Clause 9.—(IMPORTATION AND DISTRIBUTION OF RAW MATERIALS AND FINISHED PRODUCTS.)

HC Deb 17 February 1953 vol 511 cc1160-200

8.0 p.m.

The Temporary Chairman (Mr. George Thomas)

Before I call the next Amendment—in page 9, line 5, to leave out the second "and" and to insert "or "—I wonder whether it would be for the convenience of the Committee to take at the same tmie the Amendments, which also seek to leave out "and" and to insert "or ", in line 10, line 14 and line 22.

Mr. G. R. Strauss

I think that would be to the general convenience of the Committee, because all the Amendments cover the same point.

Mr. Wilfred Fienburgh (Islington, North)

I beg to move, in page 9, line 5, to leave out the second "and" and to insert "or."

The textual significance of this and similar Amendments may be clouded by the fact that they are monosyllabic, but they still make quite a considerable difference to the content of the Clause as drafted. The provision of plant and equipment in the steel industry is only half the story. The other half of the story concerns the provision of the raw materials for that plant and equipment, and it is that with which we are exercised in our attitude to the Clause as at present drafted.

The iron and steel industry has always been abnormally sensitive to the fluctuations of the supply of its raw materials. Its policy has always been to attempt to secure long-term arrangements for the supply of its raw materials at stable and guaranteed prices. In this context it is perhaps interesting to note in parenthesis that, whereas the Conservative Party created such an un-understandable hullabaloo about bulk purchase when it was operated by the Labour Government, it has been a consistent part of the policy of the iron and steel industry ever since the industry has had any semblance of organisation.

Mr. Jack Jones

It is a right policy, too.

Mr. Fienburgh

As my hon. Friend says, it is the right policy, and the inevitable policy, as the iron and steel industry learned during the '20s when the whole industry was grossly over-capitalised in individual attempts by individual firms to secure a firm base for their raw material supplies by buying up lime quarries, ore mines, and so on. It is because of the important aspect of raw materials to this industry that we attach importance to this Amendment.

The Clause as drafted embodies two conditions governing intervention by the Board. The Board can intervene directly by setting up an agency, or by itself operating the importation and distribution of raw materials, first, if it is satisfied that this service would be better organised as a common service for the whole industry, and secondly if it is satisfied that reasonable arrangements do not already exist in the industry for the importation and distribution of raw materials. We have no quarrel with the imposition of these two major conditions. Obviously it is right and proper that the Board should put up a case for the creation of a common service for importation and distribution. It would be wrong to embark on an expensive scheme if the existing services were satisfactory.

Within each of these conditional subsections there is a further sub-condition, because on each of these points the Board must prove its case, in respect of both importation and distribution. It must prove that the importation of raw materials is unsatisfactory and that it would be better organised as a common service, and that both the importation and the distribution are not operating to the general good of the industry. As we have said time and time again, in this Bill many restrictions are imposed on the powers of the Board—many of them, we are convinced, are deliberate.

Much of this Bill is a matter of making honourable professions and then refusing to provide the powers whereunder these professions could be put into effect. We are reasonably confident, however, that this inhibition on the powers of the Board is involuntarily an oversight of drafting; in effect it makes it extremely difficult for the Board actively to intervene at all in this very important field of importation and distribution, because four conditions must be satisfied—or various permutations of various conditions must be satisfied—before the Board can intervene under the Clause as at present drafted.

There are many circumstances in which we can imagine two or three out of the four conditions being entirely unsatisfied, yet because the Board cannot have a full house on the whole stack of cards it is prevented from taking action. For example, the importation of raw materials may be quite good but the distribution of what is imported may be bad. In those circumstances the Board has no power to act or to intervene actively. The distribution may be good, but on the other hand the importation may be insufficient, or badly organised, or not properly related to opening up new sources of supply. In this case the Board cannot act, even though something is seriously wrong. The case may be made that a common service for importation would be desirable, but unless the Board can at the same time make the case that it is desirable to have a common service for distribution as well, then again under the Clause as drafted the Board has no power to act.

Obviously the converse of that applies. The case may be well made for setting up a common service for distribution, but unless a case can also be made on importation the Board has no power to act. When it does act, provided it manages to satisfy all these permeations of conditions and sub-conditions it can only set up machinery which covers both importation and distribution, whereas it may well be the case that the importation machinery, such as it is, and the arrangements, such as they are, are adequate, and it is just the distribution that has gone wrong. It may well be that all is wrong, in which case, as far as this Clause is concerned, action can be taken. It may well be that only part is wrong, in which case the Board cannot act. We therefore seek to amend the Clause by substituting our "ors" for the various "ands" which are speckled throughout its lines so that the Board can act if either importation or distribution is not adequately operated.

One of the first points we should like to draw attention to is that the Clause as drafted makes it impossible for the Board to set up any kind of agency if there is any breakdown in the distribution of home-produced raw materials for the industry—which, as everybody knows is a quite substantial part, and in future will be an even more substantial part, of the raw materials supplies of the industry. There can be a complete breakdown in the distribution of home-produced raw materials, but because of the very fact that it is home-produced and has not been imported the Board cannot set up an agency to reorganise the distribution in the national interest, or even in the pecuniary interest of members of the industry itself.

Let us look at some of the raw materials in question. Of our coke supplies, all of which come from home sources, 70 per cent. comes from ovens operated by the industry itself, 25 per cent. from ovens operated by the National Board and 5 per cent. from independent coke producers. In 1951, as we remember all too well, there were various minor shortages and minor disturbances in the supply of coke to steel making plants, and dissatisfaction was expressed at the distributive arrangements. Since then new ovens have come into operation and the situation has been considerably eased. But new difficulties can arise.

For example, firms which are normally reasonably self-sufficient may, because of the nature of their product and the need there is for that product in the national interest, be able to put up a very good case for obtaining more coke from National Coal Board ovens. Plants normally dependent on the National Coal Board may, on occasion, be able to put up a case for obtaining more coke from ovens under public ownership. It is very easy to make these adjustments; it is a question of the physical transposition of the coke, moving it from A to B, to where it is most useful.

Mr. Robson Brown

What has this to do with it?

Mr. Fienburgh

I am trying to point out—and I am sure Mr. Thomas, who is very adept at chairmanship of this Committee, would have called me to order if my remarks had been out of order— that the Clause as at present drafted makes it impossible for the Board to intervene actively[...] if there is a breakdown in the distribution of home based and home produced raw materials. I am trying to indicate that there would be no point in making the suggestion if there was no possibility of breakdown, and to indicate some of the lines on which it may be necessary for some reorganisation to take place, and therefore make necessary some intervention on the part of the Board, which until Mr. Thomas raises objection, I shall continue to do.

The same case comes in in relationship to home ore, which is an increasing element in the production of steel, and an inevitable and desirable increase in the use of home ore will take place during the years to come. Much of this is tied production coming from tied plant, but as we go on it may be necessary to divert some of the home ore to plants normally more dependent on imported ore.

The Minister of Supply (Mr. Duncan Sandys)

I should like to put the point, Mr. Thomas, that I shall be unable to follow the hon. Gentleman in replying, because neither the Amendment nor the Clause deals with anything but imported raw materials from overseas.

The Temporary Chairman

I am grateful to the Minister, but the Clause also deals with distribution, as I read it, and so far as I am concerned the hon. Member is quite in order.

Mr. Sandys

It deals with the distribution of imported raw materials but not with the distribution of raw materials obtained from sources at home.

Mr. Fienburgh

The heading is "Importation and distribution of raw materials." If our Amendment were accepted we could, of course, cover the distribution of home-based raw materials. If I am out of order, I will not pursue that point any longer, and I will concentrate on the difficulties which may arise concerning the importation and distribution of home-based ore and scrap. There again, much the same position may arise. The distribution arrangements may be adequate but the importation arrangements may be bad and vice versa. I think that it is important in this context—

Mr. Robson Brown

Does the hon. Gentleman mean imported ore and scrap or home ore and scrap, because he only said home ore and scrap?

