IRON AND STEEL BILL

HC Deb 21 March 1967 vol 743 cc1451-557

Order read for consideration of Lords Amendments.

Motion made, and Question proposed, That the Lords Amendments be now considered.—[Mr. Marsh.]

3.50 p.m.

Mr. John Peyton (Yeovil)

At this moment of great nostalgia, someone from this side of the House should express the great regret that we are about to part with this abominable Bill. None of us would wish—

Mr. Speaker

Order. The Question before the House is, That the Lords Amendments be now considered. The hon. Member for Yeovil (Mr. Peyton) must endeavour if he can to link whatever he has to say to the Motion.

Mr. Peyton

I had only got through half a sentence when you called me to order, Mr. Speaker. I was about to address myself to the point, but I hardly had a chance, with great respect, of showing whether I was in order or not.

Mr. Speaker

Order. The hon. Gentleman must not join issue with the Chair.

Mr. Peyton

This Motion is the last point of the Bill and, with profund respect to everyone concerned, I wish to express regret that we should be parting with what I regard as a legislative disaster. The Government are minded to accept 41 out of the 44 Lords Amendments. I hope, Mr. Speaker, that it will be in order for me to comment that I regret that the Government are in such a generous mood.

Mr. Speaker

The hon. Gentleman will have his opportunity of commenting on the Amendments which are proposed to be accepted or not accepted when we come to them. At the moment, we are simply discussing the question of whether the Lords Amendments should now be considered.

Mr. Peyton

With great respect, Mr. Speaker, if I have a chance, I am about to express some reasons why I am hostile to the Motion. What I have been saying so far leads up to the point and expresses the view, which I hold very strongly, that we would be better not to consider the Lords Amendments at all. This springs from my never concealed hostility to the Bill. I am very sorry that when the House of Lords was framing these Amendments it did not take some more serious bites out of this horrid Measure.

Mr. James Griffiths (Llanelly)

On a point of order, Mr. Speaker. I have had some experience of the proceedings of this House, but this is the first time I have heard this Motion turned into a Second Reading debate. Is that in order?

Mr. Speaker

I am grateful to the right hon. Member for Llanelly (Mr. James Griffiths). As the House will know, I am endeavouring to keep the hon. Member for Yeovil in order.

Mr. Peyton

Further to that point of order. Perhaps I can be allowed to say to the right hon. Member for Llanelly (Mr. James Griffiths), who is, quite properly, shy of legislative horrors—

Mr. Speaker

Order. The hon. Gentleman is quite out of order. He must get back to the Motion.

Mr. Peyton

I rose to a point of order, Mr. Speaker. The right hon. Member for Llanelly was challenging my right to express my views on the Motion. I rose on a point of order and I was about to say that if the right hon. Gentleman had been here when a similar motion was moved in connection with the Land Commission Bill, which I dislike almost as much as this one, he would have heard this issue debated at some length. But evidently he was too shy to be here on that occasion.

Sir John Eden (Bournemouth, West)

Further to that point of order, Mr. Speaker. I understand that my hon. Friend the Member for Yeovil (Mr. Peyton) is on a point of order at the moment and I want to seek your guidance. If this Motion is debatable, is it not in order, under these circumstances, to comment upon the scope and scale and number of these Amendments?

Mr. Speaker

It is not in order to comment on the scope and scale and number of the Amendments. Once the Motion is passed, we shall be debating whether this House agrees or disagrees with the Lords in the various Amendments. In those debates, right hon. and hon. Members will have the opportunity to say what they think about them.

Mr. Peyton

There are two points that I would like to raise with the Minister of Power as being valid reasons why we should not now consider the Lords Amendments. The first is that still the Government have not made clear what the precise issue terms of the compensation stock will be. These are important matters.

Mr. James Griffiths

On a point of order, Mr. Speaker. The hon. Gentleman is now proceeding to discuss a provision in the Bill, which may or may not have been amended in the House of Lords, dealing with compensation.

Mr. Peyton

rose—

Mr. Griffiths

I do not object to the hon. Gentleman making a speech, but perhaps he will listen to me as I ask you, Mr. Speaker, to rule whether, on a Motion of this kind, it is in order to discuss at large the Bill and all its provisions. If it is in order, I can only say, with respect, that it is the first time that I have heard that ruled as being possible.

Mr. Speaker

If we take the point of order as the right hon. Gentleman put it, it is not in order on this Motion to discuss the contents of the Bill and various actions which the Government have or have not done. The hon. Member for Yeovil must advance reasons why the House should not proceed.

Mr. Peyton

With great respect—

Sir Douglas Glover (Ormskirk)

Further to that point of order, Mr. Speaker. Surely an hon. Member is in order in putting forward arguments as to why Lords Amendments should not be considered if he thinks that the totality of the Measure itself is not in the national interest. I agree that the Lords Amendments are part of the Measure, but it must be in order, when arguing whether we should consider the Amendments, to discuss the Measure itself.

Mr. Speaker

Order. The hon. Member for Ormskirk (Sir D. Glover) must submit his points of order. He must not tell Mr. Speaker what must be in order. I am sure he will appreciate that.

Sir D. Glover

I apologise, Mr. Speaker.

Mr. Speaker

It is not in order on this Motion to discuss the merits of the Bill.

Mr. Peyton

In point of fact, what I am trying to deal with, if I get a chance from the right hon. Member for Llanelly, is that, before we part with the Bill we should have some information on three important points. [Interruption.] If hon. Members simply want to prolong proceeding they are going the right way about it. We still have not been given any information on some vital issues. The first of these is what are the terms of the issue of the compensation, which is a matter of very great importance to many people, although it may be a matter for mockery from hon. Members opposite. The second point is that the right hon. Gentleman the Minister of Power himself told us that the Bill was an umbrella which he sought to erect and under cover of which he was going to take over the steel industry.

Mr. Speaker

Order. This is not a reason for or against considering the Lords Amendments. The hon. Gentleman is essaying a difficult exercise but he must do it rightly.

Mr. Peyton

With respect, I hope I am doing it correctly. This is the last opportunity that we shall have to express our regret that we are parting—

Mr. Speaker

Order. The hon. Gentleman has said that many times. He must not indulge in repetition and must accept the guidance of the Chair.

Mr. Peyton

With respect, Mr. Speaker, I have had a great deal of guidance from the Chair and I accept it and will do my best, if I get a chance, to comply with it, as I am always willing to comply with the Rulings of the Chair. It is not my habit to challenge the Rulings of the Chair, but I hope I may be given an opportunity to make a few sentences. I want to make my position clear before we consider these Amendments. It is that we should have information from the Government which we shall be almost powerless to secure hereafter.

What are the issue terms of compensation stock and what do the Government mean about rationalisation? Until I can get a minimum of information on these two points, I consider that as a back bench Member I have every right to oppose the Motion. I realise that the rights of back benchers are in some jeopardy in modern times, but if I am unable to get up and challenge a very powerful Administration because they have failed throughout the passage of a Bill to give information of fundamental importance, I feel that one might as well not come to Parliament. [HON. MEMBERS: "Hear, hear."] There we are. How intolerable do hon. Members opposite find it that anyone should dare to disagree with them! I maintain my bitter and irreconcilable disagreement with the Bill and my opposition to it to the end.

4.0 p.m.

Mr. Russell Kerr (Feltham)

We get the message.

Mr. Peyton

I therefore ask the right hon. Gentleman, who has better manners than his hon. Friend, before we pass this Motion—and we need not spend long on it—to give us some information on these two all-important points. If he were to do so, I feel sure that—

Mr. David Griffiths (Rother Valley)

On a point of order. If the hon. Gentleman is allowed to continue in this direction, is it within the bounds of possibility that an hon. Member on this side of the House will have a similar privilege and opportunity?

Mr. Speaker

There is no privilege in free speech. Any hon. Member has the same rights as any other hon. Member.

Mr. James Griffiths

Further to that point of order. The hon. Member for Yeovil (Mr. Peyton) is putting a series of questions to the Minister. I presume that those questions will have been discussed on Second Reading and in Committee and on Third Reading. My right hon. Friend will be out of order if he seeks to reply, because the Motion before the House is that we consider the Lords Amendments.

Mr. Peyton

I am grateful for one thing, which is that the right hon. Member for Llanelly (Mr. James Griffiths) is not the occupant of the Chair. I would have concluded my comments long before had I been given a reasonable hearing by the passionate addicts of this silly Measure. However, I have asked the right hon. Gentleman whether he cannot give the House of Commons some information on these two vital questions. I hope that I can have the attention of my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) on the Opposition Front Bench, because we hope to have some support from there. On behalf of the back benchers anyhow, I am saying that we want some information on matters of vital importance and consequence to Parliament and the country. Until we get that information, I for one will be very reluctant to part with this Motion.

Mr. Speaker

Sir Keith Joseph.

The Minister of Power (Mr. Richard Marsh)

I wonder whether I might intervene very briefly. I apologise to the House, because I shall very rapidly have to leave the Chamber for another meeting, but I intend no discourtesy—[HON. MEMBERS: "It is a disgrace. Why go?"] Because Government continues.[Interruption]

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

On a point of order. As the right hon. Gentleman proposes to leave the Chamber, may I submit that this is not a suitable day upon which to take this business and that it would be better if the House now adjourned and considered these Amendments on a day when the right hon. Gentleman is able to grace us with his presence, which is essential to our deliberations on the Bill?

Mr. Speaker

That is about the oldest gambit. It is quite out of order.

Mr. Marsh

The Amendments before the House are very important.

Sir Gerald Nabarro (Worcestershire, South)

Then the right hon. Gentleman ought to be here.

Mr. Marsh

They are, almost without exception, Amendments which have been requested by the industry itself, and I should have thought that on both sides of the House there would be a desire to conduct our proceedings and to deal with—

Sir G. Nabarro

rose—

Mr. Marsh

If I can finish the sentence—what are not party points but specific Amendments of fact requested by the industry and frequently agreed by hon. Members opposite. We have quite a number of them here. They raise a difficult problem, because in Committee, in agreement with hon. Members opposite, we decided to look very seriously at the issues which they raised and about which they made speeches to see how far it was possible to meet them. These Amendments are a genuine attempt to meet the Opposition and views within the industry.

Sir G. Nabarro

rose—

Mr. Marsh

I would be grateful to the hon. Gentleman if he would allow me to finish this observation. I should have thought that it was to the advantage of The House—[Interruption]—one knows that many hon. Members opposite are violently antagonistic to the Bill. That is not news to anyone. Some of us have guessed it in the course of about four months' proceedings. None the less, the matters which the hon. Member for Yeovil (Mr. Peyton) has raised and to which he knows the answers, because he has raised these questions himself very well for so long—

Mr. Peyton

Hear, hear.

Mr. Marsh

I should have thought that it was in the interests of Parliament to get on with discussing the Amendments, for which the Opposition have asked and which appear on the Order Paper only because of the Government's desire to treat this matter sensibly. I can only say that people in industry would find this a particularly edifying spectacle.

Sir G. Nabarro

The right hon. Gentleman has said three times that the 44 Amendments represent concessions to the Opposition, or are Amendments for which the industry has asked. Is he seriously suggesting that Amendment No. 5 involving—

Mr. Speaker

Order. The hon. Gentleman can make that point when we come to Amendment No. 5.

Sir Keith Joseph (Leeds, North-East)

The right hon. Gentleman began the proceedings by putting to the House a Motion which, presumably, had substance. It therefore seemed perfectly proper for my hon. Friend the Member for Yeovil (Mr. Peyton) in response to argue that certain major strategic points had not been revealed by the Government during the proceedings on the Bill. That argument seems to deserve a proper Ministerial reply. When the Minister courteously rose and, as we thought, intended to address himself in reply to my hon. Friend, he disclosed that he did not propose to be present during the discussion of what he himself described as very important Amendments.

I am new to this Shadow appointment during the last few weeks, but I gather that the date of the day on which these Lords Amendments would be dealt with has been known for some days. The only conclusion to be drawn is that the right hon. Gentleman has deliberately chosen to give priority to some non-Parliamentary obligation before his obligation to the House. Of course, we shall welcome an explanation from him.

Mr. Marsh

I am grateful to the right hon. Gentleman for giving way, because whatever disagreements there are, it would be wrong for Ministers to treat the House with contempt. The meeting to which I am going is a Ministerial meeting which involves a number of other Ministers. This is the only opportunity for it. The Government will be represented by two of my colleagues, including the Chief Secretary, whose presence was implored by the hon. Member for Yeovil (Mr. Peyton) for three and a half months.

Mr. Peyton

I always confessed to some schizophrenia on the subject of the Chief Secretary. When he was not there I felt bound to complain, but when he was there I made his presence the subject of my complaint.

Sir G. Nabarro

We have now reached the ridiculous state of affairs that not one of the eight Ministers whose names are printed on the Bill will be present in the Chamber after the right hon. Gentleman has departed. Is not that treating the House with utter contempt?

Sir Harmar Nicholls (Peterborough)

The Minister has shown himself to be too insensitive by his announcement that he will not see these debates through. I thought that it was accepted that the first priority of any Minister was to answer to the House of Commons and that that priority came before Ministerial meetings, or even Cabinet meetings. There are other people in his Department who can attend Ministerial meetings, but the right hon. Gentleman is the only one with final authority to address the House on this subject.

My hon. Friend the Member for Yeovil (Mr. Peyton) raised important questions which the right hon. Gentleman should answer before he goes. What my hon. Friend has said is that the matters which he has mentioned—my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) called them strategic points—will not be covered by the Amendments. My hon. Friend was saying that before allowing the Bill to go another inch along the way, even to the Lords Amendments, those points of strategy should be announced by the only person able to do so, the right hon. Gentleman. I believe that that argument is valid.

My hon. Friend was saying that he would rather the Bill went no further. He would rather that we did not proceed to the Amendments, he would rather they fell to the ground until he has an explanation on these questions to do with compensation and other points of high strategy. This is the only stage at which my hon. Friend can raise this. Once we get on to the Amendments we are bound by the narrow point of the items contained in the Amendments, and these points of high strategy are not in order.

I hope that the Minister will keep to the convention, if not the rule, that his duty to the House of Commons transcends any other as long as he holds ministerial authority. I hope also that he will recognise the validity of my hon. Friend's points, and without in any way infringing the rules of the Chair, not by any reference to any point in the Amendments, he will clear up these strategic points, particularly the one on compensation. If his answers are satisfactory, I take it that my hon. Friend would join with all of us in getting down to detailed discussion of the Amendments.

Mr. James Griffiths

I rise to a point of order, not because I want to stop discussion, but I want to know where we stand in Parliamentary procedure. The hon. Member for Peterborough (Sir Harmar Nicholls) has put the point very simply, and it is this: the hon. Member for Yeovil (Mr. Peyton) was seeking to raise points about this Measure, one of them, for example, was the scale of compensation, which is not covered by the Lords Amendments. The point that I raise is very important because this is not the first or the last time that the House will have to consider Amendments to a Bill made by the Lords, submitted to them by this House and returned to us for consideration. The Motion before the House is that we proceed to consider the Amendments made by the Lords and that we should consider them one after the other in sequence, as Mr. Speaker calls them.

In my experience, it has never been the practice, and I may be wrong, to allow discussion at this stage on matters which are not within the Amendments which we are considering. If we are to change the rules, and I do not for a moment object to a change, they should not only be changed for this Bill but for every occasion when this Motion comes before the House. This would mean that we can raise matters not covered by the Amendments submitted to us for our consideration by the other place but that we can consider any matter which any Member of this House puts forward.

The hon. Member for Yeovil raised the point about the scales of compensation. The hon. Member may think that the scale is not adequate; I may think that it is too generous. If hon. Members on the other side of the House, holding views quite sincerely, believe that the scale of compensation is not adequate and are allowed to debate this at this stage, may I put it to you, Mr. Speaker, that so too are hon. Members on this side of the House, if they feel disposed, entitled to argue that the scales of compensation are too generous. We then get back to Committee stage. There need not be any Committee stage—[Interruption.] I am addressing myself to you, Mr. Speaker.

Once the precedent is established by Mr. Speaker in this House, that precedent abides. That is how our constitution has been built up. Am I to take it that you are now ruling that it is permissible, on an occasion like this, not only to discuss the substance and the form of the Amendments which come before us on this Motion, but that it is also in order to do what the hon. Members for Peterborough and Yeovil wanted to do, to discuss provisions in the Bill which are not covered by the Amendments before us?

If that is ruling, and I do not object to that ruling, all I say to you, with the greatest of respect, and to hon. Members opposite, is that this means that this debate can be constructed into another Second Reading and Committee stage. In my experience, here I have never before seen a debate of this kind allowed on provisions not covered by the Amendments. If we are to allow this now, let us do it with our eyes open and see that we are departing from what has been the custom of the House.

Mr. Speaker

Order. I must attempt to guide the House at this point. We are on a procedural Motion. The Bill has passed through this House and has been to another place. It has been sent back with Amendments. The question that we are deciding is whether we consider those Amendments. The right hon. Gentleman is perfectly, correct, it is not in order on the Question that the Lords Amendments be now considered to discuss any of those Amendments. They will taken in their turn. It is not in order—and this is laid down in Erskine May—that the provisions of the Bill can be discussed on this Motion. All that we can discuss now, and all that I have been patiently attempting to rule, is whether we shall consider the Lords Amendments.

4.15 p.m.

Mr. Anthony Barber (Altrincham and Sale)

I rise only to try to be helpful, particularly in the light of what you have said, Mr. Speaker. I believe that my hon. Friend the Member for Yeovil (Mr. Peyton) was right, and I hope that he would agree, in bringing forward a number of reasons why he thought that the Lords should not now be considered.

I will not go into them, but he mentioned the fact that we did not know very much about compensation terms. Whatever the merits of that may be, this is an arguable reason for not proceeding with the Lords Amendments at this stage, What troubles me was the observation of the right hon. Gentleman the Minister that he is not able to be present during these important debates. If the right hon. Gentleman will say to the House that he has changed his mind and that he intends to be here, despite the calls made upon him from elsewhere, I for one, despite the arguments advanced by my hon. Friend the Member for Yeovil, with which I have much sympathy, would not advise my hon. Friends to divide the House on this particular Motion.

I must say, with great respect to the right hon. Gentleman, that one of the problems with which we are faced is that the Chief Secretary and the Parliamentary Secretary would be dealing with this matter in the absence of the Minister. The Chief Secretary was not present during most of our discussions in Committee and, with the greatest respect to him, I do not think that he would be as capable of dealing with these Amendments as the right hon. Gentleman. The Parliamentary Secretary was not even a member of the Committee. I find these very compelling reasons indeed why we should not proceed with the Lords Amendments at this stage.

I do not know how pressing the right hon. Gentleman's other engagement is, and it is for him to decide, but if he feels that he must leave the Chamber I would suggest—I understand one of my hon. Friends is intending to rise after me should he catch your eye, Mr. Speaker—that the Minister should consult with the Leader of the House, while my hon. Friend is talking, to see whether we could not make some satisfactory arrangement so that he can be present to answer these debates. The alternative is for him to change his mind out of respect for the House of Commons. In which case I hope that we can proceed with these very important Lords Amendments.

Mr. Marsh

It would be a very hard man who could fail to be moved by the realisation that he was wanted. It happens to few of us and to hon. Gentlemen opposite very infrequently. Having listened to these requests, which I appreciate and which I like. I know that hon. and right hon. Gentlemen want me, and it would be more than any Minister's ego could stand to leave in those circumstances. I hope that I will be allowed to leave for a cup of tea during the course of the proceedings. Otherwise it is my intention to stay.

Mr. Speaker

Order. On this emotional note, I think we may pass.

Question put and agreed to.

Lords Amendments considered accordingly.

Clause 5.—(PUBLICATION BY CORPORATION OF LISTS OF PRICES AND CONDITIONS OF SALE.)

Lords Amendment: No. 1, in page 5, line 20, leave out "in normal circumstances" and insert "normally".

Mr. Marsh

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

With this Amendment we can also take Amendment No. 2.

The Amendment changes the phrase "in normal circumstances" to "normally". There was a debate on this point in Committee. There is rather more in it than just a simple change in phraseology. It was argued that it was not clear whether the phrase "in normal circumstances" related to the prices or to the surrounding circumstances. It was suggested by my hon. Friend the Member for Rotherham (Mr. O'Malley) that in present circumstances the steel industry might be held not to be normal because of the under-utilisation of capacity. This Amendment, with the following Amendment, is designed to clarify Clause 5. I cannot believe that in this atmosphere they are contentious.

Mr. Patrick Jenkin (Wanstead and Woodford)

The Minister, whom we are delighted to know will be with us for the rest of the proceedings, has put the point to the House as it was put on Report and has adverted to the question asked in another place. But I am no clearer as to what the answer is.

The Clause is concerned with the prices which the Corporation will charge and the prices which it will have to put in its published price lists. To my mind, it is still totally unclear as to whether "normally"—to which I do not give any different meaning from the phrase "in normal circumstances"—refers to the price which it would expect to charge in the normal course of trading—that is, no special prices to special customers—or whether it refers to the prices which it would expect to charge during normal trading circumstances.

The hon. Member for Rotherham (Mr. O'Malley) asked this question on Report and pointed out that the present circumstances were very far from normal, with considerable over-supply and most plants running at substantial under-capacity. These, one would hope, would be abnormal circumstances. Is it intended that the price list, although published for prices which would operate in normal trading circumstances, would not be adhered to in the circumstances which we see today; or is it intended that it shall publish prices and amended lists from time to time to take account of trading circumstances but that that will leave the Corporation free in special circumstances to charge special prices which may depart from the published price list?

I do not believe that the Minister has answered that question. It must be clear in his mind which it is, because he suggested that we should accept the Amendment. However, it would be helpful not only to the House but to the trade if we might know what is in his mind.

Mr. Marsh

I should have thought that the position was fairly clear, because the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) was present during the discussion in the House and the argument was fairly simple. It was suggested by a number of Members that the words "in normal circumstances" might relate to the surrounding circumstances and that, to this extent, there could be variations in price which reflected the abnormal circumstances within which the industry was operating. They could, none the less, be taken into account in normal circumstances.

A point was made about high unemployment, meaning were these circumstances normal or abnormal and, therefore, did prices relate to them? These are the prices which will normally be charged within the industry. I find it difficult to see a clearer way of putting it. The position was fairly clear, but the intention is to make it even clearer. The word "normally" means the prices which will normally be charged, not taking into account the surrounding circumstances which may from time to time be abnormal.

Mr. Brian O'Malley (Rotherham)

My right hon. Friend the Minister has an enormous capacity for understanding complicated situations and circumstances, which, I must confess, having listened to this debate and the previous one, I find it difficult to follow. Would he confirm what I think he said but which I am not sure he said, that "in normal circumstances", which is now replaced by "normally", means that if the steel industry is in its present position in respect of capacity and utilisation, and so on, the Steel Corporation shall publish notices which normally, in this kind of circumstance, will be the prices to be followed, and that if, for example, the general circumstances change, one would again get a new set of criteria for price levels and normally those levels would be followed unless there were specific abnormalities in the general situation. Is that what my right hon. Friend means?

