HL Deb 08 July 1959 vol 217 cc853-923

2.56 p.m.

LORD EBURY rose to draw attention to the danger to industry of the continued uncertainty as to the limits of State control; and to move for Papers. The noble Lord said: My Lords, it is sometimes said that there are very few major issues dividing the political Parties at this time, but I feel that, if this be the case, the subject to which I am speaking this afternoon must surely be an exception. It seems to me that in our Parliamentary democracy there lies the weakness that matters of the greatest national importance are most subject to bitter political controversy. It cannot, I think, be denied that the future of industry is of the most vital concern to us all, and that by our industrial and scientific progress we shall stand or fall as a nation in the future.

Feeling as I do, therefore, that quite soon decisions may be taken which could make or mar this progress, I wish this afternoon to draw your Lordships' attention to the problem of State control. In doing so, I should like at the outset to regret that much of what I say will be controversial—especially on such a hot afternoon—and to assure noble Lords opposite that, if I criticise their Party, I do so with reluctance, for I should not like them to think that I am not conscious of the part which the Labour Party have played in our history.


My Lords, I observe that the noble Lord seems to be reading word by word from a very long brief. It would have been very helpful if we could all have had it.


I think that that was a rather unfair observation. My Lords, I think that a reasonable case can be made for public utilities being publicly owned——


On a point of order, this matter has constantly been before the House, and the House has expressed its opinion very clearly. Will the noble Viscount the Lord President of the Council take the same rigid line about the Rules of Order as he attempted to enforce on my very senior colleague on my right?


I think the House is usually very generous to its younger Members. Of course, it is out of order to read a speech. On the other hand, I have known some Members of the Front Bench opposite to implement their observations with notes which can be described only as remarkably full. I think that, on the whole, the House should pursue its ordinary traditions of generosity to those who seek to address them from the Back Benches.


Why did not the Lord President of the Council say: "It is out of order, but I permit it"?


My Lords, I am the servant of this House. It is not for me to permit or to refuse to permit anything. And I must say that it is a remarkable suggestion that I should assume these powers.


I am entirely in the hands of the House, and if I may continue my speech——


Hear, hear!


I thank the noble Lords opposite. I was saying that I think that a reasonable case can be made for public utilities being publicly owned. I would not myself quarrel with the proposition that gas, electricity, and water should be State responsibilities. What I do feel is that an exceptionally strong case must be made to justify the transfer of our secondary and major exporting industries from private firms, and it is for this case that I shall listen most carefully when noble Lords opposite come to speak.

I have two major points upon which I wish to base my arguments this afternoon. The first concerns the theory of State control the second the attitude of the Labour Party towards it. I am myself a great believer in an empirical approach, and it seems to me that any would-be reformer, before his reforms are acceptable, must prove first that that which he would reform is in need of reform, and, secondly, that the particular reform he suggests will achieve the desired result. I should have thought it highly arguable that industry was in such a parlous state that the whole structure requires drastic alteration and I should have thought that, even if that were the case, nationalisation would not be the correct solution.

The pros and cons of nationalisation have been argued ad nauseam with great emotion on both sides and without quoting the statistical side of the argument, I should like to state what in my view constitutes the major insuperable objection to nationalisation. In my opinion, the majority of members of the Party opposite are idealists, and in common with most idealists they fall into a very simple trap. They imagine people to be as they wish them to be and not as they really are; but unfortunately human nature has never conformed as the idealists would wish. It would be very pleasant if everyone behaved as he should and never transgressed objective morality—in this would lie the answer to all human ills.

I agree entirely with the theory that man should be completely selfless and should be prepared to sink his efforts in the common good. Indeed, I should like to see a world in which inequality of wealth, greed, class distinction and racial prejudice would no longer exist; a world in which all men would work as a community for the communal good. Unfortunately, this view does not allow for human nature, and facts must be faced as they are; for I am convinced that, with very few exceptions man undoubtedly needs an incentive, if you like a selfish incentive, for which to work. I believe that it is entirely wrong that man should be asked, even by implication, to shed his individuality, and I think I can say that socialism, if carried to its logical conclusion, can result in nothing else. It is here that I believe Russian Marxism is so repugnant. For it is my opinion that man was made in the image of God, and is not just a soulless creature destined merely to perform the tasks allotted to him. I believe this more strongly than anything else in the world. Yet our transition to a state of automation must follow if Socialist thought is pursued to its logical conclusion, and the nationalisation of industry is but a step, albeit a most important step, in this process.

Socialism, by forcing people to work for purely aesthetic rewards, is not only flying in the face of history but directly transgresses the moral principles which it professes to hold so dear, I simply cannot accept that people can or should be persuaded to work as well for the State, and purely for the State, as for themselves. So far from seeing that nationalisation can make industry more effective, in my opinion, by this one criterion alone, it will make it less so. I concede the enormous strides made by industry in the Soviet Union, but in reply I would point out that the system in the Soviet Union is authoritarian and that the Russian people have always been ruled by authoritarian regimes which seem, for some reason, to suit them. Such a system, however, most emphatically does not suit the British people, who have always been proud of their independence. Indeed, I contend that it is this very independence that has had the most tonic effect on our industrial progress.

I recognise the merits of the Civil Service in an administrative capacity, but they just have not the necessary traditions and training to enable them to bring to industry the breadth of vision and dynamic qualities which are necessary and which have been achieved by people trained in competitive conditions. Yet it is the latter class of people the Party opposite seem most anxious to destroy. They are very critical of the operations of gentlemen such as Mr. Clore and Mr. Fraser. They have threatened that under a Labour Government the game will not be worth the candle; and yet the question of who ultimately benefits by the operation of gentlemen such as these tends to be overlooked. There is a carefully fostered illusion that to be a shareholder is to be in some way anti-social, and I have a shrewd suspicion that the dogma of nationalisation is directed just as much against shareholders as it is designed to improve the efficiency of industry. I should just like to ask who are these shareholders. To take but two examples, who benefits from "with profits" insurance policies? And what do trade unions do with their funds? I wonder who pays trade union dues. Perhaps Mr. Cousins keeps the funds of his union at the bottom of his bed.


My Lords, I wish the noble Lord would make that statement clearly, because over here I hear only half his sentences and not the rest.


My Lords, I do not wish to be discourteous to the noble Viscount, but perhaps if he listened to me more instead of conferring with his colleagues it would be better.


My Lords, I am also anxious as my noble friend to hear that phrase, which I did not hear. If the noble Lord would be courteous enough to repeat it I should be most grateful.


My Lords, I join in making an appeal to the noble Lord to make himself more clearly heard.


Very well, my Lords, I will repeat what I said. I wonder where trade unions are paid and where their funds are invested. I also said that I wonder whether Mr. Cousins perhaps kept the dues of his union in his own house or in a bank, and perhaps did not invest the money.


May I put the noble Lord right straight away? All trade union funds are subject to public audit under the Industrial and Provident Societies Act and are submitted to the chief Registrar of Friendly Societies. I am sure that there is no difficulty about the noble Lord understanding that.


My Lords, I think that the noble Viscount is deliberately misunderstanding my point. Perhaps when he comes to speak he could tell me the answer to my question which is: do trade unions invest their money or not? That is all I was saying. These interruptions are quite irrelevant to what was saying.

It seems to me that there is no rhyme or reason about the theory of State control. Logic appears to have been thrown to the winds, for the very words are so emotionally involved with class distinction and half-remembered battles against injustice and inequality that there appears to be little, if any, clear thinking on the subject. Let me make it perfectly plain that I would support any scheme or ideas that would better the lot of the people around me—penal taxation, heavy death duties, abolition of public shools—provided it could be proved that they would achieve the desired object and would work. My fundamental anxiety is that the stresses and strains of uncertainly about how far the State is going to interfere will so hamper industry that it will not be healthy enough to compete for the world markets we so desperately need.

At this critical juncture I think that it is absolutely wrong that private industry should be hamstrung by having to justify and defend its very existence. The Party opposite are highly indignant at the way industry is defending itself. Yet it is they themselves who put industry in a position where it is forced to defend itself. I observe with great interest the latest Socialist line, characterising the Institute of Directors as "faceless" men, who exercise a sinister influence over the Conservative Party. I notice, too, that the members of the Institute of Directors include some of the noble Lords opposite who could not be considered "faceless" and certainly could not be considered to have any influence on the Conservative Party. I believe that industry is absolutely justified in defending itself, just as much as a private individual who feels himself wrongly accused. If the Labour Party say publicly that industry is pursuing private and selfish aims contrary to the national interest, industry is equally at liberty to appeal to public opinion to witness that this is not so.

My main contention in moving this Motion is that it is quite wrong at this vital stage that industry should have to dissipate its energies in such a manner and should be left by the Party opposite in complete uncertainty as to what it should defend itself against. It is my belief not only that if our great exporting industries are State controlled their inspiration will wither and die, but that the very uncertainty as to their future will check them and blunt that vital edge which makes all the difference between capturing and losing world markets. I am sure that noble Lords opposite can cite cases where they feel that industry has not been conforming to the public interest, and I dare say that in some cases I would agree with them.

The point I wish to make is that I do not find take-over bids particularly edifying, and I think that the procedure could be improved upon. But they prove that industry is vital and alive, and that it does afford an opportunity for men of vision and ability to make their mark. Far better this than that they should rot under the dead hand of bureaucracy. The Party opposite, especially at this vital time, must, if they wish to alter the status quo, have something so much better with which to replace it that no one can be in any doubt on the matter.

If the Labour Party wish to put private industry in the dock, the onus is on them to prove their case. I shall be very interested to hear their case. Here I am in some difficulty, because I find it extremely difficult to discover exactly what their case is. There are two distinct trends of thought in the Labour Party at the moment, as far as I can see it. There are those who stand four-square behind the traditional Socialist policy of nationalisation, and there are those who, whilst conceding the value of the part that private industry plays, feel that the nation would benefit more from the profits of industry and envisage the State as holding a watching brief. I would find the latter proposition almost unexceptionable had I not a suspicion that it is purely a piece of vote-catching—I am sorry to say so—designed to achieve the first objective by another means. If this be not the case, I can find no other explanation for the completely contradictory pronouncements we have had from Labour Party spokesmen. And if it is a genuine policy, it does not appear to have a great deal of support in the Party, if the speech of Mr. Cousins yesterday is anything to judge by.

In this I find confirmation of a private belief of mine, and that is that no member of the Socialist Party can in honesty support anything but a policy of total nationalisation. It seems to me that you are either a Socialist supporting Socialist doctrine, or you are not. I cannot be persuaded that men of the intellectual calibre of those who lead the Labour Party would be satisfied with a hybrid policy—neither one thing nor the other. Because all this is so bad for industry, and makes its future prospects seem so uncertain, I must ask noble Lords who speak for the Opposition for a categorical answer to this question: will they please say whether the Labour Party still stands for a genuine Socialist policy—that is to say, nationalisation of all the major industrial undertakings?

It would be tedious to quote the denials and counter-denials we have had recently from the Party opposite; nor would I wish to embarrass them unduly, although they have done their best to try to embarrass me. However, if noble Lords cannot truthfully say that what appears to be the official Labour policy at the moment is not just a device to achieve nationalisation by other means, I shall regretfully have to conclude that the Labour Party intend to fight the Election under false colours. Indeed, there are grounds for believing this already, for if the proposed purchase of equities is not nationalisation by another name, why cannot it be stated that any purchase by the Superannuation Fund will not exceed a certain percentage of the issued equity in the manner of insurance companies?

It seems to me quite unjust that industry should be left in a state of suspense just because the Labour Party cannot compose its differences and produce a clear-cut policy. I should have thought that any political Party seeking election as the Government of the country has a constitutional duty to inform the electorate where it stands and how it intends to treat any given issue, and to give clear and unequivocal answers to questions. At least if the Party opposite said quite plainly that it intended to take over the major industries, everyone would know where he stood. As it is, neither industry nor anyone else has a clear idea what would happen if a Labour Government were returned to power.

Whilst not denying the deep sincerity of the views held by noble Lords opposite, and the difficulties they are facing, I sometimes wonder whether they are aware of the damage they are causing by this uncertainty as to their policy. I think the time will come when, as a Party, they will have to make up their minds whether to follow a genuine Socialist policy or not. I myself believe that they would be all the stronger if they discarded Socialist dogma and concentrated their efforts upon finding some new ideas whilst reserving their deepest concern for human dignity and liberty.

I wish it to be clearly understood that what I am about to say is in no way intended as a personal discourtesy to any noble Lord opposite, but it is something feel I must say. I feel that the tenacity of the Labour Party in hanging on to this dogma does more than anything else to characterise it as an ageing Party, warming its chilly hands at the embers of long dead controversies. It is most instructive to observe how little attraction the Party opposite holds for the younger generation. People like myself, brought up in very different circumstances from the preceding generations, have strong affinities with radical views; yet I, for one, am horrified to find that the Labour Party, which attaches to itself the label of progressive, still seems to draw its inspiration from the static waters of the 'twenties and 'thirties. For a political Party to lose touch with the young is tantamount to signing its own death warrant, and when the young look for a lead for the years to come it will not look to the Labour Party unless drastic changes are made; and unless these changes are made the Labour Party is doomed to the same oblivion which overtook the forebears of the Party sitting on its left. It may be that the present uncertainty is a transitional stage that would decide the fate of the Labour Party one way or the other. Whatever it is, it is bad for industry and bad for the people who work in it. I ask your Lordships to leave no room for doubt upon this matter, and strenuously to affirm your distaste for the present position. I beg to move for Papers.


My Lords, before the noble Lord sits down, may I put one question to him? Would he make it clear—and evidently he wants to be clear in this debate—that the running of capitalism on competitive lines by the State is not, and never has been, anything to do with Socialism?

3.19 p.m.


