HC Deb 14 May 1981 vol 4 cc931-69

`(1) In the 1975 Act, after section 4, there shall be inserted the following section—

4A.—(1) It shall be the duty of the Corporation so to exercise their powers as to secure that the carrying on of the activities that have fallen to be carried on under their ultimate control is organised, so far as regards the direction thereof, in the most efficient manner.

(2) The Corporation shall not make, or permit to be made, any substantial change in the manner in which the carrying on of the activities that have fallen to be carried on under their ultimate control is organised, so far as regards the direction thereof, except with the consent of the Secretary of State.

(3) In carrying out any measure of reorganisation or any work of development which involves substantial outlay on capital account, and in securing the carrying out by any publicly-owned companies of any such measure or work, the Corporation shall act in accordance with a general programme settled from time to time with the approval of the Secretary of State.

(4) Without prejudice to subsection (1) of section 4 of this Act or subsection (3) above but subject as provided in subsection (5) below, the Secretary of State may by order give the following directions to the Corporation or any publicly-owned company after consultation with the Corporation or that company, as the case may be, that is to say—

  1. (a) a direction to the Corporation to discontinue or restrict any of their activities or to dispose of any of their property, rights, liabilities and obligations; or
  2. (b) a direction to the Corporation to secure the discontinuance or restriction of any of the activities of a publicly-owned company or the disposal of all or any of its property, rights, liabilities and obligations, or the winding up of any such company; or
  3. (c) a direction to a publicly-owned company to dispose of all or any of its property, rights, liabilities and obligations;
and the Corporation or the publicly-owned company shall give effect to any directions given to the Corporation or the company.

(5) The Secretary of State shall not give any direction under subsection (4) above unless he is satisfied that the giving of it will further the public interest.

(6) As soon as practicable after giving a direction under subsection (4)(c) above, the Secretary of State shall give notice of the direction to the Corporation.

(7) Subject to subsection (8) below, any direction under subsection (4) above to dispose of property, rights, liabilities or obligations may in particular include a direction—

  1. (a) to form a company for the purpose of acquiring the property or rights and assuming the liabilities or obligations to be transferred in pursuance of the direction;
  2. (b) prohibiting, except with the consent of the Secretary of State, the disposal to, or acquistion from any person by, any company which will acquire property or rights in pursuance of the direction of assets used or capable of use in the production of products of a description, or of products other than products of a description, specified in the direction.

(8) The powers to direct the formation of a company and to restrict the disposal or acquisition of assets are exercisable subject to the following further limitations, that is to say—

  1. (a) no company shall be directed to be formed otherwise than as a publicly-owned company; and
  2. (b) no such restriction shall be imposed except on a company which is or, when formed will be, in public ownership or be binding after it ceases to be in public ownership;
and the Secretary of State shall, as soon as it is practicable to do so, give notice of the imposition of the restriction to any company that is to be bound by it if that company is not the one to which the direction is given.

(9) So long as a restriction on the disposal or acquisition of assets is binding on the Corporation or a publicly-owned company the provisions of this Act relating to the capacity of the Corporation or the publicly-owned company shall have effect subject to the restriction."

(2) In section 4 of the 1975 Act (general powers of the Secretary of State in relation to the Corporation) the following provisions shall be omitted, that is to say—

  1. (a) subsection (power to give directions about organisation);
  2. (b) subsections(3) and (4) (which are re-enacted as subsections (2) and (3) of the section 4A inserted by subsection (1) above);
  3. (c) subsection (5) (which is re-enacted with modifications in subsection (4) of that section); and
  4. (d) subsection (6) (no direction to prejudice discharge to Corporation's duties).

(3) In section 5 of the 1975 Act (which imposes on the Corporation duties to review their affairs and report to the Secretary of State)—

  1. (a) subsections (1) and (2) (Corporation to review and, after consultations, report on their organisation) shall be omitted;
  2. (b) in subsection (5) (annual report to set out directions given by Secretary of State during year) after the words "to the Corporation", where those words occur first, there shall be inserted the words "or to a publicly-owned company"; and
  3. (c) after subsection (5) there shall be inserted the following subsections—

(4) Section 13 of the 1975 Act shall have effect with the substitution, in subsection (2) (exemption of Corporation from stamp duty where chargeable transaction is due to directions etc.), for paragraph (a), of the following paragraph— (a) for the purpose of giving effect to a direction given by the Secretary of State by virtue of section 4A(7) of this Act; or".

(5) In section 36 of the 1975 Act (supplementary provisions about orders and regulations), in subsections (2) and (5), for the figures "4(5)" there shall be substituted the figures "4A(4)". '.—[Mr. Tebbit.]

Brought up, and read the First time.

6.55 pm
The Minister of State, Department of Industry (Mr. Norman Tebbit)

I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Bernard Weatherill)

With this it will be convenient to discuss also Government amendments Nos. 2 to 5.

Mr. Tebbit

This new clause and the attendant amendments are put forward in response to the arguments, put most notably by my hon. Friends the Members for Aldridge-Brownhills (Mr. Shepherd) and for Birmingham., Selly Oak (Mr. Beaumont-Dark), and many others, that competition between the State and the private sector in the steel industry should not only be fair but be seen to be fair. In Standing Committee, my hon. Friend withdrew his amendment to that effect and his further amendment concerning the present requirements for the corporation to report to the Secretary of State certain reviews of its affairs. He did so on my undertaking that I would introduce amendments on Report to meet the comments in Committee. I apologise to the House for the length and complexity of the new clause and the short time that it has been on the Order Paper.

Mr. D. N. Campbell-Savours (Workington)

Does the hon. Gentleman accept that the Opposition and others outside the House will think that this is a new Bill? This is not just a new clause that has come before the House today. We are having no chance to discuss this matter in Committee. This has been brought before the House, swept through its parliamentary procedures and will be put on the statute book in a completely unacceptable way. Will the Minister address himself to that? Many of us are disgusted by what has happened.

Mr. Tebbit

The hon. Gentleman will perhaps concede that I am addressing myself to this point. If he will be kind enough to wait, I shall make the point again. The new clause does no more and no less than what I undertook would be done after the debate on the amendments that were tabled by my hon. Friends in Committee. I have no apologies to make for that; what I say to the House is that I very much regret that this has proved to be such a complex new clause and that we could not put it down earlier. We sought to find a shorter and simpler route to the objective, but that did not prove to be attainable, and eventually the form now before the House was devised and was tabled as soon as I had seen and approved it.

7 pm

Because I was painfully aware of the complexity of the new clause, I provided copies of an explanatory memorandum to those hon. Members who were members of the Standing Committee and to some others who I thought would be particularly interested. In the time that I had to do that, I could do very little more, and I hope that any hon. Members whom I have forgotten will not feel aggrieved. [Interruption.] I hear a sort of noise from my right and I suspect that I have forgotten somebody. However, my hon. Friend the Member for Honiton (Mr. Emery) is welcome to my copy of the explanatory memorandum as soon as I have sat down.

I come now to the new clause itself. Since it was clear that it was bound to be complex, I took the opportunity to bring together a number of provisions about the organisation of the corporation's activities. The new clause begins by imposing a specific duty on the corporation to organise its affairs efficiently and it has three additional main purposes arising out of discussions in Committee.

First, it will enable the Secretary of State to direct the corporation, by order subject to annulment, to form separate companies to carry on those of the corporation's businesses which are in competition with the private sector of the industry; secondly, it will remove the Secretary of State's existing power to give directions how the corporation should organise itself internally; thirdly, it will remove the Secretary of State's power to require the corporation to carry out a review of the way in which it is organised and to report to him the conclusions of such a review. None of those purposes will come as a surprise to hon. Members who were on the Standing Committee.

Mr. Campbell-Savours

They are disgusting.

Mr. Tebbit

They may be disgusting, as the hon. Member says—that is a matter of opinion; but I hope that it will be a matter of agreement that they are not surprising.

The first additional purpose, that of empowering the Secretary of State to direct the corporation to form separate companies where there is competition with the private sector, is achieved by subsections (4) to (8) of a new section, 4A, which this new clause inserts into the Iron and Steel Act 1975. Section 4(5) of that Act empowered the Secretary of State to direct the corporation to discontinue or restrict its activities, or to dispose of its assets, in areas of its business other than iron and steel making.

The House will recall that clause 1(4) of the Bill, as presented, extended that power to cover iron and steel making activities and assets as well. Subsection (4) of the new clause now consolidates these changes, and in addition extends the Secretary of State's powers of direction to cover the disposal of assets by any of the publicly owned companies.

In addition to the power to direct the discontinuation of activities and disposal of assets, a new power will be available to the Secretary of State to direct that the assets which are specified in the order under subsection (4) should be transferred to a separate company which shall be formed for that purpose. This is in subsection (7)(a). In order to ensure that the company so formed into a separate and identifiable accounting unit actually carries on the type of business which is intended, subsection (7) (b) prohibits the company, except with the consent of the Secretary of State, from taking on assets which can be used for the manufacture of products other than those specified in the direction. This restriction will remain in force for as long as the company remains in public ownership.

Mr. John Bruce-Gardyne (Knutsford)

My hon. Friend has reached subsection (7). I was hoping that he would tell us something about subsection (5), which I find riveting. I wonder why it has been inserted into the Bill.

Mr. Tebbit

Subsection (5) is the subsection which requires that the Secretary of State shall not give any direction under subsection (4) above unless he is satisfied that the giving of it will further the public interest. I do not think that my hon. Friend really finds that surprising.

Mr. Bruce-Gardyne

I find its insertion very surprising indeed.

Mr. Tebbit

If my hon. Friend would go carefully through the 1975 Act and the Bill and the new clause, I think that he would see that it fits in perfectly clearly. I am not sure whether he objects to the position of this provision or to what it says.

Mr. Bruce-Gardyne

I do not understand the purpose of inserting it. Presumably, anything that the Secretary of State decides to do he will decide to do because it is in the public interest. He will not do it because he thinks that it is not in the public interest. What on earth is achieved by inserting this subsection?

Mr. Tebbit

My hon. Friend will know that there is a long history, and a good history, of requiring that such directions as these are given in the public interest. It would be possible for a direction to be given which was in the interests of a section of the public, and that might seem to a Secretary of State a reasonable thing to do, but I think that it would have to be established—and would have to be capable of being contested—whether it was in the public interest as a whole that he should do it. I think that that is a fair point to make.

Mr. Tom Ellis (Wrexham)

My difficulty is not that of the hon. Member for Knutsford (Mr. Bruce-Gardyne). I understood that the thrust of the Government's policy was to put the emphasis on the commercial viability of the steel industry, whether publicly or privately owned. To the extent that the public interest might not coincide with the commercial viability of a particular company, surely the Secretary of State is defeating his own object.

Mr. Tebbit

The two matters have to be balanced. At any time, it has to be the public interest which prevails. I do not think that that is particularly extraordinary.

As I was saying, subsection (7)(b) prohibits the company, except with the consent of the Secretary of State, from taking on assets which can be used for the manufacture of products other than those specified in the direction.

That direction will remain in force for as long as the company remains in public ownership. It is envisaged that, initially, all companies formed in this way will remain publicly owned, but it will of course be possible for private capital to be introduced into such companies on either a part or a whole share basis.

Mr. Stan Crowther (Rotherham)

Can the Minister explain how this can possibly work, bearing in mind the fact that innumerable items of machinery can be used in the production of many different products? This apparently would preclude the BSC, except with the Secretary of State's permission, from buying any of this machinery, although it desperately needed it to produce decent steel products, because it could be used for some other purpose—for example, the manufacture of aluminium products. Will the BSC have to ask the Secretary of State for permission every time that it wants to buy a new lathe or something of that sort?

Mr. Tebbit

That is not the purpose at all. The purpose is that the BSC should not take on assets which would not be recognised—typewriters, for example, which could be used to type letters which were not conceivably about the business of the company. Thus the corporation would require the Secretary of State's permission to buy processing machinery which was clearly not directed towards the purpose for which the company was set up.

That seems reasonable. Otherwise, those companies would be free to act in a way in which the corporation itself was not free to act, in going beyond the obligations or the responsibilities which were laid upon it in the normal course of the legislation which affects all nationalised industries. Otherwise, as the hon. Gentleman will understand, a company would have no restriction upon the activities into which it entered.

The powers that are incorporated in the new clause have been necessitated by the serious situation that has developed in the areas in which the British Steel Corporation competes with the private sector. My hon. Friends have often expressed their concern about that, but equal concern has been expressed by Labour Members, and understandably so. Many Labour Members have private sector steel companies in their constituencies and they have been made painfully aware of the problems which have been caused to those companies, which in many instances the companies and the employees contend have been caused by the corporation's trading practices.

