Sitting of 28 May 1946

Preamble
The House met at Half past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  LONG EATON URBAN DISTRICT COUNCIL BILL
  Read the Third time, and passed.
ORAL ANSWERS TO QUESTIONS
  TOWN AND COUNTRY PLANNING

    New Towns
    Sir Waldron Smithersasked the Minister of Town and Country Planning whether Meopham, near Gravesend, is to be the site of one of the new towns; and if he will make a detailed statement on the development proposed.
    The Minister of Town and Country Planning (Mr. Silkin): The matter is under consideration, and I am not at present in a position to make any statement.
    Sir W. Smithers: Before the right hon. Gentleman comes to a decision, will he visit the site so that a suitable reception can be prepared for him?
    Mr. Silkin: I will certainly visit the site.
    Sir W. Smithers: Will the right hon. Gentleman give notice of his visit?
    Sir W. Smithersasked the Minister of Town and Country Planning if he will give a detailed list of the sites and numbers of the proposed satellite towns.
    Mr. Silkin: A new town is to be established at Stevenage. I am not at present in a position to say how many other new
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    towns there will be or where they will be situated.
    Sir W. Smithers: May I repeat my supplementary question on Question No. 1?
    Mr. Silkin: May I repeat my reply to that supplementary question?

    Ironstone Quarries (Land Restoration)
    Mr. Manningham-Bullerasked the Minister of Town and Country Planning whether he is now in a position to make a statement with regard to the report by Mr. A. H. S. Walters, V.C., on the scope and efficiency of the measures at present employed in the ironstone industry in Northamptonshire and adjoining counties for the restoration of land damaged by quarrying operations.
    Mr. Silkin: I am afraid that, because of the pressure of other urgent matters, some time must still elapse before I am able to make a statement on this matter.
    Mr. Manningham-Buller: Is the right hon. Gentleman aware that on 16th October last he undertook to make a statement on this matter at the earliest opportunity? Is it really the case that there has been no opportunity up till now, and is he not aware of the importance of land restoration for the purpose of food production, and that nothing was said about this matter in the course of yesterday's Debate?
    Mr. Silkin: The undertaking still stands. I do intend to make a statement at the earliest possible opportunity, but there are other urgent matters which must take first place.
    Mr. Manningham-Buller: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment.

    Large Houses (Conversion to Flats)
    Mr. Marplesasked the Minister of Town and Country Planning if it is the Government's policy, under the Town and Country Planning Acts, to grant permission for the conversion of large houses into flats, accompanied by a provision that the fiats may only be used for a limited period of time.
    Mr. Silkin: In the present housing emergency, it is the Government's policy to encourage in appropriate cases the conversion of houses into flats. Local planning

    961
    authorities may, however, limit the period of time during which the flats may be used, in order to prevent prejudice to their longer-term planning requirements. But in determining the period of time, they should take into account the capital expenditure incurred by the developer.
    Mr. Marples: Is the right hon Gentleman aware that licences are being issued by the London County Council with a limiting period of 14 years, and does he not agree that this policy does not allow flats to be converted out of old Victorian houses, and it is definitely not helping the existing housing shortage?
    Mr. Silkin: It is always open to a developer who is dissatisfied with a decision of the London County Council to appeal to me.
    Mr. Janner: When licences are granted for the conversion of houses at present covered by the Rent Restriction Acts, will the right hon. Gentleman see that proper provision is made for reasonable rents to be charged for flats as and when they become ready for occupation?
    Mr. Silkin: That, of course, is another question.

    Haslemere (Industrial Zone)
    Lieut.-Commander Joynson-Hicksasked the Minister of Town and Country Planning whether he is aware of the plan of the Haslemere Urban District Council to start an industrial zone in the neighbouring and rural parishes of Camels-dale and Fernhurst; and, as such proposals are strenuously opposed by the parishes and rural districts whose inhabitants will be injuriously affected by them, what is his attitude in this matter.
    Mr. Silkin: I am aware of the plan referred to. I am at present in consultation with the planning authorities concerned on the application of the Haslemere Urban District Council for my consent to the acquisition of land for industrial development. I am not, therefore, in a position to express an opinion upon it at present.
    Lieut. -Commander Joynson-Hicks: Will the right hon. Gentleman say whether he has also taken into consideration the objections of the rural authorities?
    Mr. Silkin: Certainly, in considering it I shall take into account all sides of the question.

  MINISTRY OF WORKS

    Italian Embassy (Decoration Work)
    Squadron-Leader Sir Gilford Foxasked the Minister of Works why the Grosvenor Square premises of the Italian Embassy, which have not suffered any material war damage, are being redecorated inside and outside; and for what purpose it is proposed to use these premises.
    The Minister of Works (Mr. Tomlin-son): I have made inquiries and I am advised that certain maintenance work is being carried out on these premises by Italian " co-operators " seconded to the Embassy for general duties.

    Victory Celebrations
    Sir G. Foxasked the Minister of Works how many scaffolding poles then; are at present in situ up the Victoria Tower; how many years they have been erected and not been made use of; if he will use prisoner-of-war labour to remove these, erect stands in the streets from the material for the public to view the parade on Victory Day and then re-erect the poles on the Victoria Tower; and, if he will give an estimate of how many seats this would provide.
    Mr. Tomlinson: There is approximately a 120,000 feet run of steel scaffold poles on the Victoria Tower. The scaffolding, which is about half of that erected in 1937, has since been in use for the continuation of the stone restoration work on a small scale. It would not be practicable to use prisoners of war to dismantle and re-erect the scaffolding, which could only be done by skilled scaffolders and I regret, therefore, that I am not prepared to adopt the hon. Member's proposal.
    Sir G. Fox: Could not the Government give the public the greater opportunity of seeing His Majesty's Ministers in this parade?
    Mr. Tomlinson: Not via this scaffolding.
    Sir G. Foxasked the Minister of Works what arrangements he is making for the floodlighting of the Royal Parks during the Victory celebrations; and if he will

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    continue the floodlighting for a fortnight to enable those visiting London before and after the celebrations to enjoy them.
    Mr. Tomlinson: St. James's Park lake will be floodlit from 10 p.m. to midnight on the nights of 8th June to 15th June inclusive. A number of fountains, water falls, etc., will be temporarily installed to enhance the effect. In view of the continued need for the conservation of fuel, I do not propose to extend the period of floodlighting.
    Mrs. Castleasked the Minister of Works whether he will arrange for representatives of the war disabled to be given special accommodation for viewing the victory parade.
    Mr. Tomlinson: Yes, Sir. Special accommodation has already been reserved for representatives of the war disabled to view the victory parade.
    Mr. Vernon Bartlettasked the Minister of Works why the fireworks displays to be given in connection with the forthcoming London victory celebrations were not put out to tender; and why one of the directors of the firm which is to supply these fireworks is a member of the River Pageant Committee which is arranging them.
    Mr. Tomlinson: It was not practicable to invite competitive tenders for this display. It was, therefore, decided to entrust the work to a firm having the experience and manufacturing facilities necessary for a display on the scale contemplated. The firm was invited to join the committee after the contract had been awarded to them so that the fireworks could be coordinated with the rest of the display.
    Mr. Bartlett: Could the right hon. Gentleman say when the decision was made; because I understand the gentleman in question has been a member of the committee since March? May I at the same time ask the right hon. Gentleman to accept my apology if I have unjustifiably drawn attention to what appeared to be an abuse, which I know he would be the first man in this House to deplore?
    Mr. Tomlinson: I can assure the hon. Member that there is no question of abuse. It was just a question of prac-
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    ticability, and the firm in question were not invited to join the committee until after this matter had been decided.

    Regent's Park Terraces
    The following Question stood upon the Order Paper:
    10. Lieut.-Colonel Sir THOMAS MOORE,— To ask the Minister of Works what is the estimated cost of restoring and recon structing the terrace houses in Regent's Park; and how does the interest on the capital sum involved compare with the prewar rents received.
    Sir T. Moore: In view of the courteous explanation that the right hon. Gentleman has given me in writing, I do not propose to ask this Question.
    Sir T. Mooreasked the Minister of Works how many civil servants it is pro posed to accommodate in the terrace houses of Regent's Park.
    Mr. Tomlinson: It is estimated that about 5,000 civil servants can be accommodated in the houses in Regent's Park which have been taken over for use as Government offices.
    Sir T. Moore: Is the right hon. Gentleman aware that before the bombing took place there were over 1,000 people accommodated in these houses; and will he take steps to ensur3 that those homeless people be returned to their homes at the earliest possible date?
    Mr. Kirkwood: Are they members of the working class?
    Sir T. Moore: Are not we entitled to them, as workers?
    Mr. Tomlinson: I do not see how that can be done with this property, in view of the decision that has been taken. I am just as anxious as the hon. and gallant Gentleman to see that they are rehoused.

    Royal Parks (Shrubs and Flowers)
    Mr. Jannerasked the Minister of Works whether, in view of the large number of persons, including visitors from all parts of Britain and from overseas, who visit the Royal Parks in the London area, he will make arrangements at an early date to effect an improvement in the quality and variety of shrubs and flowers therein, and particularly to arrange, in

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    conjunction with the horticultural industry, to provide an effective demonstration of the achievements of modern British horticulture in this field.
    Mr. Tomlinson: It has always been the aim of the Department to provide the most effective display of shrubs and flowers in the Royal Parks, though naturally during the war, owing to shortage of labour and the need for concentrating on food production, it has not been possible to preserve the high standard attained in the past. Now that more labour is becoming available, and, as stocks of plants increase, further improvements may be expected in the general appearance of the Royal Parks, and any proposals put forward by the horticultural trade for providing new and improved varieties will always be welcome.
    Mr. Charles Williams: Will the right hon. Gentleman do everything in this respect to encourage the use of British grown horticultural products and new forms of British varieties?
    Mr. Tomlinson: Yes, Sir.
    Mr. Eccks: Is the right hon. Gentleman making an experiment with beech or hornbeam hedges, because these deciduous plants are much cleaner in London than the evergreen plants which are planted now?
    Mr. Tomlinson: We have been making experiments with quite a number of hedges, and I will take notice of the hon. Member's suggestion.

    Departmental Documents
    Brigadier Mackesonasked the Minister of Works how many circulars, regulations forms and instructions have been issued by his Department and its regional or other subsidiary offices during the first quarter of 1946; and what percentage of increase or decrease there is compared with the first quarter of 1936.
    Mr. Tomlinson: During the first quarter of 1946 my Department was responsible for two regulations, five circulars and 28 forms. No similar documents were necessary during the first quarter of 1936.

    Sanctuary Buildings, Westminster
    Brigadier Lowasked the Minister of Works if he will state which Depart-
    966
    ment or branches of Departments are at present in occupation of Nos. 1, 2 and 3 Sanctuary Buildings, Great Smith Street, Westminster; the number of staff in each case; to what extent any part of the leased buildings is at present unoccupied; how many additional persons could be accommodated; who occupies the part of the buildings not under lease to the Government; and whether he will consider initiating arrangements to secure the full occupation of these buildings by the Ministry of Pensions at an early date so as to provide accommodation for the staff of that Department who have been away from their homes in London for over six and a half years.
    Mr. Tomlinson: As the answer is long and contains a table of figures, I will, with permission, circulate it in the OFFICIAL REPORT.
    Following is the statement:
    The whole of Nos. 1, 2 and 3, Sanctuary Buildings is leased by my Department. The accommodation is occupied as follows:

    Staff.

    Private Branch Telephone Exchange.

    543

    s.f.

    —

    Admiralty

    21,425

    s.f.

    247

    Privy Council Library

    1,234

    s.f.

    —

    National Savings Committee.

    26,078

    s.f.

    147

    Ministry of Pensions Headquarters.

    37,022

    s.f.

    253

    Ministry of Pensions Region.

    34,996

    s.f.

    280

    Ministry of Works

    6,434

    s.f.

    28+21*

    Foreign Office Library

    8,614

    s.f.

    36

    Foreign Office Passport

    874

    s.f.

    —

    Society for Overseas Settlement of British Women.

    1,125

    s.f.

    10

    Stationery Office

    1,255

    s.f.

    7

    Development Commission

    4,033

    s.f.

    21

    Temporarily vacant

    1,930

    s.f.

    —

    Society of Civil Servants (sublet).

    1,826

    s.f.

    —

    147,389

    s.f.

    * 21 staff, Industrial.

    † Staff not known.

    I cannot give any undertaking concerning the allocation of further space to the Ministry of Pensions staffs referred to in the Question.

    Brickworks Labour (Transport)
    Mr. William Fosterasked the Minister of Works whether, in view of the need for additional labour for brickworks, which are often in remote areas, he has

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    considered the desirability of providing transport in cases where men are available but are unable to take employment because of the lack of transport facilities.
    Mr. Tomlinson: Yes, Sir. As an emergency measure to meet special cases of difficulty in recruiting labour due to lack of transport, a scheme has been agreed whereby daily transport will be provided for groups of men who would have to travel long distances to brickworks. Employees participating in such a scheme will pay 6d. per day and my Department will reimburse to employers the expenses of the main journey in excess of this amount. A supplementary estimate to cover this expenditure will be presented in due course, but in view of the urgency to which my hon. Friend refers, the scheme is being brought into operation at once and will be financed in the meantime by advances from the Civil Contingencies Fund.

    London Co-operative Society (Building Department)
    Mr. Marplesasked the Minister of Works whether the building department of the London Co-operative Society, 54 Maryland Street, E.15, has been given a certificate by his Department under Defence Regulation 56AB; and what are the rates of pay paid by this firm.
    Mr. Tomlinson: The London Cooperative Society Ltd. was granted a certificate of registration, in respect of its building department, in September, 1941. I am informed that the rates of wages being paid by this firm to building operatives are, 2s. 8½d. per hour to craftsmen, and 2s. 2¼d. per hour to labourers.
    Mr. Marples: Is the right hon. Gentleman satisfied that the rates of pay paid by this firm do not infringe the conditions which his Department require before they grant a certificate?
    Mr. Tomlinson: All I know is, these were the complementary rates in operation when the registration was granted. There has been no alteration.
    Mr. Marples: Will the right hon. Gentleman make inquiries to ensure that the rates of pay paid by this firm do not infringe those requirements?
    Mr. Tomlinson: I will inquire into it.

    Trafalgar Square (Clearance)
    Mr. Keelingasked the Minister of Works whether he will give an assurance that Trafalgar Square will shortly be cleared of Government advertisements and other excrescences, and will be kept clear.
    Mr. Tomlinson: The posters on Nelson's Column have already been removed, and I hope that Trafalgar Square will shortly be cleared of the temporary buildings erected during the war, and that it will be possible to keep it free from advertisements and temporary buildings in future.
    Mr. Keeling: Many thanks.
    Major Bruce: Will the right hon. Gentleman ensure that it is kept free from private advertisements as well?

  HOUSING

    Housing Corporation
    Mr. Challenasked the Minister of Works what are the present plans of his Department for recruiting building trade labour for the purposes of the new Housing Corporation; and whether he will now make his full statement about this proposal.
    Mr. Tomlinson: I am not yet in a position to make a statement on this subject.

    Temporary Houses (Fitments)
    Mr. Stanley Prescottasked the Minister of Works how many prefabricated houses are at present stored by his Department owing to lack of fitments.
    Mr. Tomlinson: Hardly any prefabricated houses are stored owing to lack of fitments. The normal practice is to deliver houses as soon as sites are ready for their erection.
    Mr. Prescott: The right hon. Gentleman says that hardly any are stored. Does he mean by that, that those are stored pending being sent out to the sites for erection?
    Mr. Tomlinson: Yes, Sir.

    Derequisitioned Premises, London
    Commander Nobleasked the Minister of Works how many hotels, large houses, small houses and flats, respectively, in the London CD. region, have

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    been derequisitioned by the Government for use as dwelling accommodation since 7th February, 1946.
    Mr. Tomlinson: The total number or hotels, large houses, small houses and flats derequisitioned in the London Civil Defence region between 1st February and 30th April, 1946, was 1,883, made up as follows:—Six hotels, 89 large houses, 1,231 small houses, and 557 flats. In addition, requisitioning Departments have transferred to the Ministry of Health for housing 240 properties consisting of 59 large houses, 135 small houses, and 46 flats.
    Commander Noble: Would the Minister give an assurance that everything possible is being done to expedite this?
    Mr. Tomlinson: Yes, I certainly will.

    Baths
    Lord Willoughby de Eresbyasked the Minister of Works what percentage of baths manufactured in this country go to the export market; and what percentage to the home market.
    Mr. Tomlinson; Approximately 3 per cent, of the baths manufactured in this country are exported. The remainder are available for distribution in the home market.
    Lord Willoughby de Eresby: Does roughly the same percentage apply to other sanitary equipment?
    Mr. Tomlinson: I could not say. That is certainly the figure with regard to baths.

  COAL INDUSTRY

    Production
    Mr. William Shepherdasked the Minister of Fuel and Power how much of the projected 8,000,000 tons of extra coal production was achieved by 30th April, 1946.
    The Minister of Fuel and Power (Mr. Shinwell): Two million tons.
    Mr. Shepherd: In view of the earlier confidence of the Minister, can he say why he failed by such a substantial margin?
    Mr. Shinwell: The hon. Member is quite wrong. For the six months period we forecasted 87,000,000 tens. In fact, we gained 89,000,000 tons, so we were 2,000,000 tons to the good. I should have been better pleased if we had got the additional 6,000,000 tons.

    Opencast Coal
    Major John Morrisonasked the Minister of Fuel and Power the present monthly output and average cost per ton of opencast coal; the details of how this cost is made up; and how the cost compares with that ruling a year and two years ago.
    Mr. Shinwell: As the answer necessarily contains a number of figures I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    Output returns are rendered weekly and it is not possible to state precisely the production of calendar months. During the four complete weeks of April which included the Easter holidays, 778, 078 tons were raised, and during the first two weeks in May the average output has been 221, 461 tons. Average costs of production are calculated annually and amounted, during the year ended 31st March, 1946, to 30s. 10d. per ton at site which includes restoration of the surface, details of which cannot be given separately. The comparable figures for the two previous years are 30s. 1d. and 273. 3d. respectively. In addition expenditure in respect of prospecting, royalties and compensation, operation of screening and loading plants and stocking grounds, amortisation of equipment and other charges amount to approximately 15s. 7d. a ton making a total of approximately 46s. 5d.

    Collieries, Yorkshire
    Mr. Holmesasked the Minister of Fuel and Power how many separate colliery undertakings were in operation in Yorkshire in December, 1925; December, 1939; and December, 1945; and the number of persons employed on these respective dates.
    Mr. Shinwell: The number of separate owners of mines producing coal in the district of Yorkshire, as defined for the purpose of wages ascertainment, was 200 in December, 1925; 132 in December,

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    1939; and 122 in December, 1945. The corresponding number of wage earners on colliery books at mid December in each year was 192,900, 144,000 and 139,400 respectively.

    Aerotone Baths
    Mr. Holmesasked the Minister of Fuel and Power how many collieries in Yorkshire have Airotone baths installed; and has he any reports of the number using these baths, and of any beneficial results to miners using them who suffer from various types of rheumatism.
    Mr. Shinwell: I am informed that Aerotone baths have been installed at five collieries in Yorkshire, and that during the first quarter of the present year they were used on various occasions by 130 miners as well as by 90 other persons, including members of miners' families. The use of this type of bath as an aid to miners suffering from rheumatism is still regarded as in the experimental stage. So far, however, my medical advisers have not found any reason to believe that the bath has any special therapeutic value, but the results will continue to be carefully watched.
    Mr. Holmes: Does the right lion. Gentleman know that people suffering from rheumatism—[HON. MEMBERS: " Speak up."]—after treatment in these baths have been able to resume work?
    Mr. Shinwell: I have heard of such cases, but they do not justify us in the assumption that these can provide a complete cure.
    Mr. Murray: If these experiments are successful, will the Minister instal the baths elsewhere?
    Mr. Shinwell: After we are satisfied that we have a remedy we shall certainly seek to apply it.

    Pit-Head Baths
    Mr. Holmesasked the Minister of Fuel and Power how many collieries in Yorkshire have pit-head baths installed; how many there are without pit-head baths; and what steps are being taken to provide baths where none are at present installed.
    Mr. Shinwell: Sixty-five mines employing over 70 per cent, of the mineworkers in Yorkshire have pit-head baths in-
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    stalled; and 84 mines, including 29 small mines employing fewer than 50 men each, are at present without them. The pithead bath building programme unfortunately had to be stopped during the war; it has now been resumed by the Miners' Welfare Commission and will be progressively accelerated as increased supplies of labour and material become available. A number of Yorkshire mines are included in the baths building programme for the current year.

    European Goal Organisation
    Mr. De la Bèreasked the Minister of Fuel and Power whether, in connection with the meeting of the European Goal Organisation in Paris, he can state what is the function of this Organisation; what is the effect of its activities directly or indirectly on the distribution of British coal; whether it controls the amount of British coal which shall be available for British industry; and to what extent this Organisation is responsible for the limitation of fuel available for the essential needs of the population of this country.
    Mr. Shinwell: As explained in the White Paper issued in January last on this subject (Cmd. 6732) the main purpose of the European Coal Organisation is to promote, during the present period of general shortage of coal and of certain types of coal mining supplies and equipment, the supply and equitable distribution of these commodities in Europe. The Organisation makes recommendations to the Governments concerned regarding the allocation of coal export surpluses, and my Department gives effect to these recommendations in so far as they relate to the limited quantity of United Kingdom coal available for export to Europe. The Organisation is not concerned with either the quantity of coal used in the United Kingdom or its distribution. With regard to the last part of the Question, I would refer to my reply to a Question by my hon. Friend the Member for Everton (Mr. Kirby) on 19th March.
    Mr. De la Bère: As regards the last part of the reply, can we have a definite assurance that this European Coal Organisation cannot limit the supplies available to this country for domestic and industrial purposes? It is a very serious matter indeed to have an international body controlling the affairs of this country.
    Mr. Shin well: It is not a serious matter, because they have no power to interfere— we have determined that.
    Mr. De la Bère: Will the Minister give an assurance?
    Mr. Shin well: I am happy to give an assurance, because so far nothing has occurred or is likely to occur.
    Mr. De la Bère: I shall hold the Minister to it.
    Mr. Walkden: What are the guiding principles which determine the economic need for the rationing of coal for various European countries, particularly those which have been able to dispense with petrol rationing and other forms of fuel rationing?
    Mr. Shinwell: Obviously I cannot go into details of the operation of the European Coal Organisation in reply to a question; but so far as I know all these factors are considered—coal consumption, industrial acceleration and the needs of domestic coisumers. I am bound to say, from what I know, that the European Coal Organisation acts equitably.

    Mining, Wentworth Woodhouse
    Mr. Skeffington-Lodgeasked the Minister of Fuel and Power if he will state the amount, quality and saleability of the coal so far obtained from the recent mining at Wentworth Woodhouse; and whether he is satisfied that the progress so far made justifies its continuance.
    Mr. Shinwell: Up to 24th May, 25,200 tons of coal had been obtained, of which 5,530 is classified as inferior and is being exported. The remainder is up to the recognised standard of the seams and is being disposed of to industry at home. It is usual for inferior coal to be obtained at the surface edge of the seams and I have no reason to change my opinion that this enterprise is fully justified.
    Mr. Skeffington-Lodge: Is the Minister aware that a statement has been published that the amount of coal so far obtained is very much less than originally anticipated, and in view of this statement will he not close down on the whole scheme because of the vandalism which is involved?
    Mr. Shinwell: As regard the figures, if my hon. Friend desires accurate figures
    974
    he should apply to the Ministry of Fuel and Power. I have given him the accurate figures as far as I am aware of them. A public statement on the amount of coal secured, contrary to what I have stated, ought to be regarded with scepticism. As regards the alleged vandalism, while I agree that there is some spoliation, in all the circumstances the decision taken was warranted.

  FUEL AND POWER

    Gas Industry
    Mr. Keelingasked the Minister of Fuel and Power how he proposes that the development of the gas industry should be encouraged and financed in the in terval before nationalisation.
    Mr. Shinwell: I am at present having discussions with the gas industry on this matter.

    Domestic Coal
    Sir Hugh Lucas-Toothasked the Minister of Fuel and Power whether he will consider revising the scheme for the allocation of coal to householders, particularly in contemplation of further acute stringency during the next winter; and, in particular, whether he will allow a greater weighting of the scale in favour of householders with old-fashioned houses and parents and others with extra needs for washing and warming in respect of young children.
    Mr. Shinwell: No, Sir. It is open to any consumer who claims to have special needs to apply to the Local Fuel Overseer.
    Captain John Crowderasked the Minister of Fuel and Power whether de-mobilised ex-Servicemen who have just returned from service in the tropics are entitled to an extra allowance of fuel.
    Mr. Shinwell: No, Sir, but if in any case there are special medical grounds, vouched for by medical certificate, application should be made to the local fuel overseer.
    Captain Crowder: Is the right hon. Gentleman aware that in one of the demobilisation centres in Lancashire the Advisory and Welfare Department have been telling soldiers that if they have served in India they are entitled to this extra allowance? Will he get in touch with the Secretary of State for War on

    975
    the matter, because these men are going to the fuel overseer for the extra allowance and are then being refused?
    Mr. Shinwell: There would appear to be no ground for giving such information to the men concerned, but in view of what the hon. and gallant Member has said I will see that the matter is cleared up.

    Heyworth Report
    Colonel Clarkeasked the Minister of Fuel and Power whether he intends to implement the recommendations set out in the Heyworth Report.
    Mr. Shinwell: The recommendations of the Heyworth Committee are being considered in connection with the proposals for the nationalisation of the gas industry. I am not yet in a position to say to what extent the recommendations will be implemented.

    Coal Stocks
    Mr. De la Bèreasked the Minister of Fuel and Power whether, in connection with the stocks of coal which have been provided for emergency purposes, he will give an assurance that full recognition has been given to the drastic deterioration which takes place if coal is maintained in this manner for a substantial period of time and that the stocks are being repeatedly turned over.
    Mr. Shinwell: Of the emergency stocks of coal laid down on Government account between 1940 and 1943, over two-thirds have now been sold to meet consumers' essential requirements, and few complaints have been received of deterioration in the quality of the coal supplied. I appreciate that some of the more friable domestic coals tend to break down in size whilst lying in stock, but provision is made for screening such coal before it is disposed of to domestic consumers. The question of disposing of these emergency stocks is receiving attention.
    Mr. De la Bère: But will the right hon. Gentleman specially bear in mind that there is undoubtedly a certain amount of deterioration still going on, and, in view of the grave shortage, will he take steps to see that these coals are used now, or that steps are taken to turn them over in the necessary way to avoid waste?
    Mr. Shinwell: I am trying to dispose of them as fast as is practicable.
    Mr. De la Bèreasked the Minister of Fuel and Power what are the existing stocks of coal in this country; and what total stocks he is aiming at accumulating.
    Mr. Shinwell: Total distributed stocks at end of last month were approximately 6½ million tons. In order to be sure that the country will get through next winter without serious industrial stoppages due to lack of fuel, we would have to aim at bringing stocks to a total of about 16 million tons by 1st November next.
    Commander Nobleasked the Minister of Fuel and Power, in view of the fact that, during the recent Winter, coal stocks in London fell short of reasonable demands, what steps he is taking to ensure that adequate stocks are built up during this Summer so that supplies are available for the coming Winter.
    Mr. Shinwell: I can assure the hon. and gallant Member that I fully realise the need for building up stocks of coal during the Summer months, and I am taking all possible steps to this end.
    Commander Nobleasked the Minister of Fuel and Power whether he will give publicity to the need for merchants to set aside substantial reserve stocks for winter supply to those who have no stocking facilities and so encourage small consumers to save fuel now; and what steps he is taking to ensure that adequate labour and transport will be available to make these small deliveries during the Winter.
    Mr. Shinwell: All merchants have been notified of the tonnage they must stock between May and October, and that this stocking must be a first charge on their supplies. Merchants' stocks cannot, however, be laid down on a scale which would enable me to guarantee delivery of the full permitted quantities during the Winter, and I have emphatically warned all consumers that supplies distributed in the Summer are intended primarily for use next Winter. With regard to the last part of the Question, the labour position will be kept under constant review. I do not anticipate any special difficulties in the transport position.
    Commander Noble: Would the right hon. Gentleman give wide publicity to this statement, and so encourage people to save fuel?
    Mr. Shin well: I cannot imagine any wider publicity than this Question and the answer.

    Petrol Rationing
    Mr. Wilson Harrisasked the Minister of Fuel and Power whether he will give British motorists in Britain the same petrol allowance as is given to British motorists in Belgium.
    Mr. Shinwell: I could not undertake to grant petrol allowances to motorists in this country on the particular scale adopted in some other country.
    Mr. Harris: Can the right hon. Gentleman improve on the scale?
    Mr. Shinwell: With the greatest pleasure, if circumstances justify it.
    Mr. Pagetasked the Minister of Fuel and Power whether he will consider granting supplementary petrol allowances to enable demobilised men with three or more years' foreign service to live with their families whilst undergoing vocational training or whilst in employment within some specified distance of their homes.
    Mr. Shinwell: Supplementary allowances are granted, within certain limits, to enable a person to travel by car or motor-cycle between his residence and place of work, where the use of public transport is not reasonably practicable.
    Mr. Paget: Will the Minister consider some cases to which I have drawn his attention of men in Northampton, who have been five years abroad, and who have to travel 32 miles to their work in Leicester, and whose application for petrol, to enable them to live at home, has been refused?
    Mr. Shinwell: If there are no alternatives of transport, then clearly these cases ought to be reviewed, but if there are alternative means of transport, they should be used.

