HC Deb 18 February 1953 vol 511 cc1245-85

Considered in Committee. [Progress, 17th February.]

[Sir CHARLES MACANDREW in the Chair]


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


3.39 p.m.

Mr. Ian Harvey (Harrow, East)

; I beg to move, in page 10, line 9, after "funds," to insert "required."

I hope that this Amendment will find favour not only with my right hon. Friend, but with right hon. and hon. Gentlemen opposite, because in the discussion of another Bill they were at some pains to try to abolish the levy. The object of this Amendment is to ensure that the levy which Clause 11 empowers the Board to raise shall only be raised when absolutely necessary. It is the spirit of this Bill that the Board shall be of assistance and shall not be an imposition upon the industry. It is for that reason that this small Amendment has been tabled, and I hope that my right hon. Friend will be prepared to accept it.

The Minister of Supply (Mr. Duncan Sandys)

Even without the insertion of the word "required," I am doubtful whether the Board could legitimately raise contributions beyond those needed to meet expenditure actually incurred or definitely foreseen. However, if it is thought that there is any uncertainty on this point, I am sure that the Committee would be prepared to see the Amendment accepted.

Amendment agreed to

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

I beg to move, in page 10, line 22, to leave out "and," and to insert: being a method which relates the amount of the contributions of any such producer to his output of, or capacity to produce, iron and steel products or to other matters directly concerning his production of those products, and the scheme. The Amendment makes it clear that in the case of a business comprising other production—such as, for example, engineering—as well as iron and steel, the basis for assessment of contributions payable to the Board must be related only to the iron and steel side of the business. By the "iron and steel side" I mean, of course, that side of the business which comprises one or more of the activities listed in the Third Schedule.

I think that that is what the existing drafting of subsection (2) means and the Committee understand it to mean. We thought, however, that there was an advantage in further clarification, and even though we are satisfied that the Board would not have made a mistake, we hope the Committee will agree that the Amendment is desirable and will accept it.

Amendment agreed to.

Mr. Low

I beg to move, in page 10, line 25, at the end, to insert: (3) The said scheme may contain provisions for imposing, as respects any period, a limit on the amount to be raised by the Board by means of contributions under the scheme to meet the expenditure incurred or to be incurred by them during that period in respect of all the matters or any one of the matters included in subsection (1) of this section. This Amendment proposes to introduce a new subsection (3), which will make it clear that the contributions or levy scheme of the Board may contain provisions for fixing limits, first, upon the total amount of money which may be raised by the Board during any period and, secondly, upon the amount of money which may be raised by the Board in respect of each of their functions and the other matters in subsection (1) separately: for example, imports, research, training and education. administrative expenses, and the Board's remuneration, allowances or pensions.

The Amendment is so drafted that the Board themselves can, if they wish, write such limits into the scheme. In this case, when the draft scheme is published interested persons will have an opportunity of representing to the Minister under the existing subsection (3), which will now become subsection (4), that different limits should be imposed. If the Board do not include limits in the scheme which they publish, interested persons can represent to the Minister that limits should be imposed.

In any event, whether the Board do or do not include limits in the scheme, the Minister will now be able, if he thinks fit, to include limits on the total amount of contributions in any period or on the amount of contributions in respect of any of the particular matters which I have outlined. I think the Committee will agree that this check is desirable, and I hope that they will accept the Amendment.

Amendment agreed to.

Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."

3.45 p.m.

Mr. G. R. Strauss (Vauxhall)

The Clause permits the Iron and Steel Board to raise a levy on the iron and steel industry for the purpose of carrying out certain duties of the Board. I should like to ask the Minister of Supply a number of questions about the powers of the Board in this respect, the extent to which they may overlap the existing industry fund and exactly what the Board's relationship shall be to the industry, Steel House and himself in regard to levies over the industry.

It is quite clear that in one respect, at any rate, the levy which the Board may raise upon the industry may overlap the money raised at present under what is called the industry fund. For example, the Board are permitted to raise money to pay any of their outgoings under Clause 9. Clause 9 enables the Board to import material from abroad and, with the Minister's permission, to sell it at a price lower than they paid for it. In other words, a loss may be incurred.

It is not clear to me at the moment whether that loss would be paid for out of the levy raised by the Board or out of the industry fund, out of which a subsidy is at present paid for materials bought abroad if bought at a high price and sold at a lower price. Plainly, unless we have a satisfactory explanation, it would appear that the Board would have to reimburse themselves by means of a levy on the industry for losses sustained in that way. At present, such a loss would be paid for out of the normal operation of the industry fund. Therefore, my first question on this possible overlap—and there are many other possible overlaps so far as I see—is to ask what is the position of the Board in relation to the industry fund?

We might also take the opportunity to ask the Minister a wider question. The Board are here given powers to raise a levy. At the moment a levy, and a substantial levy, is raised by the industry itself in order, not to ensure equalisation of cost of production, but to ensure that abnormal charges which are temporary should not fall on any particular producer or section of producers.

The incidence of the industry fund has an enormous effect on the prosperity, the profits or losses, of individual firms in the industry, and the question arises as to whether, as the Board are here given power to raise a levy for certain purposes, it is right that the Board should have, if not the full power, a substantial authority in deciding to what extent the present fund should be raised, where it should be raised, and how it should be distributed. My purpose in rising is primarily to ask the Minister to what extent he has thought about this matter, what his conclusions are, and what responsibility should rest on the Board in deciding matters concerning the industry fund—matters of vital importance to every producer in the iron and steel industry.

At the moment, the matter is very largely in the hands of Steel House, who prepare schemes—they have a scheme in operation at all times—for the industry fund. Levies are paid by some firms, and out of the fund other firms get bonuses or payments—"remissions", I think, is the word which is usually used—and the whole thing is done primarily at the instance of Steel House. Sometimes, however, the Minister of Supply comes into it; certainly, he comes into it when any change in the level or the incidence of the industry fund affects the final iron and steel prices.

As a Board is to be set up covering the whole industry, unlike the Iron and Steel Corporation which covers only part of the industry, we think that they should have special authority over the industry fund, deciding its level, the method by which the money should be raised and how it should be distributed. It is not generally realised how important this industry fund is. I believe that last year it amounted to something near £100 million. It was money raised from certain producers and redistributed in the way which was considered to be equitable.

The sum no doubt was larger last year than it is this year because of the very high import of semis from abroad owing to our shortage in this country but this year it will still be substantial. It accounts for a very high proportion of the price particularly of the heavy steel products. I do not know the exact figure at the moment but the levy last year was £5 12s. on ingots equal to 25 per cent. of the cost.

That is a substantial figure and any change up or down must have a considerable effect on the iron and steel industry and maybe on the prosperity of the individual makers in that industry. There is a 20s. levy on bought scrap. The price of our scrap in this country is low. It is kept low because there is a control and so users of scrap get a levy of 20s. Those on the other hand who have to use pig iron get a remission of I think 35s.

I am not complaining of the existence of the fund. I think that something of that sort is essential. Nor am I complaining of the present distribution of the money in the fund or of the way it is raised. The point I am making is that it is an exceedingly important levy and I am asking to what extent it should remain outside the control and authority of the Board.

There is constant need for readjustment of this fund. Conditions change and a case is put forward from time to time for the reduction of a levy or an increase, or some important change which may well affect the price of iron and steel products and certainly affects the prosperity and profits of individual producers substantially. Some of the biggest producers contribute many millions of pounds a year to this industry fund. No doubt those who contribute very large sums may sometimes think they have to contribute too much. Others who are beneficiaries may think they do not receive enough.

There are a number of conflicting interests here which, at present are sorted out at Steel House. They do what they think best and a scheme is finally devised which may be good or may not be good but there is a voluntary arrangement under which all firms agree to abide by the decision. Action is taken by some section of the industry to get a change in the fund in its incidence when it is believed that something is wrong or maybe the industry as a whole think that there should be some change in the balance, and when that affects the final prices of products the Minister steps in and says maybe that the proposed change is entirely wrong and vetos it.

Up to now all this has happened between Steel House and an occasional recourse to the Minister but now a Board is being established with certain broad responsibilities about the efficiency of the industry and so on. Unfortunately as we have complained it has practically no authority nor powers to see that its suggestions are properly carried out. We have moved Amendment after Amendment to give it that authority but every one has been turned down.

Here is a case where surely the Board should have some authority. I am not arguing at the moment—I am not certain until I hear the reply of the Minister—exactly what that authority should be, whether it should be the Board which finally decides the balance of the industry fund or the Minister. It should be one or the other; maybe it should be the Minister on the recommendation of the Board. I am sure that it cannot be left in the hands of Steel House. That is certain.

The Board must come into the picture in some way in an authoritative capacity. It is set up to have a broad supervision of the whole industry, not of one section, and no one would be in a better position than the Board to consider such matters if it were properly equipped and had an independent staff. I doubt whether it will have, but, assuming that it has, it will be better equipped to deal with this matter than any other body. We want to know what say the Board are to have in deciding these matters and what relations there are to be between Steel House and the Board and the Minister in raising this levy which last year amounted to nearly £100 million. We particularly want to know if there is a possible overlap which I suggested might arise if the Board acts under Clause 9 and buys materials abroad.

