Lords Sitting of 28 February 1967

Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Oxford

OVERSEAS STUDENTS' FEES
2.36 p.m.
LORD FERRIER: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government, with reference to paragraph 4 of the Ministerial Statement about overseas students' fees of December 21, whether they will state whether the last words "present course" apply to a course of "higher" studies, preparatory to taking a place in a university, as distinct from a university course, or whether the words cover the whole process to graduation.]
THE LORD PRIVY SEAL (THE EARL OF LONGFORD): My Lords, the exact definition of the qualification for the transitional increase of £50 a year is a matter on which my right honourable friend the Secretary of State for Education and Science will wish to consult the appropriate authorities. But, as he made clear in another place last Thursday, the intention is that students already embarked on a sequence of courses should not have to curtail their studies by being faced with a large increase in fee when they move from one course to another.
LORD FERRIER: My Lords, I thank the noble Earl for his reply.
LORD GLADWYN: My Lords, would the noble Earl tell the House whether the Government agree that perhaps the recently announced reduction in Fulbright scholarships is the result of the recent heavy increase in students' fees?
THE EARL OF LONGFORD: Well, my Lords, I suppose I am here to answer any question on any related topic, but that question does not arise directly from
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the original Question. I do not know whether I feel called upon to offer an opinion, but I would submit very respectfully to the noble Lord that if fees had been increased generally, which was the alternative course recommended by noble Lords, the effect on the finances of the Fulbright Commission would have been very much the same.

HOUSING GRANTS IN SCOTLAND
2.38 p.m.
THE DUKE OF ATHOLL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government for how many houses in Scotland applications were received for a standard grant under Sections 19 to 21 of the House Purchase and Housing Act 1959 between the passing of that Act in May, 1959, and the coming into operation of the Building Standards (Scotland) Regulations 1963 on 15th June, 1964; and of these applications how many were approved; how many such applications were received between 15th June, 1964, and 31st December, 1966 (or the latest convenient date), and of these how many have been approved.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES): My Lords, in the five years to June, 1964, 7,480 applications for standard grants were approved. The corresponding figure for the two and a half years from July, 1964, to December, 1966, was 3,533. I regret that comprehensive information is not available about the number of applications made to local authorities. The noble Duke will, of course, be aware that a standard grant must be given if the conditions prescribed in the Act are complied with.
THE DUKE OF ATHOLL: My Lords, I should like to thank the noble Lord for that information, and at the same time ask him this question. Does he not think that these figures make rather disappointing reading, and could this not in part be due to the fact that the 1963 Regulations are unduly restrictive, particularly so far as rural areas are concerned?
LORD HUGHES: I do not think so, my Lords. If we look at these figures we see that the rate at which they have been running is fairly steady. There was a peak of applications in 1962, but since then they have been running at a fairly steady rate, about 1,400 a year.
THE DUKE OF ATHOLL: My Lords, but would not the noble Lord agree that there are many houses that would still have a very useful life if they had these standard amenities added, and that due to the building Regulations they cannot be added without causing undue expense?
LORD HUGHES: My Lords, there are perhaps many reasons why more applications for grants have not been made, but I am not certain that the noble Duke is right in attributing what he does to the building Regulations.

THE SOCIAL SERVICES
2.40 p.m.
LORD ST. HELENS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government when legislation will be brought forward to embody the results of the Review of the Social Services initiated in 1964; what those results have been; and when the economic growth necessary to pay for them will be achieved.]
THE EARL OF LONGFORD: My Lords, items of legislation arising from the Government's review of social security have been brought forward as they have become ready, and this process will continue. The growth of the economy is one of the factors taken into account in determining when particular measures are submitted to Parliament.
LORD ST. HELENS: My Lords, while thanking the noble Earl for his Answer, may I ask him this further question? Since during the last two Elections Government spokesmen have emphatically denied that they would increase taxation and have promised that improvements in social benefits would be paid out of economic expansion, and since now both these promises have proven to be broken—taxation having risen substantially, and
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economic advancement having lapsed into stagnation—what are the Government going to do in relation to changing their plans?
THE EARL OF LONGFORD: My Lords, the noble Lord has told us that the Government said at both the last Elections that there would not be an increase in taxation. I am afraid that I should need chapter and verse before accepting that statement.
SEVERAL NOBLE LORDS: Oh!
THE EARL OF LONGFORD: The noble Lord just announces this, but I should need chapter and verse. I am not going to accept it from the noble Lord or from anybody else without chapter and verse, so that that part of the question hardly arises. The noble Lord, I am sure, shares with us our desire to see these social services extended further. There have been many large improvements since 1964, and as we overcome the crisis, which is, after all, the ultimate outcome of the thirteen years of Tory Government, we shall be able to expand the social services.
LORD ST. HELENS: My Lords, does the Leader of the House realise that I do not accept any of the insinuations he has made against the excellent thirteen years of Tory rule; and, furthermore, that the Government are now stewing in their own juice—
A NOBLE LORD: Question!
LORD ST. HELENS:—that they have cooked themselves? And I should like to know how they propose to pay for these increases in social benefit, since the "economic expansion" is, in fact, stagnant.
THE EARL OF LONGFORD: My Lords, if I may say so, the noble Lord is wrong in thinking that no economic expansion is taking place, and as we recover from the effects of all these wasted years, so the economic expansion will gather force.
BARONESS SUMMERSKILL: My Lords, would my noble friend agree that the noble Lord who put down this Question can have no idea of the work or the provisions of the Social Security Ministry; otherwise he would never have put the Question on the Order Paper?
THE EARL OF LONGFORD: My Lords, I had not thought of that point, but now that it has been mentioned by the noble Lady, I entirely agree.
LORD BALFOUR OF INCHRYE: My Lords, is it not a fact that during these alleged "thirteen wasted years" a higher standard of living was enjoyed by a greater number of people than ever before in this country?
THE EARL OF LONGFORD: My Lords, it would have been almost impossible, even for the late Government, to prevent that happening, when we think of what was happening all over the world.
LORD HAWKE: My Lords, when the noble Lord the Leader of the House is talking about there being no stagnation, is he talking about 1964 prices or 1967 prices?
THE EARL OF LONGFORD: My Lords, I was talking about the thirteen wasted years.
LORD ST. HELENS: My Lords, may I further ask the noble Lord, since he claims that there is economic expansion, how he accounts for the Answer given to a Question in this House, I think on Thursday last, that industrial investment had decreased by 10 per cent.?
THE EARL OF LONGFORD: My Lords, one must choose one's dates carefully.
LORD CONESFORD: My Lords, I wonder whether the noble Lord could explain to the House precisely what he means by "crisis"? It used to mean a climax, but he now uses it to describe a permanent state of affairs. Am I right?
THE EARL OF LONGFORD: My Lords, if the noble Lord is anxious to know my reply; and if he wants to know whether he is right or wrong, and is really going to accept my opinion, the answer is that he is wrong.

OVERSEAS STUDENTS' FEES: HARDSHIP GRANTS
2.46 p.m.
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether further details can now be given of the fund to enable grants to be made in cases of hardship as a result of the increased university fees for overseas students.]
THE EARL OF LONGFORD: My Lords, the details of the proposed fund and its administration are being worked out, in preparation for consultation with the authorities concerned.
LORD BROCKWAY: My Lords, may I ask my noble friend whether, when these details are being worked out, two considerations will be borne in mind: first, that the nomination of the students should be by the local authorities or, in developing countries, by missionary societies concerned in education; and, secondly, that the acceptance of applications should be in the hands of the universities?
THE EARL OF LONGFORD: My Lords, I will certainly lay those points before my right honourable friend.
LORD ALPORT: My Lords, may I ask the noble Lord to which authorities he is referring?
THE EARL OF LONGFORD: My Lords, I am referring to the local authorities, the universities and others.

"D" NOTICES INQUIRY
LORD SHEPHERD: My Lords, at a suitable moment after 3.30 p.m. my noble friend the Leader of the House will be making a Statement on the setting up of an Inquiry into "D" notices.

IRON AND STEEL BILL
2.47 p.m.
Order of the Day for the House to be again in Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Shackleton.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD JESSEL in the Chair.]
Clause 24:
Accounts of the Corporation and audit thereof
24.—
(4) So soon as the accounts of the Corporation have been audited, the Corporation shall send to the Minister—
THE PARLIAMENTARY SECRETARY, MINISTRY OF PUBLIC BUILDING AND WORKS (LORD WINTERBOTTOM)THE PARLIAMENTARY SECRETARY, MINISTRY OF PUBLIC BUILDING AND WORKS (LORD WINTERBOTTOM) moved, in subsection (2)(a), to leave out "or stock". The noble Lord said: It may be for the convenience of the Committee that Amendments 32, 33, 34, 35, 36, 37 and 38, all standing in the name of my noble friend Lord Shackleton, be considered together. These are all minor Amendments, some of a drafting nature. They fall into three groups. The excision of the words "or stock" is required simply because in this case the word "stock" is redundant, since stock forming part of the share capital of a company is included in "share" as defined by Section 59 of the 1949 Act. It is not necessary to say the same thing twice. The substitution of the term "bodies corporate" for "companies" is an improvement since bodies corporate would include friendly societies or comregistered abroad, which are excluded as the Bill is at present drafted.
Amendments Nos. 37 and 38 are simply improvements in drafting. If taken together Clause 24(2)(d) would read:
"shares in or amounts owing from a body corporate are to be treated as being held by or owing to the Corporation."
I hope that, with this explanation, noble Lords opposite will accept these Amendments. I beg to move.
Amendment moved—
Page 22, line 32, leave out ("or stock").—(Lord Winterbottom.)
LORD ERROLL OF HALE: In regard to this group of Amendments, which has been briefly and clearly moved by the noble Lord, Lord Winterbottom, I would suggest that we are correct in assuming that the deletion of the word "stock" is in fact merely a drafting matter; and "share" is defined in Section 59(1) of the 1949 Act as:
"including stock resulting from the conversion of any share into stock".
We assume also that it is likely that all the subsidiaries herein referred to have only shares, as such, or, where they have stock, that this is the result of a conversion and it was not originally issued as such. This is a point on which we should be grateful for a little clarification. With regard to the other points referred to by the noble Lord, we are in agreement with what he proposes.
LORD WINTERBOTTOM: I am able to give the noble Lord confirmation that such is the position with regard to the meaning of the word "shares". The definition provides that
"'share' includes stock resulting from the conversion of shares into stock".
But this is the only way in which stock forming part of a company's share capital can come into existence.
On Question, Amendment agreed to.
LORD WINTERBOTTOM: With the permission of the Committee I will move Amendments No. 33 to 38 together. I beg to move.
Amendments moved—
Page 22, line 36, leave out ("companies") and insert ("bodies corporate")
Page 22, line 38, leave out ("or stock")
Page 22, line 40, leave out ("or stock")
Page 22, line 42, leave out ("companies") and insert ("bodies corporate")
Page 23, line 9, leave out ("or stock in a company") and insert ("in, or amounts owing from, a body corporate")
Page 23, line 10, after ("by") insert ("or owing to").—(Lord Winterbottom.)
On Question, Amendments agreed to.
LORD WINDLESHAM LORD WINDLESHAM moved, in subsection (4) after paragraph (b), to insert:
"() an estimate of the cost of any services provided by the Corporation or any subsidiary

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thereof to or for any publicly-owned company according to the extent to which it shall have made use of the same;".
The noble Lord said: With the leave of the Committee, it may be convenient if I speak also to Amendments Nos. 40 and 43. The purpose of these three Amendments is to ensure that when the publicly-owned companies have the benefit of common services supplied to them by the National Steel Corporation or by any subsidiary of the Corporation a fair charge should be made for the cost of the services. The cost, I submit, should he shown as between different classes of business in which the publicly-owned companies may be engaged. As noble Lords will know, there are already a number of common services—for example, BISRA for research, arrangements for dealing with scrap, and so on—and these may well be extended in the future. The common use of computers is probably an obvious example.
Clause 2(3) of the Bill already empowers the Corporation to provide common services for the publicly-owned companies, and it is understood that the private sector can, by negotiation, have access to these common services as well, and that is to the good. But the private sector legitimately fear that the publicly-owned companies could receive a hidden subsidy in the form of these central services. These are services which they will have to make use of anyway, as they do now, but normally they would have to be paid for by the companies commissioning or making use of the services. Therefore, unless an appropriate charge is made in the accounts of the publicly-owned companies, a false impression of the profitability and efficiency of those companies could be given. It is for those reasons I beg to move this Amendment.
Amendment moved—
Page 24, line 5, at end insert the said paragraph.—(Lord Windlesham.)
LORD WINTERBOTTOM: One understands the intention behind this particular Amendment or series of Amendments, but I find it very difficult at this stage to recommend to the Committee that we should legislate on this subject, because the services are many and various and one cannot at this stage in the proceedings tie down the future Corporation to an exact allocation of services.
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I thought that when the noble Lord moved these Amendments he might link them to an Amendment to Clause 37, which I interpreted as designed to secure a separate figure of the estimated costs of services provided by the Corporation and any of their subsidiaries to each and every publicly-owned company. But it strikes me as extremely difficult to fall in with the assumption behind the Amendment, which is that each publicly-owned company or group of publicly-owned companies should seek to balance its accounts separately.
The Bill imposes this general financial duty on the Corporation and publicly-owned companies as a whole, and the form of organisation below the Corporation has been left to be decided after vesting date. If the Corporation decided to operate as a unitary organisation, they might come to a decision, for instance, to run down certain companies in order to enable other units or group to expand. If the Corporation were to operate in this way, I maintain that no purpose would be served by requiring them to show the cost of services provided to publicly-owned companies by the Corporation or other subsidiaries. The meaningful figure of profits and return on capital would be the consolidated figures for the nationalised sector.
Alternatively, the Corporation might decide to set up separate divisions in competition with each other; but they might still retain the publicly-owned companies, though stripping them of their assets and trading activities—for instance, in order to retain the goodwill associated with their names. In this case, too, the Amendment, I suggest, would impose a meaningless statutory obligation on the Corporation. The Corporation will be required to produce full accounts in a form directed by the Minister with the approval of the Treasury, who will ensure that all costs are brought into charge in the form most suitable to the organisation adopted by the Corporation and the nature of their activities. I think noble Lords will agree that no indication can be given at present of the precise form in which the accounts will be required. There is no doubt that the allocation of common services will be shown in the same way as the overhead figures of, for instance, the gas industry as shown in each area gas boards' accounts. But I

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think we cannot at this stage tie down the future Corporation as to the way in which they show the allocation of common services in their accounts.
LORD WINDLESHAM: The noble Lord was not able to be with the Committee yesterday and therefore he would not know that we had spoken to all the Amendments on Clause 37 in the course of the discussion yesterday. However, in replying to this Amendment he has given the Committee, to my mind, a rather unexpectedly explicit assurance that the allocation of the services will be shown—not just the cost but the allocation—between the publicly-owned companies or whatever groups there may be. This is the information required, not just that the National Steel Corporation have spent on research £1 million, but the allocation of that expenditure in a little more detail. This is the sort of information we think should be given by the Corporation, and, that being so, I beg leave to withdraw the Amendment.
LORD WINTERBOTTOM: I can assure the noble Lord that careful note will be taken of his views; but I can give the assurance that it is the intention of the Corporation that the accounts shall be illuminating, and where research has taken place is, of course, of the first importance.
Amendment, by leave, withdrawn.
Clause 24, as amended, agreed to.
Clause 25:
Information respecting certain classes of business of corporation and publicly-owned companies to be contained in Corporation's report to Minister
25.—(1) If a body in the group consisting of the Corporation and the publicly-owned companies has, in the course, of a financial year of the body ending after such date at the the Minister may determine for the purposes of this subsection, carried on business of a kind to which this section applies, or business of that kind of two or more classes that differ substantially from each other, the Corporation shall determine the amount of the turnover of the body for that financial year in respect of business of that kind or, as the case may be, of each of those classes; and if the amount of turnover in respect of that business, or, as the case may be, of any of those classes, is determined by the Corporation to have exceeded £250,000, there shall he contained, if the body is the Corporation, in the report which, by section 4(6) of the 1949 Act, they
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are required to make next after the end of that financial year or, if the body is a publicly-owned company, in the report which the Corporation are by that section required to make next after the end of the financial year of the Corporation with or within which the first-mentioned financial year ends, a statement of—

(a) that amount;

