HL Deb 03 November 1948 vol 159 cc188-267

2.38 p.m.

THE EARL OF SELKIRK rose to call attention to the organisation of nationalised industries; and to move for Papers. The noble Earl said: My Lords, I have framed this Motion in rather wide terms. I have done so deliberately, and I will endeavour, so far as possible, to stick to the wide terms which I have framed and not go into details which seem, within broad limits, not to be the subject for discussion to-day. I would like to express satisfaction that the noble Lord, Lord Pakenham, is replying. His replies are always entertaining, frequently revealing and certainly frank. We look forward to hearing a most interesting exposition of what I submit is not a very easy subject. I hope that none of his supporters will call it an apotheosis of muddling through, as it was called last time by one of the supporters of His Majesty's Government.

Since we started on this business of nationalisation there have been new schemes increasingly wrapped round our heads and perhaps we are finding it difficult to see the wood for the trees. I suggest that one or two things have become clear. The first is that when they started, His Majesty's Government did not have a clear idea of what they were going to do. They have been very frank about it indeed. I could quote Mr. Shinwell, but I will not bother. The noble Viscount the Leader of the House, speaking on the Transport Bill, admitted that it was similar to the South Sea Bubble—"for a purpose hereafter to be revealed." I have quoted that once already, and I have referred the noble Viscount to the Second Reading of the Transport Bill in this House. It shows a state of unreadiness perhaps comparable only to that of Ethelred the Unready.

There is among Labour circles a great deal of dissatisfaction about what has happened. One does not need to look far. In the first place there is the resignation of Sir Charles Reid, who, fourteen years ago, said he believed in the unification of the coal industry. There can be no doubt that he was enthusiastically determined to make the coal industry work in this country. As a result of that, the Burrows Report has been made, although it has not yet been published. Mr. Cole, in one of his Fabian pamphlets, rather sententiously explains the duty of the coal industry and tells the mine manager what he has the duty to feel. Mr. Morgan Phillips has invited Socialists from other countries seriously to examine the problem of the coal industry. I am sorry that there are no Socialists in this country qualified to do it. But we have a great tradition, as Gilbert has told us of The idiot who praises In enthusiastic tones All centuries but this, All countries but his own. There is one encouraging feature, and that is that the Government have told us frankly that they are not wedded to any particular form of socialisation. I can quote Mr. Callaghan who recently wrote in the Transport Gazette: I am not wedded to any one form of organisation of socialised industry. I think there are many other quotations which come to the same thing.

Therefore, we come to this. The Government are determined to a very large extent to stop what exists and to put something else in its place. They are not absolutely certain what, and there is diversity of opinion. If I may say so, we from this side of the House try to move from what is working to what is better. It seems to me that His Majesty's Government are taking a jump at a theory and then slowly and inexorably rolling back until they reach what is possible. That is the process which is taking place to-day, and which I think we can in some way render less painful by examining where we are going and seeing how the thing is working at the present time.

I do not propose to examine the relative merits of private and public ownership because I believe substantially in what Burnham has said in his book, The Managerial Revolution — that "ownership and control are not very easily distinguished." I should like to ask how far it is true that the nationalised transport industry is more publicly owned than, for instance, Imperial Chemical Industries. Anybody in this country can buy a share in Imperial Chemical Industries, and can attend the annual meeting and ask Lord McGowan a question. It would be very hard to ask Sir Cyril Hurcomb a question. However, I do not propose to examine that particular point any further.

The first question I want to ask is: Just what is the relationship of these corporations to the Government at the present time? Where do they stand? We have had public corporations in this country for a long period; the Port of London Authority, set up about thirty years ago, was probably the earliest. But there is a difference between corporations of the periods, say, post-1945 and pre-1945; and if I may draw out the main lines of distinction I would like to do so. The first is the power of the Minister to give directions. In the case of civil aviation the Minister has power to take away all the powers of the board. The second is that the members of the board are less independent. They are appointed by one man and, instead of being appointed for a minimum period, they are appointed for a maximum period and, if unfit to continue in office, may be removed by the Minister at any time. Thirdly, the boards cannot raise their own stocks or dispose of their reserves or surplus revenue; and, of course, their auditors are appointed by the Minister. The Minister has other very considerable personal powers, although there is growing up a feeling that Ministers should not use such powers. May I quote Mr. Shinwell? Speaking on November 15, 1946, he described the Coal Board as a semi-independent and autonomous body operating on behalf of the State. That, of course, is a glorious galaxy of self-contradictory phrases.




How can a body be autonomous if it is semi-independent? Surely the noble Lord's study of logic has taken him far enough to see the distinction.


The study of Greek has taken me even further.


I do not see how a body can be semi-independent and autonomous. The expression "autonomous" surely means a body which is self-directed. But we are getting rather into the realm of metaphysics. It appears to me that what the Minister is seeking is power without responsibility. I shall be glad if the noble Lord, when he replies, can say what directions have been given by the Ministers to the various boards. I am not aware of any directions having been given by any Minister to any corporation.

But there is another side which seems to me somewhat more ominous. I think everyone knows that it exists. It was described by the noble Viscount, Lord Knollys, speaking on November 26, 1947, when he said: … there are so many other people concerned, so many other interests to think of, so many other Departments to be consulted, that the stage after the board itself has come to a decision … takes up too many weeks. There is an enormous area of irresponsible power. How far is that being exercised at the present time? I think it is just about twelve months ago that the noble Viscount, Lord Swinton, said that ultimately some person or body must be responsible for every decision. It is absolutely vital that there should be a clear decision at the top. I think it is fair to ask who is responsible for the really important decisions. For instance, we are told that by 1951 some 250,000,000 tons of coal will be produced; and suppose that that amount is produced, and we cannot sell it because of the price—I do not think we can use 250,000,000 tons of coal in this country; we rarely use more than about 210,000,000 tons. Who will be responsible for the failure to sell the coal?

Take another example. We are told by Mr. Strauss that the Brabazon aircraft will cost £12,000,000 to produce—just the one aircraft. Mr. Strauss assures us that the money will have been well spent. But suppose that British Overseas Airways Corporation do not like it? We have already had the story of the Tudor, and a very painful story it is. It is no use saying that nobody was responsible, because a good many people who knew something about the matter knew two years before it went into operation that the Tudor was unlikely to succeed. I myself said in this House, about a year before the Courtney Report, that I thought the Tudor had missed the mark. The Tudor, which was built for the North Atlantic, is not to be flown there. For that, I blame the Minister of Civil Aviation, but there are many other people with fingers in the pie.

I will give your Lordships one more example. We are told that electricity shedding, for instance, will not be necessary after 1951. We very much hope that it will not, but suppose that it is. Who is responsible? We are told that boards are responsible for the day-to-day operation but, with great respect, I should not have thought that the Transport Commission ever dealt with a day-to-day question at all. It is quite absurd. It was said last year—I think these words were used—that policy issues in action; that unless policy is followed by action, policy can mean nothing. Anybody can make up a policy if he has not to put it into operation. Again, I should like to quote from Mr. Shinwell on November 15 in regard to salaries of the divisional officers. He said: I have never been consulted. I do not wish to be consulted. What does that mean? If I may say so, it means substantially this: that we have in the country a series of autonomous bodies—what I would call many-headed monsters, of which everyone in the country is terrified. The Minister dare not accept responsibility for the body and yet he knows it is so big, like the Army, that he cannot leave it alone. He has to keep some sort of control over it, but he is terrified of accepting full responsibility for what the Coal Board may or may not do.

I understand, or think I understand, the Communist theory. It is the complete pyramid coming down from the top to the bottom, in which every man is closely directed from the centre—in other words, a land of zeros and Neros. It is not one which is endorsed, or intended, by His Majesty's Government in this country. What we are seeking is the diffusion of power—that the responsible decisions should be made in as many centres as possible. I have said that I understand His Majesty's Government's position. I think I do. They cannot let these autonomous, many-headed monsters roam freely round the countryside, completely out of control. They have to keep some semblance of Parliamentary control. I can see no answer to this problem except to reduce the size of these monsters. Unless they are reduced in size, it seems to me inevitable that we shall have a body which in itself will be very powerful, and may become more powerful even than Parliament itself.

I have quoted the case of the Army, and we have seen in the Army Annual Act what has been the result. In the same way, Parliament will probably have to keep some detailed control over the National Coal Board and the other large corporations; but with great respect, Parliamentary methods are not suitable for examining the efficiency of industry. Politics and industry do not go together. The men who are good at politics are not necessarily good at industry; and they are seldom capable of exercising a detailed examination of the way in which industry should be conducted or, alternatively, of suggesting how it should be done better. I understand that the Government are sympathetic to a reduction in the size of the corporations. They are too big. Everybody recognises that. They are forging the instruments of dictatorship. Everyone knows what the Communist policy is. It is to seek positions on these boards. Many of us were horrified to see Mr. Homer's statement that he had twice been offered a post on the National Coal Board. I hope the noble Lord who is to reply will tell us that that is completely untrue. If it is not untrue, can he tell us how many other Communists are sitting on national boards, and how many others have been offered seats and refused them?

There is one other question which requires emphasis. The industries themselves want, more than anything else, real personal leadership. That can be secured only if there is intimate contact between the individual and the responsible head. Effective decentralisation cannot be found, if I may say so, by woolly phrases such as that used by the noble Lord, Lord Morrison, on November 13, 1947, in describing the National Scottish Divisional Coal Board. He said that the Scottish Divisional Coal Board … within the authority of the National Coal Board, have administrative autonomy and are able to co-ordinate development … That reminds me of a rather old cartoon by Low in which Colonel Blimp was seated in his accustomed costume and his normal posture. He said: "Those Indians must be dam' well free to do what they are jolly well told to." It is exactly the same in this case. Within the authority of the National Coal Board, of course, the organisations are entirely free to do what they want to do.

I have one further point to make on the question of centralisation. Not only is there this huge body but the whole structure is divided functionally. With a functional division of duties it is impossible to have anything but a completely centralised organisation. Last year the noble and learned Viscount the Lord Chancellor compared the organisa- tion with that of the Cabinet. I venture to say that that was a poor comparison, because Cabinets do not have Cabinets underneath them; and, moreover, the Cabinet is the essence of centralised organisation. One rarely finds an individual member of the Cabinet resigning. The Cabinet resign in a body, whereas if a member of an organisation disagrees with that organisation, I think he should resign and show his independence.

I suggest further that the only way to secure independence, or some element of independence, at the present moment is by having part-time directors. I would press this point. I believe that our thoughts are moving in that direction. There are three things which make that essential. The first is greater independence. In nationalised industries there is a grave danger that a man has the alternative of continuing in a situation of complete frustration or of going out into the wilderness, where his own special capacity and ability can have no scope. The result is that he has to do what he is told, or leave and lose his means of livelihood. The second advantage of having part-time directors is their wider experience in other fields, and the third is that administration and advice are not always identical; they are separate. The man who can give advice is not always a good administrator, and that is particularly true among trade union men. When it comes to advice, many of them are first-class, but their administrative ability is nil. I suggest therefore, that more consideration should be given to part-time directors.

I want to turn to my second point, and that is the position of the consumer. These corporations are essentially monopolies, and with a monopoly the first person to protect is the consumer. In each case the Minister shows himself wholeheartedly on the side of the producer or the service. The noble Lord, Lord Pakenham, has frequently had great difficulty in defending his own corporation, but I cannot recall—I may be wrong—having heard him speak in very friendly terms, or very volubly, with regard to the consumer. Moreover, the whole weight of the trade union movement, a very powerful movement, is on the side of the employee, and it is natural that the trade union movement should operate against the interest of the consumer. Those are three very potent influences—the fact of a monopoly, the position of the Minister and the influence of the trade union movement—all working against the consumer. Mr. Cole, in his pamphlet on coal, mentions the consumer only once, in parenthesis to another argument; and the noble and learned Viscount the Lord Chancellor, while speaking for forty minutes in a reply to a debate on the coal industry last year, never once mentioned the consumer. He used the word "price" only once. Yesterday, Dr. Dalton said that the nationalised industries cost the taxpayer nothing. But what about the price of coal? Is not that paid for by the taxpayer? I think an appropriate memorial to this Government would be to raise a tomb to "The Unknown Consumer."

The Government's answer to this question has been the creation of advisory or consumer councils. I do not think anybody attached very great importance to that, but in any case it was completely sabotaged by their refusing those councils the power to ask for information. Neither Parliament nor the councils can demand information, which is a pretty awkward situation. Moreover (and this is quite reprehensible), a great many of these councils have not yet been appointed. I believe there is none for transport, for example, and the only person who has endowed himself rather liberally is the Minister of Civil Aviation who, I am told, has about seventy or eighty councils. If that is not true I will withdraw it, but it has been so reported in the papers. I have had experience of two councils. One was 50 per cent. "packed" by reliable Party men, with a chairman who was determined that nothing should be recommended except what fitted in with the requirements of the corporation, and who took it upon himself to act as a spokesman for the corporation in the locality instead of doing the opposite. This has developed into something rather unpleasant in the locality and is approaching a scandal.


Since the noble Earl has made extremely slanderous remarks on a most reputable public figure, would he care to reveal that he himself has had a very large interest in a firm that has had many dealings with B.E.A.


Very gladly. I was known to be interested in aviation. I told them so. They knew; and I suggested that I was not a suitable person to serve. At the first meeting I had my interest recorded in the minutes, so that it was known exactly where I stood. I then spoke with absolute frankness to the meeting, so that there should be no doubt at all of my position. I could not take any other course.

I must ask this question. What alternative is there. We have tried this method of consumer councils, and I submit that it is not very effective. What other alternative is there? What is the test of efficiency? I asked an engineer the other day whether there was any absolute standard and he said there was none he knew except one standard which was the speed of light and which I understand is about 180,000 miles a second. Standards are purely relative. Can we get anywhere by comparing relative standards between the figures on one side and those on the other? I am bound to say that I do not think we can get very far.

I will, however, mention two figures which I think are important. His Majesty's Government generally talk about output of coal per man-shift. I think most people agree that the really important thing is output per man-year. That figure should be emphasised. There is one other matter—namely, the question of utilisation of transport equipment, and particularly the utilisation of aircraft. Up to now the Ministry of Civil Aviation have resolutely refused to give the utilisation figures of aircraft. I suggest similar figures be given in regard to the utilisation of locomotives, and I think these figures should be included regularly in the Monthly Digest of Statistics. I merely mention these points in passing. It is a relatively small matter, though I think it is important. But I am forced to the conclusion that figures get us nowhere. In fact, I think there could be quoted to-day in regard to such bodies as the National Coal Board figures which would show rather a terrifying position, but I never see His Majesty's Government blushing with shame over it. Frankly, I look at these figures as dispassionately as I can, but I think they are very unsatisfactory and utterly disturbing. The figures are there, but they make not the slightest difference.

Is there any alternative? I am not complaining that the Government are concealing the figures, because I do not think any more information could be given. There is a vast mass of figures but they do not get us very far. I would: like to read a quotation from J. S. Mill which is one hundred years old, in which he says: But while I agree and sympathise with the Socialists in their practical portion of their aims, I utterly dissent from the most conspicuous and vehement part of their teaching, their declamation against competition. They forget that wherever competition is not, monopoly is; and that monopoly in all its forms is the taxation of the industrious for the support of indolence, if not plunder. It: is the common error of Socialism to overlook the natural indolence of mankind. Competition may not be the best conceivable stimulus, but it is at present a necessary one and no one can foresee the time when it will not be indispensable to progress. I suggest that there is no alternative to competition. I am not suggesing that at the present time His Majesty's Government like competition, but they permit emulation and rivalry, and I believe I am right in saying that Mr. Strachey suggested that competition among fish and chip shops was not to be excluded. So we are getting on.

