§ Mr. Low
I beg to move, in page 5, line 29, at the end, to insert:(2) Without prejudice to the promotion of the efficient, economic and adequate supply of iron and steel products, the Board shall, in their consultations under the preceding subsection, have regard to any considerations relating to employment in Great Britain or otherwise relating to the national interest to which the Minister may have asked them to have regard.The Amendment has a background and it would be useful if I explain quite shortly why we have thought it right to come to the House to ask for the insertion of these words. During the Committee stage we discussed an Amendment about full employment in relation to Clause 5. All of us want provision to be made for full employment. Full employment is the Government's aim and is not in issue between us. It was not in issue when we discussed the Amendment in Committee, but there was a fairly wide discussion and a number of differing views were expressed by hon. Members opposite.
I explained at that time that we wished as much as anybody else to see the maintenance of full employment, but that in our view full employment was a national responsibility which the Government sought to maintain through their general economic policy. I also explained that the Government had effective power over the location of industry by means 1162 of the industrial development procedure under the Town and Country Planning Act, 1947. I further explained that in our view the best contribution that the Board could make to full employment would be to be successful in helping the iron and steel industry to produce efficiently sufficient of its products at prices that were competitive in world markets.
As I have said, a number of differing views were expressed from the other side in Committee, but I think that the official Opposition view was put by the right hon. Member for Vauxhall (Mr. G. R. Strauss), when he said:We ask that this Board, which have to make important decisions which may affect employment in many parts of the country, should be permitted to take into account that factor before coming to a decision.That is, the employment factor.They should have in their minds the effect which such decisions would have on employment. The Government's answer is that they should not have that consideration in mind at all.I do not believe that that was our answer, and it certainly was not our intention. The right hon. Gentleman went on to say:We look on that as a monstrous decision on the part of the Government. We say that this should not be the over-riding consideration, but one which it would be right for them to have in mind. But the Parliamentary Secretary says that they are not to have it in mind."—[OFFICIAL REPORT, 12th February, 1953; Vol. 511, c. 660.]1163 Once again, I never said anything of the sort. It was never our intention to prevent the Board having these considerations in mind. I was arguing then about the criteria that the Board should apply in deciding whether to give their consent to a development proposal.
It is along the lines of those words from the right hon. Gentleman that we have been considering whether the Board ought to be asked in the Bill to take account of employment considerations and of other considerations of national interest in consulting with iron and steel producers about their development proposals, particularly in the formative stage, which is the stage envisaged by subsection (1) of the Clause.
When I say "along these lines" I refer particularly to the end of the quotation which I have read from the right hon. Gentleman's speech, without overriding the other considerations ofefficient, economic and adequate supplywhich must be paramount in the mind of the Board.
At that formative stage of a development proposal, the proposal will not have been submitted for anyone's consent and no application will have been made for an industrial development certificate. It therefore seemed to us, after consideration, to be right that the Board should be asked in their consultations to have regard to employment considerations. They will, of course, have some knowledge themselves of employment considerations, but they will not have full knowledge of all the employment considerations. That knowledge lies within the province of the Government. The Amendment, therefore, refers expressly to employment considerationsto which the Minister may have asked them to have regard.Other things being equal, we think that the Board should, and would, just as industry would—as several of my hon. Friends have said in earlier debates—have full regard to employment considerations. In the same way the Amendment makes it clear that the Board, and through them the industry, will have regard to other considerations of national interest which are put to the Board by the Minister.
If the House, in considering the Amendment, bears in mind also our 1164 Amendment to Clause 14 about closures and our Amendment to Clause 15 regarding publication of the Board's report relating to development, it will be seen that, quite apart from the frequent informal consultations that there will be between the Government and the Board, and between the Board and the industry, there is ample opportunity for full consideration by all concerned of the very real human problems that may arise in the course of the development of this great industry; and for full consideration of any opportunity that may present itself for the industry to help in alleviating any local employment difficulties. At the same time it is made absolutely clear that there is ample opportunity for the Board and the industry to give full consideration to any points relating to the national interest which the Minister may bring to their notice and to which he may request them to have regard.
