HC Deb 12 February 1953 vol 511 cc613-39

Considered in Committee. [Progress 11th February.]

[Sir CHARLES MACANDREW in the Chair.]


4.9 p.m.

Mrs. Eirene White (Flint, East)

I beg to move, in page 6, line 3, after "facilities," to insert: or the maintenance of full employment. I think there will be general agreement to discuss, with this Amendment, the Amendment in page 6, line 9, after "facilities," to insert: or the maintenance of full employment. Similar arguments to those which I now propose to advance would apply also to Amendments standing in my name and the names of my hon. Friends in Clause 7, page 6, line 46, at the end to insert: or with the maintenance of full employment. and in Clause 8, page 8, line 36, at the end to insert: and with the maintenance of full employment. We do not propose to raise all these matters again when those Clauses are reached, but perhaps we might be able to take them now.

The Chairman

As they are on the same point, I think they might conveniently be taken together.

Mrs. White

That would be agreeable to us.

We on this side attach considerable importance to this Amendment, because it makes clear and specific the responsibility, not only for the production of iron and steel in the most efficient manner, but for the wider interests of the community. When my right hon. Friend the Member for Vauxhall (Mr. G. R. Strauss) moved the Second Reading of the Labour Government's Act nationalising the iron and steel industry in November, 1948, he was able to advance as one of the principal arguments for that Measure that, It will enable our steel industry…to become an effective national instrument for planning full employment."—[OFFICIAL REPORT, 15th November, 1948; Vol. 458, c. 78.] Such sentiments have not, as far as I am aware, been expressed by the present Minister. That is not surprising, of course. We have been told on the highest authority that we should not expect to find figs growing on thistles, so we do not expect to find references to full employment in a Conservative Party Measure. Nevertheless, when we are discussing a Bill which covers a major industry such as the iron and steel industry we believe that there should be consideration of the duty of any Government to secure full employment.

The duty of the Government to secure full employment has been recognised by the Conservative Party in various election and propaganda documents, but one of our complaints about the party opposite is that, while it pays lip-service to this principle, it does not, when it comes to taking practical measures, arm itself with the necessary powers to put such a policy into effect. Pious obeisance is made when the words "full employment" are mentioned, but this Bill is yet another example, of which we have already had a number from the present Administration, of a type of Measure which does not preserve to the Government the powers necessary to implement a policy of planned full employment.

We consider it important, as far as this principle can he carried out within the conditions under this Bill, unsatisfactory as they may be, to endeavour to place upon the Board, and therefore upon the Minister who is responsible for the Board, the obligation to take full employment into account as one of the factors when they reach decisions under this Clause. Last night, when discussing subsection (1), some reference was made to this subject, and at that time the Minister said that as a general rule he thought we would agree it is unsound from any point of view to keep uneconomic plant in production, even including the sociological point of view."— [OFFICIAL REPORT, 11th February, 1953; Vol. 511, c. 537.] He then went on to quote the present position in South Wales in regard to the obsolescent tinplate works which are being put out of production, and mentioned the mill at Trostre, which is a very good example of the kind of situation we have in mind. Had one been thinking solely of the steel-making aspect, one would not have put a mill at Trostre, because considering steel-making only from a strictly technological point of view, the nearer it could have been kept to Margam, the better. It was perfectly clear that in taking a decision, which the Minister himself has commended, to divide that process—which in my own constituency takes place on the same site—sociological considerations were very much to the fore.

4.15 p.m.

One could produce a number of other examples. For instance, in Ebbw Vale before the war, other factors had to be taken into account. There are also examples where those factors were not taken into account. Jarrow is the classic example, and Dowlais is another.

The argument we have put forward consistently is that in the organisation of modern industry we cannot be confined merely to technical factors. When considing whether a concern is economic or uneconomic, it is quite wrong to speak only of the limited economy of the firm or undertaking in question. In drawing up an economic balance-sheet, regard must be had for the social capital involved in reaching a decision. Not only the capital equipment of the firm or undertaking but also the capital which the community itself provides through public services of one kind and another is involved, as well as the human capital, which is not always easily transferable

In putting down these Amendments, we are endeavouring to convince the Government, if we can, that the considerations I have mentioned should be specifically recognised. If the Minister was able to make the speech he made last night, it seems clear that even now the argument I am advancing has not been fully accepted by Her Majesty's Government. If it had been fully accepted he could not, I believe, have made that speech in the way he did. He asked us to believe in the good intentions of the Board. I remind him that it is the paths to hell and not the paths to heaven which are paved with good intentions. Good intentions are not enough. We need something more than mere good intentions.

What concerns me is that, even if the Minister indicates that he is prepared to accept this Amendment, that would not be entirely satisfactory, because owing to the general lack of power given to the Board in this Bill it would once again be merely putting words on paper to indicate a belief in the maintenance of full employment without taking the necessary powers to secure that very desirable end.

The general argument is one which we think should be accepted as a major principle. When there are technicological changes in an industry, account should be taken not only of the technicological advantages of those changes, but also of the human and social disadvantages which are almost inevitable. Even in my own constituency where, I am proud to say, we have one of the finest integrated works in the country, where everything is done on the same site, there are certain dislocations due to improvements in plant and methods of production whereby certain individuals, for whom one naturally has sympathy, find that in the new set-up they have rather less important and less well-paid work than they had when there were more but smaller furnaces in operation. So even under the most favourable conditions there is likely to be some dislocation. When it comes to establishing new processes or new works in other locations, then, of course, it is quite obvious that many other factors have to be taken into account.

