HC Deb 13 May 1953 vol 515 cc1287-99
Lords Amendment

In page 16, line 13, leave out "practicable," and insert: possible and shall in any event, unless the circumstances of the case make this impracticable, inform the Board not less than three months before the proposed date of closure.

Mr. Low

I beg to move, "That this House doth agree with the Lords in the said Amendment."

I think that the Amendment will be acceptable to hon. Members opposite. The effect is that while the Board are still required to secure that they are notified of proposed closures of works or substantial parts of works as early as possible, an additional requirement is added that the period of notice to the Board shall be a minimum of three months, unless the circumstances of the case make this impracticable. Hon. Members will recall that we had a very full discussion on this very important matter during the Committee and Report stages. We discussed, in particular, whether we could insert some provision in the Bill requiring a minimum of three months' notice.

In replying to the debate on the Report stage, my right hon. Friend told the House how much importance he attached to the giving of the earliest possible notice of intended closure. It is important, not only in order to enable him to make a proper decision in connection with his power under Clause 5 (4), but also for very strong human reasons, to enable plans for alternative employment to be made, and also for general supply reasons.

In the course of that debate, referring to the hon. Member for Stockton-on-Tees (Mr. Chetwynd), my right hon. Friend said: The hon. Member stressed the importance of that period being at least three months. I agree that is a reasonable and satisfactory time. But, in many cases, it is not practicable to insist on three months' notice."—[OFFICIAL REPORT, 10th March, 1953; Vol. 512, c 1194.] When we parted with the Bill, the obligation was to inform the Board of any closure proposals as early as practicable, and it was, in our view, important to have those or similair words in the Bill to make it clear that in suitable cases much longer notice than three months, perhaps notice of several years, should be given of the intention to close down works.

The Lords Amendment still keeps that provision—that the Board must secure that notice shall be given as early as possible. It adds, and in our view wisely adds, that the Board shall secure that producers shall in any event, unless the circumstances of the case make it impracticable, inform the Board not less than three months before the proposed date of closure. Thus the Bill will provide in effect that anyone who closes his works or a substantial part of his works less than three months after he has given notice to the Board of such intention may be required to prove that it was not practicable in the circumstances for him to give earlier notice.

5.30 p.m.

I should add here, to avoid any possible misunderstanding, that this Amendment does not provide that producers must keep their works open longer than they think is right. It is solely concerned with the giving of notice. Since we are mentioning the minimum period of notice, we think that this Amendment strengthens the obligation which is placed on producers to give early notice of their intention to close their works, and we therefore strongly support the Amendment and ask the House to agree with it.

Mr. Jack Jones

We on this side of the House welcome this Amendment, which fully meets the point of view which we expressed during the Committee stage. It will remove, for all time, we hope, the fear that many men have had about the sudden closing down of any particular works. It will be impossible for anyone on this side of the House, or, indeed, on the Government benches, to accuse some wicked capitalist of closing down his works in the future, because this particular type of works will be still in the possession of the disposal Agency.

The works that will be the least easy to dispose of will be those nearest to being declared redundant, and it will be the Agency that will still be in possession of this particular type of works. That point of view may not have struck the Minister himself, but that is the position, as I see it. The Agency, in turn, will be backed by the Treasury, which, in turn, will be backed by the taxpayers of this country, and the taxpayers will be very anxious to see that men employed in that particular type of works get as fair a deal as is possible. We are happy to accept the Amendment.

Mr. Robson Brown (Esher)

We on this side of the House are also very happy to see this Amendment included in the Bill. It is one of those human touches for which we have pressed on many occasions, and I am very glad to see that the period of three months is being incorporated in the Bill. It will be appreciated by the workers in the industry.

