Lords Sitting of 23 June 1949

Preamble
The House met at three of the clock, The VISCOUNT SIMON on the Woolsack.
Prayers
  BRITISH TRANSPORT COMMISSION BILL
  Read 2a and committed: the Committee to be proposed by the Committee of Selection.
TEIGNMOUTH AND SHALDON BRIDGE BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.

AGRICULTURAL HOLDINGS (SCOTLAND) BILL [H.L.]
3.5 p.m.
THE PARLIAMENTARY SECRETARY, MINISTRY OF WORKS (LORD MORRISON): My Lords, I beg leave to introduce a Bill to consolidate the Agricultural Holdings (Scotland) Act, 1923, Part II of the Small Landholders and Agricultural Holdings (Scotland) Act. 1931, Part I of the Agriculture (Scotland) Act, 1948, and certain other enactments relating to agricultural holdings, save, with respect to rights to compensation, in their application to certain cases determined by past events. I beg to move that the Bill be read a first time.
Moved, That the Bill be now read 1a.—(Lord Morrison.)
On Question, Bill read 1a; and to be printed.

IRON AND STEEL BILL
3.6 p.m.
Order of the Day for the House to be put into Committee read.
THE LORD PRIVY SEAL (VISCOUNT ADDISON): My Lords, I beg to move that the House do now resolve itself into Committee.
Moved, That the House do now resolve itself into Committee.—(Viscount Addison.)
LORD MILVERTON: My Lords, I ask for your indulgence in order that I may make a personal statement con-
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cerning this Bill. My intervention will be of the briefest nature. I cannot claim to any expert knowledge of the iron and steel industry and in the circumstances it might be asked why in that case I cannot maintain silence—especially since, as I say, I have no special knowledge to contribute. My reason is that a great deal more than iron and steel is destined for this particular furnace. I have for some time felt, with growing apprehension, that for lovers of freedom this Bill marks the parting of the ways. For the first time the State is to take over a key productive and competitive industry. There are principles involved which make it impossible for an honest dissentient to remain silent. I was born free, and I have spent the bulk of my life in teaching what freedom means to somewhat reluctant pupils in backward countries. I am very loath at my time of life to reverse this process and to help in selling the advantages of slavery to people who were once free.
Perhaps it is because my own experience in administration has shown me how unrestricted bureaucracy can strangle enterprise that I feel some doubts about the widening circles of Government controls. I have learnt much during recent months about the lack of administrative foresight and the destructive defects in administration of the National Health scheme and other nationalisation measures whose principles and purposes I accepted. There is, it seems to me, a wider gap than the dollar gap which threatens our national stability, and that is the gap between principles and performance in these schemes. If that were all, I might have kept silence, while regretting the decision to add still further to the national indigestion. But as I have listened to speeches in the debate upon this Bill I have grown more certain of three things: that this Bill is not necessary at the present time, if ever that it jeopardises the efficiency of our most vital industry; and, lastly, that the urgency with which it is pressed strengthens the apprehension of those who fear that control of this industry is itself the end and not the means to an end.
We have here, naked and unashamed, the time-dishonoured principle that they should take who have the power. The craving to be able to say "L'Etat, c'est moi" springs to life again whenever the desert soul of man is watered by power.

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I suppose that is why the price of liberty is said to be eternal vigilance. And it is because I feel that even the present control over the whole of our national life, which is at present legally in the hands of Government, has reached dangerous proportions, especially if that Government itself is ever controlled by irresponsible, malicious or revolutionary persons—and, after all, the possibility of that looms only twelve months ahead—it is because I fear that, that I cannot acquiesce by silence in the passage of a Bill whose credentials are so dubious and whose effect on our national life will be so far-reaching and so unpredictable.
My Lords, like the ghost in Hamlet this Bill comes in such a questionable shape that it excites misgivings about its real cause. I have been told that I knew the Labour programme when I joined the Labour Party. That is true. I knew it in outline; but I did not, in joining, sign away my right to think; nor did I anæsthetise my conscience or my principles; nor, I hope, did I lose the power to learn. I had certain aims and ideals, and I thought that the Labour Party could, in vulgar parlance, "deliver the goods." I am now appalled at the type of goods which are being delivered under a false trade label—the national interest. I thought I was participating in a crusade, and I found myself a camp follower in a "rake's progress." I am one of a large number of people of independent minds who saw the merit of the Labour Party programme of social justice, but who are now beginning to feel uneasy about the lengths to which the rest of that programme is taking them. I have listened to the arguments in this House and I have read what has been said elsewhere on this Bill. I cannot find that a case has been made out for it.
In resigning from the Labour Party, I feel it my duty to make my protest in public, especially as I know there are many others of the Party who share my views. The road on which we are travelling leads to a precipice, at the foot of which clearly emerges the totalitarian State. We have heard at Blackpool a prominent Cabinet Minister bewailing the fact that the moral stature of the people has not proved equal to carrying out the measures introduced by this Government—in simple words, that human nature had not seen fit to change itself at his
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behest. It is at least permissible to ask in reverse whether the moral stature of the Cabinet has proved worthy of the principles they proclaim. I suggest that the Iron and Steel Bill provides a ready answer in the negative.
The Minister of Health, in his new rôle as the moral leader of the Labour Party, has two aspects. I cannot regard either the intemperate and provocative language of the politician or the emotional appeal of the synthetic evangelist as a suitable substitute for the clear thinking and the calm judgment which the national interest demands. I speak for thousands of independent thinkers who voted Labour at the last election and who have a keen desire to see social justice, but who now begin to fear, as I do, that such measures as the Iron and Steel Bill will destroy the only possible basis of social justice, which is surely a prosperous and united nation. My Lords, in this House at least there is no excuse for failing to speak when conscience so dictates. I have no morbid desire to be a martyr and. I find it extremely difficult having to make a public confession that one has made a mistake, but I am unwilling to be a silent passenger on this sinister journey and I will certainly not betray the principles of freedom which have made this country great, nor will I help to forge a weapon which, in later and less worthy hands, may strike those principles dead. I therefore declare my opposition to this Bill and my resignation from the Party which supports it.
On Question, Motion agreed to.
House in Committee accordingly:
[THE EARL OF DROGHEDA in the Chair]
Clause 1:
The Iron and Steel Corporation of Great Britain
(2) The Corporation shall consist of a chairman and not less than six nor more than ten other members, and the chairman and all other members shall be appointed by the Minister from amongst persons appearing to him to be persons who have had wide experience of, and shown capacity in, the production of iron ore or iron or steel, industrial, commercial or financial matters, administration or the organisation of workers.
(3) Every member of the Corporation shall hold and vacate his office in accordance with the terms of his appointment and shall, on ceasing to be a member, be eligible for reappointment:
Provided that any member may at any time by notice in writing to the Minister resign his office.
(6) A member of the Corporation who is in any way directly or indirectly interested in a contract made or proposed to be made by the Corporation, or in any contract made or proposed to be made by a subsidiary of the Corporation which is brought up for consideration by the Corporation, shall, as soon as possible after the relevant circumstances have come to his knowledge, disclose the nature of his interest at a meeting of the Corporation; and the disclosure shall be recorded in the minutes of the Corporation, and the member shall not take any part after the disclosure in any deliberation or decision of the Corporation with respect to that contract.
(8) The Corporation—

(a) shall pay to their members such remuneration (whether by way of salaries or fees) and such allowances as the Minister may, with the approval of the Treasury, determine; and

(b) on the retirement or death of any of their members as to whom the Minister may, with the approval of the Treasury, determine that such provision should be made, shall pay to or in respect of them such pensions as he may so determine.

3.24 p.m.
LORD TEYNHAM LORD TEYNHAM moved, in subsection (2) after "matters" to insert "industrial or commercial." The noble Lord said: This Amendment raises the question of the composition and membership of the Corporation, and it is really designed to exclude from membership of the Corporation such people whose experience in administration, for instance, has been gained entirely outside industry and commerce. At first sight this Amendment would perhaps appear to debar the appointment of a civil servant or officer of the Services, but that is not so at all. It does permit the appointment of a civil servant or officer of the Services who has, in fact, had industrial experience, perhaps in the course of his career. One example would be service in a royal ordnance factory, or perhaps in a naval dockyard.
I have nothing but praise for the Civil Service as a whole, but Civil Service training is designed to ensure that mistakes are not made, and it is very difficult for civil servants to take risks. I would suggest that in the majority of cases the appointment of a civil servant as a member of the Corporation would not be a suitable one. The only purpose of the Amendment is to ensure that really
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suitable people with wide experience of industry and commerce shall in fact be appointed to the Corporation. A similar Amendment was moved in another place and it was argued by the Minister that it would exclude the choice of a large range of civil servants and officers of the Services whose appointment would be helpful to the national interest. I would point out, however, that that is not so at all. The Amendment does not at all rule out the appointment of a civil servant or officer of the Services who has had industrial or commercial experience during the course of his career. I beg to move.
Amendment moved—
Page 2, line 7, after ("matters") insert ("industrial or commercial").—(Lord Teynham.)
LORD ROCHDALE: I would like to support my noble friend on this Amendment, and first I wish to underline most wholeheartedly what he said—namely, that this was in no way an attack either on civil servants as such or on officers of the Services. Obviously, we all have the highest regard for both those types of servants in their proper spheres, but, as my noble friend has pointed out, the Amendment is not aimed at them. I would go rather further than what has been said, because I feel that this is not a matter merely of detail; I believe that the principle underlying this Amendment is fundamental. The question is this: Are productive industries, such as iron and steel, when nationalised, to be regarded as one more Government Department and therefore, to a large extent, immune from natural industrial competition; or are they to be regarded, as of course they ought to be, as industries that are still liable to competition from all spheres, both overseas and at home? If that is the criterion, then I am quite sure that when members are appointed to these higher positions in the Corporation, no possible suspicion should be allowed to arise that the appointment is made either in recognition of past services elsewhere or as a means of providing promotion to some individual in whose particular department the channels may be blocked.
My noble friend has pointed out certain instances where individuals such as those we are considering—eminent civil servants and officers of the Services—would not necessarily be debarred. But I would go a stage further and say that, as this

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Amendment is now drafted, there would be nothing to prevent any senior civil servant or other person from being appointed to some lower position in the Corporation or the companies if it was thought that he would be valuable there; and then, if in the course of years he showed that he had the administrative sk ill to be able to compete in an industrial concern, he could, having proved himself, be eligible to be appointed to the Corporation itself. Of course, I admit that in certain cases that might mean that some of them would have to eat a certain amount of humble pie, as they would in a sense be reduced in position, but it would overcome the objection which the Minister made in Standing Committee in another place, when he said that this sort of Amendment would entirely debar many distinguished people from helping the country in the iron and steel industry. I do not think that that is necessarily so, but it means that they will have to serve an apprenticeship in a lower position in the industry before they can be actually appointed to the Corporation itself.
VISCOUNT ADDISON: This is an interesting Amendment. It had been in my mind that all the four Amendments on the first page of the Order Paper really relate to the same consideration, and I was going to address some remarks, if I must do so, comprehensively to the general idea which lies behind them so as not to repeat myself if and when the other Amendments are moved.
VISCOUNT SWINTON: If I may intervene, may I say that it would, of course, be very convenient to have the Leader of the House express his general ideas, but, with great respect, the three Amendments raise entirely different points. One point is whether people should have had administrative experience, apart from the Civil Service. Then there is an Amendment dealing with how many members there should be having knowledge of steel. I submit that that is a wholly different proposition which must be dealt with on its merits. After that we come to the question of whether there should be on this body, as there has always been—and with very valuable results—on the Steel Board, a consumer of steel. That again is quite a different proposition. The noble Viscount, I am sure, would not wish in any way to curtail the debate, and of
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course it will be interesting to hear his general ideas.
VISCOUNT ADDISON: I welcome the intervention of the noble Viscount, and I think it would be appropriate that I should express my general ideas on the whole subject. What these Amendments do—including the one which has now been moved—is, so to speak, to prescribe to a certain extent the personnel of this Board. They are intended to do so, and they are intended to limit the freedom of action or of choice of the Minister as that is set out in Cause 1 (2) at the top of page 2, of which I will remind the House before I say any more. This subsection sets out that: "members shall be appointed by the Minister from amongst persons appearing to him to be persons who have had wide knowledge." Remember that: they must have had wide knowledge. The subsection also says that they must:
"have had wide experience of, and shown capacity in, the production of iron ore or iron or steel, industrial, commercial or financial matters, administration or the organisation of workers."
THE EARL OF DUDLEY: Will the noble Viscount allow me to point out a slight error which he has made? He has used the words "wide knowledge." The word "knowledge" does not appear in the subsection. It is not provided that these people should have knowledge of the industry.
VISCOUNT ADDISON: I see that the word "knowledge" does not actually appear, but how can a person have shown capacity in the production of iron ore or iron or steel and all the rest of it, unless he has some knowledge? That is just a foolish observation. Of course, he has to have knowledge.
THE EARL OF DUDLEY: It is possible to have experience but not a lot of knowledge.
VISCOUNT ADDISON: I am not going to give way to the noble Earl on this. The subsection is designed so that when the Minister constitutes the Board he shall be enabled to appoint people who have capacity in these matters; and that is so stated. The purpose of this Amendment—indeed of this group of Amendments—is to prescribe that the selection should be limited to this or that, or shall exclude this or that. This particular

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Amendment says the Board shall not be this or that. As the Amendment stands, it would mean that the Minister would not be able to appoint to the Board anyone who he could not say had had
"wide experience of, and shown capacity in, the production of iron ore or iron or steel, industrial, commercial or financial matters, administration or the organisation of workers."
As the noble Lord confessed, it is intended to exclude from the possibility of choice by the Minister a large number of people who have rendered eminent and distinguished service, in the Civil Service, in other Services of the Crown and in various other ways. For instance, a man like Sir John Anderson would be ruled out. Large numbers of people like him would be ruled out, because before he was appointed Chairman of the Port of London Authority—a post which I am sure he fills extraordinarily well—he did not come within this proposed definition and would have been excluded by this provision. Mr. Churchill, too, would certainly be ruled out. So would Sir Arthur Salter, Sir Arthur Street, Sir Henry Sell and many others. There was, in fact, a distinguished civil servant on the Iron and Steel Board—Sir Alan Barlow. He would be ruled out. If he is to be ruled out from serving on this Corporation, why should he not be barred from serving on the Iron and Steel Board?
There are a number of noble Lords in this House—I see some in front of me now—who have been made directors of corporations because they have distinguished themselves in some branch of the public service. Some, for example, have served with distinction in the Army. It is right that they should receive these appointments—I am not complaining in the least. But if a private corporation which conducts business is entitled to look for men in the Civil Service, or anywhere else in the Services, why should the Steel Corporation be prevented from so doing? I want to use only Parliamentary expressions, but really I consider that this is a fatuous idea. Why should the Minister be excluded from doing this, for that would be the effect of the Amendment? I think it is a very mistaken Amendment. I will not pass to the other Amendments, if noble Lords would prefer that I should not do so, but I am sure that the right way to constitute a Corporation of this kind is to prescribe, as the Bill does, the
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type of person who has shown capacity in this, that or the other, and then leave it to the Minister who is responsible to Parliament to make the best choice he can. To prescribe that the person chosen shall definitely be this or that will limit the choice of the Minister. And it will do something else which is much worse.
I am afraid that I must refer to the principle which is embodied in the Amendment which appears at the bottom of the first page of the Marshalled List. This sets out that
"… appointments shall be so made as to secure the inclusion of at least one person appearing to the Minister to have been engaged in the production of iron or steel otherwise than as ….
"a director or officer of a publicly-owned company or of any subsidiary of a publicly-owned company; or
"a director or officer of a company specified in the Third Schedule.…"
If you specify that particular persons who having been in this or that particular concern are to be on this Corporation then they become representative and not independent directors. What you want are independent-minded people, not people who are to represent an interest or a group of interests. It would be a wrong consideration to entertain, and I am sorry that we cannot accept any of these four Amendments.
VISCOUNT SWINTON: I would address one or two observations to the Committee first on the general idea and then on particular matters. I think, however, that it will be more convenient if I reserve what I have to say on some points to the time when we are discussing and, if necessary, voting upon specific propositions. First, with regard to the general proposition. The noble Viscount, Lord Addison, seemed to assume that the Corporation must necessarily be selected (I will come to the merits or demerits of civil servants in this connection in a moment) from people having particular kinds of experience of administration, descriptions of which he read out. There was, he suggested, to be one with this experience, and another with that experience and so on. Now that is not what the clause, as drafted, says. It is true that the clause sets out a list of qualities. It says
"…wide experience of, and shown capacity in, the production of iron ore or iron or steel, industrial, commercial or financial matters, administration or the organisation of workers."

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But—I speak subject to correction on this point—although the Minister could not appoint a person who had no sort of experience of one or other of these things, he is not in the least bound to give all that experience which is referred to representation on the Board. Provided he can bring the appointment within the letter of the collective words, he can appoint a Corporation entirely of people who know about administration, and he need not have anybody who knows anything about steel. That is so—well, I hope the noble Viscount will take legal advice on that. I may have been given the wrong legal advice, but that is the advice I have been given. It is very important that before we come to a decision on this Amendment we should know the true legal construction, and no doubt some legal members of the Government will tell us what it is. I am advised that the Minister would in fact be complying with the letter of the clause if he appointed a Corporation entirely of people who are experienced in financial matters or in administration or in the organisation of workers. I am supported in this view by an ex-Lord Chancellor, the noble and learned Viscount, Lord Maugham. I am very glad we have cleared this up, and the noble Viscount the Leader of the House has shown us that when he made his very interesting general observations he was under a misapprehension about the legal position.
VISCOUNT ADDISON: My Lords, I am under no misapprehension whatever. I am advised that the noble Viscount's interpretation is entirely incorrect. If the Minister were to do what the noble Viscount suggests he would not then have appointed a Corporation of
"persons who have had wide experience of, and shown capacity in, the production of …iron or steel."
VISCOUNT SWINTON: This is very important. After I have made my observations I am giving way to the noble and learned Viscount, Lord Maugham, and there are other noble and learned Lords in the House who may speak—another has arrived, I am glad to say. None of us should proceed under a misapprehension as to the meaning of the clause we are discussing. At present I am bound to say I proceed on the assumption that the noble Viscount the Leader of the House is wrong, and the noble and learned ex-Lord Chancellor is right. We
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have two conflicting legal constructions. Whatever the House will say, at least there is a possibility that the noble and learned ex-Lord Chancellor might be right in law, and the noble Viscount the Leader of the House might be wrong. It is better so to draft the Bill that we have the matter clear. I am going to proceed on the assumption that the noble and learned ex-Lord Chancellor is right, and this means that the Milister could appoint a Corporation which contained not one single man who had knowledge or experience (and the two are not the same) of iron and steel. If that be so, it seems to me of great importance that we should insert an Amendment, or a series of Amendments, which will ensure that there will be representation on this Board—"membership," if you please; the noble and learned Viscount the Leader of the House dislikes the word "representation"—which reflects experience in the great monopoly they are called upon to conduct.
That does not fetter the Minister's choice—at least, it does not fetter the Minister's choice any more than the Minister's choice ought to be fettered. I say, most emphatically, that a direction should be given to the Minister that he should appoint a certain number of people who have knowledge or experience of iron and steel. We may as well speak frankly about this. I am not happy about some of the appointments that have been made to some of the Boards of nationalised industries, and I do not think the Government are; because there have been a series of resignations, in some cases by people who would much rather have stayed there but did not think that the thing would work, and in others because it was apparently mutually convenient that resignation should take place. I do not think it can be said that in every appointment which has been made, although I am sure it has been made in the best possible faith, the best people have been selected for the job. Therefore, I say that, with that experience behind us, it is perfectly reasonable that we shall lay down certain broad rules that the Minister will follow; and we should say that he should appoint at least one or two people who have this kind of experience. It will leave him a fairly wide choice: it will leave him with the whole of the steel industry from

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which to pick. I do not think that is an unreasonable limitation to put upon the Minister.
Let me add that we are not dealing here with the boards of the ninety-six companies. When we come to them, I think a good deal will have to be said. I am not going to say it now, but I am very worried about the risk of centralisation and that the people on these ninety-six boards will not be independent. It is difficult to see how they can be given independence, but I am sure it is vital that they should be given it. What we are doing here is to appoint the Board of the complete monopoly, the people who are going to forge the policy of not only the whole steel industry of this country but also of dozens and dozens of other activities which are now swept into the net of this nationalised complex. It seems to me that Parliament will not be fettering the Minister's discretion and will not be doing its duty by the nation unless it makes sure, by whatever are the appropriate words, that people of real, essential experience are put into this position.
I come to the specific Amendment. It is true that this Amendment would not permit the Minister to appoint someone of administrative experience unless that administrative experience had been connected with business—not necessarily with the steel industry, but with business. That is the effect of the clause, and I think it cuts both ways. We may find a soldier or a public servant (and I can think of both) who, without having actually had business administrative experience, has proved himself to be an extraordinarily competent business administrator on entering into business. Frankly, I should be sorry to cut out such a person. On the other hand, Civil Service training, of which I have the highest possible regard, does not fit a man for business. I have worked with civil servants as a Minister, on and off, for thirty years, and have even been a civil servant myself, and I think they are second to none on their job; but that job is not, and ought not to be, the running of a business. They have an utterly different training, and I would go so far as to say that they ought to have an entirely different training and a different mentality.
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From time to time you will get a man of such universal ability that he is equally good in almost any job into which you put him. The noble Viscount cited Sir John Anderson; I could cite others. But I can think of a large number of civil servants who have been very good civil servants but who, put into the direction of a business, were wholly unsuited for that purpose, and it would have been better if they had returned to the Civil Service where they would do magnificent work. Frankly, if I were involved in the appointments to this Corporation, which is to comprise not more than ten and not less than six persons, and I had to take the choice between the possibility of excluding some very good soldier or civil servant who would make a first-class business administrator, or take the risk of having a number of civil servants, all admirable in their own job, put into the direction of this vital industrial monopoly, then I am bound to say that I think the balance would come down in favour of exclusion rather than inclusion.
3.51 p.m.
LORD HAWKE: There are, I think, two strong points which have not yet been made on behalf of this Amendment. By and large it excludes from this Board almost all civil servants. I submit that there are at least three very strong reasons why civil servants, by and large, should be kept off this Corporation and any other of these public boards. In the first place, I do not believe their duty lies there. Their duty lies in their Departments, which to-day are heavily understaffed, and where their training best suits them to do their work. A further and very cogent reason, I believe, is that there should be no suspicion that a civil servant should ever be in a position to give advice as to nationalisation of an industry in which he may afterwards find an exalted post. At the moment, as regards the first two considerations, the whole of the Civil Service is suffering from overwork. The life of a senior civil servant is a dog's life: he works himself to death, or else he sees an accumulation of files growing ever larger on his desk. The temptation is to take any possible relief. But getting out means that he is going away from his duty, and he brings nearer the day when administration may break down. I would like this temptation to be kept firmly out

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of his reach. The other point is that I believe it is utterly wrong, constitutionally, that a senior civil servant should be in a position to advise a Minister about what should or should not be included in a nationalisation proposal, and afterwards step into the job of running that nationalised industry. That is a principle which is so strong that I feel we ought to insert this Amendment into this and every other nationalisation Bill.
VISCOUNT ADDISON: I am advised that, owing to the fact that the word "or" occurs three times, the Minister, if he were so crazy, could in fact, by taking advantage of all those words, do just what the noble Viscount has suggested. Therefore, I will not contest that point; I agree that the noble Viscount is correct there. I would, however, add this. Clearly, all these things are put into the clause in order to indicate the kind of people the Minister should select. I cannot imagine that any Minister who is fit to be a Minister, or who is fit to be outside a lunatic asylum, would appoint a Corporation consisting exclusively of people who have been civil servants.
VISCOUNT MAUGHAM: I am glad the noble Viscount has said what he has, because I should be loath to be at issue with him, even on a question of law. May I also say that I do not like to be referred to in a matter of this sort as an ex-Lord Chancellor, because I have known—in the past, of course—Lord Chancellors whose occupation of that position was due rather to political eminence than to a knowledge of the law? For my part, if I have any claim to tell your Lordships my opinion on the meaning of this clause, it is that I have spent a life at the Bar and on the Bench, and my opinion has nothing to do with politics at all. I have on various occasions expressed my opinion as to the construction of a difficult clause in an Act of Parliament, and so far as I can remember I have never yet been corrected either by a Lord Chancellor or by any other lawyer. In my opinion what this means is that the persons among whom the selection is to be made by the Minister are
"persons who have had wide experience of, and shown capacity in"—
and all the different things are subject to those words—
"the production of iron ore or iron or steel,"
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and, secondly,
"industrial, commercial or financial matters …"
I would observe there that possibly the Chancellor of the Exchequer, whose name has been bandied backwards and forwards as a person who would be excluded by these words, is, in my opinion, a person who has shown capacity—though I do not ask noble Lords on opposite Benches to take the same view—in a financial matter. He has made speeches which I should have thought would persuade most people.
VISCOUNT ADDISON: It does not say "financial." It is "industrial or commercial."
SEVERAL NOBLE LORDS: "Or financial."
VISCOUNT MAUGHAM: The words are there. Taking the whole lot one by one, it says:
"… wide experience of, and shown capacity in, the production of iron ore or iron or steel, industrial, commercial or financial matters "—
that is where I think my friend the ex-Chancellor would come in.
Then it is suggested that the words "industrial or commercial" should be added to qualify the word "administration" which follows, and rule out whether rightly or wrongly, the Admirals or Generals, most of whom have had great experience of one kind of administration. Then the subsection ends with the words:
"or the organisation of workers."
Those things, I think, are separate, and they are all things which the Minister may look at one by one to see whether a particular person he wishes to appoint to this Corporation is within one or the other category. Obviously the person in question need not be an expert in all these matters, but he has to be an expert in one of them. That being so, I feel there is no great difficulty, because the word "or" is a word which w ill cover every one of these separate matters, and the Minister can choose.
I am not going to inflict a long speech upon your Lordships, but perhaps I may say one word and throw out a suggestion to the noble Viscount who leads the House. Does not this clause make rather a mistake in referring, as a sort of definite rule, to every one of the members of the Corporation? Would it not carry out the intention of both sides of

