Lords Sitting of 20 April 1953

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers

  IRON AND STEEL BILL
  2.35 p.m.
  Order of the Day for the House to be put into Committee read.
  Moved, That the House do now resolve itself into Committee.—(The Marquess of Salisbury.)
  On Question, Motion agreed to.
  House in Committee accordingly:
  [The EARL OF DROGHEDA in the Chair]
  Clause 1 agreed to.
  Clause 2:
  The Iron and Steel Board
  (2) The Board shall consist of a chairman and not less than nine nor more than fourteen other members.
  LORD STRABOLGI LORD STRABOLGI moved to add to subsection (2):
  "of whom the Chairman and at least four other members shall be whole-time members."
  The noble Lord said: This Amendment is one to which my noble friends attach considerable importance, for reasons which I shall endeavour to explain to your Lordships. Under the Bill as drawn, undoubtedly it is envisaged that the Minister shall appoint a certain number of whole-time members to the Board. It does not say how many, and I believe that I am right in saying that it is not obligatory on the Minister to appoint any whole-time members, not even the Chairman. I do not want to enter into the old controversy about whether the Board of a great undertaking should consist simply of a panel of whole-time experts and technicians or whether it should consist of people with outside interests and, therefore, presumably a wider outlook. That matter has been debated over many, many years. On the Continent their system is different from our own: there,
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  they have both managerial and supervisory boards. Here, many of our successful companies have boards consisting entirely of whole-time fully paid experts, while others have mixed boards. I believe that up to now the general consensus of opinion has been in favour of the mixed board, with a certain number of whole-time experts and a certain number of people with outside interests serving part-time, who bring the benefit of their experience and knowledge to the board.
  As I say, I do not want to go into this old controversy. What we are asking for is a mixed Board, and to be sure that it is a mixed Board the Amendment asks that the Chairman and at least four others shall be full-time salaried members, entitled, after a certain number of years, to pensions. In another place, my right honourable and honourable friends moved for half of the Board to be whole-time salaried pensionable members—that is, half the Board of a minimum of nine and a maximum of fourteen members. We are more modest than that: we are asking only for a chairman and four others. I hope that our modesty will be rewarded and that the Government will be able to accept this Amendment. One reason why I think it is necessary to have some whole-time pensionable members is that it is laid down in the Bill that a certain number of members of the Board should represent organisations of the workers—in other words, trade unions—and it will not be easy to get good men to serve as part-time members. They have to give up other things to do so; they may not have private means—probably they will not—and we cannot expect men who have attained great positions in the trade union world to accept a seat on this Board unless it is a whole-time position, carrying with it an appropriate salary and pension rights. I am advised that unless we do that it will be most difficult for the kind of people we want to accept positions on the Board.
  There is another argument that I would put forward. It is common knowledge that when the late Government passed the Iron and Steel Act setting up the Corporation, there was a great pressure front the industry, which was opposed to the Act and its policy, to prevent professional iron and steel people from serving upon the Corporation. We were fortunate in getting Colonel Hardie, in

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  my opinion and in the opinion of many others as well. There was great difficulty in finding prominent and well-known members of the industry to serve, because of the professional pressure from their colleagues in Steel House against their serving. They were told that nationalisation was only a temporary arrangement and that they should not go into the scheme and should make it as difficult for the Government as they could. I am sorry to say that that argument carried some weight. That is another reason why we should have a certain number of posts that are whole-time, carrying an appropriate salary and pension—in order that the man prepared to burn his boats may feel able to join the Board. I do not know whether the same sort of pressure is going to be brought to bear on people in the industry not to serve on the Board—I hope not; but if there is, it is necessary to have a certain modicum of whole-time posts in which there is some security and which professional iron and steel people can fill.
  I do not know what the present Government, if they remain in office, are prepared to do in regard to the Board. We oppose this Bill, but as the Government are insistent and obstinate in passing it through, we are trying to make the best we can of it and improve it where improvement is possible. It may be that the Government really mean to make the Board an effective instrument for the supervision of the industry and the carrying out of a national policy with regard to iron and steel. I do not know. On the other hand, it is not impossible that if the Conservatives remain in office, they may allow this Board to wither away. Like Lenin, who insisted in his first pronouncement on the future of Socialism that the State must "wither away," the Government in this case may allow the Board to wither away. The Minister could, in effect, kill it. We hope that that will not be the case. We hope that the Government will take a wide view of the national interest and make the Board really effective. But we believe that if it is to be really effective there must be a certain number of whole-time people, including the Chairman, who will give their time to this important work in the national interest and not be occupied with outside activities.
  I would remind your Lordships that, as the Bill is drawn, it is not necessary to have any full-time members at all. I do not know whether the noble Marquess will say that nothing is further from the Government's thoughts than not to appoint whole-time members, but that they want flexibility. I dare say we shall be told that when the original Act went through under the Socialist Government, the then Minister of Supply, my right honourable friend Mr. Strauss, also pleaded for flexibility. I hope that argument is not going to be used, because the two cases are not analogous. We were setting up a Corporation of tremendous powers with a great future in front of it. This Bill sets up a Board which has not great powers—that is one of our complaints, and we hope to give it more powers before the Bill passes through your Lordships' House. The argument about flexibility and freedom to manœuvre does not apply to the same extent. There are many other arguments that could be put forward, but I think I have said enough to show that there are solid reasons for this Amendment, and I hope that the Government will accept it. I beg to move.
  Amendment moved—
  Page 2, line 30, at end, insert ("of whom the Chairman and at least four other members shall be whole-time members").—(Lord Strabolgi.)
  LORD WINSTER: In supporting this Amendment I must confess my surprise that the Bill is imprecise upon this important point. I say "imprecise," but that is a polite word to use; I must confess that I think it is rather sloppy. This Board will have most important duties of supervision confided to it, and a supervising body must be a strong body. This Board must not be a sham and a camouflage to make the public believe that a public control exists when, in fact, such control does not exist. In view of its duties, this Board really ought not to be, in the main, a part-time affair. Look at its duties. The Board is going to be charged with control of prices, of development, of the supply of raw materials; and it has to produce plans for the modernisation and expansion of the industry. It will be responsible for relations with the Iron and Steel Federation, and will exercise supervision over some 2,400 companies. The Board must

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  exercise a thoroughgoing supervision. But as regards the composition of the Board, the Bill, in its terms gives no assurance whatever that such composition will, in fact, be thoroughgoing. We do not want the Board to exercise day-to-day control of the industry; that would be absurd, and would not be at all helpful. But we do want a Board which will produce a development plan, will see that all concerned conform to that plan, and will not seek to pursue private interest, as I fear they may be inclined to do if supervision is not rigorous.
  Such duties as I have enumerated are not duties for part-timers. I believe there is force in the argument that the Minister, in appointing the Board, wants to enjoy a certain latitude and flexibility. But why not say in the Bill that the Board shall consist of a certain number of members, of whom a substantial number shall be full-time? Surely, it is reasonable to provide that a substantial number of the Board shall be full-time members. There is all the more reason for being precise in this matter because, if we look at Clause 20, line 17, we see that it says there that full-time members are contemplated. Therefore, if the Bill contemplates the appointment of certain full-time members, why be shy about it? Why not define, in some terms or other, what number of full-time members is contemplated? As the Bill is drafted at present, if the Minister were to appoint one full-time member, the terms of the Bill would be satisfied. Since it is perfectly clear from the duties imposed upon this Board that they are duties which are such as to demand the full-time attention of a certain number of the members, why not accept this Amendment, or some wording to the effect that a substantial number of the Board shall be full-time members?
  2.45 p.m.
  LORD ARCHIBALD: I feel that this is an extremely modest Amendment, and it is certainly one about which it can be said that there is nothing of Party politics involved in it. At this stage, it is unnecessary to argue that there should be full-time members of the Board, because that argument has been well put by my noble friends who have just spoken. In any case, the argument has already been accepted by the Government. The
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  Minister, speaking in the other place, said:
  "It is our intention that a proportion of the Board, including the chairman, should be full-time members."
  What we are really asking is that the Government's intention in the matter should be expressed in the Bill. The membership of this Board may be anything from ten to fifteen. All we are asking by this Amendment is that five of these members, including the Chairman, should be full-time members of the Board. My own view is that at least half of the members of the Board should be full-time; that is to say, if the Minister appoints the full number of fifteen, then seven or eight of them should be full-time members. The point at issue is simply whether the Bill is to express the intention which the Minister has indicated in another place. I can fully understand his reluctance to have his handstied too tightly; but less than five out of ten is unthinkable, if the Board is to function effectively; and even five out of ten would be a small proportion. In either case, the Minister is left with ample latitude for that flexibility he wants in the making of his appointments.
  I am bound to say that to refuse the proposal that there should be five full-time members would rather indicate that the Ministers intention was not a serious one. What is more important is that a refusal to accept that there should be five full-time members would strengthen the suspicion that the Board is not intended to play a serious part in the future of the industry; that it is, in fact, intended to be more or less a rubber stamp for Steel House. If that suspicion is unfounded, then there is an easy way to dispel it—namely, to accept that there shall be at least five full-time members of the Board, thereby indicating that the Board is intended to play a full, serious and worthwhile part in the future of this important industry.
  During the first year or two of which I had the honour to be a member of your Lordships' House I often heard the argument put from the other side, "If that is your intention, why not put it in the Bill?" I am bound to say that there were many occasions—though not on every occasion—even when that argument was resisted, when I felt it was well-founded. But I have never known a case where it was better founded than here.

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  The Minister has said that it is his intention to have full-time Members. We are only asking the Government to put that intention in the Bill. Why not have five out of ten, or five out of up to fifteen full-time members? Show that the Board is intended to be serious by accepting this Amendment; and, what is possibly more important, show that attitude of give-and-take, that attitude of both sides of the House contributing to make this a better Bill, by accepting this first Amendment.
  2.50 p.m.
  LORD MANCROFT: I do not think there is really a very great deal between us in this matter. Naturally, I have not agreed with everything which has been said by noble Lords opposite, but there are two points on which we can certainly all agree. The first is that there is room for argument concerning the precise desirable composition of this Board or, indeed, of any other board. I dare suppose that if the three noble Lords who have just spoken were to be taken aside separately and asked to give their honest opinion as to how the Board should eventually be constituted, their three opinions would all differ. I dare suppose that none of them—
  LORD ARCHIBALD: I am sorry to interrupt the noble Lord, but I think he would find that we were unanimous on the minimum number of full-time members.
  LORD MANCROFT: That may well be, but that is not actually what I said. I think there would be a fourth opinion if the noble Viscount, Lord Bruce of Melbourne, were in his place, because your Lordships will remember the very strong views on this subject which he expressed. I should like to remind your Lordships of the Government's intention concerning the composition of this Board—it has already been stated by the Minister in another place, and the noble Lord, Lord Archibald, has touched slightly upon it this afternoon. First of all, there should be a Chairman who, in the Government's view, should be independent and full-time—that is to say, not connected with the iron and steel industry, and if he comes from the industry then he severs his connections with it; then a nucleus of full-time members which should include, if possible, men
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  drawn from both sides of the industry, a consumer and possibly also an independent member. The third element should be part-time members, some drawn from within industry—when I say "within industry" I do not mean only the iron and steel industry, but industry, and, of course, from both sides of industry: consumer industry as well as the iron and steel industry.
  In addition we want some people not engaged in industry—that is to say, independent members with experience of administration, business, science and so forth. These qualifications are set out in the Bill. Steel producers on the Board should not number more than about three, and there should be equal representation of the trade union side in the iron and steel industry. These are the general ideas of the Government and they are well known, I am certain, to noble Lords opposite. I do not think noble Lords opposite would differ very much, and I do not think that I should differ very much, from what the noble Lord, Lord Strabolgi, has in mind as his final ideal Board. The next point, on which quite certainly we have no difference of opinion at all, is this. The noble Lord, Lord Strabolgi, expressed the opinion that the Government were desirous of seeing that this Board was both strong and effective, and, of course, he is completely right. We are desirous of seeing that it is both strong and effective, and I should have thought that was obvious throughout the whole length and breadth of the Bill.
  The only point upon which we differ is on this question of flexibility. The noble Lord, Lord Strabolgi, skated, I thought, a little uneasily over the observations of his colleague, Mr. Strauss, who was at the time of the 1948 Act the Minister in charge. I should like to remind your Lordships what it was Mr. Strauss said in another place on this very subject. Here I differ from the noble Lord, Lord Strabolgi, because I think that the arguments advanced there apply doubly today to the point we are discussing this afternoon. This is what Mr. Strauss, the Minister then in charge of that Bill, said:
  "It would be quite foolish for Parliament to lay down now the exact proportions of full-time or part-time membership, or even to say that there must be a certain number of part-time members. I think part-time members of a Corporation of this sort would be invaluable, but experience might show that ten full-time members are needed at a certain stage; I do

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  not know. I ask the Committee not to limit the Minister in his make-up of the Corporation, to leave it flexible, to avoid rigidity at all costs. Only in that way will the Minister be able to adapt the Corporation in numbers, proportion, and balance, according to the requirements of the situation. It may only be possible to see, after some experience of a year or two, what is the best proportion. It may be that after the Corporation has been working for some time the situation may be different and the proportion may have to be changed. I am sure it would be wrong to lay down here and now what the exact proportion should be, and I therefore hope the Committee will not ask the Government to do so."
  That Corporation had much more power on paper than this Board, but the arguments seem to me almost exactly applicable. I can find no sentiment in Mr. Strauss's remarks that would not apply equally strongly to this argument this afternoon.
  I quite agree, as I say again, that the final composition of the Board may be exactly what noble Lords opposite have in mind. But I do ask them to agree with the sentiments expressed by Mr. Strauss, that the Minister should be given a completely free hand, his intentions being well-known both to the House and to the country, so that he may choose, at the time and place he makes his choice, the best and the strongest Board possible. For that reason, whilst agreeing with many of the sentiments expressed opposite, appreciating what noble Lords have in mind and what they seek to do, I very much regret that the Government cannot see their way to accept this Amendment.
  LORD WILMOT OF SELMESTON: We have listened with great interest to what the noble Lord, Lord Mancroft, has said, because it seems to me that he has committed the Government to a number of steps which are certainly not in the Bill—or perhaps I have not searched it diligently enough. He said, first of all, that the Chairman is to be full-time. There is nothing about that in the Bill. If the intention of the Government is that the Chairman should be full-time, let it be put in the Bill; because what the noble Lord, Lord Mancroft, says is charged with great authority but it is not law unless it is in the Bill. If it really is true, as he says, that the Chairman is to be full-time, that, at any rate, can go in the Bill. The noble Lord went on to say that it is the intention of the Government
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  to appoint equal numbers of members from what he called both sides of the industry—no doubt meaning owners and workers. Is that the intention? The Minister of Supply in another place did not say so, and there is nothing in the Bill. If the noble Lord, Lord Mancroft, is committing the Government now to equal numbers, then let it be put in the Bill. Before we pass this Bill we have a right to know what in fact it is going to do.
  The remarks of Mr. Strauss in another place had regard to something quite different from this Board. They had regard to the Iron and Steel Corporation, whose functions were radically and altogether different from the functions of this Board. What he said certainly applied to the Iron and Steel Corporation who, of course, had the function of owning the entire industry. This is not an ownership body. This is described as a supervisory body and, as we shall discuss later on, we feel that its powers of supervision are very nebulous and its instruments very weak. But at any rate we have a right to know that some people are going to be serious about it. Now I am not one of those who believe that all public bodies should be composed exclusively of full-time members. I believe it is very desirable to have part-time members who still retain the contacts from which they really derive their value to the Board. But it is equally necessary that some of the members should be independent of outside interests and should be able to give the Board the whole of their time and attention and, no less important, should have no other interests. There is therefore, I submit, an unanswerable case for the Chairman and for some of the members to be full-time members. The Amendment which my noble friends have put down asks only for a minority of the members to be full-time; and I think it is an unhappy harbinger of the temperature in which we are going to pursue this matter if, on a business matter of this kind, the Government cannot state in the Bill what their intentions are. I hope that something further will be said on this subject before we leave it.
  LORD LLEWELLIN: I do not see that there is very much between the two sides of the House on this matter. The noble Lord who has just sat down said

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  that in the original Iron and Steel Act the functions of the Corporation were very different from those which the Board now being set up will have. He said that the Corporation owned the whole steel industry, and that this Board will have very nebulous powers. He came to the odd conclusion, after those two premises, that the Board should be more clearly defined when it had nebulous powers than when it was going to own and run the whole industry; and that therefore Mr. Strauss, speaking in another place, was right when he said that you could have a nebulous Board with exact powers, but that if you had nebulous powers—as the noble Lord calls the ones proposed under the present Bill—then you must have a clearly defined Board. That was what the argument of the noble Lord, Lord Wilmot of Selmeston, really amounted to, if I may put it as crudely as that.
  What does the Amendment seek to do? It seeks to provide that the Chairman and at least four other members should be whole-time members. But the position proposed by the Government as I understand it, is that the constitution of the Board shall be flexible. And although the intention certainly is that the Chairman shall be a full-time member—
  LORD WILMOT OF SELMESTON: It does not say so.
  LORD LLEWELLIN: I understood the noble Lord, Lord Mancroft, to say that the Chairman was going to be a full-time member, though I agree that the Bill does not say so. At the same time, I did not understand as clearly as the noble Lord, Lord Wilmot, appears to have done that the other members were to come equally from the two sides of the industry. The question arises whether we ought to define that position in the Bill, and whether we should say that the Chairman shall be full-time and that at least four of the other members shall be whole-time members. It may become apparent in practice that there should be only two whole-time members, or it may become apparent that there should be eight whole-time members. The difficulty about putting in any number such as four is that it may appear thereafter as though Parliament had meant it to be four, and four exactly.
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  For many years past, we have had minimum wages worked out for different industries in this country; and those of us who have studied the minimum wage problem always found that the minimum wage tended to become the maximum wage. I suggest, therefore, that if the Bill states that there shall be "at least" four full-time members, it will come to be considered later on as meaning "at most" four full-time members. I think it would be far better, after looking at this matter broadly, when the Government are in a position to appoint this Board under the Act, for them to say how many of these members shall be whole-time and how many part-time, and to leave it to Parliament afterwards to say to the Minister, if it thinks fit, that he has not selected the right proportion. I should have thought that in a matter of this kind, this Government, as was the case with the Socialist Government with regard to the original Iron and Steel Act, were quite right to ask for a free hand.
  EARL JOWITT: As the noble Lord, Lord Archibald, has reminded us, if there is one thing that rings in one's memory, and has done so since the six years' period when I was Lord Chancellor, it is the cry from the noble Viscount, Lord Swinton, "Put it in the Bill." If I learned anything, I learned that. To-day, we have the noble Lord, Lord Mancroft, in a speech of great charm—if I may say so, I never heard anybody turn down an Amendment with such sweet reasonableness—saying that the Chairman is going to be a whole-time person, a fact which does not appear in the Bill. I can only retort, therefore, "Put it in the Bill." I cannot see why you do not do so. If you want to meet us, put this in the Bill. Then an appeal was made to some words used by Mr. Strauss in another place. After all, if you are going throughout this Bill to regard the observations made by Mr. Strauss as having a kind of god-like quality of authority, that is "all right by me"; but if the Government are going to pay lip service to the observations of Mr. Strauss on this occasion only, and after that to regard the observations of Mr. Strauss as not being authoritative, I cannot see the point. The Government cannot have it both ways. Whether Mr. Strauss was right or wrong I do not know, and I do not care what he said on that