Mr. Fienburgh

I was leaving the point of home-based ore materials, and I am now turning to the importation and distribution of ore and scrap. The importation of ore and scrap at this moment—and this is an important political point and not only a technical point is controlled by the Iron and Steel Corporation Ore Limited, the shares of which are held on trust by the Iron and Steel Corporation for the British Iron and Steel Federation, which up to now has controlled importation and distribution policy.

There have been complaints about the importation policy and complaints about the policy of securing and developing overseas resources. Now many of these complaints are no longer valid because, mainly under pressure and threat from the Nationalised Iron and Steel Corporation, the position has been very greatly rectified, but still the major point of our Amendment stands. It is quite possible that things can go wrong in connection with importation.

It may be said that there is no need for the Board to intervene and that these things can be well-adjusted within the industry itself; that the importation and distribution agency is the creature of the Federation, which is the master hand in the industry, and if there is any argument or dispute or breakdown the well-oiled machinery of the Federation itself can be guaranteed to make the necessary adjustments. But I have pointed out that the import and distribution agency is the creature of the Federation and tied to the Federation.

The Federation is actively, and always has been, opposed to the conception of iron and steel being produced under public ownership. We are going to sell part of this industry. It is doubtful if we will sell much and we certainly shall not sell all. There will be a residuary part of the industry in public hands, but the whole distribution of raw materials resources for the whole of the industry can rest in the hands of a political Federation inimical to the whole conception of public ownership.

Traditionally, the control of raw materials to the industry has been the means of bringing pressure on the constituent parts of the industry. Part of the defeat of Jarrow and some of the arguments over Ebbw Vale were solved in the end because of pressure on the individual firms concerned by those who controlled the raw materials.

8.15 p.m.

We fear that the Federation, through its influence, may show undue preference to the privately-owned sector of the industry and—that part which is transferred into private hands. We fear that they may turn round, and having guaranteed to that part of the industry the material which it requires say, "Look how appallingly badly the public-owned sector is performing under these conditions. Look how superior private ownership is and how inferior the activities of public ownership." It may be no more than a dangerous suspicion in our minds, and maybe we are over fond of dangerous suspicion but there is the suspicion and it would be well if the Minister could ease our minds upon it. The position under the Clause as drafted is that, provided arrangements for importation are reasonably satisfactory, the Board has no power actively to intervene in distribution at all. The Minister must have envisaged some difficulties in this field of importation and distribution in private hands. If he had not envisaged some possibility of breakdown he would not be throwing over the good old Conservative tenet that these things are best left in private hands, and would not have introduced into this Bill the modicum of provision for intervention which there is at the moment.

If he accepts the case that there may be something quite wrong for some reason with importation and distribution, I cannot see why he cannot break that down, from the point of view of good administrative practice, into two separate halves, so that intervention can be exercised on one side or the other. If the Minister is not prepared to do this, then what he has done is what he has done in so many Clauses in this Bill so far. He has given the power and then set about carefully and artistically and with the help of the best legal advice from the Government so to hedge round this power with possible conditions, sub-conditions and restrictions that it can never be effectively put into operation.

Therefore, this leads us to assume that unless the Minister is prepared to accept this series of Amendments, this is one of the sham Clauses among the other sham Clauses in the Bill.

The Temporary Chairman

Before I call on the right hon. Member to reply, may I say that upon reflection I think that the Minister was right and that I was wrong, and I take this opportunity to apologise?

Mr. Sandys

I am most grateful to you, Mr. Thomas, for relieving me of the anxiety to follow the hon. Member for Islington, North (Mr. Fienburgh) over the very wide field which he traversed in the course of proposing this comparatively narrow Amendment. Under the scope of the words "and/or" it seems that he is able to deal with many of the broadest issues of the industry, present, past and future, and I congratulate him on his dexterity in handling this matter.

Each of the four Amendments, curiously enough, is sponsored by a different group of hon. Members pposite.

Mr. G. R. Strauss

They are all of the one mind.

Mr. Fienburgh

There are no splits on this side of the Committee.

Mr. Sandys

If they all duplicated one another I could understand it. Anybody reading the Order Paper would come to the conclusion at first sight that the Amendments were quite unconnected with each other. I can only assume that it was an ingenious cover plan to conceal from the enemy that the four moves were part of a fully integrated combined operation

Mr. Jack Jones

In the public interest.

Mr. Mikardo

The Minister has guessed right.

Mr. Sandys

The Amendment proposes that wherever in the Clause the words "importation or distribution" occur there shall be substituted "importation and distribution."

Mr. Fienburgh

It is the other way round.

Mr. Sandys

We shall get very confused over these "and" and "ors." The proposal is that wherever "Importation and distribution" occurs there shall be substituted "importation or distribution."

The purpose of the group of Amendments is to empower the Board to intervene in the arrangements either for importation or for distribution but not necessarily both, are unsatisfactory. It is urged that the Board should have the right to make alternative arrangements for either of those two functions but not necessarily for both.

It is exceedingly difficult to separate the functions of importation and distribution, particularly in regard to the Amendment to line 22, which deals with the importation of finished steel for the engineering industry. It is right that the Board should concern itself with the distribution—I prefer "allocation"—of imported raw materials among the various iron and steel producing companies, but in our view it is quite inappropriate for the Board to attempt to allocate finished steel among the consuming industries. If an allocation scheme is necessary in a period of shortage such as the present, we consider that the Government alone is qualified to judge the relative importance of the competing claims of the various metal-using industries.

It will be seen from the second paragraph of subsection (2) that, in deciding whether finished steel should be imported, as distinct from the importation of raw materials, which arises under subsection (1), the Board is asked to apply one criterion only, namely, whether the available supplies are inadequate. There is deliberately no mention in subsection (2) as to whether the allocation of the available supplies of finished steel is satisfactory. For the reasons which I have given, we consider that it is not for the Board to allocate steel among the various firms of the engineering, shipbuilding and other metal-using industries.

I am afraid that some confusion may have arisen in the minds of hon. Members owing to the use of the word "distribution" in two senses in subsections (1) and (2). In subsection (1) "distribution" means the sale of imported materials and. in addition, the decision as to which producers and in what quantities the imported material should be offered; the word covers not only the sale but also the allocation of the imported raw materials. On the other hand, in subsection (2) "distribution" means nothing more than the actual sale of the imported finished steel; the Board's functions there consist solely of importing finished steel and adding it to the general pool which is available for industry as a whole; thus, under subsection (2) the Board is not concerned with the problem of allocation.

To remove any doubts on this point I propose—I hope the Committee will agree that it is right—to introduce an Amendment on the Report stage to substitute "sale" for "distribution" in subsection (2). When that is done, it will be seen that, since the Board is not to be concerned with the allocation of finished steel, there is no object in giving it the power to sell finished steel which it has not imported. When the meaning of "distribution" in subsection (2) is clarified in that way, I hope hon. Members will agree that no purpose will remain in the Amendment proposed to line 22.

8.30 p.m.

The other three Amendments which remain are in line 5, to leave out second "and," and to insert "or"; in line 10, to leave out "and," and to insert "or"; and in line 14, to leave out "and," and to insert "or" These relate to the importation of raw materials for the steel industry itself. The Amendment in line 22 also to leave out "and," and insert" or, was concerned with imported finished steel, while the other Amendments are concerned with the importation of raw materials for use inside the steel industry itself.

Here again, it is, in my view, difficult to separate importation from distribution. The Board cannot distribute raw materials it does not own. It is most unlikely that the Board will be able to buy raw materials which have been imported by somebody else. In practice, if the Board wishes to distribute imported raw materials in this country, it will have to import them itself.

On the other hand, there is—and I am quite prepared to recognise it—the remote possibility that the Board might import raw materials, and then sell them to merchants or to a central distributing organisation working on behalf of the industry as a whole. Either the merchants or the central organisation would then distribute them to the various iron and steel companies. In that case, the Board would not be concerned with distribution in the sense of allocation.

