STEEL INDUSTRY

HC Deb 16 February 1970 vol 796 cc105-68

7.12 p.m.

Sir Keith Joseph (Leeds, North-East)

I beg to move, That this House deplores the consequences of the nationalisation of steel by Her Majesty's Government, which has retarded the progress of the industry and reduced the service to the public. Although we shall have a number of critical things to say, our criticism is directed primarily at the Government, and not at the management of the Corporation, or in the regions. It has been two years or more since vesting day, and it is time to review the progress of the industry in the light of the claims made for nationalisation. The fact is that in a time of immense change and opportunity, the industry's structure has been ossified by the act of nationalisation itself.

In 1964, the Restrictive Practices Court outlawed the price agreements between the steel companies and thus, for the first time since the war, exposed the private steel companies to the necessity to compete one with another. Had nationalisation not occurred, all sorts of changes, under pressure of market forces, which is the same pressure as affects all other companies in the private sector, would have changed the structure of the steel industry.

Some firms would have grown, some would have merged at home and overseas, and some would have declined, because there is built into the private enterprise system a pressure for resources to move where they are best used. It is this inbuilt pressure which nationalisation has not allowed to occur. It has stifled the forces of competition which were just about to be imposed on the industry by the 1964 decision of the Restrictive Practices Court.

So what I shall do this evening is to consider the objectives of nationalisation and what has happened since vesting day. The first and main reason for nationalisation put by the right hon. Gentleman the then Minister was that it would rationalise the industry, would enable it to be restructured into the units and sizes necessary to face international competition. It was common ground to the Government, to the industry and to the Opposition that the steel industry had been for some time over-manned and, in the words of the then Minister, the gap in productivity per man year which was heavily in the favour of the Americans, the Japanese and some of our European competitors was opening further against us. In May, 1968, a year after vesting day the Corporation pledged itself to a target of reducing the manpower employed in the industry by 50,000 men by 1975. It was common ground that much of any reduction in manpower would be carried out by wastage and by redeployment of men from one firm to another.

The fact is that the Government have held back the Corporation from any start upon rationalisation. Before nationalisation, industrial relations between men and management in the steel industry were a model, they were excellent; but I have to confess that harmony was perhaps bought at some cost by ignoring the overmanning that went on. The fact that, since nationalisation, industrial relations have deteriorated sharply is not the result of any attempt to deal with overmanning. It is not that the Government or the Corporation have set their hands to cutting the over-manning, which was one of the first objectives of nationalisation, and have thus fallen out with the unions. That is not why they have fallen out with the unions. So ill will has come into the industry without any benefit to the country at all. No start has been made on tackling overmanning, but industrial relations have become, and have remained, turbulent since nationalisation.

Mr. Donald Anderson (Monmouth)

Is the right hon. Gentleman seriously suggesting that there was no link between the blast furnacemen's dispute at Port Talbot and the rationalisation process under way there?

Sir K. Joseph

The new blast furnace was started before nationalisation. There has been no new initiative by the Corporation since nationalisation to justify the main claim for nationalisation, which was that it would enable rationalisation and reduction in over-manning to occur.

The second claim behind nationalisation was that only by taking the industry into public ownership would enough capital be supplied and would prices be kept down. Of course, the two are closely connected. Unless the industry services its capital and makes itself a profit it will not have enough funds for investment. The public have faced a considerable write down of the capital employed in the industry. A large chunk of the capital has been relabelled "public dividend capital". In fact, the industry is still not making a profit or making any decent return on the capital employed. It has not even been given a target rate to earn on capital employed, and we hope that this evening the right hon. Gentleman the Paymaster-General will tell us what the Government have decided that target rate should be.

Upon this industry, which was intended by nationalisation to have enough capital and profit to carry out the ambitious investment programme envisaged, has fallen the whole paraphernalia of Government price control, and this paraphernalia has been absolutely self-defeating. The Government have denied the Corporation the ordinary commercial freedom to cope with prices. They have delayed and distorted the price movements. As a result, there have been no fewer than three price increases in a very short period of time, and the total of those three price increases has been larger than it would have been if the Corporation had been free to raise its prices when it wanted to. The extra delay in allowing prices to rise and the Government's political juggling with prices and delays in dealing with them have led to even higher increases than would have been necessary.

Moreover, Government price control has intensified the demand for British steel by making it artificially cheap. It is no good, in our view, the Government instructing the Corporation to sit on prices—which only results in a weaker cash flow, less service of capital and less investment funds—when the real job of the Corporation is to sit on costs.

This is the operation which the Corporation has failed to do. The report of the Prices and Incomes Board on the claim for increased steel prices was full of complaints against the failure of the Corporation to have a proper cost reduction programme. It was because it was making no start on cost reduction that the Prices and Incomes Board recommended that the full increase claimed by the Corporation should not be allowed. Here we are back again at the failure of the Corporation to embark upon rationalisation. It has failed to set its hands to cost reduction and it has failed to set its hand to rationalisation.

Mr. Eddie Griffiths (Sheffield, Brightside)

Is the right hon. Gentleman not aware—and he is not far removed from the Sheffield and Rotherham area—that there has been a fantastic amount of rationalisation going on there, with job losses occurring quite regularly over the last two, three or four years? Is the right hon. Gentleman not also aware—as my hon. Friend said—that there are 5,000 jobs to be lost or already lost in Port Talbot?

Sir K. Joseph

The hon. Gentleman is aware that output per man year in the industry has not risen even so much as the national industrial average which is the criterion of rationalisation. The British steel industry still limps, after 2½ years, far behind its international competitors, although it was claimed as one of the reasons for nationalisation that it would set rationalisation in hand. All that has been phased out since nationalisation are a number of relatively minor facilities which had reached the end of their commercial life before vesting date. The Corporation has made virtually no change and as a result of Government price control and of bad industrial relations in the industry the public has suffered a loss in steel in 1968 and again in 1969 despite a record world boom in steel. The actual investment programme has fallen below what it was in the last years of private enterprise. [HON. MEMBERS: "Wrong"] The figures are definitely in favour of what I am saying. Even after deducting from private enterprise investment the full amount of the loan from the Conservative Government for R.T.B. and Colvilles, the average annual investment by private enterprise in the four years before nationalisation, when the clouds of uncertainty due to possible Labour victory and nationalisation were hanging over the market, was substantially larger than it has been in the four years after the Labour Government came into office. Indeed "Finance for Steel" predicted in May, 1969, an annual investment in the steel industry for five years of £175 million a year. What has happened? In 1968–69 there was not £175 million invested but £69 million invested. In 1969–70 there was not£175 million invested—there was£105 million invested. There is no evidence, therefore, that nationalisation has either increased the pace of rationalisation and productivity or that it has found extra investment money.

The Corporation production programme for 1975 of 35 million tons is much the same as that which private enterprise had in mind for that very year, and for which it was investing with its own private funds. The actual investments in Anchor and Margam are much the same as those already set in hand and designed under private enterprise. All that has happened is that private enterprise plans have been labelled public and given public relations treatment.

There is no new investment yet emerging which is due entirely to the British Steel Corporation. This is at a time when all our rivals are benefiting, as we are not, from the world steel boom and are salting away large profits made in that boom to help them continue their investment during the world steel downturn which under the normal cycle is almost bound to come sooner or later.

The third target of nationalisation was to improve exports without, I presume, affecting home trade in steel, but both have suffered. Due on the one hand to the Government's price control and on the other hand to turbulent labour rela- tions, the home market has suffered from lack of production, from delayed deliveries, from rationing of many steel varieties, while we have failed to have the surplus to serve our markets in the world steel trade boom.

The shortage of important structural materials such as reinforcing bars and a whole range of other semi-finished products has left the British manufacturing trade short of steel just at a time when the world market for their products is booming. It is a sad commentary on nationalisation, on Government interference with prices and on labour relations in the steel industry that at this stage the British industry and our overseas markets are suffering actual rationing and long delivery delays in steel products. Building contracts are being held up all over the country. Shifts worked in different parts of the country are being cut through lack of steel deliveries. Buyers are having to import at high prices when they can, and direct steel exports are suffering sharply. As a result of all this, the United Kingdom is being denied any balance of payments advantage from the world steel boom, and all this is two and a half years after nationalisation, one of the purposes of which was meant to increase exports while serving the home market.

One of the saddest sights in the last few months has been to see the Corporation shopping around the world with tears in its eyes and blank cheque books in hand buying steel wherever it could at high prices and having to sell it at a loss in the home market because of the Government's control of prices in this country.

But the British Steel corporation is in no danger of bankruptcy, because public enterprise is immune from this sort of fear. It is a somewhat disagreeable sight to contemplate a vast immune British Steel Corporation squeezing private traders who are not immune from bankruptcy in order to get payment at a time of the fiercest credit squeeze in British history.

Meanwhile, the steel corporation's main preoccupation seems to be with administrative arrangements. It seems that consumers are soon to be faced with allocation of orders to particular works, giving them no choice as to where they get their product despite years of contacts and the prime importance of quality and finish. The industry and its consumers are to be faced soon with a movement to product groups, and I hope that the Minister will reassure us about the conditions that consumers are likely to find when product groups come into operation. Those of us who have studied the organisation chart, which has been published, have been puzzled to see that there are managing directors of product groups on the one hand—and that makes sense—and also managing directors of the staff functions at Corporation headquarters as well. There is, for example, a managing director (commercial) for marketing, Lord Layton, with a large central headquarters staff. Where is the power of decision to lie? Is it to lie with the managing director of the product groups or is there some confusion about where commercial decisions will be made? We understand very well that in a holding company operation there are managers or even directors of staff functions at headquarters, but normally there is only one managing director responsible to a group managing director, or one set of managing directors out in the regions or in companies responsible to a group managing director. Where is the balance of power to be between the Corporation staff managing directors and the product group managing directors?

We look forward to a reply from the Paymaster-General, but we have become used to the bland way in which he rides over all the questions he is asked. The right hon. Gentleman sees no evil, he speaks no evil—except of Her Majesty's Opposition—and he hears no evil. We ask him now not to be so blind or so bland. There are some real problems here to be faced. When will the Corporation embark upon rationalisation? When will it try to bring productivity per man-year up to that of our rivals? What is to be the effect of the movement to product groups, and what is to be the return which they are to earn on their capital?

For our part, we shall not go back to the old companies. [HoN. MEMBERS: "Oh"] We want a flexible, responsive, enterprising steel industry, and that is why we shall make any changes necessary and practicable to provide the discipline of competition for steel.

The story which we are discussing tonight is one of shirk and shackle. The Government have shirked the rationalisation which they gave as their main reason for nationalisation. The Government have shackled the British Steel Corporation so that it has not been able to operate properly. To sum up, we have had, virtually, more paper and more plans than profits. We have had three reports on operations. We have public dividend capital, but no dividend, no profit, and no rate of return. We are shortly to have the new product groups, with the elimination of world-famous company names and the goodwill going with them. But, after 2½ we have not got enough steel to meet the demands of British industry or of our overseas customers.

Mr. Richard Marsh (Greenwich)

The right hon. Gentleman seems to be reaching his peroration. One or two of us were not entirely clear what he was proposing to do with the Steel Corporation. Could he enlarge on that a little?

Sir K. Joseph

The right hon. Gentleman would think us very unwise to commit ourselves to the exact method and degree to which we shall reintroduce competition when we win the election. He would be amazed if we were to commit ourselves without knowing the state of the books.

I say again that, after over 2½ years, we have not enough steel to meet the demands of British industry or of our overseas customers. The developments which we see emerging are almost identical with the ones on which the independent companies were working before nationalisation. At least part of these developments would have been in operation if the last years had not been consumed in administrative uncertainty and upheaval due to the ideological follies of this Government, and that is why we shall vote against them tonight.

7.32 p.m.

The Paymaster-General (Mr. Harold Lever)

This is one of a series of debates, intended, at least, by the Opposition, to be conducted on an adult level. What has to be done is to search for some possible grievance which can be exploited, then exploited in the hope that those who know little about the subject matter or who are not prepared to examine it in depth will feel that their grievance is being espoused by the Opposition, and it is hoped that some electoral support may follow therefrom.

There is complaint about the power industry. If power is short today, this must be so because of the failure on our part to put up new power stations in the last four or five years, although, as everyone knows, one has to plan them and build them many years before. If smokeless fuel is in short supply, this is so because we did not yesterday put up the necessary plants to produce smokeless solid fuel. If the balance of payments does not show a miraculous improvement in the months after we came into office, everyone can ignore the long years of gestation of this problem under the Tory Party, and one is to assume that it is all the Labour Government's fault.

The right hon. Gentleman the Member for Leeds, North-East (Sir K. Joseph) kept on about "2½ years "and" after 2½ years", as though this were an astounding period of time in the provision of steel works, as though the country should by now be littered with steel works which the pressure of competition had failed to bring into being in half a century or so beforehand. He kept repeating "after 2½ years". I shall have to take him aside and tell him how long it takes to plan a steel works. I give him this assurance, at least: under private enterprise or public enterprise, one cannot bring into being and into production any steel works of modern size in less than three years, and in most cases the period required is five or seven years.

I do not know why the right hon. Gentleman seems to think that it is not the industry but the Government who are to blame. He is right in not blaming the industry, at least the nationalised industry. I suppose that if the Government were to nationalise the egg industry and the right hon. Gentleman found a shortage on his breakfast table the next day, he would be here at the House with a Motion of censure implying that we had not brought into being overnight a sufficient supply of chickens to lay for the right hon. Gentleman's convenience.

At the end of it all, having blamed the inadequacies of supply—with which I shall deal—and the lack of production of steel on the Government and their policy of nationalisation, what does the right hon. Gentleman do? He finds the lady in distress, the lady who, under the forces of competition, would have been showing every evidence of health and success; but, having found that maiden in extreme distress, what does the gallant knight do but denounce the sinner, the Government, and then propose to gallop away and do nothing at all about it. Having declared himself against sin, the right hon. Gentleman is plainly unlikely to be energetic in the cause of virtue.

