STEEL INDUSTRY

HC Deb 18 February 1963 vol 672 cc97-163

7.0 p.m.

Mr. John Morris (Aberavon)

I beg to move, That this House, taking note of the serious under-employment of capacity in the steel industry over a long period, calls upon Her Majesty's Government to take steps as a matter of urgency to stimulate the demand for steel; and while approving the action of Richard Thomas and Baldwin's in their recent acquisition of a private company, notes with concern the unsatisfactory means by which this was achieved, and calls upon Her Majesty's Government to seek from Parliament the powers required to reorganise the structure and finances of the steel industry to serve the national interest. I do not intend to make a long speech, because I am quite sure that my popularity would be in inverse proportion to its length, having regard to the number of my hon. Friends who wish to take part in this debate.

I shall not go into the economic circumstances of the steel industry but confine myself to an analysis of it as we find it today. On numerous occasions the House has heard from my right hon. Friend the Leader of the Opposition and from my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) at great length about the need to stimulate the growth of our economy and to put it once again on its feet. I do not propose to enter into the economic arguments, but, as I say, to confine myself to the state of the steel industry as it is today.

In July of last year we debated the 1961 Report of the Iron and Steel Board. The Board therein stated that the immediate outlook for the steel industry was none too bright. The Minister for Power stated frankly to the House that it would be some time before there was a substantial improvement. How right was the right hon. Gentleman proved to be in the event. We are still awaiting a substantial improvement. But even the right hon. Gentleman expected an upturn in the economy. He told us on that occasion that his right hon. Friends the Minister of Labour and the President of the Board of Trade were most anxious to take positive steps to find new employment for workers from old plants who had lost their jobs, and reference was made to new industries in areas where they were needed.

How hollow all this rings today when we examine what the Government have achieved in the six months since that last debate. Instead of positive achievements we have had government by gimmick. The latest gimmick of the Government is to send Lord Hailsham, as a sort of cloth-capped rich man's Keir Hardie, to the North-East in an attempt to solve the problem there.

In our last debate on the steel industry the Parliamentary Secretary castigated hon. Members on this side of the House and, presumably, by inference he castigated me, in saying: … I do not think that hon. Members opposite do themselves or their country a service in painting too black a picture."—[OFFICIAL REPORT, 27th July, 1962; Vol. 663, c. 1977.] There was a patriotic vein in what the hon. Gentleman was then saying. But having regard to the situation of the steel industry six months after he said that, it would be far more becoming for the Parliamentary Secretary to don sackcloth and ashes himself rather than that right hon. and hon. Gentlemen on this side of the House should do so. The picture has not brightened since July. It remains the same, as I shall endeavour to show.

What does the balance sheet of the steel industry reveal today? What is the real situation regarding user capacity? At the beginning of 1961 the industry was operating in excess of 90 per cent. capacity. At the end of 1961 the figure was down to 75 per cent. It fell steadily throughout 1962, the average for that year was 74 per cent. The latest figures for January of this year show that the industry is operating a capacity of 69 per cent., according to the Report of the Board. In some areas the figure is far higher than that.

In my own constituency the situation is much better, but in some areas it is much worse. The figure for Scotland compared with 1961 when it was 73.9 per cent. is down to 60.3 per cent. There is another substantial fall on the North-East coast from 80.7 per cent. to 59 per cent. There are similar figures for the North-West Coast, for Yorkshire and for Sheffield. The latest figure regarding pig-iron shows an alarming fall particularly in Scotland and for steel ingots on the North-East Coast. There seems little hope for the unemployed in those parts of the country.

When examining the component parts of the industry one finds in respect of blast furnaces that a quarter fewer are operating now than at the beginning of 1961. Indeed, the latest figures for pig-iron production show that the figures for January, with the exception of one month, are the lowest for any month since this Government took office in October, 1959. That represents the achievement of this Government. Last year 1 million tons of pig-iron fewer than the previous year were produced and again in 1961 as compared with 1960 the figure was down by 1 million tons.

When one examines where the steel is going and where it is necessary for the Government to stimulate demand, one finds that home consumption has fallen by 10 per cent. compared with the figure for the previous year. The figures for home consumption may be broken down in relation to railways, shipping, mechanical and constructional engineering. One finds that there has been a slight rise only in respect of the hollowware and the motor industries.

That is a dismal, terrible picture, and I am sure that the hon. Members who, last July, put the real facts before the House, which they have gained from their own knowledge, were not doing a disservice, as was suggested then by the Parliamentary Secretary. They were doing a great service. The picture was black then it is blacker today.

In the July debate the Minister said that there was one ray of sunshine. He was dealing with the figures for exports in 1961. But even that silver lining appears to be tattered when one takes a close look. He said that in an otherwise sombre picture there was one bright spot. But the Minister painted only half of the picture. The figures for exports were falling towards the end of 1961 and the figures available then for the first five months of 1962 showed that they were down compared with the first five months of 1961. Now that we have the full figures for 1962 we find that they show that exports were down in that year compared with 1961 and we are back to 1960 level.

As I have said, the economic measures have already been dealt with by my right hon. Friend the Leader of the Opposition and by my hon. Friend the Member for Cardiff, South-East. But there is one thing of vital importance—it is the real tragedy—to which I must refer. It is the unused capacity of the steel industry. In our last debate the late Mr. Jack Jones, who then represented Rotherham, said that every pennyworth of capacity had to be paid for. That is the handicap which this industry has to bear now, and will have to shoulder for many years. It has invested in that capacity, and it is incumbent upon the Government to stimulate the economy to ensure that this capacity is being used.

Like other hon. Members, I believe that the steel industry should be competitive, and that the disadvantages from which it suffers should be examined. I refer particularly to the need for adequate ports for the industry. We are still awaiting the comments of the Ministry of Transport on the Rochdale Report. At Port Talbot, in my own constituency, we are still importing iron ore in penny packets. That is a situation which handicaps the whole industry in its efforts to compete with its continental rivals.

I wish to refer to the situation resulting from the fixing of maximum prices by the Board which are treated as minima by the Iron and Steel Federation and its constituent members. I wonder whether the Parliamentary Secretary is happy with this state of affairs? Is not this a restrictive practice? I wonder how long it will go on. I wonder what a slight increase in user capacity of our modern sheet steel mills would make to the profits of these companies. I wonder whether this is an ideal solution, that maximum prices fixed by the Board should be treated by the Federation as minimum prices.

When the Board fixes its prices it takes into consideration the cost of iron ore, and that is a very important item which is handled by the Federation. I wonder whether the Federation is efficient. May we have a reassurance that this extra cost is not being handed on to consumers and exporters? Has the Minister of Power power to investigate and ensure that the cost of iron ore is not being inflated?

Over the years there has been considerable investment in iron ore carriers. How many of those have been laid up and how many are not being used? How many are being sub-chartered at great loss? What is the end result on the cost of the importation of iron ore? These are long-term contracts. Are they good contracts? Could we have a fair examination of these matters which affect the cost of iron ore and which are passed on in the prices eventually fixed by the Board, and do they render the industry less competitive compared with continental producers?

It is vital that our own house should be put in order at all times, particularly in an industry where there is no illusion that it is a free enterprise industry.

Mr. Wilfred Proudfoot (Cleveland)

How does the hon. Member match this with the idea that the Board should go in for bulk purchase, as the Leader of the Opposition said? The hon. Member now says the opposite.

Mr. Morris

If the hon. Member was listening—and I gave him credit for listening—he would have realised that I was not condemning the practice, but I wanted it to be analysed to show whether the purchases were good. That is a very different matter.

Turning to the structural reorganisation mentioned in the latter part of my Motion, I believe the only real solution by which we can have a proper, sound, economic steel industry is that of public ownership. That is a matter of common sense.

Sir Gerald Nabarro (Kidderminster)

rose—

Mr. Morris

I am only just beginning a controversy. I am sure that the hon. Member for Kidderminster (Sir G. Nabarro) will be able to make a very good speech later.

I fought the last General Election on this issue. I said that at the earliest opportunity the steel industry should revert to the nation's hands. The recent Whitehead issue has spotlighted the vital need for the reversion of the whole industry to public hands. Among other things, it spotlighted the issue and put paid to the suggestion made in the Spectator inquiry a few years ago that half the industry should be in public hands and half of it in private hands.

The reversion of Whitehead is welcome to the public. Whitehead, being a vital limb of R.T.B., should never have been denationalised. There is no reason why Whitehead, which has played such a vital part in Richard Thomas and Baldwins, should ever have been separated and denationalised. The folly of that act of denationalisation has now been shown by the amount of money which the Government have to spend in bringing it back into public ownership.

There are close ties between these two sections of the industry. About 90 per cent. of the billets which go to Whitehead come from R.T.B. They operate on each other's doorsteps and if they had lost the contract 300 workers would have been put out at Gowerton and 3,850 would have been affected at Redbourne, while the valuation of Richard Thomas and Baldwins would also have been affected. Whitehead received very little sympathy from me on this issue. The firm brought the trouble on to its own head when it entered into the purchase of billets more cheaply than could be obtained in this country.

Some commentators say that that is good business. Good business for whom? Good business for the shareholders of Whitehead who, unfortunately, had been treated rather contemptuously by the board of directors when the dividend was cut last December. Once there was a suggestion of a take-over bid by Stewarts and Lloyds or R.T.B., there was more talk by the Whitehead directors of restoration of dividend and possibly the handing out of cash assets.

When the take-over bid was mooted, a circular was issued, full of soft phrases, with a view to reassuring the shareholders that their dividends would be protected, but the basis of this was cheap imported steel. The Guardian of 30th January asked whether, if Whitehead became a subsidiary of Richard Thomas and Baldwins, or of Stewarts and Lloyds—the fight was still on then—the customers would lose the benefit of cheap Canadian steel. What a naive question to ask. The prices are the prices fixed by the Iron and Steel Board. There was no suggestion at any time of passing on to British industry the advantage of buying those billets at a lesser price.

I am advised that the result so far as exports are concerned in insignificant. The only good business in buying Canadian billets was good business for Whitehead shareholders. The decision was taken, I understand, that in the national interest the firm should be taken over by Richard Thomas and Baldwins. I should like to know what Stewarts and Lloyds were doing at that time. That firm could not have forgotten the £400,000 or £1 million it spent before the last election on the anti-nationalisation campaign. Was it expected that the bread "cast upon the waters" would be returned and was it disappointed? Were Shylocks and Lloyds asking for their pound of flesh, and were they disappointed in the result?

The Government should stand firm on this issue. I admire the integrity of the Chief Secretary on this issue and I am glad of the decision, but I am sure that it must be an embarrassment to Stewarts and Lloyds, in view of the large amount of money that firm put up a few years ago. Why should Richard Thomas and Baldwins be saddled with paying £10⅔ million for an industry whose market value according to the shares was not worth more than £3¾ million? The industry was sold back for £3.4 million and £3.6 million of additional profits were ploughed back. On that basis it could be said to be worth £7 million. Whether it is £3¾ million or £7 million, public money was thrown down the drain and it was not necessary for the country to do that.

The Chancellor's argument is that if Richard Thomas and Baldwins had lost Whitehead there would have been a much bigger loss for the taxpayer. At Redbourne, £23 million was invested. How far could R.T.B. have gone if better offers had been made? The weakness and the short-sightedness of the Government is that in the 1953 Iron and Steel Act they retained no power to deal with a take-over bid of this nature. It was never contemplated that part of the industry would remain nationalised for many years and that the time would come when to protect itself it would need the power to acquire another steel firm.

Had the Government come to the House and introduced a short Bill to take Whitehead into public ownership, the Opposition would have given every facility for the speedy passage of such a Measure. [Laughter.] Hon. Members opposite may laugh, but had that been done a number of millions of pounds, whether £3 million or £6 million, would have been saved. Usually, there are complaints from hon. Members opposite when public money is wasted, but had a short nationalisation Bill been introduced a large number of millions of pounds could have been saved for the public purse.

There must be a limit even to the right of a nationalised industry to defend itself on commercial lines as the Chancellor suggested. Is he suggesting that the most extravagant means possible must be used by such an industry to defend itself? Had R.T.B. to enter into the jungle of the Stock Market, to be at the mercy of other competitors and to give an answer to the other shareholders that the price had risen from 27s. 6d. before Christmas to 85s. 2d.?

This can be done only once. If a situation of this nature arose again and the other competitors knew that the Government were backing the nationalised concern, then the prices would go even higher. That is a fair warning to the Government. The industry badly needs reorganisation. We need only turn our attention for a moment to the independent re-rollers, but I am sure that there is no need for us to do this; other covetous eyes are doing it now,

Having regard to the fact that £1,000 million have been spent on this industry since the war, the fact remains that it is still not organised on sound economic lines. I am convinced that the only way in which it can be reorganised is through its reversion to public ownership. Had it remained in public ownership, powers would have been available to the Iron and Steel Corporation to deal with this problem and the crisis would never have arisen.

May I give a word of warning to other shareholders in other steel firms? Let them have no illusions that they will be treated as softly and as gently, when the time comes to bring the remainder of the steel industry into public ownership, as were the shareholders of Whitehead; they will not be treated in as generous a manner.

The hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid), in the July debate, made a plaintive complaint when he quoted the 1959 Tory election manifesto: We are utterly opposed to any extension of nationalisation by whatever means. The hon. Member has my sympathy. I appreciate the dilemma in which he and other hon. Members opposite find themselves today. I have noted, as I am sure he has, the words of the Chancellor of the Exchequer on 12th February: It remains the intention of Her Majesty's Government to complete the denationalisation of the steel industry."—[OFFICIAL REPORT, 12th February 1963; Vol. 671, c. 1101.]

Sir G. Nabarro

Hear, hear.

Mr. Morris

The hon. Member may say "Hear, hear", but unlike myself he has failed to notice the omission of the usual words from the Chancellor's declaration—the words "in the lifetime of this Parliament". I am sure that the hon. Member for Walsall, South also noted the omission of those words from the Chancellor's declaration of 12th February. I am sure that their omission is not without significance.

My hon. Friend the Member for Stockton-on-Tees (Mr. W. T. Rodgers) coined the phrase that we live in two nations. I am speaking tonight about the other nation which is not so prosperous. There are also two worlds. We live in a comparatively affluent world, but there is also another world, a hungry world. It seems a tragedy that our steel industry, which could be used to the advantage of everyone by producing the steel which the under-developed nations need, is not, in fact, being so used. As I have said, we live in two worlds, and the other world is a hungry and forgotten world. That is the tragedy of the steel industry and of the misuse of its capacity.

7.26 p.m.