Without the addition of these words, the Minister would have brought such matters to the attention of the Board, who would have given them their attention and would have brought them to the attention of the industry. Since, however, some doubt was expressed during the Committee stage, it seemed to us right to remove that doubt. Indeed, this has been our policy throughout the various stages of the Bill.
§ Mr. Arthur Palmer (Cleveland)
It will not have escaped the notice of the House that we on this side had tabled our own Amendment on this important subject of full employment. We have not pressed it—indeed, we have withdrawn it from the Order Paper—in view of the Amendment which the Parliamentary Secretary has moved on behalf of the Government.
Remembering the debates that we had on this subject during the Committee stage, I listened with some surprise when the Parliamentary Secretary said that it was never the intention of the Government that the Board should not take employment questions into account. If that was not their intention, all I can say is that it sounded very much like it. Many of the speeches made during the Committee stage from the Government side should be re-made now in the light of the statement—the apology, I think—which we have just had from the hon. Gentleman. In fact, the Parliamentary Secretary, and for that matter the 1165 Minister also, rather remind me of Byron's celebrated lady who… repented,And whispering 'I will ne'er consent'—consented.That is really what has happened here.
The Government said, in Committee, that it was impossible to insert words of this kind, that there were substantial objections against doing so and there would be confusion and misunderstanding, and difficulties about definition. I remember those arguments all too well. If the Amendment is something for grace, we are glad about it. We like its principle, of course—we think it is only because of our pressure that it has appeared on the Paper; but we do not like particularly its wording. The Amendment begins:Without prejudice to the promotion of the efficient, economic and adequate supply of iron and steel products"…Whoever suggested that full employment could contradict the meaning of the beginning of that sentence? I suggest that the Amendment would be tremendously strengthened if these first words were left out altogether. No doubt they can be omitted when the Bill in due course reaches another place.
Those who have studied the wording of the Amendment will, I think, agree that the rest of the wording is extraordinarily clumsy and could be vastly improved. Nevertheless, we are glad to confess that the Amendment concedes our main point: that industry today has something more than a financial obligation to its shareholders. It has a social and human obligation to the community and particularly to the workpeople employed in it.
In the context of the Bill, and of the industry whose affairs we are discussing, it is important, especially in relation to the present Clause, that those responsible should take into account not only efficiency, economy and the quantity or quality of the material stuff that is used and produced by the industry but the immaterial aspect also—that is the security of the men who serve the industry and of their families.
In reminding the House of some of the arguments that were used against our earlier Amendments in Committee, which demanded that employment should be 1166 one of the factors to be taken into consideration by the industry in deciding its policy, I am perhaps at the same time reminding a wider audience outside also. One of the arguments then used by hon. Gentlemen opposite was that the Board should not be asked to carry out a full employment policy because that was something for the Government of the day and was not a matter for a Control Board of this kind. That however has now been contradicted by the present Amendment and we are glad of the change.
It was also objected from the benches opposite—by, I think, the hon. Member for Hall Green (Mr. Aubrey Jones), who is not now in his place—that employment and full employment could not be successfully defined. That was an extraordinary comment upon a Bill which already contains wide expressions such as "competitive conditions," "adequate supply" and "substantial extent," to name only one or two. Something has now been done which denies to a great extent the facile objection.
We on this side congratulate the Minister, who has succeeded in jumping over obstacles which were created by his own imagination at a previous stage of the Bill. Even though the right hon. Gentleman has succeeded in that, I am certain that his Amendment would never have been before us at all but for the pressure put upon the Government from this side to make it one of the social and human obligations of the iron and steel industry to take into account full employment policy.
§ Mr. Raymond Gower (Barry)
I should have thought that the hon. Member for Cleveland (Mr. Palmer) might have been somewhat more magnanimous about this Amendment. Hon. Members will recall that in Committee hon. and right hon. Members opposite made some somewhat harsh and rather sweeping statements about the Government's intention to deal with this problem. Indeed, they went so far as to say the Government had no desire to include some protective provision of this nature. They implied the Minister was not prepared to do anything, if I recall rightly. I think the fact that this subsection is included in this way shows how completely wrong those innuendoes were.
