornton-Kemsley, Col. C. N.	Mr. Wills.
Savory, Prof. Sir Douglas	Tilney, John

Clause, as amended, ordered to stand part of the Bill.