Mr. Marsh

rose—

Mr. Speaker

I hope that the debates today will follow some sort of pattern. The Minister can speak only once except by leave of the House. If hon. Members wish to intervene, perhaps they would do so before the Minister has exhausted his right to speak.

Mr. Peyton

In view of what I said just now, I wish only to show that I can be completely non-partisan and to say that I warmly agree with what Lord Mitchison said in another place when, speaking on behalf of the Government, he pointed out that he found exactly the same ambiguity in the word "normally" as the noble Lord, Lord Windlesham, had found in the words "in normal circumstances". I am surprised that we should have an Amendment such as this before us, apart from the fact that it reduces, as one noble Lord said on behalf of the Government, three words to one. This is, in principle, a welcome change. It is the sort of tiny crumb thrown to the House of Lords before it threw its dentures away and did not take more serious bites at this Bill.

Question put and agreed to.

Clause 7.—(MISCELLANEOUS PROVISIONS RELATING TO THE CORPORATION.)

Lords Amendment: No. 3, in page 6, line 28, at the end to insert: ( ) The Corporation shall not make, or permit to be made, any substantial change in the manner in which the carrying on of the activities mentioned in the last foregoing subsection is organised, so far as regards the direction thereof, except with the consent of the Minister or in pursuance of a direction given by him by virtue of that subsection".

Mr. Marsh

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

The purpose of this Amendment was to fulfil an undertaking which we gave to the hon. Member for Wokingham (Mr. van Straubenzee). The intention is to prevent the Corporation or the publicly-owned companies from making any substantial change in the nationalised steel industry's organisation except with the Minister's consent or in pursuance of a direction given by him under Clause 7(2). The Amendment goes further than the Opposition Amendment moved in this House. That amendment only prevented the Corporation from making substantial changes in organisation without the Minister's consent until it submitted its first report to him. It is illogical to do this, but to leave the Corporation free to make substantial changes after its report was, published in a way not envisaged in the report.

4.30 p.m.

The Amendment prevents any substantial changes at any time except with the Minister's consent or by his direction. It also ensures that the Corporation cannot evade the intention of this provision by acting through the publicly-owned companies. In practice, of course, the Corporation undoubtedly would obtain the Minister's consent before making substantial changes in organisation. I think that the intention is shared by both sides of the House, with varying degrees of enthusiasm, to increase the extent of Parliament's control over the organisation of the nationalised steel industry by establishing the system on a formal basis and so that the Minister shall be answerable to Parliament for any consents which he gives or declines to give.

Mr. Patrick Jenkin

We on this side categorically welcome the Amendment. As the Minister has said, it goes further than the proposal moved at an earlier stage by my hon. Friend the Member for Wokingham (Mr. van Straubenzee), and the right hon. Gentleman has explained why. The new Clause, as it was when my hon. Friend moved it, was accepted in principle by the Parliamentary Secretary, who used these words, which are worth noting because of a matter which I hope to raise presently: The Corporation can, in practice, be expected and relied on to act in a way which will not prejudice the decisions of the Minister and the views and decisions of Parliament on the first report which is required under Clause 4."—[OFFICIAL REPORT, 19th January, 1967; Vol. 739, c. 769.] There was one matter on which the views of Parliament were made known in no uncertain terms. The Minister will recollect that in Committee my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) moved a new Clause concerning the location of the National Steel Corporation's offices. It was accepted by the Government after pressure from both sides of the Committee. Indeed, the hon. Member for Rotherham (Mr. O'Malley) will remember that that was about the only debate in which we heard from virtually every member of the Committee, with, I think, the notable exception of the hon. Member for Faversham (Mr. Boston), who maintained his silence throughout the Committee's proceedings.

In accepting the new Clause concerning offices, the Minister emphasised on 14th December that in relation to offices, and particularly the London office, no decision has as yet been taken. He went on to say: I hope that we are not going to talk in terms of an office with thousands of people, which will provide opportunities for whole regions."— Indeed, that was the centre point of the arguments.

Very strong rumours are circulating among estate agents in London that the National Steel Corporation, or the Organising Committee or someone acting on its behalf, has now concluded negotiations for the leasing of 150,000 sq. ft. of office space in Centre Point House, which hon. Members will know as the tall building standing near the crossroads of Charing Cross Road and Oxford Street. It is also rumoured that the rent which is being asked and which, apparently, the Organising Committee is prepared to pay is no less than 100s. per sq. ft., which must make it about the most expensive office accommodation in London. When one hears this, one wonders whether there is any substance in it.

There has been mention in the Press of a possibility of the Corporation going to the offices owned by Richard Thomas and Baldwins in Euston Road, but this Centre Point House information, which has reached me from a reputable source, seems to be extremely circumstantial. In the light of the Amendment and the intention that no major changes should be taken without the Minister's consent, the right hon. Gentleman should take this opportunity of making the latest position known to the House.

I ask this particularly in relation to the very full information which was given in an article in The Times on Monday, and which the Minister will, no doubt, remember, in which the whole structure of the Corporation was set out by that newspaper as it apparently is now thought to emerge. I realise that the Organising Committee will have been working hard and will, no doubt, have begun to formulate its mind about how the National Steel Corporation should be organised after it comes into existence. It appears, however, as if there will be a very large central office headquarters.

When considering the organisation, one realises the reason for that. There will be at least six functional directors, who clearly will all have substantial staffs and who will have functional duties over what are thought to be the four or possibly, five production groups. If this is so and if they are to occupy a substantial office block—a prestige office block, a luxury office block—in the centre of London, this would go clean contrary to the intentions that were expressed from both sides of the Committee. I see the hon. Member for Rotherham looking round for support from his hon. Friends, because I am sure that if they were here they would be indignant at what looks like happening. It would make complete nonsense of the statement by the Minister in Committee that there is no point in having a Committee if the views of the Committee are not taken into account."—[OFFICIAL REPORT, Standing Committee D, 14th December, 1966; c. 2413.] It looks very much as if the views of the Committee have been given scant attention.

It is incumbent upon the Minister to give the House an explanation of how he intends to reconcile what looks like happening with the assurances which were given to the Committee. If what I have suggested comes about, it looks very much as if the Amendment which we are now being asked to pass is being made a monkey of and important decisions are being taken without Parliament having an opportunity to comment on them. The Minister owes the House an explanation.

Mr. John H. Osborn (Sheffield, Hallam)

I did not intervene in the interchange before you arrived, Mr. Deputy Speaker, but there is no doubt that the people affected by the Bill feel that in many ways it has given the National Steel Corporation a blank cheque to do what it likes.

One of the difficulties will be the interpretation of the Bill concerning actions taken by the Corporation. The incident to which my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) has brought to my notice has rather surprised me, because in the discussion on Clause 36, which was introduced by my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor), considerable concern was expressed about where the headquarters of the Corporation would be located.

If what my hon. Friend has said is correct, it brings into question the interpretation that will be given even to this Amendment to Clause 7, which states: The Corporation shall not make, or permit to be made, any substantial change in the manner in which the carrying on of the activities mentioned in the last foregoing subsection is organised ". I believe that this is but the first instance which we will have of many differences about the intentions of the Minister and of the House of Commons and how they are interpreted by the National Steel Corporation. Although I welcome this addition to Clause 7, I very much fear that the difficulties of inter- pretation of the Bill will begin to become apparent once it receives Royal Assent.

Mr. Marsh

I cannot believe that I would be in order in dealing at length with the point made concerning the Amendment by the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin). I am quite prepared to do so, but I would not think that an Amendment which provides that The Corporation shall not make, or permit to be made, any substantial change in the manner in which the carrying on of the activities mentioned … is organised. would permit me to enter into a discussion about who is to sell the office blocks and how many people there are in one of them.

Mr. Deputy Speaker (Sir Eric Fletcher)

The right hon. Gentleman is quite right. However, I think that it would be in order to refer quite shortly to the point which the hon. Gentleman has made, without going into it at great length.

Mr. Marsh

There is no problem here because, as always, the Government are acting in accordance with Government policy. It will be our intention that the central staff and the staff of the Steel Corporation shall conform to the Government's policies on dispersal and on office development in London. Clearly, when the Corporation comes into being, it will have to have an office in London, and, after vesting day, it will have a large number of offices in London which it will inherit from the private companies.

I take it that hon. Gentlemen opposite are not opposed to the Amendment. If they are, they have only to mention it. These Amendments are put down for their benefit, and we will certainly co-operate with them to remove them.

This Amendment is concerned purely to fulfil an undertaking which we gave in Committee, which was heralded as an advance. No changes are being made by anyone in relation to the Steel Corporation, because it does not even exist at present.

On the point about the location of the office staffs, the Steel Corporation will be inheriting about 1,800 office staff in London, and it will be its intention to see how far it can spread its activities over the rest of the country. The Amendment would clearly please both sides of the House, because hon. Gentlemen opposite wanted this sort of Amendment. In practice, in terms of staff, the policies supported by the Corporation will also meet with the approval of both sides.

Question put and agreed to.

Clause 8.—(RE-ESTABLISHMENT OF CONSUMERS' COUNCIL AND COMMITTEES.)

Lords Amendment: No. 4, in page 6, line 39, leave out "subsections (2), (4), (5), (7)" and insert: subsection (2) (with the omission of paragraph (c) and the word 'and' where occurring immediately before that paragraph) and subsections (4), (5), (8)".

Mr. Marsh

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

This Amendment relates to the Iron and Steel Consumers' Council, which originally was to consist of an independent chairman, 15 to 30 consumers' representatives and two members of the Corporation.

This and subsequent Amendments are intended to remove the two members of the Corporation from membership of the Consumers' Council. They also remove the provision for the Corporation to see copies of the Council's minutes. Plainly, it would be absurd to ensure that the Corporation received copies of the minutes of all meetings of the Council if they are not represented at the Council.

Here again, the intention is purely to remove the members of the Corporation from the Council. I have had long talks with representatives of the Confederation of British Industry and, while there are arguments on both sides, it is essential that we should increase the independence of the Consumers' Council as far as possible, and make it plain that the Council is independent. For those reasons, the Government accept these Amendments, removing from the Consumers' Council the Corporation representatives.

Question put and agreed to.

Clause 9.—(VESTING IN THE CORPORATION OF SECURITIES OF SCHEDULED COMPANIES.)

Lords Amendment: No. 5, in page 7, line 27, leave out" securities" and insert: ordinary and preference stocks and shares ".

The Chief Secretary to the Treasury (Mr. John Diamond)

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

Mr. Deputy Speaker

I ought to draw the attention of the House to the fact that, in connection with this Amendment and the next two, a question of privilege is involved.

Sir G. Nabarro

rose—

Mr. Deputy Speaker

Sir Gerald Nabarro.

Sir G. Nabarro

Mr. Deputy Speaker, as a question of privilege is said to be involved, if I heard you correctly—

Mr. Deputy Speaker

I said that a question of privilege is involved in this Amendment and the next two Amendments. Is the hon. Member for Worcestershire, South (Sir G. Nabarro) rising on a point of order? I was about to call the Minister to move this Amendment.

4.45 p.m.

Sir G. Nabarro

On a point of order, Mr. Deputy Speaker. I am not quite sure what you mean by that Ruling. Would you be good enough to guide the House by telling us what point of privilege is involved and in what way we shall be circumscribed in any financial arguments which we may wish to put to the Minister of Power or to the Chief Secretary?

Mr. Deputy Speaker

The House is not inhibited in discussing these Amendments. I draw the attention of the House to this Amendment and the next two Amendments because they introduce and affect financial provisions involving the privilege of the House. They are Amendments made in another place which involve privilege, but that docs not inhibit the debate on them.

Mr. Diamond

Would it be convenient for these three Amendments to be discussed at the same time?

Mr. Patrick Jenkin

We on this side have no objection.

Mr. Deputy Speaker

There being no objection, so be it.

Mr. Diamond

Mr. Deputy Speaker, this Amendment and the two to which you have referred cover ground which has been discussed fully in previous proceedings on the Bill in this House. The purpose of the Amendment is to replace the word "securities" with the words on the Notice Paper, and the effect of that is simply to leave out debentures from the assets which are to be acquired.

In putting forward the Bill, the reason why my right hon. Friend asked for the vesting of ordinary shares and preference shares was so as to enable the Steel Corporation to have control of the activities of the relevant part of the steel industry for the purposes which he described. The reason why it is necessary for debentures to follow is so that the Steel Corporation can take the same opportunity of achieving the same object in the same way and not be prevented, deterred, or inhibited from or delayed in achieving that object.

In short, it is an essential part of the purpose of giving effect to the nationalisation Measure which this House has approved that there should be the vesting not only of the ordinary and preference shares, but of the debentures as well. The point was explained earlier in Committee and, on that occasion, almost every hon. Member here today was present. I am sure that the House would be distressed if I went over the arguments in extenso.

As was explained previously, debenture holders have rights which are not consistent either with the rights of the Steel Corporation, which would be the shareholder on the assumption that the debentures remained in their present ownership, or of the Minister or of this House, and many of the powers and proposals which it would be the desire of the House, the Minister or the Steel Corporation to give effect to would be inhibited, delayed or prevented by this clash of interests.

For that reason, it has been felt necessary that the debentures should vest in exactly the same way as the ordinary and preference shares.

Mr. Ridley

Can the right hon. Gentleman give the House some examples of a clash of interests between the debenture holders, the Corporation, the Government and the House, as he put it? So far as I know, the obligations do not clash, and it would help us if, in explaining his argument, the right hon. Gentleman could say specifically what he has in mind.

Mr. Diamond

I am sorry that the hon. Gentleman has asked me that question. I thought that he had listened to the excellent speech made by his hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw), who, when introducing a similar Amendment in Committee, explained the differences between the rights attaching to ordinary shareholders, preference shareholders and secured creditors, of which a debenture holder is one. The hon. Gentleman started off by explaining this in great detail. His explanation was, as one would expect, quite accurate. These rights are totally different, and, therefore, the obligations which a company has respectively to each of these three classes differ.

That is all that I am saying. If one looks at it from the point of view of the shareholder who is interested in the remaining equity, it is not the same point of view as that of either the preference shareholder, who is not interested in the equity but in a prior dividend, or the debenture holder, who is neither interested in the dividend of the preference shareholder nor in the remaining equity, but is interested exclusively in his security and in his interest. If those rights ace challenged, if his security is affected, or there is the likelihood of his security continuing or the interest continuing, the debenture deed provides certain action, which he can take to protect his rights, vis-à-vis the shareholders.

Obviously, one could find oneself in a situation in which there would be a clash of interests, and to prevent this happening—because the shares would be held by one body, the Steel Corporation, and, if this Amendment were accepted, the debenture, would be held by another group of individuals, the present debenture holders—it is necessary for the House, I would suggest, to disagree with the Lords on these three Amendments.

I am fully aware of your anxiety, Mr. Deputy Speaker, which you have expressed on a previous occasion, that we should conduct the debate knowing that it is taking place in the full House. Mr. Speaker has expressed a similar point of view. I will, if the House permits, listen very carefully to everything that is said and, if the House permits, will seek to reply.

There have been various arguments raised, which I can go over very shortly, as to why, in certain circumstances, this vesting of debentures should not take place. The main argument is, of course, that when the debentures, or some of them, were originally issued by the compaines in question, they were issued at prices and under certain circumstances in which the then holders expected, if they so desired, that they could retain the debentures until the maturity date, and that the debentures would mature at a given price, normally 100.

What has happened is that most of these debentures have moved from hand to hand through a variety of agencies and are now in the hands of their present debenture holders. At present, debenture holders would prefer two things. They would prefer to have more money and greater security. That is not surprising. We can understand that. That applies to every shareholder. Any owner of property would prefer his property to be more valuable.

All that is suggested is that if these debentures were held by the present debenture holders then the present debenture holders would be happier. Of course they would be happier, because they would be holding debentures which, on the market price, would otherwise be acquired as debentures holding a security in an industrial company and would now become debentures secured, in effect, in the same way as gilt-edged. Their price would immediately go up fairly substantially.

It is quite understandable that debenture holders would prefer to hold debentures which, by an act of the Government, would be much increased in value. But the Government do not think that that is a sensible way of holding the balance fairly as between the taxpayer and the stockholder, quite apart from the problem which I explained earlier, of why it is necessary that the debenture should vest.

The other increase in value which the present debenture holders would prefer is that if they hold these till maturity they can get the full price on maturity. Whether that is, in present terms of discount or cash value, a better price or not, I would not like to say without working out each one separately. It is difficult to say, because immediately one is forced against the problem of what is the discount rate at which to discount the future value of the 100 per cent. redemption value of the debenture. But, at all events, they would prefer to have the property increase in value, which would arise, and they would, in certain cases, prefer to have the redemption falling on a date which suits the arrangements which they had in mind when they acquired them. That is a very understandable point.

The answer to that is that upon the debentures being acquired, compensation will be paid. The compensation will take the form, as has been stated many times, of Government stock, which normally one expects the stockholder would wish to retain. If the stockholder wishes to dispose of it, he can do so and reinvest in debentures carrying the same rate of interest as the present debentures, and maturing broadly at the same date as the present debentures. I can give the House details if they are wanted. In most cases there would be a small profit inuring to the present debenture holders. There is no difficulty or hardship, on the one hand, and, on the other, there is absolute need, in terms of sensible and wise administration, that these debentures should vest.

There is one further argument to which I should refer. We have discussed all this before, but I would be discourteous if I did not refer to it again. That is the argument in connection with the expectation of rights of a debenture holder, and the allegation that in some sense there has been a breach of those rights. This is completely to misunderstand what is taking place. A number of companies accepted money on loan, and issued debentures. That is to say, they stated that they would repay the loans in certain conditions.

Those companies should not be accused in any way of going back on any of their undertakings, because they are not doing so. The undertakings remain as valid today as they were the day they were issued, and when, in due course, the maturity date arrives, I have no doubt that the companies will be in a position to meet their obligations. Thus, there is no question of any variation in the undertakings given by companies at the time the debentures were issued.

Of course, as I have already said, the debentures have changed hands many times, and certain expectations of individual holders might well have been that they should retain their holding until the maturity date. The simple answer to that is that this House accepts the fact that in a wide variety of fields it is proper for Parliament to require individuals to dispose of their property against their will, involuntarily, provided, of course, that they are paid compensation. We have been over this ground many times.

With regard to the debentures as well as shares, it is proposed that they should be paid compensation which one can only describe as being both full and fair, and, it' anything, on the generous side. This applies both to debentures as well as to shares, ordinary shares and preference shares. Those who have taken the trouble to go through the individual debentures concerned will see that in every single case the amount being paid by way of compensation for the debenture is higher than the market price ruling at the date.

If a debenture holder complains that he is being compelled to accept an involuntary sale as compared with a voluntary sale, I should explain that if it had been a voluntary sale it would have taken place at the market price—there is a large market for these securities—but, instead, it is an involuntary sale, which is taking place at above the then market price. That is all that I need to bother the House with on this occasion. I repeat that I shall listen most carefully to every speech, and, with the permission of the House, I shall do my best to reply to the debate.

5.0 p.m.

Mr. Peyton

I propose to raise shortly one point relating to the matter with which the Chief Secretary was dealing in his closing words, and it is the question of the compensation being given to debenture holders. The right hon. Gentleman said that they could have received the market price, which would have been lower than they will get.

The right hon. Gentleman has persistently denied and put away from himself any suggestion that the market price has been adversely affected by the Government. The Chief Secretary does not like the phrase which I used in Committee, that the Government had rigged the market. If he finds that offensive, I shall use another phrase and say that the Government, by their conduct, have persistently adversely affected the market, and, therefore, debenture holders, and, indeed, shareholders, have been put up against the wall fair and square by the Government.

For the right hon. Gentleman persistently to get up at that Box, and in other places, and suggest that this compensation is fair on the basis that the price which they are going to get is one which would have ruled in a market free from all Government interference and intervention is quite unwarrantable.

Mr. O'Malley

How can the hon. Gentleman say that the Government's attitude has adversely affected the market when he knows that over the last 12 months many of the share prices which have been quoted have been higher because of the Government's intentions than they would otherwise have been on normal market considerations?

Mr. Peyton

In consideration of my hon. Friends, many of whom wish to speak on this Amendment, I shall not answer the hon. Gentleman at length. Suffice it to say that the Government's economic policy, which I am not at liberty to debate at large, has adversely affected the whole of industry in this country, and suffice it also to say that the Socialist Party's threat, held over this industry for many years, has been a serious matter from the point of view of the price of all shares, debentures and otherwise.

It is this threat, coming as it does from a party well known to be against the rights of the individual, to be opposed bitterly to the right to own property, which has affected the market, and the Government are now taking advantage of the consequences of their own actions and are suggesting that in a free market they are offering fair compensation, when they know that the market is far from free, and has not been for years. It has been affected by their actions, predictions, and threats.

Mr. Ridley

Would not my hon. Friend further agree that although equities may have been affected by the general malaise of all world steel industries, debenture stock prices have not been affected, because this is simply moneylending, and has nothing to do with the value of the steel industry?

Mr. Peyton

I am obliged to my hon. Friend, because he has brought me back to the subject with which the Amendment is concerned. It was the hon. Member for Rotherham (Mr. O'Malley) who tempted me into rather larger issues.

The other point with which the right hon. Gentleman stands charged is that he has failed to take any cognisance of the fact that there is a difference between an equity share and a mortgage. The right hon. Gentleman has repeatedly told us that he believes in full and fair compensation, and that this is what the Government are offering. If we could all have a reward for every time that we have heard him say that, we would all be rich, and, of course, we would all have to pay the Capital Gains Tax on it.—[Interruption.]

Sir G. Nabarro

On a point of order. The hon. Member for Feltham (Mr. Russell Kerr), from a sedentary position, has interrupted my hon. Friend on seven occasions during the last seven minutes, and all the interruptions have been prefixed by "You", referring to the occupant of the Chair. Mr. Deputy Speaker, could you kindly, in defence of my hon. Friends and myself, who are constitutionally law-abiding, ask the hon. Gentleman to observe the decencies, the conventions, and the rules of procedure of the House?

Mr. Deputy Speaker

I did not hear any sedentary interventions, but if any hon. Member wishes to intervene he should stand up and do so with the permission of the hon. Member who has the Floor at the time.

Mr. Peyton

Mr. Deputy Speaker, You are in the fortunate position of being further away from the hon. Member for Feltham (Mr. Russell Kerr). We are left with no alternative but to judge him by the character of his sedentary interruptions, and this, I am sure, is exceedingly unfair to him.

I am very grateful, as always to my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) for the generous way in which he intervened to protect me, because I readily acknowlege my need in that direction.

I return to my charge against the Chief Secretary, that he has been standing words on their ends and making them mean anything that he wants them to mean. The right hon. Gentleman talked about fair and full compensation. He is a master of tactics. This is why he is always given the unpleasant briefs to hold on behalf of the Government. He is a master when something gets a bit sticky. The right hon. Gentleman substitutes the word "inane" for "unpleasant" and says, "I shall not deal with it. I cannot be expected to deal with so unworthy a charge", and all serious allegations are put on one side in that supremely clever way; and when it comes to wriggling out of an unpleasant situation he could give points even to the Prime Minister.