My own belief is that if the Board is to take the trouble to import raw materials into this country it will in all probability wish to allocate them itself in order to ensure that there is an equitable and sensible distribution. Nevertheless, if hon. Members opposite attach importance to this point I am quite prepared to accept the Amendments in lines 5 and 14. I have disposed of those Amendments to the best of my ability and, I hope, to the satisfaction of the Committee.

The Amendment in line 10 which stands in the name of the hon. and learned Member for Kettering (Mr. Mitchison) is left. I hope, with the cooperation of hon. Members opposite, to be able to dispose of this last Amendment. I say "co-operation" because I cannot accept this Amendment, but I hope to convince hon. Members opposite that it is undesirable. The hon. Member for Islington, North, who moved it, accused us of faulty drafting. This Amendment is based upon a grammatical confusion, and I am surprised that it should have been tabled by the hon. and learned Member for Kettering because he has rightly earned a reputation in the House for lucid exposition, if not always for conciseness.

I would ask hon. Members to give me their close attention while I try to convince them that this Amendment is not desirable. The intention, as I understand it, is that if the Board considers that existing arrangements for importation or distribution are unsatisfactory, it should then have the right to intervene. I would ask hon. Members to take the Bill and read it with me. Let us turn to Clause 9, on page 9. If we leave out the words which are not relevant to this issue, this subsection reads: If the Board are satisfied…that satisfactory arrangements do not exist…for securing such importation and distribution…the Board may make arrangements… That means that if arrangements for importation and distribution are not both satisfactory, the Board are empowered to step in. If, on the other hand, we substitute "or" for "and," the Clause will read: If the Board are satisfied…that satisfactory arrangements do not exist…for securing such importation or distribution…the Board may make arrangements, If the Amendment were adopted, the Board could intervene only if arrangements for importation and distribution were both unsatisfactory.

Mr. Mikardo

O.K. You have got it.

Mr. Sandys

It is the negative which causes the confusion. After that explanation, I hope hon. Gentlemen opposite do not press the Amendment to a Division.

Mr. Mitchison

I have every sympathy for the Minister. I thought there was a point of law coming when the Solicitor-General left the Chamber a short time ago. I do not think the Minister is any more right than the Solicitor-General, but he is often a great deal more lucid. He only made his point by leaving out words of substance. I shall not take up the time of the Committee except to ask what would happen if we put in the words "importation or distribution as the case may be"? That would make it a little bit clearer. It is really a point of grammar and construction, and it would be a sheer waste of time to press the Amendment. I would ask the Minister to get well away from the Solicitor-General and to take some sound advice whether what is suggested does not convey the obvious meaning better than the present language of the Clause.

Mr. Robson Brown

I followed the hon. Member for Islington, North (Mr. Fienburgh) in the part of his speech which was completely out of order, about the distribution of home-produced raw material supplies. I fear that I shall be equally out of order by saying that I entirely support and sympathise with the point of view he expressed on that aspect of the matter.

Amendment agreed to.

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

I beg to move, in page 9, line 11, at the end. to insert: without discrimination between iron and steel producers. The Minister said that the speech made by my hon. Friend had curtailed his reply. I am in a worse difficulty, because the speech of the hon. Gentleman has curtailed my speech almost to nothing. However, I am quite prepared to deal with this Amendment from a specific standpoint, and I should like the right hon. Gentleman to apply himself to what I say, because I am not speaking on behalf of myself or even of my hon. Friends. I have moved this Amendment on a direct instruction and as an expression of the keen sentiments of the largest trade union operating in the steel trade. They are very much concerned about the powers, opportunities and privileges which will be enjoyed in the trade by what I call the big section.

This fear has arisen not because of any theoretical dissertation upon an economic question but because of the past experience of those who work in the steel trade. The distribution of materials is the most effective weapon in the hands of the big section. Reference was made to the division there will be in the industry because the cream will be taken. If one goes into a market it is quite natural to buy the best, but in this case a section of the industry will be left outside. There is a saying in the trade, "Always feed the fat pigs." What does that mean? In steel trade language it means that the furnace which is working well will get the best scrap. I am sure that my hon. Friend the Member for Rotherham (Mr. Jack Jones) has had that experience many times.

The workers in the industry say, "Yes, we see all this, but these great powerful units will, naturally, feed the fat pig." I want the Committee to realise that the steel trade is composed not only of big sections, but of hundreds of small people. It may sound incongruous to hon. Gentlemen opposite that we on this side are supporting the small man, but we have always done that as long as he is efficient.

This Amendment seeks to ensure that there shall be no discrimination and that the small man shall not be crushed out of existence by the holding back of raw materials. Those small sections, such as the fittings and socket makers in the Midlands, do not make large demands on raw materials, but they are essential. I know of a tin works in my town, a small family affair, not belonging to any of the big combines. I wonder how it will fare by comparison with these big sections of the industry. We are asking for a square deal and the people in the industry would like an assurance of it.

The hon. Lady the Member for Flint, East (Mrs. White) mentioned Trostre. It is not only a question of Trostre, but of the whole of South Wales. I know there is a committee going into this question and making recommendations, but it is no use doing so if the machine is not to operate in that direction. There will be calls made for raw materials, calls more from the sociological than the economic and industrial side.

8.45 p.m.

We are not suggesting that the makers of steel are evil men. They are not, but their job is that of making steel. They have given plenty of evidence that they can see the other side of the problem in the redundancy schemes now in operation in South Wales. Their job is to make steel and our job here is to see that people who have worked in this trade for a lifetime shall be insulated from some of the worst storms we can see gathering. I know that it is not possible for the Minister to say that a definite allocation can be made, but we want him to accept the Amendment so that if there should be a hook on which someone can hang his hat, he can do so. That is another saying in the industry. If in the future there is a desire on the part of some person or of the Corporation to assist a steel works or tin works in order to insulate them from bad economic effects, the Minister should give the opportunity to that person or the Corporation.

Mr. Jack Jones

I support the plea put forward by my hon. Friend the Member for Swansea, East (Mr. Mort). This Amendment ought to appeal first and foremost to the Government. We have been telling the Government, rightly—and we still tell them—that they will have great difficulty in selling the whole of this industry. We have agreed that it might be possible to sell a part, but the Government, in their own interests, ought to be quite certain that there shall be no discrimination between those who will have advantages beyond the fair shares they now have and those who will be denied advantages because of the raw materials supply question, which will be difficult for some time to come.

We make no bones about it; we ate mindful of the fact that those who proceed to buy the industry will do so having first asked for and obtained certain guarantees. No one will buy even the modern part of the industry unless he is assured that something more than is provided in the way of interest is to be gained. Their one intention will be that of obtaining something by which they will make a profit. Profits can only be made by having technically efficient capacity used 100 per cent. having regard to the supply of a full percentage of raw materials.

We are concerned that the Agency should be left with organisations under their control which shall not suffer by virtue of the demand of the privately-owned section for increases in raw materials. The Government should make certain, if they want to prove that they can sell the lot, that they take great care of the part which we believe will be difficult to sell. That is a simple and reasonable request. We know something of what has been referred to as the fatted pig and which I prefer to call petted conditions. The hon. Member for Esher (Mr. Robson Brown) and, in a more remote and theoretical way, the hon. Member for Hall Green (Mr. Aubrey Jones) know to what I am referring. They know that there are charts to show the effect locally. Although I have not been inside it, I understand that Steel House has a lot of charts showing production levels. Under nationalisation, production has always gone up. But that is beside the point and I shall be out of order if I continue to discuss that subject.

We want the Minister to bear this in mind, because if he wishes the Agency to get out of this miserable business of having to sell something which is difficult to sell, then, sooner rather than later, he himself, via the Board, must see that that they get a fair share in the allocation of raw materials.

We know that people think that the raw materials of this country are something we dig from our own ore beds. But we do not make steel altogether from the ore produced in Northamptonshire and Lincolnshire. Good quality steel can only be produced by using foreign ore. I have used a great many types of ore in my time and the best ore I ever used was Quillivar, the Spanish ore, which will be very largely used in their own steel works which are being erected. But if the Minister wishes to keep the good will of this country, we ask him that those who will least best be served may have a fair allocation.

