§ 3.32 p.m.
§ Mr. Iain Macleod (Enfield, West)
I beg to move, at the end of the Question to add:but humbly regret that the Gracious Speech contains proposals for the nationalisation of the iron and steel industry irrelevant to the modernisation of Britain and damaging to the national economy.As soon as it became apparent that the Parliamentary situation would be desperately close, something of a movement was launched to proclaim that it was the duty of the Opposition not to make things too difficult for Her Majesty's Government. Whatever the merits of that proposition, and I for one think that it can be overstated, no one would dispute that on controversial issues, where feelings run deep on both sides of the House, opposition should be clear and clean-cut. We have such an issue before us today.
This debate arises from a sentence in the Gracious Speech. We have also had some elaboration—which I will probe a little further—from the First Secretary. I should like to deal not only with what looks like happening, in so far as we know the Government's plans, but what I think ought to happen. It may be, although I am bound to say that I am not hopeful, that wiser thoughts will prevail, but we have to judge here on the issue before us today and I restate our position now.
To the nationalisation or renationalisation of the iron and steel industry we are 664 utterly opposed. There are no half-measures about our opposition. If we can win tonight, we want to win tonight. If we fail and if, after consultation, such a Bill is produced, then we will try to kill it on Second Reading. If we are defeated, we will do everything we can to improve what would be a thoroughly bad Bill and we will try to cut its throat again on Third Reading. That, I trust, is clear.
I do not propose to say more than a few words on what is called the doctrine of the mandate. I have qouted Disraeli too often, when it suited me, not to remember a phrase he once wrote saying that a majority is always the best repartee—as long as the majority is not fogbound, of course. So it is.
I am not impressed by particular arguments on the mandate relating to particular constituencies. We cannot, in a General Election, "strip the ticket" and take items which we may like or cut out items which we may dislike from the manifesto of the party of our choice. But what seems wrong is this: the Tory Party and the Liberal Party are both wholly opposed to steel nationalisation and it also seems certain that a very large number, indeed, according to the National Opinion Poll, even a majority, of Labour voters do not want this measure. I do not intend to rest my case on the proposition that the people of the country detest the idea of renationalisation, although I am convinced that that is the case. I intend to rest my case on the words in our Amendment which say that such a proposal would be irrelevant and damaging, and I would like to add "out-dated".
Let us see where we are. We have a sentence in the Gracious Speech and we have been told a little more about it by the First Secretary. This succeeds, with the exception of one speech at Middlesbrough on 4th October, a long and calculated period of silence on this issue in the General Election.
§ Mr. Macleod
The Prime Minister denies this. I have read through every election broadcast of the Labour Party, both on television and on sound, and this issue is not mentioned in a single one of them. The Prime Minister's own election address does not refer to it. Nor does 665 that of the First Secretary. Nor—and this, of course, is not surprising, because he has written more eloquently than anybody else against nationalisation—does that of the President of the Board of Trade. Indeed, as soon as the President of the Board of Trade saw the draft of the Queen's Speech, he fled the country. I understand that at the moment he is in Europe. He is one of the doves which have been sent out from the Ark to say that Noah is sorry it is raining.
I take it that the next step is consultation on the basis of the First Secretary's statement. I am sorry that he is not here, but no doubt there are excellent reasons for that. I hope that he will take part in these debates. I know that the Minister of Power will realise that I mean no disrespect to him by that. He and I have debated many times. It is simply that this is not just a matter of power or of heavy industry, but of profound importance for the whole of the country's economy. I hope that the Minister will take his time with the consultations. There is no hurry about them. There is no need for him to think in terms of this year or next. Some time or never would be a much better guide for him to take.
I want to take up only one point from the contribution offered to us by the First Secretary, and this is on the problems of what we can call the mixed firms. On 4th November, he said:… we do not intend to use the nationalisation of the iron and steel industry to bring the main activities of these companies into public ownership."—[OFFICIAL REPORT, 4th November, 1964; Vol. 701, c. 228.]That is a considerable advance—and I pay tribute to it—on the line taken by the Labour Government in 1948. But the Minister will realise that there are very real problems here—the problems, for example, of Tube Investments, which has a new £32 million steel works at Park Gate and which has gone into the steel business mainly to provide steel of the quality which it requires for itself. It is its own largest customer. Then there are the problems of Dorman Long, which has a vast steel interest, but other interests in bridging, engineering and chemicals.
The only point that I want to press on the Minister at the moment is this. We should be grateful if he could tell us when he speaks—I understand that he is following me in this debate—whether he has a clearer idea about the time-table of legislation 666 which will be put before the House. But, even if he has not, I urge him to clear up the issues of the companies whose future is in doubt by means of a separate statement to the House as soon as that is convenient. That is in everybody's interests, and in the interests of the best planning of the industry.
It is clear from all the evidence we have that the main argument which has been put forward by Her Majesty's Government, certainly in recent months, is based on the judgment of the Restrictive Practices Court on 22nd June this year. I want to analyse that judgment and seek to refute the interpretation put by Her Majesty's Ministers on some aspects of the hearing. I wish to state quite clearly, however, that I agree with the verdict of the Court. I, too, have criticisms of the iron and steel industry. I share the desire of the Leader of the Liberal Party to see more competition in the industry. But no one in his senses can think that the way to ensure more competition is vastly to extend State direction and control.
Before I turn to the judgment of the Restrictive Practices Court, which I want to deal with in a little detail, there are some other points of attack which have been made. I think that each of them can be refuted. We have had the argument put forward by the First Secretary and others of the interlocking directorships. The fact is that if we take the 12 major companies—and, for all we know, these may well be the basis of the Government's plan—there are 124 directors. Of these, 114, or 92 per cent., hold only one steel directorship. Of course, there are family firms and they are some of the most successful and efficient in the industry.
It is normal for son to follow father in steel just as it is in the case of doctors and dockers. The Prime Minister invited the steel masters toexplain how any parent whose boy is leaving school and going into steel can have any hope that he will get to the top.That is a fair question, and the simplest way of answering it is to consider who are at the top. The man the Minister will be dealing with most is the President of the British Iron and Steel Federation, Sir Julian Pode. I will tell him how Sir Julian entered the industry. He answered an advertisement in the local newspaper. He is to be succeeded by 667 Mr. Judge, the Chairman of Dorman Long, who, when he was at school, wrote to Dorman Long and asked whether there was any chance of a job going. Therefore, the people who have come from—[An HON. MEMBER: "What schools?"] I happen to know the schools. Sir Julian Pode was educated at H.M.S. "Conway," and Mr. Judge was educated at the Royal Worcester Grammar School.
It is also possible, on questions like the industry's export or import performance, the use it makes of oxygen, which has been referred to by a number of hon. Members opposite, and the percentage of turnover devoted to research, to produce statistics and interpret them, I dare say, in utterly different ways. But all these boil down fundamentally to a view of whether the industry is or is not efficient.
Here I should like to call a witness, not from this country, but from Germany. This is a view which was given in Der Spiegel, which many people know, on 15th April, 1964:The standards of efficiency in the private British steel works hardly deserve Mr. Wilson's criticism that Britain has fallen behind the steel-making countries of the continent. British steel works operate efficiently and profitably. From 1950 to 1962 over £1,400 million was invested in new plant, nearly £200 million more than in West Germany's war damaged steel industry. The British Iron and Steel Research Association has no comparable equivalent in Germany. The final decisive argument against steel nationalisation is that the steel industry is far too complex and too important in the economy for it to be handed over to the State.
§ Mr. Macleod
This was in Der Spiegel. Does the right hon. Gentleman know who writes all the leading articles we quote from The Times or anywhere else?
The reason why the steel industry is wholly unsuitable for the form of nationalisation, or any variant of it, which has been practised before is contained in the very complexity of the industry. One can make a case for ownership of an industry producing one product, as with coal, electricity and gas. But the steel industry is made up of a hundred different industries, not one, and it produces a thousand different products, not one. It is for these reasons 668 that the nationalisation of iron and steel is utterly different in kind from the nationalisation Measures which were put through in the years of the Labour Government after the war.
If we contemplate such an upheaval, it is surely right to look at the structure of the industry in other countries. In the Communist world, the problem is easy. But then they can direct materials, labour and everything else. There is no problem there. In the free world, 238 million tons of steel are produced under private auspices and 23 million tons, or rather less than one-tenth, by associations which are, in whole or part, State controlled. In other words, there is something less than 10 per cent, outside the Communist world which a wide variety of countries think appropriate to have under State control. I cannot believe, therefore, that it is right that Her Majesty's Government should be contemplating moving into the public sector the major part of our iron and steel industry. The onus of proof is, surely, inescapably upon them.
We have, it is true, one nationalised large firm—Richard Thomas & Baldwins, warmly praised by the Chancellor of the Exchequer a short time ago—
§ Mr. Macleod
—but the task of the Chancellor of the Exchequer in two days' time would be not just tough, but impossible, if the profit records of the great firms in this country compared with those of Richard Thomas & Baldwins.
§ Mr. Macleod
No dividend was paid in 1962, none was paid in 1963. The financial year of the company ended on 30th September. So we have plenty of time, if the Secretary of State for Scotland, who is to wind up the debate, wishes to get the figures, for him to give us at least an indication of how this firm has done in the last year. If I may hazard a guess, I think that he will find that the record is little, if any, better than the sad record of the last two years.
I come to the judgment of the Restrictive Practices Court. When the First Secretary was referring to the evidence 669 of Mr. Craig and Mr. Judge and waved a document at my right hon. Friend the Leader of the Opposition, it was not the transcript of the evidence. It was Talking Point No. 18, issued by the Labour Party. Equally, the Prime Minister will remember his speech at Middlesbrough, of which I have the hand-out, giving long extracts from the evidence of Mr. Craig and Mr. Judge.
In passing, the odd thing is that Talking Point No. 18 omits from time to time, no doubt purely for reasons of clarity, quite a number of words from the evidence. The extraordinary thing is that the Middlesbrough hand-out omits exactly the same pieces. It is the same right down to the dots. If the Prime Minister claims that he wrote this speech himself, we had better agree on a joint reference to the Society of Psychical Research.
Talking Point No. 18 is as splendidly tendentious a pamphlet as any I ever wrote and I cannot give it higher praise than that.
§ Mr. Macleod
I shall not quote from it. I shall quote from the transcript. Not one of the key sentences of the judgment is given in Talking Point No. 18, which gives no hint that there is anything to be said for the case on the other side.
There are four such short sentences and I propose to read them from the transcript in full. Two of them tell in favour of the pricing system as it was and two of them argue against. I make it clear that I accept all four. I quote:… the Registrar does not challenge the assertion that the public has at present an adequate supply of heavy steel products of good quality at fair and reasonable prices. He does not dispute that, whether or not the restriction survives, the prices are likely … to be fair and reasonable overall, under the supervision of the Board. He emphasises, however"—these are the second two sentences—his submission that it is not reasonable, nor advantageous to anyone outside the industry, that any individual producer should not be at liberty, if he should wish to do so, to depart from a common price; though it might well be that the occasions on which he would wish to do so would not be frequent. The Registrar further denies that the abrogation of the restriction would be likely to cause any disadvantage to the public in the manner asserted by the Respondents or at all.670 This is the position. There are two main propositions. The first is that under this pricing system, whatever its defects, there are the supplies that people need at a decent price. That is the finding and a judgment of the Court. Secondly, these agreements, although they are not legally binding and there are not penalties for breach, are generally operated so that there is no competition in price. That is the finding and the judgment of the Court. There is, of course, competition in cost and quality, but there is no competition, except for a very minor segment of the field, in price.
I add one more passage concerning the evidence of Sir Cyril Musgrave, Chairman of the Board. It states:We accept the evidence of Sir Cyril Musgrave that he, and the Board, believe it to be desirable, and in the long term interests of the users of steel products, that the Board's maximum prices should usually be charged.The House will remember that included on the Board are such distinguished trade union leaders as Sir Lincoln Evans, Sir Harry Douglass and Lord Williamson.
We have reached this position. There are, I understand, 35 restrictive agreements at home. All of them are registered. One on scrap has been successfully defended. One on heavy steel, as we have seen, has been lost, and that relates to no less than 25 per cent, of the iron and steel output of the country. Six more have been abandoned.
Even if it is right to condemn these agreements—and I believe that it is—it must be right, first, to try to understand how they arose. The truth is that on both sides of industry, and also within the very law and practice and structure of government, there are practices that have their origin in past memories and in present fears of recession. That is where these come from.
Historically, we in this country fear deflation just as Germany, for example, fears inflation. One of the most remarkable examples is in the social services. Virtually the whole of that structure was planned on the assumption, which was made with all the evidence available at the time, that there would be 8 per cent, unemployment after the war. From this comes largely the idea of the retirement pension. From it comes 671 in its entirety the earnings rule, which causes so much anxiety to people all over the country. It was fear of recession that led to the building of the social service Beveridge structure that we have now.
If I may take an example of a restrictive practice from labour, I remember very well that when I was Minister of Labour almost the very first problem that came on my plate was the problem of what came to be called the screwy strike, the strike at Cammell Laird. At first sight, that strike about who would do certain jobs and the argument about demarcation seemed absurd, but the more I looked at it, the more I understood something which, perhaps, I had not understood before, that this and, I believe, all restrictive practices had their common origin in fear. People were afraid of unemployment. They were afraid, too, that newer skills and crafts would take away their opportunities.
So I come to consider the problem that is in front of us now. It is much older than nationalisation in 1948 or denationalisation in 1953. For 30 years, as the whole House will remember, in good times and in bad, in war and in peace, there has been public supervision of uncompetitive prices. It is the fear of recession all the time that has led to this. It is certainly true that this system survived the recession of 1961 and 1962 much better than did the basing point system of the European Steel Community. I am quite certain that the Liberal Party has underestimated the failure of the European pricing system to deal with the recent recession.
What happens now? I see that Mr. Paul Chambers of I.C.I., has called for a standstill. Well, I dare say that both the Minister and myself and the Leader of the Liberal Party would be all for a standstill as long as we could define the terms ourselves, as long as we could say at what moment the music stops, but I ask the Minister whether he has thought out—putting for the moment his own plans, if he has any, on one side—the ordinary consequences of that judgment in June of this year, because I think that he will find that he is tilting at windmills.
This is the dilemma. After 30 years the pricing policy of this industry is in 672 complete disarray. There has been a turmoil of arguments going on ever since. I have no doubt that the Minister knows that, and I am sure that the Ministry knows that, too. Of course, one can say, and I dare say there is some truth in it, and I dare say that it will be said, so I may as well say it first, that any change here is a deathbed repentance, but, nevertheless, the impetus has come not from the General Election, as I have shown—because, clearly, it comes far behind that—but from this judgment of the Restrictive Practices Court.
It seems to me that whichever party had won the election a few weeks ago the Minister of Power, be he Tory or be he Labour, would have had to have careful and detailed talks with the Iron and Steel Board and with the industry. [HoN. MEMBERS: "Ah."] It seems to me probable—indeed, almost certain—that these agreements will have to follow the heavy steel agreements into oblivion. I think that they will be abandoned, and in my view it is right.
§ Sir Spencer Summers (Aylesbury)
My right hon. Friend is assuming that all agreements are for the purpose he is describing and similar to one another: he has referred to fears of recession. What I would ask him to remember is that there is another fear which lies behind those agreements—the fear of excess capacity, brought about largely by Government intervention.
§ Mr. Macleod
Yes, but I am sure that my hon. Friend will realise, because I know that he has studied the transcript, too, how much of the emphasis both of the evidence and the judgment was on this single point of recession. I believe, therefore, that, quite irrespective of any proposals—we shall get them in due course—the Government are to put forward, it is right that those agreements should go, except, of course, for the ones like scrap, which have been successfully defended before the Court.
The reason really is this. If the industry is confident that a major recession is unlikely I can see no case for retention, and even if the industry is doubtful—and heaven knows the steel industry has seen many recessions—then I think that it should accept the view of the Restrictive Practices Court that perhaps the fears may be exaggerated.
673 If I am right in this, that because of a judgment that has cancelled an agreement affecting 25 per cent, of the steel products—if I am right in thinking that the others, which are similar to that agreement; and this covers the great bulk, if not all agreements—will go, we shall then have a situation which the Minister would have to consider with the industry and with the Board. He would have to look at the structure of the industry, and, in particular, at the powers of the Board. He would have to consider whether it should have power to fix minimum as well as maximum prices. He would have to consider what its power should be over imports and investment.
I ask the Minister—I agree this is a hypothetical situation, but his information must be better than anyone's in the House—what he will do then. Will he just welcome the new situation and ignore it? Because if his only argument disappears—and I have tried to show him that it is not as good an argument as he thinks—do we then still have a Bill?
Do we then have a year of Parliamentary turmoil, with the wheelchair vote mobilised, and a whole new period of uncertainty in the industry, just so that the Minister can have the pleasure of administering a ritual flogging to the dead horse of uncompetitive prices? Is that what we are to do? Is that what the House is to be asked to do? Because I say quite clearly that if he does, if he ignores this new situation which I am confident is coming, I do not believe the country will lightly forgive him.
In the leading article in The Times this morning—and I do not know who wrote this, either—the Opposition are invited to make their position plain in relation to the judgment of the Restrictive Practices Court—I have done that—and also to say what would happen—and I have given some indication to the Minister—in relation to the structure and the powers of the Iron and Steel Board, but it also sets forth a challenge to the Minister, to the Government, and I quote:It is also high time the Government deployed their case (if they have one which looks beyond party exigencies), for reverting to block nationalisation in the case of a profitable, technologically fluid, and internationally oriented industry.We have today, whatever the Minister will tell us, whatever course all these 674 negotiations may take, a clear-cut issue. This is put in the words of the Economist in the issue of 31st October:No shadow of a rational case has been put forward for the wholesale nationalisation of steel. The division among serious commentators is between those who believe that this nationalisation will do a great deal of harm and those who believe it will do only a little.What an ambition for the House, for Parliament, to set out on—a measure of which it can be said that if we are lucky, and if everything goes well, we may do only a comparatively small amount of harm to one of the vital industries of the country.
I said earlier that the word "outdated" also applied to the Government's proposals. We have had many indications already in the short period of this Parliament. We had the Minister of Transport's statement—and at once somebody rose and asked the question about the Grand Central line, of which he said there were 61 miles of track and 1,500 railwaymen. What a sense of priorities: 61 miles of track, 1,500 railwaymen, and practically no passengers.
It is no use pleading for the last century. The point has been put very clearly in the potted version of the 1964 Labour election manifesto. This is what it said:Let us take charge of our own destiny. Create and energise an atmosphere where both sides of industry can collaborate with the Government in rejecting nineteenth century solutions to twentieth century problems.This is exactly the argument we put before the House. For what is this proposal except the application by small and foolish men of a nineteenth century solution to what is a mid-twentieth century problem?
§ 4.10 p.m.
§ The Minister of Power (Mr. Frederick Lee)
In welcoming back the right hon. Gentleman at least to the fringe of the magic circle from which he and his right hon. Friend the Member for Wolverhampton, South West (Mr. Powell) were excluded, may I say that I was just a little alarmed when he began to show his old weakness for trying to forecast the future; a weakness which has revealed itself on many occasions. We all remember the speech in which he tipped Leicester City to win the cup at Wembley, and the Conservatives to win the General Election. His supporters did not get 675 much out of that double. Manchester United won.
We remember, too, the more historic occasion during the "October revolution" of 1963 when he assumed thatif the situation is going to jell quickly the choice must be Butler.On a happier note, he also reminded us on one occasion that the motto of the Clan MacLeod was "hold fast", a motto which the steel owners immediately took to their bosoms.
Today, the right hon. Gentleman gave us a number of variations on the same theme, but I think that he rather forgot one thing. He forgot that he was moving an Amendment which says that the nationalisation of the iron and steel industry isirrelevant to the modernisation of Britain and damaging to the national economy.The right hon. Gentleman did not address two minutes of his speech to that Amendment. We had a turgid defence of the position of the steel owners, which was merely a paraphrase of their own propaganda slogans. To us it did not sound in the least like the progressive utterances of the image of Tory radicalism. Indeed, it sounded much more like something from Sir Alec's "Quoodle", than anything from a Tory radical. However, we are sure that in his belated support of his Leader he will display all the enthusiasm of the convert.
The right hon. Gentleman asked one or two questions which I should like to answer. He asked whether I would clear up the position of those firms which have interests outside steel. I understand the point very well. I am not today going beyond the statement made by my right hon. Friend the First Secretary, but I undertake that as soon as it is possible to clear up this point I shall do so, either in a statement in the House, or elsewhere.
We heard from the right hon. Gentleman about the opinions of Der Spiegel against nationalisation. I do not know whether he has looked back at the opinion of the Spectator in 1958, when it held an inquiry into steel and decided that there was a case for a large percentage of the industry to be nationalised.
§ Mr. Ian Gilmour (Norfolk, Central) rose—676
§ Mr. Gilmour
On a point of order. Mr. Speaker, is it in order for the right hon. Gentleman so flagrantly to mislead the House as to describe 10 per cent. of the industry as a large percentage?
§ Mr. Speaker
I have two observations to make. First, that does not raise a point of order. Secondly, my predecessors in terms deplored the practice that when the hon. Member who has the Floor will not give way an hon. Member who wishes to intervene uses the device of raising a point of order.
§ Mr. Lee
The right hon. Gentleman —[HON. MEMBERS: "Withdraw."] What have I to withdraw? The right hon. Gentleman agreed that the whole pricing structure of the steel industry was in disarray. That has come a little late, has it not? Did we hear a word about that prior to the General Election? The right hon. Gentleman said today that whoever became Minister would have had to do something about the disarray within the steel industry. Why did not the last Government begin to do something about it? The right hon. Gentleman can claim that he was not in the last Government. I do not wish today to expound on the reasons for that, but the disarray of which he spoke did not begin a year ago. It began with the passing of the 1953 Act, and the situation has deteriorated in every year since.
It is not, therefore, true, as the right hon. Gentleman tried to suggest, that the time had come when even the Tories would have to agree to look at the results of their 1953 Act. The fact is that that Act has always been an anomaly fastened around the neck of the steel industry. When the right hon. Gentleman talks about the disarray now to be seen in the steel industry, he is, in fact, indicting the 1953 Act which brought it about.
§ Mr. Macleod
With respect to the Minister, it is not the 1953 Act which has brought this about. It has been brought about by the setting up of the Restrictive Practices Court in 1956, and the judgment of that Court in June of this year. Will the right hon. Gentleman address himself to this point: that judgment, in effect, abolished the pricing agreements for 25 per cent, of the industry. The Minister will not deny that. 677 Does not it follow that the other consequences which I indicated flow from the decision taken by the Court in June of this year?
§ Mr. Lee
I really am surprised at the right hon. Gentleman. Let us examine what happened. In 1953, the Tory Government passed the Act that he and I are discussing. That Measure produced the Iron and Steel Board and gave it certain powers. Later, in 1956, they brought into being the Restrictive Practices Court, and the very powers they had conferred on the Iron and Steel Board have now been condemned as a result of the 1956 legislation which brought the Restrictive Practices Court into existence.
There could not be a clearer case of the same Government passing two Acts, one of which completely cancels the provisions of the other. I therefore again assert that the whole position into which the steel industry has passed is the result, first, of the 1953 Act, and then the action of the same Government in bringing the Restrictive Practices Court into being in 1956.
As I have said, the right hon. Gentleman failed to address himself at all to his own Amendment, and I ask him now: why is it that today we are discussing steel instead of coal, for example? [HON. MEMBERS: "Why?"] Yes—why? Why is it that there has never been any suggestion of denationalising coal or the railways? Why is it only steel?
The right hon. Gentleman quoted Disraeli, but organised hypocrisy is the background to this debate; in other words, the only thing that the Tories are concerned about is that in 1953 they denationalised the dividends of the steel industry. The 1953 Act stultified any rational reorganisation of the industry. That, in turn, retarded the economic expansion of vital parts of our economy, and has now brought the condemnation of the Restrictive Practices Court of price-fixing arrangements that are against the public interest.
The right hon. Gentleman tried to talk his way out of this—[HON. MEMBERS: "Oh."] All right, I will quote extracts from the document he has, and challenge him to deny that these are extracts from what was said in the 678 court. [HON. MEMBERS: "Who wrote it?"] Does the right hon. Gentleman deny that questions such as the following were put to Mr. Craig?Question: For the last 30 years or so the steel industry has always had price regulation of one form or another, which has eliminated competition between steel makers?Does he deny that Mr. Craig replied, "Yes"?
Does he deny this?Question: From the customers' point of view, the position has been that, no matter with what British steelmaker he has been dealing with for a given order of steel, he would be quoted the same price and upon the same terms'?Mr. Craig: Yes.Does the right hon. Gentleman deny this?Question: And the industry has set its face against any individual variation from those prices or terms by any steelmaker?Mr. Craig: Yes.Later, the right hon. Gentleman quoted Mr. Judge, but does he deny that Mr. Judge was asked:In 1953, as a director of the Dorman Long group of companies, did you welcome denationalisation?Mr. Judge: Yes.Question: Why?Mr. Judge: Because I felt that under denationalisation there would be a return to greater private enterprise and initiative within the company.Question: But is not competition in price one of the fundamental characteristics of private enterprise?Mr. Judge: Yes, but not as applied to the steel industry in my view. I do not accept it as an essentially good thing for the steel industry.Question: It is right, is it not, that as soon as steel was denationalised in 1953, the steel industry entered into … price fixing agreements?Mr. Judge: I should imagine so, yes.Question: So that … the steel industry did not grasp the freedom that it was offered upon denationalisation?Mr. Judge: … as far as price is concerned, no, it did not grasp it.No matter how the right hon. Gentleman tries to squirm round the evidence given in that Court, those are the facts as recorded in the Court.
The right hon. Gentleman began by using, though not for long, the old argument about mandates, and so on. I do not propose to go much further than he did but, as he mentioned it, I will 679 comment on the same subject. In the General Election there was a national swing to Labour of 3.7 per cent In case the House is interested in my own credentials, the swing in Newton was 5.3 per cent., and I represent the steel workers in the Lancashire Steel Corporation.
I regret to have to record for the benefit of the House that the swing to Labour in Enfield, West was 5.1 per cent., and in Flint, West it was 3.2 per cent. In Flint, East, where my hon. Friend the Under-Secretary of State for the Colonies was defending a majority of 75, and was attacked by one of the most powerful of the steel corporations, there was a swing of 4.1 per cent, to the Labour Party. The average swing in 30 steel constituencies was 4.4 per cent., and only four of those fell below the regional swing. There were three Labour gains in the steel constituencies—Cleveland, Rutherglen and The Hartlepools. On constitution, therefore, perhaps one can leave it at that.
In booklets published during the summer by the British Iron and Steel Federation—"Steel: the Facts" and "Steel: Leave Well Alone"—it was pointed out that for the past 30 years public intervention in steel has taken the form of public supervision exercised over privately-owned companies, a unique attempt to get the benefits both of private dynamism and of central guidance. That is the Federation's comment. The Government's case is that the attempt may have been unique but that it has not been successful. This is no accident. It is, we believe, an inevitable result of a situation in which the industry lacks both the stimulus of full competition and the responsibility of public ownership.
The Leader of the Opposition has said that by nationalisation we will destroy the competitiveness of the steel industry —[Interruption.] The right hon. Gentleman and I are agreed; there is no competitiveness to destroy. The Leader of the Opposition probably got the matches in the wrong match box on this occasion. What are the facts? Before the Restrictive Practices Court it was established that the industry operated agreements under which it charged uniform prices, which were the maximum prices fixed by the Iron and Steel Board. In short, there 680 is no competition in prices. Whatever else we may disagree about, we can agree that there is no competition in prices at all. [HON. MEMBERS: "What about exports?"] I will come to exports.