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the House if, when we consider the appointment of a chairman and six, or not more than ten, other members, this clause were to make it clear that under all ordinary circumstances the majority of the members of the Board would be people who are iron and steel experts, or experts in one of the other matters which are mentioned in the last couple of lines? For my part, I would not be shocked if there were six experts and two persons who had a large experience in some other branch of human economy. I personally should be quite content, but I do not presume to do more than to throw out a suggestion for the consideration of the Government.
THE EARL OF DUDLEY: I hope that your Lordships will insist on this Amendment, because it is a matter of considerable importance. As I told your Lordships during the Second Reading debate, my experience in business has always been that a business succeeds or fails largely on the question of control. In these Amendments we are discussing the constitution of the Corporation which will control—if it ever comes into existence, which I sincerely hope it never will—the whole of this vast and complex industry, the most important industry in our national life; therefore this matter is of very great importance. It is the hand at the helm that counts. I am not going to pursue the question of the civil servant, which has been ably dealt with by the noble Viscount, Lord Swinton, and the noble Lord, Lord Hawke, but I think almost all your Lordships will agree that by and large—of course, there are exceptions—the civil servant is not the type of person who is fitted to run an important business like the combined nationalised iron and steel industry. I may say that I yield to nobody in my admiration of the Civil Service as a body. The noble Viscount the Leader of the House said just now that he considered it fatuous, childish and ridiculous (I think they were his words) to prevent persons with no knowledge whatever of administration in financial business going on the Corporation—
VISCOUNT ADDISON: I did not say anything of the kind.
THE EARL OF DUDLEY: —when there were a great many such persons serying on the boards of private companies and
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joint stock companies. That is what the noble Viscount said. He said that there were many such persons on the boards of private companies, and why should they not serve on the Steel Corporation. There is all the difference in the world. There are a great many admirals and generals, and persons who have had no previous business experience, serving on the boards of private companies. Some of them gain experience and do extremely well; some of them are complete passengers, because they have had no previous experience and knowledge. But you would not dream of putting those people on the executive of a large company of this sort. I speak from experience. We have a great many such persons on the boards of private companies in the iron and steel industry, but we do not select them when we are making up the personnel of the executive committee of the Iron and Steel Federation. We put on that committee the men of wide experience and knowledge. We select them, and we would not dream of putting on that executive committee a man who had no previous business knowledge. Surely, exactly the same principle applies to the Steel Board. I am not going to stress the matter further, but I am sure your Lordships will take a very strong view in this matter and will press the Amendment to a Division.
LORD TEYNHAM: I am sorry that the noble Viscount in charge of the Bill feels that he is unable to accept the Amendment, but his refusal to do so makes the following Amendments on the Order Paper all the more important. I would suggest that if appointments are to be made contrary to the provisions of this Amendment—I speak merely to the Amendment which I have moved—perhaps the Minister concerned will consider the suggestion made by the noble Lord, Lord Rochdale, and the noble Earl, Lord Dudley: that the appointments in the first place should be made lower down the scale; then, when the members had proved themselves, they might perhaps rise to executive positions. In view of the important Amendments to follow, I do not propose to press this Amendment and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
4.7 p.m.
LORD RENNELL LORD RENNELL moved, to add to subsection (2):
"The initial and subsequent appointments shall be so made as to secure the inclusion of

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at least three persons appearing to the Minister to have had wide experience of and shown capacity in the production of iron ore or iron or steel."
The noble Lord said: This Amendment is considerably more important than it was before, the first Amendment having been refused. I moved a similar Amendment in the course of the recent Bill on the coal industry, and the noble Viscount the Leader of the House said on that occasion that he did not like it; and he was good enough to warn me that he did not like this one. I may say that I find a curious reluctance on the part of Ministers in the present Government to be obliged to include experts on these boards. I had precisely the same argument with the noble Lord, Lord Macdonald, on the Coal Industry Bill. I wonder what is at the back of this antagonism to being obliged to include experts on a Board which requires expert knowledge?
VISCOUNT ADDISON: There is no antagonism.
LORD RENNELL: This clause says—I take it that we are now agreed upon what the wording of the clause really says—that the Minister need not appoint anybody with any knowledge of either iron or steel. We claim that at least three of the Corporation should have knowledge of iron and steel, and we claim that in particular for the following reason. The noble Viscount, Lord Addison, in speaking to the last Amendment, referred very rightly to the sort of composition that he and his friends had in mind for this sort of Board. He said, if I followed him rightly, that he did not want to have a functional Board in which one director took one subject and another director took another, but that the Board as a whole should control the operations of the group as a whole. With that sentiment I personally could have no quarrel at all, and I doubt whether any noble Lord on this side of the House could have any quarrel with it.
Let us examine for a moment what the position will be if the Minister chooses to appoint, in a Corporation consisting of not less than six or more than ten members, one from each of the categories that are described in the clause. If he were minded to appoint one each from people with knowledge and experience and capacity in "the production of iron ore or iron or steel, industrial, commercial
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or financial matters, administration or the organisation of workers," you would get precisely what may be called a functional Board, with one director of each sort who would inevitably have "put on his plate" at the meetings of that Board the particular subject with which he was supposed to be familiar. In other words, if you had only one expert director in iron and steel, all matters of technical importance in the manufacture of iron and steel would inevitably come to him more than they would to any other member of the Board. One of the principal vices of the present Railway Executive is that it is a functional board, and that is one of the reasons why I think a great many disappointing and unfortunate developments are going to take place.
It is in order to avoid having one of each class on the Corporation that we have said that it should consist of not less than three directors having a knowledge of iron and steel in order that no one of them should have all the technical matters "put on his plate." I am all the more surprised at the advance information that the Leader of the House has given us about his attitude to the Amendment because it has been one of the more frequent and ignorant gibes by members of the Party forming the Government, that at the present moment the boards of very many of our principal industrial companies do not contain experts in that particular industry. As a matter of fact, that happens not to be true, but it: is frequently said—not, of course, by the noble Lord the Leader of the House, who knows very much better. But if there is this feeling abroad amongst the members of the Labour Party that there are not enough experts on the boards of many of our industrial companies, why should there be antagonism to an obligation to put a number of experts on a Board of this sort? It is for that reason, and in order to safeguard the technical direction of this industry in matters of iron and steel, that we are of the opinion (and I am very strongly of the opinion) that not less than three members should have had experience of and shown capacity in that industry.
For those reasons I beg: to move the Amendment which stands in my name.
Amendment moved—
Page 2, line 8, at end insert the said words.—(Lord Rennell.)
4.13 p.m.
LORD HAWKE: I particularly commend to your Lordships the argument of my noble friend, Lord Rennell, on the way a functional board develops. That particular line of thought had not occurred to me, but I am absolutely certain he is quite correct, and the one thing we have to avoid is a functional board such as those which are killing the coal and transport industries to-day, and possibly other industries also. Your Lordships might think that the noble Lord and myself, in putting down this Amendment, are turning towards syndicalism; but even though that was rather fashionable, I believe, at Black-pool, we are not yet converts to the creed. In putting down our Amendment providing that these people should be experienced in iron and coal, we do not mean that people should be taken from the bottom, without any administrative and managerial experience, and be put on the Corporation, which is, in effect, what syndicalism would demand. We maintain that this Amendment would provide and ensure that there is a proper ladder from the bottom to the top, so that a young man may go into the steel industry, after we have amended this Bill, knowing that if he shows enough initiative and hard work he can perhaps become one of these three people on the board at the top. If we do not put this Amendment in the Bill, the only way he can be certain of getting to the top is by becoming a trade union official and making his living by his tongue rather than by hard work and initiative. We believe it is essential that this Amendment should go to the vote.
VISCOUNT ADDISON: I shall not make a long speech, because, as the noble Lord who moved the Amendment anticipated, I hope you will not put this Amendment in the Bill. The noble Lord who spoke last said at the beginning of his speech that he had not given sufficient thought to something or other; well, he has not given sufficient thought to the life of an average trade union official. If he saw the way those men work he would modify his opinion. However, we will pass from that and I will come to the main argument. If this Amendment were inserted, persons who at present hold important positions would not be able to take appointments
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on the Corporation. I have in mind Sir Andrew Duncan, who is the President of the Iron and Steel Federation. He was, I think, a solicitor.
A NOBLE LORD: He had a very wide business experience, for all that.
VISCOUNT ADDISON: We could not have said that he was a person of experience of steel or of commercial experience.
VISCOUNT SIMON: Is not a solicitor a person who is experienced in commercial matters?
VISCOUNT ADDISON: That is not what the words say. It is "industrial or commercial administration."
VISCOUNT SIMON: No, it is not; you are not reading it properly. It is "commercial matters."
VISCOUNT ADDISON: However that may be, I find that a number of our distinguished Treasury officials, for example, would not qualify, nor would, for instance, the Chairman of the Prudential. The point I am making is, Why should a person such as that be in a worse position than any others?
VISCOUNT SWINTON: He is experienced in financial matters.
VISCOUNT ADDISON: But not in commercial administration.
VISCOUNT SWINTON: It is "financial matters."
VISCOUNT ADDISON: But the purport of the speeches was, quite frankly, to exclude people of that kind because they had not been properly instructed. However, the only point with which I am dealing is, Why should this Corporation be in a worse position than the others? I come to the point of the Amendment I am sure that neither the mover nor I would suggest for a moment that any sensible Minister would dream of appointing a Corporation for this purpose that had not at least three people on it with knowledge of the iron and steel industry. I should think myself that the chances are that the number would be larger. I am objecting to its insertion, however, because once you begin to put in this particular classification I should be committed to the other Amendments which make further classifications, and so at the end of it the poor Minister would

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have been left with no freedom of choice at all. That is not the right thing to do. I object to the principle of classifying this or that, apart from the general instructions which the clause enjoins upon the Minister: that the members should be people who have experience of and show capacity in this, that, or the other, and iron ore or iron or steel. I think it is a wrong principle entirely to fetter the Minister by specifying, as these Amendments would (and this is the first of them and the best of them, I agree) that a certain number should be this or that. I am quite sure that there will be certainly three who have had that experience and the number will probably be more; but, for all that, I think it is wrong to specify the composition of the Corporation in the clause itself. I hope therefore that the House will not proceed with this Amendment.
4.19 p.m.
THE MARQUESS OF SALISBURY: I am sorry to hear the speech just delivered by the Leader of the House. With regard to the first Amendment which was before your Lordships' House I think a certain argument could be made. It could have been said that the Amendment we proposed might unduly limit the choice of the Minister. I do not know that I would hold that view, but at any rate I see that a colourable argument could be advanced to that effect, and it was partly for that reason that we did not press that Amendment. But my Lords, surely this Amendment is harmless, and might be adopted. What is it that the Government are in fact refusing? They are refusing to agree that Parliament should lay down that three members out of a board of ten should have some knowledge of the subject with which they have to deal—the Leader of the House shakes his head, but that is what he said. After all, we in Parliament have a responsibility. We are constantly told that it is no longer a matter of private interests, that we are the shareholders now, and that we are the people who have to decide. Well, we want to decide. And we want to see that we have on this Corporation competent and not incompetent people. The noble Viscount is always fobbing us off with what he would have us believe to be the perfection and omniscience of Ministers. I do not trust Ministers at all. I think there are at present some very capable and experienced Ministers in His
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Majesty's Government and some extremely incompetent Ministers—that is so of most Governments. But a Minister may be biased, and he may be definitely incapable. We have had a case recently of a Minister who said that everybody who did not agree with him was "vermin." It is not to be supposed that he would put "vermin" on the Board. That might exclude some of the most important experts—including, perhaps, most of the people who know anything about the subject!
For these reasons and because I think Parliament has a definite responsibility I would beg the Government to think again. Surely this is not a very extreme proposal, that three people out of the ten on this Corporation should know something about the subject—or, in the words of the Amendment should:
"…have had wide experience of and shown capacity in the production of iron ore or iron and steel."
Surely, three members of the Corporation ought to have that knowledge, and if that is so I cannot see why it cannot be provided in the Act. I suggest to the Government that they are on very weak ground here. What they are trying to do, apparently, is to keep the power of the Minister completely unfettered. But we do not want the power of the Minister unfettered. We think Parliament ought not to do this. Parliament should see that this Corporation represents the interests of the nation and contains experts on the subject with which the Corporation have to deal. I do not thank we can fail to divide on this Amendment. We believe it to be an important one; we think the Government's attitude is completely indefensible, and we must press the matter to a Division.
VISCOUNT ADDISON: Before the Division I want to correct one point in the noble Marquess's speech. He must not represent me, or the Minister, or the Government, as objecting in the least to the idea that there should be on the Corporation three persons who have a knowledge of the industry. As a matter of fact, it is more than likely that there will be considerably more than three. What I am objecting to is specifying in a series of Amendments the ingredients of the Corporation.
THE MARQUESS OF SALISBURY: If that is the view of the noble Viscount he should accept this Amendment.
VISCOUNT ADDISON: No.
THE MARQUESS OF SALISBURY: Yes, because the argument the noble Viscount used just now is an argument for and not against the Amendment.
VISCOUNT SWINTON: If the noble Viscount is really right, that he objects to this Amendment because it fetters the Minister's discretion, why have we this clause about qualifications at all? Why

Resolved in the affirmative, and Amendment agreed to accordingly.

does not the Bill say, in effect, that the ten people the Minister appoints shall be whomsoever he likes?
LORD RENNELL: I do not intend to withdraw the Amendment. If this industry is going to be nationalised I for my part do not want to risk seeing a repetition of the creation of a functional board, such as we see at present mismanaging the railways of this country.
On Question, Whether the proposed words shall be there inserted?
Their Lordships divided: Contents, 98; Not-Contents, 21.

CONTENTS

Richmond and Gordon, D.

Monsell, V.

Hatherton, L.

Ridley, V.

Hawke, L.

Aberdeen and Temair, M.

Samuel, V.

Hindlip, L.

Cholmondeley, M.

Simon, V.

Hutchison of Montrose, L.

Exeter, M.

Swinton, V.

Kenilworth, L.

Reading, M.

Layton, L.

Salisbury, M.

St. Edmundsbury and Ipswich, L. Bp.

Llewellin, L.

Townshend, M.

Lloyd, L.

Willingdon, M. [Teller.]

Mancroft, L.

Amherst of Hackney, L.

Mendip, L. (V. Clifden.)

Buckinghamshire, E.

Ashton of Hyde, L.

Middleton, L.

De La Warr, E.

Baden-Powell, L.

Milverton, L.

Dudley, E.

Balfour of Burleigh, L.

Monk Bretton, L.

Fortescue, E. [Teller.]

Balfour of Inchrye, L.

Monkswell, L.

Gainsborough, E.

Beveridge, L.

Moyne, L.

Howe, E.

Brassey of Apethorpe, L.

Polwarth, L.

Iddesleigh, E.

Carrington, L.

Rennell, L.

Lindsay, E.

Cherwell, L.

Ritchie of Dundee, L.

Munster, E.

Clanwilliam, L. (E. Clanwilliam.)

Rochdale, L.

Onslow, E.

Roche, L.

Perth, E.

Clydesmuir, L.

Rotherwick, L.

Radnor, E.

Courtauld-Thomson, L.

Sandhurst, L.

Selborne, E.

Cromwell, L.

Sherwood, L.

De L'Isle and Dudley, L.

Somers, L.

Allenby, V.

Digby, L.

Stamp, L.

Bridgeman, V.

Ellenborough, L.

Stanmore, L.

Buckmaster, V.

Forester. L.

Strathcarron, L.

Cowdray, V.

Foxford, L. (E. Limerick.)

Strathcona and Mount Royal, L.

Davidson, V.

Gage, L. (V. Gage.)

Falmouth, V.

Gifford, L.

Templemore, L.

FitzAlan of Derwent, V.

Grantley, L.

Teviot, L.

Harcourt, V.

Grenfell, L.

Teynham, L.

Lambert, V.

Hankey, L.

Tweedsmuir, L.

Long, V.

Hardinge of Penshurst, L.

Wardington, L.

Margesson, V.

Harlech, L.

Wolverton, L.

Maugham, V.

NOT-CONTENTS

Jowitt, V. (L. Chancellor.)

Ammon. L.

Lucas of Chilworth, L. [Teller.]

Chorley, L.

Macdonald of Gwaenysgor, L.

Addison, V. (L. Privy Seal.)

Crook, L.

Morrison, L. [Teller.]

Darwen, L.

Nathan, L.

Hall, V.

Foley, L.

Pakenham, L.

St. Davids, V.

Henderson, L.

Shepherd, L.

Holden, L.

Strabolgi, L.

Adams, L.

Kershaw, L.

Winster, L.

4.33 p.m.
LORD TEYNHAM LORD TEYNHAM moved to add to subsection (2):
"The initial and subsequent appointments shall be so made as to secure the inclusion of at least one person appearing to the Minister to have had wide experience as a consumer of iron or steel for industrial purposes."
The noble Lord said: The object of this Amendment is to ensure that at least one member of the Corporation shall have had experience of consumer problems. It is true that every effort has been made in the Bill, as your Lordships will see, to render effective the Consumers' Council which is to be set up, but it is obvious that this Council can operate only after the event has occurred. But this event may adversely affect the consumers. I would suggest that it is essential that the consumers' interests should be safeguarded at the policy level. What is the policy level? It must be at Corporation level. An Amendment was moved in another place seeking to provide that the Minister should include the nominee of the principal steel-using organisations. It was argued by the Minister that he did not wish members of the Corporation to represent sectional interests. I would point out that my Amendment leaves in the hands of the Minister concerned the choice of the individuals. It does not imply that the persons so appointed should represent the consumers; it provides merely that at least one member of the Corporation shall be experienced in the problems of the steel consumers.
We have already had instances of the importance of this. There was an instance where the National Coal Board took action without any regard to the consumer. For example, to take one case, without prior consultation of any kind the price of coal was raised—I believe, by 6d. a ton. I think it is true to say that experience has already shown that redress in matters of this kind cannot be obtained through the Consumers' Council. I suggest that it is absolutely essential that the consumers' interests should be considered at policy level, and that must be at Corporation level. I do not think it can be Cone in any other way. There must be on the Corporation a member who has had experience as a consumer of steel for industrial purposes. I beg to move.
Amendment moved—
Page 2, line 8, at end insert the said words.—(Lord Teynham.)
VISCOUNT ADDISON: The House will be acquainted with the reasons for which I object to this Amendment. It is another of the "ingredient" type of Amendment which is thoroughly bad. A Consumers' Council is set up with great elaboration—we shall come to that presently. I cannot imagine that any Corporation manufacturing iron and steel will not take account of the advantageous sale of its products, the needs of its consumers or the kind of price fiat they can pay. What in the world else are they going to do? That is their business. So that to ignore the interests of the consumers, as the noble Lord seems to suggest will be the case, would be far removed from the policy of this body. In any case, in order to safeguard the whole position the Bill sets up with considerable elaboration the Consumers" Council, to which we shall come presently. I am sure that that will be a much more effective body in representing the interests of the consumers than one person out of ten on the Corporation. But, apart from that, and for the reasons I have already given, we object to this Amendment.
VISCOUNT SWINTON: One way of conducting a case is to pronounce judgment before the case has been argued. That is what the noble Viscount did at an early stage in the proceedings. The more we argued, the more he remained of his opinion, although I think he now understands what his own clause means, because when he was denouncing us and giving judgment against us he was doing so upon a complete misinterpretation of his own clause. However, let him be under no misunderstanding as to what this provision is, although he has entirely misconceived the purpose of it. He thinks that this is in order that some consumer may go and make a complaint—
VISCOUNT ADDISON: Not at all.
VISCOUNT SWINTON: Then what else is it? What is the point of bringing in the argument about the Consumers' Council. The Consumers' Council is to be set up. So far, I do not think that the Consumers' Councils have been very effective bodies. In the coal industry, where we persuaded the Government to

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agree to having two Consumers' Councils—one industrial—they have not been of the least use. The price of coal has gone steadily up, by 5s. a ton in one jump, and 4s. in another; and without consultation. The Industrial Consumers' Council was not consulted over that. And what is the good of making a complaint after that has been done? Again, without any consultation, I believe there is an example where the price of coal was raised to a particular industrial consumer (one of these steel companies) by two or three shillings a ton, as against its ordinary competitors. I suppose that the company could have gone to the Consumers' Council. I do not know whether they did, probably they did not, because they no doubt thought it would not be any good. What the Coal Board would say is "Look at the losses we are making. The losses get larger and larger, and our only alternative is to put up the price." The noble Viscount asked us to be practical. We are being practical. Many steel companies have found it invaluable to have on their boards a man who is not there as a complaining consumer, but as a representative of one of the great steel-consuming industries, in order to give advice as to how the company can best meet the requirements of its consumers.
Against the Iron and Steel Board, which worked admirably, there has never been a complaint, and we shall presently come to an Amendment which I hope the House will carry for re-establishing the Prices Board. But what was found essential on that? No doubt the Leader of the House is not aware that on the Iron and Steel Board it was found essential to have a consumer representative—he was one of the great shipbuilders. He was there in the policy-price fixing body. The noble Viscount's own Government continued it. They felt it essential to have that representation on the Steel Board. Why are we not to have it here?
VISCOUNT ADDISON: It does not say we are not.
VISCOUNT SWINTON: It does not say that, but all the arguments that have been advanced are to the effect that the Minister might appoint somebody. We want to be sure that he does. But listening, to the arguments of the noble Viscount to-day the betting seems to be very much
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against his doing this, because the noble Viscount himself said "I cannot see that this is the right place to have a consumer. The right place to have a consumer is on the Consumers' Council." If that is the way in which the matter is to be arranged I do not think there is much chance of the Minister taking the view we think he should take. I suppose the Minister has some idea of the sort of Corporation he is going to set up. Perhaps we might be taken into these secrets. It would be of interest to the Committee, in debating this clause, to know. But if we are not to be allowed to know, then it is the duty of Parliament to make sure that it is within his very wide range of choice.
There is no question of a nominee here; the Minister can take anybody who has this knowledge, and put him on the Corporation. It is on the Corporation, the policy-making Board, that the practical steel consumer ought to be represented when policy is framed. It is no good coming with complaints afterwards. I think it was absolutely necessary to have the last Amendment, to ensure that people who knew about the steel industry were there. I believe it to be so on the proved evidence of the experience of the steel companies and, above all, of the Government's own acceptance of the need for them on the Steel Board. We are told that the Steel Prices Board is now unnecessary, that we need not have one because this is the Corporation which will fix the price, which is to be so wise, which will have everybody's interest at heart, and which, with the assistance of the Minister, we are to trust. If the Corporation is going to take the place of the Steel Board then it ought to have the same sort of constitution as the Steel Board, and it certainly ought to have this representative consumer. I hope that my noble friend will divide the House.
VISCOUNT RIDLEY: I think there is one point about this Amendment which is of the greatest importance—namely, that in the case of this industry the term "consumer" does not necessarily mean the person who buys the finished product. It is not the case of a person who uses transport, or consumes electricity or gas, or even who buys coal. A large number of consumers are people who buy steel products, processed to a certain stage, which they themselves