Sir Gerald Nabarro (Kidderminster)

I rise to oppose the Motion. In due course I shall ask my hon. Friends to join me in the Lobby in voting it down. The Motion is a naked attempt on the part of the Labour Front Bench to reassert Clause 4 in their constitution following the election of their new leader. I am delighted to see him in his place.

The Motion is thoroughly disingenuous. There is nothing in it about nationalisation; that word is carefully omitted. The Motion concludes with the words: … calls upon Her Majesty's Government to seek from Parliament the powers required to reorganise the structure and finances of the steel industry to serve the national interest. The Motion was set on the Order Paper before the result of the vote for the new Leader of the Labour Party was known. It was put down before last Thursday, and it was carefully framed to disguise the intention to renationalise the industry. Had the losing candidate been elected, the right hon. Member for Belper (Mr. G. Brown), who is known to be partial to the reform of Clause 4 of the Labour Party constitution, there would have been no mention of renationalisation by the hon. Member for Aberavon (Mr. Morris). But the Left-wing candidate was elected, the right hon. Member for Huyton (Mr. H. Wilson), who is pledged to uphold Clause 4.

Mr. Joseph Harper (Pontefract)

No.

Sir G. Nabarro

Yes he is. The hon. Member does not know his politics.

Mr. W. A. Wilkins (Bristol, South)

The hon. Member played on the left wing in the Pools television.

Sir G. Nabarro

No. I played on the right-wing, not on the left wing, and I am playing tonight on the right wing.

The right hon. Member for Huyton is pledged to Clause 4 of the Labour Party constitution and to the renationalisation of the steel industry. I am delighted to see him in his place, and I congratulate him upon his election success. I shall look forward to having him as an opponent at the next General Election. At least we shall know that we are opposing Socialists, and we know exactly what their policy is. A lead has already been given by the right hon. Gentleman in the——

Mr. Harold Wilson (Huyton)

I heard the hon. Gentleman muttering something about Clause 4. I am glad that he understands it, because is the position of the whole party. He need not pick out any one hon. Member; it is the policy of the whole party. Having told us that he is looking forward to opposing us at the next General Election, will he now tell us what we shall be opposing?

Sir G. Nabarro

In due course I will do so.

I must follow my congratulations to the right hon. Gentleman by saying how pleased I am to have his acceptance of my statement that he proposes to embark on a policy of the extension of nationalisation and the bringing into public ownership of all the means of production, distribution and exchange. That is Clause 4. The right hon. Gentleman has vigorously upheld it today.

In the context of steel, this is what the right hon. Gentleman had to say on 23rd March, 1961: … the Labour Party stands four square and resolved behind the proposition that the steel industry must be renationalised, that this essential industry must be owned and controlled by the nation and accountable to the nation which it exists, or should exist, to serve."—[OFFICIAL REPORT, 23rd March, 1961; Vol. 637, c. 597.] I prefer the unequivocating terms of the right hon. Gentleman on 23rd March, 1961, to the equivocation and evasion of his hon. Friend the Member for Aberavon, who had not the courage to use that dirty word "nationalisation" in the Motion he put upon the Order Paper.

Mr. Morris

rose—

Sir G. Nabarro

No. [HON. MEMBERS: "Give way."] The hon. Member for Aberavon will recall that after he had been speaking for ten minutes I rose and attempted to cause him to give way. He waved me down. I rose a second time. He waved me down again. He would not give way. The hon. Gentleman is mean and parsimonious. Contrariwise, I am always generous in Parliamentary debate and give way to the hon. Gentleman.

Mr. Morris

I am very grateful to the hon. Member. He has accused me of lacking in courage. I myself have consistently advocated the bringing of the whole of the steel industry back into public ownership. I did it at the General Election in 1959. I have done it frequently in debates in this House. I did it in the last debate we had on the steel industry on 27th July of last year, which I do not think the hon. Gentleman attended. For this point he should refer to Volume 663. column 1968.

Sir G. Nabarro

What I am complaining about is that the hon. Gentleman has not had the courage to use the word "nationalisation" in the Motion. The reason for that I have explained carefully in the context of the vote for the Labour Party leadership last Thursday. There is also the fact that "nationalisation" is not only a very dirty word. It is a highly opprobrious word. It would offend the Liberal Party, which additionally is pledged to denationalisation and would be opposed to renationalisation. I am delighted to see the Liberal Chief Whip, the hon. Member for Huddersfield, West (Mr. Wade), and the Shadow Chancellor of the Exchequer for the Liberal Party, in his place. I hope he will join me in the Lobby tonight when I oppose the Motion.

"Nationalisation" is a very dirty word. We are approaching a General Election. I have already extracted from the Leader of the Labour Party a confession of his close adherence to Clause 4. That is going to be very useful to me on the hustings. It is also going to be very useful to me that the entire Labour Party has now stated that it supports the renationalisation of the steel industry.

Renationalisation of steel is totally irrelevant to the problems of the industry today. Nationalisation in this context is a matter of administration and operational control. It is also a matter of ownership of shares, which I will deal with in a moment. It has no relevance to the under-capacity or under-employment of the steel industry today, an industry to the denationalisation of which I am glad to see that my party is pledged at the earliest possible moment. [An HON. MEMBER: "When do we start?"] We have completed denationalisation of over 90 per cent. of the industry. We have completed that denationalisation fairly and liberally both with a capital "L" and a small "l", liberally both to taxpayers and to shareholders, while promoting the continuous growth of the industry.

Mr. James Callaghan (Cardiff, South-East)

The hon. Gentleman can say that again!

Sir G. Nabarro

The hon. Member must not, according to your instructions, Mr. Speaker, remain sedentary and shout at me. If he wants me to give way, I will give way. Does the hon. Gentleman want me to give way?

Mr. Callaghan

I have made my point.

Sir G. Nabarro

No, he has not. I could not hear the hon. Gentleman, because he remained sitting.

Mr. Callaghan

A lot of unemployment has been created.

Sir G. Nabarro

More sedentary interruptions! I must say that the Shadow Chancellor of the Exchequer of the Labour Party does not measure up to the Shadow Chancellor of the Exchequer of the Liberal Party, who observes the Parliamentary courtesies in these important matters. Save only for a temporary aberration to which I objected strongly, my party has continuously pursued the denationalisation of the steel industry.

Mr. Callaghan

What about unemployment?

Sir G. Nabarro

I shall deal with that. What a curious fellow the hon. Gentleman is? I repeat that, save only for that one aberration, my party has diligently pursued the denationalisation of the industry and has stated unequivocally during the last fortnight that it proposes to complete that denationalisation. I shall quote two manifests of that, which are sufficient for me, and I hope that they will be sufficient for my hon. Friends as well. On 12th February, 1963, in response to my Parliamentary Question to him, my right hon. Friend the Chancellor of the Exchequer said this: It remains the intention of Her Majesty's Government to complete the denationalisation of the steel industry."—[OFFICIAL REPORT, 12th February, 1963; Vol. 671, c. 1101.]

Mr. Edwin Wainwright (Dearne Valley)

When?

Sir G. Nabarro

I will deal with that question later. Earlier, on 29th January, in response to a Private Notice Question, which you, Mr. Speaker, gave me permission to ask, concerning the Whitehead Iron and Steel dispute, my right hon. Friend the Chancellor of the Exchequer said this: At the same time, it is my opinion that this action"— that is, the Whitehead matter— will make it easier rather than more difficult to complete the denationalisation of the steel industry. Anything which damages Richard Thomas and Baldwins will make it more difficult to transfer the firm back to private ownership. Later my right hon. Friend said this: Pending the denationalisation of Richard Thomas and Baldwins, it is our policy that it should operate as a commercial concern and protect itself as a commercial concern can do. In so doing, it will make it easier for ultimate denationalisation to take place."—[OFFICIAL REPORT, 29th January, 1963; Vol. 670. c. 760.] In response to the intervention of the hon. Member who asked when denationalisation will be completed, the reply is: when the moment is propitious; when the stock market is in a good and receptive mood for the launching of such a large volume of stock upon it; when the Financial Times index of ordinary shares or equities has risen to 330 or above, taking with it in its train the value of steel shares. We missed an opportunity of denationalising after the last General Election. We should have denationalised Richard Thomas and Baldwins then. I am sorry to have hindsight in this matter. I am sorry that the Treasury Ministers were ill-advised. This is all a matter of history. However, with the new life being pumped into the economy during 1963 I have no doubt that the Financial Times index of equities will react appropriately during the next few months and we shall see it rise to 330 or more, when the time will be propitious to unload on the market a major part of Richard Thomas and Baldwins.

Here I want to make a point to my hon. Friend the Parliamentary Secretary to the Ministry of Power, who I hope is to reply to the debate.

The Parliamentary Secretary to the Ministry of Power (Mr. John Peyton) indicated assent.

Sir G. Nabarro

Please do not judge this problem of the denationalisation of Richard Thomas and Baldwins against the background that the whole company must be put on the stock market at once—certainly not. There is no reason why Whitehead Thomas should not be denationalised separately. There is no reason why other portions of Richard Thomas and Baldwins should not be denationalised. It is not necessary to do it completely in one operation.

Mr. Peyton

I apologise to my hon. Friend. I unwittingly misled him. It is not my intention to answer that part of the debate relating to Richard Thomas and Baldwins and the Whitehead takeover. As it is a Treasury matter, that will be answered by my hon. Friend the Financial Secretary to the Treasury.

Sir G. Nabarro

I do not mind which Minister answers it so long as we can have an assurance that there is no dogmatic adherence to denationalisation of this enormous chunk of investment, £240 million, in one operation. It should be denationalised piecemeal.

The fact is that we are pledged to this process. A part of it should be carried out in the lifetime of this Parliament, and I hope the remainder of it in in the next Parliament. [Laughter.] Oh, yes, I am out of step with the national and provincial Press. I believe that the Tory Party wins the next election. A few more debates like this, when I can draw out of the Opposition Front Bench their selfish adherences to Socialism, to Clause 4, and to extension of nationalisation, will assuredly help us to win the next General Election. I repeat that "nationalisation" is a dirty and opprobious term.

Mr. Cyril Bence (Dunbartonshire, East)

What about Baileys (Malta) Ltd.? Expropriation.

Sir G. Nabarro

May I turn to current operations in the steel industry?

It is, of course, true that the steel industry today is operating at 70 per cent. of capacity. The lighter end of the industry, and notably that sector producing sheet steel, is a good deal busier than the heavy section of the industry. That is a reflection of the under-employment of certain sections of our national economy. It is impossible to talk about reflationary measures within the steel industry alone isolated from reflationary measures for our entire economy. The exports of the iron and steel industry have been well maintained during the last year or two in the face of very fierce competition. In addition, I would remind the hon. Member for Aberavon—for in a typically Socialist fashion he isolated the British iron and steel industry from the remaining iron and steel industries of the Western world—that there is a worldwide recession in the demand for steel, and one cannot expect the British industry to sell more and more iron and steel Oft world markets in the face of a general and international recession in the demand for steel.

But, notwithstanding all these factors, the British iron and steel industry has maintained its export market. To bring the demand for steel in this country from its present level of 70 per cent. up to a full capacity of 95 per cent. needs generous measures of reflation throughout our economy. I believe that a good start has been made in that matter and that we shall shortly be seeing the effects of these reflationary measures.

I name only a few of them. There have been three reductions in Bank Rate during the last twelve months. There has been the special release of more than £400 million of bank deposits. There has been a totally unprecedented reduction in the level of indirect taxation in the form of Purchase Tax. When the Socialist Party left office the Purchase Tax on motor cars was standing at the level of 66⅔ per cent. The motor industry, of course, is the biggest single consumer of iron and steel in this country. Reflation to the extent of reduction of Purchase Tax on motor cars has been carried out from 66⅔ per cent. down to 60 per cent., 55 per cent., 50 per cent., 45 per cent. and now 25 per cent. If the Nabarro plan for Purchase Tax is finally adopted it will be reduced to 16⅔ per cent., giving a further reflationary tendency.

Mr. Douglas Jay

What is the Nabarro plan for steel?

Sir G. Nabarro

I am coming to the Nabarro plan for steel. I ask, please, for the right hon. Gentleman's patience.

There has been a repayment of £42 million of post-war credits. There have been the important investment allowances for British industry announced by the Chancellor of the Exchequer on Guy Fawkes Day and to be legislated for in the forthcoming Finance Bill. There have been grants to factories in development districts and the provision for advance factories. There has been a largely increased level of investment throughout the publicly-owned sector of industry. There has been the go-ahead for the Victoria Tube railway line, involving the consumption of very large tonnages of steel to help the heavy end of the steel industry. There have been the three tankers and the announcement about the Tay Bridge. All these, in the aggregation, represent a large reflationary tendency for the iron and steel industry, and, in my judgment, within a few months will lift very largely the figure of 70 per cent. occupied capacity today to a figure of approximately 85 per cent. to 87 per cent., which is the estimate of the industry itself.

Mr. J. J. Mendelson (Penistone)

If the hon. Member is taking such great credit for the new policy of the new Chancellor of the Exchequer, which he says would help the steel industry, may I ask whether he is also accepting full responsibility for the policy of the Chancellor's predecessor, which is directly responsible for the dire state of unemployment from which the industry now suffers?

Sir G. Nabarro

No, that is not entirely true. The hon. Member sits for Penistone, in the centre of an important manufacturing and heavy industry area in the North.

Mr. Mendelson

The hon. Member is not answering my question.

Sir G. Nabarro

I am coming to that. I am merely showing the hon. Member the customary courtesies.

Mr. Bence

That is a change.

Sir G. Nabarro

It is in contradistinction to the hon. Member for Aberavon, who showed no courtesies at all.

The fact is that if the hon. Member for Penistone (Mr. Mendelson) had looked back over the years to 1945 and had traced the progress and expansion of the whole of the steel industry during the last 18 years, he would have found that the industry had increased its capacity by far more than the overall average rate of growth in our economy over those 18 years. [Interruption.] The hon. Member for Dunbartonshire, East should not shout at me. After all, neither his hon. Friend the Member for Aberavon nor the hon. Member for Huddersfield, West, the Shadow Liberal Chancellor, nor the hon. Member for Cardiff, South-East, the Shadow Labour Chancellor, nor my right hon. Friend the Chancellor of the Exchequer can possibly look into the future and determine international demand for iron and steel over a fixture period of ten years.

We have to take a chance with investments in all industries in this country as to what the level of demand will be, If I were so clever as to be able to sit down with the aid of expert advisers and say what the demand in ten years' time will be for coal, for coke, for oil and steel, and for Kidderminster carpets, I should be a millionaire. I could buy any kind of stock or share and he assured of rapid appreciation and growth, but the fact is that the economic tipsters——

Mr. Bence

The hon. Member is the biggest tipster we have.