Mr. Lee

May I put a question to the Minister? In the Lords Amendment, we see that the purpose is to "inform the Board." Does that mean that the employers must also inform their workers? I am puzzled as to the reason why, in this Amendment, we make it obligatory upon the employer to inform the Board not less than three months before the probable date of closure. What obligation is placed upon the employer to inform the employees three months before that date? If the intention announced by the Parliamentary Secretary is the reason for the Amendment, why do not we say that the employees of such a works shall also be informed not less than three months before the contemplated date of closure?

Mr. Sandys

I agree with the hon. Member for Newton (Mr. Lee) in his desire that, if the Board are to be informed, the workpeople should also be informed, but, in fact, this Amendment deals with the power of the Board to obtain information from the industry. Therefore, it would be quite inappropriate to put into this Clause anything about the notification of their employees by the firms concerned. One important reason why we want this information to be available at an early stage is to ensure that the Minister's power, given in another part of the Bill, to keep works in being will be a reality and not a formality.

Mr. Jack Jones

May I have an assurance that the reason why the Board should be informed is to give the Board the opportunity of making the necessary inquiries, so that, after they have reported to the Minister, and it is then decided that, in the national interest, the works should be continued, the workers will not, of necessity, need to be given notice at all?

Mr. Sandys

I would not support the view that a company should refrain from informing their workpeople because the Government might decide to take over their works. The process of looking into such matters, and of coming to administrative decisions, is not quick, and I am sure that, as a general practice, workpeople should be taken into the confidence of the employers about all matters of importance, and certainly all matters that affect their livelihood, at the earliest possible moment.

Mr. W. Nally (Bilston)

May I put one further question, which is rather important, to the Minister? There are several thousand steelworkers in my division. It is clearly laid down in the Clause, and it has very properly agreed, that there should be an obligation on firms to give notice of their intention to close, and that that notice should be a minimum of three months. Let us suppose that a firm writes to the Board, marking the letter "Private," informing the Board that they propose to close down their works, and that the Board decide that a very good case has been made out for closure. Does this Clause make any difference or not to the circumstances in which, shall we say, the steelworkers in my own division may be told by the employers one Friday that, with the consent of the Board, the firm intend to close down that works? One quite accepts the motive in the Minister's mind, but I would ask him whether or not this Clause envisages the possibility that steelworkers may be told at seven days' notice that, with the consent of the Board, the works will be closed.

Mr. Sandys

We have made it clear, and I think it was recognised on all sides of the House, and, in particular, very fairly by the hon. Member for Rother-ham (Mr. Jack Jones), that there were practical difficulties in laying down an absolute rule that there must be not less than three months' notice. We have had further examples of that difficulty since the previous debate in this House. In South Wales further mills have been closed down at exceedingly short notice, and one of them affects the right hon. Member for Gower (Mr. Grenfell), who was here a few moments ago. One was a case of works which had given only seven days' notice to their employees, and there was another case in which I myself, as Minister, was only notified formally after I had already read about it in the newspapers.

Do not let us imagine that everything is perfect under nationalisation, or that everything will be perfect under any other arrangements. There are great practical difficulties in this matter. By this Amendment we are setting a certain standard which it will be incumbent upon the industry and the Board to see maintained as far as circumstances make that practicable. Beyond that, I do not think we can go. We should like to go further, but those of us who have any knowledge of how the industry works—and other industries work very similarly—see that there are practical difficulties, and that it is no good laying down something in statutes which will not work in practice, but which will merely weaken the structure of a new organisation we are setting up.

Question put, and agreed to.

Lords Amendment

In page 16, line 29, at end, insert: (4) The Board or the Minister may by notice in writing require any organisation appearing to the Board or, as the case may be, to the Minister to be representative of iron and steel producers and not to be an organisation wholly or mainly concerned with activities which are not included in the Third Schedule to this Act or are included in paragraph 4 or paragraph 6 of that schedule, to furnish to the Board or, as the case may be, to the Minister such information relating to the activities of the organisation as may reasonably be required by the Board for the purposes of their functions under this Act or, as the case may be, by the Minister for the purpose of his functions under this Act, not being in either case functions relating to activities included in the said paragraph 4 or paragraph 6, and the notice may require any such information to be certified as correct by the Auditors of the organisation. A notice under this subsection shall, in the case of an organisation which is not a body corporate, be served on, and take effect as a requirement on, such officer of the organisation as appears to the Board or, as the case may be, to the Minister to be appropriate.