Mr. R. Brooman-White (Rutherglen)

I sympathise with the misgivings and motives which inspired the speech of the hon. Member for Swansea, East (Mr. Mort). I may not be correct in my interpretation of the exact implication of these words, but even the hon. Member for Reading with all his experience was recently in error on a similar point. As I read it, this Amendment would tie up the Board very tightly in the consideration of the conditions under which allocations of raw materials may be made. In the Scottish industry, we recently had a situation where, for technical reasons, the difficulties facing that industry owing to shortages of scrap were very much greater proportionately than those affecting steel producing firms in other areas.

If this Amendment were carried, it might make it difficult for the Board in future to meet regional difficulties of this kind, or in times of acute shortage to face other difficulties arising out of varying economic considerations or those of the wider aspects of Government policy. In times of shortage, in the interests of the industry as a whole, it might, for example, be necessary, though it may be harsh, for there to be some discrimination in favour of those new plants in which enormous capital investment has been sunk.

I disagree with hon. Gentlemen opposite and maintain that such plans are most likely to be left until the last in the hands of the Agency, rather than be the first to be sold. For instance, I understand that the capitalisation of the Steel Company of Wales is something like £85 per ton, compared with about £3 per ton in the case of Colvilles.

Reference is made in the Amendment to the iron as against the steel section of the industry. There may be conditions, where either from the internal situation of the industry or for some other reason it is necessary to stimulate a certain line of production, for example, that of shipbuilding plates, or, for strategic reasons, of steel for shells, or on the iron foundry side may be necessary, at a time of raw material shortages, to stimulate production of certain lines. For instance, at Question time today we had a discussion about extensive agricultural drainage schemes, so it might, to give another instance. be necessary for a short period to stimulate the output of iron pipes.

I am simply illustrating my point by hypothetical instances, to support my contention, that there is a great deal to be said for flexibility in this Clause, governed against any unfairness or excess by the phrase, "satisfactory arrangements," and for not tying the Board down to rigid arrangements, such as would be introduced by the acceptance of this Amendment.

Mr. Charles Williams (Torquay):

I am not particularly enamoured with the words of this Amendment. I am not sure that it is practical to insert them here. But in Committee on a Bill of this sort perhaps I may be allowed to say a word, speaking as one who is not deeply involved in the steel industry, but who has seen a good deal of legislation passed and who realises that when great powers are conferred on a Board care should be taken.

This Amendment gives one an opportunity to say that the Minister or the Board should not allow people with great power to rule out the smaller people. A certain firm or a certain section of the industry may not be able to develop without help of some kind. It may be necessary to give help in the distressed areas. Where we have licences and great power such as is conferred by this Bill, we ought to have an assurance that the power will not be used unfairly and that the greatest possible regard will be shown to the smaller businesses.

I do not know whether the hon. Member for Swansea, East (Mr. Mort) will succeed in persuading the Minister, but I should like to say that he moved his Amendment with great skill and showed much more ability for oratory than is usually shown by the right hon. Gentlemen on his own Front Bench. As an ordinary back bencher, I express the view that the Minister might give an assurance that these powers will not be used in such a way that the small man is ruled out or that there are abuses of the system which sometimes arise when Government Departments are given special power to deal with licences.

Mr. Robson Brown

I rise to support the general line of argument advanced by my right hon. Friend the Member for Torquay (Mr. C. Williams) and also to endorse the remarks he made about the thoughtful and constructive speech of the hon. Member for Swansea, East (Mr. Mort). We pay tribute to the hon. Member for Swansea, East as one of the men in the House of Commons who speaks from an experience of the steel industry for which we greatly respect him.

The arguments he used were quite clear. He spoke not only from the heart but also from his knowledge in South Wales, and on that matter I should like to suppor: what he said. In this connection, raw materials are not always iron ore or scrap or metals of that kind. Raw materials for one factory may be the semi-finished material of another. It may be that in certain parts of the country there are small organisations under personal control which have built up over a long period a specialised trade outside the general run of steel production which could continue for many years to come to make a decent profit, to show a decent return and to justify their existence so long as they were assured of a supply of the raw materials for their purpose.

If that were so, I think that the Board should assist. I am sure that my right hon. Friend will show sympathy for this suggestion. It has often been said that we have to consider the sociological consequences of any act of any Board. My right hon. Friend the Member for Torquay put that point well. Sometimes a Board, in considering the great issues of the day, will forget the impact of their actions upon a small community. It is within the knowledge of many of us, not least the hon. Member for Swansea, East, that there are small works which support small communities which are no less desirable because they are small. As I see it, there may well be sympathetic consideration by the Board, resulting in a much more permanent and enduring life for many of these works than would otherwise he the case.

9.0 p.m.

Mr. Low

The Committee has already made quite clear their approval of the manner in which the hon. Member for Swansea, East (Mr. Mort) opened this short debate, and I should like to join with the rest of the Committee in thanking him for and congratulating him upon the speech he made. We are very glad that he raised this point.

As the hon. Member for Rotherham (Mr. Jack Jones) guessed in his short speech, the concern for the small people in the steel trade is a point which very much appeals to us on this side of the Committee, and we quite understand, as will all other hon. Members, the fear which the hon. Member for Swansea, East expressed about the big concerns. We can well understand those fears, but our feeling about this Amendment is that it is unnecessary, and I will explain to the Committee why that is so.

The Amendment seeks to insert the words "without discrimination between iron and steel producers." My hon. Friend the Member for Rutherglen (Mr. Brooman-White) made the point that it is possible to have some discrimination in certain circumstances which may be quite justifiable, but I think that what the hon. Gentleman who moved the Amendment meant by discrimination was unfair discrimination. Surely, if the discrimination is unfair, it would be covered by the words in line 9 as the Clause is at present drafted, which state that satisfactory arrangements do not exist and operate for securing importation and distribution.

Surely nobody would argue that arrangements for distribution which included unfair discrimination could possibly be satisfactory? It might be argued that, even though I was right on that point, we should agree to accept the Amendment because we are of one mind in the Committee about the feeling behind it, but we would advise the Committee that that would be wrong, because we would be selecting only one possible matter in which the arrangements might be unsatisfactory and it would be a mistake to single out only one matter.

Obviously, there are other possible ways in which these arrangements may be unsatisfactory. For example, the arrangements for importation may not lead to sufficient iron ore being imported into the country, and the arrangements for distribution might not be efficient. There might be all sorts of other ways in which the arrangements might not be satisfactory, and our advice to the Committee is that it is much better to leave the words "satisfactory arrangements," wide as they are. We are satisfied, as I hope the Committee will be, that these words would preclude that unfair discrimination which it is the object of all hon. Members to avoid.

Mr. Mikardo

I think there is some substance in what the Parliamentary Secretary has just said, and I would be much more inclined to agree entirely with what he said if I had not sat through the Committee stage of the 1949 Act and heard Conservative Members of that Committee put forward an argument which was, in a sense, almost directly contrary to the one which the hon. Gentleman has just put forward. If the Parliamentary Secretary, who was not a member of that Committee, if my memory serves me, will refresh himself by reference to it, he will find that Section 3 of the Iron and Steel Act lays a general duty upon the Corporation

to promote the efficient and economical supply of the products, and so on. It could be argued as easily as the Parliamentary Secretary argued his case that Section 3 (1, a) of that Act would not be met if any discrimination against one class of person or firm were exercised.

Nevertheless, during the proceedings, the then Opposition said over and over again that we ought to make it crystal clear that there must be no discrimination and, indeed, hon. Members opposite moved an Amendment to that effect and my right hon. Friend, then the Minister in charge of the Bill, who was eager to make it crystal clear that in no Bill promoted by a Labour Government was there any desire to see any unfair discrimination against anybody, accepted the Amendment, even though he said he thought it was superfluous. He accepted it in order that the position should be beyond argument and so that nobody could feel that he was being discriminated against.

May I suggest to the Parliamentary Secretary that he might well follow that example? He may well be right in saying that in the interpretation of the word "satisfactory" which the Iron and Steel Board will make they will consider a thing unsatisfactory if it is discriminatory but, after all, no one can forecast precisely what interpretation will be placed by a Board not yet set up upon a word so round as the word "satisfactory."