185
must process further. A large section of the finishing part of the industry is left out of the Bill, and many of the decisions taken on the type of plant to be installed by the steel-making industry itself, and on the type of products to be rolled and so on, would have a great effect on the part of the industry that is left out. It seems to me entirely proper that the decisions taken on the planning and organisation of production of these products should be done with the help of someone who knows intimately the needs and requirements of the next stage of the processing of these products.
Similarly, it has always been noticeable, as the noble Viscount has said, that most steel companies have on their board somebody who is intimately connected with one of the large steel-consuming industries, either shipbuilding or engineering, or similar industries. That, I think, is done for a definite purpose—namely, that the steel companies themselves should have a close and intimate knowledge net only of the ordinary commercial arrangements under which they sell steel in different forms to the consumer. Through this kind of relationship, having an experienced person on the board, the companies are able to keep fairly close contact with the general lines of policy behind the consuming industries. It is important that we should see that that policy is continued under this system.
We have a difficult arrangement to look forward to under this Bill, when we consider the relationship between the Corporation and the companies themselves. It would be very useful if, so far as is possible, we could see that the type of membership of the boards of the companies is largely repeated in this Corporation—that is to say, that there are on the Corporation, as the responsible members, people who have the same kind of outlook and experience as the directors of the companies that they are to own, and with whom they have to have working arrangements. If the Bill is to work, the relationship between the Corporation and the companies must be flexible, sensible and friendly, deriving from mutual understanding. There is no mechanism in the Bill (and I do not see how there could be) to set up any direct chain of responsibility or control as between the Corporation itself and
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the companies which it owns. That relationship must depend on mutual good will, understanding and the intention to work together, so that the more it is ensured that the Corporation consists of people who are familiar with the same kind of problems, and who approach things in the same kind of way, the better chance there is of the industry being successful.
4.50 p.m.
THE EARL OF DUDLEY: I am afraid that members of the Labour Party appear to be so distrustful and suspicious of each other that they do net understand that it is possible for men of diverse interests to sit together on the board of a company and work together in harmony for the common weal of that company. This is what the Minister said about this matter during the Committee stage in another place:
"It seems to me inevitable that if a man is called a representative of the users or is nominated by the users, in point of fact he will feel hound to work on the Corporation for the people who have nominated him…I am wholly against having anyone on the Corporation who has a divided loyalty and who feels that he is there either wholly or partly to represent some special interest. As my hon. Friend said yesterday, if we do that, we get away from the team spirit, and if a representative of one side raises a case, there is bound to be a representative on the other side who has an equally good case, and I think that we shall get a bad sort of Corporation."
That, really, if I may say so, is a dreadful representation of human nature. As the noble Viscount has; said, on nearly all steel boards at the present time there are representatives of the consuming interests—of the interests which consume the products which we fabricate. I happen to be a director of Richard Thomas and Baldwins Limited, and on the board of that concern we have two very large consumers, Sir Robert Barlow, chairman of the Metal Box Company Limited, and Sir Andrew Agnew, managing director of the Shell Transport and Trading Company Limited. The concerns with which these eminent gentlemen are connected are very big users of our product—namely, tinplate—and the contributions which these gentlemen make to the policy and welfare of Richard Thomas and Baldwins is invaluable. They do not look to their own sectional interests. Their knowledge of the consuming side of the industry is invaluable to us in

187
making up our policy, deciding on sales and so on.
I hope the noble Viscount the Leader of the House will not allow this Corporation to fall into the difficulties which face the National Coal Board. We are anxious to avoid the difficulties which have arisen between the Coal Board and its consumers. Problems have cropped up which could easily have been avoided if matters connected with the consuming side had been more closely considered, and if there had been someone on the Board who thoroughly understood them. Some of these difficulties, it is only right to say, have been subsequently put right as the result of representations by consuming interests. But they have left a nasty taste in the mouths of consumers. There have been such matters as sending unsuitable and costly coal to important consumers over great distances without previous consultation. Other instances of what has happened have been given by the noble Lord who moved this Amendment. Now we are faced with an administrative service charge, which varies all over the country and which is really nothing more than a means of "raising the wind" further without putting up the price of coal. I hope that if this Corporation is to be brought into being it will be an effective one. I trust that the Committee will support this Amendment.
VISCOUNT ADDISON: I desire to interject only a few remarks with regard to one matter which the noble Viscount seemed to have in mind. I recognise the great importance, indeed the vital importance, of the Corporation, in their deliberations, having before them information as to the needs of consumers. Suggestions from great consumers of the Corporation's product may well be of immense value. All I am saying is that I object to the specification of particular sets of persons in the Bill because it will thereby inhibit the freedom of the Minister to secure the best people. It is the principle of which I am speaking, because this is one of a serious of Amendments to which the principle applies. I have not the least objection to the kind of knowledge and experience which has been mentioned being represented on the Corporation, and I have no doubt that it will be, for we must believe that the Minister will have some sense.
VISCOUNT SWINTON: No, with great respect I cannot say that I altogether believe that. As I have already said, judging by appointments which have been made to Boards in other nationalised industries I have no reason to trust the great knowledge of Ministers. This argument which is used by the noble Viscount is extremely embarrassing—tot homines, and so on. It is extremely embarrassing to the Committee for him to say: "Look at my eminent colleague. Do you think that he is altogether a—well, a not very adequate Minister?" That is not at all a good argument. I do not mean that some Ministers are not better than others, but that is not the way to legislate or to legislate for all time. What you ought to put into an Act of Parliament, if you are to have an Act of Parliament, is what you think ought to be done. You really only strengthen the case for doing that when you get up and say: "No one who is not a complete fool would do anything except what is proposed." If that is so, had we not better ensure, if we can, that if by any mischance we had someone who was a fool, of more or less completeness, he did not do what the Leader of the House says it would be very unfortunate if he did do. The issue between us is quite simple. Apparently, we both think it is the right thing to do to have this representation. There can be no question of limitation of choice. On both sides of the Committee, we think that this representation ought to be on the Corporation. Our view is that if we think so, it is our duty to say so in the Act of Parliament. The Leader of the House says: "If that is your view then it is your duty to refrain from saying so in the Act of Parliament." I leave it at that, and I will add only that I strongly counsel your Lordships to take steps to make effective what you believe to be right.
LORD TEYNHAM: I am afraid that I cannot feel I am in any way satisfied by what has been said on this matter by the noble Viscount who is in charge of the Bill. I think the noble Viscount, Lord Ridley, made a very important point which perhaps I did not make, and I would like to emphasise it again. Lord Ridley said that some companies have on their boards directors who have knowledge of consumers' interests, such as shipbuilding and engineering. I am sure it is right that a similar association

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should be continued by this Corporation. Surely it is better that consumers' interests should be considered at Corporation level, and that there should not be delay until some event which is adverse to the consumers has occurred and is left to be dealt with by the Consumers Council. Consideration of consumers'
Resolved in the affirmative, and Amendment agreed to accordingly.
5.7 p.m.
LORD TEYNHAM LORD TEYNHAM moved, at the end of subsection (2), to insert:
"The initial and subsequent appointments shall he so made as to secure the inclusion of at least one person appearing to the Minister to have been engaged in the production of iron or steel otherwise than as:—

(i)a member or officer of the Corporation;

problems should start at Corporation level. I feel that I must press this Amendment.
On Question, Whether the proposed words shall be there inserted?
Their Lordships divided: Contents, 93; Not-Contents, 21.

CONTENTS

Aberdeen and Temair, M.

Margesson, V.

Harlech, L.

Cholmondeley, M.

Maugham, V.

Hatherton, L.

Exeter, M.

Monsell, V.

Hawke, L.

Reading, M.

Ridley, V.

Hindlip, L.

Salisbury, M.

Samuel, V.

Kenilworth, L.

Townshend, M.

Simon, V.

Layton, L.

Willingdon, M.

Swinton, V.

Llewellin, L.

Trenchard, V.

Lloyd, L.

Bessborough, E.

Mancroft, L.

Buckinghamshire, E.

Amherst of Hackney, L.

Mendip, L. (V. Clifden.)

De La Warr, E.

Ashton of Hyde, L.

Middleton, L.

Doncaster, E. (D. Buccleuch and Queensberry.)

Baden-Powell, L.

Milverton, L.

Balfour of Inchrye, L.

Monk Bretron, L.

Dudley, E.

Barnby, L.

Moyne, L.

Dundonald, E.

Belstead, L.

Polwarth, L.

Fortescue, E. [Teller.]

Blackford, L.

Rennell, L.

Howe, E.

Brassey of Apethorpe, L.

Ritchie of Dundee, L.

Iddesleigh, E.

Carrington, L. [Teller.]

Rochdale, L.

Lindsay, E.

Cherwell, L.

Rockley, L.

Munster, E.

Clanwilliam, L. (E. Clanwilliam.)

Sandhurst, L.

Onslow, E.

Somers, L.

Radnor, E.

Clydesmuir, L.

Stamp, L.

Rothes, E.

Cromwell, L.

Stanmore, L.

Selborne, E.

De L'Isle and Dudley, L.

Strathcarren, L.

Stanhope, E.

Digby, L.

Strathcona and Mount Royal, L.

Ellenborough, L.

Allenby, V.

Forester, L.

Templemore, L.

Bridgeman, V.

Foxford, L. (E. Limerick.)

Teviot, L.

Buckmaster, V.

Gage, L. (V. Gage.)

Teynham, L.

Davidson. V.

Gifford, L.

Tweedsmuir, L.

Falmouth, V.

Grantley, L.

Waleran, L.

Harcourt, V.

Grenfell, L.

Wardington, L.

Lambert, V.

Hankey, L.

Wolverton, L.

NOT-CONTENTS

Jowitt, V. (L. Chancellor.)

Ammon, L.

Macdonald of Gwaonysgor, L.

Chorley, L. [Teller.]

Marley, L.

Addison, V. (L. Privy Seal.)

Crook, L.

Morrison, L.

Foley, L.

Nathan, L.

Hall, V.

Henderson. L.

Pakenham, L,

St. Davids, V.

Holden, L.

Shepherd, L.

Kershaw, L.

Strabolgi, L.

Adams, L.

Lucas of Chilworth, L. [Teller.]

Winster, L.

(ii) a director or officer of a publicly-owned company or of any subsidiary of a publicly-owned company; or

(iii) a director or officer of a company specified in the Third Schedule to this Act or of a subsidiary of a company so specified."

The noble Lord said: The object of this Amendment is to ensure the inclusion in the Corporation of a member drawn from the independent steel-producing undertakings which, of course, are not to be nationalised. There are a considerable

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number of them. I suggest that it is important that the Corporation should include someone experienced in the problems of the small firms who will be outside the Corporation, particularly those who will be operating under licence, as laid down in the Bill. It should be remembered that nearly 400 firms are not to be taken over, and of these some fifty will be subject to licence. I think it is essential to have someone on the Corporation to safeguard their interests at the policy-forming stage; and again that stage must be at Corporation level. I should like to draw the attention of your Lordships to the fact that outside the Corporation and their subsidiaries there will be independent production of such articles as bright steel bars, steel castings, steel forgings and steel wire in excess—and I particularly stress this—of the production of the Corporation on the basis of their present activities. Therefore, I suggest that it is of the utmost importance that these large independent interests should be represented at Corporation level.
Again, in the case of light sections and bars, steel tubes and fittings there will still be independent production of those articles, but not by any means as great by the Corporation and its subsidiaries. But I feel sure your Lordships will feel that an important minority such as this should be safeguarded. This Amendment would ensure that the independent units of production which I have already mentioned, which will be outside the Corporation, will be represented at Corporation level. I beg to move.
Amendment moved—
Page 2, line 8, at end insert the said words.—(Lord Teynham.)
LORD ROCHDALE: In supporting my noble friend on this Amendment I do not want to stray unduly into Clause 3, but I feel that this Amendment must take note of a subsequent Amendment that is to be moved to that clause. Your Lordships will no doubt have noticed that Clause 3 lays upon the Corporation the duty of promoting the efficient and economical supply of certain products. But that duty relates only to the Second Schedule products. It goes without saying, I think, that in practice this duty will have to be exercised with regard to all the principal activities of the publicly-owned com-
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panies. That is what the subsequent Amendment to which I have referred seeks to ensure. If that is so, it seems to me, coming back to the present Amendment, that the position will require the most careful and thorough deliberation by the Corporation when they are considering the policy for these other principal activities, as my noble friend pointed out. All this simple Amendment seeks to do is to see that when the Corporation are settling their broad policy there shall be somebody with them who can speak with first-hand experience from the point of view of these smaller firms, who are responsible for such a high proportion of activities other than those mentioned in the Second Schedule.
VISCOUNT ADDISON: I do not want to weary the Committee with a long discourse. The same principles apply here as to the earlier Amendments, but this is rather more absurd than the others. The noble Lord urged that large interests should be represented at Corporation level. There, if I may say so, he gives away his case. We want this Corporation to be composed of independently-minded people who do their best for consumers, the users of iron ore, and so forth. They will not be there as representing any particular outside interest; that is the wrong way to constitute a Board of this sort, vet that would be the cumulative result of the last two and other similar Amendments. Why should we specify that the Minister should be compelled to go outside the general sensible instructions of subsection (2), to see that he chooses persons who represent large interests outside at Corporation level—to use the noble Lord's own words. It is entirely wrong, and I hope the Committee will not divide on this Amendment. If they do, we can only insert it. All I have to say is that it will be discreditable to the Committee to do so.
THE EARL OF DUDLEY: The noble Viscount describes this Amendment as absurd. I think it is disgraceful that the Government should have such a lack of sympathy and understanding that they deny representation to a minority of firms who will be entirely under the thumb of this Steel Board.
VISCOUNT ADDISON: I hesitate to interrupt the noble Earl, but we are not denying representation to anybody who

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will bring to bear on the subject a disinterested mind and experience. We do say, however, that the Board should not be constituted of people who are frankly on it to represent large interests outside.
THE EARL OF DUDLEY: I cannot follow the noble Viscount's method of reasoning. We insist, if something is right, that it should be put in the Bill; and this is something which we feel is right and justified. The Third Schedule to this Bill has been drafted in such a curious way that there will be an independent majority of production by certain sections of the industry, with a strong publicly-owned minority; and, conversely, a strong independent minority in other sections, which otherwise are owned by the Government. For example, there will be an independent majority, but a publicly-owned minority, in the following products: bright steel bars, steel shaftings, steel forgings, wire, wrought iron, and iron castings. And there will be a strong independent minority in light sections and bars, alloyed bars and sheets, cold rolled strip, steel tubes, pipes and fittings. It is important in regard to all those sections that they should work together and in harmony. That cannot be achieved unless they have a representative on the Corporation in close moment-to-moment touch with the policy that is being framed. The Corporation will be in the position to dictate and enforce all prices. Therefore, in that respect the independent minority will be entirely tinder their heel. It is only fair and businesslike that these independent firms should have representation and some say in such matters as price policy, wages, hours of work and so on. Otherwise, unfair conditions will be imposed. Indeed, in view of the fact that there is this curious difference, of independent minorities in some cases and independent majorities in other cases, the firms remaining as an independent majority might, if they were not working harmoniously with the Corporation, create conditions which were very disadvantageous and inconvenient to the Corporation. Therefore, in the interests of the Corporation it is most essential that they should work together. I hope the noble Viscount will give more thought to this, and will agree that it is important that these independent people should be represented on the Corporation.
THE MARQUESS SALISBURY: I imagine that it was no great surprise to any of us that the Leader of the House did not see his way fit to accept this Amendment, for the Government seem quite to have made up their minds that Parliament is to place no limitations to the powers of the Minister under this new scheme. I am sorry that is so. I think that from their own point of view they would have been wise to give it more serious consideration. It is not, after all, an unreasonable thing that there should be on the Corporation some representative to look after the interests of these smaller firms, who be faced with great competition from this immense new monopoly which is being created. Indeed, one would have thought that even from the point of view of general principle there was something to be said for representation of minorities. In this case the argument is a stronger one because, as my noble friend Lord Dudley has pointed out, in certain products which he mentioned these smaller firms are in fact producing the majority of the total products of the country. Therefore, it is particularly important that a fair balance should be ensured between their interests and the interests of this immense new Corporation that is being created.
It is generally admitted as being important—in fact, it is a general principle of British law—that not only should justice be done, but that justice should be seen to have been done. One would have thought that anything which ensured that, and was a reassurance to the general public that such a thing was happening, was of advantage—even from the point of view of the Government, in recommending the scheme to the British population which is by no means convinced that it is a desirable innovation. I am not going to advise my friends to divide on this Amendment. We have divided on two which we believe to be of great importance—arid I expect we shall have to divide on others—and perhaps there are limitations which we must set ourselves. But I regret, and I believe that the Government will ultimately regret it, that they are determined to bring in this scheme which I do not believe has the support of the majority of the people of this country. The least they can do is to see that it appears to be a completely equitable one. As I say, I cannot advise

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my noble friend Lord Teynham to press the Amendment, but I regret deeply that the Government could not see their way to accept it.
LORD TEYNHAM: I, too, am sorry that the noble Viscount in charge of the Bill cannot accept the Amendment, but in view of the arguments which have been put forward from this side, and especially by the Leader of the Opposition, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.22 p.m.
LORD WOLVERTON LORD WOLVERTON moved, in subsection (2), to omit all words from the beginning to the proviso and to insert:
"The term of office of the Chairman of the Corporation shall be five years and the term of office of the other members of the Corporation shall be three years and one third of the members, or where the total number of the members is not divisible by three, such number as represents one third of the highest number less than the total number of members which is divisible by three shall retire in each year on the anniversary of the constitution of the Corporation excepting that in each third year all such members as have held office for three years since their last appointment shall retire on the said anniversary:
Provided that of the first members of the Corporation one third of their number, or if such number shall not be divisible by three, one third of the highest number less than the total number of the members which is divisible by three, shall be appointed for one year until the first anniversary of the constitution of the Corporation and shall then retire, one third of such number as aforesaid shall be appointed for two years until the second anniversary of the constitution of the Corporation and shall then retire, and the remaining members of the Corporation shall be appointed for three years until the third anniversary of the constitution of the Corporation and shall then retire.
A person who has held the office of Chairman or member of the Corporation shall be eligible for re-appointment to that office or for appointment to the other of those offices."
The noble Lord said: This Amendment is an important one. Its object is to ensure that a system of rotation of membership of the proposed Iron and Steel Corporation takes place. In the Amendment I have been careful to ensure that there should be continuity of management, which I am sure your Lordships will feel is necessary. As the Bill is now drafted, no rotation system is provided for, although after the Amendment which was moved in another place and negatived, the Minister, resisting the Amendment, said that his objection to it was that it
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did not give sufficient continuity of management. He said that he would look into the question that members should not serve longer than five years, but nothing to that effect appears in the Bill as it is now presented to your Lordships' House.
The Amendment now before your Lordships has been modelled on the Bank of England Act, 1946. Under the Second Schedule of that Act—which was accepted by your Lordships' House in 1946—the Governor and Deputy Governor of the Bank of England are appointed for five years, and the other sixteen directors rotate on a four-year cycle, four retiring every year. Under this proposed Bill there is to be a chairman and not less than six nor more than ten members. In this Amendment, which is rather complicated to explain, we have attempted, I think with success, to put a cycle of three. It will not quite work out at a cycle of three if the full number of ten are appointed May I give your Lordships one example, because I think it is very important? The chairman will remain for five years, and if there are a chairman and ten members it will work out on this basis: after the first year, three members out of ten retire and are eligible for re-election: after the second year, three members of the remaining seven of the first appointments go and are also eligible for re-election after the third year the number has to be made one more, four, and they also are eligible for re-election.
If it is decided to appoint only a chairman and six members, it would work out on the rotation of one-third. The chairman would be appointed for five years. After the first year two members would retire, eligible for re-election, two more the next year and two more the third year, By that means I think we have met the objection which the Minister had to the Amendment moved in another place, that there was not sufficient continuity of management. We feel that this is a very important Amendment, because in all big public companies directors come up for re-election after two, three or four years, according to the Articles of Association, and we feel that the Minister should have that provision and that members should not be there indefinitely. By this method, which is rather complicated, there will

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be complete continuity of management. I beg to move.
Amendment moved—
Page 2, leave out lines 9 to 12 and insert the said new words.—(Lord Wolverton.)
LORD GIFFORD: This Amendment has been fully explained by my noble friend Lord Wolverton, and I will add very little. It seems to be a sensible and reasonable arrangement, and one which is almost universal in companies and banks; that is to say, that the directors or members of the Corporation should retire after stated periods—in this case three years for the ordinary members—and at the same time be eligible for re-election. I think it is a desirable safeguard against the Corporation being saddled for a prolonged period with some member who has not been a success. I think it is also right, as is proposed in the Amendment, that the chairman should be given a longer period, because obviously you do not want to change your chairman too freequently if you can possibly avoid it. I hope the noble Lord opposite will accept the Amendment because I think it is a very desirable and sensible one.
LORD HAWKE: Unless this Amendment is accepted, if my reading of the Bill is correct, there will be no limitation whatsoever upon the term for which the Minister can appoint the members of the Corporation. In all the other nationalisation Bills which I remember, I think there was some sort of limitation put in. At any rate, His Majesty's Government, when they bring these nationalisation Bills before us, are extraordinarily careful to make provision that where directors of private undertakings enter into long contracts for themselves or their employees which might be considered to be imprudent, the Government can repudiate them when they take over the industry. We are merely giving tit for tat. We are proposing that where possibilities exist of the Minister appointing people to this Corporation for a longer term than we feel would be justified, a limit should be put on his power. For that reason, I think we ought to support this Amendment.
VISCOUNT DAVIDSON: I hope the Government will accept this Amendment. It is not only reasonable but, from some angles, very necessary that an opportunity should be available to remove the mem-
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bers of the Corporation if it became desirable. If this Bill ever reaches the Statute Book, iron and steel is going to be a nationalised industry. Changes of Government do occur and I think that that alone is a reason for accepting this Amendment. I suggest that Governments of all complexions would probably wish to make changes, if appointments are on political grounds, as they have sometimes been in the present nationalised industries.
LORD MORRISON: This is a long Amendment and the noble Lord, Lord Wolverton, who moved it, has argued very reasonably that members should be appointed for a reasonable period and should retire in rotation. With the spirit of that proposal the Government are in agreement, but unfortunately I am not in a position to accept the Amendment because the Government take the attitude that there should not be any statutory rigidity in this matter and there must be room for flexibility in the length of the appointments. I do not think that the noble Lord, Lord Hawke, was being as reasonable as he usually is when he suggested that Ministers might appoint people for life.
LORD HAWKE: I did not say "for life," I said "for rather longer terms than we would like."
LORD MORRISON: I think you went further than that, and that is why I am endeavouring to add my small contribution to this discussion. Let us, so far as this discussion is concerned, try and keep perfectly calm, because we are in danger outside in the country of starting an era of wham. I call "bladder and stick" speech—speeches which make a loud noise but are a little remote from the facts. I therefore start by telling the noble Lord, Lord Wolverton, that, whilst we agree with the spirit, we regret that we are unable to accept his Amendment because the Government cannot accept any statutory rigidity in the matter. There must be room for flexibility in the length of the appointment. One of the main reasons for establishing independent boards is to ensure that the industry for which they are responsible can be planned on a basis of the steady pursuit of a longterm policy, and this might well require that the normal run of full-time appointments should be for a longer period than

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three years—for most nationalised boards the normal period is five years.
I must add that I think the second paragraph of the Amendment is completely unsatisfactory. It proposes that a fixed number shall retire each year. In making the appointments any Minister is bound to try to get a sufficient "stagger" to avoid a complete reappointment in five years. The older men normally would be appointed for a lesser period. I suggest also that some of the people whom the Minister would wish to attract from the Corporation (and this point has not been mentioned) might not be willing to accept full-time appointments for so short a period as three years if that meant severing their connections with their existing business at the age of fifty and finding, say, in the middle fifties, that they were no longer required on the Corporation and had reached the age at which their services would not be sought after in other directions. If that argument is sound, and I think it is, to ask, as the Amendment does, that one-third should be appointed for one year and one-third for two years seems to me to be going a little too far. I cannot conceive that any responsible person invited to accept an important appointment like this, and realising that he might not be reappointed at the end of one year, would be prepared to give up all his important interests to take up this post.
LORD WOLVERTON: May I interrupt? They are all subject to reelection, and if they are satisfactory after one year and are re-elected they go on for three years.
LORD MORRISON: But the noble Lord knows it is not very satisfactory to have only one year's service on a task of this sort. In any case, I regret for the reasons I have given that I am unable to accept the Amendment.
LORD RENNELL: I do not understand what the noble Lord who has just sat down has in mind. He talks about "statutory rigidity" but it does not seem to have any bearing at all on the Amendment proposed by Lord Wolverton. This is the commonest of all provisions in appointing and electing directors to statutory companies: a person who retires by rotation is subject to re-election
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if he is suitable. If there is no question of statutory rigidity about a man being appointed for five years and then having to resign, a fortiori there is none in regard to a man appointed for one year and then having to submit to re-election. The purpose of this Amendment is to secure that certain gentlemen who have been appointed to the Board shall retire in such a manner that there will always be a certain number retiring each year and, if they are willing to go on, offering themselves for re-election, and being re-elected if they are suitable. That has nothing to do with statutory rigidity. It is entirely the opposite. There is no statutory rigidity at all. On the contrary this gives the maximum possible flexibility.
Moreover, this Amendment enables the Minister or the Government, without causing a row and asking for somebody's resignation or sacking him from the Board, to drop a person who either has not proved his worth or has proved that he is not so good as somebody else who subsequently comes along. It is the most convenient of all methods of effecting a change without having a row in the newspapers and other difficulties, a great many of which have already come across the path of various Ministers in His Majesty's Government. In their own interests I must beg the noble Lord to reconsider this Amendment. If he will look back over appointments made in the last few years, he will see how much more convenient it would have been to have a certain gentleman retiring by rotation and to ask him not to offer himself for re-election, than to say, "Look here, old chap, you have got to go," and have every newspaper in the country kicking up a row and saying "So and so is being asked by the Government to go."
I must ask the Minister to reconsider this proposal because it is the simplest, most practical and most efficient form of securing the rotation to which the Minister referred in speaking of staggering the retirements. He said he wanted the appointments made for such a period as would avoid all the people retiring or coming to the end of their appointment at one time. What we are seeking to do in this Amendment is to do precisely what the Minister said he wanted to do but which he is unwilling to bind himself to do; that is to say, he is unwilling to bind