For example, in the following Clause, which we shall be discussing in a moment, it is suggested that when carbonisation proposals are being entertained there should be consultation with the National Coal Board and with the Gas Council. That is all very right and proper, but it is equally important that when other proposals for major changes are being entertained there should be consultation with, for instance, the Minister of Labour, the Board of Trade, and so on.

We are not suggesting that there should be put into this Bill a list of the other Ministers with whom consultation should be maintained, but we are suggesting that if this Amendment were accepted it would follow as a natural course that, before decisions were taken for major changes in steel manufacture, the kind of consultation should take place which would follow from the acceptance of responsibility for maintenance of full employment. One may say that it is unnecessary to put that into the Bill because that would happen in any case. We prefer to be safe rather than sorry, and we would like to have it in the Bill that this responsibility is definitely accepted. We would like to see the responsibility going a good deal further than is likely to be possible under this Clause, because, as I understand this Clause, according to the statement which the Minister made on Second Reading, the developments with which the Board would be concerned under Clause 5 would be only the very largest developments. In fact, the words that the Minister used were: I should like to emphasise, as it does not seem to be generally understood, that its consent to development plans has to be obtained only in the case of schemes of such magnitude as to affect the balance of the industry. What we have in mind are big expansion schemes in the heavy end of the industry, costing many millions of pounds."— [OFFICIAL REPORT, 25th November, 1952; Vol. 508, c. 275]. I suggest that there could be very serious social effects in certain neighbourhoods with schemes costing rather less than millions of pounds.

In the speech to which I am referring, the Minister said that the foundries would be of such relatively small value that they would not come into the purview of the Board under Clause 5, but I can foresee a situation in which the closing down or opening up of foundries might affect many very highly-skilled workers. I should have thought that even in instances of relatively minor changes in development the Board ought to accept some sort of responsibility. If it does not, then it cannot be pretended that the kind of organisation proposed under this Bill can satisfactorily be responsible for the direction of the industry or, what we are particularly discussing now, the maintenance of full employment both in the industry itself, in the industries which depend upon it and in localities which depend upon it.

This is a complex matter. The responsibility for the maintenance of full employment is the positive one of seeing that employment is maintained in certain areas and that other areas are not deprived of it. My hon. Friends, I know, have experience of this matter and fuller experience perhaps than I have, but no Welsh person who has studied the history of the steel industry in Wales could possibly be oblivious of the need to have the most careful and continuous observation of these other factors by any body which takes responsibility for the iron and steel industry. The industry has had a chequered history—in South Wales more particularly—and we are still in the throes of that history. We have suffered, I suppose, as an area as much as any area from the vicissitudes of the iron and steel industry. We therefore hope that the Minister will accept this Amendment in principle, and that if he does accept the Amendment he will then search his conscience to make certain whether he has power in this Bill to enable him to carry it out.

Mr. Aubrey Jones (Birmingham, Hall Green)

I do not think that anyone on either side of the Committee would wish to dissent from the general sentiments expressed by the hon. Member for Flint, East (Mrs. White). As a Welshman, I should be the last person to wish to dissent from them. She mentioned Dowlais. I was born in the shadow of the Dowlais works and both my father and my brother worked there. Both, in fact, were affected when the Dowlais works were closed down. I should therefore be the last person to wish to see a repetition of the tragedy which overtook my district and the people who live near to it.

Despite that, I do not feel that I can agree with this Amendment. Certainly in the context of Clause 5 the Amendment seems to me to be unnecessary, for reasons which I will explain in a moment. Apart from Clause 5, generally the incorporation of this phrase in the Bill would, to my mind, lead to undesirable confusion.

I think that the best way in which the policy of the steel industry could be guided would be to prevent an over-inflation of capacity during a boom. That is, of course, what happened both during and immediately after the First World War. Capacity was expanded to meet an artificial level of demand, and when the demand returned after the war boom to its more normal level, there was surplus capacity, and works such as Dowlais were forced to close down.

I agree that unrestrained competition might well mean an over-inflation of capacity. Producers might outbid one another and capacity could be piled up to an abnormal extent. It is for that reason that I believe in an external check to prevent unrestrained competition. This Clause does already provide for that. The Clause lays it down that the Board shall have the power to veto a scheme which, in the Board's judgment, would over-balance the industry, and which would, in other words, lead to over-expansion of capacity, and thus invite a later depression. So the point, so far as capacity is concerned, is already covered.

4.30 p.m.

My second objection is on the ground of terminology. We heard yesterday a very eloquent speech from the hon. Member for Edmonton (Mr. Albu) objecting to the phrase "competitive conditions." He argued that no body of economists and no body of lawyers could possibly agree among themselves upon what the term "competitive conditions" means. I entirely agree with him. What he said in relation to that phrase applies with equal strength and equal force to this matter. How many of us would agree on what is and what is not full employment? Lord Beveridge said that full employment meant an unemployment percentage of 3 per cent. I should imagine that hon. Members opposite would not accept that. When this Government took office, the unemployment percentage was between 1 and 1.5 per cent. It is now perhaps a little over 2 per cent. Hon. Members opposite would probably say that there is no longer full employment and my hon. Friends and I would maintain that there is full employment.