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  occasion—it seems to me that the circumstances are different. But I repeat that I should like to have something in the Bill.
  I was astounded to hear the observations of the noble Lord, Lord Llewellin. I have listened to him for many years, greatly to my advantage and interest, but I do not think I have ever heard him less happy than he was to-day. With the greatest respect to Lord Llewellin, it is not my experience that the minimum generally becomes the maximum. My experience is that the maximum generally becomes the minimum. That is the criticism that has always been levied. We are not asking that the number of full-time members shall be defined precisely; we are asking that it shall not be less than four, in addition to the Chairman. The position of the Chairman has already been conceded. If four is too many, then give us three; go some way to meet us, and put it in the Bill.
  If you are going to have representatives of the trade unions, it is exceedingly difficult, for reasons which we all understand, to see how that will work unless they are full-time members. I am glad to see the noble Viscount, Lord Swinton, is now present. I have just been praying in aid his—I will not call it raucous cry, but constant reiteration of the statement, "Put it in the Bill." I wish I had a gramophone record here of the noble Viscount saying it. I am sure I learned the lesson he taught me throughout the years, and I am now asking the Government to put in the Bill that which they say they intend to do. I think that that is a matter on which the Government could go some way to meet us. I repeat that if four is too many, let it be three. But put something in the Bill about it. This is not a matter on which I shall ask my noble friends to divide the House, but I would ask the Government to see, either now or between now and the Report stage, whether there is not something here which they can give us which accords with their own sense of what is right and desirable.
  3.10 p.m.
  LORD TEYNHAM: I wonder why, when the Opposition are not in office, they want one thing, and when they are not in office, they want another. I do not want to repeat the arguments put forward
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  by Mr. Strauss, which are all well known to us now; but surely it would be better to leave the matter flexible and to see how many full-time members are required after some experience of running the Board. I think there is some argument for the Chairman being a full-time member, but you might seek the services of a Chairman who was very experienced and most suitable for the job but who was unable for other reasons to give his full time. Personally, I should prefer to leave the clause as it has been drawn.
  LORD WINSTER: I have only two, remarks to make, arising out of the reply of the noble Lord, Lord Mancroft. As I understand the noble Lord, he concedes the point about a full-time Chairman, and I certainly understood him to speak of three interests at least which would require to be fully represented on the Board. So that would make, a Chairman and three other interests to be full-time members, and we are only asking for four. There is really, then, only one full-time member between us. I should have thought that the noble Lord might easily concede that point. As regards the remarks quoted from Strauss. I do not think that they were absolutely relevant to the point at issue up to the present moment. What they amounted to was that in respect of, as I think, another matter, Mr. Strauss asked that we give some time and learn by experience what to do. Surely time has elapsed, and we have gained experience. Surely we have gained sufficient experience by now to know whether a Chairman and four full-time members are the least which are requisite for the performance of the duties entrusted to this Board. As for the remarks made by the noble Lord, Lord Llewellin, I have never in my life listened to such an exhibition of hairsplitting, and I hope that I may never listen to such an exhibition again. When he suggests that the words "at least" inserted in the Bill will come to be regarded as "at most," I think that is the height of absurdity. I trust no attention whatever will be paid to that remark of the noble Lord.
  3.12 p.m.
  LORD OGMORE: I think it unfortunate that the Party which, when they were in Opposition, complained so violently and so often of delegated legislation,

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  should object now to giving Parliament control, to some extent, of the numbers on the Board. I think this is an important matter, and Parliament should consider the question of the structure of these Boards. As my noble friend has said, a lot of water has gone under the bridge since Mr. Strauss made his original statement which has been quoted to-day. When we were in office we learned a good deal the hard way about these various Boards, how they should be formed and how they should be carried on. There is one point that does not seem to me to be strongly stressed to-day, though it was touched on by my noble friend Lord Strabolgi—that is, that we as a House of Parliament ought to ensure that the rank-and-file of the industry have an opportunity of getting on to the Board, because, if there are only part-time members of a Board, who will not of course be pensionable and who will be paid only for part-time service, then the ordinary rank-and-file member, the man who comes up from the bottom, the steel worker, will have very little opportunity to become a member of the Board. We are told, "That will be all right. Of course, the Government will see to it." But why do not we see to it? That is what we are here for. I cannot see why we cannot put into this Bill something that I am sure all of us want—that is, that there should be an opportunity for the man at the bottom of the ladder in the steel industry to climb to the top.
  3.14 p.m.
  THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): I think perhaps it would be useful if I said a few words at the end of this debate. I have listened with great interest, as I have no doubt your Lordships have, to the argument advanced on both side, They have been very good-humoured and in no sense unworthy of our general attitude to affairs. Personally, I agree with what was said by my noble friend Lord Mancroft, that there is not a great deal of difference between us on this particular point. We are all in agreement, for instance, so far as I understand it from what I have heard, that there are likely to be a number of whole-time members on the Board. I think that is almost certain to be so, though no doubt the number may vary from time to time.
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  As I understand it, the only question between us is: Is it desirable at this stage to tie the Minister's hand in this matter as to the correct course for him to follow in circumstances which may be unknown and which may, as I say, vary from time to time? On that particular point successive Ministers—the responsible Minister in the late Government and the responsible Minister in the present Government—have both taken the same view: quite unequivocally they have both said that it is undesirable to tie the Minister's hand. That is a view, as has been noticed this afternoon, which was expressed quite clearly and definitely by Mr. Strauss at the time of the Labour Government's Iron and Steel nationalisation Bill. I am not going to quote his words again; they have already been quoted by my noble friend, Lord Mancroft. But there can be no doubt as to what he meant. He could not have put it more clearly.
  LORD SILKIN: Does the noble Marquess happen to know in response to what Amendment that statement was made? Was it not made in response to an Amendment from the Opposition asking for the very thing for which we are now asking?
  THE MARQUESS OF SALISBURY: Perhaps the noble Lord will wait until I have finished my remarks, anyhow on this particular argument. Apparently, Mr. Strauss did not convince the noble Lord, Lord Archibald, from what he has said to us this afternoon. I must assume he stood loyally by his Party, because I do not remember his expressing his opposition in any violent form at the time.
  LORD ARCHIBALD: I was not in the House at the time.
  THE MARQUESS OF SALISBURY: In that case, the noble Lord is completely exonerated but, since he has come into the House, I understand he has altered his view. However, that is a matter we can discuss at another time.
  LORD ARCHIBALD: I think that is not quite fair.
  THE MARQUESS OF SALISBURY: I do not want to be at all unfair. Perhaps the noble Lord would like to say something now.
  LORD ARCHIBALD: I should. The point that I made is that during the early years of my membership of this House,

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  when a representative of the Ministry said, "It is our intention to do so and so," I often heard it said, "Well, if that is your intention, put it in the Bill." I am repeating that to-day. I said there were occasions when I thought that, even when that argument was resisted, it was well-founded, but never so well-founded as on this occasion.
  THE MARQUESS OF SALISBURY: I am sorry if I misrepresented the noble Lord. It is the last thing I intended to do. In any case, whomsoever Mr. Strauss did not convince, he convinced the present Minister of Supply; and the present Minister of Supply, as he has made equally clear, has come to the same conclusion as that to which Mr. Strauss came. We on this side of the House on this particular point agree, naturally, with our colleague the Minister of Supply, and I do not think that noble Lords opposite should complain of that. If we have been convinced by the arguments that Mr. Strauss used at an earlier time, that should be most agreeable to them.
  The noble and learned Earl, Lord Jowitt, in the remarks he has just delivered, used what I thought was one of the oddest arguments that I have ever heard. He said that the Government cannot say that Mr. Strauss was right at one time and then go on to say that he was wrong at all others; that that would be having it both ways. The noble and learned Earl is a great lawyer, and presumably a great logician, too, but is it not just conceivably possible that Mr. Strauss may have been right at one time and wrong at all the others? I only put that forward for the noble Earl's consideration. I would also agree with what the noble Lord, Lord Mancroft, has said, that the argument that you must not tie the hands of a Minister is presumably more effective with regard to this Board, which is merely a supervisory body, than it would be even with the much more powerful—at least on paper—executive board which was placed in the Act of the last Government.
  Moreover—and here I come to the main point which the noble and learned Earl made—there really is more substance in our difficulty in this matter than noble Lords opposite have perhaps realised. The noble Lord, Lord Wilmot, spoke of the position of the Chairman. He said that he understood, from what
  910
  Lord Mancroft said, that he was to be a "whole-timer." Of course, in the vast majority of cases I am sure that would be true. It would be the object of every Government who had to operate this Bill to find a "whole-timer" who would do this particular job. But it is not inconceivable that there might be an ideal person to act as Chairman of the Board who also had other duties. If that situation arose it would surely be entirely wrong that, by the unduly rigid drafting of an Act, that mar should be debarred from occupying the position. That is the answer I would make to the noble Lord who says, "Put it in the Bill." If it is to be the universal ruling, by all means put it in the Bill; but if it is a case where there might be exceptions (and if there were al exception it would be an important exception), then I think probably in the end it would be wiser not to do so. In fact I feel that this is a very fine opportunity for getting inter-Party agreement, and I hope the Opposition will grasp it, if my words have been at all effective.
  It is perfectly true, as Lord Jowitt very rightly said, that this is not a matter of very great moment—it is not one of the great clashes of principle which divide Parties. I think it has proved to be very little more than an agreeable debating point to start the Committee stage of this Bill. If we are to admit, as I think we must, that there is a modicum of common sense in all Parties and, in all Governments, I should have thought that noble Lords in all parts of the House would assume that where it was possible to get a "whole-timer," a "whole-timer" would be appointed—that there would be a varying proportion of "whole-timers" and "half-timers," and in the chair there would be a "whole-timer," if such a person could be found. That is what I think noble Lords opposite really mean, and it is certainly what we mean. I hope, therefore, that they will not find it necessary to press the matter further.
  LORD STRABOLGI: Although we attach considerable importance to this Amendment, I do not think it is worth a Division and I do not propose to press it. My noble friend Lord Jowitt, referring to the charming and gracious speech of Lord Mancroft in answering my points, reminded me of the description applied to a well-known pirate—

  911
  "as good a man as ever cut a throat or scuttled a ship." What Lord Mancroft said was all very nice, but he gave us nothing; neither did the noble Marquess. We do need flexibility. We ask only for four whole-time members. As for all this play with Mr. Strauss's remarks in another place, after all they were in answer to a Conservative Amendment pressing for the same principle for which we are pressing, although not in analogous circumstances. Mr. Strauss took a line, and now we have the Government sitting on those Benches and they take the other line; the cases are not analogous. I think there is something in what the noble Marquess said in regard to a whole-time Chairman. It is possible to conceive of a man as Chairman who would not wish to make it a whole-time job. In that case I presume there would be a Deputy Chairman. I wonder whether the noble Marquess would consider, at another stage of the Bill, whether or not we should allow for that particular case? I have not consulted my noble friends on this matter, but I think there might be a case for having either a Chairman or a Deputy Chairman as a whole-time member, so as to meet the rare but perhaps important case put forward by the noble Marquess, that of a man who, while suitable in every other way, did not wish to give up his other, outside interests but wished to be Chairman of the Board. We might find words to cover that situation, and perhaps we could have our four members as a quid pro quo.
  THE MARQUESS OF SALISBURY: I cannot give the noble Lord any great hope that we shall alter the view which I have expressed, and for the reasons which I have given, but I will certainly pass on his suggestion to my right honourable friend.
  LORD STRABOLGI: I do not wish to press this Amendment, I beg leave to withdraw it.
  Amendment, by leave, withdrawn.
  Clause 2 agreed to.
  Clause 3:
  Supervision of iron and steel industry by Board
  3.—(1) It shall be the duty of the Board to exercise a general supervision over the iron and steel industry, and to such extent as they may consider necessary the powers conferred
  912
  on them by this Act, with a view to promoting the efficient, economic and adequate supply under competitive conditions of iron and steel products, and in particular to keep under review—

  (a) the productive capacity of iron and steel producers;

  Provided that the duty of the Board with respect to the arrangements specified in paragraphs (d), (e) and (f) hereof, other than arrangements for the promotion of research, shall not apply in relation to any undertaking in whose case—

  (i) the Board are satisfied that the main activities of the undertaking are not part of the iron and steel industry, and that the only activities of the undertaking which form part of the iron and steel industry are activities included in paragraph 4 of the Third Schedule to this Act and are incidental to the main activities of the undertaking; and

  3.27 p.m.
  LORD WILMOT OF SELMESTON LORD WILMOT OF SELMESTON moved in subsection (1), after "supervision" to insert "and control." The noble Lord said: This Amendment inserts two words. As it stands, the clause says that the duty of the Board is to exercise general supervision over the Iron and Steel Industry, and this Amendment adds "and control." I think the attitude of the Government to this Amendment will be important as an indication of what really is their intention about this Board, its duties and its powers, which are fraught with such great importance for the iron and steel industry, for the trade and commerce of the country, and for our very security which depends upon this vital industry. In introducing the Bill to this House on Second Reading the noble Marquess compressed the purposes of the Bill, and the duties of the Board, in what I would describe as a masterly review of the whole rather complicated matter; and if I take only the words which he used, it is clear enough that the duties of this Board are wide, complex and very far-reaching.
  To begin with, the Board not only encompasses the limits of the industry as comprised by the Iron and Steel Corporation which now exists, but extends over the whole industry in the widest possible way. It has to look after the productive capacity of the industry; it has to make sure of the amplitude of the raw materials available; it has to see that those raw materials are equitably distributed, and it has to look after the supply of fuel for the industry. It has to fix

  913
  maximum prices for the enormous range of products of the industry; it has to have regard to the whole question of future developments and education within this vast industry; it has to require that nobody shall proceed with major capital developments without its consent, and in certain circumstances it has to arrange for the production, even in countries abroad, of raw materials for the industry. The noble Marquess went on to explain a whole number of other functions which this Board has laid upon it. I think it is a misuse of words merely to describe that vast range of functions as "supervision." If the Board is to be effective, then it is a controlling body and it must have power to make its will felt. To have a Board that is a mere office for asking questions, without any powers—and that is the situation as the Bill is drafted—of inspection or verification of what it is told, is really to make a mockery of the whole thing. If it is necessary to have this Board at all—and the Government say that they are in no doubt about that—then it is necessary for this Board to have power. And if it is to have power, we must face the fact that this is a board of ultimate control, as well as a board of initial supervision.
  I do not think there is very much more to say on the Amendment, and I hope the Government will indicate that they seriously intend that this industry, in view of its vast public aspects, shall be the servant of the public; owned, managed and run by efficient private enterprise managers and directors, yes, but ultimately responsible to the public interest, and subject to the control of this Board when it is called upon to exercise it. I trust that the Government will accept this Amendment, because it will make an enormous difference to the appreciation of what the real purposes of this Bill are. I beg to move.
  Amendment moved—
  Page 4, line 7, after ("supervision") insert ("and control").—(Lord Wilmot of Selmeston.)
  3.32 p.m.
  LORD TEYNHAM: The noble Lord, Lord Wilmot, has said that the Board should be a controlling body. I am afraid I entirely disagree, because I feel that the Government certainly do not envisage the Board as a kind of super-management imposed over the boards of directors of the individual firms. I think, therefore,
  914
  it would be wrong to give it any powers of control. The Board would, in fact, be an advisory, guiding body, and it would lead the industry rather than goad it. The members of the industry would look on the Board as a kind of club to which all the firms belonged, and it would provide machinery for co-operation in dealing with the common problems that exist. I hope that Her Majesty's Government will not accept this Amendment.
  LORD WILMOT OF SELMESTON: When the noble Lord describes the Board as an advisory body, does he mean that people will be free to take the Board's advice or to disregard it as they choose?
  LORD TEYNHAM: They are not bound to accept the advice of the Board; that is quite true.
  LORD OGMORE: I think that that has about made our case. This is a club, we are told, which members join and from which, presumably, they are expelled if they are not good boys. Some may pay their subscriptions and some may not, some way be on good terms with the secretary and some may not. I do not know that we need say much more. This is what we always feared was in the minds of the Government, but we never believed that it would be so bluntly expressed as it has been to-day. It bears out what the City paper, the Statist said on November 15. It was quoted in another place and I think it will bear quotation here. The Statist said:
  "The terms of the Bill make it difficult to believe that the Board would be in a position effectively to exercise the supervisory functions it has been authorised to perform. In the circumstances the Board would be likely to become either an ineffective nuisance or a rubber stamp for the trade associations."
  To-day, the noble Lord, Lord Teynham, has added to that description of the Board as an "ineffective nuisance or rubber stamp" that it will be a club, the members of which will be able to leave if they wish, and a club over which there will be little control by the Committee or anyone else.
  This is a very serious matter, and we attach great importance to this Amendment, because already the steel industry is concerned about the future of steel and