(7) The Minister may from time time to time direct that this section or a provision thereof shall not apply to business of a class or description specified in the direction; and if the Minister gives a direction under this subsection, that fact, and the class or description of business to which the direction relates, shall be stated in each report made under the said section 4(6) so long as that direction is in force.
(8) The Minister may from time to time vary the amount by reference to which it is to be determined, under subsection (1) or (2) above, whether a statement is to be contained in a report made under the said section 4(6), and may fix different amounts under this subsection for different purposes.
2.58 p.m.
LORD ERROLL OF HALE LORD ERROLL OF HALE moved, after subsection (1)(c), to insert as a new paragraph:
"() the interest rates charged to publicly-owned companies for loans made to them by the Corporation or by the Minister, and the amounts of such loans;"
The noble Lord said: I beg to move Amendment No. 41. The purpose of this Amendment is to ensure that the Report which the National Steel Corporation must make should include a specific statement of the information referred to in the Amendment—namely, a specific statement of the interest rates charged and the amounts of loans made by the N.S.C. or the Minister to the publicly-owned companies—so that the private sectors in industries engaged in activities other than iron and steel activities can see clearly and publicly that the public sectors are not receiving more favourable terms for financing than are available to the private sectors. I hope the Government will be able to accept this Amendment, because I am quite sure their intention is that there should be no favourable treatment for those receiving loans from the N.S.C. If that is their intention, I hope they will will write it into the Bill so that we can see, as the years go by, that there has been no such favourable treatment. I beg to move.
Amendment moved—
Page 25, line 16, at end insert the said new paragraph.—(Lord Erroll of Hale.)
LORD MITCHISON: Without necessarily accepting this particular Amendment, one sees the point about equality of treatment. But what I should like to know is, what is the treatment on the other side? Are the companies in the private sector in the habit of disclosing, or are they bound to disclose, the rate of interest they pay on loans made to them? If the object is to find out whether the public sector is getting an undue advantage, there might be a wish to know what the public sector paid. But the shareholders on the public sector might also like to know what the position is on the private sector. I wonder whether, either now or at some later stage, the noble Lord who moved this Amendment would tell us how he means to ensure, or whether he has already ensured equality of treatment in that respect.
VISCOUNT MASSEREENE AND FERRARD: Surely there is a great difference here. The public sector will be getting the money from the taxpayer. One cannot make the same comparison between the public and the private sectors in regard to the financial sources from which they draw their funds.
LORD WINTERBOTTOM: One sees the objective of the Amendment moved by the noble Lord opposite, but I wonder whether he is not confusing the aims of this particular clause, which are to give the maximum measure of comparability of the various operations governed by the clause. We believe that the clause as drafted almost indicates whether or not a full commercial rate is being charged on capital. The point is that, when this clause is in operation, we shall be able to see the return on capital invested in the various activities, other than steel manufacture, being carried out by the Corporation.
What we want to be able to do, when this information is published, is to compare the measure of profitability of each of these various activities. For this reason, one excludes interest charges because, since almost certainly they would vary, because capital would come from various parts, they might in fact distort the comparability of the pictures which we are trying to achieve. For this reason, we think that, as we shall be showing the profits and the capital employed, it will be possible to calculate
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the return on the activity before interest is charged. It will therefore be easy to find out whether a reasonable return is being earned on each separate business or activity, and there will be true comparability between one activity and the other, because the possible variations in the proportions of loan to equity capital are excluded. If the noble Lord wishes to show interest rates in each case he will be distorting the clear picture which we are trying to see is presented in the Corporation's accounts.
LORD ERROLL OF HALE: I must say that I am far from satisfied with that explanation. If the intentions are as honourable as we have been led to believe, I think it would be much better to accept the Amendment, and then we could see the matter clearly laid out. As regards Lord Mitchison's point, surely the noble Lord realises by now that nationalised industries always get their money on more favourable terms than private companies: it is a sine qua non. There is no need for private companies to reveal their bank charges, rates of interest and other charges, because they are always in a worse position than the pampered public sectors of this or any other industry. I hope that the noble Lord will look at this matter again more fully, because I think we may have to divide the Committee if he cannot be more forthcoming.
LORD MITCHISON: Before we go any further let us get this quite clear. What we were told originally was that the object of this Amendment was to ensure absolutely equal treatment between the public and the private sectors. I have never supposed that a company in the course of its ordinary accounts shows the rate of interest at which it has borrowed money. It is not only a question of the steel companies' borrowing from private sources: as we all know, in the past they have also borrowed from public sources.
If there is any substance in this point, which for myself I cannot yet see, then the position will be that the Amendment seeks to make the public companies disclose in full the rate of interest on any loan, in any circumstances. I entirely agree with my noble friend that, quite obviously, there will be different circumstances and, consequently, different rates of interest, just as there are with the

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private companies. The object is to do that, on the one hand, but not, on the other, to put on companies in the private sector any full duty of disclosure. But if equality is desirable, or if, as the noble Lord himself just said, the publicly-owned bodies always get their money much more cheaply—a statement which I beg leave to doubt—how does that support the argument for this Amendment? I cannot see what the Amendment is needed for. We have not yet been told what the Amendment is needed for. What is the point of it?
LORD SALTOUN: Is not the rate of interest paid on loans by a private company a matter for the shareholders; and is not the interest paid on loans from the public a matter for the public? I am trying to understand the arguments on both sides. That is how I see the matter at the moment.
LORD WINTERBOTTOM: I will pay attention to what the noble Lord, Lord Erroll of Hale has said. But I should like to draw his attention to the fact that, as the. Bill now stands, the information to be provided is:
"Turnover, profit or loss, capital employed, and such further information as the Minister may from time to time direct."
It may be that at some future date the Minister may direct the Corporation to publish interest rates. If noble Lords at some future time feel strongly about the subject, then doubtless pressure will be brought to bear on the Minister of the day to get it published. But I should have thought it would be a pity to press the point at the moment, since what we are trying to achieve is comparability of results, so that we can all understand what is happening in the various related activities of the Corporation, and the varying rates of interest on capital, which would come from varying sources. To change this might distort the picture. But I will bear in mind what the noble Lord has said, and see whether it is possible later to clarify the picture a little.
LORD ERROLL OF HALE: I am grateful for what the noble Lord says; but noble Lords on this side feel strongly about this, and we would rather the Minister put it in now. We think it would probably be better to demonstrate our feelings on this matter by putting it to the vote.
THE MINISTER WITHOUT PORTFOLIO (LORD SHACKLETON): If the noble Lord is capable of doing sums he can find out all this information without putting this Amendment into the Bill. I must say that, for an Amendment on a point of principle upon which to divide, this seems to me to be a singularly undistinguished and unuseful one.
LORD MITCHISON: Might I respectfully agree? I make no apology for again taking up the time of the Committee. This seems to me complete nonsense. I cannot imagine any clause, in providing for the accounts of a nationalised industry, or for that matter the accounts of any comparable body, going into detail of this sort on one point and no others. So far as my recollection goes, there is no provision of this sort in any of the nationalising Statutes. They are always in general terms; they always lay down a form of accounts which has to be approved by the Minister or the Treasury or whatever the body may be, and they leave the detail to the common sense of the accounting authorities.
Why impute this absurd and incongruous malevolence to a body which we all want to succeed?—at least, I hope we want it to succeed. I am beginning to wonder whether noble Lords opposite do want it to succeed, or whether they would prefer it to fail. Why put in this particular matter? Why not put in the rents they pay, or the provision of private motor cars for any of the people who work for them, or Heaven knows what? One could go on down the whole line putting in things of this sort. Why choose this particular matter? What is the point of it?
LORD WOLVERTON: I hope the Government may have second thoughts on this matter, because a large amount of this money will no doubt come out of the taxpayers' pockets through the Budget. There can be a quite large hidden subsidy in the rate that they grant, because they get it from the taxpayers, and it is not easy to-day, having regard to the enormous extent of the National Debt, for Her Majesty's Government to raise large sums of money for these nationalised industries. The ones which are solvent can raise their own money in the market; the others which are not solvent have to come to the

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Treasury and are given taxpayers' money. Therefore I think Parliament has a right to know at what rate the publicly-owned steel industry is going to be lent this money. It is quite different from private industry, in which shareholders could get this information if they wanted it. I strongly support the Amendment.
LORD SHACKLETON: I do not know whether the noble Lord is going to divide on this Amendment. I do not want to spoil the excellent record of the Opposition so far on this Bill. The noble Lord will appreciate that the rate at which the Corporation will borrow from the Exchequer will be disclosed. I would urge the noble Lord to think again because, whatever happens, this proposal is unworkable and will have to be taken out, and I would rather your Lordships did not put an Amendment into the Bill that is unworkable. There may be an opportunity to discuss this subject again on Report stage. If the noble Lord particularly wants a Division at this moment, if he has sat here a little too long, I am sure the Committee will be happy to go its various ways. But I think that one can go some way to satisfy him on this matter in practice. The Amendment, as drafted, is—and I will moderate my language—not a very good one.
LORD HAWKE: May I ask the noble Lord a question? Of course, the rate at which the Treasury lends to the Corporation will be known. But will it be possible to ascertain from the Corporation's accounts at what rates it is passing on money to its subsidiaries? If that is readily ascertainable in the Corporation's accounts, I am certain that my noble friend's point would be met; but if it is not it is a rather different matter.
LORD SHACKLETON: Is the noble Lord suggesting that they are likely to lend the money at a lower rate than they themselves have borrowed it? The Corporation can be expected to disclose this in their accounts. I feel that the difference between the two sides is not in fact very great. It is in the hands of the noble Lords opposite. Some interesting points have been raised which we might be able to pursue at a later stage.
LORD HAWKE: Could the noble Lord give me a specific statement that it will be possible to discover from the Cor-
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poration's accounts whether they are lending out money at cheaper rates than those at which they are borrowing it?
LORD SHACKLETON: I cannot myself give a specific answer, but I certainly would have said that it was to be expected that the Corporation would do so, and I should certainly be willing at a later stage, possibly on a later Amendment, to take an opportunity to say something on this point when I have confirmed my information. I do not know whether they would have power—and this is why I should like advice on this matter—to lend money at a rate lower than they themselves have borrowed it. I can see that there could be some Treasury reaction. Some of my colleagues with more financial experience might be able to answer this point more specifically. I am trying to be as helpful as I can, without actually misleading the noble Lord.
LORD MITCHISON: I am most reluctant to annoy anybody, but I wonder if noble Lords opposite could tell me one thing?—whether they decide upon a Division on an Amendment according to its merits, or according to the time of day at which it is taken.
LORD ERROLL OF HALE: I am very glad to answer that point. We divide only on merits and not according to the time of the day—there is no question of that at all. As this is only the Committee stage we have another opportunity on Report, and it would be a powerful stimulus to the various Departments which have been invoked by the noble Lord who has replied to study the matter if we were to put this Amendment in, imperfect though it may be. This will enable the Government to draft a better Amendment for our consideration on Report; whereas if we just leave it, perhaps we shall hear nothing more about it. This is a serious matter of principle; namely, that the Corporation may choose to provide hidden subsidies to individual publicly-owned companies competing with those in the private sector by provision of money at less than the going rates of interest. I suggest to noble Lords that we put this Amendment, even if it is not perfect, into the Bill, preferably with the agreement of noble Lords opposite, but, if not, on our own.
3.21 p.m.
On Question, Whether the said Amendment (No. 41) shall be agreed to?
Their Lordships divided: Contents, 59; Not-Contents, 55.

CONTENTS

Aberdeen and Temair, M.

Derwent, L.

MacAndrew, L.

Ailwyn, L.

Drumalbyn, L.

Mancroft, L.

Albemarle, E.

Effingham, E.

Margadale, L.

Allerton, L.

Elliot of Harwood, Bs.

Massereene and Ferrard, V

Alport, L.

Erroll of Hale, L.

Newton, L.

Ampthill, L.

Falkland, V.

Nugent of Guildford, L.

Atholl, D.

Ferrier, L.

Oakshott, L.

Auckland, L.

Fortescue, E.

Rathcavan, L.

Balerno, L.

Glendevon, L.

Russell of Liverpool, L.

Balfour of Inchrye, L.

Goschen, V. [Teller.]

Salisbury, M.

Boston, L.

Hacking, L.

Sandford, L. [Teller.]

Bridgeman, V.

Hankey, L.

Sinclair of Cleeve, L.

Brooke of Cumnor, L.

Hawke, L.

Somers, L.

Brooke of Ystradfellte, Bs.

Horsbrugh, Bs.

Soulbury, V.

Carrington, L.

Howard of Glossop, L.

Strange, L.

Conesford, L.

Ilford, L.

Strange of Knokin, Bs.

Cottesloe, L.

Inglewood, L.

Thurlow, L.

Craigavon, V.

Jellicoe, E.

Windlesham, L.

Daventry, V.

Jessel, L.

Wolverton, L.

Kilmarnock, L.

Ypres, E.

NOT-CONTENTS

Addison, V.

Hilton of Upton, L. [Teller.]

Rusholme, L.

Airedale, L.

Hughes, L.

St. Davids, V.

Amulree, L.

Hurcombe, L.

Shackleton, L.

Archibald, L.

Iddesleigh, E.

Shannon, E.

Arwyn, L.

Kahn, L.

Shepherd, L.

Blyton, L.

Latham, L.

Snow, L.

Bowles, L.

Lindgren, L.

Soper, L.

Boyd-Orr, L.

Longford, E. (L. Privy Seal.)

Stocks, Bs.

Brockway, L.

Mitchison, L.

Stow Hill, L.

Burden, L.

Moynihan, L.

Strabolgi, L.

Burton of Coventry, Bs.

Ogmore, L.

Strang, L.

Champion, L.

Phillips, Bs. [Teller.]

Summerskill, Bs.

Citrine, L.

Plummer, Bs.

Swaythling, L.

Faringdon, L.

Popplewell, L.

Taylor of Mansfield, L.

Gaitskell, Bs.

Raglan, L.

Wade, L.

Gardiner, L. (L. Chancellor.)

Rea, L.

Wells-Pestell, L.

Greenway, L.

Ritchie-Calder, L.

Willis, L.

Harvey of Tasburgh, L.

Royle, L.

Winterbottom, L.

Wise, L.

Resolved in the affirmative, and Amendment agreed to accordingly.
3.27 p.m.
LORD WINTERBOTTOM: It may be the wish of the Committee that we take Amendments Nos. 42, 44, 47 and 49 together. These Amendments stand in the name of my noble friend Lord Shackleton. Again, they make no difference whatever to the substance of the clause, and are purely drafting Amendments designed to make it read more easily. For this reason, I beg to move.
Amendment moved—
Page 25, line 35, after ("make") insert ("next").—(Lord Winterbottom.)
LORD HAWKE: I am glad that the noble Lord finds that it makes the Bill read more easily to insert "next" after
1014
"make". I am afraid that to me it makes it much more difficult to read. I wonder whether the noble Lord would examine whether the word "next" should not be in line 33, making it read "the next report", because the way he is putting it at the moment—
"required to make next after the end of that financial year"—
does not read at all well.
LORD WINTERBOTTOM: I presume that when my brief says "read more easily", it means to read more easily for legal experts. All this strikes me as extremely difficult for normal human beings, but I am assured that this Amendment in fact improves the wording of this clause.
On Question, Amendment agreed to.
LORD WINTERBOTTOM: I beg to move Amendment No. 44.
Amendment moved—
Page 26, line 7, leave out ("the said section 4(6)") and insert ("section 4(6) of the 1949 Act").—(Lord Winterbottom.)
On Question, Amendment agreed to.
LORD WINTERBOTTOM: I beg to move Amendment No. 45.
Amendment moved—
Page 26, line 25, leave out from ("in") to ("respectively") in line 26 and insert ("those cases").—(Lord Winterbottom.)
On Question, Amendment agreed to.
LORD ERROLL OF HALE LORD ERROLL OF HALE moved, in subsection (7), after "The Minister may" to insert:
",but only after reference to and approval by the Consumers' Council,".
The noble Lord said: It might be for the convenience of the Committee if we took Amendments Nos. 46 and 48 together. They are concerned with the provision of the information covered in this clause, which could be of value in allaying the fears of the private sector of these industries regarding the financial affairs of their competitors in the public sectors. But unfortunately, in my opinion, subsections (7) and (8) give the Minister far too wide a discretion, which would have the effect of nullifying the clause altogether. For example, if the Minister exercised his discretion by altering the class or description of business, or if he varied the amounts given in subsections (1) and (2), this could seriously affect the trading position of the private sectors.
I should therefore like to suggest, as is conveyed by the Amendments, that the Minister should be required to obtain the sanction of those representatives of the industries concerned—i.e. the Consumers'Council—before he takes action in the way provided. This is the purpose behind the two Amendments, which I hope the Government will be able to accept. I beg to move Amendment No. 46.
Amendment moved—
Page 26, line 38, after ("may") insert (",but only after reference to and approval by the Consumers'Council,").—(Lord Erroll of Hale.)
LORD WINTERBOTTOM: We differ from the noble Lord, Lord Erroll of Hale, who thinks that these particular
1016
matters are appropriate for decision by the Consumers' Council. The Minister's power to exempt certain activities from the operation of the clause is meant to enable him to exempt non-commercial activities—for example, housing and welfare activities—and activities overseas where publication of information might be seriously prejudicial to the Corporation's business. I think noble Lords on both sides of the Committee would agree that in neither case would it be appropriate for the Consumers' Council to instruct the Minister. The Consumers' Council has no concern with the Corporation's welfare and housing activities, or with their overseas activities. As to the second point, Amendment No. 48, the power to vary the limit of turnover above, which information must be published, was inserted to ensure that the limit is always so fixed that full disclosure of all significant information is achieved. At the moment there is very little information available about the turnover of companies, although they will be required to publish figures of turnover when the present Companies Bill becomes law. When that information becomes available, it might be desirable to consider changing the limits so that the Corporation would not be required to publish useless detail or that, alternatively, all significant activities would be caught. The opinion of myself and my colleagues is that this is properly a decision for the Minister to take; and, of course, he is answerable to Parliament for it. We do not believe that it would be appropriate for the Consumers' Council to decide on these two important issues, since the Council are not answerable to Parliament, and we therefore cannot ask them to take the decision on what information shall in fact be laid before Parliament. It is for this reason that we are resisting these two Amendments.
Having said that, I should point out that the Consumers' Council already have ample opportunity, of course, to make their views known on these questions when they think it desirable. Section 6, subsection (4), of the 1949 Act as revived empowers them to consider and make representations to the Minister on any matter concerning the interests of consumers, and this provision would certainly empower them, if they so wished, to make representation about the

