Lords Sitting of 21 April 1953

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

  BUSINESS OF THE HOUSE
  2.36 p.m.
  THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): My Lords, before we proceed to the Business of the day, I think it may be convenient if I say a word about our future Business. Last night, in moving the Adjournment of the House, I suggested to your Lordships that we should continue to-day rather later than we had yesterday with a view to making progress with the Committee stage of the Iron and Steel Bill. But I have made inquiries since then, and my strong impression is that it would be much more convenient for noble Lords in all parts of the House if we did not do that, and if we adjourned at about seven o'clock, the same time as last night. That, of course, may well entail continuing to-morrow, but in that case I am quite certain that the House will be willing to take for that purpose whatever time is necessary. One might hope, in any case, that we could finish our discussion on this Bill by 4.30 p.m. to-morrow, at the latest, and then we should be able to devote our attention to the Motion on Nursing Services which stands in the name of the noble Lord, Lord Crook. I may say that I understand that the noble Lord, Lord Crook, has kindly consented to give way so that we can take the Iron and Steel Bill first, though I fear that it puts him to considerable inconvenience, as he has to leave the House at 6.30 o'clock on account of other engagements that he already has. I hope, therefore, that whatever noble Lords may feel like doing today, they will make their remarks extremely brief to-morrow.
  EARL JOWITT: My Lords, we will certainly do what we can to help. Having every reason for bearing in mind the posi-
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  tion of my noble friend Lord Crook, I have no doubt that we shall be able to accommodate him.

FOREIGN EXPORT TAXES ON COTTON
2.38 p.m.
VISCOUNT GOSCHEN: My Lords, on behalf of my noble friend Lord Barnby, who has asked me to apologise for his unavoidable absence this afternoon, I beg to ask the Question standing in his name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, in view of the reply given in the House on the 6th May, 1952, they will state the number of countries which continue to impose export tax on cotton.]
LORD MANCROFT: My Lords, there have been several changes in the list of countries and the rates of tax since May, 1952, when my noble friend Lord Lloyd replied to the Question which is referred to in the Question put on behalf of Lord Barnby by my noble friend Lord Goschen. So far as Her Majesty's Government can trace, there are now eighteen territories imposing export taxes on cotton. With the permission of my noble friend Lord Goschen and of the House, I will circulate in the OFFICIAL REPORT a table showing the countries which still impose export taxes on raw cotton and the rates of tax.
LORD HAWKE: My Lords, from my knowledge of the situation I understand that some of these Governments include Governments of the Colonial Empire, and I hope that Her Majesty's Government will convey to the Governments of those Colonies the fact that cotton may well become very much a buyer's market by next autumn and that the sooner they get rid of these taxes the better it will be for their own benefit.
LORD MANCROFT: My Lords, my noble friend Lord Hawke is quite correct in assuming that this list contains certain of the Colonial Territories. Whilst I cannot guarantee, of course, that Her Majesty's Government will convey to them the sentiments expressed by my noble friend Lord Hawke, I can at least

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guarantee that I will convey them to my right honourable friend the President of the Board of Trade.
Following is the table referred to by Lord Mancroft:
Country and Rate of Tax
Belgian Congo, 5.8 pence a lb.
Egypt, 5.1 pence a lb. on medium staple. 7.6 pence a lb. on long staple.
French Equatorial Africa, 18 per cent. ad valorem.
Grenada, 0.1 pence a lb. plus 20 per cent. of gross c.i.f. price in excess of 12d. per lb.
Haiti, 0.2 pence a lb.
India, Comilla—nil. Desi—5.6d. a lb. Others—9.0d. a lb.
Kenya and Uganda, sliding scale from nil to 1.2d. a lb. for prices between 7d. and 13d. a lb. Thereafter duty is increased by 0.24d. a lb. for every increase of ld. a lb. or part thereof.
Leeward Islands:

Antigua, 1½d. a lb.

Nevis, ½d. a lb.

St. Kitts, 4d. a lb.

Mexico, approximately 17 per cent. ad valorem.
Nigeria, approximately 10 per cent. ad valorem.
Pakistan, Comilla and Desi—nil. Others—5.8d. a lb.
Peru, variable. The tax is the amount by which the actual price paid to the producer exceeds an officially estimated cost of production.
Sudan, from 4d. to 5d. a lb. according to type.
Syria, approximately 2.4d. a lb.
St. Vincent, 7½ per cent. ad valorem,.
The above table is as complete as currently available data allow.

CONTROL OF GREY SQUIRRELS
2.40 p.m.
LORD ELTON: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the recent decision to introduce the bounty system for the control of grey squirrels was taken on the advice of the leading ecological authorities, such as the Nature Conservancy and the Oxford Bureau of
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Animal Population; what precautions, if any, have been taken to prevent the growth, as a result of the bounty, of a vested interest in the maintenance of the squirrel population; and why no instructions for the use of humane methods were issued with the announcement of the bounty.]
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE AND FISHERIES (LORD CARRINGTON): My Lords, the scheme was drawn up by the Forestry Commission and was based on the recommendations of an expert Committee after consideration of the best available advice. Progress will be systematically reviewed, and expert bodies such as those mentioned by the noble Lord will be consulted where necessary. The Commissioners are aware of the risk to which the noble Lord refers, but the restriction of the scheme to two years only, and the prohibition on the harbouring of squirrels under the Grey Squirrels (Prohibition of Importation and Keeping) Order, 1937, are, in their view, sufficient safeguards. The importance of humane killing of trapped squirrels is stressed in the leaflets which have been issued on the subject.
LORD ELTON: My Lords, I am grateful to the noble Lord for that Reply, which, up to a point, is very satisfactory. It is satisfactory to know that there is a strong Committee watching this experiment because, as the noble Lord doubtless knows, there is formidable ecological opinion against the experiment. I entirely accept what he says about the humane aspects, but perhaps he will agree that it is unfortunate that in the leaflet issued by the Forestry Commission there is a recommendation of the gin-trap without the caution that the trap has been described by the Scott-Henderson Committee as a diabolical instrument which ought to be abolished?
LORD HAWKE: My Lords, would the noble Lord, Lord Carrington, convey to the Forestry Commission also the desirability of publishing directions on how to cook and eat the said squirrels when captured, as that is probably the quickest way by which squirrels can be eliminated in this country?

BRITISH SHIPPING TO CHINA
2.42 p.m.
LORD WINSTER: My Lords, I beg to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether their attention has been called to a Press statement that Senator J. R. McCarthy has said his subcommittee soon will branch out to investigate ships under British and other flags carrying goods to China, or between Soviet-bloc,without any reference to Mr. Dulles or any other Executive agency; and, if so, can it be stated what precisely this implies.]
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS OF READING): My Lords, I have seen the Press reports referred to in the noble Lord's Question, but I regret that I have no information on this matter beyond what is contained in those reports.
LORD WINSTER: My Lords, I thank the noble Marquess for his reply, which has established the point I sought to make: that there is no substance, so far as is known at present, in the report, although it appeared in one American newspaper of very great responsibility. I asked the Question because the Merchant Navy has had good reason to resent the results arising out of the McCarran Act, although I hope that that Act is in process of becoming a dead letter so far as our Merchant Navy is concerned. But I hope that it may be noted in the appropriate quarters that, while we have no comment to make upon Senator McCarthy's activities in his own country, we hope that he
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will not intrude those activities into the affairs of our Merchant Navy.
LORD OGMORE: Arising out of this Question, may I ask the Minister whether his attention has been drawn to an informative article in this month's Eastern World, in which the writer seeks to show that there is a growing and very large body of trade with China from countries behind the Iron Curtain, and that the policy mentioned in this Question has not done any harm to China but has harmed only us, who have been prevented from trading with one of our very ancient trading sources?
THE MARQUESS OF READING: My Lords, it would require a considerable stretch of imagination to regard that question as rising out of the Question on the Paper. My attention has been drawn for the first time by the noble Lord to the article in question, and I will now peruse it.
LORD OGMORE: I was careful not to say that my supplementary question rose out of the Answer. I said it arose out of the Question—which is in rather broad terms.
VISCOUNT ELIBANK: Will the noble Marquess take up the whole question raised by the noble Lord, Lord Ogmore? It is a very important one.
THE MARQUESS OF READING: I have said that now that my attention has been called to the article I will peruse it; but until I have perused it I cannot say whether any action will be taken upon it.

TOWN AND COUNTRY PLANNING BILL
Amendments reported (according to Order).

IRON AND STEEL BILL
2.45 p.m.
Order of the Day for the House to be again in 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 3 agreed to.
Clause 4 agreed to.
Clause 5:
Provision of production facilities
5.—(1) The Board shall from time to time consult with such iron and steel producers and such other persons and such representative organisations as the Board consider appropriate, with a view to securing the provision and use—

(a) of such production facilities in Great Britain as may be required for the efficient, economic and adequate supply of iron and steel products, and

(b) of such production facilities outside Great Britain for or in connection with the quarrying or mining of iron ore for use in the iron and steel industry as may be required for the purpose aforesaid, including facilities for the transport outside Great Britain or the importation into Great Britain of such iron ore.

(3) If—

(a) the Board report to the Minister that additional production facilities in Great Britain or additional facilities such as are mentioned in paragraph (b) of subsection (1) of this section are required for the efficient, economic and adequate supply of iron and steel products, or it appears to the Minister, after consultation with the Board, that additional production facilities in Great Britain are required in the national interest; and

(b) the Board report to the Minister that they cannot secure by means of consultation under subsection (1) of this section the provision and use of the additional facilities required:

the Minister may, with the approval of the Treasury, himself provide and use those facilities, or make arrangements with any persons for the provision or use of those facilities by those persons, whether as agents for the Minister or otherwise.
Iron ore produced outside Great Britain by means of production facilities provided under this subsection shall not be required to be used wholly in the iron and steel industry.
LORD SILKIN LORD SILKIN moved, in subsection (1) before the word "use" to insert "the
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full and proper." The noble Lord said: It may be some comfort to the Committee to know that in discussing this Amendment, No. 9, we shall, with the consent of the Committee, deal also with a considerable number of other Amendments. Perhaps the Committee will allow me to mention them. They are Nos. 12 and 13, 15, 16, 17, 18 and 19 on the Marshalled List. I suggest to the Committee that whatever decision we arrive at on this Amendment should govern the others. These Amendments all hang together. They have for their object the widening of the powers of the Board under Clause 5.
The Committee will see that under Clause 5 the Board have to consult iron and steel producers for the purpose of securing efficient, economical and adequate supplies of iron and steel products, and they have a certain number of functions under this clause. In the first place, where they find that new production facilities are required they can make representations to the Minister and steps can be taken to secure them. Then, under subsection (4) of the clause, if they find that certain existing production facilities have been closed down, or are about to be closed down, they can take certain steps either to ensure that some other person carries out those functions or the Minister himself undertakes them. But there is a hiatus in these arrangements, in that the Board have no functions whatever over existing production facilities—and that seems to us on this side of the House to be the most important of all. In considering what are the production resources of the country and ensuring that those facilities are fully used, and that we get the iron and steel we need, it seems anomalous that the Board should have no duties imposed upon them of supervising—not controlling, for the Committee have decided that point—the existing facilities.
The object of these Amendments is to extend the powers of the Board, so that they can supervise existing facilities, as well as new ones and those that are about to go out of existence. I should have thought that the case for this was self-evident and that it needed very little argument. This is a matter which was discussed at length in another place. As, no doubt, other noble Lords have done, I have read the Report of that debate to

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discover the case against this Amendment. I find that the case is that the Board would, in effect, be carrying out an examination into the efficiency of the existing undertakings, and that the Board is in no position to do that. It is argued, furthermore, that it is the job of those responsible for those undertakings to see to their own efficiency, and that in any case an inefficient undertaking could not carry on for very long; it would be judged by its profits and losses and, if it went on making losses, something would happen and that therefore this power is unnecessary.
I hope that I put the case against the Amendment fairly. That is, at any rate, how I understand it; and I think it is a mistaken case. For one thing, it is not merely efficiency with which we are concerned. But supposing it were. Would the noble Lord, Lord Leathers, whom we are always glad to see in the Chamber, subscribe to the view that the profits of a company are an invariable and the only guide to the efficiency of an undertaking? The production of iron and steel may be only a part of the business, and it is conceivable that a concern may be making big profits on that part of its business which is not concerned with iron and steel and losing some of it on their on and steel undertaking, but nevertheless showing a profit, in spite of running the iron and steel section of their business inefficiently. That seems to me just conceivable. Or it may be that an undertaking may have very large reserves and can go on for a very long time dipping into its reserves and riot finding itself in "Queer Street." Or (what is even more likely) an undertaking may be running at a profit yet nevertheless be inefficient, in that it could be running at a considerably greater profit if it were run efficiently.
There are a variety of other circumstances in which the inefficiency of an undertaking may be covered up. Of course, it can go on, in many cases, for a long time running inefficiently, not producing all the iron and steel that it is capable of doing, to the detriment of the public interest, and yet not showing the fact conclusively in its accounts. I do not think that it is in the national interest that we should have to wait for a long time before discovering that a certain undertaking is not able to carry on any longer because it is inefficient. The fact is that what we want, and what this Bill
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seeks to secure, is that the maximum amount of output is secured in the most economic way, and that the Board is given the duty of seeing that that is done, without exercising control except in a few limited respects.
How can the Board do that when over a large part of the industry it has no jurisdiction whatever? What is the sense of its having jurisdiction over new undertakings, and over undertakings that are going bankrupt and going out of action, when it may well be that it can get all the desired production by an improvement in the methods of the existing undertakings? This proposition seems to me so self-evident that I find myself at a loss to understand why this Amendment, or something like it, was not accepted in another place. I hope that in the better atmosphere of this Chamber—and may I say, perhaps, in the greater sanity of this Chamber?—we shall get a more successful result to this series of Amendments. It may be—I have said this on a number of occasions—that we can improve on the wording of this series of Amendments. I should be surprised if we could not, and of course we do not pin ourselves to every word of those Amendments. If noble Lords opposite can think of a better way of achieving the purposes that we have in mind, we shall be happy to accept it. What we do feel is that the supervision which this Bill purports to give over the industry is illusory when there is no supervision at all over the most important part of the industry—that is, the existing undertakings. For those reasons, I beg to move this Amendment.
Amendment moved—
Page 6, line 17 after ("and") insert ("the full and proper").—(Lord Silkin.)
LORD WINSTER: I wish to support this important Amendment, which seeks in the main to deal with the existing plants which are not pulling their full weight because of inefficient management. Such plants, as well as the new facilities and plant acquired in the national interest to prevent their falling into disuse, should be supervised by the Board which is set up under the Bill. Surely these undertakings which fail to pull their weight through inefficient management are the very undertakings which require supervision in the national interest. It seems to me Gilbertian to build new blast furnaces and steel works if existing plant

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is not producing to its full capacity. If we could take the aggregate of inefficiency, surely to obtain efficiency amongst such plants might obviate the necessity for building a new plant. Clause 4 speaks of the national interest. Surely the national interest cannot be served by allowing needless inefficiency. There are, in the words of a Conservative Member of Parliament, "stubborn or obdurate firms in the industry." We do not want such firms driven out of business by more efficient firms; we want them brought up to the mark by supervision on the part of the Board. I myself feel that the Bill requires far more emphasis on dealing with inefficiency and securing efficiency; and that is what this Amendment seeks to obtain. I think that in the steel industry the Board, if it is to fulfil its purpose, must be ruthless in the promotion of efficiency and, if it is to be ruthless, then it must have the necessary powers to be ruthless. At present I do not think this Bill clothes it with the powers required.
I note what the noble Lord, Lord Silkin, said about a balance sheet. Efficiency or inefficiency cannot be revealed entirely by a balance sheet. It may well be that a given undertaking falls into two parts, and that a good section may be carrying a bad section, so enabling the undertaking to show a good result in the balance sheet. I read the Report of the debate in another place on this particular subject, and I noticed that a Conservative Member of Parliament advanced what to my mind was a very strong argument. He said:
"it is for the management to root out inefficiency."
But they are the very people to whom the inefficiency is due, and I think it very strange to rely upon the people who have produced inefficiency, to root it out. He went on to say that:
"…to correct bad management should be the affair of the directors or the shareholders."
That seems to me to be a very naive suggestion. Can we really imagine a shareholders' meeting trying to exercise control in these matters? To my mind, the suggestion is quite absurd. Another Conservative Member speaking in the same matter (I ask the Committee to notice the word "ultimately"—"You
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may take it easy; there is no hurry, plenty of time") said:
"Ultimately, persons whose profits are not sufficiently large will stir up the management."
So we see that the national interest, which the Bill so frequently mentions, is in fact to rely upon the profit motive. I think that is quite a ridiculous argument. Businesses fail, and such businesses are frequently bought up and a new management manages to make a success of them. The pre-war history of this industry hardly bears out the assertion that such remedies as are described by one of these two gentlemen as—and these are his words:
"normal economic forces and normal incentives,"
are processes in which one could have any great faith in promoting efficiency in the national interest. Given adequate powers, the Board is far more likely than directors or shareholders, to give us "new lamps for old" where inefficiency is concerned.
THE EARL OF GLASGOW: Is it not the business of directors to root out inefficiency?
LORD WINSTER: I would say that it is the business of directors to conduct a business so as to show a profit for the shareholders; and a profit may exist although there is considerable inefficiency in the industry. The Minister is given certain powers when a plant is falling into disuse. But what is the difference between a plant falling into disuse and inefficiency? Surely the Board should have power to deal with both cases?
Then the Parliamentary Secretary in another place made what I think is a most remarkable statement. He said (OFFICIAL REPORT, Commons, Vol. 512, Col. 433), that to decide whether an organisation is efficient or inefficient
"can be done only by a thorough investigation which would involve a degree of interference in the affairs of individual companies which we do not wish to see."
In other words, according to the Parliamentary Secretary, the more inefficient you are the more you escape notice. What becomes of the national interest in view of such statements as that by the Parliamentary Secretary? The national interest flies out of the factory window.
What becomes of the powers of supervision which the Board is expected