I submit, therefore, that the only way in which the two points I have endeavoured to bring out—namely, the breaking up of these huge organisations and the creation of some form of emulation or rivalry, and the protection of the consumer—can be achieved, is by making the National Coal Board the representative of the consumer, and leaving the production of coal entirely in the hands of the regional boards or maybe the area boards. If they had executive and financial responsibility for what they do, it would take the whole matter right out of politics. It would create an independent and, I would say, almost semi-judicial body in the centre, which would be responsible with their experts for examining the accounts, for examining the conduct of the business and for making comparisons as between one company and another.

That method is not really new. It is substantially what we had in the Traffic Commissioners; it is substantially what exists at the present time in the Inter-State Commerce Commission in the United States, in the Federal Communications Bureau and in the Civil Aeronautics Board. We were told yesterday by the Chancellor of the Duchy of Lancaster that aviation could not pay; but under the Civil Aeronautics Board aviation does not cost the taxpayer in America anything at all. I submit that there is something here well worthy of careful consideration, something which would enable a local sense of pride and interest to grow up, and something whereby we might give the consumer some real and practical defence, which he has not at the present time. Above all, it would mean that we would not be entirely dependent upon one organisation.

Suppose the National Coal Board make a tremendous mess of their function, it will take years to put right. With the form of organisation I suggest there are alternatives, and if one fails the chances are that another may succeed. I suggest that it would take commerce out of politics and would avoid the Scylla of monopoly and the Charybdis of cut-throat competition.

May I briefly repeat what I have said? The real contest to-day is between central and local control. The consumer should be able to exercise real pressure over the producer. Unless he can do that, he is entirely defenceless. We cannot have these huge corporations rolling gently round the countryside, frightening everybody, and with nobody prepared to be responsible for them. Above all, may I say, Socialism is static—a very dangerous static element. It stays where it is put. It cannot change easily. It is a big organisation which naturally gets into a rut and remains there. There is therefore, I suggest, a need for alternative methods to be tried in which change can take place. But I am sure that we all agree that whatever methods we have for running these basic industries, we must at the earliest date—if I may use a somewhat trite phrase—escape from this world of utility, priority and austerity and move to one in which amity will prevail, ability will be recognised and prosperity will come to all the people of this country. I beg to move for Papers.

3.10 p.m.


My Lords, the noble Earl, Lord Selkirk, has rendered a service to the House in bringing forward a matter which is of great and growing importance, both politically and economically. He has discharged his task with cogency and good humour, and, if I may say so, I think the House was a little surprised at the rather impulsive interjection by the noble Lord, Lord Pakenham. It showed less than his usual urbanity and fairness, for the facts disclosed by the noble Earl do not seem to have justified an attack of that character. Several of my colleagues on these Benches are eminently qualified, by reason of their personal knowledge of several of the matters that are raised, to make useful contributions to this debate. Unhappily for me, not one of them is able to be present in the House this afternoon, either through absence from London or through being abroad, or because they are prevented from speaking by reason of appointments which they hold. Rather than let the matter go by default, I throw myself on the mercy of the House in a short intervention. The brevity of my observations will fail to do justice to the importance of the occasion, but it may well be, in view of the length of the list of speakers, that on that account they will be the more welcome to the House.

The great difficulty in the conduct of socialised industries is, of course, that of overcoming the natural vices of bureaucracy. That is no new matter; it is not for the first time that we are now discussing that fundamental question. In all countries and in all times bureaucracies have had the same general vices—the vices of procrastination, of diffused responsibility, of lack of nimbleness and adaptability, of fear of taking risks on account of the financial responsibility involved. For all these reasons there is a tendency to inefficiency in all socialised industries. There is all the difference in the world between an official interest in a matter and a personal interest, and that difference is reflected when put to the test of financial profit or loss. Some industries, however, are natural monopolies and must be under the conduct of the State. In a previous "incarnation" I held the office of Postmaster-General—that was long ago; some forty years in fact. In that position, one saw natural tendencies to- these bureaucratic faults, but that particular Department, owing to their very long experience, and also owing to a watchful public and Parliament, to a great extent overcame these difficulties. Moreover, there have been occasions on which the Minister has been able to effect large numbers of useful reforms—I refer, in particular, to the period when the Postmaster-General was the late Sir Kingsley Wood.

Another industry which is a natural monopoly is that of the railways, which had already become bureaucratised to a very great degree before it was so recently taken over by the State. In fact one might say—using a somewhat violent adaptation of Shakespeare—some industries are born bureaucracies, some achieve bureaucracy, and others have bureaucracy thrust upon them. We are not here discussing the question of the nationalisation of steel, however. These new problems had clearly not been sufficiently considered before the recent series of nationalisation measures took effect. The first that was referred to by the noble Earl was the difficulty of ensuring the ministerial and Parliamentary control which is necessary when the public as a whole are responsible for the industry, and an appointed body is charged with its day-to-day management. And, of course, if we are to have nationalised industries, we must do everything in our power to give them a fair chance of success. They must not be unduly hampered, just because they are nationalised industries, and exposed to all kinds of interference and controls from which private enterprise was exempt. That creates an extremely difficult problem, and it is one which has arisen in every one of these cases.

In this connection, one might suggest a reference to the first of these measures of nationalisation in modern times, which was established by the Liberal Government of Mr. Asquith. I refer to the Port of London Authority, in relation to which this particular question was most carefully considered, both by the Cabinet and also in Parliament. There, a degree of public control has been established which appears to have worked most satisfactorily for all these years—some forty years, in fact. If there is a difficulty in finding a boundary line, where local management should be controlled and where it should not, I would suggest that that precedent might be carefully examined by the Government.

The second great danger, which has also been referred to by the noble Earl, is centralisation. That is one of the greatest faults which ensue from nationalisation. Undoubtedly, that fault has occurred in the case of the nationalisation of the coal industry. I believe that opinion is almost unanimous that that industry has proved to be over-centralised. Those of us in the Liberal Party who have been considering these matters lately, when drafting for the new electoral programme, have suggested for consideration—not with any dogmatic assurance—that it might be possible to create under separate managements groups of collieries inside the various coal districts, and that each management might be given large powers of independent decision. By that means it might be possible to introduce an element of local control and competition which could be reconciled with the general direction of large matters of policy.

The third problem to be solved is how much of an industry should be brought under public control—what should be the boundaries of the area of nationalisation, because many industries are not defined by a clear boundary but fade away into various degrees of smaller private enterprise. This question arises particularly in regard to the Transport Act, which we debated last year. It was fully debated in this House, especially with reference to matters of road haulage. It would be interesting to know whether the views expressed by the official Opposition, and also from these Benches, that there ought to have been left a larger measure of independent competition in the case of road transport, have been justified by the event. There ought to be no difficulty in inquiring into the working of road transport to see how far the evils that were prognosticated have in fact arisen.

The fourth point, and it is the only other one to which I wish to refer, concerns civil aviation, where all these problems—Government control, centralisation and boundaries—seem to have met. I think there is a general feeling, whether justified or not, that civil aviation has been the least successful of the nationalised industries, and that that is not the fault of the men chosen to administer it but is due to the complications of the system that has been created. This again was discussed very fully in the House quite recently, and on that occasion, on behalf of my noble friends on these Benches, I urged strongly that there should be a fundamental inquiry into the whole question of civilisation and its organisation in this country.


Civil aviation.


What did I say—civilisation? I am not asking for an inquiry into that. All our experience in our daily lives is a testing of civilisation. But civil aviation should be inquired into in a very authoritative way, either by a Royal Commission, a Joint Select Committee, or by such other body as may be considered most suitable. On that occasion I ventured to suggest that the Minister of Civil Aviation ought to inquire, among other matters, into whether he himself is necessary, whether there should be a Minister of Civil Aviation at all, and whether such powers as must be exercised by a Government Department could not be conferred upon the Ministry of Transport, as in the case of railways and shipping. These are the only matters on which I would desire to address the House. I trust the noble Lord who is about to reply will be able to give us answers—I can hardly expect they will prove fully satisfactory to us—in the course of the observations that he is now about to address to us.

3.23 p.m.


My Lords, the debate has certainly started on a warm note, and I hope it will continue in the same way. I have always found the noble Viscount, Lord Samuel, a most fair judge of Parliamentary conduct and therefore I listened with pain to his rebuke of myself. I can only say—and I say it with good will—that unpleasant words were used by the noble Earl. He talked about the council being "packed" and spoke in a very unpleasant way about an old friend of mine, a very eminent man. If any noble Lord spoke in equally vicious terms about the noble Earl, Lord Selkirk, in his absence, I would leap to his defence and I hope he would find my defence a worthy one. On this side of the House we cannot allow these words to pass without very severe comment.

I understand that the noble Viscount, Lord Samuel, doubts whether my existence is justified, whether as Minister of Civil Aviation, Minister of Civilisation, or however else he conceives me. Existence is a thing one cannot help. I did not create myself and I did not make myself a Minister. One does not bring oneself to an end, either in a mortal or Parliamentary sense. So long as I am Minister I shall attempt to discharge my functions as best I can. But it is an interesting question, whether the Ministry of Civil Aviation is necessary. I would only say—perhaps the noble Viscount will receive this with an ironic smile—that it seems to me a good deal more necessary than I originally thought it was. Perhaps Ministers often go through that process of thought as they begin to "dig in." I assure the House that the more I see of civil aviation, the more I think a Minister—either myself or a better man—is necessary, and will be necessary for a good while to come.

Having replied rather sharply to the noble Earl on one point, I would like to say how closely we followed his speech. The noble Earl gripped the House with his great sincerity and feeling about a matter to which he has given a lot of thought. If he expected me to accept the greater part of his conclusions, he would not be the very intelligent pupil of the noble Lord the Master of Balliol that we know him to be—though that might not have been obvious at one point earlier this afternoon. I have strict injunctions from the highest of all sources not to detain your Lordships so long as on a recent occasion, therefore I will pass over many points to which my noble friend Lord Lucas of Chilworth will refer later on. I am exempted from dealing at any length with statistics. This is not deemed to be a statistical occasion; it is not a probing into the workings of nationalisation.

The experience of nationalised industries, and there are not many of them up to the present time, convinces me that the case for nationalising them is infinitely stronger now than the strong case made out at the time they were nationalised. I understand that to-day we are not talking about the Post Office. I do not know why not, except that it is so successful. There seems to be no need to talk about it. I can only say that the noble Earl who put down the motion did not consider it necessary to call attention to any alleged deficiencies in the Post Office. If that escaped his eagle eye, it can be only because it must be doing well. Nor did the noble Earl go into the question of the nationalisation of the Bank of England, and of Cable and Wireless. Those in touch with these affairs are well aware, and those not in touch can learn from the effective oration of Dr. Dalton in another place yesterday, that these industries are highly successful.

If we are to talk about the experience of nationalised industry, there are only two which have been nationalised for any length of time—coal and civil aviation—on which we can go.


What I did talk about was the post-1945 and pre-1945 forms of nationalisation, so that the Bank of England and Cable and Wireless are included. I drew only casual illustrations from civil aviation and coal.


The noble Earl was not referring to the Post Office, but he was referring to the Bank of England and Cable and Wireless. I would beg noble Lords to read the remarks of Dr. Dalton yesterday. I will not seek to reproduce them, but undoubtedly they make it very difficult to contend that the Bank of England and Cable and Wireless are unsuccessful industries. I do not propose to go statistically into coal and civil aviation. I would say only, broadly, that I doubt whether any noble Lord will rise during the debate and tell us that it was a mistake to nationalise these industries, or who would wish to denationalise them now. I do not want to spend the time of the House on details, but if pressed on these matters my noble friend can go into them.

I want to address myself to the questions of organisation, with which the noble Earl has concerned himself. Nationalised industry must surely be judged by four tests. Does it provide the consumer with safeguards against exploitation?




We can now proceed, either by way of monologue, with occasional interjection, or by an antiphonal process, in which case I hope the noble Viscount will join me. But I hope he will weary before the end of my remarks, otherwise I shall get into trouble with the noble Viscount the Leader of the House.

As I say, there are four tests to be applied to nationalised industry. Does it provide the consumer with safeguards against exploitation?—a point on which I understand the noble Viscount has views. Does it increase the welfare, material or moral, of those employed in the industry? Does it fit in harmoniously with the general pattern of the national plan? And does it promote efficiency? I say at once that I shall be mainly concerned with the last question: Does it promote efficiency? Indeed, on the subject of the consumer weal, I will leave the noble Lord, Lord Lucas, to explain at length the elaborate system of consultative councils of one kind or another that have been set up in the nationalised industries. I would make only one point in passing. In civil aviation we have the Air Transport Advisory Council, presided over potentially with great distinction by the noble Lord, Lord Terrington. I say "potentially" because, unfortunately, though this body is supposed to receive complaints from those who have complaints to offer, very few people approach them. They have very little business in spite of our efforts and the efforts of the noble Lord, Lord Terrington, to secure a greater interest in what they are doing. I only say that in passing, because where you have a perfectly goad body longing to get its teeth into complaints, the public require stimulation by the Minister to go and make complaints.

On the subject of the welfare of those engaged in the industry, I do not think anybody doubts that the coal mines are much better off to-day than they were before nationalisation. I am not quite clear from the speech of the noble Earl whether he accepts and welcomes that fact; I should imagine he would, because he is quite as humane as I am. In our view, the reason why the price of coal has risen—and most of the increase occurred before nationalisation—is almost entirely due to the improvements in the life of the miner that have been conferred under the Act. I say with full conviction—and I should have thought that everybody would agree—that those improvements were long overdue, and if they had not been made the coal industry would have decayed and eventually passed out. In other words, they were an essential measure, and I do not see how anybody can possibly criticise nationalisation because it has raised the standard of life of the miner. I feel—I cannot impose this view upon the House—that under any scheme of nationalisation we are likely to see in this country the first three tests I have mentioned will be passed fairly easily with flying colours—namely, the protection of the consumer against exploitation (I am coming to the question of his protection against inefficiency in a moment), the improvement in the lot of those working in the industry, and the adjustment of the industry in question to the general pattern of the national plan.

This question of efficiency is undoubtedly the core of the subject before us this afternoon. The Motion deals with the organisation of the nationalised industries. I at once pose this question: Is there any form of organisation which is more efficient—that is, which raises productivity more than any other? It will be interesting to hear later in the debate the views of those who have themselves been captains of industry; but I very much doubt it. I doubt it, that is, in relation to industry in general, in relation to large-scale industry—and, of course, there are great variations in the sizes of these nationalised industries (the Coal Board have nearly 800,000 people, the Transport Commission have about 800,000 but B.S.A.A. have rather less than 2,000)—in relation to nationalised industries in the abstract, or in relation to the particular nationalised industries we are discussing this afternoon. Incidentally, it is worth observing that these nationalised industries themselves do not possess those common characteristics which would impose any close parallelism of productive organisation or structure.

Certain general rules obviously hold good, whatever industry we are discussing, whether nationalised or otherwise. The chain of command should be as clearly as possible defined. The closest possible consultation should be maintained with the workpeople (it goes without saying that we are doing it in the nationalised industries) and the greatest possible use should be made of the most up-to-date discoveries in research and every kind of modern technique. In any organisation, whether it is civilian, military, industrial, clerical or sporting, or for that matter, I should imagine, religious, the character of the leadership, the elevation of the ideal and the clarity with which it is brought home to the multitude are imponderables which cannot be written down or provided for on paper, but which in the result make all the difference between success and failure.

Even if we stick to the particular industry of civil aviation, and compare the organisational practice of the leading companies abroad (as was recently done by B.O.A.C. in great detail), important differences at once emerge. It is particularly interesting, for example, that K.L.M. and PANAM, who are both regarded as being among the most efficient operators in the world, are in fact organised in accordance with quite different principles. K.L.M. tends to be centralised and functional, whereas PANAM is decentralised wherever possible. Surely there is no royal road, short cut or text book answer to the question as to what is the best organisation for any particular industry, let alone nationalised industries as a whole. Yet I think that the noble Earl was right in directing our attention to this age-long controversy between centralisation and decentralisation, and to the necessity of striking the right balance. It is easy enough to strike it on paper—we can all do that in a few minutes—but it is very difficult in practice. If we take coal, for instance, it is quite out of the question to give the divisions complete financial independence. Without financial independence some degree of central control is inevitable. If you try for a moment to give them this financial independence, you will find that differences between the contrasted areas are so sharp that the thing breaks down at once. This, of course, is where the essential difference lies between the situation in the coal industry and the various boards in gas and electricity, because the latter are expected to pay their way, and should be able to do so. Therefore, they can be given much more autonomy, both on paper and in practice.