My Lords, I am sure we are all extremely grateful to the noble Lord, Lord Ebury, for giving us the opportunity to discuss the question of State control of industry. I should have thought that, apart from questions of peace, this was a matter of the most vital concern to every man, woman and child of this country. For that reason, at least, we are extremely grateful to the noble Lord. I myself am grateful to him because he has the occasional habit of leading with his chin; and as he is such a determined south-paw I hope he will not mind if I swing a few left counters at the target which he sticks out, though I will endeavour to restrain myself.

In my view, the noble Lord has couched his attack on much too limited a section of Government control, and I should like rather to widen that attack. On one or two of the points he has made I would assure him that the policy of the Labour Party is made at Annual Conference by the Party, and is announced openly after the fullest possible discussion, possibly fuller than that of any democratic political Party in the world. If there is any confusion, it rests with those who are unable to understand what they read, or, indeed, who do not like or do not wish to understand or accept what they read; there is no confusion otherwise. We read in the newspapers sensational headlines and quotations made out of context. If you examine what Mr. Cousins said yesterday, for example, his Union declared in favour of extension of the principle of nationalisation on a selective and progressive basis to secure control of production and distribution in the national interest. I do not think that anyone on these Benches would dissent from that as being the objective of this Party. Mr. Cousins resisted the demand about the 600 companies, which has never been made by the Party, when he said: It would have been better had the Labour movement said 'We shall take over such industries as are necessary to develop a sound economic and social system'". With that comment I also entirely agree.

If the noble Lord wants a definition of progressive Socialism, then I think he has it there. I think he has rather overdone the concern and the anxieties of industry at the moment. If we judge by the Stock Exchange value of shares quoted, they have increased by £5,000 million in eighteen months. Only yesterday the News Chronicle said this: Stock markets were exceptionally cheerful again yesterday. The Financial Times index, which had been hoisted to a new high record at the end of last week, began this week by rising into still higher ground to 241.6. Leading the general advance in the industrial market was the group of iron and steel shares, where the Steel Company of Wales was outstanding with a rise of 1s. 9d. to 26s. 7½d. And to-day the headline on the City page was, "Still Steels Ahead". I imagine that that brevity is due to the ink shortage, but in any case it is an indication that in those industries where there is supposed to be anxiety and uncertainty it is certainly not shared by the investors.

The noble Lord was good enough to say that he thought there was a reasonable case for utilities such as electricity and water coming under State ownership. I understand his enthusiasm in the case of electricity, because there we have an industry which, after paying out in the last ten years £340 million, with interest on capital and loans, which is equivalent to the return of a first-class equity, has earned profits of £100.million. In addition, the industry has doubled its output with only a 25 per cent. increase in staff, and its prices are only one-third higher than they were prior to nationalisation. I do not suppose there is any other commodity where the price increase has been so small. It is much the same with gas. There, in our view, is a complete justification for public ownership of public utilities such as that, just as the takeover of the mines was completely justified by the increased output under nationalisation, and where (and the ex-Parlimentary Secretary to the Ministry of Labour, Lord McCorquodale of Newton, knows full well) if we had not set up public ownership of the mines we should have had 2 or 3 million unemployed for a good many years that have passed.


My Lords, as the noble Lord has referred to me, may I say that I know nothing of the kind?


Then the noble Lord is not as perspicacious as I imagined he was. Certainly, in my view, we should have had at least such a level of unemployment if our coal production had stayed at its then level instead of rising to 200 million tons, which it would not have done without nationalisation.

I do not wish to pursue this, in my view, narrow front, because Government control of industry is not limited to the whole or partial ownership of particular industries which at present cover only one-fifth of our total industry. I shall study the words of the noble Lord with the keenest interest, because it is so long since I have heard, or thought I heard, that particular philosophy expressed. In my experience of talking to young Conservatives, I have found that they have progressed beyond the point at which the noble Lord still finds himself. However, as I say, I will study his words with the keenest interest.

In my view, through financial and taxation policy the Government should—and certainly this Government do—exercise a full control over every industry, irrespective of ownership. But what industry needs most—and I think this is what the noble Lord had in mind, although I do not think he quite said it—is a settled and continuing policy; and that is precisely where this Government have so signally failed. In four years we have had four Chancellors of the Exchequer, and each one has reversed the policy of his predecessor. We had Mr. Butler's era, which he himself dubbed "the old port and over-ripe pheasant era", which was inevitably followed by Mr. Thorneycroft's 7 per cent.bank rate and his plan which produced.600,000 unemployed. Now with Mr Amory's easing of restrictions the dole queues have been reduced and the production index has been raised. But industry has suffered with every abrupt and unnecessary change. Superficially, with a strong pound, rising gold reserves, increased exports and decreased unemployment the picture is a rosy one until you look at it closer. Then you see that the improved balance of payments and gold reserves are almost entirely accounted for by the fall in prices of imports—what the Prime Minister called "the slice of bloomin' luck". The drop of 67,000 in the unemployment figure last June was indeed the largest single drop in the month of June since the war, but that was only possible because the previous month of May was the highest May figure since the war. As for exports, with an increasing world market, they should be increasing. But the painful truth is that we are getting a smaller share of the whole and that we are losing out to countries like West Germany and Japan.

Yellow teeth always look white when set in a black face. It is much the same with the Government's achievements: their present achievements look well only when contrasted with earlier failures. For example, the cheers for the new production index of 111 die away when you realise that it is the same figure that we reached three years ago, and also when you realise that if we had continued at the rate of increase of production achieved by the Labour Government, something like a 6 per cent. average annual increase, the index would now be 135 and our production of goods at least £1,000 million a year more. The fact is that there must be Government control of industry; the argument between us is over the degree and type of control. Surely we are all prepared to agree with that. We feel that if we cannot afford to pay for unrestricted imports, there should be selective control of type and volume. Similarly, if home production must be cut, we should see that essential items are curtailed least.

Noble Lords opposite believe that high interest rates are the best control. I agree that they are effective, but it is at best a blunt instrument which frequently hurts essential industries and services while leaving the frivolous ones unscathed. Moreover, once a credit squeeze stops the machine, it is not easy to start it again. For example, high interest rates curtailed the building of new council houses and schools, but not city office blocks. Now we find that the Government's new building programme is being held up by an acute shortage of bricks. The squeeze forced many smaller brick companies out of business, and with a lower output the industry cannot supply the increased demand. Builders are therefore working on a day-to-day basis, and because brickmakers are quoting delays of up to six months in delivery there is talk of importing bricks from the Continent and of using alternative materials. Even so, it is expected that the shortage will lead to pockets of unemployment in the building industry, although the demand for building was never higher. This example of gross mismanagement, which could be duplicated in many other industries, is entirely due to the Government's adoption of the wrong method of control, which has thereby stifled and frustrated industry instead of encouraged it.

Another example that is happening before our eyes is in the bacon-curing industry. Having four years ago encouraged the curers to increase their production, the Government now find it necessary to say, "We do not want bacon pigs; we will make it unprofitable"; the curers are now working only at 40 per cent. capacity, and that will obviously grow very rapidly less. It is utterly wrong for the Government to intervene in an industry in this way, encouraging it to expand and then with an abrupt change of policy encompass its ruin. I hope that those two examples and the others which I have adduced are enough to establish my point that financial control is one of the most important and far-reaching which any Government can exercise, and that this Government has exercised it in a manner which has been clumsy, haphazard and, generally speaking, extremely harmful to industry.

I should now like to mention one or two other forms of Government control which our Party will employ when they return to power, and in this particular short section I hope the noble Lord will find some of the answers to the other points which he raised. I would make it clear that we believe in a property-owning democracy where the State's rising prosperity is shared by all; that, wisely used, the miracles of modern science will permit a steady advance in living standards, and that with a determination to encourage the right Government policies men and women need no longer fear unemployment during their working lives or poverty when they are old. One means whereby everyone can share in increased prosperity is for the State to own part of the equity of public companies. In this part of the Labour Party's policy, as noble Lords will be aware, we are following the example of Sir Winston Churchill with regard to the British Petroleum Company, which investment, made on behalf of the State, has now increased nearly one hundredfold. It is rather surprising that it aroused a certain amount of opposition.

This policy will permit a degree of control which will vary, in my view, from the actual to the remote. It is unlikely to interfere anywhere with the actual day-to-day management of a particular industry, but it should enable us to influence the private sphere of industry so that it broadly conforms with the country's general economic policy. Equally important, it will give every man, woman and child in the country a direct stake in these concerns and a share in their increasing prosperity. It is a remarkable fact that since January, 1958, while we have been enduring more unemployment, a mild trade recession and a severe credit squeeze, the capital values of shares quoted on the Stock Exchange in the last eighteen months have increased by some £5,000 million—£100 per head of the population. It is wealth created but not shared by the whole community, because only one person in fifty is a shareholder. Whatever one's views about take-over bids—and the noble Lord was certainly not very happy about them himself——


My Lords, perhaps I may interrupt the noble Lord. I do not like these interruptions any more than other noble Lords. When the noble Lord talks about "creating", has he forgotten the Socialist principle that wealth is created upon the floors of factories, not upon the floors of stock exchanges?


My Lords, I am quite well aware of that and there is no difference of view between my noble friend and myself. If he had heard my whole sentence, he would realise that I said that it was wealth created by the whole community. My noble friend may, if he wishes, argue with me on the narrow point that it is paper money and not real wealth. If my noble friend will allow me to explain, he will realise that I am fully aware that wealth is created only by the application of labour to resources. No one can disagree with that. As I was saying about these take-over bids when my noble friend interrupted me, whatever one's views about them no cane can deny that the people who make a lot of money do not do a hand's turn for it.

This is what the city editor of the Daily Express said recently about what he called "Royal Harrod's stakes": Here is how £100 invested in 1948 could result for the punter today; Harrods, £214,"— a lot more now, of course— Debenham's £400. House of Fraser £1,240. On income in 1948 the House of Fraser returned to £8 7s. for £100 invested; now it is £58 per annum. It may surprise you, my Lords, but these things do not seem at all funny to the chap in the factory and the shop-assistant. They feel that they are being robbed, as in a way they are. I would submit that facts like these are an unanswerable case for the investment of available State funds in suitable equities, thus following the excellent example of the Church Commissioners, the Prudential Assurance Company and indeed the trade unions.

I would say that as the natural tendency develops for firms in certain industries to grow, there is an ever increasing demand from private enterprise for State finance. That is the case not only in the aircraft industry, for a new jet. Colville's have got another £50 million for a new steel mill at Motherwell; there is £30 million for rationalising cotton, and an unknown amount coming up for the two new "Queens" for the Cunard Steam-Ship Company; and of course the list grows. Must it all be for nothing or a low fixed rate of interest? Should it not be by State ownership of ordinary shares? Surely if we allow American financiers to buy themselves into British industry we cannot refuse the same right to the British people.

The noble Lord dealt mainly with the disastrous consequences to management and shareholders of uncertainties regarding changes in Government control of industry. But it seemed to me that he was mainly concerned with the effect on the people who own the shares, the people who own the equities. We on these Benches are much more concerned with the effect of the uncertainties and the inadequacies and the failures of Government policy on the workers. For twenty years we have urged miners to produce more coal and to bring their sons into the industry. Now we find we are importing more oil, we are introducing methane and tail gas and other alternatives for the derivatives of coal. We are maintaining opencast workings. So we shut the publicly-owned pits and sack the miners. The Government transport policy has meant, and is going to mean still more, the sacking of many railway shopmen, particularly craftsmen. The increase in automation inevitably will bring redundancy, and as rockets replace aircraft high-grade technicians lose, and will lose and are losing in thousands, their place in the industry to which they have devoted their lives. When directors of companies are made redundant through take-over bids their farewell is usually sweetened with a very golden handshake. But what about the lower ranks; what do they get? Usually nothing.

In the matter of terminal payments, Britain has the worst record of the industrial nations of the world. In the United States and Canada some nine million workers have agreements for terminal payments when they become displaced through economic dislocation. With unemployment pay they can get for six months nearly two-thirds of their normal pay. Other companies allow a month's pay for every year of service above a certain minimum. In Britain workers, craftsmen and supervisory grades, get precisely one week's pay even though they may have devoted the whole of their working lives to a particular firm or industry. They have perhaps achieved a position of minor responsibility, but with no facilities for retraining their only outlook is an unskilled job and a drastic change in their living standards.

On these Benches we regard this as a scandal which should not be tolerated. We think that workers are as much entitled to a contract of service as directors, and equally entitled to compensation when, for reasons beyond their control, their employment is terminated. We should like the Government to exercise control over industry so that for ordinary workers there should be terminal allowances equal to those now paid to miners who become redundant through reorganisation projects—that is, two-thirds of the minimum wage for 26 weeks. For technicians and supervisory staffs we want allowances similar to those in the first-class agreement endorsed last month by B.O.A.C. This, in addition to a month's notice, provides severance pay on a progressive scale to every employee with more than a year's service and amounting after 24 years to a full year's pay.

It will be noted that both these agreements have been reached in nationalised industries. I do not suggest that they are yet adequate, but they are infinitely superior to anything offered in the majority of privately-owned industries. I think this is the crux of the matter. If we are to achieve the increases in production and living standards which I hope we all desire, it is imperative that the Government should take legislative action to ensure that similar contracts of service are obligatory in all industries. This is not merely a simple act of justice; it is essential if we are to achieve the level of prosperity of which we are capable. I have been in business thirty-five years—and that covers the period of the General Strike—and all my employees are trade unionists. In that time they have never lost an hour's time in an industrial dispute. In my industry we have not had a strike in thirty years. This is not because we pay very high wages; unfortunately, we cannot. It is because we have acted in the belief that, no matter who owns it, an industry cannot he completely successful unless it is a partnership between management and men. I am not thinking of profit-sharing, which is frequently "phony"—and profit is, in any case, not the sole criterion of success, or indeed the best. I am thinking of consultation, consideration, "fair do's" all the way through from top to bottom. 'That does not obtain when a sacked director gets £60,000 and the sacked employee just gets his cards.