Mr. Low

I beg to move, "That this House doth agree with the Lords in the said Amendment."

It may be for the convenience of the House if we were to discuss, at the same time, the Lords Amendment, in page 31, line 10, at the end, to insert the new Clause "A":

Service of notices and documents

A.—Any notice or other document required or authorised by this Act to be served on or given to any person, other than a company to which section four hundred and thirty-seven of the Companies Act, 1948, applies, may be served or given by leaving it at or sending it by post to his place of business or, if he has more than one, his principal place of business:

Provided that nothing in this section applies to any notice under paragraph 15 of the First Schedule to this Act.

I take it that I may do that with your approval, Mr. Deputy-Speaker, and that of the House.

This proposed new subsection empowers the Board or the Minister to get informaition from organisations representative of iron and steel producers, namely trade associations, other than those mainly concerned with casting or forging. In particular, the subsection covers the British Iron and Steel Federation. The information which the Board or the Minister can get under this subsection is information about the activities of the organisation reasonably required by the Board or by the Minister for the purposes of their functions under the Bill.

The Board or the Minister may require such information to be certified as correct by the organisation's auditors. Hon. Members will remember that we had a very full discussion on this matter during the Report stage. My right hon. Friend explained that there were difficulties about finding suitable wording to exclude the very wide range of associations which might be involved, and, in particular, hon. Members may remember the Metallic Bedstead Manufacturers' Association, which was in danger of being included by an earlier form of words that we were considering. However, the wording of this Amendment seems to get over all those difficulties.

The last sentence of the subsection is necessary because most trade associations are not bodies corporate, and, having no legal identity, could not be prosecuted for failure to furnish information. For the same reason, it has been necessary to include a service of notice Clause, in page 31, line 10, the Lords Amendment to which I referred a moment ago. It was not necessary to have such a Clause before because the producers concerned were companies, notice to whom was covered by Section 437 of the Companies Act.

The proviso at the end of the proposed new Clause "A," to which I think I should refer, preserves the requirement of paragraph 15 (7) of the First Schedule. This requires that notices under that paragraph, informing creditors of a publicly-owned company of their rights in the event of a reduction of capital without confirmation by the court, may be served by registered post if not served personally upon the creditors. That requirement, as I have said, is preserved by the proviso.

I believe that this new subsection and the consequential new Clause will meet the anxieties and wishes of hon. Gentlemen opposite. I am sure that they and my hon. Friends will agree that the new subsection and the new Clause enable my right hon. Friend to say that he has amply honoured the statement of good intentions in this respect which he made to the House during the Report stage in March. Therefore, I hope that the House will agree with the Lords Amendment.

Mr. G. R. Strauss

I fully agree with the closing words of the Parliamentary Secretary that in putting forward this Amendment which comes to us from the Lords the Minister is fully carrying out the pledge which he gave to the House on the Report stage that he would see whether it would be possible by an Amendment to meet our point of view. He has devised an Amendment which well meets our point of view, and I congratulate and thank him for doing so.

However, I hope that not only the Government, but the Iron and Steel Federation and everybody concerned will realise how important it is that a public body such as the Iron and Steel Federation—they cannot call themselves a private body—should have a duty to disclose to the Minister and to Parliament all information which is relevant to the well being of the industry over which they watch and for which they have a large responsibility. I have no reason to doubt that the Iron and Steel Federation agreed to the proposals of the Minister when he was drafting this Amendment. Indeed, I am sure they did because, if not, the Minister would not have put the Amendment forward. But the obligation is there.