    Taxi Aeroplanes (Petrol)
    Captain Rairdasked the Minister of Fuel and Power if, until more supplies of petrol are available, he will withdraw the allowances of fuel to owners of aeroplanes using their aircraft for taxi purposes, as this causes much ill feeling among taxi drivers whose mileage is severely restricted.
    Mr. Shinwell: When the ban on civil flying was lifted at the beginning of this year, the allowances of civil aviation fuel to be granted for private and charter flights were carefully considered in consultation with my right hon. Friend the Minister of Civil Aviation. In the case of companies or firms operating charter or taxi flights, the allowance of fuel is limited to the amount required to provide a maximum of 60 flying hours for each aircraft per month I see no reason that would justify me in revising the arrangements made so recently. As regards the position of charter taxi aeroplanes in relation to taxi cabs, I would also refer my hon. and gallant Friend to the reply given to him on 6th May.
    Captain Baird: Will the right hon. Gentleman consider this example of class distinction, that wealthy people, who can afford it, can travel by aeroplane any distance, but ordinary people who want to travel on pleasure by taxi cab are restricted to a very narrow limit? Does this not also penalize—[HON. MEMBERS: " Speech."]—the taxi drivers, who, very often, are ex-Service men? Will the Minister— [HON. MEMBERS: " Speech "; " Go on."] consider, as there is no restriction in the length of travel by aeroplane, withdrawing the restriction on taxi drivers?
    Mr. Shinwell: My hon. and gallant Friend misunderstands the position. Those private aeroplanes are permitted a maximum of 60 hours' flying; so that there is a restriction imposed. As regards taxi cab drivers, while I should be very glad to relax the present regulations and provide more petrol, they have a very reasonable amount on the whole, and, so far as I know, have made no complaint. I can assure my hon. and gallant Friend I have no desire to impose any class distinction.

    Electricity Meters (Certification)
    Mr. Palmerasked the Minister of Fuel and Power if he is aware of the concern felt in the electricity supply industry about the present position of the certification of meters required by the 1936 Act; and whether an extended period is to be allowed for the certification of all meters now on circuit when the procedure laid down in the 1936 Act is resumed.
    Mr. Shinwell: I assume my hon. Friend is referring to the extension of the ten-year period specified in Section 3 of the Electricity (Supply) Act, 1936, within which uncertified meters installed before the Appointed Day (1st July, 1938) have to be replaced. This period has already been extended to 30th June, 1950, by Article 2 of S.R. & O. 1946, No. 162. I understand that the Electricity Commissioners received some representations in this matter from electricity undertakings. I am not prepared so far in advance to take steps to provide for an extension of the period beyond 1950, and every effort should, therefore, be made to complete the change of meters before the 30th June, 1950.

    Petrol Stocks
    Mr. Spenceasked the Minister of Fuel and Power what his reasons are for refusing to disclose the amount of stocks of petrol in this country.
    Mr. Shinwell: I would refer the hon. Member to the last part of the reply I gave on 18th December, 1945, to the hon. Member for Orpington (Sir W. Smithers).
    Mr. Spence: May I ask the Minister whether the real reason for refusing to disclose the stocks in this country is that their publication would show that petrol rationing is no longer justified?
    Mr, Shinwell: No, Sir. The hon. Member can understand that there is a considerable military element in the use of petroleum products, and when we review the position we have to take into account that factor.

    Coal Supplies, Hull
    Commander Purseyasked the Minister of Fuel and Power whether he will state the tonnage of coal represented by the officially admitted 7.7 per cent, deficiency in the supplies to the Hull Co-operative Society, of their equitable share of the domestic coal actually supplied to the city in the coal year ended 30th April, 1946; and how many premises lost a two-bag delivery because of this mal-distribution.
    Mr. Shinwell: I am making inquiries and will communicate with my hon. and gallant Friend.
    Commander Purseyasked the Minister of Fuel and Power whether, in
    980
    view of the fact that the duties of local fuel overseer in Hull are sufficiently onerous to require the full-time attention of a capable and impartial officer with adequate staff and of the recent maldistribution of coal in the city, he will approve the appointment of a full-time official and bear the cost upon his Department's Vote.
    Mr. Shinwell: The selection of the local fuel overseer and his staff is, under the Coal Distribution Order, the responsibility of the local authority for the area concerned, but reasonable expenditure on the fuel administration is refunded through my Department. I am prepared to consider any proposals which the local authority may make.
    Commander Purseyasked the Minister of Fuel and Power whether, in view of the Hull Fuel Committee's Report of 25th April, 1946, of which a copy has been sent to him, that, while small house holders, with no alternative means of heating were without fuel and suffered an undue and disproportionate amount of hardship, large householders, with alternative means of heating, were able to obtain the maximum amount of eight 10 stone bags, he will take steps to ensure that the district house coal officer so distributes the available coal among the merchants that the small householders receive their equitable share.
    Mr. Shinwell: The report referred to appears to be an expression of views largely at variance with the position disclosed by the investigation made by my regional controller. I do not accept the aspersion implied in the latter part of the Question on the district house coal officer, who recently received, as my hon. and gallant Friend is aware, a unanimous vote of confidence from merchants and coal dealers in the Hull district.

    New Electricity Stations (Notices)
    Mr. Keelingasked the Minister of Fuel and Power whether he is aware that, under the Memorandum of Procedure drawn up by the Electricity Commissioners for observance by applicants for permission to erect a generating station, only owners of land within 300 yards thereof and the local authority for the district in which the station is to be situated need be informed; and whether, in view of the far-reaching effects of a

    981
    big modern plant on amenities, he will amend the procedure so as to enlarge the area in which notices must be given and provide for neighbouring local authorities to be informed; and if he will arrange that in all cases the earliest possible information is given to the Ministry of Town and Country Planning.
    Mr. Shinwell: In addition to the notices indicated by the hon. Member it is usual to require notices to be published in the " London Gazette " or " Edinburgh Gazette " as the case may be. Moreover, it has been the practice since the formation of the Ministry of Town and Country Planning to inform that Ministry of all proposals at the earliest possible stage. I am not aware that in general any difficulty arises in regard to these arrangements and I feel that requirements as to notices are reasonably adequate.
    Mr. Keeling: What is the good of the " London Gazette "? Does the Minister think it is right that the people of London and Middlesex should be polluted and begrimed by a nuisance from Surrey without being given the chance to ask the reason why?
    Mr. Shinwell: As I have indicated, we have taken these matters up with the Minister of Town and Country Planning, who affords all reasonable facilities for such objections. I am not aware of the pollution to which the hon. Member refers.
    Mr. Stokes: Does the right hon. Gentleman not consider that the supposed injustices implied in the Question would be cleared away if he got my right hon. Friend the Chancellor of the Exchequer to introduce a thorough-going tax on site values?

    REMEMBRANCE DAY
    Captain Bullockasked the Prime Minister if he is now able to state what arrangements have been made for the keeping of Remembrance Day this year; and if the dates 1939–1945 will be added to the Cenotaph in Whitehall.
    The Prime Minister (Mr. Attlee): I would refer the hon. and gallant Member to the reply which I gave to him on 7th May to which at present I have nothing to add. I would assure the hon. and gallant Member that both questions are far from having been overlooked.
    Captain Bullock: If I put down a Question after Whitsun, will the Prime Minister be able to give me an answer?
    The Prime Minister: I hope so, and I shall be much obliged if the hon. and gallant Member will do that.

    GOVERNMENT DOCUMENTS (PUBLICATION DATES)
    Mr. Vernon Bartlettasked the Prime Minister whether he is aware that several Government White Papers and other official documents are frequently published on one day, with the result that they cannot be adequately summarised in the exiguous newspapers of our times; and if he will make arrangements to insure a more judicious selection of dates for publication.
    The Prime Minister: Yes, Sir. I am aware of this difficulty and have taken such steps as are possible to improve the existing arrangements.
    Mr. Wilson Harris: Will the Prime Minister alternatively, or in addition, do something to remove the causes of the exiguity of the newspapers?

  GERMANY

    Trade Unions
    Mr. Cocksasked the Chancellor of the Duchy of Lancaster whether it is the policy of His Majesty's Government to encourage the formation of trades union organisations in the British zone of Germany; and what progress has been made in this direction.
    Mr. R. J. Taylor (Lord of the Treasury): I have been asked to reply.
    Viscount Hinchingbrooke: Without any reflection on the qualities of the hon. Member who is to reply, is the Prime Minister aware that the Chancellor of the Duchy was absent yesterday, as well as being absent today, and, in view of that, would it not be much better if the Prime Minister appointed a Cabinet Minister to reply to this important series of Questions, or arranged for Questions to the Chancellor of the Duchy to be put down on one day?
    The Prime Minister: I understand that there is a rearrangement regarding Questions. My hon. Friend the Chancellor of

    983
    the Duchy has been answering Questions with great assiduity. His duties, of course, take him abroad, but I would welcome anything which was done to make.the burden of answering Questions a little less onerous.
    Mr. Taylor: The reply to the Question is: Yes, Sir, that is our policy. 119 trade unions are already functioning in our Zone, and a further 159 are in the early stages of formation. Total membership now exceeds 700,000 and is increasing daily. Trade union representatives serve on the German Zonal Council which has been set up to advise the British authorities. They also participate in the work of German de-Nazification panels and committees.
    Mr. Stokes: In view of this admirable policy, will my hon. Friend ask the Chancellor to make quite sure that it is not frustrated in the districts by local dictators in the Military Government preventing trade unions from being formed?
    Mr. Taylor: Certainly, Sir.

    Police Force, Hanover
    Mr. Cocksasked the Chancellor of the Duchy of Lancaster whether he is aware of the concern caused by the fact that responsible positions in the police force of Hanover are occupied by well-known Nazis; and what action he intends to take in the matter.
    Mr. R. J. Taylor: A special investigation of the Hanover police' is now in process. The chief of police has been arrested, the chief of the personnel department dismissed and the remaining officials are being scrutinised.
    Mr. Janner: Will the hon. Member see that very careful inquiry is made into the antecedents of all members of the police force in Germany, particularly in view of the very serious effect any wrong step in an appointment would have on the population there?
    Mr. Taylor: I shall be pleased to bring that to the notice of my hon. Friend.

  AUSTRIA

    Constitution
    Mr. Cocksasked the Chancellor of the Duchy of Lancaster whether he is
    984
    aware that the Allied Control Council in Austria has refused to give its consent to the adoption by the Austrian Parliament of the 1929 constitution; and what the position is regarding the drafting of a new constitution.
    Mr. R. J. Taylor: The Provisional Government under Dr. Renner's chancellorship proposed a law reviving the 1929 constitution. This law was adopted by the Allied Council and is still in force. Subsequently, in December, 1945, the present Austrian Parliament proposed a law making an amendment to the constitution. It was not possible to secure the unanimous agreement of the occupying Powers to this amendment. The Austrian Government were instructed to prepare a comprehensive draft of a revised constitution so that the small amendment could be considered in a wider context.
    Mr. Cocks: In view of the fact that Parliament have refused to draft a Constitution, what is the next step?

    Herr Schneiderhahn
    Colonel Crosthwaite-Eyreasked the Chancellor of the Duchy of Lancaster under what ordinance of the Allied Conrol Commission, Herr Scheidermann, chef d'orchestre of the Vienna Philharmonic Orchestra, has been prohibited from giving recitals or accepting chamber music engagements whilst allowed to retain his position of chef d'orchestre.
    Mr. R. J: Taylor: The action referred to by the hon. and gallant Member was taken by the Russian authorities as Herr Schneiderhahn—who is, I understand, the person referred to—was resident in the Russian sector of Vienna. He is stated to have been a member of the Nazi Party. Discussions are proceeding in Vienna with a view to dealing with cases of this kind on a quadripartite basis.

  NATIONAL FINANCE

    Anglo-American Loan (Repayment)
    Major Haughtonasked the Chancellor of the Exchequer whether he will give an assurance that repayment of the proposed U.S. Loan has been arranged at a stable exchange rate which shall at no time diverge from the rate at which the Loan was made.
    The Chancellor of the Exchequer (Mr. Dalton): The proposed Loan is to be made, and to be repaid in U.S. dollars.

    Television Receivers (Purchase Tax)
    Mr. Cobbasked the Chancellor of the Exchequer whether television receivers which will shortly be on sale again will be subject to Purchase Tax.
    Mr. Dalton: Yes, Sir. Television receivers, like other wireless receiving sets, are chargeable with Purchase Tax at 33⅓ per cent., if they are of the domestic or portable type.
    Mr. Cobb: Would the Chancellor bear in mind that we can only export television receivers in the future if British transmitters are used abroad, and that that will depend on rapid progress in the home market, which will be retarded by the incidence of Purchase Tax?
    Mr. Dalton: That would be a suitable matter to discuss on the Committee stage of the Finance Bill, and while I am make no commitment, I shall be very glad to hear the argument.

    Accumulated Sterling Balances
    Mr. Boothbyasked the Chancellor of the Exchequer if he will give particulars of any agreement or understanding reached at Washington between His Majesty's Government and the Government of the U.S.A. regarding the amount by which our sterling obligations were to be scaled down, and the method of repayment.
    Mr. Hollisasked the Chancellor of the Exchequer (1) whether, in the course of negotiations, present or future, concerning the application of Article 10 of the Washington Loan Agreement, he will bear in mind the fact that under Article 6 of that same agreement His Majesty's Government is not entitled to apply the proceeds of the U.S. Loan for the settlement of blocked sterling balances.
    (2) whether there have been any discussions between His Majesty's Government and the Government of the U.S.A., or between His Majesty's Government and the holders of blocked sterling balances about the extent or nature of the proposed reduction in these balances.
    Mr. Norman Smithasked the Chancellor of the Exchequer (1) whether he will give an undertaking that His Majesty's Government will not, without first consulting this House, enter into any new commitments with the Government of the U.S.A. regarding the terms of the settlement of the sterling area balances under Article 10 of the Washington Loan Agreement of 6th December, 1945.
    (2) the approximate amount of dollars to be ceded to holders of sterling balances; the approximate extent to which these balances are sought to be scaled down; and the approximate period during which the remaining balances are to be liquidated.
    Mr. Douglas Marshallasked the Chancellor of the Exchequer (1) if he will obtain, through the representatives of His Majesty's Treasury in Washington, the full and authentic text of the reference made by Mr. Vinson, Secretary of the U.S. Treasury, to the terms of the settlement of blocked sterling balances in the coarse of his evidence before the House of Representatives Banking and Currency Committee on 20th May; and if he will make the text available to hon. Members;
    (2) if he will inform the House of the real rate of interest on the U.S. Loan of £937,500,000, allowing for the fact that only part of this amount will be applied for the benefit of the United Kingdom and that interest at 2 per cent, per annum will have to be paid also on that part of the Loan which will be ceded to other countries;
    (3) if he is now in a position to inform the House of the net amount of the proceeds of the U.S. Loan after deductions of the maximum amount of dollars which His Majesty's Government is prepared to cede to holders of sterling balances and after deduction of the maximum amount of sterling which His Majesty's Government is prepared to make freely convertible into dollars at the holder's option.
    Major Hugh Fraserasked the Chancellor of the Exchequer (1) whether he will give this House a detailed account of the various proposals suggested both by His Majesty's Government and by the U.S. Government concerning the method of the settlement of the blocked sterling balances;

    987
    (2) whether representatives of His Majesty's Government regularly attend the sittings of the House of Representatives Banking and Currency Committee during the discussion of the Loan Agreement of 6th December; to what extent they dispatch regular and comprehensive reports to the Treasury; and whether he will make such reports available in the Library of the House.
    Mr. Dalton: I have little to add to my reply to the hon. and gallant Member for the New Forest (Colonel Crosthwaite-Eyre) last Thursday. The obligations of His Majesty's Government are set out in Article 10 of the Anglo-American Financial Agreement. There is not, nor will there be, any additional agreement or commitment. Article 6 (i) of the Agreement will, of course, be observed, and His Majesty's Government have other resources, including existing balances and accruing receipts, out of which any commitments which may be taken to third countries can be met. The rate of interest on the loan is not affected by the objects on which it is spent. It would be premature to enter into any discussions about arrangements with holders of sterling balances, until the Loan Agreement has been approved by Congress, and the settlements themselves will be a matter for negotiations which I cannot anticipate. It would be most improper to publish confidential reports received from His Majesty's Embassy in Washington on any subject, including the proceedings of Congressional Committees.
    Mr. Boothby: May I ask whether the Chancellor will give the House a categorical assurance that there is no understanding of any kind between His Majesty's Government and the Government of the United States regarding the settlement of the sterling balances, either on the amounts involved, or the methods to be used?
    Mr. Dalton: I have already made it repeatedly plain that until the Loan is granted these discussions will not begin.
    Mr. Norman Smith: Will the Chancellor give the House an assurance that in no circumstances will he make any arrangements with America which would prejudice our financial settlement with Egypt in the matter of transferring- military installations?
    Mr. Dalton: That has nothing to do with these Questions.
    Mr. Walter Fletcher: Are we to understand that discussions on sterling balances held by India are not being carried on by the Ministers there?
    Mr. Dalton: They have no authority to discuss such questions.

    Tax Collection (Private Firms)
    Mr. Jenningsasked the Chancellor of the Exchequer whether he will give an estimate of the amount of saving to the State as a result of industries, firms and companies undertaking the work involved in the collection of P.A.Y.E., Entertainment Tax and Purchase Tax; and has he any plan for compensating these people for the expense so involved.
    Mr. Dalton: P.A.Y.E.has increased the revenue, but has not reduced the total cost to the State of collecting it. As to Entertainment and Purchase Tax, I cannot give any firm estimate. I cannot adopt the suggestion in the last part of the Question.
    Mr. Jennings: Is the right hon. Gentleman not aware that the clerical work involved in the collection of these taxes by taxpayers is a great hardship on them, and that they are put to a good deal of expense in collecting them?
    Mr. Dalton: In this case, I follow faithfully in the footsteps of my two predecessors.

    Surrendered Wheat (Payment)
    Colonel Crosthwaite-Eyreasked the Chancellor of the Exchequer whether any payment has been made by this country for the 200,000 tons of wheat recently surrendered and, if so, in what currency and to what amount; whether its re-allotment will entail any payment to this country and, if so, in what currency and to what amount; and if he will state the net gain or loss of dollar balances as a result of the transaction.
    Mr. Dalton: No, Sir; we shall be purchasing less wheat, not surrendering wheat already purchased.

    War Damage Payments
    Mr. Medlandasked the Chancellor of the Exchequer if he is aware of the

    989
    hardship to bombed-out persons by his failure to pay value payments under the War Damage Act of 1943; and when he proposes to fix a date for such payments in accordance with the statement in explanatory pamphlet, Form C.I.A.
    Mr. Dalton: I would refer my hon. Friend to my reply on 5th February, to the hon. Member for Solihull (Mr. M. Lindsay).
    Mr. Medland: Is not the Chancellor of the Exchequer aware that many of these people ar2 reduced to dire poverty, and Eire awaiting some payment from him, in order to meet their normal debts?
    Mr. Dalton: The answer which I gave to the hon. Member for Solihull was to the effect that the date of the payments under this scheme must depend, not only on financial considerations', but also on the availability of supplies, particularly of building labour and materials;, and it is very difficult to pick and choose between different sections of persons entitled to them. It is necessary to keep a firm hold on the total outflow, so as to check any danger of inflation.
    Mr. Medland: Will the right hon. Gentleman not give consideration to cases of special hardship?
    Mr. Dalton: To give much consideration to special cases leads to cumbersome and untidy administration. [HON. MEMBERS: "Oh."] It certainly does, as any right hon. Gentleman sitting on the Front Bench opposite knows, and I do not propose, at present, to vary the statement which I have made.
    Lieut.-Colonel Byers: Is the Chancellor of the Exchequer telling the House that the rights of individuals are to be sacrificed in the interests of tidiness?
    Mr. Dalton: No, Sir. What I am saying is that the present arrangements, which would not sacrifice the rights of anybody, must continue for the present unchanged.
    Mr. De la Bère: It is scandalous.
    Mr. David Grenfellasked the Chancellor of the Exchequer whether he will make a cost-of-works payment for the loss of all property by war damage which has been totally destroyed, or has been so severely damaged as to require to be rebuilt from the foundations, and pay in-
    990
    terest for the loss of rental value from the date of actual war damage until the property has been made fit for rental or for use by the occupier; and whether he will state the number of houses so destroyed and the total difference between estimates of cost-of-works and value payments in all claims for war damage up to date.
    Mr. Dalton: I regret that I cannot adopt my hon. Friend's suggestions, which would greatly increase the amount and extend the field of compensation payable under the preesnt law. 225,000 houses were destroyed or damaged beyond repair, and 40,000 of these are entitled to cost-of-works payments. No close estimate is possible of the total difference between cost-of-works payments and value payments in respect of all claims for war damage.
    Mr. Grenfell: Will not the Chancellor of the Exchequer, in view of the numerous cases of hardship, and the general confusion existing, put forward a more generous statement and publish it in the interests of these people?
    Mr. Dalton: This is a matter which we are constantly watching to see, when the moment arrives, if we can safely go further than now, having regard to the danger of inflation, which I must constantly emphasise in meeting these claims.

    Prize-Winning Bonds
    Sir Wavell Wakefieldasked the Chancellor of the Exchequer if he is aware of the method of raising State loans in the U.S.S.R., whereby, instead of issuing interest-bearing bonds, prizes are awarded to winning bondholders, which are not subject to Income Tax, whilst non-winning bondholders are able to redeem their bonds at par; and has he considered some similar plan for investors who may desire this type of investment in the United Kingdom.
    Mr. Dalton: Yes, Sir, but I do not propose to issue similar loans in this country.
    Mr. N. Smith: Is the Chancellor of the Exchequer not aware that the issue of non-interest bearing prize-winning bonds would be extremely popular among the Labour Party's supporters?
    Mr. Dalton: We are endeavouring to keep the savings movement free from

    991
    party controversy, or any other kind of controversy and, while I express no opinion, there are many people who, for reasons sincerely held, would very much object to this project.

    CIVIC IMPROVEMENT (PRIVATE GIFTS)
    Mr. Emrys Hughesasked the Chancellor of the Exchequer whether he has considered the recent legislation passed in Eire under which Mr. Bernard Shaw has transferred his property there to a voluntary civic improvement fund for the good of the community; and if he will introduce legislation in this country to enable patriotic and public-spirited landlords to make similar arrangements.
    Mr. Dalton: Yes, Sir, and Mr. Bernard Shaw was good enough to write to me himself about this. I think that our existing legislation already allows such transfers, but I am having the question carefully examined.

  GOVERNMENT DEPARTMENTS

    Civil Service Pensions (Unestablished Service)
    Mr. William Williamsasked the Chancellor of the Exchequer the result of his further consideration of the counting of unestablished service in Government Departments for pension purposes.
    Mr. Dalton: Yes, Sir, and I have decided that, as from the beginning of this financial year, the Lytton and South-borough entrants to the established Civil Service shall for the future be pensionable on the basis that the whole of their unestablished service, after the end of the 1914–18 War, shall count as to one half as pensionable service. I have further decided to apply the same principle to the so-called age-barred officers. I am asking the National Whitley Council for any observations they may wish to make, in the light of these decisions.
    Mr. Williams: Is my right hon. Friend aware that his statement will meet with the general approval of a large number of Members of this House, and will give great satisfaction to a large number of men in the service, who had almost despaired of getting justice from any Government?
    Mr. Dalton: It is my view that these men had a raw deal in the past, and it is the duty of this new Parliament and new Government to help them.
    Mr. W. J. Brown: May I ask whether the Chancellor of the Exchequer proposes to seek the concurrence of the House, either by way of Resolution or in some other form, with the proposals which he has made today, and to give the House an opportunity of discussing their adequacy or otherwise? There are a very large number of men affected by this, as the Chancellor knows.
    Mr. Dalton: It is not for me to speak of the business of the House. If there is any widespread opposition to the decision I have announced, there will be ways and means, no doubt, of giving expression to it.

    Tax Offices (Relief Measures)
    Mr. James Callaghanasked the Chancellor of the Exchequer whether it has yet been possible to take any steps to relieve the pressure of work on the staffs of tax offices.
    Mr. Dalton: Yes, Sir. I have instructed the Board of Inland Revenue to make two relaxations of procedure, which, I hope, will greatly reduce the pressure of work in tax offices. For the years 1944–45 and 1945–46, in the case of small incomes taxed under P.A.Y.E., the tax so deducted will be assumed to be the correct tax due, without any further check-up at the end of the year. But any taxpayer who thinks he has paid too much will, of course, still be entitled to demand a check-up.
    Further, I have decided that payments of Postwar Credits for 1941–42, 1942–43 and 1943–44 which are to be made to the aged, under the proposals in the Finance Bill, shall be made to all who have been in employment, without proof first being demanded that the recipient owes no Income Tax for these years. The right of the Revenue authorities to recover any arrears of tax due is, of course, unaffected by this administrative emollient.
    Mr. Callaghan: While this partial relief will be of great assistance, may I ask my right hon. Friend whether he has any hopes of further reliefs, which will do justice to the taxpayer, and, at the same time, help the staff; and will he interest

    993
    himself in the extremely inadequate accommodation and equipment facilities which are provided?
    Mr. Dalton: Those are wider questions, and I advise my hon. Friend to be content with what he has now.
    Sir W. Smithersasked the Financial Secretary to the Treasury whether he has considered the evidence sent to him indicating that the staff of the Inland Revenue Board is at breakdown point; and what action he proposes to take to remedy this situation.
    The Financial Secretary to the Treasury (Mr. Glenvil Hall): I would refer the hon. Member to the statement which my right hon. Friend the Chancellor of the Exchequer has just made.
    Sir W. Smithers: Is the hon. Gentleman not aware that one of the inevitable results of a collectivism Government, concentrating everything in Whitehall, will be that the machinery will break down, and will he take steps to avoid this?

    Statutory Orders (Authority to Sign)
    Lord William Scottasked the Financial Secretary to the Treasury how many officers of his Department are authorised to sign Statutory Rules and Orders on his behalf; and what are the respective departmental ranks of these persons.
    Mr. Glenvil Hall: Eight officers of the Treasury, in addition to the Lords Commissioners, are authorised to sign certain Statutory Rules and Orders in case of need, namely: the permanent secretary; the three second secretaries; and the four third secretaries.

    IRON AND STEEL INDUSTRY (U.S. INVESTMENTS)
    Mr. Bossomasked the Chancellor of the Exchequer if he can state the approximate amount of U.S. money invested in the British iron and steel industry.
    Mr. Dalton: This information is not available.

  EMPLOYMENT

    Apprentices (Service in Forces)
    Mr. Boyd-Carpenterasked the Minister of Labour which unions do not
    994
    recognise as the equivalent of a period of apprenticeship a period of service in the Forces in which men have been trained in, and engaged on, technical work; and how many ex-Servicemen, who are skilled mechanics, are out of work in consequence.
    The Minister of Labour (Mr. Isaacs): I assume that the hon. Member has in mind men who whilst in the Forces have been trained in, and engaged upon, various engineering trades. As I said in a reply to the hon. Member for North Belfast (Mr. Neill), on 7th February, unions in the engineering industry have accepted certain classes of Service tradesmen as skilled craftsmen, and following the discussions to which I then referred they have accepted many additional classes of Service tradesmen. Further discussions with the two sides of industry in regard to the admission of others as craftsmen, where there is a substantial shortage, are proceeding. I regret that the figures asked for are not available.
    Mr. Boyd-Carpenter: Is the right hon. Gentleman aware of the fact that the journal of the R.A.F. Association has expressed grave disquiet about this matter, and will he further look into it?
    Mr. Isaacs: I have not had my attention drawn to the article in question, but I can say that up to the present 39 classifications of acceptance have been agreed upon and there may be others. I must say that both sides of that and other kindred industries are cooperating very warmly with us.
    Mr. N. Smith: May I ask the right hon. Gentleman if his reply to the supplementary question has any theological significance?

    Building Industry Training
    Mr. Bossomasked the Minister of Labour how many trainees in the building industry have completed their training and are now gainfully employed since the Services demobilisation plans became effective.
    Mr. Isaacs: On 6th May, 2,403 trainees in the building industry had completed their training in Government training centres and had been placed in the industry. In addition 259 men are in course of being placed.
    Mr. Bossom: Could the right hon. Gentleman state if the facilities today have increased considerably over those available to make these men eligible to go into industry?
    Mr. Isaacs: Yes, Sir. Not only have facilities increased substantially as far as new premises are concerned, but many others are being prepared, and the scheme of working a double shift in the training centres has come into operation with the consent of the trainees concerned. Another scheme of completing part of the training on the job has also come into operation.
    Mr. Marples: Is there a long waiting list to go into the training centres?
    Mr. Isaacs: Yes, Sir. There is still a long waiting list, and although we are getting a number in every week the list continues to grow. We hope to clear it as soon as other premises are available.

    Direction (Building Workers)
    Mr. Bossomasked the Minister of Labour whether he will give instructions to his regional officers to ensure that powers of direction are not used to compel building trade operatives, who are engaged upon private enterprise housebuilding work, to give up their jobs and transfer to local authority housing contracts.
    Mr. Isaaes: Both types of work enjoy the same priority for the supply of labour, and only in very exceptional circumstances would labour be directed from one kind of work to the other.
    Mr. Bossom: Is it not most unjust that after people have done work by private enterprise, for which permission has been given, their employees should be directed to another job?
    Mr. Isaacs: As I said in the answer, in only most exceptional circumstances does such a thing take place.

    Directed Workers (Railway Warrants)
    Mr. Lipsonasked the Minister of Labour if women workers who were directed during the war away from their homes and now choose to return may be given free railway warrants to enable them to do so.
    Mr. Isaacs: Workers, both men and women, who were transferred by, or with the approval of, my Department to employment away from home on or after 1st June, 1940, are eligible for free railway warrants to enable them to return home when they are at liberty to leave their present employment.
    Mr. Lipson: Will the right hon. Gentleman take steps to see that his officers in local exchanges know of the Minister's policy in this matter, because I have had instances where his Department have refused free railway warrants?
    Mr. Isaacs: I should be a little surprised if that should be the case, though I do not doubt the hon. Gentleman's word. There is a special small leaflet published for the guidance of all officers and the public which gives all the information necessary, so that there should not be any doubt about it.