I am not arguing the point. All I say is that there is disagreement and that the same disagreement would be shown in such a body as the Iron and Steel Board. The phrase "full employment" is a shorthand phrase. I might also say that it is a political slogan. It is far too indefinite and hazy to be incorporated in a statute as a directive to a public authority.

The greater part of the hon. Lady's speech did not seem to be directed to justifying this Amendment. The greater part of it was concerned with the question of location. She was arguing that social considerations should be taken into account in the location of works. Although nothing is provided in this Bill in regard to that matter, it is my belief— and I should be grateful if my right hon. Friend would confirm or deny it—that it is already provided for elsewhere. I believe that there exists such a thing as an industrial development certificate and that the Minister would have a say before any works were placed anywhere. I should be grateful if my right hon. Friend could add to our information on that topic.

Finally, although I think it inconvenient to discuss this Amendment in its relation to Clause 8 as well as in its relation to Clause 5, I should object to the incorporation of the phrase there, too. I should object to it because of the haziness which I have already mentioned and because price policy does not seem to me to be the way either to avert unemployment or to get away from a situation of unemployment in this industry.

Let us assume that there is a slump with much unemployment. Presumably the Board would be instructed to lower prices. But experience has shown that in an industry such as this, however much we lower prices we do not in fact expand employment. The most we can do is to pursue over a long term a stable price policy. If the worst were to happen and there were unemployment generally, what would be necessary would be to expedite and accelerate the execution of the development plans for this industry. To do that by tax remissions and so forth is a much wider matter to be dealt with by general means. I must say that it does not seem to me to be a thing which could be promoted by this Amendment.

Mr. G. R. Mitchison (Kettering)

I can assure the hon. Member for Hall Green (Mr. Aubrey Jones) that I do not under-rate his head or the warmth of his heart, but I think that on this occasion he has let his head get the better of his heart rather unnecessarily. Let us see what we are considering. We are considering first the matters which the Board have to take in mind before they can refuse consent to any proposal.

The Board has not got a general power. It has to be satisfied, under the Bill as at present drafted, that the proposal will seriously prejudice the efficient and economic development of production facilities in Great Britain. When it is satisfied of that, it can act. That is the matter it has to consider. I do not want to rub this in, because I believe everyone in this Committee now feels a kind of national penitence for what happened in the years between the wars, but the history of Dowlais is a very clear pointer to the kind of danger which we must contemplate when considering this type of action.

What happened as regards Dowlais, and other places as well, was—and here I quote from the language of the Bill—that, in the interests of the efficient and economic development of production facilities in Great Britain, a large amount of iron and steel making capacity was moved from the coal fields of Wales to the iron ore fields, largely in the Midlands and the East of England. Factories were shut down, or fell out of use as obsolete, in Wales when at the same time there was a corresponding increase of factories at, for instance, Scunthorpe or Corby in my own constituency. It was roughly at the same time. As I understand, it was part of the same development.

For similar reasons there was a move—taking the special case of Corby—from the neighbourhood of Glasgow down to the middle of Northamptonshire. Both these moves had the most serious consequences on employment. It is not entirely true to say, as the hon. Gentleman said, that the only mistake made between the wars was that at one period iron and steel capacity was inflated. There was another side to the picture. Some attempts to provide iron and steel capacity were prevented by the action of the iron and steel masters of the period. It was their joint action, as I well remember, that prevented the establishment of an iron and steel works at Jarrow. It is a rather more complicated picture than that.

The short point is the same through the whole of the history of this industry, that plenty of regard has been had by the industry, properly and naturally, to the efficient and economic development of production facilities. If from time to time mistakes have been made, that is still the matter that they have been endeavouring to consider and the end which they have set themselves. By and large, I should say from that technical point of view that we could stand comparison very well with almost any other country, but the continuous difficulty has been that these major changes have been made, and still can be made, without regard to the overwhelming importance of this industry in the economic life of the country, and especially on the question of full employment.

I have a very short answer to the hon. Member on the other point he made. He said that full employment was capable of various definitions. So is the elephant. It is a difficult animal to define: it is comparatively easy to recognise. Full employment is perhaps much the same. But what we are considering here is not the exact meaning of either the one phrase or the other. We have to consider the circumstances in which these two groups of matters may be seriously affected. It is clear enough for those purposes. It is mere hair splitting for the hon. Gentleman to try to found his opinion on a question of whether full employment means 10 jobs for nine men or 10 jobs for 10 men or 11 jobs for 10 men or some other elaborate statistical equivalent.

The question is, what has the Board to bear in mind? What is it that will limit the Board's functioning in these cases? I remind the Committee that, as is most appropriate in this sort of matter, we are not merely dealing with the Board. We are dealing also with Ministerial responsibility, for there is a very easy and wide avenue open for appeal to the Minister on a refusal by the Board; and the responsibility is, as indeed it ought to be, not merely the responsibility of a Board, which is appointed in the way we have settled in the earlier Clauses of the Bill, but also of a Minister who is responsible to this House.

I cannot see why this Amendment should be refused. After all, "the maintenance of full employment" is a pretty well-known phrase, and, I should have thought, a responsibility which any Government, even a Tory Government, would recognise without demur. It has been recognised, not only in this country, but in the Charter of Human Rights in the United Nations, and in our own representations to other countries when we have met them at Strasbourg and similar places. Thanks to the efforts of my own party, it is rapidly becoming something so commonly recognised as not only a duty, but a supreme and overriding duty, that it is really somewhat late in the day to say it ought either to be neglected or overlooked.

