NATIONALISED INDUSTRIES (SELECT COMMITTEE)

HC Deb 29 November 1956 vol 561 cc590-660

4.3 p.m.

The Lord Privy Seal (Mr. R. A. Butler)

I beg to move, That a Select Committee be appointed to examine the Reports and Accounts of the Nationalised Industries established by Statute whose controlling Boards are appointed by Ministers of the Crown and whose annual receipts are not wholly or mainly derived from moneys provided by Parliament or advanced from the Exchequer. This Motion represents a further approach to a problem which has been exercising the House for some time. It is entirely proper that the Government and Parliament should proceed step by step in a matter of this kind. Parliament's relations with the nationalised industries will develop as an evolutionary process, and so we must not be impatient if it takes a little time to find the right answer to this question. The problem is to decide by what means Members may best inform themselves about the activities of the nationalised industries without taking upon themselves responsibilities which properly belong to Ministers of the Crown or encroaching on the independence of enterprises which are and must remain fundamentally commercial in character.

This problem was reviewed in the Second Report of the Select Committee on the Nationalised Industries which was appointed in November, 1952, under the Chairmanship of the present Lord Clitheroe and which reported in July, 1953. The Select Committee recommended by that Report was first appointed on 16th March, 1955, and reconstituted after the General Election on 7th July, 1955. On 14th November of that year the Committee reported that its terms of reference left it insufficient scope to make inquiries or to obtain further information regarding the Nationalised Industries which would be of any real use to the House. Since then we have been considering very carefully what course we ought to follow, what course we ought to recommend to hon. Members. We have decided, after considering various possible methods of procedure, that a new Select Committee should be appointed for the purpose and a fresh attempt made to grapple with what is admitted by everybody to be a difficult and delicate operation. We should have introduced this Motion last Session had there been time. The House will remember that we had a very overloaded programme, and there was not time, and so we had to wait for the new Session.

Why then do we recommend in the light of experience of what has gone before the appointment of yet another Select Committee? There are three good reasons for this. First, it was the unanimous recommendation of the Clitheroe Committee that a Select Committee is the only practical means of performing these functions that is, proper liaison between Parliament and the nationalised industries.

The second reason why we have reverted to the idea of a Select Committee is that it is our traditional procedure in this House and it is a procedure which Parliament understands and knows how to work. It has the additional advantage that it is relatively free from party bias.

The third advantage of this Select Committee procedure is that it is a procedure which is complementary to and not intended to be a substitute for Parliament's other opportunities for discussing the nationalised industries, and which everyone recognises as the easiest and straightest way of considering them.

The trouble is that the pressure of business on the Floor of the House makes it increasingly difficult for hon. Members to give adequate attention to the considerable body of facts and figures about the nationalised industries which is in various forms available just now. Therefore, there seems to be both need and room in addition for a more continuing and sustained opportunity for hon. Members to acquaint themselves with the affairs of these nationalised industries. Therefore, we would hope that a new Select Committee set up for this purpose would gradually create on both sides of the House a body of informed opinion about these industries which, while not refraining from criticism where criticism was due, would at the same time approach this problem in a helpful and constructive spirit.

Of course, such a Select Committee would produce reports of its own from time to time, and, as time permitted, we would try to see that opportunity was provided for giving an occasion for debating its reports. As a result the affairs of these nationalised industries would be brought back into the main stream of Parliamentary discussion, with this added advantage, that the material would have been sifted beforehand. So, while our opportunities on the Floor are limited, we should at least have a body of our own, and a traditional body, which would sift the material.

It is clear that the Opposition, with whom we had discussions before, do not agree with this point of view, but as far as I can see from the Amendment which, I understand, the hon. Member for Cardiff, South-East (Mr. Callaghan) is to move, the Opposition go no further than to consider that the appointment of a Select Committee is not the appropriate way of dealing with the problem.

I hope—and I say this in the hope of hearing something to the advantage of the procedure of Parliament and the nationalised industries—that the Opposition will put forward some possible alternative of their own. We shall look forward to hearing what they have to say about their alternative proposals and what reasons they have for thinking their proposals would be better than the course which the Government themselves think best and intend to recommend to the House.

However, we admit as a Government, as the Prime Minister made clear in his announcement of 10th May, that the appointment of this Select Committee will still be an experiment. It will have to be judged by its results. I can modestly say that this experiment of a Select Committee will have to be reconsidered, if necessary, in the light of experience. Everything will depend, therefore, on the spirit in which the Committee sets about its task and the way it does its work. The basic principle was stated in paragraph 15 of the Report of the Select Committee under Lord Clitheroe, which said, It is essential that the Committee which we are recommending will, when appointed, set up a tradition of conduct which will result in its being regarded by the Board not as an enemy or a critic"— I do not think that the Opposition would disagree with that— but as a confidant, and a protection against irresponsible pressure, as well as a guardian of the public interest. These remarks, at any rate, however the practice may work out, are unexceptionable.

The Committee will be asked with regard to its agenda, as its predecessor was asked last year, to examine the Reports and Accounts of the nationalised industries. These Reports and Accounts seem to us to provide a convenient summary of what the nationalised industries are doing, and I suppose that these documents would constitute the most practical agenda for the Committee that we could possibly devise. As to the restrictions on the Committee's terms of reference, the previous Select Committee was debarred by its terms of reference from considering four types of subject matter, but it became clear by experience that an exact interpretation of these prohibitions was likely to lead to great difficulties and confusion. It is almost impossible to be exact in this field, as the right hon. Member for Lewisham, South (Mr. H. Morrison), who is an expert on the subject, knew.

We have come to the conclusion, for that reason, that it is wiser to try not to debar the Committee from discussing certain questions by a series of specific prohibitions—and therefore we have learned something from experience—but simply to trust to the good sense and good will of the Committee itself. The Chairman of the Committee will have a particularly onerous and difficult task, because he will be making case law, as it were, by his conduct of the proceedings of the Committee.

Mr. Ronald Williams (Wigan)

Do I follow the right hon. Gentleman's argument correctly to the extent that he means that the proposal he has put forward is that the Select Committee which he envisages is to act without terms of reference?

Mr. Butler

No, the terms of reference are set out in the Motion.

Mr. Williams

But apart from that?

Mr. Butler

I think that as I continue my speech the hon. Member will see particularly what we have in mind. I read the Motion, which the hon. Member may not have heard, when people were moving, wisely, from the Chamber before the debate started.

The Committee will have regard to the general state of opinion in the House at the time of its appointment. I suggest that this debate will not leave very much doubt about that opinion. I was about to summarise it in two propositions. The Reports and Accounts reveal a wide range of subject matter all affecting the finances and efficiency and scope of the industries which the Committee can usefully consider. But, at its two extremes—namely where the issues involved are purely matters of day-to-day administration at the one extreme, and at the other where they are matters of major Government, as distinct from commercial, policy—it is surely right that the Committee should not seek to trespass upon the authority of those bodies respectively responsible, namely, in the one case, the Corporations themselves, and, in the other, the Ministers of the Crown.

Parliament has decided that nationalised industries are to be run not as Government Departments but, as far as possible, as independent commercial boards. As a result, their relationship to Parliament is different from the relationship of a Department such as the Post Office, and detailed investigations such as those conducted by the Comptroller and Auditor-General into day-to-day activities of Government Departments would not be appropriate. They ought not to be harried about matters of day-to-day administration, otherwise they will tend to lose that sense of independence and initiative which is so vital to a fundamentally commercial undertaking.

Mr. David Jones (The Hartlepools)

Is the right hon. Gentleman now saying that the letter which was written by the Prime Minister on 26th June, 1956, to the General Secretary of the Trades Union Congress goes by the board? Is he aware that the following words appear in that letter: Naturally the Government would not expect the Committee to interfere with the normal procedure over wages, conditions of employment … and so forth? If there is no prohibition in its terms of reference, will the word of the Minister at the Dispatch Box be sufficient to prevent the Committee, when set up, from discussing these matters?

Mr. Butler

I intended to deal with wages. I do not want to go back on any letter written by the Prime Minister. I know that the Trades Union Congress is interested in this matter and I should not like to lose any support from that quarter in the manner in which the House, through this procedural Committee, will interest itself in the industries.

Mr. James Callaghan (Cardiff, South-East)

This is a matter of substance, not merely in relation to wages, but to other issues. In what way will the Committee be debarred from discussing matters of day-to-day administration, even if it is the Government's desire that it should not, and the Committee, in its wisdom, decides to do so?

Mr. Butler

I cannot go further than to say that we lay down general guidance for the Committee and depend upon it to carry out its duties. I do not see that we can do more. The House is entitled to discuss nationalised industries on the Floor, if we set up the Committee, we are hoping that we shall find a body which will screen some of the material and enable us to use the sparse time that we have available to discuss major issues.

If this scheme does not work, we shall have to find an alternative. The appointment of the Committee is an act of faith, and I hope that the Committee will follow the lines which I have indicated from the Dispatch Box. To go further, would be to claim something that I could not claim. If we were to interfere I do not think that we should find it easy to obtain the services of first-class men on the boards of the Corporations. This was recognised by the Clitheroe Committee which made the observation which I have just made, and with which I agree, in paragraph 22 of its Report. Equally, however, the Corporations should not be cross-examined on those particular issues of policy which Parliament, in enacting the relevant statutes, clearly regarded as reserved to Ministers. The proper place for discussion of issues of that kind is on the Floor of the House where, by all our practice and tradition, Ministers are properly answerable to the House.

The Select Committee of last Session found some difficulty in striking the right course between these extremes, but I am of the opinion that this difficulty may have been, to some extent, the result of its approaching the subject in rather too negative a spirit. This may have been because the terms of reference drew too much attention to prohibitions and the Committee gave much attention to ascertaining what its terms of reference prevented it from doing when it might have explored opportunities which a reasonable interpretation could have left open to it. I think that that is advice that could be given to the new Select Committee when it is set up.

Mr. G. R. Strauss (Vauxhall)

May I, as a member of that Committee, ask the right hon. Gentleman whether he is aware that we considered a large number of possible subjects for discussion and found in every case that it was either a matter of detailed administration, or one in which the Minister ought to have, might have, and probably did have, some influence with the Committee and it came under his responsibility?

Mr. Butler

It might help the right hon. Gentleman if at this stage I gave one or two examples of the subjects to which, as I have worked out, it might be possible for this Select Committee to turn its attention straight away. One would be the financial outcome of operations. That is a fairly broad subject. Secondly, the working of the industry with reference to the devolution of authority within it. Thirdly, the working of the industry with reference to the techniques of managerial efficiency. Fourthly, recruitment and training of technical and managerial staff. Fifthly, relations with consumer councils and the public. Sixthly, relations with outside industries. Seventhly, the unremunerative responsibilities of the boards. These are only examples. I cannot go on for ever because in that case we would not appoint a Select Committee.

These are all examples which are a hint to the proposed Select Committee, steering between the two extremes I have mentioned, that there is valuable work to be done quite apart from the examination of the Reports and the Accounts which are the broad terms of reference.

In answer to the right hon. Gentleman the Member for Vauxhall (Mr. G. R. Strauss), may I say that when I said the previous Select Committee spent a great deal of its time upon the negative aspect, it was not because I wished to criticise its members, some of whom I am closely associated with, or to criticise the right hon. Gentleman? It is extraordinarily difficult to find, in a hurry, the right relationship between Parliament and the nationalised industries, and if this debate does anything to clear it up, we shall have done some good. At the moment I am sure it is right to try the experiment of another Select Committee on the lines I am recommending.

We are making a fresh start today. While it seems to the Government to be almost beyond argument that the two extremes—detailed interference at one end and Ministerial responsibility at the other—are not suitable fields for a Select Committee to indulge in or explore, we are confident that the Committee can, in its good sense, concentrate on the wide range of subject matter to which I have referred and which lies between. That is why I said this proposal was an act of faith.

In addition, over the entire range of the activities of the nationalised industries there are certain questions in which any intervention by a Select Committee would be definitely undesirable. One example is the type of question which is dealt with by machinery established by statute—and this is the answer to the hon. Gentleman the Member for The Hartlepools (Mr. D. Jones)—namely, the fares and charges dealt with by the Transport Tribunal.

Another, and perhaps even more important question, is the type affecting wages, conditions of employment, and so forth, all the issues of which are normally decided by collective bargaining arrangements. Therefore, in moving for the appointment of this Select Committee I deliberately answer the hon. Gentleman in his reference to the attitude of the T.U.C. by saying that it would be undesirable if these matters came within the purview of the Select Committee.

I need not labour the point which is involved here, but I should like to be explicit about it. Where it has been decided, whether by statute or by long-established practice, that a certain question should be handled by defined machinery, no good can come of creating an atmosphere of doubt and uncertainty about that machinery, as would be inevitable if it were subjected to the type of detailed scrutiny which a Select Committee might properly bring to its task.

Mr. Percy Collick (Birkenhead)

The right hon. Gentleman is, of course, expressing the opinion of the Government on this matter. If I understand him aright, unless there are terms of reference to the Select Committee in which these matters are closely defined there will still be nothing to prevent that Committee doing what the Minister is talking about, will there?

Mr. Butler

I am saying that we think, if we lay down a series of prohibitions, and if we try in any way to enlarge by definition the reference to the Reports and the Accounts, we should be doing more harm than good. By stating this on behalf of the Government—and I have deliberately moved this Motion myself so as to give it as much authority on the part of the Government as we can at the present time—I have to define what I think will be fields in which it would be undesirable for the Committee to intervene. Frankly, if the Select Committee should intervene in those fields we would have to provide—because the Government have the right of proposition in this House—some alternative machinery by which the job could be done.

Mr. Callaghan

We are trying to get the mind of the Government as clearly as we can. May I take the recent example which the right hon. Gentleman gave? An examination of the financial outcome of operations in the case of the Transport Commission would clearly be related to the level of charges fixed by the Tribunal, and the right hon. Gentleman has just said that he does not think that matters which fall within formal machinery of this kind should be reviewed by the Select Committee. How can such a Committee effectively review the financial outcome unless at the same time it looks at the level of charges?

Mr. Butler

That is a good question. One has to differentiate between the Select Committee endeavouring to usurp, for example, the work of the Transport Tribunal in fixing fares and charges from an animadversion by it upon the state of fares and charges in its relation to the financial outcome. That is the differentiation which the Committee would have to make. That is why, in the sentence which I had just enunciated about defined machinery, I wanted to make it clear that the members of the Select Committee should not attempt to usurp the functions of defined machinery. Both in looking at Reports—and the word "report" means what it says—and in looking at Accounts, the members of the Committee must have regard to facts as they have emerged from the deliberations of established tribunals such as those to which I have referred. I hope that is sufficiently judicial for the hon. Gentleman the Member for Cardiff, South-East, to swallow.

I may sum up in this simple way. The results of a specific piece of defined machinery working may sometimes need to engage the attention of the Select Committee in so far as it may affect the economic operations of a nationalised industry. But that is a very different matter from usurping the functions of, for example, the Transport Tribunal or attempting to take the place of the proper, collective bargaining machinery upon which the wages and conditions of this country so rightly, and to such a large extent, depend.