Moreover, the industry failed to satisfy the Court that these restrictive arrangements were necessary in the national interest. In his evidence to the Court, Mr. Lenaghan, the Managing Director of the Fairfield Shipbuilding and Engineering Company Ltd., made it very clear that inflexibility in steel prices was a handicap to the efforts of the shipbuilding industry to secure export orders. Someone asked about exports—I am now trying to oblige. Therefore, whatever might be the case for regulating actual prices charged, I am quite sure that it ought not to be left in the hands of those whose first responsibility is to their shareholders rather than to the nation as a whole.
There is, in fact, a fundamental inconsistency between the Iron and Steel Act, 1953, and the Restrictive Trade Practices Act, 1956. This is the argument that the right hon. Gentleman and I have been deploying. But let us look at the muddle into which the previous Government got themselves. I shall quote from a journal which is not exactly a supporter of the Labour movement. The muddle into which they got themselves was put very well, I thought, in the October issue of Steel Review, the monthly publication of the British Iron and Steel Federation. I quote its words:In the mid-fifties public policy became schizophrenic. On the one hand, the Government continued consistently to acquiesce in an Iron and Steel Board pricing policy which was non-competitive in concept; but, on the other hand, by making steel pricing subject to the Restrictive Practices Court in the 1956 Act it backed, too, an implicit assumption that steel pricing should be competitive … the decision of the Restrictive Practices Court in the Heavy Steel Case is just this. It has exposed the basic conflict of logic underlying the two strands of recent public policy bearing on the way in which the steel industry should be made to conform to the public interest, whether by the disciplines of a supervisory machinery associated with non-competitive pricing, on the one hand, or by the disciplines of a competitive market, on the other. Such confusion cannot long continue to prevail.I agree with the right hon. Gentleman in this: that confusion cannot now be permitted to prevail.
Let us look at capacity. We welcome the fact that this year the steel industry 681 has now sufficient capacity to meet a record level of demand. But we do not forget that until two or three years ago, owing to the reluctance of the industry to expand, capacity was insufficient to meet the demands imposed even by the stop-go Tory economy. As a result, between 1953 and I960 inclusive we had to make good the inadequacy of our capacity to produce steel by imports at a total cost to the economy of £560 million.
Over the next few years the industry should be able, without great difficulty, to provide the steel-making capacity needed to sustain a growth of the economy generally at a rate of about 4 per cent, per year. But the Government are concerned not only with five years ahead, but with providing the pace needed for continuing rapid growth. We shall soon have to start planning for the provision of large new integrated steel works. A major new works on a green field site is likely to cost now at least £150 million. It is more than doubtful if the industry under private ownership will either be able to provide finance on this scale or willing to put up the money needed to ensure that there should not be just a bare minimum of capacity, but sufficient to cover contingencies so that steel in no way acts as a bottleneck to the expansion of the economy. It is significant that since the passage of the Iron and Steel Act, 1953, well over £400 million of public money has been put into the industry either by the Ministry of Power or by the Iron and Steel Holding and Realisation Agency.
The right hon. Gentleman talked about service and quality. A great deal has been made of the claim that there is effective competition in this field. I do not wish to denigrate the efforts of any part of the steel industry. There is certainly no doubt that the best British steel firms observe the highest standards in both these respects. But again, consumers appear to have all sorts of doubts and to be quite dissatisfied with some of the results. Sir William Lithgow, Chairman of Lithgow Ltd., writing in the Financial Times on 18th November, 1963, said:The most progressive steel suppliers to the shipbuilding industry have turned their attention to service and have appreciated the economic wastage stemming from their industries' former policy of production without regard to user requirements. Nevertheless, it is still virtually impossible to buy in Britain 682 ship's plate sheared with its edges straight … this means that every plate has to be re-marked and re-cut before it can be welded or placed in automatic machines. Frequently a steel order has to be delivered to the yard within a month of the ship-builder receiving his contract; some newer mills have not yet been designed to meet the demands so imposed. The shipbuilder cannot afford to pay for overweight sections, nor can the shipowner afford to cart this excess weight around in lieu of cargo.This is not from a person with our inclinations. It is from a practical man within the industry, and I ask that hon. Members opposite should not believe that these things are put up merely for the sake of carping against a great industry.
It is also significant that although capacity is now adequate imports of steel are continuing on a substantial scale. I know that there are some special reasons for this, but these by no means account for the high level of imports. In particular, they certainly do not account for the fact that imports of sheet steel are still costing the country about £24 million a year, despite the fact that our very fine new strip mills financed by public money are in full operation.
The motor industry is the largest single importer of sheets and the Iron and Steel Board has discussed the position with all the principal importers. In no case was it claimed that imported sheet was cheaper than British. One large producer insisted that the imported material was more consistently of high quality than that from British mills. Several motor manufacturers said that they were not importing on quality grounds, but to maintain alternative sources of supply. They have been treated pretty roughly during the days of shortage by some of the steel companies. They are not going to take that kind of chance again. These are many of the points which we feel justify a drastic change within the steel industry.
An hon. Member asked me about exports and I shall try to do what I can to help him. The point has been made that steel exports this year will reach a record level of 4½ million ingot tons. This is largely because the existence of some surplus capacity has led to a generally higher level of trade among all the major steel producing countries. I was shocked, when I went to my present Department, to learn that the Iron and 683 Steel Board expects no increase at all in steel exports between 1964 and 1970, and that the British Iron and Steel Federation looks forward to a slight decrease.
Is that a position which the House can view with equanimity? We are already committed to the concept of increasing modernisation and exports. We are asking whether we can hope to maintain good living standards under conditions of that type. The industry's attitude is exemplified by its demands for a world steel conference which would not, like the conference suggested by the Liberal Party, be concerned with reducing tariffs and increasing trade, but with regulating international trade to provide a cosy home market at the expense of export opportunities.
May I turn to the question of efficiency within the industry. The Opposition—as the right hon. Gentleman did today—claim that the iron and steel industry operates at a high level of efficiency. But the Iron and Steel Board has told me that the indications are that the level of productivity in the British steel industry is probably only about half that of the United States, that it has recently been passed by Japan and that it appears to be lower than in the steel industries of the Six. Surely that is a state of affairs which none of us can afford to contemplate with equanimity.
Moreover, over the past 10 years British steel prices have increased by one-third. By contrast, in Germany and Holland prices have gone up by only one-sixth. [HoN. MEMBERS: "Are they nationalised?"] In France they have risen by a little over one-twentieth and in Italy they have actually fallen.
§ Mr. Nigel Birch (Flint, West)
Would the right hon. Gentleman tell us by how much the price of coal has risen?
§ Mr. Deputy-Speaker (Dr. Horace King)
Order. If the right hon. Gentleman does not give way, the hon. Member for Cheadle (Mr. Shepherd) must resume his seat.
§ Mr. Lee
May I turn to the question of research. The criticisms which we made in the past of a lack of expenditure on research were fully confirmed by the special report which the Iron and Steel Board made on research in 1963. Though, like the Government, the Board recognised that the industry had many achievements, it pointed out that a substantial increase was called for in the research effort of all branches of industry; that a considerable increase was required in the resources devoted to long-range research involving radical changes in techniques; that the provision for large-scale research work should be increased; and that arrangements should be made more frequently than in the past for such large-scale work to be financed co-operatively.
I was glad to learn, on taking office, that there has been some improvement since the Board's criticisms in its survey. Research expenditure appears to have increased quite appreciably in the industry as a whole; four major companies are planning substantial additional facilities for laboratory research; and a new iron-making laboratory is to be constructed for the British Iron and Steel Research Association. But the Government know of no plans for increasing the resources devoted to long-range research or for the provision of adequate facilities for largescale plant work within the industry. Surely this is the key to applying the results of research quickly and effectively.
Hon. Members opposite ask me what nationalisation has to do with this. I have concentrated so far on examining the claims of hon. Members opposite. My examination has shown that many of the claims which they make for the privately-owned industry are wildly exaggerated. More important from a national point of view, my examination has shown that there are many serious shortcomings in the industry as it is at present organised. These call for strong and for drastic action.
But the Government base their case for nationalisation not only on the shortcomings of the industry, but also on two 685 positive arguments. First, the iron and steel industry, in terms both of size and of the extent to which other industries rely on its products, is one of our great basic industries. It employs over 300,000 men and women—more than electricity or gas supply. The value of its sales is greater than the value of the sales of the coal and the gas industries combined. Capital expenditure in 1961 totalled £225 million. With the completion of the expansion programme launched in the mid-1950s, capital expenditure has fallen to £60–70 million a year; but even this is only slightly below the regular rate of capital expenditure in the coal and gas industry.
On any reckoning the iron and steel industry plays a most formidable rôle in the economy. Its efficiency is vital to the efficiency of those other major industries which use its products—motor manufacture, ship building, engineering, to quote but a few. In the Government's view this industry is one of the "commanding heights" of the economy which must be brought into public ownership.
Secondly, quite apart from the impossible position of the Iron and Steel Board, which I have already discussed, big changes in the structure of the industry are needed to make modernisation and rationalisation possible. There is, for example, the situation at Scunthorpe, where there are three major works in close proximity but under separate ownership. There is an admitted need for the rationalisation of plate production in the North-East. There is a need to consider as a whole the facilities for the import of iron ore into South Wales. There is a problem of surplus rail-making capacity.
The industry is, to its credit, trying to sort out some of these problems. We understand, for instance, that discussions are going on between Dorman Long and Consett which, if successful, would result in a big step towards the rationalisation of plate production in the North-East. But an industry consisting of about a dozen large groups and a large number of small companies, even though prodded and guided by the Iron and Steel Board, simply cannot achieve the swift and far-reaching rationalisation which the national situation demands.
I know that alternatives have been suggested to nationalisation. One possibility which has been mooted would be 686 to abolish the arrangements for public supervision and rely on competition to bring about the necessary reforms. The right hon. Gentleman certainly did not advocate that. The Liberal Party has not advocated it, nor does the industry advocate it. The plain facts are that the steel industry is too important to the whole of our economy to be dealt with in that way. And the existence of a strong central federation, which is needed to provide essential common services for the whole industry, combined with the well-known distaste of the steel makers for full competition make this a quite unrealistic policy.
The steel industry has an inherent tendency towards monopoly practices and in almost every major producing country—and I stress "every major producing country "—it is subject to special regulations. Even in the United States, with its strong anti-trust laws, the industry manages to practise effective price leadership. Both the late President Kennedy, as the House knows well, and as recently as last week President Johnson, have had to make it clear that prices cannot be decided by the industry alone.
The other alternative which has been discussed would be a strengthening of the Iron and Steel Board. It has been suggested that the Board should have powers to try to impose price competition and schemes of rationalisation. Such powers would certainly put the Board in a stronger position than it is now, but price competition seems almost impossible to impose on a pretty well closely knit steel industry. In France and Germany the steel industries have on the whole been able to maintain common domestic prices despite the E.C.S.C. price rules. There is no guarantee that the introduction of these rules, and the large and complicated machinery of supervision which such rules entail, would lead to any worth-while degree of price competition in a market as small and as compact as that of the United Kingdom.
If we look at the pre-war experience of both the Coal and Electricity Commissions, we find that when those commissions were set up in those days they had the greatest difficulty in functioning at all, and ultimately they were replaced by nationalisation. My feeling is that even if, by a strengthened Iron and Steel Board, we were to try to achieve 687 that kind of thing, the process would be far too slow and the solution of nationalisation, as in the case of coal and gas, would ultimately have to be faced.
The Liberal Party has suggested that a strengthened Iron and Steel Board should be combined with a majority shareholding in four major companies, but that would not be anything like sufficient to secure the immediate and drastic changes which the national situation demands and would not bring about effective competition which could be achieved.
The directors of the partly-publicly-owned companies would have an awkward double responsibility—to the Government to act in the public interest, and to their private shareholders to maximise profits. We recognise that there are some industries in which Government ownership of some of the shares may be justified as being reasonable, but the role of the British steel industry in the economy calls for a far more all-embracing policy than that kind of thing.
The Government want the scheme for nationalising the main part of the iron and steel industry to be the best that can be worked out. We are already studying the ideas formed when we were in opposition, in the light of the fuller information now available to us. I wish to reiterate the assurance given by the First Secretary of State on Wednesday, 4th November; that within the broad framework of our policy the Government would welcome discussions with the Iron and Steel Board, the Iron and Steel Holding and Realisation Agency, the representative organisations of the industry, and the trade unions and other interested organisations, including those representative of consumers of steel.
Nevertheless, the Government are convinced that only public ownership of the main part of the industry will make it possible to remedy the industry's shortcomings with the speed and determination which the national situation demands and to ensure that the industry as a whole plays its full part in plans for economic recovery and expansion.
Despite what has been said by hon. Gentlemen opposite in their propaganda, nationalisation has shown that under good leadership publicly-owned industries can fight vigorously for sales in difficult markets, can carry through major revolutions 688 in technology and can bring about big improvements in efficiency and productivity. The public sector of the iron and steel industry will bring the same drive to its problems and match the achievement of our most successful public industries.
During the past few years we have been seeing competitive private enterprise as such becoming more and more a figment of Tory mythology. [HoN. MEMBERS: "Oh."] We have seen the actions of the take-over bidders, and so on. I recall that some years ago the party opposite issued a list of 500 firms which, it was said, a Labour Government would wish to take over. Of those 500 firms, 112 have been gobbled up by private monopoly. They had a total capital in the region of £900 million.
This has been the tendency in recent years. It is worth noting that among the firms listed by the party opposite were three in Enfield. They have all been gobbled up and I would like to know why we cannot hear the voice of Enfield demanding independence for the industries there, instead of seeing them gobbled up by private monopolies.
We must face the problem of having great economic power blocs, such as the the private monopoly in steel, being a threat to the progress of our democracy. No Government, no House of Commons is powerful enough to control the actions of such huge economic power blocs. In the steel industry we have arrived at the time when either private monopoly continues to grow or we take the step proposed by the Government. Indeed, it is worth remarking, when speaking of power, that in the last two General Elections those giants spent far and away more on peddling their wares than the three political parties combined could afford to spend. They have intruded into our political arguments to the point where political argument between the parties is made difficult.
The Tories should not be too convinced, when discussing the amount of money spent on elections, and so on, that this will always be the case, for I believe that if hon. Members opposite were to campaign now to try to get competition into the industry another £1 million would be spent trying to stop them doing it. So hon. Gentlemen opposite should be under no illusions.
689 I put it to the House that it is not enough merely to say, as the Liberals say, "Surely we can maintain some type of competition within the steel industry". We have said—and I hope that the Liberals will study our words carefully—that we are not talking about the whole of the industry. If the Liberals want to do what they say they wish to do, and oppose monopolies, they certainly cannot go into the Tory Lobby tonight, for that would be to perpetuate the worst possible type of monopoly conceivable—the private monopoly, irresponsible to Parliament and Government.
I suggest to the House and the country that to speak as the Tories do and to say that this is merely dogma from the Labour movement is nonsense. What we are proposing will result in a further step in the progress of our democracy. Without such power we have an emasculated democracy, within which the people cannot determine the kind of society in which they wish to live. We aim to retain for the people the power to say that something should be done which will enable them to control great private monopolies of the kind I have described.
§ 4.57 p.m.
§ Mr. Patrick McNair-Wilson (Lewisham, West)
It is with great humility that I rise so early in my political career to address the House, although the subject under discussion is one about which I have a certain amount of first-hand knowledge, having only recently been connected with the British steel industry.
I have been greatly encouraged in this enterprise by noting, since I was elected by my friends in West Lewisham, the generosity shown to new hon. Members making their maiden speeches, and I hope that when I have completed my remarks it will not be considered that I have strained too heavily on that generosity. I should like also to pay a warm tribute to my predecessor and friend, Mr. Henry Price, who is a much loved and respected person in London and particularly in West Lewisham.
It is sad that the British steel industry has for so many years been a victim of party political warfare because, although it has its problems, I do not believe that these have been in any way helped towards solution by it becoming a sort of political football. It is difficult to talk 690 about the steel industry without some emotion and, because of this, one can often get the arguments about what should be done somewhat blurred.
I should have thought that if we looked back over the history of nationalisation and nationalisation attempts for the steel industry, we should be struck by the fact that in 1947 the then Labour Government made a serious, and I believe rightly so, series of attempts at compromise within their own ranks on the issue of nationalisation since this is not something which can be rushed at quickly. I should have thought that in examining what one is to do with the industry one must, at the start, ask oneself what on this side of the House is our real opposition to it being made a State monopoly.
It is the Government who are really in the dock about nationalisation because it must be proved that the industry will be better as a State monopoly than as a private enterprise organisation. The first criterion I should take if I were going to examine it in this way is that the British steel industry at present is, despite what others may say, efficient and that it is not suited—and I will examine this in more detail shortly—to an over-centralised type of control and that its continued efficiency is absolutely essential to the well being of the country's economy.
If we look at the efficiency of the industry as it stands at the moment, in spite of what has been said by critics, we find that this year its production is running at a record level of 26 million tons. This is 3½ million tons up on the previous year, and all the pointers show that next year it will be higher still.
There is tremendous production for export. Our exports are double what they were in 1946, and our exports to Europe have gone up by 45 per cent, in the last two years. If our steel is so expensive as critics suggest, why is this so? We have heard much about price rings within the industry, but of course those price fixings apply only to home prices. In the export market British steel compares with any in the world and it is cheaper than much of the steel produced in Europe.
In talking of steel exports one is apt to think of large tonnages of steel, but I am not so sure that that is what I want 691 to see. We are a workshop nation and surely we should be turning the steel we make into other things and sending them abroad. By that yardstick we find that 57 per cent, of all British exports are of steel and steel-made goods—motor cars, aeroplanes and so on. If we look at the export record of a nationalised industry, we find that in the British coal industry in the period 1938 to 1963 exports fell by 28 million tons, whereas steel exports in the same period rose by 100 per cent.
I now mention a problem with which the industry has suddenly been faced as a result of the 15 per cent. surcharge on imports. The steel industry now finds itself in the situation in which at very short notice we may be required to produce another 1 million tons which, from a Government committed to planning, raises enormous problems since it might well mean that we shall also have to produce additional iron capacity to make steel and to blow in new blast furnaces. For a short-term programme that is hardly an economic thing to do.
I have mentioned efficiency and I now take the second criterion, centralised control. As my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) pointed out, the British steel industry is enormously complex. It is made up of nearly 300 different companies and often the finished product of one company is the raw material of another. These 262 companies are tremendously interlocked because they depend on each other to work satisfactorily. In deciding how nationalization—State control or whatever we call it—is to be implemented, the definition problem of knowing where to draw the line in this is almost insurmountable.
This was found in 1951 when the industry was nationalised for a brief period. The then Government found themselves owning hotels, umbrella factories and all sorts of things which they had taken over as a result of making a clean sweep. I understand that the present Government do not intend to do that again, but that they intend to take over the 12 big producers responsible for most of the crude steel production. There they will run into another problem. If they take over the 12 main producers what are they to do about the rest of the industry? How can they keep the re-rollers 692 and the light end of the industry under control?
The British steel industry is a peculiar animal which already has a kind of control that would not be acceptable in other public enterprise systems. Is the Board, therefore, to have new powers, or are the Government to use the powers given to them by taking over the 12 key companies to squash the re-roller and light end of the industry by not supplying them with steel as required? What is euphemistically described as rationalisation in this industry could be very serious. Take, for instance, what the Minister said about the North-East Coast and the Scunthorpe area. Does it mean that Consett iron works are likely to be closed down in this rationalising of the North-East Coast? I am not sure that it does mean that, but, particularly in certain areas where population living around a steel works is not only dependent for employment on the steel company but perhaps also for town gas, chemicals and so on, rationalisation would have very serious effects on the workers in the industry if it were not carried out with great sympathy.
On the question of prices, I listened with great interest to my right hon. Friend's comments on the present structure because, of course, the apparent monopoly practices regarding prices have meant great criticism for the industry in the past, but this has referred to home-priced steel only. In the export field our prices are fully competitive. I do not understand how replacing the existing system by a State monopoly on prices can improve the situation. While I thoroughly support what my right hon. Friend said about scrapping the present arrangements, we must remember that the steel industry supplies to the manufacturing industries, and surely a stable price level for the motor manufacturer and the aircraft manufacturer is something which should be encouraged. We do not want sharp fluctuations throughout the pricing range.
Finally, my criterion of efficiency of the industry is in relation to Britain's economy. I believe that at the moment the industry is well led. Surely the yardstick in which we must be interested when looking at the management of an industry is, does it work efficiently? I hope I have shown that it does. In respect 693 of what my right hon. Friend said about father and son in the industry, steel is a peculiar creature, rather like coal or fishing—about which I known nothing—or the medical profession or the law. The father is followed by the son. Charges of nepotism which could perhaps be brought at the boardroom level could also be made al other levels throughout a steel works.
On the charge that leaders in the industry have to go to a particular school or come from a particular environment, one finds in one North-East Coast company—and there are other examples—that of 11 directors the chairman went to the local State grammar school and three of the others entered the firm as apprentices. There is a cross-section in the industry operating it. In both management and operative training schemes the British steel industry is second to no other industry in the country. Its qualifield manpower is increasing at the rate of about 10 per cent, a year.
I believe that the steel industry is doing excellently in Britain for Britain. It is possible to produce percentage comparisons between ourselves and other countries to show that we lag behind, but percentage comparisons, unless very carefully studied, and unless taking and comparing like with like, are often fallacious, because it can be shown that one ton of steel has been made this year, that two tons are made next year, and that therefore there has been a 100 per cent, increase in production.
The British steel industry is working at about 90 per cent, capacity at the moment. It has produced enough steel for an expanding Britain. I believe that it has much to be proud of. I am sure that nobody on either side of the House wants to see the industry reduced to a sort of cawing rookery of committees and sub-committees. Too many people are involved in the industry, and too many outside are dependent upon it. I urge the Government not to take hasty action. The livelihoods of hundreds and thousands of people are at stake, and I trust that we will not let them down.
§ 5.11 p.m.
§ Mr. Eric G. Varley (Chesterfield)
I am indeed grateful for the opportunity I have been given of making my maiden speech today, and I ask for the 694 indulgence of the House in doing so. I represent the constituency of Chesterfield, which many hon. Members will know for its crooked church spire. We in Chesterfield are proud of many other things. One of them is our claim to be the centre of industrial England. Whilst we may be out a few miles, geographically speaking, there is a vast amount of industry of all kinds in Chesterfield. We have coal and iron, on which I intend to speak later, and all types of engineering, both heavy and light. We have chemicals and surgical dressings. We are extremely proud of the industrial diversification that there is in Chesterfield.
Hon. Members will remember that only a few years ago the decision was taken by the House to disperse the Postmaster-General's Accountant-General's Department. This, too, went to Chesterfield as part of the decision to disperse the Civil Service from London. The Chesterfield Municipal Borough, the Urban District of Staveley and the Parish of Brimington, which forms part of my constituency, are truly a microcosm of England.
It would be appropriate on this occasion for me to mention my predecessor, Sir George Benson. Sir George served the House for over 30 years. He first represented Chesterfield in 1923. I know that he was greatly respected on both sides of the House for his work in the Public Accounts Committee and as Chairman of the Library Committee. His views and studies in connection with penal reform, I know, are admired and respected by everybody. In fact, Sir George set a very high standard.
I am fortunate in having an opportunity to speak in this debate, which is extremely controversial and contentious. Although I have no desire to break with convention and be extremely controversial—no doubt I shall get an opportunity of being controversial on a future occasion—I want to draw the attention of the House to the anxieties of the people working in iron and steel in my constituency. Some hon. Members will be aware that Stewarts & Lloyds have two works in Chesterfield. One is called the Sheepbridge Company; the other is called Stanton and Staveley. I know the Staveley part of Stanton and Staveley particularly well, because I 695 began an engineering apprenticeship there in 1947. Both the Sheepbridge and the Staveley works were nationalised round about the 1950 period. They were practically two of the last ones to be denationalised in 1960. Incidentally, the Staveley works was sold back from the Government to Stewarts & Lloyds for £8½ million. The Government had paid about £10½ million for it, so that there was a £2 million loss. I know that this has already received the attention of the House.
I mention this recent history, because it was when these two companies were denationalised that the troubles began to emerge in my constituency. In view of the facts, there is little wonder at the concern which emerged at that time. In 1960 the two works I have named employed approximately 5,800. There has been about a 20 per cent, reduction, so that today they employ only just over 4,000. In 1960 there were six blast furnaces in the constituency. Today, there are only two. Two of the furnaces—those at Sheepbridge—were regarded as being the most modern in the country. In fact, they were only 10 years old. They had what many people considered to be adequate capacity. As soon as they were bought by Stewarts & Lloyds, they were immediately closed and 500 men were declared redundant practically overnight. During the economic troubles of 1962, which all hon. Members will remember, the general position in Chesterfield was extremely distressing. There was short-time working, and there were redundancies.
I know that hon. Members will appreciate that when I speak of these grave anxieties which were there in the constituency I am not exaggerating. Many people believe that those who left the firms at that time are dispersed for good and will never return to the industry. Men of great skill—technicians with great expertise—felt the wind of redundancy and, as a result, left the industry. I am sure that some of them are lost to steel for good.
In July, 1963, the position was so acute that my predecessor and my hon. Friend the Member for Derbyshire, North-East (Mr. Swain) led a delegation to Stewarts & Lloyds here in London and explained the seriousness of the situation. At that time they extracted—I 696 think that "extracted" is the right word —recognition of the social consequences of this upheaval in the iron trade at Chesterfield. I do not think that any intelligent person would suggest that we had to keep open plants purely to keep men at work. If that were to be the case, it would be a negation of any economic principles. There were up-to-date capacity and up-to-date plant in Chesterfield at that time which were deliberately closed to serve the interests of boardroom decisions. Any person charged with taking a decision in an industrial concern such as steel has the duty of recognising what the social costs and the social benefits are. It is generally accepted that, if the iron and steel industry is to become more efficient, it will be on the basis of rationalisation and specialisation, but I think that that can be achieved without the troubles that we experienced in Chesterfield after 1960.
There is evidence at present that large companies which have works in different parts of the country do not allocate their orders in any rational way. For instance, there is evidence that when companies tackle the fundamental issue of securing greater efficiency and greater rationalisation they reach the decisions without enough consultation. There may well be consultation at boardroom level, but too often workers are faced with a fait accompli, and at that time it is sometimes found, as was said in the House on Friday, that restrictive practices which I do not think are to the best interests of the industry are set up.
This debate has generated a lot of heat, and by 10 o'clock tonight it will have generated much more heat. No matter what decision is taken tonight and no matter what decisions are taken in this Parliament, iron and steel will be facing tremendous problems. They will be facing changes in techniques and changes in structure. I am saying the obvious but I think that these will have profound effects on the ordinary man. I know from first-hand experience, after living in Chesterfield all my life, of the anxieties felt during the period of which I have spoken.
There will be changes in iron and steel but we have to start from the standpoint of seeing how far we can have the consultations and discussions which are absolutely necessary and seeing how far we 697 can look to the well-being of the people employed in the industry rather than at any other factor. If we do this we shall have the co-operation of the workers and their assistance in these changes.
§ 5.21 p.m.
§ Sir Douglas Glover (Ormskirk)
It is my pleasant duty to congratulate the hon. Member for Chesterfield (Mr. Varley) on a very distinguished maiden speech. I am sure that his predecessor, who was a distinguished Member of the House and very much liked on both sides, would have liked to have been here today and to realise that the constituency is still in good hands. I hope that the hon. Member will not mind my saying, because I think that it is a virtue rather than a vice, that his speech was not particularly non-controversial. I have always held the view that I was the biggest mug ever invented for having made a maiden speech which was non-controversial, because this is the one opportunity that one has in the House of being controversial and getting away with it.