We are dealing not merely with the question of proposals for extensions but with the question of full employment and of price policy. I think I heard the hon. Member for Hall Green say—and if he did I fully agree—that a price policy by itself cannot promote full employment. I feel inclined to say to him that I wish he would tell that to some of his right hon. and hon. Friends; because from time to time they seem to forget it, and to think that, by the mere operation of prices, full employment can be obtained.

I do not think for a moment that it can, but I do say that one of the objects and one of the proper uses of a price policy is to maintain full employment; and that it can have a distinct and appreciable effect in that direction. It can have that effect whether it is right or wrong. If it is wrong in this matter, it can have a most damaging effect on employment. If it is right it can, to a limited extent, have an ameliorating effect. Surely those matters have to be considered and taken into account side by side with efficiency and technical development, and as the more important of the two considerations, just as much when we are considering prices as when we are considering extensions.

In view of what the hon. Member said at the beginning of his speech, I do not want to put this too strongly, and certainly, I hope, not in any offensive way. That is the last thing I should wish to do after what he said at the beginning of his speech. But in the past this industry has been apt not to look sufficiently at this kind of thing. As an industry we cannot expect it to do anything other than promote itself technically, make its profits, keep good labour relations—as, on the whole, it has—and generally to behave as a single efficient industrialist with a good conscience should behave. That is the most we can expect.

When we come to the question of full employment, we must have the overriding—I use the word deliberately—authority, not only of the Board, but of someone responsible to this House. We must see that the Bill does not shut out that over-riding authority by an unnecessarily limited statement of what has to be borne in mind in this connection. I hope the Minister will accept this Amendment. He can do no conceivable harm to the Bill by so doing. So far as I can see, he can do no harm whatever. But what he can do is to make it clear that the hearts of all of us in this Committee are in the same place, and in this instance a useful contribution may be made by our heads, and by the tongue we use in this Bill.

4.45 p.m.

Mr. Arthur Colegate (Burton)

Everyone is agreed that one of the primary objectives of any Government should be the maintenance of full employment, whether it be the 3 per cent. of Lord Beveridge or some other figure. But I think the Minister would be ill advised if he accepted this Amendment. The policy of full employment should be one which is applied nationally. To try to pin it down to a particular industry would lead to a great deal of confusion, and ultimately to a great deal of inefficiency in all classes of industry.

It is all very well to say that we should have regard to the human factor when a plant, or a portion of a plant, has to be closed down. I think we should have full regard to that. But the humane thing to do is not to keep people at a job which is really a failing job, but to see that those people are transferred. under proper provisions—and thank heaven we already have a great deal of provision for that kind of thing—to more efficient plants.

I have seen a good deal of inefficiency in the iron and steel industry. I was chairman of an iron and steel works. I was brought in and given full powers. Unfortunately, after a year or two I had to advise the bank concerned that the only thing to do was to wind up the organisation. Those works had been kept going far too long from the point of view of efficiency. It would have been far kinder to the people concerned had the works been closed down at the moment it appeared that they could not go on and proper arrangements made— not necessarily by the iron and steel industry but, so to speak, by national machinery—for those people to be transferred to a more efficient section of the industry. If we impose this provision on this industry, we ought to have a similar provision with regard to other industries. [HON. MEMBERS: "Hear, hear.") I am glad to hear that, because hon. Members opposite are making my point for me. We should get industry after industry—

Mr. Frederick Mulley (Sheffield, Park)

There is nothing to suggest that the only consideration is full employment in the iron and steel industry. Does not the hon. Gentleman realise that the iron and steel industry is one factor? What we want to consider is employment generally, and in fact the arguments put by the hon. Member support our side of the case.

Mr. Colegate

No doubt the hon. Member will have an opportunity of putting his argument, but let me deal with the one point. To specify in connection with one industry that this consideration should be taken into account will inevitably leave the impression in the minds of the people concerned with it that we have to consider full employment there more than the over-all development of industry in this country, which is the only sound policy for getting national full employment.

The hon. Member for Flint, East (Mrs. White) mentioned the closing down of a particular part of the steel industry, but we must look at it in a very wide sense. One part of an industry might be closed down, which would lead to another and more efficient section of the industry going ahead. I could go in some detail into the position of the industry in North Lincolnshire and the decision to go to Ebbw Vale, which I thought a great mistake. It would have been a very good thing for some people in Ebbw Vale had they been transferred to the new housing estate being built at the efficient steel works of North Lincolnshire.

Mr. Jack Jones (Rotherham)

Under a Labour council.

Mr. Colegate

The Labour council was living on the private enterprise of the people who developed the North Lincolnshire ironfields.

Mrs. White

Is the hon. Member aware that there are some people who do prefer to live in Ebbw Vale, surprising though it may seem?

Mr. Colegate

I understand that people might prefer to live in Ebbw Vale, but at the same time people do have to make moves like that. I have had to transfer my home to where my employment was. Nothing can be worse than to encourage people to live in places with an inefficient industry, instead of going ahead with the development, progress and efficiency needed in industry, and which, in the long run, are needed to obtain full employment.

Mr. Frederick Lee (Newton)

The hon. Member for Burton (Mr. Colegate) has succeeded in frightening me. We have the spectacle here of a Government bringing along a Bill to de-nationalise the steel industry, and the hon. Gentleman's interpreting one of its results as migration from one part of the country to another. I wonder how he fared when he had to move, and whether he was able to persuade the local authorities to let him have a council house for five or six years.