Sir G. Nabarro

Maybe I am, but happen to be a successful tipster.

Economic tipsters, looking into the future, cannot be certain of the rate of growth in any particular industry. We can only make intelligent guesses. I put it in a few short words. Iron and steel in the last eighteen years has expanded by more than the demand from our national economy and from overseas has been capable of selling. That is temporarily the position. That is why many steel companies have curtailed parts of their expansion programmes.

The right hon. Member for Battersea, North (Mr. Jay) said, "What is the Nabarro plan for steel?" There is one, I assure you, Mr. Deputy-Speaker. I have related how much I support the reflationary measures of my right hon. Friend to the economy generally and the important influence that they will have on the iron and steel industry, but there are other specific measures that I want to put to my hon. Friend the Financial Secretary by which he can help the iron and steel industry. I put them under three or four headings. They are all controversial, but they are all tremendously important to the industry.

First, a disastrous decision was taken by the Chancellor of the Exchequer in 1961 to put a tax on fuel oil for industry. He fell for the propaganda of the National Union of Mineworkers, which wanted protection for coal against fuel oil. What has been the effect of this disastrous tax? The hon. Member for Aberavon left it out of his speech. He was afraid of the mineworkers' lodges in South Wales. That is all. He was running away from them. What he should have said, if he really purports to be a spokesman for the steel industry, was that the fuel oil duty cost Dorman Long and Co. Ltd., a major steel producer, 6s, 9d. per ton on finished steel and reduced the competitiveness of its iron and steel products on the world's markets by that amount.

I call on the Chancellor to abolish the fuel oil duty outright in the forthcoming Budget on 3rd April. I do not expect the Financial Secretary to reply to that point this evening, but I have told him the implication of this. I speak with the whole iron and steel industry and the whole of British industry behind me in making this point. Of course, I shall have no support from the benches opposite, save only that of the Liberal Party.

Mr. Bence

The hon. Gentleman will.

Sir G. Nabarro

The hon. Member says that I will, but he is such a hypocrite in these matters.

Mr. Bence

On a point of order. Is it in order for the hon. Gentleman, who has been carrying on like this for eleven years, to call an hon. Member on this side of the House a hypocrite?

Mr. Deputy-Speaker (Sir Robert Grimston)

It would be better if the hon. Gentleman did not use that phrase.

Sir G. Nabarro

I apologise at once to you, Mr. Deputy-Speaker. I unreservedly withdraw the word. I did not mean anything offensive to the hon. Gentleman. What I meant was that he has turned turtle politically. I trust that you, Mr. Deputy-Speaker, will deem that expression wholly unexceptionable in a Parliamentary sense.

I voted against the fuel oil duty in 1961. Only one other Tory Member did so, my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), whom I do not see here. A mixed bag from the Labour Party came into the Lobby with us; it depended whether they sat for mining constituencies. But the hon. Member for Dunbartonshire, East (Mr. Bence) was not in the Lobby with me. I looked that up before I came here tonight. He did not support me in voting against the fuel oil duty. He was protecting the vested interests of the lodges of the National Union of Mineworkers, who wanted a price protection for coal at the behest of Lord Robens, and the Treasury shamefully bowed to those blandishments. I hope that on 3rd April it will reverse its decision.

The second point is equally important. [Interruption.] It is my duty to oppose the Motion. I know that it is hurting the hon. Gentleman. Does he want to intervene?

Mr. Callaghan (Cardiff, South-East)

rose—

Sir G. Nabarro

At last the hon. Gentleman has got up.

Mr. Callaghan

I realise that we are having the speech which the hon. Gentleman might have made to the ladies' Toc "H" last week-end, and I hope that he will take up the suggestion that he should send his fee from appearing on the football pool panel to some local charity. The real point that I want to make to him is that a number of hon. Members wish to speak. He has already spoken for half an hour, and the debate finishes at ten o'clock. He is one of those few hon. Members who never uses one word when five words will do.

Sir G. Nabarro

I do not know the purpose of that intervention. Like most utterances of the hon. Member, it was both offensive and irrelevant. No doubt he is trying to outbid the Liberal Shadow Chancellor of the Exchequer. I do not think he will, because the hon. Member for Huddersfield, West is a polite fellow.

I turn to the question of imported coal and quote from Colville's magazine, the organ of the Colville Group, winter 1962–63: Thanks mainly to the bounty of nature, North American coking coal of very good quality is now freely available. More than that it is likely to remain that way for as long ahead as anyone can foresee, and can, in fact, be bought forward on long term contracts at assured prices. … It is, moreover, of extra good quality. That would offer further material savings in coke processing and in furnace usage. Colville's applied to the Ministry to be allowed to import American coking coal because it would reduce the cost of finished steel produced from its mills in Scotland, including the new Ravenscraig mill, but the Government denied them the right to bring in that American coal.

The Government, therefore, are putting two disabilties on the steel industry. First, they are adding an average of 6s. 9d. per ton of finished steel by the fuel oil duty. Secondly, they are forcing both the Steel Company of Wales and Colville's to buy coking coal at artificially high prices. They are denying them the right to buy the essential raw material of their industry in the cheapest market.

It is futile, in my judgment, for Her Majesty's Ministers to tell the steel industry to reduce its costs, on the one hand, and, on the other, to cause it to inflate costs by putting these disabilities on it.

Mr. J. T. Price (Westhoughton)

It might be futile to the hon. Member that the Government should take this action, with which we on this side happen to agree, but it would be even more futile and undesirable that they should take action which would put large numbers of British miners out of work. Has the hon. Gentleman no regard for the natural raw materials of this country? I know that we can argue about this all night and that other hon. Members wish to speak, but if the hon. Gentleman thinks that he can shut this up in watertight compartments and have this country's industry disrupted and dislocated in this way without regard for our natural resources, he will not find many of his hon. Friends agreeing with him——

Sir G. Nabarro

rose—

Mr. Price

—not only in respect of coal, but in respect of other things.

Sir G. Nabarro

Has the hon. Gentleman finished? I allowed him to make a very long intervention. This policy would not result in miners being displaced. If the hon. Gentleman had taken the trouble to do his homework and had read my many speeches on Scottish fuel and power, including the whole of the evidence which I gave at great length to the Mackenzie Committee in Edinburgh——

Mr. Archie Manuel (Central Ayrshire)

All wrong.

Sir G. Nabarro

—on 27th November, 1961, a typescript of which I will make available to the hon. Member for Westhoughton (Mr. J. T. Price) if he desires it, he would have found that no Scottish miners would be displaced. Moreover, we require from the Chancellor of the Exchequer a real boom budget on 3rd April, a highly reflationary Budget, with, I recommend, total tax reductions at an aggregate figure of £300 million, or more.

Fourthly and last, we ought to bring the Iron and Steel Board before the Restrictive Trade Practices Court so that the minimum-maximum pricing arrangement to which the hon. Member for Aberavon referred might be fully investigated. It is painfully the fact that the Restrictive Trade Practices Court has been sitting for six long years. It has investigated everything from nuts and bolts to carpets and to water tube boilers. Our basic industry, the iron and steel industry, in which maximum prices are minimum prices and minimum prices are maximum prices, arranged by the Iron and Steel Board to suit the convenience of producers and highly damaging to our manufacturing industry, has not vet been investigated before the Court.

I appeal to my right hon. Friend to take urgent steps to see that these steel prices are investigated and that agreements which in the terms of the Act are injurious to the consuming interests should be broken and deemed illegal.

With those few words, I appeal to all my right hon. and hon. Friends, together with the seven Liberal Members, two only of whom are at present in their places—I hope that the Chief Whip of the Liberal Party will bring in the other five before ten o'clock—to vote against the Motion, to vote it down and to give an affirmative declaration to the country that the Tories in this Parliament do not believe in an extension of nationalisation or of renationalisation of any part of the steel industry.

Mr. Callaghan

I rise to a point of order, Mr. Deputy-Speaker, about the conduct of the debate. We have just had what can only be construed as a very long speech in a three-hour debate and I understand from an intervention by the Parliamentary Secretary to the Ministry of Power that we are to have two Government spokesmen. Is it not possible to compress both those speeches into one and so give somebody else an opportunity to speak?

Mr. Peyton

I do not know whether the hon. Member has taken the opportunity to speak to his hon. Friend the Member for Aberavon (Mr. Morris). As it is his Motion that we are debating, I asked the hon. Member whether it would be convenient and acceptable to him that two Members should speak from the Government Front Bench as briefly as possible, my hon. Friend the Financial Secretary to the Treasury to answer the point, which the hon. Member told me he would raise, concerning Richard Thomas and Baldwins and Whitehead, and myself to answer the other points concerning the rest of the industry. The hon. Member for Aberavon said that that arrangement would be acceptable and convenient to him.

Mr. Deputy-Speaker

I allowed this exchange to take place, but there is no point of order in it.

Mr. Callaghan

I follow that, Mr. Deputy-Speaker. I was raising a question of procedure, because, whatever the Parliamentary Secretary may think, it is a matter of convenience to the House that in a short debate like this there should be as many speakers as possible. I should not have thought it beyond the wisdom of the Government, in view of the length of speech to which we have just heard, to compress both Front Bench speeches into one.

Mr. Peyton

The hon. Member is not helping——

Mr. Deputy-Speaker

Order. We had better get on and save time.

8.3 p.m.

Mr. Donald Wade (Huddersfield, West)

I have spoken recently on the subject of unemployment and I shall resist the temptation to do so again tonight. I merely say that I share the concern of the hon. Member for Aberavon (Mr. Morris) about the level of unemployment. I shall also resist the temptation to speak at the same length as the hon. Member for Kidderminster (Sir G. Nabarro). I shall not be quite as liberal in the use of words as the hon. Member has been in this debate.

I propose to direct my few remarks to the latter part of the Motion. I do not agree with the whole of the Motion and I do not agree with all the observations of the hon. Member for Aberavon, who moved it, but I agree with him when he notes with concern the unsatisfactory means by which the take-over was achieved. It seems to me that this whole strange affair has involved a number of important principles and not only the question of nationalisation versus private ownership.

In a supplementary question to the Chancellor of the Exchequer on 12th February, I said: Apart from the inconsistencies referred to by the hon. Member for Kidderminster (Sir G. Nabarro), are there not still wider issues involved? Is it satisfactory that the outcome of a take-over bid—a battle of this nature involving important questions of public interest—should be solely dependent on the amount of the bribe which the respective competitors could offer to the shareholders of the firm to be taken over? Does that still represent Government policy, however important the merger or take-over may be? The only reply I got from the Chancellor was: I am surprised to hear a representative of the Liberal Party, a believer in the market economy, describing a bid as a bribe."—[OFFICIAL REPORT, 12th February, 1963; Vol. 671, c. 1103.] If "bribe" is regarded as unfair, I am quite willing to replace it with, say. "financial inducement". The fact remains, however, that this issue was decided solely by the question of which competitor in the battle offered the biggest financial inducement—and one of those sides had the backing of the Government. One is bound to ask oneself whether Richard Thomas and Baldwins would have succeeded if that concern had not been supported by the Government. I very much doubt whether it would have found the money. It should be remembered that in this case the Government represent the taxpayer.

I gather from the observations of the Chancellor of the Exchequer that he regards the whole transaction as merely the normal activity in a market economy. I wonder whether by that he means a free market economy, because I find it difficult to regard the present set-up of the steel industry as coming under the heading of a free market economy as we generally understand it. It is unrealistic to regard this kind of take-over battle as part of a normal activity of the market economy. If surprise is to be expressed, it should be at the words used by the Chancellor of the Exchequer in describing the whole of this transaction.

Surely, some method could be devised whereby the national interest is considered impartially before a transaction of this kind takes effect. I am not suggesting that there should be no mergers and no take-overs. I believe in the necessity for a mixed economy and that in the free sector of the economy there will inevitably be take-overs and mergers. It would be unreasonable to argue that every one must be judged by a body set up by the Government.

Surely, however, we must accept that some of these take-overs involve important questions of national interest, directly or indirectly. We have had a number of examples in recent years. We have had the Daily Mirror taking over Odhams and there was the I.C.I. attempt to take over Courtaulds. All along, the policy of the Government has been to do nothing whatever about it.

It is true that the circumstances of the present case are somewhat different from those large mergers, but there is in common the fact that the national interest is clearly involved. There are important considerations both for and against the take-over by Richard Thomas and Baldwins. There is the whole question of the efficiency of the industry and the question of the maintenance of a price ring. There is the question whether we should continue to import Canadian steel. This is an additional complication.

The Whitehead Iron and Steel Company has been buying a substantial part of its steel from Canada at lower prices than it has been paying to Richard Thomas and Baldwins. We do not know what will happen if it becomes a subsidiary of Richard Thomas and Baldwins or if it had become a subsidiary of Stewarts and Lloyds. Will Whitehead's own customers in British industry lose the benefit of cheap Canadian steel? We do not know, but the point I wish to make is that the whole question of the national interest and the need for some procedure for considering the national interest seem to have been ignored.

Mr. Morris

I thought I had dealt with that in my speech, that that factor had had been raised in The Guardian article on 30th January this year, and there is no question, as I understand it, of any benefit being passed on to British industry of the Whitehead product being sold at the Iron and Steel Board's price.

Mr. Wade

Yes, I appreciate the hon. Member's point, but I do not think that it affects the argument which I am deploying.

A number of factors affecting both the steel industry and the national interest have not been taken into account. In fact, they cannot be taken into account if the transaction is just regarded as an ordinary commercial battle.

I notice that the ideological approach of hon. Members to public ownership has affected their attitude to this case. We have had hon. Members opposite getting very excited because this would appear to assist the continued nationalisation of a certain sector. On the other hand, we have had hon. Members on this side enthusiastically supporting Richard Thomas and Baldwins because at present that company is owned indirectly by the State.

I am bound to wonder whether that same enthusiasm for supporting Richard Thomas and Baldwins would have been evident if this had been merely a battle between two private companies. I very much doubt it.

Mr. Michael Foot (Ebbw Vale)

Whatever the hon. Member may think about that point, does he not think he ought to take into account, in passing judgment, who was the aggressor? Whom does he think was the aggressor in this business?

Sir G. Nabarro

There was nothing aggressive about it.

Mr. Wade

This was a battle——

Mr. M. Foot

Who was the aggressor?

Mr. Wade

I have no doubt about it. It was Stewarts and Lloyds who started the battle. I do not question that for a moment.

Sir G. Nabarro

There was nothing discreditable about Stewarts and Lloyds making for the integration of Whitehead in its organisation, which would have led to the employment of British billets and more economic production of rolled and rerolled steel products.