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to exercise, if it can apply only the rough and ready yardstick of the balance sheet? A profit does not necessarily represent maximum efficiency. There may be gross inefficiency, and yet a profit may be shown in the balance sheet. A profit may be shown by an inefficient undertaking drawing upon its reserves, which may keep the undertaking going for a considerable time, as the noble Lord, Lord Silkin, was at pains to emphasise. An undertaking can produce a profit while producing far below its capacity. There may be great efficiency, and yet there may be a loss. This test of using the balance sheet as a yardstick of efficiency is an argument which will not hold water when put under close examination.
Again, as I read the Bill, if a company is so inefficient that it has to give up and cannot find a buyer, the Minister can acquire the works and put them into use. Surely it would be much more rational and economical for the Board so to act as to prevent an undertaking from falling into such a state of disuse and inefficiency that the only remedy (and a very expensive one it is) is that the Minister should take over the undertaking root and branch, and seek to put it into profitable use. For all these reasons I think the Amendment which has been proposed by the noble Lord, Lord Silkin, is a weighty Amendment, that the arguments which have been produced in favour of it are unanswerable. The Board should be clothed with the necessary powers to see that efficiency is made the yardstick by which the work of the Board, and consequently of the industry, is measured.
3.7 p.m.
THE MARQUESS OF SALISBURY: First of all, I would agree with what has been said by the noble Lord, Lord Silkin, in opening this stage of the Bill—namely, that it will probably be for the convenience of the Committee that together with this Amendment we should deal with the large number of Amendments which have been tabled by him and others to deal with the same point as is contained in this, the governing Amendment. Clearly, it will shorten our discussions and will avoid a great deal of re-duplication of speeches.
If one looks at this first Amendment in a cursory way, it may appear comparatively harmless, though in any case
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I should regard it as unnecessary, for, as I see it, its purposes are already implicit in the present wording of the Bill. That would be a superficial view, for, as I see it (I may be wrong), the main purpose for which it is put down is to act as a peg for the later group of Amendments to which we do see much more substantial objection. As I understand it, the combined effect of these Amendments would be to give power to the Minister, not only to build and operate additional production facilities but also to acquire and to operate existing production facilities if the Board considered that they were not at present being used fully and properly, or if either the Board or, as I understand it, the Minister, were to consider they were not being used to the national interest. The Amendment to line 19 of Clause 5, would, as I understand it, make provision for compulsory acquisition in such cases—I may be told that that is wrong, but that is the way I have read it.
If I may say so, without offence—and I do not mean it offensively—the later Amendments, and not what I call the governing Amendment, appear to me, and I am sure to other noble Lords on this side of the House, a good example of that unhappy and unreasoning prejudice against private enterprise and private initiative which led the late Government originally to introduce their 1949 Act. Noble Lords opposite start with an assumption which, apparently in their view, seems to need no defence—certainly, they have put forward a very thin case for it to-day—that while public production is bound to be, in effect, faultless, private production is bound to be, or is very likely to be, both inefficient and contrary to the public interest.
LORD WILMOT OF SELMESTON: Oh, no!
THE MARQUESS OF SALISBURY:That is the impression these Amendments make upon me. Whence they derive this apparently ineradicable delusion I cannot see. It is very difficult to understand. It is certainly not true in this country.
LORD WILMOT OF SELMESTON: No, it is not.
THE MARQUESS OF SALISBURY: I am very glad to hear Lord Wilmot say that, because in this country the iron and steel industry, as he knows, especially in

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recent years has been renowned throughout the world, not only after nationalisation but before nationalisation, as a model of efficiency and economy. In our view—which perhaps he would not share—the reason it has done comparatively well after nationalisation has been that the structure which existed before nationalisation has been to a great extent maintained.
LORD WILMOT OF SELMESTON: That was why the Bill was so drawn.
THE MARQUESS OF SALISBURY: But only as a temporay measure, and the difference would have been seen asnationalisation became more operative. Indeed, I may say to noble Lords opposite that they were fortunate that the country was not able to see their Bill in full operation. But to the point which had been reached, as we know, there was a very large part of the principal structure of the pre-nationalisation industry still operating. Nor do I believe their assumption is true of the United States where the industry is also in private ownership. I never heard that there was gross inefficiency or lack of adequate productive capacity there. Those facts, though, no doubt, they will be relevant considerations for many of us, apparently have not had the slightest effect on noble Lords opposite. No reference was made to the wonderful success of nationalisation in the steel industry throughout the world as compared with the results of private enterprise. Perhaps it would have been difficult for noble Lords to have maintained a case on those lines. They do not refute, they do not dispute, the record of private enterprise in this industry; they just ignore it. It does not fit in with their theories or their philosophy or what you like, and it is to them therefore not admissible.
I was reminded, when listening to speeches of noble Lords opposite, of an old gentleman of my acquaintance, now, alas! dead, who would not have the radio in his house, not because he did not like it but because he did not believe in it. In the same way Lord Strabolgi—whom I am sorry not to see here to-day—and Lord Silkin, simply do not believe in the productivity of a privately-owned steel industry. In their view it has simply Rot to be both inefficient and contrary to the public interest. That is, no doubt,
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what led them to put down these Amendments. We, on this side of the House, entirely reject the basic assumptions which underlie these Amendments; we believe that they are based on false premises, and that the conclusions reached in them, therefore, are not valid. As I said yesterday, and I can only repeat it, for us the spur of competition is a far greater and more effective guarantee of efficiency than over-centralised control in the hands of the Minister or the Board. It is this competition, this inherent efficiency in private industry, which has produced the spectacular results of the civil aircraft concerns which are still in private ownership. It is interesting to note that the Party of the noble Lords opposite, who are always harping upon the inefficiency of private enterprise, cast their covetous eyes much more frequently on industries like the civil aircraft industry, which are noted examples of efficiency, and universally recognised to be so.
The real truth about private industry—and this is why we like it—is that it contains its own safeguards. If a company shows that it is inefficient the shareholders soon sack the directors and appoint others more efficient. The noble Lord, Lord Winster, in the remarks which he made this afternoon, asked how a management could be expected to sack themselves; they are the people who have shown inefficiency, he said, so how is it expected they will improve things? I agree that if a management is inefficient it is unlikely by its own volition to improve its situation. In that case there comes in the safeguard of the shareholders, who are quite capable of seeing whether the management are inefficient or not. If they think they are bad they sack them. The noble Lord went on to say that that means that the whole thing is tied up with profits. I do not think that profits are such a bad thing as the noble Lord does.
LORD WINSTER: I do not think profit is a bad thing at all, and I never said so.
THE MARQUESS OF SALISBURY: But the noble Lord did say that the standard was to be the standard of whether there was a profit or not, and he said that in a critical tone.
LORD WINSTER: I detest interrupting, but I should like to get this point

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straight. I said that a profit can exist, and frequently does exist, alongside inefficiency in the conduct of a business. That is quite a different statement from the one the noble Marquess is attributing to me.
THE MARQUESS OF SALISBURY. I agree that the noble Lord said that. I would again repeat that he seems to think shareholders very much more gullible than I do. If there was a small profit when there might have been a very large one, does he really think that the shareholders would not find it out? His argument seems to me, if I may say so, completely bogus. He also said, if I remember aright, that profits were a bad basis for calculating efficiency or inefficiency. I should agree that dividends were a bad basis, because you might get a good, conservative firm who, instead of paying out all the profits in dividends, put a large portion of them by for re-investment in plant and improvements, and soon. But, frankly, I do not think that profits are a bad basis. A company which runs its business economically and efficiently is much more likely to make a profit—whatever it does with that profit—than a company that is inefficient. It is our belief—we do not expect noble Lords opposite to share it—that in the vast majority of cases the safeguard represented by the shareholders of a company would be effective.
We fully recognise that there may be, and probably would be, some cases where such safeguards as that would be ineffective, and a firm might be unable, possibly through its own fault or possibly not through its own fault, to avoid something approaching collapse. On the whole, I think it is not likely that such a firm would have any great social or strategic value. I think that if it had great strategic value its prosperity would be assured, and, in any case, provision is made in the Bill for such firms. They are dealt with in Clause 5 (4) which gives the Minister powers in such circumstances to acquire or take on lease a plant. If the Board reports to the Minister that the total production of iron and steel products is inadequate—that is to say the total production in the industry—and he cannot obtain agreement from the industry to increase production (that is not a very probable event in the light of past experience, but it is still something which might
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happen), then, as your Lordships know, the right is reserved to the Minister, in subsection (3), paragraphs (a) and (b), in the public interest to provide those facilities. Surely if we look at these matters with an objective eye, both safeguards ought to be strong enough, and in the view of the Government they certainly are. I say frankly that the Government, taking the views we do, are unwilling to hamper the free operation of the industry with more restraints and controls than are absolutely necessary. We believe that would be fatal to the further expansion and vitality of the industry.
In conclusion, I would sum up briefly what I believe to be the issue between us. All these Amendments and, broadly speaking, the whole of the Bill seem to me to illustrate the conflict between the approach of the two sides. On one side, there is the philosophy of the noble Lords opposite which envisages, so far as such a thing is possible, an all-wise Minister and Board stepping in to save the nation from the consequences of the incompetence and selfishness of private enterprise. On the other side, there is the Government philosophy, which believes that competitive private enterprise and the stimulus of the profit motive, subject to the minimum necessary safeguards, are the best means of enabling the steel industry to operate efficiently in the national interest. After listening to what all the noble Lords have said up to now, I am bound to say that I, and I think all of us on this side, would maintain that view. Broadly speaking, it is for that reason that I am afraid we cannot accept these Amendments.
3.32 p.m.
LORD WILMOT OF SELMESTON: I am afraid the noble Marquess completely misunderstands both the purpose of the Amendments and our attitude to this problem and the Bill. I will try to explain briefly what we feel. We do not believe that private enterprise is inefficient, nor do we make any kind of charge against the British iron and steel industry, which has a fine record of efficient production and excellent management relations. Our attitude has nothing whatever to do with any such beliefs, and I must divest myself of these peculiar attributes which the noble Marquess finds such pleasure in hanging upon me. I have no such view.
THE MARQUESS OF SALISBURY: The noble Lord ought to read his own Party literature.
LORD WILMOT OF SELMESTON: There is quite a lot of it, and sometimes it does not all say the same thing. That is true of all Party literature, if it is to be readable. I can say that the great majority of members on this side of the House do not take the view which the noble Marquess has attributed to us. We believe that it is a good thing for a commercial enterprise to try to make a profit. In our private lives we seek to do that, and sometimes we succeed. Our point about this whole question is that we believe—and we know that circumstances have proved this to be the case—that this industry, which has enormous responsibility for the public safety and the public welfare, has duties laid upon it which in certain circumstances may conflict with the duty of the directors to seek a profit for their particular undertaking and its shareholders. That that is the case is recognised by the industry, for the industry has always kept closely in touch with the Government because of its realisation of this aspect of its work.
We know from experience that, particularly in times of trade depression, those in the iron and steel industry have been forced by world events and the pressure of economic circumstances, purely as commercial people, and as directors of private firms, to follow courses which were certainly not in the national interest. In the 'twenties and 'thirties they were forced to pursue a restrictive policy, restricting the capacity of the industry, which we know nearly cost us our victory in the last war. That was not the fault of the iron and steel industry. That is what arises if a national burden is laid upon an industry which is out of harmony with its commercial objectives. The purpose of the Amendments which my noble friends have put down to this and subsequent clauses is to ensure not only that the industry is efficient but that it is always conducted with these public duties in mind, and that such action is taken in time as only a Government or a Government instrument can take to ensure that the industry does not get into a state which imperils the national safety or national commercial interests. Therefore, I hope the noble Marquess will not again make the mistake of thinking that
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we put down these Amendments because we are against private enterprise or regard it as inefficient. We put them down because we believe from experience that they are necessary in view of the peculiar national character of this great iron and steel industry.
LORD SILKIN: We have had some discussion on this clause. It is a commonplace in advocacy that when you are in a difficulty, you abuse the other side's attorney. The noble Marquess would hardly ever be guilty of that. Another method is to answer something which your opponent has not said, and the whole case built up by the noble Marquess was in reply to an argument that had never been put forward by this side of the House. We never suggested that the iron and steel industry was inefficient, nor did we suggest that the reason for this series of Amendments was the inefficiency of the industry. The noble Marquess seems to believe that under private enterprise inefficiency is impossible. If he believes that, I suggest that he should look at subsection (4) of this clause, where a set of circumstances is visualised which may well be the result of inefficiency—that is, the closing down of a large undertaking. That may come about in a variety of ways, but it may be, and generally is, as the result of inefficiency. Therefore, that kind of thing does happen under private enterprise. There are a Bankruptcy Court and a Court of Chancery for winding up companies, and they sometimes have work to do. Most of their work has to do with those who have been engaged in private enterprise. So that there is a certain amount of inefficiency and, on the noble Marquess's own test, by their failure to make profits these concerns have been driven to Carey Street or the Court for winding up companies. I am sure the noble Marquess will not deny that there is a certain amount of inefficiency in private enterprise.
Nobody has suggested that the iron and steel industry as a whole is inefficient. Part of our case is that we cannot judge the efficiency of a concern solely by its profits. I do not say that profits are wholly irrelevant—my noble friend Lord Winster argued that profits were a quite irrelevant factor in judging the efficiency of a concern—but we do say that you cannot judge on that alone. I am sure that every businessman would agree with

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me that the making of profits by itself is not a conclusive criterion of the efficiency of an undertaking. As my noble friend Lord Wilmot has said, the purpose of Clause 5 is to secure the maximum output in the most efficient way, and the Board is given certain functions in connection with it. We did feel, and we still feel, that those functions, which are not serious ones, should be over the whole of the industry, and not over the industry at its two ends; that is, the decision as to starting new concerns, or what should be done when a concern is closing down. Having said that, I feel that on this subject we are in a position where it is impossible to reconcile our respective views, and I do not think we shall come any closer by further discussions of the matter. Therefore, I feel that the only way of dealing with it is the usual way, in the Division Lobby.
LORD LAYTON: As there is to be a Division on this Amendment, and as I understand that approval of this Amendment represents approval for nearly all the rest on the list—
SEVERAL NOBLE LORDS: No, no.
LORD LAYTON: I beg your Lordships' pardon. All the rest on the page.
LORD SILKEN: I read out those which the first Amendment governs; that is, a certain number.
LORD LAYTON: All the rest on the page, except one. Anyway, it certainly governs the Amendment giving the right to take over existing works, in certain circumstances. Therefore, my friends and I will vote with the Government.
SEVERAL NOBLE LORDS: Which friends?
LORD LAYTON: We shall see in a few moments. We shall vote that way because this Amendment really would be keeping a wide open door to nationalisation piecemeal—I see that our strength on these Benches is now doubled; and shortly it will probably be trebled. The issue is clear. The Bill gives the right, in certain circumstances, for the Minister, on the advice of the Board, to build additional steel works. It is a very different thing to suggest that the Minister, with the advice of the Board, may take over and lease, or otherwise change the ownership of, any existing steel works, if
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the Board thinks that it is being run inefficiently. After all, according to one side the question of inefficiency cannot be tested by profits. How is it to be tested? Is it to be simply the opinion of the Board conceived out of the air? What is to be the test of inefficiency? It seems to me that this Amendment, and those which it governs, however many they may be, opens the door wide to step-by-step, piecemeal nationalisation. In view of past events, and the reasons for the introduction of this Bill, it seems to me quite unreasonable that that wide power should be incorporated in it.
LORD WINSTER: The noble Marquess, Lord Salisbury, is so rightly held in high respect and great esteem in this House that I think at times he gets away with something very much like murder. His remarks upon these Amendments were directed against arguments which were never put forward by the noble Lord, Lord Silkin, or myself. I hope I took down correctly what the noble Marquess said. I understood him to say that the combined effect of these Amendments would be to give power to the Minister to build additional plants and take over inefficient industries, or industries not used in the national interest. The noble Marquess knows that one has to write these things down hurriedly, but I think that is correct. I should have thought that those were very worthy objects. But the noble Marquess went on to say that in putting forward Amendments to that effect we were inspired by our prejudice against private enterprise. As a matter of fact, I never said anything of the sort, and I entirely repudiate the general idea that private enterprise must of necessity be inefficient. I have said nothing to indicate that I do not believe that private enterprise has its victories, no less than have nationalised industries.
I believe it has been put on record, I am not sure whether it was by Mr. Herbert Morrison, but at any rate by certain authoritative leaders of the Labour Party, that they are quite content to leave some 75 to 80 per cent. of the industry of this country under private enterprise. That being so, it is the height of absurdity to say that in all that we put forward we are animated merely by a prejudice against private enterprise. The burden of my remarks was that there must of

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necessity be some inefficiency in this industry. There never has been a great industry of this nature without there being some inefficiency here and there. I quoted remarks from the Conservative side in another place to show that there, also, it is agreed that there may be inefficiency. All I am concerned with is that where such cases of inefficiency exist the Board shall have power to remedy that inefficiency in the national interest.
I think that when the noble Marquess quoted his friend's views about radio he was representing the mental attitude of a large section of the Conservative Party, which is brought out conspicuously by their attitude in regard to such an Amendment as this. Again, in respect of profit, my whole point was that profit can exist side by side with inefficiency. I gave my reasons, and those arguments have not been answered. As regards the contention that shareholders can be relied upon to remedy inefficiency and prevent a business crashing through inefficiency, City intelligence in the papers day by day and month by month quotes instances of companies which have completely failed and come to ruin, although they had shareholders. The contention that shareholders can always be relied upon to prevent an industry from falling into inefficiency is one which the records of the City completely fail to bear out.
3.39 p.m.
LORD TEVIOT: I should like to ask the noble Lord, Lord Wilmot, whether he made this statement: that it was due to the Iron and Steel Federation that a great risk was put over this country in preparation for the war. Did I understand the noble Lord correctly?
LORD WILMOT OF SELMESTON: The noble Lord can be assured that I made no such statement, because it would not be true.
LORD TEVIOT: I apologise to the noble Lord if I took him up wrongly, but that is what I understood him to say. Was the word "risk" used?
LORD WILMOT OF SELMESTON: I did say that there had been a risk,
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but I certainly did not attribute it to anybody. I said that the economic stringency of the 1920's and 1930's had reduced the steel capacity of this country, and that is an undisputed fact.
LORD TEVIOT: On that theme, I should like to say that anybody who is completely unbiased and unprejudiced will realise that it was the efficiency of the Iron and Steel Federation which enabled us, as far as we could, to prepare for the war, in spite of the fact that noble Lords opposite represent a Party who voted against preparation.
SEVERAL NOBLE LORDS: Oh!
LORD TEVIOT: What about conscription? Conscription was voted against. I am not going to apologise about that, because that is on record.
SEVERAL NOBLE LORDS: Quite wrong.
LORD WILMOT OF SELMESTON: It is not on record at all.
LORD TEVIOT: We cannot allow noble Lords opposite to get away with that sort of thing.
LORD WILMOT OF SELMESTON: The noble Lord must appreciate that he cannot get away with that, either. I was in the House of Commons at that time, and I certainly voted in no such way.
LORD TEVIOT: The noble Lord's memory seems at fault. I remember well that it happened, and I feel that we should register that point at a moment like this. There is no question about it, in my view—and I am sure in the view of any politically unprejudiced person—this Bill is trying to take this very important industry, on which the safety of the country is greatly dependent, right out of Party politics. That being so, I cannot see how these noble Lords can object to the Bill.
On Question, Whether the Amendment shall be agreed to?
Their Lordships divided: Contents, 25: Not-Contents, 62.