  915
  the future of those who work in the steel industry. I have here three reports which have appeared in the last month or two in the Western Mail, which circulates very widely indeed in the steel area in Wales. These reports all express concern, not by members of the Labour Party—at least I presume they are not—but by leaders of the steel industry. According to one report which was published on the sixteenth of the present month, Colonel J.M. Bevan, Chairman of the Briton Ferry Steel Company said:
  "I doubt whether we shall be able to get enough scrap to enable us to keep working, so there is as much danger of redundancy in the steel trade as in the tinplate trade."
  Your Lordships know that there have been thousands of men out of work in the tinplate industry.
  Recently I ventured during the Second Reading debate on this Bill to quote what was said by Mr. E. H. Lever, Chairman of the Steel Company of Wales speaking at Port Talbot. According to the report published in the Western Mail on March 20 he said that the scale of modern industrial organisation meant that money was wanted on a large scale. The great industries wanted to count on having the money as and when they needed it. He continued:
  "The money may not be there at the right time and the right price. Indeed it may not really be there at all."
  Mr. I for B. N. Evans has written an article which has been published in the Western Mail in which he gives ample evidence of the fact that steel is meeting a very serious challenge by reason of the new alloys and the new methods of producing iron, which were not even in existence a year or two ago, and that the steel industry has to meet a serious position which may affect not only the industry itself but the livelihoods of many thousands of men and the prosperity of great districts in this country. In those circumstances it would seem to call for ample control by the Board.
  If the Board has no control, if it is, as we have heard to-day, to be merely an advisory body, how can it take the necessary measures to forestall disaster and put the industry on the right road? This is, indeed, in my opinion, a difficult time, when we do not know what the call for steel is going to be and when we need
  916
  far more control even than we have had in the past. This is no time for a lessening of control. During the last few years, since the war and during the war, every scrap of steel that could be produced was urgently needed, but it may be that we shall not be in that position much longer. If, as we all hope, the Korean war is coming to a close, if there is a better climate of opinion in the world between the countries behind the Iron Curtain and those in the West, it may be that rearmament will be reduced in scale and that steel will be made available in much greater quantities for civilian production.
  At the same time it is possible, in the consequential adjustment which the industries will have to make from what is virtually war economy to peace economy that they will go through a temporary slump. In those circumstances we may find that, as is already the case with tinplate—tinplate, as your Lordships know is very largely steel; there is only 1 lb. of tin to 56 steel sheets, so that although we call it by another name it is in fact steel—we may find a very serious recession in the case of steel. In those circumstances that is the very time when control is needed. Up to now we have had control to a large extent of the purchasing of steel. We have said who may purchase steel. It may be that in the future we shall need to have some control of the production of steel—at all events for a short time in the period of adjustment. In the circumstances, I submit strongly that it is not only desirable but necessary to give power—full power of control, not merely advisory power of supervision—to ensure that the steel is produced where it should be produced in the national interest and in the interests of the community in which we live. For those reasons, I strongly support this Amendment.
  LORD SILKIN: I find myself in some difficulty in interpreting the functions of the Board. On reading the Bill I imagined that the Board had functions both of supervision and control and I thought the purpose of the Amendment was largely to make that clear. But there appears to be some misunderstanding on the subject. The noble Lord, Lord Teynham, for whom I have a great respect and for whose ability I have a high regard, must have read the Bill many

  917
  times over, yet his view is that the functions of the Board are purely advisory. I feel it is important that the position should be made abundantly clear. My reading of the Bill is that there are certain functions of control given to the Board. For example, it has control, and I should have thought absolute control, over the provision of additional production facilities. It can say "Yea" or "Nay," subject, of course, to appeal to the Minister. Under Clause 6, application is made to the Board, and it is in a position to give a decision. That is something more than advisory.
  Then, under Clause 8 it is entrusted with the duty of fixing maximum prices and these prices become binding upon all steel producers. That is something more than merely advisory. Moreover, later on in the Bill, it is given power to apply for an injunction in the courts in respect of any breach of Clauses 6 or 8. Therefore, I fail to understand how it can be contended that the only powers conferred upon the Board are advisory powers. Since there is this difficulty of interpretation, or doubt about interpretation, and since, as I contend—and I shall be glad to hear whether the noble Marquess agrees with me or not—that the Board has definite powers of control, I should have thought it right to have these words inserted in the Bill so that there may be no doubt whatever about what is the position of the Board.
  This Amendment was discussed fat some length in another place and some objection was taken to it, not on the ground put forward by the noble Lord, Lord Teynham, but on the ground that it is undesirable to say in terms that the Board should have power of control, because control is a bad thing and it is not desirable to interfere with the day-to-day functions of the various concerns. But the word "control," is not necessarily evil; it depends upon the extent of control. If the purpose of the control is merely to enable the particular functions that are conferred upon the Board by the Bill to be properly exercised—and I do not think anyone would claim that the Amendment means more than that—adding the words "and control" cannot mean more than control for the purposes of the Bill, and this is purely a clarifying Amendment. To show that the Amendment is not in any sense fanciful, I should like to quote from the Second Reading
  918
  speech of the Minister on November 25, 1952. He may have said this in an unguarded moment, but this is what he said (OFFICIAL REPORT, Commons, Vol. 508, col. 267):
  "I think it is common ground between us, on both sides of the House, that some measure of public supervision and control is necessary in the iron and steel industry. The main question is whether that necessary supervision and control can be obtained without State ownership."
  Obviously, the Minister himself contemplated a measure of control as well as supervision. Therefore, I suggest that the insertion of these words is merely carrying out what is a fact under the Bill and what seems to be the intention of the Minister.
  3.45 p.m.
  LORD GIFFORD: May I suggest that the noble Lords, Lord Wilmot of Selmeston and Lord Ogmore, made a mistake in reading the first two lines of this clause without going on to lines 3 and 4? The first two lines give directions about general supervision and the third and fourth lines go on to deal with powers. The noble Lord, Lord Silkin, mentioned that, but it seems to me that when noble Lords are arguing their case, the whole meaning of the first subsection should be taken and not only of the first two lines.
  LORD WILMOT OF SELMESTON: If the noble Lord agrees that the Board should have powers of control as well as supervision, then that should be put in the Bill.
  LORD WINSTER: I support this Amendment because I regard it as an acid test of the sincerity of the Government's intentions. Do the Government intend to use the Board for doing real business? The Amendment seeks to give the Board the necessary powers to make their supervision effective. The words "general supervision" crop up in this Bill, but general supervision necessitates powers which the Bill does not give to the Board. If it is intended that the Board shall control the industry, their powers ought to be correspondingly strong and effective, and also clearly defined. But the powers are not clearly defined in the Bill. The only power which is so defined is the power to maximum prices. There is another power which is defined—in order to add to the superfluity of

  919
  paper which is already clogging Whitehall: the Board may make reports. The Board cannot, for example, inspect works, but if on hearsay they think that a given works needs either enlarging or altering they can make a report on the matter. But they cannot do anything more. The Board enjoy no power of control whatsoever to have things which they think wrong put right. Refusal of the Amendment by the Government will certainly cause us to believe that the statement quoted by the Statist is completely right, and that the Government intend this to be a rubber stamp Board for the purpose of "eyewash" for the public.
  As I have said, although the word "supervision" is constantly cropping up, the Bill gives us no definition whatsoever of what it means. How can there be effective supervision without control? The thing is completely impossible. And without that control the public interest cannot be fully satisfied. The public interest may not be identical with that of the directors and of the shareholders, but the interests of the directors and shareholders may certainly prevail unless the Board have powers of control. It is within the memory of all of us that at Jarrow under private enterprise there was a case in which certainly the national interest did not prevail. As a matter of fact, the Minister has admitted this point by reserving to himself specifically in the Bill certain powers which are exercisable on strategic grounds. In other words, in the specific instance, the Minister recognises that he requires certain powers of control in order to safeguard the public interest, but he does so only on a very narrow issue.
  There is one other point to which I should particularly like to call attention. The Trades Union Congress have had this matter under consideration. The T.U.C. proposed a Board with the powers which they regarded as necessary for the public interest. Among these powers were the following: the power to compel private firms to undertake development; power for the Board to set up their own undertakings; power for the Board to maintain and improve wages, hours and conditions; power to give the workers a say in the politics of the industry and participation in management; power to provide for price stability and efficient
  920
  organisation. Noble Lords opposite may or may not agree that those powers are desirable, but the interesting point is that the present Prime Minister, when he was the Leader of the Opposition, said that he would—and I use his words:
  "accept the compromise solution which the Trades Union Congress have set before us."
  As Leader of the Opposition, the present Prime Minister accepted these proposals of the Trades Union Congress, but as Prime Minister he is responsible for bringing forward a Bill which mentions none of these things at all. I repeat, acceptance or rejection of this Amendment will provide an acid test of the sincerity of the Government's intentions in bringing forward this Bill, and will also be an interesting commentary on the undertaking of the Prime Minister, when Leader of the Opposition, to accept the proposals put forward by the Trades Union Congress, of which the present Bill makes no mention whatever.
  3.51 p.m.
  THE MARQUESS OF SALISBURY: The noble Lord, Lord Wilmot, made it quite clear when he introduced this Amendment that the Party of noble Lords opposite regard it as of the first importance. I am not surprised to hear that. After all, a similar Amendment was, I understand, introduced by his Party both during the Committee stage and on the Report stage of the Bill in another place, and on one of those occasions, at least, it was pressed to a Division. I shall not be greatly surprised, in view of what I have heard in this debate, if the Opposition take the same step here. Indeed, I think it is easy to understand why they attach so much importance to this Amendment. It would perhaps be unfair to them—and I do not want to be unfair—to describe this merely as a wrecking Amendment, because to describe it as that would be to indicate that it is purely negative in character, whereas, in fact, the motive is a very positive one. I have been told during recent years of terrifying operations in surgery—I believe they have even been tried, but at any rate they have been in contemplation—the purpose of which is not, of course, to kill the patient but entirely to alter his character. I suggest that this Amendment approximates closely to those operations. The whole purpose of it, as I understand it, is to insinuate into the measure which we have

  921
  before Parliament the full conception of centralised control which was inherent in their own Act.
  I do not blame noble Lords opposite for doing that; it is natural that they should, because that is the type of social and industrial structure in which they believe. But clearly they cannot expect the Government to accept it, because to do so would be to cut across the whole purpose of our Bill. If we were willing to put in Amendments of this kind, we might as well not have introduced the Bill at all. Our view, as noble Lords opposite know, is that, in order to stimulate the fullest enlistment of private enterprise and initiative in the national interest a wide measure of centralised control, even of general control, will not normally be necessary. I do not expect noble Lords opposite to agree with that, but that is our convinced view. As I said in my Second Reading speech, to which the noble Lord, Lord Wilmot, has already referred, under this scheme that we are introducing, the Board will have wide duties. It will have the duty of concerning itself with all aspects affecting efficient, economic and adequate production; that is to say, the scope of its supervision is a wide one. But we believe—and we intend to prove our case—that the work of the Board will best be done by persuasion, by influence and by cooperation, rather than by autocratic control and it is our view that, in the long run, the results achieved will be achieved by the Board and industry as partners, rather than by the more rigid relationship of controllers and controlled. The noble Lord, Lord Wilmot, and others who have spoken, evidently do not believe that, and they have used their great persuasive and forensic power in order to support their views. They think it is impossible to secure efficient co-operation of industry—at all events, of this industry with which we are concerned this afternoon—without the ultimate control being in the hands of the centralised body. They cannot believe anything else; it would be contrary to their faith to do so.
  I feel that it is only necessary for us to say in reply—and I would say it, in particular, to the noble Lord, Lord Ogmore, who spoke with great force on this subject—that, so far as I know, there is no evidence over the last twenty years that would support their thesis. On the contrary, I should have thought that all the
  922
  evidence went to show that not only had this industry been very efficient before ever nationalisation was introduced, but also that the industry was only too anxious to co-operate with the Government of the day, and to co-ordinate all its activities by a voluntary act. If that is so, surely a less onerous, a less rigid and less clamping method of supervision is more likely to achieve the objects which all of us have in view, rather than a heavy, clumsy, rigid and over-centralised machine. I am not saying anything very new in this speech, but that is the view which we take. It is also the answer I would make to the remarks of the noble Lord, Lord Winster, about "eyewash" and a "rubber stamp." We think this is the right way to do it; the noble Lord, Lord Winster, does not think so. I rather resented that he should charge us with insincerity. He said that whether we accepted the Amendment would be a test of our sincerity. I do not think that is fair. Here are two broad differences of principle, two schools of thought. I am not going to say that noble Lords opposite are not sincere in their views, and I do not think they should say that we are.
  I repeat, the whole basis of our broad industrial philosophy is voluntary co-operation, not centralised direction. I should have thought that it was the supreme merit of our scheme that the Government have not taken the attitude that there should be no modification whatever of those proposals. It has been suggested to-day that the duties of this Board will be merely supervisory. That is not so, and other noble Lords have pointed it out. We fully recognise that there are certain limited spheres where some measure of control is necessary, especially to deal with abnormal circumstances that may arise. These powers can be found in Clauses 6, 8 and 11; they affect prices, to which the noble Lord, Lord Silkin, referred, development, and also, as your Lordships know, powers to secure adequate arrangements for imports, both of raw materials and of finished steel, to meet a possible emergency. I do not say that that emergency is a probable one: I do not think it is. But we have taken steps to deal with the possibility. These powers which we have taken—because we hope we are realistic about these things—have been deliberately made

  923
  the minimum that is necessary for those purposes, and they are entirely different from the general control which is proposed in the Amendment. After all, that general control which the two little words would put into this Bill would in effect transfer all the ultimate responsibility from the firms themselves to the Board, and that is just what we do not want.
  There is also, of course, a general power to get information, but I think that may be regarded as the raw material—if I may use such an expression in this connection—to enable the Board to exercise its power of supervision. For the reasons which I have stated I think it is quite evident—it must be evident both to noble Lords on this side of the House and on the other side of the House—that the Government could not possibly accept this Amendment. I say that in all sincerity. It would strike at the very roots of our Bill, and, indeed, I am quite certain that it is intended to do that. In this matter I contend that we are not the reactionaries—we are the moderate evolutionary progressives. It is noble Lords opposite who are the reactionaries, as the country is beginning to find out. If they want to divide the House we cannot prevent them, but with a very clear conscience we shall go into the Lobby against them.
  4.2 p.m.
  LORD WILMOT OF SELMESTON: There can be no doubt now about the Government's purpose. The noble Marquess has stated it with his usual clarity and more than his usual vehemence. The purpose of the Bill is to set up an advisory body, and units within the industry will be free to accept or disregard the advice as they think fit. The supervision amounts to nothing at all except the power to ask for information which the Board has no power to verify, to give such advice as it may think fit and then go home. No wonder the Government were reluctant to comply with our request that we should know how many full-time members there were! You do not need full-time members just to give advice and leave it at that.
  It seems to me that the noble Marquess has overlooked one fundamental aspect of this matter. If the Government are serious—and I believe they are—in believing that they have a right to expect
  924
  units of private industry, controlled by directors who are elected by groups of shareholders and who are charged by their office and Articles of Association with the business of conducting that enterprise for the profit of the shareholders, to put their public duty before the interests of their shareholders, then he has the obligation of insisting that other people do the same. It is as though the tax collector were not armed with any powers of compulsion but relied upon the taxpayer as a patriotic citizen to pay his dues. The noble Marquess knows very well that unless the recalcitrant and the unpatriotic can be brought to task, the whole thing falls to pieces; and that is what will happen with these illusory powers of supervision.
  In view of the statement of the noble Marquess, the Bill could now be altered in another sense. This is not a supervisory Board, it is an advisory Board; to call it anything else is to use the wrong term and to mislead the public. At any rate, there is now no possibility of misunderstanding. The noble Marquess has gone back on the words of the present Minister of Supply. The Minister of Supply stated quite clearly in another place—my noble friend Lord Silkin has already quoted the speech—that it is agreed on both sides of the House that some measure of public supervision and control is necessary in the iron and steel industry. The question is whether it is necessary that that supervision and control should involve State ownership. Now this Bill does away with State ownership. We are not arguing that at this stage.
  THE MARQUESS OF SALISBURY: The noble Lords says that I am going back on the Minister of Supply. This is what I said: It has been suggested in certain quarters that the functions of the Board would be purely supervisory; that is not true. I went on to say that I fully recognized that there are certain limited spheres where a measure of control would be necessary. I then very briefly explained what those powers were, and I said that they are the minimum necessary for those purposes and were very different from the control envisaged in the Amendment. I never said that they were supervisory.
  LORD WILMOT OF SELMESTON: I am indebted to the noble Marquess. He

  925
  did, in fact, clearly define the limits of such control as is necessary, and he defined those limits as being the limits of an emergency only. Clause 11 in the Bill, the "Emergency clause," says, "Unless there is an emergency." According to the noble Marquess those are no powers of control—
  THY MARQUESS OF SALISBURY: But does the noble Lord wish for powers of control when there is no need? An emergency is when the powers are required.
  LORD WILMOT OF SELMESTON: The difference between the noble Marquess and myself and my noble friends is that whereas he sees the need for control only in the case of an emergency, we see the need for control before the emergency arises. Surely the experience of the non-preparation for Hitler's war convinces us that preparation in the iron and steel industry should have been made at a time when they were closing down works and throwing people out of employment. This is the very crux of the matter. It may be at the very time when the industry is unprofitable that the public interest demands that it should pursue certain unprofitable operations. By its very nature, the responsibility placed upon this industry is such that it cannot be guided solely by the measurement of individual private profit. That is not the job of the directors; it is not a matter of political philosophy or Party arguing. It is a matter of the intrinsic, basic character of the iron and steel industry, and it is because we know from experience that it is necessary to have regard to the public
  interest and the defence interest—not only in an emergency, but when things look quiet and when times are bad—that we think that control necessary. Therefore, as the noble Marquess has thought, we shall press this matter to a Division, because we believe that the whole purpose of the Bill and the future of the industry is at stake.
  LORD LAYTON: In that event, I and my colleagues shall vote with the Government. We shall do so because the Bill does three things. First, it speaks of general supervision; secondly, it gives specific powers in relation to prices and to production programmes in regard to which there is a very powerful sanction—namely, that the Government itself may do the job if the trade does not do it; and, thirdly, there are certain items which have to be kept under review. It happens that those are the things which I think are the right things to put into this Bill. I should not be afraid of the word "control." If we put in the words "supervision and control" I do not think it would add anything to the functions of the Board in regard to the Bill—at least, I have heard no argument to indicate that it would, except for the statements made on this side of the House, which seem to imply that it does add something. I do not know what it is, and, so far as I am concerned, I do not wish at this stage to put the words into the Bill.
  On Question, Whether the said Amendment shall be agreed to?
  Their Lordships divided: Contents, 24; Not-Contents, 47.

  CONTENTS

  Baldwin of Bewdley, E

  Douglas of Barloch, L.

  Ogmore, L.

  Jowitt, E.

  Haden-Guest, L.

  Pethick-Lawrence, L.

  Hare, L. (E. Listowel)

  Shepherd, L.

  Addison, V.

  Henderson, L,

  Silkin, L.

  Hall, V.

  Hungarton, L.

  Strabolgi, L.

  Lucas of Chilworth, L.

  Williams, L.

