Lords Sitting of 20 July 1949

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR On the Woolsack.
Prayers
  HALIFAX CORPORATION BILL
  Read 3a, with the Amendments; further Amendments made, Bill passed, and returned to the Commons.
  SWINDON CORPORATION BILL
  Read 3a, with the Amendments, and passed, and returned to the Commons.

  DEVELOPMENT CHARGES ON CHARITABLE LAND
  2.35 p.m.
  VISCOUNT CECIL OF CHELWOOD: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
  [The Question was as follows:
  To ask His Majesty's Government whether a non-profit making public organisation, recognised as a charity for purposes of taxation, which has been ejected from its present premises by one of the newly nationalised industries who are its landlords, is liable to pay the full development charges in respect of other property necessarily acquired to carry on its work.]
  THE PAYMASTER GENERAL (LORD MACDONALD OF GWAENYSGOR): My Lords, I am advised, and the noble Viscount is no doubt aware, that if an organisation acquires land after July 1, 1948, and obtains planning permission to build on it or materially to change its use, then under the terms of Section 69 of the Town and Country Planning Act, 1947, development charge is payable if the permission adds to the value of the land.
  Under Section 85 of the Town and Country Planning Act, 1947, land held on July 1, 1948, by a charity for the purposes of a charity is exempt from development charge if it is used in any manner for or in connection with the purposes of charity.
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  Land acquired by a charity after July 1, 1948, however, is not, as charitable land, in any way exempt from development charge and if, therefore, the charity carry out a material change of use of the land even although the use is for charitable purposes the question of development charge arises.
  I understand from the memorandum which the noble Viscount so kindly sent along that the case he has in mind relates to the lease by the United Nations Association, since July 1, 1948, of two houses in the West End in connection with which they obtained from the London County Council a planning permission.
  It is understood that the Association asked the district valuer at rather short notice to give them an informal opinion as to what the amount of the development charge was likely to be. He told them that it would be in the region of £10,000 to £15,000. When giving this opinion he assumed that the planning permission that the Association would obtain would be a planning permission which authorised the use of the premises as offices by anyone for the full period of the lease (thirty years) and that it would be subject to no conditions. One thing at least is clear about the actual planning permission, and that is that the very stringent restrictions contained in it must have the effect of considerably reducing the charge that would otherwise be payable.
  The Association have applied recently to the Central Land Board for determination of the charge but the Central Land Board tell me, and I think the noble Viscount will agree, that the valuation of planning permission owing to the terms accepted by the Association is not by any means a simple matter. The Central Land Board have under consideration and will, in negotiation with the Association, determine the amount of the charge as soon as they can.
  VISCOUNT CECIL OF CHELWOOD: My Lords, arising out of that rather complicated answer, may I ask whether it is the policy of His Majesty's Government that a tax should be indirectly placed upon a charitable organisation which is free from taxation? If not, it is clearly wrong that they should have to pay any development charge, which is merely a tax under another name.
  LORD MACDONALD OF GWAENYSGOR: My Lords, the noble Viscount will have noticed that in the second and third paragraphs of the answer which I have just given to him the question of charities is dealt with. May I repeat the opening part of the third paragraph:
  "Land acquired by a charity after July 1, 1948, is not, as charitable land, in any way exempt from development charge."
  Therefore the answer is that charities coming in that category are not relieved of development charge.
  THE MARQUESS OF SALISBURY: Why not? What is the question of principle involved in the date? If they are exempt before a certain date, why not after?
  LORD MACDONALD OF GWAENYSGOR: The answer is because, at the moment, it happens to be so under an Act of Parliament.
  VISCOUNT CECIL OF CHELWOOD: Then the result is that if there are two charities precisely similar, one which was there on June 30, 1948, would not have to pay tax, while if the other was there on July 2, 1948, it would have to pay tax. Do the Government really think that that is a serious form of taxation?
  LORD MACDONALD OF GWAENYSGOR: My Lords, so long as a differentiation remains the law of the land, the Government have no option but to carry it out.
  THE MARQUESS OF SALISBURY: My Lords, the House will remember that this provision came in a Bill the purpose of which was town and country planning. As I understand it, in this particular case there is no intention of altering the external structure; it is merely a matter of a change, for charitable purposes, of the use of rooms from one purpose to another. Can it really be considered as a question of planning? I am afraid we can almost draw the conclusion that this is only one of many cases, and a particularly deplorable one. Your Lordships will remember that when the Bill was before the House, we said that development charge had nothing whatever to do with planning. It is merely a particularly vicious form of indirect taxation, and in this case used only for hampering the activities of an organisation of which the Prime Minister and Mr. Churchill are Presidents and which has an object common to us all.

  ASSISTANCE TO GREECE
  2.43 p.m.
  LORD VANSITTART: My Lords, in rising to ask the question which stands in my name on the Order Paper, I beg leave of the House to explain that I have taken this course because the time originally allotted to my Motion on this important subject has been entirely absorbed by Government Business.
  [The Question was as follows:
  To ask His Majesty's Government whether they have any statement to make on increased assistance to Greece.]
  THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (LORD HENDERSON): My Lords, noble Lords will be aware that financial considerations obliged His Majesty's Government to lay down the main burden assistance to Greece in May, 1947, what our assistance to that country had already cost us over £60,000,000 since the end of the war. Although the main burden was then assumed by the United States Government, His Majesty's Government have nevertheless continued to afford substantial aid to the Greeks is their struggle against the Communist-led and foreign-aided rebellion. We have retained British troops in Greece; our missions continue to advise and train the Greek Army, Navy and Air Force and police; and we continue to supply Greece with military equipment and aircraft against payment. In the past year we have supplied in this way a large amount of military stores, 74 Spitfires and 24 training and 12 transport aircraft.
  Apart from this, our assistance to Greece in the economic field has also been substantial and we have granted her the sterling equivalent of 24,000,000 dollars' worth of drawing rights for the Marshall Year just ended. We have also made the Greek forces a gift of surplus stores of considerable value and we have now nearly completed delivery of the free gift of 22 Spitfires, which will arrive in time to make a valuable contribution to the present campaign against the rebels. I think noble Lords will agree that in our present economic situation we are not in a position to increase our material assistance to Greece, which, as I have shown, is being continued on a substantial scale. We have every sympathy with the plight of that unhappy people, and we have reason to hope that will the forces at

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  present at their disposal, helped by increasing disillusion and dissension in the rebel ranks, they may be able to obtain such a measure of success this year as will enable them soon to recover that peace which has so long been denied them.
  LORD VANSITTART: I thank the noble Lord for his full statement and I will revert to the subject on a more propitious occasion.
  VISCOUNT LONG: My Lords, arising out of the noble Lord's reply, may I ask what steps are being taken by His Majesty's Government to ensure that before any trade agreement is made with Yugoslavia, the children who were taken from Greece in the most horrible circumstances will be returned to that country? May I also ask whether the Government are aware of the appalling campaign led and paid for by Communists in this country, which is going on against Greece at the present time, and what steps they are going to take?
  LORD HENDERSON: My Lords, I think those two questions do not arise out of the Question on the Order Paper.
  THE EARL PERTH: My Lords, I am glad the noble Lord has been able to make this statement about Greece. I wish he had promised greater help to Greece, but I appreciate the economic difficulties to which he referred. I think we ought to express our admiration for the courage and tenacity of the Greek people and the Greek Army. They are fighting a battle for the freedom of the Atlantic democracies. It would be outside the scope of order to say any more, except to add that I hope the expectations set out in the last part of the answer will be fulfilled.

  UNITED KINGDOM HELP FOR WORLD RECOVERY
  2.49 p.m.
  LORD CHERWELL: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
  [The Question was as follows:
  To ask His Majesty's Government for details of the £900,000,000 which the Chancellor of the Exchequer said the United Kingdom had provided since the war to stimulate world trade and help forward world recovery, more especially the amounts given or loaned to each individual country, and
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  if possible, the dates on which these gifts or loans were made; and also whether they will state the amount of the sterling balances standing to the credit of the different countries at the end of the war; the extent to which each country has drawn on these balances; the amounts which they are still entitled to draw under existing agreements; and the amounts still standing to their credit.]
  THE MINISTER OF CIVIL AVIATION (LORD PAKENHAM): My Lords, the figure of approximately £900,000,000 quoted by my right honourable and learned friend the Chancellor of the Exchequer relates to gifts, loans and drawing rights made available by the United Kingdom to other countries since the war. With permission, I will circulate in the OFFICIAL REPORT a list giving details of these transactions. Since most of them took place over a period of time, it is not possible to give dates. With regard to the last part of the Question, I regret that I cannot disclose our sterling liabilities to individual countries or changes in them.
  Following is the list referred to:
  Since the end of the war the United Kingdom has made available the following sums in gifts, loans, and drawing rights.

  Gifts

  £ million

  U.N.R.R.A

  155

  I.R.O

  11.2

  Civil Affairs (not recoverable)

  49

  Greece, Armed Forces initial equipment, maintenance, etc

  31

  Greece, Surplus stores and relief supplies

  2

  Poland, Welfare and Social Services, June, 1946—March, 1947

  5

  Poland, Surplus stores

  6

  Austria: Before 1st April, 1946

  10

  Post U.N.R.R.A

  7.5

  Surplus machine tools

  0.125

  Hungary: Surplus machine tools

  0.2

  Italy: estimated value of surplus stores in excess of payments under financial agreement

  55

  Netherlands: Military equipment and surpluses, estimated portion in excess of payment under Debt settlement

  16

  Rumania: Medical supplies and surplus army foodstuffs

  0.02

  U.N. fund for Arab refugees in Palestine

  1

  Ex-Italian Colonies: Cost of administration

  12

  Burma: Cancellation of debt

  15

  B.M.A. expenditure (cancelled claim)

  23

  Total (say)

  400

  Loans and Recoverable Aid

  £ million

  Civil Affairs (recoverable)

  50

  France:

  Financial Agreement

  100

  Private credit

  15

  Denmark: Financial Agreement

  35

  Germany: Cost of supplying German civil economy

  194

  Netherlands: Military equipment and surpluses—estimated relative portion of total payment agreed under Debt Settlement

  25

  Greece: Stabilisation Loan

  10

  Burma:

  Loan and credits since 1945 (less amounts forgiven)

  27

  Stores supplied against later repayment

  9

  Miscellaneous (say)

  20

  Total

  485

  Drawing Rights exercised to June 30, 1949

  £ million

  Austria

  …

  …

  …

  …

  6.2

  France

  …

  …

  …

  …

  46.4

  Greece

  …

  …

  …

  …

  6.0

  Bizone

  …

  …

  …

  …

  0.9

  Turkey

  …

  …

  …

  …

  2.0

  61.5

  VISCOUNT SWINTON: My Lords, arising out of the answer on the first item of £900,000,000 which has been given to other countries, may I ask the noble Lord on what ground of public policy or security we are precluded from knowing what drawings have taken place?
  LORD PAKENHAM: My Lords, I was asked in the second part of the Question to inform the noble Lord the amount of the sterling balances standing to the credit of the different countries at the end of the war. I should have thought that the noble Viscount, Lord Swinton, who has had great experience of administration and government, would realise that it would be most unwise to publish information of that character.
  LORD CHERWELL: My Lords, I am grateful to the noble Lord for promising the figures giving the distribution of the £900,000,000. I have no doubt it will be ascertainable from those figures how much of it is due to conditional aid. Is the noble Lord able to tell me in what part of the Economic Survey these figures appear? Presumably, as they are important and large figures, they must appear somewhere in the Economic Survey, which purports to give a balance sheet. As to the second part of the Question, I must
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  say that I agree with lay noble friend Lord Swinton that it is an extraordinary thing that the Government refuse to tell the country what their debts are to the various countries, and to what extent those debts have been paid off. We were told at the end of the war that they amounted to £3,000,000,000, or something over that amount. I think we were even given figures at that time showing how much was owing to the various countries. Anything that is paid off represents unrequited exports from this country. Surely, when we are asked to make a united effort to increase exports and balance our trade, the country is entitled to know how much is going in unrequited exports, to which countries these are going and which debts they go to discharge.
  LORD PAKENHAM: My Lords, the noble Lord has thinly disguised a little speech in the form of a question. There will be a full economic debate next week, in which I lave been invited to take part, and I imagine the nobly Lord will also participate in that debate. I should have thought that was the time to raise this question, rather than now.
  VISCOUNT SWINTON: My Lords, if we are to have an informed debate in this House, is it not the duty of the Government—as, indeed, was the course pursued by the Chancellor of the Exchequer in another place—to give all relevant information in regard to the matter?

  MARRIAGES PROVISIONAL ORDERS BILL
  2.57 p.m.
  Read 2a (according to Order), and committed.

  MINISTRY OF HEALTH PROVISIONAL, ORDER (SOUTH MOLTON) BILL
  MINISTRY OF HEALTH PROVISIONAL ORDER (CHICHESTER) BILL
  MINISTRY OF HEALTH PROVISIONAL ORDER (MORLEY) BILL
  MINISTRY OF HEALTH PROVISIONAL ORDER (MACCLESFIELD) BILL
  Read 2a (according to Order), and committed.

  GLASGOW CORPORATION ORDER CONFIRMATION BILL EDINBURGH AND MIDLOTHIAN WATER ORDER CONFIRMATION BILL
  Considered on Report (according to Order).
  Then, Standing Order No. XXXIX having been suspended (pursuant to the Resolution of July 13), Bills read 3a, and passed.

  PIER AND HARBOUR PROVISIONAL ORDER (CRARAE) BILL
  House in Committee (according to Order), on re-commitment of the Bill: Bill reported without amendment.
  Then, Standing Order No. XXXIX having been suspended (pursuant to the Resolution of July 13), Bill read 3a, and passed.

  PIER AND HARBOUR PROVISIONAL ORDER (SOUTHWOLD) BILL
  House in Committee (according to Order), on re-commitment of the Bill: the Amendments proposed by the Joint Committee made.
  Then, Standing Order No. XXXIX having been suspended (pursuant to the Resolution of July 13), Bill reported with Amendments; Bill read 3a, with the Amendments, and passed, and returned to the Commons.

  TEESSIDE RAILLESS TRACTION BOARD (ADDITIONAL ROUTES) PROVISIONAL ORDER BILL
  House in Committee (according to Order), on re-commitment of the Bill: Bill reported without amendment.
  Then, Standing Order No. XXXIX having been suspended (pursuant to the Resolution of July 13), Bill read 3a, and passed.

  IRON AND STEEL BILL
  2.59 p.m.
  Order of the Day for the Third Reading read.
  THE LORD PRIVY SEAL (VISCOUNT ADDISON): My Lords, on the Motion that is now before the House, in order that we may suit the general convenience perhaps I may explain how it is suggested, after consultation, that we should deal with the Business. There are certain Amendments on the Order Paper, which I hope will not take long to dispose of. I am sure we all wish that they should not interfere with the debate and, therefore, if it is agreeable, I suggest that we take the Third Reading formally. We can then take the Amendments, which I hope will occupy only a few minutes, and have the general debate on the question that the Bill do now pass. I hope that will meet with the convenience of all Members of the House. I beg formally to move that the Bill be now read a Third time.
  Moved, That the Bill be now read 3a.—(Viscount Addison.)
  THE MARQUESS OF SALISBURY: The noble Viscount the Leader of the House was good enough to consult me with regard to this proposal. I entirely agree that it is the most convenient way of dealing with this rather unusual situation where we have Amendments on the Third Reading.
  On Question, Bill read 3a, with the Amendments.
  Clause 4:
  General duty of the Corporation
  (2) If any such undue preference or unfair discrimination as aforesaid is shown or exercised or reasonably apprehended, any person affected shall have a right of action for damages, or for an injunction or other relief as may be just.
  THE LORD CHANCELLOR (VISCOUNT JOWITT)THE LORD CHANCELLOR (VISCOUNT JOWITT) moved to leave out subsection (2) and insert:
  "() Nothing in this section shall be construed as imposing on the Corporation, either directly or indirectly, any form of duty or liability enforceable by proceedings before any court."
  The noble and learned Viscount said: My Lords, the Leader of the House has asked me to deal with this matter very briefly. I do not think anybody could

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  have heard the speeches of the noble Viscount, Lord Swinton, and the noble and learned Viscount, Lord Maugham, without realising that whatever view he might form as to what the courts would do, it was impossible to say that there was no room for any doubt. Lord du Parcq's statement has been referred to, and I entirely agree with the proposition that the Legislature should put it beyond a doubt as to whether it intends that a private individual, injured by breach of the Statute, should or should not have right of action for damages.
  There are two ways of resolving this doubt. The one which was adopted on the last occasion by the noble Viscount, Lord Swinton, made it plain that the private individual who can establish the necessary facts shall have a right of action. The other way is by providing that the private individual who establishes the facts shall not have a right of action. The Government think that the latter course is the right course to take. May I say this in support of this Amendment? I was consulted and was as responsible as anybody for the form in which this Bill was introduced. The form in which this Bill was introduced did not contain any undue preference clause at all. At a later stage the Minister was pressed to include such an obligation, and on March 28 of this year he tabled an Amendment providing that the duty of the Corporation under this clause shall not be enforceable by proceedings before any court or tribunal. Then the Minister was pressed—I am being perfectly frank—to withdraw that Amendment in favour of a qualification of the obligation.
  I confess that at that stage I was not as familiar as I ought to have been with the manœuvres which were proceeding on one side and the other. I must say that, looking at it now, it does seem to me that the qualification on the obligation, so far from removing the desirability to have that clause, has accentuated it. We now find in Clause 4 (1) (b) this provision:
  "to secure that neither the Corporation nor any publicly-owned company"—
  that is to say, the company nearest to John O'Groats and the company nearest to Land's End, all of whom, I may say incidentally, are supposed, on the principle of decentralisation, to work out their own salvation—
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  "shall show undue preference to, or exercise unfair discrimination against, any such persons or any class thereof in the supply and price of those products."
  Then comes this qualification, which makes it much more obscure:
  "but without prejudice to such variations in the terms and conditions on which those products are supplied as may arise from ordinary commercial considerations."
  When I have that obligation extending not only to the Corporation but to every publicly-owned company throughout the country, in whatever part of the country it may be, and I have that qualification exempting commercial considerations, quite frankly I really do not know where I stand in regard to an undue preference.
  It is one thing to have an undue preference with regard to a railway company which establishes rights, or with regard to a gas company or an electricity company. But where I see an undue preference which is to be without prejudice to ordinary commercial considerations, it seems to me that you are in the vague ambit of good morals, and are not on a question of law at all. Everybody would think it deplorable and wrong as a matter of good morals, that the Corporation or any company should try to put anybody out of business by making things difficult for him. Of course, I agree with that. But you have here an obligation of such vague import, so utterly unlike any stipulation with regard to undue preference which has ever been heard of before in this country, that I say that this is an obligation which had much better be left to political considerations than to the courts of law. I suggest that the right way of dealing with this matter is for anybody who thinks he has been aggrieved to go to the Consumers' Council, and from there to the Minister, rather than to ask the courts of this country to interpret language and circumstances which, I humbly submit to your Lordships, is quite impossible. For those reasons I beg to move.
  Amendment moved—
  Page 6, line 9, leave out subsection (2) and insert the said new sublcction.—(The Lord Chancellor.)
  3.7 p.m.
  VISCOUNT SWINTON: My Lords, the proposition which the Lord Chancellor presented to the House Monday, and

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  which he has reinforced in his argument to-day, is, of course, an entirely novel one to us. We were all taken completely by surprise when, on a purely clarifying Amendment, the Lord Chancellor invited us to change the whole structure and purpose of the clause as presented to this House and advocated by the Government spokesman when we discussed the clause, very fully, in Committee. I said that we would, of course, give it the most careful consideration. I will be as brief as I can, but the more we have looked at this Amendment, the less we like it; and I must explain why we feel it impossible to accept it. Up to now it has been common ground on both sides of the House that an action would lie, and although the Minister may have tabled some proposal in another place, in fact no such proposition was ever moved by the Minister or by anybody else, either in Committee or on Report in another place: it was never proposed to us until last Monday.
  That there should be a provision against undue preference is clearly right. If there is to be a protection and a provision against undue preference then, surely, it is equally right that that should be enforceable by the person who is aggrieved. On Monday, the Lord Chancellor asked us to accept what had been done in the Transport Act. With great respect, I submit that transport is no precedent whatsoever. The Transport Commission are not in competition with a large number of other manufacturers. The Commission serve everybody, but under this Bill the Steel Corporation and its subsidiary companies will be in direct competition with independent firms over a very wide range of business. It will be quite possible—and that is why the clause against undue preference is inserted—for the Corporation, or any of its companies, to favour the publicly-owned companies, as they are called, at the expense of the independent companies.
  The other argument which was advanced, that any small sale at a different price would give rise to an action is, I think, quite unjustifiable. The Lord Chancellor quoted the words that come at the end of Clause 4 (b)—
  "… without prejudice to such variations in the terms and conditions on which those products are supplied as may arise from ordinary commercial considerations."
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  The noble and learned Viscount poured scorn upon those words. But those are not our words; they are the words which were deliberately introduced by the Minister in another place; and they were passed and presented to us, on the Minister's advice, as the right way of dealing with this matter and as the right safeguard to ensure that there would not be a number of small and frivolous actions. It is true that when we had the clause before us here we extended its ambit. As presented to us, the clause covered only the Second Schedule products, primarily steel, and your Lordships extended it to cover the principal activities of the Corporation and its companies. Even with that extension I submit that it is right that there should be a provision against undue preference.
  I cannot anticipate what may happen in another place, or what your Lordships may do afterwards. We have, however, been warned by the noble Viscount the Leader of the House, that there is every prospect that the Government will do their best to persuade another place to reject the Amendment which your Lordships made, and put back this clause, so that its ambit covers only Second Schedule products—in effect pig-iron, ingot steel, and rolled products. But these semi-manufactured articles are exactly the raw materials of the nationalised companies and of all the hundreds of companies which are not nationalised and with which they will be in competition; and if the clause were limited in this way to cover only Second Schedule products, then it is essential that there should be a prohibition against undue preference. The Consumers' Council is no answer. It has not been an answer in other industries. Nor is it any satisfaction to be told that an aggrieved person can go to the Minister on an appeal against what has been done by the Minister's own Corporation or its subsidiaries. It is a sound principle, which I think has always been accepted, that you should not only do what is just; you should also appear to be doing justice.
  Another proposition which I should have thought was unanswerable is that where a statutory right is given, and a statutory duty imposed, in order to protect the subject against a possible wrong by these nationalised undertakings, the

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  person subject to that protection should have a right to go to the courts of this country and not to have to go as a suppliant to a Minister of the Crown. There need be no fear of a mass of actions; the petty case would not sustain an action. Moreover, if the sanction of a right of action is there I do not suppose that the offence is likely to be committed. We have given all the consideration we could to this matter, as we promised we would. I think it is a bad and a wrong proposition. I think the subject should have the right in this important and critical matter to go to the court; that is what has been presented to us hitherto by the Government. The
  Clause 15 [Disclaimer of agreements and leases]:
  LORD HAWKE: My Lords, this Amendment and that immediately following are consequential on Amendments passed on the last stage of the Bill. I beg to move.
  Government have repeatedly begged us to stand by the Bill as presented to us. We have not always been able to accept that advice. In this case I think your Lordships would be well advised to accept what were, after the first and second thoughts of the Government, and not to accept this last-moment change which is proposed. I would, therefore, advise your Lordships not to agree to this proposal.
  On Question, Whether the said new sub-section shall be there inserted?
  Their Lordships divided: Contents, 18; Not-Contents, 75.

  CONTENTS

  Jowitt, V. (L. Chancellor.)

  Ammon, L.

  Macdonald of Gwaenysgor, L.

  Chorley, L. [Teller.]

  Marley, L.

  Addison, V. (L. Privy Seal.)

  Henderson, L.

  Morrison, L.

  Holden, L.

  Pakenham, L.

  Hall, V.

  Kershaw, L.

  Pethick-Lawrence, L.

  Stansgate, V.

  Lindsay of Birker, L.

  Shepherd, L.

  Lucas of Chilworth [Teller.]

  Strabolgi, L.

  NOT-CONTENTS

  Sutherland, D.

  Long, V.

  Hawke, L.

  Ridley, V.

  Hindlip, L.

  Aberdeen and Temair, M.

  Samuel, V.

  Kenilworth, L.

  Cholmondeley, M.

  Swinton, V.

  Leyton, L.

  Salisbury, M.

  Trenchard, V.

  Merthyr, L.

  Willingdon, M. [Teller.]

  Milford, L.

  Ailwyn, L.

  Monkswell, L.

  Airlie, E.

  Balfour of Inchrye, L.

  Newall, L.

  Buckinghamshire, E.

  Barnby, L.

  O'Hagan, L.

  De La Warr, E.

  Blackford, L.

  Polwarth, L.

  Dudley, E.

  Brand, L.

  Rennell, L.

  Fortescue, E. [Teller.]

  Brassey of Apethorpe, L.

  Rochdale, L.

  Grey, E.

  Braye, L.

  Roche, L.

  Halifax, E.

  Broughshane, L.

  Rockley, L.

  Howe, E.

  Carrington, L.

  Saltoun, L.

  Manvers, E.

  Cawley, L.

  Sandhurst, L.

  Perth, E.

  Cherwell, L.

  Schuster, L.

  Rothes, E.

  Clanwilliam, L. (E. Clanwilliam.)

  Seaton, L.

  Selkirk, E.

  Sherwood, L.

  Vane, E. (M. Londonderry.)

  Cranworth, L.

  Templemore, L.

  Ypres, E.

  De L'Isle and Dudley, L.

  Teynham, L.

  Denman, L.

  Thurlow, L.

  Bridgeman, V.

  Dorchester, L.

  Tweedsmuir, L.

  Caldecote, V.

  Dowding, L.

  Waleran, L.

  Cecil of Chelwood, V.

  Ellenborough, L.

  Wolverton, L.

  Davidson, V.

  Gifford, L.

  Woolton, L.

  Hailsham, V.

  Harlech, L.

  Resolved in the negative, and Amendment disagreed to accordingly.

  Amendment moved—
  Page 17, line 13, leave out from ("not") to the third ("the") in line 17 and insert ("a proper transaction made in the ordinary course of business regard being had to the circumstances at the time.")—(Lord Hawke.)
  VISCOUNT ADDISON: My Lords, these next two Amendments, and also the Amendment to Clause 27, which is consequential on the same issue, were taken

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  to a Division on the Report stage, as your Lordships are well aware, against our advice. But we accept them as consequential on that Division, although we disagree with them as much as we did before.
  On Question, Amendment agreed to.
  LORD HAWKE: My Lords, this Amendment is consequential. I beg to move.
  Amendment moved—
  Page 17, leave out lines 19 to 26.—(Lord Hawke.)
  On Question, Amendment agreed to.
  Clause 27 [Other transactions resulting in dissipation of assets]:
  LORD HAWKE: My Lords, this Amendment is also consequential. I beg to move.
  Amendment moved—
  Page 40, line 28, leave out from ("applies") to the second ("the") in line 33.—(Lord Hawke.)
  On Question, Amendment agreed to.
  THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL): My Lords, I move that the Bill do now pass. In doing so I would just say this. At the present time, when individual liberty and the democratic way of life are suffering extinction in so many countries, it is good to reflect that here we can still freely debate, in an atmosphere of tolerance and understanding, a measure involving so much controversy. In countries under the shadow of the Iron Curtain, an expression of opinion against an important Government measure of this nature would have led to what is now known by the sinister term of "liquidation." Thank God, My Lords, we still order things differently in this country and, much as we may differ in our opinions, we can still debate them freely and openly.
  It is natural that a Bill of this importance and magnitude should arouse great interest in your Lordships' House, and no fewer than thirty-eight noble Lords have taken part in one or more of its stages. Here I should like to pay a tribute to both sides, for it is generally agreed that much of the success for its easy passage was due to the understanding between both sides of the House. Great credit is due to my noble friend the Leader of the
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  House, who has displayed his great industry, ability and usual irresistible charm. He was always willing to discuss in a friendly and informal way the many difficult points which necessarily arose from a Bill of this importance. For the Opposition, the noble Marquess, Lord Salisbury, the noble Viscount, Lord Samuel, and his friends, and the noble Viscount, Lord Swinton, have, as usual, fought a fair and courageous battle, employing all their ability and thoroughness in arguing their case—the noble Viscount, of course, retaining his position as the principal anti-nationaliser, with a record number of speeches on this Bill, as on other nationalisation Bills, making good speeches, both long and short. A tribute can also be paid to the very fair and moderate manner in which some of the noble Lords opposite, who are themselves, as were their forefathers before them, closely associated with this industry, have without feeling submitted their case with ability to your Lordships' House. I thought that was really remarkable. I am afraid that I should not be as patient had I and my forebears been so closely associated with this industry. Naturally, members of the Opposition dislike this Bill, but whether we agree or disagree with it, we all recognise that an efficient iron and steel industry is absolutely essential to the economic and financial life of this nation.
  I do not propose at this stage to repeat the arguments that I used when I had the honour to move the Second Reading of the Bill just before the Whitsun Recess, but I would say that nothing that noble Lords opposite have been able to say during the course of the debates on this Bill has shaken His Majesty's Government's belief in the soundness, both as a political proposition and as an economic one, of their determination to nationalise the iron and steel industry upon the basis set out in this Bill. Our plan, as it appears to me, secures two vital principles: first, that this all-important industry—the production of iron and steel—shall be controlled by the Government of the day, who represent the nation and interpret the nation's interests; and, secondly, subject to that overriding consideration, that the producing companies, which have so fine a record of production and of service to the country in this industry, shall continue their operations in

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  the application of the overall general policy laid down for them by the Iron and Steel Corporation of Great Britain set up under this Bill.
  The making of iron and steel in its many forms will be the responsibility of the managements of the existing companies who will, we hope, retain their identities, their good will and the loyalties they have built up. The Corporation, as a holding company, will ensure the development of the industry and see that price, quality and type of products conform to the nation's overall economic needs.
  It is pleasing to note that there was no adverse reaction in the industry as a result of the introduction of this Bill, as had been forecast by a number of its opponents. Indeed, results have shown that those who said there would be were slandering both the managements and the men employed in all branches of this industry, for it is a fact that since that day in May, 1946, when the Prime Minister made the announcement of the introduction of the Bill, production has gone up from an annual rate of over 13,000,000 tons to a very high level; and output in May ran at an annual rate of 16,400,000 tons. This was far in excess of the 1948 output which was 14,900,000 tons. That disposes of those gloomy prophecies to which I have referred, and it can be said that one of the incidental virtues of the Bill is that it imposes a scheme of nationalisation without dislocation of this industry. Indeed, the set-up provided by the Bill combines all that is best in public ownership and private enterprise. It represents an integral part of the Government's plan for establishing a prosperous national economy.
  Your Lordships' House has dealt with the Bill with expedition. A comparison of the time taken over this Bill in your Lordships' House with that of another place can best be judged when I say that as against the five clays in Committee here, it was before the Standing Committee for thirty-six sittings in another place, and of some 550 Amendments on the Order Paper, 83 were made. On Committee and Report in another place, the time taken was about 110 hours for the insertion of 150 Amendments. In your Lordships' House on the Committee and Report stages, the aggregate time
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  spent was 33½ hours, giving an average of 35 minutes for each Amendment made.
  During the five days of the Committee stage, 111 Amendment were considered and 38 were made. On Report, 37 were considered and 19 were made. Of the total of 57 Amendments made, 28 are Amendments to which His Majesty's Government have agreed, for some represent real improvements Particular mention might be made of the following: the acceptance of the principle of decentralisation; the limitation of compulsory purchase powers; the clarification of the appeal procedure relative to the arbitration tribunal; the limitation of powers to obtain information; and the duty in relation to restoration of land. Of the 29 Amendments which were voted in against the Government, or were accepted by the Government under protest as consequential to Amendments on which there had been Government defeats, the more important were the postponement of the general date of transfer; the qualifications of a specified number of Corporation members; the restriction of subsidiaries of the Corporation to specified activities except with the consent of Parliament; the extension of the Corporation's duty to the principal activities of the Corporation and the publicly-owned companies; disallowing "public interest" as a justification for showing preference; the inclusion of an express right of action in Clause 4; the establishment of an Iron and Steel Prices Board; the laying of an obligation on the Corporation to prepare a scheme of decentralisation; the alteration for disclaiming contracts; the assessment of compensation; and the publication of accounts of individual companies. Those cover a considerable number of important questions.
  It was only to be expected, of course, that important Amendments would be carried against the Government—this was indeed inevitable in such an unbalanced House as this—unbalanced, I hasten to say, only in the numerical strength of the Parties. That is tie more so, however, in view of the fact that unfortunately noble Lords of the Liberal Party have been completely swallowed up by the Tory Opposition throughout all the debates on this Bill. I can only hope that, like Jonah, they will later emerge so that they can once more express their independence in our political life.