Let me pause for a moment on coal. It is often said that the National Coal Board is over-centralised. The noble Viscount has said it this afternoon. I am assured by a great many of those best qualified to know that statements to that effect are much exaggerated. If the noble Viscount cares to develop his argument at greater length on another occasion, we shall be glad to listen to him, but he produced no evidence this afternoon. The main things settled at the centre really are wages questions, which have to be negotiated with the National Union of Mineworkers; coal distribution policy, which has to be agreed with the Ministry to a large extent; such matters as training—again settled by regulations made by the Ministry—and, finally, planning of capital development, where it is obviously (given the financial unevenness in the divisions) essential that some central decisions should be taken. I would stress that in the case of coal the internal structure was left completely open under the Act. The Act did no more than set up the National Coal Board. Therefore, it is open to the National Coal Board themselves to decide either on a centralised or a highly decentralised administration. The Government have not imposed one solution or the other.

I have already mentioned why in coal greater centralisation is required than in the case of gas and electricity. In the case of electricity, where generation was, to a large extent, already centralised in the Central Electricity Board, the problem was simply to create large and more efficient distribution areas. We have in this case a mixed arrangement. In the case of gas there is no centralised generation, and, therefore, not the same need for a powerful national body. The main emphasis in the case of gas is on the twelve area boards, though a central body is required to deal with wages, research, training and other matters requiring national negotiation and decision. I give those examples to show that one cannot apply a universal formula to a lot of quite different industries.

In the case of civil aviation there are certain factors, particularly the fixing of fares by international agreement, which prevent decentralisation being carried to the limit. Under the Act we have avoided extreme centralisation, such as would have resulted from the setting up of a single corporation as many people would have liked and as some, I believe, still advocate. But that, once settled, would have given no statutory guidance to the three corporations as to how far they should centralise, and how far they should decentralise, their operations. The House, however, must be aware that both B.O.A.C. and B.E.A. have recently been overhauling their entire organisations. B.E.A. have invited the assistance of a firm of consultant engineers—Production Engineering Limited. There has been no reluctance there to allow people to come in and have a look; it is exactly what B.E.A. have asked Production Engineering to do.

I would repeat to-day what has already been publicly stated—that, by arrangement with the Chairmen of the Corporations, Sir George Cribbett, an officer of my Ministry, is working with B.O.A.C., and another officer of my Ministry, with B.E.A. on their respective overhauls. It will interest the House and to some extent, I hope, reassure the noble Earl, to say that both Corporations are fully alive to the dangers of over-centralisation in civil aviation. The views of B.O.A.C. on this subject can perhaps be summarised in the following sentence from a document in which trey deal with this matter. The document says: It would seem that the most effective organisation will be one which is based on the general principles of maximum possible delegation of authority compatible with the maintenance of the required overhaul standards. According to the first point in the conclusions of Production Engineering in relation to B.E.A.—a Report which, I repeat, B.E.A. themselves invited and are now working out in practice: … plans should be made and put into effect progressively under strict control for a general decentralisation as outlined in this Report. I feel sure that the House will sympathise with those objectives and wish their executants well.

Unless I have misunderstood the noble Earl, however, there is a deeper and more critical implication in his remarks than any that I have yet dealt with in mine. To my mind, a reasonable explanation of why the corporations tend to find themselves at this moment somewhat over-centralised, is that there we have two large businesses which have had to build themselves up very quickly, and have had to take a very firm grip on things. So I think it is natural that at the beginning we have somewhat too much centralisation. The time has now come to relax that, and to give more autonomy to the regions. The noble Earl seems to feel, however, that over-centralisation is an inherent vice of a nationalised industry, and I am not sure that the noble Viscount was not inclined to agree with him. I do not accept that for a moment, but I am ready to concede in this connection that nationalised industries face special temptations which have to be exposed to the light of day—as they are in the discussion this afternoon—and overcome if those industries are to succeed, as I am absolutely sure they will.

Perhaps I could make my meaning a little plainer. The great advantages of a nationalised industry, from the point of view of supplying the nation with what it needs on the scale that is necessary, are two. First, it is deliberately organised in a manner that it is considered will serve the public interest. Its leaders are selected according to that criterion and no other, and its whole motive power, from the top to the bottom, is service to the public interest as a whole, rather than the interest of any section or group. None of these things is deliberately aimed at in a private industry. Sometimes they will come about by chance, but there is no reason to suppose that that will necessarily happen; indeed, very often precisely the opposite occurs. Secondly, the nationalised industry has access, through ministerial channels, to the whole resources of the community.


Does that mean it has a preference over private industry?


Not necessarily, but if it were judged in the national interest that there should be priority, then, of course, the priority would be accorded. These two advantages, the conscious dedication to the public interest and the access to and reliance on the resources made available—as they are bound to be, as the noble Viscount is perfectly well aware—through Government channels, establish automatically a tradition of public accountability which is a very fine thing in itself, but which carries with it a compensating danger. If there were no such compensating danger, of course, there would be an overwhelming case for nationalising almost every industry, and I am not arguing that this afternoon.

When all is said (and surely this can be generally agreed), the success or failure of a business depends on an immense number of commercial and technical decisions taken at all levels, many of which are bound to go wrong—even under the happiest circumstances, and even if the business men concerned are geniuses—and few of which can be scientifically defended, before or after they are taken, without at any rate an enormous expenditure of time and effort. If I could obtain the attention of the House to nothing else, I would like to stress this statement of the problem. The problem in a nationalised industry is to combine the principle of public accountability with that of the freedom of commercial judgment at all levels. I repeat: at all levels, high and low.

Even in a nationalised industry like coal, where there is no Government subsidy—I will have a word to say about civil aviation in a moment—the Minister has far-reaching responsibilities at law; the power to give general directions; powers already touched upon with regard to the distribution of coal; powers of approving capital schemes and approving training and research; powers to obtain information. And, of course, there is the general responsibility for fostering progress in the industry, a responsibility discharged in relation to non-nationalised industries by other Ministers—in relation to the cotton industry, for instance, by the President of the Board of Trade. In all these spheres the relationship between the Minister and the chairman of the board is so close and intimate that it is not a question of directions being given or needing to be given. Nor is it usually possible to disentangle the views recommended by the Minister to the board and those arrived at by the board, often after friendly interchange with the Minister. But the principle adopted by the Government is perfectly plain. I thought it was a principle that was accepted by noble Lords opposite during most of the debates. After to-day, I am not so sure, because, to be frank, there seemed to be running right through the speech of the noble Earl a fundamental inability to make up his mind. He seemed unable to be able to make up his mind whether he thought there was too much Parliamentary control or whether there was too little. I do not think anyone behind me could make out what he meant.


May I make my point plain? I was only asking whether the noble Lord would tell us just where the responsibility lay. I gave no advice at all.


The habit of giving advice, I am afraid, is one which is growing on noble Lords opposite—I hope it will not become chronic. But when a noble Lord puts down a Motion of this character, and opens an important debate in the most interesting fashion, on a subject to which he has paid so much thought, I am bound to say he is suspect if he feels unable to give any advice at all on the central point with which he dealt.


I think I gave quite definite advice that their size should be reduced.


Not on this issue of responsibility. The noble Earl evaded this issue, no doubt because there is no clear doctrine on his side of the House. However, the principle I have described is the one which the Government have applied. I am bound to say that I was very pleased to hear that the noble Viscount, Lord Swinton, is to speak later, because he seldom conceals his meaning and he is in a comparatively authoritative position in his Party. It may be that without a caucus meeting between now and 6 o'clock he can evolve a doctrine and state it. If, as I think, there are two doctrines, one in favour of more Parliamentary control and one in favour of less, he can state them both, and I should not be surprised if he does not do so.


I am much obliged to the noble Lord for making my speech for me and for giving me advice.


I shall listen to him with the closest attention. The principle is simply this: that questions of day-to-day management are not the responsibility of the Minister. The Minister is not running the industry himself in the sense that he runs his own Department. The industry is run by the board. The boards have been chosen for their combination of commercial knowledge and public spirit. They can be removed if they fail in either respect but, while there, must be allowed to give full expression to their own qualities according to their own lights.

If I am told by the noble Earl that nevertheless nationalisation must inevitably mean undue centralisation, I would say that, once things have got properly started, that could happen only if the system were being misused or misunderstood. It could happen only if Ministers were constantly meddling with management and if boards were correspondingly reluctant to take independent decisions and still more reluctant to leave such decisions to those lower down, for fear of themselves being hauled over the coals by the Minister. It could happen only if there were a general feeling throughout the organisation that every difficult or doubtful decision might have to be defended in Parliament, particularly if it happened to go wrong, and that therefore it had better be postponed or not be taken at all. It is the pattern of nationalisation now that there should not be these widespread inhibitions and that enterprise should be encouraged at all levels.

So much for nationalised industries where a subsidy is not paid—and the only case in which it is paid is civil aviation. The emphasis cannot be the same where the subsidy is paid out of public funds, as in the case of the Ministry over which I preside. There, as in other industries, the principle is established and maintained that decisions on day-to-day management are to be left to the corporations to settle and are to be withdrawn from Parliamentary questions. At the same time no Minister of Civil Aviation, while subsidies are being paid—and whatever Party was in power they would have to be paid for some time yet—can possibly divest himself of a very sharp responsibility to the public for the way in which those monies are used. Whatever constitutional doctrine is pronounced, there is little doubt that he will in fact be held responsible for the wise or foolish expenditure of those monies, which means that the Minister of Civil Aviation inevitably carries, in a much more personal sense than his colleagues, a responsibility for the general efficiency of the corporations and their general results during his period of office. No Minister of Civil Aviation, so long as subsidies are paid, could possibly content himself with pursuing a policy of non-intervention to the end of the financial year, learning when all was over that a heavy loss had been sustained and consoling himself with the reflection that if things went equally badly in the following year he could always get rid of the board in the last resort, on the assumption that he had not disappeared from the scene himself—a rash assumption in the circumstances.

The Civil Aviation Act makes special and sensible provision for the discharge of these Ministerial responsibilities with-cut any kind of pettifogging interference with the men who are actually running the lines. Well in advance of each financial year, the corporations have to come to the Minister to secure his approval for the range of services planned for the coming year and the financial estimates involved. It is through that control over the annual programme that the Minister becomes most effective—and in saying that I speak not only in a negative and restrictive but in a positive and expansionist sense. It is not enough for the Minister to set a limit to the amount the corporations are going to lose. That is one side of his responsibility. The other side is to promote the development of civil flying during the very awkward period when strictly commercial considerations would either reduce standards of safety or conditions of employment to an unworthy level, or eliminate flying entirely except on a few selected routes.

If a Minister desired to find a short cut to bringing down the deficits, he could begin by eliminating internal flying altogether. None of us would seriously entertain that idea. I mention it only to emphasise a point that can be made equally well by reference to restrictions that by common agreement have been placed on the freedom of the corporations to buy their aircraft in the cheapest market without reference to the interests of British industry. In short, the Minister of Civil Aviation who does his job in the wider interests of the country is inevitably interfering at certain crucial points with the commercial objectives of the corporations, though not, if all goes well, with their methods of giving effect to the agreed policy. But I do not agree for a moment with the noble Earl if he tells me that this amount of interference by the Minister must start, as it were, a kind of bureaucratic infection that must spread throughout the whole body of the corporations. It is quite true that if you talk to the men who used to run some small air line, perhaps to the Channel Islands or something of the kind, now incorporated in B.E.A., you will find the complaint that there is not the flexibility that there used to be; that one used to be able to make a plan for one small province and adapt it rapidly to changing circumstances. To-day the plan has to be formulated some way in advance and tends to become more rigid.


The noble Lord appears to think that if you do not have interference by the Minister, you therefore have decentralisation. My point is that you cannot, for instance, dig coal in London, and that it is the existence of the Central Board which gives centralisation—not the interference of the Minister.


I understood from the noble Earl that nationalisation, in his view, does not produce centralisation.


It does at present.


I am very glad that the noble Earl thinks that under nationalisation centralisation can be avoided, because I entirely agree with him, and we can go forward together in greater harmony than seemed possible a few minutes ago. He and I, I feel, see eye to eye in deploring the tendency to over-centralisation and I believe that it can be eliminated under nationalisation. When there is a large body such as B.E.A. there is inevitably that tendency towards more rigidity than in a small organisation. But it is fair to point out the great advantages which accrue from wider resources and careful co-ordination, and, on balance, that a much greater volume of service and a higher quality of service is offered to the public under the new system.

I will not pursue this topic further except to say that where, if ever, nationalisation is not justified, the essential reason can usually be traced back to the lack of flexibility that would result; and "Flexibility, flexibility and yet again flexibility" is graven on the heart of the corporations. I believe it to be absolutely necessary. But let me as I conclude, stress the fact that the corporations are doing a tremendous lot to improve their organisation. I have already told your Lordships of the practical steps. I would just emphasise one aspect of this which should be fully before the House. If, as I believe and as the chairmen believe, the corporations can render still better services while cutting down their staffs, it means, in consequence, that a large number of individuals—several thousands of them—will suffer. I can only say that all those who lose their jobs after careful inquiry, as a result of improved efficiency, have my real sympathy. They must not feel that the redundancy which has caused the loss of their jobs is in any way a reflection upon themselves. No one who loses his job on the corporation under this overhaul must feel that the mighty are being spared and the humble and weak are being penalised. The overhaul is being applied equally at all levels, and it is being conducted with the greatest energy.

As the House well knows, reorganisations of this kind do not show their results immediately. It is not until the financial year 1949–50 that we are likely to see a real improvement. As was said yesterday, and as I say again to-day, we are absolutely determined that by the beginning of the financial year 1949–50 all possible weaknesses shall have been eliminated from the corporations. I believe that, when the present overhaul of the corporations is complete, what had hitherto been potentially first-class athletes—a few pounds overweight—will take the field trained to a hair as never before, and fit to fight for their lives. A lot of stones are thrown at the corporations in this country—often quite unfairly. I am not suggesting that they have been thrown unfairly this afternoon. The zeal and technical standards of the corporations are unsurpassed anywhere. They already do us much credit abroad, and I believe that they will do us still greater credit in future. I am afraid I have been led on by excessive interest in my departmental affairs to concentrate on the business of one particular nationalised industry.

I would conclude by repeating that, in our view, the only nationalised industries whose results are yet available are the Post Office, the Bank of England, Cables and Wireless, coal and civil aviation. The first three seem to arouse no strong sentiments of antagonism, and must be regarded as successful. As regards the coal industry, I am quite clear that it was in a shocking condition before nationalisation, and that it is in a much better state to-day. A few years hence it will be in a much better state still. We shall: all see that result brought about, and so, it will be with civil aviation. In spite of various differences, I am sincerely grateful to the noble Earl for raising this matter to enable it to be discussed in a broad atmosphere. There are many points to which I have not replied, but I have no doubt that the noble Lord who is to wind up the debate will deal with those points which are still left uncovered. I thank the House for listening to me for so long a time. I feel sure that this debate will do good in a great many ways.

4.3 p.m.


My Lords, it was my original intention to move an Amendment to the Motion of the noble Earl. My purpose, I need hardly say, was not in any way to weaken the strength of the Motion which he has moved with such force and such effect but rather to widen its terms so that within their scope it might be possible to debate that which I believe to be the vital factor in dealing with these nationalised industries; that is, the refusal of the Government to answer perfectly proper questions in regard to them. It was put to me by the noble Viscount the Leader of the House that this Amendment would be embarrassing to your Lordships. Therefore, for that consideration, and that alone, I shall not move it, although I was anxious to have the words on the Order Paper in order that your Lordships' attention might clearly be drawn to my Amendment. I have given the noble Lord, Lord Lucas, quite shortly, notice of what I propose to say. If, quite naturally, he finds himself unable to give a full and complete answer, he will not mind my saying that I consider myself free to raise the matter again by a separate Motion on another day.