  Archibald, L.

  Macpherson of Drumochter, L.

  Wilmot of Selmeston, L.

  Bingham. L. (E. Lucan) [Teller]

  Milner of Leeds, L.

  Winster, L.

  Burden, L. [Teller]

  Morrison, L.

  NOT-CONTENTS

  Simonds, L. (L. Chancellor)

  Buckinghamshire, E.

  Bruce of Melbourne, V.

  De La Warr, E.

  Buckmaster, V.

  Salisbury, M. (L. President)

  Dudley, E.

  Davidson, V.

  Malmesbury, E.

  Elibank, V.

  Cholmondley, M.

  Onslow, E. [Teller]

  Goschen, V.

  Willingdon, M.

  Selkirk, E. [Teller]

  Long, V.

  Alexander of Tunis, E.

  Swinton, V.

  Birkenhead, E.

  Bridgeman, V.

  Templewood, V.

  Trenchard, V.

  Gage, L. (V. Gage)

  Mancroft, L.

  Gifford, L.

  O'Hagan, L.

  Aberdare, L.

  Howard of Glossop, L.

  Rea, L.

  Brassey of Apethorpe, L.

  Jeffreys, L.

  Remnant, L.

  Carrington, L.

  Jessel, L.

  Templemore, L.

  Cherwell, L.

  Layton, L.

  Teviot, L.

  Chesham, L.

  Leathers, L.

  Teynham, L.

  Fairlie, L. (E. Glasgow)

  Leconfield, L.

  Webb-Johnson, L

  Freyberg, L.

  Llewellin, L.

  Wolverton, L.

  Resolved in the negative, and Amendment disagreed to accordingly.

  THE MARQUESS OF SALISBURY: I beg to move that the House do now resume.
  Moved, That the House be now resumed.—(The Marquess of Salisbury.)
  On Question, Motion agreed to, and House resumed accordingly.

INTERNATIONAL AFFAIRS: PRESIDENT EISENHOWER'S DECLARATION
4.19 p.m.
THE MARQUESS OF SALISBURY: My Lords, I have asked that the House should resume in order that I may make to your Lordships a statement which is being made in another place by my right honourable friend the Prime Minister regarding the declaration on international affairs made by President Eisenhower on Thursday last. The statement is as follows:
"I have already welcomed this bold and inspiring initiative by the President of the United States of America. In his declaration he seeks to find means of establishing world peace on a genuine and enduring basis. Her Majesty's Government, and probably all the countries of the free world, will be glad to associate themselves with his sincere expression of those ideals and aims to which we all subscribe.
"I was glad to see that the right honourable gentleman the acting Leader of the Labour Party and the former Foreign Secretary, according to the report in the Daily Herald of April 17, seems to share these views. I cannot do better than read the words he is reported to have used. I am quoting from the Daily Herald:
'The British people, in common with enlightened people all over the world, will welcome this most important statement.'—
these are the words of Mr. Morrison—
'It is exactly the plan that was so enthusiastically endorsed by the Labour Party
928
Conference—the World Plan for Mutual Aid, which I introduced on behalf of the National Executive. What is needed now is a forthcoming response from all Governments so that the road will be opened to a new era of peace, progress and ultimate world prosperity.'
"I hope therefore that at this momentous juncture we shall not be hampered by Party controversy. It seems to me that patience is needed rather than haste. In my opinion no one can measure the extent or purpose of the change which has become apparent in the Soviet mood or even perhaps in their policy. I repeat what I said at Glasgow on Friday; no single hope however slender should be cast away. Time may well be needed to enable sure judgment to be made. I did not read President Eisenhower's speech as a challenge nor should I expect the Soviet Government to give an immediate categorical reply to the many grave and true points which his remarkable and inspiring declaration contained. It is of course as yet too soon to consider any relaxation of our efforts for collective defence.
"I trust that nothing will be said here or elsewhere which will check or chill any processes of good will which may be at work, and my hope is that they may presently lead to conversations on the highest level, even if informal and private, between some of the principal Powers concerned.
"There is, however, one sphere which claims priority because it is both practical and urgent. The establishment of a sincere and honourable truce in Korea, with due regard for other Asiatic countries affected, would not only be of the highest value in itself but it also might open the door to further priceless advances towards that general easement of the world situation from which a real and lasting peace might come. We should, therefore, all rejoice at the steps that are being taken to resume the parleys at Panmunjom. I do not wish to say more to-day except to assure the House that the whole

929
subject holds the first place in the thought and attention of Her Majesty's Government."
That is the statement which was made by the Prime Minister. I thought that this House would wish to hear it.
4.22 p.m.
EARL JOWITT: My Lords, we are all grateful to the noble Marquess for letting us hear this statement. It is very satisfactory for us to learn that the leaders of both Parties have expressed themselves so emphatically about what undoubtedly were the most eloquent and wise words which the President used. Though we are to have a debate on Foreign Affairs on Thursday of this week, I feel certain that nothing that will be said then or now will in any way "check or chill" what the President so happily expressed as the "hunger for peace" which the whole world feels.
LORD STRABOLGI: My Lords, the noble Marquess quoted with apparent approval the statement of my right honourable friend Mr. Herbert Morrison, in which he said that he hoped there would be a "forthcoming response from all Governments." Does the noble Marquess really think that the statement that we have just heard is a forthcoming response? There is nothing at all in it. Furthermore, although we all, of course, agree with my noble and learned friend the Leader of the Opposition about the very important declaration made by President Eisenhower two or three days ago, if the noble Marquess reads the statement carefully he will see that China, which is the key to the whole situation in the East, is mentioned only once, right at the end, and there is no suggestion as to how to get out of the ridiculous position in which we find ourselves with regard to recognition of the Chinese Government.
THE MARQUESS OF SALISBURY: My Lords, I do not think it would be proper for me to-day to continue the debate on the question of China, but with regard to what the noble Lord alleges is the entirely negative character of the Prime Minister's statement, I think I must read again just one sentence.
LORD STRABOLGI: I did not say "negative."
THE MARQUESS OF SALISBURY: The statement says:
"I trust that nothing will be said here or elsewhere which will check or chill any process of good will which may be at work, and my hope is that they may presently lead to conversations on the highest level, even if informal and private, between some of the principal Powers concerned."
If that is not a "forthcoming" statement, I do not know what is, and if anyone has done anything to "check or chill," it is the noble Lord opposite.
LORD STRABOLGI: The noble Marquess must have misheard me because I am sure he would not misrepresent me purposely. I did not say "negative." The statement is platitudinous—that is perhaps the best word I can use—with nothing forthcoming, as asked for in the approved statement by Mr. Morrison.
THE SECRETARY OF STATE FOR COMMONWEALTH RELATIONS (VISCOUNT SWINTON): The noble Lord had better pay attention to his own Leader.
LORD STRABOLGI: It means nothing.

IRON AND STEEL BILL
4.27 p.m.
House again in Committee.
LORD SILKIN moved, in subsection (1), to leave out
"under competitive conditions".
The noble Lord said: I beg to move the Amendment standing in my name. We have just agreed that the Board shall have supervisory functions. This Amendment relates to what will be the purpose of these functions, and the clause is pretty clear the subject. It says
"…with a view to promoting the efficient, economic and adequate supply"—
and then come the words which we seek to omit—
"under competitive conditions,"
of iron and steel. I should like to ask the noble Marquess, if he is to reply, what does he think is added by these words "under competitive conditions"? The governing thing is what we all desire and about which there is no dispute at all—that is, that the industry shall be conducted with efficiency, with economy,

931
and with a view to obtaining an adequate supply. I think it has always been the claim of noble Lords opposite that, so long as those things were secured, they were not wedded to any doctrine on the subject, whether it was by means of competition or whether it was by means of public ownership. The only test was: which system provided those things?
I should have thought it would be wiser and more in accordance with the principles which noble Lords opposite profess if they left out those words "under competitive conditions," so as to ensure that the things that were really needed were done in the way that was most appropriate. I wonder what noble Lords would have said if, in a similar Bill, we had put in the words "under Socialistic conditions"? Would they not have denounced it as being purely doctrinal and irrelevant, and nothing to do with the main purpose of securing "an efficient, economic and adequate supply"? I submit that in putting in those words here the Government are merely committing themselves to a doctrinal statement which, in certain circumstances, could even be in conflict with the purpose they have in mind. There may be cases where it will not be possible to secure competition at all. Indeed, there is a considerable tendency in this industry, in the interests of efficiency and economy, for larger and larger units to be created—I am not complaining of that—but under this tendency, in due course, competitive conditions will be impossible. I should like to ask Her Majesty's Government, in a case of that kind, what are they to do? The Board is required to secure these things by "competitive conditions." But suppose there is a conflict between "competitive conditions" and efficiency and economy, as there may well be—as indeed there is already in certain sections of the industry, and as will be the case to an increasing extent. What will happen then? My case, therefore, is that those words are at the best unnecessary and at the worst confusing to the Board, and because, in certain circumstances, they place the Board in a dilemma, compelling the Board to choose between "competitive conditions" and "efficient, economic and adequate supply."
Moreover, since the Board are charged with the duty of securing these things under competitive conditions, what is their duty when competitive conditions do not exist? Are they to go out deliberately to create them? The Committee have decided that the Board should have no powers of control. But are they to go out and use their powers of persuasion to bring about competitive conditions? Obviously not. If that is so, then what is the purpose of these words? My Amendment is designed to leave out those words which, in my submission, add nothing to the functions of the Board—indeed, in certain circumstances, they may be hampering and restrictive. It is probable that these words were inserted for purely doctrinal reasons, in order to assert the well-known belief of noble Lords opposite in the competitive principle. They are perfectly entitled to their views, but the words are quite inappropriate in this clause and in these circumstances. Noble Lords opposite may find ample opportunities for giving expression to their beliefs in competition, about which there is not a great deal of dispute. We also believe in competition where it is appropriate, but we do not believe in it as an absolute doctrine in all circumstances. If it is their intention to give expression somewhere to their belief in competitive conditions, I should have thought they could have found a more appropriate place, either in this Bill or outside it. I therefore beg to move the deletion of those words.
Amendment moved—
Page 4, line 10, leave out ("under competitive conditions").—(Lord Silkin.)
LORD MANCROFT: Here we have a change of tone from noble Lords opposite. They have been crisply commanding us in the last two Amendments to "put it in the Bill"; now they are equally crisply demanding that we should take it out of the Bill altogether. I think I can put Lord Sirloin's mind at rest on this matter. He is worried that the inclusion of the words "under competitive conditions" may lead to a clash of interests. I think I can make this point perfectly clear. All along in this matter the Government have taken the line that the whole purpose of this Bill is to substitute for a giant State monopoly an industry owned and controlled by a number of competitive units. That is perfectly

933
clear. It has been claimed by the Opposition (the noble Lord did not emphasize this point particularly) that competition between firms continued under nationalisation, whilst the Government's view has always been that, in course of time, common ownership under a State monopoly would have dried up competition.
The whole object of this Bill is to restore competitive conditions. In particular, in Clause 9 on prices, the Government have, in respect of castings and forgings, proposed that the price control provisions shall be available when monopoly conditions prevail and prices cannot be kept at a reasonable level by voluntary means. In Clause 27, the industry is immediately brought back under the purview of the Monopolies Commission, from which, the Committee will remember, under nationalisation, it was protected by the proviso to Section 2 (1) of the Monopolies Act. The fact that the industry is what is technically called an organised industry is, of course, one of the reasons for public supervision. The Government have, however, made it perfectly clear that one of the duties of the Board will be to try to stimulate competition. By making the steel industry subject to the Monopolies Act, from which the national Corporation was exempt, they are putting this view into practice.
The noble Lord, Lord Silkin, raised what I thought was a perfectly fair point. He asked, "What are you going to do when no possibility of genuine competition arises? Are you going to create artificial competition?" The noble Lord foresees cases where it will not be possible for genuine competition to exist. I agree that those possibilities may exist. It may be true in many parts of the industry—for instance, in tinplate, about which the noble Lord, Lord Ogmore, knows a great deal. When the new integrated plant at Velindre is operating in a few years' time, tinplate output will be virtually confined to three large integrated works owned by two companies. Since the Board are responsible for promoting economic and efficient production, they will be bound to recognise this fact—and this, I think, is the answer to the noble Lord, Lord Silkin's point—and not make a god of competition.
I will conclude by saying that these words have not been put in for any
934
doctrinal reason. Although efficient competition is something in which we on these Benches believe very strongly, we certainly do not believe in it if it is going to result in some state of affairs contrary to the industry's interest or contrary to the nation's interests. The words are inserted merely as an indication of the ideas behind the whole of this Bill—completely open ideas, of which I have tried to remind the Committee. The purpose of the Bill to substitute for a State monopoly an industry owned and controlled by a number of competitive units. There is no more evil intent in it than that, and I can assure noble Lords opposite that these words can stay in the Bill perfectly safely without in any way worrying them in the terms of the fear which the noble Lord, Lord Silkin, has in mind. I hope that with those assurances he will be content to allow the words to stay in the Bill.
LORD OGMORE: We have heard a gallant attempt to meet a very difficult situation, but the noble Lord, Lord Mancroft, has not answered the gist of my noble friend's complaint. My noble friend's complaint—indeed the complaint of all noble Lords on this side—is that the words are either unnecessary or confusing. We do not wish to see them in the Bill, nor do we think that any reasonable person would wish to see them in the Bill. We cannot understand why the other three adjectives in the Bill, "efficient, economic and adequate," are not sufficient. We do not think it is necessary to have this joker, as it were, put into the Bill. There are three good aces there already. Why bring in a joker? If in the future the steel industry is to be efficient, economic and have an adequate supply of iron and steel, I should have thought that that was all we in this House should require, so long as conditions of labour and so forth (with which this clause does not deal) are adequate. By putting into the Bill the words "under competitive conditions", the Government lay themselves open to the suggestion that this is a fob to those of their supporters who believe that the Government stand for the "little man," for free enterprise and for enterprise of a free nature, particularly in steel. In fact, for many years past there has been no free enterprise in steel. The noble Marquess has already paid tribute to that, when he said that the industry

935
has been so successful ever since the war started.
The Economist of August 2 said this about the proposals of the Government:
"Whether it promises truly competitive private enterprise in the steel industry is distinctly doubtful."
Why did the paper say that?—because the Economist knows, as we all do, that in the world as it is to-day, in an industry like steel, there is no free enterprise. If, nowadays, any of your Lordships wished to open a tobacconist's shop in Streatham, presumably you could do so—I am not suggesting that you would want to; but there would be nothing to stop you if you did. But if any of us wanted to set up a steel works, of course we could not. The whole industry is, in fact, though not perhaps by name, one huge cartel—it was so before nationalisation and will soon become so again. That is so not only in this country but in pretty well every country in the world—particularly in the United States. The very nature of the industry enforces that situation. It is so vital to the national life of any country, either in war or in peace, that if you do not have a nationalised industry you have to have a cartelised industry to deal with steel. No private person can set up a steel works and carry on. Therefore to put in the words "under competitive conditions" is meaningless.
Under the present conditions—and the same applies with regard to conditions which are likely to arise in the future—there is no real competition, in the old sense, in the steel industry. A hundred years ago, of course, that was not so. I see that the noble Lord, Lord Aberdare is present. When his ancestors first came to South Wales, the industry was highly competitive; it waspossible—and it did in fact happen—for the various steel masters and iron masters and coal masters, the Bruces, the Crawshays, the Homfrays, and others, to compete; and they did. There is nothing like that to-day. The industry is all cartelised, wherever it may be. That was one of the reasons for nationalising the industry. We felt that if there was to be, as in fact there had to be, a monopoly, it should be a monopoly responsible to the public and under control of the State. What this Bill seeks to do is to retain the monopoly but without effective State control. The Bill seeks
936
to put the industry back under the control of those who are running the cartel.
The noble Marquess to-day threw overboard his noble friend Lord Teynham. If Lord Teynham had been an old-fashioned sailor he would have sunk, because I understand that in the old days of sailing ships sailors never learned to swim—a ship could not "back pedal" and so if a man went overboard he was left behind. But Lord Teynham is a modern sailor; no doubt he can swim, and he will eventually come to the surface. But the noble Marquess absolutely dissociated himself from what Lord Teynham said. That shows that this Bill is a very confused measure. The noble Marquess accuses us of not understanding it, but in fact his own Backbenchers do not understand it, although I understand that they have had opportunities on several occasions of hearing from the noble Marquess and others what it was all about. We have all a very great respect for the noble Marquess, and we recognise particularly the clarity with which he is able to express himself. I cannot believe that, had this Bill been capable of elucidation, he would have failed to elucidate it to the satisfaction of Lord Teynham and other noble Lords behind him.
The noble Marquess said that in an emergency the Board would take control, and he quoted Clause 11. I ask for guidance here, because this is a very important point affecting this Amendment. I cannot see in Clause 11 that the Board are given the powers which the noble Marquess suggests. The clause deals with the importation and distribution of raw materials and finished products, but it does not say anything about an emergency. It was a surprise to us (and this is a matter on which we should like some clarification) to hear the remark of the noble Marquess. We should like to know whether it is his view, and the view of the Government, that there is provision in the Bill for the Board, on the declaration of an emergency, or even if an emergency is not declared, to take control of the industry. Suppose for a moment that the noble Marquess is right. Where does the free competitive aspect of the industry go to, assuming it has operated under competitive conditions, if at any moment—asthe noble Marquess seems to say

937
when an emergency arises the whole industry may be controlled by the Government? That statement by the noble Marquess seems to me to be illusory. These words which we seek to omit mean nothing. They do not affect the operation of the Bill at all, and they would, of course, be jettisoned, both in form and substance, on the coming of an emergency. I would therefore suggest, in the interests of good English and clear thinking, that the Government should agree to accept this Amendment and strike these words out of the Bill.
LORD WINSTER: I feel I must correct the noble Lord who has just spoken upon a point of seamanship. It is quite true that the old sailing ship could not, as he put it, "back-pedal," but it could come up into the wind very rapidly indeed and lower a boat with extreme smartness, so the reasons that, according to the noble Lord, the old-time sailor gave for not learning to swim are, I am afraid, not justified.
LORD TEYNHAM: The old sailing ships used to do more than that. They used to "back their tops'ls" and stop.
LORD WINSTER: I think there is only a matter of a few seconds between the speed of the two manœuvres.
I am sorry that the noble Marquess took exception to my using the words "test of sincerity" in regard to a previous Amendment, but I really think that it was a little thin-skinned on his part to object. I live never impugned the personal sincerity of an opponent, but to impugn the sincerity of a Government is quite another matter. One would require one of the new calculating machines to add up how many times the Conservative Party have impugned the sincerity of their opponents' motives. But I should not like to say a word to impair the harmony of these proceedings to which the noble Marquess has referred, and I hope it shall do nothing to offend in that respect.
I must say that these words about "competitive conditions" in the Bill are really meaningless and superfluous, and they do lend themselves to a charge of being propaganda and camouflage. If the noble Lord, Lord Mancroft, objects to the use of such terms, I would ask him to do what he has not yet done and tell us exactly why these words which we are discussing have been inserted in the Bill,
938
and exactly what purpose the phrase serves. The industry is at present as competitive as it has ever been, and I do not know whether these words are necessary to convey the impression that the industry is being returned to competition. If that is the idea of these words I am afraid that the Economist is against them, because I note that last year the Economist said that the Bill promised truly competitive enterprise was extremely doubtful. Would the noble Lord tell us exactly how the present partly competitive structure of the industry will be changed when the Bill has been passed? The industry was not entirely competitive before it was nationalised. There were various price fixing arrangements, and, if I may, I would make another quotation in this connection. The Financial Times in 1944, referring to this industry, said:
"In prices as in other matters the trade acts in combination."
There are various international combines and cartels, and whatever else they may be, cartels are not competitive. I would say that nationalisation resulted in there being more competition in the industry than had previously existed.
Again, if we are to have these words in the Bill about competitive conditions, would the noble Lord, Lord Mancroft, tell us what is the yardstick by which the Board will decide whether a firm is running its business under competitive conditions or not? Let us suppose they arrive at such a yardstick and the Board decide that a certain firm is not carrying on production under competitive conditions: could the noble Lord tell us what powers the Board possess to do anything about it? What is there in the Bill to tell us what the Board can do if they find such a state of affairs in a firm after the Bill has become law? Another aspect of the question is this. I understand that the industry was, and for all I know will be again, dominated by some ten great firms. In time gone by I here were ninety-eight directors of those firms, twenty-one of whom sat on more than one board in the industry, so that there was an interlocking of control and responsibility. If that state of affairs is to be revived, how will these duplicate directors, if I may so term them, deal with competition between the several firms whose affairs they direct? I cannot understand how they will be able to do that.