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himself that people shall retire by rotation so that he can re-elect them if he wishes.
The Amendment gives everybody complete freedom. It gives the director who does not agree with the policy of the company freedom to go without embarrassing the Government. There are a great many public-spirited people who feel that a policy decided by their Corporations is not one with which they are in agreement, but they do not want to embarrass the Government by resigning and have every newspaper in the country saying, "Why did you not go on? Did not you agree with the policy?" It is simpler to say, "I have come to the end of my three years," or six or nine years, and fade out of the picture. I hope it is not because it is an Amendment proposed on this side of the House that the Minister is unwilling to hind himself. This is an Amendment entirely in the Government's own interest, and it seems to me entirely in the spirit of what the Minister said in Standing Committee.
LORD BALFOUR OF INCHRYE: I hope that the noble Lord will reconsider his rejection of this Amendment. He took refuge behind a smokescreen of statutory rigidity—those were the words he used. As I understand it, he means that the Government (and perhaps he will correct me if I am wrong) are unwilling to accept fixed terms of office and fixed terms of rotation for the chairman and for the other directors. That is as I understand it.
LORD MORRISON: The Government desire that there should be some flexibility, for the reason, among others, that some would be part-time and some would be full-time.
LORD BALFOUR OF INCHRYE: But this dislike of a fixed term and retirement by rotation does not bear examination. If noble Lords will refer to the Second Schedule of the Bank of England Act—a product of this Administration—they will see that it lays down almost exactly what this Amendment is proposing to do. It says:
"1. The term of office Governor and of the Deputy-Governor shall be five years.
2. The term of office of the directors shall be four years, and four of them shall retire each year on the anniversary of the appointed day.…"
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I feel that the noble Lord ought to come with a better defence for the rejection of this Amendment than to say that the statutory rigidity of the Government is such that they now reject something which they have accepted in another of their own nationalisation measures. I hope that between now and the Report stage the Minister will undertake to consider what his own Government have done in other nationalisation measures and that at a later stage he may be able to put down an Amendment on the lines of that moved by my noble friend to-day.
LORD MORRISON: I do not know that I can add anything to what I have said. I know that the term of office, so far as the National Coal Board is concerned, is five years and that that is also the period for the Transport Commission—that is for a full-timer. The term for a part-timer is three years, and in the British Electricity Authority, two years. I know that the term in the Bank of England is five years for a Governor, and four years for the other directors, a quarter of whom retire annually. What I said, or meant to say, to the noble Lord was that the Government, while agreeing with the spirit underlying the Amendment, desire that members should be appointed for a reasonable period and should retire in rotation. The Government find themselves in agreement with that, but are unable to accept this Amendment. I endeavoured to explain that, in the opinion of the Government, the Amendment is unduly rigid. Three methods have been adopted in the appointment of the boards of nationalised concerns. First, by a provision in the Statute itself; secondly, by regulations made under the Act; and thirdly by specification in the letter of appointment. That was the method adopted in the Transport Act. The Government are of the opinion that this would perhaps be the better method. I am sorry that I am unable to respond to the request of the noble Lord, but I have no instructions to do so and must leave the matter there.
THE MARQUESS OF SALISBURY: I think we all understand the difficulty in which the noble Lord, Lord Morrison finds himself, and in which everybody must find himself who is not speaking for his own office and has not therefore the elasticity which is sometimes so necessary. But he did say at one stage that

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he thought that three years was too short. A man might respond to an invitation to give up ordinary employment to take on a job for three years and find himself at the end of that time obliged to leave, the job having come to an end. He may be in a position of great difficulty. I think we all appreciate that sort of position. We are not tied down to the terms of this Amendment. If the Government and ourselves are in favour of the spirit of the Amendment it does not seem impossible that some compromise may be found. I suggest to the Government that if we agree not to press this Amendment to-day they might, without committing themselves in any way, consider the matter a little further in consultation with the Minister before the Report stage. If at that point they find that they cannot meet us we can then see what we shall have to do. But I do not think that in this instance, when we are so near together in spirit, we on this side should go to extreme lengths. Therefore I suggest to my noble friend Lord Wolverton that he may desire not to press this Amendment at the present stage, on the understanding that Lord Morrison will discuss the matter with the Minister and let us know the result of the discussions. We can then put down an Amendment again on Report stage if that appears to be the appropriate course.
LORD MORRISON: In response to the noble Marquess, I have no objection to the conversations he suggests, and I will certainly take part in them in the hope of seeing whether it is possible to devise any words that will meet what we want. At the same time the noble Marquess will appreciate that I am not in a position to undertake any commitments.
THE MARQUESS OF SALISBURY: I do not want that.
LORD MORRISON: I appreciate that the noble Marquess has with his unerring instinct put his finger on a difficulty. There must be some elasticity. But I must ask the noble Marquess to understand clearly that I am not entering into any definite commitments. On that understanding I must leave the matter.
LORD WOLVERTON: I thank the noble Lord for what he has said, and in
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view of his remarks I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
VISCOUNT BRIDGEMAN VISCOUNT BRIDGEMAN moved to add to subsection (2):
"Provided also that if the Minister is satisfied that a member:—

(a) being a whole time member holds another office of profit; or

(b) becomes bankrupt or makes any arrangement or composition with his creditors generally; or

(c) has made a personal profit out of any contract entered into by the Corporation; or

(d) holds a financial or other interest prejudicial to the exercise or performance by him of his functions as a member of the Corporation; or

(e) has acted in a manner contrary to the provisions of subsection (6) of this section; or

(f) is convicted of an indictable offence; or

(g) becomes of unsound mind; or

(h) has for more than six months been absent without permission of the Corporation from meetings of the Corporation held during that period; or

(i) has acted in breach of any of the terms of his appointment,

the Minister may declare his office as a member of the Corporation to be vacant and shall notify the fact in such manner as the Minister thinks fit; and thereupon the office shall become vacant."
The noble Viscount said: This Amendment has a good deal in common with the last one, the principal feature of the similarity being this. We on this side are concerned to see that where there are provisions which apply to ordinary companies—provisions that have stood the test of time and have been incorporated in the Companies Act—we should follow the same procedure in regard to the nationalised Corporations. I think that is a very good principle, and I do not believe that the noble Lord opposite will disagree with me. We now come to another case. As your Lordships know Table A is the model Articles of Association under the Companies Acts. It contains a standard clause under which it is possible to get rid of a director if he does things which are not usually considered creditable in business and would not be considered creditable in nationalised Corporations—such as becoming, bankrupt or of unsound mind, and so forth. This is an ordinary provision in Table A and we seek in this Amendment

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to apply its provisions to Clause 1, subsections (5) and (6), so as to provide that a member of a Corporation shall vacate his office for contravention of those provisions which deal with disclosure of interest, a matter which is referred to in Clause 1.
There are one or two reasons why we put this forward. I hope that if the noble Lord, Lord Morrison, has no instructions to accept this Amendment, he will nevertheless perhaps stretch a point and look at this in connection with the last Amendment, because it is closely connected with it. I should like to sum up the case for this Amendment on three grounds. First that it has its parallel in the Companies Act, and is therefore something which for nearly 100 years has been found a suitable and necessary provision in the Articles of Association of companies. Secondly, there are similar provisions in the Bank of England Act and the Civil Aviation Act. I ought to say here that in the Coal Act and the Gas Act, as the noble Lord opposite probably knows, the matter is dealt with by regulation. But we think that the counterpart of Table A is the right thing to have here. Thirdly, I believe I am right in saying that on the Committee stage in another place an undertaking was given that this matter would be looked at before the Report stage there, although I do not think that anything emerged from that. The guillotine fell and there was no time for discussion. So we brine forward this point now. We do not think that there is any real difference in spirit. We suggest that this is the right way to handle it. I hope that the noble Lord opposite will think that this is a reasonable and sensible way to deal with the matter. I beg to move.
Amendment moved—
Page 2, line 14, at end insert the said proviso.—(Viscount Bridgeman.)
LORD LLOYD: I should like briefly to support the Amendment moved by my noble friend, because I think it is essentially a reasonable Amendment. All it asks is that the rules (if I may call them that) which apply to every company in this country—I do not think there is any company which does not have provisions of this kind in its Memorandum and Articles of Association—shall apply to the Corporation. I am going to add only one word to what has been said. The
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Government, as the noble Lord pointed out, started off, as so many of us do in life, with good intentions—that is to say, they wrote such provisions into their first nationalisation Bills. Since then I think they have been slipping a little. First, they compromised by putting these provisions in regulations, and then in more recent Acts they did not bother to do it at all. I feel it is important in this particular instance because in this Bill, more than in any other, we are for the first time dealing with an industry that has been split, where there is private enterprise and public enterprise—at least we hope it is "enterprise." I feel that what is sauce for the goose must be sauce for the gander. I do not see any reason why, if an ordinary company has this provision in its Memorandum and Articles of Association, the Corporation should not have a similar kind of provision. I hope the noble Lord will not consider this a "bladder and stick" speech but as a reasonable point to make, and that he will accept the Amendment.
LORD MORRISON: I can assure the noble Lord that I carefully avoid making "bladder and stick" speeches, and I hope I always shall. A similar Amendment was discussed in another place and, so far as I could gather, the debate became much more confused than it usually does here. It is true that recent precedents have dealt with the termination of appointments in three entirely different ways. In paragraph 4 of the Second Schedule to the Bank of England Act, reasons for disqualification include the fact of being an alien; and in the Civil Aviation Act in the First Schedule, paragraph 5 disqualifications include:
"is otherwise unable or unfit to discharge the functions of a member."
In the Coal, Gas and Electricity Acts the matter was dealt with by regulations, as the noble Lord said. Then in the Transport Act, as in this Bill, it is dealt with by specification in the letter of appointment. I suggest to the noble Lord that experience may have shown that the earliest precedents involved rather too great rigidity, and that if the disqualifications are embodied in the Statute itself, it is difficult to amend them in changing circumstances. Embodiment in regulations loosens the position a bit, but it is strongly felt that the sensible means is to embody in the letter of appointment the circumstances which, at the date when

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the appointment is made, would be regarded as disqualifications.
Noble Lords who have supported this Amendment seem to be aware that there is something in this point by including in their Amendment sub-paragraph (i):
"has acted in breach of any of the terms of his appointment."
This is a kind of sweeping-up provision which clearly renders the previous eight paragraphs unnecessary, because it includes the whole of them. I am aware that they correspond in some respects to the provisions of the Companies Act, 1948, but applied to this Bill they are far from water-tight. For example, under paragraph (a) a full-time member of the Corporation who made a contract with, say, the B.B.C. to appear in "Twenty Questions" or to give a series of talks on his hobby—and in neither case was there any interference with his duties as a member of the Corporation—would apparently lose his job if he accepted the usual fee of a few guineas. One could give other examples but, to sum up my short point: Any catalogue of disqualifications—and this is a catalogue of disqualifications—must inevitably be lengthy; alternatively, it must contain an "escape" provision such as that in paragraph (i) which renders the remainder meaningless. In this Bill, the Government wish to improve upon former precedents, and a careful letter from the Minister to those he desires to appoint should meet the circumstances as between sensible people. The potential appointee will know what the conditions are, and it is up to him to make his choice whether or not he accepts.
VISCOUNT RIDLEY: There is one point in connection with that which might be referred to—that is, that this Corporation is not really a parallel of any of the earlier nationalised undertakings, because, according to its description in the Bill, it is in essence a holding company, although capable of certain operations of research and organisation and so on; and it has to deal directly with operations carried out by other companies. The people in charge of the other companies are subject to the various provisions of the new Companies Act, including the Table A referred to. I think it is certainly in the interests of the members of the Corporation that the directors of the publicly-
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owned companies should realise, and it should be openly known, that the people responsible for giving them their instructions and working with them are subject to the same kind of regulation or control. As to the particular point mentioned, I think there is no doubt that there should be some discussion as to how these regulations should be worded, or whether in this case there should not be some alteration. In view of the relationship of the Corporation with the publicly-owned companies and the rather undefined machinery for co-operation between the two, it is important that there should be confidence established between them. It would help if it were clearly known and understood that they were both expected, and known to be expected, to conform to certain standards of conduct. It is possible for the Minister, in his letter of appointment, to lay down conditions which would be reasonable and proper. In the special circumstances of this Bill compared with earlier Acts, it seems to be important not only that they should be so laid down, but also that it should be publicly known what they are. And the Bill seems to be the best place to have them.
THE EARL OF DUDLEY: There seems to be an extraordinary idea that you cannot catalogue by Statute all the crimes for which a man can be sacked, but that you can catalogue them in a private letter when you invite him to join. The Minister of Supply in another place said the same thing:
"It is impossible to put in statutory form all the conditions under which a Minister might properly desire to sack a member. The sensible thing to do—it was done in the Transport Act—is to leave the conditions to the Minister to set out in his letter of appointment to the individual. If the individual does not like the conditions, he will say, 'you must find someone else. I will not accept those conditions.' The individual is not compelled to accept them."
I do not quite know how the letter would set out all these "crimes." Would it say Dear Johnny, How about your joining the Steel Corporation? But I must warn you, that if you go 'nuts,' get drunk and disorderly, go bankrupt, go to 'quod,' become a 'bookie,' go absent without leave or in any way misbehave yourself, you will get the sack." I should have thought it would have been much better, in the ordinary businesslike way, to write into the Constitution of the

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Corporation the list of offences of which a member must keep clear. It is done in ordinary everyday business. Why not write it into the Constitution of the Corporation and have the thing clear and concise? I hope the Minister will accept this Amendment.
LORD RENNELL: I think the noble Lord is under a misapprehension here. He said it provided under paragraph (a) that if a certain person entered into a contract with the B.B.C. for a few guineas to take part in "Twenty Questions" he would be disqualified. But that is not what the Amendment says. The Amendment says:
"Provided also that if the Minister is satisfied that a member:

(a) being a whole time member holds another office of profit; or

(d) holds a financial or other interest prejudicial to the exercise or performance by him of his function as a member of the Corporation

the Minister may declare his office as a member of the Corporation to be vacant."
But it does not follow that he shall. If the member accepted a fee to broadcast about matters concerning the steel industry I should think the Minister would declare his office vacant. But it does not say the Minister must; it says he may. As to the cataloguing of all these vices of which the noble Earl has spoken, I wonder how many people in the acquaintance of the noble Lord or of the noble Viscount would accept any appointment if the Minister wrote to them and said, "You can have this appointment, subject to. …" Let us bring a little reality into this discussion. How on earth is the Minister going to get anybody appointed if he says, "If you go to prison you get the sack." The thing is positively absurd. This question will arise again, and my friends and I on this side of the House will try to relate the operation of this Bill to the practice of the new Companies Act that this Government were responsible, and rightly responsible, for introducing into the commercial world. Let us use the Companies Act so far as it is applicable to this Corporation, and not depart from it in order to make a special code consisting of writing rude letters to prospective appointees.
VISCOUNT SWINTON: May I ask the Minister two questions on this matter?
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Frankly, I entirely agree with what has been said by the two previous speakers in regard to listing into the letter offences which you know no decent man is going to commit, and I ask the Minister how he proposes in those letters to set out these things for which the appointee will vacate his office. That is a perfectly easy question to answer. The second question I would ask is: Are the conditions which are to be laid down in the letter to be uniform for each member of the Board, subject to this: that if a man is a whole-time member the conditions would vary from those for a part-time member—I am speaking of the condition that he must give the whole of his tine to the business of the Corporation. Subject to that, are the conditions to be identical for every appointee? If not, why not? It is going to be rather curious if certain favoured people are to receive one set of conditions and other less favoured people are to receive another. Or are you going to say that certain people will require more strict ministerial supervision, for fear that they should do things which one or two members of some boards have, I believe done?
These are not just hypothetical questions. They are really very practical questions to which I am sure the noble Lord can give an answer, and I hope he will give an answer. If he cannot give a definite answer, then he renders himself or leaves his Minister open to all sorts of misunderstandings and misinterpretations. I would respectfully submit that if the Minister says that if a man is to be bound by conditions, those conditions must be in the letter, then his answer must be: "We are going to put into the letter all the conditions on which he will vacate his appointment." If his answer is also, as I hope and trust it must be, that the conditions for all whole-time members will be uniform, and the conditions for part-time members will also be uniform, then let him tell us what those conditions are.
If there is to be that simplicity and uniformity, would it not be much less embarrassing to the Minister and to those he approaches if the more obvious and glaring cases were set out in the Bill? We who are directors of companies do not engage in all these odd practices. Under the present disposition some of us may be lucky not to go bankrupt, but the other things I hope we shall avoid

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doing. We do not regard it as an insult that the Companies Act lays down that if we offend against the "Ten Commandments" we shall vacate our posts as directors of companies. We think that a very reasonable provision. But if my noble friend, Lord Dudley, wishing me to accept an appointment, wrote me a letter of this kind, I know what my answer would be. The Minister has had plenty of time to consider this matter, and I hope he will give us an answer to these questions.
LORD MORRISON: The noble Viscount is having a most enjoyable time and I am a little envious of him because I am in rather a quandary in my own mind. For two days I sat through the Second Reading debate in this House and heard the speeches. Every speaker on the other side of the House said that this was by far and away the worst Bill that this Government had introduced—and that was saying a lot! They said it was quite impossible to amend this Bill or to make it better; that it was a thoroughly bad Bill. I am in difficulties at the moment in that I am trying to puzzle out in my somewhat poor way, whether noble Lords opposite are now trying to amend a Bill which is so bad that it could not possibly be amended, or whether they are attempting what I ventured to say on Second Reading—namely, to destroy it by the "death by a thousand cuts." The noble Viscount has put questions to me: I put that one to him. Is this series of Amendments an attempt to amend the Bill? Only the other day the noble Viscount, who is one of the Leaders of the Conservative Party, made a speech in which he said that if his Party were returned at the next election, they would see that this Bill did not come into force. If it had been passed and was on the Statute Book, they would repeal it. What I am endeavouring to find out, and what it would be helpful to us to know—after all if we are going to start a questionnaire on this business it is as well that questions should come from both sides—is whether the Opposition, in this long series of speeches which has now begun and in this long series of Amendments which is being put forward, are really trying to make the Bill into a Bill which will work—I do not hear any response.
VISCOUNT SWINTON: I am waiting for the noble Lord to sit down. He will certainly get a response when he does.
LORD MORRISON: It will be interesting to know whether the Opposition are trying to amend this Bill in such a way as to make it into a workable measure, or are trying to make it absolutely unworkable.
To come to the particular point which the noble Viscount has raised, I made it clear, I hope, that there had been three different methods for determination of appointments—by Statute as in some of the earlier nationalisation Acts by regulations, under some later ones—coal, gas, and electricity—and by specification in the letter of appointment. The last applies under the Transport Act, and now similar provision is made in this Bill because experience up to now has suggested that earlier precedents embodying conditions for termination of employment under Statute or Regulation involve a certain amount of rigidity and that if the disqualifications are embodied in the Statute itself it is difficult to amend them in changing circumstances. When important Bills are passed, the House cannot always be engaged in making amendments whenever the rapidly-changing circumstances of the twentieth century make that necessary. That is what I endeavoured to explain, and that is the position which I still take up. The noble Viscount, of course, can make great play with what I have said, as if it were something entirely new for a Minister to write to someone offering him a post and outlining the terms. I do not think that there is anything very original or new in that. I am sorry I am not able to add any more, because I have no authority, either in the way of taking this matter back or accepting the Amendment. If noble Lords are dissatisfied with my reply or my attitude, they must do what they think wise and prudent.
6.13 p.m.
VISCOUNT SWINTON: I should not have intervened but for the extraordinary speech which we have just heard from the Minister who is temporarily in charge of this part of the Bill. I can give him a perfectly plain answer. I should have thought that as a popular and respected member of your Lordships' House he knew the answer quite well, without ask, ing for it. The answer is this: this is a

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bad Bill, and it is a Bill which we say has never been submitted to the people of this country. We shall presently come—I do not want to anticipate the debate now—to an Amendment which will ensure, if your Lordships carry it, that the Bill will not be brought into effect until the people of this country have had an opinion of expressing their opinion upon it. If the Bill were to pass and we were returned, as I trust and believe we shall he, at another Election, we should certainly repeal it. We are not in the habit of giving thoughtless pledges before an Election, and that is a pledge to which every leader of the Party to which I belong is fully committed and in which everyone in the Party which is associated with us on this measure would concur.
We have an equally clear duty, a duty which in the Second Reading debate the noble Viscount the Leader of the House impressed upon your Lordships, when he said that the most careful consideration should be given to the provisions of this Bill. This House has a duty—it is a duty which I am certain your Lordships will discharge—and although, in principle, we think that this is a bad Bill, yet if it is to go on the Statute Book it is essential that it should go on in a form which, if the principle of it is accepted by the country, will yet make it a workable measure. I am answering the question which the noble Lord, Lord Morrison, put to the House. Perhaps he will do me the courtesy of listening to my reply. I have been closely associated with my noble friends in the preparation of these Amendments, and I deeply resent the suggestion made by the noble Lord—if it came from some quarters I should not care about it, but I regret it coming from hint—that these Amendments are put down frivolously. I have had the privilege of acting as Leader of the Opposition in this House on all nationalisation Bills which have come forward. I have received the tribute of the Leader of the House and of the Lord Chancellor that the whole of that business has been conducted thoroughly, conscientiously and with dispatch. There is not an Amendment which stands on the Order Paper to-day 'which is not worthy of discussion.
And I say this—it will not make much difference whether the noble Lord is 'present in the House or not, but I give him this first firm assurance—every Amendment which stands on the Order
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Paper will be fully and fearlessly discussed on its merits in this House. We shall not unduly prolong debate. If we receive a satisfactory answer we shall accept that answer as satisfactory. We have never dealt unfairly with the Government in that respect. If we do not receive a satisfactory answer or if, as unfortunately appears to be the case now, we fail to get an answer at all to perfectly legitimate questions which are conscientiously put, we shall take such action as seems right to us. Because someone makes a joke that does not mean that he is not perfectly scrims and sincere in what he puts forward. I know that on the other side of the Border certain views are held as to the sense of humour of Southerners, and that people on this side have ideas about the Scots sense of humour. Personally I have always bad a rather better appreciation of what Scots consider to be their sense of humour. I think it has its funny side now and again, but the noble Lord really must not think that because a speaker may speak in a slightly humorous way he is not regarding his subject seriously. The noble Lord took us to task on this Amendment, and I felt it necessary to say what I have just said. The speech of the noble Lord to which we have listened is one which I am sure that he, on reflection, will regret. I trust that that is the last time we shall have that kind of speech in this debate.
I come now to the Amendment which I hope he is going to treat seriously, because it is seriously put forward by us. What is proposed here is to put in this Act an exact provision taken out of the Companies Act, a measure which was dealt with very thoroughly in your Lordships' House, and of which the Lord Chancellor said, in commending it to another place, that it was one of the most perfect pieces of legislation ever carried through and an example of what this House as a model of legislative Assembly could do. We carefully revised the Companies Act to insert these clauses, which are applicable to all companies. We have repeatedly been told, in connection with these nationalisation Bills, that it is the intention of the Government that these Corporations shall conform in all respects to the best company practice. It may be the wisest thing to apply to these Corporations many of the provisions of the Companies Act, but the Government, in

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their wisdom, have not so done in the structure of these Bills. We accept that, but where it is convenient, surely it is the right thing to write into the Bill, either by reference or directly, these provisions of the Companies Act? Is not the sensible thing to do what has been found wise in respect of every other company? The noble Lord himself said the Government were feeling their way, and that there were various ways of doing this—by including it in the Bill or by regulation. I think the latter is a suggestion well worth considering. If it were considered possible to do it by regulation, we would accept that, and I would not press this Amendment. I agree that we cannot provide for everything, but that is not a reason for not providing for anything.
I feel that the noble Lord has not studied the matter, because the last provision here is that the Minister shall be able to add such other conditions as may be appropriate. This is exceedingly important and I beg the noble Lord to treat it seriously. I dislike nationalisation and he likes it, but whether we like nationalisation or not, it is very important that what is done by the Minister in charge of a nationalised industry, or by the Corporation running it, should be open and above board. I am not saying that the Minister is going to do wrong things, but if we hedge him all round with letters written to this man and something else sent to that one, we shall only make trouble for ourselves. It would be much easier for the Minister to reconsider the Bill. If he thinks it wiser that this should be done by regulation, we will not insist on having it in the Bill. I am sure it would be wiser to reconsider this matter, and we can come back to it again on the Report stage. It may be that the right compromise will be to do this by regulation, but merely to leave it to the Minister to write a letter leaves it open to every possible objection that can be raised.
LORD MORRISON: The noble Viscount must understand that I have no authority to accept this Amendment in its present form.
VISCOUNT SWINTON: I agree.
LORD MORRISON: Secondly, as to whether it could be accepted in the modi-
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fied form the noble Viscount now suggests, I can say only that I am not able to commit the Government even to that modified form. But, of course, if an Amendment in the modified form now suggested should appear on the Order Paper on Report stage it would naturally receive the consideration of the Government. I am afraid that is as far as I can go.
THE MARQUESS OF SALISBURY: Would it not be possible for the Government to go a little further, and consider this with us between now and Report stage? We can put down an Amendment in a modified form in Report stage, but surely it is better, if there is any chance of agreement, for us to discuss it before Report stage; then if we reach no agreement it will still be possible for us to put down our Amendment and press it or not, as we think best.
LORD MORRISON: If the noble Marquess means that when we have got through the Committee stage our relations will be such that it will still be possible for us to indulge in what I call back stage conversations, and reach some kind of agreement before coming back to the Floor of the House, I would say, "Yes, certainly."
THE EARL OF DUDLEY: I would remind the noble Lord that on Committee stage in another place, the Minister was impressed by the arguments of the Opposition, and said he would give consideration to them before the next stage of the Bill. But he did not do so. I hope the same thing will not happen in your Lordships' House.
LORD MORRISON: There is no guillotine in your Lordships' House.
VISCOUNT BRIDGEMAN: Nearly half an hour ago, when I first moved this Amendment, I made an appeal to the noble Lord opposite to consider this matter in the light of the arguments I produced. I am glad to find that at long last he has done so. Before I withdraw my Amendment on the understanding we have reached, I would like to say one or two things. First of all, my name was put to this Amendment and I would not have put my name to an Amendment which is of a somewhat technical character if it had been made in a frivolous and reckless frame of mind. I ask the noble Lord to accept that.