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  I venture to say, however, that the true opinion of the opponents of this Bill is best expressed, not by their Amendments to its detailed provisions but by their Amendment postponing its operation until after the lifetime of the present Parliament—a postponement which they have accompanied with an open declaration of their intention to repeal the Bill, if only the General Election runs in their favour. Notwithstanding all the millions of the noble Lord, Lord Woolton, there is no hope, or very little hope, of such a result, particularly when the noble Lord reflects that, despite all the work he has put in, and after the Government have had four years of responsibility in a period of great difficulty and crises, the present Government have not lost a single by-election. I should again point out very clearly and plainly that the Government necessarily reserve the right to advise another place how these Amendments should be dealt with, including the serious blemishes made on the Bill by noble Lords opposite. We on this side of the House do not delude ourselves for a moment that noble Lords opposite have any affection for this Bill, despite all the efforts they have made to amend it. They have rather treated it as one would expect a person to deal with a dog which he thought was on the verge of madness. He would make every attempt to muzzle it first, and then, if he could find a gun, he would destroy it. Noble Lords opposite are going to look for the gun at the next Election, but they will not find it. My Lords, I beg to move that the Bill do now pass.
  Moved, That the Bill do now pass.—(Viscount Hall.)
  3.42 p.m.
  LORD WOOLTON: My Lords, it is characteristic of the generosity of the noble Viscount who has just spoken that, in spite of the envy that is in his heart regarding some hypothetical millions (though there is only one), he still, as no doubt your Lordships have noticed, comes forward after his opening remarks rejoicing that we live in this country, and that we have not here such conditions as would have secured that I, at any rate, would have been liquidated and so would have ceased to worry him.
  The noble Viscount has so much Parliamentary capacity that as he was speak-
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  ing on this Bill I almost thought that he liked it himself and that he certainly thought that a great number of other people liked it. I think the truth is that whilst this Bill created a good deal of interest at one time it has, in fact, passed from public interest because knowledgeable people know that overshadowing us all at this present time is an economic storm of major dimensions; and that this is a time when issues dividing us ought in fact to have been put aside whilst those that bind us together and give us mutual confidence in one another, and give other countries confidence in our unity, ought to be foremost in our minds. The threat to our economic stability which overhangs us is a threat to the whole of the sterling area associated with us. It has been prominent in public interest and in the public Press during the course of the last few months, but His Majesty's Government have been aware of this danger for at least a year. They certainly have been aware of it ever since the present Chancellor of the Exchequer assumed office. They were aware of the danger when they introduced this Bill into Parliament.
  The iron and steel-producing industries, and those other industries which are using their products, have done a great deal, as the noble Viscount was at pains to point out, to strengthen the confidence of other countries by the contributions which they have made to our economy in this period of unbalance and by the contribution they have made to the export trade of the country. Now, at this very moment when to this industry confidence and urge to development, and the expenditure of money on research, are of supreme importance, the Government have seen fit to give those in charge of it effective notice of dismissal. The effect of such blind indifference to the welfare of this great national industry is something that only those of us who are personally concerned with the industry and who know something of its daily management can appreciate. Noble Lords opposite are accustomed to being under constant threat of dismissal from office, as are all of us who have been in office. It spurs them on to greater daring and sometimes to fresh follies of language and of action. But that is not what happens when it is threatened in the industrial world. This Bill can do nothing to add to the strength of the industries with which it deals. It can do nothing to add to the efficiency

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  of their ultimate organisation, and its immediate effect—here I speak from knowledge—is to make men pause and wonder whether new plans and new research which will take a long time to develop are proper things for the present directors of these undertakings to embark upon at a time when their tenure of office is threatened. The noble Viscount deceives himself if he thinks that this great development of the productive capacity of the iron and steel industries since they were threatened by nationalisation has been caused by that threat.
  Your Lordships have given a great deal of time to the discussion of what to many noble Lords sitting on the Benches opposite must have been a most embarrassing Bill. It has brought discord wherever it has appeared. It has brought discord within the Party of the noble Lords opposite. The noble Lord referred to this being an unbalanced House. If he will forgive a plagiarism from the words of an eminent member of the Government, I would say that the Government have gone crazy in introducing this Bill at this particular time. It came to your Lordships' House as a piece of legislation in a deplorable condition, for which the Government must take responsibility, because those who control the Party in another place were not prepared to give Parliamentary time to the discussion of a measure containing destructive proposals, proposals which seem to me to be the most destructive that have been introduced within my memory into either House of Parliament.
  What is this Bill going to do? It deals with a major industry of this country, an industry not only vital to our wellbeing in time of peace, but one which served us magnificently in the last war and since the war has broken record after record. It is an industry which has produced steel in this country cheaper than it is produced anywhere else in the world, except in the Broken Hill plant in Australia, which has special advantages. Now the gentlemen who control the Socialist Party propose to nationalise it, to put it under central and a vastly different form of control, and to abandon personal responsibility allied to ownership. As a manufacturing nation we are dependent on the iron and steel trade and on the capacity of its leading men.
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  This capacity is to be discarded. I know there are some noble Lords opposite who have a theory about the construction of the industry, who will assure us that this capacity is not being discarded, and that the new National Board will willingly embrace all the capacities that the trade possesses. It will not embrace them; it will suffocate them. People who have beer accustomed to running their own businesses and taking their own business risks, to making up their own minds and giving decisions without reference to remote committees, and to seeking new methods, new openings and new avenues for their trade, cannot join in these amorphous amalgamations of disinterested management by committees. This Bill means the suffocation and strangulation of the enterprise of the British steel industry.
  Can anyone benefit by it? We have had experience of nationalisation. The country has already seen its effect on the coal trade, on which the steel industry is so dependent. I shall not weary your Lordships by repeating what you already know of this, but let me remind you that before the last General Election the Socialist Party told the people that if they were elected they would nationalise coal and make it a State industry for the benefit of the people. When people voted for that, they thought these gentlemen knew what they were talking about and how to do what they were suggesting should be done. People thought they had given proper consideration to all the innumerable matters that would arise. But they were wrong. The gentleman who talked so glibly about taking over the industry knew nothing about it. They had an idea, they had a slogan; but when he came down to the job, the Minister as your Lordships know, was completely ignorant as to how it should be done. It was obvious that the commercial consequences of such an action had not been considered.
  In spite of the generous and single-minded help given to the Minister, the nationalisation of coal has failed on every count to bring benefit to the people, to bring increased wealth to the nation, or greater happiness to the miners. Nationalisation has taken the life out of the coal trade. Men who are not dispossessed capitalists but who are working tech-

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  nicians in the trade are now freely admitting that under the multitudinous conglomeration of regulations by authorities farther and farther removed from the point of decision, they are now suffering from a sense of frustration and they have abandoned all hope of the industry achieving the aims which many noble Lords had for it when, I am sure with great sincerity, the Government put their theory into practice.
  I understand that the Secretary of State for War has said that unless the nationalisation of the coal industry works, Socialism in this country will fail. I think he is right—and I think it is failing. It is failing to produce the promised benefits. It is failing to produce any simplification of our industrial organisation. It is certainly failing to reproduce the export trade we enjoyed before the war and which is so vital to this country. I have talked about the coal trade because there we have a practical example before us of what happens when an industry is nationalised. In spite of that practical experience, the Government bring in this Bill. Obviously, they do not know how the Bill will work. They bring it in at a time when experience has warned them that nationalisation is followed by an increase in prices which is fatal to our export trade. Nationalisation with all its attendant changes is bound to be followed at least temporarily, by confusion and a decline in output. Yet at this time, when they are urging us so rightly to increase our export trade, they are throwing the iron and steel trade into confusion. No wonder so many supporters of the Government stayed away from the House. It is easier for them to do it than it is for Members in another place.
  I believe that if this Bill ever becomes law—and I hope it never will—it will do infinite damage to our economic life. I believe it will do damage to the trade union movement. I know that noble Lords on the Government Benches feel that because of their long and honourable association with the trade union movement they have some prescriptive right to speak for the trade unions. It is true that large numbers of people who are members of trade unions do not believe in Socialism and, moreover, deplore the growing tendency of closer and closer alliance between the Government
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  of the day and the trade union bosses. Trade union leaders, of course, know that this Government depend for their existence, their strength and their continuance in power, upon the trade union movement. When industries are nationalised, then the Government become the bosses. When the ordinary trade unionist sees his trade union leaders "hobnobbing" with the bosses, he begins to wonder which of them is in the pocket of the other.
  VISCOUNT HALL: May I ask the noble Lord what right has he to speak on behalf of the trade unions?
  LORD WOOLTON: I have every right to speak on a general public issue. It is arrogance for noble Lords opposite to think they only have the right to speak for the trade unions. I have been associated with them for a very long time. I am an ardent supporter of the trade unions. I support their organisation in my own business. I think they are right in saying that when they see the Government and the trade union leaders working so closely together, they are fearful. The most unfortunate phrase of the Attorney-General, "We are the bosses now," has made the work of the trade union leaders a great deal more difficult. If the noble Viscount objects to my talking about the trade unions, at any rate he will agree that one of the great problems facing this country now is that so many members of the trade unions are not following the lead of their appointed leaders. I am sure they would be very much better advised if they did follow that lead. At any rate, this is certain: that this Bill can do nothing to improve the admirable relations that have existed between the trade union leaders and the steel trade for fifty years.
  I was frankly surprised that the Government introduced this measure. I agree with the noble Viscount, Lord Samuel, when he says that this was not one of the issues at the General Election. I think it is true that before this Bill was introduced, there was a certain temper in the country that was inclined to the view that possibly it was no bad thing that nationalisation should be tried. Particularly was this so in regard to the coal industry, about which a widespread view was held that there was an industry of great importance, probably a wasting asset and certainly in danger of being a

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  wasted asset. There was a feeling that perhaps nationalisation might be tried in regard to the railways, many of which had to be maintained for strategical purposes at a loss. There was a feeling, also, that gas and electricity, already so largely concerned with the affairs of public authorities, should also be nationalised. But after experience of nationalisation, particularly of the coal trade, people were beginning to wonder whether it would not be better if we waited.
  Then Mr. Herbert Morrison made a speech which I thought was of the greatest importance. Your Lordships will remember it. It was a speech in which he told us what were the limitations of nationalisation. He pointed out (I am quite fairly interpreting his sense, but I am not quoting him verbatim) that an industry must be measured by its efficiency; that if it failed in service to the public, then it must be taken over by the public for its more efficient conduct. I thought that was a very fair remark—though it begged the question as to whether the industry would be more effective when taken over by the public. It promised, in fact, a fair trial for the industries in this country, and a fair chance of retaining their independence if they were good enough. Mr. Morrison's remarks had another effect, in that they made the traders of this country think that while they were efficient they would be safe from being taken over by the Government. To put it one way, Mr. Morrison gave them the incentive of fear.
  What do we find now? Have the Socialist Party discarded Mr. Morrison's test? Here is this Steel Bill—and I doubt whether even the most optimistic of noble Lords opposite will claim that the Corporation can run the industry more efficiently than it is being run now. Is it, indeed, that the test of how the nation can best be served has been abandoned, either because of the adherence to Socialist doctrine, or because some members of His Majesty's Government have a hatred of steel owners and want to take possession of their industry? In view of Mr. Morrison's statement, I think we are entitled to ask where the Government stand.
  LORD PAKENHAM: I do not wish to interrupt the noble Lord, but could he give us Mr. Morrison's statement in
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  the words in which it was delivered? He has informed us that Mr Morrison gave industries the impression that they would not be nationalised if they were efficient. I would like to know the words Mr. Morrison used.
  LORD WOOLTON: I have quoted it very often, and I will give it to the noble Lord. I cannot give the verbatim account now, but I have certainly given a fair interpretation of it. The reason why I have intervened in this debate is because this Steel Bill gives a clear indication of the policy this Government are going to pursue in the future. It means that no longer are industries, even when well conducted, safe from being taken over by the Government. If the hopes of noble Lords opposite are met, and after the next Election we still see them sitting on that side of the House, it is clear that the nationalisation of steel will be followed by the nationalisation of sugar, cement, insurance and banking—the whole range of these industrial and commercial activities a at have a monumental record of competence and successful trading that comes when men engaged in industry are allowed to have the sense of creating something—enjoying the product of their work and knowing that on their skill and judgment depends not only the success of their industry but the prosperity of their families and of the people above them.
  I am convinced that this policy of nationalisation will be ruinous to the country, and that is why I am standing here to-day. If I did not believe that, I should not be occupying my present position. In the few years in which I have been engaged in public life I have had many happy associations and many common aspirations with noble Lords who sit on the opposite Benches, and with gentlemen who occupy similar Benches in the other place. But on this economic issue of the nationalisation of the means of production, distribution and exchange I am sure they are wrong. I am sure that if they carry out their policy they will bring economic disaster to this country; and it is because I feel so strongly on those lines that I have ventured to address your Lordships to-day.
  4.7 p.m.
  LORD RENNELL: My Lords, I have had the privilege of taking part in discussions on all the nationalisation Bills that have been before your Lordships'

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  House. Frankly, with many of the principles of some of the earlier ones I found myself in agreement. What is the difference between those Bills and this one? I think the difference is fairly easy to see, and it accounts for that particular association of my noble friends on these Benches with those who occupy the Conservative Benches in your Lordships' House which seems to have got so much "under the skin" of the noble Viscount, Lord Hall. He has referred to it on two occasions, and it seems to him to matter more, perhaps, than many other things.
  On each of the occasions on which a nationalisation Bill has been passed there has been, as it were, a valedictory debate; and appropriately so, because I do not suppose the other nationalisation Acts which have passed, though they will probably require amendment, will need to be repealed. It was, therefore, appropriate when they left your Lordships' House that there should be such a valedictory debate. On this occasion, however, I do not think any valediction is appropriate or desirable, because this Bill, when it passes from your Lordships' House to another place, and when it has been considered there with the Amendments which have been made in your Lordships' House, will still not be an Act, and many things will happen before it becomes an Act. Therefore, it would be inappropriate to hid it farewell, as we certainly cannot bid it God-speed, because we shall have it before us again.
  What has happened to make this nationalisation Bill so different from the others that have gone before? It seems to me to be this—that on this measure turns, perhaps, a much more important thing than merely the nationalisation of the iron and steel industry. We see in this Bill the abandonment of the justification put forward that common services should be rendered freely without profit. Here we see the abandonment also of the justification to which Lord Woolton referred: that by nationalising iron and steel greater efficiency will be introduced into the industry. We see, instead, barefaced, unashamed and open, the desire for power; the preference for the State over the individual; the adulation of the State and the submergence of the individual; the submergence of individual enterprise and the subservience of the
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  individual to the State, because at the back of the Socialist doctrine resides this idea that the State is both more important, more wise, more efficient and better than the individuals which compose it.
  On that issue, if on no other, noble Lords on these Benches will always find themselves in whole-hearted opposition to the Socialist Party and its doctrines, and in that opposition will be glad to cooperate with anyone who holds the same ideas, because that is a fundamental question of principle about whether people are to be preferred to organisations. That is the fundamental basis on which our civilisation, our culture and all our spiritual background has been built up. It is the background of the ethics of our religion that the individual, first and foremost, matters; and that no organisation can be greater than the individuals who compose it. It is because we believe that this Bill is the first example of the application of a doctrine which believes that the State is greater and more important than the people, and that the people must subserve to that doctrine, that we have opposed and will continue to oppose this Bill. On the application or otherwise of that doctrine depends not only the liberties of the people, the happiness of the people in the industries, the happiness of the people and their relations with the people who lead them, but also the continuance of the whole of the background on which the history of this country and its influence in the world has been built up.
  4.13 p.m.
  LORD LINDSAY OF BIRKER: My Lords, I should perhaps apologise for intervening, in this debate when I have been able to attend so few of the previous discussions on this Bill, but I had duties in other places which made it impossible for me to be here. There have been many statements in the Press and in this House—some even this afternoon—that we on these Back Benches in our heart of hearts dislike the Bill, and that if we were as honest or as courageous as the noble Lord, Lord Milverton, we would follow his example. I hear that all the time. We support this Bill apparently for some mysterious political loyalty, though we do not believe in it. Therefore I want to give some reasons for the faith that is in me about this matter.

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  When I read through the discussions on this Bill in this House and in another place, I was struck, both in the speeches on the Second Reading and in Committee, with what seems to me a curious but constantly recurring assumption—we have had it again this afternoon—that economic reasons for nationalisation, if economically sound, are respectable, but political reasons are always bad. There may, of course, be economic or efficiency reasons for nationalisation. No one nowadays would, I suppose, want to denationalise the roads and revive the turnpike companies—not even Lord Woolton.
  LORD WOOLTON: You are quite right.
  LORD LINDSAY OF BIRKER: I can imagine the horror of the noble Earl, Lord Howe, if that were done. But normally I submit that the reason for nationalisation is and ought to be political. It is the simple Liberal and democratic principle which I learnt from my Liberal parents, that public power—that is, power over the fortunes and destiny of the public—should be publicly controlled. I am quite prepared to admit the complementary principle that purely technical power, the power of making technical decisions which have no social consequences, should not be publicly controlled. Unfortunately, in modern industry it is often very difficult, especially in large and highly organised industries, to make that distinction effective, because what I have called public power is a by-product of technical power. May I take a simple and familiar example? Suppose United Steel resolve, possibly on quite proper technical grounds, to concentrate their works in West Cumberland at Workington rather than in Maryport. That, clearly, has enormous social and political consequences to the whole of West Cumberland, and it should be in the hands of the public. Instances of that kind, not only concerned with the location of industries, could be multiplied. This, I submit to the House, is our modern dilemma, and I think it is a very important one. How are we to transfer to public control technical decisions which have important social consequences, and leave to the technical experts responsible control and initiative over the rest? I submit that this country must solve that
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  dilemma somehow if wit, are to preserve our democratic life and principles.
  I am prepared further to admit to noble Lords opposite that we must solve one side of it—how to have independent initiative in ordinary technical questions—just as much as we must solve how to have public control of the technical decisions with social consequences. I submit that the doctrinaire hatred of nationalisation which is so apparent in almost all of the speeches of the noble Lords opposite is no more helpful than the doctrinaire belief in nationalisation which I freely admit can he found in the ranks of my Party. We have somehow to recognise both sides of that dilemma and try to bring them together. That is not easy. A mere denunciation of nationalisation of the kind we have heard in the speech of the noble Lord, Lord Woolton, is no good, and the other belief that "nationalise and all will be well" is just as fatal.
  During the one portion of the debate I was able to attend earlier I heard the noble Viscount, Lord Swinton—I am sorry he is not here now—in one of his most eloquent, but, if I may say so, most unreal speeches. He has two kinds of speeches, the extraordinarily helpful kind and the other kind where his spectacles always seem to be in danger. The noble Viscount says that what the Government want is power. Of course; if you want control in the public interest you cannot control without power. If noble Lords opposite had said that the Government wanted all the power it the world, and power over the whole of industry, it would have been a different matter. Clearly, this dilemma as to how to have the necessary public control of the industry and leave the necessary initiative and invention to private enterprise, is presented in a very acute form in the iron and steel industry. Nobody can deny the great public power, in the sense in which I have used the expression, of the iron and steel industry; and nobody, I think, can deny its great diversity and its need for constant and renewed technical initiative.
  THE MARQUESS OF SALISBUAY: Does the noble Lord mean public control, or public ownership?
  LORD LINDSAY OF BIRKER: I am coming to that. I recognise that it is a very important point. This Bill is am

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  attempt to solve this dilemma in an interesting way. I do not think the noble Lord, Lord Woolton, paid any attention whatever to that aspect.
  LORD WOOLTON: Oh yes, I did.
  LORD LINDSAY OF BIRKER: It is an attempt to solve the dilemma by forming a holding Corporation which is to have the last word on public issues, and the companies within that framework are to be independent. I submit that the issue between us is not really public control or no public control, and not really private enterprise or no private enterprise; it is whether public control which most people believe to be necessary can be effected only by public ownership in the form proposed in this Bill, or whether it is already sufficiently provided for by the existence of a Steel Board or in other ways. The noble Lord, Lord Layton, with whom I have nearly always found myself in very great agreement, suggested in his speech in Committee that he had argued that control in this matter was superior to ownership. I had not heard his earlier speech, and with eager expectation I turned to Hansard. I am bound to say that I did not find any convincing argument on the matter at all.
  In my humble opinion, this crucial question has never been properly discussed by either side. If the Iron and Steel Federation had gone to the Government and said publicly, "You have already control over us in certain ways: how much more do you want? We are prepared to agree to this and that, and to the power and decisiveness you ask for," then we should have known where we were. I should have thought the Government very ill-advised to refuse an offer of that kind. They could have argued as much as they liked what details were necessary to get the control needed, and if it was clear that they could get it effectively through control without ownership, I think they should have agreed. But we have not heard that. I have heard practically no discussion about it. On the other hand, I am bound to say that I wish the Government had not confined themselves so much to generalisations on this subject.
  But if the dispute between control without ownership, and control by means of
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  ownership as prescribed in this Bill—which is a very interesting experiment of trying to combine the two things—really is, as I suspect, a question who is to have the last word in case of dispute, then I think the guardians of public policy should have it against the technical experts. I think ownership by a holding company is a way of ensuring the last word to the people who stand for public policy. Once you grant that last word, I applaud the efforts of the Opposition—leaving aside their general dislike of the Bill—for they have tried to ensure the greater independence of the companies. I think we have a great deal to learn in this very difficult problem. I believe some of the Opposition's Amendments would have helped, and I should have liked the Government to go much further in that direction. They went a good way, but they could have gone further towards meeting the proposals of the Opposition in that direction. I am sure that would have been worth doing. I sympathise with the efforts which the Opposition have been making to ensure real independence and responsibility within this framework.
  But with the fundamental Amendment passed at the instance of the noble Marquess who leads the Opposition, I have no sympathy whatever. When the noble Marquess assumes the role of the impassioned and convinced democrat, I feel slightly suspicious. I think he regards democracy, if I may be allowed to say so, from a far distance, perhaps reverentially.
  THE MARQUESS OF SALISBURY: May I ask on what grounds the noble Lord formed that conclusion?
  LORD LINDSAY OF BIRKER: By listening to a number of the noble Marquess's speeches on the subject. The real issue between us, if it is as I have described it, is not a proper subject for a referendum. You would get no further if you obtained an answer to the referendum. I should have thought that noble Lords on the Liberal Benches, al least, would know that.
  4.28 p.m.
  VISCOUNT CECIL OF CHELWOOD: My Lords, we have all listened to an extremely interesting speech from the noble Lord; if he will permit me to say so, it would have been perfectly admirable in a lecture room—or perhaps even

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  in a post-mortem examination—but it appeared to me to be slightly irrelevant to a human problem, which is the real problem that we have to meet. I do not rise in the hope of being able to make any useful contribution to the discussion of the details of this Bill. Every line of it has 'been argued by experts, both in this House and elsewhere, and I have nothing to add to what they have said. My object is only to ask your Lordships to consider very carefully the foundation of the Government's industrial policy and, particularly nationalisation. It is not the detail of this or that industry in which I am most interested; I feel that it is of the utmost possible importance that we should have a policy which will heal the difficulties and distress that threaten us from the present condition of the industry, and it is only for that purpose that II venture to trouble your Lordships.
  So far as nationalisation is concerned, the case for it seems to me to have been rhetorical, rather than argumentative. It is said, for instance, that it is dangerous to leave so important an industry as this in the hands of private people. The noble Viscount, Lord Hall, has again said so to-day. The suggestion is that they will use it for some revolutionary or political purpose. I do not know whether that is seriously contended by anybody. No facts have been alleged to justify such a contention, and I myself believe that very few reasonable persons accept it. Then something has been said about the advantages of a classless society. So far as I can learn, there never has been a classless society in any country, and I think there never will be. No doubt it is possible to destroy any existing class, but only for it to be succeeded by another. You may get rid of landowners—or, to use the modern term, capitalists—but their place will be taken by officials and by an official class. I observe that some of the workers are already beginning to suspect this in reference to this nationalisation question. My noble friend said something about democracy. By far the most dangerous enemy of democracy is oligarchy, and I cannot help feeling that we are drifting towards an oligarchical situation in this country. I regard that with the very greatest apprehension. Oligarchy means bureaucracy, and bureaucracy means tyranny;
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  and bureaucratic tyranny is, in my view, the worst type of tyranny of all.
  It is sometimes said—it has been contended with regard to this Bill, and on others—that nationalisation is necessary in order to increase production. I do not think that has been seriously put forward, though it has hail a sort of resurrection in this debate. Everybody recognises that the steel industry is in a flourishing condition, and there has been no real suggestion that its position is threatened in any way or must be saved by nationalisation. The truth really is, as I see it, that the policy of nationalisation is attractive chiefly those who are moved by the feeling that it is unjust that one man should be richer than another. I do not share that feeling, nor do I believe that it is common among my fellow countrymen. Perhaps it is commoner abroad. Indeed, the whole case for nationalisation, to my mind, reeks far more of Continental thought than of British thought. We here do not regard officials as infallible, and we incline to the view that naturally those who have been brought up to the management of industry are more likely to succeed in it than are the planners of Whitehall.
  I do not want to be misunderstood. Is there then nothing wrong with the industry? Should we simply accept the situation, and sit back and do nothing? I am far from that opinion. In the first place, it is clear that in some trades there is considerable discontent. We have had plenty of recent evidence on the subject. And remember that strikes and lockouts generally mean the existence of far more difficulties than the actual dispute which is their immediate cause, especially if the usual efforts to appease that dispute have been tried. Broadly, a strike in any one of our leading industries must indicate a want of a sense of responsibility in those who have caused it, whether they be employers or employed. To my mind, if I may say so, that is where the noble Viscount's argument a little ignores the present condition of affairs. At this moment, when it is evident that our economic position is by no means secure, a strike must add greatly to our national difficulties.
  We all say that employers and employed are together engaged in a public task of great importance. But do we and they really believe that? I see

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  accounts of enormous crowds going to look on at cricket or racing, tennis or golf, and crowding to cinemas, and even some theatres. I observe that popular newspapers are more than half taken up with accounts of sports events, and with crimes of a terrible character. Side by side with these items of news, there are urgent appeals to those engaged in this or that trade to produce more and absent themselves less. Do not misunderstand me. It is not that I am the enemy of recreation—far from it. But I cannot help feeling that at the present moment—and to my mind this is the fundamental difficulty—very little interest in work for its own sake is taken by those engaged in it. And I do not wonder at it. In the average modern factory—I am not talking about any particular factory—the work must often be hideously dull, just watching some machine to see that it does its work regularly and smoothly. How is it possible for any worker to take pride in such employment? How immensely different from the old days of craftsmanship when every employee was something of an artist!
  No doubt much has been done to improve living conditions, outside work, and that is admirable. But work seems to grow less and less inviting in itself. The division of labour and the standardisation of products make modern industry more and more inhuman, and make man more and more a mere wage-earning machine. A great deal is said from time to time about increasing the incentives to work. That usually boils down to an increase of wages for the worker and profits for the employer—very desirable, of course, but it is a profound mistake to think that making money is the only, or even the chief, object for which a man works.
  I myself should say that perhaps the strongest human reason for activity is the desire to achieve something. In America, I have been told, men will often spend the first half of their lives in amassing wealth which in the second half they spend on some public object. Certainly, in the professions with which I am acquainted, I doubt whether men regulate their exertions by the amount they expect to receive for a particular job. But, strictly, the money motive is supposed to be the only incentive for the average factory worker. That is surely
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  a mistake. Nowadays in many cases a worker enjoys little human contact with his employer. He is just part of a machine. All the higher part of his nature, his heart and brain, are almost wholly ignored. Very little is done to interest him in the work as a whole and, so far as I can see, nationalisation will make these conditions still more inhuman.
  At the top there will be just a board, the members of which will be probably unknown to the employees, and they will be chosen by a still more distant authority lodged in Whitehall. Such a system seems to be not only debasing but extremely foolish. How can you expect people to do their best if you disregard all that is best in them? I shall perhaps be told that provision is made for representatives of labour to sit on the board—that is to say, that one or more members of the board are to be trade unionists selected and appointed by the Government. But that does not make them the real representatives even of the union, much less of the workers. The other day there was a debate on this question in a conference of an important union, the Transport and General Workers Union. That debate was of a very animated character, and the following Resolution was moved—I quote from the Daily Herald of July 15:
  "That this conference being very dissatisfied with the present position of many of the nationalised boards and executives demands that Trade Union representatives should be placed upon these boards and executives with the right of the members to recall such Trade Union representatives as and when considered necessary."
  The writer in the Daily Herald goes on to say:
  "The main argument of the mover, Mr. Edward David, a London transport worker, was that there was no actual Trade Union representation on these bodies in the true sense. The boards included some ex-Trade Union officials … but they were not union representatives."
  For myself, I would add that they seem even less to be representatives of the workers. The Resolution was vehemently opposed by Mr. Arthur Deakin, the general secretary of this union, whom I believe to be a very respectable trade union leader, but it was carried against him by 433 votes to 170 votes.
  I venture to draw attention to that incident because it seems to me important in considering the whole question of

