HC Deb 19 January 1977 vol 924 cc339-48

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 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. 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. Dennis Skinner (Bolsover)

He was wrong, too.

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 for A 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

Mr. Speaker

Order. Does the hon. Gentleman seek to oppose the motion?

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 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.

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.