As to the machinery itself, and the way in which that machinery is constituted, and the way in which it works, all these are questions which are not, in the view of the Government, suitable for consideration by a Select Committee. For instance, having examined the results in the form of fares and wages as they affect the economic situation, the Committee would not, in our view, be properly discharging its task if it were to consider the constitution or the performance of the duties of such a body. For example, we should not expect the Select Committee to interfere with the normal negotiations for wages, conditions and so forth. I say that again.

I want now to turn to the assistance which we propose to give to the Committee.

Mr. Arthur Moyle (Oldbury and Halesowen)

Would it be competent for the Select Committee which the Lord Privy Seal has in mind to recommend at any time, having regard to the prevailing financial circumstances of a given nationalised industry, that, for example, the wages paid or the profits obtained were greater than the economy could bear?

Mr. Butler

I used the word "animadversion" which in simple English means "observation". I do not think we can eliminate from the powers of a Select Committee that of making observations. I do not see how we could do so, because this is an experiment and, as I have said, the previous Select Committee had to throw in the sponge because it found the work too difficult. I believe that this Select Committee will, under the right chairman, be able to perform a useful task in screening material for the House of Commons. That is all I say. I would not exclude observations about the economic effect of certain measures, but I would exclude interference with the machinery itself.

Now about the assistance to be given to the Select Committee. We want its members to have the maximum of practical and effective help. They will be granted the usual powers to require persons, papers and records to be made available to them. No doubt the Committee will wish to summon spokesmen of the industries concerned, and of the relevant Departments, to give evidence. Moreover, as the Prime Minister indicated on 10th May, there will be available to the Committee the advice and assistance of those senior Treasury officers who are in charge of the Treasury Divisions concerned with the industries in question. We think they should at all times be available to the Select Committee. That will be an improvement upon the assistance available to the last Select Committee.

Formally, those officers would appear as witnesses before the Select Committee, as would any other individuals whom the Select Committee saw fit to summon, but, although they would have that formal position as witnesses, we hope that they would, by more or less continuous attendance at the Select Committee's meetings, come to occupy a position not dissimilar from that occupied by the Treasury Officers of Accounts at meetings of the Public Accounts Committee. In relation to Accounts, of course, this Select Committee would be, so to speak, a cousin or distant relation of the Public Accounts Committee. Thus, the officers would both contribute to, and themselves benefit by, the body of knowledge and experience which would gradually be built up by the Select Committee's deliberations. We are confident that, by the sort of mutual relationship which can be created in this way, the Select Committee could do a really better job than the last one was able to do with the limited resources at its disposal.

We do not propose to adopt the recommendation of the original Clitheroe Committee that the Select Committee should be advised by a whole-time officer with the status of Comptroller and Auditor-General. To give effect to that recommendation would, in any event, involve legislation which would tend to fix the pattern of the Select Committee's work too definitely and too finally. We, therefore, propose this intermediate way, which, from my own knowledge of the officers concerned, having been at the Treasury for some time, I believe will be of the greatest value to the Select Committee. I believe it will really work.

Sir Ian Horobin (Oldham, East)

Do I understand there will be no continuing assistance to the Select Committee on the accountancy side when it transfers its discussions or considerations from one nationalised industry to another, or would it be possible, by an extension of earlier practice, for it to keep the same Treasury accountancy assistance over a field wider than any one particular nationalised industry?

Mr. Butler

Yes, Sir. I think that the way it will work is as follows. There will obviously be one senior Treasury officer who already has experience of the whole field, and, indeed, in his own sphere of responsibility, he would have to be assisted by certain officers concerned with particular industries. It would be through the permanent member, so to speak, that there would be continuity between individual industries.

I have done my best in these brief opening remarks—I know a number of other hon. Members wish to speak—to give the House an indication in general terms of the way in which the Government hope that the Select Committee may work. In life one has to decide either to define things absolutely or to commit what amounts to an act of faith and discretion. We are not in either case, whether we are to define very closely or to commit an act of faith, taking an absolutely final decision about the best method of associating the House with the nationalised industries. It may be that the scheme will not work.

We shall not listen to the Opposition point of view in any spirit of regret or bitterness that hon. Members opposite should not accept our proposal, because this is far too difficult a subject and one upon which there must be a difference of opinion. However, we hope that, by experience, we may find the solution, if the new Select Committee works, as I have a hunch it may, perhaps just for this Session at any rate, we may be able to build upon that and find the right method of associating Parliament with the industries which have been nationalised in this sector.

I invite the House to approve the Motion, and I also invite the hon. Member for Cardiff, South-East, who will be speaking for the Opposition, and his right hon. Friend the Member for Vauxhall, with all their ability, to make further constructive suggestions so that when we set up the Select Committee we may have a corpus of doctrine upon which to work; and if the Committee does not work, we shall then be able to build from this debate.

4.35 p.m.

Mr. James Callaghan (Cardiff, South-East)

I beg to move to leave out from "That" to the end of the Question and to add instead thereof: this House, while recognising the need for improving arrangements for Parliamentary discussion of the affairs of the Nationalised Industries, does not consider that the appointment of the proposed Select Committee is the appropriate way of dealing with this problem. I acknowledge the approach of the Leader of the House to this question, but I regret that the Opposition cannot support the Motion. I understand that he will shortly have to leave for other discussions. We quite understand that that should be so and are ready to release him. We only hope that the outcome of his discussions will be satisfactory. We understand that the Minister of Transport and Civil Aviation will later be speaking for the Government.

Mr. R. A. Butler

I shall have the greatest pleasure in listening to the hon. Gentleman, but I shall be very glad if the House will excuse me after that.

Mr. Callaghan

I think that everyone understands why the Leader of the House will have to leave.

It was my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), I think, who said, "Why gaze into the crystal when you can read the book?" When the right hon. Gentleman invites us to undertake this act of faith, we, in return, say to him," Why go on disillusioning yourself so many more times?" We have been through all this before. History teaches us that history teaches us nothing, apparently. It is precisely because we have had this experience of what a Select Committee can do and what it is not free to do that we have been forced to say, in respect of the Motion, "There is a great deal in your criticism, but we cannot accept your solution."

Nothing in the world is perfect, and certainly not the organisation of either the nationalised industries or large-scale private industry. The organisation of all those industries is engaging the attention of everyone who is concerned with the structure of British industry today, whether the industries be privately or publicly owned. No one on this side of the House will say that the form of the industries devised in 1947 should necessarily persist in 1957. If we cannot learn by experience, we are poor learners.

The Opposition would certainly always be willing to look at constructive suggestions which are put forward, and it is in that frame of mind that we are approaching the right hon. Gentleman's proposition. However, I do not think that the Government have properly thought this matter out. The right hon. Gentleman has one of the most acute minds in the House of Commons—no one is more capable than he is of getting to the heart of a problem—and when he is obscure, it is, in my view, a deliberate obscurity and not an obscurity which arises because he is unable to penetrate the problem.

When I and my hon. Friends asked him earlier about the manner in which the Select Committee would operate, I think the whole House was left in as much of a fog about the subject as it has been by the right hon. Gentleman's answers in relation to some more contentious matters which have been discussed in the last few weeks. What he said, in effect, was, "We are not giving the Select Committee any terms of reference, because when we gave the last Select Committee specific terms of reference it failed."

Nevertheless, in the course of his speech he indicated—I hope he will correct me if my interpretation is wrong—that it was the Government's view that all the matters which were excluded from the terms of reference of the March, 1955, Select Committee should be excluded on this occasion. He said that questions which concerned Ministerial responsibility should not engage the attention of this Select Committee. My hon. Friend the Member for The Hartlepools (Mr. D. Jones) asked a specific question about wages and conditions of employment, and the right hon. Gentleman said that he thought it would be improper for the Select Committee to engage in such discussions. There is also the question of matters of day-to-day administration. The right hon. Gentleman said that one should not harry the nationalised industries upon those and other matters falling to be considered through formal machinery, namely, fares fixed by the Transport Tribunal. He said that it would not be within the purview of the Select Committee to criticise what had been done.

Those are exactly the four matters which were excluded on the last occasion when a Select Committee was set up. What difference the right hon. Gentleman thinks is being made by not excluding them in the terms of reference but indicating that the view of the Government is that they should not be considered I am not quite sure, unless it be this. No, I do not wish to introduce that. I will not say what I was going to say, because this is a very harmonious discussion. I will put it the other way round.

In doing what he is doing, although he indicated the Government's view, the right hon. Gentleman is not preventing any hon. Member from raising any of these issues in a Committee room. I have told the right hon. Gentleman what we suspect. We suspect that hon. Members, some of whom are present here today, will use this Select Committee as an opportunity for embarking on that.

Sir I. Horobin

In that case it would be wound up.

Mr. Callaghan

Maybe, but perhaps the damage will then have been done.

Let me put one or two of the possibilities to the right hon. Gentleman. There was a reference in the last Report of the British Transport Commission to the strike of the Associated Society of Locomotive Engineers and Firemen. I have no doubt that if the right hon. Gentleman were a member of the Committee he would say, "This is not a subject on which we should have a postmortem", but would he care to say that no hon. Member of this House would not relish that opportunity? There might be one hon. Member of the House who would relish the opportunity of doing mischief and damage on a matter of that sort. If the opportunity were allowed him, he could do far more damage than this Committee could do good.

I say to the light hon. Gentleman that those who have had to sit and listen to some of the muckraking talks on nationalised industries which have been instituted by some of his hon. Friends believe that this horse has come from the wrong stable, that it is, in fact, another example of yielding to backbench driving. The hon. Member is waiting for me to mention him, so I will now gratify his vanity. The hon. Member for Kidderminster (Mr. Nabarro) is to the nationalised industries what the right hon. and gallant Member for Leicester, South-East (Captain Waterhouse) is to the Suez Canal. Both of them afflict the Government in the same way.

If we have Members of this Committee who are to follow the lines which have been followed in debates on these nationalised industries, I can only say to the right hon. Gentleman that it is our considered view that more harm will be done to the morale of those industries—to the operative and the managerial grades—than any good which will result from the examination which might be made. I can understand, in the academic atmosphere in which the right hon. Gentleman has introduced this debate, that on the surface it looks a very attractive proposition. In some ways I can find myself not objecting to it if the history of the last few years had been different, but it has not been different.

We had an example when we were intended to discuss this matter in June. We had an example of how a most trivial incident concerned with the day-to-day administration of the National Coal Board was elevated into an Amendment, discussed at great length by some of the supporters of the right hon. Gentleman, engaging the attention of the House, and clearly of no value at all to the sort of exercise we want to pursue in getting a reasonable and fair discussion of the affairs of the nationalised industries.

Mr. Gerald Nabarro (Kidderminster)

I am sure that in the harmonious atmosphere of our debates the hon. Member would not wish to misrepresent what the purpose of the exercise of last June was. It was on the question of raising fresh capital, increasing the borrowing powers of the National Coal Board. Surely therein enshrined was a very important principle, whether the nationalised industries should come to the House every five or every seven years for a renewal of borrowing powers, or whether the House should exercise an annual control over and the vetting of new money for the industries. That was not a matter of expediency, but a very important matter.

Mr. Ian Mikardo (Reading)

Why did the hon. Member not vote for it?

Mr. Callaghan

It is astonishing how the hon. Member for Kidderminster has a capacity for deceiving himself. My recollection of him that night is not that of discussing the matter in those terms, but of discussing the acquisition by the Coal Board of a so-called country mansion and bringing in photographs from the Daily Express, which he waved about in the House, thereby reducing the debate to the level of a Conservative ward meeting.

I know that the right hon. Gentleman does not want that sort of thing done. I fully accept his bona fides and those of other hon. Members opposite who have discussed this matter, but can he be sure that his hon. Friend will not be on the Select Committee?

Sir I. Horobin

As the Press would not be present, perhaps it would be a waste of his lime.

Mr. Callaghan

That is a more stinging rebuke than I could possibly have effected.

I should like to examine some of the tasks that this Committee is apparently to have allocated to it. The Minister did give us some general illustrations. He talked, for example, about the financial outcome of operations. I quoted to him what I thought a particular and immediate difficulty in relation to the Transport Commission. Let us take another illustration, as the Minister of Transport and Civil Aviation is to reply to the debate.

Let us take the case of B.O.A.C. Last spring, on 23rd April, the Minister said: We must fly British, all British. That is the assignment I intend to give the new chairman and his colleagues. One clear precedent I intend to maintain is that the Board's policy is a matter between me and the chairman. Four days later the right hon. Gentleman corrected that statement, saying: It is for the B.O.A.C. chairman, after full consultation with his Board and the aircraft manufacturers, to come forward with proposals for the aircraft needed for further operations. I must say I thought that the second statement of policy much more acceptable than the first one, but, on every count, if this Committee is to consider the financial outcome of operations it has to consider whether B.O.A.C. is right to attempt to fly all British or whether it should purchase American Boeing aircraft in order to put itself into a financial state in which it will make a profit. Is its task to support the British aircraft industry, or to return a commercial surplus? I do not think I need carry this any further. Where is the Committee to get to once it embarks on examining the financial outcome of air-aircraft operations?

Sir James Hutchison (Glasgow, Scotstoun)

I am indebted to the hon. Member for giving way, because I am most interested in this problem, as I sat on the previous Committee. I should have thought the answer to the sort of question he is putting is that the Committee would be entitled to examine this matter and come to a conclusion, but not thereafter to try to interfere with policy. It would merely say what the result of following that policy might amount to. Would not that be a fair interpretation?

Mr. Callaghan

I suppose that that would follow, but I have not quite reached that conclusion yet.

I was going on to ask the Minister, as the Government, I suppose, must have some views about this, who does he think is to come before the Committee? Is the Committee to send for B.O.A.C. officers? Will they be exposed to cross-examination by hon. Members of this House, asking, "Why did you recommend the purchase of BC.7C's rather than Bristol Britannias?"

Or, alternatively, they might be asked, "Why do you think that British aircraft should form the basis, and not American aircraft?" Are officers of the Board who are responsible for advising members of the Board on these matters to be subject to cross-examination on the nature of their advice and the reasons they gave it, or are those who come in front of the Committee to be limited to members of the Boards themselves?

Mr. G. R. Strauss

And in public, too.

Mr. Callaghan

As my right hon. Friend interjects, all this is to be in public.

These are all highly commercial and competitive operations, affecting a great many responsibilities of B.O.A.C. in its relation to corporations overseas. I suppose that it would be possible for the matter to be conducted in private, if necessary, but a certain amount of the value of the exercise would then be lost. It seems to me that the lowest the right hon. Gentleman can go, and the least he can say, is that members of the Board themselves and not their officers should come in front of this Select Committee; otherwise, it will put the servants of the Board in an extremely difficult position.

I shall leave that point, because I am anxious not to be too long, and we have only a short debate, although we really need a long one to discuss the subject fully. What about the relationships between the Minister and the Board? Suppose the Minister of Transport and Civil Aviation had persisted in his view that American aircraft should be ruled out in this connection, and that we were to fly all-British—British engines in British planes. A member of the Board would presumably come along and say, "We got our direction from the Minister".

The Lord Privy Seal said that a spokesman for the Department would come before the Committee? Who will it be? Will it be the Permanent Secretary, or one of his officials—or is the Minister or his Parliamentary Secretary to come? If it is the latter, there is no need for me to tell the Lord Privy Seal—who has much more experience of the House than I have—that we are going to stumble into great constitutional changes by accident. Although I am in favour of the empirical approach I want to see where the approach will land us in the end. We may find ourselves, as a Parliament, in a commission, at any rate so far as the responsibilities of Ministers and nationalised industries are concerned.