Without prolonging my remarks, I repeat this serious charge that the Government by their conduct, by their threats, by their words, and by their predictions of what they will do have seriously affected the market so as to make all holders, not only of debentures, but also of equity shares, tremble in their shoes, and the price has come down following what the Government said they would do. It is for this reason that we on this side of the House find the right hon. Gentleman's argument quite intolerable and wholly unacceptable.

Sir G. Nabarro

I rise to support the Lords in their Amendment, and to oppose the Treasury Bench. Rarely have I listened to a more disingenuous reply from a senior Minister of the Crown than that to which we listened this afternoon.

I do not wish to argue the legalities of the possession of debentures. This is not the issue at stake. The paramount issue is what compensation should be paid for these debentures if they were vested, as I believe they should be, along with the ordinary and preference stock, having regard to the fact that these debentures when issued were regarded by everybody on the Stock Exchange, by every member of the legal profession, by every chaptered accountant, and by every Member of the House as a gilt-edged security.

It was futile and misplaced, in another place, for the Minister without Portfolio to argue as he did that the Iron and Steel Holding Realisation Agency had not in law been acting as an agent to the Crown to permit the sale of these debentures. Many of my hon. Friends, and, in particular, my hon. Friend the Member for Yeovil (Mr. Peyton), sat in this House with myself during the passage of the 1953 Statute which denationalised the iron and steel industry, and the agency for the sale of the State assets in that industry was established as I.S.H.R.A. Gradually, over the ensuing 12 years, these assets in the State steel industry were sold by I.S.H.R.A. They were sold at realistic prices as debentures.

Many of the sales rightly took the form of debentures, and a redemption premium was offered in most cases. The Chief Secretary did not apply himself to that fact today. He said three times over that this stock constantly changes hands. Of course, all stock of this kind constantly changes hands at the contemporary market value—as it should do. But when that stock is bought and sold regard is had in the sale price to the ultimate redemption value of the stock and the premium on the stock at the time of issue. It is the premium that the Government are now negativing or denying to the holders of the stock. I regard that as an absolute breach of contract and of the terms on which this debenture stock was originally issued.

We do not have with us today the hon. Member for Poplar (Mr. Mikardo), who so prominently adorned the Standing Committee for a large part of its deliberations, covering 2,590 columns of HANSARD, but that hon. Member will recall our heated debate on the value of these stocks—notably debentures—and his comment on one occasion that the debentures were not owned by the old-age pensioners of Poplar. Perhaps not, but they are owned extensively by old-age pensioners everywhere, having been purchased as gilt-edged securities.

These people purchased these debentures because they regarded them as absolutely secure. It is important that the House should understand the feelings of these people, who are now being deprived of a substantial part of their investments. I do not buy debenture stock. I know better than to buy debenture stock I do not buy gilt-edged stock. I know much better than to buy gilt-edged stock. But old-age pensioners and others less gifted in investment virtues and experience will be beguiled by Her Majesty's Government or their creatures, such as I.S.H.R.A., into buying stocks of the kind that we are debating today.

A very interesting letter was written by an old-age pensioner to the hon. Member for Poplar. I will read it. He said to the hon. Member—not to me— With reference to your comments in the House it may interest you to learn that my wife and I (two working-class pensioners) started life on 2s. 6d. and 5s. per week and experienced long periods of unemployment, without the dole. We are the holders of £600 in steel prior charges. Obviously, you"— he is still addressing the hon. Member for Poplar— think the Government is justified in bilking us. We did not expect such a dirty deal from one of your faith. We were also the victims of Dr. Hugh Dalton's blandishments and lost most of our small savings War Loans"— the loans Dalton promoted— Yours faithfully, B. Riley, 12 Westbrook Park Road, Woodston, Peterborough. The letter is dated 6th December, 1966—immediately after my speech in Committee attacking the appropriation by the Government, on unfair terms—which the old-age pensioner described as "bilking"—of this debenture stock.

That is not the only letter in this sense which I and many other hon. Members have received. A second letter from this debenture holder followed on 10th December—again written to the hon. Member for Poplar. He said: Are not your attempts to defraud steel stockholders the efforts of a political Rachman? I repeat—"a political Rachman".

Sir J. Eden

A very telling description.

Sir G. Nabarro

I am deeply grateful to my hon. Friend the Member for Bournemouth, West (Sir J. Eden), who supports me by saying, "A very telling description".

The letter continues: And do you"— that is, the hon. Member for Poplar— not dishonour your gifted and honourable brethren (some of whom are my best friends)? I do not expect you to reply to my protest, but, of course, I could be wrong. He is still waiting for the answer.

There are many more letters of this kind. What the Chief Secretary scrupulously avoided doing in his speeches upstairs and on Report, and what Government spokesmen in another place scrupulously avoided referring to, is the depriving of debenture stockholders of their redemption premiums. That is what they were led to expect they would receive when they bought debentures. They bought them as quasi-gilt-edged stock, and none of the arguments of the Chief Secretary has replied to these allegations.

5.15 p.m.

I want to take matters further today, because there have been later developments since the Bill received a Third Reading. So aggrieved are a number of debenture stockholders at the deprivation which I have described that they have now taken their case, through London solicitors, to the European Commission on Human Rights. I see the hon. Member for Romford (Mr. Ledger) giggling and chewing the end of his finger at the same moment. The result is an extraordinary noise. He should not laugh at citizens of this country appealing to the European Commission on Human Rights, for his Government and his Party have already accepted the overriding jurisdiction of that body in Europe. [Interruption.] From below the Bar there are now noises of support from a Socialist Member. I am grateful to the hon. Member for Barons Court (Mr. Richard) for his courtesy.

Mr. Ivor Richard (Barons Court)

rose—

Sir G. Nabarro

I will give way to the hon. Member when I have finished my sentence. I was pleased to hear him intervene in support of my statement.

This application by aggrieved debenture stockholders is the first of its kind—an application from individual citizens of this country to the European Commission on Human Rights, the absolute jurisdiction of which, in the matter of human and personal rights, is recognised by the present Government.

Mr. Richard

I was merely applauding the fact that my party recognises the jurisdiction of the Commission at Strasbourg, which the party opposite refused to recognise for at least 15 years.

Sir G. Nabarro

No. The party on this side did not refuse to recognise it—

Mr. Richard

It did.

Sir G. Nabarro

It continued negotiating—

Mr. Richard

Not true.

Sir G. Nabarro

It is no good the hon. Member's muttering, "Not true."

Mr. Richard

rose—

Sir G. Nabarro

Let me finish my sentence. The hon. Member has been sitting below the Bar. He has just crept into the House for the first time. He might allow me to get on with my speech.

It would be grossly out of order to talk about the jurisdiction of this Commission and its history over the last 15 years. I am referring to the fact that four aggrieved debenture stockholders—owners of stock in one of the companies to be nationalised—feel so strongly about the appropriation or sequestration of their investments that they have appealed to this body.

This was fully reported in the Daily Telegraph of 27th February. The Daily Express of the same date prominently reported it and said that the subject of the application to the Commission was United Steel 4¾ per cent. debenture stock, 1968–78.

Does the Chief Secretary mean, in the face of an action of this kind by individual stockholders, to steamroller through the House the sequestration of debenture investment by these old-age pensioners and others? They are not the only investors, but they are important—[Laughter.] The hon. Member is amused by my reference to old-age pensioners. [An HON. MEMBER: "I am wiping away the tears."] So he should. He has only ever shed crocodile tears on behalf of retirement pensioners—[An HON. MEMBER: "Get on with it."] I shall get on with it in my own time.

For all these reasons, I hope that all my right hon. and hon. Friends will seek to agree with the Lords in the Amendment. My only complaint about the behaviour of the Members of the other place over the Bill is that they did not press their Amendments far enough and wide enough. Out of the 44 Amendments, this alone is of great substance, striking at the whole of he sequestratory terms pronounced so frequently, and with no attempt to conciliate the opposite view, by the Chief Secretary and his colleagues. I hope that, even at this late hour, he may think again about altering the terms of quasi-gilt-edged securities and thereby gravely undermining the credit of Her Majesty's Government.

Mr. Ridley

The Government's justification for this highly unusual and arguable act of taking over the debentures is that in some way they will obstruct the industry's rationalisation if they do not do so. The Chief Secretary said in Committee that the Government … must be unhampered in doing so … without being inhibited by any clash of responsibility. … In exactly the same way, debenture holders can prevent what ought to be done, in the view of an independent Steel Corporation, from being done … those … powers must be removed. …"—[OFFICIAL REPORT, Standing Committee D; 23rd November, 1966, c. 889, 891.] Anyone would have thought from that that the debenture holders had some extraordinary power to interfere with the mechanics of the Steel Corporation, whereas the Chief Secretary himself would be the first to admit that debenture holders have simply lent money on a series of financial terms which are agreed implicitly in the contract between the lender and the borrower. There is no control whatever over the use to which the money subscribed in debentures is put.

In reply to the debate in another place, Lord Mitchison said: … to allow the debentures or similar securities to remain in private hands after the nationalisation of steel would be impossible, since the rights of the holders could frustrate the purpose of the National Steel Corporation."—[OFFICIAL REPORT, House of Lords, 27th February, 1967, c. 974.] This argument has been used throughout by Government spokesmen to justify this action.

When I asked the Chief Secretary, earlier, what rights the debenture holders had to frustrate the Corporation, he rebuked me, in that slightly schoolmasterly fashion which he assumes when he is out of his depth, and accused me of not having listened to the excellent speech of my hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw), three months ago. Apart from the fact that I heard every word of that admirable speech, what he said did not answer my point. I call upon him again to answer it.

What ability does the debenture holder have to frustrate the wishes of the Corporation? He has two main rights in his capacity as moneylender to the former steel companies and now to the Corporation—first, a call, often first call, of the profits, and, second, a right of redemption at par or some stated value on a certain date.

First, he has, usually, first call on the profits. All Government stock has first call to have interest paid upon it. No Government have ever failed to pay interest on their stock. This might well come to pass, with the financial mismanagement of this Government, but it has never happened in the past and we hope that it will not happen with the Government of which the right hon. Gentleman is a member. Therefore, the claim that a first call on the profits is embarrassing, hampering or frustrating does not stand up. In fact, whatever the financial structure, the Government can always pay interest on the compensation stock, even if it is worth virtually nothing, because those are the terms upon which it will be issued.

Secondly, the right to redemption on a certain date is contained in a high proportion of existing Government stock. I would expect that a large proportion of the compensation stock issued to match these debentures will itself carry a right to redemption on a certain date. I cannot see, therefore, how this will frustrate what the Steel Corporation or the Government are trying to do. The main reason which the right hon. Gentleman has advanced why the purpose of the Amendment cannot be accepted falls down, but it is necessary for my hon. Friends to prove, in addition to destroying the Government's reason, that the action is wrong in itself.

We are really discussing the nationalisation of a loan by investors to a private company, which the Government wish to take over. For the right hon. Gentleman to say, "We will give compensation which will be as valuable or perhaps a little more valuable" is not good enough. The people who made those loans did so on specific conditions which happened to suit them at the time. Whether it is worth the same, a little more, much more or less is not what we are arguing about. The point is that they want the rights into which they entered to be maintained.

Furthermore, the Chief Secretary gives it only as his opinion that the compensation stock will be worth the same or a little more. It may not happen to be my opinion. What happens if he is wrong, and on the day of issue, the stock drops disastrously and is worth a great deal less? It will be too late then to make redress in this House to the share holders—

Mr. Peyton

Has my hon. Friend considered the possibility of an exact coincidence in time, of the peak of the gilt-edged market being reached just at the moment when the terms of the issue of compensation are made?

Mr. Ridley

This is certainly an interesting point and I am tempted by my hon. Friend's sagacious observation to delve into realms which I am sure would not be in order, connected with Corporation Tax and statements which should not be anticipated at this time of the year. I agree, however, that my hon. Friend has put his finger on a sensitive and vulnerable point.

5.30 p.m.

We are discussing debentures issued by I.S.H.R.A., which was, in effect, a Government agency. Those debentures were issued on certain terms and under certain conditions which could not conceivably carry any power to frustrate or impede the Government in their action, yet the Government are solemnly proposing to breach this contract.

I have tried to demonstrate that there is no reason for this contract being breached. If the Government insist on changing the name of the stocks, there is no reason why they should not consider swapping the existing debentures for identical debentures without the name of the particular steel company which issued them being involved in any way. There could be the same rate of interest, the same date of maturity and the same compensation price. The Government would, if they accepted this course, clear themselves of any charge of interfering with the terms of contract. It would be undesirable to change the name of the stocks, but I am sure that the public at large would acquit the Government of gerrymandering if they were to adopt this course.

We argued this in Committee, the noble Lords in another place out-argued the Government on this score, and it is clear that the First Secretary is on very weak ground indeed. The Government's credit for keeping contracts and sticking to the letter of their undertakings is not good. This is a further instance of them doing something which will go even further to destroy the word of Her Majesty's Government—and the Government's word has hitherto been sacred. This is particularly annoying, because there seems no reason for the right hon. Gentleman to take this step and because there is no advantage to the Government in taking it.

I hope that the right hon. Gentleman will accept the Amendment and clear himself and the Government of the charge of breach of contract. The Government would do credit to themselves if they showed that even at this late stage they are prepared to repent on this silly and unnecessary piece of legislation.

Sir J. Eden

I support my hon. Friends in calling on the Government to think again on this issue. The attitude of the Chief Secretary appears to mean that he wishes to disown the undertakings and contracts entered upon by I.S.H.R.A. and, as a result, he is inviting the Government to be a party to dishonouring contracts which have been solemnly entered upon. It is this aspect which is the most serious of the considerations before us.

I.S.H.R.A.'s terms were clearly stated. They were contracts properly agreed and entered upon with the purchasers. As I understand, I.S.H.R.A. subscribed to the stock and employed Treasury money for the purpose. That was subsequently recouped by the sale of the debentures and the proceeds from that sale went back to the Treasury, and no part of it went to the companies. I.S.H.R.A. was not a creation of the companies. It was an instrument of the Government, set up by the Government of the day, to carry out their declared policy of the denationalisation of this industry.

The Chief Secretary has not answered the questions asked by my hon. Friends on this issue. I want the right hon. Gentleman to explain how he envisages that the debenture holders will, if they continue to hold on present terms, interfere with the reorganisation of the industry. This question has been asked many times. The right hon. Gentleman has made the bald statement that this should be done, but he has so far completely unsupported his argument with evidence. He said that the rights of debenture holders might not be consistent with the rights of shareholders as represented by the National Steel Corporation, the Minister or the House. In what way does he see a continuance of the existence of debenture holders, on the terms on which they entered into their contracts, being likely to interfere with the reorganisation of the industry? How does he envisage a clash of interests developing over this issue?

I support the remarks of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) in that if the nature of the stock is to be exchanged for something produced by the Government the terms on which the original contracts were defined should still be maintained. I cannot understand why that should not happen. It is important that it should for the reasons that have been stated, including those put forward by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro), who spoke movingly of the situation in which many elderly people and others nearing retirement would find themselves as a result of the Government's action. The Government are proposing to repudiate a debt and this is likely to affect most grievously the holders of life policies and those who depend on pension funds for their years of retirement.

Those who manage pension funds are advised by actuaries who take into consideration the likely death rate which might emerge in any one year ahead and, for this purpose, they are bound to have regard, in the management of their funds, to the repayment date of the stocks which they purchase and which form part of the funds out of which the pensions are subsequently paid. It is important that the Chief Secretary pays attention to this fact because, on behalf of the Government, he is by this action of confiscation, cutting the ground from beneath the feet of large numbers of retirement pensioners and others who are approaching retirement age. This aspect needs further emphasis and, in equity, the right hon. Gentleman should comment on it in detail.

The terms for debenture holders form part of a solemn trust deed. Hon. Mem- bers are aware that it is open to Parliament to cut across anything and to establish its own rules. However, these are rules which the Government are seeking to force through this House in a manner which does them no credit. They are doing this without providing a proper supporting argument and they are proposing that, as a result of this action, they should not only confiscate the property of the ordinary citizen, but should do so without paying proper and fair compensation. In this they are dishonouring such little reputation as they still hold for fair dealing.

I hope that the right hon. Gentleman will give proper consideration to the points that have been raised and will at least attempt to give a proper reply.

Mr. Michael Alison (Barkston Ash)

I wish to comment on what I can only describe as one of the dodges used by the Chief Secretary, both in the House and in Committee, to try to argue that no expropriation was involved in what the Government are proposing. He said that they were simply erasing the name "Tom Jones" from the debenture and were putting in its place" The National Steel Corporation". What a charming phrase! He implied by that that there was no injustice, and that all these charges of a breach of faith could not be sustained because all that was happening was a change of names.

The Chief Secretary cannot get away with that argument. We want a definitive reply to the following point. If we look at the trust deeds of some of the debenture stocks involved—for example, that of the United Steel Company's 4¾ per cent. debentures—we find among other things in the small print: The company"— that is, the United Steel Company— will not create any mortgage or charge ranking in priority or pari passu with the charge secured on the stock"— and here comes the key wording— other than fixed charges on current assets to secure temporary borrowings and acceptance credits together not exceeding £5 million. Here we have a specific trust deed inhibition written into the debentures which the Government are taking over.

The Government are not allowed to involve themselves in debts, temporary borrowings and acceptances of credit totalling more than £5 million. Yet the Government are taking the most broadcast and general powers in this Measure—and here I refer particularly to Clause 19—to entitle companies taken over to borrow almost indefinitely.

For example, to quote Clause 19(3): A publicly-owned company may borrow from the Corporation or, with the consent of the Corporation and the Minister, by way of temporary loan from any other person, such sums as the company may require for the purposes of their undertaking. We find that the specific sums which companies may borrow under that Clause can be up to as much as £400 million. The Government are seriously pretending that the delimitation written into the trust deeds of this particular debenture stock is not blown wide open by the general provisions of the Clause entitling the companies to raise money from any source up to almost astronomical figures, and immeasurably beyond the special limit of £5 million.

Does the Chief Secretary give a firm, specific and definite guarantee that the provisions written into the trust deeds of the debenture stocks to be taken over in the name of the National Steel Corporation will not in any way be vitiated, undermined or altered by the provisions of Clause 19? If he does not, the whole miserable pretence that there is just a plain transfer of title to the debenture stock and not a fundamental alteration is entirely inconceivable and misleading, and the Chief Secretary cannot get away with it. We are firmly convinced that the argument that there is just a plain transfer, and that all the rights, titles and provisions in the trust deeds of the original debenture stock as there set out remain in existence, is pure padding to justify a piece of confiscatory legislation.

I draw attention to another facet of the Chief Secretary's argument this afternoon. It is that it is not so much that the Government do not intend to compensate the original debenture stockholders unfairly—they say they will compensate them very fairly—but that they disagree with allowing the debenture holders of companies that are later taken over acquiring, as it were, a gilt-edged base to the original debenture stock, thus giving them an unfair advantage as between—to to use what I think was the right hon. Gentleman's phrase this afternoon—different citizens of the country at the expense of the taxpayer.

We quite understand the significance of that point. It is that when the Corporation or the Government take over the individual companies the debenture stock, if left in the hands of the original debenture holders, would acquire an enhanced gilt-edged base. In that case, the Chief Secretary should be consistent. He should not, for example, allow the John Summers 4 per cent. debenture stock to run out its time under the special provision written into Clause 59 of the Bill, a point to which my hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw) referred in Committee. It is there conceded that where the stock has up to 12 months to go before redemption date it can be left, and will not be expropriated.

Why should the holders of debenture stock with a short expiring period remaining—up to 12 months, as the Clause says—be allowed to get away, as it were, with a gilt-edged enhancement to their holding and, at the same time, be entitled to the full recovery of the premium—to use the important point put by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro), the full yield to redemption? Why should not the provision making that permissible to particular stockholders in a debenture with a year to run not be applied to, say. United Steel 4¾ per cent., which has a possible redemption date of 31st December, 1968? There will be just about 12 months between vesting date and the date under which, by the trust deeds of the United Steel 4¾ per cent., notice could be given by the company of determination to repay its stock.

5.45 p.m.

Why should they be excluded if the principle is just duration of time and not the fact that some holders may get the enhanced gilt-edged base? What is the right hon. Gentleman's argument? Is it that one must not be allowed a special gilt-edged enhancement, or that we cannot allow people to hold on to a stock for too long in case it should inhibit the freedom of the Corporation? In neither case can the Government justify their inconsistency. They are leaving some people to get a gilt-edged enhancement, and not others.

It is quite clear that the various trust deeds make it perfectly possible for the Government to get round any inhibiting limitations. There is, for example, the United Steel stock, to which I referred. I see the Chief Secretary is trying to explain the point to the Minister. The United Steel 4¾ per cent. has a specific provision in the trust deed whereby negotiations can be entered into between stockholders and the company to arrive at a modus vivendi. But, in any case, we know that a company can get round the inhibitions by going into liquidation.

The Government have got their arguments all muddled up. They do not know which horse to run and back in their bogus proposition. All they want is to be certain that they get what the Minister has called the theological point of full possession. To justify their action they advance an argument which is inconsistent with what is written into the Bill. What does the Chief Secretary think the status of the Iron and Steel Holding and Realisation is? It seems to me to be quite clear from Clause 10, under which the remaining assets of I.S.H.R.A., namely, the R.T.B. holdings, are to be handed over to the Government without compensation.

That clearly demonstrates that the possessions of I.S.H.R.A. are those of the Government. If that is not the case, R.T.B. has not been nationalised, and I.S.H.R.A. should get compensation for handing it over to the Government. It is quite evident that I.S.H.R.A. is not only an agency, but the creature of the Government, and all contractual obligations into which it has entered in the issue of debenture stocks may validly be claimed against the Government, and it is just the status and standing of Her Majesty's Government that the Chief Secretary is undermining.

For those reasons, we entirely support, and hope that the House will support, the Lords Amendment.

Mr. Michael Shaw (Scarborough and Whitby)

I wish to deal, not at great length, with this very important subject. I dealt with it quite a bit in Committee and devoted my Third Reading speech to it. I should like, first, to deal with the opening words of the Chief Secretary. I was nattered to receive his commendations for my speech, but I assure him I would be equally happy to receive his odium if he had accepted my argument.

The right hon. Gentleman announced that the purpose is to leave out debentures from the take-over. He gave as a reason that this was to enable the National Steel Corporation to have control of the industry. He said the Corporation should not in any way be inhibited from doing whatever it wanted to do. The debenture holders had rights which might not be consistent with the interests of the Corporation.

It was said in the Explanatory Memorandum to the Bill, as originally printed, that The main purpose of this Bill is to bring into public ownership the principal companies concerned with the production of steel in Great Britain. Obviously, to bring into public control, as the right hon. Gentleman said, is a matter of acquiring ownership of the shares which carry the control. Therefore, one accepts that in taking over control of these firms it is necessary to acquire the share capital. Let us get this absolutely clear. There is not the slightest need to take over any of the debenture stocks in order to achieve the control of these companies. Therefore, it cannot be a valid argument to say that in order to gain control the debentures have to be taken over, for that just is not true.