939
The Bill lays down that the Board have to supervise (blessed word!) the industry so as to get efficiency, economy and adequate production under competitive conditions. I must respectfully congratulate the Conservative Party on their tardy conversion to the necessity for supervising private enterprise. But, as so often is the case, the conversion does not seem to be quite wholehearted, because in another place they rejected a proposal that supervision should be carried out in the public interest. What is the good of supervision unless it ensures the public interest? I do not know. What if, as may well be the case, the public interest were to demand in a given case either for security or for technical efficiency, or for any other reason, that there should not be competition? These completely superfluous words in the Bill nevertheless demand that there shall be competition. What do the Government really want? Do they want security and efficiency or competition for the sake of competition? I use the word "superfluous" for a definite reason. If business is to be carried on with efficiency and economy and for the ensuring of adequate supplies, as the Bill directs the Board, what is meant by throwing in competition? Surely efficiency and economy and ensuring adequate supplies of the commodity are covered by these other words. Why throw in the question of competition, which cannot add anything to the efficiency with which the industry is carried on? The whole contains the part, and the Government have introduced some completely superfluous words.
I read the whole of the Report of the proceedings in another place, and the only reason I have seen advanced by the Minister for the insertion of these words in the Bill is that they impose a duty on the Board to keep restrictive arrangements under review. Again, that is fully covered by the duty laid upon the Board to ensure efficiency. Efficiency cannot be ensured without restraining restrictive practices. Suppose the Board find that restrictive practices exist contrary to the efficiency of the industry, would the noble Lord, Lord Mancroft, tell us where it is said in the Bill that the Board are given powers to deal with such practices? There is nothing in the Bill about that.
940
There are really no arguments for these words, except, I fear, and I say it with regret, that they are introduced for propaganda and camouflage purposes, to make the public believe that the Government are going to restore to competition an industry in which nationalisation had destroyed competition.
4.55 p.m.
LORD SHEPHERD: May I ask a question and not make a speech? I understand that the noble Lord, Lord Mancroft, said that these words were included not for doctrinal reasons but for the purpose of ensuring that this great industry, which can be carried on profitably on an organised basis, shall be divided into parts so that the parts can compete one with the other. I can understand that reason, but the word "competition" suggests something else to me. The industry in Great Britain will not only be competitive within itself, but it will have to enter into competition with steel industries abroad, and in order to overcome competition from abroad it will have to make sure that the prices it charges for its materials come below the prices quoted abroad. Suppose that, in order to achieve that purpose, it is suggested by four firms making a product which I shall call a that the production of that article shall be carried on by one firm instead of four, in order to get a complete degree of organisation, to cut out unnecessary competitive costs and to ensure that the price is reasonably low. Will the words in the Bill prevent the Board from agreeing to such a proposal, either from the four firms concerned or from the Steel Federation itself—a proposal designed to enable the steel industry in this country to beat its foreign competitors? It is very important that we should know what these words mean and how far they will thwart the Board from doing the effective work they are supposed to do.
THE MARQUESS OF SALISBURY: The noble Lord, Lord Silkin, who spoke first said that he did not understand what the words meant. I shall try to explain them to him.
LORD SILKIN: I hope the noble Marquess does not think I said I did not understand what "competition" means. What I said was that I did not understand it in this context.
THE MARQUESS OF SALISBURY: What it implied—I think that would be a fairer word to use. The noble Lord seems to assume that this is just an ingenious idea of the Government, put in on their own initiative; that nobody had encouraged them to put in these words; that there was no reason for putting them in, and so on. They were put in originally for a definite reason. The reason was that with regard to this Bill, as your Lordships will remember, Her Majesty's Government adopted rather a novel procedure. Before the Bill was introduced, as far back as the summer of last year, they published a White Paper on the scheme they proposed to introduce, and said that they would welcome constructive criticism. This is one of the constructive criticisms they got from all parts of the House—I can give a quotation from the Party of noble Lords opposite in another place if it is desired. There were people who said that there was no reference to competitive conditions; that the Bill was not intended to create competitive conditions, and so on. Therefore, after careful thought, Her Majesty's Government decided, in order to make their attitude and their intentions absolutely clear, that they would include these words.
I forget which noble Lord it was who quoted from the Economist—I think it was the noble Lord, Lord Winster. It is true that the Economist used the words exactly as he quoted them, but I would remind the noble Lord that the words from the Economist date back to the time of the White Paper last summer, when there was no reference to competition. I believe I am right in saying that after the Bill was published, both the Economist on November 15, and The Times on November 7, expressed approval of the insertion of the words "under competitive conditions." Therefore I think the purpose which the Government had in mind, or one of the main purposes, was to indicate their underlying attitude to the problem of competition, and the effect was to produce the results they had intended. Suppose we had not put in these words but had left things exactly as they were. I have not the slightest doubt that, either in the other place or in this House, someone would have risen to his feet and said that the real truth was that the Government were aiming at a private monopoly; that all
942
this talk about competition in the past, if I may use Lord Winter's words, appeared to be eyewash; that we had not even taken the trouble to mention the desirability of competition in this important Bill. I can almost hear these admirable speeches being made, and probably made quite effectively.
It certainly is not our object to create a private monopoly. Indeed, as your Lordships know, Her Majesty's Government have taken steps which may have the effect of making the industry subject to the Monopolies Act—which, I may say, noble Lords opposite never did with regard to their own Act, although the Monopolies Act was their own production. That, I would say to the noble Lord, Lord Winster, is the action which can be taken. The noble Lord asked what could be done to ensure competitive conditions. If there is a situation of monopoly, the matter can be brought to the Monopoly Commission under the Monopolies Act. This, at any rate, is some action which was not possible before.
I am not going to pretend to your Lordships that absolutely free competition is always possible in the modern world: we all know it is not, and it would be foolish for me to suggest any such thing. Therefore, the words—and this I would say in answer to the noble Lord, Lord Shepherd—do not mean that in every conceivable given condition the need for competition must override every other consideration. What they mean is that we hope to create in the industry a competitive atmosphere; an atmosphere where there is a great deal more competition than there was under the existing Act, when there was a complete State monopoly. It is the purpose to re-create, so far as possible in the modern world, competition. I believe it is valuable to have included in the Bill itself these words which clearly indicate the intention of the Government.
LORD SHEPHERD: The noble Marquess will forgive me for interrupting. If under the conditions I mentioned it became proper that four steel works, or parts of steel works, should be closed down in order to enable the industry to meet foreign competition, would not the words which appear in this clause prevent

943
the Board from giving approval to the proposal, even though it were backed up by the Steel Federation itself?
THE MARQUESS OF SALISBURY: I do not think they would. In my view, the Board is always bound by the national interest as an overriding consideration. As I said, it is easy in a debate of this kind to produce any number of hypothetical situations which may not occur in a hundred or two hundred years. "Does the Bill cover this? Do these exact words cover that?" If you try to draw your legislation on that basis, you will never get anywhere. These words are a broad statement of intention; it is competitive conditions which we seek to create. I cannot define them clearer than that, and I should have thought that they were perfectly clear.
LORD WILMOT OF SELMESTON: The noble Marquess will appreciate that what we have in mind are not hypothetical situations, but the actual situation which formed the subject of one of the most valuable recommendations of the Report of the Anglo-American Productivity Committee on the Iron and Steel Industry. There is no virtue in competition merely as a label, nor is there in monopoly. The virtue lies in what happens. This most valuable Report of this authoritative Committee says:
"In all sections of the British iron and steel industry the greatest limitation upon productivity to-day is the size of the unit and plant."
I will not worry your Lordships with the rest of that paragraph, but the next paragraph goes on to say:
"Largely because of the relation between the size of the unit plant and the size of the works, the efficiency of the integrated steel works is limited again by its size."
Finally, it says:
"It will be necessary for development and re-equipment to be concentrated in the works most suitably sited for expansion."
This industry has in the course of the last few decades developed monopolistic tendencies. It has probably the most powerful trade association of any industry in the world, efficiently run and conducted with great skill; and, so far as it is possible for men charged with duties to their shareholders as paramount requirements, it is conducted in the public interest. But, as I have said before, the
944
very nature of the industry forces it into monopolistic courses. Therefore I feel it would be wise—and there are no Party politics in this—if the Government took these directing words out of the Bill. After all, here is one of the signposts to the new Board. They are to supervise this industry in such a way that they have great regard for its competitive nature. What we want is the maximum of efficient production. It is because we believe that some form of monopoly is inevitable in this industry that we prefer to have a public monopoly to a private monopoly. But I am not arguing that. I do feel it would be wise, in these circumstances, to take these limiting and perhaps thwarting words out of the declaratory part of the Bill.
LORD SILKIN: I think we have threshed this matter out adequately; and, if I may say so with respect, one of the great advantages of a good humoured discussion such as we have had on this Bill so far is that generally speaking at the end of a discussion we know exactly what is in the mind of the other. I now understand from the explanation of the noble Marquess exactly why those words were put in. Even if it is desirable in some part of the Bill to give expression to the principle of competition, I am not convinced that this is the right place. It gives rise to certain difficulties and inconsistencies. I will not ask the noble Marquess for any undertakings. I am going to withdraw the Amendment, but I hope that he will look at the matter again and see whether it cannot be improved.
What I understand the noble Marquess to say is that he recognises that in some cases competitive conditions are really either impossible or undesirable, but that generally speaking competition is a good thing and that it is desired to give expression to that in this Bill. It may be that the right kind of words is "wherever practicable," or "wherever appropriate," or something of that sort. I am not trying to draft this Bill standing on my feet. I hope the noble Marquess will be prepared to look at it again and at the next stage see whether something better can be done. Without asking him for any definite undertaking, I would be willing to withdraw the Amendment.
THE MARQUESS OF SALISBURY: I do not know whether the noble Lord wants me to say anything, because he threw a

945
beautifully decorated fly over me. I could not give the noble Lord any undertaking at all, because in our view this is perfectly clear. It represents, as I say, the broad conception which we have in mind. Of course, if the noble Lord asks me, I will refer the matter again to my right honourable friend, but I should not like him to think that his fly has caught a fish.
Amendment, by leave, withdrawn.
5.13 p.m.
LORD WILMOT OF SELMESTON LORD WILMOT OF SELMESTON moved, in subsection (1), after "conditions" to insert "and the equitable distribution." The noble Lord said: I must apologies to your Lordships for yet another Amendment to this clause. We have spent rather a long time on it, but it is a very important clause because it sets out the duties of the Board. Unless the duties are correctly and properly defined, the rest of the Bill is not much use. The purpose of this Amendment is to insert the words "and the equitable distribution" of the products, so that the duty of the Board will be not only to promote the efficient, economic and adequate supply of iron and steel products but also to promote their equitable distribution. I suggest to your Lordships that this is a necessary part of their duty. This supervision over the distribution of the products of this vital industry has, in fact, in the past formed a very major part of the duties of the various supervisory organs which have been associated with the iron and steel industry, under Governments of all colours, for a very long time.
There are several reasons why it is necessary. In times of shortage of steel products—and it should not be assumed that we are immediately emerging from a shortage of all forms of steel products—it has often been necessary for the board of control to give a direction as to the distribution of the products. Instances which occur to me are steel intended for the use in the development of the coal mines; steel needed for the proper development of railways and harbours, and for other works of vital national importance to defence or to commerce which require priority over other forms of user. Then there is the fact that in this industry there are a number of vertical combinations, so that you have a producer of primary products—and this is
946
true of most of the modern plants—while the metal is still hot proceeding to roll and fashion it into Various stages in its course towards the consumer. It is easy to envisage circumstances which have often arisen where integrated firms retain the whole of their product of a particular kind of iron and steel for use in their own finishing factories, and thus starve other competitive units, who do not produce the raw material but fabricate it, of the materials of their trade.
When this situation has occurred in the past—and sometimes it has occurred where the product is one which the national interest requires produced—the Iron and Steel Board have made a direction that there should be some alteration in the distribution of the product. Those of us who follow trade and industry have probably all come across examples of this kind. I have, and I suppose that I can say that I have an interest in the matter. But certainly those who use iron and steel products in any time of shortage sometimes require to ask for a direction that they should have a reasonable supply of the raw material. That duty was clearly placed upon the original Steel Board; later it rested on the present Iron and Steel Corporation. Now, for the first time, it is to go. We can see that the Iron and Steel Corporation faithfully discharged their function, because in their Report they set out what happened to the product and how much of it was sold down to consumers outside the nationalised sector. As I say, unless these words are inserted in the for the first time for very many years there will be no protection for the consumer who is not a primary producer, and having regard to the Government's declared intentions on this Amendment, I believe that we may expect them to agree. I beg to move.
Amendment moved—
Page 4, line 10, after ("conditions") insert ("and the equitable distribution").—(Lord Wilmot of Selmeston.)
5.19 p.m.
LORD MILNER OF LEEDS: I desire to support this Amendment, which appears to me to be a very important one. The clause seeks to provide for the efficient, economic and adequate supply of iron and steel products under competitive conditions, and there should be some assurance that those who require the products of the iron and steel industry will receive them. Your Lordships are

947
aware that in the Third Schedule those products are set out under the heading of "Iron and Steel Activities." They include
"the quarrying or mining of iron ore,"
which is obviously essential to every industry having to do with iron or steel. There is
"The casting of iron or steel by any process."
Your Lordships know that castings are required by all sorts and conditions of engineers. There is
"The production, with or without heat, of iron or steel forgings,"
again a requisite of almost every class of engineering. There is, too,
"The production of tinplate."
It seems to me that there should be some provision whereby the Board are under an obligation to ensure the equitable distribution of those and other products of which they have charge.
What is to happen if, for example, a small man in a small business desires supplies? One knows that for years during the war, and I believe for some years since, there have been shortages. I believe it is so even to-day, and that steel products are nothing like sufficient. Who is to see to it that every small man, or every large man for that matter, obtains a fair share—as they say in Yorkshire, "fair do's"—of whatever is being produced by the industry? This is not a theoretical question. I recollect an honourable Member in another place who ran a very successful engineering business not a hundred miles from Grantham during the War, and immediately thereafter prepared plans for—and, indeed, turned out—the first model or two of a small car, and also of a tractor. I have no personal knowledge of the facts, but I understand from him that he had to close down because he was unable to get from the manufacturers of his raw materials the raw material he required to enable him to provide that car and that tractor—and no doubt other products. That happened in the case of individual companies known certainly to the majority of us on this side of the House, and it may happen to many others. And this was not a small man, either.
What is going to happen to the small man? What rights and what remedies
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has he? To whom does he complain if he does not get a fair allocation of the products of the industry? I do not know whether the co-operative organisations manufacture anything from steel products. If they do, supposing that they do not receive what they are entitled to, to whom do they complain? Take the National Coal Board—I know there has been some prejudice in that direction—or British Railways. British Railways are short of certain classes of steel, for railway lines and so on. What is their remedy if there is no assurance that the Board, who are responsible for the provision of this steel, are not under a duty to ensure equitable distribution? It is curious that the Board have power to review prices. If in that connection there are reserve powers given to the Government whereby, in effect, they can override the Board, perhaps the noble Lord can tell me whether there is any provision for the Government to intervene in a matter of this sort. Is there any overriding provision whereby the Government can allocate steel? Can a Member of Parliament, either in your Lordships' House or in another place, put a question—and if so who is the authority? Who has put upon him the duty of allocating steel?
So far as I can see, there are no such reserve powers. We heard from the noble Lord, Lord Layton, on Second Reading, that the High Authority in connection with the Schuman Plan had the power to make allocations. I know that we shall have the noble Lord with us on this occasion, because there does not appear to be any power in this Bill for the Board or the Government, or any high authority, to make allocations—I may be wrong, but that is my impression. Mr. Strauss put such a provision in the original Bill. It was thought then to be essential; and in my submission it is essential now. I hope the Government will think it right to accept this principle and ensure a fair distribution of the products of the industry.
LORD WOLVERTON: If there are semi-finished articles which are being distributed, surely, if there is a great scarcity, it should not be the duty of the Board to allocate; it should be the duty of the Government of the day. We now have a rationing scheme of semi-finished raw material. I should have thought