Let me take the question of the financial outcome of operations, and consider the matter of fares again. Could the Select Committee discuss the Government intervention which took place in April, 1952, when they directed the London Transport Executive not to raise certain fares, for which increase sanction had already been given, I believe, by the Transport Tribunal—or one of the bodies which are supposed to consider such matters? The Government stepped in and said, "No"—in my view for highly party reasons, which had nothing to do with the national interest; unless the right hon. Gentleman equates the national interest with winning control of the London County Council. Perhaps it is the same thing from his point of view, but it is not from mine.

In this case, is the Committee to be able to roam over all this ground again—because it will be in the accounts, and the direction by the Government will be in the Annual Report—or, because it is a question of Ministerial responsibility, will it be taken out of the hands of the Committee and brought back into the ambit of discussion upon the Floor of the House? If it is the second alternative—and I think it must be—how does the Lord Privy Seal think that the financial outcome of operations can be sensibly discussed when decisions have been taken which make the difference betwen a profit and a loss in the accounts of the Transport Commission?

Then there is the question of coal prices. It is widely believed that the Coal Board wanted to raise its prices of coal before the General Election. It is also widely believed that the right hon. Member who represented Ladywood resisted the proposal. What we know happened is that coal prices were not raised until after the Election—and that the only reward which the right hon. Gentleman had was to be dismissed, which was a poor reward for the help he gave in winning the Election.

Mr. D. Jones

My hon. Friend is not quite correct. The right hon. Gentleman ran away from Ladywood, and is now the right hon. Member for Sutton Coldfield (Mr. Geoffrey Lloyd).

Mr. Callaghan

Then I beg his pardon.

Mr. Jones

And he was not dismissed; he was made redundant.

Mr. Callaghan

I agree that the loss which the Coal Board ran into last year was very largely the consequence of the decision of the Government not to sanction price increases until the General Election had been held. If this Committee is to be able to discuss sensibly the financial outcome of operations and is to be able to go over all this ground, is the right hon. Gentleman to be called in front of it and examined upon the part he has played? Are officials of the Coal Board to be called in front of it and asked, "Did you, in fact, ask the Government to increase coal prices? If so, what reply did you get?" I hope that the right hon. Gentleman realises where this Committee is going if it does not have terms of reference.

It is no use his saying, "In my view it would be improper for this Committee to discuss matters concerning the responsibility of Ministers," if the Committee upstairs is staffed by certain hon. Members who, as you, Mr. Deputy-Speaker, know, are particularly ingenious in the manner in which they debate matters which you would prefer not to have debated. If some of those Members are on the Committee it will run wildfire throughout the whole gamut and range of the reports and accounts of the nationalised industries.

I paid tribute to the Lord Privy Seal's acumen just now, but in this matter the Government have thrown up the sponge; the effort of cerebration has been too much for them. They considered what happened in the case of the last Committee, when the Government made an attempt to define its terms of reference, and they said, "Let us throw the whole lot at them—kitchen sink and all—and see what they can make of it." We do not believe that this way of dealing with the matter will be of any use to the nationalised industries. It will not improve their morale, nor do I believe for one moment that it will increase their efficiency.

In my view, which is the view of my right hon. and hon. Friends, who try to look at the matter fairly and want to do something about it, this proposal will blur the chain of responsibility from the Boards to the Ministers and, through the Ministers, to Parliament. It will interfere with that chain which, in any command, must be kept clear, by poking in this Parliamentary Committee half-way up. It will, in fact, create the very bureaucracy and the fear that the right hon. Gentleman always wants to get rid of. People will be bound to look over their shoulders if, for example, officers of the Board of B.O.A.C. are to be called in front of this Committee and asked to justify their decision to recommend the purchase of British rather than American aircraft. They will always be liable to say, "I am being challenged on this and there may be a post mortem on it in 18 months' or two years' time."

The views of the T.U.C. were conveyed to the Prime Minister quite clearly. It said that in its view adequate information was already available in the annual reports, and the appointment of a Select Committee of this sort to examine and report on nationalised industries would be neither useful nor desirable. The T.U.C. was looking at the matter purely from the point of view of workers in the industry. It thought that such a Committee would weaken the authority of industries to manage their own affairs, and also weaken Ministerial responsibility for supervision. In its view on this matter I think that the T.U.C. is much nearer the truth than is the right hon. Gentleman.

Sir Vincent Tewson wrote to the Prime Minister on 3rd July, as the Lord Privy Seal knows, saying that the Government should specifically exclude the question of collective bargaining from the Committee's purview. The Government have not done so, although the Minister has expressed his view that it should not be discussed by the Committee. Again, I ask the Minister of Transport and Civil Aviation what authority will that expression of opinion carry in a Committee of Members of Parliament, sitting upstairs and devising their own procedure under the general rules of the House, having been charged with the responsibility of examining the accounts and reports in which these matters will appear?

I should like to try to respond to the right hon. Gentleman's appeal that we should say something constructive about this matter. I must say, having thought about this matter for several years, that it is much easier to be destructive than constructive. I readily acknowledge that charge, if anybody wants to make it, but I go on to say that it is no use setting up a Committee and then saying, "Do not let us consider the consequences; let us put something on its plate and hope for the best." That does not seem to me to be a sensible way of proceeding either.

I read through the 1955 Report of the British Transport Commission in paragraph 32 of which it says that Parliament sat for 21 weeks last year and that during that time a total of 258 Parliamentary Questions were asked and answered, that 1,323 cases were put forward by hon. Members and were discussed with them or that Ministers entered into written correspondence with them. There was a debate on the Commission's Annual Report and Accounts, a debate on the British Transport Commission's Bill, a debate on the Transport (Borrowing Powers) Bill and several debates in part on Adjournment Motions on matters relating to questions as far apart as the condition of level crossings, transport in north-east Essex, whether there should be battery rail-cars in Scotland, and the use of diesel cars.

There was a wide range of debate on all these matters during the last twelve months, and I sometimes wonder whether we are as fully seized of the opportunities that exist, which we can create, and which, in fact, hon. Gentlemen who are interested follow. My own view is that there is much more discussion of the affairs of the nationalised industries in this House than is generally accepted or realised by a great many of the critics. In addition, we have what I might vulgarly call the seven-year itch, under which, apparently, the nationalised industries are to be subject to review in committees from time to time. We have just had the Herbert Committee on electricity. In my view, that Committee reached the wrong conclusions, but I thought that it had done a very useful job in stating the affairs of the industry.

Let me put to the Minister in a few sentences one or two other points. I should like him to know—

Mr. W. R. Rees-Davies (Isle of Thanet)

Does the hon. Gentleman then contemplate that there should be an extension of these sort of committees, like the Herbert Committee, over a regular period and that they should be expanded into committees of experts in no way connected with this House in order to analyse either the accounts or the commercial future of any particular industry? Is that suggested?

Mr. Callaghan

I am just coming to those points.

I would like to inform the House, and I think hon. Members will understand what I am saying, that the Labour Party this year is, in fact, undertaking a comprehensive review of these problems of accountability and efficiency of the nationalised industries. A number of proposals have already been put forward. These proposals are being studied and will in due course, when analysed, be laid for public discussion by hon. Members opposite. If hon. Members opposite pay as much attention to them as they do to some our other proposals, I am sure there will be a great deal of debate from which, I am equally sure, they will benefit.

At the moment we are in the middle of considering these problems, and therefore I am not able to put forward any final conclusions to the House. But two or three things could be put forward. Take the small one first. The Ministers have the power, which I believe is never used, to secure information from the nationalised industries in relation to matters of day-to-day management and to answer Questions if they so desire. That power is written into the Statute. A decision was taken way back in 1948 that although Ministers would answer Questions on matters relating to the national interest, they would not answer Questions which involved them in securing information from the nationalised boards.

We all know that Ministers get this information, and I put it to the Lord Privy Seal that there is here a case for extending the ambit of Parliamentary Answers so that hon. Members can ask Questions which do not involve Ministerial responsibility, but in respect of which Ministers can use their statutory powers to secure information in order to convey it to the House. I would say that there is an especial case for this in the matter of the National Coal Board where what happens in the case of the Board affects the life of a whole community, a whole valley. We have all seen what can happen when a pit closes. When one goes to the top of some of our valleys in South Wales one can see the effects that the closing of a pit has on the life of a whole community.

I see no reason why Ministers should not undertake to secure from the National Coal Board public statements which they can use in HANSARD. They have been given the statutory powers in order that hon. Members should have an opportunity of discharging their responsibilities in these matters. That is a small point, but one on which, I think, a decision could be taken pretty well straight away. It is not a radical requirement, and I do not claim that for it.

Another suggestion that we are considering—and I hope that we shall come forward with recommendations—is the composition and the nature of the consultative committees and their relationship with the nationalised boards. Speaking for myself, I do not like the system under which in some cases the consultative committees draw their officers from the nationalised boards. I think that there ought to be more publicity for the affairs and activities of the consultative committees. I should like to see a much closer direct relationship between the consultative committees and the local communities which they are supposed to represent.

All these are matters which I think could well be examined and which would, in fact, take a little of the burden off the backs of hon. Members who are being used as channels of grievance at the present time and put it on to the shoulders of local persons duly appointed to consider these matters. That is a matter to which I would pay more attention.

The hon. Member for the Isle of Thanet (Mr. Rees-Davies) asked about the extension of the Herbert Committee. One of the matters that we are examining is the possibility of some sort of audit team which' would roam over the whole of the field of the nationalised industries. I am not saying that this is a final conclusion, but it is one of the projects that we are examining as an alternative to the Herbert Committee, and it is something which has been given an airing by my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison), who has paid great attention to the problem. It is a matter to which we must pay attention.

Most radical of all is the view which attracts some of my hon. Friends, but which I do not share, that these boards should come under what is called the Post Office type of administration. I would only say about that that I do not think one necessarily wants the same pattern of organisation for all industries. By the same token, I do not think that a Select Committee to consider the nationalised industries should necessarily have the same tasks in relation to every industry. There is clearly a distinction between the National Coal Board, which has the responsibility for producing all the coal in the country, and British Railways, which are highly competitive with private road haulage concerns. I would much deprecate—and I hope that hon. Members opposite would also—that all the commercial activities of the railways should be exposed to the view of their competitors. That seems quite unfair.

These are matters which we think need a great deal more attention than has been paid to them so far. All these issues can be worked out, and I hope that the right hon. Gentleman will not take it amiss when I say that his proposal is a slipshod proposal because it evades the major issues that I have been trying to discuss this afternoon. It does not give a clear reply to the questions of responsibility or, indeed, to the principles which should be followed in this matter. It is because of that fact that we feel that this additional Select Committee will not meet the purpose and that much more detailed and proving study is needed. For that reason, we shall have to oppose the Government this afternoon.

Sir Leslie Plummer (Deptford)

I beg to second the Amendment.

5.10 p.m.

Sir Patrick Spens (Kensington, South)

It is with a good deal of diffidence that I take it upon myself to address the House on this subject. But, on the other hand, I was a member of Lord Clitheroe's original Select Committee, and I was Chairman of the second and third Select Committees; and I should like to remind the House exactly why those Select Committees came into being.

There was universal dissatisfaction among hon. Members on both sides of the House over the difficulties of getting information about the nationalised industries by means of Questions. The position was that no Question was in order unless a Minister had taken responsibility for a particular activity of a nationalised industry. At that stage, the Ministers connected with the nationalised industries had a very large range of activities in which, it was said, they had taken no responsibility. Accordingly, the House was unable, day after day and week after week, to get information about vital matters affecting the nationalised industries. Under those circumstances came the first demand for a Select Committee to consider the position.

The House will remember that the Select Committee recommended that it did not think it could make any substantial alteration as regards the rule about Questions, because, in spite of what has been said by the hon. Member for Cardiff, South-East (Mr. Callaghan), it was felt that there would be so many Questions affecting the nationalised industries that the Order Paper would become completely flooded out. The Select Committee gave the greatest consideration to that suggestion, but it reported against it. Instead, the Committee—I think unanimously, though I am not sure, but, at any rate, by a majority—suggested that there should be a Select Committee of this House to deal with matters affecting the nationalised industries.

Mr. Mikardo

May I ask the right hon. and learned Gentleman whether, in coming to the conclusion that if Questions were permitted there would be a flood of Questions about the nationalised industries, the Committee took into account the fact that there are some nationalised industries already—such as the Post Office, the Royal Dockyards and the Royal Ordnance factories—where no inhibition on Questions exists and, in fact, the Order Paper is not flooded out with Questions about them?

Sir P. Spens

The view taken by the Committee was that those activities, which are managed departmentally, had been going on for a long time and there was comparatively little public interest in them; whereas the nationalised industries were new and were very much the object of inquisitiveness—if I may so put it—on the part of hon. Members on both sides of the House.

Mr. John Baird (Wolverhampton, North-East)

is it not a fact that when the new National Health Service was introduced there was a flood of Questions put to the Minister for the first year or two but that the position gradually settled down?

Sir P. Spens

I cannot possibly compare the volume of Questions on the National Health Service and the volume of Questions on the nationalised industries. But that was the considered conclusion of the Committee, which reported that there should be a Select Committee.

There was a feeling among hon. Members on both sides of the House that some form of closer relationship between the nationalised industries and the House was desirable. It is put in the expression that the nationalised industries should be more accountable to the House. "Accountability" is the word used. I have never been quite sure in my own mind exactly what is meant by "accountability"—even when it is used in the leading article in The Times this morning. I do not know whether it is confined to financial accountability or general accountability. Of course, if it is general accountability, it goes very wide indeed, and we get very nearly to the responsibility of a Department. I do not take that view. I think the House did want a great deal more up-to-date and closer information from time to time about the nationalised industries. Accordingly, when the honour was done to me of suggesting that I should become the Chairman of the second and third Select Committees, I took that responsibility upon myself.

But, when we came to look at the terms of reference of these Committees, we were put in this great difficulty. We were asked to obtain for the House, … further information as to so much of the current policy and practices of those industries as are not matters which "— are contained in the exclusions in paragraphs (a), (b), (c) and (d). When we came to consider any policy or any practice, we found it extremely difficult—right hon. Gentlemen sitting on the Front Benches will agree with me—to find any policy or practice in which we thought the House would be interested which did not come more or less inside the exclusions. The position of the unfortunate Chairman was that he would have been constantly hauling up members of the Committee and saying, "You cannot ask that, because that comes inside one or more of the exclusions." But we did our best, and we asked all the Departments connected with the nationalised industries to let us know to what extent our functions were limited regarding matters for which Ministers had taken responsibility.

We were given a whole flood of schedules which, I am bound to say, made me think that there were a great many subjects on which we could properly have asked questions. But still, the House was put in this dilemma; that when it asked a Question, there was no responsibility; but when we, as members of the Committee, tried to do our job, there was a large range of responsibilities from which we were excluded. Under those circumstances, we came to the conclusion that it would have been a waste of our time and that of the House to have gone on in the limited spheres where possibly we might have functioned. As a result, there still remains this general demand for some greater accountability and more up-to-date information for the House.