The seriousness of the situation has been recognised by the corporation and it has given assurances about its pricing policies. It is already transferring two of its businesses into separate companies—namely, the pipe makers Stanton and Staveley, and the steel stock holders, British Steel Service Centres. To that extent the powers that we are now taking should be seen as reserve powers only. However, they are necessary even if it transpires that their only function is to serve as guidelines for the way in which we believe that the corporation should manage businesses that are in competition with the private sector. They are a mark of the Government's determination to improve matters in the overlap area.

It is important that the private sector should be able to see that the corporation is competing on as near equal terms as possible. The provision in the new clause should go a long way towards reassuring it of that.

Mr. Roger Moate (Faversham)

My hon. Friend is right to say that the private sector wants reassurance and wants to know of the resources that are available to its competitors in the overlap areas. My hon. Friend has said that the new clause is difficult to absorb rapidly. Does it provide, especially for Allied Steel and Wire, that from the beginning of its operations it will make clear to the world the resources, especially financial resources, that it has at its disposal and how much taxpayers' money has gone into it, so that its rivals will know of the size and substance of the State competition?

Mr. Tebbit

It is more likely that Allied Steel and Wire will take advantage of the law that applies to all Companies Act companies and will publish its accounts and balance sheet at the end of its first year of operation. That is a perfectly normal and commercial practice to adopt. The company will behave commercially arid I believe that, in its view, that would be the commercial way in which to behave.

Mr. Bruce-Gardyne

I am not clear in what way the establishment of the new separate companies—those that are being set up or will be set up under the new clause—will assist those in the private sector in competition with British Steel or former parts of British Steel to assess the transfer pricing between British Steel and the new companies.

Mr. Tebbitt

The difficulty that my hon. Friend postulates is a real one. I said in Committee that these arrangements would not be perfect because of that There still remains an obligation upon the Government and British Steel to ensure that there is not unfair practice. I say "unfair" because there are many commercial practices among private sector companies and between the State sector and fully private companies where transfer prices—prices of the raw material being bought and sold—are not immediately apparent and may vary from time to time and from customer to customer.

If we reach a stage where some companies are formed where the steel maker and some of the downstream organisations are included, these matters will be rather clearer. I do not pretend that these arrangements will solve all the problems. I am sure that my hon. Friend would not believe me if I told him that they would do so.

7.15 pm

The second purpose of the new clause is to remove the power of the Secretary of State to give general or specific directions on the way in which the corporation organises itself internally. It is the Government's view that the detailed provisions in the Iron and Steel Act 1975 enabling the Secretary of State to intervene in the internal organisation of the corporation are no longer appropriate in the context of a business which we are determined should be run on normal commercial lines.

The new clause achieves the objective of making the corporation less subject to the Secretary of State's control in matters of organisation by virtue of subsection (1) of the new section 4A which the new clause inserts into the provisions of the 1975 Act. The subsection is designed to retain the evident intention of the 1975 Act that the corporation should organise its activities in the most efficient manner. What has been omitted, however, is the power of the Secretary of State to give directions to the corporation, either of a general or of a specific nature, on the way in which this goal should be achieved, or to require the corporation to carry out a review of its organisation. In other words, the initiative in securing the efficiency of the corporation's organisation will be left where it should be—in the corporation's own hands.

We have, however, considered it appropriate to retain the provision in section 4(3) of the 1975 Act that the corporation shall not make any substantial change in the way it is organised without first obtaining the consent of the Secretary of State. To remove that provision would go too far. As I said in Committee, there is at present no difference of opinion between the corporation and the Government over the manner of the organisation, but the removal of the spirit of section 4(3) of the 1975 Act would permit the corporation in future to develop in ways which might be unacceptable to the Government of the day. That is why subsection (2) of the new section 4A repeats the provisions of section 4(3) of the 1975 Act. Similarly, the Government would wish, for obvious reasons, to retain their power of approval over the corporation's investment programme. The provisions of section 4(4) of the 1975 Act are therefore repeated in subsection (3) of the new section 4A.

The third purpose of the new clause—to remove the power of the Secretary of State under section 5(1) to require the corporation to carry out a review of the way the corporation is organised and to report its conclusions to the Secretary of State—raises similar issues. Such a power is no longer appropriate and is removed by subsection (3)(a) of the new clause. Section 5(2) of the 1975 Act—the requirement to consult employee representatives in any review of organisation ordered by the Secretary of State—falls with the removal of section 5(1). As I was at pains to point out in Committee, that does not mean that the Government or the corporation consider that consultation of employees should be reduced or abandoned; merely that it is primarily for the corporation's management to decide how such consultation is conducted.

The remaining subsections of the new clause are consequential. The most important concerns the consents given by the Secretary of State to substantial changes in organisation. Under section 5(5) of the 1975 Act the corporation is required to set out in its annual report details of any directions given to it by the Secretary of State. Subsection (3)(c) extends this to include details of consents given by the Secretary of State.

Subsection (4) amends section 13(2) of the 1975 Act so as to continue the exemption from stamp duty where the corporation is setting up a company in the course of giving effect to a direction under new section 4A(7).

I am glad to say that amendments Nos. 2, 3, 4, and 5 are consequential and require no further explanation. I hope that the House will find that my explanation has been helpful, even if it has been a complex explanation of a complex clause. I would not be surprised if any hon. Member said that at first he had had difficulty following the measure. It is particularly difficult to follow unless one has the explanatory memorandum, or, better still, a 1975 Act to amend as one goes along.

I am sure that the House will recognise the deep concern that has been expressed in all quarters about the need to ensure, as far as possible, that competition between the two sectors is seen to be fair. No one could object to that part of the new clause. I accept that Opposition Members may argue that the new clause makes it too easy to privatise subsequently. That is a difference of opinion. With the exception of the powers that we are taking to ensure that there is fair competition, it is right that the corporation should be left to take the initiative in changes and reviews of its organisation in order that it may achieve the greatest efficiency possible. The new clause is designed with those ends in view. With that in mind, I commend it to the House.

Dr. John Cunningham (Whitehaven)

The Minister has narrowly escaped the charge of having abused the procedures of the House. I have allowed him to escape because he has just about earned it by providing the notes on the new clause. I very much agree with the criticism that my hon. Friend the Member for Workington (Mr. Campbell-Savours) made during an intervention. This is not so much a new clause as a new Bill. When that point was made there was some exclamation of dissent. It came not from the Minister but, I believe, from the hon. Member for Honiton (Mr. Emery). I should point out to the hon. Gentleman that the new clause contains 95 lines of legislation. The hon. Gentleman has a copy of the new clause in front of him, but he has not got the Bill in front of him. If he were to compare the new clause with the Bill, he would see that the whole Bill contains only 134 lines. Therefore, the charge is easy to substantiate.

Mr. Tebbit

I am sure that the hon. Gentleman understands that it would have been possible to make the amendments with fewer lines. However, the measure would have been even more difficult to understand. I decided that it was better, in effect, to put a new clause into the 1975 Act. It is easier to understand.

Dr. Cunningham

My second criticism can also be substantiated easily. Several of my hon. Friends who were members of the Committee feel strongly about it. A lot of time was spent debating clause 1. We did not seek to delay the Bill's passage unduly. To table a clause of such magnitude 48 hours before the debate is to trespass on the prcedures of the House. I cannot say that too firmly. In essence, the major political part of the Bill has been rewritten. The clause makes a great difference to the management, running and prospects of the British Steel Corporation. Therefore, this is by no means a small measure.

The one thing that I welcome is that the new clause removes part of clause L As amendment No. 1 seeks to remove the whole of clause 1, we should be a little happy. However, the Government's productivity in leaving out 13 lines and replacing them by 95 lines leaves something to be desired, particularly as this Administration pride themselves on the claim that they do not over-legislate. Almost every line of the new clause allows for intervention in the management of the corporation. The Minister says that it is lengthy because the provisions need to be spelt out. Given that, many of us find it surprising that Mr. MacGregor and members of the board are happy to accept what is being proposed.

Clause 1 and new clause 1 are riddled with controls and powers for the Secretary of State for Industry. It is a compendium of restrictions and controls, which are to be assumed by—as we are told again and again—the arch-apostle of management freedom and the market economy. On 1 April the Secretary of State gave evidence to the Select Committee on Industry and Trade. The Chairman said: It has been suggested to us by previous witnesses that if there were on your staff brilliant administrators in the steel industry, they would probably be wasting their time on your staff, they ought to be in the steel industry itself and employed by the Steel Corporation. Is that not the case? The Secretary of State replied: Yes, I agree entirely. The Chairman then asked: You do not put up your staff as being superior experts to those who now man the British Steel Corporation, is that the case? The Secretary of State replied: That is correct. The Secretary of State apparently confirmed his desire not to intervene. However, within a few weeks he tabled a large clause that gives him powers that no other Secretary of State for Industry has enjoyed over any industry. That is the reality of the new clause.

The Minister fairly conceded that clause 1 and the new clause also involve the rundown of the corporation, its privatisation and the removal of virtually all its statutory duties. I am surprised that Conservative Members should accept that. Almost alone among public corporations, the BSC will have virtually no statutory duties. That is unprecedented. Of course, there are inherent dangers for the corporation's members. The corporation's statutory duties lay obligations on its members and also provide safeguards against ministerial intervention. That has always been the intention. The Government have almost completely removed those duties.

This is a denationalisation measure which in many ways creates a dangerous precedent. It will restrict and curtail the freedom and commercial judgment of board members. The Secretary of State will have new powers to direct the corporation and its subsidiaries to dispose of assets, whether or not they agree or judge it to be in the corporation's commercial interests. Under the new clause the Secretary of State will also have power to prevent the corporation from expanding its activities or acquiring assets to meet new market opportunities.

In effect, the Secretary of State has fitted up the board and has put it into a sort of tailor-made straitjacket. He has denied the board's members freedom of action and has removed or at least stifled, managerial initiative. He has wiped out the statutory safeguards for consultations, even with the trade unions.

7.30 pm

The Minister has taken up one point that we have pressed upon him again and again, namely, the statutory requirement in section 5 (2) of the 1975 Act to consult the trade unions. When we have asked why that part of the Act was not being implemented, he has come up with all sorts of lame excuses. However, the clause is altogether removing that safeguard for the trade unions.

The Minister says that it is a matter for management prerogative to decide the amount of consultation. The long history of the struggle by trade unionists to be involved in the management of their industries leads us to conclude that it is only by having statutory safeguards that major advances in consultation have ever been made. That is the lesson of history. Although he tries to disguise it, the Minister of State, in his proposals in the new clause, is taking a major step backwards in terms of that involvement and, in terms of trying to achieve the commitment that we need from trade unions to the industries that employ their members.

So much for non-intervention. Those are draconian powers that are taking the Secretary of State into a much higher level of ministerial control than has ever existed before. Those powers are specifically designed to ensure not only control in terms of the use of public resources but political control, for reasons of political dogma. Those powers are not just in the commercial interests of the steel industry. The measure is aimed at keeping down the public sector and putting it—no doubt to the delight of many Conservative Members—firmly in its place for the future of steel.

The Minister referred to the intentions of the new clause. He said that there was an intention to remove the power of the Secretary of State to give general and specific directions about the internal organisation of the corporation. I stress the word "internal" because elsewhere in the clause the Minister is doing exactly the opposite.

Another purpose of the clause is to enable the Secretary of State to direct the corporation to form separate Companies Act companies in respect of those businesses that are uncompetitive with the private sector, and to give various other directions. Therefore, the claim—if it was intended to be a claim—that somehow that is withdrawing the Secretary of State from involvement in the corporation can be substantiated only in so far as it refers to the day-to-day running. We know that, whether or not that was laid down in the statute, most Ministers and most Governments have taken the line that they would not in any event interfere in the day-to-day running of the corporation.

Mr. Bruce-Gardyne

They then proceed to do so.

Dr. Cunningham

There is no doubt that this Secretary of State has every intention of doing so on a wider and wider scale, if we read the new clause aright. However, he then says, publicly, exactly the opposite.

It says a great deal about Mr. MacGregor and his board that they have accepted all of that, apparently with equanimity. It belies Mr. MacGregor's reputation that he would acquiesce in the Government's taking such a power, but perhaps it is being taken to ensure that the Secretary of State can keep not only the public corporation in its place, but the chairman whom he has appointed. Some arguments have been advanced by Conservative Members that Mr. MacGregor was being too successful in his management of the corporation and that he should be restricted.

I shall make a number of detailed comments about the provisions. I shall begin by quoting again from the notes provided by the Minister of State: The new provision also enables the Secretary of State to direct the publicly-owned company to dispose of all or any of its property rights, liabilities and obligations. This is to facilitate the imposition of the restrictions set out in subsection (7)(b). One needs no clearer statement than that. The provision enables the Secretary of State to direct the corporation. Those are the words in the Government's own explanatory notes about the proposals.