In the past we have been exceedingly suspicious about some of the activities of the Federation. That was very largely their own fault because they indulged in politics on a large scale in a way which we found objectionable. We thought it wholly wrong that this body, whose purpose is to look after the steel industry, should use the money produced by a levy on steel to enter politics. If they do so in the future, the Government and the industry can be certain that we will press the Minister for information regarding how much of the production of the labour of the thousands of men in the industry is being used for a political purpose for which the few directors are responsible and in a way in which they, and they alone, think desirable.

5.45 p.m.

It is important that everybody should realise that not only the Board and the Minister have power to ask the Iron and Steel Federation for information about their activities, but that any hon. Member can request the Minister to ask the Federation for information, and can press him to do so. If the Minister does not want to ask for that information, he must tell the House why. In other words, the ball is at the foot of hon. Members, who can press for information from the Federation and similar bodies in future.

I wish to ask the Minister a question which follows upon the case he made to the House when we were discussing this matter on the Report stage. He gave us some very interesting and important information which we had been seeking for a long time, and which had never been vouchsafed to us, about the way in which the Federation dealt with the 1s. a ton levy, amounting to nearly £1 million a year, on all the iron and steel products of the industry. The right hon. Gentleman told us, broadly, how this money was being spent. But his answer, although informative to a certain extent, left us, in a way, in greater darkness than before, because some of the figures he gave puzzled us immensely and required further elucidation.

I have given the right hon. Gentleman notice that I should like him to give us information on two points. I am sure that the information is available and that the answer is a simple one. It would complete the statements which he made to the House on a previous occasion. No doubt the information has been supplied to him by the Federation. I think its publication would be satisfactory from the point of view of the Minister, of the Federation and of those who sit on these benches, because we want to know what exactly is the situation.

The Minister told us that out of the 1s. levy, 3½d., which represents over £250,000, was being spent by the Federation on salaries, rent and administrative expenses. That sounds an awful lot of money for this purpose, especially as the statistical services and the research work of the Federation are not included in it. Can the Minister give us some further information as to how this money is being spent?

Another very large sum, £170,000, is being used by the Federation for taxation purposes. That, surely, requires some further explanation. The Iron and Steel Federation is not a profit-making body. Why, therefore, does it have to pay such substantial sums in taxation? There may be some simple explanation, but we cannot guess what it is. Therefore, I should be most grateful if in reply the right hon. Gentleman would give us that information.

In conclusion, I wish to say that we appreciate and fully acknowledge that by this Amendment, which originated in the Lords, the right hon. Gentleman is giving us all that we have asked for. We think it highly desirable that the provision should be in the Bill in the interests of the consumers of steel and of the Iron and Steel Federation itself, and certainly in the interests of this House.

Mr. Sandys

The right hon. Gentleman very kindly gave me notice that he would raise these points and I should like to deal with them as briefly as I can, though to give him an effective answer I shall have to go into some detail. One point was that he would like more detailed information on how the Federation's expenditure on salaries and other administrative expenses was made up. I have asked the Federation—of course, I have no right to require this information from them—if they would let me have further details so that I might give them to the House. They most readily made this information available to me.

I should like to read to the House the details of how the 2⅜d., which is the proportion of the 1s. levy which is included under the heading "Salaries, Rents and Administrative Expenses," is made up.

Mr. G. R. Strauss

If the right hon. Gentleman looks at his original speech in column 1240 of HANSARD he will see that he there said the amount was 3½d.

Mr. Sandys

I am grateful to the right hon. Gentleman for correcting me; 3½d. is the total, and 2⅜d. is the amount which relates to salaries. I am sorry if I made a mistake. Let me be quite clear. I am going to give to the House the detailed breakdown of the 3½d., which covers salaries, rents and administrative expenses in the year 1952. Of that sum, 2⅜d. is for salaries for some 300 employees. It includes National Insurance payments, superannuation and group life assurance and a very wide range of duties undertaken by the Federation. The matter was fully discussed, as the right hon. Gentleman knows, with the Federation, as to what common services should continue to be carried on by the Federation after the Corporation came into being. These duties include executive duties, secretariat, steel production and supply, international relations and the export department, raw material matters, what is known as the technical advisers' department, training and labour relations, market development and public relations, costs and finance, transport department, general department and clerical services, and the plant progress department.

