§ 4.8 p.m.
§ Mr. Ian Gow (Eastbourne)
I beg to move,That leave be given to bring in a Bill to restore the steel industry to ownership by the people.The iron and steel industries were first nationalised in 1949, denationalised in 1953 and renationalised in 1967. During the Second Reading of the Iron and Steel Bill in 1966 my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said this:we are told that it would be unpatriotic to undertake to repeal the Measure. We take the opposite view. In view of the disaster that this Bill will bring to the steel industry, it would be unpatriotic if we were not to undertake to repeal it. Nationalisation will be a disaster for the efficient management of this industry."—[Official Report, 25th July 1966; Vol. 732, c. 1340.]My right hon. Friend's prediction has come true. The experience of the past 10 years has shown that nationalisation has done nothing to solve the problems of the steel industry and that the case for transferring ownership of the industry from the State to the people is stronger than ever.
Yet, despite my right hon. Friend's brave words during that Second Reading debate, the commitment to denationalise the steel industry found no place in the Tory manifestos of June 1970 or of February and October 1974. The ratchet had operated once again in favour of the Socialist State and the Conservative Party had come to accept what previously had been unacceptable. The purpose of my Bill is to challenge that ratchet effect of Socialism.
Employment in the BSC has fallen from 252,000 in 1970 to 210,000 today. In the same period, liquid steel production fell from 26 million tons to 17 million tons while steel deliveries at home and abroad fell from 19.7 million tons to 12.7 million tons. Last year the Corporation made a record loss of £246 million and this year it forecasts a loss of £70 million, all of which will have to be borne by the taxpayer.
The Corporation is subject to ministerial control. The Secretary of State may give general or specific directions to the Corporation, which is not allowed to 340 make substantial changes in its organisation without the Minister's consent. The Minister determines what rate of return on net assets is considered reasonable, and only the Minister may appoint members of the Corporation and fix their remuneration. This gives to politicians power and patronage which they ought not to have and which has been used all too often not to further the true interests of the industry but to achieve the political purposes of the Government of the day.
Nor are the powers of the Minister to give directions to the Corporation simply reserve powers to be used sparingly and in exceptional circumstances. Sir Monty Finniston was prevented by a directive from the present Secretary of State for Energy from carrying out the fundamental reconstruction of the industry which he considered to be essential. In his memorandum to the Select Committee on Nationalised Industries on 7th April last year, Sir Monty confirmed that productivity per man in the privately-owned Japanese industry was nearly three times higher than in the State-owned BSC and that productivity in the privately-owned United States industry was more than twice that of the nationalised BSC.
In the EEC, Italy alone—hardly an example of a country whose industrial policies should be followed—has a major publicly-owned steel industry. For all the rest, competitive free enterprise has produced better results.
I believe that there is a direct connection between the relatively poor performance of our steel industry and the fact that it is a giant State-owned monopoly, while in other countries, which have far outstripped our performance, discipline and competition and the absence of political interference have been the twin guarantors of success.
The need to depoliticise decision-making in manufacturing industry is being increasingly widely accepted, but we shall never be able to stop political interference until we get rid of political ownership. In the last 30 years, vast areas of this country's industrial and economic life have passed into the hands of the State.
The mix in the mixed economy, to which even the Leader of the House pays grudging tribute, has moved in one direction only—in favour of the State sector. 341 This transfer of ownership and control from the many to the few has led to the creation of State-owned monopolies and has far-reaching consequences not only for economic and industrial success but for the free society.
If we are to halt and then to reverse this dangerous extension of the State's rôle, the Tory Party must plot the path. In so doing, we have gained unexpected allies from the Labour Party and even from some hon. Members below the Gangway. Last month the Chancellor of the Exchequer announced to a hushed and tense House that, in order to reduce the public sector borrowing requirement next year, the Government proposed to sell 2 per cent. of their holding in BP.
§ Mr. Gow
What is good enough for BP is good enough for the steel industry.
The second quarter from which the Bill receives unexpected support is the manifestos of the Labour Party at the last two General Elections, which called forA fundamental and irreversible shift in the balance of power and wealth in favour of working people".Just so. The Bill has precisely that objective—to transfer power and wealth from the few to the many. Such a transfer of ownership is an essential precondition for a more efficient, responsive, competitive and depoliticised industry. It would mark a crucial milestone along the journey which must be made from a collectivist State to a free society.