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Secondly, I am still puzzled as to why one Department of the Government—the Ministry of Supply—sought to improve on the very good precedent which another Department of the Government—the Board of Trade—inserted in the Companies Act. However that may be, I think we shall find it possible to reach a compromise on the lines suggested by my noble friend, Viscount Swinton, and that that arrangement will be very much better. The terms contained in this Amendment are common terms, and a great number of companies have them. I myself, and many noble Lords, have worked under conditions of this sort, and we have found they are perfectly workable. I hope there is no need for me to say more. On the understanding that discussions will take place on the lines that I think the noble Lord opposite agreed with my noble friend, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
6.28 p.m.
LORD LLOYD LORD LLOYD moved, in subsection (6) to leave out "the disclosure" (where those words occur a second time) and insert "the relevant circumstances have come to his knowledge." The noble Lord said: Perhaps I had better begin by saying that this is a serious Amendment. It is meant to make the subsection do what we all would wish to see it do. The object of the subsection is to ensure that a member of the Corporation should not take part in deliberations on an occasion when a contract in which he had an interest is being discussed—a very proper provision with which your Lordships will all agree. But when we look at line 40, we see that the member is only debarred from taking part in those deliberations after the disclosure of his interest. My noble friends and I consider it would be better to make it an obligation that the member should not take part in the deliberations as soon as it comes to his knowledge that he has an interest in the contract. This is little more than a drafting Amendment and I cannot understand why the Minister made such a fuss about it in another place, but he did. He said it would have most dangerous legal consequences and was impracticable. We have not been told what the dangerous legal consequences will be, and if there are dangerous legal consequences, perhaps the noble Lord
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will explain them now. This seems to me to be a very reasonable drafting Amendment and I hope noble Lords will accept it. I beg to move.
Amendment moved—
Page 2, line 40, leave out ("the disclosure") and insert the said new words.—(Lord Lloyd.)
6.30 p.m.
VISCOUNT MAUGHAM: I would like to add a few words on this matter. Really I think this is only a drafting question. The middle part of subsection (6) relates to an obligation that a person directly or indirectly interested in a contract should
"as soon as possible after the relevant circumstances have come to his knowledge disclose the nature of his interest. …"
That recognises the fact, which all of us know, that with the complications of modern finance, ale may become interested in a particular contract and yet not know it. There are any number of big companies in which people do not really know their interests. If I may mention what happens in the Law Courts, I would point out that a judge is not entitled to try a case if he is interested in the business concerned. But again and again you find judges rising, after a case is opened, and saying that they are not quite certain whether, owing to their holdings in a particular company, they are interested in the subject matter of the action, and therefore they think they should disclose that possible interest. I mention that only to show that one does not always know until some later date that one is interested.
The end of the subsection contains these words:
"and the disclosure—
which the member has to make—
"shall be recorded in the minutes of the Corporation, and the member shall not take any part after the disclosure in any deliberation or decision of the Corporation with respect to that contract."
The suggestion is that he is not to take any part in deliberations of the Corporation, as the subsection says, "after the disclosure." But he must know it. Therefore, the words that my noble friends Lord Lloyd and Lord Hawke want to put in here are:
"after the relevant circumstances have come to his knowledge."
In that case he knows that he is interested, and then his mouth is closed. It cannot be closed before he knows that

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he is a person who must close his mouth. Whether this Amendment meets the ideas of a scrupulous company law draftsman, I do not know. It may be that what is sought to be achieved here could be done in a simpler way. I do not say whether that is so or not, but I do say that there is a necessity for not making a man close his mouth altogether on a particular matter before he knows that he ought so to close it by facts being brought to his attention which show that he is really an interested party.
LORD HAWKE: Curiously enough, I was going to suggest to your Lordships that you would probably like to hear the views of my noble and learned friend Lord Maugham on a problem I was going to put before the Committee arising out of this Amendment, but not the one with which he has just dealt. It looks to me as if our intentions are precisely the same as those of His Majesty's Government: we all want to secure completely disinterested members of the Board at all times. It seems to me that there has been a flaw in the drafting in some way. As I read it, the members of the Corporation, who in many cases will be full-time members fulfilling a day-to-day function, may somehow or other become interested in some contract, whereupon they are to declare that interest at the next meeting of the Corporation. Meanwhile, they are continuing their executive functions and possibly making decisions, and so on, in a matter in which they are not disinterested. I wonder whether the Government are aware of this and, if so, whether they would not accept something like the Amendment that we have put down. It may well be that I have misread the legal position, and that "deliberation" may be an act that can be performed only by a full Board. But, as a layman reads the clause, at the moment it would be perfectly possible for an executive member of this Corporation to act and make a decision eventually binding the Corporation on a contract in which he was still an interested party.
LORD MORRISON: As the noble Lord, Lord Lloyd, said, this is a serious Amendment. The noble Lord quoted something that the Minister said in another place. I am advised that since the Minister said that, he has had important legal consultations, with the result that
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my advice is that if this Amendment were accepted important legal complications might arise. The position is that the Amendment cannot be accepted, because it might give rise to an irregularity in the proceedings of the Corporation. Noble Lords will understand that I am making a strictly legal reply in regard to this Amendment. Subsection (6) provides for members of the Corporation disclosing their interest in certain contracts, and it goes on to say that
"the member shall not take any part after the disclosure in any deliberation or decision of the Corporation with respect to that contract."
In effect, the interest of a member of the Corporation in a particular item of business amounts to a temporary disqualification so far as the business is concerned, but it ought not to invalidate the proceedings of the Corporation affecting, that business. This is secured by subsection (6) as drafted, because the disqualification will arise only after the disclosure of the member's interest. If the proposed Amendment were adopted, and the member failed to disclose his interest—not necessarily in bad faith—doubt about the validity of the Corporation's proceedings would arise. An honest man will, of course, disclose his interest at the first opportunity, and the rest will follow. If, however, a man is prepared to evade the duty of disclosure, he will be equally prepared to evade the duty of not taking part in the proceedings. That is the legal information I have received, but I would desire to say this. In view of the opinion expressed by the noble and learned Viscount, Lord Maugham, with his great legal knowledge, which I followed as closely as I could, I am quite prepared that some further examination of this matter should be made.
VISCOUNT SWINTON: I feel it is very desirable that it should be looked at further. I do not think there is any difference between us. On the other hand, there are three things of which we want to make sure. First we want to make sure that there is a disclosure by a member of the Board who has an interest. That should be a duty put upon the member of the Board. That is a duty which is, of course, cast upon the ordinary director of a company by the Articles of Association of every company—indeed, I think that is so by a clause in the Companies Act; I think it is in whatever is the equivalent to

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Table A. However, as the Companies Act does not apply automatically to this Corporation, we have, I suppose, to put some provision into the Bill which imposes on the directors of the Corporation the same duty, or an analogous duty, as that imposed by the Companies Act and by the Articles of Association of a company upon a director of a company. That is the first thing which has to be done: the duty of disclosure has to be put upon the person.
While saying that, as the noble and learned Viscount, Lord Maugham, pointed out, you have to safeguard the member of the Board against an absolute duty which he may fail to discharge, not by any neglect but because he just does not know about it. Therefore, it seems to me that you have to introduce words which, while imposing the duty of disclosure upon him, will yet say that that duty of disclosure shall be exercised as soon as the facts come to his knowledge. If you have done that, you have made the thing just and fair, vis-à-vis the member of the Board. But are you, in fact, doing that under the clause as it stands? Are you not putting upon him, either directly or by implication, an absolute duty of disclosure as soon as the fact arises? The way it would come up would be this. The Corporation is meeting, a contract or proposal comes up for consideration and the member has an interest. It is then his duty to disclose that interest at once and say: "I take no further part in the discussion," and his disclosure is recorded in the Minutes. But what happens if he does not know, and only realises later on that he has this interest? I am not sure that you have in fact safeguarded him in that respect, and I think it should be looked at from the point of view of the member of the Board.
It is then said that you must look at it from the point of view of the party with whom the contract is made. Obviously, we are not dealing here with what I may call a corrupt case, the sort of case at which the original provision of the Companies Act was directed, that a director shall not take part in a discussion about a contract which is going to benefit himself personally or some company in which he is directly interested. What is in fact the legal position? I am not very clear about this. When a contract, not so much
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directly affecting a director, but a contract in which he has some remote interest, comes up for consideration—he may merely be a shareholder in the company—a most extraordinary situation arises as between these great Corporations. Suppose you are buying coal, and the director happens once to have had a share in a coal mine and has some stock—"Hyndley's" I suppose it is called on the Stock Exchange—and the poor fellow, not having received a dividend, has forgotten all about it and does not disclose an interest. I am not sure that an extraordinary situation may not arise, where a number of people happen to have this Government stock and there will be only about two members of the Board who can deliberate about coal. And as there is only one company from whom you can buy coal, it cannot be obtained in any other way. But as it is between two friendly Government companies, I presume you would not have a row about a matter like that!
This, however, is a case where third party interests are affected. It is said that if the man failed to make his disclosure the contract could be upset. It would not automatically be upset, because who could upset it? The third party ought to have a right to upset it if the thing is being done to his disadvantage. On the other hand, I do not think the contract would come automatically to an end, because it could only come to an end if either the law makes the contract completely frustrated or because one party seeks to set aside the contract. If the party has been damnified, I should have thought he ought to have a right to set aside the contract. If, on the other hand, he would be damnified if the contract were set aside, then the setting aside of the contract would have to be set on foot by the Corporation themselves, and surely they would not be in a position to take advantage of a third party merely because a member of the Corporation had failed to disclose his interest. I speak with a good deal of hesitation about this legal aspect, but I doubt whether there is that danger and risk to the third party. I would like to know what is the case in an ordinary company where a director has inadvertently failed to disclose an interest and yet a contract is made.
VISCOUNT MAUGHAM: May I help my noble friend there? There is a special

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section, either in the Act of Parliament or in the Articles of Association, which deals with that precise point, so no question arises in the case of an ordinary company if a director has inadvertently voted on the proposal before the board and yet was a person interested.
VISCOUNT SWINTON: I am much obliged; I thought that was so. But if that is so, how is it that where the contract is made by the Steel Corporation under this Bill, there is great legal danger and the contract becomes vitiated and goes by the board, whereas it does not do so in a contract made by an ordinary company?
VISCOUNT MAUGHAM: May I interrupt again? I think the point which the noble Viscount has made—although it does not arise in the case of an ordinary company—may well arise in the case of this Corporation, and the matter ought to be looked into before the Report stage.
VISCOUNT SWINTON: I will not pursue it, but I think I have said enough to show that we have uncovered a very curious legal anomaly as between these nationalised Corporations and ordinary corporations. I do not know whether it can be done in this Bill, but I would have thought that should be set right, because the whole idea was that a nationalised Corporation should have both the rights and duties of an ordinary public company. If its directors are, by inadvertence, put into a wholly different position from that of the directors of ordinary companies, then I think the whole matter wants looking at from the point of view of the directors, of the Steel Corporation and of everybody interested in it.
LORD LLOYD: I am grateful to the noble Lord for his assurance. I think we are trying to cover the same point, and on that understanding I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.50 p.m.
LORD RENNELL LORD RENNELL moved to add to subsection (8),
"Provided that the provisions of Section 38 of the Finance Act, 1948 shall apply in respect of allowances paid to members of the Corporation under the provisions of this Act."
The noble Lord said: This Amendment is in some ways analogous to the last one, and Lord Morrison's remarks earlier have some application. In this Amendment the Companies Act is not affected as it was in the case of the other two. Here it is a question of another Act, the Finance Act. The object of the Amendment is fairly clear, and I do not think it needs much explanation. It is to ensure that members of the Corporation shall furnish to the Inland Revenue the same proofs of their allowances as an ordinary company director would have to do in the ordinary course of his duties. The proviso which I am moving fits in with the clause dealing with the remuneration of members by way of salaries or fees and the provisions for their pension on retirement that the Minister may, with the approval of the Treasury, decide should be made.
As we have been told by the noble Viscount, Lord Addison, and the other spokesman of the Government that it is the Government's desire that the national Corporations should be treated in the same way as other companies (although they do not come under the Companies Act) it seems only fair that provision of this sort should be inserted. I do not think there is very much difference of opinion on this, because the Chancellor of the Exchequer, in reply to a question in another place, said that the officials of nationalised industries would be dealt with in exactly the same way as directors and employees of ordinary public companies. If that is so, I imagine that the Amendment proposed will probably be accepted from the Government Benches. I think it is desirable in the public interest, and also from the Government's own point of view, that it should be down in black and white, so that people will have no feelings that a different régime is going to govern. I beg to move.
Amendment moved—
Page 3, line 5, at end insert the said proviso.—[Lord Rennell.]
LORD WOLVERTON: My name appears in support of the Amendment which has been ably moved by my noble friend Lord Rennell, and I would like to say a few words on it. I feel certain that as His Majesty's Government have said they wish nationalised industries to be model employers they would wish to have this in the Bill and treat the people

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in no different way than public companies are treated under the Companies Act. I hope His Majesty's Government will see fit to accept this Amendment and so bring the Steel Corporation into line with public companies.
LORD MORRISON: The noble Lord who has moved this Amendment says that it is perfectly clear. His purpose is to ensure that any expense allowance made to members of the Corporation shall be subject to the same scrutiny by the Inland Revenue as the allowance made to directors of ordinary business concerns. My reply, briefly, is that I am advised that this Amendment is unnecessary, because it is already covered by Section 38 of the Finance Act, 1948, which provides that any sums paid by a body corporate to any of its directors, or to employees earning more than £2,000 a year, are to be treated as taxable remuneration, subject to any deduction which may be due under Rule 9 of Schedule E of the Income Tax Act, 1918, for expenses incurred "wholly, exclusively and necessarily" in performing the duties of the office or employment.
Perhaps the noble Lord put down his Amendment rather because he wanted the public to know, and wanted assurances given, that the expenses paid to members of the Iron and Steel Corporation will be dealt with by the Inland Revenue in the same way as the expenses of ordinary business undertakings. This assurance I am authorised to give—indeed, it was given in another place, if the noble Lord will allow me to quote what happened. On Clause 37 of the Finance (No. 2) Bill, 1948, which is now Section 38 of the Finance Act, 1948, the right honourable gentleman, Mr. Stanley, said this:
"We on this side would like to have a categorical answer by the right honourable gentleman that all directors and employees of nationalised industries will be treated in exactly the same way as he has laid down for those engaged in private industry."
My right honourable friend the Chancellor of the Exchequer replied:
"I hope to meet the right honourable gentleman's desire for information by saying that all nationalised industries will be dealt with under Rule 9."
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As recently as January 18, this year, Mr. Norman Bower asked the Chancellor of the Exchequer why officials of nationalised industries are not called upon to make detailed justifications of their expense allowances to the Inland Revenue authorities in the same way as employees of private firms. Sir Stafford Cripps replied:
"The honourable Member is misinformed. Officials of the nationalised industries will be dealt with in the same with as directors and employees generally."
When Mr. Bower asked:
"Will they have to make individual returns of their expenses in exactly the same way as employees of private concerns?",
Sir Stafford Cripps replied:
"In exactly the same way."
I hope that that assurance will satisfy the noble Lord.
LORD RENNELL: I am obliged to the noble Lord for his clear statement, and I would like to ask only one question—though the answer is perhaps implicit in what he has said: Do "bodies corporate" which are referred to in Section 38 of the Finance Act include the Iron and Steel Corporation?
LORD MORRISON: Certainly.
LORD RENNELL: In those circumstances, I beg leave withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
House resumed.

CIVIL AVIATION BILL [H.L.]
6.59 p.m.
THE LORD CHANCELLOR (VISCOUNT JOWITT): My Lords, I beg leave to introduce a Bill to consolidate the enactments relating to civil aviation other than the Carriage by Air Act, 1932, and other than the enactments relating to the constitution and functions of the Airways Corporation. I beg to move that the Bill be read a first time.
Moved, That the Bill be now read 1a.—(The Lord Chancellor.)
On Question, Bill read 1a, and to be printed.

VEHICLES (EXCISE) BILL [H.L.]
THE LORD CHANCELLOR: My Lords, I beg leave to introduce a Bill to consolidate certain enactments relating to excise duties on mechanically-propelled vehicles, and to the licensing and registration of such vehicles, with such corrections and improvements as may be authorised under the Consolidation of Enactments (Procedure) Act, 1949; and to ask that it be read a first time.
Moved, That the Bill be now read 1a.—(The Lord Chancellor.)
On Question, Bill read 1a, and to be printed.
[The Sitting was suspended at seven o'clock, and resumed at a quarter past eight o'clock.]

IRON AND STEEL BILL
8.15 p.m.
House again in Committee.
LORD TEYNHAM LORD TEYNHAM moved, after Clause 1, to insert the following new clause:
Powers of subsidiaries of the Corporation
".—(1) No company being a subsidiary of the Corporation shall, notwithstanding any provision of its Memorandum of Association or its charter of incorporation or other charter carry on directly or indirectly any activities except:—

(a) activities specified in the first column of the Second Schedule to this Act;

(b) activities which that company was in fact carrying on immediately before the general date of transfer.

(c) activities which for technical reasons ought, in the opinion of the Minister, to be 'carried on by that company with a view to the better carrying on by any such company of its activities under paragraph (a) or paragraph (b) hereof and which are specified in an order of the Minister;

(d) such other activities as shall have been approved by resolution of each House of Parliament;

and the Memorandum of Association or Charter of that company shall be deemed to be limited accordingly.
(2) A copy of any such order as aforesaid shall be delivered by the Corporation to the Registrar of Companies."
The noble Lord said: In the absence of the noble Viscount, Lord Swinton, I beg to move this Amendment. It has not been set down for the purpose of hamstringing the subsidiaries of the Corporations. On the contrary, it is designed to give a guiding principle for the operations of the subsidiaries in accordance
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with the purposes of the Bill as outlined by the noble Lord who introduced it. But, as the Bill is drawn, the powers of the subsidiaries are much greater than are required for these purposes. Surely Parliament should have some limiting control on the operations of the subsidiaries. If there is to be no limitation, why did not His Majesty's Government merely bring in a Bill in plain words to authorise subsidiaries to undertake any business they choose and control any interest they wish? I suggest that that would have been far more appropriate than the hole-and-corner method proposed in the Bill.
As the Bill is drafted, it is clear that the Corporations and the subsidiaries could obtain a footing in practically any industrial or commercial activity in the country; and this Amendment in no way precludes the subsidiaries from carrying on an activity which they were carrying on before the general date of transfer. I maintain that Parliament ought not to be asked to accept, in a Bill of this nature, a clause which gives no limitation at all. It may be argued that the Corporation and its subsidiaries have no intention of exercising these powers. But we are legislating not only for the present but for the future; and who can say what a future Government might do with the powers available in the Bill? I implore His Majesty's Government to consider the future and also the great reasonableness of this Amendment which, if accepted, would in no way fetter the proper powers of the Corporation or the subsidiaries. In any case it will be open to them to come to Parliament for any further powers they may require. The noble Viscount, Lord Swinton, will explain to your Lordships certain suggestions that have been put forward with regard to coming to Parliament by negative Resolution. I suggest that this Amendment is upholding democratic government and the proper rights of Parliament, and I hope His Majesty's Government will accept it. I beg to move.
Amendment moved—
After Clause 1 insert the said new Clause.—(Lord Teynham.)
THE CHAIRMAN OF COMMITTEES: I understand there is an Amendment of the Amendment.
VISCOUNT SWINTON: I am obliged to my noble friend for having filled the gap for a moment. The young are very

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quick off the mark! Even with the limitations proposed in this Amendment, this Bill goes far beyond anything that was contemplated in the nationalisation of iron and steel. The Government's intention, as they announced it in the Motion in another place in May, 1948, was a recommendation "to nationalise appropriate sections of the iron and steel industry." No one could have anticipated from that a Bill to nationalise great engineering undertakings such as bridge-building, the making of locomotives, floating docks and barges, printing machines, sugar machinery, pumps—or, what is even more odd, rubber goods and tennis racquets. And yet these and many other singularly inappropriate sections of the industry will be acquired by the Corporation and its subsidiaries, and the subsidiaries will have the power to continue their manufacture.
But, unless an Amendment such as we propose, is carried, the Corporation or its subsidiaries will have the power not only to do all that but to do anything which is included in the Memorandum and Articles of any of the subsidiary companies. As your Lordships are well aware, the ordinary Memorandum of a limited company is drawn in the widest terms. First, it sets out the things they are going to do. If they are going to run an iron and steel industry, it sets out the provisions that they will establish blast furnaces, rolling mills and so on, and then it goes on through all the letters of the alphabet—and sometimes they are even repeated in double letters—to specify everything which anybody can conceivably think of.
Let me take a typical case. I have here the Memorandum of the Steel Company of Wales. It begins with all the ordinary things one would expect a steel company to do, and then, when it reaches letter (J), it goes on to say this:
"To carry on in addition to the said trades and businesses any other trade, business or employment, manufacturing or otherwise which may seem to the Company capable of being conveniently carried on either in connection with or in addition to any business hereby authorised or otherwise calculated directly or indirectly to enhance the value of or render profitable any of the Companies' property, rights or business for the time being."
I do not think that anybody could devise a much wider clause than that, but in case anything has been left out, it goes on to put in every other kind of imagin-
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able object. Then there comes this interesting provision under (S). This is one of the things which, under this Bill, the Corporation and its subsidiaries will be able to do.
"To subscribe or guarantee money for any national, political, charitable, benevolent, public, general or useful object or for any exhibition. …"
I draw your Lordships' attention to the nice distinction there.
VISCOUNT ADDISON: Would the noble Viscount give me the date of that?
VISCOUNT SWINTON: The company was incorporated on May 1, 1947. The noble Viscount is going to say "in anticipation of this Bill." Your Lordships will see the nice distinction which is drawn between a political and a useful object. I do not know that that is a very good Article to have, but it would be interesting to know whether it is one of the things which ought to be taken over and done. I know that a compulsory levy is a useful if not a popular adjunct, but I really wonder whether that is a wise thing to entrust to a nationalised Corporation. I understand there is a cartoon in Punch this week showing what the nationalised undertaking is like. Possibly the worshippers would see in that the feet of clay.
Therefore, there could be an unlimited extension of the Corporation's activities into every field of manufacture or trade without any Parliamentary approval. That was never contemplated. I do not care what pamphlet or manifesto of the Labour Party you read, I say that that was never contemplated by anybody and that it would be highly dangerous. If that claim is made, why was not the claim made to nationalise everything in the whole country, or, indeed, outside it, because that would be the power which would be obtained by this curious Bill. It is said—and I have no doubt the Leader of the House 'kill repeat the argument—that if these companies had these powers under free enterprise, why should they not retain them when they become part of a vast State monopoly? That is one argument which is advanced and, as it is thought not likely to be very convincing, we have the other one to which the noble Viscount the Leader of the House is rather more attached, or which at any rate he uses rather more frequently—indeed, this argument has now received