In subsections (2) and (3) there are powers that will control the corporation so that it can be prevented from expanding to meet new market opportunities. In subsection (4) and its various paragraphs there are new powers of direction. In subsection (4) (c) there is the direction to a publicly owned company to dispose of all or any of its property.

We see that in subsection (6) the Secretary of State, As soon as practicable after giving a direction under subsection(4) (c) … shall give notice of the direction to the Corporation. It is incredible that the chairman of the corporation might suddenly receive a message one day to say that, by the way, last week or the week before the Secretary of State to directed one of its subsidiary companies to dispose of its assets. That is an astonishing provision.

It is an intolerable proposal. We are opposed to a Minister having such a power. As well as being grossly insulting to the board, it is ridiculous that such commercial intervention should be contemplated, apparently without any consultation being required. That point, perhaps more than any other, underlines the need for statutory duties for public corporations to safeguard the members who are responsible for running them.

In other circumstances we might have welcomed section 4A(5), which apparently covers the point that we raised in Committee, that the Secretary of State could not be allowed to act in a manner prejudicial to the proper discharge of the duties of the corporation. That appears to be covered by that provision. I hope that that is so.

Almost all the proposals in some way or another strengthen the ultimate control of the Secretary of State over what is left of the British Steel Corporation after privatisation. They effectively prevent major changes in activities without his explicit agreement. Subsection (4) outlines the wide-ranging power that the Secretary of State is to be given. It will allow him to order the BSC to discontinue production of certain or all steel products. It is astonishing that the Government can tell the corporation that they have decided that it will, in effect, stop competing in a certain area of steel products. That power is contained in the clause.

The hon. Member for Faversham (Mr. Moate) is looking rather puzzled. I advise him to read the clause. He is probably delighted by the provision. It probably goes a long way to meet some of his objections to public enterprise. However, we regard that as highly objectionable, too.

Mr. Campbell-Savours

I wonder what attitude Conservative Members would take if private enterprise were subject to the controls and restrictions imposed by the Secretary of State in this appalling Bill.

Dr. Cunningham

No private company, merchant bank or investment organisation would act in that way. No holding company in the private sector would act in that way to a company under its control without the sacking or resignation of the people running it. It would not get away with it without serious objection and disagreement.

Mr. Moate

My reaction was partly because I have not been privileged to have the explanatory notes, presumably because I am not supposed to be interested in these affairs; hence my puzzlement. I have now glanced at the point, and wonder whether it is not possible that the power may lead to the Government's having market sharing arrangements, which we have been told would be an impossible power for them.

Dr. Cunningham

The interpretation that I put on the matter will not be found in the explanatory notes. The Government carefully omitted to draw our attention to it, so I hope that I have done the House a favour. The EEC arrangements about capacity utilisation and market share seem to be working reasonably well without the envisaged statutory provisions.

Subsection (3) makes provision for the corporation to provide the Secretary of State from time to time with regularly constituted arrangements for consultation in a longer-term framework than that laid down by him. That seems to be a change of heart by the Secretary of State, but, although he is ensuring that he will be consulted prior to any change, the corporation has no such right; nor have the workers. I re-emphasise that their right to statutory consultation is being repealed.

Subsection (6) is interesting. The corporation is to be informed of directions only after the event. It is to be informed as soon as is practicable, but other people have no such guarantees. Will the Secretary of State explain that? In this 95-line clause nowhere can we find safeguards for the members of the corporation from what may be an intolerable level of interference. Their only apparent redress is to resign. They have no right of appeal and no safety of the sort that has been widely enjoyed over the decades in public corporations and is still enjoyed in the British Gas Corporation, British Rail and the electricity industry.

Dozens more questions could be asked about the lengthy new clause. We have many major reasons to vote against it. To say the least, it is inadequate to bring forward the proposal in this way, even taking into account the Minister's generosity in providing the background notes, although we received them only this morning. Even after the briefest consideration we see that there is more than enough in the new clause to ensure that we shall vote against it.

7.45 pm
Mr. Moate

I am totally disappointed with the Minister's reply. When a new company is set up, as has been done under the Phoenix I arrangement, we are entitled to know at the inception the resources available to it. On two previous occasions at private meetings and again today I put that point to my hon. Friend. Today he said that it was unnecessary and that Allied Steel and Wire would, like any other company, give the figures at the end of the accounting period, probably about 18 months from the time that it starts to operate. That is totally unsatisfactory. My hon. Friend is wrong not to tell the House that the figures will be published. Eighteen months in the steel industry today can be a matter of life and death. Companies can go under in that short period. The effect on competitors can be disastrous. There is no question of principle between public and private ownership. The House is entitled to know where assets are being directed.

Let me explain why that is important. In my constituency we have the highly successful Sheerness Steel company, which has survived the trials and tribulations without a major impact on the work force until a few weeks ago. Now, like other companies, it has succumbed to the problems and declared redundancies and short-time working. It wants fair competition and not subsidies. With fair competition it can and will give a good livelihood and high pay to a large, highly efficient and superb work force and survive the storm.

The new rival organisation, Allied Steel and Wire, will massively dominate the market. Sheerness Steel wants to know what public resources will be made available to Allied. Not much information has been published but I believe that Allied is to be a £100 million company. The 50 per cent. from GKN will be largely in the form of assets, so a large amount of cash will probably be put in by the BSC to make up its 50 per cent. interest. If so, Allied will start with an enormous amount of cash that could be used to undercut market prices and undermine its competitors.

My hon. Friend will argue that the company will act commercially, but in this strange market what is "commercial"? Is it not commercial to try to secure the lion's share of the market and undercut competitors? In a year or 18 months we shall know whether it has acted commercially badly or well, but by then it may be too late for its competitors.

When we have, in effect, 50 per cent. public ownership in a company, it is not unreasonable to be told what its capital structure will be. My hon. Friend says that it will act like a company in the private sector, but I do not believe that a £100 million company comes fresh to the private sector without divulging its capital structure in a prospectus or at least to the shareholders. It is not unreasonable to ask for the figures to be published now or when the company starts up. If I am being unreasonable, I hope that my hon. Friends will tell me. I cannot believe that that information will not be available.

Is my hon. Friend really saying that if the Select Committee asked him to reveal those figures he would say "I am sorry, it is private to Allied and you cannot know it for a year to 18 months"? Or if a shareholder of GKN asks GKN "How much of our assets have gone into the company? May I please be told the details of this subsidiary?", will that shareholder be told "No"? Shall we have to spend months ferreting out this information through the back door when my hon. Friend should say that he will give us the information? So far he has said that he does not think that Allied need give the information unless it feels commercially inclined to do so.

Mr. Crowther

I am following the hon. Gentleman's words with great care, but is he not overlooking the fact that the new company is entirely out of the control of the British Steel Corporation? One of the conditions which the Secretary of State insisted upon and will insist upon in all the Phoenix arrangements is that, although British Steel owns 50 per cent., it has no share of the control. The company is entirely a private sector company, albeit with some capital that belongs to a public body. It is in no way responsible to the Secretary of State for Industry, because it is not in any way a public industry.

Mr. Moate

I accept what the hon. Gentleman says, but I am speaking not as representing the State that owns the corporation, but on behalf of the shareholders who have a 50 per cent. stake in that corporation. Are we not, as shareholders, whether public or private shareholders, entitled to know those facts? My hon. Friend cannot say "If we give too much information it might imply that we are still retaining control over the company and therefore taking away the independent nature that we are trying to create". That does not arise at all. However, competitors are entitled to know what sort of new rivals are being created by the State. That, after all, is what we are doing. When this Phoenix rises from the ashes with public support, I believe that we as a nation are entitled to know how much national fuel is being put in to propel the Phoenix out of the ashes.

I hope that my hon. Friend will give me the information. What does he want me to do? I am not being unreasonable. I have asked him privately and I have asked him on the Floor of the House. He rather led me to understand that I would be told, but now he says "No". Does he want me to vote against the new clause? All that Ministers seem to understand is votes. Am Ito vote against the Third Reading? I shall be happy to do so, if that is the way my hon. Friend thinks I should proceed.

However, I would prefer my hon. Friend to understand what I am saying, and to regard it as reasonably commercial. It is not designed to undermine Allied; it is designed to achieve what he says that he is trying to achieve, namely, proper transparency of these corporation activities. That is in the notes that he has now kindly passed to me. If there is to be fair competition and transparency of accounting, this large £100 million pound corporation should divulge its capital structure at the moment when it comes to life and competes with other private companies.

In my opinion, that is not an unreasonable request, and until I have a satisfactory answer from my hon. Friend I shall remain in a difficult position.

Mr. Tebbit

My hon. Friend must understand the dilemma in which I find myself. Allied Steel and Wire will be a company in the private sector. Therefore, it would not be appropriate for me to give it any directions, which would make it something of my creature, as opposed to a. private sector company. My hon. Friend must view the matter in that light. I have carefully considered what he has said, but I cannot help him. I am sorry about that because it is my intention to make these matters as transparent as I can without going so far as to damage the proposition that Allied is not a public sector company.

Mr. Moate

I do not want to rehearse what I have already said. My hon. Friend is known for speaking frankly, so I must speak to him frankly. He is talking nonsense. It is absolute rubbish to say that the simple revelation of the amount of public capital that is going into this corporation in some way implies Government control over it. In no way does that information jeopardise the status of that new company.

Mr. Tebbit

My hon. Friend misunderstands me, which is most uncharacteristic of him. It is not that the revelation of the information would prejudice the status of the company; it is that if I were to require it to reveal that information when it does not think that it is in its commercial interests so to do it would prejudice the status of the company.

Mr. Moate

No private sector company of that size could come to the market and come to life without its being generally known what its cash resources were and the nature and the size of its capital structure. I do not believe that my hon. Friend has thought the matter through. I understand his general concern about maintaining the philosophy of independence from ministerial intervention for these new companies. However, in this instance, when all we want to know is how much public support is available for these new supposedly independent companies, he should give us the information. I do not think that it will make much difference. The competitors and the work force who see their livelihoods put in jeopardy as a result of this development are entitled to have that information—as is the House—and at some stage during our proceedings we shall have to extract that information. My hon. Friend should give it to us now, or say that he will tell us when the new company is established.

Mr. Roy Hughes (Newport)

To me the essence of new clause 1 smells of sharp practice. Its introduction at this late stage is diabolical. It could be argued, too, that the length of its content constitutes a new Bill. It is necessary, therefore, to ask ourselves what is behind the new clause. It pretends to lessen the powers of the Secretary of State. In fact, it strengthens them. In that sense, the Minister of State, on behalf of his master the Secretary of State, is speaking with a forked tongue.

The new clause appears to be an attempt, as my hon. Friend the Member for Whitehaven (Dr. Cunningham) said, to throttle the activities of the publicly owned British Steel Corporation and to curb the powers of the celebrated and relatively new chairman, Mr. MacGregor. It would appear from all the reports that, now that he has been assigned to this position, Mr. MacGregor wishes to make a success of it. As my hon. Friend the Member for Whitehaven pointed out, the provision allowing the Secretary of State to sell different parts of the corporation almost at random is an insult to the new chairman. Of course, there may have been pressure from Government Back Benchers on this issue, and they in turn may have received pressure from the private sector, which is anxious to ensure that the corporation closes certain plants and sells those that are potentially lucrative.

8 pm

It is said that charity begins at home. I can only recite what has happened recently to the Whiteheads works in my constituency. It seems that there has been private sector pressure to close the works. Last Saturday morning Mr. MacGregor made what amounted to a private visit to the works. He went unheralded and unsung. He found an efficient works, and I understand that he gave it a vote of confidence. That was good news for the town of Newport, but the whole episode shows the pressure that is being applied to the corporation.

Subsection (2) of the clause means that there will be no substantial change in the corporation's affairs without the permission of the Secretary of State. Likewise, subsection (3) says that any substantial reorganisation and development must be in accordance with a general programme settled from time to time with the approval of the Secretary of State. But all this is a complete contradiction of anything that the Secretary of State has ever said about public corporations—even during the steel strike. He has always used the stock reply that control of the negotiations in and management of the industry is a matter for the corporation and is not something with which he will interfere. We did not believe him then, and we have no confidence in him now. He is essentially the Ripper of British industry and his schizophrenic approach has already cost British industry over 1 million jobs, a figure that is for ever escalating.