Sir Harmar Nicholls (Peterborough)

Somebody ought to take the right hon. Gentleman the Paymaster-General on one side and explain to him that, although it is true that it may take three to five years to start a steel plant, it takes only about three minutes of badly used time for the Government to stop it. We blame the Government for having, by their interference and by their squeezes, stopped the developments which would have taken place.

Mr. Lever

That is what the hon. Gentleman says, but his right hon. Friend's figures do not bear him out. The rate of investment after nationalisation continued upwards and is going up to a record level of£900 million in the coming years. We are to see£150 million to£200 million brought into being to restructure the steel industry. I do not want to weary the House with a list of the works, for my hon. Friend who is to wind up will be able to give the details. It is£900 million in the next five years. The industry's investments will be at a record rate.

I do not wish to denigrate the predecessors of the nationalised industry, but, as the right hon. Gentleman knows, the British steel industry has had a rather stagnant record of production increases and productivity. For instance, in the five years ending 1969, the United Kingdom achieved an increase in productivity of 12 per cent. In the same period France achieved an increase of 27 per cent., and West Germany a similar increase of 27 per cent. In the same period, Italy achieved a 40 per cent. increase in productivity and Japan 77 per cent.

This is an industry in which, alas, much to our disadvantage over ten years or more the rate of increase in productivity in our country has been running at something under 3 per cent. compared with something over 7 per cent. in most of our competitor countries. I am speaking now not of the spectacular increases seen at particular times in Japan or in Italy. The reason for that—I am not blaming the steel masters and the fragmentation of their industry—is that the industry, like many of our great industries, has been the victim of the stop-go policies which have bedevilled all attempts to expand production and productivity in a sustained and continuous way.

I do not believe that we shall ever match the productivity increases which we have seen in other countries until we match the production increases in a continuous and sustained way, as they have done, because it is only a sustained profitable increase in production uninterrupted by artificial stop-goes which permits the kind of massive productivity increase which we have seen in other countries.

Sir K. Joseph

The right hon. Gentleman is putting forward a very plausible argument. In fact, the stop-go in Japan has been much more violent, even than here and in several European countries.

Mr. Lever

It is not true that the stop-go in European countries has been in any way comparable with what has occurred in Britain, otherwise there would not have been in France in the five years up to 1969 a 27 per cent. increase, nor as in Japan a 77 per cent. increase. I do not know where the right hon. Gentleman gets his figures or his beliefs from if he believes that Japan, for example, has suffered anything like the deliberate frustration of production which has so often marked and marred the British industrial and economic scene in the post-war years.

Of course the Japanese have had relatively brief setbacks, but nothing compared with the repeated setbacks which have followed every major exchange crisis which has hit Britain since the war. There have been about eight major exchange crises in Britain since the war. For every one the British industrialist has had to pay in terms of his expansion plans and British workers have had to pay in terms of advancved standards of life and the advanced productivity which would have supported those advanced standards.

It is idle to come here two and a half years after nationalisation and attribute either the level of production or the development of steel works to the nationalisation position. In fact there are under way projects far greater, far more imaginative, than anything that has ever been seen in a comparable period under private enterprise. When the Bill was going through the House there was one steel works in Britain with an annual capacity of more than 3 million tons. There were 14 in the United States, and five in Japan, with four more in prospect, most of which have already arrived.

I will not retail the figures and the plans that have been made and which will be followed up with vast investment carefully planned on behalf of the steel industry to put us on to something like competitive equality with the industries in other countries that I have quoted. As a result of these plans, we not merely project the increase in overall production to which the right hon. Gentleman has referred but are confident that we shall double the rate of productivity, given this rate of capital investment and the sustained expansion of the steel industry that we envisage.

Sir Spencer Summers (Aylesbury)

By when?

Mr. Lever

Within the next five years. By 1975 we expect, on the basis of the capital investment and productivity plans that are now being developed rapidly, to double, from just under 3 per cent. to nearly 6 per cent., the annual rate of productivity in the steel industry. Those are the plans at present. When we do so, we can hope then to equal France and Germany, and we shall be running more or less at the productivity levels of the Community.

Sir S. Summers

So that I may clearly understand the figures, will the Paymaster-General say whether the magic figures of 3 per cent. and 6 per cent. have any relationship to the output per man in the process?

Mr. Lever

Certainly; it has a direct relationship to the output per man. We hope to see the overall output per man rise. It is a very complicated technicality, but only at the margin—the output per man will double, as will the productivity rate.

Sir S. Summers

It is the rate of growth.

Mr. Lever

The rate of growth in productivity, not the output per man. I meant the rate of growth in productivity, which has been running for nearly 20 years at under 3 per cent. in Britain, compared with about 20 per cent. in our European competitors, to say nothing of the remarkable figures for Japan and Italy. The rate of productivity growth per man is intended to increase to approximately 6 per cent. per annum by 1975, as a result partly of the massive capital investment, details of which have been given and specified—I do not want to spend my speech in reciting them—and the immense plans for productivity arising therefrom which are in train. That is our confident prediction. That is what we seek to achieve. We cannot achieve it in two and a half years. That does not make any kind of industrial or economic sense.

As to labour relations, we are asked to believe, with a classic post hoc propter hoc argument, that, as there has been some labour trouble after the industry was nationalised, and even more labour trouble than in the years immediately preceding it, this is due to nationalisation. Not one single word of evidence or argument was addressed to the House to suggest that this is so. All that the right hon. Gentleman can hope is that ignorant people outside who have not followed this problem and not reflected upon it will take this to be a supportable indictment of the industry.

In fact, this industry since it has been nationalised has made greater efforts to improve and organise its labour relations than was ever the case in the years before nationalisation. Apart from the simple argument that there have been the strikes after nationalisation and that these are therefore due to nationalisation, we have not heard a single word to link the two.

Sir K. Joseph

Nor did I say a word. I said that the inept handling of labour relations by the Corporation had caused the turbulence, not nationalisation.

Mr. Lever

As the right hon. Gentleman was at pains to exonerate the Cor- poration when he commenced his speech, it is rather sad that the logic of his own argument compels him to pin the blame upon it. I hope he is more forthcoming should he be so fortunate as to be selected to replace me; for that is the only remedy that he can suggest. He has not told us in any detail what remedy he has in mind apart from that. His real remedy is that he should replace me as the Minister in charge of the industry.

I do not undervalue the right hon. Gentleman, and I certainly do not overvalue myself. However, the agreeable change—at least agreeable to him— would be exalted if it were described as an industrial policy. The right hon. Gentleman has to condescend to rather greater particulars if he is to convince even my most confirmed critics. He knows very well that I have been there for months. It is a wonder that he did not roll those months round his tongue as he rolled the two and a half years that the industry has been nationalised. At all events, he must come up with something better. On labour relations I am rather disappointed with him. I hope that hon. Members on both sides will contribute their views on this question.

In modern times, these vast industries, whether they are in private hands or in public hands, pose tremendous human problems. I will not expatiate on those tonight. Obviously this is one of the central group of problems which we must all face and which affect the standard of life and prospects for our country, not only in the steel industry, but in all industries.

I am satisfied that the Corporation has made immense efforts to improve labour management relations. It has tried worker directors regionally. It has had a worker director on the central board. It has gone to immense trouble over a wide area to seek to improve relations. This will continue.

It has just appointed my right hon. Friend the former Minister of Health to take on a special role on the Corporation. I welcome this, because I think that people on either side of the House who know my right hon. Friend will know that he has a unique contribution to make in the sphere of the social purposes and the industrial relations of this great industry.

I have nothing to apologise for in the rôle of the corporation in its management/industrial relations. I wish that hon. Members on both sides would turn their minds to saying something constructive instead of merely idle comment on so-called ineptitude in the handling of labour relations and the consequences in terms of strikes. We all know that the last two years have been a period of especial tension and difficulty in labour relations, for a number of reasons and not only in Britain. I would very much welcome it if we heard something constructive on either side of the House about how we might help in improving them in this great industry.

The right hon. Gentleman wants to have it both ways on the question of prices in the industry. He complains, on the one hand, that we denied the industry the increases in prices that it should have had earlier. He then says, on the other hand, again without a scrap of evidence, that the price increases as a result are greater.

Why does the right hon. Gentleman say that? I ask him to give a scrap of evidence, or argument even, to show that prices will now be higher because we held back the price increase until we had a proper opportunity to scrutinise it in relation to the industry's general plans and price strategy. When the price increase occurred, most of the right hon. Gentleman's hon. Friends, and many of his industrialist supporters outside, merely complained that the increase had taken place at all. The right hon. Gentleman should tell his industrial supporters and others outside what he is complaining about. Is he complaining that we are increasing prices now, or is he complaining that we ought to have increased them a long time ago? [Interruption.] The right hon. Gentleman pretends to try to have it both ways. He had a predecessor of his name who had a coat of many colours, which excited a great deal of discontent among his brethren. He must try to parade, in this House at any rate, in a coat with a single colour and a coherent theme.

At the moment, I do not know whether to defend the Corporation for charging too much or for charging too little or for increasing too soon or for increasing too late. I can only say that it has been of immense advantage to British industry that, until now, our prices have been significantly below world and European prices. It has been a great help to our exporters and to our engineering and motor industries. The right hon. Gentleman may regret it: they do not. They only regret that prices inevitably have to move up now towards the level of European prices. They will still remain below European prices. That is why the industry has not had the spanking profit which it might have had in the steel boom.

The right hon. Gentleman complains that there is a shortage of steel reinforcing bars. Is that the fault of the corporation, does he say, or the Government? In fact, it is the fault of neither. These steel reinforced bars are cheaper in this country, even after the price increase, by an immense margin, than any such bars available on the world or the European market. That is why, of course, every British consumer is trying to get his supplies here in Britain. Not that I blame them—we are living in a free trading world.

Many of them used to get them abroad, but in the world steel boom there is a shortage of these bars and immensely higher prices are being asked in the world market than the British Steel Corporation charges. Not unnaturally, those who have hitherto gone abroad for supplies are queuing to get them from the Corporation. Although the Corporation has increased production of these bars 50 per cent. in 12 months, we still cannot meet the eager demand by those who cannot get the supply for a reasonable price from the Continental and world suppliers, whom the right hon. Gentleman compares favourably with the British Steel Corporation.

There is really not much to answer. This is a very depressing debate. I do not think that the right hon. Gentleman can be too much blamed. There was a certain lack of conviction in his complaints which redeemed his speech and permits me to say that he reduced it to the level of relatively harmless electioneering. I cannot complain of the relatively moderate way in which he presented it. He tried to whip up some enthusiasm, and we felt that he was banging violently on the door, but it then became clear that he had not the least intention of going through it, and that the industry will go on as a nationalised industry even if the electorate makes a decision which none of us on this side would welcome.

The Tories, we can now see, are becoming the party of organised nostalgia. They do not tell the electorate the things which they are going to do; they are telling the electorate the things which they would like to do but cannot or will not do. This will take the place of a serious programme for the steel industry. I hope that as the debate proceeds we shall hear a little more detailed criticism, because I am sure that there are useful things to be heard about labour relationships and hopeful things to be heard about productivity and world prospects and the like, and many experienced hon. Members on both sides should make a contribution.

Of course, they will not bear any relationship to the ludicrous terms of the Motion of censure, but at least they will be none the worse for that. I hope that my hon. Friends will join in the debate in the same helpful and constructive spirit. in the knowledge that, at due time, 10 of the clock, we shall all register our extreme disagreement with a Motion of censure undocumented by serious argument or by appropriate fact and brought purely to seek a little electioneering vainglory in the darker and more distant strongholds of Tory opinion.

The final word which I have to say in confirmation that this is so is that, to the knowledge of the right hon. Gentleman and his hon. Friends, the annual report of the steel industry is about to come out. It has been announced that it is to come out in mid-February. The right hon. Gentleman does not wait for the facts: he would much rather argue on the myths. He has had his argument and he has presented it in an attractive and moderate way, but I am afraid that he cannot have convinced anyone, not even, I suspect, his own supporters.

7.55 p.m.

Mr. John Peyton (Yeovil)

The kindest thing that can be said about the speech of the Paymaster-General is that it constituted an excellent rehearsal for the days, which we hope will shortly come, when he speaks from the Opposition Benches. He always sparkles a little more freely when he does not have any responsibility. No one can accuse him of being weighed down with responsibility tonight in the very flippant answer which he has given to a very eloquent, although restrained, speech by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph).

It has long been my opinion that if anyone who had spent his life in the steel industry without being contaminated by politics were to have a right to speak in a debate on the industry in this House, I am certain that he would prescribe for all politicians a substantial suit of sackcloth. The right hon. Gentleman may attribute this to bias on my part, but I believe that such a person would say that the party opposite was much more to blame than the one of which I am a member. He would attribute both to the fact of nationalisation and to its threat many of the ills which have struck the industry since the war.

Looking back, as a Conservative and as one who was a junior member of a Government and with some responsibility for the industry, I take no comfort from reflecting upon the futility of the Iron and Steel Board and that policy of restraining artificially the industry's earnings, which prohibited and prevented it from obtaining, either from within itself or from outside, the resources which it needed to develop. For that, there is great blame.

But the excuse legitimately put forward on behalf of the Conservative Party is that it did this so as to appease the wrath of the party opposite, and to curb the predatory instincts of Socialism. We should have known, of course, that such a flabby compromise as was represented by the Iron and Steel Board would do nothing to satiate the doctrinal lusts of the Socialist Party. At the end of the day they insisted that they should have their way and take over the industry once more.