There is a third levy and I should like the Minister to give us information about this. This is a special levy for Steel House, a separate affair. It does not amount to such substantial sums; it amounts to 1s. per ton but under competitive conditions 1s. per ton may be very important. As there are 16 million tons being produced at the moment that means about £800,000 per annum. That is quite apart from the levy for research. This is money which goes to Steel House. It comes to 1s. per ton and I think there should be some public accountability for this. I think the Board should step in. We should like to know how the money is spent. I know there will be the strongest objection to the way in which some of the money is spent at the moment because it is spent on political propaganda.

It is outrageous that money which is largely contributed by publicly owned companies should be devoted to drawing up, issuing and publishing pamphlets supporting the Government's denationalisation Measure and ridiculing the case of the Opposition in favour of maintaining the companies under public ownership. That is what Steel House is doing, presumably with this money raised from the industry by a levy of 1s. per ton.

I maintain that that is quite outrageous and I am speaking from knowledge as I have a pamphlet here if anyone would like to ask me to quote from it. I think it entirely wrong and that Steel House should be ashamed of itself for doing anything of this sort. It is using public money, it is mostly public money, in taking part in a political campaign demanding that public property should be handed to private individuals. There is a strong case on those grounds alone why that levy should come under some sort of supervision by the Board to see that the levy on steel produced in this country should not be used in this way. I hope the Minister will be able to make some comment about that also. I know that he is not directly responsible but his relations with Steel House are no doubt reasonably close and perhaps he can give some explanation, or if anyone who can speak for Steel House in the Committee can do so he will be welcomed.

I hope that the Minister will be able to give some information on all these points. The existence of the industry fund is a matter of life and death for the industrial producers in the iron and steel industry. This matter cannot be left to Steel House but should come under the purview of the Board. We think that later on when we come to Report stage it may be necessary if the Minister is not prepared to do so, for the Opposition to move Amendments to ensure that the Board are given some authority in this field. At present we are exploring the situation. We are asking questions. We want to know what the Minister has in mind. Perhaps it is something which will satisfy us. We ask him to say that the authority given in Clause 11 to the Board to raise a fund for certain limited purposes, should be widened so as to permit the Board to have similar or at any rate a large authority over the industry fund at present raised by Steel House.

4.0 p.m.

Mr. Gerald Nabarro (Kidderminster)

I listened with interest to the comments of the right hon. Member for Vauxhall (Mr. G. R. Strauss) and the points he raised will no doubt be clarified by my right hon. Friend. There are, however, four points which I would like clarified in connection with this Clause. Can my right hon. Friend give any indication of the costs of operating the Board on an annual basis and whether those costs will, in the most part, relate to the costs of administration and the costs of paying salaries and expenses to the members of the Board; or whether there are any extraneous costs likely to be incurred which will be directly or indirectly of a financing or production character?

I think there might be some incongruity between the text of Clause 11 and the text of Clause 3. Clause 11 refers to the provision of funds for the Board which will be raised from iron and steel producers. Clause 3, on the other hand, defines the principal purpose of the Board as the exercising of supervision over the iron and steel industry. The two things are not necessarily the same. Under the jurisdiction of this Board are brought something in the order of 2,000 iron foundries. There are also a number of firms other than iron foundries who will come within the jurisdiction of the Board who are not primarily iron and steel producers.

If the expenses of the Board in the form of a levy, or a contribution, or whatever it may be in the terms of Clause 11, are to be derived only from iron and steel producers—which would be the literal interpretation of the Clause—the corollary is that there are thousands of firms who will be supervised by the Board, but who will not contribute to the administrative costs of the Board. I should like my right hon. Friend to tell the Committee whether the contributions to the Board are to be derived only from those firms who produce iron and steel, or from all the firms coming within the jurisdiction of or supervision by the Iron and Steel Board.

My third question is in connection with subsection (3) of Clause 11, dealing with the Board submitting a scheme to the Minister for the collection of these contributions. As my right hon. Friend will know, there is always a good deal of controversy in trade associations and similar organisations about how contributions should be made, and on what basis they can be computed. For example, certain large trade organisations base the method of contribution on the number of employees engaged in an individual undertaking. Other associations base it on the value of the turnover of the firm concerned. In the case of an industry such as iron and steel it could conceivably be based on the tonnage of output of each individual firm.

Those are three alternative methods by which the contributions to finance the Iron and Steel Board might be calculated. It would be helpful if we could be told what my right hon. Friend has in mind about the basis on which a scheme shall be drawn up to cover the contributions of the constituent members coming under the jurisdiction of the Board and who are to be supervised by it.

The fourth question I wish to ask is one of academic importance, but I think it should be referred to at this stage. Evidently the Iron and Steel Board are to have considerable finances. It would be interesting to know whether their annual balance sheet is to be published; in what form it is to be published; whether it is to be brought to this House; whether it is subject to statutory inspection by my right hon. Friend, and, or, in what other fashion, or by what other means, hon. Members of this House and the general public can examine the finances of the Board, and see how the funds they are raising by statute are being deployed—

Mr. G. R. Mitchison (Kettering)

; On a point of order. Is not that matter dealt with in Clause 14?

Mr. Nabarro

If that is so, I am sorry, but it arises as a direct result of the content of this Clause and I hope I may be forgiven for bringing it up at this stage.

Mr. Ian Winterbottom (Nottingham, Central)

I hope that I shall be proved wrong when I say that the hon. Member for Kidderminster (Mr. Nabarro) is an optimist if he expects clarification on the subject of the industry fund. I think we require clarification at this stage because the whole fund is wrapped in mystery. There are two contributions, the levy on serap, iron and ore, and so on, and the 1s. levy on ingot tonnage to cover the purposes of the administration of the fund. No accounts are made public and there is another rather interesting feature. The Iron and Steel Corporation have fought very hard to get representation on the various committees of the Federation. In fact, they have no representative on the finance committee of the Federation which determines how this fund shall be allocated. I assume that the ingot tonnage levy—the political levy, if we can call it that—and the ore levy are kept separately in the internal accounting of the Federation. In fact, however, there is no evidence to this effect.

The subject is one of great public interest. The "Economist," commenting on the first annual report of the Iron and Steel Corporation, said that it considered that one of the greatest-public services the Corporation could render in its last year would be to make a study of the industry fund and publish fully in its annual report what it discovered, having made that study. The "Economist" was assuming that the Corporation would render a report for the year ending 30th September, and that that would be its last public function. That is the point of view of an independent and, so far as we are concerned, a somewhat critical paper. I urge the Minister to consider the recommendations of the "Economist" on that subject.

The amount of money that is raised, not from the levy as a whole, but the 1s. an ingot ton, is such a large sum that it becomes a subject of public concern. Twenty million tons of steel a year means £1 million a year coming into the Federation. I believe that this fund was first started in 1939 to raise money for any purpose considered desirable by the industry as a whole, that is to say, by the Executive of the Federation. That is far too much money to entrust to a trade association for functions which must be much wider than the simple running of the affairs of Steel House.

I support my right hon. Friend in urging the Minister to give the Board some authority over the industry fund and to let them have their representative on the finance committee of the Federation. Perhaps the Federation would be willing to accept that while it would not be willing to accept the suggestion that a representative of the Corporation should serve on the inner and most powerful committee of the Federation which is, therefore, the guiding committee of the industry as a whole.

These large sums of money should be subject to public supervision. I urged the Minister to consider the proposals I make and, if possible today, to throw as much light on the subject as he can.

Mr. Sandys

Perhaps it would be convenient if, first, I reply to the remarks of my hon. Friend the Member for Kidderminster (Mr. Nabarro), who discussed slightly different matters than those raised by hon. and right hon. Gentlemen opposite. I assure my hon. Friend that the industry will not be asked to pay contributions to the Board to meet extraneous costs beyond those which are specified in subsection (1) of this Clause, which are those incurred: in the exercise and performance … of the functions of the Board, and: in respect of remuneration, allowances or pensions of members of the Board; or in respect of the administrative expenses of the Board. That is, in the main, administrative costs, those arising from the importation of raw materials and finished steel, and expenses in connection with the promotion of research, training and education.

My hon. Friend said that, as the Bill was drafted, many firms who are not iron and steel producers would be supervised by the Board but would not be able to be called upon to contribute to their funds. If that were so, I agree with him that it would be inconsistent; but my hon. Friend will see on page 24 the following definition of the words "iron and steel producer": a person carrying on in Great Britain a business comprising any of the activities included or deemed to be included in the Third Schedule to this Act. Therefore, the definition embraces all the activities which will be supervised by the Iron and Steel Board.

My hon. Friend also asked about the basis of the Board's scheme for raising contributions from the industry. That will have to be decided by the Board subject to approval by the Minister. Since any such schemes have to be submitted to the Minister for approval it will be open to Parliament, if it so wishes, to question him about them. It would be impossible to try, in an Act of Parliament, to define the basis of these schemes for raising contributions over a period when one cannot foresee what circumstances might exist. It should be left to the Board to decide, subject to approval by the Minister and, in the last resort, to debate in Parliament. In addition, there is the safeguard that any section of the industry which is not satisfied with the scheme can make representations to the Minister before be decides whether to approve it.

The hon. Member for Nottingham, Central (Mr. Ian Winterbottom) said that, at present, the levy arrangements were a mystery. They may be a mystery to him but I do not believe that they are to his right hon. Friend the Member for Vauxhall (Mr. G. R Strauss). The levy arrangements are, in fact, based upon an agreement concluded between the Federation and the right hon. Gentleman when he was Minister of Supply.