CONTENTS

Baldwin of Bewdley, E.

Crook, L.

Milner of Leeds, L.

Jowitt, E.

Greenhill, L.

Ogmore, L.

Haden-Guest, L.

Pakenham, L.

Addison, V.

Henderson, L.

Pethick-Lawrence, L.

Hall, V.

Hungarton, L.

Shepherd, L.

Kenswood, L.

Silkin, L.

Ammon, L.

Lawson, L.

Wilmot of Selmeston, L.

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

Lucas of Chilworth, L.

Winster, L.

Macpherson of Drumochter, L.

Wise, L.

Burden, L. [Teller.]

NOT-CONTENTS

Simonds, L. (L. Chancellor.)

Harcourt, V.

Jeffreys, L.

Hudson, V.

Jessel, L.

Salisbury, M. (L. President.)

Long, V.

Layton, L.

Mersey, V.

Leathers, L.

Sutherland, D.

Monsell, V.

Llewellin, L.

Runciman of Doxford, V.

Luke, L.

Cholmondeley, M.

Swinton, V.

Lyle of Westbourne, L.

Reading, M.

Templewood, V.

Mancroft, L.

Milverton, L.

Bessborough, E.

Ailwyn, L.

Monkswell, L.

Birkenhead, E.

Balfour of Inchrye, L.

Monson, L.

De La Warr, E.

Brassey of Apethorpe, L.

O'Hagan, L.

Lindsay, E.

Carrington, L.

Remnant, L.

Minto, E.

Chesham, L.

Rotherwick, L.

Onslow, E. [Teller.]

De L'Isle and Dudley, L.

Saltoun, L.

Powis, E.

Ennisdale, L.

Sandhurst, L.

Selkirk, E. [Teller.]

Fairlie, L. (E. Glasgow.)

Templemore, L.

Shaftesbury, E.

Freyberg, L.

Teviot, L.

Gifford, L.

Teynham, L.

Bridgeman, V.

Hacking, L.

Waleran, L.

Davidson, V.

Hampton, L.

Webb-Johnson, L.

Furness, V.

Hawke, L.

Wolverton, L.

Goschen, V.

Howard of Glossop, L.

Resolved in the negative, and Amendment disagreed to accordingly.
3.55 p.m.
LORD WILMOT OF SELMESTON LORD WILMOT OF SELMESTON moved, in subsection (1) (b), to leave out "quarrying or mining of iron ore" and to insert "provision of raw materials." The noble Lord said: My Lords, perhaps I may increase my all too slender store of good marks from the noble Marquess by being very brief about this Amendment, because I think at least we shall command the Government's support for it, so reasonable and necessary is it. This clause is one of which we very much approve. It gives the Minister the power, after consultation with the Board and such other appropriate authorities as he may think, to secure the provision not only of productive facilities if they need to be provided—he even has the power, in case of need, to provide them himself—but also of facilities for the quarrying and the mining of iron ore both in Great Britain and in foreign parts. So far it is a very necessary and very wise provision. But iron ore, although the principal, is not the only requirement of the iron and steel industry. There are other
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essential raw materials, some of them principally from abroad—manganese, tungsten, molybdenum, chrome. These are alloy metals which are used in the production of high-grade steels, and the supply in proper quantities and qualities of these sometimes rare metals, used as alloys and mixtures, is an essential part of the making of steel.
Now, it is true that the British steel industry is the world, leader in some of these special steels, and they have the highest conversion value of any products of the iron and steel industry; therefore for our labour and the use of our plant we get the highest possible value. Secondly, these are the very steels which become of paramount importance for defence purposes. Accordingly, if it is necessary for the Government to provide, as they do in this clause and subsequently, machinery which in case of need can be used for securing the supply of iron ore, then it is equally and sometimes even more necessary to provide similar facilities for the supply of the other metals which are an essential part of steel, production. Therefore I beg to move that these words be inserted in place of the

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words in the clause; and I hope that the Government will see the wisdom of accepting the Amendment.
Amendment moved—
Page 6, line 22, leave out ("quarrying or mining of iron ore") and insert ("provision of raw materials").—(Lord Wilmot of Selmeston.)
3.59 p.m.
LORD MANCROFT: This is an important Amendment, as the noble Lord, Lord Wilmot of Selmeston, rightly says, and it is a very technical one. There is nothing in it which goes to the root of the arguments so far advanced on this Bill. It deals with the provision of production facilities referred to in Clause 5. Now, Clause 5 deals with the positive powers of development in relation to two things: the first is iron and steel production facilities in Great Britain, and the second is the facilities outside Great Britain for getting the iron ore required by the British steel industry. The Bill is limited to iron ore—that really is the sole point. The other metals which the noble Lord mentioned, molybdenum, chrome and manganese—
LORD WILMOT OF SELMESTON: And tungsten.
LORD MANCROFT: And tungsten—one could mention a dozen of them—are used to such a large extent by industries other than the iron and steel industry that it would not be justifiable to include a provision for the development of them within the scope of this Bill. I do not mean by that, of course, that these metals are not important—indeed, one or two of them are vital to the production of steel. I do not deny for one moment that in war time or in some particular emergency a different provision might possibly be necessary. But we are not legislating for unusual circumstances; we are not legislating—heaven forbid!—for war circumstances. We are legislating, I hope, from the long-term point of view for the general well-being of the industry, and this particular clause concerns the general conditions of the industry in which, as the noble Lord rightly points out, iron ore is far and away the most important of the materials which he has mentioned. In fact, quite frankly—I am certain the noble Lord would agree with me over this—iron ore is in a class
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by itself. That is why it is being dealt with in a class by itself. The Government have felt that in this particular case, whilst the arguments advanced by the noble Lord are worthy of serious consideration, iron ore is in a class by itself. Tungsten was one of the examples given by the noble Lord, Lord Wilmot. About 50 per cent. of the tungsten which we use in this country I am told goes into the making of iron and steel. The problem, therefore, is not so much one of supply as of allocation between the various users, and I feel we should be going a very long way indeed if we were to make the iron and steel industry and the Board responsible for the supply of tungsten for the country as a whole, when only one half of it is used in steel-making.
LORD WILMOT OF SELMESTON: The noble Lord will, of course, appreciate that this clause does not put the responsibility for supply on the Government. These are only breakdown provisions. If the supply breaks down, something can be done. If the supply of tungsten breaks down, the steel industry is in a mess.
LORD MANCROFT: I would not deny for one moment the importance of tungsten to the steel industry, but I maintain my point that for the particular circumstances that we are debating, to put the supply of tungsten for the country as a whole within the province of this Bill when only one half of it is used by the iron and steel industry—
LORD WILMOT OF SELMESTON: Suppose the supply is not there.
LORD MANCROFT: That is outside the scope of this Bill. It would be a misfortune for the industry if that happened, but I think the noble Lord is looking at it through the wrong end of the telescope. The same argument applies to other materials which he has mentioned, materials which are not so important when mathematically or quantitatively calculated.
LORD WILMOT OF SELMESTON: Would the noble Lord give us the figures of the proportions used in the iron and steel industry of the other alloys he mentioned—manganese, for instance?
LORD MANCROFT: Does the noble Lord mean the other alloys that he mentioned or that I mentioned?
LORD WILMOT OF SELMESTON: Either or both.
LORD MANCROFT: Certainly. The noble Lord wants the proportions?
LORD WILMOT OF SELMESTON: Used in the iron and steel industry.
LORD MANCROFT: The point I think the noble Lord is making—I will acknowledge it before he makes it; I will make it for him—is that these materials significantly affect the manufacture of iron and steel. The figures are: molybdenum, 88 per cent.
LORD WILMOT OF SELMESTON: The iron and steel industry has 88 per cent.?
LORD MANCROFT: Yes; but, as the noble Lord knows, nearly all of that comes from America. He realises the implication of that remark. Then he mentioned chrome. There the proportion is not anything like so much. It is 25 per cent. at the most. Manganese is the metal which the noble Lord stressed most noticeably in his argument. The proportion is 90 per cent., I agree, but it is 500,000 tons only compared with the 10 million tons of iron ore. I am not denying for a moment the importance of these materials, but what I am saying is that to place the safeguarding of their supply, or to deal with it in any way, in this particular Bill, is misplaced draftsmanship.
LORD WILMOT OF SELMESTON: What about cobalt?
LORD MANCROFT: The proportion of cobalt is 30 per cent. As I have been trying to show, the proportion used in the steel industry varies greatly in respect of different materials, and even where the proportion used in the steel industry is low—as in the case of cobalt—the element may be of great importance. I understand it is particularly important in the case of cobalt.
LORD WILMOT OF SELMESTON: It is vital.
LORD MANCROFT: Maybe; I do not deny that for a moment. It is therefore not possible—and I am sure the noble Lord, Lord Wilmot, will agree with this—to draw any clear or logical dividing line between the 30 per cent. of cobalt and the 88 per cent. of molybdenum, or of
1014
any other figure he may mention, and we must stand fast on the principle that the ambit of the Bill should not extend beyond the material used virtually exclusively by the iron and steel industry. I would repeat that this does not mean for one moment that the importance of these other materials is not acknowledged by everybody who knows anything about these materials. I fully accept that. It merely is that, once you go beyond this one vital commodity, iron ore, you get into difficulties which I think it will be almost impossible to resolve. I appreciate entirely the point which the noble Lord has in mind and I am grateful to him for having put it forward, because it is important to have this matter threshed out. The Government's argument is that iron ore takes such a predominant place and stands so apart from those other admittedly vitally important materials that it should be the one to receive special consideration in a Bill devoted to iron and steel and not to other commodities.
LORD WILMOT OF SELMESTON: But it is appreciated, I suppose, that if the supply of these alloys or any of them broke down—and this applies only when it breaks down—the iron ore would be useless to the special steelmakers?
LORD MANCROFT: Of course it would. I do not deny for one moment the importance of these elements in the manufacture of iron and steel; but, important though they are, the quantities are so much smaller than the quantity of iron ore that they do not need to be treated in a class by themselves.
LORD OGMORE: The noble Lord has been making a case on the very poor argument put to him on his brief. So long as it is vital, it does not matter what particular percentage is used by the iron and steel industry and what percentage is used by other people.
LORD WILMOT OF SELMESTON: It is very high.
LORD OGMORE: Actually, the percentages are very high. But even if they are not very high, the question is: is the supply really important and vital to the steel industry, because, if it is, then the Board should have the opportunity of making the necessary arrangements and

1015
securing the provision of that particular element. The noble Lord said, as I understood him, that, because other users might use some of these commodities, that was a reason why this provision should not be inserted in the Bill. But if the noble Lord will read the clause, he will see that it says this:
"The Board shall from time to time consult with such iron and steel producers and such other persons and such representative organisations as the Board consider appropriate.…"
In other words, it will consult the users of these products in industries other than the iron and steel industry. It sounds a paradox to say so, but it is more important, in a way, to give this power to the Board where a number of people use the particular product than where only the Board use it. The Board are almost the sole users of a product, as they are of iron ore, then it does not matter so much, because, obviously, if they are the sole users of iron ore, there is no one else to consult. It is in the case of such other elements as have been mentioned that the importance of consultation and the importance of giving the Board this power arises. So that every argument the noble Lord has used against this particular provision could be more appropriately applied in support of it.
I would ask the noble Lord this. Does he realise that we are getting into quite a new phase of the steel industry? The aircraft industry is using more and more very light steels which need particular alloys or for which particular alloys are rather more suitable than plain steel; and very often particular products are needed to temper steel to the very high power of resistance which is required in jet engines and the like. For instance, in Uganda there have been discoveries of particularly important substances such as kyanite and niobium which are of immense importance in this particular field. Already there is great competition from other countries for these particular products. The United States is most interested in them, and so is Canada; and if the Board is not careful it may find itself very late in the queue for some of these materials from countries in Africa and elsewhere. I ask the Government to consider very carefully the case made by my noble friend Lord Wilmot. This Amendment does not weaken the
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Bill in any way; it strengthens it. If it is going to strengthen it is seems to us a little churlish not to give way. I do not want to use harsh language, and I do not use harsh language. I do not in any way suggest that the noble Lord, Lord Mancroft, is churlish; but it seems to us that if the Government do not give way theirs would be a churlish attitude, because we are trying to help them and the Board, and we are in no way wrecking or impeding the object they have in mind.
LORD LAYTON: I venture to think that on this particular Amendment noble Lords on this side have had the best of the argument. After all, Clause 3, which deals with the powers of the Board in regard to supervision, remarks that the Board shall, in particular, keep under review the productive capacity and, in paragraph (b):
"the arrangements for procuring and distributing raw materials…"—
in other words, the Board is to study not merely the question of the supply of iron ore but also that of raw materials. Supposing the supply of one of these important alloys is unsatisfactory? What is the Board to do? Is it to do something different from what it does in the case of iron ore? It is not as though the remedy is that the Government should take over the whole supply. Whether it is in regard to productive capacity, in which case the Government may run a works, or raw materials, where the proposition is that the Government may take supplementary measures, the Bill contemplates a mixture of Government and private enterprise operation. It seems to me that that is on all fours with the situation that might arise, for instance, in the supply of tungsten, where people not in the iron and steel industry are using that commodity. The Government are in part operating for the benefit of the iron and steel industry and they are concerned with a situation which can become acute. Therefore I can see no reason for differing in Clause 5 from what has been done in Clause 3. In those circumstances I shall vote with the Opposition if this Amendment is pressed to a Division.
EARL JOWITT: I very much hope that the noble Marquess will look at this matter again, because it is a point upon which there will not be the slightest loss of prestige if the Government give way. It is important to put in paragraph (b) of