This is an important matter which the Government needs to control. I know that many noble Lords opposite must endorse these views and act on them in their private concerns. But we on these Benches regard it as a matter of public concern, and intend to make it so. When we have achieved our objective we shall have industrial peace and prosperity for all. Without it we shall have industrial civil war and the stupid waste and loss which always arises from such conflicts. I am sure that by the end of this debate not only shall we have had a good debate, but we shall realise that we owe a warm "Thank you" to the noble Lord for giving us an opportunity to discuss this most important subject of Government control of industry. Clearly, there is great power in private hands which, in my view, must be watched and controlled.

Most directors of the big companies, whatever are the protests, are virtually self-appointed. Their decisions are largely reached in secret, and, in a practical sense against all the arguments of shareholders, they are unanswerable to no one. Unfortunately, there is no compelling reason why the directors of large corporations should so arrange things that the number of jobs available equals the number of people wanting work. There is no compelling reason for them to see that our exports will equal our imports, or that enough factories and machines are built to guarantee Britain's future. Sometimes these things happen sometimes they do not. The important thing is that what is good for the directors is not always good for Britain.

There are many occasions when the interests of the corporations and the interests of the nation are in conflict. What happens then? Apparently, if the Institute of Directors had their way, the nation would come off second best; big business could do what it liked. Something better than that is needed if we are to make sure of Britain's industrial future. In my view, only wise control by an enlightened Government can ensure our prosperity and safety. Noble Lords opposite may think that the Government should exercise control only when it does not interfere with the profits of financiers and shareholders. We on these Benches think that control should be exercised in such a way as to give the maximum encouragement to production and the maximum benefit to all the people of the country—to all who hold a share in Britain Unlimited. I hope it will not be long before we are given the chance to prove that we are right.


My Lords, before the noble Lord sits down, may I ask him whether he is aware that it was the President of the Institute of Directors, Lord Chandos, who put out the idea of contracts for employees, which I think was confirmed by the Leader of the Opposition in this House? Would he also confirm that the electricity, gas and water undertakings are, in effect, complete monopolies?


My Lords, I was aware, though it was not in my mind at the time, that Lord Chandos did put out the idea of a contract of service; but unfortunately it has not been proceeded with with the vigour and enthusiasm which I should have expected, following such a lead. Therefore there are no major industries in private ownership with any form of contract of service. With regard to the electricity and gas undertakings being complete monopolies, of course they are complete monopolies; but since they are State monopolies they are not forcing up their prices in the same way as the steel monopoly is forcing its price up. It has gone up two and a half times as much as the level in other manufacturing industries. That is the great difference between State and private industry.


My Lords, I did not wish to interrupt the noble Lord in the course of his speech, but before he sits down I should like to ask him one question about compensation. Like many others, I was a director of an electricity undertaking. I was proud of our company. I was sacked by Mr. Shinwell, the then Minister of Fuel and Power, without one penny of compensation. Some managing directors and chairmen had agreements and were given compensation. We did not get a very good deal. We were called "namby-pamby directors" but we were never given one penny.


My Lords, of course, I am not aware of the circumstances of the undertaking to which the noble Lord refers.


They were all the same.


When I speak of a contract of service, I think it should apply to all employees. Directors are employees equally with the people in the workshop. I do not mean that it should be a flat level, but that to each should be given according to his ability. I protest most vigorously against having these contracts of service for directors and nothing at all for the men on the floor.

3.48 p.m.


My Lords, I think we are all indebted to my noble friend Lord Ebury for selecting this most important subject for discussion this afternoon—indeed, the numbers present this afternoon show how much this House appreciates his initiative. I think all of us, wherever we sit, would like to congratulate him, too, upon the excellence of his speech. Some may not agree with everything that he said, but in my submission it was an admirable speech. One thing that I admired more than anything else was how cleverly and with such good nature and skill, he avoided the tripping motion with which the Leader of the Opposition ventured to .start off his speech. I thought that he got over that little difficulty, which I am sure on reflection the noble Viscount will regret, with skill and good nature.

I listened with much interest to the speech of the noble Lord, Lord Stonham. In many ways it was a good speech, and with a great deal of what he said I found myself in agreement. While he was talking about a property-owning democracy, I almost ventured to get up and suggest that he should come over to our side, because that is what we have been preaching for some time, and he has been only lately converted. But what I had hoped to hear from him, and what I think the House failed completely to hear, was anything as to really what was the Labour Party policy with regard to nationalisation. He made excellent remarks about contracts of service, with many of which I believe the whole House is in agreement. But when it came down to what really is going to happen if and when, at some distant future date, the Socialist Opposition becomes Her Majesty's Government, there was very little information indeed. We hope to hear from the noble Viscount the Leader of the Opposition a little later on where his Party stand in this matter; it would appear that that is the main substance of the debate this afternoon, and we have not yet got down to it.

I am particularly anxious and pleased to be able to speak this afternoon because my one real interest in politics in this country in the thirty odd years that I have been devoted to active politics, is to this one issue—Socialism against free enterprise; and once the battle is completely won I shall be able to sit back. I believe that the battle is very nearly won at the present time. Before 1945 it was always rather difficult—and let us admit it—entirely to repudiate Socialist claims for all the wonders which nationalisation was going to bring about, for it had never been tried. Therefore, promises were made; rosy pictures were painted, and nobody could entirely refute them. But then came the Labour Government of 1945, and they started off on the great nationalisation spree with a tremendous flourish—and I do not blame them. The whole country was interested to see whether it would work out in any way in which they had hoped. This was an experimental period and a most valuable experimental period, for the country; and I do not think that, on reflection, any historian will say that those years were wasted, because they gave the most valuable lesson to the country on this whole question.

When I say that they started this nationalisation spree with a flourish, may I make just one quotation from a friend of all of us, or many of us, in this House, Mr. Alfred Barnes, a most able Transport Minister in the Labour Government. He said at the end of December, 1946, just when all this was starting: Give the Labour Government five years of power in the field of transport, and the people of this country will see more progress than would be possible in 500 years of Tory rule. Well, that was the spirit in which it was started. Alas! What was the result? We had six years of Socialist rule, and nothing the Socialist Party asked for was refused them; nothing was withheld. They had every opportunity, and, as everyone knows to-day, wherever he sits in this House, the results have been lamentable.


My Lords, may I just interrupt the noble Lord? Mr. Alfred Barnes was not then aware that the Conservatives were coming in to smash the integrated British transport system, which was making a profit of £4½ million net in 1952 when the Party opposite took over. But they robbed it of all its best paying parts.


My Lords, I do not think that explanation will get past. I do not think that in the five years 500 years of progress was made. Oh, no! May I just give two instances of a verdict on this live years of nationalisation, or indeed, in many cases, a little longer? There was a most interesting article in the Liberal newspaper, the News Chronicle, at the beginning of 1958 by Sir Oscar Hobson whom many of us regard as one of the foremost economists of to-day. This is what he said: Not a single nationalised industry is generally paying its way."— not a single one— Not one of them is paying its way in the sense that it is earning a surplus of revenue over expenditure sufficient to provide for full maintenance of its assets and pay interest on its capital. So much for the economists. But what did the general public think? After all, they are of much more importance even than the economists.

It would be unwise, I suggest, that we should always accept the Gallup Polls as pure gospel, but there is no doubt that they have shown a remarkable accuracy over the years as a measure of the guide or the trend of public opinion. In February, 1959, the Gallup Poll organisation staged a large inquiry on what the people think about nationalisation, and they disclosed as the result of their inquiry that only one person out of eight in this country favoured more nationalization—I repeat, only one person out of eight; and even when you came down to those who claimed to be genuine supporters of the Labour Party, less than one in three said they were enthusiastically in favour of more nationalisation. There was a complete answer to what the man in the street thinks about nationalisation. Only one person in eight wanted any more of it, and you would think, my Lords, that in a rational society, an adult society, such as ours, after the experiment had failed, after the verdict given by the country, two General Elections, Gallup Polls and what-have-you, this issue would be dead.

Now why do the Labour Party so tenaciously hang on to this semi-corpse? Quite clearly, the future of British industry, by which we all live and upon which we all depend for our standard of living, is in real danger once again of being thrown into the political melting pot at any future time in which the Labour Party come into power. Now do they hang on to this outmoded Socialism to appease those of the Left Wing, those like Mr. Bevan of the old days, before he changed his position? He claimed in Tribune in 1952 that The heart and soul of Socialism is public ownership. Michael Foot said: Socialism without public ownership is nothing but a fantastic apology. Or, rather—and I think this is really the truth—was the real reason given by Mr. Allaun, the Labour Member of Parliament for Salford, and a noted publicist? He wrote in Tribune—and I think these words are worth repeating and I think people should remember them: If we give up our policy of common ownership we may as well give up everything. This policy is the most important distinction between the two main Parties. The issue at stake in nationalisation is not only whether industry should be made more efficient;"— and I hope that the noble Lord, Lord Stonham, remembers those words, because he was interested in efficiency— the real question is that of power. I beg noble Lords to remember this. Here is the real crux. The real question is a matter of power. The lure of nationalisation, in my judgment, is this: that it puts power into the hands of those who control Whitehall; the people who really know better what is good for people than the people know themselves." Private ownership diffuses power over a wide field, spreading it so thin that nobody can be corrupted thereby; but nationalisation places all—the workers, the investors, the general public—in the power of the Socialist Government of the day.

I wonder whether I might venture to suggest to your Lordships one or two points of my creed with regard to private ownership. I would apologise if they sound a little dry, but this is the creed in which I believe. Private industry can expand, develop and give to man a higher and better standard of life. I am convinced that the national interests and the interests of all those concerned in industry are best served by freedom—and may I at this point apologise to the noble Viscount, Lord Alexander of Hillsborough, before he goes out, because I am reading two paragraphs: I hope he will not mind.

The system of free enterprise has shown, both in this country and in many others, notably in the North American continent, that it provides a high and rising standard of living at all levels throughout the country. Free enterprise is an efficient system because it gives men the incentive to seek progress through more efficient ways of doing things, and at the same time it subjects them to the spur and to the pressure of competition from others who would seek the same end. And in the result (and this is the important point, I venture to suggest), the consumer gets the things he chooses, not the things which authority thinks that he needs—I would respectfully say that to the noble Earl who is sitting there, and who used to tell us at great length what we ought to have in the old days—and he gets them in ever-increasing quantities. I would claim also that, human nature being what it is, to provide incentives for persons there must be the prospect of reward for those who succeed in competition with their fellow men. A society which is obsessed with ideas of equality denies these personal rewards, and therefore runs a grave risk of settling into a dead stagnation.

Furthermore, the benefits of the system of free enterprise are not only economic. I would venture to suggest that they are both social and moral as well, for free enterprise is built upon the recognition of the overwhelming importance of the individual; and the individual who is self-reliant, who wishes to achieve an advancement for himself and better times for his dependants, should be free to do so by saving some of his income and by acquiring property—and I am delighted that Lord Stonham agrees with us that he should be allowed to acquire property; although I notice that a large amount of Labour policy involves taking it away—a house, maybe, or even shares in a private company. The greater the restriction of ownership of property, the less is the opportunity for encouraging the sense of individual self-reliance; and it is on individual self-reliance that I believe this country, and especially, I am sure the noble Viscount will agree, our country of Scotland, built its great reputation.

I would not at the moment be making a case for the denationalisation of all those industries or services which have already been nationalised. Circumstances vary among them. I was not going to suggest that Lord Stonham should claim that I was making his speech for him. That is why I interrupted him but I am not quarrelling with him entirely about the idea of taking over the coal industry again. It now seems impracticable to restore to private hands, even if it were in principle desirable, some of these nationalised industries. However, there is one which I should like to suggest to your Lordships might well be considered, and that is civil air transport. I think it might be most practicable and desirable in the fairly near future to restore this to freedom and to private hands. But, in any case, whether we do that or not, I am quite sure that the country should not be content with the performance displayed so far by the nationalised industries, which show grave weaknesses.

My Lords, I am sorry to be taking up your time in this way, but this is what I regard as one of the most important debates which will be held in your Lordships' House before the forthcoming Election. I would recommend most humbly to your Lordships, if I may, a little pamphlet—a modest pamphlet in size, and objective in content—published by the Federation of British Industries last autumn. Entitled Nationalisation it was drawn up by a committee under the chairmanship of one of our noble colleagues, and it is, in my judgment, quite unanswerable in the case it makes out for the advantages of private ownership over nationalisation. But what we really want to know, and what this debate that the noble Lord started is really about, is: what do the Opposition really mean? Where do they really stand? What are they going to do about all these things? There was a policy statement issued called Industry and Society. I read it, as no doubt many of your Lordships did. Lord Stonham did not say much about it, but it was passed by the Labour Conference in September, 1957, by no fewer than 5¼ million block votes against 1¼ million; so presumably, therefore, it is Labour Party policy at the present time. But what does this pamphlet mean?—and there comes the rub, because it apparently means everything different to everybody.

Apart from the re-nationalisation of steel—and what a tragedy that is!—and of road haulage, the new policy statement does not give a list of industries such as was given by the old policy statement which are considered ripe for nationalisation. However, there is in it the now famous proposal for taking over (I think it is) 512 big firms; or, if not for taking them over, for buying shares in them, or in some way getting control of, or an interest in, these large private companies. We want to know where they really do stand in this matter. I am personally very interested, because I know that a company in which I am most interested comes in that list, and I should dearly like to know what fate really holds for us in the future if the Socialists get in. But we get no information from the leaders of the Socialist Party on this subject. It was suggested that shares were going to be provided by way of death duties, or that shares were going to be bought out of pension funds. All sorts of suggestions were made, but they were all so vague and in the air. And for this reason no one can blame the Institute of Directors (although I hold no brief for them) for having a little fun by pulling the leg of the Labour Party—and pulling it to no small effect—over the matter of what is exactly meant by all these proposals.