1017
Minister's use of his powers under Clauses 25(7) and 25(8) where it affected consumers' interests. The private sector will not be left defenceless before the Minister, but we do not believe that the Consumers' Council is the best body to protect their interests in these two particular cases.
LORD ERROLL OF HALE: I am grateful to the noble Lord for his explanation. I realise that this Amendment is perhaps rather more technically defective than the last one, that it does not raise the same important issues of principle and therefore does not merit a Division to enforce our views. I am grateful to the noble Lord for his explanation, and beg leave to withdraw the Amendment.
LORD HAWKE: I do not know whether the noble Lord appreciates the somewhat ironic statement he made—that is, "in order to stop them from publishing useless detail". We spent many an evening here not very long ago trying to stop Her Majesty's Government from making small companies publish useless detail.
LORD INGLEWOOD: I should like to support my noble friend, because the same idea came into my head. I was going to ask the noble Lord whether the words we have just heard mean that the Government have had a change of heart, because the tone of the speech we have just heard from the Front Bench of the Government is the exact opposite to the tone of the speeches we heard over and over again during the Committee stage of the Companies Bill. Can we read into what the noble Lord has just said a statement of Government intention to amend the Companies Bill in the same way, having found that what they are now asking companies to provide is no more than useless detail?
Amendment, by leave, withdrawn.
LORD WINTERBOTTOM: I beg to move the next Amendment.
Amendment moved—
Page 26, line 43, leave out ("the said section 4(6)") and insert ("section 4(6) of the 1949 Act").—(Lord Winterbottom.)
On Question, Amendment agreed to.
LORD WINTERBOTTOM: I beg to move Amendment No. 49.
Amendment moved—
Page 27, line 2, leave out ("the said section 4(6)") and insert ("section 4(6) of the 1949 Act").—(Lord Winterbottom.)
On Question, Amendment agreed to.
Clause 25, as amended, agreed to.
Clauses 26 and 27 agreed to.
3.37 p.m.
LORD WINDLESHAM LORD WINDLESHAM moved, after Clause 27, to insert the following new clause:
Duty to inform private sector about E.C.S.C.
".—(1) It shall be the duty of the Minister to keep iron and steel producers, other than the Corporation and the publicly-owned companies, and such organisations as appear to him to be appropriate and to be representative of the interests of iron and steel producers informed—

(a) of the proceedings of the institutions of the European Coal and Steel Community so far as such proceedings arc within his knowledge and appear to him to be relevant to such iron and steel producers, and

(b) of such other matters concerning the relationship between the United Kingdom and the said Community as in the opinion of the Minister are relevant to the iron and steel industry generally.

(2) Nothing in this section shall be taken as requiring the Minister to disclose to such iron and steel producers or any such organisation as aforesaid any matter which in his opinion it is not in the national interest to disclose to them.
(3) In this section the expression the Institutions of the European Coal and Steel Community' means the Institutions mentioned in Article 7 of the Treaty constituting the said Community signed in Paris on 18th April, 1951."
The noble Lord said: This new clause after Clause 27 brings the Committee back to the subject of Europe, which was discussed yesterday afternoon on a much more wide-ranging Amendment. The purpose of this Amendment is to restore to the private sector of the British steel industry the right to information that they had under the 1953 Act—which they have to-day, in fact. Under the 1953 Act, Section 4, the Minister had an obligation placed on him to keep the Iron and Steel Board informed on matters concerning the European Coal and Steel Community. When an Amendment which sought to impose a similar obligation on the Minister was moved in Committee in another place, the Minister made the point in reply that this was not necessary with the National Steel Corporation because,

1019
since Britain is an associate member of the Coal and Steel Community, the National Steel Corporation itself would be a member of the Council of Association, and therefore would be receiving all the information that was needed and would itself be aware of the proceedings of the Coal and Steel Community. This Amendment is therefore much more narrowly drafted. It does not include the public sector at all, for the reasons given by the Minister; namely, that they will have access to information and there will be no need to place an obligation on the Minister to inform them since they will already know.
However, the private sector is in a different position here, and what we seek to do in this Amendment is to make it a duty of the Minister to keep iron and steel producers which are not nationalised, and organisations representative of the interests of these iron and steel producers, informed about the relationship between the United Kingdom and the European Coal and Steel Community, and of the proceedings of the institutions of the Community. Unless some provision of this sort is put into the Bill, there will be no statutory requirements upon the Minister to consult with or inform the future private sector about these matters. It is for that reason that we seek to add this new clause, thus ensuring that the private sector do not have removed from them the rights they already have under the 1953 Act. I beg to move.
Amendment moved—
After Clause 27, insert the said new clause.—(Lord Windlesham.)
THE EARL OF LONGFORD: May I say straight away that the Government fully accept the objective of the Amendment? My right honourable friend the Minister of Power has every intention of keeping both the Corporation and the private sector of the iron and steel industry as fully informed as possible of the proceedings of the European Coal and Steel Community, and of matters concerning the relationship between the United Kingdom and that Community. He will welcome the advice of both the Corporation and the representative organisation of the private sector on matters referred by him to them and, in addition, on matters they themselves
1020
raise. We consider that this consultation will be of great help to the Government, particularly in the matter of keeping a close relationship with the Community.
I would add—although I do not think there is much need to mention this again—that the Government are entirely serious and sincere in the moves they are making to join the European Community; and if we do not accept this clause—and I am afraid we are going to ask the noble Lord to withdraw it or, if he is disinclined to do that, to ask the Committee to reject it—it is due to technical considerations. But I would respectfully submit to the noble Lord and his colleagues that these technical considerations are strong.
First, there was no reason, in our view at any rate, why there should be a special statutory provision about consultation on these matters with the private sector of the steel industry when there is no statutory obligation of the Government to consult other and more important sectors of industry on these matters. To include this provision would highlight consultation with the private sector steel companies, and would therefore carry the implication that there is less need for similar consultation and co-operation with industry generally. I am sure that the noble Lord and the Committee would not wish to stress any suggestion of that kind. There is another aspect of the same point. This new clause brought forward by the noble Lord provides for consultation with the private sector, but not with the Corporation. I hope the noble Lord will forgive me if I say it really would be a little strong to introduce a statutory requirement for consultation with 10 per cent. of the steel industry and not with 90 per cent.
The second strong technical argument is that the Six are now considering a plan for the fusion of the three Communities, the E.E.C., the E.C.S.C., and EURATOM. If this fusion took place the new clause would become meaningless. Third, and perhaps the most important, as the noble Lord said, this new clause is largely modelled on Section 4 of the Iron and Steel Act. That was drafted at a time when it was envisaged that the United Kingdom would co-operate closely with the Community but would remain outside it. Its wording is clearly related to this particular situation and it is quite

1021
unsuitable to a situation in which the Government are actively and determinedly probing to find out whether United Kingdom membership of the Community is possible. It is indeed doubtful—I will not say more than that—on my advice, that the provision in a Statute of this kind would be consistent in spirit with membership of the Community, the countries of which in many respects operate on industry directly and not through national Governments.
I repeat that we intend to keep both the Corporation and the private sector very closely informed. I hope the noble Lord will accept that, as I feel he will, as a genuine and strong purpose. We intend to keep the Corporation and private sector closely informed on matters concerning our relationship with the European Coal and Steel Community. I hope, in view of the arguments I have ventured to submit to the noble Lord and to the Committee, that this clause will not be pressed.
LORD WINDLESHAM: The noble Earl has given the Committee an outright assurance, which he has repeated more than once, that the purpose of this Amendment will be achieved by the Minister. One of his reasons for resisting it—with respect, it seemed a thin one—was that it would be curious if the private sector, the 10 per cent., had a statutory right to information which the 90 per cent. in public ownership did not have. The Minister has said in another place that it is his intention to propose that, as from vesting day, the Corporation shall become an actual member of the Council of Association, which the Iron and Steel Board is at the moment. So that argument takes care of the position of the National Steel Corporation. However, we have had an assurance from the noble Earl, and I do not wish to press this Amendment this afternoon.
We are making good progress—I think the Government would agree—with the Bill. The question of the relationship between the British Steel Industry after nationalisation and the European Communities—whether it be the Coal and Steel Community separately or E.E.C., E.C.S.C. and EURATOM, does not alter this—is one of fundamental importance. We discussed this yesterday, when I put some detailed points to noble Lords opposite. If the noble Earl the Leader
1022
of the House is willing to give some information now on those points I raised, it might be a good opportunity to hear the Government's considered views on this rather wider issue.
THE EARL OF LONGFORD: I am in the hands of the Committee, and in particular I am in the hands of the noble Lord. If the Committee will there forebear with me, in view of the excellent rate of progress, I will detain them for a few minutes while I try to answer some of the points raised in the general European debate initiated by the noble Lord yesterday and, indeed, on Second Reading. One point we were able to clear up yesterday was that the Bill is not incompatible with the Treaty of Paris. I am sure that on reflection the noble Lord will not regard that as a minor matter; it is one of great importance. It seems, if our negotiations to enter the European Communities are successful, that we shall be able to sign the Treaty of Paris without any inhibitions about this Bill, which will by then be on the Statute Book. Such issues as arise will arise on the practical arrangements made by the Minister and the National Steel Corporation within the framework of the Act and by the High Authority within the framework of the Treaty. These will be matters for negotiation and discussion. It is on that plane that we shall be talking.
I turn now to the three specific questions which the noble Lord put to me yesterday. First, will the Corporation's activities on prices be compatible with Articles 60 and 63 of the Paris Treaty? Of course, if we join the Community the Corporation will be bound by the provisions of the Treaty and their activities will have to be compatible with them. But Articles 60 and 63 are in very general terms and, in particular, refer to enterprises. I think the noble Lord yesterday talked about steel-making units. The definition of an enterprise in Article 30 is such that the Corporation will, in certain circumstances, be itself an enterprise for the purposes of the Treaty. Again, these highly technical matters will be dealt with by negotiation and discussion at the appropriate time.
The noble Lord's second question was, what powers would be retained at the centre and what will be delegated to groups in accordance with the current

1023
interpretaton of the Treaty of Paris? I was asked whether the Corporation and the Minister will be conscious of the needs of Europe here. My noble friend Lord Shackleton explained very fully and clearly the present thinking of the Government and of the Organising Committee in relation to the retention of the functions at the centre and the delegation to groups. We will certainly have the question of Europe in mind in deciding on this division of functions, but I must make it quite clear on behalf of Her Majesty's Government that this will be only one factor, and that while we remain outside the Community the main factor in our decisions will be the efficiency of the British steel industry. In any case, so far as I know, there is nothing in the Treaty of Paris which says in relation to a holding company with a number of subsidiaries, what functions should be performed at the centre and what should be delegated to the subsidiaries.
The noble Lord's third question was: How will the possibility of any Government subsidy to assist payment of compensation debt interest be handled? Will this be compatible with the Treaty? The answer is that we do not intend that there should be a subsidy for payment of the compensation debt interest. We believe the compensation to be paid under the Bill is on the generous side of what is fair and just. Under Clause 19 the Corporation will assume a capital debt which will include the full amount of the compensation. In fixing the terms of this commencing capital debt, the Government will naturally have regard to the cost to the Exchequer. Thus, we do not think the question posed by the noble Lord arises. But, in any case, as the arrangements now being made by the French Government have shown, there is a good deal of flexibility in practice in interpreting these subsidiary rules of the Paris Treaty.
In addition to the three questions, the noble Lord referred to the proposed reorganisation of the German steel industry. May I interject to say that we have been following these proposals very closely, and that an official of the Ministry of
1024
Power has visited Germany for discussions with the German authorities. As the noble Lord said yesterday, it is obvious that I cannot comment in detail on the High Authority's decision, but, of course, there is distinction between a reorganisation which is being carried out in a country already in the Community and by privately-owned steel companies, and the issues which will face the High Authority in assisting the absorption of a steel industry already nationalised in a country which is yet to join the Community. I am afraid that I have read that out rather fast, but at any rate it is on the record, and I hope that the noble Lord will be satisfied that I have at least tried to answer the questions he raised.
3.50 p.m.
LORD WINDLESHAM: I am grateful to the noble Earl for the detailed and speedy answer he has obtained since the questions were put yesterday. As he said in reply, I think, to the first question—these were significant words—if we sign the Treaty of Rome, if we join the European Community, the National Steel Corporation's activities will have to be compatible with the Treaty. The whole point of the Amendment moved yesterday and this Amendment, and to a certain extent this discussion to-day, is that the question of Europe should be kept in mind when the entire British steel industry is being reorganised, so that it is not set up in such a way as would make it extremely difficult and would require very substantial relocation and basic changes if and when Britain joined the Community. I am grateful to the noble Earl for the detailed explanation which he has given us. It is useful to have got it on the record. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD SHACKLETON: It may be for the convenience of the Committee if my noble friend now makes the Statement, and therefore I beg to move that the House be resumed.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

THE "D" NOTICE SYSTEM: COMMITTEE OF INQUIRY
3.52 p.m.
THE EARL OF LONGFORD: My Lords, with permission I should like to repeat a Statement which my right honourable friend the Prime Minister is making in another place. I will use his own words:
"I regret that it was not possible to make this yesterday, the first Parliamentary opportunity for a formal announcement, but, as the House knows, I was in The Hague.
"As honourable Members will be aware, I have appointed a Committee of Privy Councillors, under the chairmanship of Lord Radcliffe, with the following terms of reference:
'To examine the circumstances surrounding the publication of an article in the Daily Express of the 21st of February entitled "Cable Vetting Sensation" in relation to the "D" Notice system; and to consider what improvements, if any, are required in that system in order to maintain it as a voluntary system based on mutual trust and confidence between the Government and Press in the interests alike of the freedom of the Press and of the security of the State'.
"The other members of the Committee will be my right honourable friend the Member for Easington (Mr. Shin-well) and the right honourable and learned Gentleman the Member for Wirral (Mr. Selwyn Lloyd), who was nominated by the Leader of the Opposition."
My Lords, that concludes the Prime Minister's Statement.
LORD CARRINGTON: My Lords, I thank the noble Earl the Leader of the House for repeating that Statement. I am sure that all your Lordships will be pleased that the Prime Minister found it possible to accept the suggestion made by Mr. Heath, I think on two occasions, that a Committee of this kind, of three Privy Counsellors, should be set up. In my view, it is a very good thing because there is no doubt that there is uneasiness about the events of the last ten days or so. May I ask the noble Earl the Leader of the House whether the Committee's terms of reference make it possible for them to inquire into whether cable vetting should or should not be the subject to a "D" notice?
THE EARL OF LONGFORD: My Lords, I certainly take it from the terms of reference that that matter must be within the terms.