We have had two very good maiden speeches today and neither speaker could have been accused of being non-controversial. I believe that the impact of the debate has been increased as a result of both the hon. Member for Chesterfield and my hon. Friend the Member for Lewisham, West (Mr. McNair-Wilson) deciding to speak without pulling any punches. This is what I also propose to do in my remarks.
I do not think that the Minister of Power, in his first appearance at the Dispatch Box as a right hon. Gentleman and a Minister, made a convincing speech for the nationalisation of the steel industry. Any argument that he put forward was shot down almost without trace by my hon. Friend the Member for Lewisham, West in a maiden speech which was cogent, to the point, and obviously delivered with a tremendous amount of closely reasoned knowledge. My hon. Friend's speech was a very impressive performance indeed.
I shall not devote most of my time to the technical arguments about the nationalisation of iron and steel, because there are far too many of my colleagues who have a much closer association with the industry and who are able to 698 advance the arguments much more cogently than I can. I shall speak purely and simply on the question of nationalisation per se, because whilst I disapprove of nationalisation I also believe that in nationalisation itself there is a real danger to the future of the people of this country.
Despite what happened in the early 1950s over steel, when the State takes over an industry, we are taking, in most cases, a final decision on the future structure not only of that industry but of the nation of which it is a part. One industry might be nationalised without serious loss of freedom to the people. If two are nationalised there is that much diminution of freedom. Since at the moment 30 per cent, of national activities are under the personal direction of the State, there is still a majority of free enterprise and therefore of freedom of action in forming the activities and the climate of opinion in the nation.
We understand now that the steel industry is to be taken over. This pushes the balance even closer to the fulcrum. Once the balance has swung, the State becomes all-powerful and it controls the individual. Once the State controls more than 50 per cent, of the nation's activities it will have to run the other free 50 per cent, under direct and physical control to keep those activities working and to fit them in with the 50 per cent, for which the State is personally responsible.
Whatever arguments may be adduced, the argument of a free society being incompatible with a society in which all the activities are controlled by the State is one which hon. Members opposite have not even begun to contradict. This is the real danger in what we are debating today. We are not debating the details of a steel renationalisation Measure. The Minister of Power indicated that when that Measure comes to be debated it may not be as far-reaching as most of us on this side of the House now expect. It may be that a great part of the steel industry will be left in free competition, but if the Government take over the commanding heights of the industry it does not seem to me, with my knowledge of the industry, that the remainder will have 699 much freedom. We shall see when we debate the Measure in detail.
I hope that I shall be in order if I now leave the steel industry and come to other aspects of the Gracious Speech which we are discussing in general.
§ Mr. Deputy-Speaker
Order. The debate today must be confined to matter within the terms of the Amendment which we are discussing.
§ Sir D. Glover
Thank you very much for that Ruling, Mr. Deputy-Speaker. I will try as a result of what you have said to remain in order. When we are discussing the nationalisation of steel we are discussing the future make-up of our society. That is the link all along the line with the actions proposed in the Gracious Speech.
§ Sir D. Glover
If the hon. Member would give me the opportunity, I am sure that Mr. Deputy-Speaker is fully competent to decide whether or not I shall get away with it, and if I know anything about Mr. Deputy-Speaker he is more likely to give me licence.
§ Mr. Deputy-Speaker
Order. The Deputy-Speaker is not the subject of this debate. I hope that the hon. Member will confine himself to the Amendment.
§ Sir D. Glover
I apologise, Mr. Deputy-Speaker. You will realise, having yourself spoken so often from almost this very place in the Chamber, that I was under some provocation from the Government benches.
We are discussing the structure of our national life and the part which the re-nationalisation of steel will have in that life and therefore it seems to me that we must tie up that subject with the other proposals in the Gracious Speech. By that I mean that if we are forming a general policy of increased State control, nationalisation and regimentation it is all part of one policy and one cannot break it up into small isolated pieces. We have in the Gracious Speech, including the nationalisation of the steel industry, all the pattern of a heading back at a great gallop towards the 19th century instead of galloping towards the 21st.
700 All the things which have happened since the Prime Minister and his colleagues took office seem to be leading backwards into the dim and distant past rather than towards an exciting future, quite contrary to what was said about our future, about a dynamic seizure of initiative in steel, and everything else, at the time of the General Election. We understand that the production of steel which would have gone into the Concord aircraft is likely now to cease.
§ Sir D. Glover
Yes there is, and its production will stop. The modernisation programme of the railways, because they use steel, will be retarded to allow the old pattern to be reproduced. After 25 days, all the tendency shows that, under this Government, we shall soon be back not in 1964 but in 1864. Neddy will be back in the shafts. I refer not to the National Economic Development Council but to Balaam's Ass, and his name is Harold.
§ 5.31 p.m.
§ Mr. Stanley Orme (Salford, West)
I thank the House for this oppportunity to make my maiden speech as the Member for Salford, West. I wish, first, to pay a tribute to my predecessor, who has now gone to another place, who served this House for 19 years with great distinction; he served on its Committees and chaired many of its meetings. I believe that he found a place in the heart of this House of Commons, as he did in the hearts of his constituents in Salford, West.
Salford is a city in the industrial North-West, the centre of an industrial conurbation of about 2¼million people. My constituency is very heavily populated, though exceedingly small in size, and it is bound up with industry in the whole of that region of Britain. Not only in and around Salford itself, but in the North-West as a whole we have one of the largest industrial areas of Britain, and in this area, often neglected in the past, like other important parts of Britain, we look to the Government, with their regional planning, to solve many of the problems which call for attention in housing, in transport, and in other vital aspects of life and policy in the North-West.
701 The area which I represent was at the heart of our first Industrial Revolution. It has been said that Britain depended in the past on cotton and on coal, and it now depends on the manufacturing industries and their exports for its very survival. I represent many thousands of skilled and unskilled workers in British industry today, and the area I come from is the home of some of our basic industries, many of them with a world-wide reputation. Among them, of course, is the steel industry and all that it stands for.
I feel that I have been relieved of worry about whether one should or should not make a non-controversial speech on this occasion by the two previous maiden speeches, both excellently delivered and very much to the point. I intend to direct myself to that point now.
The planning of my area and its industries gives me great concern. Just on the border of my constituency is the Trafford Park industrial conurbation, one of the largest concentrations of heavy industry not only in Britain but in Western Europe. This huge industrial area depends on steel for its survival, and, of course, steel manufacturing companies are in its very midst. It depends upon steel if it is to produce and manufacture the goods so urgently needed by this country.
My connection with industry is not purely as a representative of many thousands of industrial workers. I have just come from industry, from the shop floor, as a shop steward of 15 years' experience in engineering, and I am a representative of one of the major trade unions of Britain. Therefore, I have had some experience of, at least, the workers' side of industry, of negotiation and of many of the problems which concern us.
This brings me to the philosophy of public ownership as such. I welcome the fact that, in effect, a division is created at this point because it helps to clarify the issues in the debates which lake place. A very distinguished former Member of this House, Aneurin Bevan, said that politics was about power. Power is about control, and one cannot control industries unless one has them firmly under one's power and direction. Therefore, when we talk in the Labour Party about the commanding heights of industry, we are talking about the commanding 702 heights of steel and the major basic industries upon which the country depends.
The case has already been well made. The shortcomings of the industry speak for themselves. If I may say so, the kernel of the debate became clear when the hon. Member for Aylesbury (Sir S. Summers) intervened during the speech from his own Front Bench and put the fundamental issue. It is about prices, and prices raise the question of profits. While the profit motive remains the dominant factor in the steel industry, it will never be an efficient industry. It will never produce the steel upon which the manufacturing industries depend. It is this profit motive which makes the two sides of industry, and the profit motive and all that stems from it will remain until there is public ownership. In my view, this question should not be hidden under a sheet. I invite the right hon. Member for Enfield, West (Mr. Iain Macleod) to read my election address, where he will find that I quite definitely mentioned the public ownership of steel and other industries as well.
The subject of our debate today, in this cockpit of democracy, is vital for Britain and its future. Upon the outcome will depend whether we can make our country the toolroom of the world, whether we can produce the manufactured goods needed not only by ourselves but by the developing countries overseas. If we are to bridge this gap, if we are to help these other countries, if we are to make the products which we and the world need, not just for our selfish wants at home but for the world as a whole, if we are to help break down the barriers of hunger which exist today, we must have the basic control of our economy.
The point is underlined when we recall what happened during the past 13 years, when power moved from this Chamber to the boardrooms at the centre of industry. I want to see it come back from the boardrooms to this Chamber. I want to be able to have the Minister here so that we can raise questions and thrash them out with him if necessary. I want industry to be accountable to the nation as a whole, not playing about with foolhardy schemes of publicity and denigration, trying to defend itself and its profits, as it has done in the recent past. Let us have it where it can be accountable to the nation.
703 On this basis, I am proud to stand here and support the public ownership of the steel industry. I am proud that it will put onerous duties upon this House, and I am quite certain that not only the House of Commons but the nation will, in the years to come, recognise that, with a planned economy, Britain will be able to produce the goods needed both at home and overseas. In the future, after this great industry has been nationalised, the British people will say to the Labour Party, "Thank you, get on with the job".
§ 5.40 p.m.
§ Mr. William Shepherd (Cheadle)
It falls to my lot and my pleasure to welcome the hon. Member for Salford, West (Mr. Orme), and I do so particularly for two reasons. First, he comes from a part of the country that I represent, and, therefore, I know something of the problems about which he speaks. Secondly, he brings experience from the shop floor, and practical experience is always very welcome in this House. I would agree with him that he did not attempt very strenuously to keep to what are, or at any rate were, the acknowledged conventions in maiden speeches, but perhaps on another occasion we may be able to reply in a more robust fashion than is permissible today.
I think that many of us who came here nearly 20 years ago feel that this is the wheel turning round a complete circle— and that this is where we came in. I approach this with no spirit of nostalgia, because I would have hoped that in the intervening 20 years some hon. Gentlemen now sitting on the other side would have learnt something. It is true that some of them have, but, unhappily, for reasons best known to themselves, they have to include this unfortunate and retrograde step in their present programme. It is absurd to talk as a Labour Party about the jet age when it is trundling the broken-down junk barrow of nationalisation. It is impossible to say that the Government have progressed and learnt from the past when they merely put into operation the same sort of outworn and outmoded ideas with which they came to the country in 1945.
§ Mr. Loughlin
I am intrigued by the logic of the hon. Gentleman's argument. May I assume from it that because private enterprise and capitalism are pre-nationalisation 704 they in themselves are of necessity outmoded?
§ Mr. Shepherd
No. There is a constantly changing pattern of private enterprise, and one of the merits of private enterprise, about which I want to say a few words, is that it automatically responds to the changing demand of society, and when it does not respond Parliament can assist it to do so.
I regard it as unfortunate that we are having foisted on us a policy which the country does not want.
§ Mr. Shepherd
I will tell the hon. Gentleman. If one looks at the votes cast for and against nationalisation at the General Election, it is demonstrable that there is no demand by the electorate for nationalisation. It gives no satisfaction to the ordinary man in the street. It may satisfy the appetite of Labour politicians for power, but it satisfies neither the consumer nor the average elector.
It is unfortunate that a policy so clearly condemned by the electorate, so bereft of real value and purpose, should be foisted upon the country merely because the Labour Party cannot control its own extremist element. It is rather as though the Conservative Party, because it had a handful of people who did not want to convert the Empire into a free and independent Commonwealth, supported those who took the reactionary view. Hon. Gentlemen opposite who are afraid of the half-witted extremists in their ranks have nothing of which to feel proud.
I turn to the question of what we ought to do with this industry. This is the crucial issue before us. I say at once that I would have no hesitation in making the industry responsive to price competition. In case any hon. Gentleman opposite think I come to this conversion as a consequence of the General Election, I would add that I was pressing this point inside our party circles before the General Election—that the Iron and Steel Board should no longer have the power to fix prices. I know that there are those in the industry who will contest this view, because the natural proclivity of man is to make himself comfortable, but in the interests of the community it is not desirable that those engaged in industry should become comfortable. I want to 705 set the limits of comfort and discomfort. It would be wholly untenable that we should have a steel industry which was subjected to violent fluctuations of demand arid which had to compete on price.
The proposition that I make to the House is that in a modern society the State on the whole makes certain that there is a high and stable level of demand, and in response to this private enterprise has the responsibility of being competitive and price competitive. I would take the strongest possible steps to enforce price competition in this industry, because I believe that as a consequence we should eliminate nearly all the faults of the industry which have been recited today. I fail to understand how the faults—there are not a great many, but they are there —and shortcomings of the industry, which are the product in the main of a lack of price competition, will be cured by forcing on the industry a State monopoly. It is nonsensical and illogical reasoning of the worst possible order. I say right away that my cure for this situation is the virtual disbandment of the Iron and Steel Board and the erection of price competition as being essential to the business. I realise that this is a vast industry—
§ Mr. John Hynd (Sheffield, Attercliffe)
That is a very interesting argument, but would the hon. Gentleman tell me how we are to enforce price competition on private companies in view of the fact that the steel companies have said categorically that competition in price is not possible within the industry?
§ Mr. Shepherd
If the right hon. Gentleman will allow me, I will tell him. Hon. Gentlemen opposite keep popping up and down like a lot of corks.
§ Mr. Shepherd
But hon. Friends of the right hon. Gentleman have intervened.
I will indicate the limitations of competition as I visualise them. I would not disband the Iron and Steel Board altogether. I would give it powers which would be related to rationalisation proposals. I think I would say that the Iron and Steel Board would have the right to set up State companies in conjunction with the Government if it felt that the true national requirements were not being met by private industry. But I would 706 not allow it to fix any prices, whether maximum or minimum.
I believe that competition provides the only real means whereby industry can be sensitive to changing demands. One of the difficulties about the steel industry is that it has not been quite sensitive enough to those changes, and it has not been because there has been price regulation. If one gets as much profit from doing the non-risky thing as one does from doing the risky thing, one will not do the risky thing. If one has price competition, one will get a pattern of industrial development within industry which reflects the needs of the community. I say without hesitation that price competition is my answer to what defects exist in the present iron and steel industry. I can see no sense at all in imposing upon the industry a State monopoly which can only have the effect of stultifying management and rendering the industry on the whole less responsive to the changing needs of the community. What one must realize—this is where Socialists fail abysmally—is that industry is not something which one sets in a pattern and there it remains for one year, five years, or ten years. It is changing every day. If one has a set-up which is highly centralised and geared to one man's idea, it will not produce the flexibility which is so essential.
§ Mr. Robert Maxwell (Buckingham)
How is it that you failed to persuade your party when you were on this side of the House?
§ Mr. Deputy-Speaker
Order. I hope the hon. Member will not mind if I instruct him on how to put a question of this kind. He must not ask an hon. Member directly; he must ask him through the Chair. Perhaps the hon. Gentleman will now put his question.
§ Mr. Maxwell
I would like to ask the hon. Member for Cheadle (Mr. Shepherd) to tell the House why he failed to persuade his party about the Tightness of his case on prices.
§ Mr. Shepherd
I explained that I have been converted to the merits of price competition in this industry within the last two or three years. I earlier subscribed to the view that in this industry the merits of stability outweighed the merits of price competition. I am willing to admit that 707 I was wrong. I see now that the only really responsible way in which we can treat the industry is on the basis of price competition. I agree that I have been wrong in the past, but I have increasingly realised in the last few years the need for a change of outlook.
§ Mr. R. E. Winterbottom (Sheffield, Brightside)rose—
§ Mr. Deputy-Speaker
Order. It is very difficult for new hon. Members to preserve the old traditions of the House. Again, it may help if I tell them that it is not in order for an hon. Member to pass between the hon. Member who is speaking and the Chair.
§ Mr. Winterbottom
I appreciate the fact that the hon. Member for Cheadle (Mr. Shepherd) has confessed that he has been wrong in the past and that he now seeks to make amends. Does that repentance spread to the time when the steel industry was denationalised and the Iron and Steel Board was created? We claimed then that prices would be fixed by the Board. I believe that at the time the hon. Gentleman contended that the new set-up would be for the free play of price in the industry.
§ Mr. Shepherd
I am not contesting the view that I have changed my mind. Between 1945 and 1950 I thought that the merits of stability in an industry like this outweighed the merits of price competition. Now I realise that I was doing what others have been doing—dwelling in the past instead of the future. I looked upon the question in terms of the dreadful conditions of unemployment and the vicious changes in demand between the two wars and felt that anything was preferable to that. I took my view on such a basis. Now I realise that we can maintain a high and stable level of demand and, in these circumstances, it is the duty of private enterprise to be competitive, and price competitive.
When I was interrupted—and I hope that I shall not be interrupted again, for I do not want to detain the House too long—I was about to say that there are industries where the merits of competition 708 are not perhaps quite so important. There are natural monopolies like coal, electricity and others where one does not want to duplicate sources of supply and where there may therefore be a case for monopoly. But there is no case for it in the case of steel.
Here is an industry which has to change its pattern and be responsive to changes in demand at home and overseas. It must produce an infinite variety of goods. This demands enterprise and ingenuity. It demands changes of ideas and outlook—in many cases, quick changes. Nothing in this pattern of industry makes it suitable to the process of nationalisation, which could only bring about a dead hand on its activity.
I would like to say something about nationalisation as it affects the steel industry and as it will affect other industries. It seems to me that hon. Members opposite have not only learned nothing in twenty years but persist in wanting to do the job the hard way. They do not want merely to drive the car but to be the mechanic as well. That is not a very sensible or intelligent point of view.
It is the function of an industry— whether steel or any other—to maximise the wealth of the country. Distributing the wealth after it has been produced is not a particularly difficult operation and on the whole we have now achieved a pattern of wealth distribution which gives to the ordinary worker a pretty fair share of what is produced.
The problem is not, therefore, that of distribution. It is that of ensuring that all our industries work in the most efficient way that is humanly possible. This is where I join issue with the hon. Member for Salford, West. Is it really the case that if one owns and controls an industry as a Government this gives one a better control over resources of the nation than otherwise? I suggest that the truth is to the contrary.
If one is engaged in the mechanics of ownership and control one is less able to direct the broad, overall pattern, which should be the function of the Government. The more one encumbers oneself with the detailed mechanics of running an industry the less one is able to direct one's attention to broad strategy, which should be the principal responsibility of the Government. I think that 709 hon. Members opposite are trying to do the job the hard way.
It is relatively easy to control any antisocial tendencies of private enterprise, but it is exceedingly difficult to inject into State organisations the spirit of enterprise and flexibility which an industry has to have. Hon. Members opposite are doing the job the wrong way round and persisting in their old-fashioned notions because they have not realised the changes which have taken place in the past twenty or thirty years.
We need to look at the question of the nationalisation in a much more intelligent fashion. What is the most important thing that should happen to an industry? Without doubt it is that the best people should get to the top. It does not matter who owns the industry so much as whether the people at the top, who are in control, are the best people to discharge that function. That is why, as those of us who have been here since 1945 realise, it is exceedingly difficult to get the right people to run nationalised industries— and having got the wrong people into a nationalised set-up, how difficult it is indeed lo get rid of them and put new people in their places. But, if one has a system of private enterprise, these processes take place, on the whole, automatically.
The most important thing in industry is to get the right people at the top, and the system of nationalisation is the one least calculated to achieve this result. Men of enterprise do not on the whole, flourish in the atmosphere of State-run industry.
§ Mr. Will Griffiths (Manchester, Exchange)
The hon. Member talks about the right appointments to the top in private enterprise. Can he, therefore, explain how it is that every time his party goes into opposition the majority of its Front Bench is immediately put on the boards of companies?
§ Mr. Shepherd
I cannot explain these processes. I can only say that of course there are some members of the former Government—and this might conceivably apply to right hon. Gentlemen opposite who will have been members of the present Government when it becomes an ex-Government in a short space of time —who can contribute something of value 710 to these companies. I should, however, like the Monopolies Commission to study banking, shipping and insurance to make this tendency less marked than it has been in the past. I give that to the hon. Member for Manchester, Exchange (Mr. W. Griffiths).
I was saying that it was essential to get the right men to the top. It is also essential to try to organise a pattern of industry, whether the steel or any other industry, so that there is more than one stimulus. If one has a nationalisation set-up, in the steel industry, for example, it means that the central direction becomes the all-important issue. If one has the wrong man at the centre, the job clearly becomes impossible. But even if one has the right man at the centre, it is difficult for the drive and impetus from the centre to be spread to the perimeter of the activity. It is very much better to have a series of stimuli taking place in various areas of the industry as a whole. Different individuals looking at similar situations can take different views. It is by the exchange of views and the conflict of views that one gets an industry to move in harmony with the demands of the community.
I say to hon. Members opposite that their concept of nationalising the steel industry is grossly out of date and old-fashioned. It will not serve the social purpose which they seek, the social purpose of an industry conforming to the national need. Serving the national purpose is much more likely to be obtained if there is a measure of Government supervision superimposed upon a competitive industry.
I ask hon. Members to think again about these ideas and to try to get away from the early days of the twentieth century and to think in terms of what they should have learned in the last twenty years and to realise that owning and controlling an industry is not the easiest way in which to see that that industry fulfils the national need.
§ 6.2 p.m.
§ Mr. E. Shinwell (Easington)
Before I demolish the hon. Member for Cheadle (Mr. Shepherd) and the shop-soiled arguments of the right hon. Member for Enfield, West (Mr. Iain Macleod), I should like to refer to the wonderful maiden speeches which we have heard 711 this afternoon and since Parliament has resumed.
The hon. Members who have spoken from either side of the House have displayed agreeable talent, a very high intellectual quality and amazing confidence. I only wish that I could emulate their confidence. We not only welcome them, but hope to hear them on many occasions. If they are controversial we shall love it. Indeed, the more controversy there is in the House, the better some of us like it. I intended to make that observation completely personal, but I should not be surprised if there were others who join me in that sentiment.
It is a remarkable fact that I speak as one who has never before spoken from these back benches in all the years that I have been in Parliament. I have been very fortunate in that when on this side of the House I have always been in a Labour Government. That was quite fortuitous, of course, but very useful from various points of view. I am not sure whether I should not ask for the indulgence of the House, but it would be no use because I should not get it anyway.
I have heard practically all the debate this afternoon. It has been reminiscent of the debates on the subject of nationalisation which we had from 1946 onwards. We have had all the old arguments, all the old clichés, all the old objections, just as anachronistic, antediluvian, antique; yet hon. Members opposite have the brass face to say that what we are proposing is old-fashioned. Will any problems be solved by profit-making, the elimination of competition in a private monopoly, or, to take the other side of the picture, as some hon. Members opposite propose, by enabling the steel industry under private ownership and so-called private enterprise—although what enterprise there is in it is difficult to ascertain—to engage in competition?
Will that promote efficiency? Will it make any contribution to enhancing our economy? Of course not. Yet that is what is advanced by hon. Members opposite, particularly by the right hon. Member for Enfield, West—I am sorry that he is not here; I intended to give him notice—who made the most dishonest speech which I have heard in the House for a long time. I am not surprised. 712 I have heard the right hon. Gentleman before. He is dishonest because he, along with others on the other side of the House, has come along at the eleventh hour, even beyond the eleventh hour, to make proposals which in effect are just a sop to the electorate. He did not mean a word of if.
The right hon. Gentleman—here he is—was nebulous, vague and perverse and, to repeat what I said about him before he came in, dishonest. There is a Scots expression which, as a Scotsman, he will know. If he does not know it, he can go to the Library and look up the meaning in a dictionary. The word is "donsie" which means "sick from frustration".
This afternoon the right hon. Gentleman was like the old prize-fighter: a little infirm, not in the physical sense, of course, a little decrepit, a little shop-soiled in his arguments. He tried to stage a come-back. It cannot be done. I know, because I watched the faces of some of his colleagues while he was speaking. In any event, any question of the leadership of the Tory Party is quite irrelevant and will be quite irrelevant for a long time to come, if I may use the phrase used by right hon. Gentlemen opposite.
The right hon. Gentleman indulged in some blood-thirsty, sanguinary observations. He talked about cutting our throats, and cutting the throat of the Bill. Not satisfied with that, he spoke of killing the Bill—a combination of Wellington, Napoleon, Hitler and Mussolini. The right hon. Gentleman could not knock the skin off a rice pudding. The younger Members should not be afraid of threats of that sort.
§ Mr. Deputy-Speaker
Order. I am sorry to interrupt the right hon. Gentleman, but if he turns away from the Chair it is rather difficult for the Official Reporters to hear him.
§ Mr. Shinwell
I am truly sorry, Mr. Deputy-Speaker, but I have not had the opportunity of speaking in the House for some time. I have been following the practice which I used during the General Election and I thought that I was addressing a body of intelligent Members on the other side.
The only hon. Member who was worried by the right hon. Gentleman's speech 713 was the hon. Member for Aylesbury (Sir S. Summers). When the right hon. Gentleman came along with these nebulous proposals requiring much explanation, definition and interpretation, it was the hon. Member for Aylesbury who was worried and filled with anxiety and asked to know what was meant. For him this was a departure from Tory philosophy. Of course it was, but the hon. Gentleman need not have been worried, because the right hon. Gentleman did not mean it. If he had meant it, he could have done it in the last three or four years. Why should be have waited until we came in?
Let us suppose that it happened that tonight the Tory forces, the hordes, in the process of harrying the new Government, decided to defeat us and that collection came in. Does anyone suppose that the right hon. Gentleman from that side of the House would advocate the creation of a new structure for the iron and steel industry? Would hon. Members opposite reorganise the iron and steel industry, and make it more efficient? Of course not. They would not do anything of the sort. They would carry on in the same old namby-pamby, goody-goody, Sunday kind of fashion; and no one would expect anything else from them.
§ Mr. Shinwell
I am always ready to obey instructions.
As I was saying, this debate is reminiscent of what happened from 1946 onwards. I know about that because I had to pilot through the House the Bills nationalising the coal and electricity supply industries. I heard the same old arguments during the Second Reading, throughout our debates in Standing Committee upstairs, on Third Reading and when the Bills came back from another place. It was said that the nationalisation of coal was irrelevant. To use the cliché which the hon. Member for Cheadle used over and over again, nationalisation would destroy our economy.
The hon. Member for Cheadle spoke about the nationalisation of coal being irrelevant. Irrelevant to what? He used the world "doctrinaire". What is the definition of "doctrinaire"? I understand, from the little education which I 714 had, that a basic principle is doctrinaire if it is unworkable. Can that be said about the nationalisation of coal? Of course, there are defects. I agree with that. I dislike intensely, as many of my hon. Friends do, the closure of pits without regard to social consequences. But never let it be forgotten that the administration of nationalisation has been very largely supervised by Tory Governments.
What about the electricity supply industry? It has produced a surplus of £70 million. Is that irrelevant to our national economy? Of course, a lot remains to be done, and more would have been done if this industry had been administered under the aegis of a Labour Government who believed in nationalisation. The real trouble is that hon. Members opposite do not believe in it. I do not complain about that. This is a free country. We live in a democracy. This is a democratic assembly and hon. Members opposite are entitled to express their opinions. But let them be honest.
What hon. Members opposite want is profits, profits all the way regardless of whether they are consistent with the needs of the economy; profits, profits all the way regardless of the effect on the community; profits, profits all the way without regard to our export trade. I do not deny that there are industrialists who are anxious to enhance our economic and industrial prestige. But what do the Opposition care about the needs of the community? What did they care about their needs when they were in office for 13 years? What did they care about the need for efficiency in our basic industries?