What has happened since then? We have had a major capital reconstruction, and £700 million out of a debt of £850 million or so overnight ceased to be loan capital and became public dividend capital. My right hon. Friend was surely right to call attention to the fact that, so far, this capital shows little prospect of attracting any dividend at all. The right hon. Gentleman knows that perfectly well. In dealing with this matter and answering my right hon. Friend, he never referred to this point at all.

Nevertheless, one must accept that this sort of privilege is not lightly dished out to private enterprise. The right hon. Member for Greenwich (Mr. Marsh), who was Minister of Power at the time, could hardly have anticipated, when speaking in Committee on the Bill, that this was in the Government's mind.

Mr. Harold Lever

I am sorry that I did not answer the right hon. Gentleman's point. It was precisely because this structure of having dividend capital and loan stock is very normal for private enterprise. In fact, what is abnormal was the original structure in which the entire capital was in the form of loan stock without any dividend capital. This is exactly like private enterprise.

Mr. Peyton

If I may engage in a little private understanding with the right hon. Gentleman, if he will stand me a drink every time the dividend is passed, I will willingly stand him two whenever it is paid.

Mr. Lever indicated assent.

Hon. Members

I will take that.

Mr. Peyton

Regard for my health and a respect for abstinence prevent my accepting all challenges on this point.

The industry, prevented from enjoying economic prices before, has been granted substantial price increases now. It would be a mistake and unfair to say that they should not have taken place. But I am human, and so yield to temptation every now and again, and must therefore read to the House one quotation from something said by the National Board for Prices and Incomes. I have never before quoted the board with approval, but I suppose that there must be a first time for everything.

On the first page of the Report on Steel Prices we read in paragraph 4: The difficulties of the investigation have been increased by the fact that the Corporation's proposals, covering some 50 different product groups, have been undergoing constant change while the reference has been with us, largely as a result of complaints from, and discussions by the Corporation with, customers. The volume of complaints has been large, far exceeding those received in response to any other price increase referred to us. I have one further short quotation, from page 28 of the same document: The proposed prices have been determined without a prior firm programme of cost reduction, and we recommend that such a programme should be required by the Ministry of Power. It is only fair to add that I know that the Corporation was offended and replied rather sharply to those two charges. But it is at least worthy of note that the Prices and Incomes Board should have seen fit to make such sharp remarks on the subject of those price increases.

Before I leave the subject of the price increases I should just mention, if only to say "Goodbye", the Iron and Steel Consumers Council, which seems to me a singularly toothless body. I believe that the British Steel Corporation has quite sufficient means to look after itself without being protected by such a body, and for the council to say that it is concerned with the health and strength of the British steel industry seems to me to indicate that it may have got its role slightly upside down.

Hon. Members

Why?

Mr. Peyton

I move now briefly to production——

Mr. Marsh

Before the hon. Gentleman does so, will he say why he thinks it surprising that steel users should be concerned with the health of the steel industry?

Mr. Peyton

I do not believe that it is surprising that they should be concerned. I think that it is surprising that the Council should regard it as one of its main purposes. The Corporation is a very powerful monopoly. The British steel user is rather bereft of protection, and I do not believe that the Iron and Steel Consumers Council need concern itself overmuch with the strength of the industry. It should leave that to others and look after the perfectly legitimate interests of customers. I am, naturally, grateful for the right hon. Gentleman's intervention, but I want to turn to the question of production.

In 1965, 27 million tons of steel were produced in this country. In 1969, another boom year, the total was 26.4 million. I take it from the Minister that it is quite unreasonable to expect dramatic increases in a couple of years. But we do not expect reverses, and the right hon. Gentleman would have been a little more straight with the House if he had admitted that this was something of a disappointment.

I did not hear my right hon. Friend say anything about the forecast by the chairman of a profit of £30 million for this year, nor did I hear the right hon. Gentleman anticipate what we are shortly to hear, the out-turn for the last financial year. But am I right in thinking that we face a loss of £30 million or £40 million as opposed to an indicated profit of £30 million? We are entitled to ask this. I am very grateful to the right hon. Gentleman for suggesting that we might have waited until after the report had been published. Of course, when it has been published we may well want to return to the subject.

The Corporation has had some powerful advantages. It has had increases in prices, the loan part of its capital debt virtually wiped out and a major boom in steel demand. Against that background, it has made a substantial loss.

The right hon. Gentleman said a good deal about industrial relations, on which he felt we were on somewhat weak ground. I believe that it is fair to say, as my right hon. Friend did, that the industry had first-class industrial relations until nationalisation, but that this year they have not been very good. There was a recent article in The Times Business News headed Troubled Times for Mr. Smith". It referred to the dismal record of labour relations this year and mentioned the £750,000 loss due to industrial disputes, £450,000 of which was lost in the Port Talbot dispute. It is not unfair to ask whether the right hon. Gentleman considers that that dispute was particularly well handled.

We welcome the recent announcement that the right hon. Member for St. Pancras, North (Mr. K. Robinson) is now to go to the steel industry. We all have the greatest possible respect for him, and many of us on this side of the House regard him as having been a first-class Minister of Health. I say that without any reservation. I am sure that he will forgive me if I allow myself the slight joke of saying that an ex-Minister of Health is probably the best choice the industry could make today.

I am very concerned to ask the Minister winding up what he thinks will be the effect of the reorganisation on industrial relations. How does he think senior management, many of whom have left the industry, will feel? How will others face the destruction of companies that have meant a good deal to them during the whole of their working lives? One wonders which of the men who have spent their lives in the industry have given themselves to the policy.

I am more than anxious to know what will be the effect on works managers or directors, who will now have to work under increasing centralisation and in a new world of product groups rather than regional arrangements.

Mr. Eddie Griffiths

Would the hon. Gentleman take my word if I referred, not by name, to a person who came into the accounts department of a steel plant two years ago as an unknown and has recently been appointed the financial director in the new Special Groups Division in Sheffield?

Mr. Peyton

I am very grateful to the hon. Gentleman for that bit of news. What I am expected to learn from it, I am a little less than clear. The point I am making is, what is to be the effect upon those in the industry of reorganisation which is due to take effect at the end of March, the Minister having given his consent?—really mistakenly, in my opinion.

I am also curious to know where the trade unions stand. I am sure that the right hon. Gentleman's conversation is much more interesting than my speech, but I am hoping his colleague, the Joint Parliamentary Secretary, will reply to me. I am really concerned indeed to know what part the unions have played in the discussions about the new reorganisation. And also to what extent, right at the end of the queue, even the poor public have been considered.

How many people are clear that the bulk of the Scottish steel industry will be run from Cardiff, Bedford, Corby or Sheffield, that only the general steels division will have its headquarters in Glasgow? What happens when there is a dispute at Ravenscraig? Has every decision got to be referred to higher authority at Cardiff to get a ruling? It seems to me to be a system of bedlam.

Now, we have had altogether three plans. The first one was, if I may respectfully say so, not too bad. It showed on page 22, paragraph 56(c), from which I would quote one sentence: A grouping on product lines would make it easier to concentrate management expertise and sales and research effort. It could facilitate the rationalisation of production and the achievement of the optimum balance of production as between works making the same product. On the other hand, the customer's freedom of choice would be limited, the scope for competition between Groups reduced, and the Groups made more dependent on a single style of product. This was recommended a few pages later, in page 25, paragraph 64: The spur of competition, other than in price, between the Groups and between the units below them is in our view highly desirable. Those were the British Steel Corporation's views in 1967 when it published the first organisation plan.

The second plan succeeded in eradicating the merits of the first one. In paragraph 52 it had this rather nasty sentence: As a result of its experience in operating the present system of multi-product Groups it has become clear to the Corporation that this system by its nature impedes rationalisation and the optimum utilisation of the Corporation's assets. A nasty sentence, with a nastier meaning, and I myself feel that the Corporation has taken a very substantial step down the hill which leads to a most uncertain and possibly very unwelcome destination both for the industry and for the nation.

The third Report—productivity in terms of reports has been fairly substantial—was, in my view, the worst of all. It spelt out the death knell of the companies which had contributed enormously to the industry in the past, in my view, without any compensating gain whatsoever. It had one or two rather ominous sentences. The phrase "rationalising of sales" seems to me to come very high on the list of priorities and to be repeated more than its fair share of times. One wonders whether, perhaps, the sales department is not beginning to run this great industry far more than is proper or desirable.

There was a reference on page 17 of this third plan to distribution of orders among its works. This is not necessarily what the customer will want, and even the Corporation seems to be aware of this, because on the same page, paragraph 45, we have these words: The Corporation nevertheless understands the apprehension felt by some customers that more rationalisation might mean less responsiveness to individual customers' requirements. This is exactly what the vast majority of the customers are beginning to fear. They do not need to look for evidence, but if they do, then, in my view, there are the onerous conditions of sale which have received quite inadequate public attention and could be the cause of apprehensiveness and the justification of apprehension. I myself took the matter up with the board and Dr. Finniston, very courteously, replied to the effect that these conditions of sale are almost entirely a restatement of conditions operated by the individual companies before nationalisation.

May be, but I regard this assemblage as an arrogant amalgam in most improper circumstances, paying no attention to the fact that, whereas there was competition before—at least there was a choice of the suppliers—here we have none, and these terms, in my view—and I invite the right hon. Gentleman to inspect them most carefully, and I hope he will do this—are most onerous and unfair. If he says the industry has not had any complaints, I hope he will bear in mind that at least in times of boom customers of the British Steel Corporation will be reluctant to make complaints about a monopoly supplier upon whom they depend.

Mr. George Lawson (Motherwell)

Will the hon. Gentleman take it from me that I can produce evidence from firms that were afraid to complain about steel supplies when the industry was in private ownership because they thought they might be blacklisted?

Mr. Peyton

How very shocking that a private enterprise firm should so conduct itself, but how much more shocking that a State monopoly should do so. I will not challenge the hon. Gentleman to produce evidence. I have no doubt he has got it, from what he has said, but what I do say is that because something wrong happened under the private enterprise system is not justification for continuing it—and this was the whole justification in the minds of hon. Members opposite for nationalising the industry, yet here they are justifying perpetuation of sin by reference to a past which they regarded as rather sordid.

Mr. Harold Lever

I hope the hon. Gentleman is not saying that the Steel Corporation has threatened in any way to blacklist customers who complain. I am sure he would not want to say that unless he had some evidence that it was so.

Mr. Peyton

I am not suggesting a blacklisting of customers. It was the hon. Member for Motherwell (Mr. Lawson) who introduced the blacklisting subject. I was inviting the right hon. Gentleman's attention to the terms and conditions of sale which are imposed upon all customers in the United Kingdom by a monopoly, and I am asking him to let me know whether or not he thinks these are unduly onerous and should be reviewed. If I have his undertaking on that I am most grateful, and glad that I raised it.

Mr. Peter Emery (Honiton)

Does my hon. Friend realise that the Consumers Council, of which he complained, did not deal with any of the objections, many of which were voiced about these conditions, until about nine months after it had them?

Mr. Peyton

I am grateful to my hon. Friend for making the point. I can only go back to what I said before, that I do regard that as a rather toothless body.

I do not need to tell the right hon. Gentleman, I hope, that there are very widespread complaints from customers about the unreliability of supplies, and they feel very strongly indeed about it. I ask the right hon. Gentleman to accept that various of them who have spoken to me about it are, for reasons I referred to just now, reluctant to have their names used publicly, but I am perfectly prepared to give the evidence to the right hon. Gentleman privately, if I can get permission. But the fact is that the customers are increasingly reluctant to attack the Corporation in public.

Mr. Harold Lever

I was not shaking my head to indicate that I disbelieved the hon. Gentleman—the day has not arrived when I have to do that. I was shaking my head at the lamentable attitude of stupid people who feel that there is the smallest danger of retaliation by the British Steel Corporation to anybody who complained about anything.

Mr. Peyton

I think that reflects a lack of practical experience of current affairs on the part of the right hon. Gentleman. There are a great many customers who think themselves to be men possessed of ordinary courage and resolution who are very reluctant to complain. It is difficult to persuade the right hon. Gentleman that anybody except himself is gifted with even a glimpse of truth from time to time, but I hope he will accept from me that some very successful substantial customers of the industry feel convinced that it is not in their best interests to complain, and certainly not to complain publicly.

My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) made reference, very properly, to the fact that the British Steel Corporation, whose relations with its customers are going, in my view, from bad to worse, is also being the reinforcing agent of the stiffest squeeze ever to hit British industry. This will vitiate relations between the industry and its customers for many years.

There is always a danger with a monopoly that all those who are most informed about its affairs for some reason or another get an interest in keeping quiet. Whether or not they are cowardly is neither here nor there, but they tend to keep quiet, and the result is a lack of well-informed criticism.

May I go on from that point to the relations between the corporation and Members of Parliament? It has been my experience, and certainly my understanding, that senior people in the Corporation have been seriously discouraged from having anything at all to do with Members of Parliament. I have a certain amount of support for this allegation. I know one or two people who have been very reluctant to meet or to talk to Members of Parliament, and when I put this point to Lord Melchett I did not get a categorical denial.

May I sum up what I have been trying to say in this way? It seems to me that the interests of all of us, the interests of this country, taxpayer, consumer, management and worker appear to have been ill-served by nationalisation, and that they are now further threatened by a measure of centralisation which was at one time judged wrong by the British Steel Corporation itself and which is the last thing now required to tone up a massive and variegated industry to face the realities not of political theories but of a real and somewhat perilous world.

Sir Geoffrey de Freitas (Kettering)

On a point of order. I wonder, Mr. Deputy Speaker, whether you favour short speeches. It looks as though hon. Members representing steel constituencies will have no chance of speaking.

Mr. Deputy Speaker (Mr. Sydney Irving)

I hope all hon. Members will remember this.