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  nationalisation. I do not want to say anything against trade unions—indeed, I am not sure that I should not immediately incur the wrath of the noble Viscount, Lord Hall, if I were to do so. They may have been useful and even necessary counterweights to the excessive power of employers in the past. But the situation now is quite different, and there are many signs that by becoming as political as they are they have weakened their industrial position. I saw a report of a speech by a trade union leader the other day. It was an appeal to the workers to show more loyalty to their union and to behave with greater discipline—though, in my view, the appeal would have been better directed if it had asked for a greater sense of responsibility. But the speech ended with a great appeal to support "our Labour Government." That is surely a very unfortunate way of speaking. In political action is it not true that the trade unions are in danger of becoming no more than a part of the electoral machinery of the Labour Party? It is said that they provide a great deal of its funds, and we know that many trade union leaders have become Ministers of the Crown. There is no harm in that so far as the Administration is concerned, but what about the trade unions? Is it not inevitable that appeals and arguments by such trade union leaders will be regarded by their followers as political rather than industrial?
  I have seen the same kind of thing happen in other cases. I will instance one which, though it may not be very palatable to some noble Lords, is interesting. The Primrose League was originally instituted to advocate a certain Imperial policy; at first it had considerable success, but as time went on it became more and more closely identified with the Conservative Party and ceased to have any independent Imperial position. That is exactly what might happen to the trade unions. As industrial bodies they have a valuable function. If they become mere auxiliaries to the Labour Party, their industrial value will disappear. Do not think that I desire to weaken the position of the employees. On the contrary, I believe that the future of industry—nay, of the whole country—largely depends on the recognition by both employers and employed of the
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  responsibility of the latter in the conduct of industry.
  We have in this country carried the liberty of the individual further than it has been carried elsewhere. We have passed a series of great measures—trial by jury, the independence of judges, Habeas Corpus and ail the other provisions for the supremacy of the law; freedom of speech, the abolition of corruption and the enactment of universal suffrage. By these things we have destroyed privilege and achieved political liberty. It remains to carry those principles into the organisation of industry, not by planning and control, or by the increase of the power of bureaucracy, but by the creation of a spirit of co-operation among all workers, employers and employed in responsibility for what is in truth the safety, honour and welfare of our Sovereign and his Dominions.
  4.46 p.m.
  THE EARL OF HALIFAX: My Lords, it is one of the merits or at least the privileges of this House that it is able from time to time, on an occasion such as this, to elicit a speech such as that to which we have just listened from my noble friend. I doubt whether there are many other people in this House who could have made such a speech which, whether we agreed with it or not, was in the highest degree stimulating and replete with ripe wisdom gathered over many years. Like many other noble Lords, I was one of the silent participators in the Committee debates, and I heard many of the thirty-eight members of your Lordships' House who tock part. I was rather disappointed that I and the other silent members did not receive one of those bouquets that Lori Hall handed to all who had assisted the progress of the Bill, because I was certainly under the impression that I, no less than some others, had assisted the Bill. However that may be, I must confess to your Lordships that it has not left me any better qualified technically on the subject of steel, in the sense of being at all equipped to enter into the mysteries and profound arguments over which Try noble friend Lord Dudley, and others led by my noble friend Lord Swinton, moved so easily.
  But there are one or two reflections that I wish to make oil what seems to me a legitimate opportunity for a wider

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  review of all this business before the Bill finally leaves your Lordships' House. With all respect to the noble Lord, Lord Lindsay, it is all very well for him in the interesting speech he made to "set about" my noble friend Lord Woolton and to say that all this denunciation of nationalisation is irrelevant, unnecessary and off the real point, and that he is rather bored with it, and so on.
  LORD LINDSAY OF BIRKER: I did not say that.
  THE EARL OF HALIFAX: No; I was only paraphrasing the noble Lord's remarks. If I have paraphrased him amiss I shall be the first to apologise. But the general sense was that he did not think it of great importance. My answer is that he may well be right about that; but the reason why Lord Woolton and others who feel that way have to point out the error of nationalisation, is that it still seems to be a cardinal tenet of the creed of His Majesty's Government. If they were not such confirmed believers in nationalisation as such, it would certainly not be necessary to denounce it at all. To them, the process of nationalisation seems to be an indispensable element in the creation of the kind of State they wish to create. The noble Viscount, Lord Hall, said, I think, that it was an integral part of the establishing of a prosperous national economy.
  That is my justification, also, for saying one or two words about the subject, for that position seems to me to rest upon assumptions that are questionable. One assumption is that the only alternative to the old capitalism is Socialism. Another is that if the Profit motive—which we frequently hear condemned, at least as a primary incentive to effort—is wrong, the only way of eliminating or reducing it is by nationalisation. The third assumption is that the present form of nationalisation is the only method by which industry or services can be brought under effective public control. I was very glad to hear what the noble Lord, Lord Lindsay of Birker, had to say on those topics, because he, at least, recognises the strong feeling that exists that there is great need for impartial inquiry and examination. Certainly, I would suppose there could hardly be any member of the Government who would not feel that
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  in the light of the experience of the last four years there was great need to examine these and many other assumptions. There surely could be no greater contrast—and seldom is contrast more sharply exhibited—than that between the ideal picture that advocates of all this policy draw and the actual position as experience over years has revealed it.
  I think it is true to say that, from different angles, the vast majority of those concerned have pointed out the undesirable consequences that have attended on Government action. Those with special knowledge and experience of the control of industry have called attention to what they judge to be defects in the working of the nationalised industries. Consumers are painfully aware of the increased costs which affect not only them but our whole economy. The noble Viscount who spoke last had much of substance to say about the employee. Lord Woolton also had some strong things to say in that regard, because, apart from the point of view that nationalisation would impart a new quality to work, by reason of the fact that it would no longer be done for the private profit of any individual (incidentally, I imagine that that never loomed quite so large in the minds of the workers as has so often been represented) industrial workers, I believe, thought two things. They thought, first, that the conditions of their work, hours and rewards would be more agreeable. Secondly, they thought that they would have a much greater measure of control over the industry in which they worked. But, by all the evidence, the worker is not getting what he expected to get and is not very well satisfied with what he has obtained.
  It is no answer to say as the noble Viscount, Lord Hall said on the Second Reading, that if you took a plebiscite no one would suppose that the workers in these industries would ever declare themselves in favour of going back to the old position, I do not suppose they would. But that does not mean that they are content with the present position. Noble Lords on the Government Bench, haw much better evidence than I have about it, but even an outsider like myself has only to read what passed at Blackpool, what passes at many trade union conventions and conferences, and what is said in Parliament, to realise that the workers are not all very happy about the position.

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  I have been shown something that I suppose almost everyone except myself had seen before, but it is interesting to me. I do not overrate it. I have had put into my hands the result of a Gallup Poll taken at the end of last year among readers of the Railway Review, who, I understand, are largely drawn from the National Union of Railwaymen. Having lived in America for some time, I do not attach undue importance to the result of Gallup Polls, but they are perhaps interesting as showing general drifts. Among the questions put in this Poll was this: After a year of national ownership how do you find your job—more encouraging, about the same, or more frustrating? The number of people who were more encouraged was 9.7 per cent. Those who found their job about the same totalled 45.5 per cent.; those who found it definitely more frustrating were 44.8 per cent. You cannot contend that that is a very glowing result on the human side, if the object of reorganisation is to extend human happiness in industry.
  Much more significant than that, as the noble Viscount has said, is the large number of unofficial strikes. I put the dock strike by itself, and I do not deal with that, for clearly it stands on an entirely separate footing. I do not know whether noble Lords on the Government Benches will agree with this, but I have always judged it to be superficial and misleading to dismiss all these unofficial movements and strikes as the work of Communists or of irresponsible elements in industries. No doubt Communists have their fingers in any pie which they judge profitable, and no doubt there will always be irresponsible elements in industry. But when one has said all that, the British working man is not a fool; and I believe that, to a much greater extent than we always recognise, these strikes are an expression of dissatisfaction with the form that nationalisation has taken and of a general sense that the workers have been tricked in not getting either what they were led to expect or at least what they thought they were going to get. They have looked forward to conditions in industry being more agreeable, but the workers are still learning—and after a generation or two of false teaching the process of learning is inevitably slow—that economic laws retain their validity whoever is nominally the owner or
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  nominally the controller or manager. As all of us here know well, it is no more possible for the railways to be run in defiance of the relationship between earnings and costs because they are owned by the State than it would be if they were owned by private people. But that is a lesson that has not yet been learned.
  As regards control, which I think is the real question, the workers had expected to obtain a much larger share. The fact that they thought that larger measure of control would come to them by the elimination of private ownership brings me to what I believe to be one root of the trouble —namely, that a great deal of Socialist thinking about industry is out of date. That is a dreadful thing to say of a Party that judges itself to be the progressive Party in the State, but none the less I believe it to be true, in the sense that under a kind of "hangover" from the past, they have greatly exaggerated the part that capital plays in the actual control of modern industry In this age of great corporations, curiously enough, capital has a decreasing measure of control: the scale of industry is too vast and the complications too great. And in the majority of cases the power is not with the shareholders. They have, of course, the right—which they seldom use—to attend the annual meetings and make a row, but the power has been passing to a new managerial class of technical and directing experts. Therefore, when the workers expected to get control, they could not do that by getting rid of the shareholder, who had already lost most of the power he had.
  From the workers' point of view, the wrong element has been thrown out; the old capitalist who had not much power is gone and the old manager who had the power remains, although he is now saddled with a national Board composed of people who probably know much less about the job than he does and whose touch with the job is much less direct than that of the people they have supplanted. In his daily work the employee is much more conscious of the presence of the old manager than of anything else. He feels that "new presbyter is but old priest writ large." So far as he is conscious of the national Board he generally, and not unnaturally, distrusts it. The personal element has largely disappeared from it. The private employer may have been good or bad, but at east the workers

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  knew where he was, and where to get at him; and hp made decisions. The change-over from a system that was tangible and accessible to something that is impersonal and remote, and under which decisions have to be referred—is, I suspect, all very annoying, and frustrating to the chaps who have to work under it. All this cannot have been the intention of the Government—if mine is a true diagnosis—and it was certainly not the idea of nationalisation in the minds of most employees.
  But who in fact has benefited by it all? Certainly not the shareholders; they are slightly poorer on the whole, I think, for exchanging their shares for Government stock. Certainly not the employees, as I have tried to show. Certainly not the trade unions, whose bargaining power has surely weakened—whatever the noble Viscount, Lord Hall, may say—by the substitution of the State for private employer. Again, no benefit has accrued to the technologists and managers, who are in much the same position as they were, except that where they were accountable to the general shareholders they are now accountable to a national Board. I cannot see that much benefit has accrued to the State, which has always had, as the noble Lord, Lord Lindsay, said, an overriding interest in all industrial activities, and now finds that Ministers appear to disclaim the intention and right to interfere with the national Boards. I wonder where, at the end of the day, the State is going to come in.
  All that makes me ask: Is it therefore so certain that, even if the fundamental purposes of the noble Lords on the Government Front Bench are right—which I am entirely prepared to concede, much as I detest their methods—they have chosen the right way of trying to realise them. There are surely alternatives: the way of the co-operative; the way of co-partnership and profit-sharing, about which the noble Lords opposite have so frequently spoken. The noble Lord, Lord Lindsay, touched the point when he spoke about the connection between ownership and control, and I hoped he was going to say that the operation of the Iron and Steel Control Board was all right. He did go so far as to say that if they had gone to the Government and said they could see this amended in
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  this direction or that, we might never have heard of nationalisation. The noble Lord may think that, but I believe he is too optimistic.
  LORD LINDSAY OF BIRKER: I did not say that we should never have heard of it.
  THE EARL OF HALIFAX: Even so, I still think the noble Lord was somewhat optimistic. However, that may be, the broad facts surely stick out a mile. No one, right through all levels, is fully satisfied with this way of handling the situation. I cannot help believing that if the Government, when they were deciding on this policy four years ago, had had the experience which they have now accumulated, and if they had not had the label of nationalisation tied round their unhappy necks for many years, they would never have gone in for this form of policy at all. I may be too optimistic in saying that, but that is the conclusion to which I am driven. From the larger point of view it is clear that the result of this policy is to introduce a sharp division at a time when we want the greatest possible measure of unity. I know it is too much to ask the Government to suspend the passage of this Bill, but I do not think it is too much to ask that they should consider favourably once again the possibility of acceding to the terms of my noble friend Lord Salisbury's Amendment, as to the time-table of its operation. I should not think it was too much to ask them, in addition to doing that, in place of the further pursuit of a policy which is imperfectly achieving its ends, to invite men of all Parties, experienced in industry, to get together and advise them on the formulation of a policy that might really assist and not impede our national recovery.
  5.10 p.m.
  VISCOUNT ST. DAVIDS: My Lords, it is somewhat of an accident that I should follow the noble Earl, Lord Halifax, but I am glad to be able to tell him that I also will have a share in the same bouquets which he has awarded himself for having attended these debates without so far having spoken. I think, also, we should share our bouquets, and perhaps give even larger bouquets to noble Lords who have failed to turn up at all, and who have thus considerably helped in these debates!

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  There is one reason why I myself must rise to my feet at this moment. There was what amounted to a challenge put out by certain Conservative newspapers, and by various spokesmen—including, of course, the noble Lord, Lord Woolton, in this debate—in which it was suggested that some members of the Labour Party, including myself and the noble Lord, Lord Lindsay, who has already spoken, and other noble Lords on these Benches, were opposed to the Iron and Steel Bill. I have been conducting private inquiries since those remarks were made—I think it was in the Evening Standard—and I have not found one noble Lord on the Labour Party Benches who disagrees with the Government in this measure; in fact, I believe the only noble Lord who, from these Benches, disagreed with this measure is the noble Lord who had apparently joined the Labour Party without reading the Party Programme, although it had been written for a considerable time, and who left the Party very hurriedly on finding that Programme being put into effect.
  It has been argued that we should not have put this programme into effect, but that we should have thrown it away because of the crisis which is upon us. I believe the exact opposite to be true—and for this reason. This programme has been made out for two purposes, one of which is economic. This programme, which all holds together as a piece, is designed to fight off inflationary boom and disastrous slump; it is a full-employment programme. Suppose we consider an explorer marching through wild and dangerous country. Naturally we imagine that he arms himself with a rifle to deal with such ferocious beasts as may lie in his path. And suppose that these ferocious beasts appear before him. What does he do with the rifle with which he has armed himself? Does he fling it to the ground and run screaming away, or does he use it and march forward? I believe—and I am sure the Government believe—that this Iron and Steel Bill is one of the vital weapons which they have taken to protect themselves and the country in just the sort of circumstance in which we now find ourselves; and if we were to throw that weapon on the ground and run screaming away we would be running away from every ideal to which we are advancing. I personally would
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  not remain in the Labour Party a minute if we did that, and so far as my researches show that is the opinion of every member of the Labour Party I have succeeded in contacting.
  There is a further reason why we are putting through these measures and it is one on which I thought the noble Earl, Lord Halifax, touched very nicely. The fact is that there are political as well as economic reasons for this. The workers of the country want more control over the operations of the industries in which they work. You may say that abolishing the shareholder has no given them what they wanted. I agree. It was highly unlikely to give them what they wanted. But I think your Lordships will agree that until the shareholder is cleared out of the way they cannot proceed in the direction in which they want to go. They cannot possibly obtain the control in the industries where they want control before the shareholder has been removed. I thought the query about the Gallup Poll amongst the railwaymen, as to whether they were happier or less happy after one year of nationalisation, revealed just about the state of affairs I would expect after one year of nationalisation. Unfortunately, not being a house of prophets, we shall be unable for some little time to read the effect of the Gallup Poll after ten years of nationalisation; but when that time comes we may see some different opinions.
  Those are the reasons why this is being done, and I hope this policy will be continued, because until we have proper safeguards to prevent those disastrous "wobbles" in the economic state of this country which used to occur in the past, and until the workers in these industries have a greater interest in their work, I do not believe this country can proceed along the road on which we want to see it go.
  5.18 p.m.
  LORD BRAND: My Lords, I spoke on the Second Reading of this Bill, hut I should like to say a few further things to-day. Personally, I deplore this Bill, and I hope it never conies into force. I deplore it for the reason—the cogent reason, in my opinion—that it submits to Government ownership a kind of activity which it is very undesirable to submit to such ownership. I am the last to deny

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  the immense importance of the functions of Government in a modern State, or to assert that we can rely solely on laissez faire. But this Bill raises the fundamental question: What is the proper sphere of the State in modern society? Apart from the maintenance of internal order, law and justice, and control of foreign policy —which are the usual functions of Government—I put in the very centre of the picture control by the Government of our monetary, our currency and our exchange structure, the maintenance of the essential reserves of gold and currencies equivalent to gold, and the maintenance of financial and economic stability. I may say, however, in answer to the noble Viscount, Lord St. Davids, that this Bill has nothing whatever to do with the maintenance of economic stability.
  Noble Lords who have read President Truman's recent message to Congress will have a good idea of what I regard as the sphere of modern Government as regards economic affairs and the problems which modern Governments—and our Labour Government—ought to be considering at this moment. Heaven knows, they are difficult and important enough. In addition, of course, Governments have other functions—regulating physical and social conditions, ensuring minimum earnings, ensuring that free enterprise shall take account of social costs and the æsthetic interests of the country, though I must say that when I saw a plan of the new theatre which is to be built on the South Bank of the Thames, I wondered whether public authorities are really able to run our æsthetic life. The Government also have to ensure a not too glaring inequality in the distribution of the national income, though to stretch the principle of equality too far is completely disastrous.
  All these are vitally important functions, and no doubt the list could be extended. The proper performance of all of them would provide any Government with all the burdens they could possibly shoulder, and Parliament with all the responsibilities that it could possibly bear. Beyond that point, as I think we shall soon see, the more numerous the tasks given to the Government and to Parliament, the less attention can be given to them. In my opinion, we already see that Parliament cannot and will not be able to take much
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  interest in what happens to industries already nationalised, whether they are railways or other public utilities. But, of course, Socialism goes much further. How much further no one knows; and it is urgently necessary to determine. The answer will determine not only the economic, but the political and social character of this country and, above all, whether as a nation we are bound or free.
  To my mind it is curious, in view of the Socialist view of Communism, that they take as their example Russia. The Russian system is nothing but the Marxist policy of nationalisation of the means of production, distribution and exchange pushed to its limit. The more the Socialist Government nationalise, the nearer they will be to what they can hardly consider the very desirable end of getting a little closer to what the Russian system is.
  LORD PAKENHAM: I interrupt the noble Lord only for the purpose of elucidation. Does he mean that we take Russia as a model for ourselves, or as a model for Communism?
  LORD BRAND: I say that Russia has not got Communism. She has nationalisation to the hilt, plus a good deal of Russian barbarity. No doubt our system, if you nationalised everything, would be different, because Englishmen are different from Russians. But in other respects it would be completely the same.
  You have to consider, as you go along the path of nationalisation, how far you intend to go, and that is what I think it is very important to determine and tell the country. As I see it, the trade union world and the Labour Party have advocated nationalisation for years, not so much for its positive merits but, as my noble friend Lord Halifax said, for the negative merit of getting rid of the rich and powerful capitalist and redistributing their profits, though not their losses. But, so far as re-distribution of national income can be done without harm, it has been done, and more than done now. Moreover, the rich and powerful capitalists do not exist—or barely exist. As my noble friend Lord Halifax said, numerous small shareholders have taken their place—shareholders who, of course, perform an invaluable function.

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  I would like to give your Lordships a figure which I saw only a few days ago in the London and Cambridge Economic Service which, as the noble Lord, Lord Pakenham, knows, is a very admirable and dependable service. It was stated there that in 1938 sur-tax payers received about 8 per cent. of the net personal national income of the country—net after payment of taxation. They now receive, according to that estimate, 1½per cent. Therefore, as your Lordships will see, the "robber barons" and the rich capitalists have been disposed of—whether for the good of the country or not remains to be seen.
  When you do not give sufficient rewards for the intelligence, the brains, the energy and the initiative of the country, various unfortunate things may after a time happen. But while the old reasons for nationalisation have thus largely disappeared, a few new ones have taken their place. One difficulty is to know what they are, and I think my noble friend Lord Lindsay—who I am sorry is not present—felt the same difficulty, I regarded his speech, although I am not sure he knew it. as a speech against the Bill. He made a mistake, however, in stating that this was a very interesting experiment, where you had a Government Board at the top and a lot of independent companies underneath. They will not be independent at all. Noble Lords know perfectly well that those who control the finance can, in the end, control the operations of any company, and that those boards—as the noble Lord, Lord Woolton, said—which now feel free to do this and that, because they are risking the shareholders' money, having been put there to do so, will no longer feel that liberty. They know that the finance is in other hands, and that where the finance lies the responsibility lies. Therefore, they will not he free, and the situation will be totally different from what is existing to-day.
  I understand that the arguments of responsible advocates of nationalisation are something as follows: first, that if an industry is monopolistic, it should be nationalised. My view is that if an industry is monopolistic you should treat it as the Americans treat monopolistic industries. You should have a Sherman Anti-Trust law, and see that the monopoly is not run against the public interest. I do not consider that the right
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  course to take is merely to create another and bigger and more complete monopoly, particularly when that monopoly will not in fact be subject to any real control by Parliament and the public will not know as much about it as they know now about the monopolies (if they exist), or the semi-monopolies in this country. A second argument is that if the product of an industry is fundamental to the interests of the community, as steel is, then it should be nationalised. But what is not fundamental to the interests of the community? What about food? Food is absolutely fundamental to the interests of the country. Why should not farming be nationalised for the same reason? The question is begged as to whether, when the State has taken over such an industry, it will produce any more efficiently than a private industry.
  A third argument is the strategic argument that private employers cannot be trusted to see that enough of this or that is produced, like steel. That seems to me to have no foundation at all. If you give a private industry order; at a price which enables it to cover costs and make a profit, it will produce, Dr at any rate be just as able to produce as the Government. Neither will be able to produce unless the raw materials are there: if they are there, both will be able to produce. A fourth argument, I think, is that where an industry is vital to a community and is not in a position to function for lack of money, the Government must take it over. Perhaps I do not tread on anybody's corns if I quote B.O.A.C. as an example. But to take over is not the only alternative; you can subsidise an infant industry, as other countries do, and personally I think, with respect to the noble Lord, Lord Pakenham, that that might be the better thing to do.
  I believe, as do other speakers, that the driving force at the baod of all nationalisation (so as it is riot. as the noble Earl, Lord Halifax, said, a hangover from the past—and that it very largely is) remains in large part the desire to dispossess and to attack those now in control. Moreover, almost every Government function such as the ones I mentioned earlier, seems to most people prosaic or uintelligible. All that Sir Stafford Cripps has to deal with is, I think, largely unintelligible to the ordinary voter—and perhaps I might even go higher than him.

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  But taking over hundreds of companies and destroying a great organism such as the steel industry, over which the Government already possess all the control they ought to need, and dispossessing the owners—that is something real. You can see what you are doing. No difficult problem arises like foreign exchanges. Such action as nationalisation has an appeal to various motives—some of them not too magnanimous. But in this case it is immensely destructive.
  May I refer briefly to one further argument, perhaps the most common and the most seductive to the average voter? It is common to say to him, "Do you want steel produced for profit or for use? Do you want it to be the interests of the whole community or of a few shareholders? Do you want it produced by the people, in the form of a National Board, or by steel-masters?" Of course, his answer is likely to be, "I want to see steel produced for the community." But the questions are in fact meaningless: everything is produced for use. Take a farmer: what does he do? He produces for use. Of course, he must make a profit sometimes and he must make a loss sometimes. If he goes on making a loss he will stop producing. It is exactly the same with a steel company; all steel companies produce for use. They produce to sell. We all know what they do with the produce: they purchase raw materials, pay taxes and build up reserves. They also remunerate all their partners. All are partners in the business —wage-earners, salaried staff, managers and shareholders. I repeat that all these are partners and not enemies. Dividends are not blood-sucked away from other partners by parasites, any more than wages and salaries are blood-sucked away from shareholders. Dividends are necessary, both to pay shareholders interest on their capital and as a reward for risk. The shareholders must have this reward if there are to be savings, just as much as the wage-earner, and one serious danger in this country is that there are going, to be too few personal savings.
  The Chancellor of the Exchequer has said that a nationalised industry need not make profits. That I regard as a fallacy. A nationalised industry has to earn interest on capital; it has to provide for depreciation and to build up reserves out of undistributed profits, to meet losses and
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  to provide for expansion. Therefore it has to make profits. It may borrow at a lower rate than that at which other industries can usually borrow, but that is only because it has Government credit behind it; and the more Government credit is used and the bigger the amount of Government securities on the market, the lower the credit of the Government will be. The only question of real economic significance which arises is this: Will the nationalised industry produce more and more valuable products at less human effort? All experience is to the contrary. Without competition every institution puts on fat. Competition is required as a spur and guide.
  In this connection I should like to ask the Government a question which I have not seen answered and which I think is a very important one. Can coal or steel Boards, without competition to help them, settle what price they charge for the coal or steel they produce? What yardstick will they invent by which price is to be determined by the National Board? Under competition both price and quality are settled in the competitive struggle. How does a non-competitive industry settle its prices? How does it settle the price of coal? Is it to he partly settled by pressure one way one week, and then by pressure for higher wages from the workers who have the advantage of knowing that they have the taxpayer behind them? But what if American coal is much cheaper for American industry? What if Polish coal can be landed here much cheaper than British coal can be produced? What do the national Board do then? How do they settle price? What is their principle and their yardstick? This is an immensely important question and I have not yet seen an answer to it. It is very easy for a national undertaking to rely on the taxpayer.
  I hesitate to refer to a question which everyone knows about, but I was struck the other day by reading in The Times the report of an interview given by the Minister of Food in Nairobi after going to see the ground-nut scheme. He said:
  "Of course, the original White Paper was only an idea and not a rigid programme."
  Well. I suppose a White Paper may be taken as more or less the equivalent of the prospectuses which private firms have to issue to the public, when they want money. My long experience in that

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  sphere tells me that you have to be meticulously careful that your original prospectus is not just an idea You cannot go back when you have lost the whole of their money and say to your investors, "We have lost your money but it cannot be helped. The prospectus was not really a thought-out thing; it was just an idea." I see from Sir John Barlow's report in the Manchester Guardian, he having just gone to East. Africa, that the idea has cost £25,000,000 at present, is costing £1,000,000 a month and has not produced the ground-nuts, but is going to produce cattle. I raise that point merely to show that, when one accuses the Government of having no elasticity, one is wrong! The Government have great elasticity in the making of losses. These are losses, I might point out, which would have put in the bankruptcy court almost the strongest company in England. As it is, none of us cares about it; but the loss is there all the same, and the taxpayer pays for it.
  I do not claim that there are great disadvantages in nationalising standardised public utilities functioning inside this island, though here I would say that I prefer the American system. No one would suggest that we should go back to private enterprise to post our letters.
  A NOBLE LORD: Why not?
  LORD BRAND: Because the Government do it reasonably well, at least so far as we know. It might be done much better—I do not know. But, when we come to the more industrial undertakings of the Post Office—for instance, telephones—anybody who has experience of the American system knows that the American telephones are infinitely superior to those here. That may be due to handicaps about which I know nothing, but I take the facts as I know them. Much more is known also, in my opinion, by the public about the operation of the American Telegraph and Telephone Company—that enormous company—by its publications than is known about the operations of the telephone department of our Post Office. The American Telegraph and Telephone Company controls 80 per cent. of the telephones in the United States. It owns some 25,000,000 telephones. Although the company is more or less a great monopoly—though it has competition--it is kept in order by the supervision of the Federal Govern-
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  ment, and by the franchises and regulations of all the State Governments. I believe that the Department of Justice is in fact bringing an action against the company under the Anti-Trust Act. Why cannot we follow this example of dealing with great industries? Why cannot the iron and steel industry he left as it is with such expert control as exists now? The Government should be regulating such industries and not owning them. My own view is that it is wrong that the Governrnent should actually o n the competitive and exporting industries of this country. If we were a closed economy, if we needed no exports and had no dealings with the outside world, if we did not mind living in a bureaucratic State with a comparatively low standard of life, we might nationalise steel and many other things with much more equanimity than now. But we are at the opposite end of the Pole. We must have low costs to export. We must see that the nationalised industries produce as low as, or even lower than, private industry.
  How shall we do it? How are the Government to control this vast complicated industry, many of their products entering into the export trade? Who supposes that the British Government themselves can become exporters and salesmen of the enormous number of products produced by the steel industry? I must confess that, as I have listened to the debate in this House, I have asked myself, as many others may have done, why we are discussing this Bill at all. Is this the moment when vie can throw into confusion our greatest industry? Are the Government so unburdened with problems that they can add another one to their back which is already breaking under the strain? What has this Bill to do with our real and frightening problems? Nothing except to add to them. We want to become less rigid, not more rigid we want to liberate the natural energies of free enterprise, in co-operation where necessary with the Government, not bind them still more, by full Government control. The Chancellor of the Exchequer was right when he said that the circumstances to-day are not those of 1931. They are much more dangerous. To my mind, the circumstances of our nation, of our 50.000.000 people living on this small island, are such that we can live only by giving free rein to all the native energies of the population, and that