1017
subsection (1) some reference to these alloys, because it does not end there. The words in subsection (1) (b) have their effect on subsection (3). If your Lordships look at subsection (3) you will see these words:
"If—
(a) the Board report to the Minister that additional production facilities in Great Britain or additional facilities such as are mentioned in paragraph (b) of subsection (1) of this section are required for the efficient, economic, and adequate supply of iron and steel products"—
I forbear to read on. Then the subsection goes on to say that if
"(b) the Board report to the Minister that they cannot secure"—
these products—
"the Minister may, with the approval of the Treasury, himself provide and use those facilities, or make arrangements with any persons for the provision or use of those facilities.…"
I speak as a child—I have no technical knowledge, and those who have, of course, can easily tell me that I am quite wrong. But taking the question of manganese, which is important for certain qualities of steel, if I understand aright, suppose that we found ourselves faced with a ring, or a shortage, or a hold-up, or something of that sort in our manganese supplies. Surely, in those circumstances it would be wise that the situation should be looked into, to see whether we could secure—because here we are dealing only with securing—that we were not held up. Surely it would be wise for the Minister to take steps to see what he could do to supplement, if necessary, our manganese supplies, If necessary, he would go to those gentlemen who are in the industry, and who understand manganese, and ask them to enlarge their works or seek new sources of supply, or what you will. If that is so with regard to manganese, I take it that it might be so with regard to these various other alloys which may hold up the supply of iron and steel.
What I would beg the noble Marquess to bear in mind is that all we are seeking to do in a clause dealing with a securing provision, is to ensure that we are not held up by some shortage. Surely it is simple common sense that a Minister should have a right to say "I am looking around and, so far as I can, I am going to see that there are available, and that there will continue to be available,
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to the manufacturers of this country such supplies of these various alloys as they require for the making of their special types of steel." If there is no danger and no likelihood of a shortage, then of course he will do nothing. If, on the other hand, the wise men who understand this trade think that there is a danger of a shortage developing, surely it is right that the Minister should take steps to see whether he cannot encourage, if necessary by means of a loan, the industry to see that they have available other sources of supply. I do not think there is very much between us on this matter. I hope the Government will meet us, in their own interests and for the purpose of making this Bill an efficient Bill, by inserting into subsection 1 (b) the words suggested, so that they may have the beneficial effect I have indicated when it comes to subsection (3) of the same clause.
LORD BALFOUR OF INCHRYE: May I just make one point? I agree with the noble and learned Earl who has just spoken that there is very little between us on this Amendment. But I wonder whether this Bill is the appropriate instrument, and whether the Board is the proper body, to ensure what is the common purpose among us all. That seems to me to be the question at which we ought to look for the moment. The noble Lord, Lord Ogmore, raised the question of the possibility of our jet aircraft production being menaced by shortage of some particular materials. That is a very real danger—such a national danger that one wonders, if such circumstances arise, whether it should be through the working of this Bill that that danger would be removed. Would it not be a major issue with which the Government of the day, of whatever complexion they may be, would have to take responsibility of dealing? Surely it would be for them to secure the provision and use, both for the steel industry and for the other industries needing them, of these particular raw materials. It seems to me that "securing the provision" is such a vital national question that it should not rest, upon the Board to secure provision—perhaps to conduct negotiations with overseas Governments and overseas bodies, Colonial, Empire, or Dominion or foreign: I refer in particular to what is contained in subsection 1 (b). Surely it should be through

1019
some governmental action, some other governmental instrument, bigger and wider in scope than this Bill, that the matter ought to be dealt with, in a manner which would be satisfactory to Members on all sides of the House.
EARL JOWITT: May I point out to the noble Lord that under subsection (3), if the Board reports that it is not satisfied with the provision, then the Minister acts with the approval of the Treasury. Therefore, you get the whole Government machine coming in. No doubt, in practice, that would be done through the Foreign Office. It is the Government who would act to secure provision, and not the Board.
LORD BALFOUR OF INCHRYE: I wonder whether it would be the case that when the Board, being dissatisfied, goes to the Minister it would then be the Government who would conduct negotiations to secure provision and use, or whether the Board is the appropriate body to conduct any such negotiations with regard to its own particular requirements for the particular materials specified here. That is my point, and it is one which I hope the Government will consider amongst the very weighty arguments which have been put from the other side of the House. This is in no sense a Party matter, but it is one which I submit merits serious consideration.
4.22 p.m.
LORD WILMOT OF SELMESTON: I hope the Government will consider the point which the noble Lord has raised. The machinery as laid down here is exactly what the noble Lord would wish it to be. The Minister of Supply is the Minister involved, and the Minister of Supply's function is to watch over—in the sense that all Ministers watch over certain aspects of our national life—these metallurgical industries. The Board will be his eyes and ears, so far as the iron and steel industry is concerned, and it is when he gets a report from the Board which is the appropriate body to report, that there is an impending difficulty about these alloys for special steels, that the Minister will invoke the Government to do something about it. It has happened before.
Lord Ogmore has mentioned the very special requirements of the new jet
1020
engines. The Minister of Supply is also the Minister of Aircraft Production, and for the very good reason that the future safety and development of the aircraft industry, particularly its engine side, is an integral part of the concerns of our metallurgical industries.
LORD BALFOUR OF INCHRYE: It has not always been so.
LORD WILMOT OF SELMESTON: No, it has not always been so, but it has been so with respect to recent developments, and particularly since the development of the gas turbine, as Lord Llewellin will know. More and more, therefore, it is at an earlier stage that these things become vitally important. A breakdown in the supply of the alloys necessary for making special ball-bearings, for example, would have repercussions all through a great number of industries. Therefore it is vitally important that the Board should be able to get something done, if they found—maybe because of some foreign happening—that the supply of some vital alloy was lagging and that that alloy was not going to be available in sufficient quantities. I would press the noble Lord to look at this again. There is here no question of Party politics and no question of prestige. I am sure that all noble Lords who know this industry, and its interlocking and integrating qualities, will realise that this is a vital provision in the national interest.
LORD MANCROFT: I think I may be able to assist noble Lords in this respect. When I made my opening remarks, I said that I thought this was a difficult technical subject, and I was clearly right. I think I was right also in the arguments I advanced for letting the clause stand, as the Government wish. There is clearly a sharp division here on a matter which the noble Lord, Lord Wilmot, and the noble and learned Earl, Lord Jowitt, have correctly described as a highly technical matter, one involving no political principles or the principles or the prestige of the Bill. It is conceivable that I may be wrong in what I said in my previous speech. I was speaking from the Despatch Box for myself. I have since consulted with my noble Leader, and we are willing, since the feeling of noble Lords opposite on this technical point appears to be so strong, to take

1021
time to make certain that we are not wrong in the case which we advanced. I can give no more assurance to noble Lords than to say this: that I will consult those who understand these matters so very much better than I do, in order to ascertain that they have not misinformed me and that they are right—as I am sure they are. If the noble Lord will withdraw his Amendment I will look at this matter again, in view of the debate which has taken place and the helpful and technical advice which has been given by noble Lords who have taken part in it. If I can help the noble Lard, I will; if I cannot, I hope that he will not hold me to blame.
LORD WINSTER: May I ask the noble Lord if, while he is making these inquiries, which he has generously promised to do, he will take into consideration one argument which has not, so far as I know, been advanced in support of the Amendment? If the Amendment were accepted I believe that, in ways which cannot exactly be foreseen at the moment, it might stimulate the process of making a thorough and complete survey of our Colonies, where, I believe I am right in saying, many resources exist which have not yet been discovered. Only recently we have found out that in the Island of Jamaica we have been sitting upon immense deposits of bauxite under the impression that they were something resembling the good red earth of Devon. I fear that those resources are now being developed by Canadian interests, and not by our own. I would ask the noble Lord to take into consideration that this Amendment may do something towards stimulating that investigation of our Colonial resources. I support the Amendment for that reason. After all, a cook making a Christmas pudding would not be a very good cook if she satisfied herself merely that the cupboard was full of suet and did not make sure that there was adequate provision of all the other necessary ingredients. I suggest that the survey may well reveal a very full supply of ingredients which we so urgently require existing in our own Colonies.
LORD LLEWELLIN: May I say this, as the noble Lord, Lord Wilmot has referred to me? I believe that any Government have ample powers to see that the provision of raw materials is adequate
1022
—certainly for their defence industries. We did not have a clause of this kind in an Act before the last war started, and it so happened that I went to the Ministry of Supply at its very formation and had a good deal to do with the provision of materials: I was chairman of the Materials Priority Committee, and had to look after them all. Before the war started, the Government of the day, without the advice of any Board such as this, made immense plans and carried out a great many of them. We bought immense quantities of wheat; we bought and filled up a whole lot of tanks with whale oil. All that was done before the war started, and at a time when I had been Civil Lord of the Admiralty for two years before, and knew of the provisions we were making. Through the various Defence Departments we were building up one of the very things that have been talked about here to-day—the alloy steel works.
I believe that any Government have the power, so long as they get authority from the House of Commons for the money, to do any of these things and consult anyone they like. It was done before the war and it can be done at any time by the Government. If it were a question of running out of the appropriate kind of steel for jet engines, it would be absolutely wrong for whoever was the Minister of Supply not to go into this and see that there was ample provision, whatever any Act of Parliament might say. I do not think there is a great deal between us, and therefore I am neutral on this point.
While I am on my feet I would say this, though it is not relevant to this Amendment: I was rather surprised to hear the noble Lord, Lord Wilmot of Selmeston, say that his Party never voted against the Military Training Bill in 1939.
LORD WILMOT OF SELMESTON: I did not say that.
LORD LLEWELLIN: If the noble Lord did not say that, I misunderstood him. I am very glad to hear him now say that he did not say it. I have provided myself with the OFFICIAL REPORT for that period, and although I would acquit the noble Lord himself of voting against the Second Reading of the Bill and the Money Resolution, because I do not find his name on the list, certainly the Party of which he

1023
was then a member in another place voted against both the Bill and the Money Resolution.
LORD WILMOT OF SELMESTON: I should like to thank the noble Lord, Lord Mancroft, for his courteous and reasonable undertaking. We ask no more. We believe that this Amendment stands on its own feet when examined in association with those who know the industry best. I would say to the noble Lord, Lord Llewellin, that it is very unwise to leave provisions of this kind until an emergency appears on the horizon. It is true that there was a shrinkage of the special steels industry, which later was to give us so much trouble. I feel sure that an examination of this matter will justify this Amendment. The noble Lord overlooks the fact that if the Government have sufficient powers derived from other sources, then the whole clause is unnecessary. It is because the Government realise that it is necessary to have special powers in this Bill to ensure, if necessary, the supply of raw materials that they have made this special provision for quarrying and mining iron ore. Our whole case is that if it is desirable to do that—as it is—it is just as desirable to make provision for other ingredients of special steels, which are not only important to our war industries but form the kernel of the whole of our home Sheffield trade. The excellence of British cutting tools, which have a world-wide reputation and world-wide markets, is based upon the continuing progress of our special steels industry, and that progress will be set back if there is not an assured supply of raw materials, including the alloys on which they absolutely depend. I shall be pleased to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD WILMOT OF SELMESTON LORD WILMOT OF SELMESTON had given notice of his intention to move, in subsection (3), to leave out "Iron ore" and insert "raw materials." The noble Lord said: This is the same point and if I moved this Amendment, I should only have to argue it again. Perhaps what the noble Lord, Lord Mancroft, said may be taken to apply to this as well.
4.36 p.m.
LORD SILKIN LORD SILKIN moved, after subsection (4) to insert:
"(5) Whenever under the preceding provisions of this section the Minister may acquire or take on lease any facilities, he may, if he thinks fit and with the approval of the Treasury, compulsorily acquire or compulsorily take on lease those facilities and in such a case the compensation or rent to be paid by the Minister shall in default of agreement be determined by arbitration."
The noble Lord said: Subsection (4) of this clause gives power to the Minister to acquire or take on lease and use facilities, or to make arrangements with any other person for securing the use of those facilities in certain circumstances. This Amendment seeks to put teeth into this provision by enabling the Minister, if he finds it necessary to take action under this subsection, to acquire compulsorily or take on lease compulsorily these facilities, if he is not able to acquire them voluntarily. In a case of that kind compensation is to be settled by arbitration in default of agreement. This is a simple Amendment and one which I think is essential for the proper carrying out of subsection (4). I realise that it would be a rare occasion for the Minister to act under the subsection: it would be only in extreme cases where the facilities available were not being used and the Minister was of opinion that they ought to be used but could find no one to take, them. In such a case he would have to acquire the premises. In most cases he would acquire them by agreement voluntarily, but there may be cases where difficulty may arise, and this Amendment ensures that then the Minister will be able to acquire the premises compulsorily. I beg to move.
Amendment moved—
Page 7, line 19, at end insert the said subsection.—(Lord Silkin.)
THE MARQUESS OF SALISBURY: I am grateful to the noble Lord, Lord Silkin, for the extremely moderate and sensible way in which he has introduced this Amendment. I realise perfectly well that his main purpose is practical rather than ideological and that his object, as he said himself, is to put more teeth into the existing clause. I appreciate that and I should have liked very much to meet him, if I could. My difficulty is that it is the view of the Government that, however well meant, the Amendment would

1025
tend to expand unduly the power of the Minister. As the noble Lord knows, and as I think he has conceded, the Minister has the right under subsection (4) to acquire production facilities which would otherwise not be kept in use, if, in his view, the national interest requires it. We are all in agreement: there is no difference about that.
The difficulty about this Amendment is that it introduces the principle of compulsory purchase. That is giving wide powers, with a vengeance. I am sure noble Lords in all parts of the House will agree that it is most undesirable to provide a Minister, or indeed anybody else, with power of compulsory purchase in a free country, unless it is proved to be absolutely necessary. Moreover, I should have thought that if a firm were really in a bad way—that is the type of concern to which this portion of the Bill refers—and if the Government wished to buy it, compulsory purchase ought not to be necessary. An owner, unless quite exceptionally foolish, would be only too ready to sell his business as a going concern rather than allow his works to go into desuetude and rot away, in which case they would have no more than scrap value.
It may be argued that there might be another buyer, and the fact that there might be another buyer might force up prices against the Government. The noble Lord will surely not accept the view that the State is to buy below market price and thus depress value. That would be an extremely novel and undesirable doctrine. What we all aim at is to get a fair and reasonable price, whether it is done by sale or by whatever other means are employed. That is what the Bill seeks to achieve and that is why it was drafted as it is. I hope that in view of this explanation noble Lords opposite will not find it necessary to press the Amendment further.
LORD WILMOT OF SELMESTON: I am sorry, but there is another aspect of the matter which I do not think has been raised. We are dealing with exceptional cases, but this is the kind of happening which it seems to us it is necessary to provide against also. There may be circumstances in which the Minister thinks it will be wise to acquire a particular unit. The owners, though not successful in running it, may decline to sell
1026
it to the Minister and may wish to pass it on to some other user who, in some circumstances, might not be a desirable purchaser. The Minister should have power to deal with such a case. After all, the Minister is taking action in pursuit of a national obligation, and it is not always desirable to sell to any purchaser. I think the Minister should have power, if he feels it to be necessary, to do what the Amendment provides. Otherwise it may be found that the very property which the Minister thinks he ought to acquire has passed elsewhere.
THE MARQUESS OF SALISBURY: I do not think I can accept the extension of the argument put forward by the noble Lord, Lord Wilmot. In my view it makes the case for the Amendment rather worse than it was before. Subsection (4) refers clearly to any existing production facilities in Great Britain which would not otherwise be kept in use but which ought in the national interest to be kept in use. It does not deal with a desirable or an undesirable owner. I do not think that matter is covered or ought to be covered by this clause. The main object, as I have said, is to prevent facilities becoming derelict where a firm is going out of operation. It is to that end that the subsection is directed, and I think it should not go further than that.
LORD SILKIN: We are all agreed as to the circumstances under which subsection (4) becomes operative. It becomes operative only if three things happen: first if there is an undertaking which is going out of action; secondly, if there is no one else prepared to carry it on; and thirdly, if the Government think that in the public interest it should be carried on. If all these circumstances exist, the Minister will need to acquire these premises. He will in the vast majority of cases be able to acquire them by agreement; and I agree with the noble Marquess that most sellers in those circumstances will be only too anxious to sell their undertaking. No trouble will arise there. But there is always the awkward customer, and it is a useful thing for the Minister to have behind him these powers, not necessarily so that he may use them with a heavy hand, but to facilitate purchase at a reasonable price. And I should have thought that there would be no harm and only good for the Government to take these powers as an insurance and as a reserve which they would rarely ever

1027
use—I can hardly imagine circumstances in which they would be used very often. Otherwise the thing may well become a dead letter. There may be agreement on all these conditions, and then some awkward person or company may say, "No, we are not going to sell you these premises." The Government then are helpless, and ipso facto the public interest is damnified. I cannot see how it can hurt the Government to take these powers. The extent to which they use them is in their discretion. We all agree that these cases will be very rare.
I am not going to cast another fly to the noble Marquess—the last one apparently was not successful: the fish did not rise—but I hope the noble Marquess, if he cannot accept this Amendment, or accept it in this form, will be ready to say that it is something that can be considered, because it seems to us so eminently reasonable and there is nothing ideological about it. We are merely trying to help to make the Bill effective where otherwise in certain circumstances it might be rendered ineffective.
THE MARQUESS OF SALISBURY: There is a difference between the two cases. I want to be quite reasonable and I understand the substance of what the noble Lord says. In the first case, the firm is actually going out of production; it is dead and it is to be revivified by being taken over by the Government. In the second, the concern may not be doing well, but there are a number of competitors for the works. The Government could then walk in. Mind you, it is not only the present Minister who would have these powers; it might be a Minister approved by the noble Lords opposite. It might be a Minister only too anxious to takeover these works. In that case he would say that he wishes to take them over, and competitors would be cut out of the market. The sort of situation I envisage might easily arise. That is an important point. I will say this: there is substance in the Amendment. But I do not want to take back an enormous number of Amendments and raise false hopes, because I shall only be told on Report stage that it was a hollow sham. I do not think there is much chance of meeting noble Lords, but I will look at the matter again.
LORD WILMOT OF SELMESTON: What I have in mind is something that has happened in the past. A works is going out of use; competitive interests want it to go out of use; and now the Minister is going to negotiate a purchase for the purpose of keeping it in use. The competitors then will buy in order to shut it down. In those circumstances, the Minister ought to have these powers.
LORD SILKIN: In view of the noble Marquess's undertaking—and I do not accept it as more than he has stated it to be—I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD WOLVERTON LORD WOLVERTON moved after subsection (5), to insert as a new subsection:
"(6) Nothing in the foregoing provisions of this section shall empower the Minister himself to own, build, or operate seagoing ships."
The noble Lord said: I move this Amendment on behalf of my noble friend Lord Teynham, who was here in the hope that it would come on earlier. He has asked me to apologise because he has an important engagement elsewhere. The effect of this Amendment is to delete from the Bill the powers of the Minister himself to own, build, or operate seagoing ships. However, it does not prevent the Board from arranging or providing transport as covered by Clause 5 (1) (b). I need hardly say that in the past the running of seagoing ships by Government Departments has not been at all successful financially. We feel that adequate arrangements are always available for chartering ships on the exchange, and therefore, it is unnecessary to have this provision in the Bill. On behalf of my noble friend, I beg to move.
Amendment moved—
Page 7, line 22, at end insert the said subsection.—(Lord Wolverton.)
THE MARQUESS OF SALISBURY: I am sorry that the noble Lord, Lord Teynham, is unable to be here, because I should have liked to thank him for drawing attention to the point raised in this Amendment. Noble Lords who have studied this subject will remember that, during the Committee stage of the Bill in another place, my right honourable friend the Minister of Supply introduced Amendments arising out of an