It is not my purpose to approach this subject in any narrow or Party spirit. The general proposition that the fullest possible information in regard to these industries should be given is one which I am hopeful will be acceptable to many of the noble Lords sitting opposite. It has, at any rate, proved acceptable to many of those who support the Government in another place. It is a strange reflection, and one not without some humour, that, were I free to mention the names (which I am not), I should find myself a fellow-traveller with certain people with whom I thought the possibility of agreement could in no circumstances exist. One of them, when this matter was debated in another place, expressed the hope that the bright searchlight of democracy might be focused upon the nationalised industries. That is a sentiment which I acclaim. I applaud it, but I am surprised that honourable Members in another place have not realised that the bright searchlight of democracy, when operated by a Socialist Government, burns somewhat fitfully and intermittently, and seems to suffer from those "cuts" of power which we all experience at home.

I am well satisfied that the public mind is exercised upon this matter. The public do not understand technical reasons. They have been told that these industries belong to them. "We have bought them for you; they are your own railways," they are told. They find it a little difficult to understand that, when the railways did not belong to them, if a question was asked about some simple matter it would elicit in another place a courteous reply, but that, if a similar question is now put forward, it produces merely the dusty answer: "This is a matter for the Transport Commission, and we are not going to discuss it." In view of the state of some of these industries, I can well understand that some Ministers are not too anxious to answer questions in regard to them. The Minister of Fuel and Power—a somewhat sensitive character; we were both privileged to be at the same school, although it does not appear to have toughened him very much—may shrink from answering questions which would once more—most unfairly no doubt—expose him to the humour of the B.B.C. I only hope that he does not propose that the manufacture of humour should be nationalised, in common with so many other things!

I would say this to Ministers, with the greatest respect: concealment inevitably produces the impression that there is something which must be hidden. The man who finds his shirt in rags is unwilling to take off his coat. If there is refusal to disclose something, then there must surely be the impression that there is something which must be hidden. It has been said—I forget by whom—that to conceal a defect is to cause it to be exaggerated for certain into the greatest evil in the public mind. I believe that to be a fundamental truth. I can understand—as I have said—that Minsters who have not grasped this are unwilling to answer more questions than they feel obliged to. What I do not understand, and cannot understand, is the ground upon which they base those refusals. I am anxious to avoid wearying your Lordships with quotations, but I will say only that in fact the nationalisation Acts provide that Ministers shall have the right to demand the fullest information on all matters at all times. I have given only the substance of the words, but I cannot conceive that they should be put into these Acts unless it were the express intention that that information should be provided to members of both Houses of Parliament.

But what is the interpretation that Ministers put on these matters? How do they seek to interpret these Acts? They say, "These Acts give us power to make Orders and give directions in regard to certain matters, and it is in regard to those matters, and those matters alone, that we will give any answer"—which brings us down, of course, to the expression the noble Lord, Lord Pakenham used, namely, "day-to-day working." To limit an answer to day-to-day working is surely a principle fraught with peril. To begin with, the Minister of the day arrogates to himself the right to interpret day-to-day working in such manner as he thinks fit. I said that I hoped to avoid wearying your Lordships with quotations, but I must here call attention to two questions just to establish my case. The Government appear particularly sensitive about the industrial relations of the boards controlling these industries, and when the former Minister of Fuel and Power was asked if he would identify the trade unions which are recognised by the National Coal Board for the purposes of negotiation about wages, he replied: No. Any question of recognition is a matter entirely for the parties. My Lords, these boards are not secret things. Their industrial relationships are important topics; they are a subject on which I would have thought it right that the public should be fully and freely informed. If we turn now to the present Minister, he was asked if he had any statement to make on the resignation of Sir Charles Reid from the National Coal Board. His answer was "No." In view of the eminence of Sir Charles Reid, in view of the fact that he was, I believe, in favour of nationalisation, and that the Report that he issued has been suppressed completely, it seems a little unfortunate that the Minister should arrogate to himself the right to answer a question such as this with a flat and completely uncompromising negative.

There is a further danger. Even if we interpret day-to-day working in a more helpful sense, can it be denied that out of small incidents grave issues may arise? Have not some of our strikes—and not the smallest of them—found their origin in trilling incidents which well come within the province of day-to-day working? I am glad my noble friend Lord Lucas, whose reason we all admire, appreciates that point, even if he cannot follow me in the whole of my argument. It would indeed be an unhappy state if the matter merely rested there, if the Ministers confined themselves to saying, "We will do nothing beyond giving information which transcends matters of the ordinary day-to-day working." I should say it was an unfortunate, a dangerous and an unhappy position. But that is not the end of the story. Ministers go further than that. May I once more quote something from Hansard, as we come now to the question of finance for these nationalised industries? The present Minister of Fuel and Power was asked several searching questions in regard to finance, and his attitude is perfectly plain. He said: The money which the Coal Board uses to pay the salaries of … its Divisional Board and other Executives, wages and everything else, is not in the proper sense of the words public money. … If it were, certainly it would be appropriate that I should answer Questions on it, but it is not. He says it is not public money and, therefore, it is quite inappropriate for him, the Minister of Fuel and Power, to answer any questions in regard to it.

May I put this to your Lordships as a plain man would see it? These great industries have been acquired by the nation, they have been bought with the nation's money, and the physical assets of these industries have passed into the ownership of the State. The coal belongs to the State. How can it be said, then, that the proceeds of the sale of the coal are not public money and do not belong to the State? If on some technicality, with which I am not sufficiently expert to deal, I may be defeated on that ground, I would take my stand on another line of defence, from which I say with confidence that even my noble friend Lord Lucas will not be able to eject me. I would say that when these industries were purchased, when these vast sums of money were raised, great loans were floated. The principal and interest in those loans is an unconditional guarantee of the State. If the industries fail or show a loss, then the State is still bound to implement its guarantee. How can it, then, he said that the public have no interest in financial matters connected with these nationalised industries? We must realise that these industries are not subject to the keen breath of competition, that they tend to stagnate; and therefore it is all the more necessary that it should be possible to inquire and get answers to questions about them.

There is a last quotation with which I must detain your Lordships, but that for not more than another moment. Quite recently the Lord President of the Council, when speaking at Cardiff, said: Under the competitive system the threat of the withdrawal of custom can be a spur to efficiency. The corresponding safeguard in the case of nationalised industries should be in their sensitiveness to public complaint. But what is the use of complaining if an answer is denied? It is a most unfortunate thing that the Lord President of the Council has so sternly and, if I may say so with respect, so stubbornly resisted and resented replying to these questions in another place. I feel, indeed, that in this matter something is owed to the public. It is with public money that these industries have been bought and the public are entitled to know how these great concerns are being managed. I feel too, that the workers have some interest in this matter, and to deny this information is to cut right through the principle of the Whitley Councils and to run entirely counter to the spirit of working parties which the Labour Party has proposed. I feel that a constant vigilance by members of both Houses of Parliament is necessary and that in that vigilance the Govern- ment should co-operate by giving, in reason, the fullest information which they can. I am glad to help my noble friend by saying that I agree they should not be troubled with trivialities. But, having said that, I hope that I carry noble Lords with me in the proposition that it is only by constant vigilance by members of both Houses of Parliament that the interest of the public can be protected. I hope I may also carry noble Lords with me in my final proposition: that the task of watching these industries is one which it is not merely a privilege but a duty to perform.

4.19 p.m.


My Lords, the noble Earl in his opening remarks referred to the interest of consumers. Perhaps at the outset I may be permitted to say that I am closely associated with a consumer movement in this country—namely, the Co-operative movement. The Co-operative movement is particularly interested in the success of nationalised industries, and during the course of my remarks I hope to show that it is in the interests of the country in general, and not least in the interests of the trade union movement, that these industries should prove successful.

If I may be permitted to mention that I am closely associated with the Cooperative Wholesale Society, a Society which has a turnover of £225,000,000 per annum, of which approximately £80,000,000 is of its own production, noble Lords will appreciate that we have a vital interest in costs of production and in any matters which affect those costs. The Lord President of the Council, in a speech delivered in the other House, referred to the fact that, after schemes of nationalisation had been carried through, no less than 80 per cent. of the industries of the country would still be in private hands. That remainder of 80 per cent. is also keenly interested in the success of nationalised industry, because if prices of raw material or of services go up, those increased prices must affect the final prices in the remaining industries. In the case of the organisation to which I belong, increases in the cost of coal, the cost of electricity, and in transport charges are bound to have an effect on the ultimate cost.

I ask myself what is meant by the success of nationalised industry. The noble Lord, Lord Pakenham, has given us four main answers; I will confine myself to two. The first is that a nationalised industry must be able to give good working conditions to the people employed within it. The second is that by means of efficient working, by the adoption of up-to-date methods and by a process of mechanisation, it must be able to meet the whole of the charges and help to reduce the prices to the final consumer. The final product of one industry, in many instances, becomes the raw material of another industry, and if the price of that material is excessive it must have an effect on the industry which is using it as a raw material.

I suggest that so far as the efficiency of any of the nationalised industries is concerned, we cannot take a period of twelve months as affording a real test. A much longer time will have to lapse before we can judge whether the form of organisation which has been adopted is the correct one or whether, in fact, the industry has fallen down. When a new house is built, we allow a certain period of time to elapse for that house to sink and to settle, and at the end of that period we are able to decide whether there are any defects which require to be made good. In the same way, we must allow these nationalised industries to settle and to be able to decide for themselves whether, in fact, defects have become apparent. I make the assertion that no one who is associated with the Labour Party expects that the final form of controlling corporations has been reached. To-day we are in the experimental stage. I have had some little experience in this connection and I know that you cannot take over industries of the magnitude of coal, electricity and transport, however capable the board, however brilliant its members, without having aching pains, and you will not be in a position definitely and immediately to decide whether the form of organisation which you have taken over is suitable or whether some change is needed. I am confident that, in the course of the years, we shall gain sufficient experience of nationalised industries to determine whether change is necessary, and, if it is found to be necessary, what kind of change is called for.

I would like here to make this statement. In any form of organisation which is carrying on large-scale production and in which there is centralisation, it is inevitable that there should be few contacts as between the rank and file worker and those in authority. In the development of nationalised industry it will be essential to have a certain devolution which will give to the executives on the spot greater authority for contacts with the workpeople than may exist at the moment. I am not going to touch on the set-up of any nationalised industries from the point of view of labour, but I would like to commend to the attention of the Government something which I think is essential, not only in the interest of nationalised industries but in the interest of industry generally. We know that there is a shop stewards' movement, there are workers' councils, and in some cases there are pit committees. That is all to the good. Now we may have Ministerial appeals, we may have brilliant members on boards and brilliant executives, but in the end we shall not obtain the best results from nationalised industries unless we carry the workpeople along with those who are in charge of the corporations. If the workpeople feel themselves to be divorced from those above them so that they do not count within the industry, we shall not get results.

One suggestion I would like to make is that the Government, in conjunction with the Trades Union Congress and the trade unions catering for nationalised industries, should make some attempt to give shop stewards and members of workers' councils some instruction in the broad principles of management. One of the difficulties that exist to-day is that, because of what has happened in the past, those who are dealing with managements either at local or national levels are concerned with matters purely from a trade union standpoint, whereas if some such instruction as I have suggested were given—and particularly with regard to the part that the nationalised industries can play and are expected to play in the economy of the nation—I feel that good would result. By the same rule, if I may say so, it would not be a bad idea if those connected with the corporations on the board side, and employers of labour generally, paid some little heed to and studied the history and practice of trade unionism. That might do a world of good in getting them to understand some of the difficulties and the causes of friction that sometimes arises with the workers.

It is not my intention to delay your Lordships any longer except to say that unless there is a period during which the boards of corporations can settle down to their job of organising these large corporations and so decide for themselves whether substantial changes are necessary in the structure of the nationalised industries, we shall not get the maximum benefit from them. I am not now touching upon the general question of control, lack of accountability, and so on—my noble friend who is to reply on behalf of the Government will do that. I am sure that nationalize industry is going to prove itself and that, in proving itself, it will do good, not only to nationalised industry, but also to the economy of the country generally. I thank your Lordships for your patient hearing.

4.31 p.m.


My Lords, it is a great privilege for me to congratulate the noble Lord, Lord Williams, on his maiden speech. I am sure your Lordships will all agree with me that he has presented his arguments with great lucidity and with a very tine voice. Although I am sometimes not quite clear about what noble Lords say, I could hear every word of his speech and I am sure we shall listen to his speeches in future with still further interest. I think it is your Lordships' wish that I should heartily congratulate him.

In case the noble Lord, Lord Pakenham, might wish to run away before I can say what I have down in my notes, there are one or two points in his speech to which I would like to refer. He referred to the price of coal. I do not know whether the noble Lord would agree that in the days of private enterprise, had the owners been permitted to charge the prices that are charged today, undoubtedly they would have been enabled to improve the conditions of the miners and the efficiency of their mining. The noble Lord should look back to the days of private enterprise and the prices which the coal owners had to charge then. It was a competitive business and they had to fix their prices not only from the national but also from the international point of view. They had to compete with foreign coal and with pits all over the country. There was the competitive element which is not present to-day. I sincerely believe that if the industry in the past had been able to charge the enormous prices we have to pay for coal to-day, then the conditions of the miners and the efficiency of the mines would have been immensely improved, even more than they are now.

The noble Lord compared the Post Office and the Bank of England with other industries. I have had that thrown at me before in debates in your Lordships' House. Surely in both these cases there is a complete monopoly; there is no competition, and complete power to put up the price of stamps or anything else. I do not think the noble Lord really means to compare the G.P.O. with an industrial concern that has to compete with other industries. I hope the idea will not go forth that one of the first successes of nationalised industry is the G.P.O. That only makes people laugh, knowing exactly the conditions under which the G.P.O. works.

The noble Lord said something about one nationalised industry paying its way. Not very long ago, we heard that the coal industry had made a profit during recent months. During that time, however, there had been a considerable rise in the price of coal to the consumer. Of course you can make an industry pay its way, if to-morrow you put up the price of the commodity it produces. Then the noble Lord said that he thought service to the public could be rendered more efficiently by nationalised industry than by private enterprise.


Of course, I was talking only about the industries that have been nationalised or are about to be nationalised. I was not laying down a general proposition about every conceivable kind of industry.


In the case of private enterprise, if the business is to go on at all, the public will insist upon good service. The business will fail altogether if it does not render that good service. But in nationalised industry, so far as I can see, whether the public are satisfied or not, we have to take what is coming to us and put up with it. The noble Lord mentioned boards. It is only within the last few months that the board of a nationalised industry resigned almost in a body. In regard to civil aviation, can the noble Lord tell us why there has been so much discussion in regard to the Brabazon I? It is said that it will cost £12,000,000–£6,000,000 for the machine and £6,000,000 for the aerodrome. I would ask the noble Lord whether those figures are correct, and whether it is a fact that there are only three aerodromes in the world on which this aeroplane can land and take off. Perhaps the noble Lord would like to answer that question now, in case he wishes to leave the Chamber.


I shall be here.


I shall be grateful if that question can be answered. I congatulate the noble Earl, Lord Selkirk, on bringing up this matter, because it needed to be brought up. The noble Lord, Lord Williams, in his admirable maiden speech, said that, with nationalisation, what I may call a teething process was necessary—that the nationalised industries had to go through a period at the start when we could not expect things to be perfect. I will return to that later, as I am going to make the strongest possible appeal to the Government in regard to that matter. I do not think anybody can dispute the fact that so far this policy of nationalisation has cost the consumer and the taxpayer many millions of pounds. We have heard from Ministers that there is a £10,000,000 loss on this, and an £11,000,000 loss on that. We have to face the fact that there have been these enormous losses.