Mr. Colegate

I never needed to get a council house. Hon. Members opposite may not be aware that the vast number of new houses in modern coalfields and in the iron and steel industry were provided by private enterprise and not by the councils.

Mr. Lee

The hon. Gentleman has not understood my point. I asked whether he was able when he moved to get the local council to put him into a house immediately, or whether he was able to purchase a house into which he could go.

Mr. Colegate

Private enterprise provided me with a house.

Mr. Lee

If that is the conception which the promoters of the Bill have of the future after the Bill becomes an Act, it is very unsatisfactory. There is a great danger that there will no longer be full employment, because steel-using industries are not able to get sufficient steel. If that is to continue, as hon. Gentlemen suppose it will, I would ask engineers to take particular notice of the point and to regulate their production accordingly. I put it as high as that.

We have discussed in this Committee whether the Government really want the Board to have effective supervision, and we have moved the Amendment asking them to insert the word "control." They have refused point blank to do so. That refusal regulates our thinking on the main issue. We want to give the Board effective supervision and control over the industry. The Government reply that the Board have effective supervision. To supervise and control an industry means, to us, that on behalf of the State we have the ability to ensure that there shall not be suffering among the employees in the industry, and that the Government will regulate the conditions to ensure that that will not happen.

The two hon. Gentlemen who have spoken from the Government side said how their hearts bled at the thought of pre-war conditions coming back again, but before they had time to catch their breath and start again they said that they did not accept our Amendment, which would force the Government to accept this responsibility. I do not trust hon. Gentlemen opposite in the least, after that. We ask that when this industry passes into private ownership there shall be the same conditions of employment and guarantee of full employment as there have been during the period of the Labour Government and since the industry has been nationalised.

Last night the Minister told us that the only plant that he envisaged being closed down was the uneconomic plant. He is now trying to peddle the steel industry about the country. If there are economic plants he is the man who will perpetrate a swindle upon somebody. How can he now say that it is possible or probable that uneconomic plants will have to close down when at the same time he is trying to impress people who may be prospective purchasers? Is he not saying: "I am trying to sell you uneconomic plants"?

I should have thought that sort of thing would he left in the hands of the Agency and that uneconomic plants would not go hack into private ownership. The Minister or his Agency will know whether a plant is uneconomic or not. That will be the determining factor for accepting notification of closing down by any firm which has bought plant from it. The Agency is the instrument which should know whether the plant is uneconomic and which should decide whether the plant is to be closed down on the ground that it is uneconomic, and not the people who purchase the plant.

I hope that the Minister will accept the Amendment. As we see it, control must be in the interests of those who are employed within the industry. In the case of steel and one or two other industries, control is particularly vital for another reason The steel industry is the feeder of manufacturing industries which are the biggest employers in Britain. Mention has been made of the closing down of small plants. I have seen this happen, when 20 or 30 moulders lost their jobs. It was deplorable, but I should not have argued that those small foundries were uneconomic. When people are thrown out of work, is that not a social matter and one for the Minister? He must not keep his mind so much fixed on the industry as to blind himself to the social effects of loss of production in the industry, and in the manufacturing industries which it feeds.

For those reasons, I hope that the Minister will either accept the Amendment or, in de-nationalising an industry which has now full employment, he will take the responsibility upon himself of ensuring that nothing that he does will detract from the ability of the industry to continue to give full employment. Those are considerations which any civilised community in 1953 must accept. Hon. Gentlemen opposite tell us how they remember the bad old days and would not do anything to resurrect them, and then they plead with their Minister not to accept the only proposal which would prevent those days being brought back. It makes me say that those who hoped that the new Toryism did not mean what the old Toryism meant are getting back the feelings they had when they lined up in the unemployment queues in the 1930s.

If hon. Gentlemen opposite engender that sort of bitterness inside the House of Commons, it may go out into the whole of the industry. Any hope we have of getting a great drive for production and exports will then have gone, and the hope of a decent standard of life in Britain will have gone with it. This issue is as big as that, and I hope the Minister will give us a reply.

5.0 p.m.

Mr. Robson Brown (Esher)

Right through this debate, yesterday and on previous days, what has been conspicuous has been the reasonableness shown by hon. Members in bringing forward every constructive idea that could be brought to bear upon this Bill. I hope, therefore, that this afternoon we shall not stray on to paths that will lead us into dialectical argument which would do a disservice to the men in the industry. The worst thing that could happen would be to incorporate in this Bill words such as "full employment" which have a great sentimental and hypnotic appeal, but which we know in our own hearts cannot be implemented merely by putting them into a statute or by giving powers to a Minister or to a board.

Let us be realistic. If we indulge in emotionalism, and if we give the impression to the working people in this industry or any other industry that full employment can be commanded or legislated for. we shall be disloyal to them, we shall be doing them a grave disservice and we shall be leading them astray. One thing is clear in the mind of every hon. Member of this Committee, that we want to aim for maximum employment at maximum levels for a maximum period, which is an entirely different thing.

The hon. Lady the Member for Flint, East (Mrs. White) spoke from great experience and in restrained terms. The objects she had in mind were not related directly to full employment but more to the sociological question of the location of a new plant, to the transfer of production from one plant to another or from one district to another. Those matters were debated yesterday at great length and I though the Minister dealt fully with them. The undertaking was given that no firm can make any such changes in their production without reference to the Minister and without the Board having something to say about it.