Mr. M. Foot

On a point of order. If the hon. Member for Kidderminster (Sir G. Nabarro) is to get up and talk about Stewarts and Lloyds, should he not declare his personal interest in it?

Mr. Deputy-Speaker

It is customary for anybody with a personal interest to declare it.

Sir G. Nabarro

I at once declare to a personal interest.

Mr. M. Foot

Why not earlier?

Sir G. Nabarro

I did not mention Stewarts and Lloyds in my speech. [HON. MEMBERS: "Oh."] I will do now. I am a shareholder, both in Richard Thomas and Baldwins as a taxpayer, and in Stewarts and Lloyds, and, therefore, an utterly impartial person.

Mr. Wade

I find it somewhat difficult to follow the hon. Member for Kidderminster. If he had an interest, I wish that he had stated it earlier.

However, I am most anxious to stick to the one point which I am trying to make in what should have been a debate in which several Members could have taken part. First, I can see nothing but harm to an industry by subjecting it to the threat of nationalisation, denationalisation and renationalisation. If the Government intended to denationalise steel, I wish that they had got on with it. On the other hand, I regret—I still regret—the policy of the Labour Party to renationalise steel. I have not altered my views in that respect. That is point No. 1.

Sir G. Nabarro

Vote with us.

Mr. Wade

Secondly, I think that there should be some objective test where the national interest is involved in these take-over battles. Thirdly, where the State is one party to the battle I think that it is all the more important that the issues should be decided by some independent body.

It seems to me that the Government have tried to get away with two points, first, that this was merely a normal commercial transaction, and, secondly, that this particular take-over would assist them in their policy of denationalisation. I find it very difficult to accept either view. It seems to me that the Government have ignored some of the great underlying issues here, and so far we have not had an adequate explanation.

8.15 p.m.

The Financial Secretary to the Treasury (Mr. Anthony Barber)

As my hon. Friend the Parliamentary Secretary to the Ministry of Power has already explained, he hopes to catch your eye, Mr. Deputy-Speaker, later in the debate to deal with the more general matters affecting the steel industry which were touched upon by the hon. Gentleman the Member for Aberavon (Mr. Morris), but I think that it would be helpful if briefly I were to say something about the specific question of Richard Thomas and Baldwins and the acquisition by that company of control of Whitehead's.

After all, this is a matter which has been referred to by every speaker in the debate so far. I shall certainly do my best to take no longer in dealing with this particular matter than would have been taken by my hon. Friend if he had been dealing with it in his winding-up speech.

There are, I think, really two aspects to be considered. First, the more general question of principle which, I know, has troubled many of my hon. Friends, that is to say, whether the Government and the Agency were right as a matter of principle to allow Richard Thomas and Baldwins, a nationalized company, to intervene at all. I want to assure the House that this decision was not taken lightly nor, indeed, without considerable reluctance, because other things being equal I think that nobody in his right senses today wants to see an extension of the nationalised sector.

However, we were faced with the prospect of serious and lasting damage to Richard Thomas and Baldwins if Stewarts and Lloyds bid had been successful, and, of course, we had to consider not only the damage to a valuable public asset, but also the undoubted fact, as has already been pointed out, that if Richard Thomas and Baldwins had lost the custom of Whitehead's the denationalisation of Richard Thomas and Baldwins would have been made more difficult. So we reached the conclusion that it would be wrong to debar Richard Thomas and Baldwins from normal commercial action in defence of its interests solely because of its nationalised status. Of course, one should remember that, as has been pointed out, it was not Richard Thomas and Baldwins which took the initiative.

On the second aspect, it is right to consider, first, whether, having decided to allow Richard Thomas and Baldwins to intervene at all, the eventual outcome, and particularly the price which was paid, was reasonable. Of course, I recognise that the hon. Member for Aberavon would not have made any offer as we did. He would simply have acquired the company compulsorily, which, after all, is the essence of nationalisation. But I think that on this question of the eventual outcome and whether it was reasonable there are really three questions that I should like to touch on every briefly.

First, people have asked, "Was not the take-over battle really a farce?"—because one of the contestants had behind him, so it was alleged, the bottomless purse of the Exchequer. Put in this way the question overlooks two important considerations. First, at every stage the Government were in the closest touch with the Agency and with Richard Thomas and Baldwins; and, secondly, there was no question whatever of Richard Thomas and Baldwins having carte blanche to bid whatever might have been necessary to secure the control of Whitehead's.

Sir Henry d'Avigdor-Goldsmid (Walsall, South)

I am so glad that my hon. Friend has mentioned that point. Could he make it clear to all of us, because we want clarification of this point—how the bankers and brokers representing Richard Thomas and Baldwins were in a position to say to the whole of Whitehead's shareholders that they would match the winning hid whatever it was?

Mr. Barber

I shall in a moment deal with the actual final bid of 85s. 3d. But the point I am making at this stage—I am sure that my hon. Friend will accept this from me—is that throughout the whole operation the Government, the Agency, Richard Thomas and Baldwins and their advisers all proceeded on the basis that the governing factors were commercial.

This leads to the second question which has to be considered, and that is the price, and, in particular, the final bid of 85s. 3d. It is, of course, all too easy to make the unreal and superficial comparison which was made by one hon. Member opposite between the price of 85s. 3d. and the denationalisation price of Whitehead's shares—27s. 6d. But such a comparison overlooks three important considerations. First, since denationalisation Whitehead has retained in the business £3,600,000 worth of profits. If we add this to the £3,400,000 which was the value of the shares in 1955, that suggests a value of at least £7 million, or nearly £3 a share.

But there is another consideration, and that is that Richard Thomas & Baldwins was not concerned solely with the present value of Whitehead as an investment, because, as my right hon. Friend the Chancellor of the Exchequer has already pointed out, some of the consequences of Richard Thomas and Baldwins losing the custom of Whitehead would have been very serious indeed. In fact, over their last five financial years Whitehead and Whitehead Thomas, to which my hon. Friend the Member for Kidderminster (Sir. G. Nabarro) referred, have been responsible annually for 10 to 11 per cent. of Richard Thomas and Baldwins' total turnover. Even more strikingly, they have bought over the same period between 53 and 57 per cent. annually of all the billets produced by Richard Thomas and Baldwins at Redbourn and in West Wales, and over the same five years Whitehead's purchases from Richard Thomas and Baldwins accounted for 84 to 89 per cent. of its total requirements of steel.

If Whitehead's long-standing business connections with Richard Thomas and Baldwins had been severed, the immediate consequences would almost certainly have included the closing down of Richard Thomas and Baldwins' Gowerton Works in West Wales, where about 500 men are employed, and serious unemployment at Redbourn and the same at Ebbw Vale.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

As Stewarts and Lloyds have not got Whitehead, does this mean that there will be serious unemployment at Stewarts and Lloyds?

Mr. Barber

No, Sir. I am sorry if I have not made the position clear already.

Perhaps I may do so by giving my hon. Friend another fact which I think will make it clear. The position in relation to Richard Thomas and Baldwins was that because of its close connections with Whitehead, if it had lost the custom of that company it would inevitably have meant that a number of people would have become unemployed. Perhaps I can give my hon. Friend a figure which, I think, will explain what I mean. So far as we can estimate, the cost to Richard Thomas and Baldwins of losing the custom of Whitehead would have been about £10 million worth of business a year.

I mention these points because I think it is of importance, when considering whether or not the Government were right to authorise what was done, to bear in mind what the effect on Richard Thomas and Baldwins, which is, after all, a publicly-owned asset at the present time, would have been if we had not allowed Richard Thomas and Baldwins to behave as any other normal commercial company in private enterprise would have behaved.

Mr. A. R. Wise (Rugby)

Will my hon. Friend remember that this is exactly the same argument that Richard Thomas and Baldwins used previously when it wanted to devastate half North Oxfordshire, but it was turned down and did not come back for it?

Mr. Barber

The issue then, if I remember aright—it does not come within my province—was precisely the same as the issue with which we are concerned now, and that is: What is in the national interest? We should bear in mind that Richard Thomas and Baldwins is still, unhappily, a publicly-owned asset, and so I think it was right on this occasion—[HON. MEMBERS: "Unhappily?"] I will explain that to right hon. Gentlemen opposite, because it seems to be unfamiliar to them. I say "unhappily" because at at least two General Elections the electorate has come out decisively in rejecting the renationalisation of the steel industry.

I would make the final point on the question of price, that one should not overlook the fact that Stewarts and Lloyds, a company, after all, in the private sector, on the basis solely of its commercial judgment was prepared to pay 85s. a share to acquire the business, and we were satisfied that it was worth at least as much to Richard Thomas and Baldwins.

In conclusion, perhaps I may make two points. First, if Richard Thomas and Baldwins had not been allowed to bid for Whitehead, the effect on Richard Thomas and Baldwins, I think everyone would agree, would have been very serious indeed. I have already mentioned, in passing, to my hon. Friend the prospect of losing about £10 million of business a year. In fact, the loss of Whitehead's business could have entailed a substantial write-off of our investment in Richard Thomas and Baldwins' including a great part of the £23 million recently spent in modernising the Redbourne Works. One of our main objectives was to safeguard the taxpayer from the loss that would undoubtedly arise if Stewarts and Lloyds had acquired Whitehead.

The other point that I want to make is that there can be no doubt that if Richard Thomas and Baldwins had lost the business of Whitehead the denationalisation of Richard Thomas and Baldwins would have been made just that much more difficult.

Mr. Callaghan

Will the hon. Gentleman explain to us why it has been advantageous to the taxpayer to sell Whitehead back at a price of rather under £5 million to private hands and then buy it again for £10 million? How much would it have saved the taxpayer if it had remained in public hands?

Mr. Barber

I think that the hon. Gentleman must have been out of the Chamber about five minutes ago when I was explaining this—if he really can understand it. I find it difficult to believe that he did not understand it if he was listening.

Since the date when Whitehead was denationalised there has been an addition of £3,600,000 to the value of the company in the form of retained profits. I also explained, and I should have thought that the hon. Gentleman would have understood this—I really do not want to take up too much of the time of the House—that there was the other consideration that we were not concerned solely with the present value of Whitehead as an investment.

Mr. Callaghan

Is it, then, the position that if we had not sold the firm in the first place the public would have had the advantage of the £3 million which we have now had to pay for once again, and that we have, in fact, lost £5 million through the idiotic decision to sell it in the first place?

Mr. Barber

No, Sir. That is the most utter nonsense. [Horn. MEMBERS: "Oh."] Perhaps the hon. Gentleman will just bear in mind for a moment the fact that Stewarts and Lloyds, because of what had intervened since the time when Whitehead was denationalised, had itself offered 85s. a share. So we came to the conclusion that it was worth at least as much to us.

Mr. Callaghan

What a lot of rubbish!

Mr. Barber

I know why the hon. Gentleman says, "What a lot of rubbish". The fact is that he has been needled by my hon. Friend the Member for Kidderminster. [HON. MEMBERS: "No."] Yes, that is absolutely true. My hon. Friend said that with the change of leadership in the Labour Party—[Interruption.] Oh, yes; hon. Members must take it—we shall most certainly be hearing a good deal more now about nationalisation, and not only the nationalisation of the steel industry. The right hon. Member for Huyton (Mr. H. Wilson), who could not take it and has now left the Chamber, has already named a number of other industries.

Sir G. Nabarro

There is so much noise from the benches opposite that I could not follow my hon. Friend's words. Do I understand him to be precisely confirming my interpretation of the position in regard to Clause Four—that the Labour Party has now pledged itself to Clause Four and, therefore, to a wholesale extension of nationalisation? That is the issue.

Mr. Barber

That is certainly my understanding of what was said. I go further and point out that the new Leader of the Opposition has already named a number of industries which he considers to be ripe for nationalisation. What is even more dangerously subtle is that he is on record quite recently as calling for the creation of new publicly-owned industries which are wholly unspecified.

Mr. Callaghan

rose—

Mr. Barber

No. I cannot give way.

Mr. Callaghan

The hon. Gentleman is not dealing with the subject. He might as well give way.

Hon. Members

Give way.

Mr. Deputy-Speaker

Order. If the Financial Secretary will not give way, the hon. Member for Cardiff, South-East cannot remain on his feet.

Mr. Barber

I will give way to the hon. Gentleman.

Mr. Callaghan

I am obliged.

When the hon. Gentleman has finished playing politics, will he not confirm that it is a fact that if the Government had not sold Whitehead in the first place the taxpayers would be about £5 million better off today? Is it not a fact that nationalisation seems to be a very good investment indeed in the steel industry and that the taxpayers will think it a great pity that the Government ever sold Whitehead?

Mr. Barber

The answer is simple and brief. It is not a fact, and the hon. Gentleman knows perfectly well that it is not.

Mr. Manuel

What is not a fact?

Mr. Barber

What is a fact is that the right hon. Gentleman the Leader of the Opposition is aiming for what he, at least, has frankly admitted to be a substantial extension of public ownership. As far as we are concerned, it is our firm resolve to return Richard Thomas and Baldwins to private ownership.

8.32 p.m.

Mr. E. L. Mallalieu (Brigg)

The Government have had such a bad hammering in the last hour or two, continuing with the lamentable speech by the Financial Secretary—who generally does much better—that it is time I congratulated them on something. I want to repeat what has already been said from this side of the House—that they are to be congratulated on having stood up for Richard Thomas and Baldwins both on the question of denationalising the firm—although I do not think that it is nationalised in the accepted sense of the word; rather is it nationally owned—and for having intrinsically taken the right side in this matter.

Apart from the intrinsic merits of their action, there has been the attack from the quarters behind the Government. I should imagine that from the political point of view in the country it is by no means a bad thing for the Government that they have stood up to the sort of opposition they have had from the hon. Member for Kidderminster (Sir G. Nabarro), who so lamentably uses this place to draw attention to himself even if at the same time he brings disrepute to this House. It is a sad circumstance that he should use this House for the very heavy-handed self-display of which he gives us so much.

There is no reason at all, other than a doctrinaire reason, for wanting to bring this great concern out of national ownership. It has been a most excellent concern. It has not fallen down in any way on its obligations to the taxpayer since it was nationally owned, and if the Government have any idea of fulfilling their pledge to take the firm out of national ownership, then at least they should show in what way it has fallen down on its duties to the taxpayer since it was nationally owned.

Mr. Wise

Has the hon. and learned Gentleman read the chairman's last report and his forecast for next year's prospects?