Let us look at the second argument, that the Steel Corporation, when it took over the various shares and had not taken over the debentures, would find itself prevented or inhibited from doing various things in future. I assumed that the argument was that if it did not take them over it might want to reorganise, change the groupings, change the identities of the various companies owned by the Corporation, and it might be difficult to deal with the debenture stock. I accept that that is a possible argument, but I do not believe that it would turn out to provide any difficulties whatever. We have seen as late as today a great merger taking place in the North-East. There does not seem to have been any difficulty whatever in arranging terms on which those three companies can come together in an amalgamation.

The point is made much more clear if we look at certain of the terms of the various debenture stocks. My hon. Friend the Member for Barkston Ash (Mr. Alison) referred to the United Steel Company issue of debentures. If we look at some of the details connected with that issue, we see that practically every possible circumstance—except, I agree, the circumstance of nationalisation—has been taken into consideration in drawing up the trust deed It we look at how the Corporation might want to deal with debentures in future we find that whatever it wants to do can be perfectly well arranged within the existing terms of the debenture stock.

For example, if it were decided to wind up the company for any reason, nothing in the debenture deed could stop the company being wound up and the debenture holders being paid out. By the end of next year the Steel Corporation could see that the company paid for the debentures, if it so wished, on stated terms. The company could go into the open market at any time and acquire the debentures and gradually redeem them. It could go to the trustees and, in accordance with the trust deed, get an agreement by an extraordinary resolution to modify or to compromise in respect of any arrangements in regard to their rights against the company. Were an amalgamation sought it could be arranged voluntarily with the trustees under the trust deed.

It is very much on terms such as these that we devised Amendments in Committee to ensure that the future rights of debenture holders taken over in any new securities should be kept closely to the terms of the present debenture deeds by ensuring that the trustees should reach an agreement with the Treasury rather than those rights being forcibly taken over. I make the point very strongly. It is not necessary for control to take over these debenture stocks. Whatever amalgamation or adjustment may be wanted in the future reorganisation of a group, the fact that the debenture stock had not been taken over would prove no hindrance.

I was very much surprised to hear the right hon. Gentleman argue this afternoon that the company's undertaking would remain the same as before even after the debentures had been bought from the public by the Steel Corporation. The right hon. Gentleman said that he had no doubt that the companies would fulfil their obligation under the trust deeds to the new holders, presumably the Corporation, on maturity, as they would have to the old stockholders.

That is a quite extraordinary statement. It seems to assume that these debentures will run their full term exactly as the terms now exist. If they are to run their full term under the terms as they exist, what excuse is there for their being taken over by the Corporation? Possibly only one. That reason is that, by taking them over, the Corporation will make a quick "killing" of about £30 million. I believe that this is the only really valid argument in favour of taking over these debenture stocks. But, valid though it may be, it is still unworthy of a British Government.

6.0 p.m.

Now I come to I.S.H.R.A. Many of these stocks were issued during the agency of the I.S.H.R.A., which put them forward for sale. But what is the Agency? If we examine the accounts for 1955–56, returned under the Iron and Steel Act, 1953, and ordered by the House to be printed on 3rd May, 1957, we find that paragraph 4 says: The Iron and Steel Realisation Account was established under section 22 of the Act and is under the control and management of the Treasury. Thus, every indication, as we read through this and other documents, makes it clear that the Agency acted under the management and instructions of the Treasury. Here was this pupil, or subsidiary, or servant—[An HON. MEMBER: "Creature."]—of the Treasury making an offer of these debentures and selling them to the public on certain stated conditions. Those who bought the stock from the Agency were and are entitled to enjoy the peaceful possession of those stocks free from interference by those who sold it to them. The clear understanding at the time was that, as an Agency or servant of the Government, its stocks had been issued and that, by inference, the buyers were entitled to peaceful possession and enjoyment of those stocks until they were deemed to be realised or voluntarily sold.

This is a very important Amendment. We were right to press it on many occasions during the passage of the Bill in this House. I am glad that their Lordships had better success. I hope that, even at this late hour, we may be able to persuade the Minister to accept the Amendment.

Mr. John Nott (St. Ives)

I doubt whether the Chief Secretary to the Treasury will believe me, but I came with a completely open mind to hear the debate on this Amendment. Having heard it, the discussion seems to me to have fallen into two separate parts. The first concerns the question whether or not it is necessary to remove the debentures in their present form and exchange them for another form of security. The second point is that if it is not possible to leave the debentures exactly where they are, one must ask whether the terms being offered on the new stock being given in exchange are fair.

The right hon. Gentleman said that the debentures now outstanding would probably be inconsistent with the interests of the Corporation and its shareholders, the general public. In saying that, the right hon. Gentleman was probably referring to two distinct points.

First, if it is intended that the Corporation should have certain groupings, it might be difficult to move the assets around between one group and another if there are charges outstanding on particular parts of the steel industry—and certainly such charges might inhibit a reorganisation of the industry. That point I would accept and understand. Secondly, there is the question whether there might be certain restrictions on the borrowings of the underlying company, which would also inhibit in some way the operations of the new Corporation.

I do not regard these two problems as being insuperable, because it would be quite possible to leave the debentures outstanding, held by their present owners, without continuing with the inhibitions which now exist—and there are many ways in which they could be removed. First, the debenture holders could be offered as security a charge on all the assets of the new Corporation in exchange for the security they now have on the underlying assets of particular companies. The second alternative is that they could be offered in exchange for the charge they now have over the individual companies within the industry a Government guarantee. The Chief Secretary, in talking about a Government guarantee, implied that there would be something unfair about this because, if such a guarantee were involved, in some way the market price of these debentures would be higher because of the better security that the Government would provide than is provided with these debentures merely secured on the assets of any underlying industrial undertaking. The question of market price is not involved. What we are concerned with is fixed interest stocks and the relevant fact is what these debentures will be worth when they come to maturity at the end of their lives.

Surely it should be possible to leave these debentures where they are and remove the restriction on borrowing which exists and also, in addition, charge these debentures in a different way, either on the National Steel Corporation as a whole or, alternatively, by giving a Government guarantee in exchange for their present security. I support very much the idea of leaving them where they are. This is because the Government will have to issue about another £123 million of Government stock in exchange for these debentures.

If the Government offer a Government stock in exchange for the outstanding debentures now, a large proportion of the existing holders of these debentures will decide that they do not want Government stock and will sell it. Thereafter, it will have to be taken up by the Departments. In other words, it will have to be underwritten by the Government. Due to their obligations in the market anyhow, the Government cannot allow gilt-edged stock which will be exchanged for these debentures to fall too rapidly in price. The Government will have to underwrite them in some way, possibly by getting the Departments to take up the new Government issue.

The effect of this will surely be that of drawing savings out of the private sector of the economy and putting them into the public sector, which is what is happening all the time under the present Government. People save and invest and then the Government take the savings out of the hands of the private sector and, as it were, acquire the savings themselves, and this has an inflationary effect, as the Chief Secretary will appreciate.

Why do they not leave the debentures in the hands of their present holders, who are satisfied with them as they are? Why do they want to exchange them for a new Government stock when, by doing so, they will almost certainly put greater obligations on the Government, because some of the people offered Government stock will not want to hold it, thus forcing the Bank of England to step in and take it into its own portfolio or that of the Departments. This is the principal objection to offering Government stock in exchange for the present outstanding debentures.

After all, the Minister of Power, who is not present, nodded most violently when, on Report, I drew his attention to statements made by Professor Edwards, of the Electricity Council, and by the Select Committee on Nationalised Industries in favour of the general public having a direct holding in the nationalised industries. There are many people, including the chairmen of the nationalised industries and the Select Committee, who have said that they are in favour of an experiment whereby the general public would hold direct fixed interest securities in nationalised undertakings. If we were merely to alter the security of the existing debentures and remove the present restrictions on borrowing, we would achieve exactly that effect.

If, after all, however, the Government decide that this is rather awkward and that they do not want to do it and that they must issue Government stock in exchange, there is raised the second issue of whether the compensation will be fair. When discussing whether it is fair, four items must be taken into account. First, there is the question of whether the running yield of the new Government stock, the rate of interest, will be the same as on the debentures. The Government probably have that factor in mind and no doubt the running yield will be as good. There is, secondly, the question of whether the redemption yield will be as good, and perhaps the Government will issue stock with an equivalent or slightly better redemption yield than the debentures have. On both scores they will probably meet their commitments. The third question is that of security, and, clearly, the Government will meet their commitments in that respect, because the British Government are prob- ably still a better security than the assets of steel companies.

The fourth item is probably the most important of all and it is the value of the investment at maturity. From what I have heard today, it would appear that the holders of the debenture stock will be extremely badly and unfairly treated. As I understand the Chief Secretary, the Government are taking the market value of the debenture stock as the basis for compensation in Government stock. I have never heard of such an extraordinary way in which to assess the value of a fixed interest security.

When a person buys or accepts a fixed interest security on issue, he knows that on maturity he will get either the same amount in return—in money terms, if not in real terms—or that he will get the same amount in return plus a small premium. If the Chief Secretary is saying—and I confess to not having gone into these terms in the greatest detail—that although when issued these stocks had a value of, say, £100, because interest rates have changed widely—and they have changed because of Government monetary policy—and the price has now come down to £60, the Government are to issue as compensation a stock which will yield the same as that stock yields at £60, then that is clearly the most outrageous expropriation of the worst kind, and I cannot see the slightest argument to support it.

6.15 p.m.

If the right hon. Gentleman was saying that about the equity shares of a steel company, he might have some small basis of support for his case. As the hon. Member for Poplar (Mr. Mikardo) said in Committee, if someone bought an equity steel stock in 1945 or thereafter, to some extent the threat of nationalisation was overhanging it. But people who bought debentures in steel companies never for a moment could have conceived that those debentures would be taken from them on a basis by which, when the debentures reached maturity, they would have a lesser capital value than when they were first issued. Yet I understood the Chief Secretary to say that this is in practice what is to happen.

My hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) said that he never invested in gilt-edged securities or debenture stock, because he was experienced in these matters. I cannot quite agree with him. I am not as experienced as he is in these affairs, but it is reasonable to expect people, even private individuals, occasionally to hold debentures and gilt-edged stock. Six months ago, they were very good investments, because it was clear that interest rates would come down.

However, widows and orphans hold debenture stocks in the belief that when they come to maturity the stocks would not lose them a penny in money terms. Now the Chief Secretary is saying that they will lose a lot in money terms. This is as expropriatory as taking a person's house from him, as expropriating his semi-detached house at below its value. I cannot see the slightest difference between the two.

I hope that even at this late stage the Government will consider changing the proposals which they appear to be making. I would much prefer these debentures to be left where they are and for the present restrictions on borrowing to be removed. Let the public remain in the steel companies directly—control would not be affected and the companies would still be nationalised. We will then not be creating the problem for the money market—quite apart from anything else—of having to sell another £120 million of Government stock. If the Government do not want to do that, they must issue their new gilt-edged stock on a basis so that, when it reaches maturity, the capital value will be the same as the debenture holder could have expected of the debenture stock which he received from I.S.H.R.A.

Mr. Diamond

By leave of the House; I hope that I do not embarrass those who have spoken by saying that I agree with much of what has been said. I will explain in more detail those parts of the various speeches with which I completely agree.

I rest my first argument for my case for the acquisition of these debentures on the need to acquire them in order that the National Steel Corporation shall be free to carry out the duties which the House is placing upon it. In that connection, I am much reinforced by having the support and experience of the knowledgeable hon. Member for Worcestershire, South (Sir G. Nabarro), who said that these debentures should be vested along with the shares. I entirely agree with him that this is the sensible way in which to do it.

I am also grateful for the equally intelligible speech which has just been made by the hon. Gentleman the Member for St. Ives (Mr. Nott), who drew attention to the extraordinary omissions in the speech of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). He gave two relevant and valid examples of the way in which the Corporation could be prevented or delayed, possibly prevented, so long as there were debenture holders. The hon. Gentleman the Member for St. Ives gave us two examples of the difficulties in which the National Steel Corporation would be placed if these debentures, and the powers residing were extant. The hon. Gentleman the Member for Cirencester and Tewkesbury pretended, although I would not accuse him of it, to be an innocent in these matters, and said that the only rights of a debenture holder were the two he gave as examples. He completely omitted the most obvious, the first right of any secured creditor, security.

He never mentioned one word about security, but he made a long speech demonstrating that, if secured creditors were unsecured, dealing with their security would not affect the issue. The whole essence of the matter, as was said by the hon. Gentleman the Member for St. Ives—who deals with these matters every day, and whose expertise is recognised—is that a secured creditor has a right over the security which might be wholly inconsistent with the wishes and ultimate welfare of the shareholder.

He has to be protected. If the shareholder, in this case the National Steel Corporation, wants to deal with the property which forms the security of the secured creditor, the secured creditor has a right to go to the court to get the plan stopped. The reorganisation which this House is requiring the National Steel Corporation to achieve could be affected, delayed, or prevented by debenture holders sticking to their rights under their existing debentures.

The hon. Gentleman said that he was prepared to take the risk, but we are not. We think that there should be an opportunity for the Corporation to carry out its duties uninhibited in this way and that is why, as I have already made absolutely clear, it is right that the debentures should be taken over and fully compensated. The debenture holders' rights have been quoted. Let me refer specifically to one particular debenture which gives these very examples—the sum of £7,500,000, 6½ per cent. second debenture stock. I have in front of me the trust deed, clause 9(1,B) of which says: The security hereby constituted … shall become enforceable in each and every of the events following:— Everyone knows, including the hon. Gentleman the Member for Cirencester and Tewkesbury, that when one tries to enforce a security one appoints a Receiver, who takes prior authority over directors and other agents of the shareholders, and over the shareholders themselves. The Receiver proceeds to carry out his duty of realising the assets in the interests of the debenture holders. I will not go so far as to say that he pays no attention to the shareholders' interests but his duty is laid down under the trust deed to realise the assets in the interests of the debenture holders. But this House has laid upon the National Steel Corporation the reorganising of the steel industry.

The Trust Deed goes on: (B) If an order shall be made or an effective resolution passed for the winding-up of the company … It is conceivable that the Corporation might wish, as the 100 per cent. shareholder of a certain company, to wind that company up. I have been asked what happens then. Precisely what the Opposition wants—a debenture which was due to mature in 10, 15, 20 years' time at a certain price matures immediately, and a price which was £80 becomes £100 overnight. That is what happens and I am very glad that I have been asked. This is what is behind this movement; it is an attempt to hold up the National Steel Corporation to this ransom that the debenture holders shall get, not the market price, not something more than the market price, but get what would be payable to them in 10, 15 or 20 years' time, when the debenture matures.

Mr. Alison

It would also be the contractual price in so far as this part of the trust deed is concerned.

Mr. Diamond

The contractual price is exactly what it would be. The contract provides that in the event of liquidation this would have to be paid. That was one of the circumstances under which it would mature, and the effect of accepting this Amendment would be that the Corporation would be prevented from carrying out the reorganisation which we are putting upon it, if one of the methods of achieving that reorganisation was to wind up a particular company.

Then, automatically and immediately this Clause which I am reading and which is typical—it would be extraordinary if it was not in every Deed—would operate, and the sum secured by the debenture would become repayable immediately. I have misled the House slightly in saying that it would be repaid in full, indicating that it would be 100 per cent. In the case of Summers it would be a maturity price of 102 per cent. for every £100. I have understated the case there.

Clause 9(1,H) deals with the circumstances under which the security shall become enforceable. It says: If the company shall sell or dispose of, or attempt to sell or dispose of the whole or a substantial part of its undertaking or assets except in accordance with the conditions specified"— and the conditions specified are irrelevant to what is proposed. I am sure that the House will accept that from me. My reply to the hon. Gentleman the Member for Cirencester and Tewkesbury is that if the National Steel Corporation desired, in order to achieve reorganisation, in its position as 100 per cent. shareholder to dispose of a company, or of a substantial part of the assets, it would result in the debenture holder being entitled to take it to court and hold the procedure up, to prevent it going through in certain circumstances, unless the debenture holder were paid off in full, up to 102 per cent. Either this House must say that it does not want the reorganisation to be carried out—and it has given full powers for that to be done—or it must say that it will remove the preventive powers of debenture holders, the inhibition given to debenture holders to prevent that being done, except at the ransom price of paying not the market price, not the compensation price, but some price considerably in excess of both, 25 per cent. in certain cases. That is what this is about.

Mr. Nott

Would not the right hon. Gentleman agree that the rights of and restrictions on debentures are being changed every day? There is not the slightest reason why the Government should not have offered the existing debenture holders some arrangement under which the current restrictions about which the right hon. Gentleman is concerned would be removed. I am sure that the debenture holders would have accepted the removal of those restrictions. It would have required negotiation. Would the right hon. Gentleman deal with that point?

6.30 p.m.

Mr. Diamond

We are dealing with the point of the negotiations we envisage taking place between the trustees for the debenture holders and the Government, with the Government coming to the trustees of the debenture holders, probably in the person of the Treasury, which is generally supposed to have some money behind it, and saying, "We would like you to forgo certain of your rights for nothing". One can imagine the sort of response which there would be to that. I imagine that any trustee—and trustees are nearly always banks or professional men—of debenture holders who gave up the rights of the beneficiaries for whom he was acting as trustee for no consideration when it was perfectly clear that all that they had to do was to hang on to their rights to get an appreciation of up to 25 per cent. more than they otherwise would get, would be committing an act of negligence.

Mr. Nott

rose—

Mr. Diamond

I hope that the hon. Gentleman will remember what Mr. Speaker said about the nature of our debates: I give way once more only.

Mr. Nott

The point is that the restrictions which now exist in the trust deed were put there for the security of the debenture holders. When the Government become the owners of the Corporation, the security is immeasurably improved and therefore the restrictions which are there now are no longer necessary.

Mr. Diamond

The rights of the debenture holders, as the hon. Gentleman says, with a little naivety, are immeasurably increased. Of course they are. That is the point I am making. Either one would have to buy these debentures at maturity prices immediately one wanted to achieve this or, if they were retained, the debentures would automatically have a much higher price. The hon. Gentleman probably has more knowledge about how much higher the price would be than I have. However, one generally reckons that a gilt-edged security yields about per cent. more than a first-class industrial debenture with the same rate of interest. Therefore, they would be quoted at a considerably higher price—perhaps between five and 10 points higher.

Some hon. Members say, "This does not matter because they will wait until maturity". How will it be ensured that everyone waits until maturity? Is it suggested that we should impose restrictions on the debenture holders in selling? Of course not. They will have the right, if they remain as debenture holders, to sell after nationalisation and those rights will result in their selling at a somewhat increased figure. If either of these two—I would go further than to call them natural eventualities—almost inevitable eventualities, if the reorganisation is to be carried through, took place, the debentures would have to be acquired to enable the Corporation to have the freedom to carry out the duties which the House has placed on it.

That is the first answer which I would give to those hon. Members opposite who have asked why it is necessary to secure the rights of the debenture holders to the nationalised Corporation in order that it can carry out its functions. In that respect, I am grateful for the support of two hon. Members opposite in believing that the debenture holders should be vested along with the shares.

The next argument on which I base my case has been connected with the position of I.S.H.R.A. Since a great deal has been said about I.S.H.R.A., and although it does not affect the situation one iota, I will reply to hon. Members' comments. I did not refer to this matter in my opening comments because it does not affect the situation, since all we are dealing with is the principle whether a citizen should involuntarily be compelled by Parliament to dispose of some of his property at a figure laid down by Parliament. This is what we are doing in connection with the ordinary shares and the preference shares. This is what we do in connection with houses. Many authorities have the power compulsorily to acquire houses and land. In every case proper compensation is to be paid. I shall come to the question of compensation later. That is the only principle involved here.

There is no difference in the debentures compared with the shares or preference shares. The debentures were issued by various companies. I.S.H.R.A. did not issue a single debenture. Many people have based the whole of their argument on the assumption, which they have not, obviously, been sufficiently interested to check, that the debentures were issued by I.S.H.R.A. They were not. They were issued by the companies.

Mr. Alison

Who owns the companies?

Mr. Diamond

The debentures were issued by the companies. I.S.H.R.A. was merely a holding agency which held some of the debentures and which, like any other holder, sold from time to time. The continuing contractual liabilities taken on by I.S.H.R.A. were nil. We discussed this matter in Committee. Time and again I asked the right hon. Member for Altrincham and Sale (Mr. Barber), who was then leading for the Opposition, to tell me who were the parties to the contract to which he was referring and what were the contractual obligations. The parties to the contract were, on the one hand, the company, and, on the other hand, the shareholder or debenture holder.

Mr. Patrick Jenkin

rose—

Mr. Diamond

I will give way shortly.

I.S.H.R.A. was in no sense a contracting party, except to the extent that, like any other shareholder, if it desired to transfer shares or stock, it had, on receipt of the price, to give effect to its undertaking to transfer, and in every case it delivered its stock and completely carried out its function.

Mr. Patrick Jenkin

rose—

Mr. Diamond

I will give way shortly.

It is said that I.S.H.R.A. was the agent of the Government. Some Members chose their words with a good deal of care. Others relaxed into saying that it was the agent of the Government and built up their case on the basis that this is what the Government did through their agent.

Section 28 of the Iron and Steel Act, 1953, which set up I.S.H.R.A. and which was passed by the Conservative Administration, provides: It is hereby declared for the avoidance of doubt that, except where the Board act as agent for the Minister under section three of this Act"— I can read Section 3 if required to do so, but perhaps the House will take it from me that it is not relevant to our discussion— neither the Board nor the Agency are to be regarded as the servant or agent of the Crown or as enjoying any status, immunity or privilege of the Crown, and no property of the Board or the Agency is to be regarded as property of, or held on behalf of, the Crown. I do not think that it could be clearer than that.

Mr. Patrick Jenkin

I am grateful to the right hon. Gentleman for giving way. He said that he put questions to my right hon. Friend the Member for Altrincham and Sale (Mr. Barber). I should like to reciprocate by putting a question to him which I should be grateful if he would answer. When the purchaser of securities from I.S.H.R.A. paid his money, he was instructed to pay it into the Bank of England; and to whom did the Bank account for the money? May I by way of gloss say that at the bottom of the issue document, the prospectus, the following words appear: No part of the proceeds of the present offers is receivable by The United Steel Companies Limited. By whom was it received?

Mr. Diamond

It was received by I.S.H.R.A. on behalf of the Treasury. [HON. MEMBERS: "Hear, hear."] There is no dispute about this. I am grateful to the hon. Member for reinforcing himself by looking at the prospectus. He knows full well that there is not a line in that prospectus under which I.S.H.R.A. takes on any continuing responsibility to the purchasers of the debentures.