IRON AND STEEL BILL
3.54 p.m.
House again in Committee.
Clauses 28 and 29 agreed to.
LORD SHACKLETON LORD SHACKLETON moved, after Clause 29, to insert the following new clause:
Right of objection of certain iron and steel producers to trade practices of Corporation and publicly-owned companies appearing to be unfair
"—(1) Subject to subsection (6) below, the three next following subsections shall have effect where an iron and steel producer, being neither one of a description mentioned in subsection (5) below, nor the Corporation nora publicly-owned company, makes to the Minister written complaint about a practice employed by the Corporation or a publicly-owned company in selling iron and steel products, being products of an activity specified neither in paragraph 4 nor in paragraph6 of Schedule 3 to the 1953 Act, and the complaint is expressed to be made on the ground that the practice is unfair to the complainant and specifies the respects in which he considers that it is so unfair.
(2) The Minister shall forthwith after receiving the complaint send a copy thereof to the Corporation and, after such period for consideration of, and comment upon, the complaint by the Corporation as the Minister thinks reasonable has elapsed, shall send to the complainant a statement of the comments, if any, made by the Corporation on the complaint and shall, if he is of opinion that the complaint raises a question of substance and that the complainant has a reasonable case to make in support of the complaint, afford the complainant and the Corporation an opportunity of appearing, either personally or by a representative, before a person appointed by the Minister.
(3) The Minister shall consider the report of the person appointed under the last foregoing subsection and may, if it appears to him that the practice complained of is unfair to the complainant, give to the Corporation such directions as appear to him to be requisite to secure the removal of the grounds on which it is so unfair; and the Minister shall furnish the complainant with a statement to any such directions and the Corporation shall give effect thereto.
(4) Where a complainant avails himself of the right conferred by subsection (2) above to appear before a person appointed by the Minister, the Minister shall furnish the complainant and the Corporation each with a copy of the report of the person so appointed, and a statement of the conclusions reached by the Minister on considering the report.
(5) The description of iron and steel producer referred to in subsection (1) above is an iron and steel producer who carries on business comprising one or more of the activities specified in paragraphs 4 and 6 of Schedule 3 to the 1953 Act, but no other iron and steel activity.
(6) The Minister may by order give either or both of the following directions—

(a) a direction that subsection (1) of this section shall have effect as if the reference to an iron and steel producer of a description mentioned in the last foregoing subsection did not include a reference to an iron and steel producer of a specified description or that that subsection shall have effect as if the first-mentioned reference were omitted;

(b) a direction that that subsection shall have effect as if the reference to products of an activity specified neither in paragraph 4 nor in paragraph 6 of Schedule 3 to the 1953 Act did not include a reference to products of a specified description or that that subsection shall have effect as if the first-mentioned reference were omitted."

The noble Lord said: This clause has been put in to fulfil an undertaking given by my right honourable friend the Minister of Power in another place at Report stage to introduce a provision establishing a formal procedure for complaint by iron and steel producers about alleged unfair trading practices by the Corporation. It provides for iron and steel producers—these are private iron and steel producers—to complain to the Minister where they think that the Corporation or a publicly-owned company is engaging in unfair trading practices in the sale of iron and steel products. If the Minister thinks the complainant has raised a question of substance and has a reasonable case, he can refer the complaint to a person appointed by him who can hear both sides and make a report; and after considering the report the Minister can, if he decides the practice is unfair, give the Corporation such directions as he thinks necessary to remove the grounds on which it is unfair.
Iron and steel producers who produce only castings and forgings cannot make use of this procedure, for reasons which I am sure are obvious to noble Lords opposite. No complaint by anyone can lie in respect of sales by the Corporation or publicly-owned companies of castings or forgings, but the Minister has power under subsection (6) of the new clause to make an order bringing castings and forgings and their producers into the
1028
scope of the new procedure, and by virtue of later Amendments to Clause 44 such an order would be subject to Negative Resolution procedure and it would be possible also for it to be amended or revoked. This relates to later Amendments Nos. 63 and 66.
This new clause gives a right of appeal to the Minister on matters which are normally left to the commercial discretion of a nationalised industry. It is justified only by the very special circumstances of the private sector of the iron and steel industry, which over many products is in competition with the dominant nationalised sector and at the same time largely dependent on it for supplies of semi-finished materials. These special circumstances, as I said, do not apply in the case of castings and forgings where the Corporation will control only 9 per cent. of the United Kingdom output of steel castings; 24 per cent. of the output of iron castings and 45 per cent. of the output of forgings, tyres, wheels and axles. They also do not apply to the diversified activities which will come under the control of the Corporation.
The new clause applies only to unfair trading practices by the Corporation and the publicly-owned companies. This is in accordance with the general principle that those companies which are subsidiaries of the Corporation, but in which there is a minority private shareholding, should be treated as belonging to the private rather than to the nationalised sector. Any departure from this principle could limit the commercial freedom of the companies and thus prejudice the position of the minority shareholders; but I am sure in this context the noble Lord will agree that the matter is not of significance. The new clause demonstrates the desire of the Government to allay the fears of the private sector, even though on this point we believe that they are exaggerated. I hope that its introduction will reinforce the assurances given several times by my right honourable friend the Minister of Power that he will be concerned with the steel industry as a whole and with the legitimate interests of the private as well as of the public sector. I beg to move.
Amendment moved—
After Clause 29, insert the said new clause.—(Lord Shackleton.)
LORD ERROLL OF HALE: I should like to thank the noble Lord for his explanation of this new clause and to say that the Opposition appreciate the careful attention which the Minister has given to the case made by the Opposition in another place, and which has resulted in this clause being tabled in your Lordships' House. The Amendment is good so far as it goes, though I have one criticism to make—that is, that the complaints procedure to be followed is somewhat complicated. Possibly one reason for that is to make sure that only those who have a strong sense of grievance will take the trouble of going through the procedure. It would have been an advantage to have a simpler procedure, because it is unlikely that frivolous complaints will be made.
I cannot see why the complaints procedure should be limited to iron and steel producers in the private sector. The noble Lord made it plain that the Minister could, by order, extend it to casters and forgers, but I would point out that there are many other groups who may be adversely affected by unfair trading practices carried out by groups of wholly-owned companies of the Corporation. I have particularly in mind those companies engaged in the steel construction industry which remain in private hands and which will have to compete against the wholly-owned steel construction groups or subsidiaries of the main companies which are taken over. Here there is certainly every whit as good a case as for the iron and steel companies which still remain in the private sector.
There is another important group in the industry who perhaps do not get into the limelight very much—the steel export merchants, who by their activities help to sell steel products abroad and contribute to our balance of payments. I can well see how an export merchant with a good export business to a particular country may find that the publicly-owned company which has been in the habit of supplying him may get into that market by quoting an uneconomic price, or by other methods whereby it can secure the job for itself. That would be unfair trading practice. It is important that the export merchant should have the same right of appeal (if I may so put it) as the private iron and steel producer. Perhaps these two important matters could be looked at before we come to
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the next stage. Naturally these people would be delighted if the Government were to enable their complaints to be included. May I say, on behalf of the Opposition, that we appreciate the intention and care that the Government have given to the representations made and that we appreciate the tabling of this Amendment, which goes some way towards meeting our case.
LORD MITCHISON: I always try to help the noble Lord, Lord Erroll of Hale. He is sometimes a pathetic and always an attractive figure. I wonder whether he has looked at the reasons the Minister gave for what is now this clause. On January 23, on Report, the Minister set out in some detail what is now in the clause. I cannot see any material omission. My right honourable friend said:
"Leaving aside the actual drafting"—
of the Opposition Amendment he was considering—
"it has emerged from the debate so far that the Amendment is prompted by those iron and steel companies which will remain in the private sector. Here this is a very special situation, which does not arise elsewhere in the nationalised industries, and in which the private sector iron and steel companies will not only be in competition with the dominant public sector, but in general will be dependent on the nationalised sector for supplies of raw materials and semi-finished products. I have said a number of times that I think the Minister of Power of whatever Party in future will find himself as much concerned with the private sector as with the public sector because he will be the sponsoring Minister of the industry."—[OFFICIAL REPORT, Commons, 23/1/67, col. 1149.]
He then said that there were some advantages in the procedure which is now embodied in the clause and went on like this—and I hope that this will show the noble Lord that in this matter the Opposition were pushing an open door:
"I have for a long time recognised that the fears for the future private sector, which I still believe are completely unjustified, are very real. I do not think that a provision of this type poses any problem or imposes any added difficulty upon the Corporation. I think that a provision on these lines should meet the genuine misgivings of the private sector companies."[col. 1150.]
My right honourable friend then promised to put down an Amendment for consideration here. I should not like to feel that the noble Lord was still seriously worried, because this was put in to help him and others. One always wants to help the noble Lord if at all possible,

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and I hope he will say, "Thank you", in the charming manner in which he has already indicated he was going to say it.
LORD SHACKLETON: I am impressed by the thoroughness of my noble friend's research and by the eloquence and clarity with which he reads reports from another place. I had intended to answer in my own words the point made by the noble Lord, but the Minister's words are even more convincing. However, I share my noble friend's slight anxiety that there has been a growing tendency to suspicion, though not quite a persecution complex. An Opposition who believe that the Corporation are going to lend money to their subsidiaries at such a low rate of interest that they will effectively damage the competitive side of the private sector are capable of any flights of fancy, but I assure the noble Lord that we have gone a long way to meet him. I appreciate his expression of thanks. I think it would not be practical to go further into an area where the iron and steel industry do not have a dominant position but are in competition. I think that the Government have done fairly well and that the noble Lord is really quite pleased.
VISCOUNT MASSEREENE AND FERRARD: May I ask the noble Lord whether the person to be appointed by the Minister under subsection (2) is to be a professional man—a chartered accountant, lawyer or solicitor—or is he to be a civil servant or politician? Has the noble Lord any idea what sort of person is to be appointed as referee?
LORD SHACKLETON: I think he is unlikely to be a politician from either House of Parliament. Ministers of all Parties are accustomed to appointing suitable people to fill these posts. I may mention another point which may be of interest to noble Lords opposite. The Minister's action in this matter of choosing a suitable man brings him, and to that extent brings the subject, within the field of the Parliamentary Commissioner, and if maladministration has taken place he can be subject to report.
On Question, Amendment agreed to.
Clause 30 [Conditions of employment, pension rights, etc.]:
On Question, Whether Clause 30 shall stand Part of the Bill?
LORD CITRINE: I should like to make a few brief observations before this clause is passed. Clause 30 seeks to amend the 1949 Act by the insertion of particular words, as shown in subsection (2). That subsection states:
Section 39 of the 1949 Act shall be amended as follows:—
and then it proposes to substitute for paragraph (b) of Section 39(1) of the 1949 Act the following new paragraph (b):
"the promotion and encouragement of measures affecting efficiency, in any respect, in the carrying on by the Corporation and by publicly-owned companies of their activities, and the promotion and encouragement of measures affecting the safety, health and welfare of persons employed by the Corporation and by publicly-owned companies."
Those words are, to a considerable extent, a repetition of language used in other nationalisation Acts. However, there are omissions, which may be unintentional, and may be covered by the words "in any respect", to which I referred. These omissions, as I see them, are that there is no reference to education or to training. Both these questions, so far as my recollection goes, are separately dealt with in certain other of the nationalisation Acts, and I am sure it would be the intention of the Government that they should not be regarded as of less importance in this legislation. Consequently, I wonder whether the noble Lord, Lord Shackleton, might feel that on the Report stage they could be specifically mentioned in this paragraph.
LORD SHACKLETON: Naturally, I listen with the greatest attention to what the noble Lord, Lord Citrine, has to say, because no-one has been more actively and, if I may say so, successfully concerned with this subject. The noble Lord will recall that the Industrial Training Act has been passed, and although I am speaking without prior knowledge, I rather think that the matters which previously fell to a different responsibility are now dealt with under that Act. However, I will certainly consider what the noble Lord has said, and shall be happy to provide what personal assurances he may wish, or take an opportunity to restate the position at a later stage.
LORD CITRINE: I am grateful to the noble Lord.
Clause 30 agreed to.
Clause 31 agreed to.
Clause 32 [Consequential amendment of, and power of the Minister to repeal, section 7(1) of Restrictive Trade Practices Act 1956]:
4.14 p.m.
LORD WINDLESHAM LORD WINDLESHAM moved to add to the clause:
"() the publicly-owned companies shall not be deemed to he inter-connected bodies corporate for purposes of the Restrictive Trade Practices Act 1956."
The noble Lord said: This new subsection concerns the effect of the Restrictive Trade Practices Act on the non iron and steel activities of the Corporation. Its aim is to prevent the National Steel Corporation from evading the provisions of the Restrictive Trade Practices Act, which they might otherwise do by claiming that all their steel consuming companies are inter-connected companies forming a single group. The Restrictive Trade Practices Act prevents collusion between steel consuming companies, for example, in operating any form of price-fixing agreement. The British Constructional Steelwork Association has given an undertaking to the court, on behalf of their members, that they will not so collude.
As there will he several steel consuming companies in the public sector, it would obviously be commercially to the advantage of the Corporation if those companies could escape the restrictions of the Act. This could be done by claiming that these companies—there are nine of them—should be treated as inter-connected companies and part of a single group. The purpose of this Amendment is to nullify any action on these lines by the Corporation and so preserve the status quo. This is a relatively important point, concerning fair trading in the area of non iron and steel activities, particularly the constructional steelwork and bridgework industries, which remains 75 per cent. in private hands and 25 per cent. in public hands. I beg to move.
Amendment moved—
Page 33, line 31, at end insert the said subsection.—(Lord Windlesham.)
LORD SHEPHERD: The noble Lord will be aware that under Section 7(1) of the Restrictive Trade Practices Act 1956, as amended by the Transfer of Functions
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(Iron and Steel) Order 1957, it is provided that in determining whether an agreement to which iron and steel producers are parties is an agreement which is registrable under the Act no account will be taken of any term of the agreement which has been approved by the Iron and Steel Board and by the Minister, and by which the producers agree to acquire raw materials or other iron and steel products exclusively from a person who undertakes their importation or distribution as a common service for the steel industry, or by which such a person agrees to supply the materials or products exclusively to the producers. The provision—and it was a provision introduced by noble Lords opposite when they were in Government—was intended to permit exemption from the 1956 Act of the agreements which form a basis of the central arrangements operated by the British Iron and Steel Federation for the import of raw materials and steel products.
The noble Lord, Lord Windlesham, will be aware that in Clause 2(3) we have extended to the private sector the opportunities to enjoy the common services which were there under the old Iron and Steel Board, and which will continue under the publicly-owned companies. I agree that the Amendment does not in itself affect Section 7(1) of the Restrictive Trade Practices Act, but I am led to believe—and I have had advice on this—that if this Amendment were passed it might affect the operation which has been so successful for the joint service of purchases, not only of iron ore but of bricks and the like. It could well place this particular factor in jeopardy.
I would also say to the noble Lord that what he is seeking is that the public sector should be treated in a different way from the private sector—and we have in this country a large number of companies which are in a dominant position in their trade. Under the 1956 Act there have been excluded agreements as to sale and prices—agreements that is, between the holding company and their subsidiaries. The private sector under the Restrictive Trade Practices Act has been excluded. If the noble Lord wishes, I can give him the section under which this exclusion comes. It is Section 6(8), and it exempts agreements between interconnected bodies corporate, which are

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defined by Section 36(1), as "groups consisting of a body corporate and its subsidiaries".
LORD WINDLESHAM: May I ask the noble Lord whether he is speaking of companies concerned in iron and steel activities or in non-iron and steel activities?
LORD SHEPHERD: In this particular case I am referring to the 1956 Act, which excludes from the obligation to register an agreement between those companies which are inter-connected. Thus the Corporation and the wholly-owned subsidiaries are excluded from having to register agreements. The Government take the view that the Iron and Steel Corporation and its wholly-owned subsidiaries should be treated in this manner. We take the view that we should treat the private and the public sector, as far as the Restrictive Trade Practices Act is concerned, in the same way. But are we in fact treating them the same?
In the private sector these agreements are excluded from the provisions of the Restrictive Trade Practices Act and there is no sense of injury, so far as I know; but clearly in the case of the Corporation and the wholly-owned subsidiaries, whether they are producing iron and steel or are in any other field, if they were acting against the public interest, and certainly if they came to the notice of iron and steel producers in the private sector, there would be opportunities under the new clause that we have just passed. Through that clause inquiries could be made and information laid before the Minister, and he would be bound to act. The same applies in the field of the consumer. Under the clause dealing with the Consumers' Council, if there were complaints as to the activities of the Corporation or the wholly-owned companies, here again the Minister would be bound to act on the report of a Consumers' Council (assuming, of course, that the report was adverse) and he would be answerable to Parliament.
So if these companies act deliberately against the interest of the private sector there are many ways in which this matter can be brought to the attention of the Minister and the Minister will be answerable. I would say to the noble Lord, Lord Windlesham—and he is very fair
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and I am quite sure he would agree—that if we are expecting the Corporation and their publicly-owned companies to operate on a commercial basis we should not put them in any different category from that which we have demanded for the private sector, except with the proviso that, recognising the special position of the public authorities, there should be some opportunity for complaints to be made to Parliament. That opportunity is provided in the Bill, and I suggest to the noble Lord that in many ways his Amendment is unnecessary. But it would be quite wrong to treat this publicly-owned Corporation and their wholly-owned subsidiaries in any way different from the way in which we believe it is right and proper to treat the private sector. I hope that with those words of assurance and explanation the noble Lord will agree to withdraw his Amendment.
LORD WINDLESHAM: I am grateful to the noble Lord, Lord Shepherd, for his explanation. I follow his line of reasoning, but if we examine only the non-iron and steel activities we find there is an unfortunate consequence of the reasoning that he has advanced. Here there will be 9 companies, totalling about 25 per cent. of the constructional steelwork industry, which will come into public ownership—such as Dorman Long, and so on. The remaining companies in that industry are under an instruction from the Restrictive Practices Court not to collude on prices. What the noble Lord has said is: "Oh yes, but the subsidiaries of the N.S.C. must be in the same position as if they were all in private ownership and had been bought by I.C.I. for example." Therefore what he means is that these nine companies can be regarded as inter-connected companies. Although in the area of iron and steel activities I think the argument might be reasonable, in the area I have mentioned it is an unfortunate situation, particularly if we are to exempt from the due processes of law 25 per cent. of the total number of companies operating in the constructional field—
LORD SHEPHERD: May I intervene before the noble Lord sits down? I have really been speaking to the Amendment and opposing its inclusion in the Bill. I recognise the force of the argument, and if the noble Lord, Lord Erroll of Hale, remembers, we had something of a similar