For the past decade or more, we have come to assume that our industrial performance should be increasingly determined by the Government—by a small group of politically-motivated men and women sitting in Whitehall. That experiment has failed. Our industrial performance will be greatly improved if decisions are taken by the people and not by Socialists or any other Ministers in Whitehall.
The Bill seeks to provide an opportunity to restore power to the people, and I commend it to the House.
§ 4.17 p.m.
§ Mr. David Watkins (Consett) rose—342
§ Mr. Watkins
Yes, Mr. Speaker. I rise to oppose the application for leave to introduce the Bill.
The hon. Member for Eastbourne (Mr. Gow) is a compulsive denationaliser who has injected a distinct air of déjà vu into our proceedings. We have all been here before; we have all heard similar phraseology and the same theme over and again on a number of occasions when the hon. Gentleman has sought leave to introduce a Bill to denationalise various industries and, in reality, to hand over public industries to private interests. If for no other reason, the House should reject the hon. Gentleman's application on the grounds of sheer boredom and tedious repetition. However, there are a number of other important reasons which I shall touch on as briefly as possible.
The hon. Gentleman talked about competitive free enterprise, and it is interesting to look at the record of the industry when it was run by allegedly competitive free enterprise. Long before the steel industry was nationalised, there was no enterprise or competition in it. There has been no competition in steel since the 1930s when the private owners carved up the market specifically in order to eliminate competition and, at the same time, brought about a stagnation of investment.
The oxygen process of converting iron to steel is an object lesson of the failures of private ownership. The process was invented in this country but was rejected by the steel masters and developed abroad. This is demonstrated in the name used for converters—LD, Linz after the town in Austria in which this British invention was processed and developed and Donowitz after the man who developed it. It is such investment failures that are responsible for the present-day problems in the industry.
The House need not take my word for it. Let me quote from a White Paper. It said:Investment in the British steel industry during the mid-1960s was low compared with that of its international competitors, and the companies from which the Corporation was formed in 1967 were, in general, financially weak. Nationalisation brought the BSC a large number of works with obsolete technology and 343 low productivity.… Since then the rate of investment has approximately doubled.That is from paragraph 16 of the White Paper, Cmnd. 5226, produced in February 1973 by the last Tory Government.
The hon. Member for Eastbourne talked of restoring the industry to ownership by the people. If he had proposed to introduce a Bill to convert the industry to common ownership, in accordance with the principles of that important piece of legislation the Industrial Common Ownership Act 1976, I should not have opposed him. Indeed, I would willingly have been a co-sponsor. But what the hon. Gentleman proposes is exactly the opposite—to hand over a vitally important part of the British economy to private interests which, on their past and current records, would no doubt then feel free to strip the assets so as to line their pockets at the expense of the nation.
I gather that one of the hon. Gentleman's complaints is against his own party. No one in the industry wants it to be denationalised; nor does his party, if it is to be judged on its deeds rather than its words, as he himself said. Even when the Tory Government denationalised it for
§ doctrinaire reasons in 1953, they retained a strong measure of State control. They did not denationalise it in 970 when they were re-elected, when they could reasonably have claimed to have a mandate to do so and when they had a majority in this House—and inevitably a majority in the House of Lords—to do so. Nor was there any commitment in the Tory manifestos in the two General Elections in 1974 to denationalise the industry.
§ No one who knows anything about steel—producers or customers—wants denationalisation. The only ones who want it are those who bring nineteenth-century thinking to bear on the discredited theories of eighteenth-century economists. There is no case for denationalisation, and none has been made out today. It would be wholly contrary to the national interest, and I hope that the House will reject this preposterous proposal.
§ Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at the commencement of Public Business):—
§ The House divided: Ayes 170, Noes 245.347
|Division No. 37.]||AYES||[4.23 p.m.|
|Arnold, Tom||Edwards, Nicholas (Pembroke)||Knight, Mrs Jill|
|Atkins, Rt Hon H. (Spelthorne)||Elliott, Sir William||Knox, David|
|Baker, Kenneth||Eyre, Reginald||Lamont, Norman|
|Banks, Robert||Fairbairn, Nicholas||Latham, Michael (Melton)|
|Bell, Ronald||Fairgrieve, Russell||Lawrence, Ivan|
|Benyon, W.||Fletcher, Alex (Edinburgh N)||Lawson, Nigel|
|Berry, Hon Anthony||Fletcher-Cooke, Charles||Le Marchant, Spencer|
|Biggs-Davison, John||Fookes, Miss Janet||Lester, Jim (Beeston)|
|Blaker, Peter||Forman, Nigel||Lewis, Kenneth (Rutland)|
|Body, Richard||Fry, Peter||Lloyd, Ian|
|Boscawen, Hon Robert||Galbraith, Hon T. G. D.||Loveridge, John|
|Boyson, Dr Rhodes (Brent)||Gardiner, George (Reigate)||Luce, Richard|
|Bradford, Rev Robert||Gilmour, Rt Hon Ian (Chesham)||Macfarlane, Neil|
|Braine, Sir Bernard||Gilmour, Sir John (East Fife)||Macmillan, Rt Hon M. (Farnham)|
|Brittan, Leon||Goodhart, Philip||Marten, Neil|
|Brocklebank-Fowler, C.||Goodhew, Victor||Mates, Michael|
|Brotherton, Michael||Gower, Sir Raymond (Barry)||Mather, Carol|
|Brown, Sir Edward (Bath)||Grieve, Percy||Maxwell-Hyslop, Robin|
|Bryan, Sir Paul||Griffiths, Eldon||Mayhew, Patrick|
|Buck, Antony||Grist, Ian||Meyer, Sir Anthony|
|Budgen, Nick||Hall, Sir John||Miller, Hal (Bromsgrove)|
|Burden, F. A.||Hamilton, Michael (Salisbury)||Mills, Peter|
|Butler, Adam (Bosworth)||Harrison, Col Sir Harwood (Eye)||Miscampbell, Norman|
|Carson, John||Harvie Anderson, Rt Hon Miss||Mitchell, David (Basingstoke)|
|Chalker, Mrs Lynda||Hawkins, Paul||Moate, Roger|
|Channon, Paul||Hayhoe, Barney||Molyneaux, James|
|Clark, William (Croydon S)||Higgins, Terence L.||Monro, Hector|
|Clarke, Kenneth (Rushcliffe)||Holland, Philip||Montgomery, Fergus|
|Clegg, Walter||Hordern, Peter||Moore, John (Croydon C)|
|Cooke, Robert (Bristol W)||Howe, Rt Hon Sir Geoffrey||More, Jasper (Ludlow)|
|Cope, John||Howell, Ralph (North Norfolk)||Morgan-Giles, Rear-Admiral|
|Cormack, Patrick||Hutchison, Michael Clark||Morrison, Hon Peter (Chester)|
|Corrie, John||James, David||Mudd, David|
|Costain, A. P.||Jopling, Michael||Neave, Alrey|
|Craig, Rt Hon W. (Belfast E)||Joseph, Rt Hon Sir Keith||Neubert, Michael|
|Crouch, David||Kaberry, Sir Donald||Normanton, Tom|
|Douglas-Hamilton, Lord James||Kimball, Marcus||Nott, John|
|du Cann, Rt Hon Edward||Kitson, Sir Timothy||Osborn, John|
|Page, John (Harrow West)||Ross, William (Londonderry)||Thomas, Rt Hon P. (Hendon S)|
|Page, Rt Hon R. Graham (Crosby)||Rossi, Hugh (Hornsey)||Trotter, Neville|
|Page, Richard (Workington)||Rost, Peter (SE Derbyshire)||Vaughan, Dr Gerard|
|Paisley, Rev Ian||St. John Stevas, Norman||Wakeham, John|
|Parkinson, Cecil||Scott-Hopkins, James||Walder, David (Clitheroe)|
|Pattie, Geoffrey||Shaw, Giles (Pudsey)||Walker, Rt Hon P. (Worcester)|
|Peyton, Rt Hon John||Shelton, William (Streatham)||Walker-Smith, Rt Hon Sir Derek|