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its due meed of Parliamentary approbation, to use the words of Mr. Disraeli—that no Minister or Corporation would be so unreasonable as to do any of these things. Well, appetite grows with eating. We have always been told in the past that private monopolies, which are pigmies compared to this power, have greedy appetites; but they are as nothing to the totalitarian monopolies with their unwholesome appetites.
Observe that this vast monopoly, which is not even subject to the Monopolies Act, is a very different thing from ninety-six competing companies. After all, it is in the variety of the finished articles that competition is, and indeed should he, keenest. But this Corporation, with its virtual monoply of steel-making, would be in a position to subsidise their own companies at the expense of its competitors. It may be said that that would not be done. If the noble Viscount says it is not going to be done until the General Election, whether it is in the Autumn or in the Spring, I daresay that is true. But if this Bill goes through it is a Bill for all time, and when a nationalised enterprise finds itself in difficulties, when it finds, with its vast overhead charges, that it is not competent to compete on equal terms with much smaller engineering firms, unless Parliament safeguards this position adequately I do not believe for one moment that we shall be safe from having concealed subsidies or open subsidies given to nationalised competitors. It is a perfectly easy thing to do.
Under this Bill, while the Government take over in part a number of undertakings which go into competition with non-nationalised undertakings over an enormous range of endeavour and industry, they also take over the great bulk of the basic steel-making industry of the country. In fact, it is going to be the sole supplier of the raw material on which all the industries—the finishing industries, the free industries and the nationalised industries—depend. All that is put into this Bill—we shall come to these provisions later—is that this Corporation, the primary job of which is making steel, and which is also to own ninety-six subsidiaries, all competing with other enterprises in the country, is to make a profit, or to refrain from making a loss, on its over-all activities.
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What could it do with the greatest ease? It could put up the price of steel, which would be much the easiest way of avoiding losing money. We have seen that in the case of the Coal Board. How does the Coal Board avoid losing money? By putting up the price of coal every six or nine months. And it can do it because it has a monopoly. It is the only undertaking producing coal in this country. When it finds itself in competition in overseas markets, and has to reduce prices in competition with Polish and other coal, we shall find, I am afraid, that prices for the industrial consumers of coal will go up still further. That is easily done, and it is an obvious way of preventing a loss. It would be an extremely easy thing, if the Corporation wanted its subsidiaries in the finishing industries to make money and to be able to undersell their competitors, though not by merit, to put up the price of steel. The competitor can get his steel only from the monopoly. If the price of ingot steel is raised by 10s. he has to pay it, because he cannot get his ingot steel anywhere else. "Quite true," you say, "but I will not give an undue preference to my own subsidiaries. I will charge my subsidiaries the same price for the steel." That may be done, but it is only a bookkeeping entry so far as the subsidiary is concerned.
This monopoly will sell to the consumers of steel in this country vast quantities of steel—14,000,000 or 15,000,000 tons of it. Having created an artificial price for steel, having put up the price all round, it is simple for the Corporation to say: "There is no loss in the industry, if I proceed to sell from my finishing companies and undersell my competitors." That is an easy transaction, and it would be a legitimate transaction to carry out under this Bill as it stands. The Corporation would be breaking no letter of the law in doing that. It would not be giving preference because it would be overcharging everyone alike. But it would, of course, be using the profit made out of selling steel to its competitors to enable its own subsidiaries to undersell the competitors. That being so there should be strict limitation and effective Parliamentary control—and by "Parliamentary control," I mean control. It is no good saying the Minister may report something to Parliament after it has been done and

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"if you can stage a debate, then you can have a debate." That is not what is meant by control. That is not what the Government mean when they put on control. What do they mean by control? They mean that they have the power to prevent things being done. That is what Parliament ought to have in this instance; Parliament ought to have effective power to prevent a thing being done if it is regarded as wrong. This Amendment would give the subsidiaries power to carry on all the activities which they are carrying on at the date of transfer, and those are wide enough.
The Amendment goes on to specify two classes of possible further activities. Paragraph (c) specifies:
"activities which for technical reasons ought, in the opinion of the Minister, to be carried on by that company with a view to the better carrying on by any such company of its activities under paragraph (a) or paragraph (b) hereof"—
that is primarily steel or Second Schedule activities—
"and which are specified in an order of the Minister."
Then I have set out in (d):
"such other activities as shall have been approved by resolution of each House of Parliament."
I am sure that Parliamentary controls must be maintained, but at the same time I do not think it would be reasonable, if the country finally decided that the Corporation should be established, to hold up the Corporation or the Minister in the reasonable development of the business. I think it would be reasonable that Parliament should express positive approval in the case of a major extension of activity, but I agree that there may be minor cases which may not come strictly within paragraph (c), and with which Parliament would not wish to interfere or, indeed, would readily approve.
I have given careful consideration since I put down this Amendment to whether we can give to the Corporation and the Minister reasonable latitude and, at the same time, maintain effective Parliamentary control. I have come to the conclusion, which I venture to submit to your Lordships, that Parliamentary control would be adequately met if the new activities, under both paragraphs (c) and (d) were authorised by a ministerial
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order which would be subject to negative Resolution procedure in either House of Parliament. There is no difficulty about making an order. The Bill itself contemplates that the Minister will publish all these approved extensions. It is only a case of writing it out in one form against another, of writing out a notification and lodging it with the Registrar of Companies or of writing a ministerial order. That has to be done, even under the Government's proposal.
I do not think the Government need shy at making orders. After all, they make thousands of them every year, and as they like orders they ought to welcome the opportunity of making a few more. In this way Parliament would know of any extensions which the, Minister proposes and would be able to take action if they thought fit. Reasonable extension would not be challenged. Where an extension was clearly reasonable, nobody would want to have a debate about it or to put down a Prayer. But there should be the opportunity to challenge, and if need be reject, new incursions into the very wide field of industry and trade which would lie open to the Corporation and its subsidiaries. If the Minister decided upon such an incursion it would be up to him to justify it.
I should prefer to have this Amendment in a slightly different form from that in which it stands on the Order Paper. There would be no alteration down to the end of paragraph (c), but I would substitute for paragraph (d), which reads,
"such other activities as shall have been approved by resolution of each House of Parliament;"
the words (of which I have given the Minister a copy):
"such other activities as shall he specified in an order of the Minister;"
The Amendment would continue exactly as on the Marshalled List, with the words:
"and the Memorandum of Association or Charter of that company shall be deemed to be limited accordingly."
Then there would follow—and there is no difference between us and the Government on this—subsection (2) as it stands, which says:
"A copy of any such order as aforesaid shall be delivered by the Corporation to the Registrar of Companies"

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I would then add—and this is new:
"(3) An order made under this section shall be subject to annulment in pursuance of a Resolution of either House of Parliament."
That, I submit, is entirely fair as between this Corporation and its subsidiaries and the Minister and Parliament. It does not make the Minister come to Parliament for a positive affirmation of anything he seeks to do. It does make him—and this is common ground between us—notify Parliament of any extension of which he approves. Parliament would then have the right to look at it. The order would then go ahead, and if either House of Parliament thought that the order required justification it would be able, by the simple and short process of a Prayer, to call the Minister to account. If the Minister justified it, the order would go through; if he failed to justify it, then it would be annulled. I suggest that that is a practical way in this unique case of maintaining effective control by Parliament and at the same time giving all the reasonable freedom which either the Minister of the Corporation can demand. I ask leave to withdraw the original Amendment and to move it in its new form.
Amendment, by leave, withdrawn.
Amendment moved—
After Clause 1, insert the following new clause—
Powers of subsidiaries of the Corporation
(".—(1) No company being a subsidiary of the Corporation shall, notwithstanding any provision of its Memorandum of Association or its charter of incorporation or other charter, carry on directly or indirectly any activities except:—

(a) activities specified in the first column of the Second Schedule to this Act;

(b) activities which that company was in fact carrying on immediately before the general date of transfer;

(c) activities which for technical reasons ought, in the opinion of the Minister, to be carried on by that company with a view to the better carrying on by any such company of its activities under paragraph (a) or paragraph (b) hereof and which are specified in an order of the Minister;

(d) such other activities as shall be specified in an order of the Minister;

and the Memorandum of Association or Charter of that company shall be deemed to be limited accordingly.
(2) A copy of any such order as aforesaid shall be delivered by the Corporation to the Registrar of Companies.
(3) An order made under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.")—(Viscount Swinton.)
LORD RENNELL: I support this Amendment, but even in its present form it goes rather further than I would normally like to go. In this the noble Viscount, Lord Swinton, is perhaps more liberal than I am. I do not like the Bill in any form, but if we are to have the Bill and it is to become an Act, I submit to your Lordships that it should become an Act for the purpose of doing what the responsible Ministers have intended the Act to do, and no more. It has been everywhere stated that the purpose of this Bill is to bring the major part of the manufacture of iron and steel under a nationally-owned Corporation. The noble Viscount, Lord Hall, in moving the Second Reading of this Bill referred to the purposes of this Corporation as being those activities defined in the Second Schedule. You will find that in column 986 of Hansard. If we are to have this Bill, I claim that it should do precisely that, and no more.
In fact, as the noble Viscount, Lord Swinton, has said, a large number of the companies that are scheduled to be taken over indulge in a great many of the other activities. I would meet the noble Viscount, Lord Swinton, in permitting the subsidiaries of the Corporation to go on manufacturing those things other than iron and steel which they now manufacture, but only on the condition that no such further activities are added to the activities of the subsidiaries of the Corporation. The reason for this limitation to the present scale of activities resides in the difficulties that I foresee if the subsidiary companies are allowed to do all those things which are enumerated in the Memoranda of Association of a number of the companies of which your Lordships have heard something from Lord Swinton. My reason for wishing to limit them to their present activities is that if they are not so limited I see no end to anything the existing subsidiaries, let alone new subsidiaries, could indulge in.
I am fortified in my objection to this by the answers which I have received from questions asked of authoritative persons (who, I believe, favour this Bill) regarding this liberty which the subsidiaries of the Corporation would have

237
if they were not limited by the Amendment which the noble Viscount is moving. I would like to take one example, which is not a wild dream, because it is a particular question which I have put and is one which might face one of these subsidiaries in the steel industry almost from one day to another. It will be known to some of your Lordships that recent discoveries of iron ore in certain parts of the world have been closely associated with nickel. I have asked the specific question whether, if the Corporation started smelting ores of this sort for the purpose of making iron and converting it into steel, and found that they then wished to go into the manufacture of nickel, was it the intention that the Corporation should go into the manufacture of nickel; and the answer. I have received to that question is, "Yes."
If that is so, that goes beyond the purposes of this Bill as stated by members of His Majesty's Government and, indeed, by the noble Viscount, Lord Hall, in moving the Second Reading, when he referred to the purposes of the Corporation as being those defined in Schedule II of the Bill. Whether it be right or whether it be wrong for the Iron and Steel Corporation, if it comes into existence, to go into the manufacture of nickel, copper or chemicals beyond the degree in which many of these companies are already engaged in that manufacture, is a matter for Parliament, and only Parliament, to decide. It is not a matter for the Minister, the Corporation or anybody else to say: "We propose, without restriction, to go into the manufacture of copper, or tobacco or anything else." In other words, in supporting this Amendment, I do so for the purpose of limiting the activities of the Corporation to those activities which the spokesmen of His Majesty's Government have said were envisaged in creating this Corporation. The Government surely cannot argue that they will not agree with this Amendment because it is their intention to go beyond the activities which they have stated is the purpose of the Corporation. If they do, that is a question of malafides. I will not attribute that to anybody, least of all to any members of your Lordships' House. But if anyone says to me: "We want these powers in order to do these things," I can only conclude
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that they wish to go beyond what they have announced to the general public as their intentions. It is for that reason that I support this Amendment.
A second point arises here. This Amendment deals with the activities of subsidiary companies. We shall come very shortly to an Amendment which stands in my name on the purpose and form of the Corporation itself. There again—and I must give notice of this, because it has a bearing on this Amendment—I am opposed to the Corporation doing what the subsidiaries do not do and cannot do if this Amendment is passed. Moreover, I wish to hold the Ministers in charge of this Bill to what they have said—namely, that the Corporation is to be a holding company and not in itself a manufacturing company. That has a bearing on the matter because this is an Amendment which deals with the powers of subsidiaries. But those limitations imposed on subsidiaries are a fortiori imposed on the activities of the Corporation itself. I will develop that when we come to the Amendment which stands in my name. I regard this, Amendment as important, and especially the principle underlying it—namely, that the Corporation shall do that which the companies are doing now, and no more; that is to say, manufacturing steel and certain subsidiary activities which they still carry on, and which I would like to see restricted, although I would meet Lord Swinton on that point and not restrict them entirely. To ask for an extension of powers to go beyond that is, I think, to ask for something which has not been avowedly stated as yet, and, if it is avowedly stated, this should not be called an Iron and Steel Bill but should be called a Bill for carrying on industry in this country in any particular sphere which it pleases the Minister so to do.
VISCOUNT ADDISON: We have listened, as usual, to a very picturesque and rather fascinating speech from the noble Viscount, Lord Swinton. I confess that I rather felt a bit envious of his ability to roam into the realms of fantasy with the facility that he displayed. However, let me say at once that we have no sort of intention at all of going beyond the genuine intention of the Bill as stated in the reference to which the noble Viscount has referred. I confess to being a simple-minded person, but the question did cross my mind: Why is it that if, in

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the Articles of Association of a private company, it is right and proper to have powers to do this that or the other, it should be wicked when in a national Corporation?
LORD RENNELL: Because they have shareholders in these companies.
VISCOUNT ADDISON: The noble Lord has had his turn, I hope he will let me have mine. What I cannot understand, as I have said—and I am asking myself all the time as a simple-minded person—is why it should be a virtue in a private company and a crime in the public Corporation. I must confess that in the noble Viscount's observations I have not found the answer.
VISCOUNT SWINTON: We have heard the answer now, at any rate.
VISCOUNT ADDISON: My own conclusion is that it is a crime in the case of the public Corporation because noble Lords opposite do not like the Bill. If that is so, that is not a reason; it is a mere expression of prejudice. However, I will put that on one side. The noble Viscount produced the Articles of Association of the Steel Company of Wales. That looked to me to be a very extensive document, with a very wide range. Among the powers of this private company was one to subscribe to political associations. I must confess that that interested me, but I feel certain about one thing—that that Company would never subscribe to the Labour Party.
VISCOUNT SWINTON: Not until you get control of it.
VISCOUNT ADDISON: I want to assure the noble Viscount that we have no intention whatever of trying to do those strange and fantastic things which have no reality whatsoever to the purposes of this Bill. However, I confess with astonishment that my question remains completely unanswerable. I have not been able to discover from any of the speeches to which we have listened why it is wrong for a public company and a virtue for a private company. We have no intention or desire to go beyond the genuinely-expressed intention of this Bill, and I feel a little wishful that the noble Lord, Lord Rennell, could get out of the habit of attributing malafides to his politi-
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cal opponents. The other day something was, according to him, a disaster; now it is our malafides. We are not a set of criminals; we are quite decent people; and there is no reason why the noble Lord should introduce that note into his speeches. I wish he would develop the habit of leaving it out, for it does not help.
VISCOUNT SWINTON: If I may interrupt for one moment, the House would be extremely grateful if the noble Viscount would explain to us what is the genuine or general intention of the Bill—he has repeated that phrase a number of times. I have quoted the words of the Bill, which indicate power to do anything; but the noble Viscount stresses the distinction between the powers stated in the Bill and what he calls the "genuine or general intention" of the Government. It would be interesting to know what is the general intention of the Government. If we could know that, we should see how far it is carried out by the Bill.
VISCOUNT ADDISON: I was referring to a quotation, which is in general terms, which the noble Lord made from one of my colleagues in the other place.
VISCOUNT SWINTON: "Nationalising the appropriate sections."
VISCOUNT ADDISON: Whatever the actual words were, I was referring to that and I wish to adhere to it in spirit and fact. That is the only thing to which I was referring. The noble Viscount is also aware that, after consultation with the Minister, I told him and the noble Marquess beside him that we recognise that it would be desirable that we should try to come to an understanding to put something into the Bill that reasonably carries out our intention. I am sure that the Minister would never give his consent to the fantastic things which are enumerated in the Articles of Association which the noble Viscount has read out; and I am sure the Corporation will be pulled up if they wish to subscribe even to the Conservative Party, respectable as it is. However, I think it is reasonable that we might try to reach some understanding on this question, and we are prepared to try to do so.
With regard to the first two paragraphs of the noble Viscount's Amendment, paragraphs (a) and (b), I think that we can arrive at an understanding. It is not

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the intention of the Government that either the Corporation or its subsidiaries should engage in all kinds of enterprises and businesses quite unrelated to the main purpose of the Bill. My right honourable friend is willing that we should limit the activities of the bodies to those which they were carrying on before or to such activities as are substantially of that character. With regard to extensions beyond that general group of activities in existence at the time of transfer, my noble friend would require that the Corporation should make a written application to him and they would require his specific sanction. If noble Lords opposite wish, we are willing to discuss it between now and Report stage, to consider an Amendment which would give effect to undertakings of that type.
VISCOUNT SWINTON: But would that submit the point to the decision of Parliament, or would Parliament merely know and be able just to raise it in a matter of debate? The whole issue here is that of Parliamentary control. If the Minister has given his approval, will Parliament be able to say, by a negative Resolution: "You ought not to have done so"? That is the sole issue—where the control is.
VISCOUNT ADDISON: I was coming to that.
VISCOUNT SWINTON: I beg the noble Viscount's pardon.
VISCOUNT ADDISON: Paragraph (c) would be set out in modified words—the general intention. One does not quite know what a "technical process" or a "technical application" may be, but we could easily find suitable words. It means that the activities are substantially of the same order as those being pursued at the time of transfer. But my right honourable friend is not prepared—and I entirely agree with him—to agree to a condition that every alteration that he sanctions should be subject to a specific Parliamentary sanction. That would be completely unbusinesslike. It would be administratively impossible, because one could well imagine that in the manifold activities that would be embraced in these companies, it would be quite a common thing for this, that, or the other modification to be reasonable, proper and necessary. You could not expect that, in a responsible case, the Minister should
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not be in a position on the application of the Corporation to sanction extensions of that sort.
VISCOUNT SWINTON: I am sorry to keep interrupting. I hope the Leader of the House will not object to my clarifying this point, because he is making a proposition to us now, and it is most important that we should understand it. He has said that it would be unreasonable that the Minister should not have the right to sanction a thing but would have to wait. Under my Amendment, as I have moved it, he could sanction it; he would not have to wait. His order would have effect. But if Parliament, having knowledge of that order, thought it was a wrong thing to do, then either House of Parliament would be able to take exception to it and move to annul the order. That would not hold up anything; it would merely give Parliament the right to reject it if it thought proper.
VISCOUNT ADDISON: The noble Viscount is aware, of course, that the consideration which I have been able to give to this matter was in the main in the light of the terms of the Amendment as printed on the Order Paper. As a matter of fact, it was only this afternoon that I saw the modified form, which is a considerable and very acceptable modification which he himself has suggested, because I think that it recognises that it would not be reasonable or practicable to expect the Minister in every individual case either to receive the sanction of Parliament or to make a separate and independent report. If the Minister is to be in charge of these things, he will, of necessity, under the Bill have to report to Parliament on them. We must trust him to exercise some common sense and ordinary judgment in these matters. Without a little further examination, I cannot pronounce an opinion as to whether the procedure indicated by the noble Viscount could be made workable. We have no wish to Burke it, but I quite understand that it would be completely impossible and administratively impracticable for every individual alteration of this sort to be subject either to an order or to a separate communication. But, subject to that qualification, I am quite prepared to look with good will into the means whereby Parliament would be informed of what went on. I think the words of the noble Viscount's Amendment could

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be subject to substantial improvement and some modification. If the noble Viscount and the noble Marquess wish to discuss this matter with us between now and Report stage I will do my best in good faith to arrive at an understanding, but I cannot go further than that to-night. With that, I hope the noble Viscount will be prepared not to press the Amendment. I cannot accept it at the moment in the form in which it is framed.
9.6 p.m.
THE MARQUESS OF SALISBURY: I think we have all listened with great interest to the speech that has been made by the Leader of the House. I have listened to it, too, with some bewilderment, because he seemed to zig-zag about in a way that in this House is unusual. His argument was of what I may call a tortuous character.
VISCOUNT ADDISON: I was following the thread of the argument.
THE MARQUESS OF SALISBURY: As I understood the noble Viscount, he began by saying that the Government had no intention that these companies should go beyond the functions which are laid down in the Second Schedule of the Bill. I was delighted to hear that, but I do not think that statement was entirely borne out by the remainder of his speech. He made considerable play of the fact that in the past private companies have had certain powers which, it was suggested, should be denied to the nationalised company—I think I am stating his case fairly. I think there is a simple answer to the point we have been making, and about which he said he found difficulty. It is that in the case of private companies they are responsible to somebody for their activities, or for any extension of their activities: they are responsible to their shareholders.
VISCOUNT ADDISON: The Minister is responsible to Parliament.
THE MARQUESS OF SALISBURY: If the noble Viscount will allow me to continue, that was the point I was going to make. The directors of private companies are responsible to their shareholders, and the shareholders are always in a position to examine and watch the activities of the executive; and they can control it or remove the directors if they go beyond
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what is thought proper. As the noble Viscount has so properly remarked just now, the shareholders of a nationalised company are, in effect, Parliament, which represents the community. Control ought, therefore, ultimately to rest in Parliament for any extension of their activities; and if that control is taken from Parliament and left entirely to the executive, then there is no control at all, and the parallel to the private company is entirely lost. I am grateful to the noble Viscount for his interruption, because he enabled me to expose the main burden of our case. If it were proposed that the shareholders of a private company should have no control at all over the directors I am sure noble Lords opposite would have been deeply shocked, and yet that is exactly what they are now proposing to do.
The noble Leader of the House made a proposition to us—what I think he called a basis for further discussion. I listened to it with the greatest care and, as I understand it, there would be under this provision a limitation on the Corporation to certain basic activities. But the proposition contained a proviso, which was, in effect, that the Corporation could carry on any other activity whatsoever which the Minister authorised or recommended. There was in the noble Viscount's proposal no limitation at all of the activities of this great body so far as I could make out. All that was needed was that the Minister should authorise it. Parliament had nothing whatever to do with it. Parliament—the shareholders—was never to be consulted. That is my understanding. If the noble Viscount says that I am wrong, I hope that he will explain what is the exact position under his proposal. My noble friend Lord Swinton has suggested that where any extension of the activities of the Corporation was required there should be a negative Resolution before either House of Parliament. That is a very moderate proposal. All that would happen is that the Minister would lay on the Table of Parliament an order showing what was intended to be done, and unless Parliament prayed against that order it would automatically go through. That procedure is adopted in thousands of cases every year as a result of the activities of one Department or another. Parliament is a sensible body, and Members do not pray unless they have some

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real objection. That is all we suggest, in the modified Amendment of which my noble friend has given notice to the noble Viscount the Leader of the House. I suggest to the Government that that is the right course to follow. If they continue in their present line—which in effect gives the Minister absolute authority to authorise whatever extension of the Corporation's activities he likes, without Parliamentary control—then they are on a very dangerous line indeed, and one in which I believe they will not have the support of the majority of the people of this country.
The noble Viscount the Leader of the House has suggested that further discussion should take place between now and the Report stage. I need hardly say that we are open, and we always have been open, to enter into discussions, but in our view it is not the slightest good having these discussions except with some possibility of compromise ahead. I would therefore ask the noble Viscount the Leader of the House whether, in any discussions into which the Government enter, they will insist that ultimately the question of any extension of the activities of the Corporation must be left entirely to the Minister, without any control from Parliament. If that is the position which they are going to maintain, then I do not think it is worth while entering into discussions. If the Government are willing to consider some such modified proposal as is put forward by my noble friend Lord Swinton then we might profitably have discussions. Unless the Government are so willing, I do not think there is anything to be done but to carry the matter to a Division. I am not anxious to go to a Division. All of us in this House, on the whole, would infinitely prefer to settle things by compromise agreement, but unless we have a basis for discussion, it would be a hollow sham to go into it.
VISCOUNT ADDISON: I think that what I said provided a fair basis for discussion. At the moment, without having had the opportunity of examining what the noble Viscount has proposed, I cannot say any more. But the noble Marquess knows well that we do not play any tricks. It may be that if we have discussions we can arrive at an understanding. If we cannot, then we cannot.
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Apart from that I have nothing more to say.
THE MARQUESS OF SALISBURY: We must have this clear.. I ask the noble Viscount a very simple question, and I think it is clearly one to which he ought to be able to give an answer. We talked it over with him yesterday, and he knows the point perfectly well. Is the final decision as to any extension of the activities of the Corporation to be left to the Minister, or is Parliament to have any control?
VISCOUNT ADDISON: The noble Viscount knows perfectly well that I cannot answer a question of that kind in that form. The activities of the Minister will be reported to Parliament—that is in the Bill. The question which we were discussing yesterday, about which we did not arrive at an understanding and which is approached by the modified Amendment of the noble Viscount, concerns how and when Parliament is to become informed of what the Minister is doing. I cannot go any further than I have said as to the machinery of dealing with that matter. As to the general understanding on the limitation of the activities of a company to those they were pursuing at vesting date except with express sanction, I do not think there is any real difference between us and I do not think it would be difficult to arrive at an agreed form. I cannot say anything at the moment about what will happen after that. If the noble Viscount wants to put his Amendment in, let him put it in; but on that basis it makes it impossible to arrive at an understanding.
VISCOUNT SWINTON: The issue is crystal clear. The difficulty is not to see that a company do the things they are already doing and nothing else without the approval of the Minister. That is obvious; but what happens after that? I told the noble Viscount yesterday that I was prepared to accept a negative Resolution instead of a positive one. I thought there was good reason in that. The issue is perfectly clear and simple and can be stated in two sentences. The noble Viscount says the Minister will report to Parliament. That means merely that Parliament will know What the Minister has done. That is not the point. The point is: What power is Parliament going to have when it knows what the Minister has done? The noble Viscount

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proposes that we can raise a debate if we get an opportunity—but that is nothing; that is mere talk. The only effective way in which a ministerial decision can be challenged is either by a vote of censure, which is a ridiculous proposition in regard to this matter, or by the ordinary practical way of a statutory instrument, which is the way the Government themselves use. They lay before the House 3,000 of these instruments in a year and we have about three Prayers on them—one per thousand, which is even better than the death rate ! Are we or are we not going to have the right to challenge a statutory instrument by a negative Resolution, if we disapprove of it. If the Government are open to that proposal and will take that as a basis on which we can go into conference, it seems to me that there is a basis for discussion; but anything short of that is really another way of saying, that Parliament is not to have any authority or control.
THE MARQUESS OF SALISBURY: We want to get a settlement of this matter if we can, and I should like to put one further question to the noble Viscount. Is the proposition which has been put forward by my noble friend ruled out of the discussions between now and Report stage?
VISCOUNT ADDISON: The proposition stated by the noble Viscount amounts to this. If we have a statutory instrument, it means that every detailed transaction of a Minister would have to be reported separately, and that would make the whole thing an administrative impossibility. It is something to which I would never consent. I have said that I am willing to enter into a discussion on the terms indicated. I cannot go any further and I refuse utterly to do so at the present moment.
THE MARQUESS OF SALISBURY: Are we to understand from that that the proposition
of the noble Viscount, Lord Swinton, is not ruled out of the discussion? I am not asking the Leader of the House to say that he will accept the proposition, but I am asking him whether Lord Swinton's proposition can come into the discussion. We will come in with this proposition and see if we can find a middle line. If it is ruled out from the start, there is not much use our discussing it.
VISCOUNT ADDISON: As the noble Marquess well knows, I never rule anything out. However, I do say that, in our view, anything which involves the kind of thing which I have described—namely, a separate report by the Minister on every alteration he makes—is completely impracticable. The noble Viscount can suggest it, but I am not going to deceive anybody into believing that we think it is a practical proposition. Short of that, I shall be glad for the noble Marquess to bring forward any subject he likes. I am sure he will see when we discuss it that this is not a practical proposition.
THE MARQUESS OF SALISBURY: I think the Leader of the House will realise that I have been anxious to find a ground for discussion. He really has slammed the door in our face. I do not say he has done it on his own; he may be acting for a Minister whom he cannot control. The fact remains, however, that he has slammed the door in our face. He could have said: "We are quite willing to consider your proposition, but we do it with an absolutely open mind. You must not regard us as committed." The noble Viscount could have safeguarded himself in a number of ways, but in effect he has slammed the door in our face and we have no option but to divide.
On Question, Whether the proposed new clause shall be there inserted?
Their Lordships divided: Contents, 66; Not-Contents, 19.