The new Amendment sets out the considerations which the Board will have to 1167 apply, and puts them in their proper position and true perspective. It recognises, what the Opposition Amendments did not; that there must be other considerations, too; but it also recognises that the Board have the duty of taking some note of employment conditions either locally or nationally. I think it is important to have at the beginning the words that the hon. Member for Cleveland wanted to leave out, because they bring it clearly to the Board's attention that this is not their only problem. It shows equally clearly that the major responsibility for employment problems must be the Government's, and that the Board's responsibility will be a limited one in a limited field. I think that this is a valuable addition to the Bill, and I congratulate my hon. Friend c., introducing it.
§ Mr. Walter Monslow (Barrow-in-Furness)
I welcome this Amendment, and I do so because I regard it as one to deal with one of the most important aspects of the Bill, and that is the human aspect. But I hope that the Amendment is moved in the spirit the Parliamentary Secretary intended—that we are to maintain a measure of full employment. I hope that we are not going to have only the expression of sentiments and no positive action taken, if the need should arise, by the Government, even if it should mean that they are in conflict with the Board, to achieve the desired result, namely, full employment.
In my opinion an industry such as this, which does and will reflect prosperity, can embrace within its ambit even what are known at the moment as certain uneconomic units; and I suggest that whoever may be in charge of the future administration of the industry should have some regard, not only to the monetary aspect of the problem but also to the social implications which arise in connection with those uneconomic units. I would ask the Board when examining this aspect, to recognise these considerations.
I should like to take this opportunity of paying tribute to my right hon. Friend the Member for Vauxhall (Mr. G. R. Strauss) and to my hon. Friend the Member for Rotherham (Mr. Jack Jones) for the excellent work which they did in connection with works within my own constituency in the lifetime of the last 1168 Government. When we made representations to them they certainly did everything that was humanly possible to keep going the works which were on the point of closing—which would have closed had it not been for the last war. I pay my tribute to them now, and I ask them to accept it from me in the spirit in which it is given.
I sincerely hope that whatever happens in the change over the question of full employment will be kept to the forefront. I am not unmindful of the difficulties. We have experienced them in my own constituency. I respectfully commend to the Government and to the new Board that they give some consideration to making what are known as uneconomic units economic units by seeing that they receive a further measure of capital investment, so that they may have the required economic strength to play their part in an industry on whose prosperity that of the country largely depends.
§ Mr. Robson Brown (Esher)
The hon. Member for Barrow-in-Furness (Mr. Monslow) went right to the kernel of the matter when he said that this was a question affecting human values. So did the hon. Gentleman the Member for Cleveland (Mr. Palmer). It is for that reason I rise to support the Amendment, and to pay a compliment to the Parliamentary Secretary on the way in which he presented it to us. His was a full, lucid and effective statement, and the most important one that he has made during the whole of this debate.
There is no question, so far as we on this side of the House are concerned, about our having had in mind all the time the impact of the Bill, and of the powers of the Minister and of the Board, upon the men and women working in the industry as being of the greatest and most vital importance. Therefore, I am particularly glad the Opposition dropped their Amendment using the expression "full employment." I should like to concur in the observations made by the hon. Member for Cleveland. Throughout our debates his contributions have been made with great sincerity. At no other time did he touch the feelings of us on this side of the House as he did today when he spoke of the importance of the men and women in the industry and the necessity attaching to their employment in the industry.
1169 We in this House can talk about employment being secured to them, and the like, but that employment is their very life—the most important thing in life for them. That was why I said in a previous debate on this matter that it is a dangerous thing to put into the minds of the men any idea that by any Act of Parliament or any act of the Minister or of the Board we could guarantee the continuance of full employment. I do not think that the Bill of 1947 of the right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss) ever used the expression "full employment." That showed that hon. and right hon. Gentlemen opposite realised that it would not be guaranteed by a Parliamentary Bill, nor could it be introduced into a Bill to any good effect.
What is important, above all, is a satisfactory and high level of employment. That clearly depends on three interlocking factors. The first factor is efficiency within the steel industry itself. The Minister himself referred to it today. Efficiency depends on three things—the quality of the plant, of the management, and of the men. Those are three interlocking factors that control the efficiency of the industry. The second factor relating to employment is the general level of trade in this country, which does and will largely decide the general level of employment within the steel industry. The third element is the general level of world trade and our ability to obtain a fair share of the world demand for steel.