I.S.H.R.A., like any other holder who had to carry out a sale—as I have said, all this is completely irrelevant to the issue but I am answering it because questions have been put by hon. Members—has the responsibility of delivering the stock on payment of the purchase price, and that is the end of the matter. If anybody thought that the document conveyed more or that there was in some ways a mystical agency, the Act—which was brought in by the Administration of right hon. and hon. Members opposite—makes it clear that that is not the case.

Sir G. Nabarro

The right hon. Gentleman has just used the words "mystical agency". At column 900 of the OFFICIAL REPORT of the Standing Committee there are these words: The Iron and Steel Holding and Realisation Agency offer for sale debenture stock of the United Steel Company Limited's …".— [OFFICIAL REPORT, Standing Committee D, 23rd November, 1966; c. 900.] Surely, that connotes responsibility by the Treasury as I.S.H.R.A. was itself only a Treasury agency.

Mr. Diamond

It is all very well for the hon. Member to keep on repeating that I.S.H.R.A. was the agent of the Treasury or of the Government and to build his argument on that. He can keep on repeating it, but he cannot make it a fact by doing so. Surely, it was not so.

I am sure that the hon. Member was present when I read out precisely what was the law to which he assented. He, among others, was present when the House passed that very Act making it clear for the removal of any doubt. If the hon. Member still has any doubt, I repeat: for the avoidance of doubt … neither the Board nor the Agency are to be regarded as the servant or agent of the Crown. I repeat that this was the normal circumstance of a block of shares or stock, as in these cases debentures, being offered for sale by the holder but the obligations being the obligations of the issuer, namely, the companies in question. Those companies retain those obligations to this day and will retain them after the vesting of the debentures. They will retain them either until maturity or until negotiations take place to do something else with them. But they will retain them.

I have, therefore, demonstrated—and I have, I hope, answered most of the questions which have been put to me—first, that to carry out the duties which we are placing on the Corporation it must be free of the restrictions of the opposing or differing rights of stockholders; and secondly, that the fact of I.S.H.R.A. having taken part as a holder in the sale of stock which it was temporarily holding does not affect the issue in the slightest; but that if we were to accept the Clause, the only effect would be that in order to be rid of these differing obligations, the National Steel Corporation would be compelled in most cases to buy out the debenture holders' rights, to buy out the debentures at their full price, and the debenture holders would achieve what they would like to achieve: a vastly increased price.

For those reasons, I cannot possibly recommend the House to support these Amendments.

Mr. Patrick Jenkin

rose—

Mr. Speaker

Has not the hon. Member spoken already in this discussion?

Mr. Jenkin

No, Mr. Speaker.

Mr. Speaker

I beg pardon.

6.45 p.m.

Mr. Jenkin

The Chief Secretary has an astonishing facility for convincing himself of the validity of his arguments. I am certain that he has failed to convince any of my right hon. or hon. Friends on this side, and by the time that I have finished I hope to have convinced hon. Members opposite that the Chief Secretary is, as usual, wrong.

This is a narrow question. It is simply the question of whether the debentures—the loan stock or securities—are to vest in the National Steel Corporation under the Bill. As has been apparent from this debate, this matter raises wide issues of principle, which have attracted substantial interest outside his House. As the Chief Secretary rightly said, it was debated fully in Standing Committee D, and it has been debated twice in another place, both in Committee and on Report, but this specific issue has not been debated until today on the Floor of the House of Commons. Therefore, I make no excuse, and I hope that no hon. Member will try to blame us, for devoting time to it, because it is a crucially important issue.

I concede at once that there is no clear-cut solution. There is no obvious answer, It is essentially a question of weighing the advantages and disadvantages, of weighing the argument one way and the other. Our contention on this side is that the balance of argument leads unmistakably to the conclusion that these securities should be excluded from the take-over. To assess the arguments properly, they must be weighed most carefully. In particular, the arguments must on no account be overstated, because to do so would distort the position.

The main burden of the Chief Secretary's case, which he has repeated today, is that the reason why the Bill is being introduced is to effect a rationalisation of the steel industry. As the right hon. Gentleman put it, the National Steel Corporation must be free to rearrange its affairs and the assets which it will take over without regard to conflicting ownerships. I use those words deliberately because they are neutral.

I had thought of quoting from the Standing Committee but I need not do so because the Chief Secretary has over and over again reinforced what he then said by his use and his long argument of the proposition that if the debenture holders were excluded from the take-over, they would be enabled to prevent the Corporation from carrying out that function. I intervened, perhaps from a sedentary position, to ask whether the right hon. Gentleman meant "prevent" and he emphasised that word. He believes that the continued existence of these debentures in private hands would prevent the reorganisation of the steel industry. I challenge this. It simply is not true. The debenture holders cannot prevent the reorganisation of the industry.

It is well established—the point has been made by my hon. Friends the Members for Scarborough and Whitby (Mr. Michael Shaw) and Barkston Ash (Mr. Alison) and I hope that it need be no more than asserted—that a company has an unfettered right to go into liquidation. This is so even though there may be express terms—I do not believe that there are any in the debentures which we are considering—in the debenture trust deed precluding the company from going into liquidation. This is a statutory right and the court will not fetter it.

If I need authority for that proposition, I quote a case from the Chancery Division in 1953. In re House Property and Investment Company Ltd., reported at page 612 of Chancery Division, 1954: It is the right of a company to wind itself up even though it is not insolvent, and this company certainly was not insolvent … it is a statutory right. It is part of the policy of the law of England that a company should be able to wind itself up even though it is not insolvent. It is one manifestation of that wide branch of the law which abhors perpetuity. The right hon. Gentleman has rightly said that, if a company goes into liquidation, the effect is that the loan stock becomes immediately payable. He has made the point that that would result in a higher redemption money being paid to the debenture holders than is being paid by the compensation which the Government are offering under the Bill. That may be. There are quite a lot of debenture trust deeds which provide for a graduated scale of redemption in the event of the liquidation of a company before the final redemption date written into the debenture trust deeds. I agree with my hon. Friend the Member for St. Ives (Mr. Nott) who said that, in that event, all that would happen is that the company would repay its just debts in the terms on which it entered into them.

I have reinforced myself on this point with counsel's opinion, and it is important that the House should have the benefit of hearing it. Learned counsel practising at the Chancery Bar has written: I know of no reconstruction which could be frustrated on the basis that a company can pay off its debentures by going into liquidation. The problem is merely one of mechanics. A company can go into liquidation and its assets disposed of or hived off into subsidiaries whose shares are disposed of. I know of no kind of reconstruction which cannot he carried out in this way through a liquidation. The right hon. Gentleman was entirely wrong when he said that this reconstruction could be prevented. His argument was over-stated, and that is why I emphasised the importance of saying that the arguments should not be overstated if they were to be weighed fairly.

Mr. Diamond

Nor should they be repeated inaccurately, because I went on to make the point which the hon. Gentleman has been good enough to confirm, that, so long as he remains a debenture holder, the result would be that the company would have to pay out its debenture holders at the full price, and, therefore, the effect of these Amendments is to increase the price very substantially.

Mr. Jenkin

The burden of the case made by my hon. Friends in this debate is that these debentures have been purchased by the Government at below the proper price. In that event, I cannot see why the Chief Secretary regards that as an improper thing to do. He told the Committee and repeated it to the House that the continued existence of these debentures would frustrate and prevent the reconstruction. The Committee was misled, and the House has been misled. That is not true.

I take comfort from the fact that, in another place, the noble Lord, the Minister without Portfolio, did not pitch his case anything like as high. He did not seek to argue that it would be prevented if the debentures remained in existence. Lord Shackleton said: The plain fact is … that the continued existence of these debentures in the hands of persons other than the Corporation would constitute—and I put it no higher than this—a continuing risk of interruption and delay in the execution of the Corporation's plans to reorganise the structure of the industry quickly and effectively."—[OFFICIAL REPORT, House of Lords, 9th March, 1967; Vol. 280, c. 1600.] Instead of using the words "prevent" and "frustrate", the noble Lord referred merely to a risk of delay. Later on in his speech, he said that it "might be inhibited". That is a very different argument from the one which the Chief Secretary sought to put before us today. It is so different as to alter the whole nature of the case.

At its worst, the power to inhibit or delay could entitle the debenture holders to make application to the court under the Companies Act, and the court would have to be satisfied that any terms which were put forward in a scheme of arrangement were fair to debenture holders. I have taken advice, and I am told that in any straightforward scheme that whole exercise should not take more than three months. If rights are known, a scheme can be drawn up so that a fair deal is done for the debenture holders. At the outside, if they wanted to exercise their rights, it could lead to a delay of three months. In fact, it is open to the Corporation to do a proper deal with the deben- ture holders, as is done every week of the year.

I have before me a scheme of arrangement put up by the Whitbread Company with its subsidiaries. It had a large number of subsidiaries, each of which had debenture stock, and they wanted to consolidate the debenture stocks in the name of the parent company. That has involved a delay of about one month since the scheme of arrangement was published to the debenture holders before the meeting at which this was to be approved. That is the sort of delay which is likely to arise. It cannot prevent or frustrate, and it cannot seriously embarrass the Corporation. At the most, it could be a minor inconvenience, and that is as far as it goes.

Mr. Diamond

The hon. Gentleman gives as an example a case which happens regularly where a company is dealing with its subsidiaries. Such a case is unlikely to be paralleled in the National Steel Corporation, where the essential feature is that, in order to give effect to the reorganisation, assets would be transferred not to a subsidiary but to another company.

Mr. Jenkin

The whole point of the Whitbread example is that these debentures were owned outside and therefore might have been minority shareholders outside. The case is exactly the same. The only obstacle which the Corporation would face if it were not prepared to pay the true price which had been agreed to the debenture holders would be that minor inconvenience. That is what it amounts to.

Against that, what are the arguments for excluding the debentures from the Act? They are very much more serious. This amounts to a repudiation of debt and interference with contractual rights of citizens, of bodies and corporations of all sorts of people who entered into those contractual rights in good faith.

I will quote two examples, and I take first the Consett 5 per cent. redeemable debenture stock, 1975–85. That stock was offered to the public by I.S.H.R.A. in March, 1961, at £81 per cent. The compensation price is £77 and, therefore, they are getting substantially less than they would have got. It has a redemption price of £100.

Second, I take the South Durham 5¼ per cent. debenture stock, 1976–81. That was offered to the public by I.S.H.R.A. in January, 1956, at £97. The compensation price is £79 12s. 8d., and the investors in that are losing substantially the money which they invested in that stock.

It is the Government's case that there was no repudiation and that this was simply a transfer. This is the Tom Jones argument which was exploded so effectively by my hon. Friend the Member for Barkston Ash, who asked the Chief Secretary a number of questions which he has not answered. He asked in particular that, if these stocks are intended to remain in existence so that there cannot be said to be a repudiation of debt, is it intended to have a certain term set out in the offer which will be adhered to? Of course not. The whole object of the exercise is that these matters should continue to be dealt with entirely at the will of the National Steel Corporation. Therefore, the substitution of the name of Tom Jones for that of the National Steel Corporation is a bogus argument. It is a repudiation of a debt, but, as the right hon. Gentleman said, subject to compensation.

7.0 p.m.

Of course, there will be compensation, but many of my hon. Friends have made the point that compensation is, having regard to the terms under which they were issued, quite inadequate. Even accepting the right hon. Gentleman's point for this purpose that the compensation is adequate, I would venture to suggest that the rights which the stockholder will get are, in fact, quite different from those which he enjoyed before. Indeed, the Chief Secretary used those very words during the Committee stage. He said they were different rights. I would say that their difference is such as to amount to a repudiation.

That is serious enough by itself, but this is repudiation of obligations to which the Government were privy. These securities, or many of them, were issued by I.S.H.R.A., a statutory body, a creature of the Treasury. Its members were appointed by the Treasury. The right hon. Gentleman is shaking his head. Does he doubt this? Let me read to him the relevant Sections of the 1953 Act. The members were appointed by the Treasury, under Section 18. I.S.H.R.A. was answerable to the Treasury. It had to report to the Treasury. My hon. Friend the Member for Scarborough and Whitby produced a copy of one of the annual reports which said that I.S.H.R.A. was under the direction of the Treasury. The selection of the members was fixed by the Treasury.

Under Section 19 of the 1953 Act, I.S.H.R.A. was closely supervised by the Treasury. It could give it directions. It could make sure that there was adequate consideration given of any agreement entered into by I.S.H.R.A., and it could interfere with, and indeed, in the last resort, could prevent, any action by I.S.H.R.A. Indeed, I.S.H.R.A. required Treasury sanction both to lend money and to borrow money.

Under Section 22 of the 1953 Act, there was set up an Iron and Steel Realisation Account under the control and management of the Treasury. Any surplus was to be paid to the Exchequer and any deficit was to be met by the Consolidated Fund. The Treasury had power to dissolve I.S.H.R.A. The only limitation was the one which the right hon. Gentleman read to the House a few moments ago under Section 28. He relied on that for his proposition, which he did not repeat today, that I.S.H.R.A. was merely a shop. My hon. Friend the Member for Yeovil (Mr. Peyton) promptly intervened by calling it a "bucket shop".

Mr. Peyton

I do not think that I ever wished to suggest that I.S.H.R.A. was a bucket shop. What I was endeavouring to indicate was that the right hon. Gentleman had sunk below his usual level and was treating I.S.H.R.A. as though it had been a bucket shop.

Mr. Jenkin

That is exactly what the right hon. Gentleman is turning I.S.H.R.A. into. The purpose of Section 28, which said that it was not to be the servant or agent of the Crown, was to ensure that it did not enjoy that immunity from legal process to which any servant or agent of the Crown is entitled. There was no suggestion that the Treasury—or the Crown—was to wash its hands of any of the obligations which were entered into under its aegis.

This is, in fact, a legal technicality, on which the Chief Secretary is attempting to wriggle out of the argument, and, indeed, a legal technicality which is unworthy of a Government of this country. In the eyes of the purchaser, this was a Government-sponsored transaction, and, in those circumstances, the Government have a duty that they should not indulge in a unilateral repudiation of the terms of the contract.

As supporting evidence, I have already referred to the United Steel offer, in which it said that no part of the proceeds of the present offer was receivable by the United Steel Companies Ltd. The moneys that were paid for the securities which were issued as a result of this offer were paid into the Bank of England and were accountable to the Exchequer, to the Treasury, because they were paid into the I.S.H.R.A. account.

It simply does not lie in the mouth of the Government to wash its hands of this transaction. Of course, technically, I.S.H.R.A. was not bound by the terms of the contract, and technically, as a matter of law, the Government were not a party to the contract, but clearly they are morally bound, and I would have thought that that was a consideration for which any Government would have regard. This strikes at the foundation of

Government credit in the eyes of the world, and does grave damage to the Government's reputation for financial integrity. It is not answered by bleating "fair and full compensation". This is a change in the terms. This is a repudiation of contractual rights, and the first duty of any Government is to uphold the sanctity of obligations, particularly of obligations which have been entered into under the aegis of a Government Department, and any Minister, particularly a Treasury Minister, should have greater regard for the good name of a British Government.

This is the main burden of our case—whether we are to weigh the potential minor inconvenience of all the possible powers of delay reconstruction against a lasting stain on Britain's reputation for financial integrity. This is the true balance, and I have no doubt where the duty of this House lies. The duty of this House is to support the Lords in their Amendment, and I hope that my right hon. and hon. Friends will join me in dividing the House in their favour.

Question put, That this House doth disagree with the Lords in the said Amendment:

The House divided: Ayes 212, Noes 142.

Division No. 294.]	AYES	[7.8 p.m.
Albu, Austen	Craddock, George (Bradford, S.)	Gardner, Tony
Alldritt, Walter	Crawshaw, Richard	Garrett, W. E.
Allen, Scholefield	Crossman, Rt. Hn. Richard	Ginsburg, David
Atkins, Ronald (Preston, N.)	Cullen, Mrs. Alice	Gregory, Arnold
Atkinson, Norman (Tottenham)	Dalyell, Tam	Grey, Charles (Durham)
Bacon, Rt. Hn. Alice	Davies, Dr. Ernest (Stretford)	Griffiths, David (Rother Valley)
Bagier, Gordon A. T.	Davies, G. Elfed (Rhondda, E.)	Griffiths, Rt. Hn. James (Llanelly)
Barnett, Joel	Davies, Harold (Leek)	Hale, Leslie (Oldham, W.)
Baxter, William	Davies, S. O. (Merthyr)	Hamling, William
Benn, Rt. Hn. Anthony Wedgwood	de Freitas, Rt. Hn. Sir Geoffrey	Hannan, William
Bennett, James (G'gow, Bridgeton)	Dell, Edmund	Harper, Joseph
Bid well, Sydney	Diamond, Rt. Hn. John	Harrison, Walter (Wakefield)
Bishop, E. S.	Dickens, James	Heseldine, Norman
Blackburn, F.	Dobson, Ray	Hattersley, Roy
Blenkinsop, Arthur	Doig, Peter	Hazell, Bert
Boardman, H.	Dunn, James A.	Heffer, Eric S.
Booth, Albert	Dunnett, Jack	Hooley, Frank
Boston, Terence	Dun woody, Mrs. Gwyneth (Exeter)	Horner, John
Boyden, James	Dun woody, Dr. John (F'th & C'b'e)	Houghton, Rt. Hn. Douglas
Braddock, Mrs. E. M.	Eadie, Alex	Howarth, Harry (Wellingborough)
Bradley, Tom	Edwards, Robert (Bilston)	Howarth, Robert (Botton, E.)
Bray, Dr. Jeremy	Edwards, William (Merioneth)	Howie, W.
Brooks, Edwin	Evans, loan L. (Birm'h'm, Yardley)	Huckfield, L.
Brown, Hugh D. (G'gow, Provan)	Faulds, Andrew	Hughes, Emrys (Ayrshire, S.)
Brown, Bob (N'c'tle-upon-Tyne, W.)	Finch, Harold	Hunter, Adam
Brown, R. W. (Shoreditch & F'bury)	Fitch, Alan (Wigan)	Hynd, John
Butler, Herbert (Hackney, C.)	Fletcher, Ted (Darlington)	Jackson, Colin (B'h'se & Spenb'gh)
Cant, R. B.	Floud, Bernard	Jackson, Peter M. (High Peak)
Carmichael Neil	Foot, Michael (Ebbw Vale)	Jeger, George (Goole)
Carter-Jones, Lewis	Ford, Ben	Jeger,Hn.Lena(H'b'n&St.P'cras,S.)
Chapman, Donald	Forrester, John	Jenkins, Hugh (Putney)
Coe, Denis	Fowler, Gerry	Jenkins, Rt. Hn. Roy (Stechford)
Coleman, Donald	Fraser, John (Norwood)	Johnson, Carol (Lewisham, S.)
Concannon, J. D.	Freeson, Reginald	Jones, Dan (Burnley)
Corbet, Mrs. Freda	Galpern, Sir Myer	Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)
Jones, J. Idwal (Wrexham)	Morris, Charles R. (Openshaw)	Shaw, Arnold (Ilford, S.)
Jones, T. Alec (Rhondda West)	Newens, Stan	Sheldon, Robert
Kelley, Richard	Norwood, Christopher	Short, Rt. Hn. Edward(N 'c' tle-u-Tyne)
Kerr, Mrs. Anne (R'ter & Chatham)	Oakes, Gordon	Silkin, Rt. Hn. John (Deptford)
Kerr, Dr. David (W'worth, Central)	Ogden, Eric	Silkin, Hn. S. C. (Dulwich)
Kerr, Russell (Feltham)	O'Malley, Brian	Silverman, Sydney (Nelson)
Lawson, George	Oram, Albert E.	Skeffington, Arthur
Lee, John (Reading)	Orbach, Maurice	Slater, Joseph
Lestor, Miss Joan	Orme, Stanley	Small, William
Lewis, Ron (Carlisle)	Oswald, Thomas	Snow, Julian
Lomas, Kenneth	Owen, Dr. David (Plymouth, S'tn)	Spriggs, Leslie
Loughlin, Charles	Padley, Walter	Steele,Thomas (Dunbartonshire,W.)
Lyon, Alexander W. (York)	Page, Derek (King's Lynn)	Stonehouse, John
Lyons, Edward (Bradford, E.)	Paget, R. T.	Swain, Thomas
Mabon, Dr. J. Dickson	Palmer, Arthur	Symonds, J. B.
McBride, Neil	Pannell, Rt. Hn. Charles	Taverne, Dick
Macdonald, A. H.	Park, Trevor	Tinn, James
McGuire, Michael	Parker, John (Dagenham)	Tuck, Raphael
Mackenzie, Gregor (Rutherglen)	Parkyn, Brian (Bedford)	Varley, Eric G.
Mackie, John	Pearson, Arthur (Pontypridd)	Wainwright, Edwin (Dearne Valley)
Mackintosh, John P.	Pentland, Norman	Walker, Harold (Doncaster)
Maclennan, Robert	Perry, Ernest G. (Battersea, S.)	Wallace, George
MacMillan, Malcolm (Western Isles)	Perry, George H. (Nottingham, S.)	Watkins, David (Consett)
McMillan, Tom (Glasgow, C.)	Price, Christopher (Perry Barr)	Wellbeloved, James
MacPherson, Malcolm	Price, Thomas (Westhoughton)	Wilkins, W. A.
Mahon, Simon (Bootle)	Price, William (Rugby)	Willey, Rt. Hn. Frederick
Manuel, Archie	Probert, Arthur	Williams, Alan (Swansea, W.)
Mapp, Charles	Randall, Harry	Williams, Clifford (Abertillery)
Marquand, David	Rankin, John	Williams, W. T. (Warrington)
Marsh, Rt. Hn. Richard	Redhead, Edward	Willis, George (Edinburgh, E.)
Mendelson, J. J.	Rhodes, Geoffrey	Winterbottom, R. E.
Mikardo, Ian	Roberts, Albert (Normanton)	Woodburn, Rt. Hn. A.
Millan, Bruce	Rogers, George (Kensington, N.)	Vates, Victor
Miller, Dr. M. S.	Rose, Paul
Milne, Edward (Blyth)	Ross, Rt. Hn. William	TELLERS FOR THE AYES:
Mitchell, R. C. (S'th'pton, Test)	Rowlands, E. (Cardiff, N.)	Mr. Charles Grey and
Morgan, Elystan (Cardiganshire)	Ryan, John	Mr. William Whitlock.
NOES
Alison, Michael (Barkston Ash)	Goodhew, Victor	Morrison, Charles (Devizes)
Allason, James (Hemel Hempstead)	Gower, Raymond	Mott-Radclyffe, Sir Charles
Baker, W. H. K.	Grant-Ferris, R.	Murton, Oscar
Barber, Rt. Hn. Anthony	Grieve, Percy	Nabarro, Sir Gerald
Batsford, Brian	Griffiths, Eldon (Bury St. Edmunds)	Neave, Airey
Beamish, Col. Sir Tufton	Grimond, Rt. Hn. J.	Nott, John
Bell, Ronald	Gurden, Harold	Orr-Ewing, Sir Ian
Bessell, Peter	Hall, John (Wycombe)	Osborn, John (Hallam)
Biffen, John	Hall-Davis, A. G. F.	Page, Graham (Crosby)
Black, Sir Cyril	Harrison, Col. Sir Harwood (Eye)	Page, John (Harrow, W.)
Bossom, Sir Clive	Hastings, Stephen	Peel, John
Boyd-Carpenter, Rt. Hn. John	Hawkins, Paul	Percival, Ian
Brewis, John	Heald, Rt. Hn. Sir Lionel	Peyton, John
Brinton, Sir Tatton	Higgins, Terence L.	Pink, R. Bonner
Bruce-Gardyne, J.	Hobson, Rt. Hn. Sir John	Pounder, Rafton
Buchanan-Smith,Alick(Angus,N & M)	Hogg, Rt. Hn. Quintin	Powell, Rt. Hn. J. Enoch
Buck, Antony (Colchester)	Holland, Philip	Pym, Fancis
Bullus, Sir Eric	Hornby, Richard	Quennell, Miss J. M.
Campbell, Gordon	Hunt, John	Ridley, Hn. Nicholas
Carlisle, Mark	Hutchison, Michael Clark	Ridsdale, Julian
Chichester-Clark, R.	Iremonger, T. L.	Rippon, Rt. Hn. Geoffrey
Clegg, Walter	Irvine, Bryant Godman (Rye)	Rossi, Hugh (Hornsey)
Cooke, Robert	Jenkin, Patrick (Woodford)	Russell, Sir Ronald
Corfield, F. V.	Jones, Arthur (Northants, S.)	St. John-Stevas, Norman
Craddock, Sir Beresford (Spelthorne)	Jopling, Michael	Scott, Nicholas
Crowder, F. P.	Kaberry, Sir Donald	Sharpies, Richard
Cunningham, Sir Knox	Kimball, Marcus	Shaw, Michael (Sc'b'gh & Whitby)
Dance, James	Kirk, Peter	Stainton, Keith
Davidson, James (Aberdeenshire, W.)	Lambton, Viscount	Steel, David (Roxburgh)
d'Avigdor-Goldsmid, Sir Henry	Langford-Holt, Sir John	Stodart, Anthony
Dean, Paul (Somerset, N.)	Legge-Bourke, Sir Harry	Stoddart-Scott, Col. Sir M. (Ripon)
Deedes, Rt. Hn. W. F. (Ashford)	Lewis, Kenneth (Rutland)	Summers, Sir Spencer
Digby, Simon Wingfield	Lloyd, Ian (P'tsm'th, Langstone)	Taylor, sir Charles (Eastbourne)
Dodds-Parker, Douglas	Lubbock, Eric	Taylor, Frank (Moss Side)
Doughty, Charles	Mackenzie, Alasdair(Ross & Crom'ty)	Temple, John M.
Eden, Sir John	McMaster, Stanley	Turton, Rt. Hn. R. H.
Elliott, R.W.(N'c'tle-upon-Tyne,N.)	Maginnis, John E.	van Straubenzee, W. R.
Eyre, Reginald	Marten, Neil	Vaughan-Morgan, Rt. Hn. Sir John
Farr, John	Maude, Angus	Vickers, Dame Joan
Fisher, Nigel	Maxwell-Hyslop, R. J.	Wainwright, Richard (Colne Valley)
Fortescue, Tim	Maydon, Lt.-Cmdr. S. L. C.	Walker-Smith, Rt. Hn. Sir Derek
Foster, Sir John	Mills, Peter (Torrington)	Walters, Dennis
Gilmour, Sir John (Fife, E.)	Mitchell, David (Basingstoke)	Ward, Dame Irene
Glover, Sir Douglas	Monro, Hector	Webster, David
Goodhart, Philip	More, Jasper	Wells, John (Maidstone)