Since he paid tribute to the sense behind the Amendment and to the speech of my hon. Friend the Member for Swansea, East (Mr. Mort)—which terrified my hon. Friend, because he was in fear that a knighthood might be following—I urge the Parliamentary Secretary to follow the example of my right hon. Friend and to make assurance doubly sure. It may well be that he would wish to change the wording of the Amendment and perhaps to introduce the word "unfair before the word "discrimination." He may wish to narrow the Amendment in that way, but if he does, or even if he wishes to narrow it further, I would refer him to Section 3 (1, b) of the 1949 Act, the wording of which was almost entirely inspired by his hon. Friends.

I suggest to him that if he thinks the wording on the paper is a little too wide, then he should consider narrowing it, but that, even though there is a possibility that it is a work of supererogation, he should nevertheless insert some words which make it quite clear that there will be no discrimination.

Mr. Low

We listen with care to the points made by the hon. Member for Reading, South (Mr. Mikardo), and study them afterwards as we do with the speeches of all hon. Members in the Committee, but I think that what I said earlier, with the general tenor of which the hon. Member seemed to agree, will have satisfied the Committee that the words "satisfactory arrangements" already cover the point.

The hon. Member referred to the 1949 Act but, of course, there are two very important differences between the Corporation and the wording of Section 3 (1, a) of that Act, on one hand, and the Board and the wording of Clause 9 (1, b) of this Bill, on the other hand. The differences are these. First, the Board have no interest in any particular part of the industry. The Corporation, on the other hand, had a very close interest in looking after the interests of the companies under the Corporation. The Board are responsible for the whole of the industry. That is the difference.

The second difference is that the wording in Section 3 (1, a) of the Iron and Steel Act, 1949, is to promote the efficient and economical supply… Nowhere do I find the word "satisfactory" It is that word that I have been interpreting and which the Committee were asked to interpret on this Amendment. For those two reasons the fears which the hon. Member has in mind are unjustified. But I do not think that we want to go on this point very much longer and I certainly assure him that we shall have a look at the point he has made and see whether we are right, as I hope we are.

Amendment negatived.

Mr. Ian Harvey (Harrow, East)

I beg to move, in page 9, line 11, at the end, to insert: and that such arrangements cannot be secured by means of such consultation as aforesaid. This is a very small Amendment which first of all seeks to bring the procedure under this Clause into line with that in Clause 4 (2). Furthermore, it is an Amendment which I think is in keeping with the principles of this Bill and with the general attitude of the Government to the industry and to the Board. The object of the Clause and of this Amendment is to ensure that the power of the Board shall be ultimate power and that consultation with the industry shall take place so that every effort may be made to secure the arrangements which are required. I hope very much that my right hon. Friend will see fit to accept this Amendment, which lines up with the principle already involved in the Clause.

Mr. Sandys

This Amendment deals with the question of consultation in connection with the decision of the Board to import raw materials. If the Board consider that the arrangements for the importation or distribution—as we have now amended the Bill—are not satisfactory, the Board can then step in and set up alternative arrangements themselves.

I understand that my hon. Friend the Member for Harrow, East (Mr. Ian Harvey) is asking that this Clause should be brought into conformity with the procedure under Clause 4 and that the Board, having come to the conclusion that the arrangements are not satisfactory, should have a duty, before deciding to step in themselves, to try to persuade the industry itself to put matters right before the Board intervene. It seems to me that that is what a sensible Board would do in any case, but I am quite happy to accept the Amendment.

Mr. Mikardo

I am surprised that the Minister accepts this Amendment, because it seems to be one of very great moment indeed. I understand the purpose in moving and accepting the Amendment, of course. If there are consultations with some interested party about a situation being unsatisfactory, it is extremely sensible that they should be given a chance to make it satisfactory before the Board come down and use compulsory powers. But what does the Minister mean by a chance? How wide and how long a chance? Is there any time limit, or is the Board allowed to go on playing about for ever?

9.15 p.m.

Let me put this to the right hon. Gentleman. If he accepts the Amendment and it is carried, what will happen will be that the Board will not be able to take the action envisaged here unless it is satisfied that such arrangements cannot be secured by means of such consultation. Whatever it is that has gone wrong, I feel perfectly sure that it would be put right by the industry in five years or in 10 years or in 20 years or in 40 years, but the matter may be urgent; so that in fact if the right hon. Gentleman accepts the Amendment—I am putting this very seriously to the Minister—he will vitiate the whole of Clause 9 altogether and make it really a window-dressing Clause.

If the Minister accepts the Amendment, there will be no conditions under which the Board will be able to take action under Clause 9, because whatever goes wrong, whatever failure there is to make satisfactory arrangements for securing importation or distribution, whatever has gone wrong with importation or distribution, the Board will come along to the industry and say, "Cannot you manage to put this thing right?" and it may well say, "Yes, give us 10 years "—or 15 years or 20 years.

The right hon. Gentleman may say that nobody would be so foolish as to take as long as that, but when we are considering an Act of Parliament we have to be concerned with the wording of the Act of Parliament, and if this Amendment were made it would literally mean that, unless it were possible for the industry to correct a defect, even given a half century to do it, the Board would not be able to take action at all. I want to put it to the Minister that he is running the danger of its being said that this Clause is purely a window-dressing Clause and that it is not intended that the Board shall take action at any time.

I do hope that the Minister will look at this again. I do not attribute to it base motives, and I do not think that the motive of the right hon. Gentleman is to vitiate the Clause at all, because if he wanted to do that he would have done it himself and not left it to one of his hon. Friends to do it for him. I think that the Minister, not seeing the import of the Amendment, in the kindness of his heart thought he would do a good turn to the hon. Member for Harrow, East (Mr. Ian Harvey) and thought he would accept the Amendment, but I beg him to look at it again, and to reconsider it quickly indeed, to see if it is not as I suggest, that the Board would be prevented, by this apparently simple, innocuous little Amendment, from taking action at any time whatsoever under Clause 9. If that be so, he may wish to change the views he has expressed to the Committee.

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

In case my right hon. Friend should go away with the words of the hon. Member for Reading, South (Mr. Mikardo) ringing in his ears, I should like to suggest that there is a very, very short answer to his point, and that is that "satisfactory arrangements" means satisfactory arrangements. "Such arrangements" means satisfactory arrangements, and, surely it is quite idle to suggest that arrangements which might be made after five or 10 years of consultation could possibly be satisfactory arrangements.

Mr. Mikardo

Of course they could.

Mr. Raymond Gower (Barry)

I merely want to add that surely the hon. Member for Reading, South (Mr. Mikardo) exaggerated the position when he said that these words might be construed as impossible of performance in less than 15 years or 20 years. Surely, as in matters of law when no time is specified, the commonsense application of a really reasonable time would be what, as my hon. and learned Friend the Member for Middlesbrough, West (Mr. Simon) has said, would be satisfactory, and that would be the obvious answer to this, and certainly a time of 20 years would be totally unreasonable, and, as he has said, totally unsatisfactory.

Mr. Mikardo

I suggest that the hon. Member for Barry (Mr. Gower) and the hon. and learned Gentleman the Member for Middlesbrough, West (Mr. Simon) are wrong about this. The words "satisfactory arrangement" do not apply to the process of making or concluding the arrangement, but apply to the nature of the arrangement that has been concluded. It is perfectly feasible to have an arrangement which is perfectly satisfactory in nature when it has been concluded, but the process of making which is totally unsatisfactory. That is the point I was making.

Mr, G. R. Strauss

I, too, regret that the Minister has accepted this Amendment. He rejected the last Amendment we moved, although everyone agreed there was great point in it, because he thought it was redundant and unnecessary and its purpose was already covered. Surely what the hon. Member for Harrow, East (Mr. Ian Harvey) has in mind here is already completely covered, and the addition of these words is wholly unnecessary. If the Minister is unwilling to accept our suggested additional words, which we all agree were important, on the ground that they were redundant, I am sorry that he should accept these words, because I should have thought they were utterly redundant.