    Private Hire Car Licensees
    Brigadier Lowasked the Minister of Labour why, when he no longer has the power of direction of labour, he forces applicants for private motor care hire licences to undergo an interrogation by the employment exchange, and after that to have a compulsory medical examination.
    Mr. Isaacs: There is no compulsion upon applicants for private motor car hire petrol allowances to be interrogated by officers of my Department or to be medically examined. There is an arrangement for my Department to assist my right hon. Friend the Minister of Fuel and Power in his policy of dealing sympathetically with applications from men handicapped by disablement, by advising on individual cases. It is solely designed to assist a disabled man to get an allowance which would be refused if the need for special consideration on the grounds of disability were not proved.
    Brigadier Low: Does the right hon. Gentleman realise that as a result of this alleged arrangement between him and the right hon. Gentleman nobody is able to get a private car licence unless he has gone through the process of interrogation and medical examination at one of the Ministry of Labour centres? Is not that a true statement of affairs?
    Mr. Isaacs: No, Sir. There may be an interrogation in that way, but it is done at

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    the request of the applicant to help him and not to hinder him to get a licence.

    DEMOBILISATION (DIRECTED TIN MINERS)
    Mr. Beechmanasked the Minister of Labour whether service given in tin mines by persons directed from the Army into the mines will count as a credit in connection with the release groups.
    Mr. Isaacs: Periods on release to civilian employment, including work in tin mines, do not count as service for the purpose of determining a soldier's age and service group.
    Mr. Beechman: Can the Minister explain on what possible principle this gross injustice is maintained?
    Mr. Isaacs: I do not agree that it is a gross injustice; obviously we could not confine these facilities to one class of people in one special industry.

BUSINESS OF THE HOUSE
Mr. Churchill: In view of the necessity for arranging Business for Friday, can the Leader of the House say definitely whether he will be able to make a statement on food tomorrow?
The Lord President of the Council (Mr. Herbert Morrison): It is impossible to make a statement on food today, because I have not yet cleared with Washington, but I am reasonably confident that I shall be able to make a statement tomorrow.
Mr. Churchill: That still leaves the settlement of the question whether we are to have a Debate until we have had the right hon. Gentleman's statement tomorrow.
Mr. Morrison: I quite understand that. I cannot be quite sure, but I am reasonably confident that I shall be able to make a statement tomorrow.

INCORRECT STATUTORY ORDER (RULING)
Mr. Bowles: May I ask you a question, Mr. Speaker, of which I have given you private notice: Whether your attention has been called to the 14th Report of the Select Committee on Statutory Rules and
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Orders, and in particular to the evidence taken in connection with Order No. 1682, and whether you have any Ruling to give?
Mr. Speaker: In reply to the hon. Member, it seems to me clear that the misplacing of brackets—to which he has called my attention—in the copy of the Food (Points Rationing) Order, S.R. & O., 1945, No. 1682, presented on 22nd January last, amounts to a substantial error. In my Ruling of 15th May, I laid it down that any mistake in the printed copy of an Order must be considered an error in substance if it is more than an obvious printer's error which carries its own correction. I should accordingly have been prepared to rule that the Order referred to was improperly laid before the House, and should be relaid. But [understand that yesterday a new Food (Points Rationing) Order, S.R. & O., 1946, No. 733, was laid which incorporated in a corrected form the items incorrectly expressed in the Order complained of. That Order has now, therefore, been replaced so far as the erroneous portion is concerned, and while I must hold that it was improperly laid no purpose would now be served by requiring it to be withdrawn and relaid.
Colonel Sir Charles MacAndrew: This new Order No. 733, to which you have referred in your Ruling, Mr. Speaker, gives the House power to pray against the original Order No. 1682, but in my submission the opportunity has been brought about in a way that is very difficult for the House to understand. The correction has been noted at the bottom of the new Order, and one has to look through 11 documents before finding what are corrected. Your original Ruling, Sir, was that the Order should be withdrawn and relaid, so that in that way Members could see what had happened. The Order has been corrected 10 times and it is time that it was consolidated as a single new Order so that the House could understand it.
Mr. Speaker: I myself always find these Orders most difficult to understand. This Order replaces the original one so far as the error is concerned,-and there is no point in going back to the Order which preceded it. I have always hoped that these Orders would be framed in language which an ordinary person like myself could understand.

BUSINESS OF THE HOUSE (SUPPLY)
Ordered:
"That this day, notwithstanding anything in paragraph (4) of Standing Order No. 14, Business other than the Business of Supply may be taken before Ten o'clock."—[Mr. Herbert Morrison.]

ORDERS OF THE DAY

  SUPPLY
  [8TH ALLOTTED DAY]
  Considered in Committee.
  [Major MILNER in the Chair]

CIVIL ESTIMATES, 1946
  CLASS X

    MINISTRY OF SUPPLY
    Motion made, and Question proposed,
    "That a sum, not exceeding £224,000,000, be granted to His Majesty, to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1947. for the salaries and expenses of the Ministry of Supply, including the cost of trading services and of assistance to certain industries." [Note: £250,000,000 has been voted on account.]
    Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again"—[Mr. Whiteley]— put, and agreed to.
    Committee report Progress; to sit again Tomorrow.

    IRON AND STEEL INDUSTRY
    Order read for resuming Adjourned Debate on Question [27th May]:
    "That this House approves the decision of His Majesty's Government to bring forward proposals for transferring to the ownership of the nation appropriate sections of the iron and steel industry with a view to its efficient organisation in the public interest."—[Mr. Wilmot.]
    Question again proposed.
    3.36 p.m.
    The Chancellor of the Exchequer (Mr. Dalton): We had, yesterday, a very interesting Debate. It would be wrong for me to indicate on which side I thought the balance of argument lay, but I would say that a number of very interesting speeches were made, beginning with the very able speech of my right hon. Friend the Minister of Supply. I listened to my
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    right hon. Friend with all the greater pleasure because I have known him for some time and have good reason both to hold a high opinion of his abilities, and to be grateful to him for all the kindness he showed to me as my Parliamentary Private Secretary when I was successively Minister of Economic Warfare and President of the Board of Trade in the Government of the right hon. Gentleman the Member for Woodford (Mr. Churchill).
    My right hon. Friend made out his case in convincing fashion. Certainly he appeared to take a good deal of the wind out of the sails of the Opposition, which gave an appearance of lying somewhat be-calmed in the later stages of the Debate, in a thin House, in spite of the fact that we had been told that this was a most crucial Debate, and that two full days would be necessary adequately to deploy the case against the Government. Half that time has gone, and we have high hopes that the process will go on although, since liveliness is to be preferred to stagnation, we hope, in all the circumstances, that there may be a slight ruffling of the calm waters later in the day. Among the speeches that were made yesterday was one by my hon. Friend the Member for East Swansea (Mr. Mort) who spoke as a worker in the industry, a qualification solely to be found on this side of the House. He truly said that since 1932, the great trade union to which he belongs, the Iron and Steel Trades Confederation, has been constantly propagating and advocating the transfer of this industry to public ownership. So they have, and that advocacy has been both constructive and powerful, and has done much to turn bodies of opinion which might otherwise have been undecided and uninformed towards favouring the Government's policy. Since 1932, this task has been going on on the initiative of this great trade union— another illustration of the fact that this is no new topic which has suddenly and mischievously been raised by this new Government.
    The Opposition must vote tonight. I hope they will vote against this Motion, otherwise they will be in trouble again with some of their friends. I quote from a great master of English prose:
    "All who are in the battle against the spread of State monopoly, and the crushing of free enterprise, will regard the dismal performance of the Tory Party as outrageous and intolerable."

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    That is from "The Londoner's Diary," from Lord Beaverbrook's evening paper, the " Evening Standard," of 22nd May, and was referring to the failure of the Opposition to divide against the Cable and Wireless Bill. The writer of that article also said:
    " From the party that was once strong, came a demonstration of impotence and demoralisation."
    I am sure that that will not be repeated tonight.
    Mr. Churchill (Woodford): What is the right hon. Gentleman quoting?
    Mr. Dalton: "The Londoner's Diary."
    Mr. Churchill: Who writes that?
    Mr. Dalton: That question should not be addressed to me; I only know that he writes very good English, and that I often agree with him. It shows obviously that Lord Beaverbrook, not for the first time, has put aside party prejudice in the interests of those who aid him.
    Before passing to the various financial matters on which my right hon. Friend has, quite properly, committed me to say a few words, I would like to say something about one matter on which he touched in passing yesterday, but on which, I think, the House ought to be more fully informed. It concerns the arrangements which prevail in the great Dominion of South Africa regarding this industry which we are discussing today. My right hon. Friend told the House yesterday that in South Africa the production of iron and steel at the heavier end— broadly the same part of the industry which we propose to nationalize—has been in production under public ownership since 1934, with the South African Government owning the major part of the capital. I notice a tendency among the Opposition when we on this side of the House base arguments upon what is done in this or that part of the Empire, as we often do and shall continue to do, to pick and choose between the Dominions. They are inclined to say, "That is all right from Australia and New Zealand—they are misguided people who have Labour Governments too." " But what about South Africa,"I am sometimes asked, and in the context of this Debate I have great pleasure in answering.
    In South Africa, steel production was begun by private enterprise in 1915. It
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    made very little progress indeed, and up to 1934 the two private companies were producing less than 100,000 tons of steel a year. It was not until the South African Government took over the show, took it in hand and bucked it up, that economic production really started. From 1934, the year of the change in South Africa when the South African Iron and Steel Corporation Limited was set up with 90 per cent, of the total issued capital held by the Government, until the war, and even more so during the war, great progress was made, and I wish to pay my tribute here—and I am sure everyone will agree with me—to the tremendous contribution made by the iron and steel industry in South Africa to the success of our war effort. I am sure this will not be challenged, but if it is, I have the figures with me, since I did not intend to be caught without them.
    Mr. Oliver Lyttelton (Aldershot)rose—
    Mr. Dalton: I shall be prepared to give way if the right hon. Gentleman will allow me to finish my sentence. When we think of the great exploits of the Army of the Desert which will be for ever associated with the right hon. Member for Woodford, who energised and stood behind the whole thing, and in which many hon. and gallant Members of this House took part, it is important and relevant to say that a very great contribution in arms was made by the South African enterprise to the requirements of those troops. I hope the right hon. Gentleman is not going to disagree with that.
    Mr. Lyttelton: I was about to ask the Chancellor a much more limited question. What are the duties imposed by the South African Government in South Africa at the present time?
    Mr. Dalton: What kind of duties does the right hon. Gentleman mean?
    Mr. Lyttelton: Protective duties on steel.
    Mr. Dalton: They are undoubtedly high, but they are totally irrelevant.
    Mr. David Eccles (Chippenham)rose—
    Mr. Dalton: They are not relevant to this argument. I know that hon. Gentle-

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    men opposite think that all we have to do to improve the iron and steel industry is to give it more tariff protection. That is what we did before the war, but this is totally irrelevant to this important effort of war production which I am praising, and which I am surprised to find queried from the other side of the House. Either it is or is not true to say that South Africa did a great job during the war.
    An Hon. Member: Of course they did.
    Mr. Dalton: Then why do not hon. Members applaud as they should?
    Mr. Eccles rose—
    Mr. Dalton: In a moment when I have finished my sentence I shall be delighted to give way to the hon. Gentleman. I was saying that I am astonished that there should be any controversy or excitement over the tribute I am paying to the magnificent war service rendered in the form of munitions of war from this socialised iron and steel industry of the Dominion of South Africa, led by the illustrious Field Marshal Smuts.
    Mr. Eccles: No one on this side of the House denies that the South African steel industry did very well in the war. The point I wish to put to the Chancellor is that, as he must know, railway freights over those enormous distances make the difference between being able to carry on a steel industry there or otherwise. The right hon. Gentleman must also know that these railways are State owned; and further that the freights were changed in order to help the iron and steel industry when it was nationalised. Therefore the industry is heavily subsidised inside South Africa.
    Mr. Dalton: It all sounds to me like very intelligent Socialist planning. Nor need we stop at South Africa. There is also—
    Mr. Churchill: That is irrelevant.
    Mr. Dalton: But these are Imperial illustrations and I should have thought it relevant to say that what is done well in one Dominion, can be done equally in the Mother Country. Let me cite the case of Southern Rhodesia. Here the right hon. Gentleman the Member for the City of London (Sir A. Duncan) and I were able to cooperate during the war in facilitating
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    the development of a State-owned industry in Southern Rhodesia—on a small scale it is true, but with a great future. Out of small beginnings, great things may grow. The right hon. Gentleman, as Minister of Supply, and I, as President of the Board of Trade, cooperated at that time to supply plant and other facilities.
    Sir Andrew Duncan Sir Andrew Duncan (City of London) indicated assent.
    Mr. Dalton: I notice that the right hon. Gentleman is assenting to what I am saying, so we may congratulate ourselves that under the Coalition Government we provided plant, for the first time, for Southern Rhodesia. This is another illustration of how in the Continent of Africa, many valuable experiments are now being made, and considerable progress achieved along lines which we advise should be adopted here.
    May I return from these Imperial excursions, which do not seem to be altogether appreciated, to the financial aspects of our own proposals? I wish to make two observations on finance in relation to the newly constituted industry which is about to be created here. First, with regard to the interim period and the developments to be undertaken therein. My right hon. Friend the Minister of Supply said yesterday—and I quote, his sentence so as to emphasise it and associate myself with it—speaking of the interim period and the work during that time:
    "There must be no slackening of effort, and the Chancellor of the Exchequer …. has authorised me to assure the industry that whatever the final method and basis adopted "—
    he was here referring to the payment of compensation for taking over plants which are to be nationalized—
    " proper allowance will be made in assessing compensation for the results of any expenditure incurred from now onward, on approved schemes of development or rehabilitation."
    The right hon. Gentleman added:
    "I stand ready to discuss all these questions with the industry."—[OFFICIAL REPORT, 27th May, 1946; Vol. 423, c. 857–8.]
    I also am most anxious to assist, as Chancellor of the Exchequer, in this matter, and I would add to what my right hon. Friend has said that I too, shall be most happy to keep in close touch with him and cooperate fully in future with him and with public spirited men in the industry, of whom there are not a few, in

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    order that we may move forward with the long delayed work of reconstruction and modernising our plants within the sector to be nationalised. I repeat that with emphasis, so that there shall be no misunderstanding or any grounds for mistake anywhere, as to our attitude to the finances for the development period. We are anxious to do nothing and to let nothing be said which could hold back these developments, many of which are rather slow to start with.
    Passing in the field of finance to wider long-term considerations, I would say I am most anxious, and the Government are most anxious, that the iron and steel industry of the future, which will be in two parts as my right hon. Friend explained—there will be a public sector and a private sector—shall have available cheap money, a low rate of interest on borrowed capital and high priority in the queue of borrowers. It is just as important to have a good place in the queue as to be able to get something when you reach the shop—[An HON. MEMBER: "I find nothing there."] The hon. Member might not, but I do not think he must generalise too much from what may happen to him. The cheap money policy which we are consistently following has already had such success that British credit now stands on a 2½ per cent, medium-long term basis, and we may go further.
    As I have frequently said, this cheap-money policy benefits industry. In the first instance, it undoubtedly benefits the Treasury and the local authorities, but it also benefits industry, both public and private. Everyone gains by having to pay less on loans. Even if that could be generalised to apply to all those who have resort to the private moneylender, they would all be in favour of a cheap money policy. Under this policy, occasionally,. the speculators in gilt-edged may get a rap on the knuckles. That is in order to prevent them doing harm to others. But on the whole, looking to the future financing of the industry, the present level of prices of gilt-edged securities is satisfactory, and the prospects for further future improvement are, I think, good. I shall aim, so long as I hold this office, at giving the benefit of the gilt-edged rate to that part of the iron and steel industry which comes within public ownership, so that a public board shall be able to borrow as cheaply as the Government, and will
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    have the whole security of the nation behind it, as the Government have.
    I shall further aim at giving something very near gilt-edged rate, only a little above it, to sound development schemes conducted within the private sector. Would not that be helpful? The right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) is doubtful. He is more accustomed to high rates of interest. Really I should not have thought it was necessary to raise doubt as to whether it was to the advantage of private industry to borrow money at low rate. I am astonished that any contrary view should be taken. We take that for granted. This is a perfectly serious proposition, which will be understood by many financial circles, and will be reported widely in the City Press tomorrow. It will be in the " Financial Times "Tomorrow and will be welcomed. We are going to give a gilt-edged rate of interest to all the public borrowings of the nationalised section of the industry, and something very close to the gilt-edged rate of interest on any scheme we approve in what will remain the private section—[Interruption]. I think I had better go on. This is necessary in view of the tremendous arrears in expenditure on reconditioning—£168 million according to the Iron and Steel Federation Report—which it is most essential should be accelerated on a large scale.
    With regard to the means by which this cheap money can be carried forward into this industry, I would also draw attention to the possibilities of using—and I shall be quite prepared to consider using them—the facilities in the Borrowing Bill, shortly to return to us from another place, regarding Treasury guarantees on loans for reconditioning industry. In the queue for reconditioning, some sections of the iron and steel industry are entiled to stand in a very favoured position. I think I have made clear the attitude of the Treasury regarding finance for this industry.
    Sir Waldron Smithers (Orpington): What is the good of cheap money, if the inflationary process goes on as it is going on, and the purchasing power of the pound sterling comes to nothing?
    Mr. Dalton: If the hon. Gentleman got his way, the purchasing power of the pound would rapidly decline because he

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    wants to abolish food subsidies. He said so in a Debate the other day. That is not the policy of His Majesty's Government. We are sustaining the purchasing power of the pound sterling through these difficult transitional times, until we get into smoother water, when all fears of inflation will be laid to rest. They are already subsiding. [Interruption.] Certainly they are subsiding, as production is going up. The only simple corrective to an inflationary danger, is that we produce more goods. That our workers are doing today. There is also the necessity that we should conduct our Budgetary affairs with prudence, and I hope the House will agree that we are doing that.
    May I say a word, in connection with this question of the increase of production and export, upon the present output of the iron and steel industry? My right hon. Friend yesterday rightly claimed that the industry was doing very well at the moment in terms both of total production and of exports. The right hon. Gentleman the Leader of the Opposition was not here at the time, but that was the argument developed by my right hon. Friend, in reply to the rather gloomy remarks of the right hon. Gentleman the Member for Aldershot. I fully associate myself with what my right hon. Friend said about the excellent showing now being made by the industry. That is not in dispute, but I must point out that this excellent showing is being made in a seller's market, which will not last for ever, and which may not indeed last for more than a year or two at its present height. It is, therefore, essential that we should look a little distance ahead, and realise that we cannot face the future in this industry any more than anywhere else, with antiquated and worn-out plant. It may be good enough to turn out a saleable article now, but unless we use these next years to improve the quality of our material equipment, we shall not be able to face the market which will confront us a year or two hence. That is a market which is very full of possibility but will not be a seller's market in the sense in which we experience it now. Let us praise the industry for the effort which they are now making. It is a very remarkable and excellent effort, in terms of immediate production, but let us not ignore the fact that we must lose no time in building
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    up a better basis of material equipment and modern plant if we are to carry this into the years ahead.
    Discussion may turn at a later stage in great detail on this or that section of the industry. I wish this afternoon to make a few remarks on one section only, namely the tinplate section. I select this to make some observations about, because when I was serving as President of the Board of Trade I had a good deal to do with the tinplate section in that industry. I made a number of personal friends of many of those associated with it. I had to study it fairly closely. The natural home of this industry—my hon. Friend the Member for East Swansea spoke about it yesterday—is South Wales, including what Welshmen call West Wales. That does not mean the whole of West Wales, but the western part of the South Wales industrial region, Llanelly and the district around there. A large number of tinplate mills in that area are—I say-it deliberately—a disgrace to their owners. They are nothing better than old junk, and I say at once that we are not going to buy old junk for the State—not "at all.
    We shall not pay anything for old junk which should long ago have been put out of its misery and replaced by modern plant. On the other hand, when I was President of the Board of Trade I used to consult the right hon. Gentleman on the matter, because he had a great deal of experience of the industry. I am not saying anything that is not public property here: he was in touch constantly with me about it, though he is not to be held accountable for any decisions I took. However, he was helpful in giving me information of great value.
    The discussion at that, time about this section of the industry related to a redundancy scheme. A number of these old tinplate mills were, admittedly, of no use for anything, and there was a plan for paying to make sure that they would never try to produce tinplate any more. That was the essence of the redundancy scheme: the owners were to be paid not to produce tinplate again. A large section of the industry was dying on its feet; it needed so deep a burial under the earth that there would be no chance of the ghost ever walking again. The only relatively new modern plant in the whole region was that at Ebbw Vale, about which much has been said; the rest were

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    plans for new plants or airy talk about new plants. When those representing the industry came to see us, and to ask for a certificate, which, as President of the Board of Trade it was my duty to give if I were satisfied that the scheme was in the general interests of the industry— and the sole purpose of getting my autograph was to obtain a modification of E.P.T., otherwise they could have gone ahead without it—I refused to give it, until I was satisfied on three points.
    I will tell the House briefly what these three points were, because they have a great bearing on the future handling of this industry. The first point was that I should be assured that the industry really had complete plans for modernising their plants, and putting up a new hot strip mill in South Wales. I emphasised "In South Wales " because we only got the Ebbw Vale plant established after insisting upon this, and there was an inquiry set up by the Iron and Steel Federation who thought it much better to move the plants out of South Wales altogether, leaving South Wales derelict, and setting them up in some green fields in Lincolnshire or Northampton. I said that as long as I was President that would not happen, even under a Coalition Government. Therefore, the first reform we had to get was that the new plants were to be put in the proper place for tinplate plants, that is in South Wales. The second point was that of any sum of money collected for the owners of plants which were of no use, but which it was desired to put out of their agony, part should be set aside for payments to elderly workers who might be displaced by technical changes, and that this plan must be devised in full agreement with the trade unions concerned. The third point was that if shareholders of these derelict tinplate mills were paid off, we should use our best efforts to secure that the money should be reinvested in new industries in the Welsh towns where the tinplate mills were situated.
    On those three points, I wish to say that I found the chairman of Richard Thomas, Mr. E. H. Lever, most businesslike, most cooperative, and most helpful, and it is not his fault that things have gone so slowly. He is an outstanding figure amongst the younger men in the industrial world, and in these discussions he was most cooperative. But what about the new hot strip mill? It was not
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    until we got the merger of Richard Thomas and Guest, Keen, Baldwin that they could make up their minds to dispose of jealousies as to where it should be sited, and not until we got this further advance towards unified control, and the contending capitalists agreed where new plants should be put, could we get a decision about Port Talbot which, on merit, I regard as a good location.
    This illustrates the state at which the industry has arrived. Long ago it left competition; now it has arrived at what I might call imperfect competition, with a small number of quite large concerns not very harmoniously related one to another, and with a good deal of jealousy which results in the delaying of decisions and sometimes may result in wrong decisions. We were most anxious that the hot strip mill in South Wales should be proceeded with rapidly, and when Mr. Lever came to see me, I told him frankly that I had no hope, before the merger, of the tinplate industry getting a move on, until it had a unified executive, with one man or one board taking the decision, instead of all this eternal talking backwards and forwards. I went on to tell him—this was in the days of the Coalition Government—that I would do anything I could to back up this merger, because, at any rate, it would give us a decision. Then I went on to tell him that if ever there was a Labour Government in this country, I was sure that Government would insist on the unified structure which it was necessary to create for the sake of efficiency and decision, and that any industry which was no longer capable of private efficiency should come into public ownership and control. What I said to him then, appears to be coming true now.
    We have had, on the whole, a surprisingly unexciting Debate so far. It might indeed seem as though the heart had gone out of the Opposition. However, those who look back on this Debate hereafter, will note that it is an historic moment at which we stand. Here we are at the moment of the passing of a great industry from private to public hands. In the progress of the Socialist advance, we have now got past the first lines of banking and public utilities and transport; the advance is now entering upon the key regions of the heavy industries, first, coal and now iron and steel. This is a matter which should be democratically debated in the

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    House, and voted upon, but when the future looks back upon it, it will be regarded as an historic mordent in the evolution of this country. Tonight, after the vote has been taken, I am quite confident that all the patriotic and public-spirited men in the industry will accept the democratic verdict, and that they will cooperate with His Majesty's Government in carrying it out, in such a way as will be in the best interests of the community at large, and of the industry itself.
    Before concluding, I would pay a tribute to the right hon. Member for the City of London who is to follow me. The right hon. Gentleman is a great Socialist executive—I am not joking at all. When the history of these past years is written, the work that he did as chairman of the Central Electricity Board will be very emphatically underlined. It was a great new venture. He ran a risk in becoming chairman and taking charge of it. He conducted it with great energy and skill. He planned and created with his advisers the electric grid; he also brought about a number of improvements in the generating stations which the grid links. Without this fine piece of practical Socialism— which is what the grid is—it is doubtful whether we could have carried on the war as we did. Without this assurance of inter-communication between generating stations which from time to time were hit by enemy action, it is doubtful whether we could have carried on as we did. It is quite certain also, that we could not, without it, have faced the future with any confidence in the field of electrical development. I hope and believe that in history this Socialist grid will be associated with the right hon. Gentleman's name. I hope we shall call it "The Duncan Socialist Grid "—why not?
    From the Central Electricity Board the right hon. Gentleman went on to the Iron and Steel Federation, indeed, he was in some measure the founder of it. Then, doubling the parts with great skill, he went on to the Board of Trade and to the Ministry of Supply in the war, and there again he made a very conspicuous contribution at the Ministry of Supply, in particular towards organising the production of munitions. He did that, and we are all very grateful to him for it. But what was it that had to be done to lead up to that? What he did at the Iron and Steel Federation in the years before the war. He found
    1012
    a jumble of more or less efficient, more or less competitive units. He welded them together into a single, regulated, monopolistic combination. That is what he did. He took them half way along the road to Socialism. He led the industry, by great organising gifts, great initiative, great energy and great imagination, into a situation in which nationalisation became inevitable by a Government with the courage of their convictions and clarity in their minds. I ventured to quote once before, and the House must allow me to quote again, Karl Marx. One of the things Karl Marx said was:
    " Capitalist combination is the sure pathway to Socialism."
    And so it has proved. We intend to continue the work which the right hon. Gentleman so well began. If we left it half way, we should not have got anything better than the corporative State, a link-up of a Government Department and a bunch of employers. In the corporative State, the workers and public are left out on the mat. Under this scheme, we would have had the same people operating, at one hour of the day in Shell House, and at another hour in the Ministry of Supply, labelled in the morning Iron and Steel Federation, and in the afternoon, Iron and Steel Control, and sometimes holding committee meetings in the same room. That kind of combination is not defensible, nor can it be durable. It is a stage which has borne certain short-term fruit and paid short-term dividends, not in the narrow sense of the term, but in the larger sense—as a contribution to the war and to the peace.
    We must move forward at this stage and I desire as we move forward, and before the Debate ends, to pay my tribute to the right hon. Gentleman in the terms I have used very sincerely, for what he has done. In what he has done, he has ripened this industry for nationalisation as the sun ripens peaches on a wall. I am deeply grateful, and shall be deeply interested in what he has to say.
    4.13 p.m.
    Sir Andrew Duncan: My first duty to the House, in taking part in this Debate, is to disclose what has already been revealed, namely, that I hold an official position as independent chairman of the executive committee of the British Iron and Steel Federation. My second duty is to thank the Chancellor for the kindness with which he has

    1013
    tried to describe me, and I hope he will not think me ungracious if I express the hope that I have not deserved his praise a bit. To me, it would be a sorrowful state in which to find myself, if I were to accept his description as in any sense a true description, either of the services I have rendered, or of the motive for which I have rendered them. I hope also that what he indicated will not be the result of that service.
    This Motion declares an intention and states a purpose. The purpose it states is that in the public interest the efficiency of the iron and steel industry should be achieved to the fullest extent. With that purpose no one in any quarter of the House, and no one in any part of the industry, would find fault. When we come to the means by which it may be achieved, there is, of course, a fundamental difference of view. There have been attempts to cast prejudice upon this industry. I was most sorry—more sorrowful than angry—to find that the right hon. Gentleman the Minister of Supply yesterday should have descended, as I felt it, to an after-lunch gibe at the iron and steel industry. I make the claim, which could be sustained, I feel sure, by all those in the House or out of it, who have had contact with the iron and steel industry in whatever part of the industry they have worked, that this industry is one of the best examples we have of a development of which we are very proud in Britain, namely, a public spirit developed in industry.
    In this industry there has been no conflict for over 40 years. There is no labour friction here, such as the Minister of Fuel and Power had to describe in another industry with which he was recently dealing in this House. In spite of depressions and wars, throughout that period of 40 years, the leaders have established and preserved a cordial relationship and a policy of fair play which is the envy of very many other industries in this country. Nor is there ever any lack of coordination or cooperation amongst the firms in the industry. In one breath the Chancellor told us that they all speak with one mind when they are told what to say, and in another breath he told us that behind each other's back they have something different to say. That that is completely false, is evidenced by the fact that this Report which is now published as part of the White Paper—and it is a very
    1014
    remarkable fact that it should be so—is a report prepared by the industry as a whole, setting forward a national scheme interweaving within that scheme propositions in respect of a great many diverse products in an inter-related whole. There is no other industry in the country, so far as I know, today which could prepare a national scheme of that kind. The House knows perfectly well that in a scheme of this kind, prepared for what has to be achieved in five to seven years, there can be nothing completely final. Full efficiency in an industry of this kind—a mechanised, engineering, technical, industry—must always remain a relative term and at the end of five or seven years there would be need for still more progress, reconstruction and development.
    I do not propose to dwell too much on the past. Enough of the past was covered in the Debate yesterday. But I am bound to ask the House to remember something of the history of the iron and steel industry. Right up to the beginning of this century this country was predominant in iron and steel. The development of the American and European industry took place at a later stage than the British development, and they learned greatly from our pioneering experiences. But they developed and expanded within sheltered markets, which were an expression of economic nationalism. In the '20's and early '3o's, like all other British industries, amongst the other misfortunes we had to bear, and over which we had no control, was that of severe dumping from other countries which had built up their industries within protected markets. So, in 1932, the Government of this country adopted a system of protection.
    The old industries in Britain which had led the van in their day, once more had an opportunity of resuscitating themselves on a basis of greater stability than they had experienced over the last 20, 30 or 40 years. The iron and steel industry at once set about putting its house in order. In a number of years prior to this, they had had to write off £$o million or £60 million capital. The return on capital in the industry for 10 or 15 years before did not average more than 2 per cent., a totally impossible position to continue.
    In 1933 it set about putting itself in order, and embarked on capital expenditure, which between 1935 and 1939