Mr. G. R. Strauss (Vauxhall)

indicated dissent.

Mr. Robson Brown

I am sorry, but the Minister gave us an undertaking on that.

Mr. Lee


Mr. Robson Brown

If the hon. Gentleman will read the OFFICIAL REPORT for yesterday, he will see it.

Mr. Lee

The Minister said he would agree that there should be notification to the Board but he would not give the Board any power to effect a stoppage in the carrying out of such an ultimatum.

Mr. Robson Brown

Let me be perfectly frank, because it has to be said some time. On this side of the Committee we find ourselves in conflict with hon. Members opposite on one basic point. It is the presumption that for the operation of the Steel Bill, the judge is supine and the jury is dishonest; in other words. the Minister will never do what is right and the Board will always do what is wrong.

Mr. Wilfred Fienburgh (Islington, North)

The same people.

Mr. Robson Brown

That has been the underlying implied argument from the other side of the Committee right through, the debate. Now let me move to something objectively, referring to what the hon. Lady said with regard to employment. We have to accept it, and it cannot be repeated too many times, that short-term policies may sometimes lead to long-term distress. We may keep a plant in operation which is inefficient for the most humane of reasons and do permanent damage to a district or to the industry as a consequence.

One of the basic responsibilities of the Board is to maintain a sure balance between the absolute and ultimate efficiency of any part of the industry related to the sociological needs and requirements of a particular locality or, if I may put it another way, a keep a true balance between local group interests and the general interests of the industry and of those employed in it.

It might well be that sometimes, because of a change in trade and for no other reason, a situation arises where a specific plant in a certain district may be operating to the general detriment of the industry and to the holding up of long-term, properly-worked-out plans for the development of the industry as a whole. It must also be accepted, however, that as long as trade is there and the plant can operate efficiently, no one will shut it down. That is axiomatic in commerce.

Mr. Mitchison

I am obliged to the hon. Gentleman for giving way. I want to call his attention to the fact that we are considering the circumstances in which the Board can or cannot refuse its consent to proposals for extension. At present the only thing the Board can have regard to is the efficiency of the industry. If the hon. Gentleman agrees that the Board should always have regard to the maintenance of full employment, he will support our Amendment.

Mr. Robson Brown

Where the hon. and learned Gentleman and myself and all hon. Members on this side of the Committee are in disagreement with him is in connection with the play upon the words, "full employment." Yesterday afternoon it was made clear that the Minister would take into consideration the sociological impact of any proposals put to them. We cannot do more than that. We cannot put that in precise words.

Mr. Strauss

indicated dissent.

Mr. John Freeman (Watford)

Could the hon. Gentleman tell us, if this is his thesis, under what power the Board is enabled to do that?

Mr. Robson Brown

Under its general responsibility. [HON. MEMBERS: "Oh."] The difference between the other side of the Committee and ourselves is that hon. Members opposite always want things written large, with clear directions laid down, page after page. We have seen that in too many other nationalised industries to wish to repeat it.

I want to make two final points, one of detail, in connection with historic facts. In regard to Dowlais, the hon. Member for Hall Green (Mr. Aubrey Jones) made a personal reference from his own experience to its impact upon his own life. That industry was not taken out of Wales. It went to Cardiff. I am not arguing that the impact upon Dowlais was clear, concise and long term, but that the industry was not taken out of the Principality. So far as Jarrow was concerned, I dealt with that on the Second Reading of this Bill. The position was that an integrated plant could not be put upon that site because it was not a practical proposition.

With regard to employment in any industry, what we have to aim, plan, strive and work for all the time is steady continuous employment at a high level with the minimum of ups and downs, variations or fluctuations so far as we can control matters. By so arranging the industry we want what I call steady and continuous employment which must go hand in hand with competitive efficiency. The minute anyone disregards the basic economic factors in that respect, damage is done ultimately to the men whom we wish to benefit.

Mr. George Darling (Sheffield, Hillsborough)

Since the party opposite have occupied those benches I have been waiting for speeches, such as the one to which we have just listened, which would indicate how far that party will run away from the 1944 Coalition White Paper on this problem. It is true that the White Paper did not speak of measures to achieve full employment but of measures to achieve a high level of employment. I shall not quarrel about that definition, but it is quite clear from the speech of the hon. Member for Esher (Mr. Robson Brown) that while he talks about wanting maximum employment, he says that it cannot be ordered or directed or legislated for. It is in those terms that the party opposite is running away from the White Paper produced with such a flourish by the Coalition Government.

Mr. Robson Brown

What I said was nothing of the kind. I said that it cannot be done by legislation alone. We can help and plan and move towards it, we can have forward views on it, and we can do everything possible towards it but full employment is related to global conditions, and not to national conditions alone.

Mr. Darling

If tomorrow the hon. Gentleman reads his speech in HANSARD, he will notice that he did not say the word "alone," but I will not argue that. We say that we can plan and direct the economy of the country to maintain full employment. We will not quarrel whether the figure of temporary unemployment is 2 per cent. or 3 per cent. We know what we mean by full employment; that there are more jobs than workers, or just as many jobs as workers, and there is temporary unemployment while workers move around from job to job.

We believe that we can plan and direct the economy of the country to get full employment, and in all the industrial Measures, such as the Bill, with which we deal, we believe that it is a matter of common prudence and a matter of policy that every industry should be reminded that it has to play its part in the Government direction of industry to maintain full employment. In this connection, as has been pointed out, all the Amendments which deal with this question of full employment are concerned with more than the steel industry, because the steel industry has to play its part in providing full employment for the workers in all industries.