Mr. Mallalieu

Yes, and I am coming to that. A great deal has been said about this, and I will deal with it now, since the hon. Gentleman has raised it at this point. Because hon. Members opposite have failed to persuade the Government either to prevent this take-over or—so far at any rate—to take Richard Thomas and Baldwins out of national ownership, they have been trying to put about the story that the firm is the sick man of the steel industry. It has had an exceptionally bad year because it had a stab in the back from Whitehead. We have been told to what a great extent Richard Thomas and Baldwins is dependent upon the commercial help of orders from Whitehead. We know also, because we have had this discussion before in the House, that the chairman of Whitehead was none other than the vice-chairman of R.T.B. and that he was supposed to owe duties to both concerns, the interests of which were diametrically opposed. How he can do it, I do not know.

When I put this to the Parliamentary Secretary to the Ministry of Power in a recent debate I was unable to get a decent answer. All the hon. Gentleman gave in reply was a pompous lecture. I asked him to give me a proper answer, but he failed to do so.

Mr. Peyton

When it comes to pompous sort of lectures there are few to beat the hon. and learned Member. He has made a very round attack. I repeat what I said in the Adjournment debate when he raised this question. It does not do good or help the cause if one casts doubt on everybody's motives for miles around.

Mr. Manuel

You might as well have stayed asleep.

Mr. Mallalieu

While we have been trying to persuade the Government to do the right thing, opponents of the Government on the benches opposite have tried to show that this firm was not a fit concern or viable and was the sick man of the industry.

Over the last ten years an average of £10 million of profit has gone into the national Exchequer—into the taxpayer's pocket—because of the excellent activities of R.T.B. It has been extending its enterprise largely at Government instigation and has managed to keep its head above water in a magnificent way. When the profits start coming in again, as they will most certainly as soon as the running in of the works at Redbourne in my constituency and the works at Newport has been completed, it may well be that Members opposite who cast aspersions most strongly on this great concern will find themselves very much confounded. The firm had a bad year in 1962. This was because it was stabbed in the back. All the trade which Whitehead had given to R.T.B. was suddenly withdrawn in most undesirable circumstances, and the Government did nothing to put the matter right.

The matter of interlocking directorships is one of the concerns which is of very great importance in the steel industry. How can it be right that a director should be a director of two firms, trying to serve each of them, but each of them having contrary interests? What have the Government done since that Adjournment debate? All the Parliamentary Secretary can do is to give us further pompous lectures. That is not a very good advertisement for his Government, and I should like to help his Government, because it is in such a bad way. Altogether, the Government are to be congratulated, and I should like to tell them so, for what they have done in standing up to the sort of pressure to which they have been subjected.

Mr. Bence

They will lose 100 seats.

Mr. Mallalieu

Richard Thomas and Baldwins must be in an extremely robust state, because although it has charged a good deal of the expenses of its new enterprises to income—and it has had no profits from those enterprises, because of the running-in period—it has been able to hold its head above water. It owes a certain amount of money to various people.

Hon. Members

It is in debt.

Mr. Bence

So is Colvilles.

Mr. Mallalieu

It is said that R.T.B. is in debt as though that is a shocking thing to be. Is it not a sign of enterprise to be in debt if one has borrowed the money in order to make developments? Who was it who asked the firm to conduct that enterprise if it was not the Government? The Government did so because they regarded it as one of the most efficient firms in the country. However, I should like the Government to do something about interlocking directorships, because it does not look as though play was fair. It looks as though somebody was juggling with people's livelihoods.

The whole of the steel industry is in a topsy-turvy, Alice-in-Wonderland state. Canadian dumping is taking place. I know that I was reprimanded for using that word, but it has been used in very respectable sources since. By "dumping", in case hon. Members opposite do not know, I mean importing goods into this country at below cost of production. There has unquestionably been dumping by the Canadians of steel and there has unquestionably been dumping by our producers in other countries. Is not that a topsy-turvy state of affairs? Will not the Government try to do something about it? I know that their writ does not run in Canada or in other foreign countries, but is it not possible to initiate talks on this subject and try to organise the industry internationally in such a way that there will not be this nonsense of paying for the transport of each other's steel to be dumped in each other's country? This seems a ridiculous state of affairs.

The law of the jungle is very much operative in the steel industry. That is all right so long as there is enough to go round, but when there is not the pinch is felt, and it would be far better to organise the industry so that there was enough to go round, or, if there was not, so that what there was was at least properly shared. The Government have done something in that way by their treatment of Richard Thomas and Baldwins.

There is such a thing as a proposal for a bridge across the Humber. In Scunthorpe, which is nearby, the steel industry is working at little over two-thirds capacity, but we have unlimited slag for the filling in of the approaches to such a bridge. The steel industry there could be made to work to much greater capacity than at present if the Humber Bridge were built. Why are the Government holding back? They have always said that they could not go ahead because there were other things which were more important and they did not want this project to compete for scarce raw materials and scarce labour. There are no scarce raw materials or scarce labour in respect of two of the most important ingredients of the bridge—slag for the approaches and steel for the bridge itself. Cannot something be done?

We hear much about unemployment in Scotland and the North-East, but I assure hon. Members that, greatly though the people of Scunthorpe and region sympathise with those in the North-East who have been the victims of an absence of sensible planning by the Government, in Scunthorpe and Barton-on-Humber, which is where the bridge would be built, and the whole region there is considerable unemployment, both open and, even more considerable, disguised in the form of part-time and so on. The Government ought at last to take notice of these things and sensibly to plan the whole industry and see that our resources are put to proper use.

8.45 p.m.

Mr. David Webster (Weston-super-Mare)

The hon. and learned Member for Brigg (Mr. E. L. Mallalieu) seemed to divide his speech into two parts. In the first part he disposed of his surplus slag to build a bridge, and in the second part he disposed of his surplus spleen on my hon. Friend the Parliamentary Secretary. I think that my hon. Friend is capable of dealing with that.

The hon. Member for Aberavon (Mr. Morris) has my congratulations on his luck in the draw, and on raising this important matter of steel. The hon. Gentleman mentioned the contents of the Rochdale Report, allegedly as an attack on private enterprise and Conservative administration. Perhaps I might read what the Report says about Newport. Paragraph 539 says: The amount of ore needed by their Ebbw Vale works and their new Spencer works at Llanwern is likely to increase very considerably in future and three possible plans for bringing it in, in larger ore-carriers than can use the port at present, have been put forward. The Report also states that this massive new steel works is very much circumscribed because of the size of the ore carriers which can be brought into Port Talbot Docks, which are entirely used to feed the steel works at present. In fact, the Report says that no ships bigger than about 10,000 deadweight tons can use these docks.

The hon. Gentleman got away with that as an indictment against the Government. I say that it is an indictment against nationalisation, because both docks have been owned and administered by the British Transport Commission for the last fifteen years. It is important that these docks should be put right, and that the advantages of mass production should be brought into the ore carriers so that the industry can take advantage of these improvements.

If I might talk about some of the technical advantages in the industry, it is interesting to go back about seventy or eighty years when, as a result of Gilchrist Thomas, who, I suppose, was a Scotsman, trying to adapt the steel works to the ores of Cleveland and the black ban ore belt of Scotland produced the Bessemer process. It is interesting to note that as a result the ores of the Minette orefield in Western Europe came into action, and instead of a situation in which Great Britain produced more than the steel tonnage of the rest of the world together, within twenty years we dropped to third place in our capacity of steel production. We sometimes think of Gilchrist Thomas rather uncharitably as a result.

This type of process began to be practically useless in this country, and the British Standards Institution would not allow the Bessemer process to be used in this country for about ten years. We are now facing the situation in which, under modern new inventions, this process is coming back into its own and assisting British steel works to improve their competitive capacity against the Continent. This is an interesting and worth-while thing to consider.

It also presents an immense challenge to the steel industry of this country. We know that in recent years capacity has gone up from 20 million tons to a projected capacity—which I have criticised in the past as being far too optimistic—in two years of 34 million tons. It is most certainly true that the steel industry can fulfil the N.E.D.C. requirement of a 4 per cent. increase of gross national production.

Mr. Winterbottom

Is the hon. Gentleman aware that the expected tonnage for 1962 has been declared to be 20.6 million tons, despite the productive capacity of the industry; that this figure is lower than it was last year, which in turn was lower than the figure for the year before? Is he aware that the 1962 figure is the lowest since the present Prime Minister came into power? That is the situation we have to face against the background of this debate.

Mr. Webster

I was accustomed to receiving assistance from the late Member for Rotherham, Mr. Jack Jones, and I am grateful to the hon. Gentleman for assisting me. I appreciate that the figure is the lowest since 1957, which, as my hon. Friend the Member for Rugby (Mr. Wise) has said, bears comparison with Socialist fears of a shortage of steel if the industry is denationalised.

It also drives home the falsity of the argument adduced by hon. Members opposite time and time again that the steel industry is being bled white by the shareholders. That cannot be said today, because the shareholders have been very forbearing in times of prosperity. In the case of Whiteheads they have ploughed back £3 million of their own assets into the industry, and over the whole industry they have been taking only about one quarter of their earnings in dividends.

Today, when the loss is in the equity element of the industry, that loss is being taken not by the State but by the private, capitalist shareholder, whom the Socialist Party attacks again and again. It should be pointed out that we do not like the taxpayers to take the ordinary equity risk in industry. They may be allowed to take the risk of a debenture, secured against assets, but not an ordinary equity risk.

Mr. Winterbottom

The hon. Member is trying to evade a very simple issue, namely, that the steel industry is about the best barometer of the success or failure of the British economy, and that the failure of the steel industry, in terms of the last Steel Act, is indicative of the inability and incapacity of the Government to deal with our economy.

Mr. Deputy-Speaker

It is customary for an hon. Member who has the Floor to give way to enable another hon. Member to ask a question for elucidation, but in this case the hon. Member is coming very near to making a speech.

Mr. Webster

Out of courtesy to other hon. Members who seek to speak in the debate, I shall not give way to the hon. Member again, Mr. Deputy-Speaker.

The industry has done a tremendous amount to increase its capacity. In fact, not only has it increased its capacity but it has increased the technical efficiency of that capacity.

There is another and possibly ironical point that we should note. Today, there is no great risk of a "stop-go" type of economy in the steel industry because of an excess of capacity. We are not going to have people in trouble over their stockholdings—people who, when they thought there was going to be a shortage of capacity, ordered more stock and thus put more strain on the industry. That, at least, has been got rid of. We ought not to forget that this is happening not only in this country, but in Germany. There, there have also been considerable increases in capacity. Firms are working at a capacity of about 70 per cent. This is not a situation which is peculiar to this country.

Mr. Winterbottom

rose—

Mr. Webster

I am not going to give way to the hon. Member again. He is doing an up-and-down trick. He had better sit down until he catches your eye, Mr. Deputy-Speaker.

Over the whole industry about 69 per cent. of the average capacity is being utilised—about 75 per cent. capacity in the strip mills and 65 per cent. capacity in the rest of the industry. This does not bear evenly throughout the industry.

The point that I am concerned about is that some of the new processes have not only definitely improved capacity and efficiency but are making the industry much more competitive with Europe. We are reaching the time when we should scrap much of that part of the industry which is not working efficiently. We ought to concentrate on these new processes, such as the L.D. process—a phrase which slips swiftly off the tongue, but which is really short for the Linzer-Düsenverfahren process. This process now has a world capacity of 22 million tons. In this process oxygen is placed above the converter and is played on to the top of the converter.

This is a most useful process. It is producing the open hearth quality type of steel with much less capital investment cost to the industry. It is, however, a very fast process. This is one of the limitations which makes it difficult for the process to be used for special steels where a precise analysis can be obtained. I understand that with the use of computers this has been brought considerably under control.

One of the facts which we must remember is the challenge that we are getting from abroad in this new type of process. According to the latest figures that I have, a total world capacity of 22 million tons today will be in 1965 a world capacity of 70 million tons. There will be 80 plants in 22 different countries. Our capacity today, as I understand it, is six plants with a total capacity of 4 million tons. Japan will have 20 plants with a 13 million ton capacity and in Germany the figure will be nearly the same.

Here is another challenge. In Japan, the steel industry has doubled its size during the last five years and quadrupled its size during the last ten years. We are getting a tremendous increase in challenge both in capacity and in technical standards within the industry. This is a thing in which our industry is certainly not falling behind compared with the rest of the world.

It is maintaining its competitive ability by these technical processes. The L.D. process is one of those in which it has adapted its own techniques to great advantage and obtained high quality steel in the process. One could list the other processes, the Kaldo and the Roto processes, by which the industry is keeping itself highly competitive. It is time that we stopped arguing who is to control the industry. Most of us in this House have very clear ideas about it. The only people who seem to be in doubt are the Liberal Party.

I think that the essence today is to assist the industry to obtain its investment finance, to improve its technical qualities and to keep an edge on competition from abroad. I am quite sure that in that part of the industry which I know its competitive and technical quality is unquestionable and will rise to the challenge that lies ahead.

8.58 p.m.

Mr. Michael Foot (Ebbw Vale)

It would be very tempting to follow the lion. Member for Weston-super-Mare (Mr. Webster) into the wider fields into which he has ventured, but I have only a very few minutes and I came here tonight partly in order to say a kind and embarrassing word to the Government. I must confess that I was slightly warned off this by the latter part of the speech of the Economic Secretary, but even so I think that in the action which the Government took at the last moment over the takeover battle they deserve some credit. It was a good deed from a naughty Government, and when they do something of this kind I think that they should be congratulated.

The hon. Member who spoke for the Liberal Party and others in discussing this take-over battle seemed to suggest that it was half a dozen of one and six of the other, that it was just the normal kind of take-over battle and that no moral guilt attached to either side. When I suggested in an interruption that Stewarts and Lloyds were, after all, the aggressors in the battle—someone has to start a battle—we were told that Stewarts and Lloyds were behaving perfectly properly. This is not quite the view of the Economist, which is not a newspaper very friendly to those who support public ownership. The Economist has always been the great champion of private enter- prise, but the verdict of the Economist on this particular battle was that it was the most reckless of the City's take-over battles. I do not think it is a very good thing that the steel industry of this country should be the victim of a reckless battle. The Economist goes on: Stewarts and Lloyds certainly started something awkward, and now in offering 85s. appear to have tried to make R.T.B.'s pips squeak. Those are not my words, they are the words of the Economist. I do not think it a very good way to run a great industry in this country to want to try to make the pips squeak.

