IRON AND STEEL BILL

HL Deb 28 February 1967 vol 280 cc1026-78

3.54 p.m.

House again in Committee.

Clauses 28 and 29 agreed to.

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—

1. (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;
2. (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 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 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, 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 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 (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 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 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 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 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 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 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 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 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] 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- 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 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, 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 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 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 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—

• (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 WINDLESHAM

moved, 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) (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 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 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 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 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 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 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 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 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, 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 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 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 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 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 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 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 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 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".

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 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 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 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' 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 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 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 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 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 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 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 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 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 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- 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.