1037
debate yesterday and I indicated that what he was then discussing, and in some respects what the noble Lord, Lord Windlesham, is now discussing, falls within the Amendment in the name of the noble Lord, Lord Erroll of Hale, of what we call "arm's length trading", and I indicated then that I might have some useful noises to make. I think the general fear expressed by the noble Lord, Lord Windlesham, may be set at rest when we come to Amendment No. 62. The line I have taken is merely in regard to the inclusion of this specific Amendment in the Bill.
LORD WINDLESHAM: With those encouraging words I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 32 agreed to.
Clauses 33 to 36 agreed to.
4.27 p.m.
LORD SHACKLETON LORD SHACKLETON moved, after Clause 36, to insert the following new clause:
Power of Minister to change the Corporation's name
".The Minister may by order change the name of the authority established by section 1(1) of this Act, and an order under this section may make such provision as appears to the Minister to be requisite or expedient in consequence of the change of name effected thereby, including (without prejudice to the generality of the foregoing words) provision for amending enactments (whether contained in this or in any other Act)."
The noble Lord said: This Amendment relates to the name of the Corporation. In another place an Amendment was moved on Report stage to empower the Minister to change the name of the Corporation by Order, and the Parliamentary Secretary to the Ministry of Power said that the Government regarded the Amendment as being acceptable in principle and gave an undertaking to introduce, or to ensure there was introduced, in your Lordships' House a Government Amendment to achieve this intention. The new clause gives effect to that undertaking. May we also consider briefly at the same time Amendment No. 64, which provides that any Order changing the name of the Corporation will be subject to the full Affirmative Resolution procedure.
We think the initiative of the Opposition in suggesting this is useful. Indeed, as was pointed out by the Parliamentary
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Secretary in another place, there is much to be said for using the word "British" in the title of the Corporation, but the obvious alternative, and the ones now in front of us—the British Steel Corporation and the British Iron and Steel Corporation—are already pre-empted by subsidiaries of the British Iron and Steel Federation. This difficulty should disappear when the Federation's central trading services which are now run by these subsidiaries are, after nationalisation, transferred, as we hope they will be by agreement, to the Corporation. Clearly, it would be premature to "jump the gun" in this matter, but if this does take place in due course the way will then be open to give the Corporation one of these names, and the Amendment would permit this without having an amending Bill.
As your Lordships know, there is a large American company called the National Steel Corporation, and although the Government do not expect any difficulties to arise because this company has the same name as our new Corporation, they are, of course, quite ready to take the necessary steps to avoid any danger of confusion. If, contrary to expectations, difficulties should arise, the name of our Corporation could then be changed as a result of this Amendment. I beg to move.
Amendment moved—
After Clause 36, insert the said new clause.—(Lord Shackleton.)
LORD WINDLESHAM: As the noble Lord, Lord Shackleton, has said this matter was raised in another place on the initiative of the Opposition because of the possible confusion that might arise with the American National Steel Corporation. I appreciate that the Government cannot tell us at this stage whether there is any intention to make use of the two names at present held by the British Iron and Steel Federation, that is the British Iron and Steel Corporation and the British Steel Corporation, both of which have the advantage of including the adjective "British" within the name of the Corporation itself. However, the whole question of the names under which the component parts of the steel industry after nationalisation are to trade comes up in the next Amendment, No. 54, to be moved by my noble friend, Lord Erroll

1039
of Hale. Therefore I would just say on this Amendment that it has our support and we are grateful to the Government for following up the initiative taken by the Opposition in another place.
On Question, Amendment agreed to.
4.32 p.m.
LORD ERROLL OF HALE LORD ERROLL OF HALE moved, after Clause 36, to insert the following new clause:
Duty of Minister and Corporation relating to names and trademarks of publicly-owned companies
".It shall be the duty of the Minister, in giving any general authority to the Corporation under this Act or any direction of a general character to the Corporation under section 4 of the 1949 Act as revived by this Act and in approving any general programme settled by the Corporation under the said section 4 of the 1949 Act and of the Corporation, in formulating any recommendations to the Minister relating to the activities that have fallen to be carried on under their ultimate control (whether by conclusions reported to the Minister under section 4 of this Act or in settling any general programme under the said section 4 of the 1949 Act or otherwise) and in carrying on those activities, to have regard to the need to preserve the goodwill attached to the names and trademarks of the companies specified in Schedule 1 to this Act and of other publicly-owned companies."
The noble Lord said: This Amendment deals with the question of names and trade marks of publicly-owned companies, and the purpose of the Amendment is to place a duty on the Minister to give a general direction or authority to the Corporation in order to approve of certain names being maintained. This clause lays the onus on the Minister to give directions or a general authority to the Corporation to have regard to the need to preserve the good will attached to the names and trade marks of the companies specified in Schedule I, the companies which are going to be taken over.
The retention of company names and particularly of their trade marks is particularly important in obtaining export orders. Overseas buyers want to know that the quality of a well-known product is being maintained; the trade mark ensures this. They also want to know they can immediately get in touch with the company concerned in case of difficulties, and to be sure that the personal relationship built up over a period of time is not lost. This is achieved in ordinary commercial practice
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by the well known company names being known and of considerable repute, and reinforced in many cases by their trade marks of world-wide reputation, which are in themselves a guarantee of maintenance of quality and the standard of the product.
We on this side are very anxious that this valuable asset, particularly in export markets, is not going to be lost by the enthusiasm of the Corporation for reorganising and perhaps bringing together a number of large and well-establishd companies which would thereby lose their identity. Company names like Dorman Long and Stewarts and Lloyds are well known and respected internationally, whereas new ones such as "North-east A" or "Glasgow B", the sort of names commonly given to power stations or other groupings, would have very little meaning for buyers overseas.
While it may be pointed out that there are going to be certain new groupings, there is no need for the old names to be lost sight of. The proposed grouping of Dorman Long, Stewarts and Lloyds and South Durham, intend to trade under their existing names and continue to use their own trade marks. This is a practice constantly employed in private industry when companies continue to trade in their own names even after takeover by larger groups. The purpose of this Amendment is to ensure that the practice continues with the National Steel Corporation, and that we shall not needlessly throw away a valuable asset in export markets. I beg to move.
Amendment moved—
After Clause 36, insert the said new clause.—(Lord Erroll of Hale.)
LORD WOLVERTON: I beg to support this Amendment, and I am very glad that my noble friend Lord Erroll of Hale has moved it. We on this side attach tremendous importance to this Amendment. I do not want to go over the ground he has so ably covered. On Second Reading, the noble Lord, Lord Clydesmuir, who has very much more experience than I have and is a director of Colville's—I am very sorry he is not here to-day to support us—said this:
"I would also express the strong hope that it will be possible for company names to be retained under the new State ownership.
SEVERAL NOBLE LORDS: Hear, hear!"—
[OFFICIAL REPORT, 13/2/67, col. 61]

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I referred to it also, and said how important I thought it was to try to keep the names and trade marks of these great steel companies, these 14 companies to be taken over under Schedule 1 into public ownership.
I earnestly hope Her Majesty's Government will see fit to accept that it shall be the duty of the Minister to consider this and give general authority to the Corporation to have regard to the need to preserve the good will attached to the names and trade marks. All over the world these great companies are known. It is most important for us in future years to keep these markets for export. I am sure that Her Majesty's Government would be well advised to try to keep at at any rate some, if not all, of the great names in their proposed regrouping under the rationalisation programme. I earnestly hope that Her Majesty's Government and the whole Committee will give this Amendment very serious consideration, because we think it is of great importance. It does not cut across Party lines at all; it is keeping the names for the benefit of this country.
THE MARQUESS OF ABERDEEN AND TEMAIR: I would take this opportunity to support what has been said. I quite briefly referred yesterday to the fact that I myself for many years had very direct experience of what the name of a great firm meant. Travelling abroad on the sales side, one found that the name of a firm which had progressed and was responsible for new inventions, and so on, met with a very great welcome, particularly by overseas buyers. They took it almost as a privilege to be allowed to be in contact with a firm whose excellence was known throughout the world, and they wanted only one name. I am speaking from experience of a company which is not on the scheduled list, but the same thing occurs whether the company concerned is very large or is comparatively small but with certain specialities which cannot be obtained from anybody else. That will be the same position with the scheduled companies; all of them are so well known, and are great names which are known throughout the world.
On Second Reading I referred to the fact that Mr. Khrushchev, the head of the Soviet Government at that time, made a special point, with regard to an exhibi-
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tion, of saying how he knew what had been done by the various companies and why they took pride in their names, and he referred to the very important effect of keeping these names alive.
LORD MITCHISON: I think one has to be properly careful about old names in this place, and I see the point of what is proposed in this Amendment. It is, no doubt, quite true that in many places, many fields, some of the names of these companies have a real value. I do not think anyone would dispute that. But I really rise to say two things. The first is this. These companies are now, to put the matter rather inaccurately, selling themselves, and it is necessary to puff themselves up a bit for the purpose. I am most anxious, in the best interests of the iron and steel industry and of this country, that we should not have an exaggerated idea of its success at the moment, or of the value of particular names in it. I do not deny that the value exists. I am not going to repeat what I said yesterday, but when we have a considerable and increasing volume of iron and steel imports into this industrial country, and at the same time a real shortage in use of capacity, it cannot be the case that everywhere these names carry all the significance that one is tempted to attach to them. I think it would be a great pity if this public corporation, acting on behalf of the public, were to start with the impression raised in the public mind that iron and steel, latterly under private enterprise, had been singularly successful. The facts are not in support of that; nor is it the case that its prospects at the moment are particularly bright.
The next question, it seems to me, is this. Obviously, there is a real commercial value, in some cases at any rate, in keeping these names, and I appreciate that when Dorman Long and Stewarts and Lloyds, in some form or another, come together, they desire to keep their respective names. If it means that they are making exactly the same thing in exactly the same way, that is simple enough. If it is anything else, one wonders a little what, in detail, is going to happen. That is an interesting inquiry, but perhaps we will not go into it to-day. But what I think is clear is that one must trust the National Steel Corporation, upon whom, after all, we are putting a

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grave responsibility of management, to do what is sensible and wise in this matter, and to conserve this asset, for what it is worth, just as they would conserve any other asset.
I should have thought that what was being recommended here, in the form recommended in the Amendment, was an injunction which was somewhat unnecessary and inappropriate. It is not quite what the noble Lord who moved the Amendment said it was. He made it clear that it was an injunction to them to keep these names in all cases and at all costs, or something like it. In fact, it is simply an injunction to "have regard to" them. That, I should have thought, the Minister, the Corporation themselves, and those who are engaged in running these respective companies—it would be an important part of the picture—are certain to do, and must be trusted to do. With great respect, I do not think that it is a good plan, when one is putting responsible and skilled people to do a technical public job of some considerable seriousness, the results of which are going to be most important for the country at large, to tell them that a point of this sort is something they must "have regard to". If I may proceed from iron and steel to farming, I would say that it is like "telling your grandmother to suck an egg".
LORD HAWKE: I am not quite sure whether the noble Lord, Lord Mitchison, is replying for the Government on this Amendment or not. I think when he gets to—
LORD MITCHISON: May I assure the noble Lord that I never speak for the Government nowadays? I was "sacked" some time ago for being too old, and, as I explained at that time, that is a difficulty one cannot overcome. So the noble Lord can take it as quite certain that not only am I not speaking for the Government now, but on no occasion on which he hears me shall I ever again be speaking for this Government, or any Government.
LORD HAWKE: We shall anticipate with great interest the speech that is going to be made for the Government, in the hope that it will be somewhat more favourable to the Amendment than the speech of the Government scrum-half,
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the noble Lord, Lord Mitchison, who, incidentally, so far as I can make out, has not got the ball back to any of his three-quarters for the whole of this Session. When he strays into the field of engineering then, quite frankly, I do not think he knows quite so much about it as he does about the law. I think he grossly underestimates the strong call, or pull shall we say, which the names of the great producers of this country have upon overseas engineers all over the world. In many cases it is the engineer in charge of a particular enterprise or job who ultimately indicates where the material will be bought. If he has been in the habit of getting satisfaction from Stewarts and Lloyds, he will say that he wants Stewarts and Lloyds stuff again. When it comes to contracts for bridging. I am perfectly certain that a contract put in in the name of Dorman Long is going to have a much better chance of success than one put in in the name of the National Steel Corporation, or what-have-you. Of course, the new clause is not mandatory: it merely tells the Minister "to have regard to". I am sure that that is not a bad thing.
But there are two other factors which have not been mentioned here so far. First of all, there is the allegiance of the workpeople in these steelworks. Many of them have worked there for many years, and they like to see the name of the old firm going on. They have a great loyalty and allegiance to it. Then at times there is the question of convenience. There is no producer of anything in the world who does not occasionally make a mess of an order. If any one of these producers happens to make a mess of an order the National Steel Corporation can at all events offer an alternative named product next time, otherwise the customer will certainly go to a foreign country. I should have thought that this was a good clause, and one that might be put in the Bill.
4.48 p.m.
LORD POPPLEWELL: One appreciates the desire of the Opposition in trying to keep alive these old names. Having some experience of working in industry from time to time, one knows the value of a particular name. One appreciates much more the desire of those who are concerned in an industry of which we are naturally proud to keep their name. But

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one must appreciate also how extremely difficult it would be to achieve this. We visualise much more specialisation taking place within the iron and steel industry. It may be that we shall have some sections of Dorman Long, Consett, and Stewarts and Lloyds all working for better efficiency in a group. If so, how is a trade name to be tied to that particular product? It is a natural conclusion that if the Minister accepts this Amendment he will be in great difficulty.
From another point of view, I think it will not be possible to represent exactly the desire of the Opposition. I think it is much better to leave the matter as it was, to the Corporation themselves. As they devolve their operations they have a certain latitude so far as trade marks and changes of name are concerned. Therefore, I think that, having regard to the difficulties which would be involved and the danger of misrepresentation as the undertaking gets into its full swing on the specialised type of product, it would be extremely dangerous to follow what is proposed in this Amendment. It is much better that it should be left in the hands of the Ministry and of the Corporation.
LORD WINTERBOTTOM: My noble friends on this side of the House have every sympathy with the intentions lying behind the new clause introduced by the noble Lord, Lord Erroll of Hale, but I, for one, find it very difficult to understand why it has been thought necessary to propose such a clause. After all, I would say that the industry will for some years continue to be run by the able men who are at the head of the great units listed in Schedule I. It will hardly be necessary to impose on the Minister the duty
"to have regard to the need to preserve the goodwill attached to the names and trademarks of the companies specified…"
because I think that the men in charge of those companies will demand it. While they are responsible for running these companies they will want to use every asset which they possess.
But, as my noble friend Lord Popplewell has pointed out, the general structure of the industry will change, and in due course new formations or units may be created, new groupings may take place, which the National Steel Corporation may
1046
wish to publicise in their own right under their own trade names. As a matter of commercial judgment, the Corporation may decide that a new trade name may have greater value than one of the older ones. Since, in my opinion, the clause does not add anything to the powers of the Corporation and does not help the existing companies in any way beyond their own natural self-interest and determination to do the best with what they have, I cannot understand why it is necessary to put this particular clause on the Statute Book. We are in full agreement that the goodwill which exists must be preserved. I cannot conceive of the new Corporation trying to destroy it. Therefore, I cannot see the necessity for a new clause of this type.
LORD ERROLL OF HALE: I find the noble Lord's answer very disappointing. If he was sincere about the importance of retaining the names and the trademarks, I should have thought he would gladly meet the Opposition's request that this should be enshrined in the Bill, which is the best place for it. I fear the worst, because in the case of one famous name, Stewarts and Lloyds, when the chairman of that company a few weeks ago said that he hoped Stewarts and Lloyds would rise phoenix-like from the ashes, he got a very sharp rap over the knuckles from a number of Labour politicians, if not from the Government themselves. There is no guarantee at all at the moment that these well-known names will be retained. Indeed, it is very much in the thinking of large nationalised corporations to reduce everything to districts and numbers. I think it is quite on the cards that the famous steel works in South Wales will be known as "South Wales A" and "South Wales B", and other steel works grouped together by some generic title; and it will take many years before their real merits will become known by their new titles.
Or it may be that this forward-looking, energetic, capable National Steel Corporation will try to emulate the examples of Central and Eastern Europe where it is fashionable to call the steel complexes after the names of leading politicians. Dorman Long will no longer be known as Dorman Long, but as the "Harold Wilson Friendship Works". And, in view of Lord Mitchison's interest in the