Mr Lawson

On a point of order. In view of the importance of this subject, Mr. Deputy Speaker, was there no objection that we should be devoting only three hours to it? Is not this an example of a propaganda debate rather than an attempt to help the industry?

Mr. Deputy Speaker

The timetable is not a matter for the Chair.

8.24 p.m.

Mr. Richard Marsh (Greenwich)

I shall be very brief because in a three-hour debate, in all fairness, one hon. Member speaking for half an hour is enough.

The hon. Member for Yeovil (Mr. Peyton) said something which I thought was very significant. When he spoke of the industry's decision to organise itself in product groupings he said, with that phoney emotion which is sometimes summoned when people are talking about nationalised industries: what possibly can the managers in the industry be thinking of the future? But what possibly can the managers in the industry be thinking of the future in the light of the Opposition's disgraceful irresponsibility in throwing in question the entire future of the steel industry and flatly refusing to give any indication of what they have in mind?

It is perfectly right and proper that there should be arguments between the two sides, although I personally think it is a pity that this industry has become a political football, but for an Opposition to call a debate and say: That this House deplores the consequences of nationalisation of steel by Her Majesty's Government and then flatly refuse to give any indication of what they intend to do is to cast that industry deliberately, not by accident, into total lack of security in the future.

Why do they do it? They do it because they nurse this troglodytical, doctrinaire opposition to anything which is publicly owned. The argument is that the industry in two and a half years has not solved the problems of the previous 50 years. The right hon. Gentleman said: Had nationalisation not occurred market forces would have changed the structure of the industry. How much longer did the market forces need? For years and years everybody was highly critical of the British steel industry, including many people within it. Then the present Government came into office in 1964, and their policy was to take into public ownership the steel industry. We all remember that debate in the 1964 Parliament when suddenly the industry was reprieved by a discussion between my right hon. Friend the Member for Belper (Mr. George Brown) and an hon. Member who was then on this side of the House but who is now on the other side of the House, and will in due course no doubt finish up somewhere over the top of the Speaker's Chair. After that discussion the White Paper was withdrawn or suspended.

After some months I went into the Ministry of Power, and I thought that the threat of nationalisation would have spurred the industry into doing something, because market forces had not, but it was just falling further and further behind. My first question to the Department was: what changes were taking place in the industry in the light of its reprieve from nationalisation? There was an economic crisis at that time, and many people were worried about the possible effect upon foreign confidence and sterling of going ahead with nationalisation at that time, and the industry knew this. The industry could have done something about it. Had the industry itself made major changes, I am not totally sure that it would have been nationalised at that time—if the industry had shown willing. But, although faced with the threat of nationalisation, not one single thing had the industry done.

What has happened since? As my right hon. Friend says, the British Steel Corporation has been in existence for 2½ years and it has problems. That is not surprising. This is the biggest merger of competing manufacturing companies the world has ever seen—13 firms, 100 works throughout the country, 250,000 men, a major restructuring of prices, a major restructuring of unions. The Corporation deserves congratulations for the way in which it has brought the unions together in a difficult situation. On the argument about recognition, I do not think that the fault lies with the British Steel Corporation. I will not go into detail into whose fault it is, but I do not think the Corporation can be blamed for that.

The Corporation has gone through all these difficulties. It is now the seventh largest company in the world outside the United States of America. No hon. or right hon. Gentleman opposite believes that at the end of 2½ years in those circumstances it is even sensible to get up and say, "But there are criticisms we can make of the British Steel Corporation". In 2½ years it has done a superb job. Look at some of the things it has done.

Sir K. Joseph

Both the right hon. Member for Greenwich (Mr. Marsh) and the Paymaster-General are replying as if the Opposition were criticising the Government for not having built new steel works. That is not the point. The criticism has been that nationalisation was introduced in order to increase productivity per man and to rationalise. But one sees from the report of the N.B.P.I. that reduction of manpower, through wastage and other humane means, has not been begun.

Mr. Marsh

If the right hon. Gentleman believes that it has not begun, then it makes me even more worried about the possibility of his taking an interest in this industry.

Mr. Donald Coleman (Neath)

If I may interrupt my right hon. Friend, does not the right hon. Member for Leeds, North-East (Sir K. Joseph) not know of the exercise which has been taking place in the Steel Company of Wales Works at Port Talbot, about which his hon. Friend the Member for Bournemouth, West (Sir J. Eden) knows since he recently has visited the place?

Mr. Marsh

The fact that the hon. Gentleman recently visited the place is no evidence that he knows what it is all about. The right hon. Gentleman knows that a great deal has been done in difficult circumstances. One has only to look at the situation in 1968–69 with £230 million new capital projects approved. Now that they have been approved they will begin to pay off. There will be capacity in Scunthorpe alone of £130 million. These are vast investments which take time even to build, quite apart from their paying off.

I want to be brief, and I will conclude by making a point on prices. The hon. Member for Yeovil seemed surprised that the Iron and Steel Users Consumers Council should have adopted a view which agreed with the Steel Corporation. It is not the rôle of a responsible body to turn itself into a sort of gripe factory. This is an organisation which represents every major section of steel users. It is a body of very high calibre and a body with which I had the honour to be involved. It takes a responsible view. It comprises the steel users. If it approves price rises, we should ask ourselves to think carefully about the prices charged for steel.

I agree with the right hon. Gentleman on one thing, and that is that it is no credit to us that our prices are the lowest in Europe. I believe that the price of steel in this country is too low, has been too low and that the increases have been delayed too long. I do not see the purpose of a nationalised industry as a sort of hidden subsidy to the private sector. If it is desired by the Government to subsidise industry, which is perfectly legitimate in times of difficulty, then one does not distort the price pattern of a nationalised industry to do so.

I apologise for putting in a somewhat jarring note on this side of the House, but I believe that these increases should have been granted, and I hope that the industry will be allowed to get to a sensible price structure.

Hon. Gentlemen opposite have spoken about a monopoly. They are not facing a monopoly, but they are facing intense competition. The fact that the industry is not facing so much competition in this country does not detract from the fact that it faces real competition elsewhere.

I do not believe that one can run this industry other than as a commercial operation. If it is to be run as a commercial operation, its prices should reflect the real position. I shall be interested to know whether there is any calculation as to what the financial position of the industry would have been if the prices charged by the B.S.C. had equalled those being charged in the European Coal and Steel Community.

Mr. Harold Lever

There would have been £100 million profit.

Mr. Marsh

My right hon. Friend says that there would have been £100 million a year profit. That is one of the arguments against restrictions on price increases and the prices and incomes policy as applied to this particular commodity.

I end as I began, because I said that I did not wish to speak for too long. Hon. Members opposite after the next General Election, if they win it, will not denationalise the British steel industry. I know it and they know it. There are two reasons why they will not do so. One is that some of us have given a great deal of thought and effort to ensuring that they cannot. Secondly, they would not be foolish enough to take this massive industry and shake it apart again. Since this is the case, there is no sense in this sort of electioneering debate which damages a major industry, has its effects on the economy of Britain and cannot be justified on the ground of the arguments put forward by the party opposite.

8.37 p.m.

Sir Spencer Summers (Aylesbury)

I do not propose to detain the House for very long. I begin by agreeing wholeheartedly with what the right hon. Member for Greenwich (Mr. Marsh) had to say on the subject of prices. It is interesting that we have heard from the Paymaster-General a defence of the delay by the Government in raising prices. Perhaps the two right hon. Gentlemen will decide which of them is right.

I thought the Paymaster-General's treatment of the speech of my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) little short of disgraceful. It was flippant, it was designed to entertain, and to some extent did. But it paid no serious attention to the charges made. The right hon. Gentleman was at pains on the subject of labour relations to say that no evidence was produced that an increase in strikes following nationalisation had any relationship to each other. Does he really think that if, since nationalisation, the number of strikes had fallen, he would not have taken credit for the improved situation in labour relations'? Of course he would.

Mr. Harold Lever

The hon. Member would have told me that I was talking rubbish if I had brought no argument in support of that assertion.

Sir S. Summers

The Paymaster-General is entitled to his views, but if he thinks that because a proposition is simple it is not worth listening to, he is much mistaken. The public is interested in results. What happens after an event, unless there is proof to the contrary, is likely to have been influenced very strongly by the change in attitude throughout this industry.

The right hon. Gentleman had a lot of lighthearted things to say about our having to make up our minds on the subject of prices. He was at pains to say how helpful the industry had been in keeping down prices and in making those who used steel competitive in the world. He paid no attention to the lack of profits, profits that were shown to be lacking. It is the Paymaster-General who wants it both ways, not the Opposition, in that particular context.

I should like to make clear how unwise I believe it to be to eliminate the goodwill associated with individual companies. In saying that, I have done my best to dissociate my mind from old loyalties in that respect, but I am quite convinced that it is in the interests of the British steel industry to preserve the goodwill of those companies, their names, habits and attitudes in the commercial markets of the world. It is a thousand pities that they are being done away with.

I will not go over ground that has already been traversed about nationalisation being a monopoly and all the rest of it. But I am quite certain that the existence of that monopoly, the absence of competition and the creation of product groups is doing a great deal to undermine morale in the industry. Nor do I believe that it is anything like as easy, if at all possible, to have loyalty to a group in the same way as in former days it was possible to have loyalty to a company.

My right hon. Friend alluded to the new set-up. I have before me a description of the new set-up illustrated in the December issue of Steel News. It is as well that we should look at the duplication and split loyalty which is almost bound to occur by the way in which this industry is to be organised. There are to be six product groups and six administrative functional responsibilities for individuals also responsible to the Chairman of the Corporation. We are told that the managing director at the centre, not the managing director of the product group—that is the managing director of a series of factories—will be responsible for financial assessment of expenditure proposals. Surely if anyone is to take responsibility for assessing expenditure proposals—which I take to be capital expenditure—it is people on the spot at the site where the money is to be spent and where the management will operate the new expenditure.

If responsibility is to be placed at the centre there is bound to be confusion and division. The same goes for development planning and the Corporation's marketing policy, and determination of marketing and sales policy. Who is the individual down the line to believe that he is ultimately responsible to, the managing director in charge of his product group or one of the half-dozen so-called managing directors at the centre? I had some experience of this kind of situation of divided loyalties during the war when I had the exalted title of Director-General of Regional Organisation. The individuals in the several regions were responsible to the Department in the Ministry of Supply who made, perhaps ammunition, perhaps weapons, perhaps some other feature of the war effort. There was a division of responsibility between the individuals in a regional office to his product group and to the regional office and the head of it in London.

Constantly much of my time was taken up trying to resolve these confusions and difficulties of persons with a dual loyalty. I take it to my credit that almost invariably I said that the "product group carried the more important loyalty—the man who is responsible for what you, the individual, is concerned with making".

That seemed to be the only possible solution. Here the only possible solution is for the product group managing director to be responsible for everything in his factory. If he looks for advice only and co-ordination from the functional managing directors, well and good. I hope that the Minister and all those concerned will see that inevitable confusion can arise unless steps are taken more precisely to define the responsibilities and deal with them in advance.

Nationalisation was bad enough, but if the mistaken application of it is to be anything like what we are now told is to happen in March it will be a disaster for the industry.

8.43 p.m.

Sir Geoffrey de Freitas (Kettering)

I agree with the hon. Member for Aylesbury (Sir S. Summers) that the public is interested in results. The results of nationalisation in Corby, in my constituency, are something in which the public are particularly interested. Incidentally, the firm is called Stewart & Lloyds, and I hope that it will continue to be called Stewart & Lloyds. I do not know of any reason why it should not so continue.

At the General Election I argued on the platform, on the radio and television and put the case for what we would do. I said that we were in favour of nationalisation. One of the arguments I used was that a properly organised industry would make full use of the Northants iron ore, which not only grows beautiful roses but is the basic raw material used by Stewart & Lloyds. I argued that with the small privately-owned units in the steel industry the steel workers in Corby, and Corby itself, would be abandoned. I argued that nationalisation would achieve that reorganisation which was essential in the national interest and would also bring about full use of Corby, the skill of the workers and the iron ore which is there. My opponents disagreed.

Two weeks ago Sir Henry Benson came to my constituency. Hon. Members interested in the steel industry will remember the Benson Report of 1966. One matter that the Report emphasised was that the future development of the industry should be in the deep water coastal ports using high grade ores. That report cast a great deal of gloom over Corby when it was published, because Corby's inland iron and steel industry is based on lower-grade ores, and such a move would have made Corby obsolete.

There was despondency in Corby when that report came out, but Sir Henry Benson, on 30th January, said: The Benson Report was produced before nationalisation. We were working on groupings of private companies on geographical principles. Once the British Steel Corporation came into being the whole grouping was changed and the emphasis put on the product. I am sure that what is happening now is right. It so happens that, arguing by results, nationalisation has directly saved Corby.

Besides production, there is the question of administration. I have frequently argued that Corby was well suited to be an administrative centre because of geography, available housing and good amenities. I was delighted a few months ago when, in answer to a Question, I was told that the administrative headquarters of the Tubes Division would be there. I hope that more administration will be transferred to Corby. If so, the British Steel Corporation will have to act quickly. Other organisations are moving in. The Home Office is moving a department there in the next few months, so it is important that the Steel Corporation should move quickly.

The urban district council and the New Town Development Corporation are efficient. They welcome new industry. A few months ago I opened a new factory which will employ up to 700 people.

Diversification is continuing, but Corby remains essentially a steel town proud of its steel works. We have every right to be proud of the people who manage it and work in it. They come chiefly from the Midlands, Scotland and Ireland. The Registrar-General's Report shows that there are more people from Northern Ireland in my constituency than in any other constituency in England. The hon. Member for Belfast, South (Mr. Pounder) will be glad to know that we have not got any Protestant or Roman Catholic streets. We have Corby streets. We have peace. I say, thanks to nationalisation, we also have prosperity.