Take what happened over the coal industry. Hon. Members opposite say that the industry must pay. They have said that the electricity industry, transport, the railways and civil aviation must pay regardless of the social consequences. That is their philosophy. When they say that an industry must pay, that means profits and the manipulation of shares on the Stock Exchange. Consider what happened immediately before the result of the General Election was known, when it was thought that the Tories might win. They thought, "Ah, we have got it up our sleeve". Even the right hon. Member for Enfield, West expected to be sitting on this side of the House.
715 But what happened? Steel shares gradually rose. Then, when the Government took office, they went down a little. Encouraged by newspaper organs, some reputable, but for the most part animated by the most bitter opposition to nationalisation and the Government, steel shares are rising a little again. What has that to do with promoting industrial efficiency, with enhancing our economic prestige and with increasing our exports? I tell the right hon. Member for Enfield, West that that is irrelevant—wholly irrelevant. He should not indulge in threats, sanguinary or otherwise. We are not afraid of them. He is very small beer, anyhow.
I wanted the right hon. Gentleman to quote from the Labour Party's excellent pamphlet. I did not have to use it in my constituency. We have no steel industry up there. I managed to collect rather more than 34,000 votes without it. If I had used it I might have got 36,000 votes. If I had been able to tell the electorate that in a few weeks' time the right hon. Member for Enfield, West would suggest modifications of the structure of the iron and steel industry, part of the road to nationalisation and part of the road to reorganisation of the industry, we would have said, "We are with you", and I should have got 40,000 votes.
I want to make a confession. I know that my hon. Friend the Member for Ebbw Vale (Mr. M. Foot) is straining at the leash to knock the stuffing out of hon. Members opposite—and he can do it much better than I can, but he is younger than me and has more stamina. Public ownership, in my view, is not sacrosanct. There is nothing doctrinaire about it. It is a question of whether it is expedient. I have advocated it for more than 50 years, and I was very happy to be able to pilot two nationalisation Bills through the House of Commons.
It was a kind of personal achievement. One has to get something out of politics. Very few of us get any money out of it, except when we are Ministers, and even then we do not get much because of the Inland Revenue's impositions. When we on this side lose our Ministerial posts, we do not get jobs with insurance companies or banks. If I am not as capable—I do not want to be too egotistical—as some right hon. Members on the Front Bench opposite, I will eat my hat.
716 I repeat that there is nothing sacrosanct about public ownership. But there is nothing sacrosanct about private ownership. It is a question of what is expedient, what is best for the nation and what is in the best interests of the economy and of the community.
It was stated during the election, although not many people noted it, that it was the Tories who, in the past, nationalised some of our concerns. It was a very good thing for the country. When they did not nationalise, they municipalised. The late Neville Chamberlain, who was Prime Minister for several years, built up a great reputation because of his municipal activities in the City of Birmingham. That was perhaps his greatest achievement.
I want to say a few words about the Liberal Party. I am sorry that the Leader of the Liberal Party is not present. I wanted to congratulate him in his presence on his wonderful performance during the election—his charming simplicity, so naïve and so agreeable. It is very difficult to quarrel with the right hon. Gentleman. Even if we dislike what he says, we cannot quarrel with him. The right hon. Gentleman does not want another election for some time, I understand, but neither do I, for that matter. I hope that the Opposition take note of this.
In parenthesis, the Opposition need not talk about the troubles that we have. They have troubles, too, on the Front Bench and on the back benches. They will emerge in due course more intense and more active than they are at present. They will all come along. Hon. Members opposite should not make a song and dance about the fact that one or two of our people are ill. Illness and infirmity will not be confined to the Labour Party—not that I wish the other side any harm. The Leader of the Liberal Party wants to return to competition—in other words, beggar your neighbour. Down with the fellow who tries to climb the ladder. If I may paraphrase a well-known saying, "Oh for the rarity of Liberal charity." I really am astonished.
At the same time, if the Liberals have any constructive proposals, let them produce them. I do not know whether it is in order for me to ask them to produce a White Paper. At least, let them give us a manifesto and we will examine it. We 717 must examine everything that is put before us if it has even the slightest evidence of common sense. I would examine it and I would beg all my right hon. and hon. Friends to examine it. There might be something in it. If so, we will accept it; but if there is nothing in it, obviously we will reject it and we will expect the Liberal Party to do the same and be a little more sensible and rational in these modern times. Although I think that the Liberal Party is mistaken in its philosophy, I believe that it is much more honest than the Tory Party. I want to qualify that. There are some decent Members on the Tory benches—yes, some very friendly people.
Quite inadvertently, I find in my pocket something about the Tory Party which was said way back in 1923. I was here then. I heard it. It was said not by somebody who was disgruntled and malicious, like myself, but by somebody respectable, not by somebody who seeks the protection of Mr. Speaker and takes direct action, but by somebody who was highly respected in this House but who has now passed away—John Wheatley. He was a very great Parliamentary figure in his time. This is what he said about the Tory Party:If there is one set of humbugs in the world, if there is one group of unadulterated hypocrites, it is the British ruling class. I do not believe in your honesty at all. You are either knaves or fools. You are the greatest enemies of the human race; I can see no hope for this country unless we can get the people to overthrow your system.That is as true now as it was then.
I say to hon. Members, on both sides of the House, "Do not let us have any more talk about nationalisation or public ownership." Incidentally, young Members should know that when one says something like that, one should always have something to follow.
The trend is in this direction whether we like it or not. We have seen it in our lifetime. Since 1903 I have been 60 years in political life. Sixty years is quite a long time and I have seen it happening all through. Sometimes there were setbacks; it is a kind of zigzag progress, if progress it can be called. There was a time when Conservatives would not look at public ownership, or even municipalisation, but gradually they have come round to some extent to our point of view. They will come round still more 718 to our point of view. All is well in the best of all possible worlds and I say to the right hon. Member for Enfield, West that it is all very well to indulge in that kind of jollification from the Opposition Front Bench—we understand that sort of thing—but it will not take a trick with us or with the electors.
§ 6.25 p.m.
§ Mr. Emlyn Hooson (Montgomery)
It falls to my pleasure to congratulate the right hon. Member for Easington (Mr. Shinwell) on his maiden speech from the back benches opposite. It was, as were his speeches from this side of the House, most enjoyable and robust. There is nobody quite like the right hon. Gentleman for knocking the stuffing out of the Opposition. What was needed today, however, was a little stuffing in the Government's case. Unless more stuffing appears than has appeared before, the right hon. Gentleman's maiden speech may well prove to be his swansong from that side.
The right hon. Gentleman said he had heard all this afternoon's arguments before, and I do not dispute that. Surely, one of the troubles of this debate is that we are really dealing with reheated rice pudding. All the arguments have been heard on both sides before. This debate is largely irrelevant to the country's economy. The right hon. Gentleman said that over the course of 60 years he had seen great changes. I always find it interesting when the right hon. Gentleman is reminiscing, but in 60 years even the right hon. Gentleman himself may have changed. His radical cast of mind has, I fear, become that of a Conservative theoretician. I will convey to my right hon. Friend the Leader of the Liberal Party the citations of the right hon. Gentleman. I am sure that my right hon. Friend would wish me to reciprocate them.
I wish to make crystal clear the approach of the Liberal Party to this vital issue of steel. First, we intend to oppose with all the means at our disposal the Government's attempt to renationalise the steel industry. The First Secretary of State has said that the Government intend to take the main part of the iron and steel industry into public ownership. That is a clear declaration that we are faced with a doctrinaire take-over of the whole, or virtually the whole, of the 719 steel industry. I do not see how this will assist the problems of steel.
At the end of his speech this afternoon, the Minister of Power rather invited the Liberal Party not to vote with the Opposition. Although the Minister, for the first time from the benches opposite, showed some willingness to come part of the way by saying that the Government will not nationalise the whole of the industry—I do not know exactly what he meant by that—the Liberal Party intend to vote against the Government in the Division tonight unless an undertaking is given that the Government do not intend to nationalise the steel industry.
§ Mr. Hooson
We are voting against the nationalisation of steel.
Secondly, we are not, however, opposed to nationalisation out of blind devotion to free enterprise. We are opposed to it because, in our opinion, it will not solve any of the problems of the industry. Unlike the majority of the Conservative Party, we accept that basic changes are necessary in the steel industry. We are pleased to see that the magic circle which the right hon. Member for Enfield, West (Mr. Iain Macleod), speaking from the Opposition Front Bench, described for us is, at least, not made of steel, but the right hon. Gentleman has a great deal of persuasion to do in his party when he says that its members are in favour of price competition, or that he is in favour of it, in the steel industry.
On 30th June, 1964, in a Written Answer to the then hon. Member for Boltpn, West, Mr. Holt, the then Minister of Power, the right hon. Member for Altrincham and Sale (Mr. Erroll), had this to say. Mr. Holt had asked the Minister of Power:in view of the adverse verdict of the Restrictive Practices Court on two steel pricing agreements, what reconsideration Her Majesty's Government have given to their policy for the steel industry; and if he will make a statement.The then Minister replied:The jurisdiction of the Restrictive Trade Practices, Court over steel pricing agreements follows from the Government's policy that the 720 steel industry should be subject, like other private industry, to the Restrictive Trade Practices Act. There is nothing in the Court's judgment on 22nd June that calls for a change in the Government's general policy for the industry."—[OFFICIAL REPORT, 30th June, 1964; Vol. 697, c. 193–4.]There is certainly a complete change of view on the Conservative Front Bench on the Opposition side from that which emanated from the Conservative Front Bench when the Conservatives were in power. There are no grounds for believing that public monopoly, which really is what nationalisation entails, will be any more beneficial to the industry than the present set-up.
Thirdly, we think that what the steel industry needs more than anything else at the moment is a reasonable degree of certainty as to its future and a respite from this dingdong battle between nationalisation and denationalisation. The truth is that both the Government and the Conservative Opposition are prisoners of their past on this subject. Let us be frank—there are Members opposite, and I am not only thinking of the hon. Member for Bosworth (Mr. Wyatt), or the hon. Member for Pembroke (Mr. Donnelly), who are far less keen on nationalisation than the manifestos make out. There are also, I believe, on the Conservative side of the House Members who, to be fair, must be thoroughly embarrassed by having to defend the status quo. I think that the right hon. Gentleman leading for the Opposition today indicated that his personal view, at least, was in that direction, that some changes were necessary.
Everyone with any common sense must realise that nationalisation, taken purely tactically in this old, arid battle, if it is to be continued, means that the steel industry will be used as a shuttlecock lobbed over from the nationalisation side of the net to the denationalisation side of the net. The Daily Mirror, which is not best known for its radical views, last week described the steel nationalisation argument asthe greatest irrelevance, and can only justify renationalisation because it reverses denationalisation.The industry itself wants above all to be free from political upheavals which all tend to divert energy away from the real needs of the steel industry. To give an example, there is no doubt that uncertainty of the future of steel has slowed 721 up planning ahead of major investing projects. A second instance is that the day after the nationalisation of the Steel Company of Wales it lost four of its key technicians to engineering, and none of the four has returned to the steel industry.
We have had under private ownership the process of necessary mergers and rationalisation, a process which has been held back because of the fear of nationalisation; and, indeed, if we do nationalise there will still be the fear of denationalisation again. No one really debates the real issues affecting steel such as the surplus of steel products in the world at the present time, and the enormous redundancy problem, the great human problem of redundancy which will arise because of technological changes in the industry.
I believe, as do the rest of my party, that the vast majority of people are simply fed up with this continuous running battle motivated, as it is largely, by pride, prestige and prejudice. One of our greatest needs today is to remove the steel industry from the cockpit of politics once and for all, and I believe that sensible opinion backs the idea of trying to find some sort of solution to bring this arid conflict to an end.
There are, as I have already mentioned, enormous problems facing the industry. It is vitally necessary to have more certainty as to the future if these problems are to be solved, and I say to the Government that they will not resolve this conflict by imposing their will, which can only lead to bitterness and may well be the prelude to a future bout of denationalisation. I would urge the Government to think again on this problem, and to concentrate on relevant reforms.
If the proceedings of this House had been televised today, including the opening of the debate, what would have been the public's reaction? This issue of steel nationalisation is as dead as the dodo. If only hon. Members opposite could have seen the glum faces on their side as their Front Bench speech for nationalisation went on! In the same way I must remind the Conservative Opposition that they will not be benefiting the industry by adopting a rigid position, thereby encouraging the Labour Government to go in for wholesale doctrinaire nationalisation. It is highly desirable and, I think, necessary to find some form of permanent 722 settlement, and, to this end, to effect a tempering of the extreme conservative views on either side of the House.
We would seek an agreement which, in essence, is acceptable to the majority opinion in this country, and that majority opinion is represented by moderate elements on either side of the House. As hon. Members know in their hearts, if moderate Members on both sides were to dissociate themselves from the sterile theorists amongst them and the sterile theories their leaders have bandied about, it would be possible to find a solution acceptable and beneficial to the industry and to the country at large.
The Liberal Party has had a working party on the steel industry for some time, and I am only sorry that the right hon. Member for Easington did not read the report which was published in August this year. We published a plan to tackle the real problems of steel. I should like again to emphasise what has been emphasised over the weekend, a possible approach to this problem. The right hon. Gentleman the Member for Enfield, West quoted the leading article in The Times today, but he did not mention that the heading was "Injecting Sense into Steel" and he did not quote something else which was said in the course of that article:In that atmosphere the Liberals, calling for a truce and suggesting terms on which it might be arranged, may suffer the fate which commonly awaits those who intervene between brawlers bigger than themselves. They deserve better, for they have a serious contribution to propose to the settlement of the steel issue.It is to that proposal I now wish to turn. We in the Liberal Party see no obstacle to the State's holding a certain number of shares in individual firms. No one can charge that this is a rigid and inflexible answer. No one can say this would not meet with support in the steel industry as a whole. This, furthermore, is certainly a solution most acceptable to what I believe to be the majority opinion of all the parties in the House.
§ Mr. Shinwell
I am very interested in this point, but would the hon. and learned Member say whether successive Governments over a long period of years have held a huge block in the shares of the old Anglo-Iranian Oil Company, now British Petroleum, but never have interfered with the commercial proceedings of the company?
§ Mr. Hooson
The right hon. Gentleman is referring to the 51 per cent. holding in B.P. and the two seats on the board. The right hon. Gentleman is also aware that in German industry, Krupps, for example, has half the board now elected by the employees of Krupps—and yet here we are debating the arid old topic of nationalisation as against denationalisation.
§ Mr. Hooson
However, the shareholdings which have been proposed must not be too widespread, for it is clear that if they were so widespread there would belittle to choose between the dogma of the Government and this plan. Indeed, monopoly would become more rigid than ever. Our aim, and I make no apology for this, is that there should be competition between State-owned and privately-owned industry. Why should not the State-owned company have to prove itself efficient by competition with privately-owned business? I suggest that the State should assume control of the select few companies, say four, on the same lines as has been done over B.P. with regard to shares.
§ Mr. John Biffen (Oswestry)
Would the State-owned company have to accept the same discipline as a private company in raising money on the open market?
§ Mr. Hooson
There would be State investment equivalent to 51 per cent. of the shares. Thereafter, the State firms would have no greater advantage commercially than the privately-owned firms, but there would be direct State representation on the boards of directors.
In the Sunday Times Michael Shanks has suggested that companies in the North-East can be grouped together to promote rationalisation of the industry in that area. The making of railway lines has been mentioned in the debate. We know that they are made mainly by small firms. We would not view that kind of proposal with disfavour, but it is essential—
§ Mr. W. T. Williams (Warrington)
The hon. and learned Gentleman has made the point that the Government might buy shares in steel companies; that in some companies they might even buy 51 per cent. of the shares. Does 724 that mean that the Liberal Party believes that the Government should then intervene to direct those companies in a way in which they are not entitled to do in B.P.? If not, in what way would that suggestion help to solve the problems of the steel industry?
§ Mr. Hooson
The directors would represent a 51 per cent, shareholding, and would clearly have the majority say on the board of directors. One would expect them to use that both to the benefit of the industry and to the benefit of the country as a whole, but such a company would compete on level terms with any private enterprise company.
It is essential to realise, however, that one cannot impose a compromise. All that I have done is to indicate the lines on which sensible negotiations can take place between the interested sides in this dispute. Moreover, it is not suggested that a political compromise could in any way be a solution. The end of the political struggle must be accompanied by other, positive, reforms. The first need—and I am sure that this is felt deeply throughout the country—is to take the steel industry out of the political bear pits and to reach agreement on either side on a basic structure for the future of the steel industry.
There are certainly positive reforms to be made. Perhaps I might now mention competition. There is no price competition in steel. The steel industry did not take advantage of the opportunity given to it in 1953 to make steel competitive. As has been said, the old pricing system was condemned by the Restrictive Practices Court in June, and a retreat from this system is clearly necessary. Our working party has recommended a system similar to the basing points system of the European Coal and Steel Community.
§ Mr. Iain Macleod indicated dissent.
§ Mr. Hooson
The right hon. Gentleman shakes his head. That recommendation was made because of the difficulties which were encountered both in this country and on the Continent with dumping from abroad. That was due to the complete absence of international agreements on steel, and not because of the basing points system. I am not saying that the basing points system of the European Community is 725 perfect, but even Mr. de Peyer, who is a sort of one-man steel band for the Labour Party on steel, has given it limited praise in The Guardian; and from him that is praise indeed. At least on the Continent of Europe there is competition between the steel firms, and this has proved very helpful to the industry there.
Incidentally, in its election handbook the party opposite is full of praise for the steel record of the European Community. What is tended to be forgotten is that ownership there is very mixed. Private and publicly-owned firms compete. Indeed, whereas apparently some unknown German industrialist, if he was an industrialist, writing in a German paper was commending British steel, on 3rd October the Executive Council of the Iron and Steel Trades Federation, which represents a large majority of British steel workers, was full of praise for the German steel industry. In its report it made startlingly valid comparisons between steel production and achievements by German steel firms compared with ours, and it must be remembered that the West German steel industry is in the hands of private enterprise, with one major exception. I have already referred to the fact that both the State-owned enterprises and the privately-owned enterprises in Germany have employee representation in their board rooms, and that is something to which we must move in this country.
Perhaps I might now refer to the problem of industrial relations. On the whole, industrial relations have been good in the steel industry, but they are deteriorating, as we saw from what happened in the Steel Company of Wales earlier this year and last. In future, there must be proper schemes for redundancy, which is bound to occur. There are hon. Members on both sides of the House who know of the surveys carried out by, for example, American surveyors at some of our big steel plants. In some of the steel plants in South Wales today there are thousands of men who are virtually redundant. They cannot be thrown on the scrap heap, but there is no alternative employment for them. If we are to have rationalisation of the steel industry, the first thing that we need is a very good redundancy and retraining scheme. But this is not the kind of thing that we are 726 debating. We are talking about the old, arid argument of ownership.
Most important, however, are industrial relations. The success of the German steel industry has no doubt been greatly assisted by the rapprochement between the two sides of industry. I have already referred to Krupps. In this sort of company there is a growing and mutual understanding between unionists, management, and shareholders which helps to produce an environment in which unions and management are open to new ideas, which is what we seriously lack, and it helps class ideology to die. Surely at this stage of the development of the steel industry we should be looking for reforms along those lines. Surely the employees in the steel industry should be allowed to have a share in the say in the board rooms of the industry.
Any radical reform of the industry must include steps for co-determination and co-responsibility, and, whatever Bill the Government bring before the House, the Liberal Party will seek to amend it to provide for employee-elected directors, for model rules on redundancy and fringe benefits, and for rights of consultation. Though the party opposite claims to speak in the name of the working class, it is terrified of having co-responsibility for unions and shareholders on the same board of directors. [HON. MEMBERS: "Nonsense."] We shall seen what happens when the Liberal Amendments to the Bill are debated. We will propose that in the steel companies there shall be direct employee-representation on the board of directors.
I turn now to another matter on which I have touched, and that is internationalism. We on this bench sometimes feel that this House tends to deliberate too much in a purely national sense, without regard to the world implications of its acts. Certainly, there are implications of any alteration of the present position in the steel industry. Whether we nationalise or change the steel industry in any way, a new international approach is needed to the whole problem of steel.
The heavy dumping of steel last year showed that to be true. We have heard about increased capacity for steel output. The present surplus of steel capacity in the world is about 80 million tons, which is more than the total output of the European Coal and Steel Community.
727 What is the future of this country if at some stage an unkind American President floods the world market with cheap steel, which he could do tomorrow if he wanted to?
The whole well-being of the steel industry and the many thousands of people depending on it are menaced by that awful possibility. It is, therefore, necessary, whatever the form of the steel industry of the future, to reach international agreement on steel. There must be certain rules of competition. We must have tariff cuts to achieve international agreement on these rules. What relevance has nationalisation to that kind of danger? Our future policy towards the world steel situation will decide the maintenance of employment in the industry, not merely the question of ownership or even of control. An isolationist and protectionist course would be disastrous. Unless we get an international agreement, how can we possibly preserve a prosperous steel industry if faced with dumping in the future?
Those of us who are concerned with regionalism do not like over-emphasis on centralisation in any nationalisation plan. For example, we have Colvilles, in Scotland, and in Wales we have John Summers—one of the best steel firms in the country—the Steel Company of Wales, and Richard Thomas and Baldwins. The directors are there, and the research goes on there; the chief men of the industry are working in Wales and Scotland respectively. Under a nationalisation scheme, is everything to be centralised? Is research to be centralised? Are the heads of the companies to be chopped off, and everything centralised in London? Hon. Members opposite should consider that very carefully.
It is our view that wholesale nationalisation of this industry is against the public interest. It does not begin to bring about a hope that the industry's problems will be solved.
As my right hon. Friend the Member for Orkney and Shetland (Mr. Grimond) has said, there is in the Government's programme, as explained in the Gracious Speech, much that we on this bench can support. There is great need for radical reform. The Government have an ambitious programme, but if the Prime Minister and his hon. Friends intend to 728 jeopardise that programme, if they are prepared to risk sacrificing some of the much-needed reform on the steel altar of nationalisation, I tell them plainly that they will sacrifice a good deal of the sympathy and good will that might otherwise be theirs.
If the Government intend to proceed on the basis that they will nationalise the steel industry regardless of the consequences, we shall oppose them with all the power and influence at our disposal. There is a plain choice for the Government—and I do not mince my words here. There is a choice that will indicate the kind of party they are. They can show whether they are a party wedded by steel rivets to doctrinaire Socialism, or a party willing to adopt a more modern, enlightened and sensible approach, and to rethink its position on one of its old problems.
One thing is certain, and that is that the vast majority of people do not want this arid battle to go on for months in this House. There are many great problems facing the steel industry that we ought to be debating. Whatever emerges from this Government, we certainly must try to avoid, whenever there is a change of Government, the old chestnut of steel being resuscitated and debated for months in this Chamber. Certainty is necessary to the prosperity of the country, and the prosperity of the industry.
§ 6.53 p.m.
§ Mr. G. R. Strauss (Vauxhall)
In due course, I shall comment on the speech of the hon. Member for Montgomery (Mr. Hooson) and on the suggestions he made on behalf of his party for the steel industry, but first I want to say that, in many respects, I feel in much the same position as my right hon. Friend the Member for Easington (Mr. Shinwell). He and I have heard before the identical arguments which have so far been expressed today in favour of and against the nationalisation of the industry. As some hon. Members will remember, I took a very active part in former debates on this subject, as it fell to me as Minister of Supply to devise a measure of nationalisation and to pilot it through the House. Later on it was my responsibility to fight the Government's anti-nationalisation Measure, which was sponsored by the right hon. Member for Streatham (Mr. Sandys).
729 During all these years I have, like my right hon. Friend the Member for Easington, heard arguments from the party opposite about the appalling disasters that would result from nationalising any industry. Those prophecies have always proved unjustified, and even in the 1953 debates the right hon. Member for Streatham was never able to show that the industry had suffered any ill consequences from nationalisation, as he certainly would have done had he had any evidence to that effect. All experience points to the conclusion that no damage and many benefits will come to the industry if it is nationalised.
When we last debated the subject, which was in 1953, when the right hon. Member for Streatham denationalised the industry, the right hon. Gentleman hoped that the Measure he then put forward would be a final settlement of this dispute, as he argued that the Iron and Steel Board which he then set up had ample powers of public control over the industry. It was admitted by him, and, indeed, by the right hon. Gentlemen who spoke in those debates—and the most distinguished Members did speak then; Sir Winston Churchill, Sir Anthony Eden, as he then was, Oliver Lyttelton and Sir Andrew Duncan—that an industry such as this which was basic to our national prosperity must be under an effective public control.
The argument was about how one could best bring about that control and what its extent should be: should it be by wholly public ownership, as we maintained, or could it be done through a Board with certain limited powers? We told the right hon. Member for Streatham that the Board he proposed—a weak board, with limited powers—could never be the final settlement, and that further Measures would one day have to be taken to put the industry under really effective public control.
Two powers were given to the Board at that time which he considered to be adequate. One was price fixing, and we now know that the decisions of the Board have been opposed by the Restrictive Practices Court, which says That—
§ Mr. Strauss
The right hon. Gentleman is wrong. The policy of the Board was to fix certain prices for steel, and it fixed those prices believing that, in good times and in bad, it was desirable that those prices should continue. Although there was nothing in the Board's price fixing that made it impossible for companies to quote lower prices, the practice of the industry, endorsed by the Board, was for the Board to fix maximum prices knowing that they would be the general prices quoted by the industry. There is something to be said for that proposal, and it was endorsed by the consumer interest on the Board.
Now, the Restrictive Practices Court says that it thinks that system wrong, that there should be proper competition, and that firms should be able to quote prices below those fixed by the Board. Well and good, but it is a ridiculous situation when two publicly-appointed independent bodies come to different conclusions. The position now is that for the future there will be no fixed prices, in the sense that firms will be able to underquote each other. That may result in no maximum prices, or higher maximum prices, but competition in prices is certainly to be established.
The other power granted to the Iron and Steel Board, which the Conservative Party at the time thought was ample, was the power to control development of the industry to see that it did not become unbalanced. We have always said, as we say today, that those powers were wholly inadequate. The Board had no powers of initiative; the Board could say "Stop" but it could not say "Go". It could act as a brake but not as an accelerator.
What is particularly important now, in view of the present situation of the industry, is that the Board lacks power to put in hand measures for the general reorganisation of the industry however desirable it may be in its opinion. The Board is unable to enforce modernisation at a speed which it may consider 731 proper, or to bring about structural alterations in the industry which it believes to be in the national interest and which every observer of the industry today says is necessary. The Board can recommend but cannot enforce. That this unsatisfactory situation exists is clear from the annual reports of the Board, where it frequently comments that the industry has not done this or that which the Board wanted it to do and, inferentially, that it lacks powers to enforce what it believes is necessary.
The trouble with the industry at the moment which we on this side of the House want to remove, is that there is no effective authority that can ensure that it responds to the National interest as interpreted by the Government of the day. That power does not exist, and we say that it should. It seems to me in that connection that the proposals put forward by the hon. Gentleman on behalf of the Liberal Party are wholly irrelevant. I cannot see the advantage of taking 51 per cent. in the shares of some of the steel companies. If the Government want to buy 51 per cent, of a company's shares, there would be a case for doing so for the purpose of an investment but not of control, as the Government have done in British Petroleum. If the purpose is control it is far more effective to take 100 per cent., and it is far fairer to the minority shareholders. I would have thought that was a point which would be appreciated by the Liberal Party.
§ Mr. Eric Lubbock (Orpington)
Does the right hon. Gentleman think that the minority shareholders in British Petroleum are dissatisfied with their investment?
§ Mr. Strauss
In British Petroleum the Government do not control. I am saying that if we are to control it is much better to have 100 per cent, and not 51 per cent, because it is fairer to the minority shareholders.