What I am saying is simple economics, but it has to be stated categorically, in a positive fashion, none the less. We have to obtain a fair share of the world demand for steel. Moreover, British manufacturers who are consumers of our steel, and for whom steel is a raw material in making their products in engineering, etc., must also obtain a fair share. Those are the three factors interlocking one with the other, and they control employment inside the steel industry.
It is as well to emphasise that the steel industry now has to meet an impact of world competition such as it has not experienced for a number of years. It is only now that we are having to face world competition. The testing time has come, and I believe that healthy competition—and I use the word "healthy" 1170 in its true and proper sense—is a good thing for industry and is a guarantee of that efficiency with which we are all concerned. I believe that British steel can look forward confidently to meeting world competition and to being able to hold and to extend its fair share of world trade, because with few exceptions our plant is good. Beyond question, our management is first-class, and, equally vital, our steel workers, judged by the standards of loyalty, skill and good will, are second to none in the world.
I reiterate the three great, important, vital requisites of efficiency in industry: quality of plant, quality of management, and quality of the men. It will be the prime function of the Board to consider efficiency in all its aspects—their first duty all the time. If they do their job effectively the industry will have every right to expect reasonable prosperity and, as a consequence, it should be able to maintain a satisfactory and high level of employment, which is the aim of all of us in this House.
§ Mr. Frederick Willey (Sunderland, North)
I intervene only very shortly to join in the general congratulatory amity of the House at the present moment, and to say that I should have thought that, in view of the experience between 1945 and 1951, full employment was a matter now that could have concrete, specific definition; but be that as it may, I appeal to the Minister to take the opportunity of looking again at this point to see whether it can be further clarified.
We have gone a long way to meet the right hon. Gentleman. Obviously, he is a good Parliamentarian. By that I mean that, while he is out of touch with enlightened thought and progressive political ideas in this country, he is not at all immune to discussion in the House. He saw our Amendment down, and he endeavoured, I think I may say, very much to meet it, and I think he has gone a long way to meet us. I should like him to go further. This discussion should really be taken with the previous one. The difference between us is how far the concept of public supervision should be brought within the affairs of this industry. We differ about that, but, allowing for that, I think that the right hon. Gentleman could come nearer to meeting us.
1171 I intervene mainly because this is a matter which causes very real apprehension even today in my part of the world. I have only to say that Jarrow is only a few miles from my constituency for hon. Members to understand what I mean. There is still a good deal of apprehension about the reorganisation, the re-deployment, of the major industries of this country throughout what are, not by chance, called the Development Areas of the country. I would remind the right hon. Gentleman and the Parliamentary Secretary that when recently we had a debate on full employment the Parliamentary Secretary to the Ministry of Labour specifically referred to the White Paper of 1944. Let us refer back to that White Paper—that great White Paper.
It emphasised above everything else the need for the country to deal with the problem of full employment, and that we had got to see that considerations of capital investment were subjected to that objective. That is the real keynote of that White Paper, and capital investment is, therefore, in the forefront as the major way in which we can offset the threat of a depression. Both sides of the House will agree that this country can survive economically only on the basis of full employment.
We are all very proud of the Welfare State. The Welfare State can only be underpinned by full employment. That is what we all desire. I think that it is right and proper, if we are to have a supervisory Board, to provide that full employment should be a major, primary consideration. The Parliamentary Secretary has explained that that is his objective, and I should like him to express it a little more clearly.
I think that this Amendment, good as it is, is expressed in rather a cagey way, as though the Government do not want to be pinned down. [Interruption.] There may be a difference of opinion between us, but I would argue that this is a primary national consideration, and it may well arise—although I hope we shall not be threatened with depressions—that the first consideration in the national economic plan is the maintenance of full employment. I would rather that were stated in the Amendment, if it could be done.
1172 All I ask the right hon. Gentleman, when he has the opportunity of further considering this matter, is to go a little further to meet the wishes of both sides of the House that we should have a clearer expression of view that the Government accept this principle of the White Paper of 1944.
§ Mrs. Eirene White (Flint, East)
Having moved the original Amendment, to which this Amendment is in a sense a reply, I was a little surprised to find this one on the Order Paper. When one recalls the tenor of the debate on the last occasion, one had no indication then that the right hon. Gentleman was proposing to put down any such Amendment.