|Pink, R. Bonner||Shepherd, Colin||Wall, Patrick|
|Powell, Rt Hon J. Enoch||Shersby, Michael||Walters, Dennis|
|Prior, Rt Hon James||Sims, Roger||Warren, Kenneth|
|Pym, Rt Hon Francis||Sinclair, Sir George||Weatherill, Bernard.|
|Raison, Timothy||Skeet, T. H. H.||Wells, John|
|Rees-Davies, W. R.||Spence, John||Whitelaw, Rt Hon William|
|Renton, Rt Hon Sir D. (Hunts)||Sproat, Iain||Winterton, Nicholas|
|Rhodes James, R.||Steen, Anthony (Wavertree)||Young, Sir G. (Ealing, Acton)|
|Rhys Williams, Sir Brandon||Stewart, Ian (Hitchin)||Younger, Hon George|
|Ridsdale, Julian||Stradling Thomas, J.|
|Rifkind, Malcolm||Taylor, Teddy (Cathcart)||TELLERS FOR THE AYES:|
|Roberts, Wyn (Conway)||Tebbit, Norman||Mr. Ian Gow and|
|Rodgers, Sir John (Sevenoaks)||Thatcher, Rt Hon Margaret||Mr. Nicholas Ridley.|
|Abse, Leo||Doig, Peter||Lamborn, Harry|
|Allaun, Frank||Dormand, J. D.||Lamond, James|
|Archer, Peter||Eadie, Alex||Latham, Arthur (Paddington)|
|Armstrong, Ernest||Edge, Geoff||Lee, John|
|Ashton, Joe||Edwards, Robert (Wolv SE)||Lestor, Miss Joan (Eton & Slough)|
|Atkins, Ronald (Preston N)||Ellis, John (Brigg & Scun)||Lewis, Ron (Carlisle)|
|Atkinson, Norman||Eilis, Tom (Wrexham)||Lipton, Marcus|
|Bagier, Gordon A. T.||English, Michael||Litterick, Tom|
|Barnett, Guy (Greenwich)||Ennals, David||Luard, Evan|
|Barnett, Rt Hon Joel (Heywood)||Evans, Fred (Caerphilly)||McCartney, Hugh|
|Bates, Alf||Evans, Ioan (Aberdare)||MacCormick, Iain|
|Beith, A. J.||Ewing, Harry (Stirling)||McDonald, Dr Oonagh|
|Bidwell, Sydney||Faulds, Andrew||McElhone, Frank|
|Bishop, E. S.||Fernyhough, Rt Hon E.||MacFarquhar, Roderick|
|Boardman, H.||Fitch, Alan (Wigan)||McGuire, Michael (Ince)|
|Booth, Rt Hon Albert||Fitt, Gerard (Belfast W)||MacKenzie, Gregor|
|Bottomley, Rt Hon Arthur||Flannery, Martin||Maclennan, Robert|
|Boyden, James (Bish Auck)||Fletcher, Ted (Darlington)||McMillan, Tom (Glasgow C)|
|Bray, Dr Jeremy||Foot, Rt Hon Michael||McNamara, Kevin|
|Brown, Hugh D. (Provan)||Forrester, John||Madden, Max|
|Brown, Robert C. (Newcastle W)||Fraser, John (Lambeth, N'w'd)||Magee, Bryan|
|Buchan, Norman||Freud, Clement||Mahon, Simon|
|Buchanan, Richard||Garrett, John (Norwich S)||Marks, Kenneth|
|Butler, Mrs Joyce (Wood Green)||Garrett, W. E. (Wallsend)||Marshall, Dr Edmund (Goole)|
|Callaghan, Rt Hon J. (Cardiff SE)||Gilbert, Dr John||Mason, Rt Hon Roy|
|Callaghan, Jim (Middleton & P)||Ginsburg, David||Maynard, Miss Joan|
|Campbell, Ian||Golding, John||Meacher, Michael|
|Canavan, Dennis||Graham, Ted||Mellish, Rt Hon Robert|
|Cant, R. B.||Grant, George (Morpeth)||Mendelson, John|
|Carmichael, Neil||Grant, John (Islington C)||Mikardo, Ian|
|Carter, Ray||Grocott, Bruce||Millan, Rt Hon Bruce|
|Carter-Jones, Lewis||Hamilton, James (Bothwell)||Miller, Dr M. S. (E Kilbride)|
|Cartwright, John||Hamilton, W. W. (Central Fife)||Miller, Mrs Millie (Ilford N)|
|Castle, Rt Hon Barbara||Hardy, Peter||Morris, Alfred (Wythenshawe)|
|Clemitson, Ivor||Harper, Joseph||Morris, Charles R. (Openshaw)|
|Cocks, Rt Hon Michael (Bristol)||Harrison, Walter (Wakefield)||Morris, Rt Hon J. (Aberavon)|