The Board have got to be satisfied after consultation with such representative organisations as they consider appropriate … that satisfactory arrangements do not exist. That surely means that the Board calls the people together and says, "Look here, the situation is not very good. What about it? What can be done about it?" That surely means that if the people consulted say, "We are working in this direction and everything is going to be all right; you do not need to worry," then the Board does not take any action in the matter. That is surely the common sense of it.

If the words in the Amendment are added and the point is rubbed in, I should have thought it would make the position of the Board very difficult, because they might well say, "According to the letter of the law it may be that, as a result of these consultations, in future, at some time or other, satisfactory arrangements can be made." I should have thought that, if representative organisations are putting up long-term plans, or vague plans, or plans which the Board think may not ever be carried out satisfactorily, the Board would have to hesitate before taking the necessary action, and this might, indeed, endanger our imports of raw materials.

The position was fully covered by the Clause as it stood, but it is weakened and endangered by the inclusion of these words. Whatever the hon. Gentleman has in mind, the words are unnecessary. We shall not vote against the Amendment, there are other and more important things ahead; but we think it regrettable that the Minister should accept this Amendment, particularly as he did not accept our Amendment previously on the grounds that the words of our Amendment were redundant.

Mr. George Chetwynd (Stockton-on-Tees)

I should like to make a further plea to the Minister to think again about this. He has been a little hasty at jumping in and accepting this Amendment, because the inclusion of these words means that in this respect initiative is taken from the Board and given to representative organisations. The only circumstances in which satisfactory arrangements cannot be made will be when the representative organisations cannot agree about a certain thing, and if they want to keep up that state of uncertainty we ought not to give them the initiative to wreck any proposals the Board could bring forward to make them satisfactory. That seems to me the whole purpose of the Amendment, whether it is what was intended or not. I think the Minister would be wise if he agreed to look at this again, because if it is really necessary he could put down an Amendment at a later stage.

Mr. Sandys

The last thing in the world I want is a disagreement about words of this kind which I believe, as the hon. Member for Reading, South (Mr. Mikardo) very fairly said, were put forward by my hon. Friend, and accepted by me with every good intention. I still think it is desirable to amend this Clause to bring it into conformity with Clause 4. Although I have no doubt the Board would do so in any case, I think we should make it clear that we wish the industry to be given the chance to put their own house in order if the Board is not satisfied with existing arrangements. Naturally we do not want the Board to intervene when things could be quickly put right by the industry if its shortcomings were pointed out. I am sure that is the wish of the Committee.

I recognise the validity of the point made by several hon. Members, and the last thing either I or, I am sure, my hon. Friend want is that there should be a loop-hole here which would impede the action of the Board where they thought it necessary. If the Committee will agree, will accept the Amendment as it stands, and between now and the Report stage look at it to see if it is desirable to include some such words as "expeditiously" or "in reasonable time," that is, of course, in the opinion of the Board. I hope that will satisfy hon. Members.

Amendment agreed to.

Mr. George Darling (Sheffield, Hillsborough)

I beg to move, in page 9, line 12, to leave out "may," and to insert "shall undertake or."

In moving this Amendment, I am afraid that I must upset the rather friendly atmosphere which has been so far enjoyed today. This is a very important Amendment and one which raises a matter of principle. The purpose of the Amendment is quite clear. We want to give the Board authority—real authority and not sham authority—to ensure that the steel industry shall get all the raw materials that it needs. Good supplies of raw material are, of course, essential to the proper development of the industry and to its production programme.

It has been obvious in all that we have said about the need for a continuing expansion of the industry that the raw materials situation has to be looked at. It is equally clear that in this part of the Bill, at any rate, the Government realise that full and adequate supplies of raw materials, largely iron ore and scrap, cannot be left to chance, and that someone has to ensure that the supplies of raw materials come along in adequate quantities at the right time.

It is quite clear that on behalf of the industry the Board must make sure that proper arrangements—effective and efficient arrangements—have been made to give the iron and steel industry all the raw materials that it needs. Emphasis in this part of the Bill is on imports of iron ore. In the nature of things the industry will have to rely less and less on imported scrap. In fact, the blast furnace development of the industry that is going on is in a large measure designed to make the industry less dependent upon imported scrap. There will always he some scrap coming from home sources. from ship-breaking and so on, but the industry will have to increase its imports of iron ore considerably if steel production is to go on increasing.

I gather that the measure of increase that is contemplated is in the region of 50 per cent. above the present import arrangements, and it may be even higher. All this is admitted by the industry itself and by the Government in this Bill. But the position is extremely serious, and we have to make sure that iron ore supplies will be coming in adequately. We must bear in mind the big and growing demands of the steel producers in the United States and of the European steel producers for whatever iron ore is available in the world.

Indeed, in the White Paper the imperative need to make sure that iron ore imports are kept at a high level is very strongly stressed. It is worth while, I think, to draw the attention of the Committee to the words of the White Paper dealing with the supply of raw materials. In paragraphs 19 and 20 it is stated: The Board will keep under review the distribution of raw materials, including scrap, and it goes on to say: In times of shortage … it is the Government's intention that the Board should control the distribution of scarce raw materials. 9.30 p.m.

The words "should control" are worth noting. In paragraph 20 the White Paper says: The Board will be empowered themselves to take steps to secure the imports required, should they consider the industry's arrangements inadequate. Those are strong words.

When we come to the Bill all those brave words have disappeared. The word "control" does not appear anywhere in the Bill. Instead, we have a very much watered-down version of the White Paper. The Bill now says that if the private arrangements for importing and distributing iron ore are unsatisfactory the Board may consider making other arrangements, that it may appoint agents, or it may set up companies to do the job. But the Bill places no compulsion on the Board to make sure that the importation of iron ore is efficiently and adequately organised.

We believe that the Government's first thoughts as expressed in the White Paper are correct. This matter is crucial to the whole industry and also to the economic well-being of the nation. Because we recognise the crucial importance of adequate supplies of iron ore being made available to the industry, we want the Government to put the strong words of the White Paper into the Bill. We should like to know why the Government have run away from the White Paper's phrases. I believe the Government have changed their views, wording and emphasis because of the pressure put upon them by the Iron and Steel Federation, either directly or indirectly.

We must remember that the Iron and Steel Federation, which is a private cartel, has its own iron ore importing company. Under the Bill the private company run by this private cartel, over which the Board will have no control, will be completely in charge of the iron ore imports of the country. Hon. Members opposite will argue that B.I.S.C. (Ore) is a public-sprited concern, that it will not do anything contrary to the public interest and that it will do everything the Iron and Steel Board will want the importing company to do. That may be true, but we should give the industry some guarantee that that is not merely wishful thinking.

We know of the experience of the Iron and Steel Corporation. The Corporation wanted to intervene in the activities of the B.I.S.C. (Ore), but the Iron and Steel Federation soon told the Corporation that its intervention would not be permitted. If a body like the Corporation, which had a legal authority over the iron and steel industry, could not ensure proper supervision of imports by its intervention in the activities of B.I.S.C. (Ore), there will be little chance that the weak and ineffective supervisory Board establised by the Bill will be able to intervene if intervention should become necessary.

The Bill says that the Board may intervene if the ore import arrangements prove unsatisfactory. What does that mean in practice? If the import arrangements are unsatisfactory, as they may well be, the Board will first have to consult 'the appropriate sections of the industry, which means that it will start consultations with Steel House. That means that its discussions will be with a body which it is suggesting has not made satisfactory arrangements. The experiences of the Iron and Steel Corporation have shown that Steel House will not tolerate any interference with its importing company.

Therefore, there is the inevitable prospect that if things go wrong with the industry—and it may be that some sections may want to go back to the kind of restrictionist policy which went on in the inter-war years—there will be a conflict between the Iron and Steel Board and Steel House, and we should try to guarantee against that. In such a conflict Steel House is bound to win because it has got all the cards in its hand. The Board has got to go to Steel House for information because it will not have any technical or information services of its own. It will have to depend on the Federation for most of its technical services, and, therefore, in such a conflict the cards will all be in the hands of Steel House.