Steel works are fine to look at, but they pollute the air. Anyone interested in nature conservation over the years knows this. I have been concerned about it since I was on the Nature Conservancy. The problem has become greater, but so has public concern. Here I will ask something of the British Steel Corporation.

A week ago today I was in Strasbourg attending the Council of Europe where the European Conservation Year was launched with speeches by well known people, including the Duke of Edinburgh. There is no doubt that in the coming years there will be increased public pressure and bodies like the B.S.C. will be very much criticised. I wonder whether it is taking pollution seriously enough. It is expensive to stop. I will refer to a figure in a moment. My experience of the B.S.C. in this respect is not too encouraging

In August, 1968, there was a tremendous outcry about pollution in Corby. There were public meetings, I heard evidence and I accepted a petition signed by over 1,000. I took this up with the B.S.C.

Eventually, in July, 1969, Lord Melchett wrote to me saying that the Corporation had approved expenditure of about £700,000 for the installation of additional equipment, work was to begin in the autumn of 1969, the installation would be completed by August this year, and the new equipment—this is an important point—would enable the plant to conform to the statutory requirements for clean air. By August it will be two years since councillors, public opinion and the Member for Parliament started agitation.

We are glad that there will be this improvement, but has it not taken rather a long time? I am not blaming the local management. A lot of money was involved. I want to be assured that in other parts of the country the B.S.C. will do more to meet the statutory requirements. I am not asking more than that at this moment. In this, Conservation year, it is the least the Corporation should do. It has a wonderful opportunity of showing itself as an enlightened public enterprise.

8.50 p.m.

Mr. Patrick McNair-Wilson (New Forest)

I was disappointed with the Paymaster-General's speech, because he showed that indifference and lack of concern which he showed when speaking in the debate on smokeless fuels only the other day.

I think we must realise that in this House we are husbanding the public's money, and that therefore anodyne barely passable after-dinner type speeches which may keep one's supporters in fits of laughter are hardly a way to look at what I regard as a serious subject; namely, the plight of the British steel industry. I do not believe that the picture is anything like as rosy at it was painted by the Paymaster-General. When I listened to his right hon. Friend the Member for Greenwich (Mr. Marsh), I rather wished that he had been handling the job for the Government, because he did at least seem to have some knowledge of the problems in this industry.

This is a very sensitive subject in this House. It is particularly sensitive on the Government benches, because it can really be described as one of the great sacred cows of Socialism. It is a subject which has been in the political arena since the 'thirties, and the Prime Minister, in his recent speech, tried to take us back into the 'thirties with his talk of 15-bob a week housemaids. We have moved away from those days, but as soon as steel is debated in the House of Commons we get a very touchy audience on the other side of the House, because this is one of the untouchables in Socialist dogma.

I know, and the right hon. Gentleman knows perfectly well, that the reasons for taking this industry into public ownership had nothing to do with the commercial good sense of this matter. It was a purely political decision, perhaps originated by Lord Dalton, as he made it clear in his book "High Tide and After". It was not about how much open-hearth capacity we had. It was not whether or not the industry had monopolistic tendencies. It was not because the industry was failing the nation. It was simply because Socialism wanted the industry taken into its maw —and we are suffering from this today. This is beyond the dispute.

The Government might remember that nationalisation is mostly a form of management. It is no panacea. It is no answer to the problems which they always used to say existed in the industry. It is a form of management, and I suggest that it is a form of management lacking the essential commercial disciplines which make enterprises efficient.

I remember last year being on the Committee which considered the borrowing powers Bill for the steel industry. I remember going over all this ground, and today we do see not a happy, successful, industry, so much better, as we were promised, than its predecessor, but an industry which has serious problems to face, and these cannot be laughed off merely by saying that my right hon. Friend and his hon. Friends are making electioneering speeches.

These are serious matters which should be looked at by the Paymaster-General. [Interruption.] I know that hon. Gentlement opposite will provoke me into making a long speech. I do not want to deprive particularly the hon. Member for Sheffield, Brightside (Mr. Eddie Griffiths) of giving his views in a moment.

Mr. Eddie Griffiths

The hon. Gentleman referred to the Standing Committee which considered the steel Bill. If I recall the hon. Gentleman's words about efficiency, and if he had his way, half the steel plants in this country would now be on the scrap heap because they were losing money. Would the hon. Gentleman like to consider that?

Mr. McNair-Wilson

I do not want to be drawn too far. The commercial test must be success or failure. I shall press on.

I want to examine the deficiencies of the British Steel Corporation, and look at the production figures, to which reference was made earlier. We are now considering an annual production figure of a little over 26 million tons a year, which compares not very favourably with the figure for 1964. Here we are, five years later, after more than two years of nationalisation, still unable to meet the orders which the industry would be able to fulfil if it were working more efficiently. I do not regard the figure of 26.42 million tons as a very good one for the industry. We are importing 400,000 tons more this year than we were in 1947.

The import bill, which I would have thought hon. and right hon. Gentlemen opposite were anxious to see reduced, is being increased by the failure of the industry to satisfy its customers. Only today I was talking to a friend of mine in a large international construction company which was trying to buy 5,000 tons of constructional steel but could get only 1,000 tons.

Mr. Harold Lever

It cannot get any abroad.

Mr. McNair-Wilson

There is a £18 premium, and nobody can hope to get steel in the construction business now.

Then we have the problem of delay, which is substantial. The friend to whom I have referred mentioned a delay of over three months in the case of his steel. I wonder why the shortage should exist. We are told that it is because steel is being exported. When the civil engineering industry shows signs of picking up, our steel industry cannot supply it. This is a disastrous indictment against the Steel Corporation.

We have the problem of the pipe mill at Greatham, which was built in a hurry but failed to produce pipes that could be used. That point needs to be answered by the right hon. Gentleman. The stockholders were told that the shortage was such that if the firm expected more a certain amount of its allocation would be cut. These are serious effects, and should be treated seriously.

This very day we read in the newspapers that the Rootes motor company would not be launching its new model, the Avenger, because the price of the car would rise by £25 per unit owing to increased steel costs.

Mr. Harold Lever

Did not the hon. Gentleman hear his hon. Friend and his right hon. Friend complain that we had not put the price up earlier?

Mr. McNair-Wilson

I am well aware what the price should be—as is the Corporation. I suggest that the Corporation's costs should have been reduced to make sure that this price increase was not necessary, but the necessary steps were not taken. So far, instead of reducing costs, nationalised industry always takes more money out of the taxpayer's pocket.

Reference has been made to the present level of investment in the industry. It has been suggested that in the bad old days before nationalisation invest- ment was low. It was low in the years immediately preceding nationalisation, but it might surprise hon. Members opposite to know that between the years 1958 and 1963 it was running at about £175 million a year. In 1952 it was running at the rate of £230 million a year, and the figure was £193 million for the following year.

Mr. Eddie Griffiths

Referring to two of the plants to which the hon. Gentleman has referred—Ravenscraig and Llanwern—is he aware that the B.S.C. proposes to spend £76 million to make what his Government put down as an unbalanced, so-called integrated works into a properly balanced and integrated works, with smelting capacity and finishing and matching up?

Mr. McNair-Wilson

I am aware of the problems of those two plants, which we have debated in Committee. I am only saying the level of investment now suggested, of £900 million over five years which was announced for the near future, is nothing very outstanding and we have a long backlog to catch up on for those years when investment was low.

I now want to turn to the organisation of the industry. I am sorry to say that my friends in the industry tell me that morale is very low. I used to be in the industry and I know that, as a result of the switching and changing and the muddle and confusion, morale of junior and middle management is very low.

There are some very good reasons for this. Some very large organisations are being set up in the centre of the Corporation and layer upon layer of management is being imposed in the plants, so that communications within the industry are very poor. Although a plethora of newspapers and newsletters has been produced by the Corporation which are supposed to keep the employees in the plants informed, these communications are now very bad. Whereas they used to be quite short, the lines of communication are now greatly extended, and this is having a serious effect on morale.

Another thing which has upset morale is the level of appointment to senior management from outside. I am not here making any criticism of the right hon. Member for St. Pancras, North (Mr. K. Robinson) but the fact that a number of people are being introduced on to the Board and into various levels of the Corporation from outside is now beginning to unsettle the management structure and people are beginning to feel that the management ladder is becoming more and more difficult to climb. As for the number of large central departments set up by the Corporation, its administrative costs and administrative bureaucracy have got much too big. I do not criticise individuals, but the Corporation itself is becoming a bureaucratic giant.

The new product groups may be successful in the long term. They have had the problems of switching from the original structure to the new one on which everyone pins so much faith. But the grouping may have become slightly out of balance. The general steels group is far too large, having over 45 per cent. of the productive capacity of the industry and about 36 per cent. of the total employed. This is a giant group to have in a four-group system. For really efficient working I would have thought that it would prove too large. In this new grouping system, there is the problem of breaking up what were cohesive units before scattering the headquarters and making people responsible to new and different areas. This is not likely to lead to a more efficient system.

This can be seen in the fact that of the six groups—that is to say, the four steels groups and the two of construction and chemicals—there will be the unusual situation of each having some plant or being responsible to different places. That is likely to lead to a very confused situation.

I am far from sanguine about the Steel Corporation and the industry at this time. There are problems. The production figures are disturbing, and although the right hon. Gentleman tells us of all these wonderful plans that will come into being —he talks in terms of five years from now and what the output per man figure is likely to be—I believe that we may have left it too late.

We have enjoyed, and are enjoying, a great steel boom, but there are many other materials which can be used for fabricating in various forms. I am afraid that we will find that we are investing our £900 million in new plant and equipment which when it comes into production, may find itself operating at a time when it is not required.

There was one real fallacy in the concept of steel as a commanding height. It is not a commanding height. It is the first of the industries to feel the pinch when anything goes wrong in the economy. The steel industry is always tremendously vulnerable in this situation. Anybody who knows the industry—and I had the honour of working in it at one time—recognises how vulnerable it is.

I am led to believe that the nationalisation of steel has achieved nothing. The frog was too big for the snake to swallow. It is too big an industry to be taken in in one bite. It did not grow out of the commercial desire of companies to come together. The right hon. Gentleman said that they did not want to come together; but that is not entirely true. For example, we have the case of South Durham and Dorman Long. We have other evidence to show that this type of development would have occurred.

To take the example of Japan and Europe and say that because they have very large units we must have a big unit, too, is not necessarily the right concept. We should have allowed the industry to develop in its own way into sensible and viable units. I am, therefore, far from happy about the future of this organisation and of the industry. I only hope that the Parliamentary Secretary will deal with some of the points that I have raised and particularly my questions relating to the new organisation and the fact that steel still has some major problems to face.

Mr. Harold Lever

In the temporary absence of my hon. Friend the Parliamentary Secretary, and so that he will know the questions to answer, may I ask the hon. Gentleman if he is complaining that too much is now being invested in the steel industry, or too little? I was not quite sure from his remarks.

Mr. McNair-Wilson

I said that it may be too much too late.

9.8 p.m.

Mr. Donald Coleman (Neath)

I wish at the outset to declare my interest in the steel industry. The hon. Member for New Forest (Mr. Patrick McNair-Wilson) said that he had at one time been employed in the industry. I, too, have been employed in it. Indeed, I am still a member of the British Iron, Steel and Kindred Trades Association, the trade union to which the overwhelming majority of people engaged in this great industry, in both the public and private sectors, belong.

I, too, had the privilege of serving on the Standing Committee which brought the major part of the British steel industry into public ownership. It is because of the qualifications that I have that I am jealous of the interests of this great industry. It is because of this jealousy that I venture into this debate.

Those engaged in the steel industry do not believe, nor do I believe, that it serves the interests of the industry to make it the object of the obvious propaganda that we have had from hon. Gentlemen opposite tonight. No one complains of a debate on the British steel industry but surely one can complain when the Opposition are so little concerned about the industry that they have failed to provide a whole Supply day. If they were really concerned, that is what they would have done. It will not go unnoticed outside by those who really have the interests of the industry at heart that, once again, we have had hon. Members opposite playing politics round the head of the most important British industry.

When we supported the Government's intention to bring a major portion of our steel industry into public ownership, hon. Member's opposite attacked us by saying, and they say it now, that we would ruin the industry by such a monstrous Measure. They said that production would fall and that, as a result, our steel industry would decline. It is interesting to note that in 1969 steel output was up by 2.2 per cent.; and that figures recently issued jointly by the British Steel Corporation and the British Independent Steel Producers Association show that United Kingdom crude steel production totalled 26,422,500 tons in 1969, an increase of 2 per cent., or about 560,000 tons, on 1968.

I turn to the output side, because it must be stated that these figures are about 1 million tons short of the level forecast about a year ago. It is claimed that the shortfall results from production losses during the year. This can only refer to loss of production through dis- putes in the industry, but comment from this side is necessary if we are to have a balanced consideration.

I point out in particular to those who have responsibility within the Corporation for labour relations that over many years the system of regulating those relations has been built up and worked with a degree of smoothness that would have benefited many other industries. We may not have always agreed with one another, but we always respected one another. I urge those now responsible to realise that steel industrial relations have been conducted at a fairly sophisticated level for a very long time, and have never been based on the law of the jungle.

Steel output in December averaged 520,300 tons a week on a seasonally adjusted basis. This was the highest output for six months, and showed an increase of 12,900 tons a week on the November figure. I refer especially to the fact that production in the South Wales steel plants showed a good recovery in December, because it is a real illustration of the contribution of the people of Wales to the wellbeing of the United Kingdom and in sharp contrast to the lunatic behaviour of a tiny minority of Welsh people who are bent on the destruction of the livelihood of the people of Wales and of the United Kingdom.