Moreover, I do not think that what is wrong with the industry can be put right by bringing greater competition. That is a wrong diagnosis of its present ills. We are anyhow in future, as a result of the decision of the Restrictive Practices Court, going to have greater competition at home, and, of course, there 732 is already complete competition in exports. But, as my right hon. Friend the Minister of Power said, in fact in all countries, including America, there is no effective competition for home products. There is always the leader principle, the biggest firm fixing the prices and the others all following it.
Therefore, I do not think that the solution put forward by the Liberal Party is relevant to the problem. But there is another proposal which has been aired and upon which I should very much like to hear the comments of the Minister who is to reply. The right hon. Gentleman the Minister of Power, who opened the debate from the Government side, dismissed this point in a few short words. It is a proposal which should be carefully considered. I advance it, as someone with experience of this industry and of nationalising it and as one who is convinced that we must have effective control over it. We have to have complete and full authority over the industry to do the things that are necessary.
It seems to me that it might be possible and desirable to establish a new authority or to use the present Iron and Steel Board and give it those powers which it requires to bring about in any part of the industry—not just in ten or twelve companies—a modernisation and reorganisation programme and the establishment of a more rational structure. Given that power, the new authority would be under the general direction of the appropriate Minister, presumably the Minister of Power. That authority's duty would be to ensure that the industry and all its elements would respond absolutely on all matters where the national interest is involved to the direction of the Minister as advised by the authority. The Minister would then in fact have the same general powers, with the same limitations not to enter into day-to-day management, which Ministers today possess over all fully nationalised industries.
In such a set-up, certain conditions would have to be fulfilled. The first and most important is that there would have to be a built-in sanction of compulsory purchase over any company which was recalcitrant in carrying out any direction given to it. Next the authority would take over responsibility for all the main activities of the Iron and Steel Federation. 733 Thirdly, it might have to have a monopoly of imports of steel into this country, and fourthly, it should have control over all the mergers which take place within the industry. The all-important point is this: I believe—I cannot go further than that—that such a scheme would be accepted by the industry's leaders today and that they would be willing to undertake to give it their full co-operation.
If that is possible, such a solution would have certain obvious advantages. It would, first, appeal very strongly to the technicians and managers in responsible positions in the industry as they would dearly like to see an end to this controversy which boils up at every election time, and with it the unsettlement inseparable from the recurring prospects of a change in the ownership and set-up of the industry.
I think, too—here I speak personally, as I do, of course, in everything that I have said—a solution obtained along those lines should appeal to all the political parties. It would surely be a great tragedy if during the rest of this century nationalisation and denationalisation of this industry continued to be a major electoral issue, blurring the other social and economic problems and those of foreign affairs.
Another advantage is that it could be brought about quickly. If the industry were prepared to accept such a solution there is no reason why the necessary legislation should not be introduced and put into operation very rapidly. I cannot help remembering the delays imposed upon us in a very similar situation in 1949–50 when we had the opposition of the House of Lords, who insisted upon a year's delay before we could operate our nationalisation Bill. On top of that, there was the very effective passive resistance of the leaders of the industry.
The last advantage, and maybe the most important, is this. If we nationalise, as I understand is proposed, only 10 or 12 major firms of the industry, we cannot deal properly with the rationalisation problem, as the greatest need for this lies in the smaller firms outside that 12. In the re-rolling section of the industry, for example, there is an enormous need for alteration in its structure, co-operation, amalgamation, and so on, which cannot take place now because that part of the industry remains in private hands and 734 there is no authority to insist that the necessary changes should take place. But if we had a new supervisory authority, backed by the Minister and with the sanctions I have mentioned, a rationalisation of the whole industry could be achieved without much delay, which would raise its efficiency and bring great benefits to the country.
The Minister will have a lot of thinking to do before he brings to the House the Bill which he has in mind. I know from experience that there are 101 important principles to consider before a sound workmanlike Bill can be devised. He has a mighty task in front of him, and I have no doubt that he will carry it out and do it well. Nevertheless, I hope that before that Bill is finalised serious consideration will be given to the course which I have suggested and that it will be fully explored. If there are any insuperable difficulties and if for some reason which has not occurred to me they cannot be overcome, or if the industry is obstinately unco-operative, then of course he will have to pursue the full nationalisation of the industry, and he will have the support of every Member on this side of the House in doing so.
But if that does not happen, I hope he will give very careful consideration to this proposal and submit it to the Cabinet. I believe that if such a solution proves practical it would be a wise one. It would fulfil all the objectives we have in mind, in establishing full public authority over the industry, and such a solution would, too, be welcomed by the country.
§ 7.22 p.m.
§ Mr. John H. Osborn (Sheffield, Hallam)
I listened with interest to the speech of the right hon. Member for Vauxhall (Mr. Strauss), because in 1947, when he was nationalising the steel industry, I had to decide whether to make my career in the steel industry and to follow my father into a company which bears my name and which had been founded by my great grandfather in 1852. It was at the time that I entered the company that the right hon. Gentleman was doing his work of nationalisation. It is only right, therefore, that I should declare that I have a personal interest in certain sections of the steel industry which are located in Sheffield.
I also listened with interest to the speech of the right hon. Member for 735 Easington (Mr. Shinwell), who referred to a debate in the House which took place about the time that I transferred from my cradle. The right hon. Gentleman has many years' experience in the House.
But I speak on behalf of many in Sheffield, and particularly my constituency, whose livelihood, directly or indirectly, is tied up with the steel industry. They are concerned that the industry should be competitive and thriving and should continue to be prosperous, because the prosperity of Sheffield is to a large extent dependent on the prosperity of the steel industry. Any action taken by any Government will receive the blessing of the people of the city only if their livelihood and the prosperity which they enjoy continues into the future.
In the late 1940s the views of the Socialist Government were known, and some of them have been mentioned by the right hon. Member for Vauxhall. I am in the unique position of having a personal stake in the industry and having had a personal career affected and influenced by the vagaries of Left-wing politics ever since I left the Army. Those working in the industry today find that their careers and their future are affected by uncertainty because of the political uncertainties lying ahead of them. In 1950, many firms had a noose put round their necks. The Conservative Government were returned and they were reprieved. Today, companies and individuals stand on trial. The noose has been put around their necks again, and this time it may be drawn.
The hard fact which has been mentioned in speeches by the hon. and learned Member for Montgomery (Mr. Hooson) and the right hon. Member for Vauxhall is that there is no certain mandate for the Government to nationalise the steel industry. My right hon. Friend the Member for Enfield West (Mr. Iain Macleod) and my hon. Friend the Member for Cheadle (Mr. Shepherd) gave views and figures to clarify this. I noticed from recent opinion polls that 56.7 per cent, of those questioned were against nationalisation and only 24.2 per cent. were definitely in favour. There were a large number of "Don't knows". It is right to consider the electoral result, for the vote of 12 million Conservatives and 3.1 million Liberals, or 54 per cent. of 736 the vote, far exceeds the 12.2 million voters who supported the Socialist Government and all they stood for in connection with nationalisation.
There are many people who deplore the penetration by politicians into every corner of our economic and industrial life, if it means domination by politicians. Domination by politicians and political parties can be abused to a much greater extent, through centralised power, than the abuses which have been mentioned in the board room. This causes many people to be uneasy. There are many who deplore this exercise of political power in the centre by contrast with the dispersal of power through the board room. Many people in my constituency realise that the companies in which they serve will shortly have a noose put round their necks, and they view the future with apprehension. This uncertainty has increased, because as yet we have no idea what the Government's proposals are, although we heard some interesting ideas from the right hon. Member for Vauxhall.
How is all this being viewed by those connected with the industry? The difficulty is that those who face the gallows are uncertain whether to deplore nationalisation as such and all that it stands for or to reason and plead for mercy. Could they have a life sentence instead of capital punishment? The industrialists and others in the industry regret that steel is in the cockpit of politics. There are many in the industry who are sympathetically disposed to the attitude expressed by the hon. and learned Member for Montgomery. I am opposed to nationalisation if further ownership by the State means more political power in the centre, because if economic and industrial power were concentrated in the centre through Whitehall and through a political party, it could be abused. It has been abused in other countries, as the people of those countries have learned to their sorrow. As a politician, therefore, I oppose the indiscriminate nationalisation of the steel industry.
I think that the Government are aware that if it is definitely a decision of the people, and definitely a decision of this House and of another place, that the steel industry should be nationalised, the industry would co-operate loyally 737 with the wishes of the people. This point of view has been put to me privately and publicly even since this debate began. A continuing battle between the Government and those in the industry, once the decision of the people had been clarified, would get the industry nowhere.
The Government have to establish whether the steel industry has failed the nation. Some of my observations are based on studies which I have made into this question. I remember that during the General Election of 1959 the criticism of the steel industry was that there was not enough capacity to meet the demands placed upon it. I have here an extract from the speech which the Prime Minister made in Wales on this subject. He made several speeches on the steel industry—today he indicated that he had made three. I have here the release of a speech which he made in Cardiff, and he also made one in Middlesbrough. There was also a television broadcast which I heard. [HoN. MEMBERS: "Oh."] I am sorry to disagree with my hon. Friends on that point. He said in Port Talbot, Wales:You have blast furnaces and other equipment working under capacity.The reason for that was that in the last few years there has been tremendous increases of capacity in the steel industry. Had hon. Members opposite gained power in 1958 or 1959 they would have arranged things so that the surplus capacity of 18 months or two years ago would have been even greater. Their political views then were designed to increase the capacity of the industry further than was necessary to meet the demand of the early 1960s. This shows that the criticism of the present Prime Minister would have been more apt had the present Government been at the helm then and their policies carried out at that time.
This leads me to the question of investment, and the figures for this should be carefully borne in mind. At current prices investment totals about £1,700 million. That amount has been spent on the steel industry since 1946, a substantial investment indeed and one which has increased the productivity of the industry.
§ Mr. Winterbottom
Although the hon. Gentleman uses the figure of £1,700 million as that spent on investment since 1946 he is, presumably, speaking in terms 738 of new capital invested in the industry since the war. Is he aware that in one Sunday newspaper yesterday there appeared a computation of the total assets of the industry and that that revealed a figure considerably lower than that he is quoting? Is he, therefore, confusing the money spent within the steel industry with that spent on ancillary industries?
§ Mr. Osborn
I have clashed with the hon. Member for Sheffield, Brightside (Mr. Winterbottom) on this issue before. I can assure him that I have checked my figures. There is a breakdown of recent expenditure. The figures have been published and after the debate I will give him the details.
When I refer to increased productivity within the industry the figures bear out my argument, particularly when we see that productivity has increased by 35 per cent, in the 10 years 1950 to 1960. The published figures show that during those years productivity rose by 11 per cent. in the U.S.A. and 55 per cent, in Germany. The national figures for overall rise in productivity are: United Kingdom 23 per cent.; U.S.A. 15 per cent.; and Germany 86 per cent. These statistics show that if one relates the increased productivity in steel to the overall productivity of all industry for each country the United Kingdom comes first in the international league table. Although these figures have been published they are worth keeping in mind, particularly when certain people say that the industry has nothing of which to be proud.
Consideration must be given to capital productivity. It is fair to say that output per blast furnace between 1946 and 1963 has increased by 188 per cent, in Britain. In 1946, output was running at 97,000 tons per blast furnace while today it is running at about 228,000 tons. Figures for coke consumption per ton of iron melted in a blast furnace show a remarkable improvement—21.5 cwt. per ton in 1948 and 14.38 cwt. in 1963.
There has been some criticism of the amount and use of oxygen in steel production in the steel industry and the slowness of the industry to adopt this method of production. It is a fact that in Sheffield and Yorkshire generally oxygen was injected into steel melting even at about the time I joined the industry in 1947. At that time it was 739 injected into an electric are as distinct from other processes, but the figures for the use of oxygen in steel melting are remarkable. In 1958, consumption of oxygen was just under 5,000 million cu. ft. while last year it was nearly 24,000 million cu. ft. This is the extent to which the use of oxygen has increased in Britain, as it has increased throughout the world. Although it should be remembered that Japan is using more oxygen-made steel as a percentage of the total steel output than any other country, the British figure of 25 per cent is second.
§ Mr. Winterbottom
Is the hon. Gentleman aware that according to the latest statistics, not of the Steel Federation but of the Iron and Steel Community of Europe, production of steel in this country will approach about 16 per cent. in terms of pure-oxygen produced steel—and by "pure oxygen-produced" I do not mean the steel produced generally but that produced as a result of oxygen lancing? Will the hon. Member now produce the figures to cover oxygen lancing and use those for his comparison?
§ Mr. Osborn
I agree that the figures I am giving to the best of my recollection are for both methods—total oxygen usage—remembering that the L.D. process is in use in only the newer installations. I give these figures really to counteract the impression that the industry, in every respect, is doing badly with regard to the use of oxygen.
Since being elected to Parliament I have also made some studies of the export record of the industry and the pattern of the change of exports. One of the most outstanding features to alter this pattern in recent times has been the fact that the older Commonwealth Territories and the newly developing ones have abundant supplies of rich, cheap and readily available raw materials such as iron ore and coal. This is bound to give those countries a competitive advantage over us. It is also bound to result in our going in for more specialised forms of production.
It is interesting to note from the latest export figures. Between 1952 and 1963 there has been an increase of 75 per cent, from the United Kingdom in terms of exports. The E.C.S.C. countries have increased their exports by 55 per cent. 740 and in the U.S.A. there has been a decrease. These figures illustrate the strides which the industry has been making and proves that it has not failed the nation, which has been the implication of many of the remarks of hon. Members opposite. Future exports, according to the latest figures, will also show an increase and it is likely that this year we will export about 4.5 million tons. This export record shows that the country can be proud of the industry.
The implication of the last Report of the Iron and Steel Board is that not enough money has been spent on research in the industry. It is worth noting that, in 1963, £9.3 million was spent on research, almost reaching the amount of investment compared with turnover targetted by the Board.
Again, the industry's manpower given to research also went up last year, by 25 per cent. These figures all show just how dynamic the steel industry in Britain is.
§ Mr. D. Griffiths
While speaking about the efficiency and progressiveness of the industry, will the hon. Member relate his remarks to the fact that the former Government, on 15th September last, found themselves obliged to employ Professor Robert Honeycombe, Professor of Physical Metallurgy at the University of Sheffield, to assist with this work? Bearing in mind the grant of £64,000 that was made at that time, does the hon. Member call that efficient?
§ Mr. Osborn
I should have thought that a grant of that type was to be welcomed. Surely research should be confined not only to steel works and organisations such as B.I.S.H.R.A., but extended to the universities.
Since many hon. Members opposite are interested particularly in Sheffield, I suggest that we consider the industry there. If one wants to see a good example of the awareness of safety, good operative training, the training of craftsmen, the training of good management, and so on, then, in the South of Yorkshire, one is bound to note where the best example is being set.
It is only fair to say that in all probability the record of the steel industry, particularly of the larger firms which are likely to be in the first "shopping list", is second to none in the country as 741 a whole. Surely this is not failing the nation. Hon. Members from both sides of the House attended a film show recently, arranged by an hon. Member opposite. It was provided by United Steel Companies Ltd., one of the steel firms on the top of the list. Those who attended the show and have discussed the matter will realise that the operation of modernising the industry requires extensive consultation-good labour relations and planning. They will give United Steel Companies the credit of carrying out that operation of erecting electric melting furnaces in an orderly and masterly manner, meeting most requirements of modern management.
We have had reference to the other nationalised industries, coal, gas and electricity. Surely they are monolithic activities, but airways and transport— particularly railway transport—are a great deal more diverse. It is debatable whether, in the long term, nationalisation is the solution to offer those two industries. The steel industry is not just a monolithic industry like the first three I have mentioned, but it is a diverse industry. United Steel Companies covers everything from ore mining, blast furnaces, plates in the Scunthorpe area, bars and rods at Templeborough and Bramsworth, and general engineering elsewhere.
The hon. Member for Chesterfield (Mr. Varley) referred to the Staveley Company, in his area. That company has been affected by the nationalisation of coal. There has been a degree of rationalisation and concentration on one type of product—pipes—not only in Staveley, but at Stanton and in Stewarts and Lloyds groups. That has happened under private enterprise. Is this the sort of rationalisation which hon. Members opposite are seeking under nationalisation? What is the best way of bringing about rationalisation? There are other firms in the Sheffield area which do heavy forgings, but their products are all different. The diversity is such that not one set of criteria can apply as in the case of coal, gas or electricity.
That may be one reason why the right hon. Member for Vauxhall thought of why, in 1947, there should not be nationalisation. I might quote from old publications, and certainly from what Lord Morrison of Lambeth said. Not only is the steel industry diverse, but 742 there are various ways in which it could be competitive—apart from being competitive in terms of price—in quality, in soundness and in inspection. There is service which includes packaging and marketing and there are modern techniques coming forward for which a nationalised monopoly might be to unwieldly. Steel firms in Sheffield are using computers and other controls for efficient planning.
There has been reference to the 1956 Restrictive Trades Practices Act and the decision of the Restrictive Trade Practices Court which was reached only last summer on the Heavy Steel Association's price agreement. It is not irrelevant to comment on this. We can discuss the merits and demerits of pricing arrangements, but they have served the country well. In the period to which the right hon. Member for Vauxhall referred, when there was over-capacity, it was essential to fix maximum prices. Otherwise, in periods of shortage, there would be a temptation to charge too much rather than too little. The policy we have seen in the last few years in periods of surplus capacity has been very satisfactory compared with the E.C.S.C. as mentioned by the hon. and learned Member for Montgomery.
A typical by-product if the whole industry were nationalised would be that the decision of the Restrictive Trade Practices Court could well become null and void. It would be wrong to prejudge further cases as a result of the Conservative 1956 Act. The competition has had a mixed reception by various industrial associations. It has been my personal experience, operating on the fringes of the steel industry, that it is preferable to sell and manufacture outside a price association.
My experience has been that to operate under these arrangements and meet the challenge of free competition—a subject which is largely outside this debate—has the effect that unless one has efficient costing and responsible sales policies it is easy to undersell below cost price and make losses. This is a challenge which faces any industry which loses the umbrella of price competition. There is no doubt that in the 1930s it was Government encouragement which brought about the trade associations which have been responsible for the price stability 743 which has built up the industry and its various sections, including the steel foundry industry. The abandonment of price controls must be viewed with a reasonable degree of responsibility.
Various views, including those of the right hon. Member for Vauxhall, have been put forward of where and how the industry should be nationalised. Hon. Members opposite must make a better case than that put forward by the Minister of Power. It is regrettable that most of his case was built on Talking Point No. 18, which, I hope, hon. Members will show to me after the debate. We have discussed ways of Government supervision or control of the industry, perhaps by owning the whole industry, part of the capital 51 per cent, or even lower, but what is certain is that in the industry it is regretted that after 17 years its activities are still in the cockpit of party politics.
The right hon. Member for Vauxhall talked about wholesale nationalisation, but other hon. Members opposite have suggested that 12 firms should be nationalised. Let us be frank about this—these nationalised 12 firms are likely to supply the raw material to the rollers and specialists, but how much indirect control will the nationalised firms exercise over the smaller parts of the industry? To what extent will a State monopoly be in a position to make or break specialist firms such as exist in Sheffield? What, then, of the future? Those in the industry do not want to see a repetition of the sort of debacle and the debates which have taken place over the aircraft industry in the last few years. They do not want debates such as those concerning air transport which we have heard in this House. It is surely better that their affairs should be conducted and discussed in more reasonable surroundings.
Then, again, many articles have been written and much consideration given to the value of accountability in Parliament to a Select Committee as against having a balance sheet and profit and loss statement. It should be of interest to hon. Members opposite that when those who are running large industries in Europe, in this country or in America, go to Russia they find those running the Russian State industries are very interested in how free 744 enterprise manages to run its industries so efficiently this side of the Iron Curtain.
The measures before us now are about 40 years out of date. Hon. Members may ask what are the alternatives. The Conservative Government, in the last Parliament, created the N.E.D.C. and there are now a number of smaller N.E.D.C.s, as they are called. Why not try to inculcate co-operation with competition through a little N.E.D.C. for the steel industry as an alternative to operation under the 1953 Act or to the proposals that are likely to be before the House of Commons under a Socialist Government?
The right hon. Member for Easington, who is not now here, criticised the profit motive, saying, "Profit, profit, profits". Let us remember the case of other nationalised industries. It is right to say that British Railways, since vesting, have cost the country approximately £1,000 million. The total loss to the nation is £900 million. This has to be paid by the taxpayer. I therefore suggest that the proposals before the House to nationalise the steel industry are irrelevant and unnecessary. Therefore, I will support the Opposition in the Lobby tonight.
§ 7.40 p.m.
§ Mr. John Hynd (Sheffield, Attercliffe)
As a fellow Member representing the City of Sheffield, I listened with particular interest to the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn). I noted that he constantly referred to the preoccupations of what he called "those of us who are concerned in the industry". He raised again the question of a mandate. We all agree that there are so many issues involved in a General Election that it is rather difficult to say what was the amount of the mandate for one particular issue.
One fairly simple test can be made about the mandate and about those who are concerned in the steel industry; that is, a test of the constituency vote of the hon. Member himself and of that of his colleague the hon. Member for Sheffield, Healey (Sir P. Roberts). They cannot say that the steel issue was not raised, or, if they can, they might explain to the House why they did not raise it; but we know that they did. We know that Labour candidates did, very much 745 so. What was the result? The hon. Member's vote fell by 7.8 per cent. That was the swing in his constituency. The vote of the hon. Member for Healey, his colleague, fell by 7.5 per cent, and his majority of over 10,000 was reduced to 1,700. That was the voice of those who are concerned in the steel industry in Sheffield.
I would like to say a few words about the attitude of the Liberal Member, the hon. and learned Member for Montgomery (Mr. Hooson), to this question. He made a rather interesting speech in which he said that the Liberal Party was prepared to support the Labour Government in many aspects of their policy, particularly because the Liberal Party was so concerned about the measures for social reform that we intend to undertake and which would have the Liberal Party's solid support. But the hon. and learned Gentleman warned us that, if we were prepared to risk all those great reforms to get through this ideological move of the nationalisation of the steel industry, the Liberal Party would vote against it. In other words, the Liberal Party is prepared to sabotage all its care for these reforms to carry out its ideological attitude towards the steel industry.
§ Mr. Hooson
Does not the hon. Gentleman appreciate that it is the choice of the Government? It is their priority. They decide the legislation.
§ Mr. Hynd
This will not do. The Government side is entirely persuaded that the great social reforms can be carried out only if the economy of the country permits them to be carried out, and the economy of the country, in so far as it depends upon Government action, depends upon the Government having the power and the authority to carry out these reforms.
One or two things have been clarified in the debate. Some hon. Members opposite have come quite a long way. One hon. Member said that he would advocate very strongly the Government taking over a certain number of steel concerns to compete with others. This is a step in the right direction. Most right hon. and hon. Members opposite have cast grave doubts on what has hitherto been the basic test of the efficiency of the economy and industry-competition. We suddenly find that, after all these years 746 and all the arguments, perhaps competition is not such a good thing after all. There have been very few hon. Members opposite who have been prepared to defend competition.
Relatively little has been said in the debate about the old basic idea that nationalisation or public ownership is in itself wrong. It has taken us many years to break this one down. There have still been whispers of it in the debate. But, if public ownership is in principle wrong, the public ownership of a whole range of industries and activities throughout the country has been condemned—the Post Office, the Armed Forces, education, roads, docks and harbours, atomic energy, coal royalties, civil aviation, broadcasting, water, local transport, and so on—all these having been brought into public ownership long before there was a Labour Government in this country. Others have been added since.
They were brought into public ownership for one reason and one reason alone, namely, that it was essential if the national business was to be carried on and the Government were to be effective and our economy was to be safeguarded that these vital industries and services should be brought under public ownership and control. This has long since been admitted by the Conservative Party and by the Liberal Party, which, incidentally, not so long ago published a Radical Economic Policy for Progressive Liberalism in which it said:Steel, coal, transport and power are examples of industries which it is vital should be owned by the community.The Liberal Party has not travelled very far since then.
These industries and services were nationalised on the principle enunciated by the predecessor of the late Prime Minister, Mr. Harold Macmillan, in the book "The Middle Way", in which he said this:The Socialist remedy should be accepted … where the general welfare of the economy requires that certain basic industries and services need now to be conducted in the light of broader social considerations than the profit motive provides.If we accept this, we are getting a long way in the right direction.
How far does the steel industry as we see it today come under this classification, thatthe general welfare of the economy requires that747 it should nowbe conducted in the light of broader social considerations than the profit motive provides.There have been many admissions that the steel industry in the first place is far too vital an industry in the national economy to be left entierely in private hands. This, again, is a long way from the kind of arguments we used to have in the House about nationalisation and private enterprise. The Steel Review, the organ of the Federation, has said this:In such a key and highly-organised industry as steel, the public has a right to know whether the activities of the companies and of their central organisation accord with the public interest, and to ensure that they do".That was the admission of the Steel Federation itself. What we should be concerned about is whether the companies and the national organisation do accord with the public interest.
Let us look for one moment at the record of the industry. Why was it originally nationalised in 1948? We all recall the position of the industry after the war, after many years of private ownership and private enterprise. Most of us recall the devastating report published by The Times in 1945, which talked about obsolete plant, the timidity and excessive conservatism, works which were a tangled riddle of gaps and corners, over-crowded, illogical, unbalanced, too many chairmen, managing directors, works managers, etc., etc. This was The Times assessment of the conditions of the steel industry in 1945 after many years of private operation.
We know that it was denounced by a United States State Department Report in somewhat similar terms. We know that it was denounced by some of its chief customers, including Lord Nuffield, by economists like Sir Geoffrey Crowther at the time, and by leading men in the industry itself—for example, Sir William Firth, when he spoke about thefutility of hoping that individuals will subordinate their private interests to national interests.This was his denunciation.
The question immediately arises: why should they? It is not the purpose of private enterprise, nor is it the purpose of private investment, to concern itself primarily with the national interest. The 748 purpose of private enterprise and private investment is to secure the maximum profit, irrespective of the national interest, or with the national interest as an accidental by-product. This is a fact. I got into trouble with the managing director of one of the firms in my constituency for having said something like this in a previous debate. He said that he was shocked that I should say such a thing. Does the steel worker or the railway worker choose his job because he thinks that that is how he can best serve the national interest? Of course not. Does anyone put money in a shop or a factory because he thinks that that is how he can best serve the national interest? Of course not. People do these things for one purpose, and we should not expect that they should be responsible for the national interest. Their job is to look after their shareholders, their shops and their factories and so far as they can do that compatible with the national interest so much the better.
I have quoted eminent authorities who have described in similar terms the terrible condition into which the private enterprise has brought the steel industry. I could have quoted many more. There are sheets and sheets of them on record. The right hon. Member for Enfield, West (Mr. I. MacLeod) based his whole case on a single star witness who was anonymous. All the right hon. Gentleman knows about him is that his views were published in the German magazine Der Spiegel, but there are lots of things produced in that magazine which are highly suspect. Even if this man were the most eminent authority on steel in the world, he would still be faced with a tremendous range of people who would be ready and willing to contradict him.
Hon. Members may say that this is old history, but let us compare today's assessments. In the Penguin Special "What is wrong with British industry," published a little while ago, the steel industry was described in these terms so reminiscent of the report in The Times:… too many small units making a too costly product … No British plant among the world's top ten—or twenty. For those you have to go to the U.S.A., the U.S.S.R., China and Japan.749 This is the oldest and most experienced steel industry in the world in 1964, after all the tremendous investments and developments which were mentioned by the hon. Member for Sheffield, Hallam.