Under the provisions of this Bill in such a conflict there is no provision at all for the Minister or anyone else to intervene to make sure that the industry is going to come out of such a conflict in a way that the national interests will not be upset. We think that the solution to all this is that we should give the industry a guarantee that its raw materials and particularly its iron ore supplies will be satisfactorily and sufficiently arranged. If the Board would take over B.I.S.C.(Ore) right away that would meet the case. I know that is a solution that will not be accepted by the right hon. Gentleman, and if we cannot have such forthright action, which I think is necessary for the well being of the industry written into the Bill, and get the Board to take over the B.I.S.C. (Ore) from the beginning, we have got to make it possible for the Board to set up its own importing agency.

If the Board has that authority—not a permissive but a mandatory authority— if it is dissatisfied with the work of Steel House, it can make other arrangements that will guarantee the industry will get its supplies of raw materials. We should make it possible for one or other of these things to happen or, at any rate, to take the control of ore imports out of the hands of a private cartel. For that reason we suggest that the Committee would be acting in a responsible manner if they accepted this Amendment and inserted these words in the Bill.

Mr. Spencer Summers (Aylesbury)

I cannot help thinking that if it were desired to move this Amendment in terms deliberately designed to make it difficult for the Minister to accept it, then something like the speech to which we have just listened would, in fact, have that effect. I am sorry that it was moved in the terms that it was because I, personally, take the view there is some substance in the point that lies behind the words on the Order Paper.

The hon. Member for Hillsborough (Mr. G. Darling) may have overlooked the fact that considerable support came from this side of the Committee for that Amendment to Clause 4 which placed upon the Board the added task of taking an interest in the source of raw materials, and, if necessary, given power to provide capital so that reinforcement of supplies might be obtained from other sources. Already there has been quite a clear indication of the importance that we on this side of the Committee attach to the securing of adequate supplies of raw materials.

It is worth mentioning that the acceptance of my hon. Friend's previous Amendment should make it easier for the Minister to accept this Amendment, because before the Board can intervene and act directly to carry out instructions, as opposed to the option which this Amendment confers upon them, the preceding Amendment makes it necessary for the Board to make sure that what is required to be done could not be done by the industry. Only then will it be relevant for the Board to step in. The addition of the words in the previous Amendment has made it easier for the Minister to accept the present Amendment.

If, after it has been demonstrated through investigation that the sources of supply and the methods of distribution are thought to be unsatisfactory, after steps have been taken to provide a remedy, and after consultation with the industry, it is Still thought that the position is not satisfactory, I hardly think that we should be right to leave an option to the Board to do nothing about it. The Committee ought to take the view that after those steps have failed to produce the right result, it will be reasonable to place upon the Board an obligation to do something about it.

Mr. John Freeman (Watford)

I hope that the Minister will pay attention to the arguments addressed to him both from this side of the Committee and his own side. I am not associating myself with the opening remarks of the hon. Member for Aylesbury (Mr. Summers), but I thought that my hon. Friend's argument was very much to the point.

I was glad to hear the latter part of the remarks of the hon. Member for Aylesbury, because he seemed to put with considerable cogency the point that we are trying to put across. This point does not arise when the Board are satisfied about certain things, and, secondly, when they find that satisfaction after consultation. Thirdly, when they are not satisfied, they should have authority to see that something is done which cannot reasonably be accomplished in any other way. That conclusion is arrived at after full consultation with the industry.

Every conceivable hypothesis has been covered in what is a kind of preamble. The point that we are debating now is whether, at the end of all that, an optional, non-mandatory power is still to be left to the Board. It is scarcely credible that the Minister has not been advised to use his power or that he does not intend to use it. I hope it is not true, and I do not make that suggestion; but the Minister has to advance some remarkably cogent arguments, in the light of what my hon. Friend and the hon. Gentleman opposite has said, if he is to reject the Amendment. I hope he will realise, and I re-emphasise it, that the point can only arise after all hypotheses have been taken care of. If, when they get to that point, the Board are not to have mandatory power to make these changes, the Board's power will be entirely nugatory.

Mr. Sandys

The hon. Member for Hillsborough (Mr. G. Darling), in moving the Amendment, suggested that there was a serious inconsistency between the wording of the Bill and the wording of the White Paper, and that the weakening of the Bill, as he saw it, was the result of pressure from the wicked men in Steel House. Almost every sentence he uttered contained a remark about Steel House.

Mr. Mikardo

Has it been compared with what Lord Nuffield said about it?

Mr. Sandys

I assure the hon. Member that there has been no pressure of the kind he has suggested, and secondly, I hope that he will allow me to devote a moment or two to comparing the provisions of the White Paper on this point with those of the Bill. He will then see that there is neither inconsistency nor weakening between the two.

9.45 p.m.

Paragraphs 19 to 20 of the White Paper which the hon. Member read out state: The Board will keep under review the distribution of raw materials, including scrap. That is covered by Clause 3 of the Bill. The paragraph continues, and I want to emphasise this: In times of shortage, such as the present, when emergency powers are in operation, it is the Government's intention that the Board should control "— We do not run away from the word "control" as the hon. Member suggested— the distribution of scarce raw materials within the iron and steel industry under the authority of the Minister of Supply. We explained what we have in mind during the debates on the White Paper and on the Second Reading of the Bill. The Bill provides that, when emergency powers are in operation we intend as far as possible to delegate the exercise of some of them to the Board. We have in mind particularly that the Board could deal with the distribution of scarce raw materials, such as pig iron and its allocation between steel makers and the foundries.

The next paragraph, to which the hon. Member also referred, states: In view of the dependence of the United Kingdom upon supplies of high grade iron ore and other raw materials from abroad, the Board will have to assure themselves that the arrangements made by the industry for importation of the raw materials it requires and their distribution are satisfactory. That refers to its general supervisory function. It continues: The Board will be empowered themselves to take steps to secure the imports required, should they consider the industry's arrangements inadequate. That is precisely what this Clause does; it gives the Board power, if they come to the conclusion that the existing arrangements are inadequate, to make alternative arrangements to secure the importation of raw materials.

There is a misunderstanding because the Bill fully covers what was stated in the White Paper and, with one exception to which I shall come, fully meets the wishes of the hon. Member who moved the Amendment. We said in the White Paper that the Board will be empowered to take steps to secure raw materials; we did not say that the members of the Board would go out to buy theirs. They are "to take steps to secure" and that is precisely what this Clause empowers them to do.

The only difference between the Bill as it now stands and as it would be if the Amendment were adopted is, first, that the Board would be empowered to buy abroad and to import the raw materials themselves instead of employing agents to do so. I do not think there is a big point there; in fact the hon. Member himself summed up what he wanted by saying that the Board must be able to set up their own importing agency. The Bill enables them to do this. Employing agents to import raw materials is setting up their own agency. What we do not want is that the Board shall themselves get involved too directly in the business of buying and shipping raw materials. It is a specialised business and requires considerable specialised knowledge and experience which it is most unlikely that the members of the Board will possess.

We are not anxious to put into the Bill words which will encourage the Board to undertake executive and managerial duties in connection with the importation of materials. I do not believe that the Board would wish to do so. The normal thing, if they decided they wanted to secure raw materials, would be for them to employ a suitable agency, very much as the hon. Member suggested. However, this does not mean that we at all intend that their freedom to make arrangements for the importation of raw materials should in any way be limited.

I come to the other point, which I believe is more pertinent and important, namely, whether the Board's duty should be permissive or mandatory. As the Bill stands, it is left to the Board, having come to the conclusion that existing arrangements are not satisfactory, to decide whether they should intervene. After reading the Amendment I felt inclined to agree that, if the Board came to the conclusion that the arrangements for the importation and distribution of raw materials—which is vital to the industry were not satisfactory, it should not only be permitted but should have a positive duty to take steps to put matters right. Therefore, if the hon. Member would be willing to withdraw the words "undertake or," which deal with the first part of the Amendment, I shall be happy to accept the second part, which I believe to be the more important, namely, the substitution of the word "shall" for "may."