    1015
    amounted to £50 million. That put this country in the position, at the outbreak of war, of having a number of steel plants that were as good as anything in the world at the time. That, along with the other reconstruction that had taken place in the industry, contributed to the possibility of this industry engaging itself—all sides of the industry, workmen as well as management—in the war effort, to which the Minister of Supply paid such tribute yesterday. I would like, if I may, to associate myself with all he said yesterday about the war effort of this industry.
    Besides building up its plant, this industry organised itself, and I would like to say a word about its new central organisation. This was built up, from 1934 onwards, under the guidance, and also under the continuous supervision, of a Government agency, namely, the Import Duties Advisory Committee. It has had what the right hon. Gentleman the Lord President of the Council has called in another connection a due amount of public guidance and a due amount of public-accountability, because the Import Duties Advisory Committee reported regularly to this House. I would ask any hon. Member who has any doubt on this subject to read the Report of the Import Duties Advisory Committee, Cmd. 5507, which was presented to this House in 1937. Any fair review of what is written in that Report would reach the conclusion, I suggest, that this industry was demonstrating that it was a progressive and a public-minded industry.
    The central organisation had several things to develop. Let us face quite frankly the fact that one of them was orderly marketing, and that orderly marketing proceeded on a stability of prices. I do not know what will happen under a Socialist commonwealth. I do not know whether, when so many plants are owned, each will be running at different prices or not. I doubt it very much. Under our system we built up orderly marketing, which did two things: it prevented the buyer from exploiting the seller when things were depressed, thus emphasising still further the depression spoken of yesterday by the hon. Member for Bolton (Mr. J. Jones). It also protected the buyer from exploitation from the seller when things were busy, as they are now.
    1016
    The important thing in all this is how the system works. This system was overlooked and regulated by the Import Duties Advisory Committee. Prices were related to costs of efficient plants, not inefficient ones. Upon that basis the Import Duties Advisory Committee kept upon this industry a steady pressure for reduction of works costs for improvement in service and quality. What is there in the whole of the business field that is of more value to a firm or country than giving good service, and selling by good service and by good quality? What is the value of goodwill? What is goodwill? Goodwill is nothing more than just a knowledge on the part of one's customers that if they place an order with one it will be well executed. This industry has built itself up primarily on goodwill and a stable price policy.
    It is also charged against this industry that it entered into an international cartel. Let us see. It was certainly the last of the European industrial countries to associate itself with the European cartel. The industry did that in 1935, with full Government knowledge and under Government guidance. There was the White Paper, Cmd. 5201, of 1936, submitted to this House, setting out the whole of that international agreement. There was nothing secret about it. What did the agreement do? It regulated the Continental dumping of imports into our country, a practice which had been persisted in in spite of tariffs. It also gave this country a fair share in the world's markets. These were matters of quite inestimable value to this country. Section 6 of the Finance Act, 1936, was framed in order to make this international agreement possible. There has not been, in the whole of this matter, any secrecy of any kind or any going behind the Government. Everything has been done with full Government approval.
    The organisation was designed to do something more than all that. It was designed to view the problems of this industry as a whole, in particular to develop collaboration with the main consuming ancillary industries for the purpose of facilitating standardisation and programming orders between the consuming and the producing industry which in the end makes for manufacturing efficiency. Already the collaboration with some of the consuming industries has

    1017
    brought both to them and the steel industry, and therefore to the country, tremendous gains in flexibility of working. The organisation was charged—and this is very important—not only with overseeing the efficiency of the industry from day to day. It was charged with the responsibility of initiating schemes of reconstruction and development. That is how it happened that when the Coalition Government, looking forward to postwar activity, invited this industry to submit plans for a period of from five to seven years, the industry was in an immediate position to frame a policy and a programme. Nothing could have been of more value.
    We have heard what the Chancellor said this afternoon about the need there is for push, the need to get on. Could this have been done had there not been a plan ready to get on with? I suggest that this organisation which has been built up has put this country, so far as iron and steel is concerned, into a position where immediate reconstruction can take place. There has been no major challenge to that plan. I listened with the greatest care to the speech of the right Son. Gentleman the Minister of Supply, and also to the Chancellor today. I find no challenge anywhere to this scheme. It is quite true that the Minister of Supply yesterday would have liked to frame a challenge, but he did it in a kindly and a half-hearted way. He gave the profits for the years 1934 to 1938, out he did not say that in the case of two of the three firms whose gross earnings he was quoting, they had not earned or paid any dividend at all in 1934. What was the use of giving the House yesterday careful comparison of gross earnings between one period and another when there was no question of the payment of dividends. There was also a grave error in his suggestion that it was wrong, somehow or other, for this industry, in this Report, to look for priorities. I looked to see what priorities had been asked for This is what had been asked for.
    "Appropriate priorities—."
    I think someone connected with this Report must have been associated too long with Government service in using the word "appropriate."
    "—for the provision of plant and construction facilities at home, …."
    We cannot get plant or construction
    1018
    facilities without licences, and, therefore, without priority. That is all that was asked for. You do not nationalise an industry because it asks for such priorities. If everyone who has to ask for a licence today is under the threat of nationalisation, business will come to a standstill. Likewise, there is no question of this industry having asked for money or having need to ask for money from the Government. There is nothing in the Report made by this industry which implies that they are in any need of asking the Government to find money for them. This industry makes it perfectly clear that at least half the amount to be found can be found from their own resources; that is apart from resources that may come into their possession, if the collieries that are taken over are paid for in negotiable securities. There is the other half. Are we to have to confess that as a result of the guidance of monetary policy by the British Government it is quite impossible to raise in the City of London £11 million per annum for reconstruction in one of the most important basic industries? The Chancellor said nothing at all today except, "Don't bother looking elsewhere for money. In fact, don't bother about the property at all, because we are going to take the property and we are going to find the money"
    The third point is the question of unity. I think this was perhaps as flimsy as the other two. The Minister of Supply did suggest that this scheme could not be carried out or, at any rate, the Government could not rely upon it being carried out, because there was not enough power within the Federation to have it carried out. The industry is charged on the one hand with having too much power and on the other, when it suits the Minister, with not having enough. We shall see what there is in this charge. The Minister quoted three firms and said these firms had objected to the plan. I have a telegram from one of the firms. I would not read the telegram but for the fact that they say they have sent a similar telegram to the Minister of Supply and to the hon. Member for Cleveland (Mr. Willey). This is what they say:
    "Telegraph today reports Wilmot saying yesterday 'Skinningrove had announced that they could not accept the plan.' This incorrectly represents our attitude. We have not objected to plan. It embodies developments at Skinningrove formulated two years ago by company itself. We object only to

    1019
    prophecy that no permanent future can be seen for this works since we confident we can maintain high comparative efficiency. Future possibilities can be tested only in light of experience over a period of years. Am telegraphing Wilmot and Willey similarly."
    Really, it was stretching things much too far. I cannot believe the Minister did not know exactly what was the purport of the letter, but I must assume that he did not know and I do assume that. I suggest, however, that he should have known before quoting it in the House. This plan—
    The Minister of Supply (Mr. John Wilmot): I really must ask the right hon. Gentleman to quote me fairly. I said I had received a letter from the secretary on behalf of the Skinningrove Iron Company, and the right hon. Gentleman asked me to read it. I read it and I have it in my hand now. I am willing to read it again. It said exactly what I read out to the House, and I made no further comment.
    Sir A. Duncan: If the right hon. Gentleman will look at HANSARD, he will find that this is his introduction:
    "It has already been announced by important companies such as the South Durham Steel and Iron Company, the Cargo Fleet Iron Company and the Skinningrove Iron Company that they cannot accept this plan."—[OFFICIAL REPORT, 27th May. 1946; Vol. 423, c. 850.]
    Now, words seem to mean very little when we come to many of the terms that are used in this connection; but that can mean one thing only, and the telegram that I have read to the House contradicts the Minister's statement.
    Mr. Wilmot: Will the right hon. Gentleman allow me to read this part of the letter again? I will read the whole of the letter:
    "In the recent White Paper on the Iron and Steel Industry reference is made, under the heading of modernisation and development proposals for the North-East Coast,' to the Skinningrove Iron Company, Ltd. In this connection we wish to draw your attention to the implications in the report as to the future of these works. We have to state that we entirely disagree with the implications and the Chairman of this Company, Mr. R. Mather, has already written to the British Iron and Steel Federation under date 3rd April, 1946, to this effect."
    That is the letter I read to the House.
    Sir A. Duncan: Of course, that is the letter that was read to the House. That is the letter that was received; but what does the letter say?
    Mr. Wilmot: What I have read out.
    Sir A. Duncan: Well, I am going to tell the right hon. Gentleman what it says. The letter says they are full parties to the plan but they do not accept the implication, for instance, that when the next plan comes on it may be that Skinningrove might have to go out. I suggest that the right hon. Gentleman, if he had read this report carefully—as no doubt he did—should have known what was the implication that was referred to. In regard to the other companies, the South Durham Company and Cargo Fleet Company, they have two works. With regard to the Cargo Fleet Iron Company, as the chairman of the company announced, they are prepared, and always have been prepared, to join in cooperative arrangements. Their objection to this plan is that they are not being permitted to make certain extensions and incur certain expenditure at their West Hartlepool works, which they think they should be allowed to do but which they say the expert advisers of the industry do not think they should do. Important as it is to them, it is a small item on the fringe of the whole picture. So far as the plan itself is concerned, it can be carried out 100 per cent, by the firms who have subscribed to the plan. The suggestion, therefore, that there is no unity, goes completely by the board.
    I do not want to over-emphasise this at all, because, after all, I recognise that the Minister of Supply was really trying to make a few observations about the Report but he was not fundamentally objecting to the plan in the Report—
    Mr. Wilmot: Certainly, I said so.
    Sir A. Duncan: It is enough for my purpose, therefore, that the plan in the Report has not been challenged. That makes me ask the Lord President, if I may, to say what exactly he meant when on 19th November he said in this House:
    "The Coalition Government invited the iron and steel industry to submit a Report on the improvements required to put the industry on an efficient operating basis. The Government propose to await this Report, which is expected shortly, before taking final decisions on the future organisation of the iron and steel industry."—[OFFICIAL REPORT, 19th November, 1945; Vol. 416, c. 35.]

    1021
    I ask the right hon. Gentleman whether I am not entitled to assume the truth of what I am about to say. I have met no one in any section of the industry who did not assume that that meant that if we were able to submit to the Government a plan which was broadly acceptable as a plan, we would be left to carry it out as an industry, under such public supervision as was necessary. If that was not the meaning, I ask what was meant by the Lord President when he said further, on the Second Reading of the Coal Bill:
    "It may be that when we come to electricity, or gas, or transport, or—if we do"—
    and he held up his hands at that—
    "or if we do—iron and steel …"—[OFFICIAL REPORT, 30th January, 1946; Vol. 418, c. 970.]
    That showed quite clearly, I suggest, that the country was entitled to expect that this Report would be viewed by the Government from the point of view of whether or not it fulfilled the purpose of this Motion, namely, to bring this industry into a high state of efficiency. I claim that it is admitted by the Government that the Report does that. That being so, I suggest that we have to look for other reasons for the course of action that is being taken today. What those other reasons are, I must leave to others to say. I am very much more concerned about the industrial implications of this policy.
    Mr. Geoffrey Cooper: How does the right hon. Gentleman account, in view of what he said, for the report contained in a local paper which was made by the chairman of the South Durham Iron and Steel Company and which states:
    "We have continuously opposed the Federation proposals as affecting our works, which were entirely contrary to the schemes of reconstruction previously submitted to the Federation."
    I think that itself tends to substantiate the case made yesterday by my right hon. Friend.
    Sir A. Duncan: We must not confuse things. I was talking, first, about Skinningrove, and, in the second case, about the South Durham Company. I distinguished between the two works of this last company. That at West Hartlepool is what the hon. Gentleman refers to now. The company is, as I described it, prepared to take part in the scheme
    1022
    in so far as Cargo Fleet is concerned on proper cooperative arrangements.
    This country has been built up as an engineering and manufacturing country over a very long period of time. It is true to say that there is a very substantial quantity of steel that must still be produced in small quantities and special qualities, in different sizes and shapes, because of the demands of industry, but the whole trend has been towards integration. The scheme which the industry put before the Government is one which provides for integrated plants fully loaded. There are 1,750 firms in the iron industry and over 500 in the steel industry and I do not believe—the Minister of Supply will correct me if I am wrong—there an; more than half a dozen firms, if that, who can tell, after the statement made yesterday, whether they are in for nationalisation wholly, in part, or not at all. So far from clarifying the situation, it has made it more confused. We are now away from appropriate sections of the industry; we are now further on. We are in sections of the industry, and firms in sections of the industry. I suggest that if the Government are really in earnest about getting a rehabilitation of industry, they must reconsider where they stand in this matter. There could be nothing more important.
    The Lord President of the Council (Mr. Herbert Morrison): If the right hon. Gentleman will forgive me, I would say that I do not follow how the situation is less clear after the fairly definite statement made by my right hon. Friend yesterday than it was before. If the right hon. Gentleman would be good enough to say how it is less clear, and show that the implication would have been better if my right hon. Friend had not said what he did, it would be helpful.
    Sir A. Duncan: In my opinion, quite frankly, it would have been much better if the right hon. Gentleman had not said what he did yesterday. I propose to give the reason because it is no use my saying that unless I have a reason. The right hon. Gentleman said:
    "Now, I propose to tell the House which sections it is proposed should be brought into public ownership, subject, of course, to the possibility of excluding some special individual plants where conditions are exceptional."—
    everybody always claims that they are an exception when they want excluding—

    1023
    "We think it tight to start with the iron ore, and with those coke ovens which were omitted from the coal scheme as being associated with steel works. We should also take over the manufacture" of pig iron, and the manufacture of steel ingots from pig iron or scrap. We must include the primary or heavy rolling sections of the industry since steel smelting and primary rolling are essentially one industry, operating a continuous process. Beyond this, there are various other finishing operations "—
    this is the important part—
    "some of which are so closely integrated with the actual iron and steel making as to be virtually one process. We intend in such cases to include the whole plant. In other cases, the finishing processes are more easily separated, and are often carried on in separate or independent works. There we intend to review the field, section by section and firm by firm, in consultation with the industry, before deciding on the exact boundary in each particular case."—[OFFICIAL REPORT, Monday, 27th May, 1946; Vol. 423, c. 853–4.]
    There are so many qualifications—I am making the point quite seriously for the consideration of the Minister of Supply—that it is extraordinarily difficult for any firm today in the steel industry, except for half a dozen or so, to say whether they are in in part, in altogether or out altogether. That is a very serious situation at the present time.
    Mr. H. Morrison: I want to be clear about this. I am not sure whether the right hon. Gentleman is complaining that my right hon. Friend made what was a pretty broad and clear definition, which he was pressed to give, or whether he is saying that it would have been better had my right hon. Friend not responded to the pressure of the Opposition to make an attempt to define the field over which he proposed to operate. Is the right hon. Gentleman complaining because the Opposition pressed for this explanation?
    Sir A. Duncan: I was careful to say that I am making no political point on this issue.
    Mr. H. Morrison: I am as innocent as the right hon. Gentleman in that respect.
    Sir A. Duncan: I am making a practical industrial point. I am gravely concerned about the risk we are going to run in the hold-up of development. After all, the Government are as interested in the industrial and commercial recovery of the country as is any citizen in it, and I should like to help rather than hinder that movement. I say, therefore, that the
    1024
    situation, at the present moment, is a very confused one. It is a great pity that this issue has been raised. I should not have thought it necessary to raise it at the present time, for reasons which I will give. Whatever ingenuity is applied to this surgical operation, which is a dismemberment of the industry—almost a disembowelment—it is bound to create dislocation for some period. Whether, if the Government succeed in their policy, all that loss can be made up later, is a matter of speculation, but, for the present, undoubtedly, there must be dislocation. In addition to dislocation we are doing a most serious thing. The whole industry has been reaching forward towards a national plan and towards modernisation with order in its development We are now driving the industry back to think of the valuation of its properties and how it can preserve its assets and liquid resources. Who is to say that trusteeship shall be forgotten and that the industry is not to think of these things?
    We are not only doing that, but we are discouraging planning in every other industry as well. That is a grave thing at the present time when the country needs reconstruction. I would have expected the Government to resist the temptation to push the issues further than is necessary in a matter of this kind. They are fundamentally altering the basis on which the industry has organised itself to undertake responsibility for carrying out these schemes, and I fail to see how an industry can be expected, blindly, to associate itself with a venture which it believes is going to be not only damaging to itself, but damaging also to allied industries, and fatal to the recovery of the country.
    There are two things which the Government could have done in relation to this industry which calls for much more immediate pressure than an issue of this kind. I refer to coal prices. Pithead prices in this country are £2 a ton as compared with 12s. 6d, in America. At two tons of coal to a ton of steel, the pithead price of coal here is £4 per ton of steel against 25s. in America.
    Mrs. Jean Mann: Would the right hon. Gentleman say if it is the case that the hourly wage rate of the steel worker in America is double that of the British worker?
    Sir A. Duncan: I could not say that it is, if I were comparing like with like,

    1025
    We all know that the wage rate in America is high, and the standards of living and expenditure are very high. I am reminded from behind that it is a free and capitalist country. I content myself with saying that there is this disparity; let us face the fact. There is a disparity in coal cost which is as great as, if not greater than, any present disparity between American and British heavy steel prices. Whereas British prewar prices were 10s a too at least on the average less than American prices, they are now much above American prices.
    This coal question goes further. There is the question of the regularity and continuity of adequate supplies of coal for the industry, and I say this to the Government. There will be, and there must remain, some doubt as to whether we shall have adequate supplies of coal this year for all our purposes. The Minister of Fuel and Power is dealing with that matter energetically day in and day out, but there is a. great danger, which I have always foreseen and which I have always regarded as the gravest risk, that the Coal Board will be unable to develop within the operating units the flexibility of commercial and operational management which exists under the present system— or, let me put it another way, it will be the hardest task of the Coal Board to develop that flexibility. I can speak from my experience at the Central Electricity Board, to which the Chancellor referred, and I can speak also from my experience of royal ordnance factories. I think the Minister of Supply will bear me out when I say that it is the most difficult thing in the world, even there, to secure a responsible, creative and a flexible management in the units when the real responsibility lies at the centre. It does not much matter whether that centre is a large regional centre, or a headquarters centre.
    Coal has been nationalised, and the technique must be built up; I hope it will be built up, for failure to do so would be a most ghastly failure from an industrial point of view. I suggest to the Government that before they adventure themselves too widely in a field of this kind, or do something which might, in the end, strike right at the roots of British industry, they should take time, and do first the things that lie to their hand and think of further experiments later. I emphasise that all the more when I come to my conclusion, which is that it is not the
    1026
    least bit necessary to nationalise iron and steel in order to achieve the highest efficiency. Neither the Minister of Supply nor the Chancellor has said it is necessary; they have said that they were about to do it, but because you are going to do a thing it does not follow that you have proved that you ought to do it. I suggest that no proof at all has been given by the other side that this ought to tie done.
    The best combined brains and technical advice in this country were available for the preparation of the plan which is now before the Government. The industry has the organisation to carry the plan through. The need for efficiency and still more efficiency is not a reason at all for nationalisation, but it is a strong argument for asking the industry to get on with the job, as they are prepared to do. Neither is nationalisation necessary for the purpose of safeguarding the public interest. All the safeguards that ought to be necessary in the public interest already rest in the hands of the Minister of Supply. He possesses the powers, and I cannot think of any further power he requires. The steel industry is very conscious of its public responsibility, whatever criticism may be made, and is prepared to submit, as is no other industry I know of, to public supervision. If the prewar machinery of public supervision is not thought to be enough for the purpose, then by all means improve it, elaborate it and establish a new machine. The Minister of Supply can establish a new machine under his present powers; indeed, he proposes to set up a board of control in any case.
    There has been no consultation with the industry about this matter, none at all. If the Government would consult with the industry, all sections of it, men and employers alike, they could satisfy themselves beyond any doubt that a system of control could be established which would safeguard every public interest which needs to be safeguarded. I cannot think of a single public interest that cannot be safeguarded by control. The industry could then go confidently forward with its great schemes, fully pledged, and under any supervision you like, to secure the fullest degree of efficiency and service of the highest quality at the lowest economic prices. The steel industry, more perhaps than any other, has developed its organisation in a

    1027
    way that makes it possible to fulfil a unified and balanced national plan, leaving the Government to declare broad policy and to exercise close supervision of that policy in the national interest, while leaving the industry to carry it through in a responsible way. That is the relationship between industry and Government which I think it would be of the greatest importance for the Government to develop. There lies the Dunkirk spirit of which the Prime Minister speaks. In that way will be preserved all the flexibility and all the energy, operational, technical and commercial, which are so vital in industries with such diversity and such wide international contacts and markets as the iron and steel industry possesses.
    4.58 p.m.
    Mr. Burden: May I add my congratulations to my right hon. Friend the Minister of Supply, not only on my own behalf but on behalf of the workers in the steel industry? The workers in the steel industry in Sheffield suffered grievously between the two wars, and it my confident hope and belief that never again will prolonged mass unemployment Wight the social and economic life of that great steel city. No one can deny the importance of the iron and steel industry. England's pre-eminent industrial position in the eighteenth and nineteenth centuries was very largely built up on the steel industry. Two great inventions helped tremendously, first that of Bessemer who suggested that impurities should be blown out of iron by air. This must have startled the Victorian iron masters, who no doubt thought his suggestion fantastic. The second was the great invention of Siemens' of the open hearth system. Later, Sheffield had to its credit two other inventions. The first was that of Dr. Hadfield in 1882. He discovered manganese steel, of very great wearing capacity and of surprising toughness. Later, in 1913, Harry Brearley, experimenting with gun barrels made of alloy steel, accidentally, and perhaps with a flash of genius, discovered stainless steel. In 1870, Great Britain produced 50 per cent, of the world's pig iron, 37·5 per cent, of the wrought iron and 43 per cent, of steel. In 1930, the percentage of iron and steel had fallen to 8 and only in the wrought iron section, a decaying section, was there any lingering strength.
    1028
    The hon. and learned Member for Montgomery (Mr. C. Davies) yesterday gave a quotation from that admirable study of the iron and steel industry made by the two economists, Mr. Burnham and Mr. Hoskins. May I give another quotation? They said:
    " At the beginning of the steel age no country worked under more favourable conditions than Britain. We had extensive deposits of coal and ore in close proximity for the cheap production of pig iron, and some of the best coking coal occurred near seaboard where the world's best ores could be imported at low freights. We had industries of the first order, coal, ores, works, plant and machinery, and inherited metallurgical skill. In the construction of locomotives and shipbuilding we always led. Our trade position geographically was very favourable and we enjoyed political and economic strength and stability."
    They analysed the causes of the decline in the iron and steel industry. It must be remembered that, of the major industries in this country, the iron and steel industry, according to the census figures of 1930. was the only one which showed not only a relative, but an absolute, decline in the production figures. Why? Again the authors of this admirable and dispassionate study of the industry tell us. They say:
    "The handling of the ore situation "—
    which of course is the basis of the iron and steel industry—
    "lacked foresight and vision."
    There was, they said,
    "delay in the mechanisation of ore-winning methods, the small scale transport of ore, and lag in the integration of raw material ownership."
    They go on to say:
    "The most important hindrance was the amazing neglect of British basic ores, which were 2s. 6d. per ton closer to coal than Minette ores. The mixing of ores was neglected, although the advantages were known at the beginning of the period. British ores were adaptable to the Thomas process, but, due to prejudice, they were not exploited, although basic pig iron was imported from the Continent, in addition to vast quantities of basic steel."
    So it goes on. Indictment after indictment of the iron and steel industry is contained in that study.
    Major Peter Roberts (Sheffield, Eccle-sall): Most of the illustrations the hon. Gentleman has given are from 1930, at the time of the greatest world slump. Is he now suggesting that that slump was solely due to the iron and steel masters?
    Mr. Burden: If the hon. and gallant Member had been more patient he would have found that I was about to give illustrations of how the industry has developed since 1930. I shall endeavour to show that it has developed under the fostering help of the State, and to prove that statement by a quotation from the Import Duties Advisory Committee. As far back as 1916, during the first world war, the difficulties and deficiencies of the iron and steel trade were known, and a committee of the Board of Trade recommended reorganisation of the industry, concentration in plants of more than 300,000 tons capacity, that combinations should erect wholly new plants, that foreign mines should be bought, the formation of export selling associations, and that there should be a temporary tariff on steel manufactures. They were in favour of coming to the State for assistance.
    Did the industry, after the first world war, face these problems? Not a bit of it. No fewer than 12 of the most important firms distributed bonus shares to their shareholders from reserves accumulated during the first world war. Let me give to the House one or two instances. The Consett Iron Company, with a capital of —2 million, gave two shares for each one held: Hadfields, with a capital of —800,000, gave two shares for each one held: Lysaght's, with a capital of —1,600,000 gave four shares for each one held.
    Mr. Jennings: Does not the hon. Member remember that the Consett Iron and Steel Company had rearranged its; capital and had written it down very considerably?
    Mr. Burden: If the hon. Member will be a little more patient, I will come to that point. Having distributed the bonus shares, but lacking foresight, courage and determination, the industry allowed mass unemployment to develop. Let me give figures to show what happened between 1922 and 1930. In July, 1922, no fewer than 26·7 per cent, of those engaged in the steel industry were unemployed. The method of calculating the figures of unemployment was altered, I will give figures for 1930. In that year, no fewer than 30·9 per cent, of those engaged in the industry were still unemployed. I will again quote from Burnham and Hoskins. They say:
    1030
    "In the years 1921–30 the real problem was to put the industry into a position to attract capital as a permanent investment. Professor Jevons suggested that the State should assist in financing the replanning of the whole of the heavy industry at economically strategic points in coordinated modern plants of sufficient size to obtain the best scientific management."
    I come now to the point that was made by the hon. Member for Hallam (Mr. Jennings). In 1931, the Import Duties Act imposed a tariff of 10 per cent, on practically all manufactured articles. The iron and steel industry was at the head of the queue asking for help over and above the 10 per cent, and, as the right hon. Member for the City of London (Sir A. Duncan) is aware, the industry got an additional 20 per cent.—but on what terms? In order that there may be no misunderstanding, I quote from a letter written to Sir George May by the late Mr. Neville Chamberlain, who was then Chancellor of the Exchequer:
    " From the outset, the Government have made clear their view that an efficient and. prosperous iron and steel industry is essential to this country, and that the duties imposed on foreign imports were intended to provide opportunity for the reorganisation which was necessary for this purpose."
    What is implied in the reference to an efficient and prosperous industry? The implication is that the industry, in 1930 and beforehand, was not efficient, and that it was Government help and backing which were necessary to put it on an efficient footing. Judged by ordinary standards, which are acceptable in many quarters of the Opposition, that help was satisfactory, because in 1937 many of the firms which had not been earning any money, or paying any dividends in 1930–31, were paying 10 per cent, or more. There were exceptional cases where, for instance, the Stanton Iron and Steel Company earned 8 per cent, on its capital in 1932, but trebled the amount in 1938, when 24 per cent. was earned. Similarly, the Whitehead Iron and Steel Company earned 12 per cent, in 1932, but in 1937–38 that figure was multiplied nine times, and it paid a dividend of 74 per cent. Hon. Members opposite cannot take any credit to their souls about that, or pretend that the improvement was due to the sturdy individualism of private enterprise. I commend to their attention a short extract from the Report of the Import Duties Advisory