Mr. G. R. Strauss

That does not apply to the special levy about which my hon. Friend was speaking of 1s. a ton, raising nearly £1 million. I have not the remotest idea what happened to that money.

4.15 p.m.

Mr. Sandys

It is as well to remember in this discussion that the British Iron and Steel Federation is a voluntary trade association. Though it is important and powerful it nevertheless enjoys the same status as any other important trade association. The levies raised to cover the internal administration of the Federation are contributed voluntarily by its members. These members have joined the Federation voluntarily and they are perfectly free to resign and not pay contributions if they so wish. There is no question of public supervision of expenditure of money raised voluntarily by a trade association or of its internal arrangements.

Mr. Ian Winterbottom

Would the right hon. Gentleman agree that it would be advisable that the levy for the equalisation of the price of raw materials should be kept separate from the 1s. a ton levy on the industry as a whole which was introduced in 1939 long before by my right hon. Friend the Member for Vauxhall (Mr. G. R. Strauss)?

Mr. Sandys

I do not know exactly what the hon. Gentleman means by "kept separate." Obviously, it is accounted for separately by the Federation and it is used for entirely different purposes. I do not understand in what way the hon. Member wishes it to be separated more than it is already.

Mr. Winterbottom

So that hon. Members would be able to see public accounts made available of that section of the funds relating to raw materials and scrap.

Mr. Sandys

I have not got the facts before me now, but I do not think that there is any secret about the amount of money levied to cover the importation of raw materials or finished steel. I do not suppose that there is much difficulty in calculating the balance since the amount per ton is known and the number of tons are known. But without the precise facts, I should not like to commit myself. However, I do not think that there is any mystery about this since the right hon. Gentleman the Member for Vauxhall said that he had evidence with him to show exactly upon what this is being spent.

The main point raised by the right hon. Gentleman concerned the relationship between the Board and the Federation in regard to the industry funds.

Mr. Jack Jones (Rotherham)

We all realise how the right hon. Gentleman, in his usual courteous way, has put the case about voluntary organisations, but those of us who follow this business carefully realise the levy paid to balance the cost of importations of raw materials runs at the rate of approximately £5 12s. a ton on roughly 18 million tons a year, and amounts to £100 million annually. Would the right hon. Gentleman be good enough to tell us what is his purpose in denying us or the Board the right to have some knowledge as to what happens to the 1s. per ton levy which is raised internally by the Federation.

Mr. Sandys

I will just come to that point. We must be clear about our object. We are setting up a Board to supervise the iron and steel industry, and to exercise certain defined powers in respect of raw material supplies, development, research, training, and education. We are not setting up an organisation to run the iron and steel industry. There is a difference in their approach, but I do ask hon. Members opposite to recognise that, whether they approve of it or not, that is the purpose of this Bill. It is not to set up another Corporation under another name to own and run the industry, but to set up a single body, and to make its supervision effective. That is the idea.

Under the umbrella of the Board, there will, quite rightly, continue to exist a number of trade associations which will represent the various branches of the industry. The largest and most important will be the British Iron and Steel Federation, but there will be other bodies, such as the Joint Iron Council, the Council of Iron Foundries Associations, and other bodies representing different sections of the industry which will come under the supervision of the new Board.

It is not our intention that the Board should supersede trade associations or try to do their work. We are providing the Board with certain powers to intervene in the event of the trade associations of the industry failing to make the arrangements which the Board considers necessary and vital to the prosperity and efficiency of the industry. The notable example of this is in regard to the provision of raw materials. We maintain that the industry must continue to manage its own affairs, and so run its own industry funds.

It is not our intention that the Board should, for example, when it is appointed, set up an organisation to import raw materials, which is the largest element in the levy raised by the Federation. We expect that the Board will at once review the raw materials position and decide for itself whether the existing arrangements for importation are satisfactory, and, therefore, whether it need intervene. So long as the Board does not intervene in the importation of raw materials, it will not have to raise any levy on this account since this will continue to be done by the industry under its own arrangements. If the Board does import raw materials and sells them without loss, then no question of a levy will arise.

I leave out of account administrative expenses, which I do not expect to be large, and concerning which I am moving an Amendment later to ensure that the Board shall not be able to charge an excessive amount for its own administration. The problem is most likely to arise when the Board is importing raw materials—the industry having failed to make satisfactory arrangements itself—and is maintaining the present policy of importing high-priced foreign materials and equalising their prices with those of domestic raw materials, the loss being covered by the levy raised from the different iron and steel companies.

The right hon. Gentleman opposite asked me if there was any danger of overlapping and duplication. The Board would only intervene if it thought that the industry was either failing to make efficient arrangements for the importation of materials or not arranging to import sufficient quantities. The Board could then decide either to import everything that it thought was necessary for this industry, or, alternatively, to import additional quantities. In either event, there is no likelihood of overlapping, because the Board would import what they thought right, and would compulsorily raise from the industry the levies required. There is no likelihood of the industry itself raising a double contribution from the iron and steel companies.

We must always remember that the payments by the iron and steel companies to the Federation are voluntary. Let us suppose that the Board is importing all the raw materials which it thinks necessary for the industry. It is inconceivable that the Federation would—though perfectly entitled to do so, as the Bill stands—try to duplicate these services and import large quantities themselves since the certain result would be that the firms would refuse to pay the double levy for materials which were not needed.

The gist of what the right hon. Gentleman and the hon. Member for Nottingham, Central asked for was that the Board should have an effective say in the industry funds. I expect that the Board will normally leave the industry to plan its own importation arrangements, and to decide what should be the size of the levy to meet expenditure incurred in equalising prices, if that was the policy at the time. However, that does not mean that the Board is not going to have, not only a very effective influence upon these arrangements, but, in the last resort, the last word and the final say, and for two reasons.

The first, as I have indicated, is that the Board can itself organise the importation of raw materials. This would cause the Federation to cease importing raw materials, and, as a result, to cease raising a levy to meet the costs of importation. Secondly, and perhaps more effectively still, as well as more conveniently, by its price-fixing powers. In the last resort, the iron and steel companies and the Federation, in fixing the levy, are dependent on being able to reckon it as part of the cost of production reflected it the prices of iron and steel products which they sell.

4.30 p.m.

It will be open to the Board to decide—here we come to the 1s. a ton referred to earlier—whether the levy raised by the Federation from the various iron and steel companies is reasonable or unreasonable, whether it is fair for those companies to reckon all or part of the levy in their production costs, and whether it is right for that amount to be included in the prices to be fixed by the Board. If the Board come to the conclusion that the levy raised by the Federation is unjustifiable, they will no doubt decide not to allow it in the maximum prices which they fix for iron and steel products. If that is done, it will have an immediate effect upon the policy of the Federation and will no doubt very greatly restrict the amount of the levy which the Federation feel able to ask from the industry.

For the reasons which I have explained, I maintain that, while leaving the industry to run its own affairs, and while preserving the independent and voluntary status of the trade associations within the industry, the Board will none-the-less on the financial side, and particularly in relation to the levy for the industry's funds, have a very effective say in what happens.

Mr. George Chetwynd (Stockton-on-Tees)

The Minister's speech has confirmed our worst fears about his conception of the capacity of the Board. In his own words, he has proved our case that the Board have no real power whatsoever. We wish the Board to have some say in the industry. It must be clear that if we give it no real powers to control this finance, the Iron and Steel Federation will remain supreme in this respect.

I very much regret that when the industry was nationalised the Iron and Steel Corporation did not see fit to set up their own organisation for this purpose. Reasons such as the need to avoid duplication were given at the time, but I believe the Corporation would have been in a much stronger position if they had gone ahead with their own purchasing arrangements and their own allocation of levies instead of trying to co-operate with Steel House about it.

Anyone who reads Chapter VI of the Annual Report will see that from the beginning there was a tug-of-war between the Corporation and the Federation for control in this vital sphere. In the end the Corporation had to agree to a compromise which under no circumstances was satisfactory. I regret very much that the Corporation did not deal with the matter themselves. If they had done so, we should not be faced with the present situation.

The Minister has made it clear that, except in administration, the Board have no real powers and no activities under the Clause. He says about Clause 9 that he can hardly conceive a time when the Board will have to enter into arrangements about certain imports. His view is that the existing arrangements will prove satisfactory all the time. Thus the Board have no power to intervene in that field and, that being so, they have no power to raise a levy under Clause 11. Thus, the levy scarcely arises here, and the Minister says that we can safely leave matters where they are and that the Federation can run the business as they are doing at present. I believe that to be a fair statement of the Minister's attitude, and we dissent from it.

Mr. Sandys

If that is what the hon. Gentleman means, it is fair to say that so long as things are satisfactory there will be no need for the Board to intervene and therefore there will be no need for them to raise a levy to deal with matters which are being satisfactorily organised by the industry.

Mr. Chetwynd

My view is that we cannot leave the matter there. The Board ought to have control over the fund and run it in the national interest; it should not be left in the hands of Steel House. We must insist upon certain safeguards, the sort of safeguards upon which the Corporation had to insist in its compromise agreement of July, 1951, whereby the Federation recognised the duty of the Corporation to act as the sole shareholder, as is laid down in Chapter VI of the Report, and the Corporation had the right to appoint people to certain committees of the Federation.