Again there is the comment of the Financial Times editorials. These have been very interesting on the subject, and that newspaper is certainly not a Socialist journal. It said on 1st May thatThe industry can only continue to modernise, scrap obsolete capacity, and attempt to bring its manning standards up to the best foreign standards. But so far as specialisation and quality are concerned, it should be possible to find means of competing effectively with imports—a problem which deserves the industry's urgent attention … In order to remain competitive, a good deal of further modernisation and rationalisation will be needed in the British Steel Industry.This is the record after all that the industry has been able to do, after 13 years of Tory Government and after all the supervision by the Iron and Steel Board. The picture of 1945, therefore, is evidently not so out-of-date as might have been suggested. Nor is it irrelevant to recall that right until the threat of nationalisation in 1945 this steel industry had never in its whole history made any attempt at rationalisation or large-scale modernisation and that the first effort that it made towards that was when it was faced with the threat of nationalisation in 1945.
This is on the industry's own admission in the "Steel Review" which, referring to this factor and to the conditions in the early 1930s, said:Intense competition at home, and ruthless competition abroad … the consequence was chaos … The plan—this was the plan produced in 1946–47 to try and avoid the conclusion of nationalization—necessarily involved many amalgamations, but the great preoccupation of the time was not with preserving competition, which was not in danger,"—Now we are told that there has not been any competition in the last 30 years—but with stopping it from degenerating into chaos. This scheme was never fully realised …However old this history may be, it has important and lasting lessons and warnings.
First, it drives home how vital to a stable economy is this tremendous industry of steel and the grave dangers in its 750 being left again to the same forces, inspired by the same incentives of personal profit, to bring it again possibly into a similar condition.
This has so far been recognised by the Conservative Party that, as mentioned earlier in the debate, when denationalisation came about in 1951 the Conservatives found it necessary to introduce Government supervision, so-called. At least they were recognising that they should not endanger the country by reducing the industry to unfettered private competition.
It is interesting, therefore, to recall that the then Mr. Oliver Lyttleton said in debate in the House at that time:We think that a great basic industry like the steel industry, employing a large number of men, and considering the widespread use of steel in other industries, and the power of the steel industry to contribute to our exports, is so important that it should have Government supervision. We do not believe that it would be right, where such large and vital interests are concerned, to permit competition to play over the steel industry without any Government interference or without Government approval."—[OFFICIAL REPORT, 15th November, 1948; Vol. 459, c. 94–5.]This was a considerable admission, but how could it operate in the national interest unless it had that kind of control? Why should it be necessary to establish an Iron and Steel Board to supervise the industry in the national interest, a board whose chairman was deliberately selected by the Government from outside the industry? One of the merits of the chairman was claimed by the Government to be that he knew nothing about the industry and therefore could maintain an independent judgment on it. Why was such a board necessary if private enterprise is best, if competition, or controlled monopoly, can be left to control this great industry and if the national interest was already safe under the private ownership of the industry?
The appointment of the Iron and Steel Board was a "cover", but it was also an admission that the old arguments about leaving the industry to the free play of private enterprise were no longer tolerable or acceptable. My right hon. Friend the Minister of Power went into the question of the powers of the Board rather thoroughly. Its main power was to supervise the industry under competitive conditions. What competitive conditions? On price one need say no more than that the Board was established to 751 ensure that the industry operated under competitive conditions, but the Restrictive Practices Court indicated that not only did the Board fail to do that but that the Board itself created conditions which made it a monopoly industry with no competition at all in price.
We were told from the benches opposite that there is no competition in price but that there is competition in quality. Is there? If there is, then Mr. Judge, the Chairman of Dorman Long, presumably did not know what he was talking about before the same Court when he said that… generally in Britain steel products were of comparative quality, and the opportunities for quality competition in heavy steel products were fairly remote.Where is the competition in quality? As long as one operates under fixed prices, how can one have competition in quality? The implication is that inferior quality products are being and can be sold under such a system for the same price as the best goods. All one would be doing would be selling inferior quality products as top quality, because one would be charging top prices. So there is no competition in price, or, effectively, in quality either.
The second power of the Board was to veto investment in new plant if this wouldseriously prejudice the efficient and economic development of production facilities in Great Britain".I never quite understood this. The Board is told that it is essential to bring the industry up to date, to modernise it, to see that it has production plant up to modern standards, but if there is any new plant which is liable to prejudice production facilities it has the power of veto. If what is meant, is that productivity is best served by maintaining obsolete plant, it is absolute nonsense, a very curious way of modernising the industry. Has this veto ever been applied? Is there a single case in which the Board has tried to veto or even considered vetoing some modernisation or new plant on the ground that it would hamper the productivity of the industry?
The fact is that the Board never had any powers to do anything effective. So long as it has been in operation, it has failed to do anything effective. The only positive thing it has 752 been able to do has been condemned by the Restrictive Practices Court. It has failed to create competition. It has failed to protect the public interest, as the Court said. It has failed to make any great contribution to the efficiency of the industry. The test here is made by a comparison with other countries. It has failed to increase productivity.
Figures have already been quoted, and one can quote figures backwards and forwards, but the European Coal and Steel Community has shown that United Kingdom productivity went up in the last 12 years by 44 per cent, compared with 94 per cent, in the Common Market. One can bandy figures to and fro and prove what one likes, but the fact is that there is nothing to show that the Iron and Steel Board itself, the Government's guarantee to the British public that the industry is not a free industry, is not allowed to operate as a free private enterprise, has done an effective job or has proved to be any guarantee at all.
The hon. Member for Aylesbury (Sir S. Summers) interrupted his right hon. Friend, with reference to the fears of the workers about redundancy, and said that there was another fear in the industry, an important one, namely, the fear of developing over-capacity. This is what The Times report of 1945 called timidity and over-conservatism in the industry. I would not call it that. Private enterprise is entitled to protect its own interest, to protect itself against a situation which might be damaging, and to consider it wise to restrict production by closing plants, by temporary redundancy, and the rest. It is not the responsibility of private enterprise to look to or to safeguard the national interest. Private enterprise is entitled to protect itself against such contingencies, whatever might be the consequences for the long-term national interest.
If the principle suggested by the hon. Member for Aylesbury about the right of private enterprise to safeguard itself against such contingencies were applied, for instance, to atomic energy or to the aircraft industry, what would be the situation? One could see the whole case for public ownership of the key industries and services of this country. If these developments had been left to 753 private enterprise, if the Government had not, in the interests of national prosperity, been prepared to carry the industries into the new age and had not been prepared to carry the liabilities which they must face, we should have had no Concord, we should have had no aircraft industry worth calling an aircraft industry, and we should have been nowhere with atomic energy. This is the whole point.
There are certain industries and services in the modern world which are quite outside the capabilities of private people concerned with earning a profit on investments day by day. Private enterprise cannot meet and carry all the contingencies which will arise Only a national authority responsible to the people and having the resources available can properly decide how long and for what purposes such activities and industries are to be sustained in the national interest. Private enterprise cannot possibly do so.
§ Mr. Hynd
I am sorry, but I cannot give way; there are others wishing to speak and we are approaching the end of the debate.
The difference between such industries as the aircraft industry, coal mining or atomic energy, and the steel industry is clear. The other day we had a long debate about the Concord. It was an astonishing situation. The entire Opposition were up in arms demanding that the Government should nationalise this effort, that we should continue spending public money on it. Not a single voice opposite was raised to ask what private enterprise should do it. Where was private enterprise then? Hon. and right hon. Members opposite were demanding nationalisation, demanding that more public money be put into it. Where is the argument about private enterprise in matters of that kind?
The difference between the Concord enterprise or big investments in the aviation industry, atomic energy, the railways, coal and the rest and steel is that steel still offers glittering prizes for the private investor. This is the whole story, and nothing else. [HON. MEMBERS: "Oh."] Some hon. Members resent this, but they know that it is true. They 754 know that there is only one incentive behind their tremendous fight to prevent the steel industry being nationalised. There is only one reason why not only the steel industry but Aims of Industry and all the other organisations poured hundreds, thousands and even millions of £s into pro-Tory propaganda during and before the election.
The reason was not ideology. It was not that they believed that the Tory Party was the upholder of the English Church, or anything like that. It was all done for one reason, to safeguard their opportunity to exploit the industry and make a personal profit out of it. In the paper today I read that a man spent £12,000 a few years ago in buying a block of shares and he sold them yesterday for £1 million. This is wonderful stuff. This is what the argument is about. Apart from that, of course, there are dividends, there is the power of being the boss of a great industry, there is free living on expenses, and all the extras one can get out of it.
Of course, all this is worth defending, and I do not blame private enterprise people for defending it. But I blame the politicians. They are representatives, and I blame hon. and right hon. Members opposite—some of them are directors, of course—for getting up in the House of Commons and mouthing phrases about the national interest, about the rights of the workers and all the rest, when they know very well that there is only one object behind it all.
What is the test? Most of those who are defending the private ownership of the steel industry—this is certainly true of those who have spent all their money on the campaign—are concerned with getting a private benefit as a result of keeping it in private ownership. What is the incentive on this side of the House in wanting the industry nationalised? If it is nationalised tomorrow, it will not make a penny of difference to me or to any of my hon. Friends, except, perhaps, if some of them might lose a few shillings on shares. But there is nothing else in the mind of the Labour Party itself. We are not concerned about the financial benefit we might get out of it.
There is only one incentive on our part, our belief that national ownership and control of this basic industry is as important to the country as is the 755 national ownership and control of atomic energy or investment in the aircraft industry in the interests of the country. We have no other incentive. We are beyond suspicion in this matter. Every hon. Member opposite who is opposing us, and those behind them who financed their party to win the election were and are, in 99 per cent, of cases, concerned with no other issue than what they will get out of it.
That is why the Labour Party is going forward with the Measure. I am not concerned with the form in which it is brought forward. I am concerned only that this key industry to the national economy shall no longer be left as a plaything for people whose interest is not the national interest but the service of their pockets.
§ 8.10 p.m.
§ Mr. J. E. B. Hill (Norfolk, South)
Unlike the hon. Member for Sheffield, Attercliffe (Mr. John Hynd), I do not represent a steel constituency, but am a very interested onlooker. He described the condition of the industry in 1945 as being in such a state that I was left wondering how we managed to win the war.
§ Mr. Scholefield Allen (Crewe)
Can the hon. Gentleman tell me of a single steel constituency which returned a Tory Member?
§ Mr. Hill
I cannot offhand. I do not study these things in such detail as the hon. and learned Gentleman.
The fact remains that in 1945 far more than the steel industry was in a very rundown condition. Many industries had been working flat out, and this included coal, the railways, the roads, and housing. There was a great need for reconstruction. I do not think that it is a very strong argument to claim a mandate in 1945 any more than today. I think that the people were interested far more in demobilisation than nationalisation.
Hon. Members opposite have talked about the swings. It does not seem to me that the General Election can be interpreted as a decisive victory for Socialism. The Minister of Power and the hon. Gentleman suggested that there was an above-average swing in certain 756 steel constituencies which suggested a local mandate. I might claim that the swing in the Eastern Counties was less than half the average, which is one of the reasons why this Parliament is so narrowly balanced. My constituents positively dislike further measures of nationalisation. It is true that they do not make steel, but they are much concerned with quality and indirectly or directly with price because they are makers and users of machinery, much of it agricultural.
Therefore, I might just as well claim a mandate from my part of England against nationalisation. But I do not think that there was any specific mandate in the election campaign. I do not think that one emerged, and certainly one could not be discerned in the results. I would interpret the General Election by saying that the electorate, by a narrow margin and an overall minority, decided that they were willing to let the alternative Government have a go at the economic problems with which the country is immediately concerned and in respect of which the Prime Minister has so frequently proclaimed that he knew all the answers.
Surely the overriding economic objective must remain that which was proposed by my right hon. Friend the Member for Barnet (Mr. Maudling) in his Budgets, of continued expansion with full employment but without inflation. That is of common national importance. It seems to me that the vital priorities here must be genuinely to modernise, to stimulate competition and efficiency, to get rid of restrictive practices which impede progress, wherever they may be found, to concentrate on achieving an acceptable incomes policy and to improve our export performance in all ways possible.
Although, in my constituency, I have firms which make a signal contribution to exports, the constituency as a whole fulfils mainly an imports saving role. I am concerned, first, with the reference in the Gracious Speech to agriculture. It would be singularly inappropriate for me to go into that in any detail today, but I stress to the Government that it is desirable to round off and complete some of the forward-looking policies which my right hon. Friend the Member for Bedford (Mr. Soames) initiated and 757 developed in the last Parliament. Specifically, I ask the Government to bring forward legislation without delay to give effect to the recently announced agreement, that on 22nd September, for new marketing arrangements for home-grown cereals.
§ Mr. Deputy Speaker (Sir Samuel Storey)
Order. We are debating an Amendment on steel, not agriculture.
§ Mr. Hill
I merely wished to touch on that in passing, Mr. Deputy Speaker, because my constituents who grow these cereals and want to see them marketed, use machinery and are much concerned with the quality of the steel that goes into it. They were addressed passionately and at great length by the late Aneurin Bevan, in my own by-election 10 years ago, about the merits of steel nationalisation, and their only comment, from their recollection of a nationalised steel industry and a Government-controlled supply of steel, was that the then Prime Minister's list of steel priorities did not include agricultural machinery. There was a good deal of feeling about that.
In asking for Parliamentary time for any legislation, including agricultural legislation, I am brought up at once against my main criticism of the Gracious Speech, which is that there is so much in it that it threatens grossly to overload the Parliamentary machine. The longer this debate continues the more one wonders how clear-cut the main objectives and priorities are. The Government will say that they are taking urgent steps in many directions; and certainly much has been said and a good deal may be started, but it is not so much what is started but the following through to completion that matters. However many Ministers there may be, and however numerous and zealous the Whips, the Government will be squeezed between the unpredictable pressure of events and the relentless rolling on of the calendar.
I do not know whether it is in order to do this, but perhaps I might mention that in some of his speeches the Prime Minister has made it clear that he hoped for a more professional approach to our jobs. This may be one of the reasons why he wants it. He has made a good start and set a good example. I should like—it may be an old Tory thing to do—to shed a tear for the passing of another 758 amateur. No longer will an Assistant Whip, after two or three years, be asked to turn professional and join the team for good. Now all will start with a salary.
I believe that it is a sound Government precept not to take on commitments which are costly in time and Parliamentary good will and offer no sure advantage. In a Session when Parliament's back, if not breaking, is likely to bend under the weight of proposed legislation and debate, I think it odd that the Government should lay on us not a straw but the whole burden of steel. Even after the Minister's speech at the opening of the debate, I was left wondering—I have not been enlightened by subsequent speakers—what technical and economic reasons are so cogent that steel has to be nationalised. I am not convinced, as far as I have heard the arguments, that nationalisation helps one way or the other. Indeed, in some degree it seems to be a positive disadvantage.
In general, it is not so much a question of whether there should be more price cutting. There seems to be need and possibly scope for production cost cutting. That is something we worry about in agriculture the whole time. The factors which would assist production cost cutting would probably be impeded by nationalisation and are much more likely to be encouraged by the other facets of economic policy which are adumbrated in the Gracious Speech and which, I fear, we may not be left with sufficient time to follow up.
I am left wondering why these proposals were included in the Gracious Speech. Was it out of weakness, to placate the extreme Left? We may hear from other hon. Members representing steel constituencies on that point. Was it to provide a convenient option at a later stage to provoke a General Election after the post-election benefits have begun to be distributed and before the bills come in? Or is it just a face-saving operation for the Prime Minister? The right hon. Gentleman has worn several faces in the past. Is it necessary or even prudent to struggle to save all of them?
Whatever the reason, the sad fact remains that a great deal of precious time and energy, in and out of Parliament, will be consumed to no good purpose— time and energy which should be devoted 759 to familiar and inescapable problems from which Parliament, Press and public are too easily diverted Such a wanton diversion cannot be cogently justified by any reference to the national interest, despite what the hon. Member for Attercliffe said, or to any clearly expressed national de-mend. The proposal stands in the way of what I believe the nation now most wants —sensible government and constructive opposition. That is why I and a majority of my constituents are among the millions of people who regret that this nationalisation proposal was included in the Gracious Speech.
What should be the first test of policy? So many Left-wing dons are at the moment either giving or receiving advice on the Government side that perhaps I might be permitted to offer a grain of another man's wisdom—that of a Right-wing don. It is a grain which has been well taken by both the Conservative and Liberal Parties in their Amendments to the Queen's Speech.
After the Labour victory in 1929, Sir Keith Feiling, well known as the historian of the very early days of the Tory Party, addressed himself in a brilliant and too-little-known pamphlet to the question, "What is Conservatism?" and discussed the post-election scene as the Tories moved into opposition. In that pamphlet he wrote a sentence which I would like the Minister of Public Building and Works to have printed and posted up in the many Ministerial rooms that we have heard about today, including that still reserved for the Parliamentary Labour Party. The sentence is:Relevance is the first quality of mind, and irrelevant virtue is so much energy wasted.… We need to pray for relevance which the strongest leaders of the past have missed or been unable to make others grasp.We vote tonight, but we pray daily.
§ 8.25 p.m.
§ Mr. Woodrow Wyatt (Bosworth)
I would like to begin by paying tribute to someone not here today. During the General Election we were very well led, but without the previous leadership of Hugh Gaitskell, who did so much, often under great attack, to modernise the Labour Party and give it a new, vigorous look, I do not think that we would have won the election at all. It was and is a tragedy that he came 760 so close to the promised land and was not allowed to enter into it. I am sure that he would have been delighted with the rapidity with which the Government have got down to their business and with the content of the Gracious Speech.
Now about steel. I do not regard, as the Daily Mirror does, a measure to do something about steel as "the great Irrelevancy". Nor do I take the opposite extreme view that nothing whatever should be done about steel. We have here and now, in this Parliament, a great opportunity to do something beneficial for the steel industry, and to settle its political future finally and irrevocably.
There is a lot wrong with steel and its performance, whatever hon. Members opposite have said in its defence. Many of the leaders of the industry would admit it. The price fixing arrangements are unsatisfactory—one cannot deny it. There has been insufficient research compared with other countries; there has been a failure to modernise plant to keep up to date; there has not been enough positive planning of new plant, new processes, new equipment; there has been too much overlapping between one firm and another.
More rationalisation would have led to lower costs and extra efficiency. In many cases the units in which steel works in this country are not large enough. The twelve largest British firms produce only one-fifth of the amount produced by the five largest American firms. So size is a key factor. But anything done by way of legislation to make steel flourish should satisfy five conditions.
First, it should seem to be directly and positively designed to improve the efficiency of the industry and, hence, of all the industries of this country which depend so much upon steel.
§ Mr. Wyatt
Otherwise, the Bill will be thought to be a waste of Parliamentary time, delaying the other highly desirable items in the Gracious Speech.
Secondly, the method used must carry middle of the road opinion with it. I 761 am afraid that it is no good my hon. Friends thinking that the great majority of the country, or at least well above more than half of it, is not against nationalisation of steel as it has understood the concept so far, because it is. The latest National Opinion Poll is, I think, incontrovertible when it shows that only 24 per cent, are with nationalisation of steel as they understand it in the old sense. The second condition, therefore, is that any legislation should reverse these figures and not confirm them, otherwise it will be more difficult to win the next election.
The third condition is that alterations in the structure of the industry must be made in such a form that the Conservatives will be put in an intolerably embarrassing position if they seek to undo them. They should be so eminently reasonable that the industry itself—under protest, no doubt—would acquiesce in them and come in time to operate them wholeheartedly.
The fourth condition is that the legislation should take a form which the Liberals could at least abstain from voting against, even if they did not actively support it. Whatever may be thought of the suggestions made by my hon. Friend the Member for Pembroke (Mr. Donnelly) and myself, we may well need the support of the Liberals in this Parliament before it is finished. It is not wise to force something completely unpalatable down the throats of one's potential allies. [HON. MEMBERS: "Oh."] Hon. Members may take that view now, but a series of motor car accidents, cases of appendicitis and fog may very well change their views. I am concerned with trying to build up the maximum majority for my party in this House so it may rule untrammelled for the next four years and fulfil its programme and justify itself. I do not wish it to be at the mercy of chance illnesses.
Fifthly, the Measure should be as short as possible. Last time we nationalised about 100 companies, and, with a majority of nearly 200, it took us two years.
§ Mr. Deputy-Speaker
Order. Will new Members please note that they should not pass between the Chair and the Member in possession of the Floor?
§ Mr. Wyatt
The fifth condition, as I was saying, is that the Measure should be as short as possible. The last time we nationalised about 100 companies, and, with a majority of nearly 200, it took us about two years to get the Bill through. A Bill which is too contentious and which arouses too great an emotion will have very little chance with our slender majority.
I think that these conditions can be met fruitfully and at the same time honour to the full the pledge given in the Labour Party manifesto. I should like now to try to explain how and why.
The Iron and Steel Board, within its limits, has done excellent work. I do not share all the criticisms which have been made of it, for the limits put upon it were exceedingly great. Very attractive suggestions have been made about extending its powers and combining them with a further extension of public ownership to a greater or lesser degree. On balance I am against this approach. It would add to the legislative burden in the Parliamentary draftsmen's office and in the House and it would create unnecessary complications. There is a simpler way.
I should like to see a new holding and directing company set up which would incorporate most of the staff and mechanics of the existing Iron and Steel Board. This directing company should own the whole of Richard Thomas and Baldwins for a start. It is already under complete public ownership. It should also own 51 per cent, of the shares in the other nine major steel producing firms. For the sake of clarity, I will name those firms: Colvilles, Dorman Long, South Durham, Consett, United Steel, Summers, Lancashire Steel, Stewarts and Lloyds and the Steel Company of Wales. That is 80 per cent, of the steel producing industry.
It should also have the right to buy 51 per cent, of Guest Keen and Nettle-fold, Tube Investments and Vickers if it wished to do so. It should be empowered to say to those companies that if they did not wish to sell 51 per cent, of their entire operation, it should be for the companies concerned to hive off the other interests, thus saving the legislative burden once again.
In addition, I should like to see such a new holding and directing company 763 able to acquire if it wished—as a matter of fact, I do not think that it would—51 per cent, of the shares of any of the other 180 companies which make up the remaining 10 per cent. of the industry—because Guest Keen and Nettlefold, Tube Investments and Vickers are 10 per cent, in themselves.
I do not think that it would want to do this, because those 180 firms contain many odds and ends which were a considerable nuisance last time steel was nationalised and which would always be a considerable nuisance in the many queries raised in dealing with their problems when major problems of the steel industry had to be considered. Anyway, they would automatically fall into line, because the major companies would be under public control. They could, of course, be operated, if my right hon. Friend the Minister of Economic Affairs thought fit, by a kind of junior N.E.D.C.
The holding and directing company would or should appoint two directors to each of the boards it controlled, just as the Government appoint two directors to the British Petroleum Company, of which they own 51 per cent, of the shares. But, of course, the difference would be that the two directors would be operating under a central plan controlled by the central holding and directing company. That is not the case with British Petroleum today, in which the instructions are very much not to interfere.
This procedure would have enormous advantages. Without any further legislation, the holding and directing company would be able to manage all the firms—because, with 51 per cent, of each, it would have complete control of them—in accordance with the national plan and targets worked out by the Secretary of State for Economic Affairs. It would have the advantage of a strong central control with limitless internal powers. It would not be confined by any legislation from this House. It could set and fix all the prices, not merely maximum prices, thus ensuring that the consumer got his steel at the cheapest price and that there was the maximum competition.
The fact that the companies would remain with their separate identities and would publish separate balance sheets and to a large extent be rivals of each other, 764 together with the new price fixing arrangements, would restore to the industry a measure of competition which it has not got now and could not have under a complete blanket form of nationalisation.
The holding and directing company would be the technical leader of the industry. It would be able to finance all research needed without any difficulty. It would be able to initiate the building of new plants and new processes in the appropriate places. It would be in an overwhelmingly strong position to insist on modernisation. It would be able to compel mergers and the necessary rationalisation to get the bigger units which we need and a more sensible use of our resources.
It should also be empowered and directed to set up a redundancy fund, financed by a levy on the industry as a whole, to cater for those people temporarily displaced by new processes, and it should also run a central retraining scheme for the same reason.
Under my suggestion, the identities of the companies would remain largely unchanged. There would, therefore, be no potential damage to exports in countries which might hesitate to trade with a wholly nationalised concern. Old customers would be dealt with by firms with which they were already familiar.
Of course, the industry as it is today will not like much of what I have been suggesting, but I believe that, whereas its leaders would not accept a 100 per cent, transfer of the shares without a prolonged fight, they could be persuaded to co-operate on the basis of a 51 per cent, shareholding by the Government in each of the nine or twelve major companies, in addition to Richard Thomas and Baldwins. I think that such is the connection between the steel industry and the Conservative Party that it could persuade the Conservative Party not to exert too violent an opposition to such an arrangement in this House.
We need the co-operation of the leaders of the steel industry—the top executives and the managements—because we are not reshaping the steel industry for fun—at least, I hope we are not. We are seeking to do it for its own good and for the good of the country. We must have the willing co-operation of the leaders of the industry if we are to be successful. Obstruction by the leading elements of 765 the steel industry throughout a long Parliamentary battle would be immensely damaging, not only to the steel industry itself, but to all our other industries.
I believe that something along the lines I have been suggesting has the hope of healing the wounds and of removing this question of steel nationalisation and denationalisation from the Floor of the House once and for all. The Liberal Party has already said that it would accept a public shareholding in four of the major companies along the lines of the British Petroleum holding already owned by the Government. I do not think that it would become a matter of very fierce principle for it vigorously to oppose widening the principle which I have suggested concerning the taking over of 51 per cent, of nine or twelve of the major firms. This is not a great matter of principle. We are talking about the same thing but taking it further than the Liberal Party suggests.
§ Mr. Hooson
Could the hon. Gentleman explain how there would be competition between the nine firms all controlled by the same authority?
§ Mr. Wyatt
I have just explained that. I know a little about business. The nine or twelve firms, as the case may be, would each be run by its own separate board and assisted by two Government directors. Each would publish its own accounts and run its own operations under the central plan, exactly as happens today. At this moment there is a development plan worked out by the Iron and Steel Federation in conjunction with the Iron and Steel Board. The firms would continue to operate in their separate ways, seeking, I hope, to produce cheaper steel than their rivals, because they would not be bound by the price-fixing arrangements of the Iron and Steel Federation. There would be more competition if my suggestion were followed than there is today or than there could be under complete, 100 per cent, nationalisation.
If the Opposition were to fight a Measure along the lines I have suggested in the way that they fought the last Iron and Steel Bill, they would look immensely foolish in the country because the Measure would be so obviously aimed at improving efficiency and trying to get maximum good will that the stigma of being doctrinaire would fall completely 766 and utterly upon them. If they managed, through accident or illness, to defeat such a Bill as it went through the House, I am sure that the Labour Party would win any General Election then fought upon the issue.
Armed with the kind of approach which I have been talking about, all the talk of a spring election, about which we were reading in the newspapers yesterday, would evaporate. It would be entirely unnecessary. We could pursue our policies uninterfered with for the next four years. [HoN. MEMBERS: "Oh."] It is fair to say that the Leader of the Liberal Party, the Liberal spokesman today, and Liberal speakers during the rest of the debate, have made it clear that, apart from this one issue, they would support everything else in the Queen's Speech.
§ Mr. Wyatt
Well, if not everything, I am sure that they could be persuaded to accept at least 95 per cent, of it. I might even talk to them myself about it.
By this method we could get all that we needed in the way of public control and the means to stimulate the steel industry. If we approach the issue bold-headed and insist on 100 per cent, public ownership, we will be in for time-consuming dreary fights in the House. At the end of the day we might find that we had gained nothing and lost an opportunity to do a great deal, not only for the steel industry, but in other directions. This Parliament is uniquely placed to show that Socialism is not a static concept. It could demonstrate triumphantly that the Labour Party's philosophy can readily be adapted to changing situations and carry through its declared aims without the loss of one particle of its principles.