It is perfectly true that the proposed terms of reference refer to the Reports and Accounts. That was one of the difficulties. As all hon. Members know, the Reports and Accounts of one particular year come out about six months or nine months afterwards, so that there is always an out-of-date picture of what the nationalised industries are doing. On the other hand, the Report and Accounts of, shall we say, two years ago will refer, and do refer, to matters which are going on today. Starting on the subject matter of a Report, shall we say, of two years ago, no doubt it may be possible to ask for further information as to what is happening to date and keep the House more up to date in its information.

I do not in the least object to what has been a sort of indirect limitation on the terms of reference which have been put by my right hon. Friend today, but I should have thought it was perfectly clear that no responsibile Committee of this House—having regard to the enormous importance of these nationalised industries in our economy—would start inquiring into wages and conditions of employment, when it knew what a frightfully important, ticklish—if I may use the word—and difficult subject was the whole thing.

Mr. David Jones

May I put this question to the right hon. and learned Gentleman. Assume that he was the Chairman of this proposed Select Committee and an hon. Member from either side of the House who was a member of the Committee felt that he had an obligation to ask him a question on one of the paragraphs in the report concerning wages and conditions. Would the right hon. and learned Gentleman feel bound by the undertaking of the Lord Privy Seal, in spite of the terms of reference, to refuse to allow that question to be put?

Sir P. Spens

I should feel bound, out of respect for my right hon. Friend, to use what influence I possessed to prevent that question from being put. I should be quite prepared—I will tell the hon. Gentleman this—to rule the question out and take a chance about what the House would say about my conduct.

Mr. Callaghan

Does not the right hon. and learned Gentleman think that his position would be much stronger and much less open to challenge if, in fact, this were put into the Motion? Why not put it in?

Sir P. Spens

I do not think so. It is perfectly possible that a question affecting wages or conditions of employment might occur when we were considering something quite different, a casual question which would do no conceivable harm. This Motion means that we are not to take up as a subject of investigation terms and conditions of employment or deliberately to inquire into them and on our own make a report to the House about them. I understand that something much more than a broad hint has been given to the Committee, and I am sure that the Committee will comply with it. My own personal view is that all these four excepted subjects are ones which the Committee would never inquire into in any event or be at all pleased if any member attempted to do it.

Nor do I think the Committee will do any good at all unless it establishes a relationship of real friendship and cooperation with the nationalised industries. I say that straight away. I am sorry that the right hon. Member for Lewisham, South (Mr. H. Morrison) is not here. We have had all his evidence in front of us and we know exactly his point of view. We fully appreciate that any Select Committee that makes any inquiry that is likely to cause officials to go looking over their shoulders or to be anxious about their day-to-day work, will do no good whatsoever.

On the other hand, I am certain that not only does this House want more information about what is going on generally in the nationalised industries than we are getting by the reports discussed some nine months after they have been published and referring to a period at least a year before, but evidence given in front of Lord Clitheroe's Committee by the chairman of the nationalised industries themselves shows that there are often subjects which they would like brought to this House for discussion, after consideration by a Select Committee.

It is not going to be a one-way traffic, and it will not be any good if it is. It will be of use to the House and the economy generally only if proper friendly relations are established between the nationalised industries and a Select Committee of this House to work together to bring about this indefinable relationship of more accountability of the nationalised industries to the House. [Interruption.]

Mr. R. Williams

I was not thinking of intervening, but I will take this opportunity of saying that, as I understand the argument of the right hon. and learned Gentleman—which rather shakes me—it is this. Here are four perfectly sensible exclusions set out in the terms of reference. If we no longer have them so expressed, no sensible Committee would dream of discussing matters that would come within those exclusions. The Committee would impose upon itself a self-denying ordinance in the terms of these exclusions. If it did that, how could it proceed further?

Sir P. Spens

The difficulty is over the precise terms and about expressed exclusions on these lines. If they are in black and white in the terms of reference, then the moment any question comes up within these four terms it has to be ruled completely out. It is because I feel that there should be a limiting factor upon discussions that are undesirable that I would most certainly accept the general rules in the proposed exclusions.

The nationalised industries are now almost the most important financial element in the whole of our economy. A great number of people both inside and outside this House know a great deal about one or more of them, but there are very few people, including myself, who know as much about them all. There is no organisation, so far as I know, that, so to speak, keeps the activities of the whole lot in one picture.

However difficult it is to define the terms of reference of a Select Committee of this House, it is worth trying as an experiment to have a limited number of Members of this House with a full-time staff trying to form a picture from the point of view of the national economy as a whole, of the activities of all the nationalised industries. That is exactly what I am told the party opposite is thinking of doing. I am all in favour of the party opposite or of any other organisation trying to do it, but I am inclined to think that it is the duty of this House to try to do it. These nationalised industries are part of our economy now, and I think it should be the duty of this House to get a complete picture of what is going on.

Let me take another constitutional point. As I understand it, no nationalised industry is entitled to embark upon any great capital expenditure without getting the approval of the Minister and of the Treasury representative in the Departments. I understand there is one official at least in the Treasury who knows more or less what they are all doing, but that there is no committee or anybody else in this House who is kept informed all the time. These are the things that the proposed Select Committee might be useful in doing.

I want to end as I began. If a Select Committee is to be looked on with a degree of hostility or suspicion by the nationalised industries, and if that suspicion and hostility cannot be overcome by the committee, then this Select Committee is likely to fail as much as the other two.

5.28 p.m.

Mr. Ronald Williams (Wigan)

My difficulty arises chiefly because the Leader of the House in his observations put forward propositions relating to the exclusions which this Select Committee should have in mind of a far more elaborate kind than those which appeared in the terms of reference which the recent Select Committee found so difficult when it was carrying out its functions. I should have thought it would take many months indeed to analyse the speech of the right hon. Gentleman in order to decide precisely in what field it was possible for such a Select Committee to function.

I will make no bones about it. I am in favour of a Select Committee but I am most certainly opposed to the Select Committee which is now proposed, for a reason which appears to me to be obvious. The preliminary job has not yet been done. We had a stab at it, after 18 months of work, in the Clitheroe Committee more than three years ago and we arrived at a unanimous opinion and gave a unanimous report because we considered that such a Committee could function with proper safeguards. On that we were completely agreed.

Let us consider the position of the last Committee which was set up. The Government made an attempt to define as clearly as possible what the proper safeguards should be. Let there be no mistake about it; to set up a Select Committee without safeguards at all and to rely upon an act of faith is to risk industrial McCarthyism and irresponsibility and to make absolutely certain that there will be an absence of that consensus without which the Committee cannot do constructive work. If the Government adhere to their point and say that they will set up a Select Committee, regardless of the difficulties which the last one had when these perfectly reasonable exclusions were so clearly defined, and leave it to the common sense of the member of the Select Committee, what will happen?

The first thing that will happen will be that, rather than getting on with the job, there will be a discussion on interpretation. That will be done with complete sincerity by Members on both sides of the Committee. It will not necessarily be a bear garden because of the discussion on interpretation and it may not be controversial, but it will at the same time be based upon the uncertainty which will arise if an attempt is made to consider within what limited field the Select Committee should work. It comes to this: that we agree, or at least a large number of us in this House agree, that there is a limited job that the Select Committee could do. Beyond that sphere in which the Select Committee should under strict terms of reference operate, it could become so fierce in its focus and scrutiny of the nationalised industries that the leaders of those industries would be more conscious of the scrutiny than they would be of the job to do which they are given statutory powers. In other words, we should have too much Parliamentary accountability. We could, if we were quite unrestrained in our demands for Parliamentary accountability, arrive at a point of view when all possible reasonable standards of initiative are crippled.

The first thing that we must have in our minds, if we are to make any progress at all, is that we must content ourselves with the clear fact that there is no possibility of a further substantial increase in public accountability by this method. Something can be done, but it is very limited indeed. The arguments against the establishment of a Select Committee are themselves very strong. They were set out in the Clitheroe Report in some detail. Those arguments have now been strengthened by the failure of this last Select Committee to be able to do any work. Anyone approaching this with a fresh mind for the first time, if he looks at the arguments against the establishing of a Select Committee, will find that they are far stronger than the somewhat tenuous propositions put by the Lord Privy Seal. His propositions were put not only on a basis of an act of faith in relation to the Committee; I would go so far as to say that his propositions rested more in the world of his hopes and dreams than in the world of fact.

In the world of fact, the arguments against the establishment of such a Committee are very powerful indeed. What are the consequences of saying that they are so powerful that a Select Committee should not in any circumstances be set up? That would be quite wrong to my mind because it would exclude any further advance in the field of public accountability. In those circumstances, I come down very solidly to this suggestion. I put it forward as a personal suggestion and I wish to make it perfectly clear that I have not consulted my colleagues or discussed it with them.

This is the sort of friendly constructive debate in which we are all trying to make some progress, and I make this suggestion to the Minister, that there is a place at this time for a Select Committee but not of the type of which he is thinking. The Select Committee on which I sat, which is now conveniently referred to as the Clitheroe Committee, came to certain conclusions on the general question of whether a Select Committee should be set up. The part of its work which it thought it had done, and which I certainly thought that it had done, was the part relating to the safeguards that should apply. We all agree that there should be safeguards. Now the House is obviously in complete and strong disagreement as to what those safeguards should be and how they should be defined; whether they should be included in the terms of reference or not.

In those circumstances, is it not obvious that we have arrived at the point where we want a Select Committee to give careful consideration to this aspect of the matter—to do all the interpreting of these difficulties before the actual Select Committee which will deal with the Accounts gets on to the job at all? Otherwise the Select Committee proposed by the Government will have to do the preliminary job for which it might be by no means fitted because this is an entirely different type of job which has to be done, calling for very careful interpretation.

If the preliminary job of interpretation was done, so that the work of the Clitheroe Committee would have been carried on to a further point, I think that the House and the Government would then have been in a position in which they could say that they could now determine with some precision the very limited field within which this sort of Committee could function properly.

I beg the Government to realise that unless they do something of this kind they will not be in a position in which they have the necessary consensus. Such a Committee as this could not function at all if we had for instance certain types of political controversy. I make no reference to any individual Member of this House, but it is conceivable that a Member not too enthusiastic about nationalisation might think that this was a very delightful way of getting some denationalisation through the back door. He might come along to this Committee and say, "What is all this nonsense about wages and conditions. These or those workers are being paid far too much and the present situation is that the financial policy of the Board is affected by that consideration."

He could drive very far along that road if he exercised a little ingenuity and even the right hon. and learned Member for Kensington, South (Sir P. Spens) would find himself in very great difficulty in preventing that line being followed. Then, of course, there would be an extraordinarily difficult situation if the tempers of Members were such that there was a period when violent attacks were being made on nationalisation by hon. Members on the other side of the House and a spirited defence was being put up by Members on this side. Then we should not have a Select Committee but a bear-garden, and all this could happen because we had not gone to the trouble of realising that this was a much more complex thing than we had at first realised when we went through the evidence and that even after 18 months of careful study by people deeply interested and concerned there was a lot left to be done.

Since the work of the first Committee has in no sense been completely done, but that fact could not have been realised until this last Committee was set up, let us learn our lesson. Let us be constructive on both sides of the House. On the Government side they are not saying, "Here is a Committee which has demonstrated certain modifications which are necessary in the terms of reference." Oh no, they say in effect that these terms of reference are absolutely right, but for goodness sake do not express them precisely because otherwise the Committee could not work.

That, quite frankly, is the wrong way. It is a blundering, stupid and clumsy way of dealing with a subject, which calls, as the Lord Privy Seal very rightly said, for very great delicacy. I look forward to the day when there will be a Select Committee in relation to the nationalised industries, establishing a friendly relationship and giving information to this House on the very clearly defined narrow terms on which that is possible in relation to the establishment of consensus. If we go beyond that all that we will do will be to make this House look ridiculous.

Suppose that we did deal with questions which were the subject of collective bargaining and they were dealt with by the Select Committee at the very time when tempers were roused on both sides of the industry. What a deplorable situation would follow, reflecting gravely upon the Select Committee and the House and probably resulting in industrial unrest and confusion in the industry itself. What a contribution to make in the name of public accountability. It is high time that we got away from the myths and mystique involved in this. One need only use the phrase "public accountability" to get people opening their mouths and saying that this is all highly technical and very important. It is, but at the same time it is not something which we should press to a point where it causes danger, difficulty and maybe catastrophe in other ways.

Although I have had to speak critically of certain aspects of the proposals of the Government and the nature of the argument which has been put, I hope that I leave the Government with the thought that there is here some unfinished business. The Government have not the time, and if they had the time would not have the capacity, properly to do this job. It is a job for a Select Committee, but not of the type recommended by the Government.

5.42 p.m.

Mr. Norman Cole (Bedfordshire, South)

Very briefly, because we have not much time, I should like to explain why I support the setting up of a Select Committee with the terms of reference shown on the Order Paper. There is here something rather more than public accountability. What we have laboured for, and why one experiment of a Select Committee has already been tried, is to get a closer contact through hon. Members between the nationalised industries and the House of Commons, which is not only our desire but I think, the desire of the nationalised industries. That is something rather wider and more far-reaching than public accountability, which is of importance in itself.

In moving the Motion, the Leader of the House called this an experiment, and so it is. He called it an act of faith; in other words, an endeavour to do something which we all want to see done. I see nothing wrong with that. This is not the first time that the House has tried to evolve a new procedure and has done it by trial and error. Indeed, our whole system of Parliamentary government has been produced by a system of trial and error until it has emerged with this fine form of democratic government that is the envy of the whole world.

Why should we expect in this difficult and delicate situation to be right the first time? That is no reason for not going on with our endeavours. Because the first Committee could not see its way to work out its terms of reference that is no reason now for throwing up the sponge. It would be a very sad day if, in this country or in the House of Commons, we demurred from carrying on merely because we could not find the final and perfect solution in the first course of endeavour.

The hon. Member for Cardiff, South-East (Mr. Callaghan) naturally put forward many difficulties and many snags, some of them potential and some imaginative, and he pointed out, as was his duty, all the difficulties of the situation. We admit some of those difficulties. If we did not think that there were difficulties in the situation, we should probably not be debating the Motion today, because it would have gone through formally.

As my right hon. Friend pointed out, and as the hon. Member for Cardiff, South-East underlined, the two main difficulties are that nothing the Committee does should interfere with the close and harmonious work between the Minister concerned and the nationalised industry concerned, and that the Committee should not be concerned with day-to-day matters of organisation in the nationalised industries.

I point out that a very fine Committee functions in the House, and has been doing so for many years, which labours under the same inhibition and prohibition about pronouncing on matters of policy. Yet it does fine work in relation to public accountability. I refer to the Select Committee on Estimates, of which I had the honour to be a member until the end of last Session. To my knowledge, the Committee has not yet been reappointed. It is not able to pronounce on policy, but that does not prevent it from doing a tremendous amount of work in finding out the various ways in which Government Departments spend public money. That may well be a very useful precedent in this case.

Mr. Callaghan

Would the hon. Member not agree that most of that Committee's time is spent on matters of day-to-day administration by those Departments which, in the Lord Privy Seal's view, are excluded from the consideration of this proposed Committee?

Mr. Cole

That is not so. If one is analysing the expenditure of public money, one perforce has to consider a certain amount of day-to-day work. I cannot remember offhand the terms of reference of the Select Committee, but they are generally concerned with discussion of the expenditure of public money and whether it is used economically or wastefully and whether good value is obtained. I think that that is a fair summary. That denotes that some, but not by any means a large or majority proportion, of the Committee's time is spent on day-to-day matters. I do not want to score off the hon. Member, but I am speaking from three or four years' experience on that Committee.