It seems to me that the scheme which will be drawn up by the Board will hand everything, lock, stock and barrel, over to the Federation to run. If we are to safeguard the position of the Board as the supervisory element over the whole industry we must ensure that they can make their voice heard in the various committees of the Federation, such as the raw materials co-ordinating committee and the price policy committee.

We must, therefore, have an undertaking, similar to that referred to on page 16 of the Report, that the Federation will secure the approval of the Board before any new expenditure is authorised by their finance committee or incurred by the British Iron and Steel Corporation Ltd. The Federation must undertake to supply to the Board every six months a statement of the income and expenditure of the special fund. I take it that the special fund is the one to which reference has been made as the political fund. It seems that under the agreement the. Federation had already committed themselves to providing details of the fund to the Corporation.

We are entitled to know exactly what was forthcoming under those reports. We are also entitled to know whether such arrangements will continue in future so that the steel industry itself will not be using the £1 million to engage in activities which are outside the scope of the production of iron and steel. Unless we get a guarantee that the Board will remain supreme over Steel House, we can only regard Clause 11 as in keeping with the rest of the powers of the Board, a mere sham, and can take it that the real power still resides in Steel House.

Mr. Spencer Summers (Aylesbury)

; I should have hoped that by now hon. Gentlemen opposite, and particularly the hon. Member for Stockton-on-Tees (Mr. Chetwynd), would have realised that they cannot expect from the Bill some of the things which they would have put into it if they had been in office. The complaint to which we have just listened about the real content of Clause 11 is that it will not give the Board the selfsame powers which hon. Gentlemen opposite gave the Corporation when they were nationalising the industry.

My hon. Friends and I approach the function of the Board quite differently from the way hon. Gentlemen opposite do, and that is the cause of some of the criticisms which have been ventilated. The hon. Member for Stockton-on-Tees wants a driver for the coach, the coach being the iron and steel industry. My hon. Friends and I want a policeman to see that those who drive the coach do so in the public interest.

Mr. Jack Jones

The type of policeman hon. Gentlemen opposite want is one who will make certain that the driver goes the way they want him to go.

Mr. Summers

I said that we wanted the coach driven in a way which would satisfy the public interest. The hon. Gentleman must not deny me the end of my sentence. It is made clear in the Bill in many places that the function of the Board is to ensure that the steel industry complies with the public interest in the efficient management of its affairs.

It is quite wrong to say that in the last resort in this field of levy the Board have no power to see that sensible and satisfactory arrangements are carried out. The Minister made it quite plain that they have very effective methods available to them to ensure that satisfactory arrangements are arrived at, namely that they have the power to ignore that part of the levy made on an individual firm when they are assessing the price which they ought to be allowed to charge and thus can decide whether that element is a reasonable or unreasonable feature of the cost. To have the power to ignore certain charges is a very effective weapon.

Hon. Members opposite are very anxious to pose as champions of the public interest in this matter but, by being able to ignore certain levies, the Board have the power to safeguard the interests of the consumer which, after all, is one of the most important functions that they can fulfil. By their power over prices they are enabled to safeguard the consumer's interests. It is perfectly reasonable to assert that with that power the Board have the means to ensure that a sound, satisfactory levy system is applied within the industry.

Mr. H. A. Marquand (Middlesbrough, East)

I had hoped that the hon. Member for Aylesbury (Mr. Summers) would enlighten us and give some of the answers to the points put by my right hon. Friend the Member for Vauxhall (Mr. G. R. Strauss) about the spending of some of the money raised by the 1s. levy, because it is possible that that lies within the knowledge of the hon. Member. Unfortunately, he did not do so and I should like to reinforce the plea of my hon. Friend the Member for Stockton-on-Tees (Mr. Chetwynd) to the Minister to tell us a little more than he has yet done.

The Minister suggested that if the Board found that the amount of money raised by that levy was unjustifiable or unreasonable it would lie within the powers of the Board, using their pricefixing power, so to adjust prices as to eliminate some of that levy from the final price. That may be, but how are the Board to decide that the amount raised is unjustifiable unless they inquire into the way in which the money is spent? Does the Minister envisage the Board finding out how the money is spent?

The right hon. Gentleman says that the Federation is a private trade association, like many others in industry, which has a right to raise money like any other association and spend it as it pleases. That is a plausible argument, but it has not been unknown for trade associations in other industries to spend money on the pursuance of monopolistic tendencies. The right hon. Gentleman says that it is his desire—and, indeed, he has put it in the Bill—that in the steel industry there shall not be unfair monopolistic practices. Will he empower the Board to make sure how the money is spent, and particularly that some of it is not spent on fostering, carrying out or sustaining monopolistic practices? How will the right hon. Gentleman find whether the levy is justifiable?

Mr. Summers

Will the right hon. Gentleman make it clear to the Committee on what grounds he seeks the right to be given to the Board to investigate the spending of manufacturers' money if that spending is not to be a charge on the consumer?

Mr. Marquand

Quite simply, on the grounds that it is generally recognised that this is an industry fraught with great public interest and ought to be brought under public supervision. If the industry has nothing to be afraid of, let it shed the light of day on how the money is spent.

4.45 p.m.

Mr. Mitchison

I think that one ought to look at what the Board have to do under this Bill and consider whether the financial arrangements of this scheme are satisfactory to enable them to do it, having regard to other arrangements in the industry. As I see it, the levy will provide for administrative expenses for pensions, for repayment of advances, and so on, but substantially the main charge on it, outside those obvious and necessary things, is expenditure incurred in importing or distributing raw materials or other products when existing arrangements are unsatisfactory. That is particularly and obviously important, because the Board are expressly empowered to do that in certain circumstances at a loss.

I doubt whether there is any difference in principle between arrangements of that kind and tariff arrangements. Importations at a loss distributed over the industry have a great deal in common at any rate with tariffs; and it is curious how this industry has always been tied up with some special form of arrangement about tariffs, protection or subsidies or something of that kind as a means by which is was thought that the Govern- ment of the day might be able to exercise control over it.

But the industry has always been a very refractory subject because of its size and exceeding importance to the country. It was not only difficult to control because it was large and varied but also because any step taken in the matter of control had to be watched particularly carefully owing to the social and economic repercussions which it was bound to have. If we examine the last Report of the Corporation to discover what the history of this "voluntary trade association"—I quote the right hon. Gentleman's words—has been, we find that it says: Many factors contributed to the building up of the position and influence of the Federation in the industry. In the pre-war years it had a special relationship with the Import Duties Advisory Committee. Perhaps that is a euphemism for bureaucratic marriage, or at any rate for a connubial relationship, because they were so close at times that it became difficult to distinguish between them. The Report goes on: Later …the Federation was largely instrumental in setting up and staffing the Iron and Steel Control. I am not an expert on this industry. My idea was that the Federation had called itself by another name for war purposes, but perhaps that is a rather exaggerated view. At any rate, here again, when it came to controlling the steel industry, it was quite remarkable how useful and all-powerful Steel House became for the purpose. And it is not altogether surprising in these circumstances, when we are setting up a Board which is supposed to review this industry and which, under Clause 4, has the general duty to consult. …with a view to securing the provision and use by iron and steel producers … of what I may shortly call proper production facilities in the country—a Board with such wide duties—that this little toothless instrument which we are creating should be the object of our most tender solicitude when it obviously has to deal with such a giant having such a formidable record.

Not only has the giant during two wars been the apparent chosen instrument of the Government of the day for dealing with the industry in which the giant is a voluntary trade association but, in addition, when the industry was nationalised this was the only case in which a voluntary trade association succeeded in defying the Government of the day for a sufficient number of General Elections to let the opposite party into power and, in the long run, prevail successfully over the spirit and intention of a Parliamentary democracy. That is a considerable achievement. This Federation is no small matter. As my hon. Friend has already pointed out, the last stage is that after negotiations, in which, in my view, the Federation as usual did pretty well, the Federation was at long last going to say every six months what it did with the special levy and was going to give some account of the expenditure out of the industry's fund.

What I should like to know is this. I have to accept reluctantly and against all my own convictions the workings of the Conservative mind in the form of this Bill and in the result that the industry has, as the Minister put it, to manage its own affairs. But that is not the end of the story. Its affairs impinge so extensively and to such an important degree on the whole welfare of the community that the matter cannot be dismissed like that.

These two levies constitute one point at which contact between the industry and the community becomes exceedingly important. I should like to know what is to happen to this information. To whom is it to be given? Is it to be given to the Minister, to the Board or to Parliament, or is it to be published; or is the special levy, which somebody had pulled a quarter of the way out of the hole which it has occupied for so long, to shake away this inquiring hand and return at once to the hole down which it habitually lives? That is the question which we should like to have answered.

The point about the political use of this money is not to be dismissed by the silence with which I noticed the Minister thought it better to treat it; nor is it to be regarded purely as a party matter. There is a public aspect of this. We are told that the Tory Party are certainly not prepared to protest, even in the case of such an industry as this, against the use by a voluntary trade association of a levy raised on the whole industry for party political purposes. Nobody has challenged that; nobody has protested against it. We are told, "That is all right. The money will be spent in this way for all we care, and when it has been spent it will all be put right because the industry will not be allowed to charge a price which includes that levy."