An arrangement of that kind could be a model of how public control and ownership can work with the private sector. It could be followed in other industries as need arose. It would also fulfil all the conditions I have outlined earlier. I believe that it would win the admiration and sympathy of the entire country. [Interruption.] There are a lot of people outside this Chamber as well as in it.
I and hon. Friends of mine who think likewise could support such a Bill with enthusiasm. I know that it involves some 767 compromise, but the question which we have to ask ourselves is whether we will stubbornly insist upon a 100 per cent, old-fashioned style of nationalisation or whether we will bring the steel industry under public control and into a decisive degree of public ownership in a new, original and dynamic way that will enable us to carry out all our plans for that industry and yet not so overstrain the Parliamentary timetable that we could be delayed in, or prevented from, getting through increased social benefits, the repeal of the Rent Act, the control of land prices, a great housebuilding programme and a massive expansion in education.
§ 8.47 p.m.
§ Dame Irene Ward (Tynemouth)
I feel that the best speech which has been made on the Gracious Speech and on the Amendment today was the speech made by my hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn). He avoided talking about politics in relation to the steel industry. He gave a true picture of the position of the industry and I thought that the House benefited enormously by hearing such a coherent speech on this great industry.
I have listened to most of the speeches that have been made, from the opening speech by my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) and the speech of the Minister of Power, and I thought that whatever the criticisms might be of the steel industry, how unfortunate it was that an industry that had served the country very well and had taken many steps in the post-war period both to modernise itself and to serve the national interest should go by default and that nobody should really put the case for the industry. That was why I welcomed so much the speech by my hon. Friend the Member for Hallam.
I have no direct interest in the iron and steel industry except that I come from a part of the country where we have made our livelihood by coal mining, by shipbuilding, by ship repairing, by the iron and steel industry and by heavy engineering. It distresses me enormously to hear people attacking the industry as if it had made no contribution whatever in the post-war years to bring itself up to date and to serve the interests of the nation. 768 Industrial relations in the iron and steel industry have been a model for a great many other industries which I should like to take notice of them, and I would say to the Government that though people in the iron and steel industry voted for the Socialist Party, right hon. and hon. Gentlemen opposite are quite wrong in supposing that those who work in nationalised industries prefer working for nationalised boards rather than for private employers.
They had better get that out of their minds straight away, because those who are working under the National Coal Board or the Railways Board are not a bit interested, as individuals, in working for monopolies of that kind. [An HON. MEMBER: "They voted Labour."] Of course they may have voted Labour, but there are a lot of reasons which make them vote Labour. It is not because they like nationalisation or working for a nationalised industry, and that is one of the most important reasons why the Amendment should be carried tonight.
Another thing which has interested me enormously is that in all the comments and criticisms and arguments and discussions which have taken place about this Amendment I do not think that anybody has really emphasised what is my particular objection to the nationalisation of the steel industry. Nobody, so far as I have heard, has pointed out that the danger to the economy is that all the nationalisation started with the return of the Socialist Government in 1945 and that all the nationalisation has pushed up prices. [HON. MEMBERS: "Oh."] Most certainly. I very well remember the plea which was put forward by the Socialist Party at the time of the 1945 General Election—and there is some advantage in having been in political life a long time.
§ Dame Irene Ward
No. I do not want any stupid Members to be asked to withdraw, because it brings me hundreds of votes in the North of England. In the North we think that there is no substitute for experience. Sometimes, I must say, I wish that the right hon. Gentleman the Member for Easington (Mr. Shinwell) 769 would remember that; but I am not going to be put off the point I was about to make.
I remember the nationalisation of the coal mines and the argument which said, "Vote for nationalisation: you will have more coal, better quality coal, and coal at cheaper prices". I remember that, and so do my constituents, and all I am saying is that this, of course, has been the theory which has been developed. I say "theory" because practically no hon. Member opposite has made an informed speech on the steel industry. Most of them do not know a thing about it—[HoN. MEMBERS: "The hon. Lady does not."]—whereas the whole theme of the arguments which come from the Opposition this afternoon on this Amendment, though couched in terms which related to the steel industry, exactly represented the arguments which were put forward at the time of the 1945 election in relation to the nationalisation of the mines. The increase in the price of coal, of gas, and of electricity has seriously adversely affected the economy of the country. Had it not been for 13 years of Tory rule, our economy would have been "down the drain".
I listened to the right hon. Member for Easington spitting out vituperations about the profit motive. How are all the social benefits to be paid for if there are not profits which are taxable to provide the income to meet the bills which will surely come forward day by day?
I am surprised that nobody has mentioned what I consider to be the gravest objection of all to the nationalisation of the steel industry, namely, that as surely as night follows day there will be an increase in prices. With all the criticisms which have been levelled against the steel industry, it must be remembered that, from the point of view of price, it is a much better industry than the European one. That point ought to be borne in mind all the time. An economy which is run with great difficulty, by whichever Government is in power, can be seriously adversely affected if the price of steel rises.
I listened with great interest to the hon. Member for Sheffield, Attercliffe (Mr. J. Hynd). He represents a steel constituency, and knows about the production of steel, but he was so keen on 770 putting across his political observations that he failed to tell the House how, under the plan for the nationalisation of the industry, the detail was going to affect the economy in a satisfactory way, so to speak.
I am against the nationalisation of steel, partly because the workers in this industry do not care for nationalisation. British Railways have been discussed at considerable length. If we had been able to make a profit on the railways, I should have liked to have seen that profit go towards increasing the pensions of railwaymen and railway superannuitants, as well as to paying a good wage to those who work on the railways and carry a heavy responsibility. If one compares the salaries and wages paid to railwaymen with those workers in the air transport industry, one realises that the former have not derived much benefit from the nationalisation of the railways.
Not one hon. Gentleman opposite has said how he proposed to get over the difficulty of rising prices which inevitably follow the nationalisation of an industry. I could say a great deal more in strong and emphatic terms. I am lucky to have had this opportunity to say that those who advocate the nationalisation of the steel industry are doing the national interest and the economy of the country a great disservice.
§ 9.0 p.m.
§ Mr. Nigel Birch (Flint, West)
My first duty, and a very pleasant one, is to congratulate those hon. Members who have made their maiden speeches today: my hon. Friend the Member for Lewisham, West (Mr. McNair-Wilson), and the hon. Members for Chesterfield (Mr. Varley) and Salford, West (Mr. Orme). In various ways they have all been connected with the steel trade, and I thought that my hon. Friend's maiden speech was particularly interesting because he has studied the subject and all the figures very deeply. We shall look forward to hearing not only him but both the other hon. Gentlemen again.
I should also like to congratulate the Parliamentary Secretary to the Ministry of Power on his appointment, because he is a Welshman, and about one-third of all our steel is produced in Wales. He is also young—he is the exception that breaks the rule.
771 During this debate we have had three separate suggestions of a compromise: we have had one from the right hon. Member for Vauxhall (Mr. Strauss), one from the Liberals and one from the hon. Member for Bosworth (Mr. Wyatt). I was not quite certain whether the suggestions of the hon. Member for Bos-worth did not go rather further than those of the Government, but he ended by making his suit to the Liberals, as I thought. But I thought that that rather aggressive he-man approach was not quite the right way to win those rather coy, square types below the Gangway. As far as the debate goes, however, the point is that it is perfectly clear that the Government do not intend to accept any compromise, so we must conduct the debate, and vote, on the basis that the Government intend to carry on with such plans as they have announced.
The greater part of the debate—in fact, the whole of it from the opposite side—has been what I would describe as a denigration exercise. That means that one collects every point that could possibly be made against the steel industry—true or false, real or imaginary, fair or unfair—one jumbles them all together and laces the mixture with a large quantity of quite misleading statistics. At the end of the day one says, "Q.E.D.—the answer is nationalisation". But it is not an argument.
Surely the point is that the onus of proof lies upon the nationaliser. He has to show how he would organise the industry, and how he would overcome the difficulties so that the advantages he claims would accrue to our country. That has not really been attempted, but it is something that should be done. After all, we have not had too happy an experience with existing nationalisation. [HON. MEMBERS: "Where?"] Well, what about coal, and what about the railways? [Interruption.] To nationalise anything else would be a triumph of hope over experience.
In addition, as many hon. Members have pointed out, the steel industry is entirely different in kind from the industries that have been nationalised. It is not a natural monopoly like gas or electricity, or a service like transport. This was a point very well taken by the President of the Board of Trade, 772 and I should like to quote one sentence from an article he wrote on 27th October, 1959, at the height of the Clause Four controversy—oddly enough, in a paper called The Queen:The truth is that the public monopoly was suitable only for public utilities like London Transport, gas or electricity; but not for manufacturing industries.I would bet a very large sum of money that, in his heart of hearts, the right hon. Gentleman still agrees with what he then said, and I would not be the least surprised if the right hon. Member for Vauxhall thought so, too.
We have not had any attempt to meet this onus of proof. The right hon. Gentleman the Minister of Power hardly touched at all on any of the more vital arguments. I have been told that a good many years ago there was a Cabinet Minister who was so incapable of putting his brief in the Cabinet that his Ministry had to induce the Cabinet Secretariat to put in the Cabinet minutes what he should have said.
What I should like to do for the main part of my speech is to suggest to the right hon. Gentleman some of the things that he ought to have been talking about. Before I do that, I want to make one point upon the denigration exercise. That is one which my right hon. Friend who opened the debate dealt with, but, as it has been so much dealt with, I want to say a word on the question of monopoly and the judgment of the Restrictive Practices Court.
It is most interesting that the Labour Party has suddenly got so excited about this judgment, because if we go back to the 1958 Report of the Iron and Steel Board it says there that its costs are based on the costs of the most efficient and most modern plants, and for that reason the board thought it perfectly reasonable that the prices it laid down should be the actual selling prices, and they always have been so. Most of the argument at the Court was on what would happen if there were a slump. The Court, rather oddly, laid it down that there would not be a slump. Therefore, the thing did not really arise.
I think that the argument has not been put in its more sophisticated form. This is an argument which I should like to put seriously to the House. I take it from Sir Robert Shone. He wrote a 773 paper issued on 22nd March, 1961. He was at that time executive director of the Iron and Steel Board. Since then, as the House knows, he has obtained high office in N.E.D.C. What happened to him during the soldier's battle in Whitehall, I do not quite know. I hope that he is all right. In this paper he said that he believed in an administered price, but that price was competitive because it was laid down on the principle of the costs of the most efficient and modern firms.
Sir Robert said that the competition was real, and the fact that it was real was shown by this: that the rate of development of different firms was quite different; that the really efficient firm developed far more quickly. He gave the instance of the 10 largest firms in the country. In the decade up to 1961 on average they increased their production by 50 per cent., but the variation between firms extended from 1 per cent. increase to 500 per cent., showing that there was an enormous difference in the performance of the different firms. In the case of the smaller firms, quite a few of them had gone out of business because they could not stand the pace, while in other cases the production had doubled.
We see competition working through the different rates of development. So we are producing exactly the result that ought to be produced by competition by getting the most efficient firms ahead. The fact that the fixed prices are competitive is shown by poor old Richard Thomas and Baldwins, which cannot compete. The prices are competitive and, therefore, I think that my right hon. Friend the Leader of the Opposition was absolutely justified when he said that what we have to do is to keep British steel competitive. He was mocked for saying that, but, of course, he is absolutely and completely right.
Let us consider some of the argument which has been put across by right hon. and hon. Gentlemen opposite. Let us take the Prime Minister's speech on 4th October at Middlesbrough, about which much has been said. The whole of that speech was devoted to the judgment of the Restrictive Practices Court, and in no single word of that speech did he point out that the prices at which the companies were selling were not prices 774 fixed by themselves but prices fixed by the Steel Board. This, no doubt, was owing to lack of time. If somebody had challenged him and had said, "Your speech is very misleading on this point", I have no doubt that he would have admitted it at once and would have said, "Of course it is misleading"—good honest soul, who can possibly doubt that that would have been so?
On this question of monopoly, if we want a really damaging monopoly we want a public monopoly. Take coal. Hon. Members constantly talk about that. What happened when the steel industry was able to import coal from America well under the local price? It was stopped from doing so. If we have a really tight steel monopoly we shall get in a mess.
So much for the denigration exercise carried out by hon. Members opposite. I want to come to the onus of proof. I was astonished—or perhaps astonished is too strong a word; I was mildly surprised by the extraordinary vagueness of the proposals as made originally by the First Secretary and as unelaborated by the Minister of Power. We have been reading day in and day out in our newspapers about the tremendous amount of work which the Labour Party has been doing in preparing its programme, with working party after working party. We have had stories about experts, or people who think that they are experts, in the steel trade, offering their assistance and it being accepted by the Labour Party. There was even a sinister story that the Hungarian Mafia itself were involved.
I had thought that in the Prime Minister's 100 days between his Elba and his Waterloo he would have wished, not to produce a Bill—he could not do that—but to put forward a fairly clear idea of what he wanted to do. After all, he cannot honestly say that it is right to nationalise steel if he has not the faintest idea of what he would do or how it would work. I am rather sorry for the Minister of Power. He is in very much the same position as was the right hon. Member for Easington (Mr. Shinwell), when he was given the job of trying to nationalise the coal industry. He said that the Labour Party had been preaching the nationalisation of coal for 50 years, but that when he arrived at his office no work of any sort had been done on it.
§ Mr. Birch
I think that the right hon. Gentleman's memory is at fault. In any case, no work has been done, and the coal trade has never recovered from what the Labour Party did. I suggest that, as the Minister of Power needs help, the Prime Minister might make the right hon. Member for Easington an extra Parliamentary Secretary to the Ministry of Power. After all, he has the necessary seniority.
§ Mr. Birch
Surely some work must have been done by hon. Members opposite. I hope that when he winds up the debate the Secretary of State for Scotland will be able to answer a few questions and be able to make a few matters clear.
The first and extremely important question is what have the Government in mind for the structure of the industry? Do they intend the existing firms to remain more or less organised as they are? Do they mean them to keep the good will which has been built up over the years at home and abroad? Do they mean the existing teams and arrangements, which are working and which are essential for the efficient functioning of any industry, to go on? Do they mean to preserve the local loyalties which are so strong among those who work at all levels in the steel trade?
Do they mean to do that in any genuine sense? If it is not genuine those loyalties and that good will will be lost. Or do they intend to do what they would have done had they not been defeated in the 1951 General Election—mash up the industry, destroy the local loyalties and good will, destroy the teams and the general management and operation of the industry?
§ Mr. Birch
I will not give way at this stage, because I am asking questions of the Minister, although I doubt whether the Government have informed him of the answers to these questions. We are at least entitled to these answers, which are important, because, as has been pointed out by many hon. Members, there is now a surplus of steel in the world.
776 Selling steel abroad will be something not too easy to do. To sell steel abroad will require that diversified initiative, speed and decision, judgment and ability to foresee what will be found on the other side of the hill, that nose for change in markets and fashion which is essential to any successful business but which is never found in great corporations and Governments. If the structure of the industry is broken up I believe that we will also break up its selling organisation, make ourselves unpopular abroad and badly damage our exports.
I will make only brief reference to labour relations, although this is a remarkable story. There have, of course, from time to time been troubles, sometimes disputes with the management and, also understandably, sometimes disputes between unions which have troubled us. Nevertheless, apart from the General Strike, there has been no general stoppage in the industry this century, and that is something of which everyone in the industry should be proud and of which the country as a whole should be proud.
I turn to the subject of technology. I thought that we were going to have more stuff today on technology generally— [HoN. MEMBERS: "Stuff?"]—on the rate of advance. People sometimes get the wrong idea about automation. Anyone who heard the speech of the Prime Minister at Scarborough would have thought that he himself invented automation. In fact, of course, the great majority of the steel trade are using their second generation of automation techniques already and are looking forward to the third generation. There are difficult transitional phases between these generations and I believe that the new processes have been dealt with quite well by the industry.
My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) spoke about the "Spear" scheme which had worked in Sheffield and which was an example of how things can and should be done in industry when new techniques are introduced. The thing is not going too badly.
But now we have a new Ministry, the Ministry of Technology. I read in my Daily Express that the Parliamentary Secretary writes excellent novels on "Power, Politics and Love". Being in office ought to help his novels, although 777 he might be a little thin on the love side. That may be put right. As his Minister he has Mr. Cousins. Unlike many people, I think that the appointment of Mr. Cousins as Minister of Technology is very sensible. I think it very sensible for the reason that that Ministry, if it is anything, is one big demarcation dispute. Demarcation disputes are obviously down his street. I view both these Ministers with sad affection. I believe that they may come to be known as the Bootsie and Snudge of British politics.
If hon. Members opposite succeed in nationalising the steel industry I rather doubt whether the Ministry of Technology will have a great part to play. I think that a nationalised industry would be not inclined to welcome them, but if the industry is not nationalised I see no reason, if the new Minister of Technology has things of interest and importance to suggest, why there should not be a very fruitful interchange to mutual advantage. I look forward to that and I do not see why it should not work.
The next question I raise is a very important one and I trust that the Government have thought about it already. If they have not, they have not thought about very much. What type of monopoly do they intend to impose? What I mean is, will customers of the steel industry—say, firms in the engineering industry—be forced, whatever the price or quality, to buy from a nationalised industry, or would they be able to import across whatever tariff there may be? That is a very important question. [An HON. MEMBER: "They do it now."] Of course they can do it now. The question is: if the industry is nationalised will they be able to do it? That cannot be done in the coal trade, which is nationalised.
The last point I make before coming to my peroration is that it is a question of working in with the national plan, a matter which always concerns right hon. and hon. Members opposite very much. Always the steel plans have been co-ordinated by the Iron and Steel Board. Since the N.E.D.C. was set up those plans have not only been co-ordinated with the board, but with the N.E.D.C. as well. That has been already pointed out, I think, by the Minister himself. In its paper on the fulfilment of a 4 per cent. growth rate the N.E.D.C. said that 778 the steel plans were entirely adequate both globally and in detail up to 1966. I believe that there is every reason to suppose that they are adequate after that.
The point I want to make is this. The plans are adequate. Not only are they adequate and tied in with the Government plans, but they are being carried out, they have been carried out, and they will be carried out. The trouble is that it is no good making plans for a nationalised industry unless it is efficient enough to carry those plans out. How many plans for coal have gone down the drain simply because they have not been carried out? I believe that the absolutely vital thing in planning is to be able to carry out the plans and to have sufficiently able instruments to carry out those plans. The steel trade is an able instrument.
That is all I have to say, except this. Right hon. and hon. Members opposite are determined to carry through their plans against the will of the country, against the will of most of their supporters, and against the will of many of their supporters in the House. Why do they want to do it? I believe that only a small proportion are influenced by the argument of the Minister—the commanding heights of the economy. Those are the words, as the House knows, of Lenin. Those are the words of those who want power for power's sake—not to do good for others, but power for power's sake.
I believe that the real reason why this is being brought forward is that the Prime Minister and his friends won the great Clause Four battle after the election in 1959. They are determined to show that they are the masters now. As the Secretary of State for Scotland is to reply, I will end by paraphrasing two lines from the greatest of Scots poets. I believe that what they are saying is this:We'll take a cup of malice yet Forthe sake of old Clause Four.
§ 9.27 p.m.
§ The Secretary of State for Scotland (Mr. William Ross)
I must confess that this is a much more good-natured debate than I had expected and, I am sure, than most of the old hands who have been through all the steel nationalisation debates in the 1945–50 Parliament had 779 expected. That does not mean that we are tired of debating steel, because the House will never be tired of debating an industry which is so fundamentally basic to the country's prosperity.
The right hon. Member for Flint, West (Mr. Birch) talked about a campaign of denigration. He should know something about that.Never glad … morning again!I will say this. In his scourging of Prime Ministers he has not been a respecter of parties. It has been fair shares.
I was disappointed in the speech of the right hon. Member for Enfield, West (Mr. Iain Macleod). The prodigal was returning into a situation that he had expected, and having played his part in the defeat of the Tory Party he was coming to serve the Leader of the Opposition when he said that he could not with honour serve—[An HON. MEMBER: "Oh dear, drop it."] No, the right hon. Gentleman dropped it.I could not honourably serve with him in that Administration.The prodigal may have returned, but I warn him that I doubt if the fatted calf has been killed yet. The right hon. Gentleman is very much on trial, and after what we expected of him today he did not get up to standard. He merely said that he would not discuss the question of the mandate. The right hon. Member for Flint, West went a little beyond that. He seemed to think that we had no mandate to carry out our policies enshrined in the Queen's Speech with reference to steel. With all due respect, his right hon. Friend was right about a majority of one and I am happy to tell the right hon. Gentleman that it is not fog-bound now. That is quite sufficient repartee.
The right hon. Gentleman was considerably concerned not to look into what happened in the steel constituencies. There is no doubt at all that the steel constituencies, and indeed the rest of the country, knew all that was involved in steel nationalisation. The British Iron and Steel Federation took great care to tell the country. It even sent glossy documents to every school. Talk about commanding heights, what subservient depths! It shows just exactly how right one of my hon. Friends was in a maiden 780 speech when he quoted Aneurin Bevan saying that politics is power. He could have gone further and said, "And power in this country is steel."
This is the core and centre of economic power in Britain. This is what hon. Members opposite have been saying and what the steel industry has been saying. They have been saying that the national economy rests upon the industry and have talked about the dependence of our exports on an efficient steel industry. We accept all this on both sides of the House. [An HON. MEMBER: "Why muck it up?"] I am not mucking it up. I am pointing it out, as the hon. Member should appreciate more than anybody else. [HON. MEMBERS: "The hon. Member is not in the House."] The hon. Member should realise that this is something on which there is no controversy, but we must realise what has been happening over the years.
The right hon. Member for Enfield, West discovers that prices are in disarray after 30 years, but he must know that we are dealing with an industry which historically has depended upon protection. It has created its restrictive practices within itself and there is not a word from hon. and right hon. Members opposite about them. Restrictive practices at home, monopoly at home, and cartelisation abroad. This is what the propaganda has been about. We did not upset the steel applecart. It was the Government. [Laughter.] I mean the Opposition who were the Government, and the right hon. Gentleman opposite who laughs should know something about the little local difficulties that stand in the way of power.
It was the creation of the Opposition that made this position in which the industry was acting like a monopoly. We have to face it. It is a monopoly, and the Iron and Steel Board has only the right, in respect of its supervision, to lay down maximum prices. These maximum prices have become minimum prices. We never heard before the election or during the election that this worried the Conservative Party at all. It was a Liberal Member who raised the matter on 30th June—and rightly—and the Government said, "We are not going to do anything about it." Five or six of my hon. Friends raised the matter again in a fortnight, and the Government said the same. It 781 did not worry them. But then a great change came over them with the return of the prodigal. They are worried about it now. They should be. It has now become clear to the people, if it was not before, that what we have is not free enterprise in steel but a monopoly. It is a monopoly in a vital basic industry.
This is the first reason why we proposed nationalisation, because it is a basic industry. The right hon. Gentleman said that we have had some rather unhappy experiences with nationalisation. Have we? There are four Liberal Members from Scotland. The people who have had an unhappy experience with nationalisation are the members of the Tory Party, who intended to deny Scotland the benefits of a nationalised railway north of Inverness. Now, there is not a Tory Member from that part of Scotland. It was not steel nationalisation which people talked about in the north of Scotland. I am perfectly sure that it was not mentioned. People there understood the benefits they had under nationalisation, benefits which were threatened by a Minister of Transport under a Tory Government.
§ Mr. Ross
I am not flirting.
If that industry had been in private hands, would there have been any inquiries or any drawing back from the brink because of electoral considerations? It would have gone. [An HON. MEMBER: "Gone 'bust'."] Yes, it would have gone "bust". But we cannot run a basic industry in that way. It had to be nationalised.
The same is true of coal. Is any right hon. or hon. Member opposite prepared to say that the position of the coal industry would have been as good today if it had not been nationalised? I am looking for the right hon. Gentleman who was Secretary of State for Scotland in the last Government, but I do not see him in his place. [An HON. MEMBER: "He is on the grouse moors."] No; they only go to the grouse moors when they are in trouble. That light hon. Gentleman was asked, during the election campaign, what things he was most proud of during his term of office, and he replied, "Hunterston"—the product of a nationalised industry. The production 782 of electricity from atomic energy at Dounreay is the work of the United Kingdom Atomic Energy Authority. The Longannet coal-fired power station could only have been coal-fired because of the success of the coal industry and the willingness of the electricity industry, another nationalised undertaking, to go forward into new fields. Nationalisation, therefore, has not brought us unhappy experiences. It has given us stability at basic points in the economy which are essential for progress.
We are told that there is really nothing to worry about in the steel industry. The right hon. Member for Flint, West said that the plans were all fitted together and were agreed. Were they? There was a certain matter of controversy between the Iron and Steel Board and the British Iron and Steel Federation about how far, and when, they should go ahead with creating additional capacity.
The hon. Gentleman below the Gangway who intervened when the right hon. Member for Enfield, West was speaking was quite right in saying that the steel industry is worried, and has always been worried, about excess productive capacity not only here but in the international field as well. This is what the argument was about. It is, of course, right to have an argument about this, but the argument lasted for years; the Iron and Steel Board did not win and the British Iron and Steel Federation did not win. They did not decide it.
We are told, and we were told during the General Election, "Keep politics out of steel". But who made the decision about the steel strip mills? It was the politicians. It was a Cabinet decision, and it was announced here by the Prime Minister. We are talking about whether or not the plans as set by the right hon. Gentleman were all geared and fitted together and going smoothly. The British Iron and Steel Federation's plan was that this capacity was not to be available until the middle of the 'sixties. What would that have meant for Scotland, when the steel strip mill about which every Tory candidate was so proud would not be in operation today? It would also mean that the motor car industry, which was brought into Scotland because of the existence of the steel strip mill, would not have been there. 783 So, from the point of view of regional planning, to which every Government, and, to my mind, every party which forms a Government, will be committed, they must have that power with the steel industry to ensure the forward-going of these plans.
§ Sir Cyril Osborne (Louth)
If the policy which the right hon. Gentleman is putting forward for the centralisation of this vital industry is to be secured, will not all the most important decisions still have to be made on a political basis by the Minister responsible?
§ Mr. Ross
I am pointing out that it was the politicians who had eventually to make this decision but that the decision was delayed for years, because the people with power at present—let us bear this in mind; one has only to read the Iron and Steel Board's Reports to find this out—are still the British Iron and Steel Federation. The Iron and Steel Board has only the power to veto undesirable developments. Otherwise it has to work on the basis of persuasion. It was the political policies of the Government, the regional economic policies of the Government, which led it to step in. To my mind, these things have to be tied up right away; there must not be argument about them for years.
Let us appreciate the difficulties of the steel industry in this matter. It is concerned, and it is responsible to its shareholders. It was a very considerable risk to take. There are probably many people in the steel industry even today who would say that we should not have taken the risk from the purely steel economics of it. Let us appreciate exactly the difficulties. When Sir Andrew McCance was asked if he would finance the steel strip in Scotland, he said, "Do not talk to me about it. I have enough trouble getting finance for my own developments." This is true, and it is true of future developments.
We talk about our worldwide competitive position. In actual fact, we are not in the top ten in the modern provision of steel mills. [HON. MEMBERS: "Nonsense."] It is not nonsense. It is a fact. The cost of them is not something on which one will be able readily to get risk capital, which is the basis of the free enterprise which hon. Gentleman opposite proclaim. My right hon. 784 Friend the Minister of Power rightly spoke of the fact that, since denationalisation, over £400 million has been advanced by the Government towards the development of the industry. We must face the fact that this industry is a monopoly. If it cannot meet the financial needs in relation to the timing of measures according to political needs, does the House think that this matter will be settled just by putting 51 per cent. of the industry into four companies? That solution is irrelevant to the problems of the industry and its complexity.