Subsection (1) of the clause provides that the duty of the corporation is to create an efficient enterprise. For most of us that goes without saying. But efficiency is a relative term, and we ask ourselves what constitutes efficiency. It seems that some believe that a universal panacea for creating efficiency lies in the introduction of outside contractors. Having witnessed the steel scene, I can see that the wheel has turned full circle. Over the years it has been suggested that Japanese and certain Western European steel industries have achieved better production figures than our industry because, it was suggested, so much of the servicing was carried out by private contractors.

With the castles by the sea, it seems that our strategy is 25 years behind the times. Some of us have long memories of the steel industry. When I became a Member of the House 15 years ago there were many accusations and allegations about corruption in the steel industry in South Wales. The allegations concerned the Llanwern works. They related to the outside contractors who were widely employed in the works at that time. Certain cases came to light and were brought before the courts. My impression, however, was that some of the big boys seemed to get away with it.

Stemming from developments at that time there was pressure to get rid of outside contractors in the industry and let the BSC employees do the work. In that way the wheel has now turned full circle. Efficiency is a relative term. Last weekend I was speaking to a man who, having completed 15 years at Llanwern, has been made redundant. The following day he was being taken on by a firm of contractors to do roughly the same work. But in addition he was receiving generous redundancy terms from the corporation. That sort of thing—it happens in other industries, too—seems to be an abuse of the whole redundancy procedure.

The whole purpose of the clause is to tighten the Secretary of State's control over the BSC. That would enable him to nibble away at the corporation and, at an appropriate time, sell the lucrative parts to the private sector. The whole exercise is underhanded, and the clause should be thrown out.

Mr. Bruce-Gardyne

I am not a tremendous enthusiast for delegated legislation, and I think that the Department of Industry is becoming a little delegation mad. The scope of the discretionary powers that have been sought by the Department in successive Bills has been extremely wide. This Bill is no exception. Perhaps we should not take that too tragically because I have a nasty suspicion that perhaps the clause is more cosmetic than real. I hope that I am wrong, but I doubt it.

The hon. Member for Whitehaven (Dr. Cunningham) referred to the reaction of the chairman of the British Steel Corporation to the clause—the dog that did not bark in the night. Certainly from all that we know of Mr. MacGregor it is hard to see him taking kindly to a massive extension of the powers of intervention by the Secretary of the Department. I guess that Mr. MacGregor has concluded that the clause contains little of substance by way of additional intervention, and I suspect that he may be right.

I appreciate the reasons that have led my hon. Friend the Minister of State to table the clause. He referred to the considerable anxieties that are felt about the BSC's competitive practices and their impact on the private sector steel makers with which the corporation competes directly. The clause is obviously designed to deal with some of those anxieties. I wish that I could believe that the simple act of establishing Companies Act companies would greatly reassure the private sector, or what is left of it by that stage.

In my intervention I referred to transfer pricing. My hon. Friend the Member for Faversham (Mr. Moate) has drawn attention to the problems that arise over the establishment of Allied Steel and Wire. The problem is that we have established the British Steel Corporation with enormous resources from the taxpayer, resources to which we are continuing to add, even in the Bill.

We have bought the services of an eminent entrepreneur on terms which I suspect mean that he owns us rather more than we own him. He is determined—and no doubt laudably determined—to win back for the British Steel Corporation a market share that it has been consistently losing. He is seeking to do that in the depths of a recession when there is a world-wide massive contraction in demand for steel. We are frequently told that it is no use suggesting that the British Steel Corporation should not be allowed to match the prices at which foreign suppliers are prepared to supply to the United Kingdom market, because the only consequence would be not to help what is left of the private sector but to hand over a larger slice of our market to imports.

We return again and again to the problem that the British Steel Corporation can offer prices which it may not be obliged to offer by the pressures of external competition but which will make it irresistibly appealing to suppliers who might otherwise turn to the private sector.

It is difficult to be sure when that is happening and the extent to which it is happening. My hon. Friend has volunteered to investigate any complaints and I am sure that they will be carefully investigated. However, a private sector business in competition with the British Steel Corporation or a part of it will almost certainly be a customer of BSC, and, to some extent, a fairly dependent customer. That private sector business would be ill advised to complain about the behaviour of a business on which it was a dependent if it had any regard to its future prospects. I am afraid that the reassurance that all complaints of abusive competition by the British Steel Corporation will be investigated is not much consolation to the private sector. I feat also that the undertakings offered in the new clause will not be much consolation either.

Obviously the establishment of Companies Act companies will enable us arid those who remain in the private sector to examine the accounts of companies as they appear. But, as my hon. Friend the Member for Faversham pointed out, that may lead to considerable delays. I doubt whether the mere establishment of Companies Act companies will offer much reassurance o the private sector.

In that context, when my hon. Friend replies I should be grateful if he would deal with a problem for which there may be a good explanation, but I do not think he gave it in his opening remarks. It refers to subsection 8(a) of the new clause, which says: no company shall be directed to be formed otherwise than as a publicly-owned company". I am sure that there is an obvious explanation for that, but we have not had it and it would be helpful to have it.

I do not want to prolong my remarks, but we have heard much about privatisation, as one would expect, from the hon. Member for Whitehaven. The appalling spectacle of my right hon. Friend flogging off bits of the British Steel Corporation and 10 days or a fortnight later telephoning Mr. MacGregor to tell him what he has done is sheer fantasy. I am sure that the hon. Member knows that well. I do not see any prospect in the foreseeable future of that sort of privatisation. I suspect that that is one of the reasons why Mr. MacGregor is capable of viewing the new clause with the equanimity that he has displayed.

In short, if I really believed that the new clause would lead to substantial changes of substance, I confess that I would have reservations about it on the ground of the extent of delegated powers that it gives my right hon. Friend. I do not think that the House should view that with great enthusiasm. I am less 'worried about the extent of delegated powers because I am worried about the extent to which the clause will, in practice, operate.

Mr. Tebbit

My hon. Friend shows great understanding of these problems and an ability to have it both ways in his understanding. How would he prefer that I should ameliorate those problems? I say "ameliorate" because I do not think there is a practical way to end them.

Mr. Bruce-Gardyne

The Department of Trade must take a much tougher line with Mr. MacGregor and insist that he does not, by aggressive marketing behaviour based on taxpayers' subvention, continue to destroy what remains of the private sector. As I have said to my hon. Friend the Minister of State, if he succeeds in destroying the rest of the private sector, the British Steel Corporation will not retain the market share resulting because the customers are not prepared to become dependent on single sourcing. They will insist on a second source, and that second source will be overseas and imports. We shall not benefit in the long run. Import penetration will continue but we shall have destroyed the elements of competition that are left in the steel industry.

Therefore, my answer to the Minister of State is that I believe that the Department must take the initiative.

The hon. Member for Whitehaven referred to putting Mr. MacGregor in a straitjacket. He has not shown many signs of suffering from that condition, and in some respects I think that he needs to be placed in a straitjacket. I do not believe that the new clause will make the remotest bit of difference either to his freedom of action or to his freedom of initiative. Sadly, I can hardly believe that it is worth the trouble.

Mr. Campbell-Savours

The House will not be convinced by the words of the hon. Member for Knutsford (Mr. Bruce-Gardyne). He put them well, but those of us who have looked at the new clause in detail are horrified and deeply disturbed by the implications for what remains of the BSC after the Minister has laid his hands upon it.

We were equally disturbed by the way in which the new clause was produced. This is a new Bill. The Minister knows that, and he also knows that the House has been cheated out of a Committee stage on an important area of legislation. It is important that every steel worker in Britain understands what is happening in the Chamber tonight.

I should like to know what Mr. MacGregor's response was. What happened during the conversations that took place, when Mr. MacGregor was confronted by a Secretary of State laying down the law and saying that he intended to introduce a new Bill of this nature and to insert it in an existing Bill which had completed its Committee stage? He would have been negligent had he not objected most strongly to this curtailment of his activities. It is important that Mr. MacGregor understands that he has a duty to every steel worker in Britain to ensure a secure future for the BSC, but as far as I can see, there will be no security or future in any area of the BSC under the proposals embodied in the new clause.

Why was it introduced? Hon. Members on both sides of the House will be well aware of the late-night activity of Conservative Members to press the Government to give way on the reorganisation of the BSC in such a way that the private sector of the BSC's interests would be fully protected. That is at the root of the new clause—pressure exerted by Conservative Members during Committee. Indeed, Conservative Members did not chirp up too often in Committee. It seems that they did most of their lobbying in the Corridors. Had they come out publicly, at least there would have been a free and open debate about the implications of the pressure that they were exerting.

According to the explanatory notes provided by the Minister, the new provisions limit the Secretary of State's powers under section 4(2) of the 1975 Act to give directions about the Corporation's organisation. That now means that the next Government—a Labour Administration—will not be able to influence the managerial organisation inside the BSC or introduce the kind of industrial democracy within existing legislation and in the new clause that I tabled, which will be lost as a result of the introduction of the Government's new clause.

Many of us believe that the lack of industrial democracy lies at the heart of the BSC's problems. We have now lost an opportunity to introduce the vital change that is necessary to secure that industrial democracy.

The same section of the explanatory notes says later on: The Corporation will retain their responsibility to ensure the efficiency of their organisation but the Secretary of State will no longer have the power to tell them how this should be done or when they should review their organisation". It is not for the Minister to presume that the cash flow has ended, because many of us believe that over the coming years the BSC will be funded increasingly by the State. On the basis of the policy pursued by the Government, based on voluntary agreement in Europe and the lack of success in that area, it is quite clear that the level of imports will only escalate in future. Irrespective of the cash allocated to the BSC, the Secretary of State will not have the power to intervene in its management so as to secure the best use of that money.

The effect of section 4A(2), we are told, is to ensure that the Secretary of State's consent is sought before the Corporation makes any substantial change in the way it is organised. That is even more innocuous. Having removed the power to direct on organisational matters, the Government can block the reorganisational changes. It is the whirling of the big stick and the big threat. The Secretary of State can block whatever changes the BSC may wish to introduce in its best interests.

Section 4A(3), according to the notes, gives the Secretary of State a general control over the corporation's capital investment programme. That gives the Secretary of State power to stop, halt, cease and, prevent investment if the private sector complains. It is obvious that the private sector will determine the level of public sector investment, and its determination will be dependent on the private sector's partisan interests.

The effect of section 4A(4) is to give the Secretary of State power to give direction to the Corporation by order subject to annulment for the discontinuance or restriction of any of their activities". That means that the Secretary of State can instruct the BSC to stop competing with the private sector. How is it possible to impose on a public corporation, a company or a wealth-producing unit, the restrictions that prevent it from competing with a competitor because in competing it may damage its competitor's interests? I thought that that was what competition was all about—survival of the fittest. I do not wish to see the demise of the private sector, but that clause provides for a far more aggressive form of commercial activity than is in the interests of either the BSC or the private sector.

The effect of section 4A(5) is to allow the Secretary of State to put party dogma before the proper discharge of the Corporation's duties. The section is built in such a way that its political considerations, which will determine investment and the reorganisation of the BSC, are not a proper discharge of the corporation's activities.

Section 4A(7) gives the Secretary of State specific powers to acquire the formation of Companies Act companies to carry on the Corporation's business in areas where this overlaps with that of the private sector. When private companies complain about BSC activities they can threaten the public sector companies by complaints to the Secretary of State. They could demand privatisation of those companies which, dependent on those companies' internal organisation—for example, raw materials, supplies, marketing or distribution arrangements—could lead to the phasing out of operations and the bankruptcy of those companies.

The Secretary of State is emasculating many of the essential powers that the BSC traditionally holds. The Bill restricts the BSC in such a way that it cannot fairly compete with the private sector.

8.30 pm

This is all in response to a very heavy lobby that has been put up by private sector interests on the opposite side of the House and private sector interests in the country who worried about the trading tactics of the British Steel Corporation; unable to understand that those are the criteria which govern the way they operate, they are the people who demand these silly changes.

Instead of spending three or four weeks sitting in Committee and gallivanting around Europe, the hon. Gentleman would have done much better to sit down with the British Steel Corporation and work out a marketing strategy in conjunction with the private sector based on market share, so that at the end of the day the British Steel Corporation could say, "This is the proportion of the market we are required to retain." It could look at its assets and use them in the best interests of securing the market share on the least cost arrangements. If that had been done, a number of plants in my constituency would not have been closed down as a result of the policies pursued by this Government.

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)

I cannot help feeling that a tremendous amount of false hysteria is being built up by this clause. The hon. Member for Workington (Mr. Campbell-Savours), as ever, likes to use wonderful flowery phrases—which may look good in his local papers—to the effect that he has shed the last drop of their blood to protect his constituents. He has said that every steel worker should be horrified at this clause and that it was some wicked Conservatives—of whom I am glad to say I am one—who said that the new clause should be inserted in the Bill.