1029
Opposition proposal in Committee to empower the Government to provide facilities outside Great Britain for the supply of iron ore, provided that the Board had reported to the Minister that such facilities were necessary and that they could not secure them by way of consultation with the industry. It was not, however, the Government's intention that they should directly own or operate cargo vessels. The possibility that they might ever be asked by the Board to do so is, of course, extremely remote, but shipping is an international trade, and over many years, in its dealings with other maritime nations, the United Kingdom has resisted policies of intervention by Governments in the normal processes of international shipping. To depart from this traditional policy is a step which we believe would be, in the long run, against our own best interests as the leading maritime Power.
If the Board should ever report to the Minister in respect of facilities covered by Clause 5 (1) (b), and included in their report a proposal that the Government should act in regard to the provision of shipping, it would not be necessary for the Government to own, build or operate sea-going ships. Given the adoption of the Amendment now proposed, the Government will still have power
"to make arrangements with any persons for the provision or use of those facilities by those persons,"
and thus the Government could themselves charter ships for ore-carrying, if the circumstances made it necessary to do so—for instance, at times when freight rates were very high and private interests were reluctant to pay the high rates, and were thus jeopardising iron ore supplies. Furthermore, if it were felt that the provision of additional, specially designed iron ore-carrying ships was necessary, and that private industry was not taking the necessary steps to get them built, the Government could step in and give assurances as to long-term contracts for the use of the ships when built. There can be little doubt that this would be effective in securing the provision of the additional ships. This procedure has, in fact, already been followed by the Minister of Transport in regard to certain troop-carrying vessels. The United Kingdom oil companies rely on similar arrangements for a considerable proportion of the tonnage they need. In these circumstances, and
1030
in view of what I have said, I am glad to say that Her Majesty's Government accept the validity of the considerations which have inspired the noble Lord in tabling this Amendment, and we are happy to accept it.
THE EARL OF DUDLEY: I should like to ask whether this will necessitate an Amendment to page 7, line 5, where it says:
"The Minister may, with the approval of the Treasury, himself provide and use those facilities, or make arrangements with any persons for the provision or use of those facilities by those persons, whether as agents for the Minister or otherwise"
It all follows on front Clause 5 (1) (b), which raises the question of certain facilities being required. Clause 5 (3) (a) says that if
"the Board report to the Minister that additional production facilities in Great Britain or additional facilities such as are mentioned in paragraph (b) of subsection (1) of this section are required.…
and so on. In consequence of that the Minister may, with the approval of the Treasury, himself provide and use those facilities. I think it would be a pity if the powers which are given to the Minister under the Bill were interfered with. It looks to me as though an Amendment will be required on page 7 at line 5.
THE MARQUESS OF SALISBURY: I should like to look into that point. I do not think any Amendment is required, but I will make certain, and if necessary will see that it is put down on the Report stage.
LORD WOLVERTON LORD WOLVERTON I thank Her Majesty's Government for accepting the Amendment.
On Question, Amendment agreed to.
Clause 5, as amended, agreed to.
Clause 6:
Provision of production facilities to be subject to Board's consent in certain cases
(3) The Board shall not refuse their consent to any proposal submitted to them under this section unless it appears to them, after consultation with the person making the proposal and with such representative organisations as the Board consider appropriate, that the proposal will seriously prejudice the efficient and economic development of production facilities, in Great Britain.
4.58 p.m.
LORD OGMORE LORD OGMORE moved, in subsection (3), to leave out "seriously." The noble Lord said: Clause 6, as a whole, so far as I can make out, was not debated at all in another place in Committee. We on this side feel that this is a matter which your Lordships should consider. In the first place, we should like to know how the Government define "seriously." My dictionary, which is a rather old one and possibly has not caught up with the Government, says that "serious" means:
"Grave in manner or disposition; in earnest; not trifling; religious and solemn."
Perhaps the Government will let us know under which of those varied definitions they consider the word "seriously" comes. Perhaps they, in their wisdom, have added a few to the definitions as given by the various dictionaries. We do not quite understand what sort of proposals
"will seriously prejudice the efficient and economic development of production facilities in Great Britain."
Would the Government kindly give us some examples of what proposals would seriously prejudice efficient and economic development, and what proposals would not seriously affect them, but affect them perhaps only in a trilling way? In other words, how do they define this particular adverb?
Why should we not have the words "will prejudice" without any qualification? We think that that would meet the requirements of this subsection. If any proposal prejudices the efficient and economic development of production facilities in Great Britain, then, in our opinion, this subsection should come into force, and the Board should refuse to consent to a proposal submitted to them under the clause. We feel here, as in previous cases when we have raised the same sort of point, that the introduction of a word like "seriously" does nothing to strengthen the Bill, and, in fact, only imports into it an element of doubt and, perhaps, even of irrelevancy. I do not think I need stress or strain this argument any further. I hope that I have made it quite clear to the noble Lord, Lord Mancroft, what our views are. We feel that the word "seriously" should be defined, and that any proposal which prejudiced the efficient and economic development of production should be the subject
1032
of refusal by the Board; that such a proposal ipso facto would seem to be a serious one, because it is a serious subject and might have serious consequences. We feel, therefore, that it is as well that this particular word should be left out of the subsection. I beg to move.
Amendment moved—
Page 8, line 5, leave out ("seriously").—(Lord Ogmore.)
LORD MANCROFT: I do not think there is anything very "serious" standing between the noble Lord and myself on this matter. It is a question of interpretation and draftsmanship more than purpose, because I am certain that what he has in mind as the purpose of this clause is, in fact, what Her Majesty's Government have in mind, and I will try to explain to the noble Lord how we interpret this clause. Clause 6 deals with the negative power of the Board on the industry's development schemes—the power, subject to appeal to the Minister under subsection (4), to withhold consent from producers' schemes. The clause is intended to apply only to major schemes. I quite agree with the noble Lord, Lord Ogmore, that these words are difficult to define—I appreciate that point. I would say that it is almost impossible to define them, but the intention of them in this clause is made clear by the proviso in subsection (3) which says:
"The Board shall not refuse their consent…unless it appears to them…that the proposal will seriously prejudice the efficient and economic development of production facilities in Great Britain."
I can answer the noble Lord, Lord Ogmore, only by saying that it is clear that only a very large scheme could have a serious effect on development and could thus attract this veto. This Amendment seeks to delete the word "seriously" and thus to widen the scope of the Board's veto. I must confess straight away that it would not make it quite unrestricted, since under the preceding subsection (2) the Board is to consult with producers and organisations with a view to ensuring that no person shall be required to submit development schemes for the Board's approval which
"…would be unlikely substantially to affect the efficient and economic development of production facilities…"
Nevertheless, it would go some considerable way in enlarging the Board's powers.

1033
I feel that the Amendment runs counter to the general Government policy expressed by the Bill, and emphasised time and again from this side of the House, to restore the steel industry to private enterprise with the minimum possible of public supervision necessary to ensure the public interest. The noble Lord asked me to try and give examples. It is difficult, but perhaps I can expand this argument a little to see whether I can meet his difficulty. In this Bill we are deliberately limiting the powers of intervention of the Board to cases in which a major scheme might seriously prejudice the balanced development of the industry. The Board's consent to development plans has to be obtained only in the case of schemes of such magnitude as to affect the balance of the industry. We have in mind—and perhaps this will meet the noble Lord's point—big expansion schemes, costing many millions of pounds, in the heavy end of the industry, I am sorry that I cannot for the moment be more precise than that, but it shows roughly what we have in. mind. It is the very essence of this Bill that companies should be free to manage their own affairs with the minimum of control necessary to safeguard the public interest.
Here perhaps I may remind the noble Lord and the 'House of the remarks made by my noble Leader, Lord Salisbury, on the Second Reading of this Bill. He said (OFFICIAL REPORT: Vol. 181, col. 359):
"For the Government, believing as they do in the advantages of private enterprise, feel that it is a serious matter to refuse to allow a company to spend its own money in the way it thinks best."
At such time as the Government of the day feel it necessary to impose limitations on the rate of capital investment, the steel industry will, of course, have to secure approval from the appropriate authority, just like other industries. At other times it its only in respect of very important schemes, which might waste valuable resources or create a serious unbalance in the industry, that the steel industry should be singled out for a control not felt by other industries. For the vast bulk of the schemes the Government's policy (I hope the noble Lord will allow me to say this) is to trust free enterprise, and it wants the Board to do their best work by a positive and constructive approach, not by acting as a bureaucratic check. In their
1034
consultations with industry under Clause 5, the Board will be in a position to use their influence to see that the schemes put forward by the industry conform to technical needs; but if a company is willing to risk its money in a small scheme and take its chance in competing with a large modern unit, there should, so far as I can see, be no reason for restraining it: and, if I may be permitted to say so, jolly good luck to it!
LORD OGMORE: I am grateful to the noble Lord who is very seriously trying to answer my point. I do not quite follow his argument, and I think I may be doing him an injustice if I do not do so. Am I to understand that a small unit, organisation or company would not prejudice the efficient or economic development of production facilities, but that a large one would, and, therefore, that this power must be confined to large undertakings and not extend to small ones? It seems rather art extraordinary argument.
LORD MANCROFT: I am not quite making that point, although I can see that it is a point which can be deduced from this clause. I recognise that a number of small schemes which are individually insignificant may collectively reveal an undesirable trend—I can see that point, of course. That is the crux of the problem. I submit that the way to deal with that point is not through the Board's vetoing one small scheme (which might be an important scheme, although small) and going on vetoing small scheme after small scheme, but to tackle it as part of the general review of the industry's plans and development which will take place under Clause 5. In the view of Her Majesty's Government that is the most important part of the Bill. Much has been said about other clauses that we have been through so far, but so far as development is concerned the opening subsection of Clause 5 is the operative one. We believe, of course, that it is through these consultations with the industry that the Board will exercise their influence upon the structure of the industry, rather than by restrictions, limitations and any other restrictive influences which may be devised. If these consultations take place within the framework of the general review under Clause 5, I feel that the situation envisaged by the Amendment is not likely to arise.

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I agree with the noble Lord that these words are not capable of precise dictionary definition when applied to a particular industry like the iron and steel industry, but I hope that what I have said, and the general tenor of the Bill—as now understood, I am sure, by noble Lords opposite—will show that this point is a vital one. We are anxious that the intervention shall occur only in a major scheme which may seriously prejudice the efficient and economic development of productive facilities in Great Britain. I think that reasonable men and a reasonable Board and, indeed, reasonable people, like the noble Lord, Lord Ogmore, will now appreciate exactly what is meant by that. I hope, therefore, whilst thanking him for the tolerant way in which he has moved this Amendment, that he will see it is necessary that the word "seriously" should remain in the Bill.
LORD WINSTER: Will the noble Lord clear my mind upon this point? Suppose that the Board has reason to think that a proposal will, in the words of the Bill. "seriously prejudice development." Is the Board likely to think that the proposal will cease to "seriously prejudice the development" if it merely prejudices it and no longer seriously prejudices it? Unless the noble Lord is prepared to say that, I think he might well accept this Amendment and withdraw this really meaningless and superfluous word.
5.10 p.m.
LORD MANCROFT: These hypothetical, dialectical points which the noble Lord is thinking up are very confusing for those who are trying to apply themselves to the practical conditions implied by this clause. I am quite certain that the Board will have no difficulty whatever indistinguishing the points. The Board has the power, by its authority, to bring its influence to bear from an early stage on these schemes. I cannot understand the difficulty which the noble Lord foresees in this clause. I am sorry that I have not quite grasped the point; perhaps the noble Lord may care to explain it more carefully.
LORD WINSTER: I think that when the noble Lord reads Hansard to-morrow he will see for himself that the whole case is hypothetical. The very words
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"If they think it seriously prejudices" are wholly hypothetical.
LORD OGMORE: I do not wish to labour this matter. I am grateful for Lord Mancroft's explanation because, for once, it is a true explanation of what the Government have in mind. What they say is that if it is an important prejudice to the efficient and economical development of production facilities in Great Britain, then the Board may refuse their consent to the proposal, but that this does not apply to minor prejudices. The noble Lord has told us what he considers to be minor prejudices: he considers that a small company is likely to be a minor prejudice and a large company a serious prejudice. De minimis non curat lex—or even "non curat" the Government—I have forgotten the Latin for "government." The noble Lord reminds me of a tale, told as long ago as the days of ancient Rome, of a lady who appealed to the crowd for forgiveness for having produced an illegitimate child, on the ground that it was only a small one. The argument of the noble Lord is like that. If the prejudice is small he says, in effect, "do not take any notice"; if it is a large one it must be taken notice of. I do not propose to pursue this point further, and I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
Clause 7 agreed to.
Clause 8:
Duty of producers to comply with Board's determination of maximum prices
8.—(1) Subject to the following provisions of this Act, the Board may, as respects any iron and steel products, determine by instrument in writing the maximum prices to be charged in the United Kingdom for those products by iron and steel producers, and it shall be the duty of every such producer not to charge for those products, when sold in the United Kingdom, prices greater than the maximum prices so determined:
Provided that, before making any determination under this subsection, the Board shall consult with such iron and steel producers and such representative organisations as they consider appropriate, and the Board shall not make any determination under this subsection which would in their opinion be inconsistent with promoting the efficient, economic and adequate supply of iron and steel products.
5.14 p.m.
LORD MILNER OF LEEDS LORD MILNER OF LEEDS moved, in subsection (1), to leave out "Board" (where that word first occurs) and to insert "Minister."
The noble Lord said: I think it may be for the convenience of the House if the House will agree that discussion on this Amendment may cover succeeding Amendments in my name, Amendments No. 25 and Nos.27 to 41 on the Marshalled List. If that is agreeable, I propose to discuss them altogether. As your Lordships will observe, the purpose of this Amendment is to substitute "Minister" for "Board." I would point out to your Lordships that, like so many of these powers which are given to the Board, these powers are all purely permissive. It is interesting to note that the noble Lord who spoke last made it clear that the Board—at any rate as I understand it—are to have in fact little or no power; the power is really to rest with the private enterprises and undertakings. It appears that, with regard to the fixing of prices, the undertakings should do this, and that, in certain circumstances not defined, the Board may determine by instrument in writing any maximum price. I am not clear in what circumstances this maximum price can be fixed. But at any rate the power is purely permissive, and that would appear to indicate that the whole of the powers which it is proposed to give the Board are a sort of faôade.
In the event of the Board having fixed a price there is in Clause 10 an overriding power whereby the Minister may direct the Board to make a determination in regard to prices. The position therefore is, first, that the undertaking has a free hand; secondly, that the Board may in certain circumstances intervene and fix a price; and thirdly, that the Government would appear to have a permissive power to determine the prices by directing the Board. That seems to some of us on this side of the House very circuitous. For a number of reasons, we should prefer that the Minister, and not the Board, should have these powers. In the first place, as your Lordships are aware, the Board is to consist of persons who appear to the Minister to "have had wide experience of, and shown capacity in," the industry in certain directions, and the
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Board will be concerned with the production of iron and steel or activities relating to iron and steel products. There is no one on the Board who is to speak for or have regard to the interest of the consumer. Whether that be so or not, it is the view of noble Lords on this side that Parliament is the better body to fix prices, in order that the consumer, who is principally interested, should have an opportunity of challenging them.
Price, of course, is all-important to the consumer, and it appears to us that in that matter, whatever may be the state of affairs in other matters, the public interest should be paramount. The prices which are fixed by the Board, constituted as it is by those interested in the industry, may be quite right for the industry, but they may be quite wrong for the general public. And, of course, in the fixing of prices there are many social implications of various kinds. There are also implications in regard to rearmament and the supply of iron and steel products. In our view, therefore, the Government should have the deciding word. There is, for example, the question of exports. The Board is not directed, or indeed permitted, to take into consideration questions of imports, whereas the Government must necessarily do so. The power proposed is only a permissive power. It should be a compulsory power with regard to exports, and the power should rest with the Government. The Minister would have an altogether wider appreciation of the factors affecting, or affected by, prices and would be able to fix those prices having greater regard to the public interest. Moreover, he may be questioned or challenged in Parliament with regard to the prices, and that gives a greater safeguard, not only to those undertakings which have need of iron and steel products but also to the general public. For those reasons I beg to move this Amendment.
Amendment moved—
Page 8, line 40, leave out ("Board") and insert ("Minister").—(Lord Milner of Leeds.)
5.20 p.m.
LORD OGMORE: I should like to support my noble friend in his argument on this Amendment, because, in my view, it is so obviously a matter of duty for the Minister and not for the Board. The main concern of this clause is the fixing of a maximum price, and that brings into account a large number of