Whitelaw, Rt. Hn. William	Wolrige-Gordon, Patrick	TELLERS FOR THE NOES:
Will, Sir Gerald (Bridgwater)	Wood, Rt. Hn. Richard	Mr. Anthony Grant and
Wilson, Geoffrey (Truro)	Wright, E.	Mr. Timothy Kitson.
Winstanley, Dr. M. P.

Subsequent Lords Amendments disagreed to.

Clause 11.—(VALUATION OF SECURITIES QUOTED BEFORE MAY, 1966, AND OF NEW ISSUES.)

Lords Amendment: No. 8, in page 12, line 42, at end insert: and for the purposes of subsection (1) of this section, an alteration effected, after the last of the relevant days, in rights attaching to securities shall not be taken to have changed them into different securities".

The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson)

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

This technical Amendment proposed by the Government is designed to facilitate the proposed merger between Dorman Long, Stewarts and Lloyds, and South Durham. The three companies believe that the merger will bring considerable advantages from rationalisation, and will facilitate Stewarts and Lloyds' project to build a new medium-diameter pipe mill at South Durham's West Hartlepool works, using plate supplied from Dorman Long's new Lackenby plate mill. Both the Organising Committee and the Minister have welcomed the proposals as a step towards reorganisation, and Amendments were put into the Bill on the Report stage in another place to facilitate the merger.

The present Amendment is merely consequential, and is designed to make it clear that technical changes in rights which might result from the merger do not affect the present compensation position of the different classes of shares.

Question put and agreed to.

Clause 15.—(PROVISION OF PRODUCTION FACILITIES TO BE SUBJECT TO MINISTER'S CONSENT IN CERTAIN CASES.)

Lords Amendment No. 9, in page 15, line 36, leave out from "by" to "require" in line 38 and insert "order".

7.15 p.m.

Mr. Freeson

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

Mr. Speaker

I understand that Amendments Nos. 9, 10, 11 and 12 are fairly well related, and may be taken together.

Mr. Freeson

This Clause provides that the Minister can require the private sector of the industry to submit for his approval major projects involving the provision of more iron and steel-making capacity. Under the Clause as it left the Commons, the Minister could from time to time publish notices defining those projects which must be submitted to him, and these notices were not subject to any form of parliamentary procedure. These Amendments will provide, instead, that the Minister should make an Order defining the cases to be submitted, and that such an Order should be subject to the negative Resolution procedure.

The Amendments have resulted from a suggestion made by the Opposition in the House of Lords that the substance of notices under Clause 15 should instead appear in Orders subject to parliamentary procedure, and the Government were glad to accept this suggestion because they recognised the need to keep Parliament fully informed where appropriate

Mr. J. H. Osborn

This Clause is of considerable concern to the private sector of the industry. During our discussions in Committee on the original Clause, which is now Clause 13, various Amendments were made, and we now have these Amendments which were accepted in the House of Lords.

As Lord Windlesham said in the other place on 28th February, 1967, these Amendments deal with a politically explosive area of potential problems. The whole question of the extension of production facilities in the private sector will be affected by this Clause when the Bill becomes law. The Millom case will no doubt arise.

You will remember, Mr. Speaker, that on Report, in a slightly different context, I raised the Millom case. I do not wish to elaborate its pros and cons, but it is a typical, complicated case. Only a short time ago, after my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) and I had visited Millom, not only to see the process, but also the factory and its environs, the Iron and Steel Board gave grudging approval for the Millom scheme to go ahead.

Mr. Speaker

Order. The hon. Member must link his remarks with the rather narrow terms of the Amendments before us.

Mr. Osborn

I agree that I should deal with the Amendments, Mr. Speaker. Lords Amendment No. 13, in page 16, line 24, after "except" insert: after giving to the person seeking the consent notice containing particulars of the reasons for which he has not yet given the consent and and No. 14, in line 25, leave out "the person seeking the consent" and insert "that person".

Mr. Speaker

Order. We are not discussing those two Amendments. We are discussing Lords Amendments Nos. 9, 10, 11 and 12. We are concerned with the question of a notice, or of publishing a notice, or of making an Order. We shall reach the other two Amendments later.

Mr. Osborn

I do not know what the wish of other hon. Members is in dealing with the Amendments to this Clause. Perhaps I should speak on the last two later on.

Mr. Speaker

I cannot see how the case that the hon. Member is dealing with has anything to do with the four Amendments with which we are dealing at the moment.

Mr. Ridley

The Amendments make it incumbent upon the Government to bring an Order before the House if they wish to curtail any extension of steelmaking capacity in the private sector, rather than merely giving notice that they have decided to curtail that development. This is of fundamental importance. I agree that the nationalised steel industry must be able to compete with the private sector. I am not sure that I like the doctrine, but I accept it for the future. But I urge the Minister to agree that there must also be ability for the private sector to compete with the public sector.

Unless the Amendments are accepted, the private sector can be refused power to develop and expand, without even a protest being made in Parliament. I strongly support the Amendments, because it is vital that the Government should have to make an Order, not only so that the House can debate it, but so that the public shall be made aware of the fact that a development in the private sector has been prevented.

I know of no industrial or commercial parallel where the Government have taken power to prevent industrial development, especially in development area. My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) mentioned Millom, which is in the middle of a development area. It seems crazy that the Government could stop the creation of increased capacity in such an area. If the Government are to take such power there must be an opportunity for the issue to be debated.

The only justification for taking such a power as this is the wish to preserve a monopoly. I am against monopolies, both private and public. Any departure from a policy of allowing the private sector or the public sector to expand as it will is a matter of major national concern, which in my opinion should be subject to the affirmative Resolution procedure. Except on grounds of planning or amenity the idea that the Ministry should be able to prevent development in the private sector is one that I do not like.

As far as I know, power has never been used by the Iron and Steel Board to prevent development. I know that there was a postponement of permission in the case of Millom, which the Board was unable to endorse at its later meeting because it felt that development at Millom would not substantially affect the pattern of steel making. I am extremely glad that that decision was arrived at.

Nevertheless, if a development is proposed by a steel company which is held substantially to affect the pattern of steel making it surely ought to be incumbent upon the Government to bring an Order before the House, so that we are alerted to what is happening and have an opportunity to debate the matter. If the facility at Millom had been suppressed it would have been one of the most terrifying things that could have happened. I am trying to see into the future, when the Bill has become law. There is the possibility of another Millom, perhaps on a larger scale, as a result of which competitors of the National Steel Corporation would be strangled, without our having a chance to debate the matter.

We must provide against that in the Bill. I therefore strongly support the Lords in the Amendments.

Mr. Speaker

It seems to me that we might, after all, take Lords Amendments Nos. 13 and 14 with this group. This will assist the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn.)

Mr. J. H. Osborn

I am grateful, Mr. Speaker. My remarks will be very short.

On Report, I referred to the case of Millom. It is important that the criteria on which the Minister decides whether permission should be given for development in the private sector should be subject to the Government's bringing an Order before the House. The private sector welcomes these Amendments. Lord Hughes, speaking for the Government in another place, said that they would not accept the affirmative Resolution procedure. It would be of immense advantage if they would reconsider this decision, but failing this the private sector will welcome the fact that the Minister has to establish his criteria by way of the negative Resolution procedure.

There will be difficulties of definition. The first development by Millom was under £100,000, the criteria under the 1953 Act, and subsequent developments were higher. The Minister will have to consider the criteria and we shall be able to give him our views when they are debated.

The other difficulty arises over the question of a referee. Under the Clause as sent to the Lords, a person would be appointed by the Minister under a welcome procedure. Amendments Nos. 13 and 14, in effect, alter this procedure, but this gives the private sector an opportunity of voicing its views to the Minister. When this matter has been dealt with, the Minister will then operate the procedure in consenting or otherwise.

It is becoming apparent that the Minister accepts responsibility for the private and public sectors. I hope that our points will be borne in mind, and the Clause will be operated as fairly as possible for the companies concerned and in the national interest. I welcome the Amendments as a move in the right direction.

Question put and agreed to.

Subsequent Lords Amendments agreed to.

Clause 24.—(ACCOUNTS OF THE CORPORATION AND AUDIT THEREOF.)

Lords Amendment No. 15: In page 22, line 32, to leave out "or stock".

Mr. Speaker

Perhaps it would be convenient to discuss also Amendments Nos. 16, 17, 18, 19, 20 and 21.

Mr. Freeson

I beg to move that this House doth agree with the Lords in the said Amendment.

Clause 24 provides that the Minister may make regulations requiring the Corporation to put in or with its accounts information about shares or stock held by them in, or amounts owing to them from, companies or bodies corporate. Its object is to ensure that Parliament and the public are kept informed of the extent of the nationalised steel industry's interests. The Amendment, and the others to Clause 24, make certain drafting changes in this provision. Their main object is to delete reference to stock as well as shares because they are unnecessary.

Subsection (2,a) provides that the Minister may make regulations requiring the Corporation to give information about "bodies" which are its subsidiaries, but subsection (2,b) empowers the Minister to require information only about "companies" and not about all "bodies" in which they have less than a controlling interest. Subsection (2,b) is, therefore, less comprehensive, and the Amendments extend the subsection to cover all "bodies corporate".

Mr. Patrick Jenkin

I have one brief question, which can be answered with a quick "Yes" or "No". The argument for the elimination of the word "stock" is that, under Section 59 of the 1945 Act, as revived, the definition of "share" is: 'share' includes stock resulting from the conversion of any share into stock;". The question arises whether any stock which might fall to be dealt with under the Clause has been converted from shares. Would the hon. Gentleman confirm that there are no securities which were issued in the form of stock ad initio and not in the form of shares subsequently converted?

Mr. Freeson

The stock forming part of a company's loan capital is covered by the reference to amounts owing to the Corporation from the companies. There is, therefore, no need for the phraseology in the Bill.

Mr. Jenkin

I am not sure whether the hon. Gentleman has taken the point. This is a question of equity shares or stock. I am not concerned for the moment with loan stock. Was preference stock all issued as shares and subsequently converted? Can the hon. Gentleman confirm that none of that stock was issued as stock? If so, it would not come within the definition of "shares" in Section 59 in Schedule 4, because that includes only stock resulting from the conversion of any share into stock. The answer must be a simple yes or no.

Mr. Freeson

The answer is "No", but not for the reason that the hon. Member has been putting. The only way in which stock forming part of a company's share capital can come into existence is by way of the definition in the revival of Section 59.

Question put and agreed to.

Subsequent Lords Amendments agreed to.

Clause 25.—(INFORMATION RESPECTING CERTAIN CLASSES OF BUSINESS OF CORPORATION AND PUBLICLY-OWNED COMPANIES TO BE CONTAINED IN CORPORATION'S REPORT TO MINISTER.)

Lords Amendment: No. 22, in page 25, line 35, after "make" to insert "next".

Mr. Speaker

Perhaps it would be convenient also to discuss Amendments Nos. 23, 24, 25 and 26.

Mr. Freeson

I beg to move that this House doth agree with the Lords in the said Amendment.

This Amendment and the others to Clause 25 are drafting Amendments to make the Bill read more smoothly.

Question put and agreed to.

Subsequent Lords Amendments agreed to.

New Clause "A".—(RIGHT OF CERTAIN IRON AND STEEL PRODUCERS TO OBJECT TO TRADE PRACTICES OF THE CORPORATION AND PUBLICLY-OWNED COMPANIES APPEARING TO BE UNFAIR.)

Lords Amendment: No. 27, in page 30, line 2, at end insert new Clause "A":

"A.—(1) Subject to subsection (6) below, the three next following subsections shall have effect where an iron and steel producer, being neither one of a description mentioned in subsection (5) below, nor the Corporation nor a publicly-owned company, makes to the Minister written complaint about a practice employed by the Corporation or a publicly-owned company in selling iron and steel products, being products of an activity specified neither in paragraph 4 nor in paragraph 6 of Schedule 3 to the 1953 Act, and the complaint is expressed to be made on the ground that the practice is unfair to the complainant and specifies the respects in which he considers that it is so unfair.

(2) The Minister shall forthwith after receiving the complaint send a copy thereof to the Corporation and, after such period for consideration of, and comment upon, the complaint by the Corporation as the Minister thinks reasonable has elapsed, shall send to the complainant a statement of the comments, if any, made by the Corporation on the complaint and shall, if he is of opinion that the complaint raises a question of substance and that the complainant has a reasonable case to make in support of the complaint, afford the complainant and the Corporation an opportunity of appearing, either personally or by a representative, before a person appointed by the Minister.

(3) The Minister shall consider the report of the person appointed under the last foregoing subsection and may, if it appears to him that the practice complained of is unfair to the complainant, give to the Corporation such directions as appear to him to be requisite to secure the removal of the grounds on which it is so unfair; and the Minister shall furnish the complainant with a statement of any such directions and the Corporation shall give effect thereto.

(4) Where a complainant avails himself of the right conferred by subsection (2) above to appear before a person appointed by the Minister, the Minister shall furnish the complainant and the Corporation each with a copy of the report of the person so appointed, and a statement of the conclusions reached by the Minister on considering the report.

(5) The description of iron and steel producer referred to in subsection (1) above is an iron and steel producer who carries on business comprising one or more of the activities specified in paragraphs 4 and 6 of Schedule 3 to the 1953 Act, but no other iron and steel activity.

(6) The Minister may by order give either or both of the following directions—

1. (a) a direction that subsection (1) of this section shall have effect as if the reference 1529 to an iron and steel producer of a description mentioned in the last foregoing subsection did not include a reference to an iron and steel producer of a specified description or that that subsection shall have effect as if the first-mentioned reference were omitted;
2. (b) a direction that that subsection shall have effect as if the reference to products of an activity specified neither in paragraph 4 nor in paragraph 6 of Schedule 3 to the 1953 Act did not include a reference to products of a specified description or that that subsection shall have effect as if the first-mentioned reference were omitted".

Mr. Speaker

I think that it will be convenient to discuss also, Amendment No. 29 to Clause 44, in page 38, line 32, leave out "section 5 and section 28" and insert: sections 5, 15, 28 and section (Right of certain iron and steel producers to object to trade practices of the Corporation and publicly-owned companies appearing to be unfair)". and Amendment No. 31, in page 38, line 40, to leave out from "by" to "to" in line 41 and insert: each of the following provisions, namely, section 4 of the 1949 Act and sections 5, 15 and section (Right of certain iron and steel produces to object to trade practices of the Corporation and publicly-owned companies appearing to be unfair) of this Act".

Mr. Marsh

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

The new Clause introduces a provision which I am sure is welcome to right hon. and hon. Gentlemen opposite and certainly to the industry, to establish a formal procedure for complaints by iron and steel producers about unfair trading practices by the Corporation. It provides that they can complain to the Minister when they think that the Corporation or a publicly-owned company is engaging in unfair practices in the sale of iron and steel products.

If the Minister thinks that the complainant has raised a question of substance and has a reasonable case, he can refer the complaint to the person appointed by him, who can hear both sides and make a report. The report having been made, the Minister, if he decides that the practice in question is unfair, can give the Corporation such directions as he thinks are necessary to remove the grounds on which the unfairness arose.

The new Clause therefore gives a right of appeal to the Minister—and this should be accepted as a major departure—on matters which are normally left to the commercial discretion of a nationalised industry. There is a special situation here in that it can be justified only by the special circumstances of the private sector in the iron and steel industry which, in respect of many products, is not only in direct competition with a very large public sector but is often frequently dependent on that sector for its supplies of semi-finished materials.

The new Clause demonstrates the Government's desire to allay the fears of the private sector, even though—and I hope that I say this for the last time; I have said it so often in these long debates—I believe that these fears are exaggerated. Its introduction should reinforce the assurances I have given on several occasions to the effect that any Minister, whatever his party, must be concerned with the prosperity of the steel industry as a whole and with the legitimate interests of the private as well as the public sector.

Mr. J. H. Osborn

I have no doubt that in Committee I said more on behalf of the private sector than any other hon. Member. I have admitted that I have an interest in this sector of the steel industry and, having said so much about the private sector, I hasten to inform the right hon. Gentleman that the new Clause will be welcomed by this section of the industry, particularly since it shows that the Minister in another place has gone a long way in an endeavour to meet the fears of the private sector.

Nevertheless, the new Clause does not remove the suspicion and fear that exists in view of the inevitability of unequal competition when one has a large company like the National Steel Corporation alongside smaller companies. However, at least the Minister has shown his intention to have machinery to deal with complaints.

Lord Erroll made a long speech in another place about the steel construction and bridging industry, 25 per cent. of which will be in the public sector, or 33 per cent. by value, and 75 per cent. in the private sector, or 60 per cent. by value. He outlined the work that this branch of the industry does, including the building of bridges, towers and schools, and in the debate he raised the problem of prices and delivery. The supplier, the nationalised concern, might give its subsidiary products favourable delivery dates and prices so that when supplies are short the subsidiaries would have that advantage. The right hon. Gentleman has referred to the Consumer Council and some of the complaints can, I understand, go to the body. Would the right hon. Gentleman therefore explain in which way the new Clause could be used to help the steel construction and development industry?

One then faces the problem of trying to define the phrase "fair competition." In the Western Mail of 27th February last a paragraph appeared in this Welsh newspaper stating: An expansion plan for a South Wales plant which manufactures equipment for collieries has been approved by the National Coal Board—and is almost certain to lead to more jobs. The new scheme is at the Ystrad Mynach plant of Tredomen Engineering Works, where 500 men are employed. The N.C.B. has approved the installation of a new type of electric arc furnace as part of the plan. This is a steel foundry which is expanding and is in competition with companies in the private sector. I raise this case because I have asked a number of Questions of the Minister and I wonder how it will be possible to prove fair competition. The right hon. Gentleman may have answered some of my Written Questions today, although I will be asking him a Question after Easter about this matter. I do not expect him to give a definite answer to some of these queries today. I trust, however, that he will bear my comments in mind.

7.45 p.m.

I question how one will prove "fair competition", because one must take into account all the information about turnover, capital employed, profit and prices. A public company might deflate its selling prices and ultimately end up by not giving a fair return on its capital. The new Clause states that someone can make … to the Minister written complaint about a practice … in selling iron and steel products … and the complaint is expressed to be made on the ground that the practice is unfair to the complainant and specifies the respects in which he considers it is so unfair". I presume that the Ministry has considered what sort of evidence will be necessary to prove such unfairness. The case to which I referred, of a steel foundry, is one where the firm is not specifically dealing with iron and steel products. I trust that when the Minister answers the Questions which I have tabled he will be able to supply me with this information. Has he considered how difficult it will be, certainly in the early years, to collate this information and for this body to adjudicate upon these matters.

Although I naturally welcome the new Clause—the Minister has been moving towards protecting the private sector to a certain degree, as has his counterpart in another place—I still believe that it will be difficult for this body in many cases to differentiate between whether or not competition has been fair. Nevertheless, I welcome the new Clause but hope that the right hon. Gentleman will remember that the phrase "fair competition" will present a problem for those who will have the destinies of the private and public sectors of the industry in their hands. It is, therefore, with a word of warning that I welcome the right hon. Gentleman's proposal.

I also welcome the fact that the right hon. Gentleman will be coming to Sheffield to meet representatives of the private and public sectors. I assure him that I will be one of those who will give him a courteous welcome to Sheffield. He will find that Sheffield will buckle down to this Measure, whether or not it likes it, and will meet him with the courtesy which a Minister of Power deserves.