I do not wish to strain such classical knowledge as the right hon. Gentleman may have brought with him from Eton, but he may remember a passage in Virgil where it was suggested that when the Trojan Horse is offered by the Greeks, one should be on one's guard against this bringing of gifts to one's hands. The Minister has been extremely accommodating—it may be his Parliamentary technique, as was suggested—and perhaps one should be on one's guard when he has been so extremely pleasant in meeting the suggestions of the Opposition. We hope that the country will not have any false impression from the relatively friendly manner in which our debates on this Bill are being conducted.
I should like to turn for a moment to the Amendment as proposed. I must agree with my hon. Friend the Member for Cleveland (Mr. Palmer) that it is a most inelegant Amendment. I am certain that the drafting of it could be improved, perhaps in another place. On a point of substance, I cannot feel that the first phrase of the Amendment is really one which can be upheld in logic. To say:without prejudice to the promotion of the efficiency, economic and adequate supply of iron steel products, the Board shall … have regard to any considerations …really does not make sense, because the whole argument we have been putting forward is that, while the Board should have regard to the efficiency of the industry, they should also have regard to other matters.
It may be that the other matters, when taken into account, will be to some extent—and are very likely to be to some 1173 extent—prejudicial to the absolute efficiency of the industry. Therefore, I would suggest that this Amendment would be very much more effective if that first phrase were omitted and the Amendment then stated that the board "shall in their consultations," etc. It has been suggested, for example, in the "Economist," which I think had a very tendentious paragraph on our last debate, that those of us on this side of the House who proposed and supported the original Amendment were suggesting that full employment should be the only consideration in the mind of the Board.
None of us had any such idea. All that we suggested was that it should be one of the considerations. Naturally, efficiency is also a major consideration. We are very glad that the right hon. Gentleman has seen fit to meet us so far as he has done. We shall never agree on whether "full employment" or "a high and stable level of employment" is the proper phraseology, but, so far as it goes, the Amendment on the Order Paper does refute the suggestion made in our previous debate that any reference to employment in a Bill of this kind would be out of place.
§ Mr. George Chetwynd (Stockton-on-Tees)
I do not wish to throw any cold water on this Amendment, which I welcome, nor do I wish to go into the motives which led the Government to put it down. I rather suspect that they were political more than anything else, to forestall any attack made upon them in the country on this matter. I want to warn the Government against too easy an acceptance of that position, because the implications of the Amendment at a time like the present, of full employment and of large-scale investment, are very different from the implications of such an Amendment in a different climate of opinion, when a slump is already coming about, and when it is not so easy for the industry to be a profitable one.
It seems to me that this Amendment may at the moment be meaningless, and that the Government may be concerned to put it in as a nice piece of window-dressing. When it comes to the time when it is necessary for the State to intervene actively in giving an investment lead in order to maintain full employment, this Amendment may be very dangerous to 1174 the party opposite, although we shall welcome it. The steel industry, and the national investment involved in it, will be a most effective national instrument for the planning of full employment, but it may have to take on the use of controls and the things which go with them.
Therefore, I would say that, when the time comes, there will be all kinds of reasons put forward to prove that this Amendment really does not mean what we think it means now, and I should like the Amendment to be strengthened by having some sort of safeguard in it to make the Minister come along and say what directions, advice or instructions he has given which the Board should bear in mind with regard to employment. On the other hand, the Board should be made to state in their annual report, or in some other way, what advice they have given to the Minister, how they have followed out his instructions and what kind of response there has been to the suggestions by the industries concerned. I think that we need more than the words of this Amendment to make it a full force in the planning of the full employment which we all desire.
§ Amendment agreed to.
§ Mr. Wilfred Fienburgh (Islington, North)
I beg to move, in page 6, line 8, at the end, to insert:Provided that under this subsection the Minister may compulsorily acquire or compulsorily take or lease facilities and in such a case the compensation or rent to be paid by the Minister shall in default of agreement be determined by arbitration.I think that the purpose of this Amendment is very clear. It echoes very closely a similar Amendment which was moved during the Committee stage of the Bill. The Minister of Supply has already this afternoon drawn attention to the fact that he has—and he stresses them very strongly—at least some powers under this Bill.