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  we can keep costs down only by competition. Our problem cannot he mastered at all if we think, as this Bill does, in terms of concentrating all authority and energy in Whitehall, or in Boards subordinated to Whitehall.
  5.46 p.m.
  LORD PAKENHAM: My Lords, noble Lords have, very properly, if I may say so, in a most interesting way taken the opportunity of affirming their fundamental convictions on a great number of matters, some closely related to the Bill which we are discussing and some a little more remote. I think we have all enjoyed the speeches that have been made. Like other noble Lords on this side, I always follow the speeches of the noble Lord, Lord Brand, with particular attention. If I may put it this way, we are attracted by his long record of public service, by his intellectual elevation and by his charm and style. But I am afraid that we decline to accept him, as he is sometimes accepted by noble Lords opposite, as immortal and infallible. In our view, noble Lords opposite are inclined to regard him as a village cricket team might regard their umpire whom they take round to local matches and upon whom they can rely at critical moments to raise his finger against the opposing batsman. Sometimes I am bound to say he raises his finger before there has been an appeal, as in the case of food subsidies and the health services, which noble Lords opposite have not openly opposed: but in this case the appeal has been most vociferous and the noble Lord has raised his finger in a magisterial manner.
  Before replying with care, though briefly, to the remarks of noble Lords, may I turn with equal brevity, in view of the hour, to one or two other speeches that have been made? The noble Lord, Lord Rennell, sang what might be called the "last song of Liberalism." It was a fine dirge which Mr. Gladstone, if he had been present, would have applauded; but few of us on this side could relate it to the Bill. May I turn to the noble Lord, Lord Woolton? There is one thing that I do accept from him, as we all do. He asked us to believe that he was passionately and sincerely opposed to this Bill. I am sure we all recognise his passion and sincerity in regard to this
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  Bill but, if the noble Viscount, Lord Cecil of Chelwood, is going to rebuke some of the speakers on our side for being rhetorical—and if we were not rhetorical he was inclined to pack us back to the lecture room at Oxford!—I feel that the noble Lord, Lord Woolton, comes under the most severe censure, because his remarks would undoubtedly have been received with resounding cheers by a large gathering of Conservative ladies in the Albert Hall. No one will question that, and why should he be ashamed of it? The noble Lord is proud of it. I only venture to suggest that he repeats the same speech on the next occasion and does not inflict on them a speech which I know he has in his mind—some kind of detailed examination of the present Bill—because I am bound to say that none of us on this side thought he came at all close to the measure before the House.
  LORD WOOLTON: I think it is a great pity that you did not see the importance of it. I was endeavouring to say that what you are trying to do by this Bill is to ruin England. If you have not seen it, then I can do nothing more.
  LORD PAKENHAM: Perhaps the noble Lord could try once more and could return to the theme on another occasion and explain it a little more closely, and in closer relation to the measure before the House. However, it is not for me to comment on the noble Lord's speeches, because they are his own, as indeed are the speeches of all of us. But in passing I would like, without impertinence, to refer to the speech of the noble Earl, Lord Halifax, in which I think we were all very much interested. It seemed to me that much of what he said related to all kinds of industry, and to many kinds of societies, and he placed his finger on many of the present-day difficulties. But I do not think he said anything particularly damaging to nationalisation. He took the view that the workers of this country were disillusioned about nationalisation. As to that, I will make only two points. I can repeat, in the first place, what the noble Viscount, Lord Hall, said when he pointed to the remarkable fact that the Government had not lost a by-election. If there were this widespread disillusionment, it is curious that it should not show itself at the polls. May

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  I make one further remark on that subject, from personal observation? I am responsible, and have been for the last year, for a nationalised industry—namely, civil aviation—and in civil aviation I find the greatest possible keenness. I have moved about from one place to another and indeed from one part of politics to another, and I think I can say that I have never found anywhere such enthusiasm and fervour as is found in civil aviation, which is a nationalised industry. I can only offer that personal remark to the noble Earl.
  May I now come to the general arguments for and against the Bill? I will not argue to-day the general case for nationalisation against private enterprise. There may be an opportunity, if it is desired, to go into that during the general economic debate on Monday. I think noble. Lords opposite sometimes seek to prove too much. They are inclined to seek to prove that nationalisation can never work, and they seem to assume that we believe that nationalisation will always work. Of course, we assume no such thing. We study it in relation to each particular industry. That was why I ventured to interrupt the noble Lord, Lord Woolton, to ask about the quotation from the Lord President of the Council, because I feel sure that he has in no way changed his ground. I naturally cannot place my finger on the particular words he used on that occasion, but from something that the noble Lord, Lord Rennell, said, I take it that the remark quoted was a statement by the Lord President of the Council that nationalisation in relation to any particular industry would be regarded as a matter of efficiency, or words to that effect; that each industry would be approached on its merits. The noble Lord, Lord Woolton, was under the impression that the Lord President had said that an industry would not be nationalised if it was efficient already. Of course, it could be nationalised if, by nationalising it, it would be made more efficient. I am seeking to clear that point up and to emphasise that we still stand on what the Lord President said—namely, that efficiency must always be taken as the test.
  I would like now to come to the remarks of the noble Lord, Lord Brand. They seem to suggest that he is still under
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  a misapprehension about the kind of nationalisation we are introducing. I am bound to say that he did not seem to be under quite so fundamental a misapprehension at this stage as during the Second Reading, when he talked about the Government themselves conducting the industries. But even to-day, if I understood his words right, he was asking the House "Suppose, For instance, that the Government themselves become exporters and salesmen." So I feel he is under a misapprehension that the Government themselves are proposing to run these industries.
  I should have thought that those of us who had participated, whether vocally or silently, in the discussions on this Bill—and I know the noble Lord has been with us at times, and I am not suggesting the contrary for a moment—were all pretty clear that the Government have no such purpose in view; that it should be the Corporation that runs his business and the Government or Minister responsible will make sure that the business is run in a way that conforms with the public interest. I beg the noble Lord, Lord Brand, to disembarrass his mind of that particular misconception.
  I challenge the suggestion that nationalisation is necessarily and particularly unsuited to competing in export industries. In spite of what at has been said about the coal industry—and I do not consider it was very accurately said—I do not think anyone in this House seriously believes that we ought to go back on the nationalisation of coal or that it was wrong to nationalise coal at the beginning. It has never been seriously put to us in this debate from the other side, although they may be pointing to difficulties which they feel have arisen. Whatever may be said about coal, civil aviation, if I may go back to my awn industry, is very competitive indeed. You could not get a more competitive industry and I do not think anybody seriously suggests—though I do not quite follow Lord Brand's line of thought about it—that you could hand over civil aviation to private enterprise.
  We try to apply the test of efficiency in each particular case, and when we come to the iron and steel industry there are a great number of arguments and very many ways in which the same argu-

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  ments can be stated. I would select for the moment three arguments and try to develop them briefly, alongside the reply, so to speak, that the noble Lord, Lord Brand, was giving us to arguments that he had formulated on our behalf. First, there is undoubtedly an argument that may be called political. I entirely agree with the noble Lord, Lord Lindsay, that there is nothing disreputable in a political motive. We are all politicians here, or trying to be, and therefore I do not see why we should be censured for entertaining a political motive.
  But I would mention three arguments for the Bill, and the first I would call political, not in the sense that we are out to grab power for some disreputable purpose of our own, but in the sense that the political reason springs from a particular political phase Under this political heading we believe that national prosperity depends upon national planning, and that no coherent national plan can ever be guaranteed while the far-reaching key industry of iron and steel remains the property of private enterprise Noble Lords may think that, taken by itself, that is an argument which does not bear closely on the efficiency of the iron and steel industry, but I mention it as one of the arguments which we take together in reaching a decision. Secondly (and here we come to the economic reason) we believe that the technical necessities of this particular industry—the concentration, it may be, on the more efficient plants, the countless adjustments between particular interests, the huge reconstruction involved, and various kinds of State assistance—clearly point to the need for unified ownership of the industry in order to make it more efficient. Once you are going to set up a single body that owns the industry, it is unthinkable that that single body should be any single group of citizens; it can only be the people of the country as a whole.
  Now I come to the third reason—and this to my mind is the overwhelming argument, and I hope that the noble Marquess, if I may venture to say so, will reply to this point in particular when he winds up the debate for the Opposition, because I have taken some pains to draft it in the way that seems to me to be most conclusive. There are various other ways of putting it but to me this seems the most conclusive way. This
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  industry, through no one's fault but through the technical nature of the case, is a giant nation-wide monopoly. It seemed to me that the noble Lord, Lord Brand, with his great knowledge of this subject, skated very rapidly over this main point. If I understood him correctly he said, "Do not turn it into another monopoly. Do not let it remain a monopoly at all. Break it up."
  LORD BRAND: I never said, "Break it up." What I said was that you have a Commission on Monopolies and Restrictive Practices and they can consider the steel industry and consider how best it should be run. They can consider what is the best way in which the Government can give their assistance in their share of the regulation and so on, and arrive at a solution where there is cooperation between private enterprise and the Government; to my mind, that is infinitely better than complete Government ownership.
  LORD PAKENHAM: I think the noble Lord referred to the Sherman Law.
  LORD BRAND: Yes, I did.
  LORD PAKENHAM: I am sorry if I misrepresented the noble Lord. I am sure that he knows that I would not willingly do so. His purpose, as I gather, would be to leave the industry as a monopoly and to relate it in some way to Government control.
  LORD BRAND: I do not admit that it is a complete monopoly. I believe there is a great deal of competition within the steel industry. I would not like it thought that I accept the view that it is a complete monopoly. I do not think it is.
  LORD PAKENHAM: And we have no reason to think that there will not be a substantial degree of competition in the future. I was interested in trying to discover what the noble Lord thought about the industry. I gather from what he has just said that he would now turn for advice, before any steps were taken, to the Monopolies Commission. We regard this as a matter—it has been threshed out time and again, and the conclusions which have been reached have been made plain—where the decision must rest with the Government. It

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  would be quite impossible to leave the final decision or the conclusive view to a body of the kind which the noble Lord suggests. And now I would beg the noble Lord, Lord Brand, to follow me closely. I feel that it is just conceivable that, in spite of his life-long antagonism to nationalisation, he may realise that there is a case here.
  If I may digress for a minute, may I say that I remember that the noble Lord once wrote a little book called, The Case against Socialism. The noble Lord has been stating that case ever since in various ways, all of them well phrased; but the point, surely, is that there is no reason whatever in this case to suppose that left to itself the steel industry's pursuit of its private interest would maximise the public interest. There is no reason to suppose that its private and public interest would coincide.
  The noble Lord was critical of those who asked people whether they wanted to produce for profit or for use. He seemed to assume two things which are not necessarily the same. Even if one accepted—as I do not—the noble Lord's view of the operation of the price system, in the best style of Adam Smith, in relation to competitive industry, those economists who taught the noble Lord and myself have never claimed that private interest and public interest would necessarily coincide. The noble Lord, Lord Layton, is not with us so I will not quote him at length, but it is well known that he is an opponent of the Bill. He said: "It is common ground that the industry must obey orders." So Lord Layton is under no illusion that the private pursuit of the industry's own interest and the achievement of the public interest would necessarily coincide. Without labouring, the point further, I think we all agree that there is a necessity for a considerable degree of State supervision. The only issue is between a privately-owned and a publicly-owned company, both in any case supervised by the State. That is the only issue between us, and I hope that when he speaks the noble Marquess will confirm that that is so.
  But, my Lords, when we talk of control or supervision in this case, we are not talking merely of the kind of control or supervision which is extended to many
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  private industries at the present time. Inevitably, it goes much further than that in relation to the general plan, though, as we have explained so often, there is no question whatever of interfering in the detailed management. The Iron and Steel Federation have pointed out in an excellent booklet the merits of what they call the recent system under which, in their words: "the broad policy decisions were made by a public Board responsible to the Minister." They applaud that system. But once you go so far as that you cannot stop there. The system of control through the Iron and Steel Board was always regarded by the Government as temporary and transitional. For what it comes down to is this; in the last resort you can exercise a negative control over some else's property, but you cannot exercise a positive and creative and continuing influence over some one else's property.
  As my right honourable friend the Minister of Supply has emphasised from the beginning, under that system the industry and the individual producers can be told what not to co and, in most matters, what they must do. That situation is unavoidable so long as control and ownership are in separate hands. No controller—perhaps the noble Earl, Lord Dudley, will support at any rate this fraction of the argument—ean ever order an owner to spend money which he does not want to spend, even where it is essential in the national interest that he should do so. Therefore, once you carry control to the point where main policy decisions are to be made by a body responsible or responsive to the Government, you are forced by every logical and technical consideration to go further. When control reaches this point you can no longer divorce it from ownership.
  I therefore say that this is the main argument for nationalising the iron and steel industry—though there are a number of other arguments which have been put by my noble friends far more forcibly than I could put them. You have got to carry control a long way, and once you go so far as that you are conferring responsibility upon the Government which they can discharge effectively and adequately only if ownership is transferred to the hands of the community at large and the Government are allowed to act unimpeded in discharging their duties as a national trustee.
  VISCOUNT ADDISON: My Lords, before the noble Viscount who is due to speak next rises, may I intervene to say a word as to the course of our proceedings this evening? There is a considerable amount of Business for the House to get through after this Bill has been dealt with. It has therefore been arranged, I believe to meet the general convenience, that the House will adjourn for an hour at 7.30 p.m.
  6.10 p.m.
  VISCOUNT CALDECOTE: My Lords, I have hesitated very much to take part in this debate at all, and my hesitation has been much increased as a result of listening to the speeches which have been made this afternoon. I promise your Lordships that I will be brief. The noble Lord, Lord Pakenham, has said that we are to judge this matter of nationalisation not on whether industry is inefficient now but on whether it will be more efficient after nationalisation. That, I am sure, is the real question. Surely the first thing that is essential to increase efficiency is that there should be harder work by all concerned, with more, not less, initiative. If noble Lords opposite think that under nationalised industry there will be more hard work done and more initiative displayed, I am sure that anyone who has had any experience of the Civil Service, or of any Government controlled concern, will not agree with them.
  The next essential is that there shall be quick and good decisions. The same men, so the Government hope, will be in control after nationalisation as are there now. Presumably they will be no better, because there is no place from which to get better men. What about quickness of decision? Everybody who has had any dealings with Government-run industry will agree that decisions by Departments take longer than in privately-run concerns. So we shall not have more rapid and better decisions.
  The need for good relations between management and men has already been stressed by the noble Earl, Lord Halifax. Surely the most important thing there is personal touch and loyalty from top to bottom and back again. Is it more likely that we shall get personal touch and loyalty when the boss is in Whitehall and the men are in Sheffield, than when, as now, employees can go to the works council table and talk to the boss, and
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  know that he can give a decision now or next week, and not in three months' time, after letters have come back from Whitehall? If we are to have men working happily, there must be conditions to suit all tastes. In a commercial undertaking, when one of the best men leaves to go to a competitor, it is possible to get another man in a few days to replace him. Then we have two men content. But it is bound to happen in the long run in a nationalised industry, whether we leave the firms nominally independent or not, that all the concerns will come to the same conditions of employment, so that a man will not be able to leave one concern to go to another to find conditions where he is happy. So we shall have discontent. Then we need good equipment. The industry is already re-equipping itself according to a plan which the Government have approved. The limitation on that re-equipment is surely not anything the industry is doing, but the physical incapacity of the country to undertake the re-equipment. So there will not be any improvement in that respect. The plan is there already, but the ability to carry it out is not.
  On these considerations, the balance of the argument indicates that after nationalisation the industry will be not only not more efficient but actually less efficient The fallacy under which those who support nationalisation labour is that they believe the wicked steel makers are not to be trusted to do anything in the national interests if it conflicts with their own interests. Surely that is as outmoded as the old Socialist theory that exports do not matter. The steel makers are just as patriotic as the noble Lords on the Government Front Bench. Moreover, the country's interests are surely their interests. If the country goes down we all sink or swim together, and they go down as much as anybody else—perhaps more, since they have more to lose. Another fallacy is that of an omniscient Government—that Government planning is necessarily good planning. Apart from all the difficulties I have mentioned, just because the industry is nationalised planning will not necessarily be, and almost certainly will not be, 100 per cent. efficient. The shipbuilding industry still remembers the time when 2,000,000 tons more steel than actually existed were allocated to it—not because the steel industry unexpectedly failed to produce the

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  steel, but it was never there and nobody thought it would be.
  One can only come to the conclusion that the reason why the Government are nationalising this industry is to hold power, unless it can be—I cannot believe it is, but I have heard it suggested—because the industry is efficient, and will make good profits which may off-set some of the losses on other nationalised industries. I am afraid it is rather a vain hope, but I hope that the Government will take the advice of the noble Marquess, Lord Salisbury, and allow the date to he put back, so that the people may have an opportunity to judge again, in the light of the information that has come forward in the debates in another place and in your Lordships' House. I do not share the view of the noble Lord, Lord Lindsay, who, if I followed him rightly, seemed to think that the people were not qualified to judge the issue. I think they are, and I think they ought to be given the chance, so that if as may well happen—and the Government think it may happen—a Conservative Government repeal this measure the industry may be saved much of the inevitable disturbance.
  6.16 p.m.
  VISCOUNT SAMUEL: My Lords, the House will very soon proceed to a decision as to the passage of this Bill. That decision will necessarily follow from the decision that was taken on the Second Reading. On that occasion, both from the Conservative Benches and from the Liberal Benches, strong opposition to the principle of the Bill was expressed. Nevertheless, it was thought proper that this House should not reject it on Second Reading, but should pass the Bill through its stages with the addition of an Amendment which would ensure that it would not come into operation until after the date of the next General Election. This Bill was not conspicuously before the people at the last General Election; in fact, little was heard of the proposal. Since then, and on its introduction, it has been found highly contentious, it has been strongly opposed, it has received little popular support, and it is right that, with an Election imminent, it should be referred to the opinion of the country. At the next Election it could for the first time become a prominent issue. With these considerations in mind, your Lord-
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  ships passed the Second Reading, and since then the Bill has spent many long days and hours in the Committee and the Report stages. I would pay a tribute to the indefatigable industry during those stages of the members of the Front Opposition Bench and those sitting behind them. Noble Lords on these Benches have also contributed, particularly my noble friend Lord Rennell, who has been untiring in his efforts to improve the Bill.
  The noble Viscount, Lord Hall (I am sorry not to see him in his place at the moment), said that the consequence of this co-operation was that the Liberal Party had been swallowed by the Conservatives like Jonah by the whale. If he had said the Liberal Nationals, I should agree, for in fact that simile has many times occurred to me. Sometimes when I have heard the noble Lord, Lord Teviot, prognosticating in somewhat sepulchral tones, I have remembered that we are told that Jonah spoke from the belly of the whale. But that noble Lord is not aware that the process of deglutition has been completed and the process of digest on is very far advanced. We observe these facts as we remember the similar case of the Liberal Unionists in a previous generation, who were swallowed up and disappeared for ever, and we beware accordingly. I can assure the noble Viscount, Lord Hall, and any others who are interested, that this alliance between the Benches above and the Benches below the gangway is purely temporary and ad hoc, relating only to this Bill on which our views coincide.
  If this Bill is to be referred to a General Election, it is right that this House, performing its functions as a revising Chamber, should make it as good as it can make it, in order that, if the people should accept the Bill, it should reach the Statute Book in as little harmful a shape as may be. Since the House has taken so much trouble on Second Reading, in Committee and on the Report stage of the Bill, it would obviously be unreasonable to throw it out on Third Reading. But if in another place the Amendments should be rejected, and particularly that which provides for the postponement of the date of the operation of the Bill, then other stages may follow and it may be that your Lordships will then take a somewhat different attitude.

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  It is not merely on the strict merits of this individual Bill that our action is taken. We regard this as a test case in a controversy which has become one of the central issues in our politics—that is to say, whether the nationalisation of our principal industries is a matter not only of ensuring more effective administration in any one particular case, but as a matter of general policy. On two previous occasions I have quoted the declared Objects of the Labour Party, in which they say they regard the socialisation of the principal industries as one of their objects. It is there stated, and that is more important than the observations of any particular Minister, even if he is so distinguished as the Lord President of the Council.
  I understood Lord Pakenham to say in the course of his speech that the Conservatives—I think he included the Liberals —did not regard any nationalisation as legitimate, and that they are against nationalisation altogether as a matter of principle. That clearly is not so—certainly not of the Liberals, and it has not been so of various of the Conservatives. They may speak for themselves, but I would mention, incidentally, that one of the few constructive measures for which they have been responsible during the present century has been the law establishing the Electricity Commission and Board and the Electric Grid throughout the country, a very valuable measure which was one of pure nationalisation. They were responsible, also, in greater degree than others, for the passage of the London Transport Act. The Liberals, for their part, established in years gone by the Port of London Authority in place of the various Companies, and they supported the nationalisation of the railways at the last Election and, in this Parliament. the nationalisation of the mines and the gas industry. Therefore, it is not the case that there is now any Party in this country, as there was in the nineteenth century among the advocates of laissez faire, who reject in principle and in all respects the intervention of the State in industry, or even the ownership by the State of various industries.
  On the other hand, it is the case that the Labour Party have fallen into exactly the same error as the advocates of laissez faire—namely, that of adopting a sweeping generalisation. They have held the
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  view that because laissez faire was wrong, therefore the opposite must be right; and if it is wrong to say, "Nationalisation, never," therefore it is right to say, "Nationalisation, always." That, of course, is an obvious fallacy, but they are slipping down that slope. It is that that we regard as the great danger of this Bill, because it is the first time that this difference of principle emerges clearly into the open, and it is the first instance where it is quite evident that the claims of abstract economic theory clash with reality.
  VISCOUNT ADDISON: I hesitate to interrupt the noble Viscount. I have been following him as closely as I could, as I always do. What is the difference of principle to which he refers?
  VISCOUNT SAMUEL: I am afraid I must have been very obscure, although I try not to be I have said it three times over. The difference of principle is that in the Objects of the Labour Party it is stated that they are aiming at the socialisation of the means of manufacture, production, distribution and exchange. That is stated among the prime objects for which they exist, as a matter of principle. My assertion is that they are endeavouring to apply this principle, in spite of the fact that harm may be done to the particular industry and to the country. On the other hand —I cannot speak for the Conservative Party—the Liberals hold that each case must be judged upon its merits. We do not hold the principle of laissez faire, that never should any industry be nationalised; nor do we hold the principle that all industries should be nationalised sooner or later. Perhaps in defining the Objects of the Labour Party I ought to have inserted the words "sooner or later," because they are not suggesting that it ought to be done all at once.
  Now we hold that the time has come to call a halt. We have passed during this Parliament several large measures of nationalisation, in particular of the mines and transport, and we see in various directions grave difficulties arising as a consequence. In our view, the country ought to wait before it proceeds further, until it has found a way to solve those difficulties and until it is assured that the principle that has been followed in the nationalisation of these industries

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  is a practical, sound and workable one. We would make an exception in the case of the water resources of the nation, because those are in the nature of a natural monopoly. But, apart from that, we should be very chary of supporting new measures for the nationalisation of industries until the country sees more clearly where it stands and how the great difficulties that have ensued may be overcome.
  But it is not so with the Labour Party. I never attach importance to the "thin end of the wedge" argument, which has been used and abused to oppose every useful reform that has ever appeared. The Labour Party, however, have made it quite clear that this is not merely the thin end of the wedge, because a very large part of the wedge has been driven in. They are waiting for opportunities to press it in very much further, and are now engaged in making a selection of more industries to be included in their programme for the next Election. We cannot yet discuss that, because the selection has not yet been made, hut we cannot forget that in the Labour Party programme for the Election before last, in 1935, they included the nationaliation of the joint stock banks. We cannot ignore the fact, also, that an active Socialist Government in Australia have, in fact. passed a law to nationalise their banks, in the face of great opposition. As to that, it would be improper in this House to make any comments.
  The Minister of Fuel and Power, Mr. Gaitskell, at a meeting, I think at Folkestone, a year or so ago, was asked whether the Labour Government were going to nationalise the motor car industry, and he replied: "Not at the moment." In The Times of yesterday I read—and this is not an action of the Government, but an action by one of the principal trade unions in the country—that:
  "The Amalgamated Union of Building Trade Workers at its Conference at Bridlington passed a resolution calling for the full nationalisation of the building industry and for the immediate setting up of a State building corporation."
  It remains to be seen whether the Government will endorse that, but when a powerful trade union like that considers that an industry so organised as the building industry is a suitable one for nationalisation, we can see how grave the situation is and may become.
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  Now all this must give a sense of insecurity to British industry as a whole. They do not feel that they know what will happen in the future. Those who are responsible for deciding upon long-term investments and developments—they always have to face risks, and in the present state of the world the risks that have to be faced by those responsible for large industries are very great—must ask themselves: "Why should this unnecessary risk be added to all the others?" Able young men of character and capacity who are thinking of devotirg their lives to the world of industry may well hesitate if they think that in five, ten or twenty years the w hole of their work may be cut away at the roots. My noble friend Lord Lindsay said: "Oh, well, this Bill is making the best of both worlds. It continues what is good in private enterprise, and combines with it what is good in State control."
  LORD LINDSAY OF EIRKER: May I be allowed to say that I have had a good deal to do with young men in the past, and I have never come across that before.
  VISCOUNT SAMUEL: No, because it is not so prominent as it will become when one industry after another is nationalised, and one trade union after another passes resolutions to say that they ought to be nationalised.
  LORD LINDSAY OF BIRKER: That is prophecy and not a statement of the facts.
  VISCOUNT SAMUEL: I do not say it exists at the moment, but it is something looming in the future if the principle is accepted. The noble Lord said that the Government were combining in this Bill the best things in both systems. But I am afraid that he is unduly optimistic if he thinks that it will be possible in the steel industry, when this Bill comes into operation—if it does—to secure that genuine private enterprise which has existed hitherto. It does, not matter what name is put over the shop front; what matters is who has control of the finances. When all the stock is made a common stock and issued by the Government, then you will no longer have the possibility of the same degree of adventure and enterprise that you had when private enterprise largely prevailed.
  The noble Lord, Lord Pakenham, said: "But surely this was in the nature of a

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  monopoly." We have dealt with that in the previous stages, and for my part I do not want to repeat myself. I would urge, however, that if there are fields of monopoly in this industry they ought to be brought out clearly and on sound authority by the Government's own procedure, which they embodied in the Monopolies Act of last year. They passed that Act for that very purpose and now, while applying the Act to a number of other industries, they leave out the steel industry. The noble Lord said it is well known that it is a monopoly. It is not well known at all. The facts are very obscure, and need bringing out. The noble Lord also said that the Government could not divest themselves of their responsibility by putting the final decision in a great matter of this kind, vital to the interests of the nation, in the hands of any Commission. That is not proposed, but it is proposed that there should be an inquiry into the facts of the industry and the possible alternatives, whether by a Bill such as this or by other alternatives which might be found and which might be acceptable to the industry.
  My final point is this. Perhaps the greatest danger of all of pursuing this policy of nationalisation step by step to the end is that the State becomes more and more the sole employer of labour. There is always disagreement between labour and capital in all countries. There is a continuing effort on the part of labour to better their position, and it is very healthy and right that it should be so. But when the Government become the sole capitalist, then—and this is the danger—opposition to the employer becomes treason to the State. We see the consequences in Russia, where not only are the political institutions in the hands of an individual or a group, but the whole economic system is in the hands of the same group. We see how the rights of the trade unions are of no account whatsoever, as evidenced by the recent clash in Berlin between the Russian administration and the German railway unions. That is the great danger which faces us. It is therefore from that point of view that this situation becomes more dangerous in the long run to labour than the system of private enterprise in its modern, remoulded form, with adequate controls by the State to protect the just interests of the workers. That is not the
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  purpose of this Bill. This Bill is nationalisation naked but, I think, occasionally ashamed, and we on these Benches are against it.
  6.36 p.m.
  THE MARQUESS OF SALISBURY: My Lords, the noble Viscount, Lord Samuel, who has just sat down began with a religious parable of the story of Jonah. I do not want to pursue him very far on that ground but in fairness to National Liberals I would like to remind him that Jonah has been handed down to us as essentially a prophet, a far-sighted man looking ahead. Jonah came out very much better from the story than some others who could be mentioned. Even now I do not lose all hope that the noble Viscount may come round to Jonah's point of view. However, that is not the purpose why I have made so bold as to address your Lordships.
  I rise not to say anything new (the ground covered by the debate has been so wide that I doubt whether there is anything which has not been said) but to summarise briefly the main arguments which have been adduced during the afternoon's discussion. I think it will be generally agreed that it has been a remarkable debate, and I hope that it will be widely read and digested, not only inside this House but outside. Indeed, I imagine that, although it may not have convinced them, it has impressed even those noble Lords who are sitting on the other side of the House. In the earlier discussions on this Bill, on the Second Reading and during the Committee stage, we were concerned mainly, as was natural, with the actual provisions of the measure. But I think we have all been conscious throughout that there have been far wider issues involved than the mere details of any individual measure, however important those may be. We on this side of the House have been mainly concerned to see that the iron and steel industry is made as efficient, as productive and as harmonious as possible. We believe that that is important, not only at any time, but especially at the present moment when, as the noble Lord, Lord Brand, has warned us, there is rapidly approaching as severe an economic crisis as this country has ever had to meet.
  The Government, on the other hand, so it seems—and I have listened very care-