Mr. Ian Mikardo (Poplar)

I have a short and simple question for my right hon. Friend. He reminded the House, for the umpteenth time—it is this theme song or "pop" record and he is probably sick of hearing himself saying the words—that he considers it his duty to further the interests of the steel industry as a whole and to ensure that neither the public nor the private sector suffers an unfair disadvantage at the hands of the other. The new Clause is headed: Right of certain iron and steel producers to object to trade practices of the Corporation and publicly-owned companies appearing to be unfair. What right is my right hon. Friend providing to the Corporation and the publicly-owned companies to object to the trade practices of certain iron and steel producers which appear to be unfair? If he has no answer to this question, then he is not doing what, according to his "pop" record, he want to do, which is to hold the balance fairly between the two sectors.

Mr. Patrick Jenkin

I assure the hon. Member for Poplar (Mr. Mikardo) that he will have to search long and hard before he finds in the private sector of the iron and steel producing industry any evidence of the sort of unfair practices against which the private sector feels that it is in need of protection from the National Steel Corporation. I should not have thought that there was any need to put in the Bill measures to protect the 90 per cent. which the National Steel Corporation will represent from threats of the unfair competition and eventual financial ruin the Corporation might face from the 10 per cent. sector. However, I shall be interested to hear the right hon. Gentleman's reply if only to get, as I think we will, his assurance that there is nothing from which to protect anyone.

We welcome the new Clause very much. My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) has been quite properly tireless in his efforts to secure the writing into the Bill of what we regard as the minimum measures necessary to ensure the Minister's objective of a healthy and viable private sector. The House will recollect that on 17th November in the Standing Committee my hon. Friend moved an Amendment which would have provided for an arbitration tribunal to adjudicate on any allegations of unfair trading practised by the Corporation.

The Amendment was turned down, the then Parliamentary Secretary—now the Parliamentary Secretary to the Ministry of Technology—saying that any form of arbitration would be quite unworkable. He indicated that any interference with the freedom of the National Steel Corporation to trade in the manner which it regarded to have the greatest commercial advantage would be impossible. We were not dismayed by that reply, and on Report we tabled an Amendment to say that at any rate there must be a sort of complaint procedure. It is that suggestion, now enlarged and put in a somewhat over-complicated form, that the Minister has accepted by an Amendment moved in another place.

We have pressed very hard for this provision. It was refused earlier, as I say, but we now welcome the fact that it has been accepted. Nevertheless, it is of a somewhat limited scope. In another place the Minister without Portfolio drew the distinction between those who would have to address all complaints they might have to the Consumer Council and those in the rather more limited body who would be entitled to make use of this special procedure of an appeal to the Minister. It is only iron and steel producers who have this right. Not all iron and steel products come in from the beginning, because the provision excludes castings and forgings. Those producers are not considered to be at the same risk as those who are actually engaged in making iron and steel and carrying out the other processes listed in the Third Schedule to the 1953 Act.

I am not sure that this provision goes far enough. Although it is not open to us now to alter the Clause in any substance, I hope that the Minister will be able to go rather further than did the noble Lord in another place in giving an assurance to industries which might be described as being neither solely consumers nor iron and steel producers; they are neither one thing nor t'other—they are a sort of "mixty-maxty" in between.

In this context, my hon. Friend mentioned the constructional steelworks industry. I understand that my noble Friend, Lord Erroll, referred to this industry in the debates in another place so I need not repeat in detail what he then said. Perhaps, however, I could just summarise the problems which the industry faces and which conics the context of the mischief at which this particular Lords Amendment is aimed.

The industry is in a particularly vulnerable position by reason of the fact that the whole of its raw material, with the sole exception of limited items, comes from the steel makers and, furthermore, comes almost entirely from those companies which are being nationalised under the Bill. I can give some indication of the proportion which those purchases represent in the total turnover of the constructional steelworks industry. Its products are made up of approximately 50 per cent. fabricated steel and 50 per cent. labour costs. This is a far higher proportion of the input factor which is represented by purchases from the National Steel Corporation than is the case in almost any other industry. For comparison, one can take the example of the motor car industry. The proportion of that industry's turnover represented by steel purchases is probably less than 10 per cent., while with the constructional steelworks industry it is over 50 per cent.

That is the first leg of that industry's difficulty. The second is that a very large proportion of the industry is being nationalised under the Bill. One does not need a fevered imagination to conjure up the name of companies which have substantial interests in the constructional steelworks business. There is no other steel consuming industry that will have quite as large a proportion of competition in its own industry coming from the public sector.

The publicly-owned fabricating companies produce about one quarter of the tonnage output of the industry, and that quarter, by reason of the size of the companies and the capital investment was, in 1965—the last year for which figures are available—worth one-third of the value of the total turnover. In other words, the nationalised sector companies produce a high proportion of the more sophisticated work of the construction steelworks industry, and for the two reasons of the high proportion of turnover represented by imported steel and the very substantial proportion of the industry which will now be in the public sector, the industry feels itself particularly exposed and vulnerable. It would have liked to have come into the procedure which the Minister is now making available under the new Clause to the iron and steel producers.

Those concerned recognise, however, that, as worded, the Clause would require an immense amount of amendment if it were to take this enlargement, as it would be, into account. In those circumstances, therefore, I wonder whether the Minister would be prepared to give to the industry, which has expressed its anxieties to me and to a number of my hon. Friends, the assurance that he will watch the position closely, and that if there is any evidence of the sort of unfair practice about which an iron and steel producer would be entitled to complain under the new Clause it will be open to those in the constructional steelworks industry to make an informal approach to the Minister under the new Clause, and that he would be prepared to give directions to the National Steel Corporation in the same way that he would be prepared to give directions to it under the new Clause. This would not give them the same statutory protection that is available to the iron and steel producers, but it would go a very long way.

If the Minister could see his way to give that sort of assurance to those in this industry—and for all I know there may be other industries that are in the same category of being neither one thing nor t'other and which could take advantage of that assurance—I am sure that it would come as a considerable comfort and reassurance when, at the moment, they feel themselves vulnerable to competition—and, it might be, unfair competition—from an organisation which, of any kind, will be very formidable competition now, if only by reason of its size.

8.0 p.m.

Mr. Marsh

The interesting thing about the exchange on this new Clause is that my hon. Friend the Member for Poplar (Mr. Mikardo) made warning sounds about how far one could go in leaning so far over backward to protect the private sector that we endangered the public sector. I was worried for a moment until hon. Members opposite said that they had worries about the private sector, which convinced me that we must be about right on this matter.

It would be absurd to take into public ownership a massive industry like this and so hedge it with qualifications that it was a positive danger to the private sector. The answer to my hon. Friend, although I accept that it is a point which has to be watched, is that in the field to which this Clause applies the public sector is a pretty massive organisation. It is something like 95 per cent. to 5 per cent.

There are fields of special sales in terms of some specialised products where, in spite of the fact that there is a small private sector, it could produce embarrassing reactions to the Corporation, but I am satisfied that this protects a relatively small unit from unfair practices which I do not believe are likely to take place. Yet there is this worry and the public and the private sectors have to live together. If one can avoid justified worries, one should get rid of them. I do not think the fears rightly put forward by my hon. Friend are valid in this case.

We have drawn a distinction between that section of the private industry which is largely independent and completely dominated by the public sector and not applied the same argument to other sections which are capable of looking after themselves to same extent. The hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) and the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) both raised the question of the constructional steel industry. That was a fair point to raise. One has to take account of the fact that the constructional steel industry is not in relation to such a dominant competitor as is the case with iron and steel producers. It is much less dependent than the private sector is on iron and steel producers for supplies. It can get them from private suppliers, from merchants or from imports.

Mr. Patrick Jenkin

The right hon. Gentleman has referred to the heavier end. What proportion of the turnover is represented by purchases from the heavier end? That may represent very large sales.

Mr. Marsh

That is true, but in this case one is shading off a part of the industry in constructional steel where it is a minority interest. When we take the heavier end, we are taking a section of the constructional steel industry which has a minority of the activities or less than a whole part and the whole industry is not in the same position as being dominated by the public sector. It is a question of judgment, but the difference is that this is not an industry dominated by the massive organisation to the extent that the iron and steel producers are. The hon. Member asked, suppose this does not work out? It is new yet. Certainly the Association would have the right to go to the Consumer Council and to the Minister if it thought that this did not work. I hope that the House will see fit to accept the new Clause.

Question put and agreed to.

New Clause "B".—(POWER OF MINISTER TO CHANGE THE CORPORATION'S NAME.)

Lords Amendment: No. 28, in page 34, line 10, at end insert new Clause "B". B. The Minister may by order change the name of the authority established by section 1(1) of this Act, and an order under this section may make such provision as appears to the Minister to be requisite or expedient in consequence of the change of name effected thereby, including (without prejudice to the generality of the foregoing words) provision for amending enactments (whether contained in this or in any other Act)".

Mr. Freeson

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

This is a fulfilment of an undertaking given by the Government on Report in response to an Amendment moved by the hon. Member for Barkston Ash (Mr. Alison) to empower the Minister to change the Corporation's name by order. We believe that this Amendment, prompted by the Opposition, will prove useful. As I pointed out on Report, there is much to be said for using the word "British" in the Corporation's title, but the obvious alternatives, "British Steel Corporation" and "British Iron and Steel Corporation", are already used by subsidiaries. This difficulty should disappear when then Federation's trading services are transferred by agreement to the central trading organisation and the Amendment will permit this to be done without further legislation.

Mr. Alison

As one who had the honour of moving the Amendment on Report, I wish to thank the Parliamentary Secretary for accepting this Amendment from the House of Lords. He is, perhaps, a little optimistic in thinking that the Corporation has succeeded in steering clear of all the difficulties in the title of "National Steel Corporation" because, although the permutations on "British Steel "or" British Iron and Steel" might be taken over, there is still the British Sugar Corporation. Having shown all sweetness and light, the Government are going to show themselves all lightness and sweet. Perhaps it will not be so easy as they thought.

A point worth mentioning is that the Minister in another place, moving the Amendment on behalf of the Government, was at some pains to stress the importance the Government attached to it and the need to adopt the affirmative Resolution procedure in the matter of the Order which may be required to change the title. It is worth noting that this Amendment is regarded as so important that the affirmative Resolution procedure was spelled out by Lord Shackleton in the House of Lords.

Question put and agreed to.

Clause 44.—(REGULATIONS, ORDERS AND RULES.)

Lords Amendment No. 29, in page 38, line 32, leave out "section 5 and section 28" and insert: sections 5, 15, 28 and section (Right of certain iron and steel producers to object to trade practices of the Corporation and publicly-owned companies appearing to be unfair)".

Read a Second time.

Mr. Deputy Speaker (Mr. Sydney Irving)

I understand that we have discussed this Lords Amendment. Does the hon. Member for Wanstead and Wood-ford (Mr. Patrick Jenkin) wish to move his Amendment to the proposed Lords Amendment, in line 2, leave out '15'?

Mr. Patrick Jenkin

With the greatest respect, Mr. Deputy Speaker, we have not discussed Amendment No. 29.

Mr. Deputy Speaker

Not with Amendment No. 27?

Mr. Jenkin

I am extremely sorry. I did not appreciate that.

Lords Amendments Nos. 29 and 30 cover Clause 15 as well as the new Clause we have just dealt with. Had I appreciated that it was proposed to take this Amendment at the same time, I would have voiced an objection, because it would seem inappropriate.

Mr. Deputy Speaker

I was not in the Chair at the time, but I understand that we took Lords Amendment No. 27 and discussed Lords Amendments Nos. 29 and 30. It is still open to the hon. Member to move his Amendment to Lords Amendment No. 29 and to discuss that Amendment, but we have dealt with the debate on the main Lords Amendment.

Mr. Jenkin

I beg to move, as an Amendment to the Lords Amendment, to leave out '15'.

We could perhaps take with this Amendment Lords Amendment No. 30, page 38, line 36, after "32(2)" insert section (Power of Minister to change the Corporation's name)", and the Amendment in my name to the proposed Lords Amendment, to leave out 'after "32(2)" insert' and insert 'leave out "32(2)" and insert "15, 32(2)"'.

Mr. Deputy Speaker

If that is for convenience of the House.

Mr. Marsh

Obviously, if the hon. Gentleman wants to make a specific point, he must make it, but I assumed that these were consequential Amendments on the original Clause.

Mr. Jenkin

With respect, they are nothing of the sort. They are Amendments in fact, and although my hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) adverted to them in talking about Clause 15 the merits and the affirmative and negative Resolution procedure were not discussed. I hope that the right hon. Gentleman will take no objection if we now address ourselves to these Amendments.

Mr. Deputy Speaker

The only concern of the Chair is whether this will be for the convenience of the House.

Mr. Marsh

indicated assent.

Mr. Jenkin

I am grateful to the right hon. Gentleman for his agreement. It is a sensible thing to do, because the Amendments stand and fall together. They are designed to make sure that the new power to make Orders, introduced into Clause 15 in another place—a Clause which we accepted earlier—will be exercisable by the affirmative and not by the negative Resolution procedure. There are two grounds on which we put this forward as a serious suggestion.

The first is the importance of the matters which will be comprised within the Orders. The second is the nature of the Orders, what kind of Orders they are to be. On the question of importance, I do not think that anyone could dispute that the power now contained in Clause 15 is of crucial importance to the private sector of the industry. The Minister has described it in the White Paper as a reserve power to control substantial development projects in the private sector and it is worth examining this a little more closely to see exactly what that power consists of.

Under Clause 15, the Minister may make an Order in which he classifies the sort of development to which this power will apply. Subsection (2) of Clause 15 says that the applicant … shall not proceed therewith without the consent in writing of the Minister. In other words, the right hon. Gentleman has a complete yea or nay as to whether a project which falls within the terms of an Order that he has made is to go ahead.

The only limitation that is written into Clause 3 is contained in subsection (4) which says, in effect, that a notice must be framed so that consent is only required … where the provision of the additional production facilities … would be likely, in the Minister's opinion, substantially to affect the efficient and economic development of production facilities in Great Britain. That is to say, the only limitation that is written into the Bill is a limitation on the type of Order that may be made specifying the production facilities to which the power is to apply. It in no sense limits or fetters the right of the Minister to give or withhold consent once the Order has been made. Thereafter, in fact, his discretion is completely unrestricted.

This is quite different from the existing power under the 1953 Act, which is exercised by the Iron and Steel Board. Section 6(3) of the Act says: The Board shall not refuse their consent to any proposal submitted to them under this section unless it appears to them after consultation … that the proposal will seriously prejudice the efficient and economic development of production facilities in Great Britain. There, as it were, the limitation is introduced at a later stage. This is a limit on the Board's authority to withhold consent for a development project.

The Minister, in relation to his own unfettered discretion which the Bill contains, has acknowledged the fear—although he described it as a "folk fear" and an "exaggerated fear"—of the private sector. The fact is that the private sector feels that it has its head in a noose, that it is only necessary for the Minister to pull the knot tight and it will be "sunk".

I mention this because it emphasises the vital importance of the Order which the Minister will have power to intro- duce under the Bill specifying the nature of the developments which are to come within it. This is the only stage at which there is to be any scrutiny by Parliament of the matter at all.

I give an example as to how this control has worked in the past under the 1953 Act to illustrate how we envisage this working under the Bill. My hon. Friend the Member for Hallam has already mentioned the Millom Hematite and Iron Company and its development of the spray steel process. This company invested £75,000 of its own money in developing a new process for the production of steel—a process that was originally discovered in the B.I.S.R.A. laboratories.

Since May, 1966, the company has been successfully operating this new process. It might be useful if I indicated the economic importance of why the issue arises by reading a short passage from an article in New Scientist, by Mr. David Fishlock, on 20th October, 1966. He wrote: Steelmaking history may thus repeat itself. The last great advance in steelmaking, the Linz-Donawitz (LD) process, in which oxygen replaces air as the agency whereby iron is refined to steel, was born of economic necessity on the part of a declining Austrian steel industry. Today, it is said, royalties from the LD process provide Austria's largest foreign income. Millom's concern was to use more fully the substantial output of its pre-blast furnaces, but it could not sell the extra iron. Nor was it economic to instal conventional steelmaking plant for an output of not more than ¾ million tons a year. The solution, its new managing director Mr. D. R. G. Davies decided, lay in an entirely different steelmaking technique. In other words, the Millom Company saw its own survival dependent upon its being allowed to develop steel making facilities using this new spray steel process. It therefore applied for consent to the Iron and Steel Board to spend £190,000 on spray units and £760,000 on continuous casting.

The company's case was that the new spray steel process revolutionised the economics of steel making and made possible what was not hitherto possible and what had hitherto not been accepted as possible—the manufacture of steel in relatively small units which was economic compared in process economics with the major units.

Some people—I do not say whether they are right or wrong—have contended that the existence of this process destroys the whole basis of the case for the rationalisation of the industry and therefore, of course, for nationalisation. But I would be out of order if I pursued that now, What is true—and again I quote from the article—is that … the indications are that the process is in direct competition with the new oxygen processes like LD and Kaldo. Its attractions—on large or small scale—may not induce a steelmaker who has already re-equipped with an oxygen process to change his mind. But it should make many who have still to re-equip—abroad as well as in Britain—think hard before they swap, say, their open-hearth furnaces for LD converters. It is, therefore, instructive in this context to see exactly what has happened. In the end, the Board felt that the terms of the 1953 Act debarred it from refusing consent to the Millom Company for this development, and there were many people who cheered when they read that consent could not be refused, because they defended, as my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) has defended this evening, the right of a company to invest its own money in its own assets.

However, it is interesting to read some of the reasons why the Iron and Steel Board would have refused permission had it had power to do so, because those considerations will operate in the case of Clause 15 and any Order made under it. A letter dated 7th March and written by Mr. Moore, Secretary of the Iron and Steel Board, to the managing director of the Millom company, said: The consideration that has been uppermost in the Board's mind has been that the new process should be tried out in existing steelworks which already possess, in addition to ironmaking plant, the facilities for converting molten steel into saleable products". That means that the existing producer would have been favoured against the new man.

The letter went on: … the Board are satisfied that it is not necessary from a national point of view, that spray steelmaking by Millom should be carried beyond the present experimental stage. It also said: … the Board consider that such a development is undesirable ". and contrary to the proper and efficient development of the British iron and steel industry". The letter concluded by saying that because the development did not fall within Section 6(3) of the 1953 Act and would not seriously prejudice the efficient and economic development of production facilities in the United Kingdom, the Board felt itself precluded from withholding consent.

Mr. Marsh

The hon. Gentleman is making rather a point of Millom in some detail. Offhand, I cannot remember whether it is mentioned in the letter, but, of course, a strong consideration was that this process was already in existence in other plants.

Mr. Jenkin

Exactly, but it was developed to the commercial scale by this company and if this company wanted to exploit its own development, it seemed prima facie that it should have the right to do so.

Mr. Marsh

Inevitably, we are getting into great detail. It was not only a matter of approval which was required. Public money was wanted, too.

Mr. Jenkin

I agree. An application for public money has been made, but I have not heard of the outcome of that application. However, I have been given to understand that the company is prepared to go ahead with its own money on the basis of the consent which has been given.

Mr. Alison

Would not the Minister agree that there is all the difference in the world in trying out spray steel at Lancashire Steelworks, by-passing existing furnaces and perhaps putting 20,000 or 30,000 men out of work in those and similar works, and trying out the process at Millom, where, although there are blast furnacemen, there are no process workers in the melting stage to be upset by the development of the spray steel process? Is not Lancashire Steel a different kettle of fish?

Mr. Jenkin

I am grateful for what my hon. Friend has said, for it reinforces the strength of my argument for Millom steel.

However, that is not the point of this debate. The point is—and by his words this evening the right hon. Gentleman has confirmed this—that, had the Minister had power, he would have refused consent. Had the power been his and had the decision been his, he would have refused consent, and the only test of whether consent would have to be obtained would be whether the Order came within the terms of Clause 15.

Once the Order had been made, the Minister's consent would have been unfettered. This is, therefore, the classic case where the rights of the citizen or the rights of the private company depend entirely upon the terms of the Order, and in the Bill there is no indication of the limitations, except the blanket phrase that the development must be such as substantially would affect the development of iron and steel products. Once an Order is made, discretion is unfettered. For that reason I argue that Orders made under Clause 15 are of a critical and crucial importance and justify the affirmative Resolution procedure.

I also base my argument on the kind of Order which justifies a distinction between a negative and affirmative Resolution procedure. The House will recollect that this matter was investigated by the Select Committee on Delegated Legislation which reported in October, 1953, and which although making no express recommendations about the principles which should divide the negative from the affirmative procedure, nevertheless accepted the evidence of the Senior Parliamentary Counsel about how the lines had been drawn in the past, evidence which was quite uncontradicted by any other evidence, let alone evidence of comparable weight.

Sir Alan Ellis, then Senior Parliamentary Counsel, gave evidence to the Committee to which the Committee referred in paragraphs 75 and 76 of its Report. He said that there were four classes of Order which justified the affirmative Resolution procedure. The first two classes do not concern us. They are powers which substantially alter the provisions of an Act of Parliament by altering its language or increasing or limiting its extent or duration and, secondly, powers to impose financial charges, an example being Purchase Tax Orders. Clearly, the kind of Order which we are discussing is neither of those. The third class consists of cases of skeleton powers where the parent Act fixes the purpose and leaves the whole substance of the law to be dealt with by subordinate legislation. There is a fourth class of miscellaneous cases which for various reasons were deemed to be of special importance.

This is a Case 3 instance. Clause 15 establishes the control over the investment by the private sector, establishes the broad principles, but the critical and definitive stage which determines exactly which investments are to be subject to control, subject to the unfettered power of the Minister to give or withhold consent, is to be left to the Order. This is, therefore, a case when the Act contains skeleton powers, when the parent Act fixes the purpose and leaves the whole substance of the law to be dealt with by subordinate legislation. Alternatively, one could say that this was a case of special importance within Sir Alan's fourth class.

8.30 p.m.

It is interesting, in this context, to look at the reasons which were given by the noble Lord, Lord Hughes, on 28th February, when he said, in justifying the introduction of the negative Resolution procedure that the first reason was that the Order would do no more than define those projects which must be submitted to the Minister for his approval. In the light of what I have said, and of the argument that I have addressed to this House, I cannot conceive how that can be an argument justifying the more limited negative procedure.

I therefore pass to the second reason. The Minister said that there was a wide range of consultation before the notice was issued under Clause 15. That is consultation outside Parliament and is no substitute for control by Parliament of the power which Parliament has conferred on the Minister.

The third reason he gave was that there was no question here of the Minister being able to amend an Act of Parliament. As I have said, that is a different category of Order, which would come within the affirmative Resolution procedure. He might have added that there was no new tax being raised; it would have been as relevant. This is of great importance to the private sector, which is intended to be viable and efficient, and to have a life of its own. This is the Minister's cardinal principle which he has stated repeatedly.