Our general impression was that he had not enough powers, and our general demand has been to increase his powers, but he has this afternoon decided that he has at least some powers—over price determination and over development. Included in his power over development is his power to acquire plant which might otherwise go out of production, but which in the national interest it is essential should remain in production. Our only 1175 difficulty about this power, of which he is so proud, is that, as provided at the moment, it is entirely clouded in dubiety and difficulty, because he can make such an acquisition only if there is a volun-agreement between himself and the owners of the plant. In this Amendment we seek to strengthen that power by giving him the power compulsorily to acquire the plant concerned.
I am delighted to see here the Solicitor-General, who replied to our Amendment on the Committee stage. I am always glad to see him. One is not so certain when he comes to the Dispatch Box whether the Government Front Bench are equally glad to see him; there is then a certain frisson, a certain tension in their attitude, for they are wondering whether he will put his foot in it again, and they are hoping desperately that on that occasion he will not.
In his reply to our Amendment during the Committee stage, the Solicitor-General treated us to some three columns of speech, of which some two and a half columns were entirely irrelevant to the main substance of our argument. He indulged in some legalistic hair-splitting about whether the powers should reside with the Board or the Minister, forgetting that the issue arose owing to the unwisdom of the House in rejecting Amendments which we had moved previously. However, within his three columns he presented us with eight lines of argument related to the subject under discussion. As they are so important and as they are embedded in the irrelevancy, it is worth while extracting them so that we may proceed to deal with them. He said:I should have thought that it was extremely improbable, and so improbable as to render it unnecessary to take compulsory powers, that any company would act like a dog in the manger and not realise some cash value for the premises or the production facilities which they were going to put out of use."—[OFFICIAL REPORT, 11th February, 1953; Vol. 511, c. 517.]We can imagine several circumstances in which they may adopt this dog-in-the-manger attitude. Therefore, if we can impress upon the Solicitor-General that such occasions may arise, no doubt he will be prepared to eat the words he then uttered and accept this Amendment.
1176 Here is the situation which will face the Minister of Supply when he comes to use one of the rare powers which he has given himself. He may only use the power of acquisition when it is in the national interest that he should so do. So, first of all, the company which he seeks voluntarily to acquire, or whose plant he seeks to acquire, will know straight away that he has some compelling reason for his approach. It will not be that he merely wants to add another series of production facilities to an already overburdened responsibility. We do not envisage that the present Minister of Supply, or any Minister of Supply in the present Government, will dash willy-nilly into the acquisition of private companies; he will only do it when compelled to do so by the most cogent reasons in the national interest, or when he is subjected locally to some heavy degree of political pressure to keep in operation some plant which might otherwise go out of operation.
This will not be undertaken lightly. That would be quite clear to the people owning the assets. If he refuses our Amendment, the hon. and learned Gentleman will, in effect, have created a seller's market against himself. If the reasons for acquisition are so compelling that even an apathetic Conservative Government is provoked into the breaking of all it tenets of private ownership, that will not escape the knowledge of those who own the assets, and it is quite likely that they will stand out for a higher price than they could otherwise get.
It may well be that no price which the Minister is prepared to offer will tempt a concern to part with its plant. There can be two reasons for this. First, the concern may have an alternative and more profitable use for the site. We have to remember that many of the older steelworks sited in towns which have subsequently grown have a considerable site value, particularly now that the Government have taken away the development charges under the Town and Country Planning Act. I do not stress the point too strongly, but it is well within the bounds of possibility that a firm may choose to use the site for other purposes than the production of iron and steel and that offers made to them for such a purpose may be much more tempting than any the Minister of Supply could 1177 make. It may be that in those circumstances no price will persuade them to relinquish their concern so that it could continue, in the national interest, to function producing steel.
Secondly, it may be that they will refuse any offer because, owing to some internal arrangement within the steel industry, they have decided that the plant shall go out of production anyway. It may be that through reorganisation within the steel industry they have decided to restrict production or to concentrate production elsewhere and no offer which the Minister can make will outweigh the financial advantage to be gained by losing the production of that plant altogether. Unless the Minister accepts the Amendment, he is without power compulsorily to acquire such plants in the national interest.