I turn to the question of the increases in steel prices. The Government's agreement to an average increase of 10 per cent. in steel prices from 28th January will mean that an extra £100 million in revenue will be available to the British Steel Corporation. That will enable the Corporation to meet the extra cost it has incurred over the past months, to pay off part of the deficit and show some return on the £700 million worth of public dividend capital with which the State financed the Corporation. It will also mean that the Corporation can get ahead with its modernisation programme which involves replacing uneconomic plant with new plant based upon the lastest manufacturing technology. This in turn will mean that redundancies can be kept to a minimum and that the future price of British steel is competitive in world markets because it is made in plants using modern techniques of production.

It is not only in Britain that there has been a demand for increased prices. Foreign steel makers have increased their revenues by increasing prices while British steel prices have been kept artificially low. Much of the increased revenue to foreign sources has been reinvested in order to increase production which, in turn, will lower prices in world markets. We must not prevent the British steel industry in these circumstances from increasing its own revenue which will enable it to match the investment of overseas steel manufacturers; otherwise, what will happen in time is that British steel will not be competitive with foreign steel.

Such a situation cannot and will not be in the interests of British steel workers and cannot be tolerated by them. We have seen the difficulties put on others of our basic industries through lower prices forced upon them as a means of subsidising other industries, which has meant that they have been unable to raise the necessary revenue to finance developments which ought to have been made, and I am thinking here particularly of the coal mining industry. There are people who have attacked the decision to increase prices on the ground that it will lose for us competitive gain for this country as a result of devaluation.

Even with a 10 per cent. increase in prices British steel prices are still 5 per cent. lower than those of our foreign competitors and therefore if it is held that this cost advantage to our industries will mean that they are not competitive then we should take a very close look at others of our manufacturing industries because there is surely something wrong with the efficiency of those industries if they cannot work on the basis of steel prices at this level.

Steel workers have long recognised that their interests are inseparable from the fortunes of their industry, and they will hold members of the Corporation entirely responsible if they fail to take advantage of the more favourable conditions under which they now operate—and so, too, will members of the party on this side of the House. But I feel that with an industry in public ownership there is much more likelihood of this industry being sensitive to the need to take the opportunities which are now becoming available to it as a result of increasing investment and better world conditions.

9.20 p.m.

Mr. Rafton Pounder (Belfast, South)

Most hon. Members who have taken part in the debate come from areas in which there is an important steel manufacturing unit. I come from an area which has no steel production whatever, a matter of constant regret to us, but we in Northern Ireland are substantial users of steel, and my interest in the industry stems more, perhaps, from the consumer's standpoint.

Time is too short to rehash or comment upon many of the political arguments which, inevitably, are advanced in a steel debate. Suffice it to say that I deplore the way in which, over the last 20 years or so, this vital industry has been regarded by right hon. and hon. Members opposite as a sort of political football. But let us accept, at least—I think that this will be one point on which there can be unanimity in the House—that the position of the steel industry in the British economy is one of dominance. It is vital that the industry should be both efficient and competitive, but there is grave doubt that it is either.

No one will claim that, in the pre-nationalisation days of the mid-1960s, the steel industry was the acme of efficiency, but what can be fairly claimed is that the great forecasts made of what would happen when the British Steel Corporation got into its stride have thus far not been supported.

As recently as last Saturday night, I had occasion to talk to one of our main building contractors in Belfast who was expressing anxiety to me about the supply of reinforcing bars which are used a great deal in building construction. The point he made—I find it alarming—is tint until recently it was possible to place one's orders for steel on a month-tomonth basis, but now, apparently, ordering is required on a quarterly basis. For someone who may not be in a very large way of business, having to anticipate one's needs a quarter in advance will make life much more difficult, and this difficulty will be felt by many users of steel apart from the giants. Moreover, in the construction industry one does not often have all that much notice of an order which has to be completed in, perhaps, a fairly short time. Therefore, apart from the fact that costs seem to be going up alarmingly, the new ordering requirement calling for anticipation of needs much further ahead on a quarterly procedure rather than monthly will make the running of business that much more difficult.

It is distressing that, although one acknowledges that the cost of steel in this country is a great deal lower than that of our competitors overseas, one tends to hear more about the putting up of the price of steel than of making savings in costs. In its report in the middle of last year, the National Board for Prices and Incomes said that it expected cost savings from the British Steel Corporation. It is, perhaps, a little too early yet to condemn the Corporation on this point; we will be able to tell whether it has made any cost reductions when we see the state of its accounts which are to be published within the next few days.

There has been comment more than once in the debate on the Corporation's production plans over the next five years. My understanding from the Paymaster-General was that it plans to increase production by 6 per cent. annually over each of the next five years. I grant that at present the increase in production is about 2 per cent. to 3 per cent. Even leaving out of account the Japanese, whose progress in the manufacture of steel has been fantastic, our E.E.C. competitors are and have been averaging an increase in production of about 8 per cent. So, even if we achieve 6 per cent. over each of the next five years, presumably we will still be substantially behind our continental competitors.

When steel is being discussed the mind of any Belfast Member inevitably turns to shipbuilding. The way in which shipyards are having to tender cut-throat prices for such work as may be available is atrocious. In a period as short as seven months there have been as many as three increases in the price of steel. Although I acknowledge that steel does not represent the bulk of the cost of ship, already it costs the British shipbuilder of an ordinary medium-sized bulk tanker £20,000 more for his steel than his Japanese rival. In these days of intensive competition, £20,000 could be sufficient to win an order away from a British shipyard. The shipbuilding industry is at the mercy of the British Steel Corporation and its fixing of prices.

Harland and Wolff has taken orders for delivery in 1971 and 1972, and already there have been three increases in the last seven months in the price of the steel which will be used to fulfil the orders. Who knows how many more increases there will be in the intervening period before completion of these orders?

One particularly distressing facet is the fact that brand names or trade names will disappear. I do not know what the position is for the industry as a whole. I can speak only of the shipyard in Belfast, of which I have some knowledge and which for many years has had a special link with Colvilles. It means something to an organisation to have a link with an organisation in a trade which is vital to it. Now the separate names and entities will disappear and, with them, the goodwill that has been built up over many years.

This is a matter of the profoundest regret. It is impersonal to deal with a vast entity like the Corporation when for years there has been a homely and mutually satisfactory relationship with a specific member of the steel industry.

The pattern is that customers face spiralling increases in prices, delivery dates are lengthening, and we now have the absurd situation of rationing of certain vital types of steel.

Several Hon. Members rose——

Mr. Speaker

Order. I remind the House that the Front Bench is intervening at half-past nine.

9.28 p.m.

Mr. Eddie Griffiths (Sheffield, Brightside)

From listening to the right hon. Member for Leeds, North-East (Sir K. Joseph) one could get the impression that it is new for there to be a sellers' market with customers having to wait for steel. Before the steel nationalisation Bill was passed, I spent fifteen years in a steel plant. From my experience there I could give the right hon. Gentleman chapter and verse of how people used to order 500 tons of steel and how they were told, regretfully, that they might be offered 100 tons of it six months hence. The right hon. Gentleman grossly misleads the House by saying that it is only now that there are these waiting lists, because there is a terrible shortage of good quality steel throughout the world.

In the very short time available to me I do not want to harp back on the difficulties of the past twelve months. I do not condone any one of the strikes which have hampered the industry and resulted in the loss of production of 750,000 tons of ingot steel.

The obverse side of the coin is that many steel plants struck an all time record in 1969. Ebbw Vale, about whose future there has always been a cloud, broke no fewer than 13 records in 1969. Records were broken in the Midland group at Scunthorpe and at Steel, Peech and Tozer. Do the Government and the Corporation have a policy on scrap for the 1970s? As we push up production, there is no point in importing it. We have had difficulties, especially in the special steels division. Would the Minister address his mind to a nickel policy for the industry?

9.30 p.m.

Sir John Eden (Bournemouth, West)

I am sure that every hon. Member agrees that the steel industry occupies a position of immense importance to our economy, that we are all dependent on it and, therefore, to an even greater extent, on its success. I begin, although it is unnecessary for me to do so, by underlining what my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said, that it is our hope and our earnest desire that, whatever may come the industry's way in future, it will earn ever greater profits and be even more successful at meeting the customer's needs.

It was unfortunate that the Paymaster-General treated the debate so flippantly. He did not seem to recognise just how serious is the position which confronts not only the industry but all of us as taxpayers. My hon. Friend the Member for New Forest (Mr. Patrick McNair-Wilson) was quite right to remind the House that we are husbanding public money here. That is the aspect which has caused us great concern.

One of the ways in which the Steel Corporation will be able to show a better return on the capital invested in it is by more realistic pricing policies. I agree with the right hon. Member for Greenwich (Mr. Marsh), but there seems to be a divergence between his views and those of the Paymaster-General—[Interruption.] Yes, the right hon. Gentleman has now raised the prices twice, but what he claimed credit for earlier was that, under some self-denying ordinance apparently, the Corporation had kept its prices artificially low. But, as he knows, steel prices have been too low for too long, which is one reason why the Corporation has been in difficulties.

I hope that the Minister will make some reference to the out-turn for the year ending September, 1969. We have had little information about this, but it is common knowledge that the Corporation, which had expected a profit of about £20 million to £30 million in 1969, has now had to return a loss of about £22 million. One does not know the exact figure, but I understand the Annual Report and Accounts are to be published shortly. No doubt we shall then be able to discuss them in greater detail.

But the fact remains that, in the short time it has been publicly owned, a number of forecasts have been made by the industry, and claims have been made for it by Ministers, which have not been achieved in practice. Perhaps this is partly due to the uncertainty which the board faced after the original White Paper on Steel Nationalisation. This was produced in April, 1965, and it had this to say about the Corporation's pricing policies in paragraph 12: In the Government's view, these monopoly characteristics "— a reference to what went on in the then private sector— in this basic industry point to the need for public ownership under which price policy would be determined and prices fixed with regard only to the public interest. That is an extraordinary statement. Right hon. and hon. Gentlemen opposite had better try to get the matter clear, and decide once and for all what is to be the Corporation's pricing policy.

The Corporation, like every other sector of British industry, has had to endure considerably increased costs in many areas including increased wages and substantial increases in its fuel costs. Fuel accounts for 22 per cent. of its overall costs. Prices of coking coal, which accounts for two-thirds of steel's total fuel intake, have risen.

What we complain about is the delay which there has been in adjusting prices, and the uncertainty which seems to have surrounded it. First, the Corporation submitted a comparatively small price increase—5.6 per cent.—to yield £40 million in a full year. This was granted early in 1969. The original claim had been subject to an abatement by direct Government policy of 1¾ per cent.; it was Government policy which held that back. The Government then demanded, in conjunction with the Prices and Incomes Board, that there should be some attempt to get greater savings from improved efficiency, and I understand that this has been done. Curiously enough, the figure is exactly comparable to that which was advocated by the Prices and Incomes Board. I cannot help feeling a bit suspicious about the coincidence of those two figures. If, as a result of the recommendations of the P.I.B. on the original price increase claim, the Corporation has been able to find those savings through greater efficiency, I wonder what would have happened had the latest increases been referred to the board, though I am glad that it was not.

This spells a complete change of Government policy, which has not gone unnoticed. It has not gone unnoticed in the rest of industry. Many sectors of industry would dearly like to be able to put up their prices to counter the increased costs they have suffered as a result of Government policy, but it is apparently Government policy to try to prevent their doing so. Here is one law for the public sector and another for private enterprise. If the Government are in favour of industries trading at a profit and covering costs which Government policies have imposed on them, let them say so. Let them spell this out clearly and ensure that it covers the whole range of British industry, and not just the privileged public sector.

My hon. Friends raised a number of important points, particularly in a characteristically moderate speech by my hon. Friend the Member for Yeovil (Mr. Peyton), who referred to the conditions of sale. I hope that after the debate the right hon. Gentleman will go over the ground we have covered and have a close look at the conditions of sale and the policy—no so much the policy as the attitude of mind—which caused the Corporation to try to impose them. There is much here which is cause for concern to all of us who believe it right that even those in the public sector must be extremely sensitive in their handling of their customers and have regard to those dependent on them, particularly when they are a monopoly.

The right hon. Gentleman thought to taunt us because we said that we expected better results after 2½ years of nationalisation. He made great play with this in a very entertaining and flippant speech. I agree that 2½ years is not a long time.

It was not we who were expecting a great deal as a result of nationalisation. It was hon. Members opposite; it was Labour Ministers; it was the right hon. Gentleman himself; and it was the British Steel Corporation. All of them, in speech after speech and in publication after publication, made great claims for nationalisation, as though the mere act of nationalisation would transform the situation overnight and bring about many of the conditions which all of us would regard as wholly desirable.

Mr. Lawson

Rubbish.

Sir J. Eden

It is not rubbish. This was the reason for nationalisation and it is contained in the White Paper which I have here. These were the great claims made in the Second Reading debate and these were the claims made in publication after publication by the British Steel Corporation itself. It was claimed that as a result of nationalisation there would be enough capital to meet the needs of the industry, that prices would be kept down, that the export position would be improved, that labour relations would be enhanced. All these and other claims were made by the Government in order to excuse the folly of the act of nationalisation.

What, in fact, has happened?

Mr. Marsh rose——

Sir J. Eden

No. I cannot give way.

Hon. Members

Give way.

Sir J. Eden

The most remarkable series of claims made on behalf of the industry——

Hon. Members

Give way.

Mr. Speaker

Order.

Sir J. Eden

I apologise for not giving way, but I have an extremely short time to cover the ground. Of course, if the right hon. Gentleman promises to be quick I will give way.

Mr. Marsh

Would the hon. Gentleman answer the question I asked his right hon. Friend? Does his party intend to denationalise the steel industry?

Sir J. Eden

The right hon. Gentleman has already had a very satisfactory answer from my right hon. Friend, so I need not waste further time on that.