Clause 15 gives the Minister, when the Order has been made, an unfettered power to cut the private sector's throat. This is largely undefined in the Bill. Once the Order is made, the Minister has complete discretion and therefore the key is the Order. It is the Order which will give flesh and blood to the skeleton power contained in Clause 15. This is, therefore, an Order requiring Parliamentary control and an Order for which the affirmative Resolution procedure is the only really effective procedure to be established.

Mr. Allison

I want to emphasise the apparent anomaly in the statements that the Government have made in another place on this matter. As I reminded the Minister the noble Lord, Lord Shackleton, took some pride in asserting that the Government had provided that any Order changing the name of the Corporation would be subject to the full affirmative Resolution procedure, as much as to say: "So substantial and far-reaching is the significance of changing the name of the Corporation that we must invest this possibility with the full affirmative Resolution procedure."

Then the Government come along in the House of Lords and present us with the possibility of an Order being made which might have repercussions as far-reaching as that suggested by my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) with regard to the Millom Company and the development of spray steel and yet here they fight shy of the full affirmative Order procedure. It is all right when one is just changing a name, but when one is denying a company the possibility of developing a totally new process, then they do not think this warrants the affirmative Order procedure.

I am sorely tempted to inquire of the Minister whether it is that the penny has dropped about the possibility of hybridity arising under the affirmative Order procedure where the specification of particular companies takes place. Here he will recall the debate that we had in Committee. The disadvantage from the Government's point of view is that any such Order subject to the affirmative procedure is that it is liable to be hybrid in the House of Lords and therefore the Millom Company, which might be involved in any Order arising under Clause 15, could invoke the full panoply of counsel, and representation before the Special Orders Committee of the House of Lords, and argue its case fully in public in a Parliamentary setting.

Instead of this, we have the set-up provided for under Clause 15 under which it seems quite clear that most of the basic decisions will be made before the Order is made. Any question of the company named in the Order just sitting tight waiting for the Minister to send a nice letter is entirely fatuous. Consultations relating to the administrative decision will have been made.

The first thing that any company worth its salt will want to do as soon as it has an Order served upon it, if it is in accordance with our Amendment to the Lords Amendments is to appeal, to go to the House of Lords, and to bring counsel and to argue the case out fully in public. That is why we think that Lord Hughes was anxious to accept the Amendment, but diverted to the negative procedure. It is a most inconsistent attitude for the Government to take in the same debate, to apply the affirmative procedure to so small a thing as a change of name, but to deny it to the procedure of perhaps destroying the possibility of existence for a private company. For that reason, I earnestly support my hon. Friend's Amendment to the Amendment.

Mr. J. H. Osborn

I have made my contribution on this theme and on Millon in particular. One thing which alarms me is the Minister's reference to grants. There are two possible grants in this case, one from the Ministry of Technology for developing, and one from the Board of Trade in the normal grant which has been the subject of an announcement today. This means that a firm will not only have to comply with an Order but will be very much dependent on grants. This debate has shown that a private company will have to find ways round difficulties not only in legislation but on the question of grants. I do not think that the Minister will want to expand on this. Obviously, if a company in a development area wishes to expand its activities, it will expect to receive the development grants or investment grants which are available. This shows the extent to which an activity of this type will be encumbered with social and development problems and other problems.

As I have said, my view is that the Order should be an affirmative Order rather than a negative Order. I will not pursue that argument further.

Mr. Marsh

This is a rather surprising debate. Hon. Members opposite have made rather heavier weather of this point than is justified. A great deal has been said about Millom. As the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) said, it would not be in order to deal with that concern at great length.

The only reason why I made a point about grants was that it is legitimate for industrialists to ask for money if an Act provides that they may do so. I was merely arguing that there are a number of factors in this case. What I find extraordinary is the fact that hon. Members opposite have been talking about the dreadful things which would have been done to Millom under the Iron and Steel Act, 1953, without saying that it was passed by their own party. The only restrictions which could be placed on the company had it gone against any regulation were restrictions placed on it by hon. Members opposite when they were in office. It is a bit much for the Opposition to complain to the Labour Government about the iniquities, of which there are many, of the Conservative Government in 1953.

I am sure that hon Members opposite may have doubts about this Act, that they wish that it had not been enacted by their party and perhaps would like to get rid of it. This is exactly what we are doing.

Mr. Patrick Jenkin

The Minister should recognise that that Measure was put forward in good faith by the Conservative Government as an attempted compromise solution which would determine the future of this great industry for a very long time. Unfortunately, it appears to have failed to achieve that purpose, as a result of which we have this Bill.

Mr. Marsh

The hon. Gentleman is wriggling off the hook. The point which he makes clearly and pointedly—it has been made several times—is that the dreadful things which might have been done unto a company like Millom under the 1953 Act are so appalling that they have produced this Bill. My only point is that the powers which exist in the Bill exist in the 1953 Act, which is a creature of hon. Members opposite. Not one hon. Member opposite has complained before about this Act. I take no responsibility for the 1953 Act.

Sir J. Eden

The point at issue is the enormous accretion of power which the Bill gives to the public sector and the threat of the wrongful use of this power to the remaining part of the private sector. In this context, the 1953 Act takes on a totally different complexion, and it is against this that we would argue.

Mr. Marsh

The only change which has come about is that when hon. Members opposite sat on this side of the House they thought that the 1953 Act was all right, but now that they sit on the benches opposite they say that it is all wrong.

Mr. Alison

rose—

Mr. Marsh

I am trying to be non-controversial.

Mr. Alison

How does the right hon. Gentleman conclude that we are complaining about the 1953 Act? Under that Act, Millom got its way. We are not concerned with the 1953 Act. We are concerned with what might take its place after the Act has been rescinded by the Bill.

Mr. Marsh

I was coming to that point. I thought that the speeches of hon. Members opposite were largely centred around this particular case, which arose only as a result of the 1953 Act, one of the many pieces of legislation which hon. Members opposite enacted on an unsuspecting populace.

The hon. Member for Barkston Ash (Mr. Alison) has made a fair point about the reason for having an affirmative Resolution to change the name and not doing so in this case. The difference in changing the name of the Corporation is that consequential positions would be produced so that the name had to be altered in the Act, perhaps in other Acts, in legal documents and in leases.

Although it does so in only a small way—this is the significant difference—an affirmative Order to change the name of the Corporation would be changing the law. In these circumstances this is quite right and proper. If an Order makes a change in the law, no matter how small, a Government cannot do so without coming to Parliament—although I sometimes think that it would be a good idea to change the law without coming to Parliament. [Interruption.] That is a view which must be shared by all Ministers from time to time. In terms of changing the law, there is a different position. This would be the justification for having an affirmative Order concerning the name of the Corporation but not in this case.

I suggested earlier that hon. Members opposite were making rather more of this than is justified. The Order would do no more than define the projects which have to be submitted to the Minister for his approval. It would not change anything. All that it would decide would be which projects should be submitted to the Minister. The Minister then will have taken a decision under the Act and he would be directly answerable to Parliament by Questions, debate and Motion of censure. It is in this way that Parliament has its control.

The considerations which determine the classes of projects which are to be submitted to the Minister for approval—not whether they are right or wrong, but whether they should go to him for approval—would be largely technical in character. There is not the same careful balancing of interests that there would be subsequently when the substantive decision had to be made.

Reference was made to the discussion in the Select Committee. Clause 15 does not fit in with the evidence given in that case by the then senior Parliamentary Counsel. There is also the point—

Mr. Patrick Jenkin

I hoped that before leaving that point, the Minister would explain why he considers that Clause 15 does not fit in with that evidence.

Mr. Marsh

It is difficult for me to do so if the hon. Member will not let me finish the sentence. I certainly would like to explain. I did not expect the hon. Member to agree.

The difference is the very size of the activity, the fact that the Order does not change the law, that it does not make any decisions other than to refer a case or argument to the Minister and the fact that by subsections (2) and (3) of Clause 15, specific provisions are written into the Bill in considerable detail requiring the Minister to consult organisations representing the private sector, consumers and workers. We therefore have the situation that all that is happening is the reference to the Minister of particular cases for approval, which in most cases would probably be given. The moment that any decision is taken, it is a direct decision of the Minister, and he is answerable to the House. In addition to that, all the parties concerned—the consumers, the workers, and the private sector company itself—are consulted before decisions are taken.

In those circumstances, it would not be realistic to think that every issue of this type should be brought to Parliament for Parliament to debate not the Ministerial decision, but merely that the Minister was examining the problem.

Question put, That "15" stand part of the Lords Amendment:—

The House divided: Ayes 208, Noes 134.

Division No. 295.]	AYES	[8.45 p.m.
Albu, Austen	Brown,Bob(N'c'tle-upon-Tyne,W.)	Doig, Peter
Alldritt, Walter	Brown, R. W. (Shoreditch & F'bury)	Dunn, James A.
Allen, Sholefield	Butler, Herbert (Hackney, C.)	Dunnett, Jack
Armstrong, Ernest	Cant, R. B.	Dunwoody, Mrs. Gwyneth (Exeter)
Atkins, Ronald (Preston, N.)	Carmichael, Neil	Dunwoody, Dr. John (F'th & C'b'e)
Atkinson, Norman (Tottenham)	Carter-Jones, Lewis	Eadie, Alex
Bacon, Rt. Hn. Alice	Chapman, Donald	Edelman, Maurice
Bagier, Gordon A. T.	Coe, Denis	Edwards, Robert (Bilston)
Barnett, Joel	Coleman, Donald	Edwards, William (Merioneth)
Baxter, William	Concannon, J. D.	Ellis, John
Benn, Rt. Hn. Anthony Wedgwood	Corbet, Mrs. Freda	Evans, Ioan L. (Birm'h'm, Yardley)
Bennett, James (G'gow, Bridgeton)	Craddock, George (Bradford, S.)	Faulds, Andrew
Bidwell, Sydney	Crawshaw, Richard	Finch, Harold
Bishop, E. S.	Dalyell, Tam	Fitch, Alan (Wigan)
Blackburn, F.	Davies, Dr. Ernest (Stretford)	Fletcher, Ted (Darlington)
Blenkinsop, Arthur	Davies, G. Elfed (Rhondda, E.)	Foot, Michael (Ebbw Vale)
Boardman, H.	Davies, Harold (Leek)	Ford, Ben
Booth, Albert	Davies, S. O. (Merthyr)	Forrester, John
Boston, Terence	de Freitas, Rt. Hn. Sir Geoffrey	Fowler, Gerry
Bowden, Rt. Hn. Herbert	Dell, Edmund	Fraser, John (Norwood)
Braddock, Mrs. E. M.	Diamond, Rt. Hn. John	Freeson, Reginald
Bradley, Tom	Dickens, James	Galpern, Sir Myer
Brown, Hugh D. (G'gow, Provan)	Dobson, Ray	Gardner, Tony
Garrett, W. E.	Macdonald, A. H.	Redhead, Edward
Ginsburg, David	McGuire, Michael	Rhodes, Geoffrey
Cordon Walker, Rt. Hn. P. C.	McKay, Mrs. Margaret	Roberts, Albert (Normanton)
Grey, Charles (Durham)	Mackenzie, Gregor (Rutherglen)	Rodgers, William (Stockton)
Griffiths, David (Rother Valley)	Mackie, John	Rogers, George (Kensington, N.)
Griffiths, Rt. Hn. James (Llanelly)	Mackintosh, John P.	Rose, Paul
Hale, Leslie (Oldham, W.)	Maclennan, Robert	Ross, Rt. Hn. William
Hamling, William	MacMillan, Malcolm (Western Isles)	Rowland, Christopher (Meriden)
Hannan, William	McMillan, Tom (Glasgow, C.)	Rowlands, E. (Cardiff, N.)
Harrison, Walter (Wakefield)	McNamara, J. Kevin	Shaw, Arnold (Ilford, S.)
Haseldine, Norman	MacPherson, Malcolm	Sheldon, Robert
Hattersley, Roy	Mahon, Simon (Bootle)	Short, Rt.Hn.Edward(N'c'tle-u-Tyne)
Hazell, Bert	Manuel, Archie	Silkin, Rt. Hn. John (Deptford)
Heffer, Eric S,	Mapp, Charles	Silkin, Hn. S. C. (Dulwich)
Horner, John	Marquand, David	Silverman, Julius (Aston)
Houghton, Rt. Hn. Douglas	Marsh, Rt. Hn. Richard	Silverman, Sydney (Nelson)
Howarth, Harry (Wellingborough)	Mendelson, J. J.	Skeffington, Arthur
Howarth, Robert (Bolton, E.)	Mikardo, Ian	Snow, Julian
Huckfield, L.	Miller, Dr. M. S.	Spriggs, Leslie
Hughes, Roy (Newport)	Milne, Edward (Blyth)	Steele,Thomas (Dunbartonshire,W.)
Hunter, A Jam	Mitchell R. C. (S'th'pton, Test)	Swain, Thomas
Hynd, John	Morgan, Elystan (Cardiganshire)	Swingler, Stephen
Irvine, A. J. (Edge Hill)	Morris, Charles R. (Openshaw)	Symonds, J. B.
Jackson, Peter M. (High Peak)	Newens, Stan	Taverne, Dick
Jeger,Mrs.Lena(H'b'n&St.P'cras,S.)	Noel-Baker,Rt.Hn.Philip(Derby,S.)	Thomas, George (Cardiff, W.)
Jenkins, Hugh (Putney)	Norwood, Christopher	Tinn, James
Jenkins, Rt. Hn. Roy (Stechford)	Oakes, Gordon	Tuck, Raphael
Johnson, Carol (Lewisham, S.)	Ogden, Eric	Varley, Eric G.
Jones, Dan (Burnley)	O'Malley, Brian	Wainwright Edwin (Dearne Valley)
Jones,Rt.Hn.Sir Elwyn(W.Ham.S.)	Orbach, Maurice	Walker, Harold (Doncaster)
Jones, J. Idwal (Wrexham)	Orme, Stanley	Wallace, George
Jones, T. Alee (Rhondda West)	Oswald, Thomas	Watkins David (Consett)
Kerr, Mrs.)Anne (R'ter & Chatham)	Owen, Dr. David (Plymouth, S'tn)	Wellbeloved, James
Kerr, Dr. David (W'worth, Central)	Padley, Walter	Whitlock, William
Kerr, Russell (Feltham)	Page, Derek (King's Lynn)	Wilkins, W. A.
Lawson, George	Paget, R. T.	Willey, Rt. Hn. Frederick
Leadbitter, Ted	Palmer, Arthur	Williams, Alan (Swansea, W.)
Ledger, Ron	Panned, Rt. Hn. Charles	Williams, Clifford (Abertillery)
Lee, John (Reading)	Park, Trevor	Willis, George (Edinburgh, E.)
Lestor, Miss Joan	Pearson, Arthur (Pontypridd)	Winnick, David
Lewis, Ron (Carlisle)	Pentland, Norman	Winterbottom, R. E.
Lomas, Kenneth	Perry, Ernest G. (Battersea, S.)	Woodburn, Rt. Hn. A.
Loughlin, Charles	Perry, George H. (Nottingham, S.)	Yates, Victor
Luard, Evan	Price, Christopher (Perry Barr)
Lyon, Alexander W. (York)	Price, Thomas (Westhoughton)	TELLERS FOR THE AYES:
Lyons, Edward (Bradford, E.)	Price, William (Rugby)	Mr. Joseph Harper and
Mabon, Dr. J. Dickson	Probert, Arthur	Mr. William Howie.
McBride, Neil	Rankin, John
NOES
Alison, Michael (Barkston Ash)	Dodds-Parker, Douglas	Jones, Arthur (Northants, S.)
Allason, James (Hemel Hempstead)	Doughty, Charles	Jopling, Michael
Baker, W. H. K.	Eden, Sir John	Kaberry, Sir Donald
Barber, Rt. Hn. Anthony	Farr, John	Kirk, Peter
Batsford, Brian	Fisher, Nigel	Kitson, Timothy
Beamish, Col. Sir Tufton	Fortescue, Tim	Lamb ton, viscount
Bell, Ronald	Gibson-Watt, David	Langford-Holt, Sir John
Bennett, Sir Frederic (Torquay)	Gilmour, Ian (Norfolk, C.)	Legge-Bourke, Sir Harry
Bessell, Peter	Gilmour, Sir John (Fife, E.)	Lewis, Kenneth (Rutland)
Biffen, John	Glover, Sir Douglas	Lloyd, Ian (P'tsm'th, Langstone)
Black, Sir Cyril	Goodhart, Philip	Lubbock, Eric
Bossom, Sir Clive	Goodhew, Victor	Mackenzie, Alasdair(Ross&Crom'ty)
Brewis, John	Gower, Raymond	McMaster, Stanley
Brinton, Sir Tatton	Grant, Anthony	Maginnis, John E.
Bruce-Gardyne, J.	Grant-Ferris, R.	Marten, Neil
Buchanan-Smith, Alick(Angus,N&M)	Grieve, Percy	Maude, Angus
Buck, Antony (Colchester)	Griffiths, Eldon (Bury St. Edmunds)	Maxwell-Hyslop, R. J.
Bullus, Sir Eric	Gurden, Harold	Maydon, Lt.-Cmdr. S. L. C.
Campbell, Gordon	Hall, John (Wycombe)	Mills, Peter (Torrington)
Carlisle, Mark	Hall-Davis, A. G. F.	Mitchell, David (Basingstoke)
Chichester-Clark, R.	Harris, Reader (Heston)	Monro, Hector
Clegg, Walter	Harrison, Col. Sir Harwood (Eye)	More, Jasper
Cooke, Robert	Hawkins, Paul	Murton, Oscar
Corfield, F. V.	Heald, Rt. Hn. Sir Lionel	Nabarro, Sir Gerald
Craddock, Sir Beresford (Spelthorne)	Higgins, Terence L.	Neave, Airey
Crowder, F. P.	Hiley, Joseph	Nott, John
Cunningham, Sir Knox	Hobson, Rt. Hn. Sir John	Orr-Ewing, Sir Ian
Dance, James	Holland, Philip	Osborn, John (Hallam)
Davidson, James(Aberdeenshire,W.)	Hornby, Richard	Page, Graham (Crosby)
d'Avigdor-Goldsmid, Sir Henry	Hunt, John	Page, John (Harrow, W.)
Dean, Paul (Somerset, N.)	Hutchison, Michael Clark	Pardoe, John
Deedes, Rt. Hn. W. F. (Ashford)	Irvine, Bryant Godman (Rye)	Peel, John
Digby, Simon Wingfield	Jenkin, Patrick (Woodford)	Percival, Ian

Pink, R. Bonner	Stainton, Keith	Ward, Dame Irene
Pounder, Rafton	Steel, David (Roxburgh)	Webster, David
Powell, Rt. Hn. J. Enoch	Stodart, Anthony	Whitelaw, Rt. Hn. William
Pym, Francis	Stoddart-Scott, Col. Sir M. (Ripon)	Wills, Sir Gerald (Bridgwater)
Quennell, Miss J. M.	Summers, Sir Spencer	Wilson, Geoffrey (Truro)
Ridley, Hn. Nicholas	Taylor, Sir Charles (Eastbourne)	Winstanley, Dr. M. P.
Rippon, Rt. Hn. Geoffrey	Taylor, Frank (Moss Side)	Wolrige-Cordon, Patrick
Rossi, Hugh (Hornsey)	Temple, John M.	Wood, Rt. Hn. Richard
Russell, Sir Ronald	Turton, Rt. Hn. R. H.	Wright, E.
St. John-stevas, Norman	van Straubenzee, W. R.
Scott, Nicholas	Vickers, Dame Joan	TELLERS FOR THE NOES:
Shaw, Michael (Sc'b'gh & Whitby)	Wainwright, Richard (Colne Valey)	Mr. R. W. Elliott and
Smith, John	Walker-Smith, Rt. Hn. Sir Derek	Mr. Reginald Eyre.

Lords Amendment agreed to.

Subsequent Lords Amendments agreed to.

Schedule 2.—(TRANSITIONAL PROVISIONS IN CONNECTION WITH DISSOLUTION OF IRON AND STEEL BOARD.)

Lords Amendment: No. 32, in page 43, line 35, at end insert: ( ) The foregoing provisions of this paragraph shall not apply to a document which appears to the Board to be relevant for the purposes of any legal proceedings pending immediately before the vesting date by or against the Board".

Mr. Freeson

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

On vesting day the property of the Iron and Steel Board will become the property of the Corporation, but with one important exception. Certain documents which the Board will be required to set aside before vesting date will be excluded. The documents which the Board will be required to set aside are those which appear to it to relate to the affairs of any company not coming into public ownership, or other documents which the Minister has directed it to set aside.

The purpose of this provision is to prevent the Corporation acquiring documents which will be inappropriate for it to inherit because, for example, they contain information about its competitors in the private sector. For the same reason, although the Minister may direct that the Corporation may see or copy set aside documents which he thinks it requires to know about, it cannot see or copy any document relating only to the affairs of private sector companies.

This Amendment will specially provide for the class of documents to which the Corporation will need to have access, even where they relate to private sector companies, in legal proceedings pending immediately before vesting date, but by this Amendment the Corporation will inherit only papers relating to cases where the Board itself found it necessary to undertake proceedings before vesting date.

Question put and agreed to.

Subsequent Lords Amendment agreed to.

Schedule 3.—(AMENDMENTS OF REVIVED PROVISIONS OF 1949 ACT.)

Lords Amendment: No. 34, in page 45, line 36, at end insert: In subsection (6), for the words 'the publicly-owned companies' there shall be substituted the words 'their subsidiaries'".

Mr. Marsh

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

Mr. Deputy Speaker, I wonder whether with this Amendment we might discuss Amendment No. 39?

Mr. Patrick Jenkin

I have no objection.

Mr. Deputy Speaker (Mr. Sydney Irvine)

So be it.

Mr. Marsh

The purpose of this Amendment is to ensure that there is a general account of the activities of all the subsidiaries of the Corporation and it makes logic of some of the earlier Amendments.

Question put and agreed to.

Subsequent Lords Amendment agreed to.

Lords Amendment: No. 36, in page 45, line 41, at end insert:

"Section 6(6)

At the end, there shall be added the words 'but, if he decides not to give directions on any such matter, he shall lay before each House of Parliament a statement of that matter and of his reason for not giving directions thereon'".

Mr. Marsh

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

I wonder whether with this Amendment we might take Amendment No. 42, which deals with a similar point?

Mr. Deputy Speaker

If the House agrees, so be it.

Mr. Marsh

This Amendment follows the policy set out in the early parts of the Bill, and earlier Amendments, and says that wherever the Minister decides not to give directions on any such representations he shall lay a statement of the matter and of his reasons for taking no action before each House of Parliament.

Question put and agreed to.

Remaining Lords Amendments agreed to.

Committee appointed to draw up Reasons to be assigned to the Lords for disagreeing to certain of their Amendments to the Iron and Steel Bill: Mr. Diamond, Sir I. Eden, Mr. Freeson, Mr. Patrick Jenkin and Mr. Marsh; Three to be the quorum.—[Mr. Marsh.]

To withdraw immediately.

Reasons for disagreeing to certain of the Lords Amendments reported and agreed to; To be communicated to the Lords.