May I read out to the House, at the risk of boring your Lordships, just one or two quotations from important Socialist leaders on what they think these problems are, or what they think this pamphlet which they have adopted means? It will not take long. Mr. Herbert Morrison—who, to the regret of us all, I am sure, is retiring from the House of Commons—said: The document is confusing. It is too clever by half.… I am unhappy about it.… The electorate has a right to know the principles on which a Labour Government would act. I would agree with Mr. Herbert Morrison on that. Mr. Shinwell said: For the sake of our principles and our great movement it should not go any further. It should be strangled at birth. Mr. Ness Edwards, one of the Members of the last Government: The new policy statement leaves us with the feeling that our public school comrades have put cleverness before principle."— a nasty "back-hander" towards his Leader, I thought. Mr. Bottomley: The document is so vague about how much can be done that it can be interpreted by many people in many ways". Others went further. Mr. Baird: This cock-eyed idea of buying shares in capitalist firms. Mr. Allaun, whom I have already quoted: It is not honest with the electorate to be deliberately vague. Miss Jennie Lee: Nothing has reconciled me to the statement on public ownership called Industry and Society" although it had just been adopted by an overwhelming majority. Then from Mr. Callaghan we had this statement: Nothing is to be gained by transferring ownership from functionless shareholders to a functionless State director". My Lords, those are only a few quotations. I have many more, but I will not bother the House with them. But they show, I think, that there is some doubt among the leaders of the Labour Party, and I would suggest that this matter should be cleared up in the interests of decent politics and good government. When we come to an Election, the great thing is that the electorate should know where both Parties stand on the major subjects of the day—and surely the biggest home subject of the day is the ownership of industry. Therefore, I hope that, before the debate is over this afternoon, we shall hear something about where the Parties stand on this subject. I would enter an earnest plea to those on the right of the Labour Party—I know that there are many of them, and we have a high regard for them—who know the great strides that industry has made over the last few years, who know the great benefits which have accrued to so many in our land, including so many who vote for them, and their staunch supporters, to let this matter be judged on its economic and not on a political basis. What folly it would be to throw away all the huge advances which we have made recently in this country and to take up with this antiquated, suspect, discredited, old policy of nationalisation, which I would suggest to your Lordships is completely contrary to the spirit and the genius of the British race!

4.9 p.m.


My Lords, I am not an industrialist, and I speak merely as one who, like millions, is a consumer of the goods and services provided by the nationalised industries. As such, I have a natural interest in, and can look with a very critical eye at, any extensions of nationalisation. The wording of this Motion put down by the noble Lord. Lord Ebury—to whom we are very grateful—draws attention to the danger to industry through the uncertainty as to the limits of State control. There seems to be little doubt that this uncertainty will remain until a General Election is fought, and it does not appear likely that any speaker from the Benches opposite will give us the detailed plans for further nationalisation should they come to power, in the first place, because there appears to be so much disagreement within the Party. I wonder if the noble Viscount who leads the Opposition has gone out to see whether he can find a policy to give to us at the end. It may be that nothing can be decided. Secondly, an extensive programme for further State control would become so unpopular in the country that it would undoubtedly make more certain than ever that a Conservative Government would be returned to power with a very large majority. For this reason, as my noble friend Lord McCorquodale of Newton said, we should all welcome a declaration of policy from noble Lords opposite. But I fear that it will not come.

The other method of allaying this uncertainty would be for my noble friend the Lord President of the Council to inform us to-day of the date of the General Election; but again I think that that is unlikely. I, for one, am happy, with complete but not complacent confidence, to leave this matter in the hands of our able Prime Minister. It is true, indeed, that continued uncertainty is damaging to industry. In fact, the eyes of the world are on the outcome of this Election. We are a small country with great outside responsibility in our Commonwealth. We are just about the most heavily taxed country in the world, and although, in theory, the losses on the nationalised industries are not a call on the taxpayer, as they are, in theory again, losses to be paid back, it is impossible to reduce taxes and keep a balanced economy if more of industry is nationalised and falls back under the dead hand of bureaucracy.

The basis of freedom is not political, it is economic. It rests entirely on and springs from the individual ownership of property. Where this right does not exist and where it is not regularly exercised, at any rate by some members of the community, the individual becomes of less importance than the State and the natural social and economic unit of society—namely, the family—is put at great peril. This effect they have understood well in Russia and in China, which are the only two areas in the world in which a serious attempt is being made to make successful the so-called common ownership of the means of production, distribution and exchange. The Russians and the Chinese, at least, have understood that where the economy of a country is to be successfully controlled by the State, the first thing that must be controlled is labour. That is the cardinal factor in successful nationalisation, which noble Lords on the opposite side of the House have consistently failed to face. But until they do face it and solve it, the dreary catalogue of failure will continue. The question is: do we wish to control labour? I suggest that there are few noble Lords who would accept that conception.

I do not intend to go into the history of nationalisation, except to say that had the losses incurred in the past produced value in either a cheaper product or more efficiency, the money might have been well spent, but the expense and poor quality of coal and the sad story of the railways completely disprove the value of these experiments. Her Majesty's Government, I know, are trying all they can to make nationalisation work, as any subsequent Government will have to do. I understand that an agonising appraisal is going on in British Railways at this time. It seems utter madness to rush into further State ownership, at least until the present industries have been made to work so far as possible. We must remember that it is always easier to spend other people's money than our own, and it is human nature to spend a little bit more or to be perhaps a little careless with with money if it happens to belong to one's firm or to the nation and not to be one's own.

As my noble friend Lord McCorquodale of Newton said, the Socialist Party have put out vague threats—but maybe all this is now off, after the statement which is expected to-day—that on their return to power they will take over, either directly or indirectly, by the purchase of shares, any company which they consider is not working to the common good. Just who is to decide what is the common good is rather difficult, I imagine. Many Socialists, like many Conservatives have denounced in no uncertain terms the practice of take—over bids in industry, but that is exactly what they propose to do. Naturally, in this case there will be no chance for the company concerned to advise shareholders not to accept the bid. The shares in that company will rise as always when there are eager buyers and reluctant sellers and will be purchased at inflated prices with money from the taxpayer's pocket. This cannot be in the interest either of the company or of the people.

I should like to turn for one moment to exports. Prior to nationalisation we exported a great deal of coal, but now Poland and, believe it or not, America can transport coal to the Continent at a cheaper rate than we can. And do not forget that America has to ship it across the Atlantic. The truth is that free enterprise in carrying the entire burden of the nationalised industries on its shoulders. While it is true to say that these shoulders are broad enough to carry some passengers, the body-general of British industry will break down if we add further nationalisation to this burden. That is why the proposals to re-nationalise steel and road haulage are so fantastic and a miserable thought. They should be of great concern to us all.

I cannot close without a word on civil aviation. It seems ridiculous that when reputable companies find it possible to quote fares on the Colonial routes at about half the price of those demanded by B.O.A.C., it is not possible to license them because the Chairman of B.O.A.C. states that although they are in no way tied to the present fares, a reduction would undermine the whole structure of international agreements. We can only hope that the talks now going on will alter this arrangement and that people in our overseas possessions will be able to return home on holiday or see their children at school more frequently, and that those in this country will be able to visit their families overseas. I can only hope and pray that this country will be allowed to go forward to prosperity in the well-proved path of free enterprise rather than fall back into the Slough of Despond of further State ownership, which only a few doctrinaires either believe in or want.


My Lords, before the noble Lord sits down may I ask him this question? He is perfectly entitled to state his view, as he has done clearly, but it sounded to me that he attributed the state of British Railways and of the mines to-day to nationalisation. I accept that that is his view, but is his memory so short that he cannot remember the condition in which those industries were when the State took them over?—the railways completely and utterly bankrupt, making no interest payments to their shareholders, and a mining industry that was practically finished. It was only the State, and State capital that came to those industries, that gave them an opportunity of new life. The noble Lord resents the idea of State money going into an industry. Yet the noble Lord's Party and Government are prepared to pay £30 million to £40 million of taxpayers' money into the cotton industry with no opportunity of ever getting it back. They are even to-day asking Parliament to agree to that, and not putting to Parliament what is going to be the end product of that industry.


My Lords, I thank the noble Lord for that information. One starts off by realising that the two industries, because of the war, were unable to get themselves straight.


Before the war.


Yes. But one must remember one thing, and that is that a good business man and a good director takes over a bad industry maybe on more careful terms than the Socialist Government took over these two industries.


Does the noble Lord mean that we paid too much compensation for them?


In that case.


I am glad to get that clear.


It is not the fault of our side. It was merely the fault of whoever dealt with the situation. I have forgotten the last point made by the noble Lord, Lord Shepherd.


The cotton industry.


That remains to be seen. I am afraid I am not experienced in cotton, so we shall just have to see.


My Lords, may I ask the noble Lord opposite a question? What does he actually mean by "State capital"? Because State capital has come only from private enterprise, from taxation.


My Lords, may I suggest that we are getting a little disorderly? Perhaps the best course would be if a noble Lord addressed the House on some subject.

4.23 p.m.


My Lords, I should like to endorse what my noble friend Lord McCorquodale of Newton said with regard to our feelings of gratitude to my noble friend Lord Ebury for initiating the debate this afternoon, and for his robust and courageous speech, which I am sure was listened to with admiration, if not entirely with agreement. I also welcome this debate because it gives us an opportunity of hearing from the noble Viscount the Leader of the Opposition answers to some of those questions which are being asked, both in your Lordships' House and outside, as to what will be the position in relation to industry and the questions of nationalisation if, as the noble Viscount hopes, his Party are returned to power at the next Election. It is a good opportunity, because there are many misgivings and doubts as to where the Party stand. Are your Lordships not fortunate this afternoon to have such a distinguished member of the Party opposite to give us that clear, concise counsel as to where his Party stand that is being so widely sought and so unsatisfactorily obtained throughout the length and breadth of the country at the present time!

The Motion asks that the uncertainty should be resolved. I think that is certainly an objective, but I submit that the outline of State control and State relationship to industry cannot be a clear-cut one but must always, to some extent, be irregular. I believe that the tide of Government control or relationship must advance and recede on no set pattern but according to the ever-changing circumstances of our economic life. I believe that the days are gone when it is practical politics for two directly opposing forces to argue on very old grounds—the implementation of the Socialist doctrine of nationalisation of the means of production, distribution and exchange. That comes forward only in rather remote pamphlets; it is not practical politics today, although some members of the Socialist Party may say that it is their final objective. But we are not arguing that over the next five years.

Equally, I think the viewpoint that all State ownership must inherently be bad just because it is State ownership has been thrown overboard. As my noble friend Lord McCorquodale of Newton said, we all accept that the mines, the railways and the Post Office are within the province of State ownership, as indeed the present Government have passed a measure for the State ownership of atomic power. One must be reasonable in these matters; one must not be entirely dogmatic, as some of the members of the Party opposite are. On the other hand, I certainly do not accept the nationalisation of steel or road haulage. Nor do we accept the unspecified blank cheque which is being asked for at the present time in the terms of the speeches and writings of the "Shadow" Chancellor of the Exchequer. I think we are entitled to ask, and expect to hear from the noble Viscount, what is the Socialist policy.

The blank cheque is this: that any industry failing the nation may be nationalised. We are entitled to ask whether that means State ownership, or whether it means State participation in shareholding to a degree which gives control. One would like to know which form of State entry into industry we shall have if an industry "fails a nation", as it is called. Some time ago there were 26 industries on what I call the "shopping list" of the Socialist Party. The number was reduced in, I think, Labour Looks Forward to three. Chemicals have now been thrown overboard, and the latest. Socialist proposals deal with steel and road haulage specifically. But behind that there is the threat—I use the word advisedly—that any industry failing the nation may be taken over. That means any and every industry might qualify, in the eyes of a Socialist Administration, for being taken over in one of the two forms—which I do not know, though I hope we shall soon hear.

May I remind your Lordships of what the conditions of failing the nation are? The first is failure to play an adequate part in the national export drive. I find it difficult to imagine road haulage and steel in that category. Road haulage is not intimately concerned with the export drive; and as regards steel, nearly 40 per cent. of the steel industry's products already go abroad. So I do not think you can condemn those two industries which are on the Socialist plate at the present time for nationalisation under that first point.

The second is the abuse of monopoly power. The road haulage organisation has 17,000 different operators in severe competition with each other. Steel is a competitive industry, with the Iron and Steel Board to see that there is competition within that industry. So I do not think that under the second category you can say that the two favourites down the nationalisation course are really qualified. The third is unwillingness to expand sufficiently in the national interest. I find it difficult to see how road haulage can expand, unless it means buying more new vehicles or building a large number of garages or offices. I do not think they fail there. As for steel, there has been an expansion of 75 per cent. since the war.

The next condition is bad industrial relations. From 1949 to 1957 the steel industry lost 76,000 working days in one year, whereas the nationalised coal industry lost 576,000 working days. I grant you that there are more men in the coal industry than in the steel industry; but even allowing for that, the comparison is a very bad one for the nationalised industry as compared with that run by private enterprise. Then there is failure to co-operate in Government planning measures. I suppose that means that any industry which does not conform to Whitehall's dictum is to be nationalised. The last one is "any other tests". What does that mean except tests put forward by a Socialist Administration mirrored in the light of Socialist theory?

I think this unknown position of industry, coupled with the threats made to industry by Labour leaders, and the abuse of industry by Labour leaders, is doing no good at the present time to the industrial prosperity of this country. It is on a successful competitive industry that we all depend. It is not political Parties and political policies which bring about prosperity. For we in this country have nothing left except our skill, and if you thwart and discourage the skill of those who direct, as well as those who work in the industrial life of this country, you will be doing a grave disservice to every citizen in this country, from the highest to the lowest. You cannot get the best out of ownership or direction if these are targets for abuse; if success is penalised, and if industry is used as the fuel for stoking up political prejudice for electoral purposes. The "Shadow" Chancellor of the Exchequer referred the other day to the City of London as a casino. That is cheap; and it does no good. After all, the City of London is a great institution and the foundation of the prosperity of our financial integrity.


That was Maynard Keynes' description, was it not?