|Cohen, Stanley||Hart, Rt Hon Judith||Murray, Rt Hon Ronald King|
|Coleman, Donald||Hattersley, Rt Hon Roy||Noble, Mike|
|Colquhoun, Ms Maureen||Hatton, Frank||Oakes, Gordon|
|Concannon, J. D.||Heffer, Eric S.||O'Halloran, Michael|
|Conlan, Bernard||Hooson, Emlyn||Orbach, Maurice|
|Cook, Robin F. (Edin C)||Horam, John||Orme, Rt Hon Stanley|
|Corbett, Robin||Howell, Rt Hon Denis (B'ham, Sm H)||Ovenden, John|
|Cowans, Harry||Hoyle, Doug (Nelson)||Owen, Rt Hon Dr David|
|Cox, Thomas (Tooting)||Huckfield, Les||Padley, Walter|
|Craigen, Jim (Maryhill)||Hunter, Adam||Palmer, Arthur|
|Crawford, Douglas||Irving, Rt Hon S. (Dartford)||Pardoe, John|
|Cronin, John||Jackson, Miss Margaret (Lincoln)||Park George|
|Crosland, Rt Hon Anthony||Janner, Greville||Parker, John|
|Crowther, Stan (Rotherham)||Jay, Rt Hon Douglas||Parry, Robert|
|Cryer, Bob||Jenkins, Hugh (Putney)||Pavitt, Laurie|
|Cunningham, G. (Islington S)||John, Brynmor||Penhaligon, David|
|Cunningham, Dr J. (Whiteh)||Johnson, James (Hull West)||Prescott, John|
|Dalyell, Tam||Johnston, Russell (Inverness)||Price, C. (Lewisham W)|
|Davidson, Arthur||Jones, Alec (Rhondda)||Rees, Rt Hon Merlyn (Leeds S)|
|Davies, Bryan (Enfield N)||Jones, Barry (East Flint)||Reid, George|
|Davies, Denzil (Llanelli)||Jones, Dan (Burnley)||Richardson, Miss Jo|
|Davies, Ifor (Gower)||Kaufman, Gerald||Roberts, Albert (Normanton)|
|Deakins, Eric||Kelley, Richard||Robertson, John (Paisley)|
|Dean, Joseph (Leeds West)||Kerr, Russell||Roderick, Caerwyn|
|Dell, Rt Hon Edmund||Kilroy-Silk, Robert||Rodgers, George (Chorley)|
|Dempsey, James||Lambie, David||Rooker, J. W.|
|Roper, John||Stoddart, David||Walkinson, John|
|Ross, Stephen (Isle of Wight)||Stott, Roger||White, Frank R. (Bury)|
|Ross, Rt Hon W. (Kilmarnock)||Strang, Gavin||White, James (Pollok)|
|Rowlands, Ted||Strauss, Rt Hon G. R.||Whitehead, Phillip|
|Sandelson, Neville||Taylor, Mrs Ann (Bolton W)||Whitlock, William|
|Sedgemore, Brian||Thomas, Dafydd (Merioneth)||Wigley, Dafydd|
|Selby, Harry||Thomas, Jeffrey (Abertillery)||Willey, Rt Hon Frederick|
|Shaw, Arnold (Ilford South)||Thomas, Ron (Bristol NW)||Williams, Rt Hon Alan (Swansea W)|
|Sheldon, Rt Hon Robert||Thorne, Stan (Preston South)||Williams, Alan Lee (Hornch'ch)|
|Shore, Rt Hon Peter||Thorpe, Rt Hon Jeremy (N Devon)||Williams, Rt Hon Shirley (Hertford)|
|Short, Mrs Renée (Wolv NE)||Tierney, Sydney||Wilson, Alexander (Hamilton)|
|Silkin, Rt Hon S. C. (Dulwich)||Tinn, James||Wilson, Gordon (Dundee E)|
|Skinner, Dennis||Tomlinson, John||Wilson, William (Coventry SE)|
|Small, William||Torney, Tom||Wise, Mrs Audrey|
|Smith, John (N Lanarkshire)||Tuck, Raphael||Woodall, Alec|
|Snape, Peter||Urwin, T. W.||Woof, Robert|
|Spearing, Nigel||Wainwright, Edwin (Dearne V)||Young, David (Bolton E)|
|Spriggs, Leslie||Wainwright, Richard (Colne V)|
|Stallard, A. W.||Walker, Harold (Doncaster)||TELLERS FOR THE NOES:|
|Steel, Rt Hon David||Walker, Terry (Kingswood)||Mr. Frank Hooley and|
|Stewart, Rt Hon M. (Fulham)||Watkins, David||Mr. Roy Hughes|
§ Question accordingly negatived.