HL Deb 28 February 1967 vol 280 cc1001-24

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


(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) 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.)


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.


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.


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 moved, in subsection (4) after paragraph (b), to insert: () an estimate of the cost of any services provided by the Corporation or any subsidiary 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.)


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. 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 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.


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.


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 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—

(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 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.)


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.


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.


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 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.


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.


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 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?


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.


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.


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.


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.


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?


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 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.


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.


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.


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.


Could the noble Lord give me a specific statement that it will be possible to discover from the Cor- poration's accounts whether they are lending out money at cheaper rates than those at which they are borrowing it?


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.


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.


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.

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.
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.


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.)


I am glad that the noble Lord finds that it makes the Bill read more easily to insert "next" after "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.


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.


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.


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 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.)


We differ from the noble Lord, Lord Erroll of Hale, who thinks that these particular 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 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.


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.


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.


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.


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.


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 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—

  1. (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
  2. (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, 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.)


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 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 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.


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 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.


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 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 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.


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.


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.