We ought to pay more attention to precedent, especially when the precedent is bolstered by the fact that it was introduced by a Conservative, or predominantly Conservative, Administration. The Defence Regulations during the war entrenched the power to acquire firms in the national interest, and the power so entrenched was compulsory. There was no talk about a voluntary relinquishment. Indeed, the one concern which was taken over, and it stands out in all our minds—Short Brothers—was certainly not handed over voluntarily. The litigation arising from that transaction is probably still going on, or, if it is not, it has only just stopped after all these years.
If it was right then for a predominantly Conservative House of Commons to decide that the powers of acquisition should be compulsory in the national interest, surely it is right now. However, Conservatives are not noticeably attached to precedent when the precedent argues against the expediency which they are advocating at any one point in time. Nevertheless, we must remember that in this we are the custodians of public money, and if we are seeking to acquire plant in the national interest, it is right that we should seek the best possible circumstances in which to make the bargain.
I urge the Government to apply to this matter the standards which, as individual businessmen, they would apply to the acquisition of any firm which they sought to take over. It is not unknown in 1178 private competitive capitalism for one firm to seek to take over another firm. But it does not create a seller's market against itself as its first instance of approach. Instead, it evinces an ostentatious unconcern about the firm which it wishes to take over so that the price may be better than if it came forward and said, "We must, in our own pecuniary interest, acquire your firm. Give us a price and an offer." If those standards are proper to the conduct of private business, we contend that they are proper to the conduct of public business.
If the Government seek to make an acquisition only in extreme national interest, that will be well known to those whose property the Government seek to acquire, and that concern will, fairly naturally, hold out for the highest possible price. We contend that the Minister should arm himself with the power of compulsory acquisition, so that if no agreed price is reached, a price is then adjudicated by arbitration. We find nothing strange in this; we find precedent for it; above all, we ask that the standards applicable to the conduct of private business by private businessmen should in this case be applied to the conduct of public business by what will, after all, be public businessmen in the industry.
§ The Solicitor-General (Sir Reginald Manningham-Buller)
The hon. Member for Islington, North (Mr. Fienburgh) began his speech by saying that this Amendment echoed a similar Amendment we discussed in Committee. I entirely agree with him and, of the two speeches made in moving these Amendments, I must confess that I thought the speech of the hon. Member for Brightside (Mr. R. E. Winterbottom) by far the more persuasive, convincing and, indeed, eloquent. The hon. Member for Islington, North commenced as though to be offensive was a satisfactory substitute for argument. He went on to make a few arguments with which I shall endeavour to deal, but I feel that I shall not satisfy him. I am not sufficiently optimistic for that, and I cannot do much more than echo the arguments that were advanced on the previous occasion.
The hon. Member complained that, in dealing with this point in Committee, my 1179 arguments occupied only eight lines in HANSARD. He will realise we were then considering an Amendment somewhat different in form, and I think I did, quite properly, draw attention to the fact that there was apparently a defect in form on that occasion. I will not go into that now, but I will come to the substance of the case that he endeavoured to put forward. The House will realise that my right hon. Friend, or any Minister of Supply, before he can exercise the power given by this subsection to acquire or take or lease or otherwise secure the use of existing production facilities has got to satisfy himself that those production facilities ought to be kept in use in the national interest, and also that they will not be kept in use unless he exercises those powers.
Production facilities are defined in the Bill as plant, premises and machinery. We have to consider this very carefully. In our view, if those production facilities are not going to be kept in use—and it is upon that that the operation of this subsection depends—then it is highly improbable that the owner of those facilities, which he does not intend to use, will not be willing either to sell or at any rate, to lease them for a period of time. We regard that as so improbable as to show that there is no need for the powers of compulsory acquisition such as the hon. Member suggests.
We take the view that powers of compulsory acquisition should not be conferred on the Minister unless the need for them is clearly established. The hon. Member has made it quite clear by his speech that he does not agree. Hon. Members opposite seem to take the view that compulsory powers of acquisition should be given to meet the slightest possibility arising for their need in the future. The hon. Member, in moving this Amendment, said that he could imagine many circumstances in which the need for those powers would arise. I confess that my imagination cannot be as good as his. He has talked of cases of the Minister wanting to acquire. That may well be, but I am sure he does not think it really likely that persons who are not intending to use their production facilities will want to go on hanging on to them and not derive some capital by selling them or some income by leasing them.