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that, if it was necessary to introduce a scheme, it should be the duty of the Government and not of the Board.
LORD MILNER OF LEEDS: Supposing that to be so, where is that duty laid upon the Government?
LORD WOLVERTON: They have a general power: they can do it under the Supplies and Services Act.
VISCOUNT SWINTON: In the same way as the steel allocation scheme was introduced under the late Socialist Government.
LORD MILNER OF LEEDS: There would have to be some special provision with regard to that. It was provided originally in the Iron and Steel Act.
VISCOUNT SWINTON: No: with great respect, it was not. That steel allocation was not done under the Iron and Steel Act—and deliberately. The late Government did not suggest for a moment that even the Minister of Supply should administer it. As a matter of fact, I had to administer it when I succeeded. The power to impose a scheme of that kind was under one of the Supplies and Services Act Orders. It was never part of the Iron and Steel Act.
LORD WILMOT OF SELMESTON: But the noble Viscount will remember how the thing worked, since he had a part in it. The duty was clearly laid on the Iron and Steel Board. The noble Lord is speaking about the licensing scheme. That licence is a duty or a permission to give an order, and a permission to someone to execute the order; but it does not guarantee the supply. Many times I have known people with a handful of licences unable to get the product to which the licences referred. They have had to go to the Iron and Steel Board and get a direction to the supplier to supply. That is how the thing works. And it is because under this Bill that machinery is now to go, for the first time, that it is important that these words should be put in. Otherwise, unless you are a manufacturer of your own raw material, you are in jeopardy as regards supply.
5.28 p.m.
LORD MANCROFT: This Amendment would give the Board the duty of promoting "equitable distribution" of iron and steel products in addition to
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their "efficient, economical and adequate supply." It is clear from Lord Wilmot's speech that he desires to be helpful in this matter, for which I thank him but while thanking him ought perhaps to warn him that I fear his help is a little misconceived. I think his fears are unjustified. When I first saw this Amendment on the Paper I was a little doubtful as to what was intended by the words "equitable distribution" in this context. I could not quite see how they applied to this Bill.
If I have understood aright the argument of noble Lords opposite, there are two different types of "equitable distribution" which the Opposition have in mind. The first is the fair distribution of semi-finished products within the industry, with the aim ensuring that the vertical concerns to which Lord Wilmot referred, producing from the raw material to the finished product, should not starve the finishing concerns not producing their own raw materials. The second was the fair distribution of the final products of the industry between the various consumers. I think the answer to the first point is that it is already provided for in Clause 3 (1) (b), which gives the Board the duty of keeping under review the arrangements for procuring and distributing raw materials for use in the steel industry.
LORD WILMOT OF SELMESTON: Ah!
LORD MANCROFT: Since "raw material" is defined in Clause 34 as including materials subjected already to any process or processes, it clearly includes pig iron or semi-finished steel used by an iron and steel producer to make an iron and steel product. The promotion of the appropriate distribution of semi-finished products within the industry is, therefore, already made, so far as I understand it, a part of the Board's duty.
LORD MILNER OF LEEDS: Which clause is that?
LORD MANCROFT: Clause 34.
LORD MILNER OF LEEDS: That refers to "Application to Northern Ireland."
LORD MANCROFT: I beg your Lordships' pardon. It is page 33, Clause 33. The important point I want to stress about it is this—and I come back to the

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exact meaning of the word "equitable"; and this is where I think the noble Lord and I differ, for good reasons. I do not think that the overriding consideration should be the word "equitable." The criterion is not whether distribution is equitable. That is a desirable factor—at times a very desirable factor—but surely the overriding criterion is the efficient, economic and adequate supply under competitive conditions. The Amendment which the noble Lord has moved in this regard is, at best, redundant, and might, indeed, indicate (the noble Lord, Lord Milner, has put this into my mind) that "fair shares" were more important than efficiency. I hope that I misconstrue the noble Lord's words when I say that.
LORD MILNER OF LEEDS: The two are complementary, surely.
LORD MANCROFT: They may well be complementary, but it must be efficiency which, in the last resort, is the overriding consideration. That may bring about some small degree of unfairness; I appreciate that.
On the second point, if I understood the noble Lord correctly, I am advised that the legal view is that the word "supply" includes "distribution." The Board's duty to promote efficient, economic and adequate supply under competitive conditions thus covers, as I understand it, efficient and competitive distribution, and the Board will be concerned with the general arrangements for marketing by producers—for example, arrangements with merchants and stockholders, so that the genuine needs of consumers, small and large alike, can most conveniently be met, and the consumer has the choice of buying what he wants. They will, in particular, use their influence to bring to an end undesirable restrictive agreements. That is a point we have already discussed on the previous Amendment, when we talked about monopolistic tendencies.
In normal times of rough balance between supply and demand, this supervision, I should have thought, would be adequate. In times of scarcity, like the years since the war, it may be necessary to have an allocation system; but it would be wrong, surely, to give the task of allocation to a Board set up to supervise one particular industry. This point has already been discussed by noble
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Lords who have practical experience of it, whereas my experience is purely theoretical. But it seems to me that an allocation in the national interest, which, incidentally, in practice is often extremely inequitable, is a job for the Government and not for any one particular industry or one particular Board. The Board cannot be expected to know the national need as regards allocation between different industries. Indeed, the Labour Government, as the noble Lord himself has suggested to us, I think, like the present Government, did not regard it as an appropriate function for a Departmental Minister, like the Minister of Supply, but rather as one for an inter-Departmental Committee, with a specially appointed chairman.
Moreover, any system of allocation involves automatically some form of discrimination, and equitable distribution, which is all that the Board could seek to secure, might at such times—this is where I differ from the noble Lord—run contrary to the national interest. Of course, the Board will seek to promote equity, whenever they can, by persuasion and by leadership. Naturally, that is important. What could be a more unhappy industry than an industry which thought that inequity prevailed? From top to bottom the industry would be discontented if it were thought that equitable distribution was not the watchword. I would ask the noble Lord, however, to agree with me in thinking that it should not be the overriding consideration, very important though it is, but that the national interest, which may at times clash with equitable distribution, is the overriding factor. I hope that, with that explanation and my thanks to the noble Lord, Lord Wilmot, for the careful and helpful way in which he put this important idea forward, he will agree to withdraw his Amendment.
5.35 p.m.
LORD WILMOT OF SELMESTON: One of the penalties of being on this side of the House is that one is bereft of the actual assistance of the Government draftsman. Therefore, I would never cling to a form of words when I have been shown, as in this case, by the noble Lord, Lord Mancroft, that the words themselves are not quite the right ones. Therefore, I hope that the Government will agree to try to find the right words to give effect

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to an idea which obviously has their sympathy. It is not mathematical equity which we seek: it is the national interest; and it is not in the national interest, in many circumstances, that producers of certain kinds of essential products should be starved of their raw material because the people who make that raw material have a fabrication plant which they will enlarge or use to absorb their whole output or, alternatively, tune their output of that kind of iron and steel product to the capacity of their own finishing works.
One has only to look at the ramifications of the United Steel Company, of the Lancashire Steel Corporation, of Guest Keen Baldwin and of Guest, Keen And Nettlefolds (to take some of the famous names in this industry) to realise that those circumstances may occur in the future as they have in the past. Wire is a case in point. There are very few big wire drawers. Most of them are users of that product, and there have been quite a number of occasions when the supply of wire has been not more than was necessary to feed their own plants. Special producers of other products, very necessary, might frequently have gone without but for the intervention of the Board. The same is true of sheets and plates, and other forms of semi-finished steel which are used by industries of every kind and who have a right to some court of appeal to which they can go if they feel that not only are their own pecuniary interests being affected but that the national supply of an essential product is being limited.
This is the dilemma. The primary producer feels that he is acting perfectly properly in doing the most profitable thing for his particular shareholders, using the whole of his output in his particular works. Maybe that particular form of product is less profitable than other forms, so that he does not want to make it for other people besides himself. I attach no blame in this matter, because t is part of the dilemma in which the Government put themselves by denationalisation, that they have to have regard to these commercial considerations
which govern the actions of boards of directors. May I make an appeal to the Minister to give an undertaking that the Government will alter the words to safeguard this situation which I have tried to describe? If they will do that, I will not press these words to a Division. But I regard this, as we all do on this side of the House, as a very important principle and, I may say, it is so regarded outside this House. This particular matter is of the greatest consequence to many industries, and unless the Government will try to put it right, I am afraid that we shall have to have a Division, in view of the importance of the principle involved.
LORD MANCROFT: I am sorry to hear the noble Lord say that. I thought I had convinced him.
LORD WILMOT OF SELMESTON: You did.
LORD MANCROFT: I am afraid that I cannot give him the undertaking he wants, for reasons which I think I have made perfectly clear. In regard to my assurance that the fears from which he was suffering are unjustified, I will, however, make certain that the points he was making are already covered in the Bill. I will make certain, if he likes, that I was speaking the truth, but I am pretty sure that I am well advised and that all the fears which lie has voiced this afternoon are met in the Bill. I can go no further than that. I am afraid that I cannot give him the undertaking for which he asks, and if- he must press his point more strongly, then press it he will.
LORD WILMOT OF SELMESTON: I am afraid that is what we shall have to do, because neither I nor anybody else can find any place in the Bill where this protection, which has existed hitherto for a very long time, is not being taken away. Therefore, I must press the matter to a Division.
On Question, Whether the Amendment shall be agreed to?
Their Lordships divided: Contents, 20; Not-Contents, 40.

CONTENTS

Baldwin of Bewdley, E.

Chorley, L

Ogmore, L.

Jowitt, E.

Haden-Guest, L.

Pethick-Lawrence, L.

Henderson, L.

Shepherd, L.

Hall, V.

Kenswood, L.

Silkin, L.

Lucas of Chilworth, L

Strabolgi, L.

Bingham, L. (E. Lucan) [Teller.]

Macpherson of Drumochter, L.

Wilmot of Selmeston, L.

Milner of Leeds, L.

Winster, L.

Burden, L. [Teller.]

Morrison, L.

NOT-CONTENTS

Simonds, L. (L. Chancellor.)

Bridgeman, V.

Gifford, L.

Buckmaster, V.

Howard of Glossop, L.

Salisbury, M. (L. President.)

Davidson, V.

Jeffreys, L.

Furness, V.

Jessel, L.

Cholmondeley, M.

Goschen, V.

Layton, L.

Willingdon, M.

Long, V.

Leathers, L.

Swinton, V.

Llewellin, L.

Alexander of Tunis, E.

Mancroft, L.

Birkenhead, E.

Aberdare, L.

Milverton, L.

Buckinghamshire, E.

Carrington, L.

Rea, L.

De La Warr, E.

Cherwell, L.

Remnant, L.

Dudley, E.

Chesham, L.

Templemore, L.

Onslow, E. [Teller.]

Fairlie, L. (E. Glasgow.)

Teynham, L.

Selkirk, E. [Teller.]

Freyberg, L.

Wolverton, L.

Shaftesbury, E.

Gage, L. (V. Gage.)

Resolved in the negative, and Amendment disagreed to accordingly.

5.48 p.m.
LORD JESSEL LORD JESSEL had given notice of two Amendments to the proviso to subsection (1), the first being at the beginning of paragraph (i) to insert "either." The noble Lord said: On the Second Reading of this Bill I raised the point covered by this Amendment, and the noble Viscount, Lord Swinton, in his winding up speech was good enough to say that the Government would give further consideration to the position of foundries under the Bill. The Amendment does not touch on raw materials, which we were told was the reason for including foundries within the scope of the Bill. My Amendment deals with such matters as training and education, safety, health and welfare, and arrangements for joint consultation. In these respects the Government have already excluded the tied foundries from the scope of the Board, and we contend that the independent foundries, which are equally part of the engineering industry, should be treated in a similar manner.
All we ask is that where the Government are satisfied that independent foundries already have their own machinery for dealing with matters concerning industrial relations, those foundries should be excluded from supervision by the Iron and Steel Board. We have been told that the Board has no powers, but advice from a Board of this kind can, on Occasions, be equally effective and disturbing to the recipient of that advice. We have the precedent of the Road Haulage Wages Act, 1938. This Act excluded from the supervision of a board firms which already had satisfactory conciliation machinery. It is on those lines that this Amendment is drawn, and I hope
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the Government will see their way to accept it. I beg to move.
Amendment moved—
Page 4, line 33, at beginning insert ("either").—(Lord Jessel.)
5.50 p.m.
THE MARQUESS OF SALISBURY: The noble Lord, Lord Jessel, has in the speech to which the Committee has just listened explained, I think with great clarity, the purpose of his two Amendments. If I understand him aright, his point is that the arrangements for training, welfare and labour relations in many of the foundry firms—whether tied to other works or not—are governed by agreements made for the engineering and allied industries between the engineering employers' federations and the engineering trade unions, and he and others are anxious that the setting up of the new Iron and Steel Board with the wide duties set out in paragraphs (1) (d), (e) and (f) of Clause 3 should not jeopardise these arrangements. There are, I gather, fears that intervention in these arrangements by the Board, however well-intentioned it might be, might prejudice them and put in peril the work of many years of patient negotiation. The noble Lord's Amendments, therefore, as I see it, seek to exempt from the Board's supervision of training, safety, health, welfare and joint consultation, foundry firms whose arrangements for joint consultation are part of wider general arrangements negotiated by the two sides of an industry not mainly concerned with iron and steel—notably, of course, the engineering industry.
I think it may help the noble Lord and other noble Lords if I explain in a very few words Her Majesty's Government's intentions in framing Clause 3 (1) (d), (e) and (f). The Government take the view

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that a Board responsible for promoting the efficient, economic and adequate production of an industry must have some regard for and supervision of such important matters—such increasingly important matters—for production as the training, safety, health and welfare of the workers and the arrangements in the works for joint consultation. As your Lordships will know, the iron and steel industry has art admirable history of labour relationships. It is, I believe, second to none, and it is our belief and hope that those relationships, which have been equally good under private and under public ownership, will so continue for a great many years to come. None the less, we have thought it right to charge the Board with the duty of keeping under review the collective arrangements in the industry for the promotion of research, training, safety, health and welfare—that is provided for in paragraphs (d) and (e)—and the arrangements for joint consultation in the factories in the industry—that is in paragraph (f).
I explained during the Second Reading debate, I believe, that it is the Government's view that the Board's best work will be done by its prestige and influence, and these are none of them matters in which—except for the spending of money on research and training—the Bill gives the Board any actual powers. Indeed, the Government are sure that the Board would not wish, even if it had the power to do so, to intervene in arrangements built up over the years and operating so smoothly on the basis of mutual confidence. The Government moved in another place the proviso which your Lordships will find at lines 32 to 48 on page 4 of the Bill, to make it clear that in these matters the Board's supervision would not extend—and this is Lord Jessel's point—to works where the foundry was only an incidental part of a larger works, and where the joint consultation machinery in the works embraced the foundry workers equally with the others. That was to avoid undesirable duplication.
The Amendment moved by the noble Lord, Lord Jessel, if I understand it, seeks to extend this proviso to what I may call independent foundries whose arrangements for the matters set out in paragraphs (d) to (f) are part of the joint arrangements for the engineering or
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some other industry. I feel that this would be going too far. If we are agreed—as I am sure we all are—that these matters are of the highest importance to efficient economic and adequate production, and if we want the Board to be in a position to fulfil its important duty of promoting such production, then we must, as I see it, give the Board the duty of keeping these arrangements under review—that is, watching, promoting and helping but not, if I may use such words in your Lordships' House, unnecessarily butting-in. It would, I am certain, be wrong to exempt by statutory provisions any particular group of concerns just because at a particular point in time they had geared their arrangements to other industries. If my right honourable friend had felt that the fears which Lord Jessel has expressed were real, I know that he would have tried to meet him. I would, however, remind noble Lords that the Board has not been given powers to direct what form the arrangements on such matters should take, and the Government are confident that a responsible Board would not consider, for one moment, interfering or intervening between the two sides of industry in agreements affecting firms coming under its supervision. I am very grateful to the noble Lord for raising this matter. It has been very helpful in clarifying the position. I hope that after the explanations and assurances I have given him he will agree to withdraw his Amendments.
LORD SILKIN: I should like to say one word upon this Amendment. I do not think I can really add much to the very clear statement of the noble Marquess, a statement with which we on this side of the Chamber all agree. Is it not the case that if this Amendment were accepted it would mean that every single independent concern would have to be examined by the Board to ascertain whether it satisfied those conditions or not? You might get a portion of the industry coming within the Act and a portion not doing so. It would really be a very unsatisfactory state of affairs in regard to foundry firms to have some in and some excluded on a basis of whether certain arrangements had been made between employers and employees. For those reasons I believe that the Amendment really cannot stand up.
LORD JESSEL: In the first place, I apologise for speaking on two Amendments at the same time. Secondly, I should like to thank the noble Marquess for the extremely full answer he has given to my point. I realise that the Minister of Supply has taken a considerable amount of trouble over this matter: I know he has had a great many interviews with people concerned. I was just trying to put the point of view of the independent foundries, and the noble Marquess has explained why the Government cannot accept the Amendment. In the circumstances I beg leave to withdraw it.
Amendment, by leave, withdrawn.
6.0 p.m.
LORD BURDEN LORD BURDEN moved, after subsection (1) to insert:
"(2) The Board shall, in the performance of their duty under the preceding subsection, have regard to the need to secure full employment in Great Britain and to any other considerations relating to the national interest to which the Minister may have asked them to have regard."
The noble Lord said: In the absence of my noble friend Lord Lawson, I beg to move the Amendment standing in our names. As the noble Marquess the Leader of the House said a moment or two ago, this industry has a remarkable record of labour relations. Over some ninety years the workers in this industry have built up a strong and powerful organisation and they have produced some remarkable men—before the formation of the Confederation in 1917, men like John Hodge, and since the formation of the Confederation, Sir Arthur Pugh, happily still with us, and Sir Lincoln Evans. I do not think it is an exaggeration to say that in the proper carrying out of this highly skilled craft which has a high degree of risk the safety of this country both in peace and in war depends. I think I can also claim that in both world wars the industry made a wonderful contribution to the nation's safety. What it has done in post-war years everyone will agree is something of a record.
But in the labour and trade union world there are long memories, and those employed in the industry remember what happened after the First World War. With your Lordships' permission, I should like to quote from what is now a rare document, a pamphlet entitled, What is
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Wrong with the British Iron and Steel Industry, issued by the Confederation in 1930 and dealing with the problem of unemployment. Incidentally, although it is not germane to the point I am making, in this document the Confederation ask for something very much like what was put on the Statute Book by the Labour Government. This is what the statement says, regarding the conditions after the First World War:
"After about twelve months of inflated trade, the industry in 1920–21 dropped into the inevitable slump. During the years that have elapsed, in which the industry has been struggling to find an outlet for its products, prices as regards a considerable percentage of those products have dropped to a level even below the cost of production. Wages have followed suit and abnormal conditions of employment and unemployment have occurred."
The statement goes on to set out figures comparing unemployment in the iron and steel industry with general unemployment. In 1924, the yearly average of unemployment in the pig iron industry was 14.3 and in steel smelting, iron puddling furnaces and rolling mills, it was 21.1, while the general level was 10.4. So it went on (I will not trouble your Lordships with all the figures) until 1930, when in the pig iron trade unemployment was 23.9 and in steel smelting, et cetera, 34.1, while the general level of unemployment was 16.6. Throughout the whole table unemployment in the iron and steel industry was approximately double the general rate of unemployment in the country. That condition prevailed almost up to the outbreak of the Second World War, notwithstanding the burst of employment which came from a measure of rearmament.
Strange as it may seem to noble Lords opposite, we on these Benches hold that those who have invested their labour power in this industry have an interest second to none in it. My first Amendment endeavours to place fairly and squarely on the shoulders of the Board the duty of endeavouring to secure and maintain full employment. The noble Lords in charge of the Bill say that they are going back to competition; they do not even say regulated competition or licensed competition, but back to the days of laissez faire. The noble Marquess who leads the House says that they are the evolutionary Party and we are the "stick-in-the-muds"—but they are going back to the very condition in which the