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  fully to all that has been said—are not really concerned with the economic aspects at all. It is perfectly true that the noble Viscount, Lord Hall—I do not want to misrepresent him—said in passing, in the speech with which he opened the debate: "The efficiency of an efficient iron and steel industry is absolutely essential." But neither he nor any of the other spokesmen of the Government have given the slightest indication throughout all these discussions as to how nationalisation is going to further that end. Moreover, if the noble Viscount, Lord Hall, said that to-day, he said something else on the Second Reading of the Bill. I have already quoted the passage once to your Lordships, and perhaps you will allow me to quote it once more. The noble Viscount said:
  "I am not going to base the case which I shall submit to you on the question of the efficiency or otherwise of the industry."
  We must therefore assume that increased efficiency is not the main reason behind the introduction of this Bill, and we must assume equally that to the noble Viscount himself, and to his colleagues, the issue—as I think the noble Lord, Lord Lindsay quite frankly said—is mainly political. I agree with the noble Lord, Lord Pakenham, that there is nothing disreputable about an issue being political; but it is very important that we should realise where we stand, and we know that it is political—that has gradually been coming out throughout the Second Reading, the Committee and the Report stages. It is, therefore, over that aspect in particular that our main discussions have been ranging this afternoon.
  LORD PAKENHAM: Whether one chooses to call a particular reason political or economic is a matter of terminology. But the Bill, in fact, seeks ultimately to raise the standard of life of the British people—whether the noble Lord chooses to describe that as political or economic.
  THE MARQUESS OF SALISBURY: I am coming to these points as I go along. This political aspect is, of course, vital because it raises the whole question of what we mean by democracy. No doubt we all have our own ideas of what democracy means. Lord Lindsay said that when I spoke of democracy it filled him with suspicion. I do not quite know why;
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  I asked hint why, and he gave no answer. Actually, I consider myself, like many other noble Lords on this side, a very Rood democrat. Indeed, I have been three times elected by the democratic electorate of a constituency, which I believe is more than the noble Lord himself can say. In any case, what I mean by democracy cal be quite simply described: it is exactly the same as what Abraham Lincoln meant:
  "Government of the people, by the people, for the people."
  It means that the people—all sections of the community—should be allowed to manage their own affairs, economic and otherwise, in their own way, so far as is consistent with the welfare of the community as a whole. I gather that that definition receives general approval. But to my mind it is perfectly clear that the Government, by my definition of "democracy," are not democratic at all.
  The noble Viscount, Lord Hall, in an earlier speech described economic democracy and nationalisation as the same. To the noble Viscount, therefore, democracy means Socialism in its most complete form. It means, as the noble Lord, Lord Rennell and the noble Lord, Lord Brand have pointed out, the end of all private effort and of private initiative on any considerable scale. It means the centralisation in the State of all our main activities. Now that is the policy of the Government, as. I understand it from what they have sail and are saying on every platform in the country; if they have their way that is the process that will continue until all these main activities have beer absorbed into the State machine. I do not say that every little shop will be shut down, and every tiny business absorbed, but the main activities of our great industries are to be so absorbed. To such an idea as that we on these Benches, like the noble Viscount, Lord Samuel, and those who support him, are unalterably opposed—not, let me say to the Lord Lindsay, from any doctrinaire prejudice but for severely practical reasons.
  We believe that the result of the wholesale socialisation of industry would be, not the management of industry by the infinitely varied ingenuity of free men but the substitution for them of a dictatorial, standardised, unimaginative and horribly expensive bureaucracy. That is

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  what we believe it would mean. Indeed, that is already happening to some considerable extent in both the coal and the railway industry at the present time. I am not sure about the position on the railways, but in the coal industry losses have been made and yet the price of coal is going up; and certainly the price of travelling is steadily rising. Lord Pakenham spoke with immense satisfaction of the position of civil aviation. He said he had never seen so much keenness, or men so happy. But my impression is that civil aviation is going to cost the country a considerable number of millions this year. If the noble Lord can contradict that I shall be glad to listen to him.
  LORD PAKENHAM: As the noble Marquess has challenged me, the answer is that losses are steadily dropping. If he wishes to discuss civil aviation and cares to stop for the next debate before the House, we shall no doubt be able to go into all these matters.
  THE MARQUESS OF SALISBURY: The fact remains that there is a considerable loss on the operations. Now, if the economic effects of this revolution (for I can only call it a revolution, if a gradual revolution) are likely to be deplorable I should have thought that the social effects are likely to to be more formidable. To listen to the noble Viscount, Lord Hall, one would gain the impression that under this new dispensation the coal miners, the railwaymen, the gas workers and the rest were controlling their destiny as never before. But, in fact, as all the workers in those nationalised industries are increasingly finding out, all they have done is to exchange one employer for another —and one more rigid, remote, and unapproachable than the other was. The gap between employer and employee today in these great monopolies is far wider than in the past.
  There are, moreover, many other disturbing results from the present developments, to which earlier speakers have drawn attention—I do not want to go into them at length, because time does not permit. There is the extravagance of administration, which has been referred to by more than one speaker; there is the dislocation of industry at a moment of great economic peril, mentioned by Lord Brand; there is
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  the inefficiency of nationalised industry, mentioned by Lord Woolton. I think that Lord Pakenham challenged Lord Woolton on a quotation of a speech by the Lord President of the Council. I now have the quotation. This is what the Lord President said—it was in a speech made in Leeds in 1945:
  "Mind you, nationalisation is no magic cure; it is not an end in itself. It provides the conditions, and the opportunity."
  No doubt the noble Lord will fully agree with that
  "The test of success will be whether these industries will be better run, whether they show a steady increase in technical efficiency and public spirit from the top to the bottom."
  The noble Lord accepts that, I trust. But there is a corollary. If these industries do not show that efficiency, what happens? Are the Government then ready to denationalise them? If the Lord President's argument is an accurate and correct interpretation of Socialist doctrine these industries, if they do not show themselves more efficient under nationalisation, ought to be de-nationalised. No doubt the noble Viscount the Leader of the House would like to deal with that point.
  VISCOUNT ADDISON: I am not objecting, but I will deal with it later.
  THE MARQUESS OF SALISBURY: It was because Lord Pakenham raised the question that I was putting the point to him.
  Next, there is the question of the inhumanity of these vast monopolies and the frustration and distrust of the workers to-day, which was mentioned by my noble relative Lord Cecil, and there is the further danger of definite class friction which was mentioned by the noble Earl, Lord Halifax. All these are formidable features of our present national situation, but I do not propose, if the House will forgive me, to go further into them because the hour is now late and they have already been brought to the notice of the House. There is, however, one particular point which has already been mentioned by the noble Lord, Lord Woolton, which I should like to re-emphasise. I am almost relieved that the noble Viscount, Lord Hall, is not here because I am afraid that to him it is rather like a red rag to a bull. I want to re-emphasise it because it is a result of nationalisation which was cer-

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  tainly not in the minds of the electorate in 1945. It has emerged, as the result of our practical experiences, only in the last four years. It is this. The intervention of the State as an active participator in industry is already leading, in my belief and in the belief of many others, to the destruction of the whole balance of the structure of industrial relations in this country.
  Before the advent of State ownership, such a balance had been successfully achieved. I do not say that it was an ideal balance, but on the whole it worked. There were three elements—this is all very elementary for your Lordships, but I would remind you of them—in this industrial structure. There were the employers, there were the employees—two bodies who negotiated with each other under an elaborate system of collective bargaining which had grown up over a great many years—and then there was finally the State (that is, the community) who stepped in as an arbiter when the system of collective bargaining was not leading to a satisfactory solution. Broadly speaking, that is the position which existed. The leaders of the trade unions, who represented the men, enjoyed the confidence of those for whom they spoke, for they owed an undivided loyalty to those whom they represented. Can anyone say that is the case now? To-day, the whole position of the trade unions, which are, after all, an essential balance in our industrial life and have the support of all Parties alike, is being tainted and warped by politics.
  When a Labour Government are in power, as they are to-day, the leaders have a divided loyalty—on the one hand, to their own political Party, which in the nationalised industries has become the employer; and, on the other, to the men who have elected them to champion their interests. This dual allegiance—we can see it happening all the time—sways them first one way and then the other. The inevitable result is that they lose the confidence of their followers, and chaos results, in the shape of unofficial strikes, which are becoming an increasingly prevalent feature of our affairs. When an anti-Socialist Government come into power, no doubt the position will be entirely different. The political beliefs of the trade union leaders will lead them always, in the nationalised industries, to oppose the employer-State, which in their minds will be identified with their politi-
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  cal opponents. But even then their impulse will not be the right one, for their views will be dictated by political and not industrial considerations. That, as I see it, is the cancer which is beginning to infect our whole industrial life as a result of the policy of nationalisation. At present, fortunately, it appears to be, comparatively speaking, confined to those industries which have already been taken into public ownership; but with the socialisation of our whole industrial life it will spread and spread and, with its spread, our national unity and our national efficiency will be mortally impaired.
  I have spoken only briefly of them, but those dangers, which have been mentioned either by myself or, much more fully and more capably, by earlier speakers, are the perils which are at the present time grimly opening before us. They are the dangers to which the Government, with what, if I may say so, I can call only reckless irresponsibility, are exposing our country at a moment of acute economic peril. A great deal of harm has already been done, and this Bill, to which your Lordships are asked to give a Third Reading to-day, is likely, in our view, to spread that evil infinitely further. I hope that I shall not be told that I know nothing whatever about industrial relations. That has been said to me before from the opposite side of the House. But, my Lords, it needs no technical knowledge to detect these dangers. They are portents which are patent to every thinking man and woman in the country. In most impressive terms, as I think will be agreed, the House has been warned this afternoon of these dangers by some of the most respected figures in our public life, men who will certainly not be said to be actuated by any unworthy or partisan motive. They have all given the Government a solemn warning, and I believe their anxieties are by no means confined to this side of the House. I wish even now that we could hope that the Government would be guided by what they have said.
  Ultimately, of course, it is only the electorate that can decide the road that this country is to tread. The noble Viscount the Leader of the House suggested, in the last speech which he de-livered to your Lordships on this subject during the Committee stage, that

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  this House, in the action that they have taken with regard to this Bill, had exceeded their proper functions. Honestly, without wishing to say anything provocative, I do not think that that criticism was fair. We have not opposed the Second Reading of this Bill; we have not opposed the Third Reading of this Bill. We have done our very best to amend the Bill efficiently and practically in Committee. I would assure the noble Viscount if he is not already aware of it, that we in this House, on whatever side we sit, have no desire to supersede the electorate. What we can do and what we must do, if we are to justify our existence, is to express our very real preoccupations for the benefit of the electorate, and do what lies in our power to give them the chance to come to their own decision. The Leader of the House, in the speech to which I have already referred, said that the Government:
  "will not accept that this House shall be able to demand a second mandate of the people."
  As was stated by my noble friend, Lord Swinton, on the Second Reading, we do not accept that there has been a clear mandate to the people, even in 1945, for this particular Bill. The Bill which we are discussing now is a very different measure from that which was envisaged at that time. But, in any case, if such a mandate existed, it was a mandate to try an experiment. It was not a blank cheque.
  Now, the position is entirely different. The experiment of nationalisation has been tried in one great industry after another. The results have certainly not come up to expectation and, in the view of many, have been disastrous. In such circumstances, surely it is not unconstitutional for the Second Chamber to give a chance to the people to have another look at this policy, in the light of experience, before yet another great industry, the most complicated and most vital of all, is put into the same straitjacket. Not only do I believe that this House were right to take the course they adopted; I believe that if we had not taken it the country would, rightly, not have forgiven us. We might have expected the Government even to cooperate with us in this most democratic
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  object. Up to now, we have been disappointed in that expectation. We can only hope that, when the Bill returns to another place, wiser counsels will prevail.
  6.59 p.m.
  VISCOUNT ADDISON: My Lords, in the first instance, I would most heartily associate myself with what the noble Marquess said at the beginning of his speech in paying tribute to the general character of our discussion. I think a great deal of it has been rather wide of the mark, so far as this Bill is concerned, but we have had some interesting and thoughtful discourses on the merits or demerits—some real and some completely Imaginary — of Socialistic proposals. However, before I try to deal with some of the points that have been made, may I say a word about the speech of the noble Viscount, Lord Samuel—the kind of speech to which we are becoming rather accustomed? Evidently, he has set himself out to tell the Labour Party what is in its mind. It is exceedingly interesting but, so far as I know, having been intimately associated with the Labour Party now for a good many years, his description of its mind and what its objectives and methods are likely to be has no relation whatever to reality. That is all I can say about it.
  But I could not understand him—and that is why I ventured to interrupt the noble Viscount—when he said that he based his case in opposing this Bill on some question of principle. Then he told us that as a result of his argument the time had come to call a halt. I want to say that that is not a question of principle at all; that is merely a question of expediency or of time, and considerations of that sort. There is no question of principle in it. When the noble Viscount was describing to us the attitude of the Liberal Party on this matter his remarks would have applied just as well to the Gas Bill when it was before us, and even more so to the Bank of England Bill when that was before us. So far as I remember, the noble Viscount did not raise any objection to those Bills, because they were introduced in the early stages —if you like, when the mandate was a little more fresh.
  LORD HAWKE: And the experiment was beginning.
  VISCOUNT ADDISON: But there was no difference in the principle of the Bill —not a bit. Now I come, very shortly, to the question of this Bill. May I just refer to what the noble Marquess said a moment ago about this claim to refer the matter to a second vote of the people, or words to that effect?
  THE MARQUESS OF SALISBURY: That was your expression, not mine.
  VISCOUNT ADDISON: Never mind; it means the same thing. When we have the view of the other place sent up to us on the Amendment which has been put into the Bill prescribing the time of coming into operation of the Bill, if they differ from your Lordships, which I suspect they will, there will, no doubt, be an opportunity of discussing this matter Therefore, I will refrain from saying any more about it at the moment. But I retain the view which I expressed with some emphasis on the occasion to which the noble Viscount has referred.
  I was interested to hear Lord Woolton's speech on the Bill. I wish that he had given the Bill a little more study because he described it as "giving a notice of dismissal"—those were his words—to those who are at present conducting the different industries which make up the Bill. There is nothing of the kind in the Bill—not a word of it. As a matter of fact, we have discussed with considerable good will various Amendments to give a certain security of tenure to those now in office. But of course the proposal that there should be a holding company and that the different concerns should be under separate boards —and for the most part I have no doubt the present boards will continue—is not a question of a notice of dismissal. It has no relation whatever to the Bill.
  I come next to a point which was made by several speakers—namely, that the Bill is political. Of course, it is political. What else could it be? It is what should be our national policy with regard to this industry. That is a political issue. It may be founded upon economic and other considerations, but of course it is political.
  THE MARQUESS OF SALISBURY: I do not want to interrupt the Leader of the House, but it is more than that. The political issue is that all the main industries in this country should morally be
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  in the hands of what they call the people. That has been said both in this House and outside.
  VISCOUNT ADDISON: I have no recollection of that having been said in this House. However, that is not the issue before us to-day. The issue before us to-day is whether it is or is not desirable in the national interest that this industry should be treated in this way. That is the issue. It is not some imaginary evil which the noble Lo-d has conjured up, with many flesh-creeping illustrations, of what may happen in the dim and distant future. That is lot the issue at all. The issue is: Is this the sensible way of dealing with this great industry? That is the issue and it is nothing else, and I refuse to be drawl into the wilderness which the noble Viscount, Lord Samuel, conjured up in his speech.
  Let us look at some of the considerations which have been raised in connection with this Bill, partly in objection to it and partly otherwise. The noble Lord, Lord Rennell, and several other speakers said that this meant the suppression of the individual—"the subservience of the individual" was the expression of the noble Lord. But the noble Marquess drew our attention to the "inhumanity of these vast monopolies." Let us look at that for a moment. My noble friend Lord Macdonald was for many years of his life a miner. He must have been exceedingly careful because is seems that as a hobby he made a record of what he earned under the glorious system of freedom of private enterprise from which we are told we must not depart. Lord Macdonald was working at the coal face for twenty-two years, under the happy system which we are told we ought to continue. In the whole of those twenty-two years added together, he did not receive as much as £2,001 If you divide that up into weeks you will see that it is substantially less than £2, a week.
  LORD CHERWELL: Which is worth £5 to-day.
  VISCOUNT ADDISON: If it was worth £5 to-day he would lot be very rich, would he? But at all events, that is what he had under this system. But that is not the end of it. For various periods, not because it was national policy, not because it was in the interests of the community, but because that particular

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  concern so decreed it, he was without any wages at all. I ask: What about the subservience of the individual in that case? What about the subservience of the individual in this industry as it was years ago within my own personal knowledge? Some parts of it could be closed down at the will of a particular concern and people put out of their homes and left destitute. I do not know what others may think of that, but we do not think much of that system of freedom of the individual. They are subservient to an organisation or a system which does not —and I am not blaming it—by its character take account of public need. For my part, I am quite sure that it was that kind of consideration, that kind of bitter experience, which made the miners so determined that they would have nationalisation of the mines.
  A good many of your Lordships have said that nationalisation of the mines is not doing very well at present. It is not. I am not suggesting for a moment that the production of coal, the price of coal, and all the rest of it are what we should like them to be to-day. They are not. But what sensible, thinking person ever expected that this industry, which has been a disgrace to our community for two or three generations, would be put right in two or three years? I am an old man and I do not expect to live to see it, but if it is put right in twenty years then I think we shall have done exceedingly well. That is the kind of vision which we have got to have. It is very short-sighted, unthinking criticism that is based on the assertion that some of these concerns have their defects now when they have been under public ownership for only two or three years. That is not related to the point at all. I know that we have these miserable strikes, contrary to union advice. But I also have a vivid recollection of the state of the coal industry for three or four years after the last war. I do not forget that; neither do the miners. That was the system which the men resented and to which they will never agree to return. I believe that even the noble Earl, Lord Halifax, though he had not a good word to say for the system of nationalisation, did admit that he thought that if a vote were taken the workers would not vote to return to the system
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  of private ownership. I think the noble Earl said that. I am sure that the workers would not vote to go back to the old system, though it is true that they are not altogether happy with the present system as it is.
  So, as I say, I think it is not fair to contend that because we have troubles in the mines—and I admit that we shall have trouble in the mines—because we are not getting coal in the way that we had hoped, nationalisation has not proved successful. We have the machinery for improving the industry, the machinery for taking into consideration what is in the national interest and particularly what is in the interest of each different local concern in the industry throughout the land. It is even more important that those kind of considerations should apply to iron and steel. The noble Lord, Lord Lindsay of Birker, gave us a very interesting and thoughtful speech on this aspect, and I hope that many of your Lordships swill read the report of it. He pointed out that there are all kinds of ways which can be employed to bring about improvements: we have not by any means as yet found the completely right method by which national control should be exercised.
  Do not let us forget that behind the scenes in this industry there has been for many years a large measure of central control. Even before the war there were cartel agreements with European producers. Control is not new, but it is true that one method may be more efficient and sensible to apply, say, in the coal industry than, let us say, in the gas industry. I believe, and I say frankly, that I am sure that methods which have hitherto been adopted will be improved upon. We shall not learn how to manage this business all at once. It is an entirely different set-up, a great experiment; but I think that this is the right kind of set-up. It aims at giving national control of the main policy and the production of the industry, and at the same time it preserves the independence and the initiative of the private and individual companies. I dare say there will be mistakes: I think there will be. We should not be human beings if we did not make mistakes. I dare say that sometimes there will be temptation to make too much use of red tape. Behind the scenes I have often contributed what

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  I could to the diminution of red tape; it is a tempting article to provide when dealing with certain matters. There may well be mistakes, but the central idea is that there will be direction of policy and of the development of the industry, taking account all the time of national needs and at the same time trying to develop—as I hope will be the case— local initiative and enterprise.
  That is the general idea of this Bill and I have not heard a word to-day of disparagement of what is proposed, except general condemnation of Socialism such as we have had from the noble Lord, Lord Brand. He always condemns Socialism; we are used to it. But apart from general condemnation of the Socialistic method I have heard nothing disparaging of the method proposed in this Bill.
  LORD BRAND: I do not wish unnecessarily to interrupt, but may I ask the noble Viscount one question? It is with regard to each of the existing boards. Will they finance themselves independently or do they look to the Government or to the Corporation for their money?
  VISCOUNT ADDISON: The shares of the concern, as the noble Lord knows, will belong to the State.
  LORD BRAND: I mean future finance, when they want money.
  VISCOUNT ADDISON: I have no doubt that sensible arrangements will be made with the Steel Corporation whereby the ordinary finances of the concerns will be dealt with—surely there is nothing to be hilarious about in that. If they did not make these sensible and practical arrangements they would be very foolish people. But hypothetical questions of this kind are neither here nor there. These boards will pursue their business, so far as can be, on separate independent and progressive bases. Any sensible man who had been a member of this Corporation for a week would, I am sure, have addressed himself to dealing with the very question which the noble Lord, Lord Brand, asks. But it is beside the main issue altogether. These really are trivial details. Noble Lords ought to realise that we should not have these pedantic details introduced into a debate on a great issue such as that which we are now discussing on the right way of
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  guiding in the national interest the policy and development of this great industry.
  This is a concrete scheme which is put up in opposition to a control primarily and in the end for personal interest. That is the issue, and that is the issue upon which we stand. I have no doubt myself that in practice, given a fair chance, this scheme in a few years' Lime will be such a success that a number of noble Lords who are now young enough to have a good prospect of seeing that success will ask themselves why they were ever so foolish as to oppose it.
  On Question, Bill passed, and returned to the Commons.
  [The Sitting was adjourned at twenty minutes past seven o'clock and resumed at half past eight.]

  AIRWAYS CORPORATIONS BILL
  Order of the Day for the Second Reading read.
  LORD PAKENHAM: My Lords, I rise to move the Second Reading of the Airways Corporations Bill. In doing so, I should like to express my gratitude to the Opposition for helping us in the way they are doing. I am rot as yet aware what their reaction will be to the Bill, but it seems to me they have shown a wise and generous attitude in enabling us to proceed with it as rapidly as possible, and allowing the Corporations to know where they stand. This is a short Bill and I will therefore ask permission of the House to deal with it fairly briefly, although the issue is important. The purpose of the Bill is simple. It is to amalgamate two out of the three British Airways Corporations—the British Overseas Airways Corporation and the. British South American Airways Corporation. The single issue before the House to-day is whether or not this amalgamation shall take place. As I think is generally known, the amalgamation is approved and supported by the Board of B.O.A.C. and the Board of B.S.A.A., and by the National Joint Council of the civil aviation industry, on which the trade unions, of course, are represented on an equal footing with the managements. It would be fair to suggest that if the companies concerned were operating under private enterprise the merger would go

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  through with the agreement of all concerned. Let me remove any possible doubt as to whether I am influenced here by the opinion of others—I am convinced that it is the right and essential step in the circumstances, and I am hopeful that this House after due consideration will take the same view this evening.
  Let me make another point absolutely clear. The Bill does not in any way, actually or potentially, affect the third of the British Airways Corporations—British European Airways. That Corporation carries on a different kind of business from the two which it is proposed to amalgamate. It flies different types of aircraft over shorter stages. It is responsible also for the internal services of this country where special circumstances arise. So far as it is possible to see into the future, there is likely to be no advantage in merging British European Airways with the other Corporations, and I would underline the fact to-day that the Government has no such intention. British European Airways can go on their way with the good will of all of us and, I may add (though I have been in civil aviation just long enough to touch wood and cross my fingers whenever optimism overtakes me) British European Airways is putting in some particularly impressive work at the present time.
  I feel sure that in discussing the proposed amalgamation of the other two Corporations, we can keep ourselves clear of Party politics. So far as I can see, no moral or political issue is involved. As I said, it is simply a question that might arise between two private companies as to which is the most efficient way of conducting the business. In so far as a Minister in my position might be supposed to start with a political bias, it would probably be in favour of maintaining a status quo and avoiding the necessity of asking for an important amendment of the Civil Aviation Act, 1946. But it was made plain at the time the Civil Aviation Act was passed that there was nothing sacred about the number of three Corporations, nothing immutable about that arrangement, and the House I am sure shares the view of the Government that if, in the light of circumstances, it seems that the arrangement should be modified, it is our duty to come down to Parliament and ask for permission to modify it.
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  Towards the end of last year, when I had been Minister for a few months, I went thoroughly into the problem of the amalgamation of two or more Corporations. I reached the definite conclusion, from which I have never receded and in relation to which I have never wavered, that British European Airways should be left as they were, but I was much more doubtful at that time about B.O.A.C. and B.S.A.A. I ought to say at once, and I am particularly glad to say it in the presence of my noble friend, Lord Lindsay, who deals out praise and blame impartially to his own side and others, that I am no blind fanatical amalgamationist. You can very often find reasons, as you can in this case, for an amalgamation between companies undertaking comparable work; you can usually point, as you can here, to some overlapping of functions at headquarters and elsewhere, and to economies that could be effected if this overlapping were eliminated. You can often point to the advantages of a more coherent and systematic structure.
  On the other hand, my Socialism owes quite enough to Mr. G. K. Chesterton, Mr. Hilaire Belloc and my old tutor who sits behind me, the Master of Balliol, to be aware of the dangers of bigness. I am quite aware that the optimum unit may not be the most efficient or most socially desirable unit in various ways; and I am aware that you do not inevitably improve a coupie of "good shows" by throwing them into one. In short, it is in my view a practical matter that has to be considered on its merits in each particular case as it comes along. I would make it plain that at the beginning of the present year, after studying this question for quite a little while, I had an open mind about the ultimate future. But I was quite clear that the balance of argument in favour of amalgamation, if it existed at all—as many thought—was far more than offset at that time by the disturbance that would be caused at a moment when a great deal of reorganisation was going on, and by the fact, which weighed heavily with me at that moment, that the board of B.S.A.A. were strongly opposed to a merger. I therefore decided definitely against a merger at that time.
  That situation was rapidly changed by the loss of "Star Ariel" in January of this year. The House will remember

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  that after a most searching inquiry, undertaken by the greatest of all experts on aviation, the noble Lord, Lord Brabazon, which left the cause of the disaster unexplained, it was necessary to withdraw from passenger service the nineteen Tudor IV aircraft, four in service and the rest nearing completion, on which B.S.A.A. were relying for all their future plans until the big flying boats and the De Havilland jet planes—the Comets —should come along in 1953 or thereabouts. We were confronted then—I want to put the House into the situation with which I was confronted—with a problem of replacing by the most economical means the capacity lost by the withdrawal of the Tudors. It was a very troublesome problem, as noble Lords are aware, although one honourable member in another place, usually particularly thoughtful and well-informed, seemed to think— whether he was speaking seriously or not I do not know—that all I had to do was to show a little initiative and "winkle" (that was not his expression; it is mine but it conveys his meaning) a few extra British aircraft out of my friend the Minister of Supply. There were and are, in fact, no suitable British aircraft which could be made available in time to restore the services and meet the planned expansion.
  Reviewing, therefore, the new situation —first, the original arguments for and against amalgamation; secondly, the fact that it was no use trying to avoid a disturbance, because the disturbance had already occurred; and thirdly, the aircraft problem as it now presented itself—I had little doubt that the case for amalgamation was now overwhelming. And this is a very significant fact: I found that the board of B.S.A.A.—who were, of course, represented by the chairman in his dealings with me—who had previously been opposed, were now clearly in favour, and that B.O.A.C. agreed with this view. Having secured the approval of my colleagues in the Government, I announced in this House on March 15 our intention to introduce legislation to bring the amalgamation into effect.
  Why am I so certain that this amalgamation is the right thing? I will try to explain briefly and clearly, distinguishing between many various pros and cons, one fundamental argument which seems to me conclusive. The beginning of
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  wisdom in the light of the present aircraft situation—because I am not going to dogmatise about the past—is the proposition that the North and South Atlantic must be run by a single company, however much devolution or decentralisation you provide within that framework—and I have no doubt that a good deal is required. Without going too much into detail of past history, experience of the last three years has shown that North and Central America, the West Indies and the Northern Republics of South America can, from the operational point of view, best be treated as one area. They can best be served from the United Kingdom by one or two main arteries, along which all the traffic would pass to a focal point on the other side from which connecting services would radiate. Already, as the House knows, the service to Central America and West Indies is operated via North America, and the experience of the last three years convinces us that both operationally and commercially the most economical method of transporting the traffic on the common Atlantic stage is by the use of a single fleet under the control of one operating organisation.
  This method possesses two clear advantages. I know how difficult it is to sum up the arguments for or against any particular organisation or levelopment, but if I may put it briefly I will do it in this way. First, it provides flexibility in the disposition of aircraft capacity to meet varying incidence in seasonal traffic demands in this area. North American seasonal traffic demand; do not arise at the same time as Caribbean area seasonal demands, and the necessary switches of capacity can readily be made from the resources of a single 11,2,t under a central control. Secondly, and perhaps more fundamental, even apart from the seasonal factor, the use of a single fleet as an alternative to separate fleets of two Corporations enables the capacity available to be put to its maximum use over the common stretch across the North Atlantic. In the result, less overall aircraft capacity, operating, of course, to higher load factors, is necessary. In that way you secure the greatest possible economy in numbers of aircraft and the highest possible earnings per aircraft. Admittedly, as some noble Lords will wish to point out, the route to Brazil, Argentine,