1047
Bill and his many, and at times somewhat long-winded, contributions to it, it is quite clear that Stewarts and Lloyds will be known in future as the "Mitchison Steel Works". There are many opportunities for making changes. We want to ensure that these changes will not be made. This particular Amendment has aroused widespread interest in all parts of the Committee and I hope that I can count on noble Lords to support it with such degree of severity as may be necessary.
LORD SHACKLETON: I must say that I find it almost inconceivable that the noble Lord is going to divide on this Amendment. He has given us a bit of fun, but it would appear that the other side are choosing the Amendments which are almost the most futile. They have put down some rather good Amendments which could be argued about seriously. There is no difference between us as to the desirability of preserving goodwill, we leave this to the Corporation. I should certainly be sorry to see the name of Dorman Long changed even to the "Erroll Lighthearted Works" or whatever it may be, if only because my great uncle was the founder of Dorman Long—a confession, I admit. But anyone with experience of trading and business seeks to preserve the goodwill that goes with names. As mergers take place those concerned have to consider whether the name can be preserved as a nominal company name. I cannot believe that the noble Lord is going to divide on this Amendment, after the rather dangerous experience he had on the last Division. It may be he has been busy and has been counting up and thinks that his majority may go up a little above the four he had on the last occasion. But if he really wants to play games of this sort and it is good for the morale of the Opposition, who are we to prevent him?
On Question, Amendment negatived.
Clause 37 agreed to.
Clauses 38 to 40 agreed to.
Clause 41:
Restriction of disclosure of information obtained under Iron and Steel Acts.
41.—(1) No information obtained under this Act, the 1953 Act or the 1949 Act shall be disclosed except—
1048

(c) for the purpose of enabling the Corporation or the Minister to discharge their or his functions under this Act or the provisions of the 1949 Act thereby revived or of enabling the Iron and Steel Board to discharge their functions under the 1953 Act or this Act; or

4.57 p.m.
LORD WINDLESHAMmoved, in subsection (1)(c), to leave out "the Corporation or". The noble Lord said: With the leave of the Committee, in moving Amendment No. 58 I should like to speak also to Amendments Nos. 59 and 60. Under the Bill, as it is at present drawn, no information obtained under this Act or the 1949 Act, or the 1953 Act, shall be disclosed unless certain conditions are met. These are that the information has to carry the consent of the person by whom it was furnished; or to be in the form of a summary so as not to enable particulars relating to the business of individual persons to be ascertained; or for the purpose of enabling the Corporation or the Minister to discharge their functions under this Act; or of enabling the Iron and Steel Board to discharge their functions until it is dissolved; or, finally, with a view to the institution of legal proceedings.
These provisions, so far as I can see, are not cumulative. It is therefore possible for information to be disclosed if it satisfies only one of these criteria. Information could be disclosed for the purpose, for example, of enabling the Corporation or the Minister to discharge their functions under the Act, but without the consent of the person from whom the information was obtained, or without its being in the form of a summary. The Amendment seeks to make it obligatory in the case of subsection (1)(c) that no information should be disclosed to the Corporation in order to enable it to discharge its functions unless it is with the consent of the person by whom it was furnished, or unless it is in the form of a summary.
In the debate in Standing Committee D in another place on December 14 last, the then Parliamentary Secretary, Dr. Bray, said in column 2329:
"I certainly give a categorical and unqualified assurance that no commercially valuable information obtained under Clause 34(2)"

1049
(as it was in the House of Commons; it is now Clause 39(2) in the Bill before us)
"…about individual companies will be disclosed to the Corporation, even when it is necessary to enable the Corporation to discharge its function."
On general information not concerned with forecasts, this provision which the Amendment seeks to put into the Bill seems necessary. It would make it impossible for any information under Clause 41 to be given to the Corporation about a private sector company, unless some safeguards are obtained. The Corporation already have considerable powers to obtain the information they need. Clause 39(3) and (4), Schedule 2, paragraph 4, sub-paragraphs (2) and (3), and the revived parts of the 1949 Act, Section 22(3), 23(1)(b) and 25(2), all give the Corporation power to elicit information.
I submit that if the Corporation are really to act commercially they should be in the position of other commercial companies—some of which, it may be added, will be the Corporation's competitors—and although it is recognised that the duties imposed upon the Corporation by the Bill require them to receive certain preferential treatment, this should be restricted to the summaries. Obviously summaries are not nearly so dangerous from a commercial point of view, because they can be prepared in such a way as not to disclose individual items of confidential information. But where this is not feasible the permission of the informant should be obtained. In many cases, no doubt, it will already have been obtained.
As I say, these provisions of the Bill, as it is drawn at the moment, are not cumulative. So far as I can make out, if you satisfy one you are all right under the Bill. There are about six alternatives, and any one of them will do. It is for this reason that we have tabled this Amendment. The disclosure of commercially valuable information is a matter, as I think noble Lords opposite will agree, of legitimate concern to the private sector. There are problems which arise from the special position of the Minister who has responsibility for the whole industry, which is divided up into the National Steel Corporation and the private sector, and we feel that the private
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sector has here a point of understandable concern on which we should like to hear the Government's reply. I beg to move.
Amendment moved—
Page 37, line 23, leave out ("the Corporation or").—(Lord Windlesham.)
5.4 p.m.
LORD WINTERBOTTOM: Noble Lords opposite have very properly set out to make certain that the private sector is treated justly and correctly by the very large public sector which it is proposed shall be created. But I hope that I shall be able to show that there is no need for an Amendment to the Bill in order to provide the private sector with the special protection which I presume these Amendments are intended to provide. I understand from the technical experts that this particular group of Amendments is an example of skilled drafting. Somewhere the noble Lord must have available to him Parliamentary draftsmen who are denied to us.
LORD WINDLESHAM: I should hope that the Bill was drafted by skilled Parliamentary draftsmen, since it is to nationalise an enormous industry for some years in the future.
LORD WINTERBOTTOM: It is the noble Lord's drafting to which I was referring, unless he has his own draftsmen. I was trying to pay him a gracious compliment. It is considered by experts that this is a skilful Amendment. It recognises that the Minister's powers to collect information under Clause 39(1), which is what we are discussing, are intended to be used to support the vesting, compensation and safeguarding provisions of the Bill, but that the enforcement of some of the safeguarding provisions rests in part with the Corporation to whom information collected under Clause 39(1) might therefore have to be made available. The Amendment gets over this difficulty by allowing the Minister to make available to the Corporation information which relates to matters that took place before the vesting date; for it is, of course, only in the case of these matters that the question of applying the safeguarding provision might arise. The noble Lord is to be congratulated on spotting this point, and on spotting also an even subtler point: that it is conceivable that in certain cases the vesting

1051
of a company might, under the Bill, take place not on the general vesting date but on a subsequent date of transfer. This might create special difficulties.
It follows from all this, however, that the Amendment is effective not in relation to Clause 39(1), the powers under which in any case cease to have effect one year after vesting date, but only in relation to the powers created by Clause 39(2). That subsection empowers the Minister to obtain from the private sector iron and steel companies' forecasts of their future production and capacity to produce iron and steel products. And I submit that in relation to Clause 39(2) the Amendment goes too far. It would prevent the disclosure to the Corporation of information about the plans of individual companies even when that disclosure could do no conceivable commercial damage to the company concerned. This might not only impede the Corporation in the performance of their duties and in making their own plans; it might also inhibit the Minister—for example, in discussing with the Corporation the programme of capital development which they will be required to submit to him under Section 4 of the 1949 Act revived.
These are important matters, and I am certain that noble Lords opposite, in their proper determination to protect the private sector of the industry, would not hamstring the Minister or the Corporation in this way. We are all sensitive to the rights of the private individual and the private sector, and the noble Lord, Lord Windlesham, quoted a statement by the then Parliamentary Secretary to the Ministry of Power in another place. All I think I can do for the noble Lord is to repeat that assurance without qualification, and on that basis I hope that these three Amendments will be withdrawn. As we have already said on earlier occasions during the progress of this Bill, Ministers will always be open to questioning if the powers are abused here.
LORD WINDLESHAM: The noble Lord who has replied for the Government has given, in the first part of his reply, a complex answer concerned mostly with drafting considerations. I should have hoped that if he saw no harm in this Amendment, and the other two which go with it, he would have been able to
1052
accept them, particularly in view of the compliments which he paid to the drafting of our Amendments. None the less, we must study carefully what he said in the first part of his reply when it is printed in Hansard, so that we can, if necessary, come back again at the next stage. I beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 41 shall stand part of the Bill?
LORD MITCHISON: I am sorry I intervened unduly or at the wrong moment.
LORD SHEPHERD: Unduly, yes.
LORD MITCHISON: All I want to ask the Government to consider—because they are obviously going to look at this again—is this. Is there here supposed to be a direct liability on the Corporation itself as "a person"? There is a penalty provided at the end, and that penalty, whether on indictment or not, takes the alternative form of either imprisonment or a fine. There are obvious difficulties in imprisoning any Corporation, public or private, and I think it ought to be considered whether something or other should not be put in to make it clear what the intention of the Government is in regard to the Corporation itself.
LORD WINTERBOTTOM: All I can do is to assure my noble friend that attention will be given to this point. If I can give him an answer at a later date, I will.
LORD MITCHISON: I thank my noble friend.
Clause 41 agreed to.
Clauses 42 and 43 agreed to.
5.11 p.m.
LORD ERROLL OF HALE LORD ERROLL OF HALE moved, after Clause 43, to insert the following new clause:
Review of uneconomic activities
".—(1) If it appears from the reports prepared under section 25 of this Act that over a period of five consecutive years any principal activity (other than an iron and steel activity) carried on under the ultimate control of the Corporation has been carried on at a loss or without making a profit in each of such five years, it shall he the duty of the Corporation forthwith to undertake a review of such activity

1053
for the purpose of determining whether such activity should continue to be carried on and to report their conclusions to the Minister.
(2) The Minister shall lay before each House of Parliament a copy of any report prepared under subsection (1) above, together with his observations thereon, unless it appears to him that to so do would be harmful to the competitive position of the said activity in the United Kingdom or elsewhere; in which case a statement to this effect shall be laid before each House of Parliament."
The noble Lord said: I beg to move Amendment No. 61. The purpose of this Amendment is simply to provide for a review to be made of any non-iron and steel activity which persistently makes a loss. I should like to submit to your Lordships that non-iron and steel activities will probably be subject to less public scrutiny than iron and steel-making itself. Since, under Clause 2 of the Bill, the Corporation is empowered to diversify into almost any field of activity, I submit that it is of the utmost concern to the private sector that unfair competition from nationalised activities which consistently make losses should be prevented. This Amendment enables a review of uneconomic activities to be carried out, and would thus bring out into the open any such situation. I hope the Government will be able to accept this Amendment, which I beg to move.
Amendment moved—
After Clause 43, insert the said new clause.—(Lord Erroll of Hale.)
LORD SHEPHERD: Last evening we were discussing Clause 16, which deals with the financial duties of the Corporation, and I think the noble Lord, Lord Windlesham, will agree with me that we were in full agreement that the Corporation and the public companies which come within the Corporation should not only be run as commercial undertakings but certainly balance their accounts one year with another, the aim being within the first five years. The noble Lord, Lord Erroll of Hale, is now seeking a special review of any of the uneconomic activities that may come within the Corporation's responsibility. I should like to suggest to the noble Lord that, while we are with him to the full as to the intentions behind it, his Amendment is really unnecessary.
It is the Government's view that no additional sanction is required. The Corportion are already subject, under the Bill
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to the unique discipline of having to publish in their Annual Report a statement of turnover, profit and loss, and capital employed in respect of practically every one of its separate activities. There will therefore be full disclosure of any unprofitable activities, with all the possibilities for pressures upon the Minister of Power and the Corporation, both inside and outside Parliament, that such publicity creates. Under the revived subsection (4) of Section 4 of the 1949 Act (as it is amended by this Bill) the Minister already has power to direct the Corporation and any publicly-owned company to discontinue or restrict any of their non-iron and steel activities; or to dispose of the whole or part of their assets employed in such activities; or, in the case of a publicly-owned company, to wind up the company if it is considered necessary. If, therefore, the Corporation decide to keep an unprofitable activity going and the Minister does not challenge it, Parliament, with all the procedures about which we know, and particularly the Committee on Nationalised Industries, would have full opportunity of bringing pressure to bear on the Minister and, through the Minister, on the Corporation.
I do not believe there is any danger that loss-making activities by the Corporation would go unnoticed, either by Parliament or by the Minister, or by the Corporation itself. Nor is there any danger that the Corporation or the Minister will be disposed to allow loss-making activities to continue without good reason. There may be occasions when it is right and proper that it should be done in the interest of the country. I hope that the noble Lord will accept the view that there are clear duties laid upon the Corporation and upon the Minister to review the activities of the Corporation and of the publicly-owned companies; and the fact, too, that Parliament itself, through its Committees, has the means of seeking information and bringing pressure to bear upon the Minister.
I would say to the noble Lord, Lord Erroll of Hale, that I agree with the purpose of this Amendment. I believe that we should seek to reduce the unprofitable activities of the Corporation and the publicly-owned companies, particularly if they do not contribute to the well being of the Corporation through means other than financial, or to the nation. But I believe

1055
the power to do this exists in the Bill; and, although I agree with the noble Lord, Lord Erroll of Hale, as to the purpose of the Amendment, I would not recommend the Committee to accept the inclusion of this new clause into the Bill. I would hope that, with those words, the noble Lord will kindly agree to withdraw his Amendment.
LORD ERROLL OF HALE: I think I will agree to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
5.18 p.m.
LORD ERROLL OF HALE LORD ERROLL OF HALE moved, after Clause 43, to insert the following new clause:
Arm's length trading
".—(1) In the event of the Corporation or any publicly-owned company or any subsidiary thereof or any company in which the Corporation has acquired or holds any interest or any company in respect of which the Minister or Corporation has given directions or exercised control pursuant to the powers given by this Act entering into contracts or legal relationships of any kind with public statutory bodies or government departments whether for the purposes of production, sale, purchase or research or any activity or class of business whether concerned with iron and steel or otherwise, each and every party thereto shall conduct itself upon the assumption that the relationship which exists between them is solely that of offer or and offeree and so that neither party shall gain any advantage from the fact that each party is a public body in any matter relating to the transfer, exchange, purchase or sale of equipment or raw materials or of any matters relating to production or the management of their respective concerns.
(2) Insofar as the Corporation enters into such relationships as are mentioned in the above subsection with the companies under its control or in which it holds an interest the parties thereto shall conduct themselves upon the same principles as stated in the above subsection but so that any saving or economy which arises solely by virtue of the common administration and financial control inherent in the administrative structure of the Corporation pursuant to this Act shall be permissible insofar as such saving or economy is in the public interest."
The noble Lord said: I have to inflict on your Lordships yet another Amendment, but I hope that this time the Government will be able to accept it. It is Amendment No. 62, which deals with the vexed problem of what one can only describe as arm's length trading. It is a matter to which the private sector attaches very great importance. It is,
1056
indeed, of central importance for fair competition between the private sector and the nationalised industry that the nationalised industry should neither obtain craven advantage by reason of its relationship to other corporations nor subsidise any of its own activities by what I can only describe as non-arm's length trading transactions.
This matter has been debated in another place, where the submissions by the Opposition were rejected. However, the Minister gave an assurance that it was his intention that the Corporation should normally trade on a commercial basis. While assurances are, of course, always welcome, it is very much better to see them translated into something more concrete; namely, a clause in the Bill. This is what we have attempted to do, and I hope the Government will be able to accept this Amendment, which I beg to move.
Amendment moved—
After Clause 43, insert the said new clause.—(Lord Erroll of Hale.)
LORD SHEPHERD: I have referred to this particular Amendment on two occasions in the course of this Committee stage. This new clause is very similar to one that was recommended to the Minister by the Confederation of British Industry, and it is designed to ensure, as the noble Lord, Lord Erroll of Hale, has said, that trading is conducted on an arm's length basis between, first, on the one hand, the Corporation, the publicly-owned companies and other companies under the control of the Corporation, and, on the other hand, Government Departments and other public corporations and statutory bodies; and, secondly, different sectors and companies under the control of the Corporation.
Under the second part there is a provision which permits any savings to be realised which arise solely by virtue of the common administration and financial control inherent in the administrative structure of the Corporation. On the first point, I would repeat what the Parliamentary Secretary to the Ministry of Power said in another place. Trading between the nationalised steel industry and other public bodies will normally be at arm's length, and any departure from this might well be contrary to Clause 3 which seeks to avoid undue preference