Yes; but the "Shadow" Chancellor of the Exchequer was only too happy to trot it out, in order to build up a political point of a cheap character which I am sure does not find countenance in the mind of the noble Viscount.

Then there is the question of tax avoidance. We know, of course, that there is tax avoidance; but the Chancellor of the Exchequer has said that the Inland Revenue have power to deal with it. This is used as a sort of political "Aunt Sally" against the Conservatives and against the present Administration. Here and there there may be tax avoidance, not only among the higher direction but among all sections of the taxpayers. I think it does an ill-service, when the particular instance is exaggerated, to draw a general conclusion, such as Mr. Wilson has been doing.

Then there is the capital gains tax. It sounds attractive to talk about a capital gains tax, but I notice that he has never told us whether there will be a capital loss offset against a capital gains tax. Perhaps the noble Viscount, Lord Alexander of Hillsborough, will be able to give an answer to that question to-day; because if the Socialist Government come in and the financial strength of this country is under suspicion, through extremists' getting hold of the political domination, there will be no question of gains for the Exchequer from a capital gains tax but only offsets from capital losses. I would say: do be careful that you do not embitter and discourage industry for political motives; and be careful that you do not kill incentive and venture.

There is a theory tenaciously held in the Socialist Party that a man should and will work as hard for the State as he will for his own wife, his children and his own material benefit. Maybe it should be so; but it is not so. We all work rather harder for our own families and for those we support than we should for a nebulous State. If you discourage rewards to the extent that is threatened at the present time you may bring about a lethargic laissez faire among those who direct industry at present, who may feel that continuous effort, possibly to an early grave, is not really worthwhile. In that case, it will be not only Conservatives but many of the supporters of the Socialist Party who will suffer.

To me, as a Conservative, the problem of State control is quite a different one from State investment. I think the issue is far too important to be made what I call a political stalking-horse, and it deserves a balanced examination. State participation in investment is a fact to-day, and I believe it is something which is going to increase; because in modern industry capital requirements are such that in many directions the market cannot supply the goods, and only a State guarantee or State participation will supply the capital needs. The noble Lord, Lord Stonham, quoted Cunards, the Colville steel mill, the aircraft industry and the cotton industry. The Socialist Party say that they would like to convert their investment in industry from what I call a fixed-interest time loan to an equity participation to a degree which gives them control of industry. I think that is nationalisation by the back door.

I believe, as the noble Lord, Lord McCorquodale of Newton, said, that centralised control by Whitehall is something which must be resisted if we are to have a free and virile industry. I submit that the answer to the question, "Is it not right that the State should participate in what I call the equity gain in an expanding economy?" lies in the fact that profits tax and income tax are taken by the State, and in that way the State will already, under the present structure of capital investment, participate greatly in any equity gain from industry. I think that by that means we have achieved an amalgam of free enterprise and public participation without the evils of wide expansion of public ownership and control, which I sincerely believe would bring distress and depression to the industry of this country upon which every one of us depends for our present and future living.

4.38 p.m.


My Lords, I should like to say to the noble Lord who put down this Motion that I join with his colleagues on the other side in saying that we are glad he did. If he felt a little hurt at what I said at the beginning, I would say that it is not at all a bad thing, when a young Peer is starting on such an important debate as this, that he should be made aware of what is the generally accepted rule of the House. But I do not think he was really upset, because he took it very well.

When this Motion was put on the Paper I felt that it was either a sincere individualistically-arrived-at conception of what the Business should be for to-day, or that it was maybe a little fly-fishing with an eye upon, possibly, a near campaign for the General Election; I was not quite sure which. It was a little difficult to think that the noble Lord himself had been thinking in the second category, although he had certainly some fairly well-known quotations to make. But as I listened to the subsequent speakers from the opposite side it seemed to me that they had made a careful study, either of their own library of accumulation in the political propaganda sphere or with that subtle prompting that can come from time to time from Party headquarters.

The thing that astonished me most of all was this: that we are continuously, in such a debate as this—this is not the first occasion—being asked, "What is your policy; what are you going to do?". We used to try to find that out in 1950 and 1951. Over and over again we tried to find out, when we were the Government and likely to be approaching an Election, what the Conservative policy was going to be. On the actual detailed summary of policy we never got the answer. All that we really got was: "Set the people free. All these wicked controls that are on now! Set the people free." There was a good deal of argument at the time of the first Election, and even more when it came to the 1951 Election. We said that it appeared fairly certain from those very general statements of the Tories at the time that one of the first things they would do in setting the people free would be to reduce or take off all food subsidies. "Oh, no," said the leaders of the Conservative Party. The noble Earl, Lord Woolton, got on the wireless and gave a political speech to all the housewives in the country: "The wicked Socialists say our policy will be to take off food subsidies. Don't you believe it. It isn't true." And so you got the majority in 1951, and without any real constructive political policy ever having been adumbrated in advance.

At this moment you come along with a little debate like this—rather small and insignificant, in regard to the amount of general interest apparently taken in it—and you say, "What do you mean? What are you going to do? Look at all the uncertainty you are creating". How have we created uncertainty by not stating our policy? Has there ever been an occasion when the Conservative Party have put down upon paper in advance their policy? We have published paper after paper, first for discussion in all the branches of the Party and then carried afterwards in National Conference, in the freest kind of political conference you can find in the world—certainly not conducted like the Conservative Party Conferences, which a lot of delegates attend but in the end they have to conform to what comes out of the leadership at No. 10. And the leadership at No. 10 is not really much in the sphere of the votes of the democratic Party throughout the country; it comes from the top.

In our free National Party Conference we come to decisions and publish them in separate booklets. You have had them all. I found it very difficult to discover, when questions were being put this afternoon, whether the people who seemed to think they knew so much about what was going to happen with the Labour Government have really read all these books. Take a publication like The Future Labour Offers You: I have seen nothing at all to match it in the Tory propaganda literature. I hear in the clubs that I sometimes visit as a guest—I have been at one or two clubs—this man and that man get up and say, "We have a wonderful Government now. What those wicked Socialsits could do now, don't you know! The Government has done it all for them". There is the general idea, "If we could preach to the country enough, what a wonderful success we should have! They would soon forget all those disasters of 1956 and 1957" —when you made such dreadful mistakes and put industry and commerce back by the financial controls you had to impose, some of which still remain. Surely they may also have something to do with the uncertainty in industry.

I was sorry I had to go out for a few minutes when the noble Lord, Lord McCorquodale of Newton, was speaking. He was talking about housing and homes and things of that kind. I understand that he said that the Labour Party would make it difficult for people to own their own houses. Is that so? I was not here.


My Lords, I was pointing out that our policy is to encourage people to own their own homes, and I do not think that that is Labour Party policy.


That is very interesting. The real fact, of course, is that the Labour Party policy has been stated and has been proved in the past. I am interested, as a shareholder in the big Co-operative Building Society. I know exactly what went on in the difficult money circumstances, and of the enormous progress we nevertheless made through the Building Society between the years 1945 and 1951. It is no good looking at me as if we had not done anything to help the building of houses. We did a very great deal and in very difficult financial circumstances, immediately after the war. Our housing policy would help the growing number of people who want to own their own houses, and we will do not only what we have done in the past but very much more in the future. We hope also to do something which has been very much discouraged in the last two years by the Conservative Government—to provide good houses at fair rents for those who live in rented houses or flats, and not to leave them in the position of being bound down by the Rent Acts of this Government, which have led not only to extraordinary rises in rents all over the country but to capital accretions in property companies which are simply amazing. I may mention one or two instances of capital accretions before I sit down, in view of the fact that they have been mentioned to-day.

To encourage home ownership we shall keep down—and I know the noble Lord, Lord McCorquodale of Newton, will expect me to say this—rates of interest. Since Suez, which everybody wants now to treat as a success story for the Tories, most of the building societies have been unable to lend money for home building for less than 6¾ to 6½ per cent.


My Lords, would the noble Viscount kindly tell me in a few words whether he is going to municipalise rent controlled houses of all those who suffered rent control in January, 1956—"Yes" or "No"?


If the noble Lord, Lord Meston, thinks he is at the moment acting in a court of law as prosecuting counsel, he is gravely mistaken. That is not a question that I am going to answer in the manner that he desires. But certainly we have published the fact that rather than follow the process of rent raising and capital accretions to property owners that has been going on, we would prefer to take over houses in that category and to improve them, and to let them at rents reasonable to the people in relation to the improved accommodation.


My Lords, I am grateful to the noble Viscount for giving way and for giving those concrete facts of what the Labour Party propose to do. That is what we want and we are delighted to know it. He made a most interesting statement just then: that the Labour Party, artificially, I presume, are going to keep down interest rates. In view of the disasters that followed Mr. Dalton's efforts to do that ten years ago, I am really wondering how he is proposing to do that and carry it out this time. It is very important.


My Lords, one of the first things we shall have to do is so to conduct our general policy, not as the Tory Government did but so that we do not have to put up interest rates to 7 per cent. plus. For the last 2½ to 3 years that has been the biggest handicap in getting on with the building of houses. All the local authorities under their housing policy have had to pay untold amounts in rates of interest for their public works. That has all been due to the policy of the Government. Now you want to go to the country with that as a success story, because the position is a little better now. It is quite amazing to think that you should be able to count upon the memories of the people of this country as being as short as all that.

Now I want to refer to one or two of the earlier parts of the speech of the noble Lord, Lord Ebury. I was intensely interested to hear what little I did at the beginning—it was extremely difficult at the beginning—of his general ideas on politics. It seemed to me that he was very nearly in the same state of mind as myself when I was first becoming interested as a young Socialist. He was like the idealist. He wanted to see that in whatever way he acted, it would be in the interests of all men and not for selfish purposes and motives. It was a beautiful thing. But as he went on with his speech and gradually wandered away from this basis of idealism, I said to myself, "I really must get him on this before he goes any farther in his political explorations and while he is at a young age." I advise him not to consult his immediate experience under Tory partners, but let him go back to the writings of Ralph Waldo Emerson.

There is a young man—I shall not mention his name—in the Conservative Cabinet to-day who once asked my advice about going into politics. I said, "Whatever Party you go into is a matter for you to decide upon on the facts as they present themselves to you. But do not go into politics at all unless you think you have got a mission. Just have a look at the writings of Ralph Waldo Emerson. He says in his essay on Politics: What the tender poetic youth dreams, prays or paints to-day but shuns the ridicule of saying aloud, shall presently become the resolutions of public bodies, thence to be carried by Bill of grievance and rights through conflict and war until it is the establishment of law for one hundred years; thence to give place to new prayers, new dreams, new pictures. That influenced me as a young man more than anything else I read at that time or since.

If those early passages of the noble Lord's speech this afternoon mean anything I would say, "Here is a fine soul at heart. It is like a brand to be plucked from the burning. I must put him on to one of the best sources of inspiration as to what should be at the basis of a man's political life." One should have a mission. I do not care what Party one is in so long as there is a real mission. It seemed to me that here was a little of the missionary spirit at the beginning of the noble Lord's speech, and I am much obliged to him for it.

Referring to some of the arguments which have been used, anybody would think, sizing up the arguments in regard to the nationalisation policy carried out by the Labour Government between 1945 and 1951, that it was something which could well have been done without, although in one or two later speeches there were some indications that nothing else could have been done with the railways and the mines. But that view did not seem to be generally held; nor is it being generally held in the Tory Party to-day. Mr. Nabarro, for example, thinks that you should at least have another mine take-over—choose the best of the mines that are left—and that all the others should go to waste. Then there is Mr. Harmar Nicholls, who, I believe, is a Junior Minister in the Government and who has been spreading his sails to the winds by suggesting more casting back of the national assets now possessed by the people to the uncertainties of private enterprise. We get that evidenced, on examination by question and answer, in the famous instance of S. G. Brown and Company, which was an outstanding success in national ownership of a productive, expanding and scientific industry of national importance, and is now only to be thrown back to private enterprise—snatched away from the ownership of the people.

All I have to say on those two questions—I am saying this especially for the benefit of the noble Lord, Lord Grenfell, who seemed to think that mines and railways were really in the condition in which they are to-day because of nationalisation, a most interesting supposition—is that in the history of the mining industry of this country in the middle and late 'nineties the best seams of coal were always exploited at the lowest cost of labour and the difficult seams were left, and sometimes mines were either half abandoned or wholly abandoned. The general state of the mining industry was chronic in the extreme. Long before the outbreak of the last war, not only the miners themselves but any decent student of current industrial happenings knew there was no real answer to the coal problem except national ownership. The noble Lord, Lord McGowan, is retired from industry, but certainly at the time when he was at the head of the Imperial Chemical Industries he combined a kind of profound knowledge of industry and public relations in regard to industry. He it was who said that if it had not been for the nationalisation of the coal mines, there would have been added at least another one million to the unemployed list of this country.

Let us turn to the railways. In the old days when the railways were first set up there were 147 companies. The noble Lord, Lord Balfour of Inchrye, seemed just now to be very pleased, because he said that in the road industry at the present time there are 17,000 different operators competing one with another. This is all in my lifetime. We had 147 railway companies, not always competing because some of them were complementary to others, but most of the big lines were competing with one another. What was the result? In the middle of the nineteenth century railway debenture stock was a first-class trustee security. I could go on 'Change before and after the First World War and buy debenture stock which ought to have been worth £100, but on the market it was worth £9 to £10. Category after category of the debenture and preference stocks——


Not debentures.


I beg your Lordships' pardon. I think the one thing that was really stable, not in all the companies but in the Great Western, was the 5 per cent. Preference stock. I used to have these figures all in my head, because I studied them so much. But certainly the general position stands that the railways would never have recovered.