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  Uruguay and Chile is a separate operational task—I am not disputing that—but it represents roughly only a half of B.S.A.A.'s present activities. No one would seriously suggest that that sector forms the basis in itself for a separate Corporation. Indeed, many advocates of the optimum unit theory would consider that B.S.A.A. was already too small. Once it is accepted, as I think it must be, that you cannot, for reasons of aircraft utilisation, separate the North and Central lines, you are committed inevitably, I would submit, to a single management for the whole Atlantic area.
  I pause there, because we are now passing the crucial stage of the argument. What follows from that in regard to the number of Corporations? Two possible decisions could be discussed, but only one surely can be seriously entertained. Theoretically, I admit that I could have asked Parliament to remodel the Corporations in a different way from that now proposed. Theoretically, I could have thought of a different plan. B.O.A.C. has about 19,000 employees, B.S.A.A. about 2,000, and under our existing proposals we are joining the 2,000 with the 19,000 on terms that are approved by the Boards of both. We could instead, I agree—though I do not think the House will wish to pursue it very far—have split the large Corporation, B.O.A.C., from top to bottom. We could have taken its Atlantic or Western elements, a number a long way in excess of the total engaged in B.S.A.A., and hooked together this element and B.S.A.A. to retain the original mystic number of three Corporations. That was the only other conceivable course.
  By so doing we should, I submit, have created far more disturbance than the proposed arrangement and would just as effectively have ended the separate identity of B.S.A.A. Moreover, we should have acted in the teeth of the considered judgment of the Boards of both companies concerned. In the circumstances, would that not have been an inconceivable course? I am sure it would. I hope and believe that nobody will recommend it in this House, 'because I am sure it would have been a very bad course. With that one exception, which in the circumstances I decline to take very seriously, I am sure that the one thing
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  we could do is the one that we have done. We are following out the logic of a single control for the Atlantic area by unifying the North and South Atlantic managements while maintaining the present unity of the North Atlantic and Empire routes; and that means, of course, an amalgamation on general lines such as we propose. In short, in taking this decision we have gone hack to first principles.
  Of course, a great many detailed calculations arising out of the particularities of the aircraft situation had to be worked out. As your Lordships are aware, we have gone some way to fill the gap left by the disappearance from the scene of the nineteen Tudors by acquiring four Stratocruisers which will probably carry as many passengers across the Atlantic as eleven Tudors. It may be said, though not I think by anyone well-informed in these matters, as noble Lords are: Why not give them to B.S.A.A., and why not get B.O.A.C. to hand over to B.S.A.A. some other aircraft? Well, my Lords, if the House wishes, I can attempt in my reply to deal with these points in detail hut, frankly, while those projects would have been most impracticable, the issue really goes deeper. The vital point lies where I sought to place it earlier. In principle, it has become clear that it is better to organise the Atlantic from a single headquarters. I agree that it was differently organised before, for a number of historical reasons which perhaps need not detain us now. It would almost certainly have been wrong, I agree, to disturb the existing organisation, but fate stepped in and effected the disturbance herself.
  VISCOUNT SWINTON: Would the noble Lord elaborate that? If it is fundamentally right to have this new organisation, what has fate to do with it? It is either right or wrong.
  LORD PAKENHAM: If fate had not stepped in, in the disappearance of the Tudors, we should have had a different aircraft situation. We should have had nineteen Tudors which we do not now possess. We should have found that the Corporation of B.S.A.A. were strongly opposed to the change. I do not believe that in these circumstances the noble Viscount, whatever his view

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  of abstract argument, would have considered it prudent to intervene; and that was the view I took, as I explained at the beginning of my speech.
  In the new circumstances it would have been far more certainly wrong, and indeed I personally should have been acutely conscious of betraying not only British civil aviation but the general body of taxpayers if I had declined to make use of this sad disaster—for that is what it was—to the Tudors by making a fresh start along the lines mentioned that commended themselves o to the shrewd business managements concerned. The managements in question included, of course, the particularly capable chairman of B.S.A.A., Mr. Booth, who had originally played so enterprising and valuable a part on behalf of private shipping interests in launching that separate concern. I know that I can quote Mr. Booth, with his consent. He was emphatic that in the new circumstances the amalgamation was necessary and proper.
  The main argument for the merger is the one I have just stated. I can summarise it by saying that that is the only way of using our aircraft fleets to the best advantage on the routes now served by B.O.A.C. and B.S.A.A. Putting that in terms of output per man employed, the benefits will accrue rather from a larger productive result achieved by the employment of the same kind and number of men than by drastically cutting down staff and getting the same total result as before with a smaller number employed. It is a question of getting the same number of people to produce a much better result. It would be most improper, in my opinion, and the reverse of courageous, to say the least, if I sought to avoid redundancies for fear of public criticism if, in fact, such redundancies were necessary in the interests of efficiency. It seems unlikely, however, that any appreciable number of men will lose their jobs as a result of the merger in addition to those vacancies arising from normal wastage which will not be filled. I am referring to vacancies which will occur mainly among the headquarters and administrative staff.
  One should bear in mind that B.S.A.A. unlike B.O.A.C., were in the process of building up to meet the needs of the Tudors. As I stated in this House on March 1:5—and by leave of the House I wish to repeat it now—any staff redund-
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  ancies resulting from the merger will be shared fairly between the two Corporations and in accordance with National Joint Council procedure. On the other hand—I again stress this fact—redundancies arising from the internal reorganisation of B.O.A.C.—I stress this again as I stressed it in Marc:I—which brought down their numbers from 24,464 in March, 1947, to 20,890 a year ago and 18,871 to-day will be restricted in fact to B.O.A.C. personnel. I cannot pledge that no single man in B.S.A.A. will lose his job because of redundancy arising from the merger, but I do net think from this point of view the staff of B.S.A.A. have any cause for anxiety.
  This then is the purpose of the Bill to provide for the amalgamation of B.O.A.C. and B.S.A.A. Unfortunately, it is impossible to make a clean merger of these two Corporations by a single legislative action. B.S.A.A. have various operating rights, contracts and permits in South America which cannot be transferred to 13.O.A.C. merely by legislation in this country. The contracts will have to be negotiated individually between the parties concerned, and their transfer will take some time. Meanwhile, it is necessary to keep B.S.A.A. legally alive. Clause 1 of the Bill, therefore, provides for a two stage merger. The first stage is that under subsection (I) all B.S.A.A.'s property in the United Kingdom and aircraft, and all their rights and liabilities enforceable in the United Kingdom, are to vest in B.O.A.C. immediately on the passing of the Act. Under the remaining subsections, B.S.A.A are empowered to transfer any other property or rights to B.O.A.C., and B.O.A.C. are empowered to undertake any other liabilities or obligations of B.S.A.A., in both cases without consideration and without payment of stamp duty. The second stage is reached when the Minister is satisfied that the necessary arrangements have been made. He may then direct by statutory instrument that B.S.A.A. shall be dissolved on an appointed day.
  The other clauses, with one exception, are mainly technical and I do not think the House would wish me to discuss them at this stage. But I would say one word about Clause 5, which concerns the Board of the Corporation Hid, in particular, makes possible the appointment of a

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  second deputy chairman to B.O.A.C. It is the intention, as I announced on March 15, that the present chairman of B.S.A.A., Mr. Booth, should become a joint deputy chairman of the new Corporation with Mr. Whitney Straight. I believe I carry the whole of the House with me in saying that we have here two first-rate lieutenants with the new chairman, Sir Miles Thomas —a most inspiring leader to succeed that great public servant, Sir Harold Hartley.
  My Lords, I have presented this simple but important measure in broad outline, and I am ready to attempt to-day, or later, to reply to any questions that may be raised. At this stage the House has a very simple issue before it— namely, to allow or not allow these Corporations to amalgamate in the way that all directly responsible consider to be in the best interests of British civil aviation. I have great confidence in the future of the Corporations in their new form, but if we are shortly to take leave of B.S.A.A. let us not do so without paying tribute to the men at all levels who got it going and who under its auspices have accomplished so much. I would not be asking the House to approve this measure unless I felt sure that in the future their opportunities would be as wide, perhaps wider, and their services as great, perhaps greater, in the years ahead of them. To them, to their new colleagues and to all those actively engaged in British civil aviation, II believe that this House is ready to send out a message of hope and encouragement, and in that spirit I beg to move that this Bill be read a second time. Once again, I would like to thank noble Lords for coming together in a way that has facilitated this movement forward.
  Moved, That the Bill be now read 2a.—(Lord Pakenham.)
  8.58 p.m.
  LORD BALFOUR OF INCHRYE: My Lords, the noble Lord, to whom we are indebted for his explanation of this Bill, was good enough to express in terms of appreciation the action of the Opposition in facilitating the progress of the Bill. I am sure I speak on behalf of all noble Lords on this side of the House when I say that we are grateful for his appreciation. We are always willing to help. When something proposed by the Government is good, we welcome it with open
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  arms; but if wrong is to be done, then let us know the worst and face it. Let me say at the outset, that we on this side of the House do not like this Bill. The noble Lord said that we have to allow or not allow this amalgamation. So far as this House is concerned, I think that direct issue does not quite arise. In another place this amalgamation was sanctioned by a majority of the Members. We must in this case acquiesce with that majority, but in acquiescing with the majority decision we do not in any way give up our rights of objecting to and criticising the measure.
  The noble Lord summed up the advantages and disadvantages of this Bill—or he said he did. If I may say so, it was rather a one-way traffic. His praise of the Bill would have conveyed greater conviction to me had he been a little more balanced. It may be that there is some criticism to be made and that not everything that is to be said should be in terms of praise. By the time I had listened to the noble Lord's speech, taken in what he was saying and absorbed all those forcible arguments which he put forward, I wondered why the Government had ever proposed three Corporations originally. The noble Lord's speech was very special pleading. From the other side I would like to put forward, I hope in a reasonable manner, four criticisms of this Bill. Then let noble Lords, even though we do not vote against it, at any rate make up a balance in their minds concerning the advantages of this Bill on what I and perhaps other noble Lords may put forward.
  My first criticism is that this is a premature, permanent alteration to correct a passing phase. The noble Lord has said that what finally brought about the introduction of the Bill was the very tragic loss of the "Star Ariel," the subsequent withdrawal of the Tudor aircraft and the consequent shortage of aircraft resulting upon that withdrawal. But the answer is, I think, that aircraft can be replaced; and the right action, I believe, should have been not to make this a permanent alteration in the structure of our civil aviation, but to concentrate upon replacing the deficient aircraft in some way or another. It might well be that by a reorientation of the aircraft available, including the use of the Tudors again in certain areas upon which B.S.A.A. operated, we

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  could have got over this awkward time without having to disintegrate the third Corporation.
  This permanent change in structure sweeps away the element of competition which Cabinet Ministers of the noble Lord's Government themselves, on the introduction of the Civil Aviation Bill in 1946, praised and said was a desirable thing. If I may, I will quote just a few words from the speech of the Lord President of the Council, Mr. Herbert Morrison. He said this on the Second Reading of the Civil Aviation Bill:
  "We wish to introduce and develop in the industry the spirit of emulation, of gathering a varied experience, and a certain degree of competition between various undertakings."
  He went on to say:
  "The Minister of Civil Aviation has deliberately decided on the basis of three Corporations, each of which will have its set degree of responsibility to him and for the general operations of which he and the Parliamentary Secretary will be answerable to Parliament."
  I must be fair and tell your Lordships that the Lord President further went on to say:
  "If future experience should show either that three are too many and that two or even one would be enough, modifications can be made."
  I admit, straight away, that he said that.
  Then my mind goes to the debate which we finished not long ago, the debate which was wound up so eloquently by the noble Viscount the Leader of the House in a speech in which he was defending the position and said that we must not judge the achievements of the national corporations on a short-term view. The noble Viscount said that it would be a short-sighted view to take the measure of the success or failure of concerns which had been in public ownership for only two or three years. What is sauce for the goose is sauce for the gander. If we are to accept that argument from the noble Viscount the Leader of the House, we must not draw conclusions as regards airways Corporations which have been in public ownership for only two or three years. Like other noble Lords, I have read the debates in another place, when it was put with force that there cannot be competition in civil aviation because we cannot compare this line running with one particular aircraft with that line running with another par-
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  ticular aircraft. But I submit that competition can exist not only in direct operational qualities, but in many other ways—in maintenance, in handling passengers and freight, in catering and road transport. In these and in many other directions we can draw valuable comparisons between one organisation and another.
  I ask the noble Lord what has altered, beyond a temporary shortage of aircraft at the present time caused by the withdrawal of the Tudors, to cause this Bill to be introduced. Why should we not take a long-term view of civil aviation, in the same way as the noble and learned Viscount the Leader of the House asked us to take a long-tem view as regards other nationalised corporations? I believe the answer is that this is a further indication of the application of Socialist theory in our national life. I know the noble Lord disclaimed this and said he was not an amalgamationist.
  LORD PAKENHAM: Not a fanatical amalgamationist.
  LORD BALFOUR OF INCHRYE: Not a fanatical amalgamationist. Nevertheless, in every direction we are seeing the Three Graces of nationalisation—size, monopoly and centralisation—becoming ever more present. The noble Lord was careful to say that this amalgamation of two Corporations out of three was not a preliminary step to the formation of one gigantic Corporation. The noble Lord said that it does not affect British European Airways and there was no prospect in the foreseeable future—
  LORD PAKENHAM: It has no effect on it whatever.
  LORD BALFOUR OF INCHRYE: The noble Lord said that in the foreseeable future there will be no difference. I ask with great respect what is "the foreseeable future"? In another place the Parliamentary Secretary, the noble Lord's junior Minister, was questioned on this matter, and on that occasion the Parliamentary Secretary replied to a question as to whether we could expect an amalgamation of the two, "Not at the present time." When the noble Lord replies, could he go a little closer in definition and say whether "the foreseeable future" and "the present time" mean three years, five years, seven years or ten years? We would like to know w hat is in the minds

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  of the Government when they say, "Not in the foreseeable future."
  I pass now to my second criticism. It is that the supply of aircraft is not increased by one single civil aviation liner by this amalgamation; no increase in passengers or freight is brought about; and there are no great economies in manpower which could not be effected by a rationalisation of the efforts of the two Corporations without legal amalgamation and the elimination of one. To us on this side of the House it seems that something almost intangible is being lost by this amalgamation; a spark of individuality and keenness is being extinguished. I could give noble Lords comparable figures of the alleged efficiency of B.S.A.A., as against B.O.A.C.
  LORD PAKENHAM: It is very difficult.
  LORD BALFOUR OF INCHRYE: I agree. I could give a set of figures, the noble Lord could give another set of figures to counter me; I could give another set of figures, and the noble Lord could give yet another set of figures. I agree that it is very difficult to quote chapter and verse in figures. But what I believe is indisputable is that there is something—I repeat the word—intangible in the spark of individuality, which is so valuable and which is being extinguished. The noble Lord claims that there will be a planned use of the aircraft fleets in the future. But all his plans, which have been debated at great length in another place and in less detail here to-day—if I may say so, quite rightly—were based on the assumption of deliveries of aircraft from America, the Boeing Stratocruisers and the Canadairs. I believe we are supposed to have ten Boeing Stratocruisers by the end of the year. I wish the Boeing Stratocruisers good luck, but I would hazard a guess that the noble Lord's Corporations will not have ten Boeing Stratocruisers by the end of the year. The Tudor was a much-abused aircraft, but there have been more accidents in Constellations than there have been in Tudors. The trouble is that the Tudors disappeared without any explanation. There has always been some explanation of the Constellation accidents, whether it was a right one or not. The Stratocruisers, we read almost
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  every day in our papers, are having to turn back through various teething troubles. I would hazard the view that improvisation will be just as necessary under the noble Lord's plan as it would be under a policy which did not amalgamate but tried to rationalise the fleets in order to overcome this temporary shortage, because the expectation of aircraft deliveries on which he bases his whole plan will not be fulfilled.
  I come now to my third criticism, which noble Lords will probably think is the most serious—namely, the danger of all the technical development and operational experience in British long-range aircraft being concentrated in one Corporation, instead of having two outlets, and dual and competitive usage and development work by two Corporations. We are told by the Chancellor of the Exchequer that in the future we shall have to depend a great deal on our export trade in this country for our ability to live. One of the great possibilities for export in this country is in this new field of development of civil aviation. But if we are going to export civil aircraft to other countries in the world, I would submit to your Lordships that we must be in a position to give the best possible product, a product which will beat our competitors from whatever country they may come. We put a handicap on ourselves if we definitely limit the user of long-range aircraft to one instead of two. I would prefer three, four or five users, because the more users you have the greater wealth of experience you can build up. I am sorry to know that all the long-range aircraft developed by the British industry will in the future for civil aviation have to pass through this one channel of home usage, instead of being able to pass through two or more.
  I would particularly mention flying boats. The question as to whether or not B.O.A.C. were flying-boat minded was dealt with in another place, and critics were rather brushed aside by the Parliamentary Secretary who said that B.S.A.A. had never seen a flying boat. That was late at night, and perhaps the words were excusable. B.S.A.A. may not have operated them but let us remember the greatest exponent of flying boats, the late Air Commodore Brackley, whose service, experience and wealth of knowledge were at the disposal of

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  B.S.A.A. It was largely upon his advice that B.S.A.A. decided to use the Princess flying boat, which is now under construction, and which was turned down by B.O.A.C. in 1947. We are a seafaring nation, and there is something very pleasing, I believe, to the British character that in our aviation life we should 20 as close to marine life as we can. I should be sorry to feel that those who were responsible for technical decisions in 1947, and the turning-down of flying boats, were able to-day to command a view which might prejudice not the use but the enthusiastic use—and there is a great difference between the two —of the flying boat.
  I now pass to my final criticism, which is on the question of personnel. One asks oneself: "Is this amalgamation in the interests of the personnel and the expression of their skill?" I believe the same argument applies here as in other nationalisation Bills which we have discussed in this House—that there is danger to the skilled operative in having only one employer to absorb his skill. I believe the chances of their individual protection for their skill, and the chances of advancement of the technique in which they are skilled, are lessened by the fact that there is only this one main direction in which they can apply their experience. In support of that view, I would say this. Nationalised industries so far do not seem to have pleased operatives. Central control is being increasingly resented by its staffs. Long-distance regulation has aggravated operatives in the coal industry and the railway industry, and certainly in the nationalised industries higher charges are exasperating to the consumers. Of course, I agree that policy cannot be dictated by staffs, but nevertheless their views—and particularly in technical industries—are important.
  The noble Lord made the statement —and it was also made in another place —that all those concerned were in favour of this amalgamation. I rather question that. It is true, as he said, that the Boards are in favour of it—the "big boys" are all for it, I am sure with great conviction and with genuine feeling—but the ones down the ladder are not all in favour of this amalgamation.
  LORD PAKENHAM: I actually said "of those directly responsible."
  LORD BALFOUR OF ENCHRYE: But may I ask the noble Lord whether he would not consider that pilots are directly responsible for certain important phases of operation? Can he tell me that all the pilots in the British Airlines Pilots' Association who fly in B.S.A..A. aircraft are in favour of it? After all, they are "directly responsible." I think the noble Lord, if he looks at the list of those who attended the packed meeting of protest held at Caxton Hall, will find that there were many who were not in favour.
  LORD STRABOLGI: In what sense is the word "packed" used?
  LORD BALFOUR OF INCHRYE: A full meeting. I am sure the noble Lord would not expect anything but the straightest deal from these men. As to the engineers, I do not want to go into the vexed question of who represent the engineers of the B.S.A.A. and what union is concerned. There has been considerable discussion in another place, and we in this House may come back to that point in Committee. Fait the noble Lord must admit that there is a great element in B.S.A.A. who, out of their convictions, have protested against the action of the Government in bringing about this merger.
  Those who take an interest in these matters were greatly comforted by the assurances given by the Parliamentary Secretary in another place the night before last, when he said that the minority organisations would be taken into consideration and that no man would be penalised for expressing his views if be did not belong to one of the big units. I do not believe the noble Lord is going to have a "happy ship" with this amalgamation. The battalions have marched through the Lobbies in another place. We are not going to divide; the noble Lord is going to get his Bill. But I wonder if he might not have done better if he had done what some of us feel might have been done in the case of the dockers: gone down with his Parliamentary Secretary and met the men of B.S.A.A. in an unconventional way and explained to them what the Government were doing and made the Government ease. Incidentally I should have loved to be there to make the case against it. He might have shown what the Government are trying to do. He might then have carried those doubtful elements with him to a greater degree

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  than he has at the present time. I have put forward, I hope reasonably, my grounds of criticism. We feel that this Bill is endangering civil aviation by the suppression of the competitive element for no adequate long term reasons. We shall not oppose the Second Reading, but we cannot resist criticising the Bill.
  9.24 p.m.
  THE MARQUESS OF WILLINGDON: My Lords, I feel that the attention of this House should be seriously addressed to this Bill, as it is handing over a commercial corporation formed before nationalisation to a nationalised concern. B.O.A.C. are a concern which we all admire. They have built up a reputation of mercantile marine quality; they are manned by professionals who are experienced, loyal and responsible—and. I think, far from overpaid. I should like at once to record the helpfulness of the Minister in giving us so much information and in providing me personally with figures which were previously denied but which, thanks to the request of the noble Viscount, Lord Swinton, have been made available. Now you are handing over to the first nationalised Corporation. Granted that it has a hoard of directors, a chairman, personal assistants to the chairman, personal representatives of the chairman, private secretaries to the chairman and a deputy chairman, but we all know that the real boss is the Minister of Civil Aviation. He has kindly provided me to-day with the figures of his staff. They total 7,535. The Treasury grades are 2,796, and other grades are 5,339. As regards the staff of B.O.A.C. to-day, the figures (again provided by the courtesy of the Minister) are 18,898. Those are split up into figures which are, of course, available. Now the number of planes flying and carrying a commercial load on Monday last in B.O.A.C.—and this is the Corporation, the first nationalised Corporation, the first experiment in nationalisation, to whom we are handing over a concern running at a profit and commercially manned—was sixty-six, with this colossal staff to keep them in the air.
  VISCOUNT SWINTON: Will the noble Lord give me again the numbers of the staffs?
  THE MARQUESS OF WILLINGDON: There are 7,535 in the Ministry and 18,898 in B.O.A.C. There were sixty-six aircraft flying carrying a commercial load on Monday last. Having been in commercial civil aviation for a great part of my life, I know from experience that there are more technical ways of judging this than by the figures available daily to the Minister—for instance, passenger miles per number of staff, ton miles per number of staff. I would like to ask the Minister whether, as regards B.O.A.C., after the experience they have had in the last few years since the war operating on their long haul, the figures completely satisfy him and compare favourably with those of operating companies of foreign concerns.
  The second question I wish to put to the Minister—and I think it is the really important thing, for us to-night—is: Can he assure the House that B.O.A.C. are really running on business lines? Because British South American Airways were. I think that is the most important point for us to ask him to answer to-night. Have B.O.A.C. really learnt economy in administration? When we had the last debate on the interests of these concerns, as I understood it there were to be two divisions in the new organisation, the East and the West Divisions, and also a manager of the home stations. They were going to sit in these wonderful new premises, the Simmonds factory on the Great West Road, with communicating doors. They were to employ three men, and a fourth is now to be added. They were to be in constant touch.
  I also want to ask the Minister: Where does Stratton House come into the picture? Is it true that the rent and loan for Stratton House is £20,000? Is it true that the whole of Stratton House is devoted to this wonderful Board, with their representatives, their technical advisers and so on, and that only one of the general managers of this Corporation has even a room in the B.O.A.C. headquarters on the Great West Road, and that room is not even in the main building? I ask noble Lords when they are driving past there in their cars to stop and look at it. Look behind Simmonds factory; you will see acres and acres of huts. I am not raising these criticisms from any political motive. All I ask is a fair deal for

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  B.S.A.A., a fair deal for their employees and for all the users, both commercial and passenger, who use B.S.A.A. and B.O.A.C. I do ask for the Minister's assurance that the shareholders, that long-suffering British public, John Citizen, shall benefit from this amalgamation.
  9.30 p.m.
  LORD STRABOLGI: My Lords, I rise to support my noble friend on the Second Reading of the Bill, and my only excuse is that I happen to have used both Corporations very considerably over recent years and twice this year. I was stranded in the West Indies when the Tudor accident took place. I have never understood, and I do not understand now, why the Tudors were withdrawn. I was most favourably impressed with them and, after all, as the noble Lord, Lord Balfour, pointed out, there have been a great many accidents with American aircraft; and those accidents continue. I had to come back by Trans-Canadair air lines after some delay. I have used B.O.A.C. also to cross the Atlantic in the orthodox way.
  In the few remarks I have to make I propose to give my impressions of the workings of these two great Corporations which are now to be amalgamated. I speak only as a passenger—but after all the passenger is the man to whom eventually you have to look for your revenues. Before I say more on that, however, I would point out that on every ground of business management the case for the amalgamation of the two services flying the Atlantic seems to be overwhelming. I hope I shall not enrage my noble friend if, after all he has said, I say that the same argument applies with equal strength to the amalgamation of the three Corporations. Although my noble friend has perhaps placated the Opposition by what he said about the foreseeable future—and what was said in another place we all know—nevertheless the operational reasons and the economic reasons all point to one Corporation to run the whole of civil aviation. I have never fully understood why we started off with three, except (and this is a tremendous compliment to the charm and persuasiveness of Lord Swinton) that when Lord Winster was Minister of Aviation he was anxious to appease Lord Swinton and, indeed, wanted to carry out his original scheme. There was, however,
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  some difference apparently in the Government on this point, of which I have no knowledge—
  VISCOUNT SWINTON: I can explain that to the noble Lord. We were unanimous in the National Government but, as usual, the tail wagged the dog.
  LORD STRABOLGI: I am talking about the present Government.
  VISCOUNT SWINTON: I was explaining what happened subsequently.
  LORD STRABOLGI: I am talking about this present Government, which is so adorned by my noble friends who sit on these Benches.
  VISCOUNT SWINTON: On that occasion, the tail wagged tae dog.
  LORD STRABOLGI: I do not know what the noble Viscount means by the "tail" or the "dog." I do not know how the forces were lined up. All I know is that the original scheme was practically Lord Swinton's, and I am glad to say it w as abandoned in favour of the present modified scheme. But Lord Swinton's charm and persuasiveness had so much influence (and this is all said in full compliment to him) that what I always thought was the worst feature of his scheme——namely, the creation of the three separate Corporations—was agreed to. I know that here I am in direct conflict with my noble friend. It is always sorrowful for me to be in that state. But I believe that the arguments for one Corporation are overwhelming.
  I listened with the greatest of care to my noble friend's defence for retaining the two, and I am glad, if I may say so, that he did not use the argument, which I could not follow, of my honourable friend Mr. Lindgren in another place—namely, that B.E.A. operate two-engined machines and B.O.A.C. operate fourengined machines, and therefore the services are entirely diff!rent. I suppose that presently we shall have eight-engined machines. Then will be proposed that companies still using four-engined machines should employ different methods from the ones using the eight-engined machine? I am glad that my noble friend has not been misled into using that kind of argument which I could not understand.
  LORD PAKENHAM: I went near to it.
  LORD STRABOLGI: I am going a little further, and here I am afraid that I may enrage one or two noble Lords opposite—I hope I shall. Civil aviation (and here I address myself to the noble Marquess whose speech from the Liberal Benches I listened to with great interest) is paying in scarcely any part of the world. I understand that Swiss Air show a profit though I do not know what subsidies they receive; K.L.M. show profits with very high subsidies, and one airline which runs in the Eastern states of America, a purely domestic concern—Lord Balfour of Inchrye will know about this; I think it runs traffic between Baltimore, Boston, New York and Washington—also shows profits. But the great external air organisations, Pan-American, T.W.A. and others do not, I believe, show a profit. And that will continue to be the case. I do not think they will ever show a profit while there is the same degree of overlapping and wastefulness which are bound to occur when you have a number of separate national lines using the same aerodromes and operating their own transport. In such circumstances there is bound to be waste and loss.
  An argument which I do not intend to pursue, but which I have advanced for many years, is that to overcome this waste and to operate economically, airlines must be internationalised. I have believed in that for a long time and I shall go on advocating it. I believe that when the nations wake to the realities of the situation and show a little sense, civil aviation will be internationalised; and what a great service to the cause of peace that would be! I have said what I have said only to reinforce the arguments put forward by my noble friend for at any rate amalgamating the South Atlantic Service and B.O.A.C., I think that the case which Lord Pakenham made was overwhelming, and I am very glad that your Lordships are not going to take the trouble to-night to divide against the Bill.
  There is one question which I wish to ask and which has already been touched upon by the noble Lord, Lord Balfour of Inchrye. I have given my noble friend notice of it. I happen to be a flying-boat
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  "fan." I am an enthusiast for the great flying-boat, very largely for the same reasons which have been advanced by the noble Lord who spoke for the Opposition. I think that sea experience and sea sense incline one that way, and in view of our control over so many harbours and so many maritime territories all over the world, the need for us to develop the large flying-boat, in my opinion is incontrovertible. I ask my noble friend, without going into great detail, to tell us what are the views of his Ministry on this matter. I hope they will coincide with mine. The views of the Ministry will, of course, influence the decisions of the new amalgamated Corporation. That is putting really the same question as Lord Balfour of Inchrye put in a slightly different way. I had experience of the flying-boat over twenty years ago and again last year. I think the case for it is very strong indeed. It is only a matter of arrangement to reduce the admittedly heavy overheads.
  I would like to say how sorry I am that civil aviation is once more being pulled up by the roots to see how it is growing. I am sorry for the changes; I am sorry they are necessary. I believe that notwithstanding all that has been said about extravagance, and so on, by the noble Marquess and others, the record of British civil aviation, of the two Corporations, and also of the British European Corporation, is very high indeed, and I believe that reputation is acknowledged by foreign users. I have been using the services of these two Corporations as an ordinary passenger for a good many years. I was one of the first civilians to fly out to India with the old Imperial Airways; and I have watched developments ever since the days when in Handley Pages we went at eighty miles an hour, stopping at a capital each night —and most agreeable it was. I have seen the latest developments and the wonderful achievements and advances that have been made. In spite of all difficulties about machines, I believe that both these Corporations have done a magnificent job. Their reputation for safety, especially that of B.O.A.C., is very high. They look after passengers extremely well. If one really wants to see the contrast, travel by some of the foreign lines, especially the American, and see the difference in treatment, courtesy and efficiency. If you want to be delayed and kept kicking your

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  heels two or three days, travel in an average American line—and I am afraid some of the other foreign lines are not much better. But if you want efficiency, certainty and the feeling of confidence, go by British Airways.
  Why should all these deteriorate because we wish to bring about a more or less paper arrangement of amalgamating the two? Pilots with experience in the South Atlantic will continue to fly the South Atlantic, and maintenance crews will continue to serve on the same machines belonging to one Corporation instead of to two. What difference will that make? I cannot see the idea that the amalgamation of these two well-tried instruments will destroy the men's spirit, alter their appreciation, and injure that intangible psychological value that the noble Lord, Lord Balfour of Inchrye, described so vividly. Why should not these men continue to do their best for the country, to whichever service of civil aviation they belong? I hope the noble Lord will be fully justified in the steps which have been taken. On balance I think the justification is overwhelming, and I hope there will be no unreasonable criticisms, certainly not of the efficiency and devotion of the great mass of personnel of these two Corporations, now to become one great service.
  9.43 p.m.
  LORD PAKENHAM: My Lords, I do not think anyone will accuse the noble Lord, after his remarks, of being a Government "stooge." The general effect of his remarks, which are based on firsthand experience, is all the more helpful to us. May I say from the Front Bench that we were interested in all that the noble Lord, Lord Balfour of Inchrye, had to say. He speaks with a great wealth of practical experience behind him. I will not follow him at great length through his remarks, as we shall have another stage to thresh out these things more closely, but I think it would be discourteous not to touch at least on the four main headings he raised. I hope he will accept from me—as I am sure he will—that I have not been influenced by any kind of political pressure or any ideology in deciding that this change is necessary. If I have a personal interest, I hope it is one proper to my position—to bring down the deficits and secure
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  thoroughly creditable results for British civil aviation. I am sure the noble Lord will take it from me that that is the only way to act in the circumstances.
  I would like to say a word on the subject of competition. The noble Lord was the first to point out that in no real sense can we talk about competition between B.O.A.C. and Perhaps we can talk about emulation—two different public bodies doing different jobs and returning figure; which may be taken into comparison with one another. But I ask him—and he has far more experience of flying than I shall ever have —whether, in fact, the real test and the real competition will not always be between B.O.A.C. and those foreign companies flying similar routes. That must be the yardstick, although tonight it has not been discussed so freely as it was in another place. However. I go some way in the noble Lord's direction. I think it is very important that we should have the fullest light thrown on the various activities of the Corporation. In another place my honourable friend my Parliamentary Secretary was able to reassure the members on that subject, and I hope I shall also be able to reassure the noble Lord at another stage.
  The noble Lord asked me—and I am glad he did—to say ye: again that we have no intention whatever of bringing B.E.A. into this amalgamation. He said I alluded to the "fore seeable future." To be pedantic, I believe the actual words I used were: "So far as it is possible to see into the future." They have the same meaning, and I, of course, accept those as my words. I am ready to go any distance, short of giving a pledge to people in B.E.A., which they might afterwards say had been broken if events took a completely unexpected turn. That is the long and short of it. So far as I am concerned, this will not happen. But I really cannot stand here and say on behalf of the Government that it will not happen, because if something peculiar occurred and it was done, and I had given a pledge, noble Lords would rightly say: "You cannot act in that way as you have given a pledge." I am ready to go as fix as possible to emphasise the fact that it will not happen, short of giving any kind of pledge.