Then we had a most remarkable phrase from the hon. Member for Aylesbury, if he will forgive me, to the effect that it was not going to come out of the consumer in any way but that it was to be the manufacturers' money. The manufacturers' money, in a case like this, is obtained by selling iron and steel, and I cannot see a distinction in the receipts from iron and steel as between the manufacturers' money on the one hand and what the consumer is charged on the other hand. Directly or indirectly, it stands to ordinary common sense that the consumers, the country—that is us and the people whom we represent—are to pay in order to enable the iron and steel industry to use its funds for political purposes.

It is absolutely scandalous in an industry of this character. My opinion is that it is scandalous that it should be done at all by public companies. I have been a director of public companies for a great many years now, and I would never sanction any expenditure, for any political purpose of my own party or the party opposite, of money which was intended specifically for business use. I know from the recent decision in the Tate and Lyle case that it can be done, and that nothing can be done about it under the law as it stands. But, in my opinion, the law ought to be altered.

Can there be a clearer case in which the whole country—for we all are consumers of iron and steel—is really paying for this misuse of the industry's funds? That is one case that we know about. This levy is down its hole. We happen to know about this one, but what about the rest of them? What about the expenditure generally? It touches so closely on what the Board has to do and the way in which the Board itself is to levy money that I suggest to the right hon. Gentleman that it is quite impossible to leave this question in the confused and uncertain state in which it is at the moment.

For these purposes I have accepted the new Tory view of independence in industry. I am doing my best to adapt myself. But I am not arguing the main point. I am simply saying that if the Board are to do their job properly, to supervise this industry and take action in certain cases which are contemplated in this Bill, and if it is to have money raised for that purpose under this scheme, it is quite impossible to leave out of consideration the similar levies made by the Federation and their use. We ought to have, in the form of a Ministerial statement if we cannot have it in the Bill, a clear definition recognising the peculiar position of this industry and the extreme importance of the activities of the Federation in connection with the industry and, therefore, with the country as a whole.

Mr. Summers

The hon. and learned Gentleman has been giving us the benefit of his views on what it is proper or improper for a trader to do with the resources at his disposal. He regards the expenditure of any money on a political object to be improper. He told us that if he had influence he would prevent it in any company with which he is associated. Does he carry his censure of such practices to the Co-operative societies, who, without question, use some of their resources for that purpose?

Mr. Mitchison

I quite agree that I was a little illogical. I went rather far—

The Chairman

If the hon. and learned Gentleman went any further he would be out of order.

Mr. Mitchison

I do not know whether I can satisfy the hon. Member and, at the same time, be in order. I doubt whether I can, but I suggest that he knows quite well that there is a considerable difference between the Co-operatives and the iron and steel industry.

5.0 p.m.

Mr. Robson Brown (Esher)

I have listened with close attention to the hon. and learned Member for Kettering (Mr. Mitchison), and in many of our discussions on this Bill he has made some useful contributions. But this afternoon he stopped short of justice and fairness. There is one point in particular on which I must take issue with him. He said that the British Iron and Steel Federation, the personnel at Steel House and the leading members of the industry, formed the iron and steel control during the war. I believe that that redounds to their credit. They rallied to the cause in the interest of their country and concentrated everything they had upon the pursuance of the war and its successful conclusion.

Mr. Austen Albu (Edmonton)

Why not?

Mr. Robson Brown

Why not? Of course; but why indict them for it? This is something outside the general aspect of the debate we have had—

The Chairman

It is also outside Clause 11.

Mr. Mitchison

The hon. Member is quite mistaken if he supposes that I was blaming the individuals for doing what they did. On the contrary, I am considering the position of the Federation.

Mr. Robson Brown

It did not sound like that to hon. Members on this side of the Committee.

Mr. Nabarro

It was a wicked imputation.

Mr. Robson Brown

It linked up with many things which have been said by hon. Members opposite in connection with this fund. The whole emphasis underlying the criticisms of this particular levy has been upon the application of moneys to political ends. I assert that the iron and steel industry has an excellent record in the way in which, by and large, it has kept itself outside the political arena. Whatever moneys have been spent have been infinitesimal in comparison with the sums of money we have been talking of this afternoon.

There is not the slightest reason why any voluntary organisation or company should not embark on any activity—political, public or otherwise—which they consider to be in the interests of their shareholders and of the country. I go one stage further than that. No man should be indicted or pilloried because he takes an attitude one way or the other on political issues. Hon. Members opposite consider nationalisation to be a desirable thing; but more than half the country do not—or we should not be here today.

It is entirely unfair that in a debate of this kind all this matter and material should be dragged in. The fundamental fact is that any voluntary organisation, association, trade union or body of people has to raise levies. I concede that what we have to be satisfied about is that those levies are not excessive and that the use of the money is a reasonable and proper one for the proper conduct of the association or federation. If a levy were imposed that were excessive it would unquestionably be a charge, directly or indirectly, upon the production of steel or any other product.

But one has to take a reasonable measurement of this question. I am quite satisfied that the Board themselves, in considering all the factors that make up the price structure of the industry and any representations made to them, will challenge anything that is unreasonable. These factors and representations are all familiar. The right hon. Member for Vauxhall (Mr. G. R. Strauss) always took them into account and if he or his advisers had thought that any particular action was unreasonable he would have challenged it, and he would have been perfectly right to do so. We think the Board should be in precisely the same position.

The money has to be raised. Hon. Members have talked about 1s. a ton, but when one considers the wide range of expenditure necessary to be covered by this amount the situation is seen in its proper proportion and perspective. We are dealing with an enormous industry and the moneys raised are raised only for the proper running of that industry—its central organisation, its general efficiency. Whatever measurements are taken—and hon. Members have cited education, training, research, pension schemes and all the other elements that go into the proper and intricate working of a great federation of industry, this expenditure is necessary.

I cannot think that what some hon. Members opposite have said has been anything other than a letting off of air and a little parading of the past. In that matter, again, a great deal of injustice has been done. If we go back to 1932—I want to refresh the memory of the hon. and learned Member for Kettering (Mr. Mitchison)—we find that the industry enjoyed no protection of any kind. It was open to competition from all over the world. Protection was sought and the Trade Imports Advisory Committee was set up. It was the first step by an enlightened Government to see that industry and Government moved together—to see that unreasonable or unfair protection was not given and that the protection which was given was not used unreasonably or unfairly.

The Chairman

This is quite beyond the subject of Clause 11.

Mr. Robson Brown

I am sorry. These matters have been raised by hon. Members opposite and I think they must be answered.

The Chairman

I tried to stop them being raised.

Mr. Robson Brown

I am sorry.

Mr. G. R. Strauss

I want to deal strictly with one or two points which have been raised and which I am sure come within the scope of Clause 11. The first is the question to what extent the Board's power to raise money—to levy the industry—should be extended. We have had two answers to the case which I put up. Neither was satisfactory. I think hon. Gentlemen opposite will appreciate that neither the answer of the Minister nor the speeches of his supporters have satisfied us in the least.

We are discussing two levies here. One is the industry fund, and the hon. Member for Aylesbury (Mr. Summers) and the Minister have put up the argument that the Board will be able to control that fund by their control over prices, because there cannot be any change in the balance of the industry fund without there being some effect on prices. That is an answer; but it is not a complete one. There might well be some significant changes in the balance of the industry fund without prices being affected. But that is a matter which I should like to consider with my colleagues between now and the Report stage, before deciding whether it is necessary to put down any further Amendments on it.

The other question which has arisen is that of the special fund, and whether the Board should have control of that. Here we disagree entirely with the attitude of the party opposite. If they do not see our case, the public—if they understood what is at issue here—would do so. We are told by the Minister and other people that the Steel Federation is an ordinary trade association; that it should be allowed to mind its own business and that on domestic matters this supervisory board should not intervene.

We disagree completely with that argument. We do not believe it is possible for the Iron and Steel Federation, with the important status which it has in the British economy to be looked upon as an ordinary private trade association whose affairs are unimportant to the public. Secondly, we say that in view of the attitude and the record of that so-called ordinary trade association, it is most desirable that when a public supervisory board is set up to look after the industry and protect the public interest that board should have some authority at least to find out how the money which is raised by the Federation is spent, and its findings published to Parliament and the country.

If it is then found that the money is used for ordinary staff purposes—for keeping its organisation alive, paying its rent and so on—everyone will be satisfied. But we do not know that that is so. We have a strong reason for believing that it is not so and we want to find out. We are entitled—not only the Labour Party but the public as a whole—to know how much this industry is an instrument of political propaganda and anti-Labour propaganda. If, by some freak of chance, those in control at Steel House were Socialists and were using the money raised by the industry for Labour propaganda, hon. Gentlemen opposite would be the first to complain. They would say, "This is outrageous; this is a scandal; we want to see the figures; we want to find out to what extent this is true."

Mr. William Shepherd (Cheadle:)

Is the right hon. Gentleman now telling the Committee that an industry—and I am speaking generally not specifically—has no right as an industry to use any of the resources which may come from its members in order to meet any attack, if it is attacked or told that it will be attacked and nationalised?

Mr. Strauss

That is a trite question. I may not be in order in answering it, but I can answer it in a sentence. It is my view that no industry should use its money for any political purposes, because the money is derived from the profits of the shareholders and the industry of the workers in it. No board has any idea what political views are held by either individual shareholders or the workers.

Mr. Robson Brown

Does that mean that they should not be allowed to make representations about the Budget and about taxation on industry?