We must face the facts. If the Liberals are looking for a solution to the problem, they should go back to what was said by Lord Beveridge in his book "Full Employment". [Interruption.] Does the right hon. Gentleman the Member for Enfield, West wish to interrupt? I would be glad to give way. Lord Beveridge said:If an industry is by nature a monopoly, and if it becomes a monopoly, it is essential that it should be conducted in the public interest and not in the interest of a section. The simplest way to secure that is to make it a public service under a public corporation.Joseph must shed his coat of many colours—
§ Mr. Ross
—I will not give way in the middle of a sentence—and make up his mind about some issue. The solution the Liberal Party offers is not a solution. It is merely one of those compromises made to appeal but which will not meet the situation.
The solution offered by the Liberals is not something which works in the European Coal and Steel Community. It will not work in relation to a steel industry organised as a small, tight community, as ours is. It is not intended to. If the right hon. Member for Orkney and Shetland (Mr. Grimond) once again examines what has happened in countries where there is considerable build-up of steel interests, he will see that the same thing happens there as has happened here and in the United States. Tightness of approach, the tendency to monopoly which defies all effort at regulation, happens all over the world.
It is only when one faces that situation that one appreciates that the Government's proposal is the only real solution.
785 I am quite sure that right hon. and hon. Members opposite do not propose that in a case like this they genuinely want competition. They do not want it and the industry does not. We must face the fact that competition is out for the steel industry. Therefore, if there is to be a monopoly it must either be an irresponsible monopoly under the close control of the British Iron and Steel Federation with the relatively ineffective control of the Iron and Steel Board as the last Government created it, or there must be the cleaner and simpler solution of nationalisation. That is what it comes down to. I sincerely hope that, on both sides of the House, there will be an appreciation of the sincerity of our endeavour in relation to this.
The decision in the 1945 Parliament to nationalise the industry was not dogmatic. It arose out of the history of the steel industry itself. The dogmatic approach to it was the approach of the Tory Party in 1953, the same approach which it made to transport, and the Minister of Transport of the last Government knows quite well the difficulties which that has led us into. Let us not make the same mistake twice. [Laughter.] I hope that after they have finished their cheering and their smiling, hon. Members will appreciate that we have to grasp this nettle and appreciate the importance of this to our own industry.
Let us take the subject of prices. Prices have been rising at a time when world prices have been falling. We have had customers in this country, shipbuilders, complaining that they had to pay high prices, increased prices, for steel in Britain while their competitors were paying much lower prices. What has applied to the shipbuilders has applied to every other user of steel. It should be remembered that according to the figures of the British Iron and Steel Federation one fifth of its steel production is directly exported and another one fifth indirectly exported, so that the result of steel prices being kept high, for whatever reason, and higher than world prices, is a considerable holding-back effect on our exports.
It has been said that the steel industry has done well in exports this year and that is true, but whether it has done as well as in other steel producing countries is debatable. The figures in publications which I have read show that we 786 are very much behind. But the staggering fact with the steel industry, as was brought out by my right hon. Friend, is that it does not expect to see any increase in steel exports between now and 1970 and says that there might well be a reduction. It does not strike me as being terribly export-minded.
I am reminded of the Stewarts and Lloyds factory which was started at Shotton in 1961 and which was to produce pipes for export to meet the growing needs of the oil industry. It was dismantled and sold to Canada. The same company built one in Lanarkshire. It was heralded by the Secretary of State for Scotland at that time as one of the great advances in Scottish industry, but for three years it produced nothing. Then, for a few years, while the European Community was increasing its exports of pipes from 1,200,000 tons to 1,500,000 tons, the exports from Britain fell from just over 600,000 tons to just over 400,000 tons.
§ Mr. Hooson
The right hon. Gentleman will certainly agree that the Common Market countries did not do that with a nationalised industry.
§ Mr. Ross
Is the hon. and learned Gentleman saying that because we have slipped back with competing private enterprise we should not look at the defects of our own industry and do something about them? Is he saying that taking four of the companies and getting 51 per cent. of their shares will put that right.
§ Mr. Hooson
As the hon Gentleman has asked me the question, may I say this? The argument which he has used is not valid. He is saying that the Common Market countries have outdistanced us in competition. But they did not do it by means of nationalised industries.
§ Mr. K. Lewis
I stood up before. The hon. Gentleman must have heard 787 the speech of his hon. Friend the Member for Bosworth (Mr. Wyatt), who suggested that Government control of 51 per cent. of the shares was a better form of nationalisation than his.
§ Mr. Ross
I have heard quite a few speeches today, but I do not accept everything said in all of them. Certainly I do not accept my hon. Friend the Member for Bosworth as the ultimate authority on how to nationalise an industry.
We have weighed up all the various alternatives to deal with the situation. I do not think that by giving free enterprise steel a greater measure of freedom will produce a solution to the difficulties which it has obviously met in the Restrictive Practices Court. I do not think that by giving it a sort of half-way Liberal house will meet the difficulties. The simpler and cleaner solution is the solution of public ownership.
How are we to do it? Hon. Members opposite must make up their minds about this. [Laughter.] The right hon. Member for Flint, West virtually asked me to
§ say what was in the Bill, including what was in subsection (3) of Schedule 4. But the right hon. Member for Enfield, West, who opened the debate, said, "Do not hurry about it. Take your time. Discuss it". We will take our time; but it will be our time and not that of hon. Members opposite. We will discuss it, and we are prepared to discuss it with the people in the steel industry who, I am perfectly sure, are equally concerned about the problems of steel and about getting the right solution. I am satisfied that we will get the right solution in public ownership.
§ We were told in 1950, and we were told in other debates in 1953, that we did not have the trade unions behind us. We have the trade unions behind us, because the trade unions in the steel industry have 13 years of Toryism behind them, and they realise that the future of steel is safest in public ownership, as the future of the British economy is safe with Labour planning.
§ Question put, That those words be there added:—
§ The House divided: Ayes 300, Noes 307.791
|Allason, James (Hemel Hempstead)||Carlisle, Mark||Emery, Peter|
|Amery, Rt. Hn. Julian||Carr, Rt. Hn. Robert||Emmet, Hn. Mrs. Evelyn|
|Anstruther-Gray, Rt. Hn. Sir W.||Cary, Sir Robert||Erroll, Rt. Hn. F. J.|
|Astor, John||Channon, H. P. G.||Fell, Anthony|
|Atkins, Humphrey||Chataway, Christopher||Fisher, Nigel|
|Awdry, Daniel||Chichester-Clark, R.||Fletcher-Cooke, Charles (Darwen)|
|Baker, W. H. K.||Clark, Henry (Antrim, N.)||Fletcher-Cooke, Sir John (S'pton)|
|Balniel, Lord||Clark, William (Nottingham, S.)||Forrest, George|
|Barlow, Sir John||Clarke, Brig. Terence (Portsmth, W.)||Foster, Sir John|
|Beamish, Col. Sir Tufton||Cole, Norman||Fraser, Rt. Hn. Hugh (St'fford & Stone)|
|Bell, Ronald||Cooke, Robert||Fraser, Ian (Plymouth, Sutton)|
|Bennett, F. M. (Torquay)||Cooper, A. E.||Galbraith, Hn. T. G. D.|
|Bennett, Dr. Reginald (Gos & Fhm)||Cooper-Key, Sir Neill||Gammans, Lady|
|Berkeley, Humphry||Cordle, John||Gardner, Edward|
|Berry, Hn. Anthony||Corfield, F. V.||Gibson-Watt, David|
|Bessell, Peter||Costain, A. P.||Giles, Rear-Admiral Morgan|
|Biffen, John||Courtney, Cdr. Anthony||Gilmour, Ian (Norfolk, Central)|
|Biggs-Davison, John||Craddock, Sir Beresford (Spelthorne)||Gilmour, Sir John (East Fife)|
|Birch, Rt. Hn. Nigel||Crawley, Aidan||Glover, Sir Douglas|
|Black, Sir Cyril||Crosthwaite-Eyre, Col. Sir Oliver||Glyn, Sir Richard|
|Blaker, Peter||Crowder, F. P.||Godber, Rt. Hn. J. B.|
|Bossom, Hn. Clive||Cunningham, Sir Knox||Goodhart, Philip|
|Bowen, Roderic (Cardigan)||Curran, Charles||Goodhew, Victor|
|Boyd-Carpenter, Rt. Hn. J.||Currie, G. B. H.||Gower, Raymond|
|Boyle, Rt. Hn. Sir Edward||Dalkeith, Earl, of||Grant, Anthony|
|Brinton, Sir Tatton||Dance, James||Grant-Ferris, R. (Nantwich)|
|Bromley-Davenport, Lt.-Col. Sir Walter||Davies, Dr. Wyndham (Perry Barr)||Gresham-Cooke, R.|
|Brooke, Rt. Hn. Henry||d'Avigdor-Goldsmid, Sir Henry||Grieve, Percy|
|Brown, Sir Edward (Bath)||Dean, Paul||Griffiths, Eldon (Bury St. Edmunds)|
|Bruce-Gardyne, J.||Deedes, Rt. Hn. W. F.||Griffiths, Peter (Smethwick)|
|Bryan, Paul||Digby, Simon Wingfield||Grimond, Rt. Hn. J.|
|Buchanan-Smith, Alick||Dodds-Parker, Douglas||Gurden, Harold|
|Buck, Antony||Donaldson, Cmdr. C. E. M.||Hall, John (Wycombe)|
|Bullus, Wing Commander Eric||Doughty, Charles||Hall-Davis, A. G. F. (Morecambe)|
|Burden, F. A.||Douglas-Home, Rt. Hn. Sir Alec||Hamilton, Marquess of (Fermanagh)|
|Butcher, Sir Herbert||Drayson, G. B.||Harris, Frederic (Croydon, N. W.)|
|Butler, Rt. Hn. R. A. (Saffron Walden)||du Cann, Edward||Harris, Reader (Heston)|
|Campbell, Gordon||Eden, Sir John||Harrison, Brian (Maldon)|
|Agnew, Sir Peter||Elliot, Capt. Walter (Carshalton)||Harrison, Col. Sir Harwood (Eye)|
|Alison, Michael (Barkston Ash)||Elliott, R. W. (N'c'tle-upon-Tyne, N.)||Harvey, Sir Arthur Vere (Maccles'd)|
|Allan, Robert (Paddington, S.)|
|Harvey, John (Walthamstow, E.)||McMaster, Stanley||Royle, Anthony|
|Harvie Anderson, Miss||McNair-Wilson, Patrick||Russell, Sir Ronald|
|Hastings, Stephen||Maginnis, John E.||St. John-Stevas, Norman|
|Hawkins, Paul||Maitland, Sir John||Sandys, Rt. Hn. Duncan|
|Hay, John||Marlowe, Anthony||Scott-Hopkins, James|
|Heald, Rt. Hn. Sir Lionel||Marples, Rt. Hn. Ernest||Sharples, Richard|
|Heath, Rt. Hn. Edward||Marten, Neil||Shepherd, William|
|Hendry, Forbes||Mathew, Robert||Sinclair, Sir George|
|Higgins, Terence L.||Maude, Angus E. U.||Smith, Dudley (Br'ntf'd & Chiswick)|
|Hiley, Joseph||Maudling, Rt. Hn. Reginald||Smyth, Rt. Hn. Brig. Sir John|
|Hill, J. E. B. (S. Norfolk)||Mawby, Ray||Soames, Rt. Hn. Christopher|
|Hirst, Geoffrey||Maxwell-Hyslop, R. J. (Tiverton)||Spearman, Sir Alexander|
|Hobson, Rt. Hn. Sir John||Maydon, Lt.-Cmdr. S. L. C.||Speir, Rupert|
|Hogg, Rt. Hn. Quintin||Meyer, Sir Anthony||Stainton, Keith|
|Hooson, H. E.||Mills, Peter (Torrington)||Stanley, Hn. Richard|
|Hopkins, Alan||Mills, Stratton (Belfast, N.)||Stodart, J. A. (Edinburgh, W.)|
|Hordern, Peter||Miscampbell, Norman||Stoddart-Scott, Col. Sir Malcolm|
|Hornby, Richard||Mitchell, David||Studholme, Sir Henry|
|Hornsby-Smith, Rt. Hn. Dame P.||Monro, Hector||Summers, Sir Spencer|
|Howard, Hn. G. R. (St. Ives)||More, Jasper||Talbot, John E.|
|Howe, Geoffrey (Bebington)||Morgan, W. G.||Taylor, Sir Charles (Eastbourne)|
|Hunt, John (Bromley)||Morrison, Charles (Devizes)||Taylor, Edward M. (G'gow, Cathcart)|
|Hutchison, Michael Clark||Morrison, John (Salisbury)||Taylor, Frank (Moss Side)|
|Iremonger, T. L.||Mott-Radclyffe, Sir Charles||Teeling, Sir William|
|Irvine, Bryant Godman (Rye)||Murton, Oscar||Temple, John M.|
|Jenkin, Patrick (Woodford)||Neave, Airey||Thatcher, Mrs. Margaret|
|Jennings, J. C.||Nicholls, Sir Harmar||Thomas, Sir Leslie (Canterbury)|
|Johnston, Russell (Inverness)||Nicholson, Sir Godfrey||Thomas, Rt. Hn. Peter (Conway)|
|Jones, Arthur (Northants, S.)||Noble, Rt. Hn. Michael||Thompson, Sir Richard (Croydon, S.)|
|Jones, Rt. Hn. Aubrey (Hall Green)||Nugent, Rt. Hn. Sir Richard||Thorneycroft, Rt. Hn. Peter|
|Jopling, Michael||Onslow, Cranley||Thorpe, Jeremy|
|Joseph, Rt. Hn. Sir Keith||Orr, Capt. L. P. S.||Tiley, Arthur (Bradford, W.)|
|Kaberry, Sir Donald||Orr-Ewing, Sir Ian||Tilney, John (Wavertree)|
|Kerby, Capt. Henry||Osborn, John (Hallam)||Turton, Rt. Hn. R. H.|
|Kerr, Sir Hamilton (Cambridge)||Osborne, Sir Cyril (Louth)||Tweedsmuir, Lady|
|Kershaw, Anthony||Page, John (Harrow, W.)||van Straubenzee, W. R.|
|Kilfedder, James A.||Page, R. Graham (Crosby)||Vaughan-Morgan, Rt. Hn. Sir John|
|Kimball, Marcus||Pearson, Frank (Clitheroe)||Walder, David (High Peak)|
|King, Evelyn (Dorset, S.)||Peel, John||Walker, Peter (Worcester)|
|Lagden, Godfrey||Percival, Ian||Walker-Smith, Rt. Hn. Sir Derek|
|Lambton, Viscount||Peyton, John||Wall, Patrick|
|Lancaster, Col. C. G.||Pickthorn, Sir Kenneth||Walters, Denis|
|Langford-Holt, Sir John||Pike, Miss Mervyn||Ward, Dame Irene|
|Legge-Bourke, Sir Harry||Pitt, Dame Edith||Weatherill, Bernard|
|Lewis, Kenneth (Rutland)||Pounder, Rafton||Webster, David|
|Litchfield, Capt. John||Powell, Rt. Hn. J. Enoch||Wells, John (Maidstone)|
|Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)||Price, David (Eastleigh)||Whitelaw, William|
|Lloyd, Ian (P'tsm'th, Langstone)||Prior, J. M. L.||Williams, Sir Rolf Dudley (Exeter)|
|Lloyd, Rt. Hn. Selwyn (Wirral)||Pym, Francis||Wills, Sir Gerald (Bridgwater)|
|Longbottom, Charles||Quennell, Miss J. M.||Wilson, Geoffrey (Truro)|
|Longden, Gilbert||Ramsden, Rt. Hn. James||Wise, A. R.|
|Loveys, Walter H.||Rawlinson, Rt. Hn. Sir Peter||Wolrige-Gordon, Patrick|
|Lubbock, Eric||Redmayne, Rt. Hn. Martin||Wood, Rt. Hn. Richard|
|Lucas, Sir Jocelyn (Portsmouth, S.)||Rees-Davies, W. R. (Isle of Thanet)||Woodhouse, Hn. Christopher|
|Lucas-Tooth, Sir Hugh (Hendon, S.)||Renton, Rt. Hn. David||Woodnutt, Mark|
|McAdden, Sir Stephen||Ridley, Hn. Nicholas||Wylie, N. R.|
|MacArthur, Ian||Ridsdale, Julian||Yates, William (The Wrekin)|
|Mackenzie, Alasdair (Ross & Crom'ty)||Roberts, Sir Peter (Heeley)||Younger, Hn. George|
|Mackie, George Y. (C'ness & S'land)||Robson Brown, Sir William|
|Maclean, Sir Fitzroy||Rodgers, Sir John (Sevenoaks)||TELLERS FOR THE AYES:|
|Macleod, Rt. Hn. Iain||Roots, William||Mr. McLaren and Mr. Batsford.|
|Abse, Leo||Boardman, H.||Castle, Rt. Hon. Barbara|
|Albu, Austen||Boston, T. G.||Coleman, Donald|
|Allaun, Frank (Salford, E.)||Bottomley, Rt. Hn. Arthur||Conlan, Bernard|
|Alldritt, W. H.||Bowden, Rt. Hn. H. W. (Leics S. W.)||Corbet, Mrs. Freda|
|Allen, Scholefield (Crewe)||Bowles, Frank||Craddock, George (Bradford, S.)|
|Armstrong, Ernest||Boyden, James||Crawshaw, Richard|
|Atkinson, Norman||Braddock, Mrs. E. M.||Crosland, Anthony|
|Bacon, Miss Alice||Bradley, Tom||Crossman, Rt. Hn. R. H. S.|
|Bagier, Gordon A. T.||Bray, Dr. Jeremy||Cullen, Mrs. Alice|
|Barnett, Joel||Broughton, Dr. A. D. D.||Dalyell, Tam|
|Baxter, William||Brown, Rt. Hn. George (Belper)||Darling, George|
|Beaney, Alan||Brown, Hugh D. (Glasgow, Provan)||Davies, G. Elfed (Rhondda, E.)|
|Bellenger, Rt. Hn. F. J.||Brown, R. W. (Shoreditch & Fbury)||Davies, Harold (Leek)|
|Bence, Cyril||Buchan, Norman (Renfrewshire, W.)||Davies, Ifor (Gower)|
|Benn, Rt. Hn. Anthony Wedgwood||Buchanan, Richard (Gl'sg'w,Spr'burn)||Davies, S. O. (Merthyr)|
|Bennett, J. (Glasgow, Bridgeton)||Butler, Herbert (Hackney, C.)||de Freitas, Sir Geoffrey|
|Binns, John||Butler, Mrs. Joyce (Wood Green)||Delargy, Hugh|
|Bishop, E. S.||Callaghan, Rt. Hn. James||Dell, Edmund|
|Blackburn, F.||Carmichael, Neil||Dempsey, James|
|Blenkinsop, Arthur||Carter-Jones, Lewis||Diamond, John|
|Dodds, Norman||Jones, J. Idwal (Wrexham)||Randall, Harry|
|Doig, Peter||Jones, T. W. (Merioneth)||Rankin, John|
|Donnelly, Desmond||Kelley, Richard||Redhead, Edward|
|Driberg, Tom||Kenyon, Clifford||Rees, Merlyn (Leeds, S.)|
|Duffy, Dr. A. E. P.||Kerr, Mrs. Anne (R'ter & Chatham)||Reynolds, Gerald|
|Dunn, James A. (L'pool, Kirkdale)||Kerr, Dr. David (W' worth, Central)||Rhodes, Geoffrey|
|Dunnett, Jack (Nottingh'm, Central)||Lawson, George||Richard, Ivor|
|Edelman, Maurice||Leadbitter, Ted||Roberts, Albert (Normanton)|
|Edwards, Rt. Hn. Ness (Caerphilly)||Ledger, Ron||Roberts, Goronwy (Caernarvon)|
|Edwards, Robert (Bilston)||Lee, Rt. Hn. Frederick (Newton)||Robertson, John (Paisley)|
|English, Michael||Lee, Miss Jennie (Cannock)||Robinson, Rt. Hn. K. (St. Pancras, N.)|
|Ennals, David||Lever, Harold (Cheetham)||Rodgers, William (Stockton)|
|Ensor, David||Lever, L. M. (Ardwick)||Rogers, George (Kensington, N.)|
|Evans, Albert (Islington, S. W.)||Lewis, Arthur (West Ham, N.)||Rose, Paul B.|
|Evans, Ioan (Birmingham, Yardley)||Lewis, Ron (Carlisle)||Ross, Rt. Hn. William|
|Fernyhough, E.||Lipton, Marcus||Rowland, Christopher|
|Finch, Harold||Lomas, Kenneth||Sheldon, Robert|
|Fitch, Alan||Loughlin, Charles||Shinwell, Rt. Hn. E.|
|Fletcher, Eric (Islington, E.)||Mabon, Dr. J. Dickson||Shore, Peter (Stepney)|
|Fletcher, Ted (Darlington)||McBride, Neil||Short, Rt. Hn. E. (N'c'tle-on-Tyne, C.)|
|Fletcher, Raymond (Ilkeston)||McCann, J.||Short, Mrs. Renée (W'hampton, N. E.)|
|Floud, Bernard||MacColl, James||Silkin, John (Deptford)|
|Foley, Maurice||MacDermot, Niall||Silkin, S. C. (Camberwell, Dulwich)|
|Foot, Dingle (Ipswich)||McGuire, Michael||Silverman, Julius (Aston)|
|Foot, Michael (Ebbw Vale)||McInnes, James||Silverman, Sydney (Nelson)|
|Ford, Ben||McKay, Mrs. Margaret||Skeffington, Arthur|
|Fraser, Rt. Hn. Tom (Hamilton)||MacKenzie, Gregor (Rutherglen)||Slater Mrs. Harriet (Stoke, N.)|
|Freeson, Reginald||Mackie, John (Enfield, E.)||Slater, Joseph, (Sedgefield)|
|Galpern, Sir Myer||McLeavy, Frank||Small, William|
|Garrett, W. E.||MacMillan, Malcolm||Smith, Ellis (Stoke, S.)|
|Garrow, A.||MacPherson, Malcolm||Snow, Julian|
|George, Lady Megan Lloyd||Mahon, Peter (Preston, S.)||Solomons, Henry|
|Ginsburg, David||Mahon, Simon (Bootle)||Sorensen, R. W.|
|Gourlay, Harry||Mallalieu, E. L. (Brigg)||Soskice, Rt. Hn. Sir Frank|
|Greenwood, Rt. Hn. Anthony||Mallalieu, J. P. W. (Huddersfield, E.)||Steele, Thomas|
|Gregory, Arnold||Manuel, Archie||Stewart, Rt. Hn. Michael|
|Grey, Charles||Marsh, Richard||Stonehouse, John|
|Griffiths, David (Rother Valley)||Mason, Roy||Stones, William|
|Griffiths, Rt. Hn. James (Llanelly)||Maxwell, Robert||Strauss, Rt. Hn. G. R. (Vauxhall)|
|Griffiths, W. (Exchanges)||Mayhew, Christopher||Stross, Sir Barnett (Stoke-on-Trent, C.)|
|Gunter, Rt. Hn. R. J.||Mellish, Robert||Summerskill, Dr. Shirley|
|Hale, Leslie||Mendelson, J. J.||Swain, Thomas|
|Hamilton, James (Bothwell)||Mikardo, Ian||Swingler, Stephen|
|Hamilton, William (West Fife)||Millan, Bruce||Symonds, J. B.|
|Hamling, William (Woolwich, W.)||Miller Dr. M. S.||Taverne, Dick|
|Hannan, William||Milne, Edward (Blyth)||Taylor, Bernard (Mansfield)|
|Harper, Joseph||Molloy, William||Thomas, George (Cardiff, W.)|
|Harrison, Walter (Wakefield)||Monslow, Walter||Thomas, Iorwerth (Rhondda, W.)|
|Hart, Mrs. Judith||Morris, Alfred (Wythenshawe)||Thomson, George (Dundee, E.)|
|Hattersley, Ray||Morris, Charles (Openshaw)||Thornton, Ernest|
|Hayman, F. H.||Morris, John (Aberavon)||Tinn, James|
|Hazell, Bert||Mulley, Rt. Hn. Frederick (SheffieldPk)||Tomney, Frank|
|Healey, Rt. Hn. Denis||Murray, Albert||Tuck, Raphael|
|Heffer, Eric S.||Neal, Harold||Urwin, T. W.|
|Henderson, Rt. Hn. Arthur||Newens, Stan||Varley, Eric G.|
|Herbison, Rt. Hn. Margaret||Noel-Baker, Francis (Swindon)||Walden, Brian (All Saints)|
|Hobden, Dennis (Brighton, K'town)||Noel-Baker, Rt. Hn. Philip (Derby, S.)||Walker, Harold (Doncaster)|
|Holman, Percy||Norwood, Christopher||Wallace, George|
|Horner, John||Oakes, Gordon||Warbey, William|
|Houghton, Rt. Hn. Douglas||Ogden, Eric||Watkins, Tudor|
|Howarth, Harry (Wellingborough)||Oram, Albert E. (E. Ham S.)||Weitzman, David|
|Howarth, Robert L. (Bolton, E.)||Orbach, Maurice||Wells, William (Walsall, N.)|
|Howell, Denis (Small Heath)||Orme, Stanley||White, Mrs. Eirene|
|Howie, W.||Oswald, Thomas||Wigg, Rt. Hn. George|
|Hoy, James||Owen, Will||Wilkins, W. A.|
|Hughes, Cledwyn (Anglesey)||Padley, Walter||Willey, Rt. Hn. Frederick|
|Hughes, Emrys (S. Ayrshire)||Page, Derek (King's Lynn)||Williams, A. J. (Swansea, W.)|
|Hughes, Hector (Aberdeen, N.)||Paget, R. T.||Williams, Ll. (Abertillery)|
|Hunter, Adam (Dunfermline)||Palmer, Arthur||Williams, Mrs. Shirley (Hitchin)|
|Hunter, A. E. (Feltham)||Pannell, Rt. Hn. Charles||Williams, W. T. (Warrington)|
|Hynd, H. (Accrington)||Pargiter, G. A.||Willis, George (Edinburgh, E.)|
|Hynd, John (Attercliffe)||Park, Trevor (Derbyshire, S.E.)||Wilson, Rt. Hn. Harold (Huyton)|
|Irvine, A. J. (Edge Hill)||Parker, John||Wilson, William (Coventry, S.)|
|Jackson, Colin||Parkin, B. T.||Winterbottom, R. E.|
|Janner, Sir Barnett||Pavitt, Laurence||Woodburn, Rt. Hn. A.|
|Jay, Rt. Hn. Douglas||Pearson, Arthur (Pontypridd)||Woof, Robert|
|Jeger, George (Goole)||Peart, Rt. Hn. Fred||Wyatt, Woodrow|
|Jeger, Mrs. Lena (H'b'n& St.P'cras,S.)||Pentland, Norman||Yates, Victor (Ladywood)|
|Jenkins, Hugh (Putney)||Perry, E. G.||Zilliacus, K.|
|Jenkins, Rt. Hn. Roy (Stechford)||Popplewell, Ernest|
|Johnson, Carol (Lewisham, S.)||Prentice, Reginald|
|Johnson, James (K'ston-on-Hull, W.)||Price, J. T. (Westhoughton)||TELLERS FOR THE NOES:|
|Jones, Dan (Burnley)||Probert, Arthur||Mr. Irving and Mr. Whitlock.|
|Jones, Rt. Hn. Elwyn (West Ham, S.)||Pursey, Cmdr. Harry|
§ Main Question again proposed.
§ It being after Ten o'clock, the debate stood adjourned.
§ Debate to be resumed Tomorrow.