Mr. Callaghan

I was on that Committee before the hon. Member came into the House.

Mr. Cole

I am prepared to accept that. My right hon. Friend made one very important observation about the nationalised industries. He said that they were becoming independent commercial organisations. I am sure that we are all very pleased to know that. We are glad to see the emergence of this business atmosphere which is coming about in the nationalised industries. I do not believe that anything which this Committee with proper skill and judgment does will interfere with that process. On the contrary, it may help and accelerate that process.

When we were discussing this matter two years ago, an hon. Member opposite said—and the hon. Member for Cardiff, South-East reiterated the point today—that those on nationalised boards would be looking over their shoulders, because there was some accountability to a Committee of Parliament. I disagreed with that view two years ago and I am happy to be able to point back and say, "I told you so." The sum of £1,200 million is to be spent over fifteen years and, perforce, with a sum of that magnitude there must be a certain degree of risk. That cannot be called looking over one's shoulder and being frightened to go out and spend money. That money is to be spent by the British Transport Commission with great enterprise and is absolute proof that members of nationalised boards do not look over their shoulders whether or not they are accountable to Parliament, The British Transport Commission is prepared to go forward with business enterprise to modernise its railways. The same state of affairs applies to other nationalised industries.

Mr. Moyle

I gather that the hon. Member desires that nationalised industries should become as independent and as commercial as possible. Can he name any chairman of any private industrial undertaking who would stand for five minutes the managerial interference which the Government propose to impose on the nationalised industries?

Mr. Cole

This issue was raised two years ago. I do not want to take up a lot of time in replying to it, but I will deal with it very quickly. Of course, the average large company whose dimensions are comparable with those of a nationalised industry is subject at several points to scrutiny—from shareholders, the registrar of companies, public opinion through the purchase of its goods, and in other ways and, with a very large company, on the Floor of the House, if the company offends against certain canons of public conduct.

I believe that the nationalised industries are emerging—we are pleased to see it—into a business atmosphere of a very high degree. We have these industries, and we want to make them work. They must work, because they are all basic industries and form a large part of our economy. We wish them well. In setting up a Select Committee in the terms of the Motion, we on this side of the House have no intention but to try to assist the nationalised industries which may give evidence before the Select Committee in carrying out their business enterprises.

It is not impossible that the Select Committee, reviewing under its procedure all the nationalised industries and not only one nationalised industry, may act as a pool of knowledge, enterprise and research and thus be able to give some assistance to other nationalised industries to which that information would not otherwise be available. By that means, comparisons between nationalised industries may be not odious but beneficial. I wish the Select Committee well and hope that it will be of assistance in achieving public accountability to the House in respect of the nationalised industries.

5.51 p.m.

Mr. J. Grimond (Orkney and Shetland)

We are sent here as politicians. It may be an interesting speculation as to why some of us are elected at all, but, speaking for myself, I know that I was not elected to run the National Coal Board. No one would vote for me on those grounds.

I still believe that we are, in a sense, trying to do a job which Parliament is not intended to do. We must rely to a great extent upon the market and upon ordinary commercial practice to ensure that the nationalised industries are efficiently run. Many of them are already subject to the market and it operates upon them.

At the same time, however, we nationalised those industries on the ground that there should be some public responsibility for them, and we have to make the best of the job that we have set ourselves. On those lines, I am prepared —rather reluctantly, I must confess—to support the Motion for the setting up of a Select Committee. I am very attracted by the idea that one might have a series of reports, such as was referred to by the hon. Member for Cardiff, South-East (Mr. Callaghan), like the Herbert Report; I think we might well have such reports. Nevertheless, they themselves do not meet the point about public responsibility. They, in turn, have to be considered by Parliament in some way. I do not think they would meet the difficulty that the public expects us to exercise rather more efficient control over the nationalised industries than we do at present.

I will support the Government's Motion only if it is clearly understood that its usefulness is extremely limited, and that the functions of the Select Committee must be very limited. Further, I do not believe that the Select Committe will have any success unless other reforms are brought about at the same time.

I regard the Select Committee as being concerned primarily—I do not mind if it does so after the event—to examine, in general in the first place, whether a Minister is doing his job. It seems to me that the first person who has to be accountable to the Select Committee is a Minister. We deal with the nationalised industries through a Minister. Suppose we ask the question "Is this industry being well run?" The Select Committee may come to the conclusion that the National Coal Board is not being well run. Our first sanction in that event is to try to sack the the Minister of Fuel and Power.

Mr. Callaghan

That will not be done in the Select Committee.

Mr. Grimond

Nevertheless, it is a point which should be borne in mind. Secondarily the Committee can give us some idea as to whether the Nationalised Industries are well run. And that is about all it should attempt.

I was astonished at the list of jobs read out by the Lord Privy Seal as the sort of thing the Select Committe might do. I should have thought that they were nearly all managerial tasks which it would be quite improper for a Parliamentary Committee to dabble in. If the Select Committee is to dabble in such tasks, I cannot see why it should not dabble in matters of wages, which apparently everybody is agreed it should not do.

Further, I do not think that the Select Committee should become a mere pressure group for the retention of redundant branch lines, nor become a forum for the expression of grievances. There are ways of ventilating grievances, and possibly they can be extended. The Select Committee might be given some general part to play in relation to grievances, but we do not want an endless series of pinpricks to various industries being debated by the Select Committee.

I do not think the Select Committee can do anything to determine the policies of the industries in advance. It can merely review what is being done by an individual industry. We must bear in mind that it is no good multiplying committees, Ministers, consumers' councils and so forth, and thinking that merely by multiplying we are doing any good. Look at the situation. We shall have the board, the Minister, the Select Committee, this House, consumers' councils and rent tribunals and so on, all of which the nationalised industry has to try to placate.

I very much hope that the Minister of Transport and Civil Aviation will tell us a little more about how he views the relationship between the Minister and the industries and between the Minister and the Select Committee. In particular, I hope he will say a little more about the powers of the Select Committee to summon before it members of the boards or other officials of the nationalised industries. The hon. Member for Cardiff, South-East mentioned that, and it is a very important point.

Further, do the Government propose any alterations in respect of the scope of Questions in this House? I should have thought that the mere setting up of the Select Committee would almost inevitably have meant that that matter would have to be reconsidered.

I wonder whether the Government are prepared to say a little more about the expert advice which the Select Committee will have. It was at one time proposed that it should have its own trained, skilled accountancy staff. That is not now the proposal. It is now proposed that it should have Treasury staff. I think that is a very much better arrangement, but I wonder how far the Treasury is briefed on all the aspects of the different nationalised industries. I simply do not know to what extent it is a fair burden to put upon the Treasury.

I think the Select Committee can be useful only in so far as it provides information so that the House can be better informed and can exercise better control over the Minister, the House having only very indirectly any effect upon the Board's policy. The real policy of the nationalised industries must be to get the right men to run them and to give the industries a fair crack of the whip. I do not think we shall do that unless, at the same time as setting up the Select Committee, we do certain other things.

Everyone who examines these industries agrees that we must pay their Boards much better. We must, surely, get out of the habit of treating the boards as vehicles for general Government policy. An hon. Member has mentioned the subject of "Fly British Aeroplanes". It seems to me quite unfair to put that sort of onus upon the airways and expect them to boost British aircraft at the cost of their own services. Equally, it is unfair to ask the railways to subsidise certain forms of traffic. I have asked for Government assistance for some form of transport in my constituency, but I always thought that it should be borne by the Exchequer and not by the general run of railway passengers.

Mr. Arthur Palmer (Cleveland)

Would the hon. Gentleman include price stabilisation in respect of electricity and gas among the things in which the Government should not interfere?

Mr. Grimond

The Government should interfere as little as possible with the commercial pricing of the industries in their own field. If they want to assist certain classes of consumers, they may do so, but the burden should be carried fairly by the Exchequer and the industry concerned should be compensated.

We must also tackle the question of deficits. I do not think the Select Committee will have much of a chance unless deficits are dealt with. Then I believe that we should have a capital investment board to deal with the needs of all the industries. I do not believe that we should always saddle industries with fixed interest stock upon which they have to meet the interest whatever their commercial success may be.

There, very briefly, are my views on the Motion. I support it with reluctance because I believe it is an attempt to do a job which the House is not equipped to do. I am not at all clear that it is a Parliamentary or political job in essence at all. However, we have taken it on and we must make the best of it.

If we get better information and good reports from the Select Committee, and if it is clearly understood that the main responsibility still rests upon the Minister, I think the Government's proposal may do good. There is, at any rate, this to be said for it, that it will lead to some discussion about certain industries which at present are never discussed. I have in mind here the North of Scotland Hydro-Electric Board, Cable and Wireless, and the Bank of England. I do not think the Bank of England has ever been discussed. I hope the Select Committee will examine the Bank of England and let us know what it finds out.

As an hon. Member has already said, it may also be valuable to compare practices which have grown up in one industry with those which have grown up in another and thus see whether we can discover something to help all the industries to improve their general efficiency.

6.0 p.m.

Mr. William Shepherd (Cheadle)

I must say that if this horse had a starting price it would be a very long one indeed. I am one of the few hon. Members who benefited from the appointment of the last Committee. I had a bet that it would never do any good at all, and, ultimately, I drew my handsome reward. I think that this Committee has a little more chance, but the improvement in the odds is very slight.

It is obvious from what my right hon. Friend the Lord Privy Seal has said that we can look upon this only as an interim proposal. The Committee cannot possibly succeed in doing the task allotted to it. Indeed, I think that we are tackling this problem from the wrong end. The hon. Member for Cardiff, South-East (Mr. Callaghan) struck a most pertinent note when he said that these industries cannot all be treated alike. A little later I want to refer to that, because it is important to develop the situation in which we find ourselves largely through trying to treat all the nationalised industries as single entities.

My reason for thinking that a Committee of this kind cannot really function is that I do not believe that we can get sufficient hon. Members, uncommitted, to do the job. We have great difficulty nowadays to man our Public Accounts Committee and our Estimates Committee. To find other hon. Members who are prepared to devote a considerable amount of time—and who have the necessary capacity—is a very considerable task for the House. Furthermore, it is most important that we should get the right kind of person, because the wrong man can start causing friction and a good deal of trouble which is really quite disproportionate to his own importance. Therefore, the selection of the personnel is one which causes me a great deal of concern.

I certainly do not think that the list of possible activities that my right hon. Friend gave is at all practicable. Immediately one attempted to delve into these realms, one would come into conflict with the management and direction of the organisation. It is difficult to define an area of activity for a body of this kind which would permit the undertaking freely to carry on its activities—as it should be allowed to do—and, at the same time, to achieve a degree of public accountability.

I do not think that we are facing the problem, and although I shall not vote against this proposal today I must necessarily regard it as the merest interim measure. I hope that my right hon. Friends will get down to dealing with the basic problem. As I see it, that problem is this. We are all concerned, certainly, our constituents are concerned, in varying degrees of informed and uninformed interest, with the conduct of the nationalised industries. I am sure that neither side of the House is satisfied with what has been done, and the reason for that dissatisfaction is that we have endeavoured to get from those industries something that they could not give us.

When the party opposite established these corporations they sincerely and genuinely believed that it was possible to get the advantages of private enterprise by establishing some sort of State corporation. They really thought that if one had a private corporation which was divorced, as far as was practical, from the Government, we really could simulate the conditions of private enterprise. That is a fallacy. I suggest that, while we should approve this Motion, we have really to settle for the advantages that the nationalised concerns can give us, and not to try to extract from them the advantages of private enterprise.

I said that the hon. Member for Cardiff, South-East was hitting the nail on the head when he told us that we should not try to deal with the nationalised industries as if they were all the same. When we come to rethink this problem, I hope that we shall not make the error which we made in the years just after the war. If an industry, even though it be State-owned, is subjected to the stimulus of competition it can be pushed much farther away from Parliamentary control than is the case today. For example, I should like to see B.E.A. and B.O.A.C. taken right out of the reach of my right hon. Friend. I believe that when we have industries like the civil aircraft industries it is quite possible to push the Corporations outside the ambit of State supervision altogether and let them run as commercial corporations. Conversely, if we have industries which are largely monopolistic, and not subjected to competition, the answer is to bring them under Parliamentary control.

I do not, for one moment, accept the proposition that it is impossible to run these industries directly through Parliamentary control. I am quite satisfied that the example of the Post Office could be duplicated in the case of two or three of the existing nationalised industries, with great advantage to the country and to the House. If we are to have a nationalised industry, abolishing competition, do not let us attempt to ape the advantages of competition. Let us rather settle for the advantage that direct Parliamentary control can give us.

I know that some of my hon. Friends believe that there are many objections to this course and prefer this interim Committee rather than to face the problem of dealing with these industries as they should be dealt with. I feel reasonably certain that the time will come when we shall have to abandon these ideas of tinkering with the problem, and get some degree of proper Parliamentary control. One of the obvious difficulties of the men who are running these boards is that there is too much dubiety about the control. There is an immense amount of "buck passing" between Ministers and chairmen of corporations. When it is convenient for one man to "pass the buck" to another he does so. We cannot run an undertaking on the basis that no one is very sure who is really in control.

The result of transferring these undertakings to Parliamentary control would be that there would be clear and un-mistakeable indications of where the responsibility lay. We in this House would be very much better off. We could tackle the relevant Ministers, and the relevant Ministers could put forward propositions which are, at present, beyond the chairmen of the boards.

Therefore, while I do not object to this Motion now, I feel that the Committee has very little chance of being really successful, because I cannot see how it can work without coming into conflict with the managerial responsibilities of the corporations. Although I shall vote for the Motion, I hope that we shall not try to leave it at this. This is clearly not a suitable solution of this problem.

We have to go much further. We have to realise that mistakes were made in the years after the war, and we have to consider how far we can deal with the nationalised industries, on the basis of pushing them further away from Parliamentary control, in some instances, and of bringing them further into Parliamentary control in others. I hope that the House will support the Motion tonight, but that it will direct its attention to the greater problems ahead.

6.10 p.m.

Mr. Ernest Davies (Enfield, East)

I very much regret that so little time is being given to this debate this evening, because I understand that those right hon. and hon. Members who are to wind up for the respective sides wish to rise in a few minutes. This means that very few hon. Members will have had an opportunity to participate in this debate on what is a very important subject, as has been made clear from the speeches which have already been delivered.

The hon. Member for Cheadle (Mr. Shepherd) expressed new ideas which I feel sure we should all like to debate, but, unfortunately, there is insufficient time. All those who have spoken have indicated that they are not satisfied with the present relationship between the boards and the Ministers, and between the boards and Ministers and this House. The present situation as regards public accountability is far from satisfactory. The question which is before us is whether this proposed Select Committee will provide the answer to the problem. The Opposition's Amendment states that it is not considered that such a Select Committee would be the answer. Those who have supported and those who have opposed this Motion have expressed doubts as to how the Committee will operate and whether it is possible to have those safeguards which we consider necessary.