I do not claim to have gone into all these matters and to know exactly how they are made up. All I would say is there is no doubt that the Federation is carrying on a very wide range of duties for the industry as a whole. It is not our business to decide whether they employ the right number of people or pay them the right amount in salaries. The right hon. Gentleman has asked me a question, and that is the information, the very full information, which I have obtained.

As for the remainder of the 3½d., it is made up of: travelling expenses, ¼d.; rent, rates, lighting and heating, etc., ⅜d.; telephones, cables, postage, stationery and printing, ¼d.; general office expenses, ⅛d.; and legal and professional charges, ⅛d. That makes up the 3½d. I think the right hon. Gentleman will agree that we are indebted to the Federation for providing in such detail the particulars of their internal finance, which we have no right to demand but which they have readily provided. I hope that the statement broadly covers the points about which the right hon. Gentleman wanted to know.

His other question was why the Federation is liable to taxation at all and how that liability arises. I have consulted both the Federation and the Board of Inland Revenue on this question. The Board informed me—I am not an expert on these things and so I will keep fairly close to what they have told me about it—that companies are entitled for taxation purposes to deduct from their profits such part of their subscriptions to a trade association as is expended by the association for purposes which would have been admis-sable as a deduction from profits if it had been incurred directly by the company itself. However, the literal application of this principle would cause considerable inconvenience to the companies concerned, as well as to the trade association and to the Inland Revenue authorities. Consequently, a trade association is permitted to come to an arrangement with the Board of Inland Revenue, under which sums paid to a trade association by its constituent firms may be treated as trade expenses by those firms.

On the other hand, the association is assessed for taxation on any surplus of its receipts over its expenditure. I understand that the British Iron and Steel Federation have made an arrangement of this kind with the Board of Inland Revenue, and, as a result, are liable to taxation. The figures I quoted show that a substantial amount of the Federation's receipts had not been expended but had been retained, and are available for capital expenditure on ore ships and similar matters on which the Federation has undertaken substantial commitments. I understand from them that it is this surplus which gives rise to this taxation liability. I hope that this covers the point about which the right hon. Gentleman wanted information.

Mr. G. R. Strauss

I thank the right hon. Gentleman for that information, for which we are indebted to the Iron and Steel Federation. My own comment is that there seems to be bad business somewhere. Because the Iron and Steel Federation want capital at a later date, they collect from the iron and steel companies so much more money than they require that they have to pay the Inland Revenue £170, 000 a year surplus. That was because they were collecting more than they required or could spend. They only need the surplus to pay for ships which they have ordered and want to be delivered in a year or two's time. It seems extraordinarily bad and inefficient business, but that is not our affair. I am grateful to the right hon. Gentleman for giving us the figures.

Mr. Sandys

I think the answer is that if the companies retained that money they themselves would have to pay pre-cisely the same amount in additional taxation. It is merely a question of whether the companies pay the taxation themselves or the Federation pay it on their behalf. I do not suppose they are such bad businessmen as to pay more money than necessary to the Chancellor of the Exchequer.

Question put, and agreed to.

Lords Amendment

In line 34, at end, insert: or to the distribution of such raw materials when imported.

Mr. Low

I beg to move, "That this House doth agree with the Lords in the said Amendment.

The proposed Amendment rectifies what we acknowledge is an omission in subsection (4), which relates to common service importers of raw materials. The subsection only provided for information from such bodies about the importation of raw materials. It is obviously important that there should be also information about the distribution of such raw materials, and I hope that the House will agree with the Lords in the Amendment.

Question put, and agreed to.

Further Lords Amendments down to page 33, line 19, agreed to. [Several with Special Entry.]