As I was saying, a great number of claims were made on behalf of the industry and about what would be the effects of nationalisation. What in fact has happened? Let us just recapitulate what has taken place. We have had three reports on organisation. We have had three price increases. We have had a whole series of most unfortunate and costly industrial disputes. We have had a reduction in exports. We have had an increase in imports. We have not had the capital expenditure which the needs of the industry warranted, and we have had £700 million worth of commencing capital debt converted into public dividend capital and, as my right hon. Friend said, no dividend.

In addition to that we have had adverse effects on morale, particularly at middle management level. In this connection I hope that the hon. Gentleman the Joint Parliamentary Secretary will answer the points raised by my hon. Friend the Member for Aylesbury (Sir S. Summers) and others about the dual loyalty which is to be required of individuals throughout the industry. We have not had the progress with rationalisation that we were led to believe would be forthcoming. After all this great and costly effort we are still only at the beginning of the process of rationalisation.

In fact, we have made very little or no more progress than that which was announced in the series of plans brought forward in the Benson Report to which the right hon. Member for Kettering (Sir G. de Freitas) referred. The Benson Report advocated the rationalisation of plant at three or four major integrated works, and although there are slight differences, which I accept, between the exact locations, broadly speaking this is exactly the same as now advocated by the British Steel Corporation. Benson stressed the need for a reduction of manpower of 100,000 by 1975, broadly in line with what is now proposed. Benson envisaged the need to expend some £170 million a year on investment—the amount actually forecast by the chairmen of the companies concerned. This compares with the figure of £180 million forecast by the right hon. Gentleman and the Corporation. No difference. All this time, after two and a half years of costly expenditure and wasteful expenditure we have got no further.

Mr. Lawson rose——

Mr. Speaker

Order.

Sir J. Eden

We are absolutely no further than had been proposed before nationalization——

Mr. Lawson

On a point of order. Everyone agrees that this is a very serious subject, but may I ask you, Mr. Speaker, how it is that we are allowed only three hours to discuss the subject?

Mr. Speaker

That is not a point of order for Mr. Speaker.

Sir J. Eden

In the circumstances as I have described them, it was less than generous of Dr. Finniston, when he was asked if he did not agree that his thinking was somewhat similar to that outlined in the Benson Report, to describe that document as "superficially correct". It was spot on. The tragedy is that the responsibility for making this industry a political football is on the Government.

The right hon. Member for Greenwich boasted that this was the biggest merger of all time. He will know that any merger generates enormous problems. This one is certainly not without them, because of its size and complexity, and the Government have imposed an almost impossible task on the people they have put in to run the industry. Added to this are the additional problems of nationalisation, the result of which has been to bring the Minister and his Department into checking and double-checking virtually everything brought forward by those in whom they have put their confidence and trust to run the industry. This imposes delays and leads to frustration and the sapping of the enterprise of men and management.

This act of renationalisation has retarded the progress of the industry and reduced the service to the public, and it is for that that we censure the Government tonight.

9.46 p.m.

The Joint Parliamentary Secretary to the Ministry of Technology (Mr. Alan Williams)

I have been left with rather little time to wind up the debate. The hon. Member for Bournemouth, West (Sir J. Eden) and I agreed that we would limit our time so as to enable as many back benchers with constituency interests as possible to take part. In view of the shortage of time, I hope hon. Gentlemen will excuse me if I do not cover every single point raised. I will do the best I can in the time to cover the main points.

It is not enough for the Opposition to show that problems exist. Of course problems exist. What industry in this country or abroad, be it private or publicly owned, does not have problems of some sort? What the Opposition must show in relation to the Motion is that the problems would not have existed if the industry had remained in private hands, or that they have been worsened by nationalisation, not just by an unforeseen change in world circumstances but by the act of nationalisation. So far, no one has attempted to address himself to the Motion. There have been many criticisms on the production and supply front, yet no one had denied that, when the British Steel Corporation took over, the industry had inherited inadequate previous investment. It took over in the trough of a cycle. No one has attempted to deny that in the time available the industry could not have hoped to remedy the inadequacies of investment for all the previous years.

Yet, again this background, having taken over in a loss environment, having taken over with inadequate investment, the Corporation found itself faced with an unforeseen and, as I think most people would agree, an unpredictable upsurge in the world demand for steel. This was unforeseen by the previous owners, and unforeseen, I will accept, by the nationalised industry. [Interruption.] The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) is showing the same capacity for irrelevancy as most of his colleagues who have spoken this evening. As world prices rose, previous importers switched to domestic supplies. Not just Britain but many other countries have been faced with tight supply conditions.

We recognise that there has been an unfortunate labour record this year [HON. MEMBERS: "Oh."] It is a record none of us likes. The hon. Member for Yeovil (Mr. Peyton) and others referred to the unfortunate events at Port Talbot and described it as an indictment of nationalisation that we should have lost so much time and output there. They both forget the fact that although during the summer at that particular works there was an unfortunate loss of 220,000 working days, in 1963 when the works were in private hands the loss was not 220,000, but 310,000 working days. Indeed, only the abnormalities of the labour situation, plus the unfortunate minor technical difficulties, have frustrated the highest output ever. We shall still come very near to the highest output ever during this year.

Despite this fact, the Steel Corporation and indeed the private sector showed their concern for the domestic consumer. While crude steel output rose by only half a million tons during this year, home delivery rose by 750,000 tons and the B.S.C. increased its home deliveries by over 2 million tons during this year as compared with the previous year. It did so by itself assuming a considerable sense of priority in the national advantage. Faced by potential domestic shortages, the Steel Corporation diverted its own potential exports from the premium high-earning market to the higher-valued manufacturing exporters of this country. It diverted them to those areas which were in the short-term yield of higher return to the economy through exports.

It went further, and this again is a remarkable demonstration of concern for the national interest. Where there were inadequate semi-finished products it finished them itself and so reduced the gross value of imports which otherwise would have been brought into the country. In both these ways, despite the fact that it was injurious to its own financial position, it showed great regard for the national interest and the national import/export position. This year the net balance of trade surplus on steel was £125 million.

Some hon. Gentlemen opposite including the hon. Member for New Forest (Mr. Patrick McNair-Wilson) and the hon. Member for Belfast, South (Mr. Pounder) referred to reinforcing steel. This is an area in which the political prejudice of hon. Gentlemen opposite is shown at its clearest. In fact, although British demand for reinforcing steel has hardly increased over the last three years, there has not been much of a fall. Imports this year fell by 32 per cent. This meant that the people who previously had been buying that steel abroad switched to the domestic suppliers.

Faced with this situation, the B.S.C. increased its production during the year by between 45 and 50 per cent. That was a remarkable increase. Hon. Gentlemen opposite do not want to give credit for it. But the Cement and Concrete Association, which is directly interested, gave credit for it. A report prepared for the association by Economic Consultants Limited looked at the problem of supplies of reinforcing steels and in paragraph 44 said that the B.S.C. had increased its production of steel for reinforcement by 45 per cent. in the past year, which was a considerable achievement. But the B.S.C. gets no credit from the party opposite.

I am at a loss to understand how the consumers can criticise the actions of the Steel Corporation in this respect if they wish, as apparently they do, to remain contractually fancy-free. If they wish to show a preference for the foreign product, then they cannot complain if, when they unpredictably undertake financial flirtations with the British steel industry, their hoped-for favours are not reciprocated. The main responsibility of the industry must be to its long-term customers.

There has been criticism by the right hon. Member for Leeds, North-East that deliveries have lengthened. Of course they have. In a situation of world shortage we would not have expected anything else. They have not lengthened just in this country, but also abroad. In December in the export market there was normally on reinforcement steel a delivery date of two, and more generally three, months and that at a price of 50 per cent. above the United Kingdom price levels. So far, despite the shortages of which hon. Members opposite have spoken, we have found no evidence of delays on major construction work.

The right hon. Gentleman asked specifically about rationalisation measures which have been introduced since the Corporation took over. He implied that there has been no progress in this sphere of labour productivity. In fact in the year 1968–69 the B.S.C. gave notices of closure or rationalisation to 30 different works affecting about 12,000 jobs. By 1975 the Corporation expects to reduce manpower by a net 28,000 jobs. In addition, productivity deals should save another 20,000, which would give a total of 50,000 jobs saved.

Some of my hon. Friends may say, is this contraction in manpower desirable? If the industry is to be competitive and to match the overseas competition which it meets in times of world surplus capacity, which is what the industry normally faces, it has to put itself on a viable basis. The Corporation is also stepping up its positive rôle of new investment. The right hon. Gentleman criticised the level of investment since the Corporation took over. I shall give a few examples of its record. This current year the Corporation's investment programme is for £105 million. For the five-year programme 1969–74, it will be up to £900 million. This annual rate of well over £150 million compares with £94 million a year in the five years preceding nationalisation.

Sir K. Joseph

It was double that in the five last Tory years.

Mr. Williams

The right hon. Gentleman should look at the record. This is an unprecedented level of investment. This Motion could have been tabled only by hon. Members with no understanding of the national or international problems of the industry. It could have been tabled only by a party which at Selsdon Park chose to fight the General Election on increasing food prices and increasing house rents, a party which does not understand the industry. The Motion deserves to be heavily defeated.

Question put, That this House deplores the consequences of the nationalisation of steel by Her Majesty's Government, which has retarded the progress of the industry and reduced the service to the public.

The House divided: Ayes 238, Noes 301.

