§ 8.15 p.m.
§ House again in Committee.
§ 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;
§ (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 228 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.
After Clause 1 insert the said new Clause.—(Lord Teynham.)
§ VISCOUNT SWINTON
I am obliged to my noble friend for having filled the gap for a moment. The young are very 229 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- 230 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 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 231 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.
232 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 233 "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 234 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 Companies235 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.
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;
§ (2) A copy of any such order as aforesaid shall be delivered by the Corporation to the Registrar of Companies.236
§ (3) An order made under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.")—(Viscount Swinton.)
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 238 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 239 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?
§ 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 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 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- 240 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 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 241 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
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 242 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 243 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.
§ 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.
§ 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 244 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 245 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. 246 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 247 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.
§ 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, 19.249
|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.|
|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, 250 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.
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.
Page 3, line 32, leave out ("sole or main"),—(Viscount Swinton.)
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 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.
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 252 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.
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 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
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 255 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 256 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.)
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 257 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.
I am grateful to the noble Viscount for accepting my Amendment, which I think makes the 258 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 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.
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 260 it would to a very large extent hamstring the work of the Corporation.
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.
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 261 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 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 262 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
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 263 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.
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 264 company which is to vest in the Corporation or of any guarantees given to such lenders.
§ 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 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
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
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.
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 267 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- 268 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 269 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.—
§ 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.
§ 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 272 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?
§ 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 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 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
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 274 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.
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.275 "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.