Mr. Strauss

That is an entirely different matter. I think the board of a company are perfectly entitled to inform the Chancellor of the Exchequer of their views on the Budget or to write a letter to the Press expressing a certain point of view on the Budget, but if it comes to spending may be, as far as we know, hundreds of thousands of pounds—we do not know and we want to know—on political propaganda, we say that that is entirely wrong. We say that those facts should be published and that somebody, in this case the Board, should know about them and should inform Parliament.

In particular, it is wrong in this instance because of the past behaviour of the Iron and Steel Federation in this matter. Not only did they carry out a very extensive political propaganda throughout the country before we nationalised the industry, inducing the public to believe that the industry should not be nationalised—and it was a well carried out and most competent campaign—but also, after the industry had been nationalised, they used the money of the nationalised industry in propaganda demanding de-nationalisation.

Mr. Peter Roberts (Sheffield, Heeley)

On a point of order, Sir Charles. Can you enlighten me how this argument is in order on this Clause?

The Chairman

I think a good deal of the debate has been too wide. I have been trying to keep it within bounds, for I think it has gone a little wide.

Mr. Strauss

I submit that I am in order, Sir Charles. My argument is that the Board are given power to levy money on the industry and that that power to levy should be extended very substantially so that all the industrial levies and not just a small section should come under the Board. I am submitting reasons why the powers of the Board in this matter should be substantially extended.

The answer given that the amount of money involved is not very large and does not greatly affect the price to the consumer, because it is only 1s. a ton, is true; but this is a big industry, and the total amount comes to about £1 million a year, derived from the iron and steel industry. We say that the Board, who are given powers to levy under Clause 11, should have powers to investigate how that money is spent.

It is significant that the Iron and Steel Federation would not allow any member of the Corporation to sit on their finance committee. They wanted to keep secrets from the Corporation, which owned three-quarters of the companies—judged on a financial basis—which made up the Steel Federation. They would not allow the Corporation representative to sit on the Finance Committee. In view of the challenge I issued today, that the iron and steel industry have produced this pamphlet and possibly others and have entered the fray of the nationalisation or denationalisation debate, it is also significant that no hon. Member opposite has risen to defend that action. Even though the hon. Member for Hall Green (Mr. Aubrey Jones) is closely associated with the Iron and Steel Federation and has made a number of most valuable and interesting contributions to our debates, he has not risen to speak on the subject and certainly has not denied that action or defended it.

I suggest to the Committee that the Federation's action is contrary to the accepted ethics of public behaviour. It is because the Federation have in the past acted in that way that we feel we are entitled to ask, on behalf of a party which represents half the electorate, that we should be told whether the industry will continue to act as a political propagandist for one party. We ought at least to know the facts. We say that the Board should have some authority and some control here and should at least be able to investigate the matter.

We believe that the action of the Federation in this matter in the past has been scandalous, but we accept that we do not know the facts. As my hon. and learned Friend the Member for Kettering (Mr. Mitchison) pointed out, the facts have been kept secret. Publish them; let us know. It may be that we are wrong. We think we are right, but if we are wrong we shall be the first to apologise for any imputation we may have made. But, for heaven's sake, let us know about it.

As the hon. Member for Aylesbury said, the Board should act as a policeman in this connection—a policeman for the industry on behalf of the public. Let the Board, acting as policeman, see that the £1 million which the Federation get every year from the special levy from the industry is not used for an improper purpose.

5.15 p.m.

Mr. Sandys

I should like to say a few words in reply to some of the later speeches. It is perhaps an indication of how peaceful our debates on the Bill have been that this little, almost agreeable, banter which has been taking place in the last half-hour or so is about the most turbulent passage we have had on the Bill. This shows the extent to which the Committee have concentrated upon improving, from a technical standpoint, the efficiency of the organisation which is being set up under the Bill. I pay my tribute to hon. Members opposite, who I know are not happy about the general setup proposed in the Bill, for the way in which they have applied themselves to trying to improve the various Clauses.

We are concerned here with two levies, as the right hon. Member for Vauxhall (Mr. G. R. Strauss) pointed out. One is the industry fund and the other is the special fund. The right hon. Gentleman said there might be a change in the balance of the industry fund which would not affect prices and therefore would not come under the influence of the Board through their price control powers. He said he wanted to consider that matter further.

I submit that if there is a change in the balance of the industry fund—and I am not quite sure what the right hon. Gentleman means by that phrase—which does not affect prices, then, by and large, it is not a matter of very great concern. The important things from the general standpoint of the industry fund are these. First, it should be applied to a useful purpose and should secure the results required—that is, in the main, the importation of raw materials and finished steel. Second, it is for the Board to judge whether it is conducted economically and administered in such a way as not unduly to increase prices. Are prices unaffected and importation arrangements efficient? I think those are the two main considerations which should be in the minds of the Board. The right hon. Gentleman may, of course, have some other point in mind, and we shall await his Amendment, if he puts one down, on Report stage.

I come to the special fund, which is the 1s. a ton levy which has excited a certain amount of attention this afternoon. The right hon. Gentleman said he does not accept that the Federation is an ordinary trade association. I think we all agree that it is not an ordinary trade association; it is a very important and unusually large and influential one. Nevertheless it still remains a trade association, composed of the firms who make up the industry and supported by voluntary contributions from them.

The right hon. Gentleman said that the Board should have authority to find out how the money in the special fund is spent by the Federation. I would question that. I really do not see why either the Board or Parliament should require to know how money raised by a trade association is spent. I would submit to the Committee that the Board have two interests in this matter. One is to ensure efficient production, and the other is to ensure a fair price to the consumer. It is only in respect of those two considerations that the Board would have a right to ask for information about how this fund was being used. Except for those two considerations, I do not consider it is the business of the Board to inquire how this money is spent.

The right hon. Gentleman, and other right hon. and hon. Gentlemen opposite, said no industry should use its funds for political purposes. It is a question that I do not propose to go into today, for I think you have indicated, Sir Charles, that it is hardly in order on this Clause. The question is whether companies whose independent existence is threatened have the right to spend their shareholders' money to try to protect their shareholders' property. That is the issue. I just pose it. I do not think that we could arrive at any conclusion without pro- longed debate, and I have no doubt that we should still be divided at the end of it. However, that is not the point on this Clause.

Mr. Jack Jones

On this question of efficiency, which we are all for, and on which the Committee is united, would the right hon. Gentleman explain to me how he can expect workers in the industry to be efficient, satisfied, and happy about their job, if one of the first things they have to earn is money which is to be used against their political interests.

Mr. Robson Brown

That has not been proved. That is the point.

Mr. Sandys

I do not want to exacerbate the hon. Gentleman on this point.

Mr. Jack Jones

It is efficiency that is important.

Mr. Sandys

Yes, but any such money would, at the end, come out of the profits that are distributable to the shareholders. If the shareholders prefer to have some of their money spent on preserving their existence, rather than have increased dividends, I do not think that is a matter of great public interest.

Mr. John Freeman (Watford)

Would it not be fairer if the Minister were to put it in this way—that once this industry had come into public ownership the Federation or company were using their shareholders' money in order to remove shareholders' rights from the shareholders—and not the other way round?

Mr. Sandys

Who were the shareholders? The public were the shareholders—through the Corporation—and were still in a position to object if they wished to do so. Of course they were.

Mr. Freeman

I am not sure that the Minister has got the point. The point he was making a moment ago was that it is perfectly reasonable for a trade association to use shareholders' money in order to prevent those same shareholders' property being filched from them. That is a point of view. What he omitted to tell us was that once nationalisation had taken place—and what we are charging is—the Federation deliberately and secretly used this fund, the shareholders' money, against the interests of those shareholders.

Mr. Sandys

I do not think we ought to get involved in this. In the first place, the shareholders could object if they wished to. In the second place, so far as I am aware I have seen none of this political propaganda to which the right hon. Gentleman was referring. If he is referring to the pre-nationalisation period, then it is a question of the industry defending itself against the threat of nationalisation. There have been strong and continuous attacks made upon this trade association, the Iron and Steel Federation. I do not think it surprising if from time to time they state the other side of the case. I do not think that they have done any more than that. However, that is not the point I am trying to make today.

Leaving aside the question of whether it is right or wrong for a trade association to spend money for political purposes—it is an issue upon which there is no agreement in the Committee—I recognise that political expenses, or, for that matter, any extraneous expenses, which are not concerned with production of iron and steel and the efficiency of the industry, are expenses which it would be quite proper for the Board to exclude in assessing the production costs of the industry for the purpose of fixing prices; I am not questioning that for one moment. If the industry spends money on things which do not, in the opinion of the Board, relate directly to efficient production, then the Board, in my opinion, is perfectly entitled not to take such costs into account in fixing prices.

On the question of the industry's special fund, this 1s. a ton which has been spoken about so much, I would draw the attention of hon. Members to the fact that the speeches have been as though this were entirely a political fund concerned with nothing but making political, anti-Socialist propaganda. In point of fact, apart from anything to which they can object, this 1s. a ton is used for administrative expenses of the Federation, for training schemes, for the scrap drive publicity, and for that very large statistical organisation from which hon. Members receive information.

Mr. Marquand

What we want to know from the right hon. Gentleman is whether the whole of the 1s. a ton goes on these things or whether some of it goes to something else.