I think that one of the reasons why public accountability has not yet been worked out is that the concept of the public corporation at the time of its inception before the war is different from the present concept which we have of the much larger industries which are now nationalised. That is to say, when the first public corporations were established it was intended that they should be, and it was considered that it was possible for them to be, financially independent and autonomous and to have no Ministerial interference whatsoever with them. In fact, in the case of the London Passenger Transport Board the then Tory Government changed the original conception so that even the appointment of the members of the Board should be taken away from the Minister himself and be given to a body of trustees.

Since the war, with the nationalisation of the basic industries, it has been quite rightly accepted that the Minister must play a part in those industries; and not only does the Minister appoint the members of the boards, but in every case there was given to him the reserve power to give directives to those boards if it was considered necessary in the national interest. In addition, the Minister has a very large number of statutory duties with respect to the boards for which, of course, he has to answer to Parliament.

The Minister not only has these statutory responsibilities; he not only appoints the boards and is able to give directives, but he exercises a considerable influence over those boards indirectly and does not report to this House on those actions. It is for that reason that I feel that some increase of accountability to this House is called for. As I say, I do not know whether the Select Committee is the answer or not. Personally, I favour giving the experiment a trial, provided that there are adequate safeguards.

It seems to me, however, that today the Minister exercises considerable influence. He sees the members of the board frequently and he does not give them directions because, unfortunately, in my view, it has become accepted for some reason or other that if the Minister resorts to giving a directive to the board he is thereby casting a reflection upon the board. The chairmen of the boards resist right up to the point of giving in to the Minister in order to prevent a directive being given.

There are very few cases where a Minister has resorted to using that power, but that does not mean that he does not get his way with the boards, because the chairmen know full well that he can use that power, but they do not want it used because they consider it would be a reflection upon themselves.

Similarly the Minister, including the present Minister, have sometimes interfered with these boards more than is allowed in the statutes which created the boards. I would cite the case of interference with fares, not by the present Minister, but in 1952. Even the present Minister went so far as to over-ride the statutory authority of the Transport Tribunal inasmuch as when it had given its advice to him concerning the increase in fares he laid aside its advice. However, I do not want to raise that controversy now.

I refer to this matter because it seems to me that if the Minister is to have responsibility we must know what responsibility he is taking upon his shoulders, and, also, we must have the right in this House, through some form of procedure or another, to hold the Minister to account. I suggest that the Minister is taking responsibility in private today for which he is not answerable in public. It is for that reason that I feel that this whole question of public accountability has to be explored further, and, if possible, a means found, such as this suggested Committee, to make it possible to hold the Minister fully to account.

I feel, therefore, that this Committee, if it works satisfactorily, which I do not think is impossible, would serve a dual purpose. First, it would have a check upon the Minister. This is what the hon. Member for Orkney and Shetland (Mr. Grimond) suggested. The Minister would be accountable to the House through that Committee for any actions which he might take. No longer would he be able to act in secret and keep from the House the knowledge of the influence that he may exercise over these boards.

The second function is one which was referred to by the right hon. and learned Member for Kensington, South (Sir P. Spens), namely, that the boards can use the Committee as a channel to inform Parliament of their policies and plans and the reasons for their actions. Those who served on the Select Committee on nationalised industries which recommended that such a Committee should be set up, subject to certain safeguards, were very impressed with the evidence which was given to us by Lord Hurcomb. Lord Hurcomb pointed out that in his view, if Parliament had been better informed on certain matters concerning the British Transport Commission, Parliament might not have acted, as he considered it did, on misinformation.

In Lord Hurcomb's view, it was not in possession of the full facts, but agreed to certain policies being followed by the Government which he considered to be wrong policies and on which he did not think Parliament was sufficiently informed.

Mr. Shepherd

rose—

Mr. Davies

I cannot give way, for I have only a few minutes left. There is a great deal which I could say, but my time is very limited.

Some of the difficulties which have been referred to today have been exaggerated. I do not know that looking over one's shoulder, as long as it is limited and is controlled, is such a great danger. Everybody is held in check. Everybody has his responsibilities and has to answer to somebody else for his actions. At least, he should have to answer. If a Committee like this functions, if the board chairmen appear before it and the members of the board and the staff are aware that there is such a Committee, and that what they do may later be questioned by the Committee, I do not believe that they will act less responsibly or with more fear and less initiative and enterprise.

After all, the whole of the Civil Service is answerable to this House, and I do not know that our Civil Service is so lacking in initiative and enterprise as all that. Indeed, it is reputed to be the best Civil Service in the world. We must not get the idea that it is wrong to hold these people to account and to have some check upon them; but it does depend upon the manner in which the Committee exercises its functions. It depends upon the Committee itself acting responsibly and not interfering in matters which it knows will put a brake on initiative or enterprise, that is to say, not interfering in the day-to-day affairs of management and the like.

As to the other fear expressed, of its being a political party body, as it were, for muck-raking, that danger, of course, exists in all Parliamentary Committees. But I, like other hon. Members, have served on the Select Committee on Estimates, and I think all who have served on that Committee and its subcommittees have been impressed by the responsible manner in which hon. Members do their work and how, as a rule, they approach matters which come before them in an objective manner. There is objective examination of the Estimates which come before the Committee and of the matters which it decides to discuss. Its business is not always approached in a party sense, and I do not see any reason why the same thing should not be possible in this case.

If this Committee is set up, as, presumably, it will be, it can prove helpful rather than a hindrance, if the members of it approach their task not with a view to being critical and finding fault and looking at the boards as the enemy, as it were, but in a constructive and helpful fashion. They must endeavour to help along the nationalised industries, helping them to explain themselves to us, and enabling the Minister also to explain his action to the Committee and, through it, to the House.

6.21 p.m.

Mr. A. J. Champion (Derbyshire, South-East)

I feel bound to add mine to the voices which have been raised in this debate to say how sorry we are that it should have been necessary to confine our discussion within so short a time. I very much regret that the remarks of the hon. Member for Cheadle (Mr. Shepherd) and, certainly, those of my hon. Friend the Member for Enfield, East (Mr. Ernest Davies) have had to be cut short because of lack of time.

The question before us is one of very great importance, not only to those who work in the industry but to this House and the nation as a whole. The subject of Parliamentary accountability is one to which a great deal of thought has been given, and I am sure that we have not yet arrived at hard and fast conclusions upon it. Today, in my view quite rightly, this debate has not had any of the character of a party debate.

I was a member of the so-called Lord Clitheroe Committee, and I agreed with both the Reports of that Committee. I did so because I recognised that there is a clear inadequacy in the examination of the nationalised industries by this House. Most of us here who are interested in the nationalised industries, and many who are not, have participated in the debates. I am sure that we have all read them.

When one reads the debates upon the nationalised industries, one is always struck by the fact that so much of the time which Parliament devotes to the examination, or supposed examination, of these industries is devoted to trifling questions, often to minor, unimportant constituency points; the debates range much too widely over the whole field instead of being confined to an attempt to pinpoint, at specific times, some aspect of nationalised industry. The time available in Parliament to debate this matter is inadequate, and the information that we get is too little and too late.

Further, I must say—and here I follow my hon. Friend the Member for Enfield, East—that I am not really scared by the idea of managers always having to look over their shoulders at what Parliament or somebody might be saying about them. We are in danger of overemphasising this point. I do not think it is a bad thing that people should from time to time have to look over their shoulders at somebody else. It is good that Members of Parliament should from time to time have to look over their shoulders at their constituents and pay attention to what they are saying. It does not necessarily follow that one always accepts what one thinks, they are saying, but it is a good thing that this state of things should exist and that we should have to look over our shoulders at the electors. I do not consider that it is, or would be, a bad thing for the Boards and chairmen of nationalised industries to be looking over their shoulders at Parliament and paying attention to what Members of Parliament are thinking. After all, we represent the people in this matter. The heads of these thousand million pound undertakings must be a poor lot if they are unable to explain to a few Members of Parliament what they are up to and what they are actually in process of doing. Frankly, I do not very much fear the possibility of these people having from time to time to explain their actions to a group of parliamentarians. That is why I supported the initial Reports of the Select Committee which was set up under Lord Clitheroe.

Having said that, I am bound to go on and say that I should never have been a party to those Reports, and would never have permitted them to go through by unanimous decision, if the terms of reference for the suggested Select Committee had not been clearly defined and if we had not clearly set out the terms of reference under which the committee would have to work. The Clitheroe Committee sat for two years, carefully examining this problem. It had before it the most important people in these industries. It had before it points of view expressed by civil servants, important trade unionists and others. As a result of its hearings and deliberations, it arrived at a unanimous conclusion. However, as I say, that conclusion could have been unanimous provided only that certain matters were excluded.

There is a vast difference between the way in which the Clitheroe Committee looked at this great problem and the way in which the Committee set up in 1955 approached its task. I believe, with the Lord Privy Seal today, that the Committee set up in 1955 made no real attempt to explore the possibilities open to it. Its whole approach to the problems facing it appeared to me to be negative, and not positive. I believe that it could have done much. It ought to have tried very much more than it did. It certainly ought not to have left its examination to four meetings and to have had before it people who were not in the nationalised industries at all, but to others, such as the Attorney-General and people in the Ministries.

It made up its mind straight way, as it seems to me, that its terms of reference were too restrictive, and it started out from that point. I believe that it made a tremendous mistake in doing that. It ought, at least, to have gone over some of the possible aspects and to have faced the matter with a more positive approach. The right hon. and learned Gentleman the Member for Kensington, South (Sir P. Spens) said that the Committee could not ask questions within the terms of reference. I frankly do not believe that it tried hard enough.

If it was not possible for that Committee to ask questions within the terms of reference as clearly laid down, how will it be possible for this Committee to work, if it is to be limited in the gentlemanly manner suggested by the Lord Privy Seal and have in mind precisely the same ideas as were embodied in the other terms of reference, with restrictions placed upon it by a sort of "gentlemen's agreement", leaving it to the honour of the Committee to avoid those matters which were set out in the last terms of reference?

It is a fact, and it is inevitable that it should be, that quite often, despite that kind of idea, party passions rise above some undefined sense of Tightness. That is understandable. This is a political institution and everything here tends to turn into party matters with only the rarest of exceptions. My hon. Friend the Member for Enfield, East, who was for a time a member of the Select Committee, said that his experience was that party considerations did not, as a rule, enter into the examinations undertaken by the Committee. I, too, sat upon that Committee for five years and I must say that it was very rare for that to happen. I remember occasions when an attempt was made to arrive at decisions based upon party considerations, and I remember some of the fights in that connection.

This is, as I say, a political institution. Nationalised industry cannot be cut out from this play of party, one side against the other, neither can it be removed from the conflict between Socialism and capitalism, the two points of view which are clearly held on the opposing sides of the House. No matter how one regards nationalisation, it is still part of this great conflict. There is still too sharp a conflict of opinion as to the Tightness of nationalisation or otherwise. I was hoping that by this time we might have got away from it, but, quite obviously, the decisions taken by the Government after they came into power threw it back straight away into the field of party conflict.

There is still much too sharp a conflict of opinion as to the proper outcome of trade union negotiations between the two sides. That, too, is inevitable. Here arises another aspect. The relationship of the trade unions to the nationalised industries is in process of being worked out. It is bound to be a somewhat protracted process. It is one in which the trade unions themselves will have to accept a new relationship to their industry. I believe that they are coming to recognise this as a fact, but it is not an easy process. It involves the recognition of a partial change of function to one which is rather different from the old trade union concept of "Our job is to fight the boss now and always." It must be something more than that in nationalised industry.

If this change of function, even if it is recognised in the unions at the top, is eventually to become what we hope it will be, it must permeate the whole of the unions concerned, from the president down to the ordinary member of the branch who attends on Sunday, or whatever day it may be, and participates in the trade union work at that level. It is easy for us here to see what ought to be happening in relation to trade unions and nationalised industry. It is rather different when looking at it through, say, a signal box window, or on the floor of a trade union branch. These matters must be approached warily in this House and by its Committees. We must avoid doing anything which would interfere with what must be a gradual process.

It is because of the fact, and because of my fear, that a Select Committee without specific terms of reference would be quite unable to avoid the matter of trade union negotiations, and the outcome from them, that I am opposed to the idea of a Select Committee in its suggested form. In our Amendment, we on this side say that we are not satisfied with the present position. We have said that it is a matter requiring examination.

I shall vote happily tonight, despite the fact that I sat with the right hon. and learned Member for Kensington, South on the Clitheroe Committee, against the Motion, because we ought not to try this experiment without at least having terms of reference which will govern the conduct of the members and of its chairman in its task of examining these great industries which are now the nation's.

6.35 p.m.

The Minister of Transport and Civil Aviation (Mr. Harold Watkinson)

I, too, am sorry that we have had such a short debate, because this is a vitally important subject and I know that there were many other hon. Members who would like to have spoken had they seen any opportunity of doing so. Those who have spoken have contributed very much to the debate.

I think it would be fair to use again the words of my right hon. Friend the Lord Privy Seal and say that it is extraordinarily difficult to find the right relationship between this House and the nationalised industries. Probably we all agree on that. As many hon. Members have said this evening, however, the conception of the nationalised industries themselves is changing. I do not quite agree with the hon. Member for Derbyshire, South-East (Mr. Champion) when he says that nationalised industries are not slowly moving out of politics. I think that they are.

Mr. Champion

I did not say they were not moving out of politics. I said that they were not yet clear of party politics. I think that they will become so eventually.

Mr. Watkinson

That should be an objective. While we must differ in our political views on nationalised industries, most of us, I think, agree that too much controversy, particularly ill-judged controversy, does not help the chairman of a nationalised industry or those who work with him to do their job. In my view, that is certainly not an argument that we in this House should, therefore, throw up our hands and say, "We must do the best we can. We in this House must try to find what time we can. We must have a few more Questions if we can get them in," and so on.

My reason for quarrelling with the Opposition Amendment is that no constructive alternative is put forward. The hon. Member for Cardiff, South-East (Mr. Callaghan) rightly said that the Opposition is still in process of producing its views and thoughts on the whole range of nationalised industry, and that I accept. For the moment, however, there seems to be no alternative to the proposition which my right hon. Friend as put before the House, that we should try again to see whether we can make a success of the Select Committee.

I never find that hesitancy is one of the features of the hon. Member—usually, in fact, the very reverse is the case—but I thought that he was a little hesitant about this matter today. He admitted that we could learn by experience and I think that we have learnt something by experience with the first Select Committee. What we have learnt—and in this I certainly differ from those who have spoken from the Opposition benches—is that if we try to tie down that kind of Committee, particularly when it is feeling its way, with rigid terms of reference, we will find that it cannot, and will not, work. My right hon. and learned Friend the Member for Kensington, South (Sir P. Spens) made that point forcefully. We think, therefore, that it is right to experiment again and to do it clearly in the knowledge, as my right hon. Friend said, that this is an experiment which may fail but one which we sincerely hope will succeed.

It is a little underestimating the capacity of members of Select Committees of this House to associate them with a bear garden or a place which would be used for muck-raking. They are both very picturesque and, no doubt, quite proper terms, but I do not think that Select Committees of this House have usually been distinguished for conduct of that kind. Therefore, I do not think we are wrong to run the risk, if it is a risk, of a Committee of that kind conducting itself in a way that would not help the nationalised industries.