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considerations which may not be purely trade considerations at all. They might be—indeed, they very likely would be—considerations of national interest, considerations which would be possibly beyond the scope of the Board and the industry, and it is obviously a matter for the Minister to decide on those matters rather than for the Board. I am fortified in my view that this must be so by something that the noble Lord, Lord Mancroft, said yesterday. He said (OFFICIAL REPORT, Vol. 181, col. 964):
"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?"
Obviously, that was his view with regard to full employment affecting the steel industry. It is equally, I suggest, relevant and appropriate when you come to consider maximum prices. There, again, it is the duty of the Government to be responsible for the creation of the conditions which make for an effective industry and
"by internal financial, economic and social policies and by agreements with foreign countries"
to attempt to secure that end. In other words, if the noble Lord resisted the Amendment to make the Board responsible for full employment, saying that this was obviously the concern of the Minister, surely now, when there is a question of maximum price in which the national interest may be at variance with the interests of the steel industry as such, it is also a matter for the Minister and not for the Board. It may well be that it would be highly embarrassing for the Board to have to consider a point of this kind, and I should have thought they would welcome the responsibility and the duty being placed firmly on the Minister.
Of course, the Minister really must come in in all sorts of ways. Only yesterday, the Government announced the Steel Plate Distribution Scheme. This is what the Minister said about it in another place—I am entitled to quote him because this
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was an official statement. Mr. Sandys said (OFFICIAL REPORT, Commons, Vol. 514, col. 648):
"What it means is that the industry is to be given certain general lines on which to proceed by the Government that is to say, certain priorities. Within that they will make such adjustments as they consider are necessary. Over and above that, there will be this Inter-Departmental Committee to which I have referred, which will be able to deal with any cases of difficulty which may be submitted to the Sponsoring Department. As the right hon. Gentleman"—
that is Mr. Strauss—
"knows, each Department sponsors certain industries. The Departments which sponsor the plate-using industries will be represented on this Committee and will be able, through this machinery, to give guidance to the industry; but there is not to be a detailed allocation."
It is a curious coincidence, I think, that at the very moment when this Bill, which we assumed would give the industry a greater latitude, is going through the House, the Government—that is, the Government in another place; I presume the Order will come here later—are making an Order for the control of steel plate distribution. It is a very odd commentary on the various arguments that have been made by the Government that that should be so.
The Government may say, "Yes, but the Order is necessary because there is a great demand for steel plate at the moment and there is not enough supply. We are catering for over-supply." That may be so, but the same principle arises. If you free the industry, you free it; you cannot half free it. You cannot say: "We will free it when there is over-production and we will control it when there is under-production." Once we pass this Bill we cease to have any control—so we understand from the noble Lord, Lord Teynham, who says that the Board is going to be merely advisory. The Government are bringing in a Bill to do one thing while they are bringing in an Order to do something entirely different.
There will be a recession in trade when rearmament slows down and when industry is being reoriented to a civil basis. I do not think that many people would deny that. I feel certain that we ought to have control. We ought to have control of prices by the Minister, who is responsible to Parliament, as the noble Lord, Lord Milner, has so rightly said. But your Lordships may say, "That is

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nonsense; there is going to be no recession." May I say that a recession is already here in certain cases. I gave yesterday the opinion on this question of leading men in the steel industry in South Wales, and only yesterday in another place Mr. Lloyd answered a Question on an industry closely allied to steel, another basic industry—that is, the coal industry. Mr. Lloyd was asked why France had decided to restrict purchases of British coal. Mr. Lloyd said (OFFICIAL REPORT, Commons, Vol. 514, col. 623):
"The present restriction relates to the second quarter of 1953, and I am informed by the National Coal Board that they do not expect to have any difficulties in finding other markets for the coals which France has decided not to buy during this period."
That, as I shall show in a minute, is not necessarily a true and correct appreciation of the point.
Then Mr. Lloyd was asked about the position of the ports. If there is no coal exported, what happens to the ports? Mr. Lloyd said:
"I am afraid it means that other ports"—
not Barry—
"will benefit and that some of the South Wales ports will suffer in this quarter."
Then he was asked what he had done about it, and he replied:
"We have made representations to the French Government."
So Mr. Lloyd had to admit not only that the French Government had cancelled orders for Welsh coal but also that the South Wales ports, including Barry, were badly affected. In the Western Mail to-day on this point, the docks correspondent writes as follows:
"The reduction of the South Wales coal trade to France has been viewed with much misgiving in coal trade circles. For the current three months, business is likely to be as low as 14,000 tons compared with 165,000 tons during the January—March period. This, said the traders, is serious to the traditional French coal exporter who had always relied on this market. Last year, there were signs of this trade expanding and it was hoped that it would have ruled around the 2,000,000 tons mark in 1953. In the latter part of 1952, shipments had improved and were at a rate of 1,200,000 tons a year. It is realised that the French economic and financial position had deteriorated, but operators at the same time wonder whether the Schuman plan has influenced the position."
Steel does not live in a vacuum. Here are foreign buyers refusing our coal, turning our coal down, an action which would have been unheard of a year ago.
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Steel tinplate business is already in recession, and thousands of men are unemployed.
I instanced to your Lordships yesterday the view of the leading men of the South Wales steel trade about the position of the steel industry and the likelihood of grave difficulty. Therefore, with these recessions in prospect, it seems to me that there is a possibility that the question of the maximum price of steel, which governs so much of our industrial life—steel is used in so many things—may he not only an industrial matter for the steel trade but a highly political matter for the country as a whole. I do not think any noble Lord (I am sure this applies to the noble Viscount, Lord Davidson) would deny that for a moment. Therefore, because we feel very strongly about it, we say that the person who ought to decide this question of the maximum price of steel, is the Minister, because he has under his survey the whole of the economic, social and political life of the country, and not merely the industrial aspect of the steel trade which the Board will have.
I wonder whether I can get some support from many noble Lords who have been sitting here for a long time, very patiently, without saying anything, as is usual when the Government is trying to push through a long Bill. It has always been said of Government supporters that they also serve who sit and vote. That is perfectly true. But in regard to this question I would ask some noble Lords to rise in their places and support us, because, here again, this is not really a Party political matter; it is a matter which may have an enormous bearing upon the future economic position of this country and the political situation in this country and abroad. I would ask the Committee to impress upon the Government that this is a matter which has a much wider significance than they have given it in this clause in the Bill, and that the clause would be immensely improved if "Minister" were substituted for "Board."
5.32 p.m.
VISCOUNT DAVIDSON: I am not rising at the invitation of the noble Lord, Lord Ogmore; I had intended to make a few observations on this Amendment in any case. One thing has struck me during the passage of this Bill, through which

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I have sat consistently—namely, that noble Lords opposite have tended all the time to talk more of the steel trade as it was between the wars than as it is now. There has been a great revolution in the steel trade, as those who have been engaged in it know only too well. There is a very highly organised machine; there is complete co-operation within the limits of a certain amount of competition—co-operation in research and in a desire to reduce costs, and therefore prices, to the minimum, and to promote efficiency in every possible way in order that we may compete in the world markets.
All these things have developed almost unseen by the public, and noble Lords opposite may now accept as a fact that the steel trade is quite as conscious of its national duty as is any other trade in the country, and possibly to a greater degree than any other trade in the country. When certain trades were seeking shorter hours and more pay, the steel trade went on to continuous working, recognising the necessity of providing the basic raw materials of the engineering trade, and thus helping the country to get through the crisis which faced it. Now the new organisation of the industry will continue the Iron and Steel Federation, and under this Bill there will be set up a supervisory Board. It is no reflection on any Government, neither this nor the late Government, but if I were asked who was most suited to decide on the appropriate prices, taking into account all the many factors which go to the making up of a price, I should say that the new Steel Board, having at heart all the interests of those engaged in the industry, on both sides—the unions and management—was much better able than a Government Department to fix a price.
What is really necessary is not the substitution of the Minister for the Board in this question of fixing prices but the passage of Clause 10, which gives the Minister an overriding veto on anything which is done in relation to the Board and, in particular, if I read it aright, even on the question of the range of prices. We hope that the Board will have a high measure of confidence and prestige. Once the Bill is through, I hope that everybody, on both sides of the House, will desire that the Board shall be of the highest possible
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quality and command the greatest possible confidence, in the country and in the trade. It would be very unfortunate if from its powers were taken the one most vital and important power of fixing prices, provided always that there is in Clause 10 an overriding veto or control—if you like the use of that word—vested in the ultimate authority in this country that is, the Government. That, I suggest, is a reasonable attitude to adopt. I can quite see—and those who have been in politics for a long time, and who have sat through many years in debates in both Houses know this perfectly well—that there is a policy in all these Amendments. But that policy is diametrically opposed to the policy of those who sit on this side of the House. If you give a Minister greater powers there would once again be a nearer approach to nationalisation. That, I accept. But taking the premise of the Bill, which is to re-establish the steel trade in its full vigour, I hope that the Government will resist this Amendment, because I am sure that in the long run it would not be in the interests either of the nation or of the iron and steel trade upon which, after all, the country must depend for its ultimate success.
LORD BURDEN: If this Amendment has served no other useful purpose than to get on to his feet the noble Viscount who has just spoken, it has been well worth while, because in a few sentences he, as a practical steel man, has blown sky-high the dialectics of his noble Leader. We have heard from the noble Marquess all about the virtues of competition and—I do not mean it offensively—this "claptrap" of "tickling the ears of the groundlings." That has all been blown sky-high by the noble Viscount who, as a practical steel man, knows that since 1932–33, under the Import Duties Act of that year, there has grown up a closer measure of co-operation in practically every branch of the steel industry. He himself has indicated that he wants it to continue. We agree with him. Having come from Sheffield, and knowing a little about the trade, I know that what the noble Viscount has said is correct. Therefore, why should the noble Marquess who leads this House talk, as he does, of the virtues of competition, and all the rest of it, when he knows that it is all "eyewash," and that it has all been said once before? Having

1045
heard from a practical steel man behind him, I think the noble Marquess should recant what he has said, and tell us the truth of the situation.
VISCOUNT DAVIDSON: I am afraid that I cannot let that pass—not that I am here to defend my noble Leader, who is perfectly well able to defend himself, if I may say so. Actually, there is nothing better in this world than good organisation, but there is a very great difference between good organisation with non-competition, and private enterprise based on good organisation and competition. The latter is much more likely to promote the national interest than private enterprise based on bad organisation. That is what I hold most strongly. Do not imagine that I have discussed this matter from the point of view of anything but competition, good organisation, and low costs.
LORD BURDEN: That is the very thing I have been saying; but inside this closely-knit organisation which has been built up under the Federation since 1931, although there is emulation, if you like, there is not competition, in the sense that the noble Marquess has been preaching to the House—cutting of prices and all the rest of it. We all know that to be the case. We ought not to deceive ourselves, and the noble Marquess ought not to endeavour to mislead the Committee, as he has been doing, in talking about the virtues of competition and saying that his philosophy is that of competition and all the virtues in that connection. I repeat that the noble Viscount behind him has blown the noble Leader's dialectics sky-high, and we thank him for it.
5.42 p.m.
LORD MANCROFT: I have heard the noble Lord, Lord Burden, make, if he will allow me to say so, some odd remarks in this House from time to time, but I have never heard anything odder from him than the interpretation which he has just placed on the speech of the noble Viscount, Lord Davidson. It only goes to show how two impressions of one speech can differ. If the noble Lord, Lord Burden, had not got up to say that Lord Davidson had blown the noble Marquess sky-high—and I myself have seen no one looking less blown up—
LORD BURDEN: I said Lord Davidson had blown the dialectics of the noble
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Marquess sky-high. The noble Marquess himself is not going up or down yet.
LORD MANCROFT: If Lord Burden had not got up to make that remark, I was going to get up and express gratitude to Lord Davidson, not only for supporting my noble Leader so staunchly but for taking out of my mouth the very words which I was going to offer to your Lordships in response to this Amendment. Will the noble Lord, Lord Burden forgive me if I now return to the issue before us—namely, whether the Minister or the Board should have these powers which we are now discussing?
Under the Bill as drafted, in Clause 3 (1) (b), the Board have a duty to keep under review the prices charged for iron and steel products, and under Clause 8 the power to fix minimum prices for all such products—except of course castings and forgings, for which there are special provisions in Clause 9. The Minister has an overriding power under Clause 10 to direct the Board, by order, subject to Negative Resolution, to fix maximum prices or vary maximum prices already fixed. A direction can be given only if he
"considers it necessary in the national interest and consistent with promoting the efficient, economic and adequate, supply of iron and steel products."
That point is surely perfectly clear by now. Her Majesty's Government have always made it clear that one of the primary supervisory functions of the Board, to which they attach so much importance, would be in respect of prices. I should have thought it obvious that no Board could exercise proper supervision of the industry unless it was able to control prices. Indeed, this power will be one of the Board's most important sanctions in promoting an efficient, economic and adequate supply, under competitive conditions, of iron and steel products. The Government consider that with a balanced Board, comprising producers, consumers, trade unionists and independents—I make this point particularly for the benefit of Lord Milner of Leeds, and I think that it will set his fears at rest—the Board will, in general, reach balanced conclusions on the best price policy to adopt in carrying out its duties. The matter is so important, however, that the Government agree that the Minister cannot be entirely free of responsibility

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in the matter. They attach much importance to the point, but they think that his power of intervention need not go beyond what is provided for in Clause 10.
I will not waste the time of the Committee any more on this matter, which has been threshed out so thoroughly on both sides. I will sum up with these four points which I think are essential. The first is that price fixing is one of the principal instruments of the Board in securing efficient and adequate production. If you take away from these powers unnecessarily you weaken the Board, and it is our desire to do no such thing. You undermine the Board's prestige if you take away any of these powers unnecessarily and not in the national interest. The second point is that if, in normal times—I emphasise normal times—steel prices are always fixed by the Government of the day, then price fixing, I believe, will inevitably become an issue of Party politics. That, it has been made clear, is, in the view of both sides, highly undesirable. The third point is that the Board will be so constituted as to arrive at a fair and balanced view. I say this again to reassure Lord Milner. I will not go into the details which we traversed yesterday—the details of the composition of the Board. I would ask the noble Lord, if he is still interested, to be good enough to read my remarks again or to go through the Bill, or to study the assurances of my right honourable friend in another place. If he reads those assurances, I am sure he will be satisfied that his fears are ill-founded, and that the Board will be so constituted as to arrive at a fair and balanced view on this vital question of prices.
The last and, I think, overriding—and certainly the most important—point is that Parliament will always have the right to question the Minister on the exercise or non-exercise of his powers. I would submit that those four points are conclusive. The Government attach great importance to them. I hope that I have dealt with the various points raised from the other side of the Chamber. I hope your Lordships will agree that to accept this Amendment would run quite contrary to the whole concept of the Board, and, whilst not being so unkind as to suggest that this is a wrecking Amendment
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—which it is certainly not—I do say that it would seriously undermine this most important part of the Bill.
LORD MILNER OF LEEDS: Would the noble Lord tell me who, in fact, is to fix the prices—the undertakings, the Board or the Minister? I understand from him that the Board are to fix the prices. The noble Lord will appreciate that the power given to the Board is merely permissive. I ask who the Government intend shall fix the prices—the undertakings, the Board, or the Minister.
LORD MANCROFT: The Board, but it is permissive.
SEVERAL NOBLE LORDS: Steel House will do it.
On Question, Amendment negatived.
5.50 p.m.
LORD HAWKE LORD HAWKE moved, in subsection (1), after "maximum" to insert "or minimum." The noble Lord said: It occurred to me that this Bill was incomplete in one respect, and I put down an Amendment which is in itself incomplete. If the Bill were amended in the sense in which I think it should be, it would involve a considerable degree of amendment in other directions, but I have put down this one Amendment in order to make my point. In the normal course of events the industry is going to fix its prices by the Board coming in and fixing maximum prices, or by the Minister coming in and causing the Board to fix maximum prices. In any case the Board would have to have regard to the economic supply of iron and steel products. Admittedly that is in the negative sense, but I think it is a fair inference to make that they have to have in mind the provision of an economic supply of steel products, which, as I read it, means the economic condition of the industry. In other words, the Board must have regard to the continued ability of the industry to go on supplying. And that means adequate prices.
In the last few years we have become so used to talking about maximum prices, because we were in a period of war inflation and the supply was never adequate, that we have not recognised that, in fact, prices in this country have been much too low. For some reason or another we have constantly had prices that have undersold our principal competitors in the