Mr. Sandys

I am not a member of the Federation. I am merely saying that this special fund is to cover all these things, in addition, no doubt, to a number of other things that I have not mentioned, and that there is no question of its being a political fund of 1s. a ton. But at the end—let me say what I have said before—the important thing is to ensure efficient production, and to protect the consumer from excessive prices.

The Board will be able to ask the Federation for any information it wishes about what money the Federation raise and what money they spend, and how they spend it. It will be for the Federation to decide, in regard to these internal matters, what information they will give to the Board. [HON. MEMBERS: "Ah."] I should like hon. Members to listen. At the end, the Board will have the last word, because they will say to the Federation, "Will you tell us how you spent"—I hope I may have the right hon. Gentleman's attention, because I am trying to answer his point. The Board will say to the Federation, "We understand you raised a levy of 1s. a ton on iron and steel companies. Will you, if you wish that to be taken into account in the fixing of prices, satisfy us that the whole of it is being used for the promotion of efficient iron and steel production?" To the extent that the Federation can satisfy the Board that that money, all or part of it, is being used to promote efficient iron and steel production—to that extent—the Board will, I have no doubt, reckon it in the prices they fix. To the extent that the Federation either fail to satisfy the Board or, alternatively, refuse to inform the Board, that element will, I am sure, by any sensible Board, be left out of their calculations of maximum prices.

Mr. G. R. Strauss

Not because we disagree with the purpose of the Clause, but in view of the most unsatisfactory answers we have received to the questions we have put to the Government, we propose to divide the Committee.

Question put.

The Committee divided: Ayes, 269; Noes, 236.