In the war period we knew that they were absolutely indispensable to the strategy and safety of the country. When we came to the war, and I was one of the Service Ministers, we had to face these problems. We knew that unless we put our hands into the State pocket and pulled out during the war hundreds of millions of pounds we should be let down strategically, and we were bound to keep them going. We had to put our preference traffic on for the war materials and the like. There would be no replenishment of stock, and no refurbishing of the locomotive departments; all that would have to wait in the interests of the country. When it came to the question in 1946–47, of whether or not the railways should be taken over, there was no alternative to any Government but to take them over. And the answer now which the noble Lord, Lord Grenfell, can make to me is only one thing; that perhaps, after all, what you wanted was one good businessman to arrange at what price you took over. That was the effect of his answer just now. Although we have been "slammed" from Dan to Beersheba about taking over these things at a price, here is the noble Lord, with all his experience of the City, who says, "Perhaps you paid too much."


My Lords, I must say that I have had exactly two years as a clerk in a Stock Exchange office, and that is my great knowledge of the City. We on this side can be very individual in our thoughts. I am a very humble man, and I am sure that what I have said will do no harm to anybody.


My Lords, after the very firm expressions the noble Lord has made this afternoon—and with such a name; I repeat, with such a name—I am very pleased to have his explanation of the situation and of exactly what value we may place upon his advice as to how to deal with the assets of a great national system. I am very glad to have that explanation. In other words, he is telling me he is not competent to advise me on the matter. That is how it seems to me.

Now that I have had my say about the mines and about the railways, let us look at the general question which the noble Lord, Lord Balfour of Inchrye, put to me: why should we want to renationalise road transport? Well, for the simple reason that because purely to satisfy Party dogma, and for no other real reason, road transport, which was being run completely successfully by the Transport Commission, as a result of the nationalisation of the heavy road transport, was denationalised: you took away from this integrated railway system the cream of the traffic payment and profits.


My Lords, on this question of road transport, is the noble Viscount aware that the nationalised road haulage have had to lower their rates in order to compete fairly with free enterprise?


Is the noble Viscount sorry about that?


No, I am not.


Ah! I should like to have all the facts before me.


I will send them to the noble Viscount.


Do please send them to me.


The noble Viscount made the statement.


Well, if the noble Viscount will send me the facts I shall be glad to study them; I am always ready to study them. But I know you took the cream of the traffic away and you sold very often at prices below the value of the stock being transferred on to a market, which still could not absorb it all. The railway companies are left with a little of it to run as the Transport Commission. And all the time we had an abuse, in my view—I am speaking for myself, but I am sure I am right—and misuse of the "C" licences and a very difficult position created for the real owners, whether private or Commission owners of the "A" and "B" classes of transport. In fact, as was said, I think, by one of my colleagues earlier this afternoon, up to 1952 the two organisations running together showed a profit. I am not going to say for a moment that I would have guaranteed in the next five years a continuing profit—although it might well have been the case—because I know full well the capital expenditures which were lying ahead of British Railways if they were to be successful. So I am not chancing my arm on a statement like that. But I know that if you had had an expanding revenue from your road section competing—and jolly glad to compete apparently—with private enterprise to take the traffic away from the railways, and, what is more, leaving on the State-owned industries the heavier burden of the charges which cannot be got rid of, you could have made a much better "go" of the British Transport Commission than you have done.

What is going on now? In the course of the last five years or so there has been a great improvement in a whole number of the old railway hotels which are being run by the British Transport Commission. What is the position there? Mr. Nabarro wants to take over the now refurbished, greatly improved Transport Commission hotels, and take them back into the palms of private enterprise because they are paying. We made them pay; that is the whole thing. That is an extraordinary thing to me. The fact about noble Lords on the other side, or Members on the other Benches in the other place, is that they are much more concerned about the profits of their friends in that class or order of society than about the general commercial stability of the country. They want to get these opportunities all the time in order to see people making very large fortunes—and are they not being made?

I take an example from an article by Mr. Paul Johnson, a journalist, whom I hope all noble Lords will read on every occasion they can. I hope they read the book he wrote immediately after the Suez incident, in which he quite correctly analysed what had been going on behind the scenes. I noticed that Mr. Randolph Churchill, in his last book on the rise and fall of Sir Anthony Eden, says that Mr. Paul Johnson was right two years ago on the Suez incident, and that Mr. Randolph Churchill was wrong, and he is glad to acknowledge now what a bold statement it was and how true are the things he said. That is interesting.

Here is what Mr. Paul Johnson says about some of the fortunes that are being made as a result of Conservative economic policy. Let us look at it. He said—I will give his words and I want to give the whole thing: A society which exalts the gambler and which pays those unable to obtain work 50 shillings a week invites clinical inspection. For this is not merely an arbitrary juxtaposition of news-items; it is a pointer to the fundamental lines of economic inequality which still bisect our society. Then he quotes Mr. Frederick Ellis, the City Editor of the Daily Express. Well, we had a quotation early in the debate from Sir Oscar Hobson of the News Chronicle, who made the most astonishing statement, which I should like to deal with personally, that there was not a single one of the nationalised industries that was paying its way sufficiently to meet all its necessary requirements. I will say a word or two about that in a minute.

This is what is said by Mr. Ellis, City Editor of the Daily Express: Never has so much money been made from property in the decade 1949–59. The article continues: He estimates that three men—Messrs. Clore, Fraser and Wolfson—have made a net capital gain of £20 million since the war, and that a further £20 million has been made by six others—Jack Cotton, Felix Fenston, Cyril Black, M.P., and three members of the Samuel family. These princely sums have been acquired, quite legally, without paying one penny in tax upon the accretion.

That brings me to say this to the noble Lord, Lord Balfour of Inchrye, when he raises the question of the proposed tax upon capital accretion. This is not altogether a new idea in fiscal requirements, either in this country or in other countries. I am quite sure that, with all his political knowledge, he is not unaware that in that great cathedral—shall I call it?—that great centre of private enterprise, the United States of America, there exists a tax upon capital accretion, and they do not find any great difficulty in administering it. Why should we?


My Lords, I know of the capital gains tax in America; I also know of provisions for offsetting capital losses. What we have not heard is whether the proposals of the Party opposite include the offsetting of capital losses.


I do not think anybody has ever been able to find, in our proposed amendments to taxation in this country, or in any of our innovations, anything which was unfair in its actual structure; and although we advance a policy in this matter of a tax upon capital accretions, you may be certain that there will be the proper fairness and consultation with the highest fiscal authorities as to how that can best be dealt with. But that it can be dealt with has been proved by the largest private-enterprise organisation—namely, the United States of America. I think, therefore that that is sufficient answer upon that point.

There is another statement that I want to answer, and I have forgotten which noble Lord made it, but I think it was quoted from Sir Oscar Hobson—whichever noble Lord it was who quoted Sir Oscar Hobson. It was that public ownership was not anywhere producing results which would enable the particular nationalised industry to meet its commitments.


My Lords, I think it was perhaps my noble friend who referred to Sir Oscar Hobson, but I certainly did not hear any statement to that effect. What I understood was said was that there was no publically-owned industry which was making a sufficient sum to cover its maintenance and the renewal of its assets. It certainly was not the words which the noble Viscount has said at all.


It was the noble Lord, Lord McCorquodale of Newton, I think, who quoted an article by Sir Oscar Hobson; but the purport of the statement which followed it was that there was no nationalised industry which was recouping its costs and earning sufficient to make good its depreciation. That was the exact purport of it—its depreciation.


I am just wondering how that possibly can be so when I look at these particular figures on record. In the case of electricity—I am taking the case of electricity first, if your Lordships will excuse me, because it is a good one—in the year 1956–57 the surplus was £11.7 million. In 1957–58 it was £16.1 million. That is surplus: that is after having paid out, in the ten years of its life, £340 million to meet its existing and increasing current capital charges, and the like. The accumulated surplus over the years of its term of operation has now reached a figure of over £100 million. Now I think that that wants some answering. It certainly does not come within the general condemnation of Sir Oscar Hodson.

Let us take coal. They have been having a pretty bad time the last year or two. I am very glad to see the Minister of Fuel and Power in his place, because when I think of coal I think of him. It is one of his great liabilities. I think we have been, I would say, so unfrugal in admitting such an influx of oil fuel, and other fuels, for use instead of coal in producing electricity, that we have helped to put coal into a pretty bad position. Yet, in 1956–57 that industry had a surplus of £12.8 million, and in 1957–58 they had a loss of £5.3 million. In the accumulated position, spread over the whole of the years of nationalisation up to that date, they had an overall deficiency of £28.9 million, but that was only after paying out on their capital charges, development policy, and the like, something over £200 million. For an industry taken over in the shocking condition in which the coal mining industry was, that was not at all a bad result. They showed improvement in machinery; they showed improvement in many mines; they showed improvement in the output per worker; and, if they had had anything like a fair crack of the whip, in my judgment, in the distribution of the product of the mines instead of other classes of fuel being given preference, then I think the result would have been even better still.

Let us take the gas industry. In the year 1956–57 the industry had a surplus of £3.7 million. In 1957–58 it had a surplus of £2.3 million. But in the period that they have now been running, they have had an accumulated surplus of £16.3 million—not a bad result. That was after they had paid out capital charges and other charges on them of £120 million. Not the least part of the charges on the nationalised industries is the interest upon the capital of the stock, which is handed over to those who had that stock before. To hear some people talk about nationalisation, anybody would think that we were just a lot of armed robbers. You have always been paid fair compensation: and although apparently he disqualified himself from authority when the noble Lord, Lord Grenfell, made his last statement, nevertheless he has suggested to us that probably we paid too much compensation to those people who were already the holders of the stock.

Now I could give other figures of a similar kind which show that in spite of the very large sums which have been paid out, the nationalised industries are doing exceedingly well. I was not quite sure what the noble Lord, Lord Grenfell, was after at the end of his speech when he started to talk about civil aviation. I was expecting some sort of startling attack to be made upon the way it was taken over or upon the way it was being run, or something of that kind, but he was apparently a little mute about that. I was also a little astonished at the criticisms of civil aviation which came from the noble Lord, Lord Balfour of Inchrye, because I believe he has had experience of the board of one of these civil aviation Corporations, and I should have thought that, from his experience on a board like that, he would have known very well that there are two sides to this nationalisation question.


My Lords, may I just tell the noble Viscount opposite, in case he should give a wrong inference to the House, that as a member of a nationalised Corporation I took very careful advice under the Addison Rules before I spoke to-day and was very careful never to mention the words "civil aviation" or anything concerning it. Let me read only the relevant paragraph, because I think I am entitled to do this: Finally, I should like to make it clear that what I have said applies only to debates relating to public boards. Experience acquired as a member of a public board will often be relevant to general debates in which the same considerations do not arise, and the contributions of board members who are Peers may be all the more valuable because of that experience. I would not say that my contribution was valuable, but I would say that it was justified.


I accept entirely what the noble Lord has said. I make no complaint about his speaking at all; he was perfectly entitled to speak. What I did say, as a personal opinion, was that I was surprised that, in view of his experience, he was quite so hard on the rest of the idea of nationalisation, because I should have hoped that his experience would have shown him that at least there were two sides to the nationalisation question.

Another point was made during the debate which I think I ought to answer. It was said that private enterprise diffuses power, whereas nationalization concentrates it. I have spent a lot of my time in the last fifty years trying to study the problem of the accumulation of power. When I was doing my work with the Co-operative Movement we were always being attacked from one source or another. We always had on the other side the general growth of trusts and combines. I made a study of this question and took the view that there was no better definition of a trust than that of Professor Taussig, which stated that it was a monopoly or partial monopoly of a market by which the benefits went to a limited number of shareholders. That is the truly anti-social monopoly. But if we are talking about the concentration of power in the hands of the State or the municipalities, I do not see any great social reason for objection there, because when ownership is spread over the whole nation you have settled one of the main objections to the definition of the concentration of power in the hands of a few, as given by experts like Professor Taussig.

I do not want to keep your Lordships, though I could go on much longer on many of the shots that have been fired in this debate. I have enjoyed them and I do not mind them. But I am sure that of all the Parties in the State to be put "on the spot" this afternoon and asked "What are you going to do?", I think that my Party should be the last. We could never get an answer to that over the years from the Conservative Party, except, "Set the people free." The Conservatives did. They came in and set the people free. They took the subsidies off, raised the prices of food, pushed up costs in industry and had a price level increase all the way round. Then we were bound to have wages increases, increasing costs of production and everything. This is how the Tories "set the people free." Now what is their policy for the future? We have nothing before us at present, so far as I know, except the famous statement of the late Lord Oxford and Asquith: "Wait and see."

5.23 p.m.


My Lords, the noble Viscount, Lord Alexander of Hillsborough, in his somewhat didactic admonitions to my noble friend behind me, advised him, in the words of a famous essay, "to have a mission". The noble Viscount, and indeed the Opposition as a whole, has had a mission this afternoon: the mission of avoiding answering any of the questions which were put to them by those noble Lords who have taken part in this debate. I do not wish to pursue the disarray. It is a picture which arouses sympathy rather than disgust when a large number of ex-Leaders of the Party opposite send hurried telegrams to the Isle of Man, to have the points sent backward to the Leaders, on the very topic which we are discussing, and I shall be nothing if not chivalrous in dealing with this embarrassing aspect of the matter.


If the noble Viscount wants to mention things like that, perhaps he would not mind a counter-quotation I think it was the Lord Lambton, Conservative Member of Parliament for Berwick, who said in the London Evening Standard: This campaign against Mr. Butler was singularly effective. It was also the most squalid political manoeuvre that I have ever been aware of, and one which went to an inch of shocking me out of Politics. The noble Viscount should not begin to gather up this sort of thing, because I can provide plenty of examples.


The noble Viscount is still fulfilling his mission. I was about to reveal to your Lordships that I, too, have a mission. My mission is to return to the Motion, which is, To draw attention to the danger to industry of the continued uncertainty as to the limits of state control. Though I have been vastly entertained with Professor Taussig and Mr. Randolph Churchill, the state of mind in the 'nineties, Sir Oscar Hobson and everything else, I want to return to the Motion. That is my mission, which I shall fulfil, I hope, without undue delay.