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world market, in some cases by very substantial amounts. Presumably that was on the basis of maximum prices. When the position turns round, however, we may well find that the maximum prices obtainable may not be adequate and it may well be necessary to have this provision for the fixing of minimum prices so that the prices charged may, in fact, prove adequate. We have to remember that public money will be invested in this industry, and if by fixing minimum prices it would be possible to save this public money from loss, clearly it would be to our advantage to do so.
Moreover, the power to fix maximum prices is clearly one which denies the industry the fruits of a boom. It denies them the profits out of which they could build up great resources. One would think, pari passu, that in the other direction there should be some protection to the industry from a slump, when prices go too low. It may be argued, quite correctly, that the industry is a highly organised one and can lock after that itself. I can only say that I have always been deeply impressed by the fate of the Lancashire cotton industry, of which I knew something between the wars. That industry had abundant federations and associations, yet, owing to the obstinacy of an odd individual here and there, great branches of that industry practically committed suicide between the two wars, owing to the lack of ability to bring in, perhaps, one man out of forty who was standing out and spoiling the price arrangements. If the principle of my Amendment is accepted, in the event of any great steel depression if there were such individuals who stood out, and who were not amenable to the internal discipline which the trade might have to impose to secure its self-preservation, under this Bill the Board would have power to enforce these regulations on the offender, always, of course, under the supervision of the Minister. I beg to move.
Amendment moved—
Page 8, line 41, after ("maximum") insert ("or minimum").—(Lord Hawke.)
THE MARQUESS OF SALISBURY: Perhaps I had better say immediately that, however much I respect my noble friend's purpose in moving this Amendment, we shall be unable to accept it.
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I appreciate that there is a case to be made—he made it himself just now; and made it, I thought, moderately and well—for minimum prices. His case was that in times of severely reduced demand, or slump, minimum prices would prevent cut-throat competition, which results in prices being forced so low that insufficient margins are earned to cover necessary replacement and modernisation of plant, and thus in a decline in the efficiency of all producers. In practice, however, voluntary minimum or fixed price agreements within an industry usually apply at other times—that is, at times of roughly equal balance of supply and demand. And at such times, I suggest to the noble Lord, there is an equal danger that they may unduly protect the inefficient firm by fixing a minimum price which enables it to keep going and which gives it an unduly high rate of profit. The whole idea behind the Bill is that competition—I use the word without nervousness, because I see that the noble Lord, Lord Burden, has now left the House—should encourage efficiency by compelling firms to keep their costs down in order to get remunerative orders, and should ensure that savings in costs by improved efficiency are passed on to the consumer. That is the idea we have. The only advantage the consumer might gain by minimum prices in these circumstances is a certain stability in prices—Iadmit that; but probably it would be a stability at a higher level than in a competitive market.
The Bill places on the Board the duty of promoting the efficient, economic and adequate supply of iron and steel under competitive conditions, and I suggest that a power for the Board to fix minimum prices would not be consistent with this. However, there is nothing in the Bill to prevent producers from making voluntary price agreements in times of recession, if they so desire, and in certain circumstances that may be in the national interest. But in my view it would be the Board's duty to discourage agreements which might keep prices at an unduly high level in times of slump or rough balance of supply and demand. Moreover, the powers of the Monopolies Act are available to protect the consumer against undesirable arrangements restricting competition. For these reasons, I do not think this Amendment, however well-meant, would be of assistance to the aim which the Government, and I am

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sure the noble Lord himself, have in view. I feel that it would be out of harmony with the general underlying philosophy of the Bill, which, as I have said, is to provide the minimum of statutory powers necessary to safeguard the national interest. In view of what I have said, I hope that the noble Lord will agree not to press this Amendment. I think the arguments against it outweigh those in its favour.
LORD WILMOT OF SELMESTON: The noble Marquess must feel nervous again, as my noble friend Lord Burden has returned. Unhappily, the word "competition" escaped him before he appeared. I can well understand the noble Marquess's nervousness in talking about competition in this industry, because it is so hard to discern. The noble Lord, Lord Hawke, can withdraw his Amendment with complete confidence that the Iron and Steel Federation will take care of minimum prices in the future, as they have always done in the past. I expect the noble Viscount, Lord Davidson, can give a list, if we ask him, of iron and steel products the minimum prices of which are entirely protected today—products in which there is no competition or variation in prices, no matter from whatever works they come or by whatever works they are delivered.
LORD LAYTON: I am very glad this Amendment has been moved, because though it is a very small Amendment, indeed—only two words—it opens a big issue of policy. It raises an issue of policy which I ventured to suggest in the debate on the Second Reading has not been adequately dealt with in the Bill. There is no general directive at all to the Board about prices and policy generally. All that is said is that the Board may fix maximum prices. There is no indication of its general policy as regards prices. But the major issue in the steel industry is quite likely in a very short time to be how to deal with another variation in prices or production; in effect, we shall return to the sort of problem of boom and slump which we had in the past. If there is, as we must all hope, a decline in international tension and a reduction in the armaments programme, it will be inevitable that there will be a big slump in the demand for steel. Whatever may be done about making good
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that demand, by Government orders, for example—as might have been done, as the Liberal Party so strongly urged, in the 'thirties, as the answer to the problem of the slump then—or by whatever other steps may be taken, there is bound to be an interim period of slump in the demand for and the price of steel. When that happens, we do not want the sort of chaos that occurred in the 'thirties to occur again, with the weakest going to the wall, the highest cost producer closing.
Is it right that this matter should be left entirely to the Federation to deal with? I can see that it is very difficult indeed politically, and it is questionable whether it is in any case desirable, to give a Board of this kind power to fix minimum prices. Certainly, it would be ridiculous to force minimum prices on an unwilling group of manufacturers. Nevertheless, I should have thought it essential that the Government should wish to see something less chaotic than happened in the 'thirties, and should consider what is the right policy to adopt at a time when there is a big surplus of steel. It is quite true that if the industry were nationalised the Minister would settle arbitrarily what would happen; but in the new situation it is a matter which should be considered. For my part, I think the Board should certainly be a party to, and know about, whatever steps are being taken by the Federation. I should like this to be considered before the Bill finally passes: that schemes for minimum prices should be subject to the approval of the Board. So much for the situation internally.
I should like also to mention a point in connection with a proposition that I brought forward in the debate on the Second Reading of the Bill. The Schuman Pool has had to consider precisely this problem of policies and it has developed elaborate steps to deal with the situation where there is a surplus or where there is a scarcity. Also it has dealt with the problem of unemployment in the industry. Its policy is based on the proposition that an industry must make provision for its own unemployment. It is not reasonable to suggest that the same powers should be given in this Bill. The Schuman Pool is, in part, a Government, and so far as rationing is concerned, this function in this country is performed by

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the Government. So far as full employment is concerned, that policy is a function for the Government, though not unemployment within the industry itself. But when it comes to a situation of surplus, then I should have thought it essential, if there is to be a quota system to avoid the chaotic closing of works, that it must be operated through such an organ as the Board set up by this Bill.
If we are to go into contact and be associated with the Schuman Pool—and that is the view that is strongly urged by Labour Members in another place—we shall have to face the issue of this question of policy, and I think the Government will have to take powers to fit in exactly with the rules of the Coal and Steel Authority for dealing with surplus or scarcity; alternatively, it is one of the points on which Her Majesty's Government will have to contract out. Therefore, although the subject may not come into this Bill, it is certain that within a very short time the Government must face the issue of what they are prepared to do in these two eventualities of surplus or scarcity. My only positive contribution to this issue at this moment is to urge Her Majesty's Government very seriously to consider whether they should not give the Board responsibility for part of such measures as may be taken to deal with the bottom of the curve, whether in the form of minimum prices or quotas of production.
LORD BURDEN: I am sorry that I was temporarily away from my place when the noble Marquess, the Leader of the House made some comment concerning me, but I will read his comment tomorrow and, quoting Henley, although I expect my head will be bloody, it will not be bowed. I have been rather intrigued by the remarks of the noble Lord who has just spoken. He has consistently supported the Government in their proposals in this Bill and he has been against any Amendment which has been moved from this side of the House, and now he is coming in to support this little Amendment.
LORD LAYTON: I nearly supported one Amendment.
LORD BURDEN: That is why there is the smiling face of the noble Viscount, Lord Davidson, behind the
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noble Leader. The noble Lord must appreciate that the seat of power now will not be the Board. This Bill provides that the seat of power in the iron and steel industry will be the Iron and Steel Federation. The noble Viscount knows that very well indeed. If the noble Lord thinks that one can, by this Amendment, give an increase of power to the supervisory body, which has authority to ask for some information, but no real power to do anything at all, I think he is really deluding himself. My final remark is that he has been a consistent supporter of the Schuman Plan. I cannot understand why he should support international control but run away from national control of the steel industry.
VISCOUNT DAVIDSON: I should like to say one thing to the noble Lord, Lord Wilmot. He asked whether I could produce a list of various commodities where prices had been fixed. I think it is only fair to say that the prices are fixed in relation to lower cost firms, and not to high cost firms. That is important.
LORD WILMOT OF SELMESTON: But they are fixed.
LORD HAWKE: I felt it my duty to raise this matter because, so far as I am aware, it is the only issue of major policy that seems to have completely escaped the notice of another place. I felt, therefore, that it was our duty to consider it here to some extent. My Amendment has certainly met with a mixed reception: opposition from in front of me, support from my left, I do not quite know what from the noble Lord, Lord Burden, and certainly a strong supporting speech from the noble Lord, Lord Ogmore, delivered on the previous Amendment. However, I do not feel that I have received sufficient support to take this Amendment any further. But before withdrawing it, I would ask my noble Leader to consider whether something might be put in Clause 10 to meet the point my noble friend Lord Layton and I make; in other words, that there should be some residual power in the Minister to see about this matter.
THE MARQUESS OF SALISBURY: I will, of course, look into the noble Lord's suggestion. I will not say more at this stage.
LORD HAWKE: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 8 agreed to.
Clause 9 agreed to.
Clause 10 [Powers of Minister as to prices]:
6.12 p.m.
VISCOUNT LONG VISCOUNT LONG moved, in subsection (1), after "products" (where that word first occurs) to insert, "to which that section for the time being applies." The noble Viscount said: As Clause 10 stands at present, the Minister, in my opinion, has wider powers to fix prices than was intended when the Bill was going through another place. I realise that the question was fully debated there, but I cannot help feeling that the intention was that the powers conferred upon the Minister for fixing prices should refer only to the three conditions which were set down—namely, in the event of a monopoly, if prices were unreasonable, or if the Board were not satisfied. What this Amendment seeks to do is to ensure that, in the event of one of those conditions being infringed by any of the companies, the Minister should have power to take the necessary steps to fix prices. I beg to move.
Amendment moved—
Page 12, line 11, after ("products") insert the said words.—(Viscount Long.)
LORD MANCROFT: I am grateful to the noble Viscount for his clear explanation of this Amendment. It is one which has been suggested once or twice by the Joint Iron Council. It is really only a drafting Amendment, and the Government have much pleasure in accepting it.
On Question, Amendment agreed to.
Clause 10, as amended, agreed to.
Clauses 11 to 14 agreed to.
Clause 15:
Furnishing of information to Board and Minister
(2) The Board shall so exercise their powers under the preceding subsection as to secure that, in such cases as may be defined by notice in writing, if any iron and steel producer, one of whose main activities forms part of the iron and steel industry, proposes to close down any works of substantial size used by him for the purpose of any activity forming part of the iron and steel industry, or any substantial group
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of production facilities in any such works as aforesaid, he shall inform the Board of the proposals as early as practicable.
(4) The Board may by notice in writing require any person engaged in the importation into Great Britain, as a common service for iron and steel producers or any group thereof, of raw materials for use by those producers, to furnish to the Board information relating to such importation as aforesaid.
LORD WILMOT OF SELMESTON LORD WILMOT OF SELMESTON, moved to add to subsection (2):
"and in any event not less than three months before such closing down takes place."
The noble Lord said: As your Lordships will be aware, Clause 15 gives the Board power to call for certain information from iron and steel producers. Subsection (2) says, in effect, that if any iron and steel producer is contemplating closing down any substantial works engaged in the iron and steel industry, then he shall inform the Board of his proposal as soon as may be practicable. This can be an important matter, because it is easy to imagine circumstances in a trade depression—which we trust will not occur—where the closing down of substantial works would have grave social consequences for the whole area. This is a highly concentrated industry, and such a closing down might spread distress, as has happened in the past, throughout a whole locality. The only purpose of this Amendment is somewhat to strengthen the intention of the clause by saying that at least three months' notice should be given of intention to close down a substantial producing unit. It is not unreasonable to ask for three months, because the physical operation of closing down a substantial iron and steel producing unit would certainly require a decision to be taken at least three months before it could become operative. Therefore, it is not unreasonable for the Board to ask for the same notice as the actual proprietors would have of any such intention. I hope the Government will accept this Amendment. I beg to move.
Amendment moved—
Page 16, line 13, at end, insert the said words.—(Lord Wilmot of Selmeston.)
LORD WINSTER: I hope that the Government will be able to accept this Amendment. I must say that I notice a certain change coming over the mentality of the Conservative Party. I always

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understood that that Party was associated to a reasonable extent with the maxim of festina lente: that they were not in a hurry. But in the last two Bills we have been considering they seem to have been in a dreadful hurry. When we had the Transport Bill before us the other day, in the first clause of that Bill they inserted an imposition on the people concerned to go as fast as possible, without any regard whatever to the value of the assets, or to other considerations. Here again, we find the same idea at work: that if an undertaking is to be closed down, it is to be closed down as rapidly as possible. I do not think those words are really worthy of this Bill. If an undertaking is to be closed down, surely there are two factors which ought to be taken into consideration. The first is that the people earning their livelihood in that organisation are entitled to great consideration. Secondly, there are questions of value which would be involved.
For those reasons, I think that merely to give a "blanket" injunction that the whole thing is to be done as rapidly as is practicable is not sufficient. Surely, when one considers the welfare of the people engaged in the industry, and the questions of value involved in the undertaking which is to be closed down, to ask for a period of three months is quite reasonable. In many instances, it is the length of notice one would give to a personal employee. One would not turn him off as rapidly as practicable; one would wish to soften the fact that he was leaving one's employment. In the case of a big concern to ask for what, after all, is a very short period—and three months is not long when people's lives and futures are involved—is, I think, a most reasonable proposal. As in the Bill the Government charge the Board with questions of welfare, surely it is not too much to ask that in this matter welfare may receive proper consideration, and that a period of three months should be regarded as a minimum in which the closing down should take place.
THE MARQUESS OF SALISBURY: This is not one of those Amendments in which there is any difference of intention between us at all. I think that we should all agree—and I certainly do—with what was said by the noble Lord, Lord Winster, just now: that in the unhappy
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event of its being necessary to close down works, the longest notice possible should be given, to enable other arrangements to be made. Purely from the humanitarian point of view, that would be desirable, and also from the business point of view. My right honourable friend the Minister of Supply, when he spoke on a similar Amendment in another place, entirely agreed on that, and even went on to remark that in itself three months was a reasonable and satisfactory time if it was practicable. I should entirely agree with that. My right honourable friend went on to point out that it is not always practicable, and he drew attention to a particular case of some tinplate mill closures—with which I expect the noble Lord, Lord Wilmot, is familiar—during the nationalisation period, where it was possible to give only a few weeks' notice. That view, I understand, was accepted by one of the most knowledgeable spokesmen of the Opposition in another place, the honourable Member for Rotherham. He said that he recognised the technical difficulties of a minimum of three months—at least, so I understand.
I understand that the Minister considered substituting a shorter period of one month, but that he came to the conclusion that one month was so much less than all of us would have wished that it would probably do more harm than good, and that the minimum might in some cases become a maximum. In these circumstances, I hope that noble Lords will not press this Amendment. I can assure them that there is no difference between us at all. It is the object of every one of us to make the notice as long as possible, but for the reasons which the Minister explained in another place, and which were accepted, I gather, by the Opposition, I do not think it would be possible to fix it definitely at so long a period as that.
6.25 p.m.
VISCOUNT HALL: I am rather surprised that the Government cannot accept this Amendment. In this industry the relationship between the workpeople and the employers has been of the happiest over a very long period. Looking back over the last thirty years, as one who has not been so closely connected with this industry as with others, I can say that this industry has always been regarded as the one where the relationship between both sides was of the closest.