There are two interests to be protected here. As I said in Committee, private steel workers and private employers bleed just as much as the State or the State worker. When a private company gets into difficulty, if it has not sufficient finance behind it, it goes to the wall. Such companies were and are going to the wall. With the State there is a lot of tut-tutting, a lot of sorrow, a lot of anguish, with many people saying how awful times are, and the Minister has to ask the House, quite modestly and without any blushing, for another £3,000 million for this and another £500 million for that. State enterprises go marching on while private enterprises are faced with that awful claw, a pincer movement. They cannot get support from their banks because they will not be profitable enterprises.

The State can go on because it gets support out of its own pocket via this House. The idea of this clause which my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) and I were pleased to have had a hand in—I am sure he will speak for himself—was not, as the hon. Member for Workington said, to protect private industry. One should ask firms such as Duport, Round Oaks, Guest Keen and Hadfields about compensation. If one wishes to be cynical, one may well say that it is better to lay off one British Steel worker than it is to lay off one private steel worker. The British Steel worker will get up to 10 times the compensation awarded to his private colleague who is still working just as hard as the British Steel worker. The difference is that the BSC worker's compensation will come out of the pockets of the taxpayer whereas the compensation of the private workers can come only out of what funds are left when the private companies try to compete with the British Steel worker.

Mr. Bill Homewood (Kettering)

During the massive BSC closures, including Corby in my constituency, we did not hear such plaintive speeches from the Government Benches. It is amazing how their interests have been animated by the steel workers' cause since the private sector ran into trouble. The hon. Gentleman ignored the public sector.

Mr. Beaumont-Dark

That is not true. The British taxpayer is being asked to write off thousands of millions of pounds. Because we needed an Iron and Steel Bill we are given the chance to put right the inequities which led to some of the private steel industry's problems.

It has been said that the clause is cosmetic. I do not believe that it is. It is a genuine attempt to ensure that the problems are better understood. We hope to prevent a repetition of a firm such as Stanton and Staveley quoting a price for black iron which made it impossible to break even. That cannot be allowed to continue. The intention of the clause is not to keep down the British Steel Corporation. There is a need for the BSC. We cannot go on nationalising and denationalising industries.

However, we need a powerful private steel industry as well. Private industry has greater flexibility. Some people do not wish to deal with State companies. We must move away from the amorphous balance sheet of the BSC. Nobody knows whether it competes with private steel companies as fairly as possible. Private, quasi-public companies are to be set up. We shall not know whether the competition is entirely fair, but it will be fairer. It will be only partly fair because, as I understand the public debt structure of the BSC, it is not based on a notional rate of interest on its money. If any money is left over, that is called a profit. If a private steel company could regard all its borrowings as an equity debt, some gross profits would suddenly appear, instead of its having to pay between 15 per cent. and 17 per cent. interest.

I understand that Allied Steel and Wire will be 50 per cent. owned by Guest Keen and Nettlefolds. It will have an absolute duty to its shareholders to tell them precisely how much of their assets are in the company. It will not be a secret, hole-in-the-corner £100 million company. All the facts will have to come out. They will have to be published in the balance sheet of a company which is owned by about 54,000 shareholders, including trade union pension funds. It will not be a secret affair.

My hon. Friend the Member for Faversham (Mr. Moate) is confused with the idea that Allied Steel and Wire can draw up a balance sheet until it knows what assets are to go into it and what value will be put on the assets by the British Steel Corporation in collaboration with the new company.

Mr. Moate

I accept that, but I am not asking the Minister now, before the company exists, to tell us what cash and resources it has. However, when that company exists we should be told how much taxpayers' or BSC cash has gone into it. That is reasonable.

Mr. Beaumont-Dark

The point is quite reasonable. I think that the Minister was quite right to say clearly that this will be a matter for Allied Steel. It will then be run as a separate entity. That board will be answerable to its shareholders, of whom the Slate will be one. Then all the figures will come out. Members cannot press the point now as though it was a matter of enormous principle because something has been hidden. In my view, the Minister is right. It cannot be hidden because there will be other shareholders.

Some hon. Members say that this clause is sinister. In my view, the only sinister part is that, having heard all the explanations, I now understand why lawyers make so much money, because I found the Bill difficult to understand but I found the explanations even more difficult to understand. But if the new clause does what I believe it is meant to do—enable people outside to see, not that the BSC is driven into the ground, but that the private steel industry will have a fair chance to compete—it and the Bill will have my support as well as my respect for the Minister at the Department.

Dr. Jeremy Bray (Motherwell and Wishaw)

I understand the wishes of the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) in commending the new clause to the House. I understand the way in which the Minister of State set about producing it. I doubt whether the Minister himself wrote it. I cannot recall a similar process, in a late stage of a Bill similar to this, since the Industry Act 1975. That was a Bill introduced by my right hon. Friend the Member for Bristol, South-East (Mr. Benn) when he was Minister for Industry. When the Bill was half-way through Committee he was moved into the Department of Energy. His successor saw the Bill through the remaining stages in the House, introducing a fantastically baroque new clause, comparable to this one, which was drafted by no less a person than my right hon. Friend the Member for Huyton (Sir H. Wilson) to screw up the mandatory requirements for disclosure at the behest of trade union representatives to such an extent that they could never be exercised and never were exercised. In this case, instead of my right hon. Friend the Member for Bristol, South-East being knocked out by my right hon. Friend the Member for Huyton, the Secretary of State for Industry is himself knocked out in one of those extraordinary contortions of which only he is capable.

If I remember aright, in so far as I have been able to delve into this matter, in the original Industry Act there were no powers for the Secretary of State to give directions either of a general or of a specific character. Perhaps the Minister of State can confirm that. Those powers to give general or specific directions were written into the Iron and Steel Act 1975 by my right hon. Friend the Member for Bristol, South-East only to bring the iron and steel industry into line with the original nationalisation statutes of other industries. With this new clause the Minister of State is preserving all the Bennery, sharpening it up a little to serve the purposes of the Secretary for Industry, and getting himself into a bit of a muddle.

As I understand it, the powers to give a general direction have been left totally unchanged. It is still possible for the Secretary of State to give a general direction which the original Secretary of State was not able to do in the 1975 Act. In the new clause the powers to give a special direction have been greatly sharpened up, but not in terms of the general organisation of the corporation, as we used to understand it—the question whether the private sector company should continue, and whether it should be rationalised on to a product basis, or a geographical or market basis, and the major trauma that the industry went through in those successive wages reorganisation as it was gradually shaken down into an organisationally practicable form.

The original intention was to give a special direction, but the Secretary of State has departed entirely from that policy. I understand and agree with the hon. Member for Selly Oak in wishing to see proper accountability and comparability in the corporation—with a view to carving out bits of the corporation that may be put into a shape that will enable them to be sold off to the private sector, or put into joint ventures with the private sector and, if they are successful, subsequently sold off completely.

8.45 pm

I suspect that no one in the Department of Industry thinks that these powers will be used for the principal steel making and steel finishing facilities of the BSC in such works as Ravenscraig, in my constituency, Port Talbot, Llanwern, Scunthorpe and Thrybergh, namely, the corporation's main central steel making and finishing mills. These powers will be used in the engineering steel and special steels sectors where the private sector is in direct competition with the BSC. These are the areas in which we shall see attempts made to use these powers.

I ask the Minister of State whether there have been underlying problems that led him to introduce the clause. I have in mind problems in dealing with the corporation. Has the Department been trying to push the pace of hiving off in the special steels and engineering steel areas that the corporation has not been willing to accept? In other words, has it not been prepared to move as fast as the Department wishes? I am not sure that we shall receive an answer from the hon. Gentleman or from the Under-Secretary of State—the hon. Member for Arundel (Mr. Marshall). The broad smile of the Minister of State confirms that there have been difficulties of that sort.

Mr. Tebbit

The broad smile on the face of the Minister of State appeared when he considered the idea that a Minister would discuss in the House such intimate details of the relationship between himself and the chairman of a nationalised industry. It would be unusual.

Dr. Bray

It would be unusual, but that does not mean that discussions have not been somewhat difficult.

If the real purpose of the clause is to assist the hiving off process and not merely the accountability process, and if it is being used as a weapon to enable the Secretary of State to strengthen his argument with the corporation's chairman, I think that we can understand what is happening. If that is so, I think that we need not be too worried about the major impact in wrecking the corporation that undoubtedly some of my hon. Friends fear.

Instead, we have a pathetic revelation of the sheer confusion with which the Secretary of State conducts his industrial policy. He has the basic doctrinal position that all problems in industry should be solved by competition. Therefore, he says to the corporation "We shall put you on to a fully competitive basis. This requires your becoming competitive in your principal activities, revealing what your minor activities are and hiving those off if you can." If that is his strategy, the main thrust of where he is putting his money and what is being done with his money is to make his competitive strategy completely nonsensical.

The right hon. Gentleman has rightly enabled the corporation to pursue an aggressive commercial policy against overseas competition. It is regrettable that some of that policy has rubbed off on the private sector, which should have been looked after by giving it comparable support by comparable measures to ensure that the private sector could survive in a way in which it would be able to meet the country's needs when the upturn comes. To do that would have gone against the Secretary of State's dogmatic preconceptions. He was not prepared to do that. He has found a reasonable solution for the public sector. However, because of his schizophrenia about what he is prepared to do for the private sector, he is wrecking it.

I understand the frustration experienced by Conservative Members. However, I cannot understand their readiness to go into the Lobby with this mad Secretary of State for Industry while he slaughters the private sector. Have they no guts, or convictions on behalf of their constituents? Will they just wait to be mown down by their constituency party chairmen during the process of reselection? Should Conservative Members survive that process of reselection, a stickier end awaits them. At the next general election they will find that their principal basis of support has disappeared. They have pursued an economic strategy that they do not understand. In so far as they understand it, they disagree with it. They like the slogans, but they do not like their effects.

The industrial consequences of the Government's policy are inescapable. Bankruptcies and closures have taken place throughout industry and there has been a tragic rundown of the private sector of the steel industry. There have also been grievous consequences for the public sector. Such things will prove to be the real measure of the Department of Industry's disastrous policies, which Conservative Members have not had the guts to oppose in the Lobby.

Mr. Tom Ellis

On Second Reading, I said that it was clear that if we did not have a corpse on our hands, we had at least a patient on a life-support system. The clause is an attempt—albeit wrong-headed—to deal with that patient. The Minister intervened in a speech made by the hon. Member for Knutsford (Mr. Bruce-Gardyne). He spoke about having to ameliorate the position. The Minister served only to confirm my feelings. I am disappointed that the hon. Gentleman should have felt it necessary to argue that the measure was being introduced for some purpose to do with the need for transparency of competition. He seemed to say that that was its justification. However, the hon. Member for Faversham (Mr. Moate) shot down that argument. Competition policy in the Community is knocking on the door and the problem of transparency may solve itself shortly.

There is something in the argument that several people put forward when Mr. MacGregor announced his plan. It was said that the proposals were not drastic enough. This set of proposals is a wrong-headed attempt to prepare the ground for introducing even more drastic measures, should they prove necessary. I do not have any strong ideological conviction about whether the industry should be publicly or privately owned. Most of those who work in the industry are not bothered whether it is publicly or privately owned. They are bothered about keeping their jobs. To the extent that all hon. Members would sink their prejudices if that would ensure jobs, I support the Minister.

As the hon. Member for Motherwell and Wishaw (Dr. Bray) said, this measure is nothing but a reflection of the Secretary of State's ideological commitment. I cannot help feeling disappointed that the Minister is disproving the old adage that necessity is the mother of invention. There is a serious problem in the steel industry. It has been getting worse and we are not half-way towards curing it.

With this reconstruction we have an opportunity to try to do something and to get the best out of the precise arrangement in a publicly owned body and the precise and ideal relationship between the board of the corporation and the Minister. One of the problems which has faced the steel industry, like many other nationalised industries, is the perverse and capricious relationship between the Minister and the industry. We have an opportunity to solve that problem, given what appears to be good management in the British Steel Corporation; I do not object to the great expense at which its chairman was obtained. We have the opportunity to let the manager manage. Are we letting it slip? We are imposing a specific narrow halter. The Minister shakes his head, but I feel that that is what will happen.

By hiving off the more competitive parts of the British Steel Corporation, the rump or main stream will be even less competitive and in due course we shall end up with the corpse. That point was made by the hon. Member for Motherwell and Wishaw. It is sad and tragic that the Minister has failed to take advantage of the situation and has failed to try to achieve the ideal relationship between himself and the chairman.

Once the Bill goes through and once quasi-public / private companies are established, the only direction which will remain to the Minister will be to give a directive to dispose of the corporation's assets and to close it down. For that reason more than any other I shall vote against the new clause and support the hon. Member for Whitehaven (Dr. Cunningham).