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  I now come to the third point, which is admittedly rather difficult to assess across the Table—namely, the question of whether it is desirable that there should be only one consumer for long-range aircraft, with all that that implies in the way of technical development. I myself believe that no adverse results will occur, but that the effect will be the opposite. Under that same heading the noble Lord raised the question of flying boats, to which the noble Lord, Lord Strabolgi, also alluded. Lord Balfour made the point that it would be regrettable if the same people who, according to him, turned down the flying boats in 1947 were still in charge of the situation, because they could hardly be expected to be enthusiastic about flying boats. I must reserve my attitude as to what exactly took place in 1947, because I was not then responsible for these affairs. From what I know, I believe there has been a good deal of misconception on the point of the attitude of certain gentlemen who were previously responsible for B.O.A.C. But this I do know, and it comes directly under my eyes. The new chairman, Sir Miles Thomas, who was not connected—at least, I presume he was not—with B.O.A.C. at the time the noble Lord has in mind, is most enthusiastic about flying boats. Therefore, I can say—and I know he would wish me to say it—that he will guarantee that there will be enthusiastic use of the flying boats that have been ordered.
  I think it will suffice if I deal with only one more point to-night—namely, the attitude of the pilots. I have, in fact, seen the representatives of the pilots generally, and no protest was made on this subject. I can inform the noble Lord and the House that the General Secretary of the British Air Line Pilots' Association was present when this policy was approved, and he was among those who raised no objection to the merger. In other words, there is no reason to suppose that the pilots as a body are opposed to the merger. If any official objection had been raised on their behalf it would certainly have come to me. I cannot speak for every individual, but that is the official position.
  I turn now to the observations of the noble Marquess, Lord Willingdon, which, if I may say so, even at this late hour,
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  were far too short—short, but pregnant. I would just touch upon one or two of his points. He seemed to indicate that my Ministry was rather large. I should have hoped that the noble Marquess, with his great knowledge of aviation, would realise that a very small proportion—a few score—are directly concerned with supervising the corporations. The great majority are not in London at all, but are running the aerodromes, and at the headquarters a very large proportion are directing those who are running the aerodromes and ancillary activities. Really, the noble Marquess should not have begun to discuss my Ministry in this connection! We should be delighted if he would come and look at our arrangements to see all that we are doing, and if he can suggest any way in which the staff can be reduced it would be interesting to hear it. I would say this. We have had a very close examination lately of my staff. Undoubtedly quite a number of them are overworked, and therefore I do not want to hold out any suggestion that there is any economy to be made there. If the noble Marquess has any concrete suggestions, let us hear of them, but it does not bear closely on this point, because, relatively speaking, only a handful are concerned with the Corporations.
  The noble Marquess asked about Stratton House. With regard to the figure for the rent I cannot help him, but I can inform him that Stratton House is occupied by the members of the senior staff as well as members of the Board. When the Brentford accommodation is improved, it will accommodate more staff and enable Stratton House accommodation to be released, except for small requirements. I therefore hope that the noble Marquess will realise that we are doing everything possible to economise in this connection. The noble Marquess then put wide questions of a kind to which I am certainly not going to give a dogmatic and complacent answer—indeed, that would be the worst possible service to render. He asked about B.O.A.C., and whether I am satisfied that we are running on business lines. Sir Miles Thomas, who is the new chairman and who has been concerned with the reorganisation with Mr. Whitney Straight for the last year is, I think we shall all agree, a first-class business man, and if he does not run the Corporation on busi-

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  ness lines, I do not know who will. I hope the noble Marquess will be assured that business lines and commercial practice will be the essence of the whole affair.
  I will give the noble Marquess one set of figures— and one only—for the expenditure in pence per capacity ton mile. In 1946–47 it was 76.2d., in 1947–48 69.7d., and in 1948–49 it is estimated at 59.11d., so the figures are improving fairly rapidly.
  LORD STRABOLGI: That is B.O.A.C.?
  LORD PAKENHAM: Yes. I emphasise that we shall not achieve the results we are all looking for until the new aircraft come along, and we hope that when that happens we shall see a great deal of improvement. I will not go over the old ground again. We know that B.O.A.C., compared with its main foreign competitors has been handicapped as a result of the decision (from which none of us is now going to run away) to pursue the "Fly British" policy. That has handicapped B.O.A.C. and B.S.A.A. in the past. The handicap has not been so great in the case of B.E.A.C. Therefore, to compare our Corporations with foreign operators in any way which is really helpful is not easy. If noble Lords ask me whether I am satisfied with the level of costs, even with the existing aircraft, let me say that I am never satisfied. I shall never be satisfied in that regard. But I am satisfied with the spirit and the way in which the thing is beginning to move. I am certainly very hopeful about the future of British civil aviation, and in particular about the results which will accrue from the amalgamation we are now discussing. I look forward to noble Lords going into these matters in greater detail later.
  I end as I began, and as I indicated in the middle of my speech, by thanking noble Lords for coming forward to try to get this matter settled as soon as possible. If I may venture one personal regret it is—in spite of the extraordinarily compelling remarks of the noble Lord, Lord Balfour of Inchrye— that the noble Viscount, Lord Swinton, has sat there beside him all through without saying a word. I hope there will never be another Civil Aviation debate in the future when that occurs.
  On Question, Bill read 2a, and committed to a Committee of the Whole House.

  NURSES (SCOTLAND) BILL [H.L.]
  9.57 p.m.
  Order of the Day for the House to be put into Committee read.
  Moved, That the House do now resolve itself into Committee.—(Lord Morrison.)
  On Question, Motion agreed to.
  House in Committee accordingly:
  [The LORD MERTHYR in the Chair]
  Clauses 1 to 6 agrees to.
  Clause 7 [The Mental Nurses Committee]:
  LORD MORRISON: May I say at the outset that, while there are a good many Amendments to this Bill on the Marshalled List, the great bulk of them are either drafting or consequential Amendments, and the others are Amendments dealing with minor points on which, to the best of my knowledge, there is no difference of opinion? This Amendment is preliminary to the next Amendment, and both are drafting. I beg to move.
  Amendment moved—
  Page 5, line 8, at beginning insert—
  ("The following matters, namely (a)")
  —
  (Lord Morrison.)
  On Question, Amendment agreed to.
  LORD MORRISON: This is a drafting Amendment. I beg to move.
  Amendment moved—
  Page 5, line 12, after ("question") insert("and
  (b) any matter relating to the training of persons for admission to the supplementary part of the register containing the names of nurses trained in the nursing and care of persons suffering from mental diseases or to the supplementary part of the register containing the names of nurses trained in the nursing and care of persons suffering from mental defect "). —(Lord Morrison.)
  On Question, Amendment agreed to.
  LORD MORRISON: This is also a drafting Amendment. I beg to move.
  Amendment moved—
  Page 5, line 13, after ("question") insert ("as aforesaid").—(Lord Morrison.)
  On Question, Amendment agreed to.
  LORD MORRISON: This is another drafting Amendment. I beg to move.
  Amendment moved—
  Page 5, line 22, after ("Committee") insert ("on behalf of the Council").—(Lord Morrison.)
  On Question, Amendment agreed to.
  Clause 7, as amended, agreed to.
  Clause 8 [Registration of nurses trained abroad]:
  LORD MORRISON: This is a drafting Amendment. With the two following Amendments it makes it clear that a nurse trained abroad must have successfully completed his training and must have passed any examinations attached to it before he can claim to be registered in Scotland under this clause. I beg to move.
  Amendment moved—
  Page 5, line 40, leave out from ("that") to ("in") in line 42 and insert ("in a country or territory outside the United Kingdom, he successfully completed his training either generally as a nurse or as a nurse of some special class").—(Lord Morrison.)
  LORD CLYDESMUIR: This seems only to follow the English example, but we on this side do not object to it for that reason. It seems a desirable thing to ensure that the training has been satisfactorily completed, and we agree with the noble Lord's Amendment.
  On Question, Amendment agreed to.
  LORD MORRISON: This Amendment is consequential. I beg to move.
  Amendment moved—
  Page 6, line 5, leave out ("has been trained") and insert ("successfully completed his training").—(Lord Morrison.)
  On Question, Amendment agreed to.
  LORD MORRISON: This Amendment also is consequential. I beg to move.
  Amendment moved—
  Page 6, line 8, leave out ("he has been so trained") and insert ("his training was").(Lord Morrison.)
  On Question, Amendment agreed to.
  LORD MORRISON: This is a drafting Amendment which transfers the words mentioned in the Amendment to their grammatically appropriate place in the clause. I beg to move.
  Amendment moved—
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  Page 6, line 15, leave out ("if they are satisfied that he is of good character").(Lord Morrison.)
  On Question, Amendment agreed to.
  LORD MORRISON: The last Amendment left out these words in line 15. This Amendment inserts them in line 16. I beg to move.
  Amendment moved—
  Page 6, line 16, after ("may") insert ("if they are satisfied that he is of good character"). —(Lord Morrison.)
  On Question, Amendment agreed to.
  Clause 8, as amended, agreed to.
  Clause 9 [Closing of parts of the register]:
  LORD MORRISON LORD MORRISON moved, after subsection (2) to insert:
  "() No request under the last foregoing subsection shall be made by the Council with respect to—

  (a) the supplementary part of the register containing the names of nurses trained in the nursing and care of persons suffering from mental diseases;

  (b) the supplementary part of the register containing the names of nurses trained in the nursing and care of persons suffering from mental defect; or

  (c) the supplementary part of the register containing the names of nurses trained in the nursing of sick children,

  unless the Council are satisfied that means exist whereby members of the public can readily ascertain whether a registered nurse has been trained in the nursing and care of persons suffering from mental diseases or in the nursing and care of persons suffering from mental defect or in the nursing of sick children as the case may be."
  The noble Lord said: This Amendment is rather lengthy. It debars the General Nursing Council from asking for the closure of the principal supplementary parts of the Register unless they are satisfied that other means exist for enabling nurses with special training to be identified by the public. What would happen in practice is that, when the supplementary registers are closed, the Council would attach an appropriate distinguishing mark in the main Register to the names of nurses who had undergone particular forms of training, and who would under present conditions have their names entered on the appropriate supplementary Register. The Amendment corresponds to one made to the English Bill on Report stage in your Lordships' House. Apart from the merits

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  of the Amendment, it is desirable that there should be similar provisions on this subject in the English and in the Scottish Bills because of the statutory reciprocity between the Scottish and the English registers of nurses. I beg to move.
  Amendment moved—
  Page 6, line 36, at end insert the said subsection.—(Lord Morrison.)
  LORD CLYDESMUIR: We agree that this is a desirable Amendment. The drafting differs slightly from the English version for technical reasons. I understand that in Scotland nurses for mental defectives are entered in a separate supplementary part of the Register. Hence the difference in wording. I presume the same end is achieved?
  LORD MORRISON: Yes.
  On Question, Amendment agreed to.
  Clause 9, as amended, agreed to.
  Clause 10 [Provisions relating to the approval of training institutions]:
  LORD MORRISON: This Amendment is drafting. I beg to move.
  Amendment moved—
  Page 7, line 32, leave out from the beginning to ("may") in line 36 and insert—
  "The Council shall notify their final determination of any such question as aforesaid to the persons to whom they are required by the last foregoing subsection to give such a notice as is therein mentioned and any such persons.—(Lord Morrison.)
  On Question, Amendment agreed to.
  LORD MORRISON: This Amendment is consequential on the last Amendment. I beg to move.
  Amendment moved—
  Page 7, line 37, leave out ("such person") and insert ("them").—(Lord Morrison.)
  On Question, Amendment agreed to.
  LORD MORRISON: This Amendment relieves an appellant from the necessity of himself applying to the Lord President of the Court of Session for the appointment of arbiters to decide his appeal. The procedure contemplated is that the appellant will notify the Council of his desire to have the matter referred to such arbiters, and the Council will then make the necessary application. I beg to move.
  Amendment moved—
  Page 7, line 39, leave out from ("appointed") to ("by") in line 40 and insert ("for the purpose").—(Lord Morrison.)
  On Question, Amendment agreed to.
  LORD MORRISON: This Amendment and the next correct drafting defects. I beg to move.
  Amendment moved—
  Page 7, line 42. leave out ("nominated") and insert ("appointed").—(Lord Morrison.)
  On Question, Amendment agreed to.
  Amendment moved—
  Page 7, line 43, leave out ("section") and insert ("subsection").—(Lord Morrison.)
  On Question, Amendment agreed to.
  Clause 10, as amended, agreed to.
  Clauses 11 to 14 agreed to.
  Clause 15 [Allowances to members of the Council and the Assistant Nurses Committee]:
  LORD MORRISON: This also corrects a drafting defect. I beg to move.
  Amendment moved—
  Page 9, line 14, at end insert ("as the case may ho").—(Lord Morrison.)
  On Question, Amendment agreed to.
  Clause 15, as amended, agreed to.
  Clauses 16 to 18 agreed to.
  Clause 19 [Interpretation]:
  LORD MORRISON: This Amendment makes it clear that references in the Bill to supplementary parts of the Register include references to parts not specifically created by the 1919 Act as supplementary parts, but which have been set up by rules made in pursuance of that Act. The only statutory supplementary parts are the parts for male nurses, for mental nurses and for sick children's nurses; the parts for nurses for mental defectives and for fever nurses have been set up by rules. I beg to move.
  Amendment moved—
  Page 11, line 11, at end insert—
  ("" supplementary part of the register" means a supplementary part thereof mentioned in subsection (2) of section two of the Act of 1919 or prescribed in pursuance of paragraph (e) of that subsection").— (Lord Morrison.)
  On Question, Amendment agreed to.
  Clause 19, as amended, agreed to.
  Remaining clause agreed to.
  First Schedule:
  3. Of the members of the Council appointed by the Secretary of State two shall be registered nurses employed by local health authorities appointed by him after consultation with such persons and bodies as he thinks fit, being persons and bodies having special knowledge and experience of the work of nurses so employed.
  LORD CLYDESMUIR LORD CLYDESMUIR moved to leave out paragraph 3 and insert:
  "3. The members of the Council appointed by the Secretary of State shall include—

  (a) two registered nurses employed in services provided under Part III of the National Health Service (Scotland) Act, 1947, appointed by him after consultation with such persons and bodies as he thinks fit, being persons and bodies having special knowledge and experience of the work of nurses so employed;

  (b) registered medical practitioners, appointed by him after consultation with such organisations representative of the medical profession as he thinks fit;

  (c) persons with experience in hospital management, appointed by him after consultation with such persons and bodies having experience in hospital management as he thinks fit; and

  (d) persons with experience in local government, appointed by him after consultation with such local health authorities, or such organisations representative of local health authorities, as he thinks fit."

  The noble Lord said: This Amendment is, I think, the only one of substance on the Marshalled List, and as it is the result of an agreement between the noble Lord and myself, I do not anticipate any difficulty in its acceptance. I will not weary your Lordships with any lengthy description, but a word or two is necessary. On the Second Reading of the Bill it was pointed out that the composition of the new General Nursing Council appeared to lack specification as to the qualification of the members (eleven, I think, in number) to be appointed by the Secretary of State. I was reminded that in a previous Act of 1919 there had been more precise specification, and I received representations on this subject. I know that the noble Lord has received representations from the local authorities and from the nurses in this regard, so this Amendment seeks to meet that situation—that is,
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  to give more precise direction as to the type of person to be appointed by the Secretary of State to the General Nursing Council.
  If your Lordships will look at the paper you will see that subparagraph (a) of the Amendment repeats in essence the existing paragraph 3 of the Bill, and this redraft is necessary to secure that the nurses employed by voluntary bodies in contract with local authorities instead of directly by local authorities will not be debarred from appointment. I think that clearly that is a wise provision. Subparagraph (b) of the Amendment introduces registered medical practitioners and directs that they should be included in the composition of the Council. The third subparagraph names special persons with experience of hospital management. Subparagraph (d) names persons with experience in local government. I think the noble Lord will agree—because, as I say, his Department has been in touch with me—that this will give wise direction and yet not tie the hands of the Secretary of State too closely in making these appointments. I think it will also meet very largely the representations of those bodies which have come before us with proposals for improving the Bill in this respect. I beg to move.
  Amendment moved—
  Page 12, line 31, leave out paragraph 3, and insert the said new paragraph.—(Lord Clydesmuir.)
  LORD MORRISON: The noble Lord, Lord Clydesmuir, has given a brief and absolutely accurate description of the Amendment, and in view of the lateness of the hour I think it will suffice if I say—as indeed the noble Lord himself said—that this Amendment has been placed on the Marshalled List after discussions which have taken place between us. We accept it and we believe that it makes a considerable improvement in the Bill.
  On Question, Amendment agreed to.
  LORD MORRISON: This Amendment makes it clear that persons appointed to fill casual vacancies must have the qualifications (if any) which would have been required of them had they been elected or appointed in the ordinary way to the place they are filling on a casual basis. I beg to move.
  Amendment moved—
  Page 13, line 4, at end insert—
  ("() A person appointed to fill a casual vacancy occurring in the place of an elected member of the Council shall be a person who would be qualified for election to that place if an election were to take place on the date on which he is appointed and a person appointed to fill any other casual vacancy shall, if the place vacant was originally filled by a person required by the foregoing provisions of this Schedule to be a person of a particular class, himself be of that class.")—(Lord Morrison.)
  LORD CLYDESMUIR: This Amendment would seem to ensure continuity of representation, and therefore appears to be desirable. We on this side certainly have no objection to it.
  On Question, Amendment agreed to.
  First Schedule, as amended, agreed to.
  Second Schedule [Regional Nurse-Training Committees]:
  LORD MORRISON: This Amendment and the next one are both drafting. I beg to move.
  Amendment moved—
  Page 14, line 6, leave out ("sub-committees") and insert ("any sub-committee.")—[Lord Morrison.]
  On Question, Amendment agreed to.
  LORD MORRISON: I beg to move the next Amendment.
  Amendment moved—
  Page 14, line 13, at end insert ("as the case may be, as may be specified in the order.")—(Lord Morrison.)
  On Question, Amendment agreed to.
  LORD POLWARTH LORD POLWARTH moved to add to paragraph 2:
  "Provided that no person shall be qualified to audit the accounts referred to in sub-paragraph (d) of this paragraph unless he is a member of one or more of the following bodies:—

  The Society of Accountants in Edinburgh;

  The Institute of Accountants and Actuaries in Glasgow;

  The Institute of Chartered Accountants in England and Wales;

  The Society of Incorporated Accountants and Auditors;

  The Society of Accountants in Aberdeen;

  The Association of Certified and Corporate Accountants;

  The Institute of Chartered Accountants in Ireland; or

  Any other body of accountants established in the United Kingdom and for the time
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  being recognised by the Board of Trade for the purposes of the provisions of section 161 of the Companies Act, 1948, relating to the qualification for appointment as auditor of a company other than in exempt private company."

  The noble Lord said: This Schedule provides that the Secretary of State may make regulations for the auditing of the accounts of regional nurse-training committees. The object of this Amendment is to ensure that these accounts shall be audited by members of a recognised professional body. I should make it clear that I have an interest in that I am a member of one of these bodies, but my reason for moving this Amendment is merely to ensure that the accounts are audited according to professional standards.
  Amendment moved—
  Page 14, line 20, at end insert the said proviso.—(Lord Polwarth.)
  LORD MORRISON: I admit at once that it is usual to insert a provision of this kind into Bills where Ministers are appointing auditors for finds derived from other than Exchequer money, for example, in the Electricity Act and the current Legal Aid Bill; but it is not customary to do so where the funds concerned come entirely from the Exchequer, as is the case with the regional nurse-training committee. These are usually audited by departmental auditors, who have been specially trained inside the Departments and do not always possess outside qualifications. The financial affairs of the committees are very much interwoven with those of the regional hospital boards, where accounts are audited by departmental officers, and it is most desirable that both sets of accounts should be audited by the same people. Therefore, think the noble Lord will appreciate my difficulty in accepting this Amendment.
  LORD POLWARTH: I thank the noble Lord for his reply. I think it is true to say that in Scotland we have not the same system of district auditors as in England, and I am not entirely happy that this audit should be carried out by an official inside the Department. I think it is also true to say that the monies expended by these committees are furnished by the General Nursing Council, whose accounts are audited, I believe, by professional audit. At this hour I do

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  not wish to enter into any argument about it and we may possibly discuss it later; at this stage I am prepared to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  Second Schedule, as amended, agreed to.
  Third Schedule [The Mental Nurses Committee]:
  LORD MORRISON LORD MORRISON moved, in paragraph 4, after sub-paragraph (1) to insert:
  "() A person shall not be appointed to fill a casual vacancy in the place of any member of the Committee unless he possesses the qualification required by the foregoing provisions of this Schedule for election or, as the case may be, appointment under the said provisions to that place."
  The noble Lord said: This Amendment makes clear that persons appointed to fill casual vacancies must have the qualifications which would have been required of them had they been elected or appointed in the ordinary way to the place they are filling on a casual basis. I beg to move.
  Amendment moved—
  Page 15, line 41, at end insert the said new sub-paragraph.—[Lord Morrison.]
  On Question, Amendment agreed to.
  Third Schedule, as amended, agreed to.
  Remaining Schedule agreed to.
  House resumed.
  Then, Standing Order No. XXXIX having been suspended (pursuant to the Resolution of July 13), Bill reported, with Amendments; Bill read 3a; Amendments (Privilege) made; Bill passed and sent to the Commons.

  HOUSING (SCOTLAND) BILL
  10.20 p.m.
  Order of the Day for the Second Reading read.
  LORD MORRISON: My Lords, I rise to move the Second Reading of the Housing (Scotland) Bill. During the past few weeks a Housing Bill for England and Wales has been passing through its various stages of your Lordships' House. The Scottish Bill now before you is the counterpart of that Bill. Its main objects are the same, and I
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  can sum them up in four short sentences. The first object is to extend the powers of local authorities to deal with the housing, not merely of those usually referred to as the working classes, but of all members of the community. The second is to make financial assistance available to local authorities, to private persons, and to housing associations, for the improvement of existing houses. The third is to provide certain new special subsidies for other purposes; and the fourth to make certain amendments to the Scottish Housing Acts so that they will form a more comprehensive and flexible instrument of housing policy.
  In view of the debates which we have already had upon the English measure, your Lordships will not expect me to deal in much detail with the provisions of the Scottish Bill. But I should like to say something of how the Bill differs from the English Bill, and to invite your interest in some of those provisions which are common to both Bills but which are of particular significance to Scotland. Of the common provisions, the most important to Scotland are undoubtedly those in Part II of the Bill, providing for financial assistance to local authorities, to private persons and to housing associations for the improvement of existing housing accommodation. A housing policy for Scotland, however, could not be regarded as well balanced or even adequate if it did not take into account the conservation of existing house property as well as new building. Your Lordships know, I think, how solidly constructed are the stone houses built in Scotland in the days before the First World War. The interiors of many of these houses, however, belie their external appearance. Thousands of them are seriously deficient in sanitary and other conveniences but are well worth improving for the benefit of the families who must continue to live in them for many years to come. Large numbers of them are conveniently sited in relation to places of work and community services. Indeed, it is in the national interest to prevent such houses from getting beyond the stage when they are suitable for improvement at all.
  These were the main conclusions reached by the Scottish Housing Advisory Committee in the MacTaggart

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  Report on Modernising our Homes published in 1947. Part II of the Bill is based upon the recommendations in that Report. The terms of the Bill are so drawn as to cover not only the improvement of a house as it stands, but the subdivision of a large house into several dwellings, and the combination of small houses in tenements and terraces to provide larger dwellings and thus relieve overcrowding. There is considerable scope for the combination of houses in Scotland, which is still a country mainly of small houses. But as combination involves the loss of separate dwellings, much of this form of improvement will have to wait until the new housing programme is sufficiently advanced to make it easier for alternative accommodation to be found for displaced families. Indeed, it will be obvious to your Lordships that an improved programme must be closely dovetailed into the new housing programme in order that we may avoid diverting labour and materials from what must still have first priority—the building of new houses in areas where they are most needed.
  As in the English Bill, the grants to private persons are available only for houses which are owner-occupied or which are occupied on an ordinary tenancy basis. Grants will not be available for the improvement of tied houses in town or country. The normal grant from a local authority to a private person is a maximum of one-half of the owner's share of the expense of improvement. The normal maximum expense which may be approved is £600—giving a normal maximum grant of £300. The Bill provides, however, for the relaxation of this £600 limit on the approved expense of improvement in exceptional cases. It also provides for grant of a higher proportion than one-half of any such additional expense if the house being improved is of special architectural or historic interest.
  There are two special Scottish features in the improvement provisions which I should like to mention. Like the English Bill, the Scottish measure provides financial assistance for improvement on the basis that the resultant dwellings will have an estimated life of thirty years. The Scottish Bill, however, provides for the relaxation of this condition in exceptional cases, so long as the estimated
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  life is not less than ten years. This relaxation, which is based upon a recommendation by the MacTiggart Report, is designed to give the local authority more flexible powers in dealing with houses which may be due for demolition for road widening or other planning reasons before a period of thirty years expires. If such houses are seriously lacking in sanitary conveniences—and many of them are—it seems a pity that the occupiers should not have the benefit to some degree of the provisions of the Bill so that they can live in reasonable comfort until demolition falls due. There are appropriate safeguards to present abuse of this relaxation.
  The second special Scottish feature is a financial one. The ordinary Exchequer contribution to the local authority—whether for improvement carried out by the local authority or towards the cost of grants paid by them to private persons and housing associations—is three quarters of the local authority's net expenses. In the Highlands and Islands, where the resources of local authorities are more limited, this proportion is increased to seven-eighths.
  I now pass to one or two of the miscellaneous provisions in the Parts III and IV of the Bill. One of the provisions of special Scottish significance is that for the payment of additional subsidy for building new houses in special materials to preserve the character of the surroundings. Building in stone is more expensive than building in brick—by £100 or more per house. Building in stone is also, unfortunately, very much slower than other forms of construction, and for that reason alone it could not at present be used on a widespread scale. The additional subsidy is, therefore, not intended for general stone building, but for special cases where the cost of providing a house is specifically enhanced because of the use of such special materials—for example, small groups of houses in our proposed national parks, in other areas of unusual natural beauty, or in gap sites in streets of historic interest or containing notable examples of Scottish domestic architecture.
  As in England and Wales, local authorities will be enabled to provide a service of meals and laundry facilities or services as part of their housing operations. These facilities and services are

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  intended principally for hostels or blocks of flats in the cities and larger towns. The Bill also proposes to give statutory sanction to the long-standing practice of local authorities in selling furniture to their tenants. I should like to assure your Lordships that it is the intention of the Government that the provision of these facilities and services should be self-supporting and not a charge on public funds. Local authorities will be advised in these terms.
  Finally, the Bill contains a number of amendments to prepare the way for consolidation. The principal Scottish Housing Act is the Act of 1925. Since 1925 there have been eleven Scottish Housing Acts and this Bill makes the number twelve. All of those concerned with central and local administration of these Acts are keenly aware of the need for consolidation. The opportunity has accordingly been taken in this Bill to repeal and amend in advance a number of obsolete provisions so that a new Consolidation Bill can be prepared which will be as simple and as up-to-date as possible. I commend this Bill to your Lordships. Improvement of existing houses will be a growing housing operation. It may be some time before the full benefits of the Bill as a whole will be widely visible on the Scottish housing scene, but we must make a beginning, and I think that it is right that we should do so now. I beg to move that this Bill be now read a second time.
  Moved, That the Bill be now read 2a.—(Lord Morrison.)
  10.30 p.m.
  LORD POLWARTH: My Lords, I feel rather in the position of the twelfth man who has been told on the eve of the match that he has got to play, and I hope your Lordships will excuse any shortcomings on that account. I would point out also that there are many noble Lords who are far better acquainted with housing conditions in Scotland than I am, and I know for sure that some of them would have been present here to take part in this debate had it not been for the extremely short notice they received. I know it is not easy to avoid this, but I think it is a fact that the earliest notice that noble Lords in Scotland can have had of the Second Reading
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  of this Bill would have been in some cases on Saturday and in quite a number of cases on Monday. I also consider it deplorable that a Bill effecting such fundamental changes in Scottish Housing law should have to be taken at this hour of the night. I do not for a moment blame the noble Lord opposite for either of these facts, nor do I blame those responsible for arranging the Business of this House. The responsibility rests entirely with His Majesty's Government for the state of comparative legislative indigestion which they have succeeded in inducing by this time in their programme.
  We are grateful to Lord Morrison for giving us such a concise and factual account of this Bill. It was particularly pleasing that we have managed to avoid the political implications which on occasions are brought into this subject. I think we on this side in general welcome the policy laid down by this Bill. A great part of it is what we have been pressing for for some time past, and we could wish only that certain provisions of the Bill had been introduced at a rather earlier date. I believe that it was in 1945 that the present Government repealed the last Act which governed the improvement and reconditioning of houses in Scotland. A promise was made at the time that we were to have a better provision.
  The Committee investigating the matter published their Report in, I think, February, 1947. It is now nearly two and a half years since that Report was published, and here we are with a measure only just introduced—in the last year of the present Parliament, though the promises were made in the first year. However, better late than never! Perhaps it is a consolation that in this matter of reconditioning the lead was in fact given by Scotland, since Mr. Tom Johnston gave to the MacTaggart Committee the task of reporting on the possibility of this reconditioning of houses. And although, unfortunately, we have had to wait until after England to get our Bill, we do, in general, as I have said, welcome the measure. Perhaps we may not be quite so sanguine as the noble Lord about the results that will flow from some parts of it. We feel that in this measure there has not been shown quite so much regard as there might have been for the very different position of housing in Scotland