1057
or unfair discrimination between customers.
The Parliamentary Secretary also said in another place that there is much to be said for the view that the diversified activities of the nationalised steel industry should be organised into separate concerns from the iron and steel interests and that trading between these concerns and between them and the Corporation should normally be on an arm's length basis. The Minister has already brought the point about organisation into separate concerns to the notice of the Organising Committee, and he will have the advantages both of this possibility and of arm's length trading very much in mind when the time comes for him to take decisions on the Corporation's report on organisation submitted under Clause 4 of the Bill.
To try and deal with this subject by provisions on the lines of the new clause would however be contrary to the general principle of not trying to lay down the Corporation's organisation in detail in statutory provisions and would introduce an element of rigidity which could have disadvantages. A number of major steel companies including those with large diversified interests, such as Dorman Long, Lancashire Steel and United Steel, have organised their diversified activities into separate companies. Others, like Consett and South Durham, have kept them in the steel producing company. Moreover, even where there are separate companies some trade at arm's length from the rest of the group to which they belong and others do not. It will be necessary when the time comes to take decisions on the organisation of the nationalised industry to weigh the undoubted advantages of separation against these practical disadvantages.
Moreover, there may be circumstances in which it would be in the national interest for trading between different sectors of the Corporation's business to take place other than on an arm's length basis. For example, in order to promote exports the Corporation might wish to supply steel to steel-using companies under their control at prices which while being justifiable on economic grounds are below those normally charged—a practice which is already followed by at least one group controlling both steel-producing and steel-using companies. It would not be
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possible in a statutory provision to cover all the circumstances in which it would not be in the national interest to insist on trading on an arm's length basis.
The new clause—and I do not criticise it on these grounds—also contains technical defects. First, it would apply not only to the Corporation and publicly-owned companies but also to partly-owned companies under the control of the Corporation. It would be wrong in principle and might prejudice the position of minority shareholders to apply to these latter companies provisions which go beyond the general companies legislation. For example, the minority shareholders in a partially-owned subsidiary of one of the scheduled companies which has been supplying steel products to it at reduced prices, could suffer substantially by the operation of the new clause. Second, it might be very difficult in practice to determine whether savings or economy had arisen from the
"common administration and financial control inherent in the administrative structure of the Corporation"
or was due to an improper departure from arm's length trading.
I am authorised to say three things which I hope will help the noble Lord. First, Clause 25 requires the Corporation to publish much information about each of their main diversified activities, and subsection (3) requires them to include with the published information a statement of the way in which the figures have been calculated. It seems to us inevitable that under this provision the Corporation will have to explain a good deal of the basis on which trading takes place between different sectors of their activities. Second, my right honourable friend the Minister of Power will discuss with the Corporation the possibility of including in their first report on organisation under Clause 4 a discussion of the principles on which trading between different sectors of the Corporation's business will be based. Under Clause 4(4) this report will have to be laid before Parliament so a section in it would correspond to the publication of a White Paper while leaving the primary responsibility with the Corporation where it properly belongs. Third—and I think this will meet the noble Lord's point—the final responsibility in this matter will rest with the Minister as a result of Clause 7(2) which enables

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him to give the Corporation specific directions on organisation. Moreover, my right honourable friend when he receives the Corporation's report on organisation will be prepared to discuss this issue further with interested organisations such as the Confederation of British Industry.
As I have spoken at greater length than I have so far in Committee, I hope that this may emphasise the serious view that the Government, and particularly my right honourable friend, have taken in this matter. The Minister is most anxious to see that the relationship between the Corporation, the publicly-owned companies, the private sector and the consumers is a fair and proper one which will meet with the satisfaction of all the parties concerned in industry as a whole. I share the view of the Government—
SEVERAL NOBLE LORDS: Oh!
LORD SHEPHERD: Noble Lords must not be too quick. It is getting late. When I sat on the other side, I pressed the previous Administration to put this and that into a Bill. I must say there were occasions when I thought they were obstinate. When you are sitting on the Opposition Benches everything seems very clear; but as the noble Lords, Lord Erroll of Hale and Lord Drumalbyn, know, when you see the consequences of Statutes you realise the limitations of what can be put into a Statute. I hope the noble Lord, Lord Erroll of Hale, will believe me when I say that we are with him in spirit in this matter—I believe my right honourable friend will wish to achieve what the noble Lord has in mind—but that we should not put it in a Statute. I hope the noble Lord, as on the previous occasion, will withdraw his Amendment.
LORD ERROLL OF HALE: I am sure the Committee will much appreciate the important statement that the noble Lord, Lord Shepherd, has just made. This is a matter of some detail. He gave important undertakings on behalf of the Government, which I am sure the industry and those affected by the nationalised industry will wish to study in detail before making further comment. As a first impression, we certainly consider the Government have really gone a long way to meet a point of view which is a matter of real seriousness to those affected, and
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I am sure that the Minister's statement will be extremely welcome.
I am delighted to learn that the noble Lord, who is a member of the Government, shares the Government's views. They are getting on fine. We know that the Government are monolithic. They have never pulled together more than at the present time, and already, after such a short time, it is necessary for the Minister to admit he shares the views of the Government.
5.30 p.m.
LORD SHEPHERD: The noble Lord must not be allowed to get away with that. He really is mischievous. There are times when he is more mischievous than others and I am not quite sure where he is to-night. The noble Lord, Lord Erroll of Hale, must not jump to conclusions. I have always supported the Government. I doubt very much whether I shall change. I am not like the noble Lord, Lord Champion, who, having left the Government Front Bench, said he felt free to agree or disagree with the Government. But I do thank the noble Lord for his generous appreciation of the line that the Government have taken. Perhaps those few words may ease a little of the rancour he felt over some of the criticism, as I thought, which came from the noble Lord, Lord Mitchison, who has now left the Committee. I thank the noble Lord for his acceptance of the view of the Government on this Amendment.
LORD ERROLL or HALE: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 44:
Regulations, orders and rules
44.—
(3) No order shall he made under section 32(2) or 46(1) of this Act unless a draft thereof has been laid before Parliament and has been approved by resolution of each House of Parliament.
LORD SHACKLETON: I beg to move Amendment No. 63.
Amendment moved—
Page 38, line 32, leave out ("and section 28") and insert ("section 28 and section (Right of objection of certain iron and steel producers to trade practices of Corporation and publicly-owned companies appearing to be unfair)").— (Lord Shackleton.)
On Question, Amendment agreed to.
LORD SHACKLETON: I beg to move Amendment No. 64.
Amendment moved—
Page 38, line 36, after ("32(2)") insert ("section (Power of Minister to change the Corporation's name).").—(Lord Shackleton.)
On Question, Amendment agreed to.
LORD WINDLESHAM LORD WINDLESHAM moved in subsection (3), after "Act" to insert:
"and no notice under section 15(2) of this Act shall be published".
The noble Lord said: This Amendment concerns the powers the Minister has concerning the provision of extra production facilities. Under Clause 15 of the Bill the Minister has wide delegated powers. He sets the level above which he will not allow a privately-owned steel company to increase its iron and steel-making facilities without his consent. Under subsection (2) he is to publish a notice, but this notice is not subject to any Parliamentary scrutiny.
On Report stage in another place Sir John Hobson, for the Opposition, moved a new clause to safeguard the private sector against adverse decisions by the Minister in respect of his powers under Clause 15. Speaking about the Minister's powers, Sir John Hobson said:
"In other words, he is given complete control down to the tiniest detail over any change in the plant and machinery or premises of the private sector.…This power is exercisable by the Minister by a notice, incapable of correction at the instance of anybody, which will create obligations even on those who have never seen the notice or had it served on them or drawn to their attention."…[OFFICIAL REPORT, Commons, 19/1/67; col. 714.]
Sir John Hobson went on to state that the Select Committee on Delegated Legislation dealt with various classes of delegated legislation orders, and said that the type of power in this clause is plainly one which the Select Committee deemed to be an Order of special importance. The Select Committee said that any powers within that category should be subject to an Affirmative Resolution of both Houses of Parliament before they come into operation. Yet here, under Clause 13, orders are not laid before Parliament for the information of either House, or subject even to the Negative Resolution procedure or a Prayer. This is some way away from what the Select Committee on Delegated Legislation suggested for this type of power. Their
1062
recommendation was that it should be made subject to the Affirmative Resolution of both Houses. That is what this Amendment seeks to provide.
This is not the first time the Affirmative Resolution procedure arises in the Bill. Clause 44 already lays down that this procedure should be used in certain respects. The first is Clause 32(2) concerning the effect of Section 7(1) of the Restrictive Trade Practices Act, which we debated on an earlier Amendment and which requires an Affirmative Resolution under this Bill. The second is Clause 46(1) concerning new iron and steel-making processes which are not yet known and which can later be brought within the scope of the Bill. So we on these Benches would argue that this very wide power, which has been attacked on constitutional grounds from the Opposition Benches in another place, should be made the subject of Parliamentary approval in the way indicated in the Amendment. I beg to move.
Amendment moved—
Page 38, line 37, after ("Act") insert the said words.—(Lord Windlesham.)
LORD HUGHES: For a variety of reasons it does not appear to the Government that it would be appropriate to make an Order containing the substance of a notice under Clause 15(2) subject to the Affirmative Resolution procedure. For example: first, the Order would do no more than define those projects which must be submitted to the Minister for his approval. Its importance, therefore, should not be exaggerated. Applicants will be more concerned with whether their applications are approved or rejected.
Secondly, Clause 15(3) requires the Minister, before issuing a notice under Clause 15(2), to make a wide range of consultation. This should ensure that all interests affected are able to put their view before an Order is made. In the third place, there is no question here of the Minister's being able to amend an Act of Parliament, as he will do in the Orders under the Bill which are made subject to Affirmative Resolution procedure. These are the sections to which the noble Lord, Lord Windlesham, referred. Under Clause 32 he can direct by Order that a provision of the Restrictive Trade Practices Act shall cease to

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have effect—he is altering that Act. Under Clause 46 he can extend the definition of the iron and steel activities for the purposes of this Bill and there he will be altering what will then be an Act. The new name under Clause 36 again has the effect of altering legislation. Because of that it is important that the Affirmative Resolution procedure should be followed in that case.
I recognise, however, that there is a case for making a notice subject to Parliamentary procedure, and its seems to me that a case can be made out for having the Negative Resolution procedure brought in. If the noble Lord, Lord Windlesham, agrees to withdraw the Amendment, I will undertake to consider the introduction of an Amendment on Report stage to provide that an Order under Clause 15(2) which will take the place of a notice shall be subject to Negative Resolution procedure.
LORD WINDLESHAM: I am grateful to the noble Lord, Lord Hughes, for what he has said. He does not go quite all the way with us, but he has accepted the point of principle, namely that this wide power of the Minister should be made subject to some form of Parliamentary restraint. I appreciate the offer he has made, and with that encouragement to look forward to at Report stage, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD SHACKLETON: I beg to move Amendment No. 66.
Amendment moved—
Page 38, line 41, leave out ("section 5") and insert ("sections 5 and (Right of objection of certain iron and steel producers to trade practices of Corporation and publicly-owned companies appearing to be unfair)").—(Lord Shackleton.)
On Question, Amendment agreed to.
Clause 44, as amended, agreed to.
Clause 45 agreed to.
Clause 46 [Power of Minister to extend definition of iron and steel activities]:
5.40 p.m.
LORD ERROLL OF HALE LORD ERROLL OF HALE moved to add to the clause:
"() for the avoidance of doubt nothing in this section shall apply to any activity other than iron and steel producing activities."
The noble Lord said: I would be the first to admit that it may well be desirable that the Minister ought not to be restricted too much in regard to the iron and steel making processing which exists at the time of the passing of the Act, but I submit that the phrase "processing of iron and steel" is too loose a phrase to enshrine in the Bill. It could be claimed some time in the future that the processing of iron and steel could cover the fabrication of rolled steel sections and plates, the drilling of steel plates by some new process, the making of some new sort of beam of the Costello type out of a plain beam, or any new fabrication process, or could apply to any new method that might be developed for preparing steel surfaces, by painting or preservation. The phrase is too wide and too loose and, therefore, for the purpose of avoiding any doubt the whole clause should be specifically limited to steel making or to steel producing activities, as suggested in the Amendment. I beg to move.
Amendment moved—
Page 40, line 29, at end insert the said new subsection.—(Lord Erroll of Hale.)
LORD HUGHES: It seems to me that the fears expressed by the noble Lord are groundless. I am in general agreement with the motives which led him to put this Amendment forward, but Clause 46 is in the Bill to ensure that, if there are technological advances which make possible new processes for the production of iron and steel, they can be included within the definition of iron and steel activities. It would be contrary to the purposes of the clause to use it to bring activities unconnected with the production of iron or steel into the definition of "iron and steel activities". To this extent I am in agreement with the noble Lord who moved this Amendment. But there is no need for an Amendment to provide that Clause 46 shall only apply to processes for the production of iron or steel. This object is already attained by the clause as drafted. The first two lines, with their reference to "the processing of iron or steel" put it beyond doubt that the only activities which the Minister can bring within the definition of "iron and steel activities" are these which take the form of "the processing of iron or steel".

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But we have an even better reason than that for thinking that the noble Lord's fears are groundless. We have in fact chosen the words used in Section 3(4) of the Conservative Iron and Steel Act, 1953. If they served the purpose which we intended them to serve in 1953, they ought to serve the same purpose in 1967, unless noble Lords were seeking to convey the impression that when they used these words in 1953 they were more to be relied upon than when we use them in 1967. Despite the "chit-chat" that has taken place between my noble friend Lord Mitchison and the noble Lord, I doubt very much whether he is suggesting that we are going that length. I hope he will accept my assurances that we are putting the words in to have exactly the same meaning as they had in 1953.
LORD MITCHISON: May I say this to the noble Lord, Lord Erroll of Hale, because I know how much he always likes hearing anything I have to say? I do not think he would wreck anything on purpose—he is a benevolent person—but it would wreck the Bill, by accident, if this Amendment went in. It fails to distinguish between producing and processing. If we take, for instance, Stewarts and Lloyds tube works, they are not producing tubes but processing them. I think that the language is perfectly clear and would allay even the most extravagant nocturnal apprehensions.
LORD ERROLL OF HALE: I was about to withdraw the Amendment when the noble Lord got to his feet, and I could not resist his magnetic attraction. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 46 agreed to.
Remaining Clauses agreed to.
Schedule 1 agreed to.
Schedule 2 [Transitional provisions in connection with dissolution of Iron and Steel Board]:
LORD SHACK LETON LORD SHACK LETON moved to insert after sub-paragraph (3) of paragraph 4:
"() The foregoing provisions of this paragraph shall not apply to a document which appears to the Board to he relevant for the purposes of any legal proceedings pending immediately before the vesting date by or against the Board."
The noble Lord said: Perhaps we could take this Amendment and No. 69 together. Under Clause 27(1)(a) the Iron and Steel Board's property will on vesting date become the property of the Corporation. There is, however, an important exception to this provision. Paragraph 4 of Schedule 2 provides for the exclusion from the property of the Board which vests in the Corporation of certain documents which the Board is required to set aside before vesting date. The documents the Board are required to set aside are those which appear to it to relate to the affairs of any company not coming into public ownership or to belong to any other class of documents which the Minister has directed them to set aside. The purpose of these provisions is to prevent the Corporation from acquiring documents which it would be inappropriate for them to inherit, because, for example, they contain information about their competitors in the private sector. For the same reason, although sub-paragraph (2) empowers the Minister to direct that the Corporation may see or copy set-aside documents which he thinks they require to know about, sub-paragraph (3) provides that they cannot see or copy any document relating only to the affairs of private sector companies.
These Amendments make a further provision. The first Amendment makes special provision for a class of documents to which the Corporation will need to have access, even where they relate to private sector companies. Under paragraph 7 of Schedule 2 they will take the Board's place in legal proceedings pending by or against the Board immediately before vesting date. They may, for example, need to continue proceedings against persons who failed to pay the levies which the Board raise to finance research in the cast iron industry. Plainly, however, they will not be able to continue such proceedings effectively unless they acquire all the relevant documents from the Board. This Amendment, by excluding such documents from paragraph 4 of Schedule 2 will have the effect of bringing them under Clause 27(1)(a) and so providing for them to vest in the Corporation. It thus achieves the result we want. There is no danger of any abuse of this provision, because the Corporation will only inherit in this way papers relating to cases where the Board themselves