Division No. 97.] AYES [5.30 p.m.
Aitken, W. T. Fyfe, Rt. Hon. Sir David Maxwell Maitland, Patrick (Lanark)
Allan, R. A. (Paddington, S.) Galbraith, Rt. Hon. T. D. (Pollok) Manningham-Buller, Sir R. E.
Alport, C. J. M. Galbraith, T. G. D. (Hillhead) Markham, Major S F.
Amery, Julian (Preston, N.) Gammans, L. D. Marples, A. E.
Anstruther-Gray, Major W. J. Garner-Evans, E. H. Maude, Angus
Arbuthnot, John George, Rt. Hon. Maj. G. Lloyd Maudling, R.
Ashton, H. (Chelmsford) Glyn, Sir Ralph Maydon, Lt.-Comdr. S. L. C
Assheton, Rt. Hon. F. (Blackburn, W.) Godber, J. B. Medlicott, Brig. F.
Astor, Hon. J. J. (Plymouth, Sutton) Gomme-Duncan, Col. A Mellor, Sir John
Baldock, Lt.-Cmdr. J. M. Gough, C. F. H. Moore, Lt.-Col. Sir Thomas
Baldwin, A. E. Gower, H. R. Morrison, John (Salisbury)
Banks, Col. C. Graham, Sir Fergus Mott-Radclyffe, C. E.
Barber, Anthony Gridley, Sir Arnold Nabarro, G. D. N.
Beach, Maj. Hicks Grimond, J. Nicholls, Harmar
Bell, Philip (Bolton, E.) Grimston, Hon. John (St. Albans) Nicholson, Godfrey (Farnham)
Bell, Ronald (Bucks, S.) Grimslon, Sir Robert (Westbury) Nicolson, Nigel (Bournemouth, E.)
Bennett, F. M. (Reading, N.) Hall, John (Wycombe) Nield, Basil (Chester)
Bennett, Sir Peter (Edgbaston) Harden, J. R. E. Noble, Cmdr. A. H. P.
Bennett, Dr. Reginald (Gosport) Harris, Frederic (Croydon, N.) Nugent, G. R. H.
Bevins, J. R. (Toxteth) Harris, Reader (Heston) Nutting, Anthony
Birch, Nigel Harrison, Col, J. H. (Eye) Odey, G. W.
Bishop, F. P. Harvey, Air Cdre. A. V. (Macclesfield) O'Neill, Phelim (Co. Antrim, N.)
Boothby, R. J. G Harvey, lan (Harrow, E.) Ormsby-Gore, Hon. W. D.
Bossom, A. C. Harvie-Watt, Sir George Orr, Capt. L. P. S.
Bowen, E. R. Hay, John Orr-Ewing, Charles lan (Hendon, N.)
Boyd-Carpenter, J. A. Head, Rt. Hon. A. H. Orr-Ewing, Sir Ian (Weston-super-Mare)
Boyle, Sir Edward Heald, Sir Lionel Perkins, W. R. D.
Braine, B. R. Heath, Edward Peto, Brig. C. H. M
Braithwaite, Sir Albert (Harrow, W.) Higgs, J. M. C. Peyton, J. W. W.
Bromley-Davenport, Lt.-Col. W. H. Hill, Dr. Charles (Luton) Pitman, I. J.
Brooke, Henry (Hampstead) Hill, Mrs. E. (Wythenshawe) Powell, J. Enoch
Brooman-White, R. C. Hinchingbrooke, Viscount Price, Henry (Lewisham, W.)
Browne, Jack (Govan) Hirst, Geoffrey Prior-Palmer, Brig. O. L.
Buchan-Hepburn, Rt. Hon. P. G. T. Holland-Martin, C. J Profumo, J. D.
Bullard, D. G. Hollis, M. C. Raikes, Sir Victor
Bullock, Capt. M. Hope, Lord John Rayner, Brig. R.
Bullus, Wing Commander E. E. Hopkinson, Rt. Hon. Henry Redmayne, M.
Burden, F. F. A. Horobin, I. M. Remnant, Hon. P.
Butcher, Sir Herbert Horsbrugh, Rt. Hon. Florence Renton, D. L. M.
Butler, Rt. Hon. R. A. (Saffron Walden) Hudson, Sir Austin (Lewisham, N.) Roberts, Peter (Heeley)
Campbell, Sir David Hudson, W. R. A. (Hull, N.) Robertson, Sir David
Carr, Robert (Mitcham) Hurd, A. R. Robinson, Roland (Blackpool, S.)
Cary, Sir Robert Hutchison, Lt.-Com. Clark (E'b'rgh W.) Robson Brown, W.
Channon, H. Hutchison, James (Scotstoun) Rodgers, John (Sevenoaks)
Clarke, Col. Ralph (East Grinstead) Hyde, Lt.-Col. H. M. Roper, Sir Harold
Clarke, Brig. Terence (Portsmouth, W.) Jennings, R. Ropner, Col. Sir Leonard
Clyde, Rt. Hon. J. L. Johnson, Eric (Blackley) Russell, R. S.
Colegate, W. A. Jones, A. (Hall Green) Ryder, Capt. R. E. D.
Conant, Maj. R. J. E. Joynson-Hicks, Hon. L. W. Salier, Rt. Hon. Sir Arthur
Cooper, Sqn. Ldr, Albert Kaberry, D. Sandys, Rt. Hon. D.
Craddock, Beresford (Spelthorne) Keeling, Sir Edward Savory, Prof. Sir Douglas
Cranborne, Viscount Kerr, H. W. (Cambridge) Schofield, Lt.-Col. W. (Rochdale)
Crookshank, Capt. Rt. Hon. H. F. C Lambton, Viscount Scott, R. Donald
Crosthwaite-Eyre, Col. O. E. Lancaster, Col. C. G. Scott-Milier, Cmdr. R.
Crouch, R. F. Langford-Holt, J. A. Shepherd, William
Crowder, Sir John (Finchley) Law, Rt. Hon. R. K. Simon J. E. S. (Middlesbrough, W.)
Crowder, Petre (Ruislip—Northwood) Leather, E. H. C. Smithers, Peter (Winchester)
Cuthbert, W. N. Legge-Bourke, Maj. E. A. H. Smithers, Sir Waldron (Orpington)
Davidson, Viscountess Legh, Hon. Peter (Petersfield) Smyth, Brig. J. G. (Norwood)
Davies, Rt. Hn. Clement (Montgomery) Linstead, H. N. Snadden, W. McN.
Deedes, W. F. Llewellyn, D. T. Soames, Capt. C.
Digby, S. Wingfield Lloyd, Rt. Hon. G. (King's Norton) Spearman, A. C. M
Dodds-Parker, A. D. Lloyd, Rt. Hon. Selwyn (Wirral) Speir, R. M.
Donaldson, Cmdr. C. E. McA. Lockwood, Lt.-Col. J. C. Spens, Sir Patrick (Kensington, S.)
Donner, P. W. Longden, Gilbert Stanley, Capt. Hon. Richard
Doughty, C. J. A. Low, A. R. W. Stevens, G. P.
Douglas-Hamilton, Lord Malcolm Lucas, Sir Jocelyn (Portsmouth, S.) Stoddart-Scott, Col. M.
Drayson, G. B. Lucas, P. B. (Brentford) Storey, S.
Drewe, C Lucas-Tooth, Sir Hugh Strauss, Henry (Norwich, S.)
Duncan, Capt. J. A. L. Lyttelton, Rt. Hon. O Stuart, Rt. Hon. James (Moray)
Duthie, W. S. McAdden, S. J. Studholme, H. G.
Eccles, Rt. Hon. D. M. McCorquodale, Rt. Hon. M. S. Summers, G. S.
Eden, Rt. Hon. A. Macdonald, Sir Peter (I. of Wight) Sutcliffe, Sir Harold
Elliot, Rt. Hon. W. E Mackeson, Brig. H. R. Taylor, William (Bradford, N.)
Erroll, F. J. McKibbin, A. J. Teeling, W.
Fell, A. McKie, J. H. (Galloway) Thomas, Rt. Hon. J. P. L. (Hereford)
Finlay, Graeme Maclay, Rt. Hon. John Thomas, Leslie (Canterbury)
Fisher, Nigel Maclean, Fitzroy Thompson, Kenneth (Walton)
Fletcher-Cooke, C. Macleod, Rt. Hon. lain (Enfield, W.) Thornton-Kemsley, Col. C. N
Fort, R. MacLeod, John (Ross and Cromarty) Tilney, John
Foster John Macmillan, Rt. Hon. Harold (Bromley) Touche, Sir Gordon
Fraser, Hon. Hugh (Stone) Macpherson, Niall (Dumfries) Turner, H. F. L.
Fraser, Sir Ian (Morecambe & Lonsdale) Maitland, Comdr. J. F. W. (Horncastle) Turlon, R. H
Tweedsmuir, Lady Waterhouse, Capt. Rt. Hon. C. Wills, G.
Vane, W. M. F. Watkinson, H. A. Wilson, Geoffrey (Truro)
Vosper, D. F. Webbe, Sir H. (London & Westminster) Wood, Hon. R.
Wade, D. W. Wellwood, W. York, C.
Wakefield, Edward (Derbyshire, W. Williams, Rt. Hon. Charles (Torquay) TELLERS FOR THE AYES:
Walker-Smith, D. C. Williams, Gerald (Tonbridge) Mr. Oakshott and
Ward, Hon. George (Worcester) Williams, Sir Herbert (Croydon, E.) Mr. Richard Thompson.
Ward, Miss I. (Tynemouth) Williams, R. Dudley (Exeter)
Acland, Sir Richard Greenwood, Anthony (Rossendale) Orbach, M.
Albu, A. H. Greenwood, Rt. Hn. Arthur (Wakefield) Oswald, T.
Allen, Arthur (Bosworth) Grenfell, Rt. Hon. D. R. Padley, W. E.
Allen, Scholefield (Crewe) Griffiths, Rt. Hon. James (Llanelly) Paling, Rt. Hon. W. (Dearne Valley)
Anderson, Alexander (Motherwell) Hale, Leslie (Oldham, W.) Paling, Will T. (Dewsbury)
Anderson, Frank (Whitehaven) Hall, Rt. Hon. Glenvil (Colne Valley) Pannell, Charles
Attlee, Rt. Hon. C. R. Hall, John T. (Gateshead, W.) Pargiter, G. A.
Awbery, S. S. Hamilton, W. W Paton, J.
Bacon, Miss Alice Hardy, E. A. Peart, T. F.
Balfour, A. Hargreaves, A. Plummer, Sir Leslie
Bartley, P. Harrison, J. (Nottingham, E.) Popplewell, E.
Bellenger, Rt. Hon. F. J. Hastings, S. Porter, G.
Bence, C. R. Hayman, F. H. Price, Joseph T. (Westhoughton)
Been, Hon. Wedgwood Healey, Denis (Leeds, S.E.) Price, Philips (Gloucestershire, W.)
Benson, G. Holman, P. Proctor, W. T.
Beswick, F. Holmes, Horace (Hemsworth) Pryde, D. J.
Blackburn, F. Houghton, Douglas Pursey, Cmdr, H.
Blenkinsop, A. Hudson, James (Ealing, N.) Rankin, John
Blyton, W. R. Hughes, Cledwyn (Anglesey) Reeves, J.
Boardman, H. Hughes, Emrys (S. Ayrshire) Reid, Thomas (Swindon)
Bottomley, Rt. Hon. A. G. Hughes, Hector (Aberdeen, N.) Reid, William (Camlachie)
Bowden, H. W. Hynd, H. (Accrington) Richards, R.
Braddock, Mrs. Elizabeth Hynd, J. B. (Attercliffe) Robens, Rt. Hon. A.
Brockway, A. F. Irvine, A. J. (Edge Hill) Roberts, Albert (Normanton)
Brook, Dryden (Halifax) Irving, W. J. (Wood Green) Roberts, Goronwy (Caernarvonshire)
Broughton, Dr. A. D. D. Janner, B. Robinson, Kenneth (St. Pancras, N.)
Brown, Rt. Hon. George (Belper) Jay, Rt. Hon. D. P. T. Rogers, George (Kensington, N.)
Brown, Thomas (Ince) Jeger, George (Goole) Ross, William
Burton, Miss F. E. Jenkins, R. H. (Stechford) Shackleton, E. A. A.
Butler, Herbert (Hackney, S.) Johnson, James (Rugby) Shinwell, Rt. Hon. E.
Callaghan, L. J. Jones, David (Hartlepool) Short, E. W.
Carmichael, J. Jones, Jack (Rotherham) Silverman, Julius (Erdington)
Castle, Mrs. B. A Jones, T. W. (Merioneth) Silverman, Sydney (Nelson)
Champion, A. J. Keenan, W. Simmons, C. J. (Brierley Hill)
Chapman, W. D. Key, Rt. Hon. C. W. Slater, J.
Chetwynd, G. R King, Dr. H. M. Smith, Ellis (Stoke, S.)
Coldrick, W. Kinley, J. Smith, Norman (Nottingham, S.)
Collick, P. H. Lee, Frederick (Newton) Snow, J. W.
Corbel, Mrs. Freda Lee, Miss Jennie (Cannock) Sorensen, R. W.
Cove, W. G. Lever, Leslie (Ardwick) Soskice, Rt. Hon Sir Frank
Craddock, George (Bradford, S.) Lewis, Arthur Sparks, J. A.
Crossman, R. H. S. Lindgren, G. S. Steele, T.
Cullen, Mrs. A. Lipton, Lt.-Col. M Stewart, Michael (Fulham, E.)
Daines, P. MacColl, J. E. Strachey, Rt. Hon. J.
Dalton, Rt, Hon. H. McGhee, H. G. Strauss, Rt. Hon. George (Vauxhall)
Darling, George (Hillsborough) McGovern, J Summerskill, Rt. Hon. E.
Davies, Ernest (Enfield, E.) McInnes, J. Swingler, S. T.
Davies, Stephen (Merthyr) McLeavy, F. Sylvester, G. O.
Delargy, H. J. McNeil, Rt. Hon. H. Taylor, Bernard (Mansfield)
Dodds, N. N. Mainwaring, W. H. Taylor, John (West Lothian)
Donnelly, D. L. Mallalieu, E. L, (Brigg) Taylor, Rt. Hon. Robert (Morpeth)
Driberg, T. E. N. Mallalieu, J. P. W. (Huddersfield, E.) Thomas, George (Cardiff)
Dugdale, Rt. Hon. John (W. Bromwich) Mann, Mrs. Jean Thomas, lorwerth (Rhondda, W.)
Ede, Rt. Hon. J. C. Manuel, A. C. Thomas, Ivor Owen (Wrekin)
Edelman, M. Marquand, Rt. Hon H A Thomson, George (Dundee, E.)
Edwards, John (Brighouse) Mayhew, C. P. Thorneycroft, Harry (Clayton)
Edwards, Rt. Hon. Ness (Caerphilly) Mellish, R. J. Thornton, E. (Farnwerth)
Edwards, W. J. (Stepney) Messer, F. Thurtle, Ernest
Evans, Albert (Islington, S.W.) Mikardo, lan Tomney, F.
Evans, Edward (Lowestoft) Mitchison, G. R. Ungoed-Thomas, Sir Lynn
Evans, Stanley (Wednesbury) Monslow, W. Usborne, H. C.
Fernyhough, E. Moody, A. S. Viant, S. P.
Fienburgh, W. Morgan, Dr. H. B, W. Wallace, H. W.
Finch, H. J. Morley, R. Watkins, T. E.
Fletcher, Eric (Islington, E.) Morris, Percy (Swansea, W.) Webb, Rt. Hon. M. (Bradford, C.)
Follick, M. Morrison, Rt. Hon. H. (Lewisham, S.) Weitzman, D.
Foot, M. M. Mort, D. L. Wells, Percy (Faversham)
Fraser, Thomas (Hamilton) Moyle, A. Wells, William (Walsall)
Freeman, John (Watford) Mulley, F. W West, D. G.
Freeman, Peter (Newport) Murray, J. D. Wheatley, Rt. Hon. John
Gaitskell, Rt. Hon. H. T. N. Nally, W. Wheeldon, W. E.
Gibson, C. W. Neal, Harold (Bolsover) White, Mrs. Eirene (E. Flint)
Gooch, E. G. Noel-Baker, Rt. Hon. P. J. White, Henry (Derbyshire, N.E.)
Gordon Walker, Rt. Hon. P. C Oliver, G. H.
Whiteley, Rt. Hon. W. Williams, Ronald (Wigan) Woodburn, Rt. Hon. A.
Wigg, George Williams, W. R. (Droylsden) Wyatt, W. L.
Wilkins, W. A. Williams. W. T. (Hammersmith, S.) Yates, V. F.
Willey, F. T. Wilson, Rt. Hon. Harold (Huyton) TELLERS FOR THE NOES:
Williams, David (Neath) Winterbottom, lan (Nottingham, C.) Mr. Pearson and Mr. Hannan
Williams, Rev. Llywelyn (Abertillery) Winterbollom, Richard (Brightside)

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

  2. cc1328-80