CONTENTS

Richmond and Gordon, D.

Albemarle, E.

Lindsay, E.

Beatty, E.

Munster, E.

Aberdeen and Temair, M.

Buckinghamshire, E.

Onslow, E.

Cholmondeley, M.

De La Warr, E.

Rothes, E.

Exeter, M.

Dudley, E.

Reading, M.

Fortescue, E. [Teller.]

Allenby, V.

Salisbury, M.

Gainsborough, E.

Bridgeman, V.

Townshend, M.

Howe, E.

Buckmaster, V.

Willingdon, M. [Teller.]

Iddesleigh, E.

Elibank, V.

Falmouth, V.

Cranworth, L.

Moyne, L.

FitzAlan of Derwent, V.

De L'Isle and Dudley, L.

Polwarth, L.

Harcourt, V.

Forester, L.

Remnant, L.

Ridley, V.

Gage, L. (V. Gage.)

Rennell, L.

Simon, V.

Gifford, L.

Ritchie of Dundee, L.

Swinton, V.

Hatherton, L.

Rochdale, L.

Hawke, L.

Roche, L.

Ashton of Hyde, L.

Hindlip, L.

Sandhurst, L.

Balfour of Inchrye, L.

Kenilworth, L.

Stanmore, L.

Barnby, L.

Layton, L.

Strathcarron, L.

Belstead, L.

Lyle of Westbourne, L.

Teynham, L.

Carrington, L.

Mendip, L. (V. Clifden.)

Waleran, L.

Cherwell, L.

Middleton, L.

Wardington, L.

Clydesmuir, L.

Milverton, L.

Wolverton, L.

NOT-CONTENTS

Addison, V. (L. Privy Seal.)

Crook, L.

Macdonald of Gwaenysgor, L.

Darwen, L.

Marley, L.

Hall, V.

Douglas of Kirtleside, L.

Morrison, L. [Teller.]

Stansgate, V.

Hare, L. (E. Listowel.)

Pakenham, L.

Holden, L.

Pethick-Lawrence, L.

Ammon, L.

Kershaw, L.

Piercey, L.

Chorley, L.

Lucas of Chilworth, L.

Shepherd, L. [Teller.]

On Question, Amendment agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.
9.29 p.m.
Clause 2:
Powers of the Corporation
(2) The Corporation shall have power—

(a) to conduct research into any matters affecting the activities which any publicly-owned company is for the time being authorised as aforesaid to carry on, and to assist other persons conducting such research;

(b) to provide for the publicly-owned corn-panics, or for any group of such companies, any services which in the opinion of the Corporation can conveniently be provided as common services for those companies or that group thereof.

(3) The Corporation shall have power, with the consent in writing of the Minister, to carry on any other activities which, at the time when the consent is given, any publicly-owned company is authorised as aforesaid to carry on.
(4) The Corporation shall have power to do any thing or to enter into any transaction (whether or not involving the expenditure, the borrowing in accordance with the provisions of this Act or the lending of money, the acquisition of any property or rights or the disposal of any property or rights) which in their opinion is calculated to facilitate the proper carrying on of their activities or the proper exercise of their powers under the preceding provisions of this section.
(5) Any reference in this section to interests in a company includes a reference to rights in respect of money lent to the company or guarantees given for the benefit of the company.
VISCOUNT SWINTON: I think the first of these Amendments is consequential on the clause that we have just inserted,
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and the next two are consequential on the first consequential Amendment. I do not think I need argue them. If the last Amendment is right, then this Amendment is right. If the last Amendment is wrong, then this would not be right. I beg to move.
Amendment moved—
Page 3, line 26, leave oat from ("any") to the end of line 30, and insert ("subsidiary of the Corporation is authorised to carry on and is not by any provision of this Act prohibited from carrying on").—(Viscount Swinton.)
THE FIRST LORD OF THE ADMIRALTY (VISCOUNT HALL): agree that the first Amendment to page 3, line 26, is consequential; and the Amendment to page 3, line 33, is also consequential. We do not propose to divide on those two Amendments, but it should be understood that in the event of the new clause which has just been voted upon being voted out in another place, these two consequential Amendments will suffer the same fate. May I also refer to the Amendment to page 3, line 32, to leave out the words "sole or main"? We accept that Amendment.
Amendment moved—
Page 3, line 32, leave out ("sole or main"),—(Viscount Swinton.)
Amendment moved—
Page 3, line 33, leave out from the second ("any") to ("or") in line 35, and insert ("subsidiary of the Corporation is authorised to carry on and is not by any provision of this Act prohibited from carrying on").—(Viscount Swinton.)
LORD TEYNHAM LORD TEYNHAM moved, in subsection (2) after "power" to insert:
"with the consent of the Minister to be signified by order."
The noble Lord said: This Amendment is a very simple one and I feel sure His Majesty's Government will not have any great difficulty in accepting it. Its object is to require the Corporation to obtain the Minister's consent before they set up new machinery for research and common services. There is already very comprehensive machinery in existence for research and common services, and surely it would be a great mistake and quite unnecessary to duplicate this machinery.
On the other hand, if the present machinery proved inadequate for the purposes of the Corporation and its subsidiaries, they could come to the Minister for consent to alter or perhaps enlarge it. And the Minister concerned, I am sure, intends to keep a watchful eye on the wellbeing of the companies which will not come under public ownership. Those companies will require the research and common services already provided. Therefore, surely, it is for the Minister to determine if such research and services are adequate to meet the wishes not only of the Corporation but also of those other companies outside. I hope His Majesty's Government will accept this very reasonable and necessary Amendment. I beg to move.
Amendment moved—
Page 4 line 8, at end insert the said words.—(Lord Teynham.)
VISCOUNT HALL: I am afraid we cannot treat this Amendment as a simple one. It is a very important Amendment, because it would have the effect of restricting the Corporation to conducting research and providing common services only if the Minister had consented by order. We all appreciate the excellent work in research which has been done by the Iron and Steel Federation, and the amount of work which is done by various companies in relation to common services, such as the import of raw materials and so on. There is no doubt that these organisations will continue until the Corporation has considered with them how they can best be worked into the organisation as a whole. But the Government cannot accept a position in which
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the Corporation's powers on such essential but non-controversial matters as research, now mainly carried on by the British Iron and Steel Federation, and common services, should always be subject to the Minister or to both Houses of Parliament. The Corporation must be free to exercise its powers in these directions. These functions are obviously necessary if the industry is to be efficient and enterprising. It would be unsound to make the Corporation dependent on the Minister in this matter and in the matter of the provision of common services and research which are now being carried on by the companies which are to be publicly owned. The value of centralisation of research and common services has been proved and there is no reason why they should not be carried on as efficiently under the Corporation as they have been carried on under the organisation which is now responsible for them. I regret that we cannot accept the Amendment.
LORD TEYNHAM: In view of the explanation given by the noble Lord, I do not propose to press this Amendment; but we may have to consider it again, perhaps in another form, at a later stage. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
9.39 p.m.
LORD RENNELL LORD RENNELL had given notice of an Amendment to leave out subsection (3) and to insert:
"(3) The Corporation shall have power to carry on such other activities as shall have been approved by resolution of each House of Parliament."
The noble Lord said: This Amendment is of importance, and raises a matter of principle, but having regard to the amendment of the new clause inserted after Clause 1 the text of this Amendment, as presented in the Marshalled List, will require appropriate modifications. The Amendment should now, I think, read:
"The Corporation shall have power to carry on such other activities as shall have been specified in an order of the Minister, such order being subject to annulment in pursuance of a Resolution in either House of Parliament."
That follows from the addition to the new clause after Clause 1. With your Lordships' permission, I should like to move my Amendment in that amended form.
The purpose of the Amendment is to clarify what was discussed on Second Reading; namely, the Corporation's functions and purpose—I do not mean "purpose" in the form of manufacture, which has been the subject of an Amendment recently discussed, but the form which the Corporation is to take. Your Lordships will remember that in the course of the Second Reading debate the Corporation was described by the noble Viscount, Lord Hall. I refer to the OFFICIAL REPORT of May 24, Column 987. The noble Viscount was there discussing the powers of the Corporation in the form in which they were originally drafted when the Bill was presented in another place. He stated, in this context:
"As the clause originally stood, the Corporation would have had the sum of all the powers contained in the Memoranda of all the publicly-owned companies."
He went on to say—and this is the material point:
"It was never the Government's intention that the Corporation itself would be actively engaged in the manufacture of iron and steel; the intention was that the Corporation should be a holding company, controlling the policy of the underlying companies through its shareholdings in them. Following discussion in Committee, it appeared that this intention could be more clearly expressed, and the clause now represents a substantial advance to meet the views of the Opposition."
In the course of the Second Reading debate, I asked specifically, because in spite of what the noble Viscount, Lord Hall, had said, it was not clear to me, if it really was the Government's intention that the Corporation should be a holding company and nothing more. I asked the noble Viscount, Lord Addison, the question, and in the course of the debate on the next day May 25, at Column 1140 of the OFFICIAL REPORT, the noble Viscount said:
"Now I will come to one or two items in the Bill. The noble Lord, Lord Rennell, asked me a very proper question as to whether the Corporation would be a holding corporation or an operating corporation. It will be a holding corporation … It cannot be an operating corporation"—
I have skipped some words—
"without the specific consent of the Minister."
Lord Hall's explanation of what the Corporation was intended to be in the way of a holding company is perfectly clear. It also follows from other statements that have been made from time to time, and it follows to some extent from the set-up
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of the Corporation as a holding company holding shares in the subsidiary companies which are actually carrying on the manufacturing activities.
A great deal of doubt was, however, raised in my mind by that last sentence of the noble Viscount, Lord Addison. Referring to the Corporation he said:
"It cannot be an operating corporation without the specific consent of the Minister."
Therefore, it follows that, with the specific consent of the Minister, the Corporation can become something else than a holding company. The purpose of this Amendment is to ensure that the Corporation is restricted to being a holding company and shall indulge in other activities—direct manufacturing activities—only on the order of the Minister, following on the new clause inserted after Clause 1, the order of the Minister being subject to a Prayer for annulment in either House of Parliament. That is very important. It is fundamental to what we understand to be the structure of this nationalised industry. As I see it, as the Bill is drafted, it appears to be the intention, but in this point as in so many other points, the intentions are obscured, and to some extent vitiated, by those permissive rights.
As I say, it appears to be the intention that there should be a holding company with a very limited personnel—a board of directors, or a body, comprising a chairman and six to ten members. They will have certain secretarial services and premises, and so on. The noble Viscount, Lord Addison, will tell me if I am wrong in this, but it appears that they will not have a large staff, because the actual manufacturing, the operation of the steel industry, will be in the hands of the constituent companies which are taken over. Here is raised a very important point. A holding company cart and ought not to have machinery other than that which is required to give directions of policy at the highest level. It should not be concerned with any technical matters. It might be concerned with such major issues as the fuelling or heating of open-hearth furnaces by oil rather than coal, or vice versa. But it should not be concerned with particular applications of particular processes; nor should it be concerned with the individual products, innumerable as they are in the Schedule which we have seen. It should not be

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concerned with whether Company A manufactures this rather than that; whether Company B ceases to manufacture sections of certain sizes and turns over that production to another company, unless that production is a very important element in that part of steel output or manufacture. I believe that that is the intention and, if it is, I think this Amendment will be acceptable. But I want to elaborate for a moment what the alternative might be if that was not the intention.
The alternative is that the central board of a holding company, instead of being concerned only with policy-making, directing the subsidiary companies at the highest possible level and without interference with their individual activities, might easily become a technical board of directors engaged in manufacture, either directly—by owning bits of plant for which it could get powers from the Minister by a written consent and without an order which can be prayed against in Parliament—or, by the acquisition of power and staff, by taking away from the individual companies the direction which appertains to the board of each individual company. The latter, in my view, would be a highly undesirable development, because it would lead to that particular form of centralisation which is the main subject of criticism of the coal industry, and probably also the transport industry. If that were to happen, the individual initiative, not only of boards but of the staff of individual companies, would be frustrated and lost, and more and more work would be piled on to an organisation which was essentially devised as a holding company organisation giving directions at the highest level.
It is for the purpose of safeguarding that position, which I believe to be the intention of the Minister, that I move this Amendment in the form which I have read out. I cannot think that anybody looking at this industry, composed as it is, can have any other view about what the purpose of the Corporation should be. Therefore, I cannot see why anyone should object to the change of its functions from being a holding company to a manufacturing company being accompanied by at least the formality of an order which can be prayed against. In other words, the Corporation's function should not be altered by such an
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easy method as a letter from the Minister, saying, for instance: "Go right ahead, put up a blast furnace and so on, and see what you can do." Putting it another way, the maximum amount of publicity and formality consistent with business should surround any modification of the holding company aspect of the Corporation which was intended and indeed was announced by several responsible Ministers, including the noble Viscount, Lord Hall, himself. I beg to move.
Amendment moved—
Page 4, line 18, leave out subsection (3) and insert—
("(3) The Corporation shall have power to carry on such other activities as shall have been specified in an order of the Minister. Such order being subject to annulment in pursuance of a Resolution of either House of Parliament.")—(Lord Rennell.)
LORD TEYNHAM: I should like to add my support to this very important Amendment. One of the principal lessons His Majesty's Government might have learnt from previous nationalisation measures is that it is essential to provide for as much decentralisation as possible. Yet here, in subsection (3) of this clause, is a power given to the Corporation, with the consent of the Minister, to embark on any activity which can already be carried on by any of the publicly owned companies. It could, for example, set up a pilot plant. Surely, that could be done by one of the subsidiaries of the Corporation. There would be no difficulty about it. Let us go further and suppose that the Corporation wish to undertake some completely new process. It is said that it may be for some reason impracticable to use one of the subsidiaries. I find that impossible to believe. It surely could be done by one of the subsidiaries. In any case, the Corporation have power to form a new company to do such things. Any extension of powers not set out in the Bill should certainly be a matter for Parliament to decide, as has been so clearly explained by my noble friend Lord Rennell.
VISCOUNT HALL: I was going, to treat this Amendment as consequential upon the new, clause which was voted into the Bill, because there is a similarity in it. I was going to treat it with the qualification which I applied to the other two Amendments which I think the Committee agreed were consequential. The noble Lord, Lord Rennell has again quoted

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from Hansard remarks which I made in my speech during the Second Reading debate. I was pleased to note that he was much more accurate in his quotation on this occasion than he was when he quoted me a short time ago. At that time he completely misquoted what I said. Indeed, if he had accepted my description of the powers of the Bill, he would not have spoken in favour of the Amendment nor would he have voted for it. I do not wish to enter into any controversy with the noble Lord but I think he was a little unfair in attributing certain "disqualities" to certain Ministers and others. His mistake—I say this in quite a friendly spirit—was not a deliberate mistake. I will read to the Committee what I said. If the noble Lord had taken the trouble to read just ten lines above the portion of my speech which he quoted he would not have made the quotation. This is what I said in the course of my speech:
"The main purpose of the Bill is to transfer to public ownership the companies specified in the Third Schedule. This will be done by transferring their securities from the present holders to a public Corporation which will be known as the Iron and Steel Corporation of Great Britain. It will own all securities of the major companies in the sections of the industry responsible for the production of iron ore, pig iron, ingot steel, or the hot rolling of steel. These are the activities defined in the Second Schedule."
I think the noble Lord will see that he was rather unfair in making that quotation in the form in which he made it. With regard to the Amendment, I stand by the quotation which I made. There are certain qualifications, but I am not going into that now, because I do not want to take up the time of your Lordships' House in view of the fact that I think the Amendment is consequential and we are treating it as such, with the same qualifications as applied to the two previous Amendments which were regarded as consequential.
THE MARQUESS OF SALISBURY: I am grateful to the noble Viscount for what he has said. I gather he regards this Amendment as consequential, and on that basis the Government are accepting it. I do not think there is any further need for discussion.
LORD RENNELL: I am grateful to the noble Viscount for accepting my Amendment, which I think makes the
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matter clearer. The noble Viscount spoke about the quotation I made, but I do not think I was being unfair. I do not think I quoted the words out of their context. I was not quoting the method of transferring subsidiaries of the old companies, but the object which the Corporation as a whole was intended to carry out—namely, the manufacture of iron and steel, the activities found in the Second Schedule. If the noble Viscount thinks I was unfair, I very much regret it, as I did not intend to be. I picked up his words because they were in line with the argument I was making—namely, that the Corporation should make iron and steel and not anything else.
VISCOUNT BRIDGEMAN VISCOUNT BRIDGEMAN moved, in subsection (4) to omit "which is their opinion" and to insert:
"as to which the Minister is satisfied that it"
The noble Viscount said: We have just finished dealing with subsection (2), and the noble Viscount has accepted the Amendment of the noble Lord, Lord Rennell. Now we conic to subsection (4), which is very wide indeed. It says:
"The Corporation shall have power to do any thing or to enter into any transaction (whether or not involving the expenditure, the borrowing in accordance with the provisions of this Act, or the lending of money, the acquisition of any property or rights of the disposal of any property or rights) which in their opinion is calculated to facilitate the proper carrying on of their activities.…"
Several times to-day we have had it put to us by noble Lords opposite that they are anxious to avoid unduly fettering the Corporation. In this subsection they have certainly succeeded with a vengeance! What they have done is to arrange matters so that the Corporation are sole judges in their own cause. I am not at all sure whether in the subsection as drafted there is any responsibility to Parliament at all, or whether the Corporation can do anything they like, and the Minister, if challenged in Parliament, can say: "Under the Act this is entirely a matter for the Corporation, and therefore it cannot be questioned." If that is a right interpretation of the subsection—and I am not at all certain that it is—then it goes certainly much further than we want it to go, and probably further than the Government really want to go, in view of the attitude they have taken over the last two Amendments.
The Amendment standing in my name and that of my two noble friends seeks to bring this subsection into line with our wishes on the other two subsections; that is to say, to place the responsibility not on the Corporation but on the Minister to satisfy himself what they wish to do and whether the sweeping powers are to be exercised in a way calculated to facilitate the proper carrying on of their activities. In other words, if there is to be any empire building, do not let the Corporation build their own empire. Let the Minister decide whether it is right or wrong, and let him be answerable to Parliament. That is what we think should happen. I may have misunderstood the meaning of this subsection. It is so widely drafted that it might mean almost anything. If I have misunderstood it. I know that the noble Lord opposite will forgive me. In anticipation of a clear explanation of what is intended under this subsection, I beg to move.
Amendment moved—
Page 4, line 27, leave out ("which in their opinion") and insert the said new words.—(Viscount Bridgeman.)
VISCOUNT HALL: On paper this Amendment looks quite simple, but it is not so simple as it looks. This subsection gives the Corporation the necessary general powers to carry on their activities, and to exercise particular powers under subsections (1), (2) and (3). The subsection is completely in line with provisions in the Coal, Gas, Electricity and Transport Acts. The Government believe that there should be a minimum interference by the Minister in management by the Corporation of the affairs of the publicly owned industry. If he is to follow the example of Ministers who are charged with the responsibility for other nationalised industries, then he will interfere as little as they have interfered. If the Amendment were accepted, the Corporation would be required frequently to consult the Minister on matters arising in their day-to-day work. It is difficult to believe that anyone would seriously wish to establish this position. It would mean that the Corporation would become virtually a Government department, and I am sure that is not the intention of noble Lords opposite. I am just warning them against their own work. I cannot accept this Amendment, because I think
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it would to a very large extent hamstring the work of the Corporation.
LORD HAWKE: I wonder whether my noble friends and I have worded the Amendment a little wide. Nevertheless, I feel that on principle something of the kind should be in the Bill. We are doing our utmost to circumscribe the actions of the Corporation in going into trade, and we have made them subject to orders by the Minister for the approval of Parliament. Here the subsection gives the Corporation the wherewithal to plunge into trade if they wish to do so, and we are providing a degree less in safeguard than in the other case, because we are saying here that they should get permission from the Minister. The Minister does not have to come to Parliament. I admit, and I think my noble friend would admit, that in certain cases it is possible that the Corporation would have to go to the Minister unnecessarily. On the other hand, I can see no reason why the Minister should not give them, in writing, blanket instructions that they can do certain things in connection with activities which he has approved.
We are guarding against a tendency which we have learnt to expect from other nationalisation measures, whereby the centre aggrandises itself at the expense both of the periphery and the community in general. The noble Viscount said that there was no provision like this Amendment in other nationalisation measures. If there had been, I wonder whether we should have seen half the stately homes of England now in the occupation of Electricity Boards, Coal Boards and so on. We feel that amendment of some kind to this power to acquire property ad libitum is necessary in order to prevent the Corporation breaking away from the type of holding company which we feel it is absolutely essential it should remain.
LORD GIFFORD: I feel that this Amendment must be looked at to some extent in connection with the previous Amendment which was accepted by the noble Lord, because, if you leave subsection (4) as it is worded at present, it does give the Corporation extremely wide powers. We ought to bear in mind that this Corporation is not identical in function to some of the other Corporations, like the Coal and Transport Boards. As has been admitted, it is almost entirely

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a holding company. Although we may not have quite the right wording in this Amendment, I feel that as the subsection is worded at present it opens the door far too widely.
VISCOUNT HALL: I want to emphasise that this subsection is completely in line with provisions in the Gas, Coal, Electricity and Transport Acts. It is a common form provision found in all the nationalisation Acts, dealing with ancillary machinery, powers such as in contracts, buying land, borrowing money and so on. It does not enable new activities by the Corporation at all. As that is so, I really feel that there is some misunderstanding amongst noble Lords opposite as to what the purpose of this subsection is.
VISCOUNT BRIDGEMAN: I am grateful to the noble Viscount opposite for having given that explanation. This subsection, as it is drafted, is, I think, capable of being read in two ways. Either it can be read in the way in which I understood the noble Viscount meant it to be read, as providing the machinery to implement the powers in the preceding subsections, or else it can be read—and it can be read like this as it is drafted—as being an omnibus clause giving additional and wider powers. If it is only a question of providing the machinery, then I admit that there is a great deal to be said for the noble Viscount's point of view that machinery must be provided. I am bound to say that I should have thought that it could be provided without drawing the clause in such a way as to give such extremely wide powers. However, this is not an Amendment to which we attach quite the same importance as some others that we have discussed and shall discuss. Therefore, in the light of the noble Viscount's explanation of the meaning of the subsection, I think the right course now is to beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
10.12 p.m.
VISCOUNT BRIDGEMAN VISCOUNT BRIDGEMAN moved to leave out subsection (5). The noble Viscount said: We have put down this Amendment in order to give the Committee an opportunity of learning a bit more about what the Government intend to do under this subsection. If your Lordships look at page 3 of the Bill you
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will see that the Corporation have various powers. They have ere power to hold such interests in companies as vest in them, they have power to acquire by agreement and to hold interests in any company whose activities, including the activities of any subsidiary of the company, consist wholly or mainly of activities defined; and then they have power to exercise their rights. That is all very well, but here again it is hard to know exactly what the Government mean to do and what is likely to happen if this Bill becomes law.
Let us come back to Clause 2, to subsection (5). Your Lordships will see that there are two things included in the reference to "interests." First of all there is a reference to
"rights in respect of money lent to the company"
and secondly there is a reference to
"guarantees given"
by somebody or other
"for the benefit of the company."
I am not sure what is to happen to the people who have already lent money to the companies before they vested in the Corporation. I take it that those loans which the draftsman of the Bill had in mind were loans from banks, secured by debentures and so forth. They may be short-term loans, they may be any kind of loans, but all those loans have been given on certain terms, and those terms must have been satisfactory to the lender when the companies were privately held by the shareholders. It does not at all follow that the lenders will wish to continue those loans once the companies vest.
Here is the first question I would like to ask the noble Viscount opposite: Does the subsection as drafted imply that there will be any compulsory alteration in the terms under which loans were given? Is there any intention of altering the terms under which the lender can call in the loan, whatever those terms were? Secondly, whit regard to the guarantees, it appears a little more difficult because just as a loan would be given in particular circumstances so a guarantee would have been given by a guarantor, and the guarantor, I imagine, would have given the guarantee on the strength of his faith in the