Mr. Homewood

I have given much thought to the new clause, although it has not been with us for long. I wondered why, in such a short space of time, the Government could substantially change their minds about a clause in a Bill which was introduced only a few weeks ago.

I sought to discover why the Goverment changed their minds. My hon. Friend the Member for Motherwell and Wishaw (Dr. Bray) and the hon. Member for Wrexham (Mr. Ellis) probably came fairly close to the truth. When we receive lectures about competition from the Government Benches almost every day, usually their attitude has been that private enterprise is so successful that it is in no need of any protection from public enterprise. That is relevant to the new clause.

I have said before in the Chamber and in Committee that the Government and some Conservative Members have found that the new management of the British Steel Corporation has been far too successful for their comfort, with regard to public enterprise. It is only in the steel industry that we have a publicly owned industry which was nationalised as a doctrinaire concept. I am not afraid to use that term. I do not know why people back away from it. The Government have doctrinaire ideas and so do we. The BSC is the only doctrinaire company in this country. The remainder of publicly owned industries were nationalised to keep them afloat. It is the only such company in direct competition with private enterprise. All the other deliberately nationalised industries are complete monopolies.

9 pm.

With BSC a constant failure, the Conservatives had a marvellous setting for denigrating public ownership. Recently, the scene has changed. The BSC is no longer such a failure. The Government are, therefore, introducing this clause, but not to interfere internally. Why should they? The corporation is successful internally. The concept in the clause is that, having become successful, the corporation will be sold to private enterprise. The Government's record of interference in industry means that they would probably have turned it into a failure. The BSC management is successful, so the Government plan to let it continue without internal interference, become more and more successful and then sell it off.

In business, the ultimate criterion for success is expansion, so the Secretary of State is taking control of expansion, perhaps by venturing into different processes or taking over private enterprise. It is stopped there. The Secretary of State will have complete jurisdiction over expansion; otherwise the corporation could devour the entire private sector.

As the Government know, even in these depressed times, the steel-making side of the industry is where the losses are made. If the BSC could continue its steel making and make its peripheral activities profitable, the private sector could not prevent itself from being commercially taken over by the corporation. Therefore, the marvellous idea of the Phoenix came about. There will be no rising from ashes. The Phoenixes will be in two sections. I believe that the one that will be created in engineering steels will be the most successful and in a short time will be sold to the private sector. By selling off that sector, the Government will ensure that they can again say that the publicly owned steel industry is a failure and a loss-making industry, having taken away from it every chance of being profitable.

In all the arguments about doctrinaire activities, this squalid little clause is the most doctrinaire measure that has been introduced in my two years' experience in the House. Its purpose is simple. The Government, having decried and denigrated public enterprise and having been proved wrong in one industry, then deliberately re-assert the situation in this squalid clause.

The Under-Secretary wrote to me about a possible Phoenix operation between Corby tube works and TI. He denied that possibility, and I am sure he is right, because at present Corby tube works is not very profitable. Its condition is such that neither the Government nor TI would wish to turn it into a Phoenix. However, I am sure that the Minister knows that developments are now taking place in Corby that would make such an arrangement very attractive, not only to the Government but to TI. The clause makes it possible, without consulting either the work force or BSC's management, for the Secretary of State to bring such an arrangement into being.

I believe that Mr. MacGregor, having discovered how critical Labour Members are of his appointment, set out to make sure that BSC became a successful enterprise. I do not agree with his methods. I believe that he is a complete autocrat and that no industry can function very long on the system of consulting no one. That is Mr. MacGregor's way of doing business. But at the moment he has succeeded to a degree that has frightened the people there to death. Give us two or three more chairmen like that, even if we have to pay them £2 million or £3 million, and the old denigration of public enterprise will be destroyed. That, I believe, is the sole purpose of the clause. That is why it appeared so late on the Order Paper. It was not realised until a few weeks ago that the whole intention is to make sure that public enterprise, put in a competitive situation, will never be able to escape from criticism.

Mr. Martin Flannery (Sheffield, Hillsborough)

The hon. Member for Faversham (Mr. Moate) complained at some length that he and the steelworks in his constituency had no knowledge of its fate. He complained that Ministers were treating him and his hon. Friends in a cavalier fashion. If that is so it must be obvious to all that their treatment of the steel workers—including the managers—is disgraceful.

Our debate is a farce. It is hardly a debate at all. My hon. Friends and I are taking part to show that we are still fighting a Bill whose aim is nothing less than the denationalisation of the corporation, an organisation that has received massive amounts of public cash. The private sector is always complaining about taxpayers' money being spent on public ventures, but while saying that it is a crime to use taxpayers' money in this way, they are preparing to take the thousands of millions of pounds that the taxpayer has put into the BSC.

The Report stage of a Bill is the occasion when those who served on the Standing Committee come to the House to report on their stewardship of that Committee. The farce is that we are apparently reporting to fewer than 20 hon. Members because the Conservatives are not interested. So long as they can filch this great industry they are satisfied. It is a farce also because the Bill that we discussed in Committee is different from that now before us. What is the good of our reporting on the Bill we had in Committee—and we had insufficient time for that—when on Report we have to contend with a different Bill, one that I saw for the first time at 4 o'clock this afternoon—[Interruption.] The hon. Member for Bromsgrove and Redditch (Mr. Miller) is not in the House because he is on the wrong side of the Bar. I suggest that he either keeps quiet or comes into the debate.

It is a task simply to read the 95 lines of the new clause, or the new Bill, which introduces a new set-up. This is not a Report stage. It is the Committee stage of a new Bill. By adopting this approach the Government are guilty of sharp practice and improper behaviour. My hon. Friend the Member for Whitehaven (Dr. Cunningham) quoted from subsection (6). Subsection (5) is enough to make a cat laugh. It states: The Secretary of State shall not give any direction under subsection (4) above"— and it continues with this deathless prose— unless he is satisfied that the giving of it will further the public interest. Who do the Government think they are talking to? They are to take from taxpayers thousands of millions of pounds and are to put it into the pockets of the robber barons. And they say that is in the public interest.

9.15 pm

I hope that what I say will be heard widely by those working in the industry. Some workers from the private industry, from Hadfields, visited the House today to try to save their jobs. Hadfields is part of the so-called corporate plan. The Committee on the lion and Steel Bill has not seen that so-called plan. I am not sure that Mr. MacGregor has seen it. I do not know whether anyone has seen it. The intention of the plan is to take the public steel industry and this vast amount of money away from us. The new Bill, miscalled a new clause, is one that we have never seen before. We are having a Committee stage on a new clause.

On Second Reading the Secretary of State said: This Bill will allow the corporation's activities to be reduced virtually to nil but we have stopped short of introducing a measure to provide for complete liquidation of the corporation. We do not think it appropriate at this stage to take such powers but we do not rule out the possibility of introducing further legislation to wind up the corporation if it becomes necessary. The Secretary of State went on: I am simply emphasising that if the residual British Steel Corporation seemed no longer to have justification we should be ready to seek further legislation to wind up the corporation."—[Official Report, 19 March 1981; Vol. 1, c. 445–446.] We are expected to have a nice leisurely debate on a massive new clause, in what is miscalled the Report stage, in a Bill carrying out massive robbery, as was said by the Secretary of State for Industry.

The original Clause 1 entitled "Modification of Corporation's functions" means destruction of the corporation's function. My right hon. Friend the Member for Salford, West (Mr. Orme), the Shadow Minister, said earlier in that debate that the Bill was produced by doctrinal prejudice against nationalised industries.

That is true of the interests of the workers in the private sector who came here today. They came from the Phoenix II factory, Hadfields. They have been put out of work already in the great private steelworks as a result of the Government's action. In those factories hundreds, if not thousands, will be sacked from the private sector which the Bill is supposed to help by its effects in the public sector.

A few days ago I took part in a march for jobs, the biggest demonstration that the city of Sheffield has ever seen. The whole city was involved and the police attempted to keep the demonstration away from the centre of the city. The Minister understands, as he once worked in that area. All over the city are great factories bearing signs "To Let". The city looks like a desert as a result of the Bill and what is called the slump—as though a slump is an act of God. The reality is that the Government have failed to help the industry to survive.

The Bill loots and robs working people and at the same time puts them out of work and lays waste the factories that were built with public money.

We are against this so-called new clause, which we have never had time to discuss. It has been imposed on us without a chance. The explanation was that it was only issued this morning. I received a copy on the board earlier this afternoon. It is impossible in the midst of all our other work to read the new clause and be expected to debate it, when we should be reporting the Bill that we discussed in Committee.

A new word has appeared in our vocabulary—"privatisation". The old word was "redundancy". Both mean people out of work. We want these people and the trade union movement to know that this seemingly small Bill is one of the most powerful and reactionary that we have ever had to discuss, and that a great industry has been taken away from those who have patiently built it up. That is exactly what happened before.

I am fundamentally opposed to what is being done. We should tell working people that vast amounts of money will be taken from them to help private industry. We are defending all working people. We shall not allow anyone to set workers in private industry against workers in public industry, because to the extent that public industry suffers, private industry—which to a great extent is its customer—also suffers.

When the Bill is passed, as it will be, I hope that it will be made clear to everyone that a proper debate did not take place and that things we had never seen before were foisted upon us at the last moment before we even had time to glance over them.

Mr. Crowther

The Minister moved the new clause in the moderate tone for which he is rightly famous. One could have been lulled into thinking that this was a modest extension of the Secretary of State's powers. However, my hon. Friends have clearly shown that it is far from that. In fact, it will give the Secretary of State powers that are absolutely unprecedented in any nationalised industry.

If the powers are used—and we can only assume that they will be, or there is no point in inserting them into the Bill—the BSC will be placed in the middle of a web of bureaucratic and political interference which no industry can be expected to survive. Indeed, from the new clause, it seems that Mr. MacGregor will almost have to get the Secretary of State's permission to blow his nose. I do not know how any chairman could tolerate that sort of interference, and in due course I look forward to hearing from Mr. MacGregor's own lips what exactly he thinks of it.

My hon. Friend the Member for Whitehaven (Dr. Cunningham) properly pointed out that the Secretary of State, throughout his evidence to the Select Committee on 1 April, protested that he had no responsibility, and did not want it, for the management of the industry. My hon. Friend quoted one part of the Secretary of State's evidence, and I shall quote another. In answer to me the right hon. Gentleman said: I do not expect to have officials who are expert at steel management, or steel managers—that is the job of the Steel Corporation. That is clear enough. The right hon. Gentleman is telling us that he does not have people in his Department who are experts on the industry. He said later: I think, with respect, Chairman, we would be deceiving the public if we promised to have in position people with the same level of experience and depth of knowledge in each of the nationalised industries for which we are responsible. Whose advice will the Secretary of State seek when deciding whether to make directions under the power that he is taking in the new clause? He has told us clearly that there are no people in his Department qualified to advise him. His answer makes it clear that they do not know as much about the industry as the people in charge. We are therefore forced to the conclusion that his decisions will be made on purely political grounds. That is the only conclusion that we can reach.

When the right hon. Gentleman makes a decision on whether to order the BSC to dispose of its assets, the rather naive condition is imposed that he must be satisfied that it will "further the public interest". We are entitled to ask what criterion he will use to decide what is in the public interest. Whose advice will he seek? Clearly he will riot seek the advice of Mr. MacGregor or the people running the corporation, because the only time when he will need to give such orders is when Mr. MacGregor refuses to sell an asset.

If Mr. MacGregor or is in favour of selling, there is no need for the Secretary of State to make an order. That much is clear. Under the new clause, the Secretary of State's political decision will override the commercial judgment of those who have been placed in charge of that publicly owned industry. The people appointed by the Secretary of State will be overruled by his political decision. I do not understand how that can be in the public interest.

We have to see the new clause as we see clause 1, namely, in the context of the Bill as a whole. Later clauses, which we shall not oppose, provide for major financial restructuring of the corporation at considerable public expense. Yet the Bill, as the Secretary of State and the Minister of State have pointed out many times, is a denationalisation measure. There has been no attempt to hide that fact. The reason for pouring in vast sums of taxpayers' money is not to boost a publicly owned industry but to prepare it for slaughter. An industry that is submerged under a mountain of debt will not be an attractive proposition for prospective purchasers.

We must consider the new clause against that background. It has been introduced at this stage for a clear reason. I appreciate the Minister's point that he cannot discuss the intimate relationship between Ministers and chairmen. He does not need to do so because anyone wno has his eyes open can see why the clause, which provides massive powers, has been introduced.