In returning to the Motion, perhaps I may congratulate my noble friend on putting it down on the Order Paper. As the noble Viscount reminded us, my noble friend has not long been a Member of your Lordships' House. I think that he has been among us for only something like two years. He has not had the vast experience of the noble Viscount opposite, but I would say this. It is a highly prized privilege of Members of this House to be in a position, as many Members of another place are not, to initiate debates on matters of public importance, whether the leaders of either Party like it or not. I can conceive of no better example of this than the courage, resolution and enterprise with which my noble friend has put down this important Motion, the idea for which was entirely his own and thereby exercised and vindicated the right of a Private Member of your Lordships' House to do that very thing.

I would say that my noble friend has performed a considerable service in so doing, and I think that I should be echoing the opinion, perhaps of all of us, certainly of the vast majority, if I said to him that he is to be congratulated upon the way he has done it. It is not any part of my mission to advert to the rather stormy reception with which he was greeted from the Front Bench opposite in the first moments of his speech. It is something of a tribute to my noble friend that he aroused the counter-battery work of such big guns so early in the debate, and I thought that he rode the storm with the unruffled calm of an expert. I would like to say to my noble friend that at any rate in the opinion of this side of the House, and I think of the Government, we welcome the initiation of debates of this kind by the younger Members among us. I think that there is no better tribute to the virility and vigour of this institution than the ability of noble Lords, like my noble friend, to initiate discussions of such importance as the present.

Again pursuing my mission in my humble way, I would point out that, despite the many vigorous interchanges which would appear to indicate the contrary conclusion, we are not debating intrinsically the rival merits of private enterprise and public ownership. I thought, if I may say so, that that was the fallacy in most of what the noble Viscount said. But the terms of the Motion do not in fact raise that issue. If it had raised that issue, I should have been disposed to agree with the approach made by my noble friend Lord Balfour of Inchrye, who, I thought, gave a thoroughly objective and constructive account of what a modern Conservative Member of Parliament normally thinks about it. I confess that I was disappointed not to have enjoyed the ripe wisdom, and what I know to be the objective and constructive ideas, of the noble Lord, Lord Pethick-Lawrence, who has always something of value to say to your Lordships about economic subjects.

I think that my noble friend Lord Balfour of Inchrye was perfectly right when he said that the approach to this subject is largely obscured by the retention in a few minds on both sides of extreme views of two rather obsolescent, if not wholly obsolete, philosophies—the philosophy of our Victorian ancestors, which I may refer to as unadulterated laissez faire, and old-fashioned socialism. At any rate, after the publication of the book, The Middle Way, in the middle 'thirties by the present leader of the Conservative Party, I do not think that Conservatives have been addicted to unadulterated laissez faire. Unfortunately, for reasons not. I think, unconnected with its complicated structure, the Labour Party have never made a similar break with doctrinaire Socialism. I even went to the trouble of looking up its objects as defined in 1958, which included still, I am sorry to say, the basis of the common ownership of the means of production, distribution and exchange. But I do not think myself, for reasons which I hope will appear in the course of my remarks, that this dogmatic approach to the subject is either very helpful to the course of this afternoon's debate or even strictly relevant; because what my noble friend was drawing attention to was not the weakness, if it be a weakness, of nationalisation as a means of conducting our economic affairs, but the dangers of continued uncertainty as to its limits.

I myself have no doubt that in drawing attention to this point, which is the true point of the debate, my noble friend put his finger on a most important issue which has ultimately little or nothing to do with the rival merits of the two philosophies. Because whatever the relative merits or virtues of free enterprise and public ownership or control may be, there is one thing about which I should have thought all Members of this House could wholeheartedly agree; and that is that you can get the best out of neither system in a continued atmosphere of uncertainty. This is sure to bring out the worst in both. I should have thought that it was clearly intolerable, in the strict sense of not being capable of being tolerated, that the great industries of this country should be treated as a sort of shuttlecock between political parties: nationalised at one General Election, de-nationalised at the next, or next but one, and re-nationalised thereafter; alternatively (and I would say that this was equally bad), I should have thought it intolerable that they should be permitted to eke out a sort of puerile existence under a kind of sentence of death but with a stay of execution. Whatever the virtues of nationalisation or private enterprise, that cannot make sense. Nobody can plan and expand and nobody can be enterprising in conditions such as that.

Yet if extremism in either Party, the doctrinaire approach in either Party, is able to secure predominance, that is precisely what will happen. In a sense, part of it is precisely what is happening. I say this to noble Lords opposite in the hope that they will use their great influence with the members of their Party not in this House—because much of the mischief I have been describing can be effected by a Party in Opposition, as well as by a Government, and much of the mischief can be effected by the lunatic fringe just as much as by responsible leadership. On Conservative platforms, I am constantly being asked why, if State monopoly is as bad as some of us think it is, we have not de-nationalised the great public corporations erected between 1945 and 1950. I can claim a good deal of consistency in what I am about to say to your Lordships, because on every occasion I have pointed out to my own supporters, who were often inclined to be critical, that there were two valid and, to my mind, overwhelming reasons why they should be accepted, at any rate in present circumstances.

They are the insecurity which must necessarily accompany their return to any other system, so long as re-nationalisation was the policy of the official Opposition, and the constitutional undesirability of an economic see-saw taking place on the occasion of every General Election or every General Election but one. I would say we cannot be for ever tinkering with the structure of industry if we are to achieve prosperity or expansion. It is therefore on this basis I can claim an element of consistency, and in no spirit of Party antagonism that I would make my plea to the Party opposite. Cannot they use their influence with their colleagues to put an end to these ceaseless attacks on private industry and private industrialists? I can foresee great advantages coming to the nation if they can agree to such a course. I can foresee great electoral advantages coming to their Party if, as I believe, and as some noble Lords have said (I think my noble friend Lord McCorquodale of Newton said it in the course of his excellent speech), the true fact is that public ownership is, and always has been, anything but an Election winner.

But whether that be so or not, cannot they come to realise that, whatever Party is in power during the foreseeable future, that Party will have to operate a system in which there are public corporations, and in which a great part of industry is conducted by private enterprise? It is neither decent nor responsible conduct on the part of one of the two great Parties in the State to indulge in a ceaseless drizzle of vituperation and criticism directed against one of those two great systems, and designed and calculated to upset confidence, upon which alone the prosperity of the people of this country depends. Cannot we rely upon noble Lords opposite to use their influence to see that that sort of thing is brought to a stop?


Could I ask the noble Viscount to bring his notable influence to bear upon the Institute of Directors and also upon those who squabble every time there has been a necessitous nationalisation in industry and say, "We are going to put that back into private enterprise as soon as we get back." The noble Viscount does not give the right advice all the way round.


There is nothing which I have asked the noble Viscount opposite to do in the course of what I have just said which mutatis mutandis I should not be prepared to accept as my own code of conduct in dealing with this kind of thing, because the whole burden of my speech has been that this state of uncertainty which is engendered by this kind of attack is one which can benefit nobody, least of all the Labour Party. I would think that with the great experience in the leadership of their movement, they could bring their influence to bear to bring this kind of thing to an end.


Before the noble Viscount leaves that point, would he not agree that his plea for continuity is, in effect, just as much a criticism of his own Party for denationalising steel and road haulage as it is of our Party for restoring it to public ownership?


I do not think so. I am anxious not to be drawn away into the details of policy, but I think it was a perfectly logical thing, after a Conservative Government was returned in 1951, not to denationalise the major public corporations which had been nationalised by the Labour Government, but to return certain parts of them to private enterprise—those parts in which, in respect of steel, nationalisation had not been effectively completed, and where, in the case of road haulage, there were, to my mind, conclusive economic advantages (which have since appeared) in running the roads on a system separate from the railways and in conditions of competition. So far from that being an inconsistency—and I was not a member of the Administration at. the time, and if the noble Lord had been a Member of this House he would remember that I was in fact quite critical of the decision to denationalise road haulage—I would have thought it was an example of the kind of objective approach eschewing the electoral tit-for-tat.

May I give one or two instances of what I mean, of the kind of way in which we could hope for some improvement? Noble Lords opposite have been at pains not to give us the smallest details of the policy they intend to pursue. In some ways I am a student of their literature, and even of their speeches. I think I am able to answer some of the questions which were not answered by the noble Viscount, on whom would have fallen the primary responsibility of dealing with the subject. If returned to power the Labour Party would undoubtedly return to nationalisation the road haulage industry—whether with or without some of the "C" licences is not plain—and the iron and steel industry. It is certain that no charge is brought against these industries. It is not alleged that they have failed the nation, but simply that, as a matter of electoral revenge, or alternatively of doctrinaire policy, it must be done, whether it is good or bad. I will not pursue this particular line of approach. That is the first big uncertainty which is introduced into the realm of State ownership about which my noble friend is complaining.

Then the second great step which is to be taken is that an unspecified number of industrial equity shares are to be bought. Whether they are to be limited to the famous 500 or 600 companies is not plain; but I could produce quotations conclusive in both directions. Whether they are to be used for the purposes of control, or simply for the purposes of investment, is not plain; but again I could produce quotations from authoritative speakers in directly opposite senses—although (if I may again interpolate a scholiast's gloss) I should have thought it was highly immoral, at any rate for a Socialist Party, to advance the theory that they could acquire ownership without obtaining some responsibility, moral or actual, for control. Whether the intention is to acquire all the assets of these companies, or some of them, or a controlling interest again is not plain. But there is some reason to expect that the ultimate objective is to acquire all the assets. Those are the first two elements of uncertainty introduced into the situation.

Thirdly, there is the advertised intention to subject a list of either 500 or 600 leading companies—I suspect that the true number is 512—to some form of public accountability or control. We are not yet told what is meant by "public accountability or control", in this connection, but it undoubtedly covers many of the most important uses of the shareholders' money, including expansion, investment and the like. Whether it includes a service contract, as I thought perhaps it did, listening to the noble Lord, Lord Stonham, this afternoon, I cannot authoritatively say. The noble Lord, Lord Stonham, of course, is himself an employer, and I could not help thinking, as I listened to his speech, that he was introducing a new element of uncertainty into the situation altogether. It is true that the American unions, pursuing in this connection a somewhat more enlightened policy than their British counterparts, have acquired service con- tracts by negotiation with private enterprise in many ways superior to what their British counterparts have been doing. It may be that the British trade unions have been too eager to take part in the national debates and the struggle for power inside the Labour Party, to which they are affiliated. But the American unions, which have been pursuing the interests of their constituents, have in fact obtained terminal payments by negotiation.

I would ask the noble Lord, Lord Stonham, whether he realises the implications of what he is saying. Is he really trying to use the instrument of State control to take the place of industrial bargaining between the unions and the employers? If he is—and that, to my mind, is the only legitimate construction to put upon what he was saying—he is introducing a principle which would be controversial widely outside the ranks of the Conservative Party.


If the noble Viscount will recollect all that I had to say, he will remember that I pointed out that B.O.A.C., the mines and the railways had given service contracts, including terminal payments. I said that they were publicly owned industries and they had been negotiated by the respective responsible trade unions. But the point is that nationalised industries are better employers and they make a better response.


For the reasons that I gave, I am not going to canvass the question which is the better employer, although I must say that a number of the industrial troubles of recent years have not been confined to private industries. The noble Lord has still not given an answer to the question. He said that this was a matter of public concern; he said it in connection with public control, and he has not made it plain whether or not the true construction of his words is—and, in my view, it is the only legitimate construction, although I shall look at them again tomorrow—that he would take the matter out of negotiation, so far as private industry is concerned, and interfere with the ordinary process of collective bargaining for this purpose. If so, I am sure that, on reflection, he will come to agree that, as I said, his proposal would be widely controversial outside the Conservative ranks.


The point I am making is this: that if the State owns a share in equities it will be able to influence these matters in the same way as it does in the case of private undertakings. But these agreements will be negotiated by the responsible trade unions. That is the point I am making; it is a legitimate point; and that would be the policy of my Party.


The noble Lord has not only not answered the question, but has introduced a further element of uncertainty, because I could give a number of quotations from authoritative members of the Labour Party to show that it was specifically denied that the purchase of equity shares was designed to secure control. That is another element of uncertainty that has now been introduced.


I am still waiting to hear the real answer to the point at the beginning of my noble friend Lord Stonham's passage on this issue. He drew attention to the enormous sums being paid in compensation to directors and how little was being proposed in regard to people displaced from the working-class and skilled labour class elements. I am still waiting to hear the reply to that. What is the policy on that? Why should they not have a contract?


I have never said that they should not. I said that it was rather a serious criticism of the trade union movement that they had failed to secure what their American brethren had secured from private employers. I am proposing to pursue this further, but so far I have only dealt with three of the major elements of uncertainty created by the Labour policy.

There is a fourth. In addition to the re-natiortalisation of road haulage and iron and steel, in addition to the purchase of equity shares, and in addition to the proposal to render subject to control 500 or 600 public companies, which cover over half of the private sector of industry, there is also the advertised threat to which my noble friend Lord Balfour of Inchrye adverted—namely, nationalisation on what is called the old model (whatever that may mean) of any industry which, for one reason or another, can be alleged to have failed the nation; and in one way or another this really amounts to a threat to subject to public ownership or control the greater part of private industry. We are still not told how much of it is to be controlled or what the criterion is to be.

Side by side with these four measures of uncertainty there is, also, I am sorry to say, a fifth; and that is a carefully prepared and deliberately executed attempt to "smear" the private sector of industry, as such, by deliberately critical speeches and Motions in Parliament, by Party political broadcasts and by any other device found ready to hand. One cannot avoid asking oneself, and I cannot avoid asking the Party opposite, whether these attacks are really in the public interest. Prosperity and expansion are now the admitted targets of both sides in politics—at least I have yet to hear the contrary view. On either view the economy which either Party will have to operate in Parliament will be mixed for a long time to come. Can private industry produce its best under a prolonged drizzle of threats, bribes and smears? We in the Government should be the first to agree that this is an argument which cuts both ways. No more. I should have said, than nationalised concerns could give of their best if constantly subjected to spiteful and pinpricking attacks. But certainly since we have been in office my noble friends, my right honourable friends and myself have always been concerned to defend nationalised corporations against frivolous or irresponsible attack. I would give two examples that seem to me to be exactly cases of this kind of attack which I would ask noble Lords opposite to bring their influence to bear upon their Party to bring to an end.