    1031
    Committee, in the summary of which they reported:
    "The policy pursued by the State since 1932 has contributed materially to rehabilitate the iron and steel industry and to put it on a profit-making basis. It has also assisted the promotion of a comprehensive organisation capable of exercising a powerful influence on the conduct of the industry a a whole and able to negotiate with its foreign competitors on equal terms."
    The report goes on:
    "There cannot be a return to the lack of organisation, the almost casual development, and the competition largely unrestricted at home and almost wholly unrestricted from abroad, and the State cannot divest itself of responsibility as to the conduct of a protected industry so far-reaching in its scope, so vital to the national well being, so largely affected by State fiscal policy, and now being brought into a closely knit organisation."
    Surely, that is evidence that the industry, which I admit played a great part in the second world war, would not have been put on to its feet and would not have reached the pitch of efficiency which it reached in 1938 if it had been left in its old unrestricted private competitive state.
    Sir A. Duncan: Will the hon. Member bear in mind that the Committee submitted that there was a due amount of public guidance and a due amount of public accountability?
    Mr. Burden: I am glad to have had that admission from the right hon. Gentleman and I hope that, as the Chancellor said, we shall be able to take him along with us in the next logical step in the development, to which I shall refer later. It is true that the industry is now proposing reorganisation. It is true that in July, 1945, a gentleman who went from the Ministry of Supply to become the technical and commercial adviser to the Federation, published on its behalf a scheme for the reorganisation of the industrly, involving, I believe, an expenditure of £125 million. The present report mentions an expenditure of £168 million to reorganise the industry. While we give the industry credit for that, surely, some of us must bear in mind what has happened in reorganisation schemes, and the ruthless way in which, in the interests of the industry., Jarrow was treated, and remembering these things, ask ourselves whether we can trust in the industry to carry out reorganisation in the public interest, for behind reorganisation there is
    1032
    a great human and social problem. It is because I believe that only the Government can carry through reorganisation, and look after that problem in the right way, that I am glad the Minister has submitted his proposals.
    The hon. Member for Hallam has interrupted me once or twice. I wish to recall to his mind something which he is reported to have said in Sheffield in a speech immediately after the Minister of Supply first announced these proposals. If the hon. Member was correctly reported in the local Press, he said that he hoped there would be no "Quislings"In the steel industry. " Quisling "Is an ugly word. " Quisling " stands for an ugly thing. " Quisling,"I believe, was a term hurled at Lord Catto by a former Member of the House because Lord Catto decided to continue as Governor of the Bank of England. I ask the Minister of Supply not to choose his advisers in this matter from those so-called experts in the industry, the people who have worked a restrictionist, monopolistic, protectionist policy. I believe there are men trained in the industry who are ready and willing, if they get the opportunity, to lift the industry on to higher and better levels of public service in the interests of the community. If those men are chosen, I am convinced that the iron and steel industry, with fuel, electricity and transport, will play its part in the reorganisation of our industries and in the building up of a new world order based not on scarcity and restriction, but on the plenty, and make this the century of the common man.
    5.20 p.m.
    Mr. Peter Thorneycroft: I must compliment the hon. Gentleman the Member for the Park Division of Sheffield (Mr. Burden) upon the exhaustive researches which he has made into the dividend policy of the iron and steel industry. I do not intend to follow him in that matter, but it makes it the easier for me to confess at the outset that I have some inerest in this industry, which I think it is proper to confess. My great great grandfather was an iron master, and rather a good one, and, like many other people, he believed in the hereditary system. As a result, I still own some iron and steel shares; at least, for the moment.
    Mr. Emrys Hughes: And coal shares?
    Mr. Thorneycroft: Iron and steel, and probably coal.
    Mr. H. Morrison: The hon. Gentleman does not know what he owns.
    Mr. Thorneycroft: I hope that the Chancellor of the Exchequer will deal with me as generously as the national interest permits. I turn from the past history of this industry to the Motion which the Government have put down. They ask for general approval of their ownership of some sections of the iron and steel industry. I have no particular objection to the Government of the day owning a steel firm. I think quite a lot could be said in favour of it. It would probably be an advantage if the Minister of Supply had owned a steel firm in the past, because I think it would make it more easy for him to know which section of the industry he should nationalise. If one were setting up a great new steel works in Northamptonshire, there would be a good case for the Minister of Supply taking them over and making them the best steel works in the world. What I am concerned about in discussing a Motion of this kind is that it seems to me there is too much talk on the question of who is going to own the steel industry, and nothing like enough has been said about what the Government intend to do with it. We have heard, for example, a discussion as to whether the Skinnin-rove Company approves the industry's plan. What we would like to know is whether the Government approve the industry's plan. All that the Minister of Supply has said so far is that he accepts much of it. We want to know how much, before we are asked to hand it over. I would like to ask a few questions, and though the Lord President—
    Mr. H. Morrison: The old trick.
    Mr. Thorneycroft: The Lord President is replying, so that I should think the chances of getting a reply to any of my questions are almost nil. Nevertheless, I will try again as I have tried in the past. I will ask them slowly so that he can write them down if he wishes.
    Mr. H. Morrison: Will the hon. Gentleman say whether he is going to put a string of questions so that he, as a so-called progressive Tory, may evade making any statement of where he stands on the issue of policy involved?
    Mr. Thorneycroft: No, I am not going to evade anything, but if I am allowed, I hope to make one or two observations about the iron and steel industry myself. I am not asking the Government to comment in detail on the industry's plan—I think that would be unfair—but they have had it for several months; they have had ample opportunity of studying it, and they should be able to say where they stand, at least, on the broad lines. Do they think the industry has set its target high enough? Do they regard the sum of £168 million for a period of seven years as rather a parsimonious approach to this matter, or do they contemplate, when they are in control of the situation, development upon a very much greater scale? We ought to be told. I want to know their views on the scrapping policy. The Minister of Supply pointed out that in the industry's plan 30 per cent, of the steel capacity and 40 per cent, of the blast furnace capacity was to be scrapped. Do the Government agree with that figure, or is it part of their case that the industry's plan is not sufficient in scope and that, in point of fact, a great deal more of the existing capacity ought to be scrapped?
    If I might have the attention of the Minister, I would like to know the Government's views about exports. I see the target is put at 3,000,000 tons. Is that, in the Government's view, a high enough figure? In the course of our discussions a large number of hon. Members opposite have condemned the cartel. Will the Government in no circumstances whatever enter into a cartel? I would like to know if that -is part of their policy, because if so we ought to be given an assurance that in no circumstances whatever will the new steel board enter into any international cartel. After all, it has been condemned in fairly clear terms. I would also like to ask whether the Government are satisfied with the price situation. The pre-scheme and post-scheme prices are set out in Table IX of the Report, and it is hoped that with the progressive reorganisation of the industry the prices will come down. Do the Government intend to bring them down still further? Are they satisfied with those prices? If they are asking to-own the industry, I think we are entitled to know whether it is part of their case that they can reduce the price of steel lower than that to which it would be reduced under the industry's own plan. I hope

    1035
    the right hon. Gentleman will be able to answer at least some of those questions, although I should think he is quite incapable of answering them, because the fact is that the Government have not got a steel plan at all. If they had a steel plan and had given any thought to these matters, which are the main basis of any steel plan, obviously they would have decided them long ago.
    May I say a few words about the steel industry? I am not an expert on the steel industry at all. The steel industry is, of course, a monopoly, and, frankly, on the whole I dislike monopolies. But let us be quite, clear that it was encouraged and assisted in every way by the Government of the day in order to set up that particular type of organisation. That monopoly was created by the Government. It has been largely controlled by the Government under the Import Duties Advisory Committee or the Iron and Steel Control, or, under the future arrangements, by the right hon. Gentleman's steel board. Rightly or wrongly, the principle that steel should be a monopoly of some kind seems to me to be accepted by everybody. It is obviously accepted by the Socialist Party, because they are going to continue it. It was introduced and sponsored very largely by the Conservative Party—and I agree with the Minister of Supply—so that I think the principle that we should have a monopoly, at least at this stage in Our affairs, is something which is accepted on all sides of the House.
    Mr. Dalton: I agree.
    Mr. Thomeycroft: I now come to the approach of the Labour Party as set out in a booklet, of which I retain a cherished copy, " Let Us Face the Future."It says:
    " Private monopoly has maintained high prices and kept inefficient, high cost plant in existence. Only if public ownership replaces private monopoly can the industry become efficient."
    And they propose that it should be taken over. Incidentally, what is all this talk about the careful impartial approach that has been given to this matter recently? It was long ago part of the policy of the Socialist Government that this industry should be nationalised. Let us be frank about these things. The Chancellor " let the cat out, of the bag "In the course of
    1036
    his remarks when he told the chairman of Richard Thomas that he was going to take it over in the days of the Coalition Government.
    Mr. Dalton: Speaking with the chairman of Richard Thomas in one of those many friendly conversations that he and I had together, I expressed an opinion about the probabilities.
    Mr. Thomeycroft: It seems to have been a fairly accurate opinion. It is one which we all recognise has come about. I am not quarrelling. All I am saying is that it is much better to be open about these things than to imagine that we have had an impartial examination. The point I wanted to bring out was this what was the reason advanced at that time by the Socialist Government? The reason at that time was that the monopoly had maintained high prices and kept inefficient, high cost plant in existence. Let us be clear about this matter of monopolies. Of course, all monopolies charge prices higher than those that could be charged by the most efficient plants. That is the object of a monopoly; it is the object of a private monopoly, and it is the object of a State monopoly. The idea of a monopoly is to prevent those violent upheavals and rapid changes in development which are inclined to happen under a completely free system.
    Suppose, for example—though I do not say it is something any party would suggest—that at this moment we said to Richard Thomas, " Forget all about Socialist nationalisation and controls and the rest of it. Put up a great steel plant and produce steel, and anything else you can as a result of the finishing processes, as cheaply as you can." Quite obviously they would probably charge a cheaper price than any monopoly suggested by the party opposite, or anything run under the very able administration of the right hon. Gentleman the Member for the City of London. (Sir A. Duncan). It is part of the price that we pay; we sacrifice the cheap price, the efficiency and the progress, in order to avoid the social consequence of rapid change, to some extent to keep plants in operation. Take another thing which I understand the right hon. Gentleman is going to do. The Minister of Supply in his speech made this perfectly plain. He said we should consider the location of these new industries. Indeed, we have to consider the location,

    1037
    and it may be that under the most efficient plan there would be set up a new steel plant which would take away the employment which other areas had previously enjoyed, thereby bringing very grave unemployment problems to a particular area.
    I agree with the right hon. Gentleman, that the industry, as a whole, has accepted this plan However, in the area around me, in Monmouthshire, there is the old Monmouthshire tinplate industry. I assure the right hon Gentleman that in Pontypool, where there has been a tin-plate industry for very many years, and where there is a conglomeration of various industries connected with the iron and steel process—iron and steel foundries, tinplate works, sheet works and so on— the plan as put forward by the Government will have very serious repercussions indeed. It will be no comfort to men in such areas to know that the repercussions are taking place under an industry owned by the right hon. Gentleman. What they are interested in is, not who owns the industry, but whether there will be a steel industry at all in that area. The point I wish to emphasise is this. Under any of these monopoly schemes, whether it is a private monopoly under the Iron and Steel Federation or whether it is a monopoly run by the party opposite, we are bound to make some sacrifices so far as efficiency and the cheapest price is concerned.
    I agree that everybody has accepted the principle that the iron and steel industry should be monopolistic in character. However, I would ask the Government to look at one thing. I have read this Report, indeed, I hope every hon. Member who participates in this Debate has done, and I observe that, apart from the big steel works—and this is a matter that was known to most of us before—there are vast numbers of trade organisations. There is an organisation that rejoices in the name of the British Grit Association, an admirable and very proper association, and there are many others. How many of those fix prices? How many of those really need to be organised on the basis of a monopoly? Take, for example, manufacturers of cast iron bedsteads. Is it really necessary that they should all be organised into a price ring? I think that at the very time the Government are concerned with bringing large sections of the industry into a tighter public ownership they might be equally concerned to
    1038
    see that there is a degree of enterprise among some of the extremer fringes of the industry. I pass that comment on to the Chancellor of the Exchequer, because it would be entirely consistent with the pledges of the Labour Party at the time of the Election.
    I turn to what, I think, is the real basis of this Debate. The real question we have to face is what the relations between the monopoly which exists and the State ought to be. The Government say the only way of dealing with it is that they should own the whole thing. That is their case. Of course, it is always very easy to find reasons for nationalising an industry. If it is competitive, like road transport, it is said that it is a most wasteful competition, that it needs coordinating, and that, therefore, it has to be brought together under a nationalisation scheme. If the industry has eliminated all competition and brought itself into a tight monopoly, it is said that it is one of those wicked cartels and, therefore, it must be taken over. Really, some of the arguments on this matter are becoming a little farfetched. Let me take the ordinary case which has been put forward in the past and is put forward here. It is sometimes said of an industry that the labour situation is such that public ownership is the only thing which will satisfy the labour force. That was said, with some degree of justification, in regard to the coal industry. I think the Chancellor would agree that argument would not apply here. On the other hand, it may be said that the industry refuses to organise. The iron and steel industry is not refusing to organise. It has produced a great many more plans than the Government have produced.
    I turn to the extraordinary reasons— and they are quite extraordinary—which were produced yesterday by the Minister of Supply. Some of them are astonishing. He said he would give us the reasons. The first reason he gave was that the priorities of finance would have to be laid down by the Government—mark this, the priorities of finance. The Minister of Supply did not suggest that the Government would have to supply the finance. Some hon. Members who followed him did, and the " Daily Herald" was trying to sell that statement today. "The public must find the money; therefore, the State must own the industry,"Is the cry, and one which

    1039
    the Government think might appeal to the public. It is, of course, an entirely false statement. The Chancellor of the Exchequer is not being asked to supply the money, and he himself very fairly stated that position today. All that is asked is that the Government should lay down the priority. Because a great basic industry such as the iron and steel industry is given priority over, say, silk stockings in regard to production and capital, is that a reason for nationalising it? At the present moment if anybody wants to build a laundry he has to get a licence for it. Is that a reason why the State should take it over? The argument got very nearly as far as that, because the Minister of Supply used the argument, not only with regard to money, but even with regard to bricks, saying that priorities and facilities would have to be given for the necessary labour and materials. Surely, that cannot be put forward as an argument for national ownership?
    He then went on to his next point— and I make this a substantial point—and said that this industry could not put through a reorganisation plan of its own. He said that this divorce of control and ownership would not work. What will happen to the rest of the Government's schemes and plans? I thought it was the proud boast of this Government that they were going to exercise over-all control over the main lines and strategy of our whole economic and industrial life. Is it part of their case that the control will not work unless they bring the other 80 per cent, of industry under public ownership? What about the working parties at the present time? What about the working party in regard to cotton, or the working party on the pottery industry? They have just reported back, and people all over the country are reading with interest the reports they have made for reorganisation and reconstruction in those particular industries. It is part of those reports, as I understand them, that the industries should remain under private enterprise. Is it part of the Government's case that this divorce of control and ownership will not work? If so, why are the working parties wasting their time going about the industries?
    I believe, and I have always firmly believed—and I think it will be conceded that I have been consistent in this matter —that it is part of the State's responsi-
    1040
    bility to have some control over our industrial and economic life, and that it is the job of industry to get on with the day to day running of industry. I had hoped, when the right hon. Gentleman and his colleagues appointed these working parties, that that was the kind of thing we could expect in regard to those industries, but it appears that even that hope is gone.
    I wonder why it is they want ownership. I do not think it is because of politics, in that sense. I think it is something a bit more fundamental. They want to do with steel what they think they have already done with coal—and, indeed, probably have done—and, to some extent, with cotton. They want to control the raw material. If they can control the raw material they will have the whip hand, not over one big industry only, but over all the hundreds, indeed, thousands of small industries in this country. It will not be necessary to come to the House of Commons and ask for the mandate of the House of Commons to nationalise those small industries. It will not even be necessary to get over the rather difficult affair of not having a mandate to do it at the Election. It will be possible completely to strangle them.
    We have seen what is going to happen already in the coal industry. There will be a Board to discriminate between one consumer and another, with power to favour the subsidiaries of firms under its control against firms in private enterprise. All the efforts on the part of the Opposition to introduce safeguards are resisted. I have no doubt we shall see exactly the same thing in the steel industry. I have no doubt whatever that a Bill will be introduced, and the making of steel will be in the hands of the Government; and some of the finishing processes will be in the hands of the Government, too. Will the Government sell to their own finishing process firms on the same terms as to their competitors? I think there is very little doubt about what the answer to that will be. That is, I think, the real reason behind the Government's desire for ownership.
    I do not want to speak any longer, but I am bound to say that I think the Government, in this matter, have missed a great opportunity. I do not know whether they have made a big mistake.

    1041
    It is always unwise to prophesy in politics. The events unfolding themselves in the industrial world are such that few of us could say that this or that will happen in so many years' time. This may be the big mistake of the Socialist Government. I do not know. But I do say that they have missed a great opportunity. If ever there was a chance for partnership between the State and industry, this was it. Let the Government, in a case like this, take 100 per cent, control to see a reorganisation scheme put through. Having agreed upon that scheme, let them take powers to put in managers, if need be, as they did in wartime under wartime controls, so that the reorganisation scheme can be put through in the quickest possible time. Having got the power to put the scheme through, let them put the immense responsibility on the reorganised industry of running its own affairs. That is the right course.
    What the Government have done is to take the worst of both worlds. They have iiddled about with reorganisation, and they do not know now whether they accept it or reject it, and they have got the ownership of 66 per cent, of the industry itself. That is not going to help anybody at all. I am bound to repeat that a great opportunity has been missed. I believe that if the Government had gone forward taking the control powers they needed to put reorganisation into effect, we should then have had the sort of Government control, the sort of Government planning, in which I have always believed; and, in addition, the initiative and enterprise amongst the men who have built up and who in the future will, I hope, build up the steel industry of this country.
    5.46 p.m.
    Mr. Ellis Smith: We are devoting our attention today to the industries which are the basis of modern industrial life, especially in our own country, which is more highly industrialised than any other country in the world. Let me make it clear that in the observations which I shall make, I cast no reflection whatever upon those engaged in the industry, the managements or the people who are rendering service in the industry. I make no reflection upon them whatever. Most of them have served the industry well. The contribution they made to the war effort will
    1042
    bear favourable comparison with that of any other section. Most of those engaged on the management side are big men, with a big outlook and with vision. Any Government that is courageous, that will plan scientifically, will command the confidence and wholehearted support of the large proportion of men engaged in the steel industry. They realise that they have been the victims of private ownership and finance capital, and of price fixing for far too long.
    This Report on the industry which we have before us is a well informed Report. It is the result of hard work, put into its preparation by managements, technicians, accountants and others. This Report provides us with a basis and with specifications upon which a plan can be drawn up and which it is time the Government were drawing up, with regard to our economic position as a whole. This provides us with adequate specifications upon which a really national plan can be drawn in order to build an efficient steel industry. Prior to. the war the output per person in the steel industry in Britain can be taken at 100. In the United States of America it was 400. Between 1935 and 1936 the annual value of output per head in iron and steel was in Britain £239; in Germany, £291; in the United States of America, £596; while our workers worked at least as hard if not harder than any in any part of the world. Indeed, they worked faster, longer, harder, and for less wages than the workers were receiving in the United States of America. Between 1934 and 1939 the average rate of capital expenditure, as the right hon. Gentleman the Member for the City of London (Sir A. Duncan) said this afternoon, was £10 million, and that in a period when we were confronted with the growing menace of the greatest military power that had ever existed in the world.
    The Steel Federation's prices in relation to other commodities, as noted by the Board of Trade Index in 1934—the excess of iron and steel prices—was 10.6, and in 1938 it was 37.7. I should like the Government to carry out as soon as possible an investigation into the costs for which this industry has been responsible during the past ten years. On examination we find that since the Federation began a policy of price fixation, prices have gone up compared with pre-

    1043
    Federation days. This has had a very serious effect upon those engaged in the heavy industries. It has seriously affected the engineering and shipbuilding industries, and our export trade. These industries have been subject to price fixing by trade associations, and this has affected internal prices and our export trade. The time has arrived for a full investigation to be made into the question of price fixation by the many trade associations in this country, and the time has arrived when national ownership must put an end to all this. Profitability has determined the policy of this industry, instead of technical requirements. For these reasons I am asking for an immediate investigation to be made.
    Government spokesmen and others are going about the country and appealing to those engaged in industry to increase production, and most of us in this House will be ready to cooperate in that appeal. But what are the facts? Our exports for galvanised, tinned and black steel sheets and plates of one-eighth stood at 1,395,499 tons in 1913, whereas in 1938 the figure had fallen to 554,870 tons. We cannot hope to hold our own in the world markets if prices are to be fixed in the industry as they have been during the past 13 years. Our exports of coal, steel and cotton have continued to decline during this period, and this is a serious economic fact, which we must face up to if we are to improve our standard of living. We on this side not only suggest increased production to make our country greater but a sustained raising of the standard of living of our people. Week after week we advocate important improvements in our social services, but our economic organisation must be upon the most efficient basis to have the maximum results from the human energy expended in industry. During the war our people proved how great they were, and our workers won admiration throughout the world as a result of the mighty contribution they made in the battle for freedom. People who can be great in war can be equally great in peace, provided that industry is organised on an efficient basis and its equipment is modernised with the necessary capital.
    We have no need to build up an indictment against the steel industry, because the facts themselves do so. I am not uttering a word of criticism in regard to the management of the industry, be-
    1044
    cause it is outside the industry that the trouble starts. Finance and capital have stood in the way of the development of our basic industries, but our people have decided that the industries must be organised on an efficient basis, to achieve maximum output, and so to increase our exports and enable this country to become even greater than it has been in the past. The main issue to be considered is what is the best road forward. This is a Report to fit the needs of private ownership. We now need to use it as a basis for preparing plans which will give the best results for the nation. The Report admits the need for large-scale expenditure in order to carry out urgently required modernisation. I very much doubt whether any Member on the other side who disagrees with the line we have taken, has studied the Report to the extent which he might have done. I would direct the attention of the House to a very serious statement on page 32 No one is to blame for this, because we were all victims of what took place during the war. The Report states:
    "The problem of building in a period of high plant cost is a handicap in relation to the United States, where 15 million tons of new capacity was built during five years when war conditions suspended new construction here. Part of the American expenditure was incurred by the Government and part by the industry."
    This is part of our case, and shows the urgency of the step we are taking.
    Lieut-Colonel Sir Walter Smiles: Will the hon. Gentleman read what follows, and show how the industry was permitted to write off the expenditure?
    Mr. Ellis Smith: Certainly, and this is evidence of what I am saying:
    " Part of the American expenditure was incurred by the Government and part by the industry. The industry was permitted to write off their expenditure at the rate of 20 per cent, per annum, and thus recover the outlay against war income. A major reconstruction and extension of capacity has thus been carried through in America with a legacy of very minor capital charges."
    It is essential that the same thing should be done here. The point I am making is that private enterprise is incapable of doing it, and is incapable of putting the industry on the same basis as the American steel industry.
    Mr. R. S. Hudson: Surely the reason was that, in America, private enterprise was not saddled as it was here

    1045
    with a 100 per cent. Excess Profits Tax? As to who is to blame for this, I would point out that hon. Members opposite were clamouring at the beginning of the war for a roo per cent. Excess Profits Tax.
    Mr. Ellis Smith: The logic of that remark is that the right hon. Gentleman stood for profit-making to be continued without any limitation. If I remember rightly, it was a Conservative Government which introduced the 100 per cent. tax, but in my view it was not administered in such a way as to make it really 1000 per cent.
    The Report means Government finance, Government concession and Government assistance. Let me emphasise to the Government that the whole of the Labour, trade union and Cooperative movements have opposed this drift for 15 years of the use of public money for the perpetuation of profit-making concerns. I congratulate the responsible Minister on having arrived at this decision with regard to the steel industry. What applies to the steel industry applies equally to other basic industries which are to be considered. Taking the modern view, the steel industry is essentially a national industry. The case made out by the right hon. Gentleman the Member for the City of London, who sees that public ownership is inevitable, was devoted to keeping the industry as long as he possibly can for those whom he represents so well. This Report emphasises that many plants are badly located, some are obsolete, and the capacity of others is far too small. It calls for integrated concerns, increase in the size of plants, more efficient production methods, production from the raw material to the finished product, fuel economy and more scientific research to be applied to the industry.
    All this calls for large-scale capital expenditure. All this means that you have either private national monopoly ownership or public ownership. We, on this side of the House, stand for full public ownership of the steel industry. The people recently voted for that, science demands it, and the economic needs of our country demand it. (An HON. MEMBER: " What kind of science? "] Industrial science. I repeat that science demands it. If hon. Gentlemen opposite were better acquainted with the scientists in the industry, they would know that scientists are demanding it.
    1046
    Twentieth century technology demands it. The technical advantages of public ownership are enormous. Here are some constructive suggestions—[HON. MEMBERS: " Hear, hear."]—far different from anything we have heard from the other side up to now. There should be set up a National Steel Corporation. It should be composed of a chairman, a deputy-chairman, and one other to be appointed by the Minister. They should appoint two others, and there should be three elected every five years by all engaged in the industry. Twice, in my relatively short time, we have fought in order to save democracy, and it is time that we had some instalment of democracy in industry itself. If the election took place every five years, this would stimulate great interest and keenness in the industry. Plans would be put before the industry; targets would be considered; and instead of having a policy imposed upon them, like the representatives of large-scale industry have done for too long, those who were serving. the industry and the nation would have a say in what was taking place. If any right hon. Gentleman or lion Gentleman opposite doubts the advisability of this, I invite him to read the story of the Tennessee Valley Authority. Our economic needs call for the production of a similar policy. This would stimulate great interest and achievement in the industry.
    Mr. Brendan Bracken (Bournemouth): Is this a reflection on the composition of the National Coal Board appointed by the present Government, which does not include elected representatives of the industry? It is a most interesting suggestion, and I hope that the Chancellor will listen to it.
    Mr. Ellis Smith: We are not considering the Coal Board now, and so far as the industry is concerned, we, unlike horn Members on the other side, are making constructive suggestions on behalf of the people, which, if they do not receive consideration now, will receive it sooner or later.
    Acting under the national concern, I suggest that there should be a North of England Steel and Metal Corporation and Midland, Welsh and Scottish Corporations. They should have the powers of decision within limits, and local reasonable. autonomy. Give our people the tools, the equipment, and they will deliver

    1047
    the goods. We must have a grouping of plants which will result in maximum efficiency, and I am suggesting this decentralised regional organisation. because, in my view, it is the.best way to bring about maximum efficiency. It is because we realise that the efficiency and the future greatness of all modern countries are largely based upon the greatness of the steel industry, and upon its efficiency that we say that there are only two ways forward: either the way towards national monopoly ownership, or the way towards public ownership, running the industry for the benefit of the people, and, at the same time, making a great contribution towards solving mankind's economic problem.
    Therefore, we have reached the stage when mankind has got to embark upon a policy of cooperation internally, and a policy of cooperation throughout the world. This is a big step forward towards building up cooperation internally, towards harnessing the people's energy to the maximum extent, towards increasing productivity, and, as a result of that, increasing our contributions to the export trade, and towards bringing about, and laying the basis of, international economic cooperation. In that way, we are helping to solve mankind's economic problem, and it is only in that way that we shall avoid a repetition of what we have already passed through on two occasions.
    6.8 p.m.
    Mr. Maclay (Montrose Burghs): I do not propose to follow the line of argument of the hon. Member for Stoke (Mr. Ellis Smith). He speaks with a great sincerity, which one must respect, but the reason I do not like following him is that nearly always he says a remarkable number of things about which one wants to argue indefinitely; and, with the time at one's disposal, that cannot be done. I believe that the objectives which he is after are the same as those of all other hon. Members: A really efficient industry, and the best standard of living for the men in it. But we fall out sadly on the methods of obtaining it.
    At this stage in the Debate it is very difficult to avoid a certain amount of repetition. One must go back over what has been said, and I think that at this stage it is permissible to do so. I am afraid that I am going right back
    1048
    to the Minister's speech. I am not an expert on steel. I am one of those who have worried a great deal in the past about the monopolistic tendencies which appeared to exist in the steel industry. I can say that when the firm with which I was connected was building ships in the years before the war, we may have made one or two thoroughly irresponsible statements about the steel people, such as the statement quoted yesterday of an eminent leader of the motor car industry. Lots of us felt that there was something to worry about in the growth of this monopoly, and I agree that some of us may have made that kind of remark, although we were ill advised to do so without looking into the facts very carefully indeed.
    The facts as presented by the Minister in his opening statement, if correct and wholly true, were very disturbing. I have been carefully through his speech in HANSARD and I listened to it. I should say that it is not only the written word but the effect on the House that must be considered. The impression I got from his speech is that this industry, after a period of boom, became thoroughly inefficient between the wars, was saved from disaster by the import duties, and thereafter formed itself into a centralised, monopolistic control, maintaining high costs and high prices by inefficient methods, all of which was free of any national control and conducted without regard to the public interest. Such was my impression of the speech. Here I might quote one sentence from the Minister's speech:
    " No national control was established adequate to prevent a steep and steady rise, not only in prices, but in profits."—[OFFICIAL REPORT, 27th May, 1946; Vol. 423, c. 846.]
    I think that the Minister will agree that this version is a fair enough impression of what he said yesterday. It is necessary to agree on the facts in a matter of this importance, and if I am wrong in anything, I hope the Minister will correct me. But this is not what happened. In the last war this industry was forced to expand quite unnaturally to meet the demands of that war. In the 'twenties it, more than any other industry, met the full force of world economic fluctuations; it was then faced with competition from the Continent, which amounted to dumping on these shores goods produced with very low paid labour. It sought protec-

    1049
    tion and, having got protection, it started to set its house in order. It made quite remarkable progress in doing so considering it had only three years in which to do it, because we must remember that the crisis in the steel industry started in 1936 when the demands for war production were beginning to appear. During that period attempts were made to modernise, but it was equally necessary to keep old inefficient plants in existence. They could have been and should have been closed down, so that the charge, possibly, in " Let Us Face The Future "That high cost plants were kept going is correct, but they had to be kept in existence. Otherwise where would we have got the material for the rearmament programme, and what might have been the effect in this war if we had been without them?
    During these years the steel industry was trying to do what it could to modernise, but it had to keep its output going. Let me come to the final charge, that of no adequate control. Is it not correct that when import duties were imposed, the whole structure of prices had to he submitted to the Import Duties Advisory Committee? I turn to the point made by the hon. Member for Stoke. He was talking about costs and suggested that surely somebody should have a look at these costs. Is it not correct that in order to establish prices, the steel industry had to submit costs in great detail to the Import Duties Advisory Committee. I ask the Minister if that is correct. I repeat my question. During the period we have been discussing, after the advent of the import duties, did the industry consistently submit to that Committee detailed costs before any price was fixed? I am very anxious to get that point clear, because from my point of view it is very important that hon. Members opposite should know it.
    Mr. Wilmot: The short answer to that is that they did so. But that is not sufficient to answer the question. Part of our case is that an industry cannot be effectively controlled and developed unless it is owned by the Government. It cannot be done by controlling prices of an organisation on an inefficient structure.
    Mr. Maclay: That is a completely different argument.
    Mr. Wilmot: Not at all. It is the whole basis of our case.
    Mr. Maclay: I am dealing with the charge that a private monopoly maintained high costs and high prices.
    Mr. Wilmot: That is true.
    Mr. Maclay: I leave it to the House to decide. I have made my point. The Minister has turned the question into a completely different argument. I am going to repeat what I said, because it is important that hon. Members opposite should realise it. I am sorry there are so few of them here at the moment, but I can quite understand it as I am speaking.
    Mr. Dalton: Where is the Liberal Party?
    Mr. Maclay: The true Liberal Party is now speaking. I was going to repeat that on this question of costs, ever since these import duties were brought into existence, the industry has been submitting full details of its costs to this Committee. The Minister has agreed to that, and also that no price was fixed until these costs were thoroughly scrutinised.
    Mr. Wilmot: If the hon. Member is going to ask me a question I wish he would allow me to say again, that nobody can be a low cost producer, if he has an obsolete plant and the Import Duties Advisory Committee has no power to change the plant.
    Mr. Maclay: I agree. I have been trying to make it clear that I was only dealing with one charge against the industry. In the amount of time which is allowed to a back bencher one can only deal with one aspect of the case, but I should be delighted to deal with more if I had the time. I have, I think, established that the Minister's version of the industry is very far from the true position. It is one of those dangerous quarter truths. I have a great respect for the Minister, and I do not accuse him of deliberate misrepresentation, but I do say that in his presentation of the case he failed to put the facts before the House.
    I admit that the steel industry presents an enormous problem to the country. There is the whole question of:As organisation and its relation to the Government. I think that there are other