Another interesting point is that in all these industries which have been nationalised, or which it is proposed to nationalise, I have not heard of one where those who had been in the industry the whole of their lives, and perhaps their families for generations before them, have ever agreed with it. They have all thought it a bad thing. Up till the time that nationalisation took place, the industries that have been nationalised paid their way, and at prices far lower and more competitive than those charged to-day. One cannot get away from that fact. I am absolutely certain in my own mind that if present prices had been permitted to those industries then, very large profits, and not the losses that we are suffering to-day, would have been made. I will tell your Lordships why. If you put up the price you either make a profit or you lose your sales. We have had from Sir Stafford Cripps warnings that we must work harder and produce our goods at prices that will enable us to sell them in the markets of the world.

It has been said many times that one of the reasons why it was necessary to nationalise some industries was that the enormous amount of money required to re-equip them after the war could not be procured by those industries. I am quite sure that that is wrong. I am certain that if a proposition had been put up, with the rise in prices which we now have, the City of London would have supplied the necessary capital. I see that Dr. Dalton said yesterday, in another place, that civil aviation was the only industry which affected the pockets of the taxpayer. Who is going to pay for the losses in the other nationalised industries? Surely, it must be the taxpayer.

I come now for a moment to a subject that was mentioned by the noble Earl, Lord Selkirk. He touched on the word "monopoly." Here we are embarking on a campaign to monopolise various industries of a very complicated nature. The result of that, so far as I can see, is that immediately there is a combination of sellers here and in other parts of the world it creates what I might call a sellers' monopoly, because there is only the one buyer. We can talk about soaking the rich, but it would be very easy to soak the buyer from the monopolies resulting from nationalisation. I am sure we could sit down round a table and work out a simple way of doing that. Another matter that is worrying me a great deal, as a result of all this, is that we are immensely dependent on our foreign business. I am quite certain that the foreign buyer is much happier dealing with an independent, private enterprise firm than with a nationalised Government industry. I warn the Government that this is something worthy of serious consideration. I would stress (incidentally, I think this was at the back of the mind of the noble Lord who spoke so ably before me) that we should take care at the present time. We have certain industries now nationalised, and I would make the strongest possible appeal to His Majesty's Government not to proceed any further on this line until this experimental stage of the industries already nationalised has been passed. As Sir Stafford Cripps himself has said, we would have had a major disaster in our industries and in our life here had it not been for three things: first, the fact that we are living on borrowed money; secondly, the charity of the United States of America; and, thirdly, the sellers' market. And Sir Stafford Cripps himself has told us that the sellers' market is not for ever going to be with us to the extent that it is to-day—as, indeed, the charity of the United States will not always be with us. If the Government have confidence in themselves, and if they are confident that they are going to win the next Election, can it really matter if they postpone any further nationalisation until such time as they know for certain that the industries at present nationalised are a success?

There is one other warning that I would like to give to His Majesty's Government. I think something has been said about giving advice, or not giving advice. I remember making a speech in this House some years ago, and what I then prophesied has come true. If I may use the expression, I was rather "ticked off" from the Woolsack for not being constructive. To-day, in giving this warning, I am going to try to be constructive. Where a manufacturing industry which has many ancillary businesses connected with it is nationalised, there is a great danger. The political aspect of it seems to me to be very dangerous, because great powers are concentrated in the hands of a few people. It is bound to have that result. As I see it, to-day we are getting less and less, and paying more and more for it. I hope noble Lords opposite will seriously consider before they go forward any further with what at the present time is costing the taxpayers of this country far more money than they can afford.

4.50 p.m.


My Lords, the noble Lord who has just spoken will excuse me if I do not follow his particular argument. Broadly, the argument was an attack upon the whole principle of nationalisation. I should not mind taking that on at some time, but it would take some time to develop and the hour is late. If I correctly understood the noble Earl who initiated this debate, he was not primarily concerned with that, whatever his opinions may be upon the general principle of nationalisation. It would not, I think, be unfair to describe what he had to say as: "If you are going to nationalise you had better think about it, recognise the great difficulties there are in it and consider them in the best way possible."

Noble Lords may remember that I moved a Motion in this House, rather less than a year ago, in much the same terms as the Motion of the noble Earl, Lord Selkirk. I then regretted his absence, because he and I had discussed this matter with, I think, a good deal of agreement. He referred to the fact—he did not mention my name with regard to it—that I had described the answer I received from the Government as being "the apotheosis of muddling through." I have a very vivid memory of how angry and indignant I was with the official answer I received at the end of that debate. One remembers one's anger and imagines that probably it was unreasonable. But I read the answer the other day, and I am surprised at my moderation on that occasion. I received the most negative answer possible. I say nothing against my noble friend Lord Chorley, who I felt at that time was a good man struggling with adversity—"adversity" being another name for a Government brief. But I was extraordinarily dissatisfied because the Government would not recognise what seems to me a fairly simple point—namely, that there are great difficulties in deciding how best to conduct an organisation of the kind we were discussing.

Assuming (as I assume) the democratic principle, that when you have public power it should be publicly controlled, that seems to me, broadly, the case for nationalisation—certainly of those industries which have a great effect on public fortune. I should have thought it was clear to anybody who reflected for one moment that you pay a price for that public control. You pay a price for bigness, and what you gain for democracy on the one hand, in the shape of public control, you may lose by excessive bureaucracy. I do not think anybody can doubt that that is a possible result. It is worth thinking about, and I did implore the Government to set up a Committee to consider it. The Government say "Oh, no; it will be a case of solvitur ambulando." That seems to me to come rather strangely from a Government who believe in planning.

I think that I received an unfortunate reply and, if the noble Lord will allow me to say so, I am considerably cheered at the very different answer given us so far by my noble friend Lord Pakenham. He did for one moment use a rather foolish gambit in this sort of situation, by showing the impossibility of a proposal which no one had put forward. That is a very good game, but it can be overdone. Nobody thinks for one moment that there is a concealed doctrine for these industries—at least nobody out of a lunatic asylum; and this is not a lunatic asylum. Let me take two points which have come up in this debate. There was the very interesting proposal, if I understood him rightly, of the noble Earl who opened this debate, that we could have general public control and yet have competition. I think that is a most interesting proposal. I do not know whether or not it is right, but I should like it properly discussed. When I say anything, it is not supposed to be science, but when the noble Lord, Lord Cherwell, makes a remark, that is science speaking; and one knows what an infallible thing that is! But poor teachers and students of government, like the noble Lord, Lord Pakenham, and myself, are not supposed to talk science or even anything resembling science. But you can conduct research into those things and you can discover everything if you do it properly.

I want to repeat something like my request of last year. To-day I am being rather better treated, but I am not going to be more modest. I want to suggest to the Government that they ask the Institution to which I have the honour to belong, Nuffield College, to go into this matter. May I describe for one moment to your Lordships their method of conducting conferences of this kind? We had last summer a most interesting conference on the subject of controls. It was done in this way. We had so many Government servants, so many leaders of industry, so many representatives of trade unions, and so many—I will not call them experts, but humble students of things like political administration and government, which my noble friend Lord Pakenham and I have pursued some distance. What is important is that the conference was confidential. People from all these various bodies—people with practical and theoretical experience—were invited and the proceedings were confidential, so that they had no need to keep to their slogans, and they could forget they had ever had Government briefs. It is quite remarkable what results can be gained from such a conference.

I submit that the Government should ask Nuffield College to see whether there are certain principles which can be laid down on that basis of perfectly frank discussion between the people who understand the general principles of Parliamentary responsibility and people who understand the general principles of big business. This is not a question confined to Socialism. All the great organisations of the world are discussing how the conduct of business can be combined with some decentralisation.

I do not know how many of your Lordships have read a book by Peter Drucker called Big Business. It describes the way in which the General Electric in the United States have grappled with this problem. It is a scientific problem in its way, and you can discover quite a lot of things about it. You can do that without having a sealed pattern. I urged upon the Government last time—though with very little effect—that if they can get certain principles and, what is much more important, if the senior civil servants have themselves heard the discussions and know what can be said for and against, they will be convinced.

I should like to take up a point made by the noble Viscount, Lord Buckmaster. I should have thought that everybody would agree that this question ought to be answered by someone, and that these answers should have the sort of scrutiny that is given to answers made in another place. I do not think it is necessary that the answers should always be given in another place. But wherever the answers are given, the corporations must be told how they can devise machinery by which questions asked by consumers and other people may be frankly answered.

I do not know, and I venture to say that at this stage no noble Lord in this House knows, how that ought to be done. It is a matter of Government organisation, and I implore the Government to take action. I know they are very concerned about it; the noble Lord, Lord Pakenham, has said so. But I do not think it is enough to say "We"—which means this Department or that—"are looking into this." It is not good enough that people should in that sense judge their own cause. What is needed is a good deal of research work, with the best machinery for doing research work. I think if that were carried out, we should get an answer to many of these questions. We are all, in a sense, of one mind (apart from a desire to score off one another), and I agree that the questions are not easy to answer. Therefore let us try to use such means of research into these matters as are available, and see whether we cannot progress further in that way.

5.2 p.m.


My Lords, it is always a great pleasure to follow the noble Lord, because his philosophic way of putting problems before us is novel and of great interest I think I can assure him that the problem with which he dealt mainly in his speech is one to which all the leaders of industry in this country are fully alive. Certain of the major industries have already done a great deal of decentralisation in promoting competition among their component elements. And, if I mistake it not, in the case of the Gas Act I thought I saw a glimmer of light in the mind of the Minister of Fuel and Power in that respect. The noble Lord, Lord Pakenham, was regretting that nobody had exposed the shortcomings of the Post Office, and I had not intended to do so; but I am not quite sure whether he remembers the services we used to get before the First World War. If he will consult the noble Lord, Lord Walkden, on that subject, I feel certain that he will receive some facts that may surprise him.


May I ask why Lord Walkden in particular—except that he is a mine of information on all subjects?


A mine of information on all subjects, an impartial mind; and he has a very good memory.

In my remarks I am going to deal with coal. I think the miners have probably "missed the bus." In 1945 the vast majority of the nation sympathised very much with the miner. They thought that between the wars the status of the miner in the wage earning classes had declined, and they wanted to see it restored. Probably the majority of the nation were willing to concede nationalisation. Many knew its dangers, but they felt that the miner was rather like the small boy in the soap advertisement: "He won't be happy till he gets it"—though, of course, they knew that the small boy loses the cake of soap in the bath or gets some of it in his eye and cries. In the outcome we had nationalisation. What was the result? We have had too little coal, too dirty coal, and too dear coal. In 1948 many good judges thought that the target was set 10 per cent. too low; but there seems now to be doubt whether the original target will be reached at all. Just think what 20,000,000 tons of coal would have done for us in the sellers' market for coal. It would have produced £100,000,000 in foreign exchange. It would have been an enormous help to our prestige in the world. On the subject of price, I do not know whether your Lordships are fully aware of the enormity of the export price at the moment. The pre-war United States Pocahontas coal was approximately £1 per ton f.o.b.; South African was 13s. a ton, and Welsh coal was just over £1. To-day Pocahontas is £3, South African is just over £2, and Welsh coal is £4. How long that will go on I do not know—but I think the miners have "missed the bus."

Now I turn to the difficulties with which this industry has had to contend. First, there is the problem we must not shirk: that of Communist leaders. His Majesty's Government are to-day apparently learning the facts of life. They must surely have known for a long time that Russia has been fighting a war against us for at least eighteen months. The soldiers in this war are the fifth columnists, the Communist Party in every country. And what more advantageous position is there from which to wage this war than the leadership of a large body of miners—especially when, so far as Britain is concerned, her position as a first-class Power depends solely upon coal? Another great problem is that of the psychology of the miner. In the modern State, with its redistributions of income, it is necessary that the wage-earner should be willing to spend less than he earns in order that his savings should fertilise industry. But there is a corollary to that, which is that the wage earner should be willing to earn more than he spends. That is where we have great difficulty with the miner, because from time immemorial he has suited his earnings to his physical needs of the moment. He was never one of nature's savers; nor, apparently, has he ever had any great desire to improve his standard of life.

The third problem is that of human relations. Everyone knows that when big organisation comes in at the door, humanity is apt to fly out at the window. That was well known when the set-up of the Coal Board was being prepared. Moreover, they started with a great advantage, because the existing relationship in this industry was mixed, to say the least of it. They had a better chance than any other industry of producing a really improved arrangement. But the set-up that was put into force made everything more remote. The miner exchanged the devil he knew for the board he did not know; and the board was further away than the devil. The fourth problem is that of who is to get the benefit of mechanisation. Is the consumer to get cheaper coal or is the miner to get an easier life?

What are the solutions for these various problems? I do not want to delve into his Majesty's Government's secrets, as to what they intend to do in their stable in regard to the Communist leaders; but as regards the psychology of the miner, I would ask what steps are being taken to open the eyes of the miner to the fact that a fuller life can lie before him. At the new pits that are being sunk, are large car parks being prepared for the miners' cars—not for the Coal Boards' cars? Are the miners being told that, by saving so much for a certain period, they can own their own house? Are they being encouraged to save so that, when they take their pension, they can buy a little house and a bit of land in the country? I see nothing impossible in a state of affairs in which the miner lives half a dozen miles from his work, and rolls up in his car to do his shift. In view of the earnings in the industry, I do not think that this is quite a practicable idea. But do his Majesty's Government want the miner to own his house, and so on? They may speak with divided voices upon that matter.

Now a word about human relations. How can we improve those? I do not believe it can be done through labour relations officers. Surely it can only be done by giving more authority to the manager to decide questions on the spot, and by bringing the body to whom he is responsible nearer the pit—in fact, far more like a body of part-time directors, about which the noble Earl, Lord Selkirk, spoke earlier on. Surely swift justice on the spot is the key to better human relations and to discipline. As to the rewards of mechanisation, somehow his Majesty's Government must get into the heads of their supporters that these rewards belong, to a very large extent, to the consumer; otherwise we shall never retain our markets. The reward to the miner consists first in the lessening of his toil and only secondly in the increase of his other rewards, though even those will be substantial. Unless these problems are solved, so far as I can see we shall be faced with four conditions, one of which is bound to apply. The first is that we shall get too little and too dear coal; or secondly we shall employ more miners to do the job than we really need; or thirdly the miners' pay will have to be cut; or fourthly—the thing that we really all want—the miners will be induced to earn more than they are earning at present, and produce more coal. That is the solution which suits our way of life because it leads to a property-earning democracy.

5.15 p.m.


My Lords, we should be extremely grateful to the noble Earl, Lord Selkirk, for raising this matter in your Lordships' House to-day. If I may say so, in the extremely refreshing speech which he made upon this subject, he has undoubtedly given both sides of the House something upon which they can chew. He has given it in the form of what some of us like to feel are constructive ideas. After all, in these difficult times, it is ideas which we want. It is no good His Majesty's Government, or any other Government, sitting down and saying that they believe in nationalisation as a cult and, therefore, as long as the tail of the dog wags them they will proceed to nationalise from top to bottom everything they see. That will not do. They have to see that each scheme is working. Whether His Majesty's Government will listen to what has fallen from the noble Earl's lips, of course I do not know, but I was very glad to hear the noble Lord, Lord Lindsay of Birker (I cannot technically call him the noble and learned Lord, although, as we all know, he is very learned) say that he felt there was something—in fact a good deal—in what the noble Earl, Lord Selkirk, had said. So far as this nationalisation programme is proceeding now, there is no doubt that it is proceeding at an extremely fast pace. I can liken it only to the pace of the Gadarene swine in the Bible.

The noble Earl, Lord Selkirk, raised several very good points, some of which have been in my mind for a considerable time. First, he said that he felt—and he thought that a great many other people in this country felt—that the Government did not really know where they were going; everything seemed to be so haphazard. I suggest that this is not an entirely false statement; indeed, it is the reverse. I believe that that is gradually becoming the general feeling in the country. Whether the Gadarene swine knew where they were going, we are not told. What we do know is that their pace was fast and that, once the devil was in them, hey went down the steep hill into the sea. Whether we are shortly to see the like befall His Majesty's Government, only time can tell.