The noble Viscount, Lord Alexander of Hillsborough, referred to the Institute of Directors. The Institute of Directors is a trade union; it is a trade union of directors. It is a far less political trade union than most. Unlike the National Union of Mineworkers or the Municipal and General Workers' Union or the Transport and General Workers' Union, it has no actual policy on the hydrogen bomb. Unlike them, it is not affiliated to any political Party. However, like the National Union of Mineworkers and the National Union of Railwaymen, the Institute of Directors has adopted a stand on the issue of free enterprise or nationalisation. Unlike them, it has espoused the cause of free enterprise. Is this what is causing all the hullabaloo? Why should they not?

Can noble Lords opposite conceive any reason at all why, it the National Union of Mineworkers are entitled to express their view in favour of nationalisation, the Institute of Directors are not entitled to express their view against it? Yet the moment they do they are attacked in the Socialist Press as if they had done something dishonest. They are attacked on the radio as "faceless men"—whatever that means—by prominent members of the Labour Party. The connection between some of their leading figures and the Conservative Party, which is as open and honourable as that of the noble Viscount, Lord Hall, with the Labour Party, is taken as something underhand and made the subject of obloquy and invective. Can noble Lords opposite not see that what is sauce for the mineworker in this case is also sauce for the director, and bring to bear their great influence on their own Party to put an end to unscrupulous attacks of this kind?


My Lords, I am very interested in this homily which is being delivered to the wicked trade unions and the Labour Movement by the noble Viscount the Lord President of the Council. Of course, I think that anybody in the State has a perfect right to express his political opinion. On the other hand, we do publish in the accounts of trade unions exactly how much they spend on stating and organising their political opinions. In the Labour Party we have an annual account published, and we disclose where our contributions come from. If the Tory Party would publish a complete balance sheet of its operations, and the Institute of Directors would indicate quite clearly what is the extent of the money they are spending before the General Election to get their way, and so make things equal all the way round, I should be more inclined to listen to the homily.


My Lords, I wonder whether the noble Viscount could tell us whether the trade union figures show how much of their funds come from Conservative and Liberal trade unionists.


I think people from time to time find it out quite easily. They go to the Chief Registrar of Friendly Societies and find out who are those who contract out. There are a large number of trade unionists who contract out, and they are perfectly free to do so.


What they will not find is what the difference would be if it were a question of contracting in and not contracting out. But I think this is burking the point I was trying to put to the noble Viscount.


It is awkward for the Directors.


I see nothing more awkward about it than about contracting in and contracting out. I assert that this is an unscrupulous attack which creates uncertainly and is not in the public interest. Cannot noble Lords opposite bring their great influence and sense of responsibility to bear to bring it to an end?

Or take, for instance, the question of take-over bids. I would observe that this is a practice which is obviously attracting a great deal of intelligent public attention and public discussion at the present time. I can see some very clear public advantages in it. I can see, for instance, the fact that an unprogressive management can be challenged by new and progressive boards. I can see that one of the particular arguments presented by the Labour Party, that the shareholder no longer plays any part in the control of his business, might well be brought to an end, and may be coming o an end in this era. On the other hand, can see dangers in the practice. I can see that it might perhaps jeopardise the conservative finance of some wise and prudent firms, who have written off their assets. It might be a danger; I do not know. I can see that it might conceivably jeopardise the security of employees in their employment.

All these things deserve to be discussed and given calm consideration. They deserve some evidence, at any rate, before foolish jibes and charges are flung across Parliament or attempts are made to exploit the situation for electioneering purposes.


Would the noble Viscount forgive me? I believe that the main attack against take-over bids has been made by noble Lords on this side of the House. But what has been attacked has not been so much the take-over hid, as the general method in which the whole transaction has been carried out.


I still want to know of any evidence that the practice has had an actual public disadvantage. These are matters for public discussion. What I am objecting to is not public discussion but an attempt to exploit for some kind of Party advantage a situation which requires discussion.


My Lords, I think if the noble Viscount the Lord President is looking for information he will find statements in the papers. I think a journalist called Thomson, in the Evening Standard, says it is stated in the City that Mr. Clore is supposed to have made a profit of £500,000—I do not know whether it is true or not—on the Watney's transaction, which was abortive, simply by the manipulation of shares on the Stock Exchange. Things of that kind must lead to uncertainty. It is a very difficult thing to have a fluid situation like that in the organisation of companies, or see a place like Harrod's going up two, three or four times in capital value and the company. May be, trying to live up to that afterwards.


All I was saying was that it was a pity these things had to be exploited for Party political advantage, and I await any evidence that any profits made have resulted in potential public disadvantage. There may be danger, but let it be discussed, and not by rumours and not based on the assumption that every time somebody makes a profit he is doing something against the public advantage.

Take the subject of the so-called "golden handshake". When it was decided to wind up the groundnuts scheme it was decided to compensate Sir Leslie Plummer by (I think it was) £8,000; but no one complained about that. It is not quite as much as may have been offered to the owner of the brewery, but the brewery was slightly more successful than the groundnuts scheme. Did anyone say that was a scandal?


The biggest mistake in that scandal was employing a great capitalist organisation to carry out the groundnuts scheme.


I do not say these things are bad and I am not seeking to make Party advantage. I am asking: why this attempt to exploit? Why cannot there be calm and rational discussion? Tremendous play about capital appreciation was made by the noble Lord, Lord Stonham, who really ought to have known better. Nobody makes any money until he sells his shares. Obviously, the person who invests in British equities—which we are constantly being encouraged to do; and if we sell them we are told we are sabotaging the pound—is bound to find the value of his shares reflecting the general level of prosperity in the industry. He does not make any money out of them unless he sells them. They are an investment. What complaint opposite comes when a boxer, for very doubtful public services, makes a purse of £250,000? That is not said to be wicked. Or take somebody who invests in the pools and makes some money? I have yet to learn that the Labour Party arraigns such a person as in some way responsible for great public mischief.

That brings me back to the main challenge which I make to the Party opposite. Why cannot they put an end to this silly drizzle of insult and innuendo against a system which they are bound to have to operate if ever they are given the reins of power again? And this, in turn, brings me back to the question of nationalisation. Both the Labour Party, and we are anxious to secure an expansion of industry and confidence, and a proper use, without prejudging what that might be, of the influence of the Government in securing those objectives. Is this really to be won by a system of share purchase, a system of centralised control, or, still worse, by, an open and running inquiry of each industry as to whether or not it u "failing the nation"? That is the kind of question that one is bound to ask. I wonder if noble Lords opposite have read the criticisms of some parts of their programme contained in a book Mr. Kelf-Cohen, for this seems to me to be a convincing argument. He says that: A Labour Government will be under continuing pressure to use ts powers. Trade Unions and back benchers will repeatedly clamour for the big stick. Every company's affairs will be dragged into politics by irresponsible persons, with disastrous results. Sooner or later the Government will take action. The moment an inquiry starts in one industry all private enterprise will be waiting with great anxiety for the result The point which I would ask noble Lords opposite to consider seriously is whether they have really taken into account how difficult, how impossible, it will be to conduct industry in a competitive world with such threats hanging over the whole field of its activity. Both Parties are talking glibly of expanding production, as if that was the easiest thing in the world to do; but could industry really flourish, let alone expand, while all the time all the interested or prejudiced elements were seeking to find some pretext for alleging that industries, and therefore individual firms, had failed the nation?


All I have to say on that is that, judging from what I have read from time to time, and from the explanations of the Institute of Directors, these pressures do not come only when there is a Labour Government in power. They come at all times, whatever Government is in power. It is claimed by the Institute of Directors that we were really responsible for going into the matter of the fixing of these sums, which would be generally unpopular in the country, but it comes from the pressure of the Institute of Directors. Look at your own side as well as ours.


I do not think that the noble Viscount is really following the point. The point I am making is this: what is going to happen if this mandate for which the Labour Party is asking is given? What does "failing the nation" mean? My noble friend Lord Balfour of Inchrye has pointed out one of the definitions, and the authority of definition given with it can mean anything. A Party which goes to the country with wide words like this, without further explanation in its programme, is asking for carte blanche to be appointed judge, jury, prosecuting counsel, court of appeal and Lord High Executioner. They are asking for a hangman's mandate, and I hope they do not get it. But we on this side of the House are not prepared to that extent to accept the verdict of "the man in Whitehall" as to investment, as to planning, as to whose fault bad industrial relations may be, as to export, or even as to efficiency. And if a business is inefficient, I would say that we are not prepared to say, as apparently the Labour Party are, a priori, that the best thing for the country to do with an inefficient industry is to buy it from the inefficient industrialist.

Take the purchase of shares. I would agree with those—and this has been said on both sides of the House—who say that possibly an increased use of Government capital in industry is necessary. But is the best use of our national resources to buy up existing shares in established concerns? I personally should hardly think so. The only way to predict the future, in my view, is to examine the immediate past. I would say that Government finance is needed for both public and private projects. Some of them have been mentioned. One is nuclear power stations. Farm and fish subsidies I do not think have been mentioned. Cotton schemes come to mind. Then there are strip mills in Scotland, scientific research and development contracts. Then we have heard about new Cunarders and aircraft, and help overseas for under-developed countries. These are going to be demands on Government capital resources. These are the actualities.

My own criticism for what it is worth, is that, even if we take the most niggardly and parsimonious view possible of our responsibilities, Government credit is likely to be strained to the utmost. Is this the time, I would ask, to deploy Government credit in the purchase of old shares or old houses, or in paying compensation for existing businesses or inefficient industries? This is the proposition to which the Labour Party appear, to me at least, to be committed.


We shall not in these cases try to obtain control, but buy a share of the equities which are on sale in the market so as to get some return to the country in flourishing as well as languishing businesses. It is perfectly unreasonable to say that a Labour Government is not entitled to buy on the market, not with the intention of getting power, but up to a certain limit to get a proper share in the profits for the benefit of the community. To me that does not sound unreasonable. The benefit would accrue to the general community.


The noble Viscount has now disclosed himself as being in violent opposition to the noble Lord, Lord Stonham, who, in the last half an hour, was going to use these shares for the purpose of securing terminal payments for employees, and not simply for the purposes set out by the noble Viscount. I am simply saying that if that is the best way in which to deploy Government credit, to buy old houses or inefficient businesses, or allegedly inefficient industries, you will not be able to deploy Government credit in other directions. You will not be able to run the new Cunarders, you will not run the power stations, and you will not be able to help the under-developed countries, because the deployment of Government credit has not an unlimited capacity.


I am sure the noble Viscount would wish to be exact in this respect. There is nothing in the statements made, whether in print or otherwise, that the Labour Party propose necessarily to buy up old shares. What they will do, of course, is to put new money into the industry and, presumably, get new shares related to that money. There is nothing in the proposals about buying up old shares or old houses.


The noble Lord, Lord Latham, really must listen to the speech of the noble Lord, Lord Stonham, or at least read it in Hansard tomorrow. The whole theme of this, and of all the statements I have read, is, as I have said before, that it is the intention. I do not wish to take the noble Lord, Lord Latham, through the list, and I need not weary the House by going through the question of the buying up of equity shares in existing industries which is: precisely what the noble Lord, Lord Latham, is denying. I do not want to be unchivalrous in this matter, but the truth is that there are as many different policies as there are members of the Labour Party; and the reason why they do not answer any of these questions is that Mr. Frank Cousins would object if they gave the only true answer, which is that they do not know, and that they know that forms of public acquisition of control are Election losers. At the same time they do not wish to disappoint their most enthusiastic workers in the country, to whom it is the Ark of the Covenant of the Lord.


You are asking us to try to attempt to avoid the use of "smearing" language. What you have just said about Frank Cousins is a type of "smearing" which I hope is not going to be continued. Moreover, I want to see quite clearly where we are in this. We certainly have differences in our Party; so have you—any number of them. I hear them expressed; I see them written from members of your own Party. You are not all united on the ideals of your Party—not by any means. There is nothing new in that. But in this matter we are entitled to say what we are going to do. Yours is a Party which does not say what it is going to do, and never really believes in telling us what you are going to do. We say that any surpluses arising from any superannuation scheme that we have could, where necessary, be put into equities, so that the ultimate recipients in the superannuation fund will be able to benefit from the general prosperity of the country; and we intend to do that.


My Lords, the noble Viscount continues to be very vocal but continues to be insufficiently precise. He seems to forget that I was replying to an intervention by his colleague who is sitting next to him, to the effect that they were not going to buy existing equities. Of course the noble Viscount is entitled to describe what he is going to do. My complaint has been that he has not succeeded in conveying his meaning to anyone else. I assure your Lordships that these are questions which have not been asked by me in any partisan or doctrinaire spirit. I simply want to know the answer.

I confess at once that I cannot rid myself of the belief that much of the Labour Party's present programme is born, not of an objective desire to cope with the economic realities but as the consequence of an endeavour to placate minorities. When your Lordships come to read what I said about Mr. Frank Cousins in the morning you will find that I said nothing disrespectful of him. He appears to be the prospective leader of the Labour movement. These extraordinary disagreements, this extraordinary inability to state a fair answer to a fair question, are not, I am sure, due to any want of integrity on the part of noble Lords opposite, but simply because the policy has not been designed for the purpose of making itself plain but simply to placate minorities, to paper over differences or pander to outworn prejudices. Having said that, I would reiterate my plea to noble Lords opposite to take this debate back to their colleagues in the Labour Party and try to persuade them not to do the mischief to British industry and British economy which this continued uncertainty over their plans is undoubtedly bringing about.


My Lords, I should like to thank noble Lords for taking part in this debate, and I beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.