    1051
    industries in t he same position, which will have to be considered sooner or later. I think it is folly for people on any side of the House to shut their eyes to that. We have reached a stage in evolution where the relationship between industry and Government has got to be decided. I was going to add " once and for all," but the way in which the Government are going to decide it now, is no good. I think the Minister put the matter very clearly at the end of his speech. He stated that:
    "This divorce of control from ownership will not work and it must stop."—[OFFICIAL REPORT, 27th May, 5946; Vol. 423, c. 858.]
    That is the real fundamental question we have to discuss here. It is not really a question of the efficiency of the industry. Not once in the Minister's opening speech did he mention the future efficiency of the industry. I have been through it carefully and I have checked it, and no trace exists of any such reference. Further, no argument has been put forward by any hon. Member on the other side of the House as to how the future efficiency of the industry is going to be maintained by State ownership. I am afraid I am repeating a great deal of what one hon. Member on this side of the House said, but it is important that it should be emphasised—that no claim is made that nationalisation can make the industry more efficient.
    What I would submit to the House is that in the Federation and its relationship to the Import Duties Advisory Committee we have an approach to a solution which however may not be ideal. There was control of costs and prices, and the Federation has been so organised as to make general modernisation of the steel industry possible. That is progress. The Federation has got a certain organisation, and it has got a certain relationship with the State. It states categorically that it is willing to develop this relationship. The point is that it is difficult to develop this relationship between industry and Government. The whole trouble is that the Government are taking the easy way— when they run up against this business's of how really to arrange the relationship in a democracy between a large scale industry and Government, the only thing they can do is nationalise it, But it really
    1052
    is a certain way of ruining the industry in the process.
    I want to make one last important point, 'to refer to the interesting, speech which the hon. and learned Member for Kettering (Mr. Mitchison) made yesterday. He discussed at some length, and with considerable effect on those who heard him, the question of the export of scrap iron to Japan before the war. I want to put this point to him, and to those who feel that the State ownership of the scrap iron industry would have made that kind of thing impossible. I will quote from my own experience. The shipbuilding firm with which I am connected, in the difficult period in the autumn of 1938, had a ship moving towards a certain country. We got a message from the Board of Trade saying that it would be a good idea if we diverted that ship. Immediately, by telephone, we said, " Could you give us your reasons and, what is more important, could you give us your instruction to divert the ship? "The answer was, " No." As some Members may know, when bills of lading are signed for a ship's voyage the insurance is invalid if the ship deviates from that voyage. One requires a Government instruction to keep the insurance valid. It is known technically as a " Restraint of Rulers and Princes."Therefore, we asked, " Why cannot we have orders to divert? " and the reply was that orders from the Government to divert the ship might provoke a diplomatic incident, and make the existing position infinitely worse. So we had to find some means of not arriving in that country.
    If there was a proper relationship between industry and Government, working through various possible expedients which I have not time to detail now, the Government would be able to work with industry to achieve all sorts of objectives, including diplomatic objectives. If the Government are in actual ownership they will create crises almost every time—
    Mr. Mitchison: Would it not have been much simpler if the ship had belonged to the Government, instead of to the hon. Gentleman's company?
    Mr. Maclay: No, that is just my point. The ship was carrying cargo for an Italian firm. If it had been a Government ship, the bills of lading would have been precisely the same.
    Mr. Mitchison: Why?
    Mr. Maclay: Because there must be bills of lading for every cargo. If the Government had wanted that ship not to arrive, they would have had to break the bills of lading, and the result would have been immediately obvious. It is no secret that what is done in these cases is that the engineer of the ship, most surprisingly, finds that the coal is not burning very well. I use that as an illustration of Government owned property getting mixed up in international events. I could go on for a long time about this subject, but I must now stop.
    6.24 p.m.
    Mr. Alfred Edwards: I would first like to deal with one point made by the hon. Member for Montrose Burghs (Mr. Maclay) about the Import Duties Advisory Committee, as this is a matter which wants clearing up. It is true that iron and steel manufacturers could not raise their prices without the permission of the Advisory Committee, but that Committee had no power whatever to question the cost placed before them. Once satisfied the cost placed before them was the real cost the high price could still be put through by an apparently inefficient industry. Therefore, the argument about inefficiency is entirely irrelevant—
    Mr. Maclay: That is a separate argument which I could not deal with without trespassing too long on the time of the House. I was concentrating on the general charge made yesterday, that the industry was uncontrolled before the war.
    Mr. Edwards: The Advisory Committee could fix prices only on the cost given to them. Yesterday, the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) mentioned that prices were agreed by the Advisory Committee. He might have told how often manufacturers went before the Committee, and had their increases refused. The people we are dealing with today, and those who are charged with inefficiency in the past, are those who were always claiming increases. The fact that there was control, through the Advisory Committee, kept prices down. Had there not been that Committee prices would have shot up to a higher figure.
    Mr. Maclay: Surely the hon. Gentleman is making my point, that there was effective control.
    Mr. Edwards: We are dealing with people who have run the industry, and the charge is made that they have run it inefficiently. The facts are there. They made application several times for increases, which were not allowed. Their costs should have bean lower than they turned out to be. It was said many times yesterday that nationalisation will not make the industry more efficient. I have never heard anybody say that it would. I have never heard anybody say that nationalisation, in itself, would make any industry more efficient. What it will do is to give us an opportunity to -make the industry more efficient by having control of it. Nothing can be done until there is this control. I agree that the test is up to the Government and, in particular, the Minister. My right hon. Friend now has the opportunity, arid that is all that is claimed for nationalisation. The hon. Member for Monmouth (Mr. P. Thorneycroft), and others, said that the people who drew up the reorganisation plan were willing, anxious, and able to carry it through. Are they suggesting that the same people will not be willing to carry it through if the industry is nationalised? The point is whether the plan can be carried through more efficiently under national ownership than under private ownership, which has a bad record, as I shall show later.
    I think the same hon. Member also said that he advised the Government to take no per cent. control and ownership, and to leave it to them to run the industry. I could not follow what he was talking about. He cannot have it both ways. If the Government take 100 per cent. control of the industry who are the, "they," who are to run it? They are the people who are the brains of the industry, who are underneath, and nobody has any reason to suppose that these brains will not still be there. The best brains are not always to be found on the boards of directors. There is some confusion of thought here. On the boards for every steel manufacturer there are two or three chartered accountants, or expert financiers.
    I do not know what the right hon. Gentleman the Member for the City of London (Sir A. Duncan) was getting at when he was speaking of Skinningrove. The Minister read a letter which was as clear as it could be, that Skinningrove has to go. It is suggested in the Report

    1055
    that it must go though it may have to be kept going for some time inefficiently, but only until the long term policy can be developed. It is clear that Skinningrove cannot survive. People have objected to the scheme because they say that is the implication. But it is more than that, it is a definite statement that that plant must go. The men who have to fork in it know better than we in this House that it must go, and cannot possibly survive. It would be an absolutely uneconomic plant. I do not know why the right hon. Member for the City of London made such heavy weather over that. I think it is perfectly fair and that people mean what they say. No doubt a little pressure has been put on, in the meantime. Members opposite talk about this enormous amount of money which is to be spent, as though they were setting out on some grand plan of reconstruction. It is not that really. The Report itself said that they are merely maintaining the rate of progress which they had before the war, and which was interrupted by the war. It works out at about £million per annum on a prewar basis if we take postwar costs which they suggest have a 100 per cent. increase. It is the same rate of progress on prewar and comes out at about £7 million per annum. That does not suggest great vision.
    Our greatest competitor and biggest exporter of steel in Europe is now out of the market. Yet it is suggested that a reorganised industry can only make provision for half a million tons increase. Do these visionaries expect us, with our biggest competitor gone, to increase our export by no more than half a million tons?
    Sir W. Smiles: Does that not take into account the increase in the steel industry in India and in South Africa?
    Mr. Edwards: That may be, but I should have thought that there is a great advantage to exporters here.
    Sir W. Smiles: In India the ore is actually beside the coal mines
    Mr. Edwards: Yes, but they have to compete with us in Europe. I can take hon. Members back to the days when on the Tees we saw pig iron coming from India into that district; Half our blast furnaces were out—why? Because 50
    1056
    per cent. of them were nothing more than junk and have been absolutely obsolete for more than 20 years. With all our technical knowledge we have not kept up with our equipment and we saw pig iron coming all that way while billets were coming from the Continent and our men were unemployed. Neither the industry nor the Government of the day could do anything about it. That is a very good argument for a little more Government control.
    But I wanted to make a point about this great expansion. I do not think it is a visionary idea at all. There is a steel famine in Europe and immense quantities are needed at home. There is not a word in the Report which says definitely that they can get the money they want. There are such phrases as "It is not improbable " and that kind of thing.
    Mr. Orr-Ewing: Has the hon. Member heard a single word from the Government Front Bench as to how much money they propose to put into the industry if they nationalise it?
    Mr. Edwards: I can answer that straight away. They can put whatever money is required into the industry to bring it to the state in which it should be. What is important is that no longer should commercial profit be the dominating influence in the industry. The right hon. Member for Aldershot taunted the Minister with the possibility of having dual control, and said that we might take over a plant up to the billets and would not then know what to do. But t e Government have put forward a perfect plan of integration. It is a plan for coal, iron ore, transport and power, and iron and steel. What more perfect integration do you want in industry than that? I suggest that you cannot do without any one of those things, and if we left out one we would be asking for trouble. We must have absolute control of them all. The Government propose that, and I am very glad they do So.
    I come to my own district for a moment. One very strong reason why I support the Minister is that in this industry, as in many others, the leopard does not change its spots. The welfare of thousands of my constituents depends on this industry as there are no other big industries on the Tees, which is almost entirely iron and steel. In the old days,

    1057
    there was a certain amount of integration but what was it for? For the public benefit, for national security? No. It was gambling in the most reckless manner to get profits and high prices. The right hon. Member for Aldershot dodged this point yesterday, and said he was not expert on this. But he was asked a question on which he is expert, on watered capital. When asked about watered capital, what happened? He was scuttled, and he skedaddled. I will tell the House what watered capital is. Dorman Long's bought in Middlesbrough for £1,250,000 a plant from Samuelson's. it was never worth more than £250,000, and in a comparatively short time it was scrap iron, and never again earned a penny. Dorman Long have had to lease their cost on all that watered capital ever since
    Sir Arnold Gridley: The hon. Member is not quite right. Dorman Long's wrote millions of share capital down.
    Mr. Edwards: That is quite right. But up to that point, the watered capital existed. It is true that the workers, many faithful employees, had put their life savings into these shares and they lost their life savings. The pound shares were cut down to 2s. The hon. Member for Bolton (Mr. J. Jones) spoke about it here yesterday. The cream of the industry, the essence and the very heart and soul of the industry, put their life savings into the industry, showing their confidence. Eighteen shillings out of every pound was lost. Is that efficiency? I admit that the industry went through a bad time. It was not all its fault. It had some bad luck but nobody who honestly investigates the history of the iron and steel industry in this country dare say that it has been very efficiently managed. For many years Dorman Long never had an executive on a board of directors—never was there a man who had come from the works and had worked his way up, a representative of the men who really made the money and really ran the industry. Time after time, I could trace men from that industry all over the world. There was not much encouragement here in those days. It may be better these days. But one cannot take the position as one sees it today; one has to take the history and see the mentality of those who rim it, and see if it would not be better if the nation itself
    1058
    had responsibility for these great basic industries.
    I am not sure that I would insist on the Government showing a return for the Government's capital. There must be a profit and loss account. There is no substitute for that. There must be proved efficiency. The Minister will be responsible as in the case of the coal industry. I do not see the sense of this—every time the cost of coal goes up three shillings is put on steel. I think this is bad practice. When the industry is privately owned one cannot afford not to do it. When it is Government owned we can do something about it. [HON. MEMBERS: " What? "] Use public money. Use public money as we do for stabilising food prices. I would stabilise coal prices if I were sure it would be economic to do it. Why is it not? If one puts a shilling on coal and then pays 3s. on steel, and other manufacturers have to increase their prices, we have no stability. The Chancellor of the Exchequer could justify using public money to cover that loss because he would be. saving an immense amount more in fie-cycle of production.
    Mr. William Shepherd: How is the Chancellor saving more money? I cannot follow the argument. Is the hon. Gentleman suggesting that, having got an increase in the cost of coal, if steel costs increase, we should not pass it on to other manufacturers? Where is it to end?
    Mr. Edwards: If the hon. Gentleman wants assistance, I will help him to reason it out. I wish the House would reason it out. Where does it end? It does not end. It goes round and round until there is a war, and then we use public money without limit. We finish where we were. It is simple enough. If we do not cover it with public money and our price has to go up. the prices of everything—nothing can escape it—must rise and wages must follow Is it not better to absorb that cost in the first instance instead of the last? We pay it in taxes. Is it not cheaper in the long rim to pay a little more tax through the Chancellor than put this increased cost on everything we do?
    Mr. Bracken: Would the hon. Member apply that in the export trade?
    Mr. Edwards: That is the very trade that can be helped, if we can stabilize prices. But if every time the coal price rises by is., steel is 3s. more, how is that going to help?
    Mr. R. S. Hudson: That is prohibited under the commercial agreement with Washington, which the Chancellor signed.
    Mr. Edwards: And some people find ways of getting over that, but their system will have the same effect.
    Mr. Bracken: Does the hon. Gentleman suggest, with the Chancellor of the Exchequer present, that some devious methods are going to be used to get over an agreement we have signed with the United States?
    Mr. Edwards: But if they are being escaped by other countries, he may have to reconsider his policy.
    Mr. Hudson: This is a most serious statement—if the hon. Gentleman carries his party with him, one of the most serious statements made for a very long time—having regard to the fact that at the present moment the Loan Agreement is going through Congress in the United States on certain assumptions and one of those is that the commercial agreement will be honourably carried out. If hon. Members opposite are going to say there are methods of getting round it, their words will be repeated in Washington with disastrous effects on the Loan.
    Mr. Speaker: The right hon. Gentlernan will be able to make a speech at a later stage, but he must not do so now.
    Mr. Dalton: I think the hon. Gentleman had better get on to another point.
    Mr. Edwards: If anything is quoted abroad it will be the right hon. Gentleman's words, not mine. Nothing that I have said would bear the construction he has put upon it. I was arguing the matter from a purely economic point of view, and that is perfectly sound. We should go to the period I was discussing when these agreements were not in existence. The hon. Gentleman must not try to distort my statements. Some figures were quoted today about the cost of steel. We were told that before the war we were selling steel at 10s. a ton lower than America was selling it. The argument was that in spite of our supposed inefficienccy, we were able to sell steel cheaper than America. I have some figures which I want to go on record. Either my figures or those which were quoted are wrong. In 1938 basic pig iron was sold in America for £4 2s. and
    1060
    in this country £5; rails, £8 in America and £io 2s. 6d. in this country; joists, Rio in America and £ir in this country; plate at £9 10s. in America and £ir 8s. in this country. The arguments fall to the ground if my figures are correct. I am glad to put those side by side with the others. Perhaps one of us will have to withdraw his figures. At least we ought to know where the other figures come from.
    It is constantly put forward in arguments from the other side that this great bureaucracy which we are building up is bound to bring us down sooner or later. It has never been admitted on a single occasion on this side of the House that there is to be a bureaucracy. The whole efforts of the Government are to find a form of control which would be more efficient and not less efficient than the methods in the industry today. I admit quite frankly that one cannot do that with a vast bureaucracy, and the present Government will fail if they slip into a bureaucracy. Hon. Members must not continue to advance that argument as though it were accepted that because the industry will be government owned there will be a vast bureaucracy and the inefficiency associated with bureaucracy. That is an entirely false and dishonest argument.
    Mr. Jennings: How does the hon. Member propose to avoid it?
    Mr. Edwards: I could tell the hon. Gentleman if there was time. There are many ways—some very simple. Perhaps my method will be too simple for the present Government, so I will not go into it now. We could get beneficial ownership without very much trouble at all—pretty much the same way as we got beneficial ownership of Imperial Airways. I think to buy the shares of the company would be a very short cut. If the Minister wants to own a particular industry, he could take shares in that and get beneficial ownership quickly, and could decide improvements and management later.
    Mr. Jennings: That is the honest way to do it.
    Mr. Edwards: Perhaps that is the best way to do it. I do not want to see all kinds of boards superimposed on industry. It might be very dangerous and

    1061
    there are the elements, at least, of bureaucracy there which I hope we shall avoid, and I have no reason to suppose that we shall not be able to do so. If we could get ownership in a simple way, however—perhaps I am over-simplifying it—I hope at least 'the Government will give some thought to it, but it is not honest of lion. Members opposite to make speeches based on the assumption that there will be in the control of this industry a vast bureaucracy, because there is no foundation for it. There may be suspicion. Well, we have had suspicion about private industry for many years. Such bureaucracy as we have in this country has been built up by hon. Members opposite under Tory Governments, for we have never had an opportunity to build up a bureaucracy. So such red tape and bureaucracy as exists is entirely the fault of Tory Governments, and I hope hon. Members will cease to base their speeches on that particular false assumption.
    6.52 p.m.
    Mr. George Ward: I have listened to almost every speech made so far in this Debate, and the more I hear from hon. Members opposite, the more obvious it becomes that there is only one real reason why they want to nationalise the iron and steel industry. That reason was revealed last week in an article in the "Tribune," from which I will quote:
    " Steel is a basic industry, and those who control its fate must wield tremendous political power."
    This revealing statement by a Socialist publication at once betrays the whole object of hon. Members opposite. It also reveals once again the Socialist determination that no one except Socialists shall have any political say whatsoever. Incidentally, the statement completely overlooks the fact that before the war the industry was virtually governed by a State committee, which had statutory responsibility to safeguard the interests of the consumer and the community as a whole, and that the industry has made it amply clear that it welcomes a continuation of this supervision and indeed would be the first to agree that such supervision would always be necessary in the national interest. It is true that several somewhat abortive attempts have been made by the Minister arid by hon. Members opposite to justify this extraordinary decision, this
    1062
    piece of purely political folly, by producing one or two rather thin arguments.
    First of all, there is the old well-worn if not threadbare mandate, of which we have heard so much. But if anybody voted for the Socialist Government because the iron and steel industry was to be nationalised, which I very much doubt, they could only have clone so in the belief that the nationalisation of the iron and steel industry would benefit the consumer. No one wants to become a shareholder in the iron and steel industry against his will by paying higher taxes than necessary. The only reason they voted for it was because they really believed that the consumer would benefit. If that is so, why is it that not one single user of steel, or any organised body representing steel users, has yet raised his voice in welcoming the advantages which the Government claim will accrue from the public ownership of the industry? On the contrary, the National Union of Manufacturers, the most important single body in this country, representing 4,003 firms who depend on steel products, came out categorically yesterday with the following statement:
    " British manufacturers want an adequate supply of iron and steel at prices which enable them to compete in the markets of the world, both in regard to direct sales and in the provision of machinery for our industrial population. The industry's own plan is designed to achieve this with the least possible delay."
    Surely, that is clear enough, and if the consumers do not want nationalisation; if the consumers are quite satisfied with the plan produced by the industry, then I submit that all the mandates in the world will not justify the Government's decision.
    Secondly, the Minister tried to justify himself by saying that the industry had become a private monopoly. He complained that a previous Government had encouraged this state of affairs and had protected the industry by a tariff. What he should have said was that a previous Government encouraged the industry to unite in the national interest; it encouraged give and take within the industry, with the object of achieving the maximum saving in costs by the greatest possible degree of integration, both within a single plant and on a basis of inter-district planning. These aims hold good today, and they are the main aims behind the industry's plan in addition, of course, to the modernising of the plants con

    1063
    cerned. With regard to the protective tariff, I think it is generally acknowledged that this marked the turning point in the fortunes of the industry. If from the Minister's sneers at this tariff we are to assume that he intends to abolish it, then let me assure him that it will be the quickest possible way to plunge the industry back into the parlous condition in which it was left by the last Labour administration in 1931, when they were forced to hand over to a more competent Government.
    We have also had some highly misleading figures given to us on the question of prices. The fallacy of those figures has been exposed by other speakers, notably by the hon. Member for Stockport (Sir A. Gridley) and by the right hon. Member for the City of London (Sir A. Duncan). However, I think there is one point in regard to prices which cannot be over-emphasised, and that is that the greatest single factor in the price of steel is the price of coal. British steel makers are now paying twice as much for their coal as American steel makers, and hon. Members opposite, when they talk about competition in world markets, should realise that in competition with the American steel maker, the British steel maker starts off with a disadvantage of $8.50 per ton due to the cost of coal alone.
    Mr. A. Edwards: In view of what the right hon. Member for the City of London (Sir A. Duncan) told the House, are these prices for coal delivered or at the pit mouth?
    Mr. Ward: These are at the pit mouth.
    Mr. Edwards: Then the figures which were given to the House must be quite inaccurate.
    Mr. Ward: I do not agree at all. If the Minister can tell me how the nationalisation of the iron and steel industry is going to reduce the price of coal by one penny, it would be a very interesting piece of information. That, I am certain, is the only way in which he can possibly keep the price of steel down, but I am not going to enter into an argument with the hon. Member for Middlesbrough, East (Mr. A. Edwards) about his rather quaint way of coping with that situation merely by handing the loss over to the taxpayer.
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    The point I did want to emphasise is that for the last ten years the steel industry has submitted to open public supervision of its prices and price policy. There has been nothing underhand, and its present plans assume that such supervision will continue. That has been made abundantly clear by the industry. The Minister of Supply very properly paid a tribute to the industry for its proud achievements during the war, but he somewhat spoilt his tribute I thought by claiming a large part of the credit for Government control without which, he insinuated, the industry would not have been run so well. How does the right hon. Gentleman reconcile that with his later statement that the divorce of ownership from control will not work? Hon. Members opposite are very fond of saying that because Government control of industry worked so well during the war it must automatically work well in peace, but it now appears that, although it worked very well during the war, it will not work in peace. It is sometimes very difficult to follow their arguments. What they are not prepared to admit is that it was the self discipline which the industry imposed upon itself in the national interest which was the secret of its success.
    The Minister asserted that the Federation would be unable to impose its will on the industry. That point has been touched upon by other speakers, notably by my hon. Friend the Member for Monmouth (Mr. P. Thorneycroft). Of over 400 undertakings the Minister could only cite three which had raised their voices in any sort of protest, and even then that was proved today by the right hon. Member for the City of London to be not quite so accurate as we thought yesterday. How does the Minister's assertion square up with that of the hon. Member for Wednesbury (Mr. S. N. Evans), who suggested yesterday that when the right hon. Member for the City of London sneezed the industry caught cold? Hon. Members opposite really cannot have it both ways.
    Of course, the Federation was very well aware that its plan would not be accepted by everybody in the industry without protest. That was not its aim. The aim of the plan has been made amply clear, and the Federation was perfectly prepared to take firm action in the best interests of the industry as a whole provided it received the backing and approval of the Government. It would, of course, have no diffi-

    1065
    culty whatever in forcing its will on the industry had the Government given their approval to the scheme in principle. Immediately, the rather burning questions, such as the location of industry, could have been very easily solved by discussion with the industry, and the Government would have found the industry fully prepared to co-operate and to meet the Government half way in discussing the problem of the upheaval of social life in various areas. These difficult problems should have been tackled on the basis of discussion between the Government and the industry without loss of time.
    I submit that as a massive, intricate, and courageous plan, the Federation's blueprint can hardly be improved upon. Indeed, I think the Government are extremely fortunate to have such a solid foundation on which to build their flimsy and impermanent fabric of management from Whitehall. One can only prophesy that such an enterprise will founder. In my view it will prove to be the costliest national experiment and the costliest piece of Socialist research this country has ever seen and, ironically enough, this is the country in which the fundamental processes of steel making have their origin.
    7.6 p.m.
    Mr. Edelman: Right hon. and hon. Members who have spoken so far have, for the most part, either been associated with the iron and steel industry or have actually represented steel producing constituencies. For myself I lack either of those qualifications but I feel urged to speak for other reasons. I was born in South Wales; and as I heard the Chancellor of the Exchequer speaking I recalled very vividly how the people of the countryside were delighted by the red glow at night of the furnaces over the Dowlais works near where I was born. It meant that men were at work. I recalled also how far more frequently than that gladdening phenomenon, the people of that region saw derelict furnaces, derelict villages, and derelict men. I feel that on both sides of the House we all hope that it will not need another war to bring prosperity to that region and to other regions of the same kind.
    For that reason, in approaching this great basic British industry we must do so with open minds, and consider the
    1066
    whole question of nationalisation or reorganisation on its merits. At certain points the decision will cut across parties. For example, in the City of Coventry which I represent in part, it is not only the workers who in the past have felt that something should be done in order w make the price of steel competitive with that of other countries, but the employers too have thought the same. My right hon. Friend the Minister of Supply yesterday referred to something that Lord Nuffield had said about the cost of steel during the 1930's. Whatever the reason, it is a fact that in Coventry, as a steel consuming city, as a city where steel is fabricated both for the home market and for export, there was considerable dissatisfaction at the steel shackles which were laid on its capacity to compete both in the domestic and the world markets. Quite clearly, unless the motor industry and also the machine-tool industry can purchase steel at world competitive prices, our own industry will be hampered and prevented from competing effectively in world markets once the present boom has come to an end. For that reason we are concerned about the question of obtaining steel cheaply.
    We can quite understand in Coventry that the iron and steel industry wants to be protected. At the same time, even if the iron and steel industry were fertilised with all the generosity and guarded by all the tariffs which a benevolent Government might bestow upon it, it would still be necessary, at a certain point, for steel to be produced in this country at prices which are competitive in the world market. I wish to quote only one current price in order to show the handicap from which the motor industry is suffering at the present time. Twenty gauge cold rolled close annealed steel, delivered to the British motor manufacturer, now costs £23 per ton. In the United States exactly the same steel costs, delivered, the equivalent of £20 3s. 8d, As various hon. Members have pointed out, that is not due to the fact that the worker in the British steel industry is the beneficiary of this increased price. The average wage for a worker in the British steel industry, working a 50 hour week, was 2s. 6d. per hour last July, In the United States last December the average wage of a worker in the steel industry working a 40 hour week, was 45. 6d. per hour. I do not say that to the disadvantage of the British steel in-

    1067
    dustry or in order to deprecate its intentions.
    On both sides of the House we must congratulate the workers, technicians and the people who directed the policy of the iron and steel industry in the last ten years, on the way in which they made a contribution, first of all to the effort of rearmament, and finally to the provision of iron and steel and iron and steel products during the war. At the same time, we must all recognise that the existing equipment of the iron and steel industry is either obsolete, obsolescent or old fashioned.
    Sir Peter Bennett: Surely the hon. Member does not intend to leave that point of comparing American prices with British prices without referring to the difference in quantity and the continuous strip mills which the Americans run? He ought to refer to the great advantage which these give them in offsetting the wages difference to which he has quite fairly referred.
    Mr. Edelman: I was not describing our own industry to its disadvantage when comparing it with the American industry. I was only stating the fact that at the present time, our own industry, for various reasons—possibly because the Americans started later than we and thus have more modern equipment—is at a disadvantage as compared with the American iron and steel industry.
    The task before the country is not only to overtake American industry but to surpass it, and once again take the lead in Europe and the world. That is the problem to which we have to address ourselves on both sides of the House. How is that to be clone. On this side of the House it is suggested that nationalisation is the method by which we will be able to re-equip and re-organise our iron and steel industry, and give it a lead over the other steel industries of the world. On the other side of the House there is the idea that the iron and steel industry can be reorganised and integrated in its present federative form, and that in that way it can go ahead, and not only obtain better results than nationalisation, but continue to make the progress which hon. Members consider it has been making since the Federation was formed.
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    In order to try to make some kind of prognosis of how the iron and steel industry would develop if it were left alone in its present form, I would draw the attention of hon. Members to a most interesting document which was published during the war, under the signature of 120 leading industrialists. It was called " A National Policy for Industry." Amongst the signatories were the Earl of Dudley, Lord McGowan, Sir Cecil Weir and a number of equally distinguished industrialists, who have made incalculable contributions to the industry of this country. If one reads that document one sees that here indeed is a plan for industry. Here, in the opening paragraph, one first of all finds a description of how capital and labour should work together, and of how industry should have close relations with the Government. Then, in succeeding paragraphs, the document sets out what I might call a Charter of Labour. In this charter it describes the objectives it has in mind for the workers in industry. It suggests that industry should work in close association with the trade unions; holidays for workers; a working week with restricted hours and various other social and working benefits which would clearly be of the greatest advantage to workers. It also suggests what the function of the trade unions should be in relation to industry. There should be partnership, but the trade unions should be the junior partners in this arrangement, with a consultative voice in industry, but in no sense a voice in management.
    Then, this document goes on to describe what the actual organisational structure of industry should be in this country. It suggests that there should, first of all, he a close integration of all the firms in any given industry in a trade association or federation, and that these in turn should he federated into a National Council of Industry. As I read this document it seemed to me that certain of its features were familiar—a charter of labour, the national council of industry, partnership between industry and the trade unions; and, finally, and this is the most important, the idea—although it was explicitly disclaimed it was implicit throughout the whole document—of self-government of industry. The Council should decide policy for all those things which affect industry, while the Government should merely be a ratifying instrument, a sort of