1180 6.15 p.m.
The right hon. Member for Vauxhall (Mr. G. R. Strauss), speaking on the previous occasion in support of this Amendment, advanced as an argument what he himself said was an extreme situation. I quote from HANSARD:To take an extreme situation as an illustration, there may be works which are doing well, but in which the facilities are being only half-used; they may not be very efficient or may be badly run."—[OFFICIAL REPORT, 11th February, 1953; Vol. 511, c. 518.]I should have thought it was rather surprising to find works in those circumstances doing well, but if they are only using half of their works when doing that, I should have thought it was extremely likely that the other half would be brought into use fairly speedily, in which case there would be no need for the Minister to seek to exercise these powers.
This argument is advanced that we must have compulsory powers of acquisition in case we come up against a person who is not prepared to sell at the price that we are prepared to offer. It may be that his view of the proper price is the right one and that ours is the wrong one, and it by no means follows that, if we have the power of compulsory acquisition, we will be able in the long run to acquire the lot cheaper than the price at which we originally offered. That may or may not turn out to be the case, but what is quite obvious from the hon. Member's speech is that he wants the Government to be supported by the power of compulsory acquisition so that that power can be used as a lever to apply pressure upon the person who has the production facilities, which are not going to be kept in use, to make that person agree to accept the offer made to him.
Views may differ as to whether that is the right use of compulsory acquisition. All I can say in answer to the hon. Member for Islington, North and to his hon. Friends is that the Defence Regulations in wartime do not constitute any precedent whatever. We are not at war now, and so far as this Bill is concerned, in our view, the need for compulsory powers in this subsection does not exist and the case for them has not been established. Therefore, we can adopt no different attitude to the attitude we adopted when this was last before the Committee.
§ Mr. Fienburgh
Before the hon. and learned Gentleman sits down, perhaps I could ask for clarification on this one point. We have certainly not suggested that the power of compulsory acquisition should stand as a lever whereby the Minister can secure at his own takeover price. He has ignored the last phrase of the Amendment, which says:… in such a case the compensation or rent to be paid by the Minister shall in default of agreement be determined by arbitration.Arbitration, if it means anything, will not be effected in any way by any lever which may reside in the Minister's hands. In fact, the only use to which a lever and the power of acquisition can be put is largely that of seeing that too high a price is not paid—higher than that which subsequently may emerge from arbitration. Surely the insertion of the word "arbitration" protects the seller completely.
§ The Solicitor-General
The short answer to that is the speech of the hon. Member for Islington, North in moving this Amendment. He indicated, as I think HANSARD will reveal, that the power of compulsory acquisition could be of use as a threat, in the first place against the person who was going to be asked to sell, and was to be held over him. I fully appreciate that there is a provision for arbitration. And it was in that connection that I made my remarks that, when you have had arbitration, it may be found that the price which is to be paid is a price at which the vendor was willing originally to sell.
§ Mr. Willey
The Solicitor-General's case, as I understand, is that the circumstances in which such a Clause as this might be useful are so rare as to make the legislaton not worth while. I wonder whether he has forgotten what happened to the major industry in my constituency. I refer to the shipbuilding industry. We had premises which were left unused for years. They were sterilised, and they remain sterilised today. One of them was the most up-to-date and modern shipyard on the Wear. It is still not a shipyard, and it could not return to shipbuilding. Another yard which was used during the war and which had a tremendous amount of capital put into it also once again became sterilised. That is an example of a great industry where premises remain unused, and it is conceiv- 1182 able that similar circumstances might arise—I hope not—in the great iron and steel industry.
§ The Solicitor-General
I can only speak again with the leave of the House, to say that it is only in circumstances where production facilities are not used that the powers of the subsection will arise at all.
§ Mr. G. R. Strauss
We are not satisfied with the reply given by the Solicitor-General. I do not think he is surprised, because he realises the force of the arguments that were put forward in the moving of the Amendment. We are not dividing the House on it, but I want to make it clear that our decision has nothing to do with any willingness to accept the Government's answer, which we think was not an answer at all. It is merely because we are worried about the passage of time.
§ Amendment negatived.