The second point the noble Earl raised—and in my humble opinion I consider it a very important one—is this. One of the chief evils in the present system, when dealing with nationalised industries, is that it is extremely hard, if not impossible, to elicit any information as to what is happening in these affairs. In the old days, if a man had a grievance, or he thought that something ought to be put right, what did he do? He went to his Member of Parliament, and if that Member of Parliament did not deal with it and get up in the House and ask a question, he would probably know the reason why. We have heard it here; we have heard it in another place. Questions have been asked in regard to these nationalised industries. What happens is that one is promptly referred to the board for an answer.

It is true that if one of your Lordships, or even I myself, were to write a letter to one of these boards, in the course of time—I repeat "in the course of time"; it may be a matter of days; it may be a matter of weeks—we might receive an answer. On the other hand, we might not. But what about poor old Bill Smith who lives at Coventry? What about poor Alec McKenzie who lives in Dundee? What hope has he of getting an answer? We have heard about these consumers' consultative councils. We are always told that they would not be acceptable to the people. It is not the sort of thing, or the set-up, that this country has understood. What the people would like to see is some red-hot Socialist representative of the manual workers, like Lord Pakenham, get up in your Lordships' House and say: "Bill Sykes, my friend in Tottenham, never got his coal this week. Why not? He got it last week, and it was full of stones." That is what our coal is to-day, and it is well known to all of us.

The third point I want to deal with is one which was raised by the noble Earl, Lord Selkirk. I do not wish to repeat it but I think it needs stressing. I refer to the old bugbear which affects us all, and especially those of us far from the centre—that of centralisation. We have said again and again that it is a stranglehold upon efficiency. The noble Lord, Lord Pakenham, will forgive me if I repeat that Ministers like to consider it merely as a temptation. If it is only a temptation, if I ever meet such a mass of knock-kneed, spineless sinners as the members of the present Government I will eat my hat, because they yield to temptation at every turn. Most of us think that a measure of control in these complicated days is absolutely essential, but if there is to be control it should be in the form of regulated competition, or regulated commerce, shall we call it, with as much decentralisation as is possible, in order that enterprise may function.

The noble Lord, Lord Lindsay (I think I am right in saying) said that he was interested in the point of view put forward by the noble Earl, and that he should think that it might be possible for private enterprise, or anyhow enterprise, to function in a nationalised industry. Lord Lindsay considered it would be worth while going into that question. My Lords, that is all we always want to do. I do not want to rush off on to another subject, the subject of my own beloved country, for instance; but that is all we ask should be done—namely, that the question as to whether or not decentralisation will work should be investigated. If the Government say, and prove, that it will not, then we will sit down on our hunkers and keep quiet. But until they prove it, we will never sit down, and they will have trouble and lack of co-operation from us from start to finish. In my humble opinion further decentralisation in these nationalised industries is absolutely essential, but it can be effective and efficient only if there is delegation of managerial and financial responsibility. Only in that way will there be real success in decentralisation. One has only to look to the local authorities. Most of your Lordships at some time or another have served in those august bodies, and those who are serving now will realise that this is being proved again and again at the present moment; and that is the reason for this present stagnation in local affairs. I am going to call it "mental constipation," because that is the only phrase that can describe what is going on. The area in which I live suffers from that mental constipation, and I believe it is universal throughout the country.

The noble Lord gave a good many excellent examples of what one might call regulated commerce. He spoke of the Traffic Commissioners. Their existence, after all, is regulated commerce, because somebody who wants to start a bus route has to go to them in order to do it. Take the Electricity Commissioners, which the noble Earl did not mention. That was one of the finest bodies we ever had, and it has had its head cut off. It was really an efficient body, and its members knew their stuff. I happened to serve for a short time in the electrical world and I had to deal with these people. They were absolutely first-class. What were they? They were merely a judicial body which dealt with matters which were brought up to them from the decentralised bodies below. That is really what we want. Even more, they were what the noble Earl spoke of as "the watch-dogs of the consumer"; they looked after his interests. I speak as a consumer, but we are all consumers, and in these days no one seems to care two hoots or "a tinker's cuss" about the consumer. He does not count in this world. The only person who counts is the employee. I will go back to my own record at home or any- where you like. I have as great a feeling as anyone for the employee, and I realise that there was much ground to be made up and a great deal to be done to rectify some of the great wrongs which had not been put right. But it is not right that the employee should have a fair deal at the complete expense of the consumer, which is what is happening to-day.

Take the instance of coal. Take a miner. Nobody knows better than I do that he has a terrible job; he has a dangerous job; he has a dirty job and an uncomfortable job; and he is entitled to fair play and a fair deal. But it should not be entirely at the expense of the consumer, as it is now. I bring this up to illustrate this point. Go into your coal yard, and tell me how much decent coal you get now. You can take it up into your hands and you will find that half of it is stone and slate. If you ask whose fault that is, the answer will be that it has nothing to do with the set-up of the National Coal Board. But I believe it has; and so does the noble Earl. And that is what he is raising in this debate. It is in the general set-up of these affairs, and the National Coal Board should have as one of their main objectives the care of the consumer, leaving the question of production, the actual working out, to the more decentralised and district bodies. If they fail, the Government have a remedy in their hands—sack them.

Finally, I come to the costs of nationalised industries. I think it was the noble Lord, Lord Pakenham, who said they were hound to rise because of improved conditions to the workers; and one agrees with that. But, my Lords, the cost of every industry is rising throughout the country and I, for one, feel that, sooner or later, there must be a limit. There must be a limit to this rise. I tremble to think what the railway accounts will show when they are published in the spring for the first time since the taking-over. Week by week the railway receipts are dropping. Rumour has it (I may be wrong) that already another rise in wages is talked of. Traffic is gradually, day by day, going from the railways to the sea and to road transport, and before very long we shall find that industry in complete bankruptcy. Who will have to pay for the tune? You and I; all the taxpayers. And that is what happens to all these nationalised industries. To my mind, something must be done. The noble Earl, Lord Selkirk, has put in front of your Lordships something over which you can think, and upon which you can chew, and perhaps some action may be taken before this stranglehold of central control, which is so dear to the Socialist heart, throttles the very life of the nation.

5.29 p.m.


My Lords, the noble Earl's Motion is couched in such wide terms that it might be approached from almost any angle. The remarks which I hope to make to your Lordships, though much less general, fall fully within the terms of the Motion. I should like to say something about that industry which forms such a large part of the nationalisation programme, the railways. Now that they are nationalised they will have to make a more or less fresh start, and it is important that the fresh start should be in the right direction. The privately owned lines had successes to their credit; they also had failures. It is to be hoped that the State lines will follow up the successes and, so far as possible, avoid the failures. There is nothing more helpful than to make a good beginning.

During the discussions in Parliament on the Transport Bill, I noticed that hardly anything was said on the subject of railway efficiency or the effect that nationalisation might be expected to have upon it. The discussions were almost entirely political and hardly at all economic. The only real justification for nationalisation will be if it increases efficiency, and it is to be hoped that this matter will be given priority over everything else. Railways have been in existence for well over a century. During that time many ideas have been tested and a good many mistakes have been made. It is to be hoped that the nationalised management will profit by taking note of the mistakes and avoiding them so far as possible. One of them can, unfortunately, never be put right. The 4 feet 8½ inches gauge of the rails and the unduly cramped loading gauges must remain as they are.

It may be worth while to glance at the course of the railways' progress. The first public railway was opened in 1825. For twenty-five years progress was rapid, particularly in the elimination of numerous defects in the primitive lines and rolling stock. After this energetic beginning, there supervened a long period of almost complete inertia. The railway managers quickly became aware that railways, in the circumstances of the time, were so vastly superior to every other form of inland transport that no competition with them was possible, and that all that was required to secure for themselves a quiet, untroubled existence was to agree together to do as little as possible in the way of improvement or development. In a young and vital industry, it was not, of course, possible to do absolutely nothing; but progress was extremely slow for something like eighty years. The most important improvements made during this period were the adoption of continuous brakes and block signalling, which were forced upon the railways by the Board of Trade. This was, undoubtedly, a triumph for officialdom over private enterprise.

Inertia, punctuated with little spurts of energy, continued up to about ten years before the outbreak of the Second World War. As late as 1926, it was still possible for the general manager of one of the big railways groups to remark that: "Railways have the advantage of speed and need not exercise themselves to enhance this advantage." About the same time, the chairman of the same group, when asked whether he would put on third class sleeping carriages, replied: "I hope not." Then, suddenly, came a complete change of front. From approximately 1930, one radical improvement after another was introduced. Express goods trains were multiplied, the use of containers and the system of railhead distribution was developed, passenger services were greatly improved, third class sleeping carriages were introduced, much progress was made in the design of the steam locomotive and in the construction and maintenance of the permanent way, and the capacity of the lines was greatly increased by means of almost a revolution in signalling.

I do not know what the reason was for these highly satisfactory changes, but it is evident that the privately owned railways had learned their lesson. Incidentally, it may be remarked that this may easily have made the difference between winning and losing the Second World War. When war broke out, the railways were in a far better position to play their part than were the Service and other Government Departments, and it is by no means improbable that this just tipped the balance in our favour. The point which I wish particularly to emphasise is that the really important improvements that were carried out during the long, dreary period of semi-inertia, were due to the fact that there existed an overriding authority, the Board of Trade, which was in a position to put pressure on the railway managers to compel them to accept desirable reforms. In the new set-up instituted by the Transport Act, there will be no overriding authority. The railways will be controlled absolutely by the Minister of Transport and his advisers, with nobody in a position to apply effective pressure to compel them to do anything they do not wish to do. Public opinion is a broken reed, and Parliament is equally impotent, because to exercise real control, expert knowledge is required.

The nationalised railways will no more be run by the nation than the privately owned railways were run by the shareholders. Just as the latter were run by the official managers, so will the former be run. The managers are, indeed, the same men—none the worse for that, if only they continue the same satisfactory progress as they achieved immediately before the last war. But will they? Rapid progress was quite a new idea. We had, roughly, ten years of it after eighty years' inertia. The temptation to go slow when there is no overriding authority to prevent it is tremendous, particularly when the whole nation can be compelled to subsidise inefficiency. I notice, for instance, in the Economic Survey, that it is proposed not to restore the permanent way even to its pre-war standard of solidity. What a glorious, ready-made excuse for a general slowing-down of the traffic! Can any officials be expected to do their best in such circumstances without stimulus from outside? Anyhow, they will not be able to attribute their troubles to road competition, as has so often been the case lately, and they will be free to make the best they can of increased road-rail co-ordination.

I believe that far too much importance is attributed to the effect which the competition of road transport exercises upon the railways. It is impossible to be very precise about this because no figures which would enable any useful conclusion to be reached are published. Such trouble as there is, is one of the results of the craze for subsidies which is, at the present time, threatening to destroy civilisation. The railways, with Government approval, have always so arranged their charges that persons despatching valuable goods of small weight and bulk have been forced to subsidise persons despatching cheap, bulky goods. The valuable goods are precisely those suited for carriage by road, while most of the cheap goods must travel by rail. If we lived in a sensible world, the obvious thing to do would be to allow each class of goods to travel by the means for which it is best suited, and to charge what the transport costs, together with a reasonable profit. But the cancer of subsidies has such a stranglehold upon transport, and the abandonment of subsidies would be such a shock to the national economy, that it is considered necessary to maintain them, cost what it may. Even so, I am unconvinced that the loss of profitable traffic to the roads would be anything like sufficient, of itself alone, to cause serious trouble to the railways.

It is only fair to add that there is a school of thought which, far from accepting the view that the bulky traffic is subsidised by the valuable goods, takes precisely the opposite view. Its advocates point out that the work required in collecting, sorting, transshipping and delivering small consignments of valuable goods is much greater per unit of weight than that required to run, say, a train with 1,000 tons of coal direct from the mine to the works. The subject is complicated, controversial and highly technical. I do not agree with this view because an enormously greater proportion of capital and maintenance costs are obviously due to the heavy bulky traffic.

Turning from the general to the particular, one of the things about which I hope the nationalised railways will take a strong line is punctuality. It is difficult to over-estimate the importance of punctuality in railway working. If one important train is late it delays, or may delay, those following it, those connecting with it and those crossing its path. Unpunctuality wastes the time of the passengers and of the railway servants, and introduces confusion, which is by far the commonest cause of accidents. The worst accident that has ever occurred on a British railway, that at Gretna in 1915, in which over 200 persons were killed and many more were seriously injured, was a direct result of manoeuvres consequent upon the unpunctuality of certain main line trains in reaching Carlisle. The same thing has happened in many other cases. Delays will occur, and if a train is once late, the only way of getting it back in its proper place in the great scheme for working the traffic is to make up the time that has been lost.

In France and Germany, and, so far as I know, most other European countries, the drivers receive definite printed instructions ordering them to make up time where a train is late and setting out in detail the speed limitations which they must observe SD as to do so with safety. Strange as it may seem, the subject is one of which British railway managers have always fought shy. Up to some twenty years ago the drivers received no printed instructions at all about making up lost time; and though a few half-hearted attempts have since been made to tackle it, nothing in the least adequate has yet been done. What is wanted, of course, are definite printed instructions, issued with the authority of the management, so that drivers may know exactly what they are expected to do in each case as it arises; and strict enforcement of these instructions.

May I say a word about electrification of surface lines? For underground lines electricity, of course, has decisive advantages, but I earnestly hope that no electrification of surface lines will be undertaken without making quite sure that it will be financially justifiable. There is an enormous volume of propaganda in favour of electrification. Every feature of it that can be of the slightest use is lauded to the skies—quicker starting, reduced stand-by losses, quicker turn-round, cleaner tunnels, and so on. It all a mounts to very little. The one really important consideration, whether electrification saves money in comparison with a similar, or almost similar, service carried on by the best type of steam locomotive, is wrapped in mystery. It is simply impossible to get the relative figures. I have been trying for many years without success to get the figures of the Southern Railway, which had the greatest mileage of electrified lines in this country. I have heard the shareholders shout for them at a General Meeting and be refused. All this leads me to suppose that the electrification of surface railways should be approached with the greatest caution. Such facts as are known are by no means hopeful. For instance, electrification requires an enormous capital expenditure, interest on which must be earned in addition to that which would have sufficed to pay interest before electrification. An electric motor costs about twice as much as a steam locomotive of the same power. The conducting wires or rails required greatly hamper the work of maintaining the permanent way, and in the marshalling yards are highly dangerous. I must add that the more intensive utilisation of the electrified lines is almost entirely due to the improved signalling with which these lines are equipped. Improved signalling would have the same effect if the lines were worked by the best type of steam locomotive.

Another matter to be approached with caution is standardisation. In the early days, many different experiments were inevitably made with equipment of all kinds, much of which was of such solid construction that it lasted for a great many years. From about 1850 the process of eliminating the worse and adopting the better was a very slow one, partly owing to the long period of semi-inertia, already alluded to, through which the railways passed. Towards the end of the nineteenth century, for instance, steam locomotives turned into useful power little more than 5 per cent. of the heat latent in the fuel burned. To-day steam locomotives built on the latest principles can be made to return more than 12 per cent. These are figures given by a former chief mechanical engineer of the L.M.S. Perfection is far from having been reached in railway appliances, and standardisation may easily put obstacles in the way of improvements of many kinds. On the other hand, it may obviously produce great economies. Railway rails, for instance, have been successfully standardised. It is eminently a case for going forward, but with caution.

I see that the noble Earl is moving for Papers. I hope he will not be understood merely to be making use of a conventional formula. I suggest that detailed information on various points would be of great assistance to the public in helping them to take an interest in the railways which members of the Government have so often assured them are now their own property. I hope that the Government will lay Papers giving the fullest information. One extremely important point is the cost of electrification. Let us be told exactly what existing schemes of electrification have cost, and what are their technical and financial advantages, together with an estimate of the cost of a service as nearly as possible the same if carried on by the most modern type of steam locomotive. Then, with regard to punctuality, let us see the instructions issued to the staff. This should be a good beginning in the education of the owners of the railways.