If we try to get down to the facts, I think that everyone in the House wants to have proper Parliamentary control of the nationalised industries. Everybody says that, on the whole, they should be made more accountable and not less accountable. The question I would then put to the House is: can we have adequate Parliamentary control unless we have an adequate knowledge of the facts? That seems to be one of the main tasks the Select Committee should perform, and it could render the House a great service by sifting and winnowing the facts and in presenting them to the House in a digestive form.

Most of us suffer from having far too much to read, and I believe that the Select Committee, by predigesting some of the vast amount of information now lying fallow in the nationalised industries, would be doing a great service to the country, to them, and to every hon. Member of the House. I make no apology at all for saying that I think we should be very wrong if we did not appoint again a Select Committee to examine, as our Motion says, 'the Reports and Accounts of the Nationalised Industries

Sir Leslie Plummer (Deptford)

Does the right hon. Gentleman include among the nationalised industries the British Broadcasting Corporation? Clearly not, although the greater part of its revenues are not provided by Parliament or advanced from the Exchequer. However, he would, I suppose, include the I.T.A., which is a trading concern, whose members are appointed by a Minister, and the greater part of whose receipts do not come from either Parliament or the Exchequer. Does that not mean that the Select Committee will be inquiring into the workings of a nationalised trading orgnisation, the I.T.A., and not into those of the B.B.C.?

Mr. Watkinson

That is a fascinating idea, but one hardly relevant to the Motion.

Mr. Callaghan

Oh, but it is. What will prevent the Select Committee from doing so?

Mr. Watkinson

Merely the fact, as I understand, that it will not be charged with the duty of inquiring into them.

Mr. Callaghan

It is rather important to know what the Select Committee is to be empowered to inquire into. My hon. Friend has pointed out that the I.T.A. is a body which is appointed by a Minister and has receipts from public funds, though not the greater part of its receipts. What, therefore, is there to preclude the Select Committee, if it so desires, from inquiry into the affairs of the I.T.A.?

Mr. Watkinson

I am not going to be led away into fascinating spheres of that kind. I know the hon. Gentleman's great and able interest in those spheres of public entertainment, but I want to deal with the questions he raised in his speech.

I was just coming to one he raised about B.O.A.C It is a good example. Here is a matter of vital concern not only to the Corporation but to the whole country. The hon. Gentleman asked about the general procurement policy of both that Corporation and B.E.A.C., and, indeed, of the independent companies, too. There is no doubt at all that we should have benefited in the day's debate we had recently on the affairs of those Corporations, had we had before us a report of a Select Committee which had been able to give the time we certainly could not give in so short a time, to examining the most technical and difficult problem of the right kind of aircraft for the Corporations. That, in my view, is one of the urgent arguments for appointing the Select Committee.

The hon. Gentleman and the hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond), the Leader of the Liberal Party, asked how the Select Committee will deal with the relationship between the chairman of the board of a nationalised industry and the Minister responsible to the House for the industry. I would remind the House of what I said on a recent occasion, because my views are quite clear and definite on the relationship between the Minister responsible to this House and the chairmen of the boards of the industries for which I am responsible. I said: In my view, the chain of command is that I am responsible to the House and the Chairman is responsible to me. But, of course, before coming to me he discusses, clears and brings to me the collective decision of the Board. I believe that it would be absolutely wrong for any Minister to deal other than through the Chairman, who must be directly and solely responsible to the Minister."—[OFFICIAL REPORT, 9th May, 1956; Vol. 552, c. 1215.] I would add to that only, "the Minister directly and solely responsible to this House."

I must make it plain that I do not think that any Select Committee or a committee of any kind can stand between the Minister and that relationship. If it does, the Minister has no further function to perform to this House or anyone else. I must make that perfectly plain, because I think that that is essential. However, I do not think this presents any difficulty, because that position is clearly known, and this is a very flexible relationship.

I do not see that it presents any difficulty to the Select Committee, which may, quite properly, want to examine and question either the chairman of the board himself or officers who may be nominated by the chairman to deal with certain specific points into which the Committee is inquiring. I do not see any great difficulty there.

Mr. Callaghan

In other words, if the chairman of the Select Committee asks to see a representative of one of the nationalised industries it would be for the chairman of the board of that industry to determine who should appear before the Committee, whether it should be he himself or another member of the board or one of his officers?

Mr. Watkinson

I am much obliged to the hon. Gentleman. He has put very clearly exactly the view I take. The view which I believe the Select Committee will take is that it is pari passu with direct personal responsibility to the chairman and the Minister.

Many Members have said that one of the difficulties is that the Select Committee will get involved in day-to-day matters. For example, there may be some most difficult wage negotiations going on, or, as the hon. Gentleman said, there may be the difficult problem as to what kind of aircraft the Corporations should buy, or the problem of what kind of modernisation should be carried out. My own view is that it would make the position of the Minister quite impossible if the Select Committee were to try to pronounce on those matters, when the Minister, at the same time, is trying to examine them with the chairman of the board. However, that is fully safeguarded against in our Motion by the words to examine the Reports and Accounts of the Nationalised Industries. And for this reason. I am afraid that, with the best will in the world, they are never less than about 12 months in arrear.

That is the safeguard, for the Select Committee is bound, in my view, to base its proceedings upon the last year's business. Therefore, while it can, quite properly, as my right hon. Friend said, ask to be brought up to date about certain things it is examining, it must base its main proceedings and findings on the current reports and accounts, which will certainly be about 12 months in arrear, sometimes more.

Mr. Ernest Davies

Surely the Minister is taking a view different from that of the Lord Privy Seal? The matters which the Lord Privy Seal put forward as examples of matters which would be considered by the Select Committee were matters which, quite clearly, were for the future, such as future financing and revenue, and so forth.

Mr. Watkinson

I am just coming to that. It is a very important point. It is one which my right hon. Friend and I have discussed.

To come to the reports and accounts. Let me take the three bodies for which I am responsible because they are most familiar to me. Suppose the Select Committee were discussing the British Transport Commission. As the House knows, it is the largest employer in the country. It is a massive business. In almost every line of its Report there is material for investigation that ought to be investigated in the interests of the House and of the Commission and of the country. There is not time to delve into it all very deeply, so let me take two short examples.

There is a small one about the 10-year programme for the modernisation of certain Commission-owned hotels having been approved in principle. There is a great deal of money involved in that, and very interesting tourist problems and a great many other things. If the Select Committee decided to examine that aspect of the industry's work it would be perfectly proper for it to ask how policy had developed since the Report was written. I see no conflict in that. The Committee would be basing itself quite properly on the Report, but would be asking to be brought up to date as far as could be so that the examination would be topical.

Mr. Ernest Popplewell (Newcastle-upon-Tyne, West)

That is done now without a Select Committee.

Mr. Watkinson

It may be, but I do not take the view of those who think that the work of the nationalised industries is adequately reflected in the House either at Question Time or in debate. Certainly, there is a very short day to cover the whole of the work of the Airways Corporations.

Another example is found in the Report of B.O.A.C. where there is a paragraph headed "Co-operation with British Independent Companies". There, again, there is a possibility of a wide-ranging examination which might have the utmost effect.

Mr. F. Beswick (Uxbridge)

The right hon. Gentleman said a little earlier that we should not get involved in day-to-day business. I see no value at all, interesting as it might be, in all this historical research unless it is related to future policies.

Mr. Watkinson

There is a good answer to that. I said, I think before the hon. Member came into the Chamber, that my view of the duty of the Select Committee was that it should provide for the House relevant facts, perhaps in digested form, so that when the House came to discuss the matters it had a background of factual, detailed, examination on which to base discussions in the limited time that we have available in the House. I am indicating how the Select Committee could quite properly base itself on the annual reports and accounts and yet be reasonably up-to-date in its consideration of matters of great import and interest.

Mr. G. R. Strauss

Does the right hon. Gentleman think that the Committee would be justified in making comments on the present development of some proposals which were based on a report for the previous year?

Mr. Watkinson

That is covered by my previous remarks about the relationship between the Minister and his chairman, and the Minister and the House. The Leader of the Liberal Party proposed that this Select Committee should be a kind of Star Chamber that would invigilate the Minister and haul him before it as it thought necessary. I do not take that view. If a Minister is to be hauled up and invigilated it should be by the House in this Chamber and not by remote control through a Select Committee.

This is a difficult problem, but I think that there is a way through. We would have the Committee properly examining the reports and accounts and examining an enormously wide field which the nationalised industries represent. The Committee would be obtaining all the facts that the House might want and yet not getting to the point where it would get between the Minister and the chairman or directly between the Minister and the House, which, as far as I am concerned, as a Minister, would, I think, be completely impracticable and unworkable.

Mr. Strauss

We want to have this clear, because it is very important. There is confusion in the minds of many of us as a result of speeches made previously and the words of the right hon. Gentleman himself. Is it, in the Minister's view, the right function of the Committee to consider affairs which are happening currently, which have developed, it may be, from something that happened in the previous year, and then make about those affairs any critical or laudatory comment whatsoever, or should it all be purely factual?

Mr. Watkinson

Absolutely factual. The Committee's duty is to base itself on the current reports and accounts which, as I have said, would never be less than about 12 months in arrear, and to inform itself as far as it can on the reports and accounts. It is quite proper for the Committee to ask for further information, which, of course, must be more modern information, but that must be factual information and must not conflict with the proper relationship between the Minister and the chairman. That is something for which the Select Committee must try to find a workable solution.

We have seen in this interesting debate how, if we try to set things out in black and white, we will fail. We must leave it to the good sense and good will of the Committee to try to work out its own principles and rules as it goes along. After all, this House has got along very well through the years without a written constitution, and by making its own rules very largely as it goes along. Therefore, we have a very respectable precedent for this Select Committee, which I hope will start before long on its very difficult and responsible tasks.

I carry that argument forward to the subject of wage negotiations, which I think worries one or two hon. Members, and in which the trade unions are naturally deeply interested. If we maintain the principle which I have enunciated that the Select Committee must base itself on the annual report, as the Motion states, that rules it out, obviously, from any discussion of current wage negotiations. Also, I am quite sure that it is the general tradition of the House, which even in my short time here I have seen observed many times, that we in the House do not interfere in industrial negotiations, nor do we try to discuss them at great length when they are taking place. I feel sure, therefore, that the Select Committee will adopt the same procedure and, as my right hon. Friend has said, with his wise and great experience, he would rule out of order a question which bore upon current wage and industrial negotiations.

I think that my right hon. Friend is quite right, but I equally think, as the hon. Member for Derbyshire, South-East has said, that it is not wrong that a nationalised industry should have somebody looking over its shoulder, because ordinary business has its shareholders who have many ways of looking over the shoulders of large industrial concerns. I would welcome, and I am sure that the nationalised industries would welcome, some reasonable form not so much of investigation as of a forum in which the industries could make plain some of the many facts that concern their great businesses.

I do not believe that this conception is one that is unwelcome to the nationalised industries. I believe that they would welcome a forum of this kind where they could discuss and explain facts concerning their businesses in a way which it is quite impossible to do in the House. There is already a tradition for members of nationalised industries sometimes to talk to private party committees upstairs, and it does not seem to me very different, on the whole, for members of nationalised industries to talk to a Select Committee in a way that would do nothing but good to their industries and their relationship to the country and its customs.

I sum up by saying that this is not the first experiment that we have carried out in the House where we have had to try to find our way and make our rules and procedure as we have gone forward. We should be quite wrong to take the Opposition view and say that because we cannot think out anything better we do nothing at all. Indeed, there have been speeches from the Opposition benches this evening which have indicated that this Select Committee might not be a bad thing. If it is set up—and I am not sure that it is not the real sense of the House that we ought to have a body of this kind—it will be an experiment. As my right hon. Friend has said, it might well fail, but I think that we should try it.

I have no doubt that we shall maintain the democratic decencies by dividing on the Motion this evening, but, having done that, I hope that all hon. Members will

try to play their part in making the Select Committee work. I believe that it has a useful part to play. If the experiment succeeds, we shall have done something to help the nationalised industries and, indeed, the Ministers responsible for them. I therefore commend this Motion to the House, and I hope sincerely that, if the Select Committee is set up, the House will do its best to succeed in an experiment that will not be without significance to the future of our industrial democracy.

Question put, That the words proposed to be left out stand part of the Question:—

The House divided: Ayes 292, Noes 225.