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Indeed, in regard to conciliation it has a record second to none—a situation which has brought great advantage both to the employers and to the workpeople. Notwithstanding this relationship and this record regarding conciliation in the history of this industry, it could not prevent large pockets of unemployment, and I have very unhappy memories of some of the works which were closed down and the large communities who were faced with unemployment.
I am not suggesting for a moment that the employers were entirely responsible, but they must have known what was happening. In the old days, the only intimation the workpeople would receive—men who had spent their lives in the industry for the same companies—was merely a notice posted at the gates of the works or at the pit top, indicating that in a week's or a fortnight's time the works would be closed. I agree with the noble Marquess the Leader of the House that this is a human problem and one which ought to be dealt with. Why cannot a company, particularly at a time such as this, indicate to the workmen that there is the possibility of this happening, call into consultation the consultative organisation which this industry has, and then inform the workmen of the cause of the redundancy or the closing down of the works? If there are 1,000 men who have given their life's work to a company, what hardship would there be if the company continued to pay them either their full wages or part-wages for a period of three months, having regard to the service which these men must have given before the industry became a successful industry?
I care not what anyone else says. I have been through a situation of that kind myself, and there is nothing which poisons the minds of men more than what is regarded as an injustice. Indeed, much political and industrial trouble in this country has been caused, not so much by the treatment the men received whilst in the employment of the company, but by the fact that their services were dispensed with without the necessary notice to enable the men to readjust their lives. It is for that reason that I beg the Government at a time like this to show that they really mean what they say. I know the noble Marquess and the Government
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are hoping that as a result of the passing of this Bill, when it is an Act, the problem of the steel industry in this country will be solved. I have listened to the debate from the commencement, and noble Lords opposite appear to listen very little to the appeals which are made from this side dealing with these human problems. If you want this Bill to do what you suggest and hope it is going to do, then for Heaven's sake make a concession. You could never make a greater concession than this: to provide that regard is given to the hundreds of thousands of men forming a pocket of unemployment here, a pocket there. If the Board and the Iron and Steel Federation itself could set up a fund so that if works were closed down before the end of the period of notice, the men could draw their wages until such time as they were able to readjust their lives and get into suitable employment, what harm could be done? I beg the noble Marquess to prevail upon the Government to reconsider their attitude in relation to this great human problem. It will bring no credit to the Government unless they concede what is asked for here.
6.30 p.m.
THE MARQUESS OF SALISBURY: As I am sure noble Lords opposite will realise, the noble Viscount, Lord Hall, in the moving appeal which he has made, was preaching to the converted. All I was saying was that I recognise from the information I have received that this is technically very important. I am only giving the noble Viscount the information which I have. He, as a great expert, has admitted the technical difficulty. I am not an expert: I have only given the House the best information I have. I agree that this is an important matter which must touch the hearts of all of us. If the noble Viscount wishes, I will certainly take it back and look at it again. I am certainly not in disagreement with him; it is only a question whether it is practicable or not. If it is practicable, of course we shall wish to have it in.
LORD WILMOT OF SELMESTON: In view of the noble Marquess's remarks, we will not press this Amendment. But I wonder whether I might make a suggestion. We very much appreciate his statement, and I am sure that he would like to do this if a practical way can be found. I think there is a practical way. I have

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just remembered that in a much less important matter—though still a substantial one—a way has been found. It was decided that shareholders in companies should have the earliest possible notice of an impending dividend and that the companies should be required to give notice to the appropriate authorities as soon as a meeting was convened even to consider the matter. If something were put into the Bill to require a company to give notice as soon as they have called a meeting to consider closing down, that would be an advance on the previous position.
LORD SILKIN: It may assist the noble Marques if I make a suggestion which occurs to me on this point. I think he is concerned, as the Minister is, about the exceptional cases where it will not be possible to give three months' notice, or anything like it, though in the great majority of cases it will be possible. Surely it is possible to legislate that notice shall be three months unless there is very good reason for a shorter period. In other words, the onus will be on those who are not able to give three months' notice to show that they have a very good reason for not being able to give it.
LORD WOLVERTON: I am glad the noble Marquess is going to look into this matter again, because some of us on this side have been feeling on this matter exactly as noble Lords opposite. We are a little worried about it.
LORD WINSTER: The noble Marquess is getting a great many suggestions at the present moment, but I should like to make one more. I recognise that there was force in what he said about its not being practicable. Practicability has to be taken into account. But would not the use of some such words as "three months when that is practicable" serve the purpose? As the noble Marquess said, there is no difference between us in intention. He spoke in a most humanitarian way. But I wonder whether it might not be possible to put in some such words as I have suggested. I do not want to revive old, unhappy things, but this is an industry which has in it some very bitter memories, and some words of this sort would, I think, give the Bill a good start among the labour forces employed.
THE MARQUESS OF SALISBURY: I can assure noble Lords that I will look
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into all the suggestions that have been made.
LORD WILMOT OF SELMESTON: In view of what the noble Marquess has said, I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD WILMOT OF SELMESTON LORD WILMOT OF SELMESTON moved, after subsection (3), to insert:
"(4) The Board or the Minister may by notice in writing require any organisation appearing to the Board or, as the case may be, to the Minister to be representative of iron and steel producers and not to be an organisation wholly or mainly concerned with activities which are not included in the Third Schedule to this Act or are included in paragraph 4 or paragraph 6 of that schedule, to furnish to the Board or, as the case may be, to the Minister such information relating to the activities of the organisation as may reasonably be required by the Board for the purposes of their functions under this Act or, as the case may be, by the Minister for the purpose of his functions under this Act, not being in either case functions relating to activities included in the said paragraph 4 or paragraph 6, and the notice may require any such information to be certified as correct by the Auditors of the organisation.
A notice under this subsection shall, in the case of an organisation which is not a body corporate, be served on, and take effect as a requirement on, such officer of the organisation as appears to the Board or, as the case may be, to the Minister to be appropriate."
The noble Lord said: This Amendment is rather an important one and it has to do with this same question of requiring information. Clause 15, as it stands, gives the Board power to call by notice in writing for information from iron and steel producers, and it is limited to such categories. This Amendment would give to the Board and the Minister power to obtain information which they require, to be certified by auditors if necessary, from other organisations mainly concerned with iron and steel activities. It would also give them power to call for that sort of information for which they would be properly entitled to call under the Act.
Obviously, the purpose of the Amendment is to enable the Board to do something which they may very often require to do, and that is to ask for information from the Iron and Steel Trades Federation. As the Bill stands, the Federation, not being a producer, could not be called upon to furnish information, and this Amendment would make them liable to the same requests as producers were.

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It is very important, because circumstances might arise where it was necessary for the Board to have certain information which only the Federation could supply, and the Board could get it otherwise only by consulting all the members and going through all the statistical performance which the Federation has already done, and done surpassingly well. Therefore, it would seem right that they should have this power.
The second paragraph of the Amendment is required because the first clause deals with corporate bodies, and it may be that some of the Iron and Steel Federation's ramifications and subsidiary organisations may not be corporate bodies. It is necessary, therefore, to make this apply both to incorporated and unincorporated organisations. In view of what I think is the obvious necessity to have this power if the Board is to do this work properly, I venture to hope that the Government will, on this occasion, agree with us. I beg to move.
Amendment moved—
Page 16, line 29, at end insert the said subsection.—(Lord Wilmot of Selmeston.)
LORD MANCROFT: The noble Lord has explained this situation very carefully to the House, and the Amendment which stands in his name and that of the noble and learned Earl, Lord Jowitt, covers, I think, all the difficulties which have arisen in this matter in past negotiations. The noble Lord, Lord Wilmot of Selmeston, expressed the hope that the Government would accept his Amendment. I should hate at this time of the evening to dash his hopes, and I have great pleasure in accepting it.
LORD WILMOT OF SELMESTON: I very much appreciate that.
On Question, Amendment agreed to.
LORD WILMOT OF SELMESTON: I beg to move the next Amendment.
Amendment moved—
Page 16, line 34, at end, insert ("or to the distribution of such raw materials when imported.")—(Lord Wilmot of Selmeston.)
On Question, Amendment agreed to.
LORD WILMOT OF SELMESTON LORD WILMOT OF SELMESTON moved, after subsection (5) to insert:
"(6) For the purpose of verifying or amplifying any information or forecast furnished by an iron and steel producer to the
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Board or to the Minister under this section, the Board or, as the case may be, the Minister, may by notice in writing require that iron and steel producer to provide facilities for the inspection by any personauthorised by the Board or, as the case may be, by the Minister, of any property of or under the control of that iron and steel producer, being property to which that information or forecast relates."
The noble Lord said: This, again, has to do with this matter of requiring information. In view of the happy relations which have now been established between us, I am hoping the Government are going to accept this Amendment also. It is a highly necessary one. The powers which the Bill very properly gives to the Board to require the information are useful and necessary, but there is one obvious omission, and that is that they have no powers to verify the information which they have been given. Now, the Government, in accepting my last Amendment, have admitted the need for powers of verification. As the clause stands, and as we drafted it, the information can be certified by auditors; but there is no provision in the clause, when asking for information from iron and steel producers, requiring it to be verified, nor has the Board any powers of inspection.
It happens that in nearly every case the new clause which I moved last time will have to do with financial information and, therefore, auditors' certificates would normally be adequate verification of that information. But the information called for from producers may be of a much more diverse character than merely financial information. So what is required is not only the power to call for an audit but also the power, if necessary, to make an inspection, because the information may be primarily concerned with physical characteristics of the works which require the inspection of some expert other than a financial expert. Therefore, the purpose of this Amendment is to give the Board the power to verify, in the case of producers, the information supplied, if necessary, in the same way as they will have the power to verify information provided by the Federation. I beg to move.
Amendment moved—
Page 16, line 41, at end insert the said subsection.—(Lord Wilmot of Selmeston.)
VISCOUNT BRIDGEMAN: The noble Lord opposite, I think, has made it

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appear as if this Amendment was almost a natural consequence of the Amendment which my noble friend in front of me accepted last time.
LORD WILMOT OF SELMESTON: I think it is.
VISCOUNT BRIDGEMAN: There, I am afraid, I must differ from him, because, whereas the Amendment last time did, I think, add something which we agreed was lacking—namely, the power to require information from the Federation and associated people—this is quite a different point. Here we are seeking to add to the powers. We already have the power of physical inspection by order, if necessary: that is a different thing altogether. The Bill already gives power to require that the information supplied shall be verified by auditors.
LORD WILMOT OF SELMESTON: No.
EARL JOWITT: Where is that?
VISCOUNT BRIDGEMA.N: Have we not?
EARL JOWITT: No.
LORD WILMOT OF SELMESTON: I wish we had.
VISCOUNT BRIDGEMAN: I am looking now at Clause 15 (3).
LORD WILMOT OF SELMESTON: I am looking at it, too, but I do not see any audit powers.
VISCOUNT BRIDGEMAN: I am looking at subsection (3), lines 27 and 28, on page 16. If information can be certified as correct by auditors, the auditors can deal not only with the accounts, as the noble Lord, Lord Wilmot, said, but also with stocks. I should have thought that information certified by auditors was quite sufficient for any ordinary purpose that might be required, and that information may be given in a friendly atmosphere and according to the ordinary practices of business.
When we come to this Amendment, however, we find something different. We find that we go back to the compulsory powers of inspection, and those compulsory powers, I think, are bound to be
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taken in quite a different atmosphere from the atmosphere in which Lord Wilmot's last Amendment would be applied or the Bill as drafted would work. For that reason, I do not think that this is a good plan. I feel that we are stepping across the border of friendly cooperation between the Minister, the Board, the Federation and the companies themselves, and going back into the atmosphere which I can fairly describe as one in which there might be a possibility of snooping being alleged. I think that the value of this Amendment, which was clearly explained, would be more than outweighed by the disadvantages which I have tried to describe.
LORD SILKIN: Without wishing to detain the Committee for very long, I should just say a word in reply to the noble Viscount who has just spoken. He referred to subsection (3), and I take it that his point was that there is already in the Bill power for the Minister to require these statements to be verified by audit.
VISCOUNT BRIDGEMAN: Yes.
LORD SILKIN: But if the noble Viscount will look carefully at subsection (3), he will see that that is limited to information required for the purpose of fixing maximum prices, whereas the Amendment deals with all the information which may be required by the Board. Subsection (1) of this clause is much wider and deals with things other than maximum prices. For instance, it requires information about stocks, consumption, raw materials and so on. There may be a possible answer if the Board had a right to ask for an audit in respect of the information required by subsection (1) in the same way as they have for information required under subsection (3); but at the moment they have not. Failing that, I think that there is virtue in the Amendment, which, of course, asks for inspection rather than audit—I do not know what my noble friends would say if they were offered an audit.
VISCOUNT BRIDGEMAN: I see the noble Lord's point. I agree with him that the powers regarding auditors refer to that subsection. The noble Lord's argument may well be one for providing for an audit under other subsections, but that is not the Amendment which is before us now. It is a different point.
LORD WILMOT OF SELMESTON: I think I owe the noble Viscount an apology. As he rightly said, there is provision for audit, but only in the limited sense that my noble friend said, not in respect of the whole clause.
VISCOUNT BRIDGEMAN: I am much obliged.
6.48 p.m.
THE MARQUESS OF SALISBURY: Perhaps it may be for the convenience of the House if I say a word or two. It appears a complicated matter but, in essence, the point is a very simple one, as I understand it. It is a question of how this information is to be given on a basis which makes it most likely that the whole scheme will be a success. The whole conception of this Bill, as your Lordships know—and indeed it is bound to be so—is that there should be cordial and confident relations between the Board and the industry. If that is achieved, we may hope that the scheme will be a success. If, on the other hand, that is not achieved, then it is quite clear that the scheme will be a failure. There will be a state of internecine warfare which will be most unfortunate from the point of view of the national interest. If we create an atmosphere of mistrust on the part of the Board towards the industry, that is the one thing which will do more harm than anything else. Inspectors arrive at a works, or whatever it may be, armed with powers—authorised snoopers. We know the sort of thing which, I am sorry to say, has happened to authorised persons with powers in the past, and it is the last thing that we desire to happen now.
I think I am right in saying that a Bill which had similar characteristics was introduced by the late Government in 1947. It was the Statistics of Trade Act and that, of course, provided for the collection of information from industry, just as this does. In that case, however, the Government, quite rightly in my view, did not, I believe (I hope I am right in saying this) include the power to inspect premises for the purpose of verifying or amplifying information. I think they were absolutely right. If you are going to get good results you must trust people. If you think they are going to behave like criminals you will not get the sort of co-operation which will be necessary.
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Already in subsection (5) the Board may, by notice, require any iron and steel producer to furnish information. Then subsection (6) says that it is the duty of every person on whom a notice is served to comply with it. Clause 30 provides penalties for those who provide false information. Those are perhaps necessary sanctions but, just as the Labour Government did with the other Bill, I myself should prefer to trust to co-operation. I believe that by those methods we shall get better results. That is the reason—and we believe it to be a valid reason—why we find it impossible to accept this Amendment.
LORD WILMOT OF SELMESTON: I appreciate the point which the noble Marquess has made, and I certainly do not wish to start up an atmosphere of impending snoopers. But the Government must see the force of the need for verification or they would not have put in the requirements with regard to audit which they have put in at page 16, line 29. If the facts were as the noble Viscount, Lord Bridgeman, believed them to be, that the powers of audit conveyed by lines 28 and 29 applied to the whole clause—a suggestion made by Lord Silkin—then, in view of what the noble Marquess has said, I should feel that that was satisfactory. But the information called for by subsection (1) of Clause 15, and the information called for by subsection (2) of that clause, are every bit as important as the information called for by subsection (3). Why then do the powers to require audit apply only to subsection (3)?
If the noble Marquess will look at the first subsection of Clause 15, he will see that the Board calls for information and forecasts in respect of output and stocks and what-not. It is upon that information that the Board will compile its whole view of the next period of the industry. I do not suggest for a moment that anybody is going deliberately and criminally to set out to mislead the Board, but the necessity for audit is recognised throughout industry, not only as a check upon dishonesty but as a guarantee of accuracy. Some people, in taking stock, have different views from other people in taking stock; it is a subject which is liable to create grave philosophical doubts in some minds, and it is important that the basis

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of stocktaking should be a common basis. If the same auditors and the same practices are made to apply throughout the industry, we shall get a common measure of values. I do press the noble Marquess to have another look at this, because it is not unreasonable to suggest that the noble Viscount, Lord Bridgeman, should have been right; that the powers of audit which he welcomed should be there, and that they should apply to all classes of information and not merely to those contained in subsection (3).
THE MARQUESS OF SALISBURY: The noble Lord talked of an audit. What he is asking for is not an audit at all. He is asking that the iron and steel producer should:
"provide facilities for the inspection by any person authorised by the Board or, as the case may be, by the Minister"—
LORD WILMOT OF SELMESTON: I said that I am quite willing to let that go. The noble Marquess convinced me that that Amendment might be undesirable. If he will give me an audit, I will withdraw it.
THE MARQUESS OF SALISBURY: There is another thing. The noble Lord said there is to be an audit of a forecast. I have never heard of such a thing. I am not very conversant with the duties of an auditor, but the answer to that is that it is not the same thing. The powers that are being asked for are of a very wide character and they are not appropriate to an auditor. We have considered this matter very carefully, but for the reasons which I explained earlier, and with the best will in the world, we do not believe that this is going to be effective; in any case we think that it would do immense harm to the relations between the Board and the industry. For that reason we simply cannot accept the Amendment.
EARL JOWITT: I quite follow the position of the noble Marquess. He does not like the idea of an inspection being imposed upon an unwilling person, and he thinks it may do more harm than good. I was certainly impressed with the observation which he made upon that matter. I do not remember what we did about the Statistics of Trade Act. I have not verified my reference, and I do not
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think the noble Marquess has verified his. But I can well understand that we took the line he has suggested. But what I should like to suggest to him now is this. It is now nearly seven o'clock, the time when we have proposed to adjourn, and I cannot help feeling that, if we do adjourn, we may be able to find a solution here.
My suggestion is this. Let us withdraw our endeavour to impose inspection upon a company; let that go. In return, let the Government concede the certificate of the auditors, which of course, in the nature of things, can never deal with forecasts, but only with facts on which forecasts may be based—if you want to argue upon the facts set out you can do so as much as you like. But if the certificate of the auditors were to deal with the facts set out, just as they deal with the facts set out when you come to price fixing in business, and if there were to be a somewhat wider position with regard to that, then this Amendment can go and we will deal with the matter in that way. I suggest, if I am not exceeding what I ought to say, that we adjourn at this stage, in order that we may consider whether we cannot work out something. There is very little between us here. Indeed, when Lord Bridgeman made his speech, he thought these powers were already there. So far as I am concerned, we shall abandon what we ask for here if we get that slight extension of the powers in relation to an audit. I suggest that, between now and to-morrow morning, we may be able to hit upon some compromise plan.
THE MARQUESS OF SALISBURY: I appreciate that noble Lords opposite would wish to consider the matter further. I think the, debate has been useful, but it is a very unusual plan that we should adjourn in the middle of an Amendment on the Committee stage of a Bill. I do not think I have ever known such a thing happen. Could I not make an alternative suggestion to the noble and learned Earl which might meet him? We have said that we will take back and consider a certain number of things. Will noble Lords opposite take back and reconsider this Amendment, and then they can produce an amended Amendment on the Report stage, which we will consider?
EARL JOWITT: Yes, we will do that. We are all trying to meet one another and to help each other. We will take back the Amendment and see whether we cannot put in an Amendment slightly extending the power in regard to the audit. We will deal with the matter in that way. We shall have an opportunity of discussing the matter between now and the Report stage, even though we have not got the Amendment put down.
Amendment, by leave, withdrawn.
Clause 15, as amended, agreed to.
Clauses 16 and 17 agreed to.
House resumed.

NATIONAL TRUST BILL [H.L.]
Returned from the Commons, agreed to with Amendments: the said Amendments considered and agreed to.

DOVER HARBOUR BILL METROPOLITAN WATER BOARD BILL
Brought from the Commons; read 1a, and referred to the Examiners.
House adjourned at seven o'clock.