In fact, Stewarts and Lloyds knew very well what it was doing; it was raping Richard Thomas and Baldwins. It was not aggression, it was attempted rape. It knew that and the Government appreciated it, and I congratulate the Government on being realistic. What started this latest war was a desire to inflict serious injury on Richard Thomas and Baldwins. Partly, no doubt, Stewarts and Lloyds may have had commercial reasons for doing so. But there might have been other motives. There has been a vendetta against Richard Thomas and Baldwins. Hon. Members opposite, including the hon. Member for Walsall. South (Sir H. d'Avigdor-Goldsmid), who has just entered the Chamber, are pursuing a vendetta against Richard Thomas and Baldwins. Almost every hon. Member opposite, with the exception of the hon. Member for Weston-super-Mare, has indicated as his main interest the continuance of their vendetta against Richard Thomas and Baldwins. They are, of course, tied to Stewarts and Lloyds.

The hon. Member for Kidderminister (Sir G. Nabarro) was bashful for the first time, I suppose, in his political career when he did not indicate at the beginning of his speech that he was a shareholder in Stewarts and Lloyds. But I think it is pretty disreputable that all the questions, or the main part of the questions, on this matter have come from those who were put up to it by Stewarts and Lloyds. Han. Members do not have to take my word for it. The Economist thought that Stewarts and Lloyds ought to be rebuffed, and so did the Government. What happened then? Richard Thomas and Baldwins was engaged in defending itself, and here again this is what the Economist had to say: R.T.B. in public ownership is behaving as a commercial enterprise must be expected to behave in the protection of its own commercial interests. My complaint is that Richard Thomas and Baldwins should ever have been put into the position of having to defend itself.

Before Parliament rose for the Christmas Recess my hon. Friend the Member for Gower (Mr. I. Davies) raised the question because the Gowerton Works in his constituency were affected. Hon. Members on this side pressed the matter, and at that time the Government could not tell us what they proposed to do. The simplest thing would have been for the Government to appeal to Stewarts and Lloyds to call it off as we asked. That might have saved the country a lot of money. Even so, the Government did come forward at the end and support Richard Thomas and Baldwins in its action.

I am sorry that the Financial Secretary has departed from the Chamber. He had some controversy with my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan), and it may be that that is the reason why he has left. It was clear that the hon. Gentleman could not answer the questions put by my hon. Friend. There is not the slightest doubt whatever that the Government and the taxpayers have lost roughly £5 million on the deal.

The fact is, of course, that Whitehead should never have been denationalised. Indeed, at the time of the passing of the 1953 Act or later there was a proposal made that when R.T.B. was left nationalised Whitehead should be left as well. It was such an obvious thing to do. But the Government insisted on going ahead and selling off Whitehead. I am biased in favour of public ownership. But everyone knows that the Economist is not biased in favour of public ownership, and it stated: Technically R.T.B. and Whitehead are on the same side of the fence. Legally nationalisation divided them, and it almost certainly should not. Of course that is the situation. On any technical grounds Whitehead and R.T.B. should never have been severed from their relationship as they were when one was denationalised and the other was not. So when the Government took this action they did so in defiance of technical needs. They acted at the behest of their own doctrinaire ideas. However, even though they committed this act originally which caused the trouble, the Government did rescue the situation at the cost of a considerable amount to the taxpayer. The position of the Government and the Minister of Power reminds me of the story in Victor Hugo's novel where the sailor let loose a battering ram against the ship and almost caused a shipwreck. Then at the last moment and by great energy he managed to rescue the situation. What happened to that sailor was that he was first decorated and then shot. That is the prescription I suggest for the Government.

The hon. Member for Kidderminster——

Hon. Members

Where is he?

Sir G. Nabarro

I am here——

Mr. Foot

—suggested that there was some equivocation on the part of my hon. Friend the Member for Aberavon (Mr. Morris). Of course there was no equivocation whatsoever. The only person who has equivocated in this debate is the hon. Member for Kidderminster who refused, or failed, to declare his interest at the beginning of his speech. We may also say this for the hon. Member; he has shown that he has cold feet in this debate. He used to be the big, brave warrior fighting for R.T.B. to be denationalised and battering the Government over the head because they would not do it. The Government, however, did not have the frankness or common courtesy to tell R.T.B. what they told hon. Members at a secret meeting in the House of Commons.

Sir G. Nabarro

rose—

Mr. Arthur Lewis (West Ham, North)

On a point of order, Mr. Deputy-Speaker. Why should an hon. Member who spoke for thirty-six minutes in the debate and then left the Chamber almost immediately seek to interrupt other hon. Members?

Mr. Deputy-Speaker (Sir Robert Grimston)

That is not a point of order, but I hope there will be fewer interruptions because I wish to get in several other speakers.

Sir G. Nabarro

I want to make perfectly clear that I cannot declare an interest in a matter in a question——

Mr. Foot

I am not giving way to the hon. Member on that point——

Sir G. Nabarro

rose—

Mr. Deputy-Speaker

Order. If the hon. Member who has the Floor does not give way, another hon. Member cannot interrupt.

Mr. Foot

If the hon. Member for Kidderminster wanted to declare his shareholdings he should have done so at the beginning of his speech.

The hon. Member has run away on another matter. He has been pressing the Government to say that they must denationalise R.T.B. Now he is in a much weaker position to do so. He says that the Government do not have to do it all at one time but they can take little bits and sell them off. That is how some hon. Members opposite care for the industry. Already we have the example before us of how technically it was most unwise to sever the relation between Whitehead and R.T.B. Now the hon. Member has so much interest in the working of the industry that he, with his technical knowledge of these matters, recommends the Government to lop off little bits here and there and sell them as job lots. Of course, he has a financial interest in these matters.

The hon. Member tried to make some capital by saying that my hon. Friend who introduced this Motion had something to disguise about his views on public ownership. He has nothing at all to disguise, neither he nor any of my hon. Friends. It has been made quite plain at the time of the last General Election and repeated afterwards. Everything that has happened in this jungle struggle of the last few weeks and months confirms what we said, that if we want to secure a proper technical arrangement of the industry, finance has to be put into second place. Technique has to be put in the first place.

If we are to solve the problems of the steel industry we have to take command of the economy as a whole, but if we are to contribute to that economy we must lay a firm basis in a publicly-owned industry. That remains one of the main issues to be decided by the electorate at the coming General Election.

9.9 p.m.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

I quite understand why the Government found it necessary to make two speeches from the Front Bench this evening, because we know that in the past my lion. Friend the Member for Yeovil (Mr. Peyton) has felt very strongly about the question of R.T.B. But I think it a bit unfortunate that on a private Members' night so much of the time should have been monopolised by Front Bench speakers.

I congratulate the hon. Member for Aberavon (Mr. J. Morris) on his luck in the Ballot, but I must say that he started to fish in rather troubled waters when he decided to raise the subject of the steel industry. The hon. Member for Ebbw Vale (Mr. M. Foot) accused hon. Members on this side of the House of carrying out a vendetta against R.T.B. I wonder whether hon. Members opposite are not carrying out a vendetta against Stewarts and Lloyds.

Having listened to the debate, I feel that the whole of the argument is a bit arid and sterile. So often in steel debates, particularly that in July, hon. Members have tried to make out that in some way nationalisation of the steel industry would have affected its present position in respect of output and orders, and I should like to address myself to that proposition for a few minutes. The hon. Member reaffirmed his belief in nationalisation, as did the whole of the Labour Party. They seem to think that they are alone in sympathising with workers in the steel industry who are on short time or redundancy, and I should like to repudiate that, because I share in that sympathy just as much as they do.

I do not believe for one moment that any organisation, administration or ownership, which they might have produced for the steel industry would in any way have altered the situation of that industry at present. What contribution can nationalisation make to the position? Do hon. Members opposite believe that if they owned the shares, or the taxpayer owned them, rather than private individuals, there would have been a bigger demand far steel and more orders and more work in the industry? I do not think that that can be held to be true. The industry was in private hands and then in public hands, and then mainly in private hands again, and no one can say that this affects the demand for steel.

As hon. Members well know, whether the industry is nationalised or not, prices in the steel industry are controlled almost entirely by the Iron and Steel Board, which is an instrument of the Government. Whether prices are too high or too low is a point into which I do not wish to enter in this debate, but surely a different organisation of the industry could in no sense have affected the demand for steel.

Next, we come to the question of investment and capacity in the steel industry. Again, it was the Iron and Steel Board which persuaded the Government to put £100 million in R.T.B. and Colvilles for making strip. I do not know which is the cart and which is the horse—whether it is the firms or the Board—but we have been persuaded to invest £1,500 million in the private steel companies to increase capacity. The end result of all this has been that we now have a capacity approaching 28½ million tons a year. As hon. Members have said, in 1960 we had 26 million tons ordered, in 1961 it was 23 million tons, and in 1962 it was 20½ million tons.

Several Hon. Members

rose—

Mr. Ridley

Surely this demonstrates beyond any doubt the absolute fallibility and futility of central planning of an industry's capacity.

Several Hon. Members

rose—

Mr. Ridley

Thus we are running at about 8 million tons under the capacity which hon. Members opposite in their wisdom had backed in backing the planning of the Iron and Steel Board. Yet they say that planning and a further strengthening of the organisation of the industry is the only way to secure a recovery. I do not know whether there have been mistakes in the past.

Mr. Winterbottom

rose—

Mr. Ridley

Surely it is obvious that here is a prime example of where planning on a grand scale has failed to get the answer right.

Hon. Members

Oh.

Mr. Ridley

I think that the truth is that 1960 was a boom year in our country with boom effects in the steel industry. What has happened since then is that demand has settled back to a normal pattern and we are getting a much more normal type of demand.

Hon. Members

Nonsense.

Mr. Speaker

Order. Listening to the debate the other day on an Allocation of Time Motion, I heard a happy slip by an hon. Member who referred to a speech in which 14 Members had taken part. I think that we had better get on.

Mr. Ridley

I have not time to say all I would like to say. This proves that we have had a large degree of nationalisation, in the sense that control of prices, investment and capacity has been in semipublic hands. It proves that the whole debate about nationalisation of steel is becoming sterile and pointless. Whether the ownership is private or public does not really affect the demand for steel. If hon. Members opposite would direct themselves to keeping the economy competitive and to looking for markets abroad to sell steel and steel products, they would do a much greater service to the steel industry than by repeating their parrot cry of nationalisation at any price. I cannot think how this constant changing backward and forward from private to public enterprise has escaped "That Was The Week That Was".

Mr. Bence

Who did it?

Mr. Ridley

I wonder whether we could not try to drop the steel industry out of our current political battles. It is high time that we tried to find a compromise in this matter.

To get reflation going would not cure the basic troubles of the steel industry. If the economy were to take up the slack, we might achieve 2 or 3 per cent. extra consumption of steel, but we are looking for an increased consumption of 30 or 40 per cent. To ask for a boom in consumer goods industries would not have the desired effect. There has been a serious error in the calculation of capacity which has been necessary, in which both the private side of the industry and the public control apparatus have shared.

Now we must concentrate on keeping the price of steel and the price of all our exports competitive, so that we can as the years pass sell more. In this respect probably the future of the industry rests much more on the co-operation which right hon. and hon. Members opposite will give in forming an incomes' policy than in the arid and sterile argument of whether there should be public or private ownership.

9.18 p.m.

Mr. Frederick Lee (Newton)

The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) suggested that the alternative to a publicly-owned steel industry was competitive private enterprise within the industry. No such animal has existed in steel for many years, nor have the Government the slightest intention of trying to bring competition back to the industry. It is their objective to create, instead of a public monopoly, a private monopoly.

For our part, as these are the alternatives with which the country is now faced, we put our faith in a public monopoly, properly controlled by the Government or by the vehicles of control they would create, functioning in the public interest and not in the interest of the shareholders. This, I should have thought, is the basis of the discussion which we are now having. If we may rightly judge from the cacophony we have had over last weekend of Ministers telling the country that the age of "stop-go" economics has gone and that they are new converts to planning, the first thing they would see is the need to plan that which has been described on both sides of the House as one of the major industries in the nation. It is the genesis of most of our other manufacturing industries. About 40 per cent. of our exports have a steel content.

We have been told so often that we must try to remain competitive. There cannot be any argument that because of the denationalisation of steel the price of British steel has increased more than the average of manufactured goods in Britain. It has, therefore, played its part in making it impossible to succeed in the export drive which the Government are supposed to have embarked upon. The main point we make is that if on both sides of the House we are agreed on the need for planning, the vehicles for planning should be set up, but the Government refuse to do just that.

I submit that there is not in connection with the steel industry, or indeed industrially at all in this country, any authority which can ensure that plans made by the Government will be carried out. There is no way in which either investment or the rate of investment in an industry, as desired by the Government, can be guaranteed. Surely, therefore, this debate is not merely about the silly old nonsense that we heard from the hon. Member for Kidderminster (Sir G. Nabarro), during the period when he forgot to declare his financial interest. It is not an argument about nationalisation versus competitive private enterprise. It is, for us, a challenge to the Government to show that they are now accepting the basis of planning by creating the planning instruments which are necessary to do the job.

I believe that over the last few years we have seen what I have described as a potential instrument dissipated and turned into loot for private speculators. This has been accompanied by a rundown of the use of steel by consuming industry. No matter what the capacity, when nationalisation came to the steel industry we had full employment, but since denationalisation we have never had it. When we had public ownership we had a Government who believed in an expanding economy. Denationalisation has been accompanied by the presence of a Government who never believed in an expanding economy. We have, therefore, had the restrictions and contractions which have been the history of the steel industry during the past few years.

The Government themselves only recently sought powers in the House to increase investment in the public sector. Why? They said, in effect, "The economy is in great trouble. We want to get Britain moving again and, therefore, we take the vehicle which is at our disposal—the public sector—and we increase investment in it." Had other industries in the public sector been capable of being used as vehicles for getting a profit for private business they would not have been in the public sector anyway. How, therefore, can the Government have a replanned economy? The fact that steel alone of these great industries could be put back to private backing has robbed the Government of a great planning instrument which should now be used in the interests of the nation as a whole.

In a debate some time ago we on this side of the House queried the power of the Iron and Steel Board. The hon. Member for Cirencester and Tewkesbury was quite wrong in saying that we accepted the Board as being the controlling instrument of the steel industry. We said precisely the opposite. We said that it had no real power at all to control the steel industry. I remember that in the course of the debate on Richard Thomas and Baldwins, on 27th June, 1960, I argued that there was no effective control of steel. The Minister of Power said: The Government believed that there was absolutely no reason why public supervision should depend on public ownership. In fact, they believed that the question of ownership had nothing to do with the effectiveness of public supervision which could be equally effective, if not more effective, under conditions of private enterprise. The Government therefore set up the Iron and Steel Board, which had the minimum powers necessary for the balanced development of the industry and to try to avoid waste of national resources. It is quite correct, as the hon. Member for Newton pointed out, that it was always our intention that the real power of the Iron and Steel Board would depend not on its ability to give orders, but its ability to lead and persuade in the industry.—[OFFICIAL REPORT, 27th June, 1960; Vol. 625, c. 980–1.] We have just had discussed the affair of the Whitehead take-over. The ethics of the thing on all sides have been deplorable. The Financial Secretary said that the Government were compelled to back Richard Thomas and Baldwins because, unless they did so, Richard Thomas and Baldwins would have become a less lucrative selling organisation as far as the Government were concerned.