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found it necessary to undertake proceedings before vesting date; and because it is entirely for the Board to judge which papers are relevant to any particular case.
The second Amendment makes clear that for the purpose of these provisions a document includes modern means of storing information, like punch cards and punched tapes, which the Board have acquired in connection with their statistical work. Without this Amendment, such records would not come within the scope of paragraph 4(4) of Schedule 2, and so would vest in the Corporation under Clause 27, even though they contained information, for example, in the private sector companies which it would be wrong for the Corporation to acquire. I hope that these Amendments will be acceptable to your Lordships. They arose out of a helpful suggestion—indeed, an Amendment was put down on Report in another place—by a Member of the Opposition, and the Government have now given effect to it in the Amendments which I now move.
Amendment moved—
Page 43, line 35, at end insert the said subparagraph.—(Lord Shackleton.)
On Question, Amendment agreed to.
LORD SHACKLETON: I beg to move.
Amendment moved—
Page 43, line 35, at end insert—
("() In this paragraph, 'document' includes any device by means of which information is recorded or stored, and, in relation to information recorded or stored by means of a device, the reference in sub-paragraph (2) of this paragraph to the Corporation's being entitled to see it shall be construed as a reference to their being entitled to have it made available to them and sub-paragraph (3) of this paragraph shall have effect accordingly.")—(Lord Shackleton.)
On Question, Amendment agreed to.
Schedule 2, as amended, agreed to.
Schedule 3 [Amendments of Revived Provisions of 1949 Act]:
5.51 p.m.
LORD WINDLESHAM LORD WINDLESHAM moved to add to the proposed Amendment of Section 4 of the 1949 Act:
"In subsection (6), after the word 'Corporation' where secondly occurring there shall be inserted the words 'and in any event within four months thereof' and after 'companies'
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there shall be inserted the words 'and of the subsidiary companies of the Corporation and of the publicly-owned companies'."
The noble Lord said: It may be for the convenience of the Committee if we take Amendments Nos. 70, 76 and 77 together. The purpose of these three Amendments is to improve the accountability to Parliament of this new nationalised industry by setting a time limit on the period within which the annual report must be produced, and by increasing the amount of information about the subsidiaries of publicly-owned companies that it must contain.
The first aim of these Amendments, contained in Amendments Nos. 70 and 76, is to impose on the Corporation a duty to produce the annual report within not more than four months of the end of the Corporation's financial year. As this report would be laid before Parliament, if the Amendment were accepted, a debate could then be held at a regular time each year. In the same way as with the Defence Review, there would be a steel debate in which this important industry's affairs would be discussed by Parliament. The principle at stake is that Parliament has the right to look at and discuss the National Steel Corporation's state of trading—the entire group, and the subsidiaries inside and outside the iron and steel field—over a twelve-month period and on a regular basis.
The second aim of these three Amendments, contained in Amendments Nos. 70 and 77, is to require more information about the activities of subsidiary companies to be included in the annual report to the Minister than might otherwise be the case. After all, shareholders in large companies have an opportunity to question the directors at an annual general meeting, even though in a very large group there may well be little information about the activities of subsidiary companies. That being so in the private sector, why should it not apply in the case of a nationalised industry? Why should there not be an opportunity in Parliament to question the Minister about the way in which the steel industry has been run?
I want to be quite frank about the purpose of these Amendments, so that the noble Lord who is to reply does not spend too much time looking at the wording of them. These are intended as

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probing Amendments, and we hope to get on record, either now or on the Report stage, a statement from the Government as to the extent to which the Minister will be accountable to Parliament for the National Steel Corporation. This will be a large and important industry. The Minister has responsibility for the whole industry, and we on this side of the Committee would like to know how he intends to exercise that responsibility in relation to Parliament. I beg to move.
Amendment moved—
Page 45, line 36, at end insert the said words.—(Lord Windlesham.)
LORD SFIACKLETON: I fully agree with the noble Lord, Lord Windlesham, as to the importance of this report, although I am not sure whether Parliament would look forward to an annual debate at a set time rather like the debate on the White Paper on Defence which is very much part of the system of Supply. None the less, I think we all agree with the importance of the object that the noble Lord has in view. The Government attach great importance to this matter. The report, for instance, will contain important information, and the amount of this has been increased and strengthened by the insertion in another place of Clause 25, which requires the Corporation to include in the annual report extensive information about their diversified activities.
But I think it would be unreasonable to require them to publish the report within four months of the end of the year to which it relates. The annual reports of the Coal Board, the Electricity Council and Boards, and the Gas Council and Boards are not published until five or six months of the end of the year to which they relate; and, from what I am told, these reports are got out as quickly as possible. The task of producing the Corporation's report will probably be greater, because there is an even wider range of activities to cover, and especially these new requirements in Clause 25. Therefore, I think it would be unreasonable to put on them an obligation to produce annual reports more quickly than other nationalised industries.
I can assure the noble Lord that my right honourable friend is well aware of the importance of the information published in the annual report, and will bring to the attention of the Corporation the
1070
views he has expressed. We have considered this Amendment fully, because I do not think there is any disagreement as to the desirability of achieving this end. We even thought about putting in a different time limit of, say, six months. But it is not possible to foresee all the complications involved in getting reports ready. There might be a fire, or a strike at the printing works—and strikes have held up reports before now. I think the Corporation can be trusted to act reasonably in such matters, and to impose upon them an obligation which is imposed on none of the other nationalised industries would really imply a reflection on their ability and willingness to get the report out as quickly as possible. Certainly the Party opposite, when they were in government, did not impose any such obligation on the Transport Boards in their 1962 Transport Act. This, I hope, will satisfy the noble Lord.
The second half of the Amendment concerns a rather different point, but it is one of some importance; namely, the proposal that the Corporation should include in their annual report a general account of the activities of all their subsidiaries, and not only those of the publicly-owned ones. The Government originally excluded the partly-owned subsidiaries because they think there are objections to treating companies in which there are private shareholders any differently from private companies in general. That is why there has been this clear distinction throughout the Bill between the Corporation and the publicly-owned companies—which is the nationalised industry, and to which the provisions appropriate to a nationalised industry apply—and the partly-owned subsidiaries. But the publication of information is, surely, hardly prejudicial in itself to the interests of the partly-owned subsidiaries. Indeed, the Government have accepted this point by providing, in Clause 24, for the publication of the accounts of the partly-owned subsidiaries.
Therefore, I am prepared to accept in principle the second half of the Amendment. We cannot accept the Amendment as it stands, but I am willing to consider with noble Lords opposite how we can give effect to their wishes, which are set out in the second part of Amendment No. 70 and also in Amendment No. 77 As I think there are practical objections

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to putting in a date for the publication of the annual report, I hope that the noble Lord will not press that point, and that, as I have met him on the second point, and we are prepared to achieve his objective, he will now consider withdrawing his Amendment.
LORD HAWKE: Before the noble Lord sits down may I ask him a question? It might make a certain amount of difference if one knew when the financial year of the Corporation was to end. It may be in the Bill and I have not seen it, but it is rather important. I have always thought that there should be a debate on the nationalised industries before Parliament goes into the Summer Recess. I cannot quote chapter and verse, but my impression is that it is not always possible because some of the reports are not available at that time. On the other hand, if the Corporation's financial year is to be a calendar year, that will provide for much wider latitude, making certain that there is a debate. If the financial year is going to end on April 5, it is a rather narrow margin for the Corporation to get out their accounts in time for the debate, and I think that they probably would not do it.
LORD MITCHISON: I rise only to say, on the second point, that I think it would be extremely unwise to attempt to put in a time limit for this purpose, because it is so hard to foresee exactly how long the preparation of these accounts is likely to take. If one looks at the 1953 Act, introduced by a Tory Government, one sees that in Clause 16 all that was said about the report was this:
"The Board shall, as soon as may be after the end of each financial year of the Board, make a report to the Minister".
So far as I can discover, there was in fact no time limit in that Act. One need not go through all the instances of such matters as the New Towns Report, which we shall probably discuss tomorrow, and certainly some of the Comptroller-General and Auditor's investigations take a good deal longer. I see no point in this suggestion, and a good deal of risk.
LORD WOLVERTON: I rise to support this Amendment, because in the past nationalised industries have taken a long time to introduce reports. I think
1072
I am right in saying that the Gas Boards' and Electricity Boards' years end in December and the reports do not come through until July. Parliament then goes into Recess, and the reports are not debated until the autumn. By that time the information contained in them is out of date.
I should have thought that four or five months would be an adequate time. The noble Lord, Lord Shackleton, suggested six months and expressed the opinion that four months was a bit tight, but I think one could cover it in five months. He mentioned printing strikes, fires, and so on, but these are not usual occurrences and I think it is important that Parliament should discuss a report of this nature while it is in the minds of everybody, not months afterwards when it is rather stale news.
LORD SHACKLETON: I do not know whether the noble Lord is content with the reply I gave him. I really think I must defend the nationalised industries against the charge of the length of time they take. Their reports are immensely long and thorough. The noble Lord, Lord Hawke, asked about the date for the accounting year. This has not yet been fixed. I can see a certain virtue in timing it so that the report comes out at a convenient Parliamentary time, but I agree this is not the only factor to betaken into account.
LORD WINDLESHAM: I am grateful for the offer made by the noble Lord about the amount and form of information that should be given on subsidiary companies. I should like to underline what my noble friend Lord Wolverton and others have said on the question of the period of time. I can well understand the problems connected with getting out the reports. That is true of any large organisation, but it is possible to be a little too complacent about these things. If there is an actual statutory duty to publish a report at a certain time, then one must take into account all possible delays, such as the fires at the printing works conjured up by the noble Lord, Lord Shackleton. It is generally the case that these reports are about nine months out of date, if they are printed in the summer when Parliament is in Recess. I should have thought a determined effort could be made by this streamlined, modern

1073
Government to give us more up-to-date information. Such a step would be welcome.
In moving the Amendment I said—and I would like to repeat it in case the noble Lord can help us on Report stage —that to a certain degree these are probing Amendments to the extent to which the Minister will accept responsibility for the Corporation in Parliament. It may be that it will be entirely on all fours with his responsibility for the National Coal Board or other public corporations. I think it would be helpful to have on record a statement of the position.
LORD MITCHISON: Can the noble Lord tell us why his Party put no time limit in the 1953 Act?
LORD WINDLESHAM: I do not want to prolong this discussion. I have made all the points that are relevant to the Amendment under discussion, and I beg to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.8 p.m.
LORD ERROLL OF HALE: This Amendment is concerned with the words "principal activities", because it is clear that with an organisation as vast as the National Steel Corporation group the principal activities must also be very large. However, there are many small products of the group that are completely vital, such as aircraft turbine blades, springs, and so on, which cannot be described as principal activities, nor would the Consumers' Council cover such byproducts as slag or chemicals. This Amendment is an attempt to define "principal activities" more closely and to seek some information on the Government's intentions in the matter. I beg to move.
Amendment moved—
Page 45, line 40, at end insert ("and after the words 'principal activities' there shall be inserted being activities resulting in sales of a particular product or group of products and by-products to consumers of an amount exceeding £100,000 in any year'.").—(Lord Erroll of Hale.)
LORD HUGHES: If we were to accept this Amendment practically everything but the very smallest of the activities in the public sector would be covered by the definition contained in this Amendment. At present, in the companies legislation there is no obligation on companies to
1074
publish figures of turnover, although there is in the Companies Bill now before Parliament. Because of this there is no detailed information about the levels of different activities of business in industry as a whole, but it is plain that a turnover of £100,000 a year is very small indeed. The National Steel Corporation as a whole will have a turnover of about £1,000 million a year.
The turnovers of the Schedule I companies are not known in all cases. In eight where it is known it ranged in 1965–66 from about £33 millions to £173 millions. Even the catering establishment in the Palace of Westminster had in 1965 a turnover of £257,000. In an industry of which I have some close knowledge, the building industry, a turnover of £100,000 is reflected by a building concern employing as few as 40 employees. So the effect of this Amendment would have the result of defining the national steel industry's principal activities as practically the whole range of its efforts.
This would extend the interests of the Consumers' Council in a way both unnecessary and dangerous. It would be unnecessary because, except in regard to their major activities, the National Steel Corporation will not be in such a dominant position that a special body to represent the interests of consumers is necessary. It would be dangerous for the Corporation because they would be subject to the procedures of the Consumers' Council in activities in which they were, without having a dominant position, in competition with commercial rivals not subject to those procedures. This would unnecessarily restrict the Corporation's commercial practice. It is, I would suggest, inconsistent with the Opposition's general desire that the Corporation should act commercially. The Amendment also would be dangerous for the Consumers' Council itself. If, as we all want, the Consumers' Council is to be a vigorous and effective body, it must be able to concentrate on matters which are of real importance and where its intervention would be especially appropriate. For these reasons, I cannot advise the House that this is a suitable Amendment to accept.
LORD ERROLL OF HALE: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD W1NDLESHAM LORD W1NDLESHAM moved to add to the proposed Amendments of the 1949 Act:

"Section 6(6)

At the end, there shall be added the words 'but, if he decides not to give directions on any such matter, he shall lay before each House of Parliament a statement of that matter and of his reason for not giving directions there on' ".

The noble Lord said: With the leave of the Committee, I think we might take Amendments Nos. 73 and 80 together. They would require the Minister to report to Parliament if he decides not to act on a representation from the Consumers' Council. The consumers' councils in general have not been particularly effective bodies. Here we have the position that if a dispute develops between the consumers of iron and steel and the Corporation, and if the Minister decides not to implement the recommendation of the Consumers' Council there is at present no need for Parliament to be informed. The power rests with the Minister himself.
This leads back to the point we were discussing earlier on Amendment 70, concerning Parliamentary accountability. It is important, since market pressures generally speaking will not apply here, that if a consumer is dissatisfied he can make representations through the Consumers' Council. But if the Consumers' Council as a whole are not satisfied, and make representations to the Minister, and the Minister decides not to support the point of view of the consumers as against the Corporation, the consumer will probably not be able to take his business elsewhere. The Corporation itself will cover about 90 per cent. of steel production, and therefore the normal market forces will not apply. For those reasons, it would seem there is a case for making the Minister in this respect accountable, by requiring him to report to Parliament if he decides not to act on any representation from the Consumers' Council. I beg to move.
Amendment moved—
Page 45, line 41, at end insert the said words.—(Lord Windlesham.)
LORD SHACKLETON: There is no provision in the Bill corresponding to the Amendment, for the simple reason that the Council will, under Section 6(15) (this
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is the revived provision), make an annual report to the Minister which he must lay before each House of Parliament, and the Council will, of course, have complete discretion as to the contents of this report and will be able to describe in it any representations made to the Minister and his reactions to them where they consider this to be important or that Parliament's attention should be drawn to them.
In the happy state we have now reached on this Bill, and in the interests of adding to the gaiety or the satisfaction of the noble Lord, Lord Erroll of Hale, and indeed to give confidence—and this is, I accept, the purpose behind the Amendment—that the council should be as effective as possible (incidentally. I do not accept his strictures on consultative councils generally), and if the noble Lord thinks these Amendments will help, the Government will be very glad to accept them.
On Question, Amendment agreed to.
Schedule 3, as amended, agreed to.
Schedule 4 [Form in which Provisions of 1949 Act have Effect by Virtue of this A ct]:
6.18 p.m.
LORD ERROLL OF HALE: I beg to move Amendment No. 80.
Amendment moved—
Page 60, line at end insert (";but, if he decides not to give directions on any such matter, he shall lay before each Houset of Parliament a statement of that matter and of his reason for not giving directions thereon").—(Lord Erroll of Hale.)
On Question, Amendment agreed to.
Schedule 4, as amended, agreed to.
Schedule 5 [Provisions of 1953 Act repealed]:
On Question, Whether Schedule 5 shall be agreed to?
LORD SHACKLETON: Perhaps this would be the moment to thank noble Lords opposite for the assistance they have given. I do not know whether to thank my noble friend Lord Mitchison. He is now clearly occupying a position of total independence. But we are not prepared to trade him for the other side at the moment. I am not sure whether this

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is the first major Bill in which the noble Lord, Lord Windlesham, has played a big part in Opposition, but I should like to congratulate him and say that I hope he will have many such opportunities in Opposition. If by chance there should be a change, I am sure the courtesy he has shown, mixed with the frivolity and practical knowledge of the noble Lord, Lord Erroll of Hale, will ensure that our proceedings in this House will continue to be as enjoyable as I believe they have been on the Committee stage of this Bill.
LORD ERROLL OF HALE: I should like, on behalf of my noble friend Lord Windlesham, and all noble Lords on this side, to express to Her Majesty's Government our appreciation of the courteous way in which they have studied our Amendments, and of the number of occasions they have been able to see their way either to accepting them or to subjecting them to further scrutiny. We hope to have an agreeable Report stage.
I hope also that those who have followed the long-drawn-out and somewhat acrimonious proceedings in the Committee stage in another place will not think that, because our proceedings are perhaps calmer, we do not get as much out of the Government as those in another place. Indeed, we are often more successful than they. On that note, I would thank the members of the Government for their help in making this an agreeable Com-
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mittee stage, and I only hope that they may be able to keep their independent deterrent in order a bit more.
Schedule 5 agreed to.
House resumed: Bill reported with Amendments.

TELEVISING THE PROCEEDINGS OF THE HOUSE
First Report from the Select Committee: made, and to be printed.