Mr. Darling

I most certainly accept the offer of the Minister and I think we can be sure that the Board will act in the way we want it to act in the form of words which the Minister has accepted. I therefore beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Amendment made: In page 9, line 12, leave out "may," and insert "shall."— [Mr. G. Darling.]

Amendment proposed: In page 9, line 22, leave out "and," and insert "or."—[Mr. G. Darling.]

Amendment negatived.

Mr. Ian Harvey

I beg to move, in page 9, line 27, after "Minister," to insert: after consultation with such representative organisations as the Board or the Minister consider or considers appropriate. This Amendment is really dotting the i's and crossing the t's of the proviso to Clause 9, subsection (2), which lays down that there shall be consultation with those representative bodies referred to in my Amendment. In the proviso this procedure is not referred to specifically. I feel certain that it is intended that that procedure should be followed, in the same way as in the main Clause. In view of some of the observations made earlier, I have every confidence of the integrity and desire of the industry to complete their arrangements satisfactorily, and that is why I hope very much that my right hon. Friend will accept the Amendment.

Mr. Sandys

It is my intention to accept this Amendment and I hope I shall not encounter any difficulty from hon. Gentlemen opposite. Unlike my hon. Friend's previous Amendment which was concerned with raw materials, this deals with the importation of finished steel. Under subsection (2) of this Clause finished steel may be imported by the Board either on their own authority or on a direction from the Minister. Before deciding to import finished steel on their own initiative the Board are required by the Bill to consult the industries concerned, but no similar obligation is placed upon the Minister.

I think it would be very unwise for a Minister to omit this obvious precaution, but I see no harm in including this Amendment in the Bill and with, I hope, the agreement of hon. Members on both sides of the Committee, I propose to accept it.

Mr. Mitchison

I agree entirely with what the Minister has said, but I suggest he looks at the wording of the Amendment again. He accepted it on the footing of applying it to the Minister. If be takes the Amendment as it is he will find that there has to be, as it were, two consultations by the Board and I cannot make clear the distinction between the two. It is not a matter we need to go into now, but I suggest that the language be looked at again.

Amendment agreed to.

Mr. Mikardo

I beg to move, in page 9, line 28, after "is," to insert, "or may become."

I do not propose to make very heavy weather of this Amendment, as I feel sure that the Minister will accept it, and I want, as I know he would want, it to appear he is accepting it of his own free will rather than as a result of the bludgeoning of an unaccustomed and uncharacteristic torrent of verbosity from myself. The object of this Amendment is to ensure that the Board or the Minister, as the case may be, can lock the door before the horse is stolen and not afterwards.

As the right hon. Gentleman pointed out in a very lucid explanation of the whole Clause, subsection (2), unlike subsection (1), concerns arrangements for the importation, not of raw materials but of steel products. If one takes the two together, what they mean, in non-legal language, is that if the Minister or the Board find there is inadequate supplies of an important form of iron and steel they can make arrangements for it to be imported.

The position may be better in the future, but we all know that in these days it sometimes takes a long time to obtain deliveries. One provincial Government in Canada is in some difficulty at the moment as they cannot get pipes to carry a gas supply to the capital before the end of this year. It finds that the earliest delivery date it can get anywhere in the world is two and a half years.

10.0 p.m.

It would be silly if the Minister or the Board had to wait until there was an actual shortage before they could go off to place import orders. A good deal of thought is given in these days to the forecasting of demand requirements. Some of that thought is given by the much maligned sometimes unfairly—gentlemen of Steel House. It would be silly if we prevented ourselves from taking advantage of those forecasts. If, for example, we knew that certain types of tube would be in short supply six months hence although they were in adequate supply now, it would be wrong if we did not put in orders now. This case is so clear that I am sure that I need not urge it further.

Mr. Summers

Before the Minister replies, I should like to point out one aspect of this matter. The hon. Member for Reading, South (Mr. Mikardo) took exception to an earlier Amendment about consultation on the ground that it might hold things up for five, 10 or 20 years. I hope that the Minister, in considering the wording of this Amendment, will bear in mind that the same argument which was adduced by the hon. Member for Reading, South on the preceding Amendment is equally relevant here.

If it was proper to add some words to bring consideration on the earlier point to the reasonably near future, it seems equally proper that similar words should be introduced here to make certain that the distant future is not something implied by the words on the Order Paper.

Mr. Mikardo

The two cases are not on all-fours, as I think the hon. Gentleman will see if he refers to the wording of the proviso Suppose we took his point and it appeared to the Board that the supply of products for use in Great Britain might become inadequate in 20 years' time, all that would happen in these circumstances would not be that the Board would be compelled to exercise their powers but that they could if they wanted to, taking all the circumstances into account. In other words, we have here a double negative. All that the proviso does is to lay down the circumstances under which the Board must not, and the circumstances in which they must. That is the difference between this Amendment and the one moved earlier by the hon. Member for Harrow, East (Mr. Ian Harvey).

Mr. Summers

I am prepared to leave the argument on the detailed wording to be dealt with by the Minister.

Mr. Low

Having once decided that there should be available this power to import finished steel when there was a shortage, we do not pretend that the power should be available only after a shortage has arisen and damage has been caused to the British economy. The question is what is meant by the word "supply."

I assure the hon. Member for Reading, South (Mr. Mikardo) that if there is doubt we will consider the matter further, but our view is that the words: …the supply of those products for use in Great Britain is inadequate… mean not only that there are at that moment insufficient products available in Great Britain but also that supplies, including such imports as private buyers may reasonably be expected to make, are inadequate to meet the demand in the near future. That was our view about the meaning of the words, but we will certainly consider whether we are right in view of what the hon. Gentleman said. We had already given the matter a good deal of consideration since the Amendment appeared on the Order Paper.

I now come to the actual words which the hon. Member suggests should be inserted to make the matter clear. In our view to accept the words, "or may become" would be to give the Board and the Minister too wide a power to import in anticipation of a possible shortage which may never arise. My hon. Friend the Member for Aylesbury (Mr. Summers) made the point, and, to emphasise it, went well into the future.

The point I am making is that, whatever one's views about how far it goes into the future, I think the Committee must agree that these words would give the Board power to import in anticipation of a possible shortage, which may never arise. We do not want to go as far as that, but we will consider again what the words now in the Clause mean, and whether they are open to the criticism which the hon. Gentleman has made of them. If we decide that they are open to criticism or doubt, then we will come back at a later stage with words possibly to this effect—"is or is shortly about to become." That is the sort of point which we have in mind at the moment, and I hope the Committee will be prepared to accept the withdrawal of this Amendment on the assurance of further consideration which I have given.

Mr. G. R. Strauss

I want to be quite clear about this, and I think so does my hon. Friend. Obviously, the Board cannot be certain about a shortage in the future, and what we want to be sure about is that, if it appears to the Board that there is likely to be a shortage in the future—not that there is to be any certainty about it, for it may never develop —but if it appears to the Board, after all the consultations which it has to make, that there is likely to be, or there is the presumption of, a shortage in the future, it can go in, and, through its agents, buy iron and steel and those things which it is empowered to do under Clause 2.

If the Parliamentary Secretary says that he proposes to meet us on that point by some words which are more appropriate than those in the Amendment, I feel sure that my hon. Friend would be willing to withdraw his Amendment, but we do not want him to come forward with words which will only enable the Board to act if they are certain that there will be a shortage in the future. We want them to act if there is an anticipated shortage in the future. and there is a great difference.

Mr. Low

I think the right hon. Member for Vauxhall (Mr. G. R. Strauss) will have noticed that the words …unless it appears to the Board or, as the case may be, to the Minister already appear in the Clause. We have no intention of taking out those words or of detracting from their meaning, and nothing that I have said should lead the right hon. Gentleman to that opinion. I have no quarrel with what the right hon. Gentleman has said.

Mr. Mikardo

In view of what the Parliamentary Secretary has said, and his undertaking to give careful consideration to the point, may I express my thanks to him for the way in which he has met us, and beg to ask leave to withdraw the Amendment?

Amendment, by leave, withdrawn.

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