I put this question to the Parliamentary Secretary: if the Iron and Steel Board has the authority within the industry which the Minister told us it has, why did it allow this take-over nonsense to go on? Why did it not step in and determine what was in the national interest? Why did not it say, just as the hon. Gentleman said tonight, that Richard Thomas and Baldwins would be gravely weakened if Whitehead went to Stewarts and Lloyds? We have heard that it would have cost about £10 million per annum to Richard Thomas and Baldwins and that White- head purchased 89 per cent. of its total requirements from Richard Thomas and Baldwins.

Therefore, I should like the hon. Gentleman to give us an answer on this. Is it the case that the Iron and Steel Board has no authority whatever over the steel industry and, therefore, could not intervene in any way to prevent what would have been a major catastrophe, on the Financial Secretary's showing, if Stewarts and Lloyds had been able to take over Whitehead? I have heard some of my hon. Friends give a lot of credit to the Government for stepping in and doing what they did, but could they have allowed some kind of differentiation between the take-over bid by a nationalised industry and a bid by a private industry?

We have seen the news today about Guest. Keen and Nettlefolds making a twin bid involving well over £10 million in cash and shares for Ambrose Shardlow and Co. Ltd., of Sheffield, and Smith's Stamping Works, at Coventry. According to The Times, the Ambrose Shardlow take-over involves the transfer of 49 per cent. of the capital to the United Steel Company if and when Guest, Keen and Nettlefolds is successful in taking it over.

Could the Government—indeed, dare they—have done other than they did in this case without making it essential that the take-over bids which I have described be vetoed by private companies? I believe that they were forced into this position not only by their feelings of tenderness for Richard Thomas and Baldwins, but because they knew that throughout the steel industry, and, indeed throughout most sections of big industry in Britain, there is no alternative to the take-over bidder, to the elimination of competitive private enterprise or to the creation of public monopoly in its place.

Sir G. Nabarro

Oh.

Mr. Lee

The hon. Gentleman is still growling from behind the bushes there, but I do not think that he has come out of this debate very well and I advise him to be quiet for the rest of it.

We know that when it was essential for an enlargement of steel production the Government had to turn to the one nationally-owned section of the industry—Richard Thomas and Baldwins. Had they not had R.T.B. to do the enlarging job to get the new strip mill, £120 million of public money would have had to be put into private enterprise instead of the mere £50 million that went into Colvilles. I wonder why the hon. Member for Kidderminster and the rest of the "fuel furies" did not scream their heads off about the enlargement of public enterprise when recently the Government deliberately enlarged public enterprise. There was no real alternative to the action that the Government then took.

I understand that during the present year a further 2½ million tons of new capacity will be created in the steel industry. As far as one sees the position in 1963, there will be little prospect of any sufficient increase in demand to meet the 2½ million tons of extra capacity which is now being created.

What do the Government propose to do about this? We on this side have for long argued the need of a more closely planned economy. We have not argued for public ownership, either in steel or in any other industry, for reasons of sheer dogma. We have argued it because it is an essential development in any planned society. Even in the United States, far more public money is being put into industry than in any other nation outside the Soviet Union. Only the British Tories do not know what century this is.

When we hear rather stupid arguments from the hon. Member for Kidderminster that all this is based on dogma, the fact is that even in the death throes of the present Government the Tory Party should realise that unless it tries at least to get abreast of the 1960s the state of the economy will continue to go down.

Hon. Members opposite are belatedly attempting to use the distribution of industry policy which they neglected for so many years. I do not believe that the use of that policy will of itself be sufficiently deep or wide to eliminate unemployment and to get the country growing in the way that is needed. There is now the need of development of new industry which will require enormously increased capacity in the steel industry. We must now look to the new industries of the second half of this century rather than merely spread throughout the country industries many of which are simply the ghosts of the first Industrial Revolution.

In what way can the Government possibly plan the demand for the increased capacity of the steel industry unless they put themselves in a position where they can hold the authority to decide the capacity of the industry and hold the planning powers to ensure that new industry is created? Surely this is the economic problem of this day and age. I do not believe that the Government have the capacity to do what is necessary.

My hon. Friend the Member for Aberavon (Mr. Morris) spoke of what he called the two sections of the world. How can it possibly be that in the Western, highly industrialised countries, we see the great tragedy of unused steel capacity, Whilst throughout the rest of the world there is a crying need for the products which our steel industry could produce?

My right hon. Friend the Leader of the Opposition mentioned the other day that in some of our towns we are faced with the closing down of railway workshops. Is there really no demand in other parts of the world for the products of those workshops? Is it the case that we are an insular race, living on a high standard of living, but whose Government are incapable in their planning of seeing beyond these shores at all? When we see tonight the spectacle of this great industry working at 65 or 67 per cent. of its capacity, producing over 2½ million tons capacity this year which will not be used, surely the case for planningplanning—is proven.

The hon. Gentleman had better make up his mind where he stands on this. He really had better make up his mind.

Sir G. Nabarro

Which hon. Gentleman?

Mr. Lee

The hon. Member for Kidderminster as well, if he likes.

The hon. Gentleman really ought to keep abreast with his Government.

Mr. Proudfoot

Has the hon. Member ever sold anything in his life?

Mr. Lee

When the Prime Minister declared that the Tories had become planners we really did expect that the nonentities in his party and Government would move with him. If we really are to have the hon. Gentleman opposite telling us that the idea of planning is not acceptable to Toryism we must decide, between him and his Prime Minister, who speaks for the Tories.

Mr. Proudfoot

Would the hon. Gentleman tell us how he plans sales? Has he ever sold anything in his life?

Mr. E. G. Willis (Edinburgh, East)

Has the hon. Member for Cleveland (Mr. Proudfoot) ever made anything in his life?

Mr. Lee

If the hon. Member for Cleveland cannot make a better intervention than that I would advise him to remain seated.

I have been saying that there is a demand in Britain, where the Government have produced 815,000 unemployed people, who, if they are given the ability to work, will create the demand. I can assure the hon. Gentleman of that. We can create goods, and we should be creating markets for them, but upon this the Government have failed and failed lamentably.

I put it to the House that the Government themselves have completely failed in their efforts to denationalise the steel industry and have brought themselves into the dilemma which the Financial Secretary told us about over Richard Thomas and Baldwins and the damage which was threatened. In fact, a great industry, of which we have reason to be proud, is now in sheer chaos because of the anarchy created by denationalisation. It is not merely a question of dogma. It is a question of public ownership, meaning the ability to control this industry, and that is a condition, partly, of our ability to expand the economy itself.

If the Government and the Tory Party will not accept that, then I tell them they are not in favour of an expanding economy and of producing a planned economy.

9.38 p.m.

Mr. Peyton

The whole House owes a debt of gratitude to the hon. Gentleman the Member for Aberavon (Mr. Morris) for having raised this very important subject. If I may say so without embarrassing him, he gave one of his most eloquent speeches, which he started, of course, with a sprinkling—I suppose every one of us has to do it—of abuse of the party opposite.

Then he recalled one remark which had been made by Inv right hon. Friend in the last debate at the end of July, when my right hon. Friend said that some time would elapse before substantial improvement took place. I can only say to the House that my right hon. Friend was entirely justified in saying that. [HON. MEMBERS: "Oh."] What is the choice to be—some pretty gloss of words to try to paint over the hard facts, or to try to confront them, as my right hon. Friend did? In fact my right hon. Friend did then point out as he was perfectly right to do, that the state of this industry is inextricably linked with the economy. Nothing can alter that fact, and the hon. Gentleman the Member for Aberavon was quite right in reminding the House of what my right hon. Friend had said.

He then went on to charge me, and he made an offer to me of a suit of sackcloth and ashes, which, I dare say, would fit me very well; but he made about me the kind of remark with which I should be happy to be charged again and again. Then the hon. Gentleman went on to something which I regard as very important indeed. He was almost alone in the debate in dealing with the all-important questions of costs and the competitive power of the steel industry. It would be my hope and ambition to avoid a lot of trite utterances about other people being efficient, but I think that the points he made are very important on shipping, ports and ore contracts. These are all points which relate very much to the costs and competitive ability of the industry. The industry is confronted, as it made clear in its evidence to the Rochdale Committee, with certain handicaps, such as in shipping heavy loads out of this country, and in being subjected to heavy costs.

With regard to the bringing in of ore, I want to quote a remark by Sir Harry Spencer, managing director of Richard Thomas and Baldwin, which was reported in the Metal Bulletin of 21st December last year: Every shilling per ton on ore costs which we unnecessarily incur increases the costs of our finished steel by half a crown a ton, and on the costs we are called on to bear there could be plenty of savings. That is a very important remark. As to whether Sir Harry's figures are entirely justified, he is an expert on the steel industry and should be listened to with a good deal of care.

I have some estimates that I would commend to the House about the difference it might make if we had in this country a fleet of ore carriers which could be described as being of modern size—always assuming that we have the ports in which to fit them. One of this country's terrible problems at the moment is that of the 15 or so ports regularly used for the import of iron ore, only the Tyne can accommodate a 35,000 ton ore carrier. It has been estimated that the saving which would result from using a ship of, say, 31,000 tons compared with a 9,000 ton vessel—which can get into Port Talbot, in the hon. Gentleman's constituency—would be 11s.-12s. per ton. If one doubles that to reach the resulting effect on the cost of pig-iron, it becomes an important factor for the industry.

I am sure that the hon. Gentleman was right in focussing the attention of the House on the all-important question of our ports and, arising from that, the size of the ships that we can use. This matter is very germane indeed to the competitive power of the industry, and I am grateful to the hon. Member for having raised the matter today. I would tell the House that my right hon. Friend the Minister of Transport is considering urgently the important report of the Rochdale Committee and will in due course be making a statement on it.

If I might just answer one of the hon. Gentleman's points, he asked what sort of ships we had in our ore-carrying fleet. The answer is that we have 72 ships in the fleet, plus another two building. Of these ships, six only are over 17,500 tons, and 24 are under 10,000 tons. That represents a very considerable addition to the ore-carrying costs of the industry.

The hon. Gentleman then turned to more contentious questions. He said he fought the General Election on the question of public ownership, and I was happy to gather from the way he said it that it was his intention, and, indeed, the intention of the Labour Party, to fight the next General Election upon the same ground. This is something which always surprises the Conservative Party but nevertheless is a source of great relief to us, and I would like to express on behalf of my hight hon. and hon. Friends their deep and sincere gratitude.

The hon. Gentleman then went on to say that it was a very sad thing that there should be an under-use of capacity in this country while the under-developed countries were short of steel which they could put to great use. But it would be beyond the capacity of the steel industry or this country as a whole to make a present of steel to anybody, whether they wanted it or not.

As the hon. Gentleman is probably aware, it is the Government's intention in suitable cases to give, by way of aid, materials which are wanted, but it would be a hopeless and absolutely wrong approach, and would completely undermine the purposes for which aid is given, if, by way of conferring a gift or some assistance, it was made a condition that the recipient country should accept what we insisted upon giving.

I come now to the speech of my hon. Friend the Member for Kidderminster (Sir G. Nabarro). He spoke with great brevity and with accustomed modesty and patience, and the hon. Member for Cardiff, South-East (Mr. Callaghan) made a number of very noisy sedentary interruptions. But I must say that the hon. Gentleman should hit someone who has much better self defence than my hon. Friend. My hon. Friend is inclined, as one hon. Member remarked, towards diffidence. I want to call attention to his statement that if he were so clever as to be able to foretell demand for the product of any industry he would be able to make a fortune.

A great deal of this debate has proceeded on the assumption that some people possess this kind of wisdom. It is profoundly untrue. It is wrong to suggest that anyone, by force of planning, can introduce immense new capacity in the steel industry just at a time when demand is at a peak. Whether hon. Members opposite like it or not, the kind of expansion which took place recently in the industry had to be planned over years. They must face the fact that no one can be certain that new plant will come into operation just at the moment when demand is at its height.

My hon. Friend the Member for Kidderminster went on to draw the most attractive distinction between turning turtle politically and being a hypocrite. I do not intend to pursue this distinction, but I accept that turning turtle politically is at least a very nice, happy phrase and one which comes very well from his armoury.

Mr. Bence

rose—

Mr. Peyton

I have a lot to say.

Mr. Bence

Will the hon. Gentleman allow me? This is important.

Mr. Peyton

No.

The hon. Member for Huddersfield, West (Mr. Wade) expressed on behalf of the Liberal Party his regret, which we fully share, that the Labour Party should still intend to renationalise the steel industry. He devoted most of his speech to the question of the R.T.B.-Whitehead issue, and I do not propose to follow him into that as it has already been fully dealt with by my hon. Friend the Financial Secretary.

The hon. and learned Member for Brigg (Mr. E. L. Mallalieu) launched a savage attack on my hon. Friend the Member for Kidderminster. He then proceeded to turn his guns upon me. I was a little puzzled. He was very concerned to point out the conflict of interest which, he said, must exist between somebody who had been on the boards of both Richard Thomas & Baldwins and Whiteheads. Whether it is desirable or not, I have always been under the impression that the whole argument was that there was such an identity of interest between Richard Thomas & Baldwins and Whiteheads that it would be intolerable and not sensible for the two to be split.

Mr. Bence

When they were both still nationalised.

Mr. Peyton

I was referring to the argument put by the party opposite again and again and which has come to us from other Socialist sources.

The hon. and learned Member then said that it was high time that something was done about dumping. He said that in an Adjournment debate not very long ago. I remind him that so far the Government have received no formal application whatsoever, and he should know of the machinery which is available to those who have grounds for complaint about dumping. No steel company has yet made any application for action by the Government.

My hon. Friend the Member for Weston-super-Mare (Mr. Webster) was concerned to welcome the way in which the industry is going in for new processes and developing other ideas, a welcome in which I share. He was even brave enough—and my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) carried on with this later—to say that it would be a good thing if the House of Commons were to argue more about the way in which the industry was run than by whom it was owned.

I do not intend to answer at length the speech of the hon. Member for Ebbw Vale (Mr. M. Foot), to whom it is always a pleasure to listen. He was concerned again to discuss the question of Richard Thomas & Baldwins and Whiteheads. However, one phrase from his speech deserves to go down in the annals of Parliamentary debates. I wrote it down at the time. He said that it was not aggression, it was attempted rape. My understanding of the word "rape" has been that it is not very far distinguished from aggression.