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  from that in England. The housing position in Scotland is, on the whole, more serious, and at the same time it is of a different nature. That is largely due to the anomalies of the rating system which at present exist in Scotland.
  If the noble Lord will forgive me, I will go through the Bill as briefly as I can. I should like to leave out Part I for the moment and refer to it later. Part II deals with the grants for the reconditioning and improvement of property and results from the Report of the MacTaggart Committee. In passing, I would say that I think we ought to congratulate the Committee not only on the nature of the Report but on the extremely readable form in which it was presented. I think the lay-out and the general get-up set a good example which might well be followed by other Departments when introducing White Papers and other documents. As Lord Morrison said, in Scotland we have a remarkably large number of these substantial stone houses, and it is probably true to say that a good many of those houses, provided that they are maintained and modernised, will still be standing after quite a number of the houses that have been built in the last twenty years, and which are being built at the present day, are no longer standing. I do not think many of us will be there to prove the fact, but I regard that as most probable. The provisions regarding the grants to local authorities are on the whole acceptable. I know that the City of Edinbugh are most anxious for this Bill to go through in order that they can go ahead with improvement and reconditioning. We on this side will do everything to see that the Bill goes through before the House rises.
  When we come to the provisions for grants to private persons to improve property, I must say that we are not quite so enthusiastic. The Report of the MacTaggart Committee recommended grants for these purposes of up to 75 per cent. The Bill provides only for grants up to 50 per cent. While that may be perfectly satisfactory in England, I would point out that in Scotland, owing to the difference in our rating systems, the result is not nearly so satisfactory, because we in Scotland have an owner's rate as well as an occupier's rate, and this reduces considerably the amount of return which an owner will have on the money which
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  he has spent. I do not want to go into the figures because they were gone into fully in another place, but I think it was convincingly shown that the increased rent which an owner is allowed to charge as the result of an improvement will hardly meet the increased costs which he will incur—if indeed it will meet them—with his increased rates, his increased Schedule A tax and the increased repairs to property. That being the case, I think it is unlikely that a great number of private owners will be tempted to go ahead with schemes under this Bill.
  I do not want to go into this very vexed question of service houses which, as your Lordships know, are excluded from the benefits of giants under this Bill. I think in Scotland it is of considerably greater importance than it is in England, owing to the nature of our farming and the general geography and lay-out of our land. I feel that what is required are service cottages on the farms, and that the local authority should construct a sufficient number of small houses and cottages, not large ones but two and three-roomed buildings suitable for the old and retired people. By that means the greatest economy in building would be secured, and everybody would be satisfied. My noble friend Lord Airlie, will deal with this subject, so I will not go into it any further. However, I do feel that we are rather up against a stone wall. When the English Bill was passing through this House, one of Lord Morrison's colleagues stated categorically the Government's attitude. He said:
  "the present Government are not in favour of tied cottages and therefore they are opposed to doing anything which may in any way encourage the continuance of tied cottages."
  We could not have anything plainer than that. I will not now go into that matter any further, because I do not wish to make the noble Lord, Lord Morrison, have to emulate his colleague in the magnificent stone-walling performance which he put up on that occasion.
  The noble Lord mentioned the special cases in which grants can be given. I think I may say that we are in general agreement with them—namely, for preserving or building houses in traditional materials where that is considered a good thing, the construction of hostels, and particularly for the conducting of experiments in connection with building methods. I attach very great importance

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  to that, particularly improvements connected with new methods of internal heating. While the Scottish climate is admirable in many ways, I think it is essential that it should be kept in its proper place, which is out of doors.
  The noble Lord then touched on the miscellaneous provisions of the Bill—that is, the provision of board and laundry and the power to sell furniture. I do not think we can seriously object to the provision of board and laundry, but I feel that this service must be provided on an economic basis. It would be wrong that there should be any question of its becoming a charge on the rates, and another subsidised service. I feel that at a later stage we might insert in the Bill a provision that at any rate over a period of years these services should be self-supporting and that, failing that, the local authorities should be compelled to discontinue them. I am not quite so happy about the provision regarding selling furniture to tenants, although I understand in fact it has been the practice in certain local authorities. I think this matter should be watched with the greatest care, because the provision of cheap furniture is now on a pretty competitive basis, and there should not in general be any necessity for local authorities to enter this field.
  Finally, I would like to come back to Part I to which the noble Lord made reference, mainly to deal with the question of deleting from the duties of local authorities to provide accommodation the reference to the working classes. I believe we should welcome the abolition of this distinction. There is no reason why the noble Lord and his colleagues opposite, just because they continue work until such a late hour of the night and do not necessarily "knock off" on the dot of five, should be distinguished in any way from their fellow beings when it comes to the question of the provision of accommodation—indeed, in many ways I think they are even more deserving. But there is one question that is raised by this provision and which, I think, is a serious question—namely, to what extent should housing become a subsidised social service? We know that to-day to a large extent it is so subsidised. The question is, whether this should continue or some effort should be made to put housing on an economic basis. I throw that out only because it
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  is a question which obviously requires a good deal of thought. After all, the cost of providing houses and shelter has largely become concealed from the average man at the present day. At present values, his normal rent is probably about equivalent to about twenty cigarettes a day. It is an interesting comparison, and one could go on dealing with it for a long time. But in my view it is a problem which will have to be faced sooner or later, whether this service is to continue to be subsidised to the extent it is or whether we are to put it on an economic basis.
  I hope the noble Lord will forgive me if I return now to what I mentioned before, and what I am sure is one of the main reasons for the present housing shortage of Scotland, and one of the main obstacles to further progress—namely, the rating system. We may be told that this problem should have been tackled long ago before the war. Perhaps it should; but, after all, in those days with rates at the level that they then were, the problem was not nearly so serious. At the present day, with costs and rates at the levels they have reached, this problem is extremely serious and it will have to be tackled sooner or later. I cannot help feeling it is like that awkward letter which always gets to the bottom of the "pending" tray. It is not an easy one to answer and so it goes to the bottom; but sooner or later it must be answered, and the longer it is left the more difficult it is to answer. I do not know, but perhaps I am right in assuming that the noble Lord intends that this problem should be left over for the successors of the present Government to tackle. I will not keep your Lordships any longer at this hour but I would like to say that we welcome this Bill so far as it goes. We think that perhaps it might have gone a bit further, and we think it might also have been introduced at an earlier date. But now that we have it we wish it well, and we hope that perhaps greater advantages will flow from it than on first appearance seems likely.
  10.40 p.m.
  THE EARL OF AIRLIE: My Lords, I have no wish to be pugnacious at this time of night. In fact, quite frankly most of the pugnacity has gone out through the bottom of my shoes waiting for this

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  excellent moment. But I think your Lordships will allow me to stress on my behalf and that of other noble Lords what the noble Lord, Lord Polwarth, has just said in regard to the conduct of Scottish Business in this House. I myself had notice of this Bill two days ago. Had it been a measure not of such importance as housing one would not perhaps have minded so much, but this relates to what after all is probably one of the root causes of half the unrest and trouble in the country to-day, and we find that sufficient notice is not given to allow more than three noble Lords from Scotland—two of whom are resident in London—to be here. To say the leant of it, I think it shows extremely bad management. I hope that the noble Lord who is in charge of the Bill will make representations to the noble Viscount the Leader of the House to see that this sort of thing does not happen again. I think I had to speak to him once before about this same matter—perhaps he remembers it—but I am afraid that what I said had no effect. It may seem a laughing matter, but in the case of those of us who live 600 miles away it does make our lives very difficult. We are not idle people by any means. We have a great deal of work of various kinds to do. To give us only two days' notice when a measure of this kind is coming up for Second Reading is really not showing us much consideration. However, I will leave the matter there.
  In dealing with the Bill, I will he as brief as I possibly can, but I am sure that your Lordships would not wish that only one or two noble Lords should speak on the Second Reading. It would certainly not look very well in Scotland if that were the case. Before dealing with points arising out of the Bill, I would like to take the opportunity of raising one matter which I think has a bearing on housing generally. I am wondering whether the noble Lord who is in charge of the Bill would be good enough to make representations with a view to ascertaining whether there is some means of insisting that these various housing schemes should be made less ugly. As you travel about Scotland, you find that, taken by and large, the housing from the aesthetic point of view is monstrous. To begin with, the houses are only too often very unattractive on the outside. I know the difficulty that arises with
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  regard to materials, but is it necessary, as is so often the case, that dwellings should be made up of such a mixture of materials? Some of them are composed of a little bit of concrete, a little bit of stucco, a few bricks and so on. In the end you cannot help being impressed by the horrible ideas which seem to have been embodied in the construction of these places, and you cannot help feeling that it may not really be necessary.
  And when you go inside these houses, what do you find? First of all, there are the doors. You ask the builder about them and he tells you, with a smug smile, "These are housing scheme doors." If you go into any of the old "mews" cottages in London you will find the doors fitted there are in perfect proportion. It is quite an easy matter to have new doors with the panels made in proper proportion, just as it is easy to have the fenestration of houses in proper proportion. The well-known firm of Crittall's make windows in every proportion. I cannot believe that it is necessary to have almost everything connected with these houses so horribly ugly. I admit that this is not a matter which comes strictly within the Bill, but as it relates to housing generally I have taken the opportunity of raising it. I would be grateful if the noble Lord could ask whether, with the help of the Fine Art Commission or something of that sort, it would be possible to insist on something being done to mitigate what is really a great evil in the country. We are being swallowed up in a mass of ugly buildings and I, far one, do not believe that it is necessary.
  I will now, if I may, deal with two or three points in the Bill. I have little quarrel with what is in the Bill. On the whole, I think we must welcome it, and anything about which I have a quarrel is with respect to one or two matters which are not in the Bill but which I hoped might be. There is no reed for me to tell your Lordships, for it must be obvious to any of you who travel about Scotland, that the housing situation there is deplorable. We heard a great deal at Election time about an operation being carried out, in military fashion, whereby housing was to be speeded up in the same way that the production of guns was speeded up during the war. All I can say is that if a General in charge of an operation like this during the war had lasted as long

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  as the present people who are at present in charge of housing, with their record, I should have been very much surprised. I would have expected to find him wearing civilian clothes at a very early date, having been given the sack a long time ago.
  I do not feel that this Bill, good as it is in parts, is going to accelerate matters very much, partly because I believe it will be found that local authorities are not very anxious to build cottages where they are extremely costly, right up at the top of these far glens, until they have been able to overcome some of their own housing difficulties near at hand, for, after all, even with the grants given to them, they will have to find a proportion from the rates. I do not want to labour this point about the housing difficulty in Scotland, but I feel that I should draw the attention of your Lordships to a resolution which was passed by the British Legion in Scotland at their annual conference the other day. I had the honour of being Chairman of the British Legion of Scotland for a number of years and know that they are sound men. I would emphasise the fact that this body is entirely non-political and that this resolution is not an attack directed on the present Government or any other Government. The resolution was as follows:
  "That this Conference of the British Legion Scotland notes with the gravest concern the appalling housing shortage in Scotland: that it thinks that the number of houses built is totally inadequate compared with the number required, and that this situation is causing dreadful physical, mental and moral hardship among thousands, particularly among ex-Service men, their wives and families: that it notes also that many open and infectious cases of tuberculosis still have to remain at home in overcrowded conditions: and that it therefore requests the Legion Executive to make the strongest possible representations to all Scottish M.Ps., to the Secretary of State for Scotland, and to the Government to make the provision of houses a top priority and to tackle the problem in the same fashion as a military operation."
  I think that the resolution has a great deal to be said for it, and I consider that the Government, with all their difficulties, which I know are many, in handling their various recalcitrant followers in the docks and in other places, could still do something more than they are doing, though perhaps this Bill may help in some measure.
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  Shortage of housing is the cause of half the unrest to-day. If we could deal with the housing problem, I am certain that many of our difficulties would disappear. People are miserable under the present housing conditions. I am old enough, and most of your Lordships are old enough, to remember the music-hall jokes about mother-in-law. It is getting past a joke. She is becoming a stark permanent reality in the home. Families are all living together. I had a lovely mother-in-law, and most of us have very nice mothers-in-law, but to live permanently with one's mother-in-law is an entirely different matter. I know this subject causes amusement, but it is a fact that hundreds of families are living with their mothers-in-law who, as I say, may be charming people; but in the end contact makes things a little raw.
  Obviously in this Bill there is an attempt to bring back to some extent the benefits of the Housing (Rural Workers) Acts, but we are to be given no grant for what are known as tied or service cottages. I am very much afraid that, owing to the understandable reluctance of local authorities to extend their building, even with grants, into these far-flung districts, the rural housing problem will not be covered within the next thirty years, even if the Bill does accelerate building to some extent. I do not desire to make any Party capital out of this and I would therefore confine myself not to destructive criticism but to making one or two suggestions with the desire that they may be constructional. I feel that somehow or other in this Bill we have to get some of the building business back into the hands of private enterprise. Although private enterprise is now operating to a certain extent, it is doing so only with a great deal of red tape and controls. The situation as regards materials is undoubtedly easier, but I feel the Government should allow a much larger measure of free enterprise. I know that in my own county the view held is that if the ten or twelve of the excellent building firms who operate there had a free hand they would have been able to overcome our housing difficulties in about two years, and would have by now made "mincemeat" of them, if left free to do so. But because of the controls we are not on top of the problem. Somehow or other I feel we

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  have to try to free these controls to allow a freer approach towards building new houses.
  I would like to bring to your Lordships' notice a case which emphasises the point I am trying to make. At the end of the war a contractor in the North of Scotland went to the Department of Health and offered to build temporary houses of a very good type for £600 apiece. The houses were well designed, had a life of fifteen years and, as he said, could be converted to permanent houses at any time in their lives at very small expense. I believe the Department said that they could not possibly take the responsibility of rejecting such an offer, but they would write. They did write, and sent with their letter an enormous number of forms to be filled in. One of the questions that had to be answered was: "How many houses can be turned out in a week?" The answer from the contractor was: "That depends on whether I am to find my own labour, or whether labour is to be directed to me—in short, what labour I can rely on." From that day to this I believe the Department have let the matter drop. It may be the objection was over the use of traditional materials—that is, wood or stone—but as I have pointed out, these are in better supply now. There is no doubt about that.
  Noble Lords who were here for the debate on forestry heard a suggestion made in regard to the shortage of timber, that if the Government, instead of buying foreign pit-props would take the homegrown pit-props, and with the money which they used to buy the foreign pit-props would buy wood for housing, they would have a method of dealing with the shortage of timber, which is one of the things holding up housing—though that shortage does not now apply to the same extent. It is true that there is also a shortage of cement. However, taken by and large, there is a general improvement in the materials situation. I cannot help feeling that a measure of relief in regard to red tape, forms and controls would reduce a great deal of the slowness in enabling more houses to be built.
  My second point is this. I implore His Majesty's Government to take their courage in both hands and alter the rating system in Scotland—a question which was mentioned by my noble friend Lord
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  Polwarth. I am sure fiat until that is done the Government will never be able to deal with the housing difficulty there. As the noble Lord has explained, our rating system operates on entirely different lines from that in England, and if it is not dealt with the Government will never really cope with the housing shortage. The last point I want to raise is on the question of the tied or service cottage. I know that this is a point on which the Government are absolutely adamant. I have taken a great deal of trouble, not only in asking workers myself but in getting my friends in Scotland to ask their own people on the farms to ascertain whether there is any truth in this feeling against the tied cottage. I have come to the conclusion, because I receive the answer everywhere, that it is, really a myth. I believe it is true that the farm workers' union have said that they are against it. On the other hand, I understand the National Farmers' Union in Scotland are not against it. However, the Government feel unable to move unless they can get the National Farmers' Union and the farm workers' union to agree. I am afraid that those who represent the farm workers' union are rather in the same position as the leaders of the dockers and the dockers at the present moment—they are out of touch with their members. I have done my best to find out whether there is any real feeling against this system of tied cottages, and I am satisfied in my own mind that there is not, provided that the men get a reasonably satisfactory house. Scotland, as has been mentioned, is in an entirely different position. It has a different climate. One comes up against severe snowstorms, in which people are often snowed up and at times cannot get out of their homes for as long as six to thirteen weeks. There must be men on the spot to deal with the stock, and therefore the service cottage is essential.
  I would support the suggestion mentioned by my noble friend Lord Polwarth, that there should be built smaller cottages of two aid three rooms where retired farm workers could live when they have finished working. In that way agricultural workers would have houses "on the job," and when they have finished and have come to the end of their days of work they would be able to retire, knowing for certain that they would have a

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  house. These would be supplied by the local authority. I do not want to pursue this matter any longer because, generally speaking, I think this measure is a good one. I hope His Majesty's Government will be good enough to consider the points we have put forward, especially the one about Scottish Business in this House.
  11.2 p.m.
  LORD CLYDESMUIR: My Lords, the hour is late, but I think your Lordships will agree that an hour is a very short time indeed to devote to a measure of this importance. The noble Lord who introduced this Bill may feel thankful that he has been let down lightly by the Scottish Peers, because they have a legitimate grievance. Here is a measure which effects fundamental changes in the Housing Acts of Scotland, introduced at a late hour at night, at a late stage in the Session, and with the intention of rushing it through all stages at an early date next week. I feel that my friends who have made this complaint voiced the view of many Scottish Peers who would have liked to be present had there been sufficient notice to discuss this question. As one who has been responsible for housing in Scotland, I enter a protest.
  As regards the measure itself, the noble Lord was correct in describing it as one which has met with general acceptance by the local authorities. Its main provisions are based on a Report which was called for in the days of the Coalition Government by Mr. Tom Johnston—the Report of the MacTaggart Committee. I am glad that, in substance, the Government have seen fit to adopt the main recommendations of that Committee, particularly those with regard to the improvement of property. I am concerned, however, about one point which has not been raised so far in this debate, and that is that a good deal of improvement made possible may be endangered by a thoroughly bad Act—I refer to the Town and Country Planning Act. I am not at all sure that the improvement of property of individuals will not be stultified by the operation of the development charge under that Act. At this hour I will not enlarge upon that subject. It may be that I shall receive some reassurance in the Government reply that in no way will the provisions of the Town and
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  Country Planning Act affect those wino wish to improve their property. But, as I see it, there is a great risk that it may have the effect of slowing up improvements which would otherwise take place. An improvement very often means an increase of cubic capacity, and in my experience that is always liable to charge.
  This Bill was introduced in April last, and I think occupied nine meetings of the Scottish Grand Committee. It has certainly been threshed out in another place, if not here. During those meetings a number of Amendments were proposed, some of which were accepted, and so it was improved in its passage through another place. I have no complaint to make about its treatment there. My complaint is the one that I have already made, that noble Lords in this House have had insufficient time to gather together and discuss it.
  I think the local authorities will welcome this Bill, which certainly gives them further funds to apply to both the improvement of property and new housing. But the proof of the pudding will be in the eating. We must see how this plan works out. It will be of little ultimate value to Scotland if the promotion of new building must go. I hope that both will go on in a parallel way, and that advantage will be taken of every possible device that is known. I hope the private builder will have a reasonable opportunity of making his contribution to this work. As I say, I welcome the proposal that property should be improved, but in the result we must be careful that the absolute shortage of houses which still exists in Scotland is not continued by the building of new houses being slowed up. I have said all I wish to say. I hope that the working of the Bill will prove satisfactory and that my fears about the Town and Country Planning Act will not prove justified. But I felt it right to express that fear, and I trust that the Government, in a chastened spirit, will remember that this House desires to tackle big measures in a serious way.
  11.7 p.m.
  LORD MORRISON: My Lords, I am glad that this Bill has been generally welcomed. I knew there would be complaints that there had been insufficient time for its consideration. I agree entirely with that view, and I hope noble Lords will realise that I am not happy to be

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  handling a Bill at this time of night—although, indeed, both the noble Lord who spoke last and myself were accustomed to doing work in another place at hours much later than this. If I may strike a personal note, I made my maiden speech in another place at six o'clock in the morning.
  THE EARL OF AIRLIE: I never made any complaint about the lateness; I complained merely about the inefficiency of the way in which the Bill was brought in. You can bring it in at eight o'clock in the morning, if you like. I shall be here.
  LORD MORRISON: With regard to the insufficiency of the time, this of course is our busy season, towards the end of July. When a Bill that has been under discussion in the Scottish Grand Committee for a long time suddenly comes up at the end of the season, we are faced with the choice either of deciding that it shall be held up until the autumn or of dealing with it in such conditions as we are experiencing tonight. I agree with the noble Earl, Lord Airlie, that it is inconvenient. I hope he does not think I enjoy it any more than he does. If I had my way we should adopt a new system here by finishing our general work by the end of June and adjourning to Scotland, where we could devote the whole of July to Scottish legislation. I am sure that the legislation, as well as the health of the noble Lords, would benefit.
  I can only say, therefore, at this late hour, that all the points that have been made will be considered. If I went into a number of them now I do not think it would be fair either to the House or to its Officers who would be kept here. I think the Scottish people would be disappointed if the Bill were held up now, and the Scottish local authorities would certainly be disappointed. I should like, however, to answer the question asked by the noble Lord, Lord Clydesmuir. Dwellings improved under the Bill will be exempt from development charges. That purpose will be obtained by regulations which will be made under the Town and Country Planning (Scotland) Act for this purpose. I think that meets the point which the noble Lord made. I will guarantee that all the points that have been made in the debate will receive
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  consideration and will be brought to the notice of those responsible. I would like to thank noble Lords for the way in which they have received the Bill.
  On Question, Bill read 2a, and committed to a Committee of the Whole House.

  DOCKING AND NICKING OF HORSES BILL
  11.10 p.m.
  Order of the Day for the Second Reading read.
  LORD MERTHYR: My Lords, I beg to move that this Bill be now read a second time. This is a Private Member's Bill. I think I can explain it very shortly. Clause 1(1) imposes a prohibition on the process of docking and nicking of horses. Subsection (2) provides an exception and makes it legal to dock a horse's tail where it is necessary for the health of the horse because of "disease or injury to the tail." Subsection (3) imposes a penalty. Clause 2 deals with imports. Imports of docked horses are prohibited, with the exception set out in subsection (2) where imports which are intended for re-export are allowed; imports for breeding purposes are also allowed under certain safeguards and licences. Again there follow penalty clauses in subsections (3) and (4). Subsection (5), your Lordships will note, says that
  "This section shall come into operation on the first day of January, nineteen hundred and fifty-five."
  The object of that subsection is to give ample notice and time to those concerned in importing horses, and is in fact agreed between the people concerned. Then follows a rather important interpretation clause, Clause 3. I wish to draw your Lordships' attention to Clause 5, subsection (3), which says:
  "This Act shall not extend to Northern Ireland."
  One result of that will be that it will still be possible—and I admit that this is a temporary weakness in the position—to import horses from Eire through Northern Ireland into the remainder of the United Kingdom, but we thought it right to exclude Northern Ireland from this Bill because we took the view that it would be proper for the Northern Ireland Parliament to introduce a Bill of their own on the same subject.

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  This Bill has already passed through all its stages in another place. It is also almost word for word the same as a Bill to which your Lordships gave a Second Reading in 1938. On that occasion, in spite of the rejection being moved, it was carried by fifty-five votes to twenty. I am glad to see two other noble Lords besides myself here this evening who took part in that debate. Although they belonged to different Parties, they both voted on the right side. In support of this Bill I put forward two general propositions. The first is that docking is cruel; the second is that it is unnecessary. The general law of this country, as I understand it, is that cruelty to animals is lawful so long as it is necessary. When it becomes unnecessary, it also becomes unlawful. I say that this practice of docking is cruel for two reasons: first, the operation itself is cruel. It is quite true to say that, under the Animals and Anæsthetics Act, 1919, it is compulsory to use anæsthetics, but the fact remains that that is a difficult piece of legislation to enforce. It is easy in out-of-the-way farms and other places to evade the law.
  Secondly, and much more important, there is the question of cruelty that follows for the rest of the animal's life, through the deprivation of his tail. The tail is provided by nature to protect a horse against flies in summer and against the elements in winter. To remove the tail is not only an unnatural thing to do but it makes the horse completely vulnerable to those two things. Nature provides, in one way or another, a complete protection for the whole of the horse's body, and in the parts not covered by the tail it provides protection for the horse against flies. The parts covered by the normal tail are completely unprotected in any other way and, in our submission, therefore, it is a most cruel practice to remove the tail. If any of your Lordships have seen horses out in a field during hot weather you will, I think, appreciate the cruelty involved in the complete or partial removal of the tail.
  In trying to prove that it is unnecessary, I must deal very briefly with some of the objections to the Bill. It is, or was, said by the opponents of the Bill that there is a danger of the reins getting under the tail. That, I submit, is purely
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  bad driving. It is said that it is difficult to use horses for ploughing when they are not docked. That, I also say, is not a good point, because there are millions of horses used for ploughing, or were before tractors came in, principally in America; and I think it is demonstrated that it is not necessary to have docked horses in ploughs. Then it is said that undocked tails become dirty and are difficult to clean. It may save a little trouble to dock a tail; but I ask your Lordships, is cruelty to horses justified in order to save trouble to those who look after them? If trouble needs to be saved, it can be done by cutting the hair and binding it up. Then it is said that docking improves the appearance of the horse. That is a matter of opinion. I hold the opposite view, as do a great many people. I submit it is purely a question of fashion; it comes and goes. Docking has really been dwindling but is still prevalent in this country, mainly among horses exhibited at shows. Whatever the right answer to that question, it does not justify cruelty to animals.
  Finally, it is said that it is difficult to have an undocked horse in a tip cart. To that I reply that it is due to bad harnessing and to the traces being too short; and to get over that difficulty the solution is not to cut the horse to fit the cart, but to make the cart to fit the horse. My Lords, if this process of docking is necessary, why is it that millions of horses have been worked undocked, principally in other countries but also in this country, for a long period of time? In the last century, between 1840 and 1880, it was an uncommon thing in this country to dock horses, and there has never been a time when horses were more used than during those decades.
  I have taken some trouble to inquire about the position overseas. My information may not be quite up to date, but the results are interesting. On making inquiries overseas, it was found that docking is regarded as an English fashion; that in many parts of the world it is not carried on at all, and it is certainly not in all tropical countries, for obvious reasons. In seven States in the United States, it was prohibited as long ago as 1938, and possibly it is prohibited in more by this time. In Norway, Sweden and Germany it is illegal, and I would ask, if it is necessary, as alleged,

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  how comes it that it has been prohibited in those countries? Inquiries in the British Dominions elicited the information: "That sort of thing is not done here. Therefore, it is not necessary to pass legislation to prohibit it." I would ask this further question: If England is rightly regarded as a horse-loving country and also—as I hope it is—as a country which disapproves very strongly of cruelty to animals, how is it that this antiquated practice is still allowed to continue?
  The last time I introduced this Bill was in 1938, and the noble Earl, Lord Radnor—who I am sorry is not present in your Lordships' House to-night—then described it as "grandmotherly legislation." I am afraid that the lady is still very much alive, and will continue to be so until this Bill becomes an Act. Finally, I would like to say this, in apologising to your Lordships for having introduced this Bill at this hour of the night: that it is not intended to take the Committee stage until the autumn, if your Lordships see fit to give a Second Reading to this Bill. I beg to move that it be now read a second time.
  Moved, That the Bill be now read 2a.—(Lord Merthyr.)
  EARL FORTESCUE: My Lords, I do not propose to oppose the Second Reading of this Bill, but, at the same time, I reserve my right to move some Amendments at the Committee stage.
  11.22 p.m.
  LORD CHORLEY: My Lords, so far, at any rate, there is no law against the docking of speeches. Your Lordships may think it would be useful to have such a measure! Until such an Act is on the Statute Book, however, I propose to avail
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  myself of the law as it at present stands, and to keep my speech very short. His Majesty's Government welcome this Bill and will give it their support. They agree that arguments which have been put forward against this Bill are greatly over-weighted, and that, while there may be certain inconveniences, it is very unlikely that the carrying through of the Bill would, in fact, have the harmful effects which have been suggested. It is true that my right honourable friend the Minister of Agriculture has taken considerable interest in the matter, and that it was necessary to safeguard the position in respect of imported docked horses. There is a certain amount of docking of horses in some Continental countries, and, as some of those horses ire valuable for breeding it is necessary that we should be in a position to import them for that purpose. Negotiations over this have given rise to a certain amount of difficulty, but they have now been satisfactorily carried through. The Bill, as it has come through from the other place, bears the imprint of those negotiations, and is now satisfactory to His Majesty's Government who give it their support.
  On Question, Bill real 2a, and committed to a Committee of the Whole House.

  MERSEY TUNNEL BILL
  Reported, without amendment.

  URMSTON URBAN DISTRICT COUNCIL BILL SOUTHAMPTON HARBOUR BILL
  Reported, with Amendments.
  House adjourned at twenty-five minutes past eleven o'clock.