    1069
    rubber stamp for the decisions made by the National Council.
    That policy for industry seems to me to be the perfect picture of the corporate State. It may be that the corporate State has certain rational and reasonable organisational forms but beginning from the most important and, in my view, improper premise that industry should be self-governing. We on this side of the House believe that once there is a Government within a Government and a State within a State, a death blow is dealt to democracy. For that reason the iron and steel industry, a great basic industry of this country, should not he left in the hands of one great private monopolising Federation. That, I submit, is the answer to some of the arguments advanced by the hon. Member for Monmouth (Mr. P. Thorneycroft), who I regret is not in his place.
    We have, therefore, this choice. Either industry assumes the powers which it assumed throughout Europe in the corporate State—and in parenthesis it may be relevant to say that during the 193as the whole impulse to the corporate State began with the great iron and steel monopolisers—or the other alternative is the nationalisation of the iron and steel industry and its development according to public policy. The alternative is not merely to relate it to public policy, hut to make the functioning of the iron and steel industry a direct part of public policy.
    In these postwar years we have to deal with certain very great problems affecting the industry. They are not merely domestic problems. They are problems which affect the whole of Europe. What is going to happen to the Ruhr? Is the level of steel production in Europe to be determined by one big; monopoly in this country entering into cartel arrangements with an iron and steel monoply in another country, or is the level of steel production to be determined as a matter of public policy? The whole question of the protection and care of the iron and steel industry is bound up with these very grave public decisions. Other hon. Members have mentioned the question of raising money for schemes of development on which I think we are all agreed. If that money is to be raised, protected and guaranteed as a gilt-edged security, surely it should be used only
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    in a national instrument which is serving the public and not merely a sectional policy.
    Finally, I turn to the question of the form of nationalisation. The Lord President of the Council has written a most excellent and, if I may say so, well conceived book on transport and nationalisation. It merits careful study because in it the Lord President gave a forecast of certain forms of nationalised industry which he felt it might be desirable at some future time to introduce in this country. He also describes the sort of Board which should administer a nationalised industry. If it is suggested that in the iron and steel industry we should have such an instrument of control and direction I think we should go beyond that and try to draw into the industry all those people who combine together in order to make the industry work. At present, there is the London Passenger and Transport Board —a most efficient public undertaking—bat I have never heard a bus driver or conductress talk about " Our L P T.B."I think it is very important in the nationalised iron and steel industry that the workers, the technicians, and the managers should really feel that they are part of the industry. The technicians and managers must be given the opportunity of realising that in nationalised industry they have as much scope and opportunity of advancement as they had under private ownership, and even more. In that way, ultimately, the workers in the industry, the technicians, the managers and the practical directors will be able to speak of " our industry " as in other connections they speak of " our country."
    7.24 p.m.
    Brigadier Low: I listened with much attention to the long and interesting argument of the hon. Member for West Coventry (Mr. Edelman), which involved us in considerations of the relationship of the iron and steel industry to a corporate State. They were argument:, which, from his point of view, consisted of building up the ninepins of a corporate State and then knocking them down. I do not wish to follow him in those arguments because I hope to take up only a short time. Since I think he destroyed both sides of his case equally well, it probably is unnecessary for anybody on this side of the House to take him up. The hon. Member also

    1071
    entered into certain comparisons between prices in the markets of the United States and this country. As was pointed out by the hon. Member for Egbaston (Sir P. Bennett), he omitted a great many considerations. Amongst other things, he omitted any mention of the cost of coal. I have listened to most of the speeches which have been made in this House during the last two days, and I have been conscious of a great unreality when hon. Members opposite began to compare prices. I do not find it valuable to enter into discussion with the hon. Gentleman any further.
    The points I want to make this evening concern what I consider to be the fundamental issue raised by the Motion before the House. We are not dealing with the Government's proposals to nationalise this industry because no proposals have been made. We are dealing with the decision of the Government to make the proposals. The issue between us, as summed up by my right hon. Friend the Member for Aldershot (Mr. Lyttelton) and by the right hon. Gentleman the Minister of Supply, is whether or not public supervision, which we all admit is necessary, can be combined with private ownership and private management. It is not a straightforward issue in this instance between private enterprise, on the one hand, and public control, on the other. The " Daily Herald "In one of its cartoons this morning seems to have forgotten that. No doubt the cartoon was made before the Debate yesterday. The issue before the House, as I understand it, and as is agreed at least between the two Front Benches, is that which I have given. We say it can be so combined; the Government say it cannot be so combined. Our arguments are based, fortunately for us, on experience. Everybody agrees that not only during the war, but in the years immediately before the war, which mattered so much, the industry was working at the highest pressure; without what was done in those days we should now be in a very different state from that in which we are today. We should have been in a parlous condition.
    It has been pointed out by many hon. Gentlemen opposite that during the war the industry was operating under a fairly tight control by the Government. Iii saying that, surely, they at once admit that the industry can be carried on
    1072
    excellently under this public supervision at the same time as it is being privately owned. Not only can it be carried on, but, as I hope hon. Members will remember, it can also be expanded. Under public supervision, between 1933 and 1939, as we have heard from the right hon. Gentleman the Member for the City of London (Sir A. Duncan), the industry carried out a planned programme of expansion. I thought I detected in something said by the Minister of Supply an argument that, though perhaps the industry could work at full pressure, as it is working now under public supervision combined with private ownership, it could never put through a proper planned expansion. Our experience shows that argument to be quite wrong. The relationship between the steel industry and the nation obviously is a vital point which concerns all hon. Members. It is for that reason that I, claiming none of the qualifications of many hon. Members who have spoken, dare to intervene in this Debate. I believe it was for that reason that the hon. Member for West Coventry also dared to intervene.
    The Government of 1932, which was a Government of the party that I represent, accepted the fact that it was part of their duty to assist and, in assisting, to interfere in the running of this industry. During the next few years a system was worked out of which we have heard a concise and very clear summary from the right hon. Gentleman the Member for the City of London. One can read of the great value at that time of the Iron and Steel Federation and of the Import Duties Advisory Committee.
    During the speeches of hon. Gentlemen opposite, I have been tempted to ask myself once or twice whether or not they have read the excellent May Report of 1937. As a result of this interference and control, or self-discipline, of the industry by the Iron and Steel Federation, it is true to say that competition in prices was ruled out. As everyone knows, competition in prices is the worst form of competition. What exists today, and what we on this side hope will always exist, is competition in quality, technique and research. It is my belief that, if we dismiss and destroy all those forms of competition, we shall be doing great harm to the future of industry and, since it is recognised that industry is the keystone of our life and security as well as of our

    1073
    prosperity, we shall be doing the gravest harm to the country.
    The Government are obviously having some difficulty in working out proposals for nationalisation. I noticed that, when the hon. Member for Stoke (Mr. Ellis Smith) dared to put up constructive proposals, he was not greeted with much applause from his right hon. Friends on the Front Bench. I have no doubt that many such bubbles as that of his constructive proposals which both he and my right hon. Friend the Member for Bournemouth (Mr. Bracken) assisted in bursting, have burst in Government Departrnents in recent days. I would stress the importance of competition because it affects the quality on which I have always believed that the future of the industries of this country must be based. We, as an exporting country, must rely much mote on quality than on quantity. That, of course, is true not only of industry, but, for the time being at any rate, of my right hon. and hon. Friends on this side of the House. We also rely on quality rather than quantity.
    It having been accepted that the Government have a duty to assist and, perhaps, to regulate, control and supervise a part of this industry, not only in prices, but also where the placing of the industry and its expansion affect social conditions, and in keeping up import tariffs and in the matter of labour conditions which, in this case, are fortunately not much of a problem, surely, the Government's duty was to busy themselves with finding a scheme which would deal bit by bit with those problems. How best could they control prices, ensure that the industry did not interfere with social conditions, and that the tariffs, and so on, were in keeping with the needs of the industry? What have they done instead? They have taken the dead easy course; they have adopted their party dogma and said, " All this will be cured if we nationalise industry and take over the ownership of it."
    What we on this side of the House would have done—I believe I am right in this—would have been to look into this matter and see how best, with the least, not with the most, interference of the industry, we might effect our desire of supervision. Instead, the Government have chosen nationalisation. I do not want to labour this point any more, but
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    the Lord President has insisted that the burden of proof for those who choose nationalisation is to show that it is going to work best. That burden of proof has not in any way been carried out. We on this side of the House have, for our case, the Report of the Iron and Steel Industry. Instead of the Government putting down their answer in the White Paper so that we might in its cold, unemotional pages test one scheme against the other, they have come to this House and have put up what seem to me very faulty and specious arguments. They have left it to the House to destroy, if we can—and we obviously cannot—the excellent case which my right hon. Friend the Member for the City of London has put forward.
    I have been trying hard to find out the real reason for the Government's policy. I am bound to agree with what some of my hon. Friends have put forward today, that the Government do not really want to control the steel industry; they want to get their teeth into that great engineering industry on which the prosperity and the future security of the country are based. That is a very different thing from what they say they are doing and what they ask us to approve today. I hope that whoever is to reply to this Debate will at least set our minds at rest one way or the other and tell us whether the Government do, or do not, intend to get such a hold over the engineering industry that it, too, will be, if not nationalised in fact, nationalised in effect.
    7.38 p.m.
    Mr. Zilliacus: I rise to ram home a point that was touched upon incidentally by three speakers yesterday, but which has not yet been made. I refer to the fact that, in nationalising the iron and steel industry, the Government will also take a big step towards carrying out Labour's long standing pledge to nationalise the arms industry. In the years between the wars, when Labour pressed successive Conservative Governments to nationalise the arms industry, we were always told that it was not possible to separate that industry from the rest of heavy industry and, in particular, from the iron and steel industry. I accept that argument, but I reverse its application. I accept the statement made by the Minister of Supply yesterday that the iron and steel industry is one of the keystones of our military defence and I ask, there-

    1075
    fore, that the Government should make it clear that, when deciding upon what sections of the iron and steel industry are to be nationalised, they will bear in mind the desirability of effectively taking the private profit making motive out of the business of arms manufacture. The case for doing that is very strong and should be familiar to all. It was so strongly the view held at the end of the first world war that it was actually included in the Covenant. The question arose again over the scandal of the war between Bolivia and Peru in the Chaco, when both sides were armed by arms manufacturers in spite of the war having been outlawed by all the Governments.
    Mr. Lyttelton: It was Paraguay.
    Mr. Zilliacus: Of course; I am sorry—I should have remembered. The problem is important also because the Charter calls for the regulation of armaments. When we address ourselves to that subject we find, as was found in the years between the wars, that the regulation of armaments is in practice inseparable from public ownership and control of the manufacture of and trade in arms. In carrying out this policy the Labour Party will be fulfilling not only its election pledges in " Let Us Face the Future," but explicit and longstanding pledges of which I will quote only the last two. One was in our report on the International Post-War Settlement, when the Labour Party stated that whatever other nations do all British arms and munitions, including aircraft, should be made in Government factories; and the other was the pledge given by the National Executive at the Blackpool Conference in 1935 just before the General Election, when my right hon. Friend the Minister of State said:
    " Our party has always stood for the abolition of the private trade in and manufacture of arms. We stand for it today. We are pledged to the hilt and our pledges will be carried through."
    I rejoice to think that in the Motion which is before the House the Government are taking the first step to carry out these pledges. After the moving appeals made by hon. and right hon. Gentlemen opposite only last week as to the importance of fulfilling pledges to the electorate, I should have thought that they would have appreciated and applauded the determination of my hon. and right hon. Friends on this side to carry out our
    1076
    pledges regarding the nationalisation of the iron and steel industry, including the arms industry. In any case, whatever hon. Members opposite may think about this, there is no doubt that there is an overwhelmingly strong public opinion in favour of the nationalisation of the arms industry. That was demonstrated between the wars in the famous " Peace through Collective Security " ballot, when million votes were cast for the nationalisation of the arms industry. I believe that public opinion is still in the same frame of mind about that as it was when it was described by Lord Halifax, in a speech he made on 27th March, 1945, which was reported in the Press at the time; he said:
    "The great majority of the people of this country conceive this question of the private manufacture of and the trade in armaments to be directly connected with the great issues of peace and war on which they feel more deeply and more vehemently than upon anything else. Therefore, regarding war as they do as the greatest evil to which the nation can be exposed, and regarding it indeed as only justifiable in cases of ultimate and extreme national necessity, they are, if I interpret their feelings at all aright, disposed to regard the preparation of the implements of war as too high and too grave a thing to be entrusted to any hands less responsible than those of the State itself, fearing any intrusion into so dangerous a field of any interests less imperative than those of national security and national necessity."
    I believe that in nationalising the iron and steel industry we shall be satisfying that very deeply-felt and strong public opinion on this issue. In addition to the arguments of efficiency and human needs and standards of living, we can add to the reasons for supporting this Motion the overwhelmingly powerful moral and political argument that we shall be nationalising the arms industry.
    Mr. Lyttelton: May I interrupt a moment? In view of the very interesting points the hon. Gentleman has made, I hope that he will deal shortly with the result of the nationalisation of the arms industry in Germany and Italy.
    Mr. Speaker: That question is not now before the House. Mr. Fletcher.
    Mr. Zilliacus rose
    Mr. Speaker: I thought the hon. Gentleman had finished.
    Mr. Zilliacus: I was going to say one more sentence, but I will finish at that.
    7.45 P.m.
    Mr. Walter Fletcher (Bury): This Debate really divides itself into two parts: first, why the Government are taking this action, and second, how they propose to carry it out. There has been a mass of mixed reasons put forward as to why; even the Minister himself.got so inextricably mixed up, that he came to the point when, as usual, he had to rely on the stock argument of hon. and right hon. Gentlemen on the other side, and trot out the good old horse " Mandate."In his excellent speech last night the hon. and gallant Member for Holderness (Lieut.-Commander Gurney Braithwaite) used racecourse metaphor, and I should like to indulge in it too. Let us first examine this Mandate—the only horse in the Government's stable. What is its pedigree? " Mandate, by Mistake out of Control."It runs in every single race, whether it is a little selling plate of a one-Clause Bill, whether it is a great autumn handicap—and we have had a few handicaps from the other side—or whether it is one of the classics. " Mandate " always comes out to run for the Government. The only difference is in the jockeys. The leading jockey, of course, is " Hustling Herbert," whom we are to hear tonight. I have some fear that he is in trouble with the stewards and may not be able to appear.
    The other reasons put forward were very unconvincing indeed. We had a dissertation from several Members on the boards of the various companies in this industry, and their reason for nationalisation seemed to be a sort of reverse Keith Prowse reason—" You have the best seats, we want them."That come out from several speeches, the idea that if you nationalise the industry it will give great opportunities for the faithful adherents of the Government on the other side to appear in the rôle—for which they are, I think, ill-fitted—of running this highly complex and important national industry. I believe that the real reason for nationalisation is that the Government can hardly help themselves. They are in the position of the hungry python, which does not eat very often, but, when it does, is moved to eat everything in sight, crush it out of shape, smother it with the saliva of propaganda, and then start to eat it. Once it has started to eat it just cannot stop, and this Government, having started on the meal
    1078
    of nationalisation, with the Bank of England and coal beforehand, must go on with its meal. I should like to point out that after this very large and indigestible meal, the python goes to sleep, very often for a year at a time, and I have an idea that when we come to the end of nationalisation that is what will happen to the Government.
    But the real, the vital, reason behind this move is the same as that which we saw in the Debate on the Liverpool Cotton Exchange. An economic decision is being made, not on economic but on purely political grounds. This is one more rung in the ladder that the Government are climbing to complete power. This is power politics naked and unashamed, and the Chancellor himself, at one moment in his speech today, gave the show away by saying that this would go down to history as a very great moment, because at this moment we had taken over, and were going to take over, the ultimate control of an industry whose fingers reached out into practically every small industry in this country. It is being done not on sound economic grounds, but on unproved political theories. Another fine idea popped out from the opposite side during the Debate as a reason for taking this industry over, and it was the reason that Bismarck gave when he was driving through the City of London in a great procession. He looked around at the great, wonderful and well organised city and his admiration, just like the admiration that the Minister gives to the iron and steel industry, was expressed in these terms: " What a city to plunder."
    Mr. Follick: I think the hon. 'Member has made a mistake and that it was not Bismarck who said that, but Blücher.
    Mr. Fletcher: I would like to refer now to what are called "The years between "The two wars. We have heard a rather garbled version of what really happened. After the last war, what faced those who were responsible for running this industry? Very difficult decisions. Some of those people took the decision to be very enterprising and go-getting, by expanding and raising money for various sorts of enterprises. The other people thought that we were approaching an economic crisis and that it was right to conserve their capital and liquid assets. The fate of those two groups was very different.

    1079
    The fact remains that both of them were hit by an economic blizzard of undoubted magnitude. It is worth pointing out to the Chancellor, who is slightly selective in his examples, that it was a universal blizzard. It came just as much upon countries with Socialist Governments as it did upon countries with other kinds of Governments. It swept over countries of every sort of political complexion without taking any notice whether there was a sign saying, " Don't come in here. This is a well-organised, well-planned and Socialist country, and we don't like economic blizzards."It left behind a vast devastation.
    If hon. Members opposite are honest with themselves they will not take up the attitude of saying that they could have foreseen everything and could have planned everything and done everything very much better. The truth is that economic blizzards will never be totally avoided. Their effects may be modified and should be modified, but I would warn hon. and right hon. Gentle. men opposite that with all their planning, economic blizzards will fall upon them in due course and will affect them very greatly. What did this industry do? It was the one industry that realised the disaster that had fallen upon them, upon industry in general, and upon the world. It pulled itself together and produced something like a really well-thought-out plan. We have heard a great deal about the Socialist planned State from the other side of the House. Here indeed was an example that might well weaken their case. This industry put its own house in order. I have always been told that there is more joy in Heaven over one sinner that repenteth, than in the others that went not astray. Here was a semi-sinner which not only repented but found out a new path to righteousness. Nevertheless there will be no reward on earth for it. Having put itself in order it will find that there will be no mercy for it in the hearts of hon. and right hon. Gentlemen opposite, who will kill it stone dead by nationalising it, in spite of the fact that it has seen the errors of its ways in many directions and has put them right.
    If, as we have heard today, this is only the beginning of the first batch of nationalisation proposals and is to be followed by a sort of hauling of the rest of the industry up before a committee
    1080
    to be examined and put on the spot—to use an American expression—it will knock the heart out of the industry. This industry has, in many ways been a pioneer in showing how the effects of economic blizzards can be handled. The argument is put forward that this industry is both a monopoly and a cartel. I do not like monopolies or cartels, for a reason that hon. Members may find difficult to believe. I object to them because of their size. When an industry or a firm, or a group of companies, gets to that size, it loses its human element. The management is unable to keep in touch with the day-to-day problems not only of the workers, but of the management and scientific sides as well. Nevertheless there are certain industries which call out for some form of monopoly. I believe that this is one of the few—although it should not establish a precedent—which by its very nature, call out for that form of treatment.
    As for cartels, I am surprised there should be an attack from the other side of the House on this industry for joining an international cartel for the regulation of prices. I have heard vehement arguments from the Chancellor to show how extremely important it is to stabilise food and other prices, at great cost to the taxpayer. Indeed, the whole Bretton Woods international trade agreement must mean, if it means anything at all, some form of international price regulation. If that is not adhered to it is no use trying to arrive at international trade agreements. I notice reluctance on the part of His Majesty's Government to go into this particular question. We were told by the President of the Board of Trade last October that these meetings were so vital that we should hold them almost immediately. Now they have been put off for another six months because of the extreme difficulty, in a chaotic world of varying prices and production costs of raw materials and labour, of arriving at anything like a method of proper price-fixing which will give a fair deal to all countries.
    In this industry, after years of close working and hard bargaining of great difficulty, an international price agreement was arrived at which, though not perfect.by any means, was at least showing very good results, so far as this country was concerned, and there was no undue complaint from other countries. I would like to ask His Majesty's Govern-

    1081
    ment to tell us quite clearly, after the criticisms that have been levelled at cartels by the Ministry, whether they agree with price-fixing cartels, as foreseen in the Bretton Woods Agreement, or whether they will state openly now that they do not? Unless they make that point perfectly clear, the criticism which they have thrown at this great industry for its adherence to cartels has no meaning at all.
    Mr. Mayhew: To what price-fixing agreement at Bretton Woods does the hon. Member refer?
    Mr. Fletcher: The whole essence of the Bretton Woods international trade agreement is fixing of prices, as has been seen with commodities.
    Mr. Mayhew: Nothing of the sort.
    Mr. Fletcher: We shall have to wait and see, to use an old Liberal phrase. There have been considerable attacks upon the profit motive. I am always surprised that the word " profit "Is selected in that phrase as being the operative word. I think the word " motive "Is the operative word. The idea of motive has something to do with a machine which moves and works towards a target. I am afraid that if we try to substitute for a profit motive a Government-controlled stagnation, we shall not make real progress: I have yet to find in a Government office that urge to do and to improve, to get things going and to take commercial risks, such as you find in private industry working in partnership with the State.
    This brings me to the very important question raised in the Chancellor's speech today. It was very interesting to notice the offer made by the Chancellor, with that large hearted generosity which we are beginning to expect from him—a slightly vicarious generosity with other people's money—and made to this industry, or at any rate to that part of the industry which he is going to take over later on. It was an offer of money at fixed interest rates on the low side. I believe that there is a vice in that idea. The whole essence of industry and commerce is the taking of commercial risks. Commerce and industry in this country have been built up by the shrewd appraisement of those risks, how and when to take them and how to handle
    1082
    them. If industry is to. be reduced to the level of " safety first," with its capital in fixed interest bearing securities, one of the most important elements will be taken out of it. That is one of the chief vices of the Government's proposal to nationalise everything; it will stop the main object for which men consort together and create firms and businesses, which is the judicious taking of the right commercial risk. It was the ability which this country displayed over centuries to do that all over the world that created our commercial supremacy. We have supremacy no longer, but that ability still gives us, and is capable of giving us, a great commercial role. If we are to be relegated to the role of cheap borrowing at fixed interest, without taking risks, I think the prospect before this country is very bad.
    In nearly every Debate on nationalisation, there is a stock and standard argument that is made by hon. Members opposite. It is that there has been lack of scientific research. I believe that hon. Gentlemen opposite look upon scientific research and science as their own private preserve, and I believe that the Minister of Supply is in due course to have under him the whole question of scientific research. I was brought up to believe that " necessity was the mother of invention," and I presume that, with the powers that are to be given to him, the Minister of Supply will become the mother-in-law of invention. The relationship between mothers-in-law and other members of families is notoriously not an easy one I predict that there will be less active and wide-ranging scientific research under that form of Government control than the industry has displayed in the past. The enormous sums that have been expended in this industry, not only by large but by the smaller firms—many of them in Sheffield—are among the greatest refutations of the argument that the industry is unfit to carry on in its present form. If there were a case to be made against the industry for not having gone sufficiently into scientific research, I have not the slightest doubt it would have been made from the Benches opposite. It has not been made.
    The question of exports and prices should occupy the attention of all of us. I thought the Chancellor let slip today a rather unwise remark when, in talking about exports, he said that production was

    1083
    the only guide. It is not so. There must be competitive and efficient production. The word " efficiency," which we all use, and to which we give our own interpretation, has entered into the Debate; as into all Debates on nationalisation, very largely. I wonder whether it would be possible for common ground to be found on both sides of the House as to what efficiency is. One thing is certain. Whatever we may think it to be, when we get over the period of the sellers' market and get into the area in which the cold winds of competition will blow again, we shall find out very soon whether what the Government may officially term an " efficient industry " really is one. No powers, no mandate, given to the present Government can compel any third party in another country to buy the goods produced here. It is only when those goods come into the open market, in competition with goods produced in countries which enjoy certain great advantages, such as the United States of America, that we shall be able to judge whether or not the policy on which the Government are now entering is a correct one.
    I believe that as the industry has been organised up to date, on a true partnership basis with the State, it would have been able easily to meet that competition. It has an enormous good will. Throughout the world that good will reaches out from hundreds of small firms, as well as big firms. which have their connections in other countries, built up by personal contact and esteem. I beseech the Government, in no circumstances, however much they are impelled by theory or by the impatience of those who wish to see their theories put into practice as soon as possible, to break down the most valuable thing which there is in any industry or firm, that is, the good will.
    How are the Government going to carry out their plans? They do not know. The position seems to be rather like the Minister inviting his good friends in the industry to a game of bridge. He deals round the cards and he says, " Now, boys, before we start let me have a look at your cat'ds." He selects those cards he wants, and then he says, "I am going to declare trumps and I am going to win; the game is in my hands."That is what the Government are asking us to do. They say, " Give us a blank
    1084
    cheque to nationalise the industry; let us make use, on the basis of loyalty and cooperation, of the industry as it is organised today, and when we have picked out everything that is valuable, we will say, ' Thank you, very much, we will give you some Government stock, alienable or inalienable, just as the fancy suits us at that particular moment.' "If that is the method to be adopted, there is disaster in front of us. But we can also have salvation in front of us. Having thrown this sop of nationalisation in this form to their Cerberuses on the Left, having said, " We have fulfilled our mandate "—which cannot be a very strong one, because I do not think the nationalisation of the iron and steel industry appeared in the Gracious Speech —having gone that far and had a big public Debate on it, if the Government will soften the decision by the wisdom of the method used in putting it into operation, they can still save this great industry, and what it can bring to us in every way, from disaster.
    If they do not, I can only close by saying that I think their attitude can best be summed up in the words of a very great man who was a Member and an ornament of the House for many years, the late Lord Birkenhead; he was being interrupted too often in a court of law on very trivial points and got rather restive, so that when the final quite trivial and unimportant point was made by his opponent, he said, " My Lord, this is the very bankruptcy of forensic interference."I have a feeling that unless a rather different angle is taken by the Government in the method of nationalising this industry, it will go down to history as the " very bankruptcy of forensic interference."
    8.8 p.m.
    Mr. House: I wish to refer to some of the speeches that have been made by hon. Members opposite. The hon. Member for Bury (Mr. W. Fletcher) said that he was against monopolies because he thought the size of monopolies represented a danger. The hon. Gentleman should have been in the House when his colleague the hon. Member for Monmouth (Mr. P. Thorneycroft) was speaking, because the hon. Member for Monmouth eulogised monopolies. He said that the iron and steel industry was a monopoly

    1085
    and he went on to praise monopolies, saying that they were very desirable in certain industries, and he asked why in the circumstances did the Government want to nationalise the iron and steel industry. He exercised his brain to find some reason.
    Mr. Orr-Ewing: I think the hon. Member is misrepresenting the speech of my hon. Friend the Member for Monmouth (Mr. P. Thorneycroft) in saying that he praised monopolies. I think that when the hon. Member reads HANSARD tomorrow, he will wish to withdraw his remark. It may be that he misunderstood the arguments used by my hon. Friend, who certainly did not praise monopolies.
    Mr. House: I think I am right. I think the hon. Member for Monmouth did say that the industry represented a monopoly and he praised that aspect of the industry. I thought that in saying that he was conceding the case for the Government. It should have been obvious to him why the Government want to nationalise the industry, because the Minister said in his opening speech that the issue was not one of nationalisation versus private enterprise but nationalisation versus monopoly. Having heard that statement, I do not see why the hon. Member for Monmouth should have had any trouble in finding what he seemed to think was some deep rooted, hidden reason for the Government's attitude in this matter.
    The right hon. Gentleman the Member for the City of London (Sir A. Duncan) stated that there had been no industrial dispute in the industry for over 40 years, and he went on to imply that there was no desire, or should be no desire, on the part of the workers in the industry to see the industry nationalised. But, surely, no such inference could justifiably be drawn, because the iron and steel workers suffered as long and as bitterly through the trade depression as any other section of industrial workers. During those years I travelled the country a great deal, and it was deplorable to visit these steel centres and see the state of utter degradation which existed, plus obsolete plant and so forth. I put this significant point to the House. On casting one's mind round the country, one realises that, generally speaking, indeed, in practically all cases, the depressed areas centred around a steel area. South Wales, the Midlands, Lan
    1086
    cashire, the North East Coast, Cumberland and the Clydeside were depressed areas, and each one of them represented a steel centre.
    The workers, and, indeed, some of the employers—although I am now speaking of the workers principally—in the iron and steel industry have suffered between the two wars, and it cannot be argued by any stretch of the imagination that the iron and steel workers are satisfied with conditions in the industry, so far as their welfare is concerned. I have noticed that right hon. Gentlemen and hon. Gentlemen opposite do not seem to attach sufficient importance to the welfare of the workers in the various industries. The workers are a very important part of industry. From the other side of the House we hear continual talk of finance, investment control, possessions, the machinery of the industry and equipment, etc., but very few observations about the workers. On this side our interests are concentrated on the workers and on the community, and it is from the aspect of the workers and the community that we judge this question of nationalisation. I make that point because it has frequently been stated on the other side—indeed, I have seen it stated in the Tory Press—that we on this side have party politics in mind when considering this vital question affecting an important industry. I submit that we on this side are interested in the workers and the consumers.
    The right hon. Gentleman the Member for the City of London stated that under the Federation's scheme, iron and steel prices are regulated according to efficient plant. One assumes from that statement that, generally speaking, plant throughout the industry was working on an efficient basis. That is not the case. I would remind hon. Members of the statement by the hon. Member for East Swansea (Mr. Mort) that even today in South Wales there are two tinplate mills run by water-mill power. We find that the whole of the tin-plate industry in America is run on the continuous-mill process, whereas in this country we only have two continuous mills. On this question of efficient plant in the; iron and steel industry I wish to quote a statement from "The Times " dated 24th February, 1945, which stated:
    "The amount of obsolete equipment is considerable. There are too many works which sprawl, works which are a tangled riddle of