5.47 p.m.


My Lords, apart from the rather irrelevant essay which has just been read to us, I think—


It is not irrelevant. I pointed out at the beginning that it was completely covered by the noble Earl's Motion.


We all think our speeches very relevant. It is at any rate more in order to make a speech than to read an essay, but I think it is for the sense of the House, as we have no rules of order, to decide whether a speech or an essay is relevant. We have had a most interesting and valuable debate, introduced in an extraordinarily interesting speech, if I may say so to one of my own old friends—interesting in its form and particularly interesting in its substance. If I may single out one other speech, I was delighted to hear the maiden effort of the noble Lord, Lord Williams. I have had the pleasure of working closely with some of his colleagues, as I think he knows. He spoke with brevity but with real practical knowledge, and he will always be sure of a warm welcome when he intervenes in our debates.

I am not going to speak at great length. During the debate on the humble Address I ventured to offer a few observations to your Lordships comparing the nationalised and the non-nationalised industries, and I really would not have gone into that matter at all today but for the provocative challenge issued to me in his speech by the noble Lord, Lord Pakenham. I will deal with only three points which he raised. He dealt with the general rather than with the particular; that is one of the temptations it is hard to resist when we come to these questions. The noble Lord said that, after all, we have to try to find the type of organisation which yields the most efficiency, and it is difficult to find that type and to know what rules to apply. Hard and fast rules cannot be applied. I think I have faily paraphrased what the noble Lord said. There is truth in that, but there is one test that should always be applied—and here I agree with the noble Lord, Lord Lindsay. The interesting thing is that Lord Lindsay is in favour of some nationalisation, and I am not; but when we come to how it should be practised, if it has to be practised at all, he and I are both at one in our condemnation of the present Ministries who do practise it, except that he is even more condemnatory than I have ever ventured to be.

I agree with him emphatically that there is one test which we must always apply—namely, the test of size. I am sure that any of us who have been in business knows the danger of getting businesses too big. If there is a risk, it is that the businesses will be too big and not too small. Some of the railways in the old days were too big. I think the L.M.S. and the L.N.E.R. were too big to give real efficiency. But if that is a very important test—and I agree with Lord Lindsay—what sense is there in piling Pelion on Ossa? Why take the railways and put them all together, and add to them the docks, road transport, and heaven knows what else? I believe it to be quite impossible to get efficiency and economy in businesses which are as large as that.

Then the noble Lord, Lord Pakenham, said: "After all, we must have a system which is best designed to suit the consumer." He did not answer the question about the setting up of consumers' councils. He said that he had one in his own Ministry, and that they could not do any business because nobody would write to them. When I have trouble with a company, what I do in ordinary life, if I can, is to go to another company and patronise that other company. Of course, I cannot do that where the Government have taken over the industry. In any case, I do not write to a consumers' council, but to the manager of the business, although I do not say that I always get great satisfaction. Really, the test that the consumer applies is not the theoretical test which the noble Lord so agreeably presented to us. What the consumer says is: "I want to know what it costs." The test which any consumer applies is price, quality and service. I will not put it higher than this. It is a remarkable thing that in the nationalised industries prices have gone steadily up. In the case of coal, the price has gone up (I quoted it in my speech on the Address) from 17s. 1d. to 47s. 0d. I know that wages have improved, as the noble Lord said, and I think that is right. But it is a terrible proposition to say that wages can never be raised without at the same time raising prices. The whole essence of the question should be the production per man hour, and the whole related to the cost. What we want to see are higher wages and earnings, but to have them related to production. That is a remarkable contrast with steel.

The noble Lord also mentioned the point about his staffs. He said he was delighted to tell us than, they were now being cut down. What I would have liked to know was why they were so big at the start. Ordinarily, when you go into an enterprise you do not (unless it is a Government enterprise) create enormous staffs and try and find something for them to do. What you do is to start modestly, increasing the staffs in size if the business justifies it. It is quite right to do it then, but it is not a good advertisement for the nationalised industries to say: "We built up an enormous staff which was not justified, but now we have an efficiency expert in to tell us how we can reduce its size."

The noble Lord then referred to Dr. Dalton, who I gather made a speech in which he said: "Of course the taxpayer is not hurt by nationalisation, unless there is a direct subsidy. It is true that he is hurt to the tune of £10,000,000 over civil aviation, but not over anything else." That is really quite untrue—or, at any rate, it is far too limited a way of looking at the matter. I suggest that the taxpayer is hit in other ways as well. Take a nationalised industry which makes a loss. In the old days, when industries were not nationalised, some people made a loss; and it was they and not the taxpayer who carried that loss. But others who were more successful made a profit, and out of those profits the Chancellor of the Exchequer took his corporations tax, his income tax and his surtax. But now, if the Government business does not make a profit, the Budget has not only to be balanced but they have to have this enormous surplus, which must come out of other taxation.

It is true that if prices are raised the industry is able just to break level. But the Government have to remember that they have sacrificed large profits which were made in the past and were subject to taxation—indeed the greater part of which went in tax, what with income tax and surtax. To-day that has gone, and it has to be made up. Of course it has to be made up at the expense of the taxpayer, whether it is in P.A.Y.E., tax on beer or consumers' tax. Let us remember, also, that the taxpayer is a consumer, as well as a taxpayer, in so far as present taxes allow him something to spend. With coal going up, and electricity going up, he is hit that way as well.

Those are the only points from the noble Lord's speech with which I want to deal. I want to concentrate in a very few words on two matters, one concerning organisation and the other concerning information. On the organisation side, I think it is very important that there should be some yardstick of efficiency in these nationalised industries. That is important, both for the boards themselves and for the public, who are now the owners and have to foot the bill. When the normal tests of competition, of comparison and profit and loss, have all been eliminated by monopoly, it is extremely hard to see how that test is to be applied. The profit and loss test has gone, because, as we have seen, the losses are all met by putting up the prices. It is also important than none of the provisions of the Monopolies and Restrictive Practices (Inquiry and Control) Act applies. We raised this point when the Act was going through this House. The more we come face to face with the defects of these Government monopolies, the more strange it appears to me that, when we pass an Act to deal with monopolies, the largest monopolies of all—in fact the only monopolies which are complete monopolies—are to be exempt altogether from the Act.

This theory that the Government can do no wrong is not holy and inspired truth. It is more important to apply some comparative standard of efficiency, because all the tendency is to be a sealed pattern. There is no doubt that that is so. The noble Lord himself said that it was a temptation. I agree with the noble Earl, Lord Airlie, that they can resist everything except temptation. Certainly this is a temptation which they have not shown themselves very capable of resisting. Particularly is that so where there are regional boards which have no wide measure of autonomy to try out their own ideas.

Take the Transport Commission. I think the noble Lord, Lord Lindsay, referred to this to-day—certainly he did on a previous occasion. The Government have said how much they want to decentralise. The Lord Chancellor, replying in an earlier debate, said so, and the noble Lord said it to-day. It is no good their making these pious professions of their hopes any more than talking about temptation. The real test is: What do they do? When they come to act, decentralisation is the last thing they do. Under the Transport Act, where one would think that local knowledge and local delegation were needed, the Government set up regional boards. But they did not do the obvious thing, which was to say: "Now you know your locality. You have a chairman there and you have a board. Let them have a wide latitude." The noble Lord said that this set-up cannot be quite as elastic—I think these were his words—as existed in the Channel Islands service, when things could be done quickly. Now we have a great Government service and, of course, things will not get done so quickly.


That is not quite what I said. I accept it as paraphrase, and it is only about 50 per cent inaccurate.


I am glad to know that I got 50 per cent. of it accurate. What we ought to try for is 100 per cent. good, and not a thing which is 50 per cent. bad. The noble Lord will certainly not deny this, and neither will the noble Lord, Lord Lucas, who is to reply. When these regional transport boards were set up, instead of giving real autonomy to the regions, what the Government did was to make little replicas of the people in Whitehall. There were six or seven functional directors on each of these regional boards who were not made responsible to the regional chairman. They were each made directly responsible, took their orders from, and were made answerable to, their opposite numbers on the Central Commission in Whitehall. That is not decentralisation at all. That is simply bedding out somewhere else one of your own people, which is a wholly different conception. That is the Civil Service conception and doctrine which, for the Civil Service, is very good. The Civil Service is necessarily uniform, because its members have uniform duties to perform. They have not commercial or competitive duties. We do not want a competitive Board of Inland Revenue—it would be extremely awkward if the Inland Revenue were different all over the country—but we do not want the Inland Revenue system applied in running a variegated system which has to meet entirely different needs in various parts of the country.

I am hound to say that, although I think they do their job extremely well in their own territory, just as the Civil Service tend to uniformity because the job is uniform so the trade union official tends to uniformity because his job is uniform. He negotiates the wages on a national scale, and he is extremely good at it. But he has no training in the diversity which is required in this case. In fact, the whole tendency of the trade union movement—I will not criticise it—has been to centralise. Perhaps Transport House encounters some of its difficulties to-day because the union is too big. I am not quite sure that in trade unions we are not beginning to find that a union can be too large; one big monopoly union can absorb too many unions. That carries with it the seed of its own difficulties and discontents. But certainly the tendency has been that the people at the top shall give the broad directives, and that the local officials shall carry them out. Therefore, neither the Civil Service nor the trade unions, by the nature of their whole training and their life's work—both of which they do quite admirably—are suited to run this kind of delegated business. Nor are they in the least likely to favour a system of decentralisation and devolved powers so alien to everything they have done.

Comparative standards become the more important when incentive and the automatic tests of competition are eliminated. I want to ask the noble Lord, Lord Lucas, in replying, to tell me not in generalities, but in terms, what is being done, first of all, to encourage initiative and diversity—we know that in the Transport Commission it is exactly the opposite—and, secondly, to obtain and publish standards of comparison, for instance, with the United States with regard to railways. There are a great many statistics which I am sure could be obtained. The noble Lord will know that one of the things one does in a business is to try very hard—although competition is good for everyone—to pool experience and discover comparative costs. In the I.A.C.O. one of the things they do is to obtain regular returns for costings and comparative mile hours flown of an aircraft. Why do we not get those?


We have them.


Then publish them. Heaven knows, the Government are not chary of producing White Papers! The amount of papers falling upon us are like leaves in Vallombrosa. We might have a useful one, for a change, and we might get some of these statistics. I would like to know what is the profit or loss of Sabena, and the other companies, compared with those under the Minister's control.

So much for the standards. Now I want to say one word about information generally. I quite agree with those who have spoken that Parliament and the public are entitled to have that information. If there is any precedent against giving us this information then we ought to create a new precedent to deal with a new situation. I believe—in fact, I am sure—that precedent is not against this in the way that Ministers have alleged, and I believe that the Ministers are wrong. It is quite wrong to suppose that in the past Ministers have answered questions only about matters for which they are administratively responsible. I am sure the noble Viscount the Leader of the House will not deny this, because he and I have been Ministers for a great many years. I was four times President of the Board of Trade. In all those years I was continually asked, and continually gave information, about every variety of industry in this country. I was not responsible for these industries, and I could not give them orders. But I never dreamed of coming to the House and saying: "I am not responsible for merchant shipping, and therefore I am not going to give you the information."

On the contrary, one not only gave masses of information at Question Time in the House—sometimes there were twenty or thirty questions in a day—but one had regular debates. My noble friend very often took part in them, helping me where the staple subject of the debate was the state of industry in the country, and we went into the most minute details of industries. Ministers answered questions not only about those matters for which they were administratively responsible but about those matters within their knowledge. It would be a great pity if that system were not retained. While Ministers refuse to do it at one moment, they do it at another. Take the Chancellor of the Exchequer. From time to time he gives Parliament the most interesting economic replies. More frequently (I think he does it once a week) he gives the Press masses of information about this and that industry, for which he is not in the least responsible. But when somebody asks a question about a nationalised industry, a Minister gets up and says: "It would be most improper for me to give that information, because this is not under my administrative control." It would be ridiculous and fantastic if we found that we knew more about the non-nationalised industries in the old days than we can learn about the nationalised industries at the present time.

There is another fallacy. Giving that information does not in the least mean that administrative responsibility is being transferred from the board to the Minister, any more than the issue of the annual reports means such a thing. Giving information is not taking away responsibility from whoever is responsible—and I quite agree that somebody must be responsible; I stand by what I have said to that effect before. There must be somebody responsible, whether it be the Minister or the board. Giving information does not alter or shift responsibility. It tells Parliament and the people how that responsibility is being discharged, and that cannot possibly affect the proper seat of responsibility. I have always said that if the board did a job badly it was not the Minister's business to go and do the job for them; it was his business to sack the board; and it was Parliament's business to sack the Minister if he was not doing his duty.

I think that Parliament and the public have a right to know how these nationalisation experiments are working. It is more important now than ever. The Lord President of the Council has told us that the test must lie in the manner in which these things are working, and I think that the noble Lord, Lord Pakenham, perhaps in rather more roundabout language, repeated that idea to-day. We are a practical people, and we do not care much about theories or ideologies or "isms"; we care about the manner in which things work, and we have a right to know how they work—above all when we are being asked to engage in this hazardous experiment of nationalising steel. The justification is not in imaginative speeches by Mr. Bevan, who says he got a headache twenty years ago (he seems never to have lost it!). The real justification is, Is it going to work? Ministers in their more frank and expansive moments have admitted that if they fail in this matter of nationalisation, it is the end of nationalisation. But it appears to me that they are most anxious to carry on with nationalising steel, concealing from the people as much as they can the facts about past nationalisation before the people find out the facts for themselves.

There can be only one test, and that is the test of experience. We are entitled to know fully what has been the effect of nationalisation on production, efficiency, cost, salesmanship, organisation, and human relations in these industries. I ask the noble Lord who is to reply, and who replies with frankness always, to tell us what is the answer to these two things: How are you going to apply a comparative standard of efficiency; and, Are you or are you not going to give us the facts about these nationalised industries?

6.15 p.m.


My Lords, His Majesty's Government have not, and could not have, the slightest complaint about the tenor or the temper of this debate on the Motion, moved with characteristic force, but at the same time characteristic courtesy, by the noble Earl, Lord Selkirk. In point of fact, His Majesty's Government are deeply grateful to the noble Earl for putting this Motion on the Order Paper, because it does provide an opportunity, so early in this Session—a Session which may well be momentous—for them to state plainly and without any equivocation what is their policy regarding the organisation of those industries which they have seen fit to bring under national ownership. My task to-night has been made easier by the wide range of the speech delivered by my noble friend, Lord Pakenham, at the opening of this debate. I think it was a well-reasoned and well-tempered speech, and it must have given great satisfaction to both the noble Earl and the noble Viscount, Lord Samuel. But my noble friend asked me if I would deal with one specific point which was raised in Lord Selkirk's speech, and I think it may be for the convenience of your Lordships if I deal with that point now. I will then deal with the specific points raised by other noble Lords and then will attempt the difficult task of winding up in reply to the noble Viscount, Lord Swinton.

The question the noble Earl asked was: What is the position of the consumer? I hope the noble Earl will forgive me if I say that when he drew the simile of the position of the consumer in private enterprise industry and trade I had to smile—though not in any derisive sense. I have spent thirty years on the production and distribution side of industry and I know that industry's one ambition, and one of its main functions, is to eliminate competition. The British people, in thinking for the last fifty years at least that the prices they paid were prices arrived at by the force of competition, have been under a great misapprehension. Over a number of years price competition within British industry has gradually disappeared. Moreover, consumer choice has practically ceased to exist. Consumers who bought this brand or that thought they were enjoying the benefit of keen competition, but those things were often all manufactured by the same manufacturer, with prices so arranged as to gull the public. Let us then look at the position of the consumer in connection with nationalised industry.