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running of the company as it was operated under private enterprise. It does not necessarily follow that he will have the same faith in the company and will wish to continue his guarantee if the company is operated under this Bill. I can imagine, when one sees the figures of losses and small profits by the National Coal Board, and larger losses in Civil Aviation, that guarantors might take a slightly different view of the soundness of their guarantee from that which they took when they gave the guarantee to a private enterprise company. I hope the noble Viscount opposite will be able to assure us that the rights of the lenders of the loans which were made before the vesting date will not be affected prejudicially, and also that the guarantors will not be placed in a position which they never expected in the days when they gave guarantees before this Bill was thought of. I beg to move.
Amendment moved—
Page 4, line 30, leave out subsection (5).—(Viscount Bridgeman.)
VISCOUNT HALL: I could give a short answer to all the noble Viscount's questions by saying that the answer is in the negative. I do not want to do that, but I would like to assure him, and anyone who holds the opinions which he has expressed, that it is not the intention of the Corporation or the Minister that the terms of any such loans shall be altered. I would that noble Lords opposite had a little confidence in the thought that the Corporation which will be appointed to look after this industry will be composed of honest men, ready to make their full contribution not only to this industry but to the national economy. I again want to assure the noble Viscount that there is absolutely no fear of anything, such as he suggested.
VISCOUNT BRIDGEMAN: I think that everything that has happened so far in this debate has justified our probing every clause of this Bill as deeply as we can. But I am bound to say that in this case, at any rate, the noble Viscount has given an answer which entirely satisfies me. I should like to repeat my question. I take it that there is no intention on the part of the Government to alter, through the medium of this subsection, any of the terms on which loans were made to a
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company which is to vest in the Corporation or of any guarantees given to such lenders.
VISCOUNT HALL: I know of no such intention.
VISCOUNT BRIDGEMAN: In the light of that assurance I beg leave to withdraw my Amendment, at the same time thanking the noble Viscount for the assurance.
Amendment, by leave, withdrawn.
Clause 2, as amended, agreed to.
Clause 3:
General duty of the Corporation
3. It shall be the general duty of the Corporation so to exercise their powers as—

(a) to promote the efficient and economical supply of the products of the activities specified in the first column of the Second Schedule to this Act, and to secure that those products are available in such quantities, and are of such types, qualities and sizes, and are available at such prices, as may seem to the Corporation best calculated to satisfy the reasonable demands of the persons who use those products for manufacturing purposes and to further the public interest in all respects; and

(b) to avoid showing undue preference to, and exercising unfair discrimination against, any such persons or any class thereof in the supply and price of those products, but without prejudice to such variations in the terms and conditions on which those products are supplied as may arise from ordinary commercial considerations or from the public interest.

10.18 p.m.
LORD CLYDESMUIR LORD CLYDESMUIR moved, in paragraph (a) to omit "activities specified in the first column of the Second Schedule to this Act" and to insert:
"principal activities of the Corporation and of the publicly-owned companies."
The noble Lord said: At this rather late hour we turn to a new subject, the consideration of the duties of the Corporation. Up to now we have been dealing with the composition and powers of the Corporation. These powers are very wide indeed, and the Government have shown a disinclination to allow any limit to be placed on them. When we reach the duties of the Corporation we come to a curious anomaly. The general duties are closely circumscribed in the Bill. Clause 3 lays down four main duties for the Corporation: first, to promote efficient and economical production; secondly, to promote the production of enough to satisfy consumers' reasonable

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demands; thirdly, to promote supply at reasonable prices; and, fourthly, to avoid exercising undue preference or unfair discrimination.
As the clause is drawn, these duties apply only to production and supply, and to what are known as "Second Schedule products." These comprise: iron ore, pig iron and ferro-alloys, steel ingots, and hot rolled steel products. They do not apply to finished steel products, such as galvanized sheets, tinplates and tubes, cold rolled strip, or bright steel bars, wire or bolts and nuts, the combined production of which is as much as 3,000,000 tons a year. Note this: that the Corporation and its companies, while they have not a monopoly in all those products that I have mentioned, have a substantial share of that trade. I have it here that of the tube trades they have 68 per cent.; of the cold rolled strip they have 73 per cent.; of the bright steel bars they have 24 per cent.; and of wire 49 per cent. Therefore, I submit to your Lordships that, where the Corporation will have this large and important share of the trade in these products, it is right that the duties laid upon the Corporation should cover those products also. So my Amendment is submitted with a view to extending the duties laid on the Corporation by this clause to cover activities beyond the Second Schedule activities to which they are at present limited. I cannot see why the Government have produced this anomaly by giving wide powers and yet few duties. Possibly, we shall have an explanation which will make it clearer to us, but I find it difficult to understand.
Have regard for a moment to the list of these duties.
"Avoid exercising undue preference or unfair discrimination."
Surely, it is most important that over the important range of finished articles which the Corporation and its companies will produce the Corporation should be specifically charged by Parliament to pay regard to avoiding undue preference or unfair discrimination. That seems essential. I observe that when this question was discussed in another place the Minister felt unable, on various grounds, to accept the Amendment. He said there was no need for it because the Consumers' Council was established to deal with that very point. The argument that the complaints about undue preference
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can come up through the Consumers' Council is just as applicable to Second Schedule products and to the extraneous products as sauce for the goose is sauce for the gander. I cannot for the world understand why the duty to avoid undue preference should not be laid on the Corporation in regard to the range of principal products which their companies make. At this late hour, I will not enlarge upon the dangers which might be created by the Corporation's exercising undue preference. Your Lordships will be well aware of them and can imagine them for yourselves. We should like to hear from the Government a justification of the attitude which they have taken up in regard to the general duties. I hope that this Amendment will be accepted.
Amendment moved—
Page 4, line 43, leave out from the first ("the") to ("and") in line 44, and insert the said new words.—(Lord Clydesmuir.)
LORD LUCAS OF CHILWORTH: As the noble Lord has just said, at this late hour we come on to a new subject. Also, we have two new actors in this drama. The noble Lord has set me a good example which I intend to follow. He was brief, and I intend to be brief. He has stated the position quite clearly. There is a statutory duty upon the Corporation in all the things he mentioned in connection with Second Schedule products. That statutory duty is imposed upon the Corporation because the Corporation has a monopoly in Second Schedule products. That is the reason for the statutory duty. In the end products, the ancillary products, which the noble Lord has mentioned, in that market which is free and unrestricted of entry, the Corporation has no monopoly, as the noble Lord rightly said. He quoted some figures but I cannot see—perhaps the noble Lord will be able to tell me—how one can place a statutory duty upon the Corporation to do all these things in a market where it is subjected to competition.
My figures are slightly different from those given by the noble Lord, but in some things—such as bright steel bars, steel forgings, and others—the Corporation may inherit as much as 60 per cent. of the production in some cases, or as little as 15 per cent. in others. In my ignorance I do not know how this

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Amendment can possibly work. How are you to impose this statutory obligation upon the Corporation when the Corporation has not the monopoly or the control? If the noble Lord will follow me perhaps he will give me the answers to these questions. I will cite the last case to the noble Lord. Let us take the current production of steel wire, which is somewhere in the region of 600,000 tons per annum. The Corporation will inherit 60 per cent., so it will produce 360,000 tons per annum. Supposing the market remains stable, what is the duty of the Corporation under the noble Lord's Amendment? Is it to go on producing 360,000 tons? If the demand goes up, what is the duty of the Corporation? Supposing it goes down, what is the duty of the Corporation? Supposing it sinks right down to 360,000 tons, is the Corporation to produce the lot, none at all, or 60 per cent.? I recognise that the noble Lord has a problem but I do not see how a statutory duty can be placed upon the Corporation in respect of these end products such as can be put on them in regard to the Second Schedule products, where the Corporation has a monopoly. I suggest that the solution lies in the Clause 6 procedure—the Consumers' Council which, if there is a difficulty, can make representations to the Minister, who in turn can make representations to the Corporation. But my difficulty in this is to see how it works. I tell the noble Lord quite frankly that it cannot and will not work, that it is impossible, and I ask him to withdraw his Amendment.
VISCOUNT SWINTON: We have indeed a new actor on the scene, and we have a new theme. It is a triple play Bill and this is a completely new theme. I am not sure whether it is a comedy or a tragedy or a mixture of the two which is being unfolded to us, because the noble Lord in his agreeable speech has taken an utterly and entirely different line from that which his leaders or his colleagues have been expounding to us. It is a most extraordinary story. Why is this industry being nationalised? It is said that it is in the public interest. We all said originally that this was a fantastic Bill because it did not take over the appropriate sections of iron and steel. It took over some; it left others in private hands; but what it did do was to march far out-
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side the range of the appropriate sections of iron and steel and take great gobbets of the engineering industry and the finishing industry in this country, in some cases up to 60 per cent. and in other cases down to 40 per cent. Of course we have not been told the real reason. One might speculate upon the real reason. The simplest explanation is that the Ministers, having announced that they were going to nationalise, subsequently found it quite an impracticable thing to do unless the appetite grew with eating and they went a great deal further. Of course, it would not have done to say, "What we told the country we were going to do was quite impracticable. We had never thought it out. The planners had no plan, and we find we have to do something else."
They then advanced and took over these great sections of the engineering industry. The excuse put forward was that it was in the public interest so to do. There are the formulae which the noble Viscount, the Leader of the House, has recited to us from time to time in this debate. It was said that these sections were appropriate to take over, because it was necessary in the public interest that these things should come under public control. What is the public interest? They have, I agree, defined public interest in this subsection. It is:
"… to secure that those products are available in such quantities, and are of such types, qualities and sizes, and are available at such prices, as may seem to the Corporation best calculated to satisfy the reasonable demands of the persons who use those products for manufacturing purposes and to further the public interest in all respects.…"
Surely, if it is right that the Corporation should have that duty imposed upon them in regard to the Second Schedule products which, we may say, are genuine steel-making, then if they go further into nationalisation is it not their duty to serve the public interest in whatever they nationalise and to supply in sufficient quantities at reasonable prices? There can be no other justification for nationalisation except to do that. The Government have nationalised the gas industry. Surely they are not going to say: "We are going to do this in a reasonable way in Manchester, but not reasonably somewhere else where the industry is a little smaller." I really cannot see why they should not have this

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obligation put upon them. They say: "Because we have not got it all, we are not going to be under any duty to the public. We are going into the rough and tumble of the fight." And no doubt they might do so with the advantage of being subsidised through the steel prices. Certainly no one has ever suggested before in respect of these nationalised activities that they are not going to be subject to the duties which they have imposed on others, in respect of the other half of their activities.
Then it is said: "But you could go to the Consumers' Council." It is a pretty dreary outlook which is then envisaged. It is assumed that they will not be doing their duty. Indeed they will not be doing their duty, because Parliament has not imposed a duty upon them. Consider the prospect if there were legal proceedings. When you assert there is a particular duty upon the Corporation in respect of certain products, and refuse to put any duty on them in respect of other products, of course the Corporation would say: "We have no duty in respect of the other products." What would happen if they were taken into court? If an action lay as to statutory duty, the court would at once ask, "What is the statutory duty?" The answer would be: "There is no statutory duty. There is a statutory duty for Second Schedule products but none as regards these products." The Minister himself, in his maiden speech in this new adventure, boasted that there cannot be and should not be any duty. One certainly could not sustain an action in the courts. Assume that you go to the Consumers' Council, because you say you have not had a square deal from this nationalised Corporation—which, be it remembered, in one case cited possesses 73 per cent. of these undertakings and in another 60 per cent.—
LORD LUCAS OF CHILWORTH: And in another 15 per cent.
VISCOUNT SWINTON: I daresay. But we must not let the noble Lord get away with the case of 15 per cent. I think that where he owns 15 per cent. he will have to mind his own business, because there will be some competition and other people will see to it that his work is efficient.
LORD LUCAS OF CHILWORTH: That is the case.
VISCOUNT SWINTON: Where he has only 15 per cent., I am not afraid of him. Where he has 73 per cent. I am afraid of him, because I know that the dead hand of nationalisation and bureaucracy will come down. In the old clays, when we argued about effective control, it was not a case of having 100 per cent. 30 per cent. or 40 per cent. was enough for effective control. Take the Government's own Monopolies Act. We do not need 70 have 73 per cent. of all the industry of the country in order to come under the Act. On the contrary, if we have one-third, and not over the whole country but in a substantial area, we have created a monopoly which can be subject to investigation. I do not complain about that. I thought it was right and reasonable that the Bill should be passed. But the Government have been careful to see that while the Monopolies Act deals with monopolies of merely one-third, producing in one-third of the area of the country, and makes them subject to investigation, the great State monopolies, although they may incorporate 73 per cent. of the whole of the undertakings of the country, are not to be subject to any investigation at all.
Now that the noble Lord has come on the scene, perhaps he will propose an Amendment to make this subject to investigation by the monopolies tribunal. We will ill gladly accept that Amendment. I can tell him, here and now, that if he likes to put down a manuscript Amendment at this moment, or to put in an Amendment at any stage, it will be accepted with enthusiasm. But of course he is not going to do anything of the sort. Although on his own showing this is three times, or (if we multiply area by quantity) nine times as great a monopoly as those he subjects to inquiry by the monopolies tribunal, the noble Lord says, "Go to the Consumers' Council." But what is going to be the complaint before the Consumers' Council? The noble Lord may think this is extremely entertaining, but, believe me, there are people who consume these 73 per cent. of commodities who, when ':hey find it extremely difficult to sell their products in competition with their world competitors in a falling market to-day, are gravely anxious about how they are to be treated. That was the reason that led the noble Lord, Lord Milverton, to cross the floor of the House to-day after a statement

271
which I think will ring round this country.
When we go to the Consumers' Council, what right have we to complain? I ask the noble Lord, how is the complaint to be lodged? The complaint will be because the Corporation or their subsidiaries have failed to do their duty. Well, but what duty? There is no duty. You have denied that there is a duty. The Corporation are, in the words of the Bill, to have a free hand to go as they please. All the old vices of private enterprise combined into a monopoly are enlarged. There will be no case for the Consumers' Council to entertain because there will be no duty imposed upon the Corporation. On the contrary, when the Consumers' Council is asked to entertain a case, the representative of the Corporation sitting upon it will say, "What is the complaint? The Bill in terms gives the Corporation a free hand to do as they please in these matters. You have no more right to bring me here than you have to bring a co-operative society or any independent enterprise." Of course, there would be no right.
The noble Lord says that it might be a little difficult to fulfil one of these particular duties. It is not always easy to do one's duty, but that is no reason for saying that duties should not be laid down. This Government are far too ready to claim rights and to deny duties. Their only right for having this or any other Bill is justification by works—the way they discharge the duty to the people. Most certainly there should be laid down in this Bill a duty upon the Corporation, in fairness of prices, in reasonableness of supply—in fact, the duty should be laid upon them to do their best for their customers. The Government have no right to ask for the nationalisation of these great sections of the engineering industry unless they accept, in the terms which they themselves have laid down in the Second Schedule of this Bill, the duty to do their best by the people of this country. If some particular refinement is required on this Amendment, in order to make it more workable and more practicable, let the Government produce their refinement. But I sincerely hope we shall hold out for the rights of the public in this matter, and that we shall hold out for a duty being put on the Corporation
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to do what is right, where they own up to 73 per cent. of the commodities.
LORD LUCAS OF CHILWORTH: I think I had better reply to one or two of the points the noble Viscount has made, if only in the interests of accuracy. First of all, I have said that we do not see how one could put a statutory obligation upon the Corporation to carry those things set out in Clause 3 in a field where they had not a monopoly. We said we could not see how to work it. I invited the noble Lord who moved the Amendment to explain to me how it could be done. He has not done so, and neither has the noble Viscount, Lord Swinton. I said that we recognise that the interests of these people should be safeguarded, but that the machinery set up in Clause 6 was the appropriate machinery. The noble Viscount, Lord Swinton, has not addressed himself to Clause 6 with that thoroughness which is characteristic of him on these Bills which come to your Lordships' House. Clause 6 specifically states that the principal activities, which are those affected by this Amendment, can be covered by the Consumers' Council, and that the Council shall discharge the duty of considering any matter affecting the interest of consumers, including prices, being a matter which is the subject of a representation made to them by any of the consumers or which appears to the Council to be a matter for consideration. Let us be quite frank about it. I joined issue with the noble Viscount on some things on the Transport Act. One of the great arguments he raised on the Transport Act was that there was only one way to test the efficiency of the nationalised service, and that was to have the fair wind and fair breath of competition. That was his plea all the way, and that is why the Government listened to him and removed the restriction on the "C" licences. But is he now afraid of the competition of the Corporation in this field of end products?
VISCOUNT SWINTON: I am afraid of its inefficiency to the consumer.
LORD LUCAS OF CHILWORTH: If it is inefficient to the consumer, then there is nothing to be afraid of.
VISCOUNT SWINTON: I really must protest. I am here not to speak for a few producers—I am here to speak for the consumer.
LORD LUCAS OF CHILWORTH: But here you have private enterprise to fulfil the market which the noble Viscount is afraid that, through its inefficiency, the Corporation cannot fulfil. If the Corporation can produce better articles at, cheaper prices it will do so. If it cannot, then what have you to be afraid of?
LORD CHERWELL: That we go short.
LORD LUCAS OF CHILWORTH: I will read them out. These are the products which the noble Lord gave: cold rolled strip, 72 per cent.; bright steel bars, 41 per cent.; steel forgings, 45 per cent.; drop forgings, 15 per cent.; tubes, 67 per cent., and steel wire, 60 per cent.
LORD CLYDESMUIR: Mine differ slightly.
Lord LUCAS OF CHILWORTH: In substance they are the same. At a rough arithmetical sum, it is about 50 per cent. Are you afraid of the competition? You have the protection of Clause 6 machinery where, if the Corporation is not doing what it should and is harmful, then there is that machinery for the complainants to go direct to the Minister. But surely noble Lords cannot stand up one day and say: "What we want to test the nationalised industry is the fair wind of private enterprise," and then say: "What we are afraid of is competition."
VISCOUNT SWINTON: Nobody has said it.
LORD LUCAS OF CHILWORTH: But you are saying it now.
VISCOUNT SWINTON: I am delighted that the noble Lord should make any speech he pleases, but if he is attempting to answer the case I made, I did not make a case about the interests of the private competitors of this Corporation who, I am sure, will continue to do their best, but who, in one case, will have only 27 per cent. of the plant. I am talking for the consumer, and in these Bills I never talk for anybody else. He is the person who is forgotten by the Government. In the interests of the consumer I want to see this duty placed upon the Corporation. I wish the noble Lord would answer that.
LORD LUCAS OF CHILWORTH: I am answering it. I should have thought
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that if private enterprise could fulfil the needs of the consumer, because there is no restriction whatsoever, that would suit the noble Viscount. As the inefficiency, or hoped-for inefficiency of the nationalised industry goes up, so the interests of the independent producer to supply the market will increase. I have looked at this, and I have genuinely failed to see how you can pit a statutory duty upon the Corporation to satisfy the demands of a market in which it holds, let us say, only 50 per cent. of the production. What are you going to do, and how are you going to do it? What is the Corporation's duty? Will some noble Lord opposite tell me? In the case of steel wire, or anything else, we say it is impossible. We recognise the difficulties of the noble Lord, Lord Clydesmuir, and we say that there should be a medium of complaint if the Corporation does not do what is considered to be its duty. But that should be through Clause 6, and we cannot find a way of working this. For that reason—because it is impracticable in our view—I ask noble Lords to reject the Amendment.
LORD CLYDESMUIR: I fail to see the noble Lord's difficulty, and I think a number of your Lordships must have had the same experience. It is not necessary to own the whole, of a trade in order to promote efficient and economical production; you need not own the whole of a trade in order to promote supply at reasonable prices; you certainly need not own the whole of a trade to avoid exercising undue preferences or discrimination. On one point only I think I appreciate the noble Lord's difficulty, and that is, that the production of enough to satisfy the consumers' demands is a difficult thing to do if you do not own the whole of the trade. On that one point I see an opportunity perhaps for an understanding or a compromise, to modify it to that extent; but will the noble Lord then give us the Amendment subject to that modification? Because I do not think he has made out a case for omitting the other duties. I find it impossible to see that he has.
Now let me come to his contention that complaints of preference are wholly met by the existence of the Consumers' Council. He will notice the words I have used:
"principal activities of the Corporation and of the publicly-owned companies."

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"Principal activities" is used elsewhere in the Bill. It is used in Clause 6 on page 7, and the wording in my Amendment makes Clause 3 comparable with Clause 6. It seems logical that there should be this exact conformity, and I submit that it is illogical that the duties of the Corporation should not extend to all the products on which the Corporation may be challenged by consumers in the Consumers' Council. The very procedure which the Minister has set up would seem to be stultified unless at the same time the Corporation carry a duty
Resolved in the negative, and Amendment agreed to accordingly.
House resumed.

ALEXANDER SCOTT'S HOSPITAL ORDER CONFIRMATION BILL

  ROYAL BANK OF SCOTLAND OFFICERS' WIDOWS' FUND ORDER CONFIRMATION BILL
  11.4 p.m.
  Brought from the Commons; read 1a, and to be printed; and (pursuant to the Private Legislation Procedure (Scotland) Act, 1936) deemed to have been read 2aand reported from the Committee.
  as regards all their principal products. I do not think your Lordships will wish me to argue these points at greater length, and if the noble Lord will give us an assurance on that one point—on which I see his difficulty—and if it could be fairly met, perhaps we might come to an understanding. Otherwise I hope your Lordships will feel able to support this Amendment.
  On Question, Whether the words proposed to be left out shall stand part of the Bill?
  Their Lordships divided: Contents, 17; Not-Contents, 57.

  CONTENTS

  Jowitt, V. (L. Chancellor.)

  Ammon, L.

  Lucas of Chilworth, L.

  Chorley, L. [Teller.]

  Macdonald of Gwaenysgor, L.

  Addison, V. (L. Privy Seal.)

  Crook, L.

  Marley, L.

  Henderson, L.

  Morrison, L. [Teller.]

  Hall, V.

  Holden, L.

  Pakenham, L.

  Stansgate, V.

  Kershaw, L.

  Pethick-Lawrence, L.

  Piercy, L.

  NOT-CONTENTS

  Aberdeen and Temair, M.

  Allenby, V.

  Gage. L. (V. Gage.)

  Cholmondeley, M.

  Bridgeman, V.

  Gifford, L.

  Exeter, M.

  Buckmaster, V.

  Hatherton, L. [Teller.]

  Reading, M.

  Davidson, V.

  Layton, L.

  Salisbury, M.

  Elibank, V.

  Lloyd, L.

  Townshend, M.

  Falmouth, V.

  Lyle of Westbourne, L.

  Willingdon, M.

  FitzAlan of Derwent, V.

  Middleton, L.

  Harcourt, V.

  Milverton, L.

  Albemarle, E.

  Long, V.

  Moyne, L.

  Beatty, E.

  Ridley, V.

  Polwarth, L.

  Buckinghamshire, E.

  Swinton, V.

  Remnant, L.

  De La Warr, E.

  Rennell, L.

  Dudley, E.

  Balfour of Inchrye, L.

  Ritchie of Dundee, L.

  Fortescue, E.

  Belstead, L.

  Rochdale, L.

  Gainsborough, E.

  Carrington, L. [Teller.]

  Roche, L.

  Grey, E.

  Cherwell, L.

  Strathcarron, L.

  Howe, E.

  Clydesmuir, L.

  Teynham, L.

  Iddesleigh, E.

  De L'IsIe and Dudley, L.

  Waleran, L.

  Onslow, E.

  Fairfax of Cameron, L.

  Wolverton, L.

  Rothes, E.

  Forester, L.

  URMSTON URBAN DISTRICT COUNCIL BILL
  Brought from the Commons; read 1a; and referred to the Examiners.