In recent weeks it has become clear that Mr. MacGregor will not joyfully preside over the dismantlement of the industry for which he is responsible, even if he was appointed for that purpose. He has shown himself to be tough, shrewd and quick on his feet. He is the Muhammad Ali of the nationalised industry chairmen. He has taken on some powerful private companies in recent weeks—people who were lining up to grab themselves a share of BSC's special steels division. He knocked them out of the ring halfway through round two. That has upset the Government and they now have to use powers to force Mr. MacGregor to do certain things.

Everyone deplores the tragic loss of jobs in the private sector at Llanelli and the Hadfields works in Sheffield, to which my hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery) has referred. But it is true to say that the jobs at Hadfield were doomed anyway. It was well known in South Yorkshire, long before Christmas, before the Bill appeared and before the Phoenix talks were under way, that a large part of Hadfields could not be expected to survive beyond halfway through this year. The owners, Lonhro, were hoping to get a stake in the modern BSC plant in South Yorkshire before closing Hadfields. That is where Mr. MacGregor has beaten them. That is why the Secretary of State needs to take such extreme powers. He needs to force Mr. MacGregor to become the instrument of the Government's will. When the Bill was drafted the Government were no doubt hoping that Mr. MacGregor would prove a more pliable or malleable sort than has been the case.

9.30 pm

It is unfortunate that the Government have not taken this opportunity to write into the Bill, as part of the new clause, a safeguard of the interests of the taxpayers and owners of the BSC. I have raised this point with the Minister on a number of occasions. I asked him how valuation will be determined when the BSC is ordered by the Secretary of State to dispose of its assets. Under the new clause the assets are not necessarily plants, mills or melting shops. They may be research projects.

We are talking about BSC's property, rights, liabilities and obligations—in other words, all it has. A very expensive research project at BSC Stainless in Sheffield has been suspended.

Presumably the corporation could be ordered to dispose of that project to a private company. If that happens, who will decide the price so that we, the taxpayers, the owners of this property, are not robbed? Who will ensure that it is sold at a proper price? In the case of a willing vendor and a willing purchaser the matter is simple. Agreement is reached on the price and the sale is completed. If agreement is not reached, no sale takes place. If the vendor is forced to sell, there is no free market and the purchaser or purchasers are in a very strong position to take advantage of it. When I raised this matter in Standing Committee the Minister of State said: If an order were made, it would place the corporation in the position of wishing to sell an asset".—[Official Report, Standing Committee B, 28 April 1981, c. 116.] That is patent nonsense. An order would need to be made only if the corporation did not wish to sell. Quite clearly, if an order is made the corporation is not a willing vendor. There is no provision in this Bill for independent arbitration to determine the proper value of assets which are to be disposed of.

I am very concerned about this matter. Taxpayers must also be very concerned, because there is a great danger that the most valuable pieces of the publicly owned steel corporation will be sold at bargain basement prices. In all other cases, where a compulsory sale takes place—for example, there is a compulsory purchase order for highway or planning purposes—provision is made that, in the absence of agreement, the price will be determined by an independent arbitrator, in this case the Lands Tribunal. There is no similar provision in the Bill.

I agree with my hon. Friends who have expressed serious worries about the new clause. It contains provisions by which the public, the taxpayers, are likely to be robbed of some extremely valuable assets and not paid a proper price for them. It is a thoroughly bad clause.

The Under-Secretary of State for Industry (Mr. Michael Marshall)

This has been an interesting debate, if perhaps at times a strange one. The hon. Member for Wrexham (Mr. Ellis) referred to our Second Reading debate. I have to tell him that we have had it all over again. Much of the argument put forward by the Opposition reveals a state of synthetic indignation which is remarkable.

I never cease to be amazed at the ability of some hon. Members who make bricks without straw and then hurl them at us. In Committee my hon. Friend gave an undertaking to bring forward a new clause that would give power to the Secretary of State to give general or specific directions as to the internal organisation of the corporation; to remove the power of the Secretary of State to require the corporation to carry out a review of the way in which the corporation is organised; to report its conclusions to the Secretary of State and to enable the Secretary of State to direct the corporation to form separate Companies Act companies in respect of those businesses that are in competition with the private sector of the industry. Those undertakings were given very plainly, and for hon. Gentlemen to say that they received some amazing document today, when this is what the new clause provides for, is totally unreal.

It would not be sensible to rehearse many of the general arguments. On Third Reading it may be possible to pick up some of the points. I want to concentrate on some points of substance and try to answer them. I blame myself—I cannot seek to blame my hon. Friend—that the Government, in trying to be helpful, have seemingly run into crossfire.

The new clause produces a somewhat longer Bill. The hon. Member for Whitehaven (Dr. Cunningham), who opened for the Opposition, sought to make much of this. When one tries to clarify and be helpful there is a knock-on effect, and legislation becomes longer. It is frightening to think that if we took the view that the best way to pass legislation was not to expand or explain we should not have to face the type of agonising that we have had to face tonight. My hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) put the matter into perspective.

The hon. Member for Whitehaven talked about intervention. He said nothing about fair competition. Few hon. Members mentioned it, except the hon. Member for Motherwell and Wishaw (Dr. Bray) and, in a different context, the hon. Member for Sheffield, Hillsborough (Mr. Flannery). The question of competition motivated my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) to move amendments in Committee. His amendments are replaced by the new clause.

The hon. Member for Whitehaven was carried away. The provisions in the new clause cover precisely what is already happening. The establishment of Companies Act companies is envisaged in the new clause. Many arguments expressed by hon. Members have become redundant in the light of experience.

The hon. Member for Whitehaven perhaps misheard what we said about consultation. He said that under the new clause we would decide how much consultation would take place, but my hon. Friend the Minister of State explained how such consultation would take place. There is an important distinction. That is a reasonable decision for BSC in consultation with trade unions.

The hon. Member made sport of subsection (6). Procedure is provided under that subsection to ensure that a direction is given and made known formally to the corporation. That is an integral part of making plain the formal position. It is part of the mechanism under which that direction will appear in the annual report. That is how the issue is made public. On reflection, the hon. Gentleman might appreciate the significance of that.

My hon. Friend the Member for Faversham (Mr. Moate) expressed concern. I respect the way in which he has taken an interest in Sheerness, in his constituency. We are talking about a private company in which GKN has a 50 per cent. holding. The company is being established as a result of commercially confidential negotiations between GKN and the BSC. We are not in a position to comment on the negotiations.

My hon. Friend urges that we should require the publishing of information that we would not require of other private sector companies. There is a legal restriction on the Secretary of State disclosing such information obtained from the BSC or the private sector under section 33(1)(a) of the Iron and Steel Act 1975, which prevents the disclosure of information without the consent of the person who supplied the information.

My hon. Friend would be worried if Sheerness were involved in negotiations with the BSC and it was felt that there was discrimination in a company being asked to provide information that would not be required of other Companies Act companies. Reports have to be made by companies under other legislation. In those circumstances I hope that my hon. Friend will appreciate that we have tried to steer the fair course here and that there is no attempt simply to be difficult in regard to what he put to us.

Mr. Moate

I am grateful for my hon. Friend's explanation. I think that he has misunderstood my request. I am not asking for confidential information at this stage. That would unreasonable. It seems to be reasonable, when we have a publicly owned company—which is what this will be—that from the moment that the company is formed it is public knowledge. Certainly it should be known to the shareholders of that company, of which indirectly the public are shareholders, that we should know the capital structure—the balance sheet—of the company at the time of its inception. I do not believe that to be unreasonable. I do not think that the points that my hon. Friend has advanced really undermine the point that I make. I cannot believe that he can disagree with the proposition that I put forward.

Mr. Marshall

I understand the spirit in which my hon. Friend puts his point, but I think that my hon. Friend the Member for Selly Oak put the matter in proper perspective when he said that in the normal course of events one would see the reports that would make plain the matters to which my hon. Friend referred, and specifically to seek to intervene in the reporting process—which is what is implied here—would go, in a rather discriminatory way, down a track that I frankly cannot accept.

Dr. Bray

If it is a Companies Act company the balance sheet will be filed in Companies House and will meet the requirements of the hon. Member.

Mr. Marshall

The hon. Gentleman is correct. That will follow.

The hon. Member for Newport (Mr. Hughes) raised a point that I should like to clarify for him. He talked about subsection (3). He seemed to find something very worrying, and got somewhat worked up about that. That was incorporated in the 1967 Iron and Steel Act passed by the Government of which he was a supporter, and he will appreciate that there is no new or sinister connotation about that unless he wants to look back to the roots of that piece of party legislation and complain about that.

My hon. Friend the Member for Knutsford (Mr. BruceGardyne) has raised a problem that is accepted by Ministers. The difficulty of establishing and seeing fair competition is evident. It has been brought out in the debate that this is a step in the right direction. That is important. I believe that some hon. Gentlemen may be selling themselves short. I should be surprised if, armed with the information available in the Companies Act company published report, they cannot see for themselves the degree to which fair competition applies. This move towards transparency is certainly important.

The hon. Member for Workington (Mr. Campbell-Savours)—who is not with us now; I appreciate that he has other commitments—argued somewhat against himself tonight. He objected to the curtailment, as he put it, of the activities of the British Steel Corporation. He argued that we should curtail activities by some direct role in seeing how the organisation of the corporation was set up and maintained. This is a somewhat typical piece of the hon. Gentleman's confused thinking. We know that his instincts tend to make him want to run the British Steel Corporation from this place, but the burden of his arguments tonight was to object to what he described as the curtailment of the corporation's activities.

The hon. Member for Motherwell and Wishaw could not be with us at the opening of the debate. I took the opportunity in Committee to express my appreciation of his interest in these matters. I say this in no partisan sense; I mention it because he will find that one or two of the questions that he raised were covered by my hon. Friend in opening. In particular, when the hon. Member spoke about proper accountability and comparability with the private sector I agreed with him. That is part of what is intended here. I was glad that he saw the significance of what we were trying to do.

The hon. Gentleman asked why we decided to introduce the new clause. As my hon. Friend and I have made clear, it meets the spirit of the amendment that was moved in Committee by my hon. Friend the Member for Aldridge-Brownhills. The hon. Gentleman moved on to the slightly dangerous concept of reselection, and I shall pass over that quickly.

9.45 pm
Dr. Bray

In the original 1967 Act there were no powers of a general or specific direction. In this clause the Government are sharpening the Secretary of State's powers specifically to direct the corporation. Therefore, the Secretary of State is increasing ministerial interference in the affairs of the corporation.

Mr. Marshall

The hon. Gentleman is making a fair point. It is one that he made in his speech. He argued that under the terms of the 1975 Act, as with the amendment, the power of general direction would remain. He described the powers in the clause as rather more refined. We are seeking competition that is as fair as may be possible between the public and private sectors. That is the basic objective. Where we are providing these powers, we are seeking to do so in the sense that they will be used as reserve powers. We are reflecting what is already happening. Companies Act companies are being established and directions are not being issued. In future and in other circumstances it may be necessary to consider those factors. At this stage I do not regard it as relevant to take on board the hypothetical situations that were embodied in the questioning of the hon. Member for Rotherham (Mr. Crowther).

We are seeing a progression of the sort that I have described. The powers in the clause are being sought to underwrite the progression. They are fall-back powers in the event of the progression not taking place of its own volition.

Mr. Crowther

When compulsory purchase powers are given to local authorities for various purposes, there is provision for a system of appeal in the event of the person whose property is being forcibly sold not agreeing with the price that is offered. Why are the Government not incorporating a similar system in the clause which makes arrangements for our property—the BSC's assets—to be forcibly sold? Surely there should be some arrangement for arbitration in the event of a disagreement over price. It is a simple question.

Mr. Marshall

The hon. Gentleman is extremely skilful in putting forward the most far-fetched construction and then shooting it down in flames. In the real world, as he knows, there is a progression towards the Phoenix development about which he spoke.

I regard the hon. Member for Wrexham as one of the more moderate voices in these debates. I am sorry that he is not prepared to consider the real implications of these 50–50 public-private companies and to recognise that they are important.

We are seeking to reduce the powers of direction. In two of the three instances we are seeking to provide a reserve power. We are doing so on the basis of a 2:1 reduction— I have not heard what the score is anywhere else—and it seems an entirely reasonable new clause. Once more I commend it to the House.

Mr. Stanley Orme (Salford, West)

The Opposition find the Minister's explanation completely unsatisfactory. We are opposed to the new clause, as we are opposed to clause 1, and I ask my right hon. and hon. Friends to vote against it.

Question put, That the clause be read a Second time:—

The House divided: Ayes 248, Noes 194.