It is a fallacy and a great mistake to say as the noble Earl said, that the first job of the nationalised board was to pro- tect the industry over which it presided. One of its instructions, written into the appropriate Act of Parliament, is that its first duty is to see that the consumer buys the goods or enjoys the service of the highest degree of quality at the lowest possible cost. That is one of the board's paramount duties. In the past I have been very sceptical about the efficiency of consumer councils. I have always looked upon them as a feather bed. Let us look at the organisations that are being set up to-day to see if we can find out whether or not they stand a chance in the future of fulfilling a more useful function than they did in the past.

Take the coal industry. The Coal Industry Nationalisation Act provides for the appointment of two councils—the Domestic Coal Consumers' Council and the Industrial Coal Consumers' Council. Both are set up by the Act, and the representatives of the National Coal Board sit upon those councils. All information that those councils require is made available to them. The councils are not limited to dealing with complaints from consumers; they also consider matters of policy upon which the Minister may seek their advice and matters which appear to the councils themselves to require attention. In the case of electricity and gas, the Electricity Act and the Gas Act provide for a consultative council in each of the areas set up. The chairmen designate of the electricity councils have been appointed, and the councils are now being formed. The Gas Council is well forward and must be appointed in less than six months after the vesting date. The chairman of the consultative council in each case is a member of the area electricity or gas board.

Let us give that form of organisation a chance to see if it works. After all, it is worth it. Do not say that that set-up, which varies practically in all these industries of coal, electricity, gas and transport, does not work before it even commences. Let us see how it works by the well-known method of trial and error. Let us see whether this is a good system for the representation of the consumer. If it is not, I am sure that His Majesty's Government will be only too happy and pleased to alter it.


Forgive me for interrupting, but may I ask whether the Transport consultative committees have been set up?


Not yet, but they will be in the appropriate time, as set out in the Act.

The noble Earl asked me to deal with the question of staffing. The staffing of all these nationalised industries, both at the administrative and executive as well as at the industrial level, follows the present-day practice of the best of industries throughout the country. It is done through the Appointments Branch of the Ministry of Labour; the university organisations; at the ordinary industrial level through the Ministry of Labour; through all the appropriate organisations in respect of returned Armed Forces; and also through the rehabilitation centres of the Ministry of Labour.

Perhaps it would now be convenient to your Lordships if I dealt with the questions that have been asked. The noble Viscount, Lord Buckmaster, raised a point that has been referred to by quite a number of noble Lords, including the noble Viscount, Lord Swinton. If he will allow me, I will mention that point last in my general observations. However, there is one comment he made with which I find myself 100 per cent. in agreement, and that is that the devolution of responsibility and leadership right down to the lowest strata in industry, properly and intelligently used, would prevent a major number of industrial disturbances which grow and grow like a forest fire so that, before you know where you are, the sense of the original grievance is lost. I absolutely agree with that remark. I hope that it will be the aim of all the Boards to achieve that devolution.

I would like to join with other noble Lords in offering my congratulations to my noble friend, Lord Williams, on an outstanding speech. May I thank the noble Viscount, Lord Swinton, for the tribute which he paid? My noble friend is not allowed to speak again in this debate, so on his behalf I thank the noble Viscount. It was a gesture that was much appreciated. Your Lordships always listen to the voice of experience, and I feel that my noble friend made a speech that was really based upon sound common sense and derived from experience. I was particularly struck by a phrase he used that ran something like this—I do not think I have his exact words: "There can be no finality in the shape of things to come." Anybody who says that he has reached finality of organisation in this highly industrialised and competitive world does not really know the first elementary principles of his trade. My noble friend comes from one of the largest industries of this country. Whatever our views may be about it on either side of your Lordships' House, the Cooperative movement was not built up in one year or two years, but it evolved in the last hundred years until it has reached its present dimensions.

I thought that the majority of the points raised by the noble Lord, Lord Teviot, were rather outside the scope of this debate, but he made one remark which I cannot pass without comment. He said that all industries that had been nationalised were profit-earning before they were nationalised. I wonder whether he would say that about coal and, if it is true, I wonder whether the noble Lord, Lord Teviot, would care to applaud the price at which that prosperity, if it ever existed, was purchased—the degradation of those who worked in the industry. Does anybody suggest to-day that profits in industry—which were the subject of the noble Lord's main comment—should be purchased at such a terrible anti-social price?

I thought the noble Lord was perhaps going to proceed along a line which had been a favourite theme of many noble Lords who sit opposite—that of saying: "Of course, the advent of nationalisation meant that all these industries started losing money." It might interest noble Lords to know that on the vesting date of April 1, 1948, there were 150 former electricity undertakings which, on their own estimate, were operated at a loss, in the aggregate, of between £5,000,000 and £7,000,000. Those 150 electricity undertakings were operated at a loss of about £7,000,000 per annum, and the Electricity Authority had to rescue them from that perilous position by putting up a first aid scheme of increasing the all-round rate. Many instances could be given of such sayings—for example: "Immediately electricity is nationalised, up goes the price. Immediately this or that is nationalised, up goes the price," when the conditions making for price increases have no more relevance to the matter of nationalisation than has the fog which descends immediately upon those noble Lords who come to London from the delightful sunshine of Scotland.

The noble Lord, Lord Teviot, also asked for some information about the Brabazon. The noble Lord, Lord Pakenham, has asked me to say that the latest estimate of cost is £11,580,000, but it covers two prototypes and not one. I think that is the answer which the noble Lord, Lord Teviot, desires. The brief I have on this subject is that the latest estimate of the total cost of the project for two prototypes is £11,580,000. That includes development, production of special equipment, works and services at Filton Aerodrome. The actual work upon the aircraft amounts to £5,950,000, and the other service works to £5,630,000.

Lord Lindsay said that he hoped that this time he would not receive negative answers. The noble Lord has gone, but he put up the interesting suggestion (which I can undertake to pass to the appropriate authority) that Nuffield College should be asked to indulge in yet another of their well-known surveys. I have a recollection, which I have not been able to check although I think it is accurate, that in about 1942 Nuffield College undertook a survey, similar to that now proposed, upon the industrial make-up of the future vis-à-vis the Government. Lord Lindsay was himself a member of that inquiry and, by and large, the recommendations of that conference of the Nuffield College are generally the pattern of Government action to-day. Whether or not Nuffield College requires an invitation from His Majesty's Government to indulge in one of these exercises I do not know, but I will at least make the suggestion apparent in the appropriate quarter.

The noble Lord, Lord Hawke, in a speech that I thought ranged very widely, raised one question which I think is worthy of a reply—namely, what are we doing about the psychology of the miners. The National Coal Board are taking this problem very seriously, and the Government realise that, not only in the mines but throughout industry, the psychology of the worker has to be treated as a dominating factor in future industrial success.

The noble Earl, Lord Airlie, has paid me the compliment of coming back. Before he went, he said that he had to go to an official dinner and, in spite of being very rude to His Majesty's Government, he hoped I would wish he enjoyed his dinner. I do. I am going to give him just one word of advice, if I may, to pass on to his friend Bill Sykes of Tottenham, the gentleman who bought a sack of coal and found it half full of stones. Instead of going to his M.P., I should have thought the first reaction of the gentleman would have been to complain to the person who supplied him.


A fat lot of good that would do! He has to take what he is given. That is the whole burden of my complaint.


That may be, but I am sure that if his coal merchant were an enterprising member of private enterprise, he would immediately pass on that complaint with all vehemence to the people who supplied him, which may be the Coal Board. After all, is it not fair—and I am sure the noble Earl would wish to practise the elementary principles of fairness—that if somebody supplies you with an article with which you do not approve, at least the first person with whom you register the complaint is the one who supplies you?


We all make our complaints to the person who supplies us, but that gets us no further, and that is what I am complaining about.


Perhaps the noble Earl would ask his friend Bill Sykes of Tottenham whether he did so.


He was not my friend, he was the friend of Lord Pakenham, although I am willing to admit that I have done just as much manual labour as any noble Lord on the opposite side of the House—and possibly a good deal more.


The noble Lord, Lord Monkswell, asked what effect nationalisation will have upon the efficiency of the railways. My only reply can be that the object of nationalisation was to increase the efficiency of the rail-ways. Now, my Lords, I come to the noble Viscount, Lord Swinton, always a most difficult obstacle for anyone in my position to overcome. I hope the noble Viscount will forgive me if I say that I could not help thinking that his intervention in this debate to-night was rather in the nature of a muscle loosener, a getting ready for the Test Match which is on the fixture list of your Lordships' House at some date in the not too distant future—a fixture in which we on this side of the House sincerely hope he will play the rôle of the opening batsman for the Opposition side.

Whatever differences of opinion the noble Viscount and I may have upon a lot of these problems, we are at least on common ground on one thing, that we can both view this particular problem from a not inconsiderable practical experience of industry and commerce. I would like to address one or two of my points to the noble Viscount, because I agree with so much of what he said. He said there must be a test of size. That is quite right, but any reduction must be evolved by a system of decentralisation. Then there was the question of the test of the yardstick of efficiency. The noble Viscount and I know that the one test of efficiency in industry is quality and price. I was intrigued and interested in his suggestion about a comparison of standards. That is a most valuable suggestion and, though I think it too early at the present time to institute such a comparison, because some of our nationalised industries have been running for only a month or so, I think that at some time in the future that would be a most valuable step to take. And it conforms to the best practice.

The noble Viscount rather centred his attack (if attack I can call it) upon the transport industry. But is it not a little too early to judge whether the fit-up of the transport industry, as regards that measure of decentralisation that is proposed, is going to be a success? I know that the noble Viscount will agree with me that nationalised industries must conform to the best industrial practice, within the general economic policy which the Government, in the national interest, find it necessary to adopt. From his vast experience and, if he will forgive my impertinence, a brilliant experience as a Minister, the noble Viscount must know that Ministers, and Ministers alone, can decide what is and what is not in the national interest. They are the only people possessing all the information which would allow them to come to that decision.

But the best industrial practice, he will also agree with me, is not an exact science. I suppose that if he and I looked back, if we were honest with ourselves and gave a straightforward answer to the question, "to what did we attribute any success which we had achieved in industry," we should have to answer: "Our ability to learn from our mistakes." After all, the man who never made a mistake never made anything. Mistakes have been made in the fit-up of the nationalised industries. It is useless to represent—and I would not for one moment insult the intelligence of noble Lords opposite by claiming such a thing—that His Majesty's Government have already found a perfect pattern in the best of all worlds. The fact is that they still have open minds as to what is the best way of accomplishing this task. That, surely, is illustrated by the diversity of organisations which exist at the present time.

The coal industry presented a particular and special problem. Was ever an industry in such a depressed state? Was ever there an industry in which industrial relations were so pitiful? The only thing to do with the coal industry was to follow the drastic practice, which I dare swear the noble Viscount, Lord Swinton, has followed many times—that was to bring it into the centre, sort it out, clean it up and then decentralise it as fast as possible. That is what is going on to-day. And I can say this with the authority of His Majesty's Government—that is the process which will go on as experience shows that it is right and proper in the national interest that it should continue. When we turn to the Electricity Authority we find a slightly different set-up, with area boards. The same is true of the gas industry, with its Gas Council which has no executive authority. Then there is transport, which is organised not on an area but on a functional basis.

If, in connection with these varying organisations (I dare not mention one which, perhaps, your Lordships will be discussing in a very short space of time, and which exemplifies decentralisation to the last degree), it should be deemed necessary to alter the existing fit-up, and if that alteration calls for additional legislation, such is the fluidity of the minds of His Majesty's Government that I would not be at all surprised if that legislation were forthcoming. His Majesty's Government are determined that the right way and the best way shall be found. It is too early yet, I suggest, to make very severe criticisms.

Perhaps the most contentious matter was that which was raised by the noble Viscount, Lord Buckmaster, and dealt with later by the noble Viscount, Lord Swinton. I refer to ministerial responsibility. Something was said upon it by my noble friend Lord Pakenham. May I now ask the noble Viscount, Lord Swinton, to draw again upon his industrial experience? Neither he nor I could ever have conducted a huge undertaking if the shareholders' meeting was in permanent session. The Houses of Parliament are, in this instance, the shareholders' representatives, and while it is proper that there should be an accountability—the noble Viscount, Lord Swinton, said that the public have a right to know, which is perfectly true, and the public will be told—the choice of the time and the place has still to be worked out. Neither the noble Viscount, Lord Buckmaster, the noble Viscount, Lord Swinton nor anyone else, I am sure, would advocate that there should be interference in the day-to-day management. I remember well that in the debate which we had in your Lordships' House, twelve months ago, on a similar Motion which was moved by the noble Lord, Lord Teynham, the noble Viscount, Lord Knollys, made a very strong plea that the roots of these things should not be dug up every now and then in order to see if the trees were growing. The staffs of these nationalised industries, he said, should at least be spared having to get out reports every day, instead of being allowed to get on with their proper jobs. As I say, no one would want to interfere with the day-to-day operations.

Then there is the matter of policy responsibility. It is very difficult to find a mean between where policy ends and executive management begins. Indeed, I am free to admit that it has not yet been found, but this is a matter which is receiving constant and careful thought. Both the noble Viscount, Lord Buckmaster, and the noble Viscount, Lord Swinton, have made very valuable suggestions to-day, and I feel that, with good will and tolerance on all sides, and the employment of that British way which we have, we shall succeed in the end in finding a solution to problems such as these. I have detained your Lordships for a long time, but may I, finally, say this? His Majesty's Government will ruthlessly pursue their aim of securing the maximum efficiency in all these nationalised undertakings. That means everything to this country, and we are fully alive to it. We are not so (shall I say?) conceited as to think that we have found the perfect pattern. We shall make mistakes, but we hope that we shall have sense enough to learn from those mistakes, and with the help of the informed opinion in your Lordships' House that is always at the disposal of the Government I feel certain that when the day of accountability does come—and we, as well as noble Lords opposite, shall welcome it—and it is the appropriate time for us to account for our stewardship, your Lordships will not find that we have failed in our duty to the British people and to the economy of the country as a whole.

6.50 p.m.


My Lords, I will not detain yor Lordships very long, but I would like to thank noble Lords who have supported this Motion and to tender congratulations to Lord Williams on the speech which he made this afternoon. The noble Lord, Lord Pakenham, mentioned two matters to begin with: the first was the welfare of the employees and the second the interests of the consumer. He did not say very much about them. He seemed to assume—certainly he did in regard to welfare—that there was nothing much that needed to be said. I am concerned at the present time at the fact that the collier is in a closed fence, and his position has many features similar to that which existed before the Colliers Act was repealed at the end of the eighteenth century. It gives me anxiety to think that such measures of restraint are being imposed. Whether it is necessary in nationalised industry I cannot say. With regard to the consumer, I think that the noble Lord, Lord Pakenham, will agree that he did not say very much.


I purposely left that matter to be dealt with by my noble friend, Lord Lucas.


I am afraid that I must challenge Lord Pakenham to publish the figures which he says he has with regard to air travel. He says he has the figures showing the cost per mile of air transport in this country and in America, and also the flying hours per day per aircraft on charge in this country and in America. These figures are important, and I think that the noble Lord should publish them if he is interested in letting the consumer here see how he stands in relation to consumers elsewhere. The noble Lord, Lord Lucas, said he thought that the consumer did not have much of a chance in the world outside nationalisation. The reason he gave was that industrialists endeavoured to eliminate competition. But when competition is not eliminated, presumably the consumer does benefit. In other words, competition is directly to the benefit of the consumer. Of course, the industrialist endeavours to eliminate competition. Who does not? But I am not concerned with the industrialists; I am concerned with the consumer. My object is to retain regulated or controlled competition. Only in that way, I submit, will the consumer receive full consideration.

I will not detain your Lordships further. I am gratified to hear that the perfect pattern has not been found and that noble Lords opposite are anxious to learn. Sometimes in Committe stage I doubt whether they are anxious pupils; nevertheless we live in hope that they will learn. I beg leave to withdraw my Motion.

Motion for Papers, by leave, withdrawn.