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iron and steel industry was twenty years ago, described in this pamphlet issued by the Confederation. They are the backward-looking Party and we the forward-looking.
In order to avoid a second discussion, may I say a word or two in regard to the next Amendment? The first Amendment endeavours to place the responsibility for securing and maintaining full employment in the industry fairly and squarely on the Board. If that is not accepted, the second Amendment provides the alternative: that the Government should assume responsibility. That is in accordance with the White Paper in regard to full employment which was issued by the Government before the 1939–45 war came to an end. If we wish this industry to continue to make its great contribution to the export trade and to the national well-being, please do not even seem to indicate to those engaged in the industry on the labour side that they are going back to the terrible conditions which obtained in the inter-war years. Surely, it is not too much to ask that in a Bill of this kind the Government should declare their intention that, so far as it is humanly possible, they will endeavour to secure that the workers in the industry never go back again to those dark days. In that spirit, I plead with the other side to accept this Amendment.
Amendment moved—
Page 4, line 48, at end, insert the said subsection.—(Lord Burden.)
LORD MANCROFT: The noble Lord, Lord Burden, has given us an interesting and characteristic speech. I do not think that anybody could complain of the general sentiments to which he gave expression. He hoped to see an industry in which full employment is the order of the day; he deplored and was horrified at the prospect, or the possibility, of any return to conditions of unemployment within the industry. Nobody on any side of the House could possibly disagree with him for one moment. But what I do disagree with him about is his attempt to incorporate these sentiments at this juncture in this Bill. This Amendment would insert a new subsection requiring the Board in discharge of their general duty to have regard to
"the need to secure full employment…and to any other considerations relating to the national interest to which the Minister may have asked them to have regard."
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As I see it, the arguments against a provision of this kind are these. This is an attempt by the noble Lord to give the Board a responsibility for a matter of public interest far beyond the scope of the iron and steel industry. A Board set up to supervise a particular industry is not a suitable body to judge matters affecting full employment. The Board will agree, of course, with every sentiment expressed by the noble Lord, Lord Burden. The maintenance of an efficient and healthy steel industry, in itself, would make a most vital contribution to the maintenance of full employment. After all, cheap steel has undoubtedly helped the competitive position of the engineering industry in this country in its overseas markets, and thus helped to earn foreign currency to buy the materials to ensure the full employment to which the noble Lord, Lord Burden, and all of us, naturally attach so much importance. But this is already covered, I suggest, by the Board's general duty. In the last resort, only the Government can be responsible for the creation of the conditions which make full employment possible, by internal financial, economic and social policies and by agreements with foreign countries. In practice, of course, the Board could not fail to bear in mind considerations bearing on full employment. As I suggested to the noble Lord, Lord Wilmot, a few moments ago, how could the Board hope to do its duty and be concerned with a happy and efficient industry if conditions of full employment were not the aim of the Board, of the industry, and of all concerned?
I must on this particular aspect conclude by emphasising to the noble Lord as strongly as I can that, however desirable these sentiments may be (and they are), the responsibility must be the Government's. It must not be thought for a moment that by refusing—as I am afraid I am—to accept the noble Lord's Amendment on full employment, and his second Amendment, that the Board will be forbidden to have these considerations in mind. That would be the grossest distortion. I would, however, point out that the Government introduced an Amendment in another place which, in connection with the Board's general development functions, required them, without prejudice to their general duty, to have regard to any considerations relating to employment or to the national

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interest to which the Minister asked them to have regard. That is Clause 5 (2), at which I think the noble Lord is now looking. The present Amendment is similar to that subsection, but extends it to the whole of the Board's duty. There is also the important difference that "the need for full employment" is placed upon the Board as an absolute criterion. This would be quite unacceptable, for the reasons I have already given to your Lordships. It seems to me that full employment and the national interest will principally be served by efficient, economic and adequate production, which it is the Board's general duty to promote.
There are various particular fields in which they have functions: principally development, prices and raw materials; secondarily, research, training, welfare, joint consultation, and so on. In the field of development there may occasionally be scope for the Board to take account of considerations outside the strict confines of their general duty. It was for this reason that the Government inserted subsection (2) of Clause 5, to which I have just referred the noble Lord. In the field of prices there is already power (this is in Clause10) for the Minister to override the Board in the national interest, and this provides an adequate means for the Minister to bring full employment and other national considerations into the balance. In connection with raw materials, clearly the national interest and full employment can only be served by the Board taking steps in pursuit of their general duty to see that the necessary raw materials for efficient economic and adequate production are available. In regard to the secondary matters to which I referred, it is clear again that the national interest and full employment will best be served by the Board taking such action as will best further their general duty—and their general duty includes high up on the list the well-being and general happiness of the industry.
To sum up, the Amendment in the name of the noble Lord, Lord Burden, is, I would respectfully suggest, unnecessary, because the Bill already provides for wider considerations affecting the national interest to be taken account of in connection with development and prices, and in other matters such considerations are
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secondary to the prime consideration of efficient, economic and adequate production. It is further undesirable, in my submission, because it would look like a qualification upon the Board's general duty and would tend to blur, I should have thought, what, because of its paramount importance, should be clear-cut and well defined. That, I am afraid, is the firm opinion of Her Majesty's Government. I cannot offer the noble Lord any hope on that Amendment, any more than I can on the next Amendment which he has down and with which, since he spoke on the two together, he would perhaps like me to deal briefly at the same time.
Much of the argument I have directed towards his first Amendment applies to this one, too. This is slightly different, because it would allow the Minister to give the Board directions, whether general or specific, about the performance of their duty in the interests of full employment or for any other reason in the national interest. This Amendment is even wider and stronger than the previous one. The power which he envisages giving to the Minister would run completely counter to the Government's conception of the Board as a high-powered policy-making body, responsible in general, but not in detail, to the Minister, and through him to Parliament. Such a power would, in the opinion of the Government, seriously undermine the stature of the Board and would probably have the effect of discouraging really able men from accepting appointment to it. Therefore, I am afraid we cannot accept this Amendment either.
I would conclude by repeating what I said at first, because I think it is important that the Government should not lay themselves open to any accusation by those who may not perhaps have read this debate very carefully that they do not wholly agree with the noble Lord, Lord Burden, in the sentiments he expressed about full employment and the horrors of unemployment. Of course, we agree about that. But the Government feel that the best way of promoting the objects which the noble Lord has so rightly in mind—and which we, too, on this side of the House have in mind, as no doubt he will readily accept—is by a happy industry, and by a Board carrying out the duties with which it is charged. Those two—a happy industry and full

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employment—must march together. But to include in the Bill the specific provisions that the noble Lord specifies in his two Amendments would, we feel, be inappropriate and would run quite counter to our whole conception of the functions of the Board, the Minister and, indeed, of Her Majesty's Government. Therefore, I am afraid I cannot accept either of the two Amendments.
LORD SHEPHERD: I understand from the noble Lord, Lord Mancroft, that the principal objection to the Amendment that has been moved is the desire that improper powers shall not be given to the Board.
LORD MANCROFT: Irrelevant powers.
LORD SHEPHERD: That irrelevant powers shall not be given to the Board. The Government do not want the Board to intervene too meticulously in the management and running of the industry.
LORD MANCROFT: That is true, of course; but it is not quite the point I was making. What I was saying was that this is not the function of the Board at all. That is the point.
LORD SHEPHERD: I am glad to know that I have been talking upon the subject which the noble Lord said is within the compass of the intention of the Government. But I would remind him of his own intervention in the debate—that whilst the Government feel unable to give us the Amendment which we have proposed, the Government themselves in another place have given authority to the Minister to authorise the Board to intervene in the subject on which Lord Mancroft said they ought not to have authority at all. I would join issue with him there, because if a body like the Board is going to overlook an industry of this kind, it has not only to consider the position of raw materials and the like but has also to consider the provision of labour and the maintenance of that labour, in the work of producing the commodities which the industry turns out. I noticed that the noble Lord indicated that, without giving this Board a simple authority to deal with the question of employment, the effect of the Board's work will be success in the industry. If you get success in the industry, he repeats, there can be no better way of guaranteeing
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employment. If the noble Lord will look back, as my noble friend has indicated to him, at the record of this industry during the last fifty years, he will find that an industry divided against itself has been remarkable for the degree of unemployment that existed. Indeed, during the period when unemployment was rife in those industries some of the greatest fortunes in the land were made.
There is another important reason why we should like this proposal put into the clause. It may well be found necessary, as it was in the pre-war period under competitive conditions, to adopt a scheme for reorganisation for the purpose of reducing the costs of production. If that were to take place, it is on the cards that by that action there would be a turning off of a great deal of labour formerly employed. The making of an efficient industry may give rise to questions of employment and they might be as dangerous as they were then. Indeed, noble Lords opposite will remember that the National Government which existed from 1931 onwards joined with the Steel Federation of Great Britain in the reorganisation of that industry, which brought about the closing down of mills and furnaces; and the concentration of work in a fewer number of places led to the discharge of a great number of men. It is conceivable that under the new conditions some sort of reorganisation will take place. If that is the case, we suggest that it is of the highest importance that there should be some degree of authority to the Board, to have regard not only to cutting down costs but also to the provision and maintenance of full employment.
I agree with the noble Lord, Lord Mancroft., that full employment is a responsibilily of the Government as a whole on behalf of the people of the United Kingdom. If an industry is organised under Government auspices, the Government naturally have the matter under complete control. But if we are to divide up industry in the way proposed in this Bill, the Government, if a way is to be found to produce full employment, will have to do so through fie agency of those continuing the industry. It will be impossible for the Government to guarantee full employment to the people employed in a competitive industry unless the Board which this Bill proposes is given authority to have regard—and this is all our

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Amendment says—to the provision of full employment as being one of the important principles at stake. If we have a nationalised industry it is for the Government to say what it requires in that industry. But if industry is under private enterprise, and it is still the responsibility of the Government that full employment should be maintained, then only through the agencies attached to that industry can the Government's wish and purpose be carried out.
6.26 p.m.
VISCOUNT BRIDGEMAN: I think we may be in danger of misconceiving the attitude of the House on the question which is the subject of this Amendment. As my noble friend in front of me has said, there can be no question but that everybody in this House, irrespective of Party, wishes to do everything possible to avoid conditions of unemployment and hardship to the workers, in this industry or any other. But although one can say that with all one's heart, it does not therefore follow that that is a reason for putting words to that effect into this or that Bill.
The other thing which strikes me, not only about this Amendment but, if I may refer to them, about some Amendments which have gone before, is that a number of the Amendments proposed by noble Lords opposite seem to us to have the effect of placing upon the Board responsibilities far outside the scope of the steel industry itself, and extending into the realms of the economic conditions of this country. That, I am quite sure, is wrong. After all, so long as the economic conditions of this country are good, the steel industry, like any other industry, will be fully employed; and there is the incentive there, not only to the workers to do their best but to the employers to employ as many of them as possible. In any industry like the steel industry, where labour conditions have traditionally been extremely good, as they are now, that will work. When you get to a state of affairs such as existed in the early 'thirties, which noble Lords opposite have in their minds, you have a condition where the maintenance of full employment, in this industry or any other, is a problem reaching far beyond the bounds of the industry itself. The only way in which the steel industry can maintain
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full employment if orders are not there is for the Government to take such action as will keep the steel mills working, by providing orders which might not otherwise have been provided. There is no other way to do it. That I am quite certain is something far beyond the capacity of the steel industry itself and, therefore, far beyond what ought to be the purview of the Steel Board, because the Steel Board is a body which has been set up to deal with the steel industry and not to deal with the political considerations outside it.
Therefore, do we not come back to this? If a situation like that arises—a situation which we all want to avoid—is that not a matter for the Government of the day, and have not the Government of the day proper powers in the Bill itself? In Clause 5 (2)—a clause which I think was slightly misquoted by the noble Lord, Lord Shepherd—the important feature is that the Minister may ask the Board to take into account any circumstances which he, the Minister, should take into account. In those circumstances, surely we include any such circumstances as might arise from the sort of national crisis which noble Lords opposite have in mind.
LORD SHEPHERD: May I intervene? I was not misquoting, as the noble Viscount suggests. I was merely indicating that the noble Lord, Lord Mancroft, had said that the Board was the wrong institution to be given such powers, whereas in the subsection now being quoted by the noble Viscount, the Minister has the right to give them such powers, and I could not see how it was possible to square the two.
VISCOUNT BRIDGEMAN: I think they square perfectly well. The Board should not have power themselves to deal with economic difficulties outside the industry. The Minister should certainly have powers to ask the Board to take into consideration any matters to which he thinks they should have regard. Surely that would apply to the matter of full employment, or, if the worst came to the worst, to unemployment. I feel that this problem of unemployment is one which is well taken care of in the Bill, and I think we should be wise not to try to impose on the Board powers which go far outside their real business, which concerns the steel industry itself.
LORD LAWSON: I apologise for the fact that I was not here to move this Amendment, as was originally arranged. The noble Viscount, Lord Bridgeman, has just said that this is a matter to which the Government, and not the Board, should have regard. One of the outstanding problems in the last war was that in most of the heavy industries (I am fairly familiar with the heavy industrial areas) no notice whatever was taken by the privately run industry of the need for conserving a strong esprit de corps among the skilled workmen particularly, to say nothing of the unskilled workers in the great industries.
VISCOUNT BRIDGEMAN: I am sorry to interrupt. Surely, the words that the noble Lord has just used, to the effect that no steps were taken by heavy industry to preserve an esprit de corps, were rather strong and very sweeping. I do not want to take up the time of the House, but I should like to give the noble Lord afterwards several instances of cases in which that was done. We must not allow it to go out of this House unchallenged that no steps were taken.
LORD MANCROFT: Exactly what period has the noble Lord in mind at the moment?
LORD LAWSON: I had in mind 1939. As a matter of fact, in the shipyards the most outstanding factor was that if it had not been for the "phony war" we should have been in a very bad situation indeed, because not only skilled but the great corps of unskilled men—known as "black gangs"—had to leave the shipyards. It was a well-known fact that they were dissipated in the most alarming way, so that they could not be found when they were wanted. We did manage to pick up some of the older men and get a kind of "scratch" gang together to deal with the situation. But as I say, had it not been for the "phoney war" at that time, we should have been in a very difficult position indeed. I know this for myself: I speak with knowledge of the matter.
It is also a well-known fact that these men, who were dissipated and dispersed all over the place, were doing jobs that were little better than making dolls' eyes—at the very time that the Government were crying out for them. I should have thought that that industry, upon
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which the country is so dependent, is an outstanding instance and a living proof of the fact that there mast be some relation between these Boards and the Government of the day, so that the men can be sure that they are not being let down. I will not detain the House, but I could speak at considerable length on this matter, because I was deeply involved in the special areas in the North. I remember how heartbreaking it was to see highly qualified men from the shipyards and heavy industries practically driven away. It fact, I myself had to get them away to get them jobs, to industries that were certainly not worthy of this country, considering the high degree of skill of these men. There should be some close contact between the Boards of nationalised industries or semi-nationalised industries—call them what you will—and the Government; and it is essential that the Government should know what is the state of things in the industry, and that the industry should know exactly what is the policy of the Government of the day.
LORD SILKIN: I think it is a great pity that the Government have decided not to accept either of these Amendments or anything which resembles them. It seems to me that the reasons given by both the noble Lord, Lord Mancroft, and the noble Viscount, Lord Bridgeman, take little account of the actual wording of these Amendments. As I understand it, the reason given is that it is not the job of the Board to concern itself with full employment, but that that is a matter for the Government. I accept fully the fact that this Government, as indeed any Government in modern times, have to concern themselves with the problem of full employment. No Government could live long in these times unless that was one of their dominating concerns. Therefore, I am not making the slightest imputation against the Government, or suggesting that they are indifferent to the question of employment. But it seems that the reasons given are involved in the doctrine of good government—that this is a matter with which the Government must concern itself and not one on which the Board either has the information on which it could act or could properly act, even if it had the information.