Division No. 65.]	AYES	[10.0 p.m.
Alison, Michael (Barkston Ash)	Glover, Sir Douglas	Montgomery, Fergus
Allason, James (Hemel Hempstead)	Goodhart, Philip	Morgan, Geraint (Denbigh)
Amery, Rt. Hn. Julian	Goodhew, Victor	Morgan-Giles, Rear-Adm.
Archer, Jeffrey (Louth)	Gower, Raymond	Morrison, Charles (Devizes)
Astor, John	Grant, Anthony	Mott-Radclyffe, Sir Charles
Atkins, Humphrey (M't'n & M'd'n)	Grant-Ferris, Sir Robert	Munro-Lucas-Tooth, Sir Hugh
Awdry, Daniel	Grieve, Percy	Murton, Oscar
Baker, Kenneth (Acton)	Griffiths, Eldon (Bury St. Edmunds)	Nabarro, Sir Gerald
Baker, W. H. K. (Banff)	Gurden, Harold	Nicholls, Sir Harmar
Balniel, Lord	Hall, John (Wycombe)	Noble, Rt. Hn. Michael
Barber, Rt. Hn. Anthony	Hall-Davis, A. G. F.	Onslow, Cranley
Bennett, Sir Frederic (Torquay)	Hamilton, Lord (Fermanagh)	Orr, Capt. L. P. S.
Bennett, Dr. Reginald (Gos. & Fhm)	Hamilton, Michael (Salisbury)	Osborn, John (Hallam)
Berry, Hn. Anthony	Harris, Frederic (Croydon, N.W.)	Page, Graham (Crosby)
Biffen, John	Harris, Reader (Heston)	Page, John (Harrow, W.)
Biggs-Davison, John	Harrison, Brian (Maldon)	Pearson, Sir Frank (Clitheroe)
Birch, Rt. Hn. Nigel	Harrison, Col. Sir Harwood (Eye)	Peel, John
Black, Sir Cyril	Harvey, Sir Arthur Vere	Percival, Ian
Blaker, Peter	Hastings, Stephen	Peyton, John
Boardman, Tom (Leicester, S.W.)	Hawkins, Paul	Pike, Miss Mervyn
Body, Richard	Hay, John	Pink, R. Bonner
Bossom, Sir Clive	Heald, Rt. Hon. Sir Lionel	Pounder, Rafton
Boyd-Carpenter, Rt. Hn. John	Heath, Rt. Hn. Edward	Powell, Rt. Hn. J. Enoch
Boyle, Rt. Hn. Sir Edward	Heseltine, Michael	Price, David (Eastleigh)
Braine, Bernard	Higgins, Terence L.	Prior, J. M. L.
Brewis, John	Hiley, Joseph	Pym, Francis
Brinton, Sir Tatton	Hill, J. E. B.	Ouennell, Miss J. M.
Bromley-Davenport,Lt.-Col.Sir Walter	Hogg, Rt. Hn. Quintin	Ramsden, Rt. Hn. James
Brown, Sir Edward (Bath)	Holland, Philip	Rawlinson, Rt. Hn, Sir Peter
Bruce-Gardyne, J.	Hooson, Emlyn	Rees-Davies, W. R.
Bryan, Paul	Hordern, Peter	Renton, Rt. Hn. Sir David
Buchanan-Smith, Alick(Angus,N&M)	Hornby, Richard	Rhys Williams, Sir Brandon
Buck, Antony (Colchester)	Hunt, John	Ridley, Hn. Nicholas
Bullus, Sir Eric	Hutchison, Michael Clark	Ridsdale, Julian
Burden, F. A.	Iremonger, T. L.	Robson Brown, Sir William
Campbell, B. (Oldham, W.)	Irvine, Bryant Godman (Rye)	Rodgers, Sir John (Sevenoaks)
Campbell, Gordon (Moray & Nairn)	Jennings, J. C. (Burton)	Rossi, Hugh (Hornsey)
Carlisle, Mark	Jones, Arthur (Northants, S.)	Royle, Anthony
Carr, Rt. Hn. Robert	Jopling, Michael	Russell, Sir Ronald
		St. John-Stevas, Norman
Cary, Sir Robert	Joseph, Rt. Hn. Sir Keith	Sandys, Rt. Hn. D.
Chataway, Christopher	Kaberry, Sir Donald	Scott, Nicholas
Chichester-Clark, R.	Kerby, Capt. Henry	Scott-Hopkins, James
Clark, Henry	Kershaw, Anthony	Sharples, Richard
Clegg, Walter	Kirk, Peter	Shaw, Michael (Sc'b'gh & Whitby)
Cooke, Robert	Kitson, Timothy	Silvester, Frederick
Cooper-Key, Sir Neill	Knight, Mrs. Jill	Sinclair, Sir George
Corfield, F. V.	Lancaster, Col. C. G.	Smith, Dudley (W'wick & L'mington)
Costain, A. p.	Lane, David	Smith, John (London & W'minster)
Craddock, Sir Beresford (Spelthorne)	Langford-Holt, Sir John	Speed, Keith
Crouch, David	Lawler, Wallace	Steel, David (Roxburgh)
Crowder, F. P.	Legge-Bourke, Sir Harry	Stodart, Anthony
Cunningham, Sir Knox	Lewis, Kenneth (Rutland)	Stoddart-Scott, Col. Sir M.
Currie, G. B. H.	Lloyd, Rt. Hn. Geoffrey(Sut'nC'dfield)	Summers, Sir Spencer
Dalkeith, Earl of	Lloyd, Ian (P'tsm'th, Langstone)	Tapsell, Peter
Dance, James	Lloyd, Rt. Hn. Selwyn (Wirral)	Taylor, Sir Charles (Eastbourne)
Dean, Paul	Longden, Gilbert	Taylor, Frank (Moss Side)
Deedes, Rt. Hn. W. F. (Ashford)	Lubbock, Eric	Temple, John M.
Digby, Simon Wingfield	McAdden, Sir Stephen	Thorpe, Rt. Hn. Jeremy
Dodds-Parker, Douglas	MacArthur, Ian	Tilney, John
Doughty, Charles	Maclean, Sir Fitzroy	Turton, Rt. Hn. R. H.
Drayson, G. B.	McMaster, Stanley	van Straubenzee, W. R.
du Cann, Rt. Hn. Edward	Macmillan, Maurice (Farnham)	Vaughan-Morgan, Rt. Hn. Sir John
Eden, Sir John	McNair-Wilson, Michael	Vickers, Dame Joan
Elliot, Capt. Walter (Carshalton)	McNair-Wilson, Patrick (New Forest)	Waddington, David
Emery, Peter	Maddan, Martin	Wainwright, Edwin (Dearne Valley)
Errington, Sir Eric	Maginnis, John E.	Walker-Smith, Rt. Hn. Sir Derek
Eyre, Reginald	Marples, Rt. Hn. Ernest	Wall, Patrick
Farr, John	Marten, Neil	Walters, Dennis
Fisher, Nigel	Maude, Angus	Ward, Christopher (Swindon)
Fletcher-Cooke, Charles	Maudling, Rt. Hn. Reginald	Ward, Dame Irene
Forteseue, Tim	Mawby, Ray	Weatherill, Bernard
Foster, Sir John	Maxwell Hyslop, R. J.	Wells, John (Maidstone)
Fraser,Rt.Hn.Hugh(St'fford & Stone)	Mills, Peter (Torrington)	Whitelaw, Rt. Hn. William
Fry, Peter	Mills, Stratton (Belfast, N.)	Wiggin, A. w.
Galbraith, Hn. T. G.	Miscampbell, Norman	Williams, Donald (Dudley)
Gibson-Watt, David	Mitchell, David (Basingstoke)	Wilson, Ceoffrey (Truro)
Gilmour, Sir John (Fife, E.)	Monro, Hector	Winstanley, Dr. M. P.
Wolrige-Gordon, Patrick	Worsley, Marcus	TELLERS FOR THE AYES:
Wood, Rt. Hn. Richard	Wright, Esmond	Mr. R. W. Elliott and
Woodnutt, Mark	Wylie, N. R.	Mr. Jasper More.
NOES
Abse, Leo	Edwards, Robert (Bilston)	Latham, Arthur
Albu, Austen	Edwards, William (Merioneth)	Lawson, George
Alldritt, Walter	Ellis, John	Leadbitter, Ted
Allen, Scholefield	English, Michael	Lee, Rt. Hn. Frederick (Newton)
Archer, Peter (R'wley Regis & Tipt'n)	Ennals, David	Lee, Rt. Hn. Jennie (Cannock)
Armstrong, Ernest	Evans, Fred (Caerphilly)	Lee, John (Reading)
Ashley, Jack	Evans, loan L. (Birm'h'm, Yardley)	Lestor, Miss Joan
Ashton, Joe (Bassetlaw)	Faulds, Andrew	Lever, Rt. Hn. Harold (Cheetham)
Atkins, Ronald (Preston, N.)	Fernyhough, E.	Lewis, Arthur (W. Ham, N.)
Atkinson, Norman (Tottenham)	Finch, Harold	Lewis, Ron (Carlisle)
Bacon, Rt. Hn. Alice	Fitch, Alan (Wigan)	Lipton, Marcus
Bagier, Gordon A. T.	Fletcher,Rt.Hn.Sir Eric(Islington, E.)	Lomas, Kenneth
Barnes, Michael	Fletcher, Raymond (Ilkeston)	Loughlin, Charles
Barnett, Joel	Fletcher, Ted (Darlington)	Luard, Evan
Baxter, William	Foley, Maurice	Lyon, Alexander W. (York)
Beaney, Alan	Foot, Rt. Hn. Sir Dingle (Ipswich)	Mabon, Dr. J. Dickson
Bence, Cyril	Foot, Michael (Ebbw Vale)	McBride, Neil
Benn, Rt. Hn. Anthony Wedgwood	Ford, Ben	McCann, John
Bennett, James (G'gow, Bridgeton)	Forrester, John	MacColl, James
Bidwell, Sydney	Fraser, John (Norwood)	MacDermot, Niall
Binns, John	Freeson, Reginald	Macdonald, A. H.
Bishop, E. S.	Galpern, Sir Myer	McElhone, Frank
Blackburn, F.	Gardner, Tony	McGuire, Michael
Blenkinsop, Arthur	Garrett, W. E.	McKay, Mrs. Margaret
Boardman, H. (Leigh)	Ginsburg, David	Mackie, John
Booth, Albert	Golding, John	Mackintosh, John P.
Boston, Terence	Cordon Walker, Rt. Hn. P. C.	MacMilian, Malcolm (Western Isles)
Bottomley, Rt. Hn. Arthur	Gray, Dr. Hugh (Yarmouth)	McMillan, Tom (Glasgow, C.)
Boyden, James	Greenwood, Rt. Hn. Anthony	McNamara, J. Kevin
Bradley, Tom	Gregory, Arnold	MacPherson, Malcolm
Bray, Dr. Jeremy	Grey, Charles (Durham)	Mahon, Peter (Preston, S.)
Brooks, Edwin	Griffiths, Eddie (Brightside)	Mahon, Simon (Bootle)
Broughton, Sir Alfred	Griffiths, Will (Exchange)	Mallalieu, E. L. (Brigg)
Brown, Rt. Hn. George (Belper)	Gunter, Rt. Hn. R. J.	Mallalieu,J.P.W.(Huddersfield,E.)
Brown, Hugh D. (G'gow, Provan)	Hamilton, James (Bothwell)	Manuel, Archie
Brown, Bob(N'c'tle-upon-Tyne,W.)	Hamilton, William (Fife, W.)	Mapp, Charles
Brown, R. W. (Shoreditch & F'bury)	Hamling, William	Mark, Kenneth
Buchan, Norman	Hannan, William	Marquand, David
Buchanan, Richard (G'gow, Sp'burn)	Harper, Joseph	Marsh, Rt. Hn Richard
Butler, Herbert (Hackney, C.)	Harrison, Walter (Wakefield)	Mason, Rt. Hn. Roy
Butler, Mrs. Joyce (Wood Green)	Hart, Rt. Hn. Judith	Maxwell, Robert
Callaghan, Rt. Hn. James	Haseldine, Norman	Mayhew, Christopher
Cant, R. B.	Hattersley, Roy	Mellish, Rt. Hn. Robert
Carmichael, Neil	Hazell, Bert	Mendelson, John
Carter-Jones, Lewis	Healey, Rt. Hn, Denis	Mikardo, Ian
Castle, Rt. Hn. Barbara	Heffer, Eric S.	Millan, Bruce
Chapman, Donald	Henig, Stanley	Miller, Dr. M. S.
Coe, Denis	Herbison, Rt. Hn. Margaret	Milne, Edward (Blyth)
Coleman, Donald	Hilton, W. S.	Mitchell, R. C. (S'th'pton, Test)
Concannon, J. D.	Hooley, Frank	Morgan, Elystan (Cardiganshire)
Conlan, Bernard	Horner, John	Morris, Alfred (Wythenshawe)
Corbet, Mrs. Freda	Houghton, Rt. Hn. Douglas	Morris, Charles R. (Openshaw)
Crawshaw, Richard	Howell, Denis (Small Heath)	Morris, John (Aberavon)
Cronin, John	Howie, W.	Moyle, Roland
Crosland, Rt. Hn. Anthony	Hoy, Rt. Hn. James	Mulley, Rt. Hn. Frederick
Crossman, Rt. Hn. Richard	Huckfield, Leslie	Murray, Albert
Darling, Rt. Hn. George	Hughes, Roy (Newport)	Neal, Harold
Davidson, Arthur (Accrington)	Hunter, Adam	Newens, Stan
Davies, E. Hudson (Conway)	Hynd, John	Norwood, Christopher
Davies, G. Elfed (Rhondda, E.)	Irvine, Rt. Hn. Sir Arthur	Oakes, Gordon
Davies, Dr. Ernest (Stretford)	Jackson, Colin (B'h'se & Spenb'gh)	Ogden, Eric
Davies, Rt. Hn. Harold (Leek)	Jackson, Peter M. (High Peak)	O'Halloran, Michael
Davies, Ifor (Cower)	Janner, Sir Barnett	C'Malley, Brian
Davies, S. O. (Merthyr)	Jay, Rt. Hn. Douglas	Oram, Bert
He Freitas, Rt. Hn. Sir Geoffrey	Jeger, George (Goole)	Orbach, Maurice
Delargy, Hugh	Jeger, Mrs. Lena (H'b'n&St.P'cras,S.)	Oswald, Thomas
Dell, Rt. Hn. Edmund	Jenkins, Hugh (Putney)	Padley, Walter
Dempsey, James	Johnson, Carol (Lewisham, S.)	Page, Derek (King's Lynn)
Dewar, Donald	Johnson, James (K'ston-on-Hull, W.)	Owen, Dr. David (Plymouth, S'tn)
Diamond, Rt. Hn. John	Jones, Dan (Burnley)	Paget, R. T.
Dickens, James	Jones, Rt. Hn. Sir Elwyn(W.Ham,S.)	Panned, Rt. Hn. Charles
Doig, Peter	Jones, J. Idwal (Wrexham)	Park, Trevor
Driberg, Tom	Jones, T. Alec (Rhondda, West)	Parker, John (Dagenham)
Dunn, James A.	Kelley, Richard	Parkyn, Brian (Bedford)
Dunnett, Jack	Kenyon, Clifford	Pearson, Arthur (Pontypridd)
Dunwoody, Mrs. Gwyneth (Exeter)	Kerr, Mrs. Anne (R'ter & Chatham)	Peart, Rt. Hn. Fred
Dunwoody, Dr. John (F'th & C'b'e)	Kerr, Russell (Feltham)	Pentland, Norman

Perry, George H. (Nottingham, S.)	Short, Rt. Hn. Edward(N'c'tle-u-Tyne)	Watkins, David (Consett)
Prentice, Rt. Hn. Reg	Short, Mrs. Renée(W'hampton,N.E.)	Weitzman, David
Price, Christopher (Perry Barr)	Silkin, Rt. Hn. John (Deptford)	Wellbeloved, James
Price, Thomas (Westhoughton)	Silkin, Hn. S. C. (Dulwich)	Wells, William (Walsall, N.)
Price, William (Rugby)	Silverman, Julius	Whitaker, Ben
Probert, Arthur	Skeffington, Arthur	White, Mrs. Eirene
Rankin, John	Slater, Joseph	Whitlock, William
Rees, Merlyn	Small, William	Wilkins, W. A.
Rhodes, Geoffrey	Snow, Julian	Willey, Rt. Hn. Frederick
Richard, Ivor	Spriggs Leslie	Williams, Alan (Swansea, W.)
Roberts, Albert (Normanton)	Steele, Thomas (Dunbartonshire,W.)	Williams, Alan Lee (Hornchurch)
Roberts, Rt. Hn. Goronwy	Stewart, Rt. Hn. Michael	Williams, Clifford (Abertillery)
Roberts, Gwilym (Bedfordshire, S.)	Stonehouse, Rt. Hn. John	Williams, W. T. (Warrington)
Robertson, John (Paisley)	Strauss, Rt. Hn. G. R.	Willis, Rt. Hn. George
Robinson, Rt.Hn.Kenneth(St.P'c'as)	Summerskill, Hn. Dr. Shirley	Wilson, Rt. Hn. Harold (Huyton)
Rodgers, William (Stockton)	Taverne, Dick	Wilson, William (Coventry, S.)
Roebuck, Roy	Thomas, Rt. Hn. George	Winnick, David
Rogers, George (Kensington, N.)	Thomson, Rt. Hn. George	Woodburn, Rt. Hn. A.
Ross, Rt. Hn, William	Thornton, Ernest	Woof, Robert
Rowlands, E.	Tomney, Frank	Wyatt, Woodrow
Ryan, John	Tuck, Raphael
Shaw, Arnold (Ilford, S.)	Urwin, T. W.	TELLERS FOR THE NOES:
Sheldon, Robert	Wainwright, Edwin (Dearne Valley)	Mr. Ernest G. Perry and
Shinwell, Rt. Hn. E.	Walker, Harold (Doncaster)	Mr. R. F. H. Dobson.
Shore, Rt. Hn. Peter (Stepney)	Wallace, George