Division No. 188] [9.49 pm
Aitken, Jonathan Body, Richard
Alexander, Richard Bottomley, Peter (W'wich W)
Amery, Rt Hon Julian Braine, Sir Bernard
Ancram, Michael Bright, Graham
Aspinwall, Jack Brinton, Tim
Atkins, Rt Hon H.(S'thorne) Brittan, Leon
Atkins, Roben(Preston N) Brotherton, Michael
Baker, Nicholas (N Dorset) Brown, Michael(Brigg & Sc'n)
Banks, Robert Browne, John (Winchester)
Beaumont-Dark, Anthony Bruce-Gardyne, John
Bell, Sir Ronald Bryan, Sir Paul
Bendall, Vivian Buchanan-Smith, Alick
Benyon, W. (Buckingham) Budgen, Nick
Berry, Hon Anthony Bulmer, Esmond
Best, Keith Burden, Sir Frederick
Bevan, David Gilroy Butcher, John
Biffen, Rt Hon John Butler, Hon Adam
Blackburn, John Cadbury, Jocelyn
Blaker, Peter Carlisle, John (Luton West)
Carlisle, Kenneth (Lincoln) Langford-Holt, Sir John
Chalker, Mrs. Lynda Latham, Michael
Chapman, Sydney Lawrence, Ivan
Clark, Hon A. (Plym'th, S'n) Lawson, Rt Hon Nigel
Clark, Sir W. (Croydon S) Lee, John
Clarke, Kenneth (Rushcliffe) Le Marchant, Spencer
Clegg, Sir Walter Lennox-Boyd, Hon Mark
Colvin, Michael Lloyd, Ian (Havant & W'loo)
Cope, John Lloyd, Peter (Fareham)
Cormack, Patrick Loveridge, John
Corrie, John Luce, Richard
Cranborne, Viscount Lyell, Nicholas
Critchley, Julian McCrindle, Robert
Crouch, David MacKay, John (Argyll)
Dean, Paul (North Somerset) Macmillan, Rt Hon M.
Dickens, Geoffrey McNair-Wilson, M. (N'bury)
Dorrell, Stephen McNair-Wilson, P. (New F'st)
Dover, Denshore McQuarrie, Albert
Dunn, Robert (Dartford) Madel, David
Dykes, Hugh Major, John
Eden, Rt Hon Sir John Marland, Paul
Edwards, Rt Hon N. (P'broke) Marlow, Tony
Eggar, Tim Marshall, Michael (Arundel)
Elliott, Sir William Mates, Michael
Eyre, Reginald Mather, Carol
Fairbairn, Nicholas Mawby, Ray
Fairgrieve, Russell Mawhinney, Dr Brian
Farr, John Maxwell-Hyslop, Robin
Fell, Anthony Mayhew, Patrick
Fenner, Mrs Peggy Mellor, David
Fisher, Sir Nigel Meyer, Sir Anthony
Fletcher-Cooke, Sir Charles Miller, Hal (B'grove)
Fookes, Miss Janet Mills, Iain (Meriden)
Forman, Nigel Mills, Peter (West Devon)
Fowler, Rt Hon Norman Miscampbell, Norman
Fox, Marcus Mitchell, David (Basingstoke)
Fraser, Rt Hon Sir Hugh Moate, Roger
Fraser, Peter (South Angus) Monro, Hector
Fry, Peter Montgomery, Fergus
Garel-Jones, Tristan Morgan, Geraint
Gilmour, Rt Hon Sir Ian Morrison, Hon C. (Devizes)
Glyn, Dr Alan Morrison, Hon P. (Chester)
Goodhew, Victor Mudd, David
Goodlad, Alastair Murphy, Christopher
Gow, Ian Myles, David
Gower, Sir Raymond Neale, Gerrard
Greenway, Harry Nelson, Anthony
Griffiths, E.(B'y St. Edm'ds) Neubert, Michael
Griffiths, Peter Portsm'th N) Newton, Tony
Grist, Ian Onslow, Cranley
Gummer, John Selwyn Page, Rt Hon Sir G. (Crosby)
Hamilton, Hon A. Page, Richard (SW Herts)
Hamilton, Michael (Salisbury) Parris, Matthew
Hampson, Dr Keith Patten, Christopher (Bath)
Hannam, John Patten, John (Oxford)
Haselhurst, Alan Pattie, Geoffrey
Havers, Rt Hon Sir Michael Pawsey, James
Hawksley, Warren Percival, Sir Ian
Hayhoe, Barney Pink, R. Bonner
Heddle, John Prentice, Rt Hon Reg
Henderson, Barry Price, Sir David (Eastleigh)
Heseltine, Rt Hon Michael Proctor, K. Harvey
Hicks, Robert Raison, Timothy
Higgins, Rt Hon Terence L. Rathbone, Tim
Hogg, Hon Douglas (Gr'th'm) Rees, Peter (Dover and Deal)
Holland, Philip (Carlton) Renton, Tim
Hooson, Tom Rhodes James, Robert
Hordern, Peter Ridley, Hon Nicholas
Howell, Rt Hon D. (G'ldf'd) Ridsdale, Sir Julian
Hunt, David (Wirral) Rifkind, Malcolm
Hunt, John (Ravensbourne) Roberts, M. (Cardiff NW)
Jenkin, Rt Hon Patrick Roberts, Wyn (Conway)
Johnson Smith, Geoffrey Rossi, Hugh
Jopling, Rt Hon Michael Rost, Peter
Kaberry, Sir Donald Royle, Sir Anthony
Kimball, Marcus Sainsbury, Hon Timothy
King, Rt Hon Tom Shaw, Giles (Pudsey)
Knox, David Shelton, William (Streatham)
Lamont, Norman Shepherd, Colin (Hereford)
Lang, Ian Shersby, Michael
Silvester, Fred Waddington, David
Sims, Roger Wakeham, John
Skeet, T. H. H. Waldegrave, Hon William
Speed, Keith Walker, Rt Hon P.(W'cester)
Speller, Tony Walker, B. (Perth)
Spence, John Walker-Smith, Rt Hon Sir D.
Spicer, Jim (West Dorset) Wall, Patrick
Spicer, Michael (S Worcs) Waller, Gary
Sproat, Iain Walters, Dennis
Squire, Robin Ward, John
Stanbrook, Ivor Warren, Kenneth
Steen, Anthony Watson, John
Stewart, Ian (Hitchin) Wells, John (Maidstone)
Stewart, A.(E Renfrewshire) Wells, Bowen
Stradling Thomas, J. Wheeler, John
Taylor, Robert (Croydon NW) Whitney, Raymond
Tebbit, Norman Wickenden, Keith
Temple-Morris, Peter Wiggin, Jerry
Thomas, Rt Hon Peter Williams, D.(Montgomery)
Thompson, Donald Wolfson, Mark
Thorne, Neil (Ilford South) Young, Sir George (Acton)
Thornton, Malcolm Younger, Rt Hon George
Townend, John (Bridlington)
Trippier, David Tellers for the Ayes:
van Straubenzee, W. R. Lord James Douglas-Hamilton and Mr. Robert Boscawen.
Vaughan, Dr Gerard
Viggers, Peter
Abse, Leo Duffy, A. E. P.
Adams, Allen Dunn, James A.
Alton, David Dunnett, Jack
Anderson, Donald Dun woody, Hon Mrs G.
Archer, Rt Hon Peter Eadie, Alex
Ashton, Joe Ellis, R. (NE D'bysh're)
Atkinson, N.(H'gey,) Ellis, Tom (Wrexham)
Bagier, Gordon A.T. English, Michael
Barnett, Guy (Greenwich) Ennals, Rt Hon David
Barnett, Rt Hon Joel (H'wd) Evans, loan (Aberdare)
Beith, A. J. Evans, John (Newton)
Bennett, Andrew(St'kp't N) Ewing, Harry
Bidwell, Sydney Faulds, Andrew
Booth, Rt Hon Albert Field, Frank
Bottomley, Rt Hon A.(M'b'ro) Flannery, Martin
Bray, Dr Jeremy Fletcher, Ted (Darlington)
Brown, Hugh D. (Provan) Ford, Ben
Brown, R. C. (N'castle W) Forrester, John
Brown, Ron (E'burgh, Leith) Foster, Derek
Buchan, Norman Foulkes, George
Callaghan, Rt Hon J. Fraser, J. (Lamb'th, N'w'd)
Callaghan, Jim (Midd't'n & P) Freeson, Rt Hon Reginald
Campbell, Ian Garrett, John (Norwich S)
Campbell-Savours, Dale George, Bruce
Cant, R. B. Gilbert, Rt Hon Dr John
Carmichael, Neil Ginsburg, David
Carter-Jones, Lewis Graham, Ted
Clark, Dr David (S Shields) Grant, John (Islington C)
Cocks, Rt Hon M. (B'stol S) Hamilton, W. W. (C'tral Fife)
Coleman, Donald Harrison, Rt Hon Walter
Concannon, Rt Hon J. D. Hattersley, Rt Hon Roy
Conlan, Bernard Haynes, Frank
Cook, Robin F. Heffer, Eric S.
Craigen, J. M. Hogg, N. (E Dunb't'nshire)
Crowther, J. S. Holland, S. (L'b'th, Vauxh'll)
Cryer, Bob Homewood, William
Cunliffe, Lawrence Hooley, Frank
Cunningham, G. (Islington S) Huckfield, Les
Cunningham, Dr J. (W'h'n) Hudson Davies, Gwilym E.
Dalyell, Tam Hughes, Robert (Aberdeen N)
Davies, Ifor (Gower) Hughes, Roy (Newport)
Davis, Clinton (Hackney C) Janner, Hon Greville
Davis, T. (B'ham, Stechf'd) Jay, Rt Hon Douglas
Deakins, Eric John, Brynmor
Dean, Joseph (Leeds West) Johnson, James (Hull West)
Dempsey, James Johnston, Russell (Inverness)
Dewar, Donald Jones, Rt Hon Alec (Rh'dda)
Dormand, Jack Jones, Barry (East Flint)
Douglas, Dick Jones, Dan (Burnley)
Douglas-Mann, Bruce Kaufman, Rt Hon Gerald
Dubs, Alfred Kerr, Russell
Kilroy-Silk, Robert Roberts, Gwilym (Cannock)
Kinnock, Neil Rooker, J. W.
Lambie, David Ross, Ernest (Dundee West)
Lamborn, Harry Rowlands, Ted
Lamond, James Ryman, John
Leighton, Ronald Sever, John
Lestor, Miss Joan Sheldon, Rt Hon R.
Litherland, Robert Shore, Rt Hon Peter
Lofthouse, Geoffrey Silkin, Rt Hon J. (Deptford)
Lyon, Alexander (York) Skinner, Dennis
McCartney, Hugh Smith, Rt Hon J. (N Lanark)
McElhone, Frank Snape, Peter
McKay, Allen (Penistone) Soley, Clive
McKelvey, William Spearing, Nigel
MacKenzie, Rt Hon Gregor Spriggs, Leslie
McNally, Thomas Stallard, A. W.
McNamara, Kevin Stoddart, David
McTaggart, Robert Stott, Roger
McWilliam, John Strang, Gavin
Magee, Bryan Summerskill, Hon Dr Shirley
Marks, Kenneth Thomas, Jeffrey (Abertillery)
Marshall, D(G'gow S'ton) Thomas, Dr R.(Carmarthen)
Marshall, Dr Edmund (Goole) Thorne, Stan (Preston South)
Marshall, Jim (Leicester S) Tilley, John
Maxton, John Tinn, James
Maynard, Miss Joan Torney, Tom
Meacher, Michael Varley, Rt Hon Eric G.
Mikardo, Ian Wainwright, E.(Dearne V)
Millan, Rt Hon Bruce Walker, Rt Hon H.(D'caster)
Mitchell, Austin (Grimsby) Watkins, David
Mitchell, R. C. (Soton Itchen) Weetch, Ken
Morris, Rt Hon A. (W'shawe) Wellbeloved, James
Morris, Rt Hon J. (Aberavon) Welsh, Michael
Moyle, Rt Hon Roland White, J. (G'gow Pollok)
Newens, Stanley Whitehead, Phillip
O'Halloran, Michael Whitlock, William
O'Neill, Martin Willey, Rt Hon Frederick
Orme, Rt Hon Stanley Wilson, Gordon (Dundee E)
Palmer, Arthur Wilson, Rt Hon Sir H.(H'ton)
Parry, Robert Wilson, William (C'try SE)
Penhaligon, David Winnick, David
Prescott, John Woodall, Alec
Price, C. (Lewisham W) Woolmer, Kenneth
Race, Reg Young, David (Bolton E)
Radice, Giles
Rees, Rt Hon M (Leeds S) Tellers for the Noes:
Roberts, Allan (Bootle) Mr. James Hamilton and Mr. George Morton.
Roberts, Ernest (Hackney N)

Question accordingly agreed to.

Clause read a Second time.

It being after Ten o'clock, further consideration of the Bill stood adjourned.