We have had some personal references. May I give one? We remember that in Sheffield in the 1920's there were 70,000 unemployed. Seventy thousand was quite a large number of unemployed in that city, but they were not all steel workers. Quite a number of them were engineers. I was not in Sheffield at the time, but was finishing my engineering apprenticeship. There was no work for thousands of apprentices as tradesmen, and we had to get out of the industry. How stupid it was that what skill we had was wasted.

The stupidity arose in this way. The railways wanted new locomotives and rolling stock, new stations, goods yards and all the rest; they wanted new cranes and new methods of handling freight. But the steel workers in Sheffield, who should have been making the plates, the castings and the forgings, were walking the streets, and the engineers, who should have been making the stuff, were out of work and lining up at the employment exchanges.

The cotton industry should have been re-equipped in the 1920s and 1930s with new mills and machinery, but nothing was done. There was no direction or planning. It was left to the industrialists to get us out of the mess but they failed, and they failed for the very reason that the hon. Member for Hall Green (Mr. Aubrey Jones) has given: it is not their responsibility. It is the responsibility of the State to begin with, and it is the responsibility of the boards and of the people who come into the public control of industry to accept those directions and to play their part in giving us full employment.

Mr. Aubrey Jones

What the hon. Member has to do is to prove how all this, which I do not dispute, would be effected by his Amendment. He is not dealing with my contention that the point is already provided for in the Clause.

Mr. Darling

I disagree entirely with the hon. Member, and I will proceed to answer him. None of use can be sure that within the next two or three years we shall not be faced with another serious trade recession. At the end of the rearmament programme, with tensions in the world that may upset confidence in commerce and trade, whatever the reasons may be, it is likely that the threat of another recession will arise. If it comes, hon. Members opposite will argue, as several of them have done already, that the same mistakes as were made in the 1920s and 1930s will not be made again and that the Government will take action to deal with this threat of a trade recession and the threat of mass unemployment.

5.15 p.m.

This is where I answer the hon. Member for Hall Green. I apologise if I have mistaken his arguments. What I am saying now applies to all the Amendments that we have put down on this subject. We cannot forget that the same people who were running the steel companies in the 1920s and 1930s will be running the steel companies again after the Act is passed. We cannot leave them to carry on in the way that they did between the wars without some direction placed upon them to get the steel industry to play its part in stopping the drift to unemployment.

We cannot forget also that the Government, the party who now sit on the benches opposite, are the same party as were in power during that earlier period, the Government and party that did nothing at all to stop the drift to mass unemployment. We are now told that the Conservative Party have goon intentions on this matter, but good intentions are not good enough. We need evidence of the Government's determination to do some planning and to give direction if the threat of mass unemployment arises.

We want to show that the Amendments are wider than their mere application to the steel industry. If a trade recession comes along, the steel industry will be the key to whatever action has to be taken to deal with unemployment. Orders and contracts will be placed for steel for—

Mr. Aubrey Jones

When the hon. Member says that the steel industry is the key to the whole question of employment, is he aware that the capital investment of the steel industry amounts to 2 per cent. of the total annual capital investment of the whole country?

Mr. Darling

That has nothing to do with the matter. The steel industry is the key industry in this sense: that the public works schemes that no doubt will be developed, as is foreshadowed even under the Coalition White Paper, to provide work for those who are unemployed—necessary public works schemes like the new road bridge over the Forth, the new bridge over the Severn, and other necessary schemes that have been held up for so long—are all made of steel. The re-equipping of industries in the new distressed areas, like Lancashire, that will arise, which will be very necessary and desirable from the viewpoint of the national economy to provide work, will depend on steel. The new mills will have steel girders, and the machinery that is put in them will be made of steel. At the same time, it will be found that if any planned attempt is made to develop our export trade, perhaps on a barter basis with other countries that suffer from unemployment, it will be steel products all the time that are leading in the planning of that export drive.

In all this, we cannot leave the steel companies to decide for themselves what they are going to do. If the nation is to plan to deal with and to counter mass unemployment, the steel industry has to be directed as if it were a wartime operation and the whole thing must be done as if we were in a war effort. Unless there is some public authority over the steel industry which is capable of directing the steel companies to serve the interests of the nation, it will be quite impossible for us to carry out even the rather weak and vague intentions that were expressed in the Coalition Government's White Paper for dealing with a possible trade recession and unemployment.

If the Government do not today express their determination to deal with unemployment in the way that I have suggested—Government direction, with an Iron and Steel Board ready to take charge of the industry and to do the job properly—we shall all have to accept the view that all we shall get from the Government is a pious expression of good intentions.

Mr.I.Mikardo (Reading, South)

Whatever conclusion this Committee may come to as a result of this debate, I feel sure that the workers in the steel industry, and indeed the workers in all the other industries in the country, will have noticed and attached significance to the fact that the only three speeches made so far from the Government benches have all had the point of argument that in the development of the steel industry we ought not to take into account the need for full employment.

I am quite sure that that is an argument which will not be lost upon the workers of the country. In some cases it will do no more than reinforce deep feelings which they already have, and which hon. Members opposite during the last General Election campaign and before sought very carefully to dispel, with their Industrial Charter, their lipservice to full employment and other means of the same kind.