The hon. Member for Newton (Mr. Lee) complained that there was no way in which the rate of investment, or investment at all, in a particular industry could be guaranteed. That is profoundly untrue. The hon. Member should know by now that it is quite easy for the Government—indeed, it is constantly done—to direct investment in all the nationalised industries, and into the steel industry under private ownership. The hon. Member persistently ignores the fact of the enormous investment in the steel industry which has gone on in the two instances he mentioned. He does not accept the consequences, which are that huge sums of public money have been invested both in Richard Thomas & Baldwins and in Colvilles. The hon. Gentleman does his case no good when he ignores matters of that importance.

The hon. Gentleman ignored also the fact that the capacity of the steel industry over these years has increased to 30 million tons, the figure it will reach this year. This is not, surely, the result of a long period of restriction on growth? When, in the not very distant future, this capacity proves itself entirely warranted, I hope that those who now pretend to lament the excess capacity will not be the first to complain of shortage.

The hon. Gentleman completed his denunciation of the Government by saying that we on this side of the House——

Mr. Mendelson

rose—

Mr. Peyton

I shall not give way. The hon. Gentleman——

Mr. Mendelson

On a point of order. Is it not completely unjustifiable and out of order to make an assertion which affects every Member representing a steel constituency without providing an opportunity for correction?

Mr. Speaker

I had hoped that we had got rid of points of order that were not points of order.

Mr. Peyton

The hon. Gentleman ended his denunciation of the Government by saying that we had failed in our efforts to denationalise the industry. It is a very strange failure. I think that the whole of this side of the House is disappointed that the operation is not complete because we regard it as necessary. It is very strange to say that we have failed to denationalise when we have denationalised the whole industry except for this one admittedly large company.

Let me come for a moment to the Motion before the House. It is, as one of my hon. Friends said, a very thinly concealed demand for renationalisation of the industry. The camouflage is indeed thin, and I can only say that from our point of view the Motion explains nothing and offers nothing save some worn out

advice and one very unwelcome crumb of praise which we are not at all anxious to pick up.

I cannot help feeling that when the debate is over some hon. Gentlemen opposite will feel a regret that they have aired once again their naïve enthusiasm for this old, worn out dogma of nationalisation which is going to solve nothing and answer no problems.

Mr. Callaghan

Why did the Government nationalise the industry?

Mr. Peyton

The hon. Gentleman, who has intervened constantly, has already had this explained to him. He has intervened frequently in this debate from his usual sedentary position. The first time he did it, he did so without bothering to inquire whether his hon. Friend had been consulted about an arrangement which was made for his benefit.

Mr. Callaghan

Will the hon. Gentleman give way now?

Mr. Peyton

No. I end by saying that we are delighted to have the round and repeated assurance from right hon. and hon. Gentlemen opposite that they are determined once again to fight an election on this issue of nationalisation. I can only say how greatly and warmly——

Mr. Callaghan

The Government are the nationalisers.

Mr. Peyton

—we welcome this enthusiasm, and I would like to take this opportunity of foretelling that, once again, this old-fashioned idea will prove to be a millstone round their necks.

Question put:—

The House divided: Ayes 144, Noes 197.

Division No. 55.	AYES	[10.0 p.m.
Alnsley, William	Bray, Dr. Jeremy	Dempsey, James
Allaun, Frank (Balford, E.)	Broughton, Dr. A. D. D.	Driberg, Tom
Allen, Scholefield (Crewe)	Butler, Herbert (Hackney, C.)	Dugdale, Rt. Hon. John
Awbery, Stan (Bristol Central)	Butler, Mrs. Joyce (Wood Green)	Ede, Rt. Hon. C.
Bacon, Miss Alice	Callaghan, James	Edwards, Robert (Bilston)
Baird, John	Castle, Mrs. Barbara	Edwards, Walter (Stepney)
Barnett, Guy	Cliffe, Michael	Evans, Albert
Baxter, William (Stirlingshire, W.)	Collick, Percy	Finch, Harold
Bence, Cyril	Corbet, Mrs. Freda	Foot, Michael (Ebbw Vale)
Bennett, J. (Glasgow, Bridgeton)	Craddock, George (Bradford, S.)	Galpern, Sir Myer
Blackburn, F.	Crossman, R. H. S.	Gordon Walker, Rt. Hon. P. C.
Blyton, William	Dalyell, Tarn	Gourlay, Harry
Bottomley, Rt. Hon. A. G.	Darling, George	Grey, Charles
Bowden, Rt. Hn. H. W.(Lelcs, S.W.)	Davies, Ifor (Gower)	Griffiths, Rt. Hon. James (Lianelly)
Boyden, James	Davies, S. O. (Merthyr)	Gunter, Ray
Braddock, Mrs. E. M.	Delargy, Hugh	Hale, Leslie (Oldham, W.)
Hamilton, William (West Fife)	Manuel, Archie	Slater, Mrs. Harriet (Stoke, N.)
Hannan, William	Marsh, Richard	Slater, Joseph (Sedgefield)
Harper, Joseph	Mason, Roy	Small, William
Hart, Mrs. Judith	Mendelson, J. J.	Soskice, Rt. Hon. Sir Frank
Hayman, F. H.	Millan, Bruce	Spriggs, Leslie
Healey, Denis	Milne, Edward	Stewart, Michael (Fulham)
Henderson, Rt. Hn. Arthur (Rwly Regis)	Mitchison, G. R.	Stonehouse, John
Herbison, Miss Margaret	Moody, A, S.	Stones, William
Hill, J. (Midlothian)	Morris, John	Swingler, Stephen
Hilton, A. V.	Mulley, Frederick	Taverne, D.
Holman, Percy	Noel-Baker, Francis (Swindon)	Taylor, Bernard (Mansfield)
Houghton, Douglas	Oram, A. E.	Thomas, George (Cardiff, W.)
Howell, Charles A. (Perry Barr)	Oswald, Thomas	Thornton, Ernest
Hughes, Emrys (S. Ayrshire)	Owen, Will	Wainwright, Edwin
Hughes, Hector (Aberdeen, N.)	Padley, W. E.	Warbey, William
Hunter, A. E.	Paget, R. T.	Weitzman, David
Hynd, H. (Accrington)	Pargiter, G. A.	Whitiock, William
Hynd, John (Attercliffe)	Parkin, B. T.	Wigg, George
Jay, Rt. Hon, Douglas	Pavitt, Laurence	Wiikins, W. A.
Jeger, George	Peart, Frederick
Johnson, Carol (Lewisham, S.)	Pentland, Norman	Willey, Frederick
Jones. Rt. Hn. A. Creech (Wakefield)	Plummer, Sir Leslie	Williams, W, R. (Openshaw)
Jones, Elwyn (West Ham, S.)	Popplewell, Ernest	Willis, E. G. (Edinburgh, E.)
King, Dr. Horace	Prentice, R. E.	Wilson, Rt. Hon. Harold (Huyton)
Ledger, Ron	Price, J. T. (Westhoughton)	Woodburn, Rt. Hon. A.
Lee, Frederick (Newton)	Probert, Arthur	Woof, Robert
Lee, Miss Jennie (Cannock)	Pursey, Cmdr. Harry	Wyatt, Woodrow
Lever, Harold (Cheetham)	Reid, William	Yates, Victor (Ladywood)
Lever, L. M. (Ardwick)	Rhodes, H.	Zilliacus, K.
Lewis, Arthur (West Ham, N.)	Roberts, Goronwy (Caernarvon)
Manon, Dr. J. Dickson	Robertson, John (Paisley)	TELLERS FOR THE AYES:
MacDermot, Niall	ROSS, William	Mr. E. L. Mallalieu and
McKay, John (Wallsend)	Silverman, Julius (Aston)	Mr. Winterbottom.
McLeavy, Frank	Skeffington, Arthur
NOES
Altken, W. T.	Eden, John	Johnson Smith, Geoffrey
A Mason, James	Elliot, Capt. Walter (Carshalton)	Jones, Arthur (Northants, S.)
Ashton, Sir Hubert	Elliott, R. W. (Nwcastle-upon-Tyne, N.)	Kerans, Cdr. J. S.
Atkins, Humphrey	Emmet, Hon. Mrs. Evelyn	Kirk, Peter
Awdry, Daniel (Chippenham)	Errington, Sir Eric	Lambton, Viscount
Balniel, Lord	Farr, John	Lancaster, Col. C. G.
Barber, Anthony	Finlay, Graeme	Leburn, Gilmour
Barlow, Sir John	Fisher, Nigel	Litchfield, Capt. John
Barter, John	Foster, John	Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Bennett, F. M. (Torquay)	Fraser, Ian (Plymouth, Sutton)	Longden, Gilbert
Berkeley, Humphry	Freeth, Denzil	Loveys, Walter H.
Bitten, John	Gammans, Lady	Lucas-Tooth, Sir Hugh
Biggs-Davison, John	Gibson-Watt, David	MacArthur, Ian
Birch, Rt. Hon. Nigel	Gilmour, Ian (Norfolk Central)	McLaren, Martin
Bishop, F. P.	Glyn, Dr. Alan (Clapham)	Macleod, Rt. Hn. Iain (Enfield, W.)
Black, Sir Cyril	Glyn, Sir Richard (Dorset, N.)	Macmillan, Maurice (Halifax)
Bourne-Arton, A.	Goodhew, Victor	Macpherson, Rt. Hn. Niall (Dumfries)
Box, Donald	Cough, Frederick	Maitland, Sir John
Boyd-Carpenter, Rt. Hon. John	Grant-Ferris, R.	Markham, Major Sir Frank
Boyle, Rt. Hon. Sir Edward	Gresham Cooke, R.	Marshall, Douglas
Braine, Bernard	Gurden, Harold	Marten, Neil
Brooman-White, R.	Hamilton, Michael (Wellingborough)	Matthews, Gordon (Meriden)
Brown, Alan (Tottenham)	Hare, Rt. Hon. John	Mawby, Ray
Bryan, Paul	Harris, Reader (Heston)	Maxwell-Hyslop, R. J.
Buck, Antony	Harvey, Sir Arthur Vers (Macclesf'd)	Maydon, Lt.-Cmdr. S. L. C.
Bullard, Denys	Hay, John	Mills, Stratton
Bullus, Wing Commander Eric	Heald, Rt. Hon. Sir Lionel	Miscampbell, Norman
Burden, F. A.	Hendry, Forbes	Montgomery, Fergus
Butcher, Sir Herbert	Hill, Mrs. Eveline (Wythenshawe)	More, Jasper (Ludlow)
Campbell, Rt. Hn. Sir D.(Belfast, S.)	Hill, J. E. B. (S. Norfolk)	Morgan, William
Campbell, Gordon (Moray & Nairn)	Hirst, Geoffrey	Morrison, John
Carr, Compton (Barons Court)	Hobson, Sir John	Neave, Airey
Chataway, Christopher	Hocking, Philip N.	Noble, Rt. Hon. Michael
Chichester-Clark, R.	Holt, Arthur	Nugent, Rt. Hon Sir Richard
Clark, Henry (Antrim, N.)	Hope, Rt. Hon. Lord John	Oakshott, Sir Hendrie
Clark, William (Nottingham, S.)	Hopkins, Alan	Orr-Ewing, C. Ian
Clarke, Brig. Terence (Portsmth, W.)	Hornby, R. P.	Osborne, Sir Cyril (Louth)
Cooke, Robert	Hornsby-Smith, Rt. Hon. Dame P.	Page, Graham (Crosby)
Cooper, A. E.	Hughes Hailett, Vice-Admiral John	Page, John (Harrow, West)
Cordeaux, Lt.-Col. J. K.	Hughes-Young, Michael	Partridge, E.
Costain, A. P.	Hulbert, Sir Norman	Peel, John
Craddock, Sir Beresford (Spelthorne)	Hutchison, Michael Clark	Percival, Ian
Crawley, Aidan	Iremonger, T. L.	Peyton, John
Curran, Charles	Irvine, Bryant Godman (Rye)	Pickthorn, Sir Kenneth
Dalkeith, Earl of	James, David	Pitman, Sir James
Deedes, Rt. Hon. W. F.	Johnson, Dr. Donald (Carlisle)	Pitt, Dame Edith
Doughty, Charles	Johnson, Eric (Blackley)	Pott, Percivall

Powell, Rt. Hon. J. Enoch	Smyth Rt. Hon. Brig. Sir John	Wade, Donald
Prior, J. M. L.	Stevens, Geoffrey	Walker-Smith, Rt. Hon. Sir Derek
Prior-Palmer, Brig. Sir Otho	Steward, Harold (Stockport, S.)	Webster, David
Proudfoot, Wilfred	Storey, Sir Samuel	Wells, John (Maidstone)
Pym, Francis	Studholme, Sir Henry	Whitelaw, William
Quennell, Miss J. M.	Summers, Sir Spencer	Williams, Dudley (Exeter)
Rawlinson, Sir Peter	Taylor, Edwin (Bolton, E.)	Williams, Paul (Sunderland, S.)
Rodmayne, Rt. Hon. Martin	Taylor, Frank (M'ch'st'r, Moss Side)	Wills, Sir Gerald (Bridgwater)
Ridley, Hon. Nicholas	Taylor, Sir William (Bradford, N.)	Wilson, Geoffrey (Truro)
Ridsdale, Julian	Teeling, Sir William	Wise, A. R.
Robinson, Rt. Hn. Sir R. (B'pool, S.)	Temple, John M.	Wolrige-Gordon, Patrick
Ropner, Col. Sir Leonard	Thomas, Sir Leslie (Canterbury)	Wood, Rt. Hon. Richard
Royle, Anthony (Richmond, Surrey)	Thomas, Peter (Conway)	Woodhouse, C. M.
Russell, Ronald	Thompson, Sir Kenneth (Walton)	Wootlam, John
St. Ciair, M.	Thorpe, Jeremy	Worsiey, Marcus
Scott-Hopkins, James	Touche, Rt. Hon. Sir Cordon	Yates, William (The Wrekin)
Sharpies, Richard	Turton, Rt. Hon. R. H.
Shepherd, William	van Straubenzee, W. R.	TELLERS FOR THE NOES:
Skeet, T. H. H.	Vane, W. M. F.	Sir Gerald Nabarro and
Smith, Dudley (Br'ntf'd & Chiswick)	Vaughan-Morgan, Rt. Hon. Sir John	Sir Henry d'Avigdor-Goldsmid.

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1. BUSINESS OF THE HOUSE 27 words