HL Deb 20 July 1949 vol 164 cc196-274

2.59 p.m.

Order of the Day for the Third Reading read.


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 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) 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 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— 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.


My Lords, the proposition which the Lord Chancellor presented to the House Monday, and 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. 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 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]:


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.

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.
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.)


My Lords, these next two Amendments, and also the Amendment to Clause 27, which is consequential on the same issue, were taken 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.


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]:


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.


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 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 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 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.

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.


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- 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 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. 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- 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 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.


May I ask the noble Lord what right has he to speak on behalf of the trade unions?


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 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.


I do not wish to interrupt the noble Lord, but could he give us Mr. Morrison's statement in 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.


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.


My Lords, I have had the privilege of taking part in discussions on all the nationalisation Bills that have been before your Lordships' 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 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.


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. 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.


You are quite right.


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 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.


Does the noble Lord mean public control, or public ownership?


I am coming to that. I recognise that it is a very important point. This Bill is am 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.


Oh yes, I did.


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 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.


May I ask on what grounds the noble Lord formed that conclusion?


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.


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 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; 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 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 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 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 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.


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 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.


I did not say that.


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 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. 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 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 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 this direction or that, we might never have heard of nationalisation. The noble Lord may think that, but I believe he is too optimistic.


I did not say that we should never have heard of it.


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.


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!

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 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.


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 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 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.


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?


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.

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 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. 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 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 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.


Why not?


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- 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 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.


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 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.


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.


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 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 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- 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 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."


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.


I think the noble Lord referred to the Sherman Law.


Yes, I did.


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.


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.


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 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 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.


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.


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 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 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.


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- 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.

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 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.


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?


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 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.

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."


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.


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.


That is prophecy and not a statement of the facts.


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 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 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.


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- 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.


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.


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; 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 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.


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 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 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.


I am not objecting, but I will deal with it later.


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- 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- 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 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 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.


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.


And the experiment was beginning.


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?


That was your expression, not mine.


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.


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 in the hands of what they call the people. That has been said both in this House and outside.


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.


Which is worth £5 to-day.


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 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 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 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.


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?


The shares of the concern, as the noble Lord knows, will belong to the State.


I mean future finance, when they want money.


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 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.]