I want to say a word or two in reply to some observations of the hon. Member for Hall Green (Mr. Aubrey Jones). I share with my hon. and learned Friend the Member for Kettering (Mr. Mitchison) the desire not to say anything antagonistic, in view of the tone of his speech, but he objected to this Amendment on the ground, among others, that full employment is a term which cannot be defined. As my hon. and learned Friend the Member for Kettering pointed out, the Amendment would be equally effective even if it were the fact that full employment is a term that cannot be defined. But, unlike the term "competition" about the definition of which there was a difference of opinion yesterday, full employment is a term for which there is a recognised and widely—indeed, universally—accepted definition, to which my hon. Friend the Member for Hillsborough (Mr. G. Darling) referred.

The definition is quite simple. It is a condition in which there are always more vacancies for workers globally than there are globally workers seeking vacancies; or, as it is so often commonly put, a condition in which there are more jobs looking for men than men looking for jobs. That is a very simple definition, and one against which it is superlatively easy at any moment to check whether the condition of full employment exists. Once every fortnight the Ministry of Labour tell us how many vacancies there are and how many people there are looking for work, and it lies within the capacity even of hon. Members to put the two figures side by side and see which one of them is the greater.

I do not wish in this debate to make any general party points about full employment, but the hon. Gentleman referred to differences of view there might be between the two sides of the Committee on whether there is now full employment, and so I might just mention in reply that if one takes this universally accepted definition that full employment exists where there are more vacancies than there are people looking for vacancies, then by that definition we had full employment every fortnight when the Ministry of Labour figures came out from the end of the war until the first Monday in September, 1952. Since the first Monday in September, 1952, we have not had full employment. If hon. Members opposite can find some consolation in that, they are perfectly welcome to it.

The hon. Member for Hall Green was wrong in his reference to Lord Beveridge. I beg him to go back and refresh his memory of what Lord Beveridge said. He did not say that full employment exists when there is no more than 3 per cent. of unemployment. What he said was that full employment exists when there are more vacancies than people seeking jobs. That does not mean, he added, that there is no unemployment; indeed, that condition can arise with unemployment figures of up to 3 per cent. What the hon. Gentleman quoted as Lord Beveridge's definition was not his definition; it was a part of his explanation of his definition.

I want to refer to the two remarkable speeches made by the hon. Members for Esher (Mr. Robson Brown) and Burton (Mr. Colegate)—two speeches, I thought, which were characterised more by passion than by authority. Both of them seemed to me to be taking full employment to mean something that it does not mean and to which my hon. Friend the Member for Flint, East (Mrs. White), who moved the Amendment, did not refer as meaning at all. Full employment does not mean—and we are not demanding in this Amendment—that everybody in the steel industry should be permanently guaranteed his existing job or a job in his existing firm, no matter how inefficient that firm is.

The two hon. Members were flogging an extremely dead horse—the deadest dead horse that I ever set eyes on—when they were arguing that we ought not to maintain full employment merely to keep inefficient plants in operation. Of course, we agree at once that people ought not to be maintained in work in their existing jobs or firms in order to maintain the existence of inefficient plants. But what we do say, and what my hon. Friend the Member for Flint, East pointed out with very great force, is that where we have, in the interests of the nation, to move people because we are moving capacity, that movement should he done with a great sense of social responsibility for all the consequences involved.

A steel master who wants, no doubt for very good technical reasons, to move his plant has got no responsibility except to provide jobs for the workers whom he will put off. If a steel master said "Look chaps, if you come with us we will provide you with jobs; and, indeed, we will go further; we may provide you with a house," that employer would feel a great sense of having fulfilled his social responsibility to the full. I think he would be right because he would be doing all that one could reasonably require of him.

He would have no responsibility to see that the grown-up daughters of his steel workers could get employment where they were going to be moved, but that is a very important factor. He would have no responsibility to see that his steel workers' children of school age could get schooling where they were going to be moved. That is a very important factor as well. All we are saying is, not that every steel worker should be guaranteed his existing job or his job in an existing firm, but rather that all the social implications of such change should be taken into account.

Mr. Colegate

Surely the hon. Gentleman is agreeing with us. He is saying that the whole policy of full employment should be applied nationally and not to one particular section of workers?

Mr. Mikardo

I was just about to come to that point, which is a valid one and deserves a reply. First, may I point out that the demand which was made by the hon. Member for Esher was a much more thorough-going demand and, indeed, a totally impracticable demand than anything we have said, because what he asked for was maximum employment. What does "maximum" mean? It means the most. The most employment we can get is when every worker is in a job—that is 0.000 per cent. unemployment, which can never be got in practice. We all know that there must be moves and shifts, as we have all seen.

The hon. Member for Burton, in effect, says this: "Granted the need for looking after full employment, why should that be the business of the steel industry or of any other industry? This should be dealt with on a central basis." He is partly right, and if what he says means that he has become a convert to central economic planning for full employment, I welcome his conversion, and I have much joy over the one sinner that repenteth. But it cannot be done entirely on a central basis. To some extent each industry must take some responsibility, because if iron moulders are thrown out of work on a Friday afternoon they cannot be re-employed on the following Monday for the manufacture of silk stockings. I do not think we have complete vocational interchangeability. Certainly while we have the housing shortage there cannot be complete geographical interchangeability. We have to supplement central planning by some planning done by industry and by each area.

Mr. Colegate

I want to get this point clear. If the central—

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