Division No. 12.]	AYES	[7.0 p.m.
Agnew, Cmdr. P. G.	Crosthwaite-Eyre, Col. O. E.	Harvie-Watt, Sir George
Aitken, W. T.	Crouch, R. F.	Hay, John
Allan, R. A. (Paddington, S.)	Crowder, Sir John (Finchley)	Heald, Rt. Hon. Sir Lionel
Alport, C. J. M.	Crowder, Petre (Ruislip—Northwood)	Heath, Rt. Hon. E. R. G.
Amery, Julian (Preston, N.)	Cunningham, Knox	Henderson, John (Catheart)
Anstruther-Gray, Major Sir William	Currie, G. B. H.	Hesketh, R. F.
Arbuthnot, John	Dance, J. C. G.	Hicks-Beach, Maj. W. W.
Armstrong, C. W.	Davidson, Viscountess	Hill, Rt. Hon. Charles (Luton)
Ashton, N.	D'Avigdor-Goldsmid, Sir Henry	Hill, Mrs. E. (Wythenshawe)
Astor, Hon. J. J.	Deedes, W. F.	Hill, John (S. Norfolk)
Atkins, H. E.	Digby, Simon Wingfield	Hinchingbrooke, Viscount
Baldock, Lt.-Cmdr. J. M.	Dodds-Parker, A. D.	Hirst, Geoffrey
Baldwin, A. E.	Donaldson, Cmdr. C. E. McA.	Holland-Martin, C. J.
Balniel, Lord	Doughty, C. J. A.	Hornby, R. P.
Barlow, Sir John	Drayson, G. B	Hornsby-Smith, Miss M. P.
Barter, John	du Cann, E. D. L.	Horobin, Sir Ian
Baxter, Sir Beverley	Dugdale, Rt. Hn. sir T. (Richmond)	Horsbrugh, Rt. Hon. Dame Florence
Bell, Philip (Bolton, E.)	Duncan, Capt. J. A. L.	Howard, Hon. Greville (St. Ives)
Bennett, F. M. (Torquay)	Duthie, W. S.	Howard, John (Test)
Bevins, J. R. (Toxteth)	Eccles, Rt. Hon. Sir David	Hughes, Hallett Vice-Admiral J.
Bidgood, J. C.	Eden, J. B. (Bournemouth, West)	Hughes-Young, M. H. C.
Biggs-Davison, J. A.	Elliot, Rt. Hon. W. E.	Hurd, A. R.
Birch, Rt. Hon. Nigel	Emmet, Hon. Mrs. Evelyn	Hutchison, SirlanClark (E'b'gh, W.)
Bishop, F. P.	Farey-Jones, F. W.	Hyde, Montgomery
Black, C. W.	Fell, A.	Hylton-Foster, Sir H. B. H.
Body, R. F.	Finlay, Graeme	Iremonger, T. L.
Boothby, Sir Robert	Fisher, Nigel	Irvine, Bryant Godman (Rye)
Bossom, Sir Alfred	Fletcher-Cooke, C.	Jenkins, Robert (Dulwich)
Bowen, E. R. (Cardigan)	Fort, R.	Jennings, J. C. (Burton)
Boyd-Carpenter, Rt. Hon. J. A.	Fraser, Hon. Hugh (Stone)	Jennings, Sir Roland (Hallam)
Boyle, Sir Edward	Fraser, Sir Ian (M'cmbe & Lonsdale)	Johnson, Dr. Donald (Carlisle)
Braine, B. R.	Freeth, D. K.	Johnson, Eric (Blackley)
Braithwaite, Sir Albert (Harrow, W.)	Galbraith, Hon. T. G. D.	Johnson, Howard (Kemptown)
Bromley-Davenport, Lt.-Col. W. H.	George, J. C. (Pollok)	Jones, Rt. Hon. Aubrey (Hall Green)
Brooke, Rt. Hon. Henry	Gibson-Watt, D.	Joseph, Sir Keith
Brooman-White, R. C.	Glover, D.	Joynson-Hicks, Hon. Sir Lancelot
Browne, J. Nixon (Craigton)	Godber, J. B.	Kaberry, D.
Bryan, P.	Gomme-Duncan, Col. Sir Alan	Keegan, D.
Buchan-Hepburn, Rt. Hon. P. G. T.	Gough, C. F H.	Kerby, Capt. H. B.
Bullus, Wing Commander E. E.	Gower, H. R.	Kershaw, J. A.
Butcher, Sir Herbert	Graham, Sir Fergus	Kimball, M.
Butler, Rt. Hn. R. A. (Saffron Walden)	Grant-Ferris, Wg Cdr. R. (Nantwich)	Kirk, P. M.
Campbell, Sir David	Green, A.	Lagden, G. W.
Carr, Robert	Gresham Cooke, R.	Lambert, Hon. G.
Cary, Sir Robert	Grimond, J	Lambton, Viscount
Channon, H.	Grimston, Hon. John (St. Albans)	Lancaster, Col. C. G.
Chichester-Clark, R.	Grimston, Sir Robert (Westbury)	Leather, E. H. C.
Clarke, Brig. Terence (Portsmth, W.)	Grosvenor, Lt.-Col. R. G.	Leavey, J. A.
Cole, Norman	Gurden, Harold	Leburn, W. G.
Conant, Maj. Sir Roger	Hare, Rt. Hon. J. H.	Legge-Bourke, Maj. E. A. H.
Cooper, A. E.	Harris, Frederic (Croydon, N. W)	Legh, Hon. Peter (Petersteld)
Cooper-Key, E. M.	Harris, Reader (Heston)	Lennox-Boyd, Rt. Hon. A. T.
Cordeaux, Lt.-Col. J. K.	Harvey, Air Cdre. A. V. (Macclesfd)	Lindsay, Hon. James (Devon, N.)
Corfield, Capt. F. V.	Harvey, Ian (Harrow, E.)	Linstead, Sir H. N.
Craddock, Beresford (Spelthorne)	Harvey, John (Walthamstow, E.)
Llewellyn, D. T.	Nicholls, Harmar	Spence, H. R. (Aberdeen, W.)
Lloyd, Maj. Sir Guy (Renfrew, E.)	Nicholson, Godfrey (Farnham)	Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)
Lloyd, Rt. Hon. Selwyn (Wirral)	Noble, Comdr. A. H. P.	Stanley, Capt. Hon. Richard
Lloyd-George, Maj. Rt. Hon. G.	Nugent, G. R. H.	Stevens, Geoffrey
Longden, Gilbert	Oakshott, H. D.	Steward, Harold (Stockport, E.)
Low, Rt. Hon. A. R. W.	O'Neill, Hn. Phelim (Co. Antrim, N.)	Steward, Sir William (Woolwich, W.)
Lucas, SirJocelyn (Portsmouth, S.)	Ormsby-Gore, Hon. W. D.	Stewart, Henderson (Fife, E.)
Lucas, P. B.(Brentford & Chiswick)	Orr, Capt. L. P. S.	Storey, S.
Lucas-Tooth, Sir Hugh	Orr-Ewing, Charles Ian (Hendon, N.)	Stuart, Rt. Hon. James (Moray)
McAdden, S. J.	Orr-Ewing, Sir Ian (Weston-S-Mare)	Studholme, Sir Henry
Macdonald, Sir Peter	Osborne, C.	Sumner, W. D. M. (Orpington)
Mackeson, Brig. Sir Harry	Page, R. G.	Taylor, William (Bradford, N.)
McKibbin, A. J.	Pannell, N. A. (Kirkdale)	Teeling, W.
Mackie, J. H. (Galloway)	Partridge, E.	Temple, J. M.
McLaughlin, Mrs. P.	Peyton, J. W. W.	Thomas, Leslie (Canterbury)
Maclean, Fitzroy (Lancaster)	Pickthorn, K. W. M.	Thompson, Kenneth (Walton)
McLean, Neil (Inverness)	Pilkington, Capt. R. A.	Thompson, Lt.-Cdr. R.(Croydon, S.)
Macleod, Rt. Hn. lain (Enfield, W.)	Pitman, I. J.	Thornton-Kemsley, C. N.
MacLeod, John (Ross & Cromarty)	Pitt, Miss E. M.	Tiley, A. (Bradford, W.)
Macmillan, Rt. Hn. Harold (Bromley)	Powell, J. Enoch	Tilney, John (Wavertree)
Macmillan, Maurice (Halifax)	Price, David (Eastleigh)	Turton, Rt. Hon. R. H.
Macpherson, Niall (Dumfries)	Price, Henry (Lewisham, W.)	Vane, W. M. F.
Maddan, Martin	Prior-Palmer, Brig. O. L.	Vaughan-Morgan, J. K.
Maitland. Cdr. J. F. W. (Hornoastle)	Raikes, Sir Victor	Vickers, Miss J. H.
Maitland, Hon. Patrick (Lanark)	Ramsden, J. E.	Vosper, D. F.
Manningham-Buller, Rt. Hn. Sir R.	Redmayne, M.	Wade, D. W.
Markham, Major Sir Frank	Rees-Davies, W. R.	Wakefield, Edward (Derbyshire, W.)
Marlowe, A. A. H.	Remnant, Hon. P.	Wakefield, Sir Wavell (St. M'lebone)
Marples, A. E.	Renton, D. L. M.	Walker-Smith, D. C.
Marshall, Douglas	Ridsdale, J. E.	Ward, Hon. George (Worcester)
Maude, Angus	Rlppon, A. G. F.	Waterhouse, Capt. Rt. Hon. C.
Maudling, Rt. Hon. R.	Robinson, Sir Roland (Blackpool, S.)	Watkinson, R. Hon. Harold
Mawby, R. L.	Roper, Sir Harold	Webbe, Sir H.
Maydon, Lt.-Comdr. S. L. C.	Ropner, Col. Sir Leonard	Whitelaw. W. S. I. (Penrith & Border)
Medlicott, Sir Frank	Russell, R. S.	Williams, Paul (Sunderland, S.)
Milligan, Rt. Hon. W. R.	Schofield, Lt.-Col. W.	Williams, R. Dudley (Exeter)
Molson, Rt. Hon. Hugh	Scott-Miller, Cmdr. R.	Wills, G. (Bridgwater)
Monckton, Rt. Hon. Sir Walter	Sharples, R. C.	Wilson, Geoffrey (Truro)
Moore, Sir Thomas	Shepherd, William	Wood, Hon. R.
Morrison, John (Salisbury)	Simon, J. E. S. (Middlesbrough, W.)	Woollam, John Victor
Mott-Radclyffe, C. E.	Smyth, Brig. Sir John (Norwood)
Nabarro, G. D. N.	Soames, Capt. C.	TELLERS FOR THE AYES:
Nairn, D. L. S.	Spearman, Sir Alexander	Colonel J. H. Harrison and
Neave, Alrty	Speir, R. M.	Mr. Barber.
NOES
Ainsley, J. W.	Corbet, Mrs. Freda	Griffiths, William (Exchange)
Albu, A. H.	Craddock, George (Bradford, S.)	Hale, Leslie
Allaun, Frank (Salford, E.)	Cronin, J. D.	Hall, Rt. Hon. Glenvil (Colne Valley)
Allen, Arthur (Bosworth)	Crossman, R. H. S.	Hamilton, W. W.
Allen, Scholefield (Crewe)	Cullen, Mrs. A.	Hannan, W.
Awbery, S. S.	Darling, George (Hillsborough)	Harrison, J. (Nottingham, N.)
Bacon, Miss Alice	Davies, Ernest (Enfield, E.)	Hastings, S.
Baird, J.	Davies, Harold (Leek)	Hayman, F. H.
Balfour, A.	Davies, Stephen (Merthyr)	Healey, Denis
Bellenger, Rt. Hon. F. J.	Deer, G.	Herbison, Miss M.
Bence, C. R. (Dunbartonshire, E.)	de Freitas, Geoffrey	Hewitson, Capt. M.
Benn, Hn. Wedgwood (Bristol, S. E.)	Delargy, H. J.	Hobson, C. R.
Benson, G.	Dodds, N. N.	Holman, P.
Beswick, F.	Donnelly, D. L.	Houghton, Douglas
Bevan, Rt. Hon. A. (Ebbw Vale)	Dugdale, Rt. Hn. John (W. Brmwch)	Howell, Charles (Perry Barr)
Blackburn, F.	Dye, S.	Howell, Denis (All Saints)
Bottomley, Rt. Hon. A. C.	Edelman, M.	Hubbard, T. F.
Bowden, H. W. (Leicester, S. W.)	Edwards, Rt. Hon. Ness (Caerphilly)	Hughes, Cledwyn (Anglesey)
Bowles, F. G.	Edwards, Robert (Bilston)	Hughes, Emrys (S. Ayrshire)
Boyd, T. C.	Edwards, W J. (Stepney)	Hughes, Hector (Aberdeen, N.)
Braddock, Mrs. Elizabeth	Evans, Albert (Islington, S. W.)	Hunter, A. E.
Brockway, A. F.	Evans, Edward (Lowestoft)	Irving, S. (Dartford)
Broughton, Dr. A. D. D.	Fernyhough, E.	Isaacs, Rt. Hon. G. A.
Brown, Thomas (Ince)	Fienburgh, W.	Jay, Rt. Hon. D. P. T.
Burke, W. A.	Finch, H. J.	Jeger, George (Goole)
Butler, Herbert (Hackney, C.)	Fletcher, Eric	Jeger, Mrs. Lena (Hoibn & St.Pncs, S.)
Butler, Mrs. Joyce (Wood Green)	Forman, J. C.	Jenkins, Roy (Stechford)
Callaghan, L. J.	Fraser, Thomas (Hamilton)	Johnson, James (Rugby)
Carmichael, J.	Gaitskell, Rt. Hon. H. T. N.	Jones, David (The Hartlepools)
Champion, A. J.	Gibson, C. W.	Jones, J. Idwal (Wrexham)
Chapman, W. D.	Gooch, E. G.	Jones, T. W. (Merioneth)
Chetwynd, G. R.	Cordon Walker, Rt. Hon. P. C.	Kenyon, C.
Clunie J.	Grenfell, Rt. Hon. D. R.	Key, Rt. Hon. C. W.
Coldrick, W.	Grey, C. F.	King, Dr. H. M.
Collick, P. H. (Birkenhead)	Griffiths, David (Rother Valley)	Lawson, G. M.
Collins, V. J.(Shoreditch & Finsbury)	Griffiths, Rt. Hon. James (Llanelly)	Ledger, R. J.
Lee, Frederick (Newton)	Pargiter, G. A.	Stross, Dr. Barnett (Stoke-on. Trot, C.)
Lee, Miss Jennie (Cannock)	Parker, J.	Summerskill, Rt. Hon. E.
Lever, Leslie (Ardwick)	Parkin, B. T.	Sylvester, G. O.
Lewis, Arthur	Paton, John	Taylor, Bernard (Mansfield)
Lipton, Lt.-Col. M.	Pearson, A.	Taylor, John (West Lothian)
Mabon, Dr. J. Dickson	Peart, T. F.	Thomas, lorwerth (Rhondda, W.)
MacColl, J. E.	Pentland, N.	Thomson, George (Dundee, E.)
McGhee, H. G.	Plummer, Sir Leslie	Thornton, E.
McInnes, J.	Poppiewell, E.	Timmons, J.
McKay, John (Wallsend)	Proctor, W. T.	Tomney, F.
McLeavy, Frank	Pryde, D. J.	Turner-Samuels, M.
MacPherson, Malcolm (Stirling)	Pursey, Cmdr. H.	Viant, S. P.
Manon, Simon	Randall, H. E.	Warbey, W. N.
Mallalieu, E. L. (Brigg)	Rankin, John	Watkins, T. E.
Mallalieu, J. P. W. (Huddersfd, E.)	Redhead, E. C.	Weitzman, D.
Mann, Mrs. Jean	Reeves, J.	Wells, Percy (Faversham)
Marquand, Rt. Hon. H. A.	Reid, William	Wells, William (Walsall, N.)
Mason, Roy	Robens, Rt. Hon. A.	West, D. G.
Mayhew, C. P.	Roberts, Goronwy (Caernarvon)	Wheeldon, W. E.
Mellish, R. d.	Robinson, Kenneth (St. Pancras, N.)	White, Mrs. Eirene (E. Flint)
Messer, Sir F.	Ross, William	White, Henry (Derbyshire, N. E.)
Mikardo, Ian	Royle, C.	Wigg, George
Mitchison, G. R.	Short, E. W.	Wilcock, Group Capt. C. A. B.
Monslow, W.	Shurmer, P. L. E.	Wilkins, W. A.
Moody, A. S.	Silverman, Julius (Aston)	Willey, Frederick
Morris, Percy (Swansea, W.)	Silverman, Sydney (Nelson)	Williams, David (Neath)
Moss, R.	Simmons, C. J. (Brierley Hill)	Williams, Rev. Llywelyn (Ab'tillery)
Moyle, A.	Skeffington, A. M.	Williams, Ronald (Wigan)
Mulley, F. W.	Slater, Mrs. H. (Stoke, N.)	Williams, W. R. (Openshaw)
Neat, Harold (Bolsover)	Slater, J. (Sedgefield)	Williams, W. T. (Barons Court)
Noel-Baker, Rt. Hon. P. (Derby, S.)	Smith, Ellis (Stoke, S.)	Willis, Eustace (Edinburgh, E.)
Oliver, G. H.	Snow, J. W.	Wilson, Rt. Hon. Harold (Huyton)
Oram, A. E.	Sorenson, R. W.	Winterbottom, Richard
Orbach, M.	Soskice, Rt. Hon. Sir Frank	Woodburn, R. Hon. A.
Oswald, T.	Sparks, J. A.	Woof, R. E.
Owen, W. J.	Steele, T.	Yates, V. (Ladywood)
Padley, W. E.	Stewart, Michael (Fulham)	Younger, Rt. Hon. K.
Paget, R. T.	Stones, W. (Consett)
Paling, Rt. Hon. W. (Dearne Valley)	Strachey, Rt. Hon. J.	TELLERS FOR THE NOES:
Palmer, A. M. F.	Strauss, Rt. Hon George (Vauxhall)	Mr. Holmes and Mr. J. T. Price.

Main Question put and agreed to.

Resolved,

That a Select Committee be appointed to examine the Reports and Accounts of the

Nationalised Industries established by Statute whose controlling Boards are appointed by Ministers of the Crown and whose annual receipts are not wholly or mainly derived from moneys provided by Parliament or advanced from the Exchequer.