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Now let us look at the Amendments and see what they say. The first says that the Board shall have regard to these matters and:
"…to any other considerations relating to the national interest to which the Minister may have asked them to have regard."
In other words, they are not asked to take the initiative themselves. According to the Amendments—orat any rate according to the intention of the Amendments—they would concern themselves with the question of employment only when they are asked by the Minister to do so. But the second of the two Amendments is even stronger, because it gives the Minister power at any time to give to the Board—he may: he is not obliged—
"directions as to the performance of their duty to secure full employment.…"
LORD MANCROFT: The noble Lord keeps on saying "full employment." He would be more revealing if he were to read the remainder of the words
"in Great Britain."
The Amendment does not say "here and there" or "in this industry or that": it says "full employment in Great Britain."
LORD SILKIN: I prefaced my remarks, as I would on any Amendment, that it may well be that the wording of the Amendment is capable of improvement.
LORD MANCROFT: Hear, hear!
LORD SILKIN: Well, it was so even in the days when the noble Lord and his friends were in Opposition. We have not a skilled draftsman at our disposal, and it is conceivable that frequently we could be tripped up on words. But nobody is out to trip us up, I am sure, on the literal wording of our Amendments—though we are entitled to do it to the Government, because they have got draftsmen. If the noble Lord or the noble Viscount understands this Amendment to mean that a Board concerned with operations in iron and steel should deal with full employment throughout the country and in every industry, of course, I would agree with what they have said in their criticisms. But obviously that is not the intention—and none of the speeches in support of the Amendments lends colour to that interpretation. My noble friend Lord Lawson, for instance, dealt specifically
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with unemployment in the iron and steel industry; and so did my noble friend Lord Burden. And that industry is, of course, what we are talking about. So I say that, if that is to be regarded as the intention of the Amendment, the second Amendment makes it quite clear that what we are asking is that the Minister shall be in a position, if he so desires, to give directions to the Board to have regard to these questions. Why not? Questions will arise as to whether or not a particular concern should be closed down. As the Bill stands at present, the Board will have regard to questions of efficiency, questions of price and so on—the various considerations are set out in the Bill. Why should not the Minister have the right to give a direction asking the Board, in addition to the considerations that are already set out, also to have regard to the question of the employment of the industry? After all, it can be a very serious matter.
Let us take, as an example, the question of the new town of Corby, where vast sums of public money are involved in the building of a new town, and where people have been recruited from all over the country for the purpose of employment by Stewart and Lloyds in this industry. Supposing that there were some suggestion—it may be fanciful—that something should be done in connection with Stewart and Lloyds, that they should be slowed down or that the industry in that area should cease altogether, this would have repercussions upon tens of thousands of people. Eventually, the new town will be a town of something like 80,000 people, nearly all of them directly concerned with this industry. Is it to be suggested that the Minister or the Board should have no concern at all with this; that they should make their decision on the question of what should happen at Corby merely on the ground of "the efficient, economic and adequate supply of iron and steel products," without regard at all to the social capital that is involved in the creation of the town of Corby and without regard to the welfare of the individuals who are employed in the industry? All that this Amendment seeks to do is to give the Minister power in a proper case, within his own discretion to give a direction to the Board—does the noble Viscount, Lord Davidson, wish to say something?
VISCOUNT DAVIDSON: Only that under Clause 5, subsection (2), that is fully provided. May I read it?
"Without prejudice to the promotion of the efficient, economic and adequate supply of iron and steel products, the Board shall, in their consultations under the preceding subsection, have regard to any considerations relating to employment in Great Britain or otherwise relating to the national interest to which the Minister may have asked them to have regard."
Surely that is it?
LORD SILKIN: I admit that that goes part of the way, but the second Amendment, at any rate, goes much further, because it enables the Minister to give a direction to the Board on this subject. It is a much stronger Amendment; it is a much stronger provision, and it is of a much more general character. Of the two Amendments, if I had to choose between them, I think I should prefer the second. Just as noble Lords opposite were anxious to keep in the Bill the words "under competitive conditions," as a demonstration that it was important to have competition in this industry, so I think it is desirable to have the strongest possible words in this Bill to indicate that employment in the industry is something with which we are deeply concerned, and that it is to be one of the important factors in the functions of the Board when asked by the Minister to have regard to it. For those reasons, while I would not at all pledge myself to the exact wording of either of these Amendments, I hope that the Government will see their way to reconsider the matter between now and the next stage, with a view to giving us something which will be a declaration of their intentions as regards employment.
LORD LAYTON: May I ask the noble Lord who has just sat down whether he does not regard Clause 5, subsection (2), as mandatory on the Board? Because the Bill says earlier on that the Board shall have regard to considerations to which the Minister may have asked them to have regard. Is that any weaker in direction? It seems to me, if I may say so, that that subsection has identically the same mandatory effect as the second of these Amendments, and that as between the two the only difference is that the Amendment now being moved covers all the functions of the Board, as distinct from production facilities and raw materials. As the Government have
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accepted the principle in subsection (2) I do not see any clear reason why they should not do so for the whole of the functions of the Board.
LORD STRABOLGI: Surely the difference is that what we are trying to consider and do in our Amendment places the onus on the Minister. It is permissive for the Minister; it gives him the right; he may act at any time if he thinks the Board is not paying enough attention to these questions. I think the noble Lord, Lord Silkin, supports me there and will probably be grateful to me for answering the noble Lord, Lord Layton.
I have taken the opportunity to do so because I want also to say a word on the general principle. In these debates, noble Lord after noble Lord arises from the other side of the House, figuratively lays his hand on his heart and says, "Whatever happens, we are going to fight and struggle to keep full employment for the workers of Great Britain. Any other suggestion is unfair to us, unjust, libellous and all the rest of it." That is what they are saying, and I am sure they are meaning it. That is within the precincts of this Chamber. But what happens outside? Their supporters, or a very large proportion of their supporters, are business tycoons who provide the great sinews of war for the Conservative Party, who are the driving force of big business in this country and who believe that full employment is not in the best interest of their particular system.
SEVERAL NOBLE LORDS: Shame!
LORD STRABOLGI: What is the use of noble Lords saying "Shame"? It is perfectly well known.
LORD MANCROFT: By whom?
THE EARL OF ONSLOW: By whom?
LORD STRABOLGI: As I said, by many of the great leaders of industry, or the leaders of the great industries in this country, who believe that full employment means slackness on the part of the workers, too strong trade unions, and that it would be to the advantage of the country—and they are quite cynical about this—from time to time to have a good dose of unemployment.
LORD MANCROFT: That is a monstrous thing to say.
LORD STRABOLGI: It is not monstrous. Does not the noble Lord know what is being said outside this House? I do not know what he does with himself in his spare time.
LORD MANCROFT: The noble Lord is speaking rubbish.
LORD STRABOLGI: These things are being said and are being written in papers like the Economist.
Now let me come to the actual proof of what happened in the past. We can read from history. I see the noble Viscount, Lord Davidson, who is one of those who protest that of course the last thing the Conservative Party want to see is anything but full employment. He occupied a very important position in the Governments which followed upon the First World War, when we had a deliberate and considered policy of deflation and the throwing out of work of large bodies of men for deflationary purposes, followed by tremendous industrial troubles, strikes and lock-outs which caused great injury to this country.
Now we have had the second Budget of the present Chancellor of the Exchequer. I do not want to go into the details of that because I presume that in due course it will come before us in the ordinary way, as a Finance Bill. The second Budget of the present Government is a gamble. It is hoped that it will keep things on an even keel. It is hoped that it will give a certain incentive towards increased business efficiency, and so on. But it may easily fail. Half a dozen factors may upset it. What is the alternative then? The alternative then is a good dose of deflation, the throwing out of work of great numbers of men as a consequence, the lowering of wages and the standard of living in that way, and an attempt to bring about a balance in our economy exactly as was done after the 1918 War. I do not say that the noble Viscount, Lord Davidson, had anything to do with it at the time, but he was a prominent member of the Government which was ultimately responsible and which listened to the promptings and advice of the then leaders of the City of London and the great industrial leaders of the country.
What happened has been explained by my noble friend Lord Lawson, speaking from his great experience as a trade union leader. He saw it happening in the North of England. I, as a member of
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Parliament, saw it happen. He saw it as a great trade union leader. It is that sort of thing which we are hoping to prevent, by any means we can, because in the long run it is bad for the country, bad for the nation and particularly bad for the working people. Whatever our shortcomings on these Benches, we try to speak in what we think are the interests of the great mass of the workers of the country. We think that words of this sort are necessary and desirable, and we all regret very much that the Government cannot accept them, or at any rate propose some alternative form of words which will fulfil the same purpose.
LORD WINSTER: This House will certainly be a vastly entertaining place if we occupy our speeches with saying how we spend our spare time, but it might not in every case conduce to our reputation with the outside public. I hope the suggestion will not be generally adopted.
LORD STRABOLGI: I made no reflection on noble Lords opposite.
LORD WINSTER: I do not look around always making reflections or to see that reflections are implied; I leave that to others to do. But I should like in one or two words to support what was said by the noble Lord, Lord Lawson, about the effect in the shipbuilding yards of the dreadful unemployment which took place in the steel industry. That was a really dreadful period in the industry. But it is over, and it is no good going over it except to draw one or two useful conclusions from it. Certainly, at the Admiralty in the early stages of the war I had the opportunity of knowing how unfortunate were the effects in our shipyards of the withdrawal of labour from the shipyards which followed upon unemployment in the steel industry. Undoubtedly, we were put to very great straits on that account, and suffered severely in more than one respect.
On the subject of the Amendment I should like to say this. The Explanatory Memorandum to the Bill says that it provides for the return to private ownership of the undertakings in question. Well, I should have liked to see the Bill accept the fact that private ownership must have close regard indeed to employment. I think it would be unfortunate, by way of contrast, to say that

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a nationalised industry pays close attention to employment or full employment, but that when the industry is returned to private ownership that consideration is, to some extent, lost sight of. I should have thought that the Government would be very anxious indeed to connect that statement in the Explanatory Memorandum, that the Bill provides for the return to private ownership, with something in the Bill to show that private ownership will have this close regard to employment or full employment. I should have thought it would be a very good advertisement for the Government in regard to what they are doing, and I am very surprised that they have not taken that opportunity. I hope I do not misunderstand the noble Lord, Lord Mancroft, but I thought that at one time he took exception to the words "Great Britain" in the Amendment. I do not want to misquote him in any way at all—
LORD MANCROFT: I did not take exception at all. I merely asked the noble Lord, Lord Silkin, when he was referring to the Amendment, to read it out with the words "Great Britain"—not that I take exception to them, but merely to get the constant reiteration of the words "full employment in Great Britain." I was only making the debating point that full employment in Great Britain was outside the scope of the Bill; but if it was a question of full employment in the industry, then I was arguing that the best way of obtaining full employment in the industry was by the Board carrying out its functions in order to obtain a happy industry.
LORD WINSTER: I quite understand. I am sure my noble friend will agree that to some extent the wording is irrelevant, provided the Amendment takes into account this question of having regard to full employment. In that regard I think we should be quite amenable, as far as the meaning is concerned.
Two other points have occurred to me. If we look at Clause 2 (3), we find there a reference to the Board having regard to organisation and administration, and then, again, in Clause 3, we find that the Board has to have regard to training and education and to welfare. The Board is charged with those responsibilities for looking after organisations and administration, which I should think concerned very closely indeed the matter of employment,
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and also training, education and welfare. But what is the need for training and educating your workers and having regard to their welfare if it does not extend to having very close regard indeed to their employment? I should have thought that it was implicit in those directions to the Board, and that therefore the Government could have no possible objection whatsoever to mentioning the question of employment in connection with the duties of the Board. Finally, I would say that in many places throughout the Bill and throughout the directions to the Board reference is made to the Board's doing things in the national interest. I must confess that I have difficulty in understanding what could be more in the national interest than establishing a happy and contented labour force in this great industry, through having due regard to the full employment of the labour force.
VISCOUNT DAVIDSON: I should not have intervened except for a very few moments, had it not been that Lord Lawson has arrived in the Chamber. I know what a passionate interest he took in the employment of his people in the North before the war. He knows that when I was in another place I also had occasion to take a very keen interest in unemployment, or rather in the cure of unemployment, if that were possible. But in relation to this Amendment, as it seems to me, the point is a very simple one. It is that the Board, as an industrial body, will be staffed by people who are experts in their particular walk of life: management and labour, and the consumer of steel goods and other independent persons. It is inconceivable that they should not be interested in employment in the industry which they supervise. Therefore, I think the only result of accepting this Amendment would be to take out of the hands of the Government their responsibility for full employment. It could not possibly be a function of a Board restricted in their supervision to one industry. That is why I hope the noble Lords across the floor will withdraw their Amendments.
7.0 p.m.
THE MARQUESS OF SALISBURY: Perhaps I may say a word in conclusion. We have had, I think, an interesting and valuable debate on these Amendments. I regretted the intervention of the noble Lord, Lord Strabolgi, who did not seem

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to me to heighten the general standard. I have long known him to be an adept at what I may call slinging mud in the hope that some of it may stick. I should have thought he was old enough to realise that in the long run that hurts nobody but himself. It is not going to have the slightest effect on the Conservative Party. Everybody knows that what he said is not true. It has a bad effect on himself. Certainly the making of reckless statements of that kind, for which he did not produce any evidence at all, has an effect on his reputation in the country and in the House. His reputation as an accurate speaker in this House is his affair, and I do not propose to take it any further, but I should like to repeat that it seems to me to be absolute insanity to say that either the Conservative Party or any other Party should want unemployment for its own sake. There was a long slump, which was world wide and not confined to this country, and unemployment was at least as high at the time when the Labour Party were in office as when we were in office. I do not think the Labour Party were entirely responsible for that. I would be the last person to suggest such a thing. It was something much bigger than any purely British Government could tackle at that time. To suggest that we were responsible is equally wrong.
After all, there is every reason why any Government should want the working people to be employed. First, there is the obvious reason, which I think is common to us all and which was mentioned by the noble Lord, Lord Lawson, that unemployment is in itself a dreadful and a degrading thing to people who are unemployed for a long time. I should not have thought that any responsible person in any Party would desire such a situation as that for his fellow countrymen. Even if we were not humanitarian and were purely hard-boiled businessmen or economists, or whatever it may be, we should have thought it deplorable from a purely economic point of view. A man who is unemployed is unproductive; he is not playing his full part in increasing the general wealth and prosperity of the country. From that point of view, equally, it is undesirable that men and women should be unemployed. Therefore I think we can take it that it is generally accepted in all parts of the
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House that everybody of a responsible character, in whatever Party he is, wishes to see the working people of this country fully employed. I think that is common ground, and I do not believe that anyone, except the noble Lord, Lord Strabolgi, would disagree with it.
Now I come to the Amendments themselves, which I am sure are sincerely designed to bring about that result, or anyway to help towards that result. My case has already been put by my noble friend Lord Mancroft and others. However well-intentioned the Amendments are, they still seem to me, after I have listened to the whole of the debate, to be an attempt to give the Board a responsibility for matters which are really outside the scope of the iron and steel industry alone. Clause 3, which we have been discussing, deals with the supervision of the iron and steel industry. It is concerned with increasing the productive capacity of the industry and with no other purpose whatever. As my noble friend, Lord Davidson, has just pointed out, unfortunately one cannot confine unemployment to the iron and steel industry or even consider unemployment in the iron and steel industry by itself. It is a much larger question, which can be tackled as a whole only by the Government.
I do not think a reference to unemployment would be appropriate in Clause 3, and here I come to the point very properly raised by the noble Lord, Lord Layton. If we turn to Clause 5 (2) we see that almost exactly the same words as those in the noble Lord's Amendments are already in the Bill. The subsection reads:
"Without prejudice to the promotion of the efficient, economic and adequate supply of iron and steel products, the Board shall, in their consultations under the preceding subsection, have regard to any considerations relating to employment in Great Britain or otherwise relating to the national interest to which the Minister may have asked them to have regard."
That seems to me exactly what noble Lords opposite want, and I think the words are properly placed where they are. I do not think this Amendment would be in its proper place in Clause 3, and I could not give the noble Lord any assurance that we would put it in Clause 3. It is there in the Bill and that is what the noble Lords want. I should have thought they would be satisfied with that.
LORD WILMOT OF SELMESTON: I rise at this point only to say that I think the noble Marquess was unwittingly unduly severe in his strictures upon my noble friend Lord Strabolgi. Let me say why I think so. If I heard my noble friend aright, he had no intention of imputing to noble Lords opposite any such foolish thought as that they would welcome unemployment. I cannot believe that any Member of this House would have such stupid thoughts at any time. What my noble friend said was that some commercial people do say that they think perhaps it would be an advantage if there were a modicum of unemployment. We are men of the world; we mix with commercial characters, and which of us can say that we have never heard anybody say that? Of course, it is exceedingly foolish. It is a doctrine which was exploded long ago, and all of us now realise the truth of what we were told by Maynard Keynes, among others: that what we can do we can afford to do—one of the greatest truths that was ever said; and I am sure everybody realises that. But there are ignorant people who have not learned that lesson, who think that costs would come down and wages would come down, and that the trade unions would be less belligerent if there were a little queue outside the Labour Exchange—not a long queue, that would affect the market very much, but one long enough to affect the temper of the belligerent unionists. We know that such talk is stupid, and I am sure that neither my noble friend nor anybody else on this side of the House would be so foolish as to think that any Member of the House versed in the conduct of public affairs would be likely to join with such foolish people in holding these views.
THE MARQUESS OF SALISBURY: When I was at Geneva, in the days before the war, there was a process known to the League of Nations as "the reinterpretation of affairs." I think the noble Lord, Lord Wilmot, has given an. extremely agreeable and absolutely brilliant reinterpretation of the speech already made by the noble Lord, Lord Strabolgi, but I beg him to read the two speeches to-morrow morning and see whether they look exactly the same.
LORD STRABOLGI: As the noble Lords who have wound up the debate have referred to my speech, I shall take advantage of that fact to make one further comment. The noble Marquess, Lord Salisbury, the noble Viscount, Lord Swinton, and others were prominent in the Government of this country between the wars. They will remember the extremely injurious policy pursued by the then Conservative Government, in which the present Prime Minister was Chancellor of the Exchequer, when, in order to make the pound able to look the dollar in the face, we had a deliberate policy of deflation, a deliberate raising of the value of gold. We then, prematurely, went back on to the gold standard, and the result was the dislocation of our labour markets and tremendous a unmployment. In effect, the Government did not care about unemployment, which went up and up. So long as we could go back on to the gold standard, in the most foolish way, for a ridiculous question of prestige, then the consequences could follow. That happened between the wars. We do not want to see anything like that happen again. The present Government, with their narrow majority, are not trying to do that; but there may be other circumstances and conditions; and "when the devil is well" the devil again will be a devil.
LORD LAWSON: I am sorry, but I cannot withdraw this Amendment. I feel that the only way of handling this matter is to lay the full responsibility squarely on the Board.
On Question, Amendment negatived.
THE MARQUESS OF SALISBURY: Before we go on to the next Amendment, perhaps I may say a word about the business of the House. I had hoped that we should have got a little further forward than we have to-day. However, we do not complain; we have had valuable discussions which have served to clear our own minds and the minds of others. We did agree that we should stop at seven o'clock, and it is now quarter-pasts even. In the circumstances, I do not think it would be worth while to start another rather controversial Amendment. Therefore, I suggest, it is agreeable to your Lordships, that we should now adjourn the Committee stage. I only hope that it may be possible for us to make

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rather more rapid progress to-morrow. If we do not, I suggest that noble Lords should so make their arrangements that we might sit a little later, if necessary. Having said that, I now move that the House do resume.
Moved, That the House do now resume.—(The Marquess of Salisbury.)
On Question, Motion agreed to, and House resumed accordingly.
House adjourned at a quarter past seven o'clock