    1087
    gaps, corners, adjacent shops alternately empty and overcrowded, illogical separation, unbalanced and tortuous routes and methods in the handling of materials."
    That is an impartial statement indicating a low standard of efficiency in the industry. I cannot think that the right hon. Gentleman stated the position fairly when he said that prices were regulated according to efficient plant. The right hon. Gentleman also complained about the line drawn. by my right hon. Friend the Minister of Supply as to the extent of the industry which might come under nationalisation. I thought that in the difficult circumstances the Minister drew a fairly practical line. He said that the four main sections of the industry—iron ore and coke ovens attached to iron and steel plants; steel smelting; rolling mills and blast furnaces—should come wholly within the scheme, and that as far as the finishing processes are concerned, such sections as are attached to integral plants should come in. I thought that was a very practical line to draw. I mention that because the right hon. Gentleman the Member for the City of London said that there were not six firms who could say whether they were wholly or in part within the scheme.
    The right hon. Gentleman also said that the industry displays a progressive public spirit. I wonder if that is borne out when one remembers the modern scheme that was proposed for Jarrow in 1934 or 1935. In those days the industry was in a parlous condition. A syndicate proposed a fine modern integrated plant in Jarrow. One would,have thought ',hat public spirit would have encouraged the building of such a modern plant, but instead of that, the Iron and Steel Federation did everything they could to prevent that plant coming into existence. It is true that the right hon. Gentleman the Member for the City of London, who was the Minister at that time, did everything he could to encourage the installation of that plant but, as I say, the scheme was opposed by the efforts of the Iron and Steel Federation. It was a great constructive proposal. It would have been effective in bringing down costs. For example, one of the promoters said that in one steel works the cost of producing steel ingots was 83s. a ton.
    In another modern plant, using similar raw materials, the price for producing steel
    1088
    ingots was 78s. per ton; whereas the estimated cost for producing the ingots by the proposed plant was 65s. per ton, namely, a reduction of 18s. per ton in the producing of steel ingots, or a reduction of 22 per cent. Had the employers at that time possessed the progressive public spirit which the right hon. Gentleman claimed,. they would have helped in that great opportunity for providing modern plant to be developed.
    When Mr. Brassett, the great steel consultant, was asked to report on the proposed scheme, he made the statement that from a national standpoint such a modern iron and steel plant, situated on one of the world's best coking deposits and on one of the country's finest industrial harbours, would be a distinct asset. With the approaching clouds of war, with the great need in those days for securing steel, and for securing the finest modern plants for that purpose, one would have thought the project in Jarrow would have been received with open arms. The Report of the Iron and Steel Federation embodies the prospect of scrapping plant, as well as the provision of new plant. The trade has suffered severely in the past with regard to scrapping particular plants and the building of new plants. For example, when Stewarts and Lloyd came down to Corby—I was in the area in the early stages—it was just a country village with a few houses and thatched cottages. It was not right to build a new plant there without the housing conditions of the people having been concurrently considered. The building of a new plant in a new area, involving large scale transportation of people, can only be carried through by a public body who would properly consider the town planning aspect, with regard to the prospects of building a new township.
    I am strongly against the principle of half a dozen directors, half a dozen captains of industry, being able to sit down in a room and come to a decision to transplant a plant from one area to another without reasonable consideration being given to the terrific upheaval involved in regard to possibly thousands of workers' homes. That power ought not to be left in the hands of private enterprise. From that standpoint nationalisation offers a very important solution. The iron and steel industry is a basic industry for armaments. The shareholders in the iron and

    1089
    steel industry have, in consequence, a profit interest in war. On that aspect alone, the industry ought to come under public control. I have listened to the Debate almost right through, and I think a good case has been made out for bringing the iron and steel industry under public ownership and public control. On this side of the House the case for nationalisation, I submit, has been amply substantiated
    8.25 p.m.
    Mr. Emrys Roberts: I will not detain the House many minutes in giving the decision to which we on the Liberal bench have come, after profound and anxious consideration of this vital industry. We cannot help feeling that there is an element of the unreal in this Debate and in this Motion. The House has been asked to approve of a decision by the Government to bring forward certain proposals, but there is a great deal of uncertainty hanging around the nature, the extent and the date of those proposals. I was glad to hear the hon. Member for Gateshead (Mr. Zilliacus) mention the possibility of the nationalisation of the armaments industry, a proposal which we on these benches would welcome. But that is not implicit in these proposals, and has not been mentioned by a single Government front bench speaker. At the same time, it is evident that this industry has many of the qualities of a monopoly, that it needs reorganisation in the public interest, and that public ownership may well enter into that reorganisation. I have not seen the plans in sufficient detail to come to a verdict upon that; in fact, no plans have been produced. The industry is in need of organisation. It has sheltered behind a tariff wall for years; a tariff protection afforded in return for a promise of organisation, which, up to the present time, has been carried out purely on paper.
    The Liberal Party is always prepared to examine proposals for public ownership when they are put before this House in a concrete form. The plans have not assumed that form, and we suspect that doctrinaire considerations have entered into the attitude of both the Government Front Bench and the addresses of the Conservative Party. There is no immediate issue before the House; there is no present proposal before the House; there is no
    1090
    legislation before the House. Therefore, we on these benches do not feel it proper to vote on this Motion. [Interruption.] I am not looking for precedent among hon. Members of the Labour Party or the Conservative Party. If I were to do so, I have heard advice given by the Government Whips to their Members to abstain. I have also seen the party above the Gangway on this side of the House abstain from voting on an immediate, even urgent, issue like the American Loan. There is no immediate issue tonight before this House; there is no legislation before this House—
    Mr. Jack Jones: There will be.
    Mr. Roberts: I am glad to have the assurance though only from the back bench opposite that there will be plans. Until then we cannot be called upon to express an opinion on a purely abstract Motion on this important matter.
    8.29 p.m.
    Lieut. - Colonel Sir Walter Smiles: We in Northern Ireland have no coal and no steel, but we are still deeply interested in this matter because we are consumers and it is our raw material. It affects us deeply when we hear speeches in which reference is made to an increase of is. per ton on coal or 3s. per ton on steel. That affects our industry and our workers in Northern Ireland. Up to date we have had cooperation, and some mercy from the Front Bench opposite, but we cannot forget the Attorney-General when he finished one of his speeches saying, like the late Sir Henry Irving in the murder scene from "The Bells," "We are masters now." Before the war other Governments tried to apply force to Northern Ireland. Even the Liberal Government once had a cruiser at the mouth of Belfast Lough trying to force us out of the British Empire. We want to get iron and steel in the same way as the people of England, Scotland, and Wales, of the same quality and at the same price. If the steel industry is nationalised we may not get the steel we need at the price we want. It all depends on the Government in power here. We cannot forget that if this industry is nationalised Northern Ireland's engineering industry is at the mercy of the Government in power here. It employs a great many people in engineering. I see a member of the Amalgamated Engineer-

    1091
    ing Union on the benches opposite. He knows that there are 30,000 people employed by Harland & Wolff, and 6000 by Mackie's, and many more by Combe, Barbour's, making textile machinery, and by the Sirocco Works, and Musgraves, on fans. Our hundreds of small engineering industries export all over the world, and we are very nervous about the Government's proposals. We know that there is no competition at the present time, but we have our order books full. We can sell anything from a lathe to a layette anywhere in the world at present. I see that the Amalgamated Engineering Union supported this Motion. I am told they put a pistol to the head of the Government and forced them to introduce that. I do not know whether that is true or not.
    Mr. Kirkwood: I think that is true.
    Sir W. Smiles: I know members of the Amalgamated Engineering Union, and I have a great respect for them, because I was an engineer myself. But I believe they are wrong. Let them not forget that there is competition in the steel industry also. Remember the new blast furnaces which were blown at the beginning of the war in India. They have increased their production three times during the war. I saw myself in South Africa what they have done in the works of Stewarts and Lloyds, Iscor and others. South Africa is going to increase its present steel plant by one-third. Neither India nor South Africa had 100per cent. E.P.T. There is going to be great Asiatic and American competition. Other countries, too, are developing engineering industries. I remember that before the last war a firm I know got quotations for steel from this country and from other countries. A Belgian quotation was the lowest but the director said " We will buy British and face our shareholders on that decision." But they can only go up to a certain point in buying British. If they go too high in costs they will not be able to sell their machinery abroad afterwards. I have heard no mention made yet from the Government benches that the industry is going to be more efficient in consequence of their proposals. I fear the result of these proposals in England, Scotland and Wales, and especially I fear for the engineering and shipbuilding industries in Northern Ireland.
    8.33 p.m.
    Sir Peter Bennett: I intervened when the hon. Member for West Coventry (Mr. Edelman) was speaking, because, although he was putting his case very fairly, he was overlooking one point which, I felt, made a great difference, and that was the matter of quantity. It is an old story which I have mentioned very often when the motor car industry has been discussed in this House. It plays an equally important part whether one is dealing with finished cars, materials or components for them, that when one compares with America one must bear in mind the quantity as well as the wage rates. I have been into the question only this weekend, and I obtained the costs, and if we can only have half the quantity the Americans produce we can easily beat them in price, in spite of anything else. That equally applies to steel. In America they have continuous strip mills, They are run without alteration, and it is for that reason that they are able to obtain those long runs and get their prices down in spite of their extra wage rates.
    The motor industry wants cheap steel. We are always arguing with the steel people about that. The hon. Gentleman the Member for Solihull (Mr. M. Lindsay) told us yesterday the percentage of steel in motor cars. I think it is not as great as many people think it is, but steel is a substantial item and, therefore, the cost of steel to those engaged in the motor industry is of great importance. For many years we have been arguing with the Iron and Steel Federation. We used to quarrel with them, but it was not any good, and we decided to work with them and see how we could help them. Very considerable progress has been made in standardisation and in the alteration of sizes. The only hope of obtaining what we want is to have concentration. That is what the Federation's scheme means.
    During the Debate we have heard quite a number of references to what the Tory Governments did in 1932 onwards. But why pick on 1932? It reminds me of the English history that starts " 1o66 and All That." Of course, there was English history before ro66, and there was history in this matter before 1932. The Minister of Supply said:
    "In 1932 the Conservative Government of that time began to take an interest in the

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    industry.'— [OFFICIAL REPORT, 27th May, 2946; Vol. 423, c 846.]
    " Began to take an interest," But he did not say what happened in 1929. Now, I happen to be one of those who were interested in this question in 1929. I was sent for by the Minister in charge, and I attended conferences with others, and we were asked to get together to amalgamate and to rationalise in order that the growing problem of unemployment might be tackled.
    They sent an economic adviser to Birmingham during the British Industries Fair to see what could be done to get the small industrialists to amalgamate and rationalise. When the Conservative Government of 1932 came in they continued that policy, and, therefore, it is not fair to accuse them as though it was entirely an idea of the Conservative Government, that there should be this conception of federation. They developed what had been started.
    Having been in touch with the Federation, arid wanting cheap steel, I was very interested and kept in touch with it, and I saw the chairman of the Import Duties Advisory Committee. I was in regular touch with him, and he explained that although they would not be able to give us immediate advantages, because they had to get together, and to organise and consolidate, later on, when they had got that done, they would close down the redundant, inefficient plants and give us an advantage in price. We waited patiently, and then we went along in 1937 or 1938, and asked what was being done and why many of these plants were being kept open? Confidentially, we were told they could not close down a single plant, because they had had their orders from the Government to keep them going, because every ounce of steel would be needed in connection with the armament programme and the possibility of war. How right they were.
    We did not get the reduction in price we had hoped for, which would have come from a proper consolidation scheme. But now all that is set to go ahead. The postponed schemes are all ready to be put in hand, but they have been held up. Plans, which to my knowledge could have been put into operation months ago, have been delayed because of the uncertainty. The plan has been taken away from the Federation because the Government say
    1094
    they cannot allow price fixing under some form of Government control. It may be a good debating point but the fact remains that we did have price fixing under a form of Government control all during the war period, and it worked. It worked successfully and it can be worked again, provided industry provides an expanding demand with reduced costs. This organisation was designed to achieve those ends. But the Governmeat cannot guarantee the quantity.
    I had a splendid example of that only this week. A constituent of mine sent me the whole story of how he was trying to buy some surplus roofing felt. I wish that the hon. Member for Oxford University (Sir A. Herbert) could have seen this correspondence, because it would have made an excellent article for " Punch." Letters were flying from Birmingham to London and from London into the country, from one office to another, until finally he heard that the roofing felt which he had found surplus had been sold.
    There is an absolute feeling of uncertainty at the present moment. The Lord President suggested that the position was quite clear and definite, but if one took the matter to a lawyer, or asked the advice of counsel as to whether the matter was so clear that one could go ahead, I am sure that he could not give an answer —at least my lawyer would not let me go ahead. The real solution of this problem lies in the question of coal with which we were dealing last week. I wish that the Government would leave this problem alone, and that they would get on with the coal question so that we can have a plentiful and cheap supply. The Minister of Supply has told us that immediately after the last war there was a wild boom in the best style of private enterprise, followed by a terrible depression which was the inescapable result of private enterprise. I want to ask whether he has found the secret of continued prosperity. Does he imagine that we are to have an uninterrupted flow of prosperity to the end of time just because the Government are to nationalise and take over? We know that private enterprise found a way out, but it was a hard and difficult road. When a slump comes, as some day it will come, I shudder to think what will happen with all these untried conditions. I shall be the first to take my hat off to hon. Members opposite

    1095
    if they have found the secret to continued prosperity, but if they have not found it, I look forward with the greatest dread to a possible slump with these untried schemes in operation.
    8.44 P.m.
    Mr. R. S. Hudson: The Chancellor of the Exchequer, in opening today's Debate, said that this was an historic occasion. The right hon. Gentleman the Minister of Supply, in his introductory remarks yesterday, quoted a speech made by the Leader of the House, which I expect by now he is tired of hearing, the brief effect of which was that the nationalisers had to make out their case. I am bound to say that, having listened to practically all the speeches made in the course of these two days of Debate, and having read those speeches which I did not hear, I find very few arguments in favour of nationalisation to answer. There is perhaps some irony in the fact that the right non. Gentleman the Leader of the House has been selected to wind up this Debate, because rumour has it, and I put it no higher than that, that he, at all events, with his wider experience, entertains some qualms about the rightness of this decision. I have no doubt that one of the reasons for the decision lay in a certain amount of jealousy on the part of the Minister of Supply that he was not quite in the nationalisation picture. He saw his colleagues, and that tiresome fellow the Minister of Fuel and Power, getting away with all the glory, and he thought it was about time that he entered on the stage. Those of us who had an opportunity to sit on this side of the House and watch his performance, could not fail to be struck by the fact that in 'the course of his long and lucid statement he looked around for applause from various sections of the House, and during the speech of my right hon. Friend the Member for Aldershot (Mr. Lyttelton) looked to the galleries.
    The Leader of the House has not always felt himself obliged to reply to arguments from this side of the House. He has on occasions relied rather on his big battalions. I suggest that tonight, on this historic occasion, as the Chancellor called it, we are entitled to expect from the right hon. Gentleman serious arguments devoted first of all to making out the case for nationalisation, and, secondly, to answering the very cogent speech made
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    this afternoon by my right hon. Friend the Member for the City of London (Sir A. Duncan). That speech, by general consent of the House, was not only one of the best which my right hon. Friend has delivered, but one of the best speeches which has been heard in this House in this Parliament. No person listening to the speech of the right hon. Gentleman the Chancellor of the Exchequer, and subsequently to the speech of my right hon. Friend, could have entertained any doubt as to which was the really informed speech and which speaker had the better of the argument. Had I been in the shoes of the right hon. Gentleman the Minister of Supply, I should have regretted the speech which his colleague, the Chancellor, made, because the Chancellor was at some pains, no doubt unconsciously, but nevertheless effectively, to destroy two at least of the main arguments upon which the right hon. Gentleman based the case for these proposals. What was one of the chief arguments which the right hon. Gentleman used? He said, yesterday:
    "The Government consider that, faced with the necessity of carrying out vast schemes of national planning in the industry, such a divorce of ownership from control just would not work."—[OFFICIAL REPORT, 27th May, r046; Vol. 423. c. 849.]
    He supported this by the argument that the necessary money would have to be found by the Government. But in his speech, the Chancellor of the Exchequer said that a good place in the queue would be found for both State and private sectors for cheap money. If he is prepared to lend at nearly Government rates to the private sector of this industry, is there any reason why he should not also be prepared to lend, on similar security, at Government rates to the whole of the industry, as put forward in the plan? I think that he destroyed that argument. Another argument which the right hon. Gentleman the Minister of Supply used in the defence of his case was that the Federation had no control over its members, and that short of nationalisation, the Government could never ensure that their desires would be carried out. Again, the right hon. Gentleman the Chancellor of the Exchequer knocked the props from underneath that argument when he described how, without nationalisation, he had succeeded in persuading the tinplate firms in South Wales to adopt the merger.
    Mr. Dalton: I did not say that I had persuaded them to adopt the merger. What I said was that Mr. Lever was kind enough to have a word with me shortly before the merger, and I said that, in my view, it was likely to do more good than harm for reasons which I gave.
    Mr. Hudson: I think that the right hon. Gentleman will agree that he gave the impression that he was pleased with the result. IT e result that he thought desirable had, in fact, been achieved without nationalisation, and the only thing that Mr. Thomas was going to get for his public spirited action was that, eventually, he would be taken over.
    The third argument which the right,hon. Gentleman used yesterday was that the industry could no longer be regarded as a private competitive industry. Many other speakers based their statements and arguments on the ground that prices had been fixed, and that any industry where prices had been fixed could no longer be regarded as competitive. That is surely labouring under a complete misapprehension. Prices represent only one of the elements that enter into competition, and when you have fixed prices, there still remain the really important things, namely, quality and service. Having fixed prices and obtained that element of stability that everyone wants, then the competition which arises between the individual firms concerned is: Who can give the best service, and who can deliver goods of the best quality? It is, therefore, incorrect to say that this industry has ceased to be competitive.
    Then he said that the Government must exercise greater and more detailed control than was exercised before the war. Why must they exercise greater control? The Steel Federation admits that control, guidance and supervision on the part of the Government are desirable and necessary. At the present moment, and assuming that the plan put forward by the Federation were accepted, the Government have control over the location of industry, and over the location of plants; and, indeed, the right hon. Gentleman was at pains to praise the plans put forward in so far as they provided for new plant in the distressed areas. Having got control over priorities and distribution, and having got control over prices, imports and exports, what more control could any
    1098
    one desire? He went on to say that control could not be divorced from ownership, but if we look for a moment at the past, which hon. Members were so anxious to trot out for their own purposes, we see that, in fact, control is capable of being exercised, and was exercised, when divorced from ownership.
    During the years immediately before the war, and during the war, control was exercised in very great detail by the Iron and Steel Control, completely divorced from ownership. There is no reason to suppose that, given good will on both sides, control cannot continue to be exercised for all the purposes for which the Government could legitimately exercise control, irrespective of whether or not the actual ownership is in private hands or in the hands of the Government. The minds of a number of hon. Members on the back benches were not unnaturally occupied with memories of what had happened between the wars. What was done between the wars, in very different circumstances, is really no argument to what would happen, after this war, in entirely different circumstances. They were also not unnaturally pre-occupied with the human side of the industry.
    The hon. and learned Member for Kettering (Mr. Mitchison), for example. pointed out the grave danger in his own constituency of having a new town which was dependent on a single industry. The whole history of the inter-war years reinforced that fear. We all know what happened to towns that depended on a single industry, compared, for example, with Birmingham, which was dependent on a very wide variety of industries. But what happens to a town dependent on a single industry, is not altered by whether the blast furnaces are owned by the State, or owned by private individuals. If, for example—I hope it will not happen—some brand new process was discovered which made the existing installation at Corby completely out of date, the fact that it was owned by the Government under this new scheme would not save the country from having to face, and find a solution of, the problem of providing some alternative industry for Corby. It would have to be done whether the industry was owned by the nation or whether it was owned by private individuals.
    The hon. and learned Member for Kettering went on to refer to the grave

    1099
    problem of the restoration of the soil of Northamptonshire, following on the extraction of iron ore. I know the gravity of that problem just as well as he does He seemed to assume that if the whole of the ore were owned by the State, and run by the Ministry of Supply, you would get the soil restored. But is there any certainty? I should have said that the certainty was the other way. If the soil is owned by private individuals, and Parliament, in its wisdom, passes an Act imposing a statutory duty, either on the owner or on the user, to restore the land to agriculture after the ore has been extracted, it is almost certain that that will be carried out. But if you merely rely on the fact that a Government Department is to do it, you have no kind of guarantee that it will be done. Believe me I speak with considerable knowledge and experience. I have been Minister of Agriculture, and I tried my best to make sure that the Ministry of Fuel and Power, when they had extricated coal by opencast mining, would restore the land to agricultural use. I got a most explicit promise that it would be done. Anyone who has any experience of land in this country knows it has not been done, and anyone who is representative of those areas knows that no amount of questioning in this House under our existing circumstances will succeed in persuading Government Departments to have it carried out. The hon. and learned Member for Kettering is labouring under a complete delusion if he thinks nationalisation, by itself, is going to cure either of the two difficulties which are worrying him.
    Other hon. Members on the back benches gave elaborate reasons why in the case of industries of which they had experience, schemes which they thought desirable had not been carried out. Several hon. Members said that the Governor of the Bank of England had interfered to stop them. The Governor of the Bank of England is now under the direct control of the Chancellor of the Exchequer and that argument " goes West."I do not think he will be willing to sabotage the Government's own plans.
    Mr. Wilmot: He is not doing it now.
    Mr. Hudson: Yes, and I say that that argument now " goes West." Other hon. Members said they objected to the steel
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    industry having been a member of a cartel. What is a cartel? A cartel is an agreement between industries in different countries to observe certain conditions whether of price or import quotas. If and when—and I shall be glad if the Leader of the House answers this when he comes to reply —this industry is nationalised, do the Government not contemplate ever entering into cartels? For the first time, if this proposal goes through the Government are going into the export trade on a big scale with all the difficulties and complications which that will involve. Are they going to be so purist to say that they will never have agreement with industrialists in other countries or nationalised industries in foreign countries? Certainly they are going to.
    Mr. Edward Porter: Why does the right hon. Gentleman ask if he knows the answer?
    Mr. Hudson: The hon. Gentleman by making that interruption gives me the opportunity of telling him why. Even that purist the Minister of Fuel and Power said as recently as 20th May last:
    It may be necessary for us to embark upon schemes which will relate the industrial activities of other nations with our own. It may be necessary to promote economic integration not only in the national sphere but in the international sphere."—[OFFICIAL REPORT, 20th May, 1946; Vol. 423, C. 148]
    Integration in the international sphere is merely another way of saying cartel. Other hon. Members on the back benches opposite took great exception to the prices that were charged to British industry by the steel makers, compared with prices which, they alleged, could De obtained in the case of supplies coming from other countries. The hon. Member for Wednesbury (Mr. S. N. Evans) quoted the case of steel castings. He said that the price at home was, I think, £148, and that in America it was £62. That sounds a very damaging attack, but he failed to answer —as I have no doubt the Leader of the House will also fail to answer—the pertinent question: What are you going to do about it? That is a perfectly legitimate question for me to put, because the right hon. Gentleman said that the nationalisers must make out their case.
    Mr. H. Morrison: Always only 50 per cent. of my statements are quoted. I said that it was up to the nationalisers to prove the case for nationalisation, but that it

    1101
    was equally up to the anti-nationalisers to prove their case for private ownership.
    Mr. Hudson: I quite agree, but the difference tonight is that the right hon. Gentleman is defending a Motion which says that this industry ought to be nationalised. Therefore, it is incumbent upon him to do his half of the job. All I am asking, in all seriousness, is that he will face the dilemma put by the hon. Member for Wednesbury, namely, what will happen when the industry is nationalised? Will the price of these castings, in a nationalised industry, be brought down from £148 to£62? Will the industry be so efficient as to do that? The bon. Member for East Middlesbrough (Mr. A. Edwards) let the cat out of the bag. He said that it was no part of the case for nationalisation that the industry, under nationalisation, would be more efficient. All he claimed was that the nationalisers ought to have a chance of showing whether it would be more efficient. That is a different kettle of fish.
    Mr. A. Edwards: That is very different from what I said. I said that nationalisatlon in itself would not improve the industry.
    Mr. Hudson: I am much obliged to the hon. Gentleman. His revised version is even better than the authorised version, and proves my case up to the hilt. The hon. Member went on to let another cat out of the bag. He said that if there was any difficulty in getting the price of castings down he would subsidise the cost, that if coal cost too much he would subsidise that, especially if it had to do with the export trade—
    Mr. Edwards: Get somewhere near the truth.
    Mr. Hudson: I am within the recollection of the House. I hope the Leader of the House will say whether, under a system of national ownership of the iron and steel industry, he contemplates subsidising the price of exports. That is a legitimate question, and I hope we shall have an answer. The right hon. Gentleman will see the dilemma in which he finds himself. If he says, " No, I will not subsidise the price of exports,"Then the hon. Member for Wednesbury does not get his castings for £62, but has to pay £48. If the right hon. Gentleman says that he will
    1102
    subsidise exports, he is then up against the promises which he and his Government have made under the Commercial Agreement attached to the Loan Agreement with the United States. He questioned my right hon. Friend the Member for the City of London when the latter said that the speech of the right hon. Gentleman the Minister of Supply had made confusion worse confounded. We would very much like to know what are his ideas on this subject of overseas trade. If we understood him aright, the Minister of Supply said yesterday,that there were a certain number of firms in the iron and steel industry who were highly integrated and would, therefore, be taken over altogether, lock, stock and barrel. But many of these firms have very valuable subsidiaries overseas. Why did they have such valuable subsidiaries overseas? Because of the world wide reputation which they had gained. Foreign countries came and invited firms like Stewart & Lloyds and Dorman Long to establish subsidiaries in their countries—not only in the Dominions but in foreign countries as well. Does the right hon. Gentleman contemplate taking over these subsidiaries or does he contemplate having to sell them to some other private companies? I hope the right hon. Gentleman will take note of this question and answer it. In the latter case, how are the Government going to maintain the efficiency of these subsidiaries, based as they were on being run by the parent company, and if he intends to take them over what sort of reception is he going to get from the foreign countries involved? Can one possibly conceive of a foreign country agreeing to the British Government running a subsidiary industry of the importance of iron and steel in their own country? These are the sort of questions we are entitled to ask.
    In the few moments that are left to me let me try to sum up. Whatever sections of the industry are eventually taken over and nationalised, the Government will create a situation which we believe will be highly dangerous to our economy. Over a large, quite undefined and quite irrational range—because the borders will be wholly irrational—the Government will be competing with private enterprise on a vast range of small and very varied commodities. One of two results are bound to follow. Either the State will have to use its exceptional powers to put private enterprise out of

    1103
    business, a solution which inspires no great satisfaction and no great confidence in the breasts of the hundreds of individual firms who may feel themselves labouring and living under this threat, or else the Government will be compelled' to subsidise their operations out of public funds in order to compete with the more efficiently run and more energetic private firms, and that, I suggest, will afford no solution and no satisfaction to the taxpayer who has to foot the bill.
    What we have seen in the case of coal nationalisation does not inspire any confidence that the Government will be able to run the industry more efficiently than private enterprise. The right hon. Gentlemen the Chancellor of the Exchequer and the Minister of Supply made a great deal of play today and yesterday with the case of South Africa. The Chancellor said that we on this side of the House were rather " choosey " about the Dominions. He said that there is a Labour Government in Australia and a Government which is not Labour in South Africa; South Africa has a great Government owned steel industry. What are the facts? The Government owned steel industry is a modern one and, therefore, its costs ought to be low. Today we in this country can land steel in Cape Town as cheaply as South African plant can deliver it there, and when one is considering two similar plants, one in South Africa' owned by the local Government, and one in Australia owned and run by private enterprise under a Socialist Government, one finds that the private enterprise plant in Australia produces steel cheaper than the Government owned plant in South Africa.
    Mr. H. Morrison: That is one up for a Socialist Government.
    Mr. Hudson: But, unfortunately, they do not own the plants concerned; they are run by private enterprise. There is one further consideration which I should have thought would have weighed with His Majesty's Government. This Government professes its anxiety to see national planning. The right hon. Gentleman the Leader of the House, in a speech a little while ago, suggested that after all the immediate plans for nationalisation had been carried out, we would still have 80 or 85 per cent. of industry running under
    1104
    private enterprise. His colleague at the Board of Trade has been setting up working parties, one of the main objects of which was to help individual industries to plan themselves and to coordinate their efforts to help in reorganisation and in the modernisation of machinery and equipment and to encourage the maximum effort in the expott drive. I do not think anyone would disagree with that, but here we have an industry which has organised itself. It hag produced a plan, which, on the word of the right hon. Gentleman the Minister of Supply himself yesterday, is today highly efficient and making a notable contribution to our problems of the export trade. What is its reward? Its reward is to be taken over. In other words, the theory is that the more efficient one is, and the more highly organised one is, the more ripe one is to be taken over. Does anyone honestly believe that that is the way to encourage the planning of industry, the coordination of industry and the formulation of organisations for the export drive and so forth? No, Sir, that is the way to destroy confidence. That is the way to make people say, " Look what has happened to the iron and steel people who did organise themselves and produced a plan. If we want to survive as individuals and private enterprise, we had better have nothing to do with that."This is an historic occasion, because, if this is carried through, I believe by their action the Government will have done more than by any other means in their power to frustrate the pleas for increased production with which they have been so lavish in the past few months.
    9.18 p.m.
    The Lord President of the Council (Mr. Herbert Morrison): On 17th April, when was in Birmingham seeking to promote industrial production and prosperity, there was great excitement in this House consequent on the statement made by my right hon. Friend the Minister of Supply with regard to the iron and steel industry. I find that the right hon. Gentleman the Leader of the Opposition was most ingenious in putting supplementary questions on this statement, which, with interventions by others, seemed to cover about 20 columns of HANSARD. The right hon. Gentleman's language was eloquent and varied, and as fine as usual, and the result is this Debate. I am hound to say that I am a little surprised that the Leader of the Opposition has been

    1105
    absent during by far the greater part of the Debate—in fact he has been here very little—[HON. MEMBERS: " What about the Prime Minister? "] With great respect, the Prime Minister did not ask for the Debate. It was the Leader of the Opposition who asked for the Debate.
    I am bound to say that I thought the right hon. Gentleman would either move the Motion, or that I should have the fun and enjoyment, and the privilege, of following him at the end of the Debate. But he has not spoken at all; and whilst I have been delighted to listen to the speech of the right hon. Gentleman the ex-Minister of Agriculture on this subject—I am not saying that in the least scornfully; the right hon. Gentleman always makes a good speech, if I may say so, and is one of the ablest debaters of the Opposition—if I had been the Leader of the Opposition and had provoked a row lasting nearly an hour, and covering nearly 20 columns of HANSARD, I really would have stuck to my guns and come in to the Debate. However, different men have different ways. We have had two days' Debate, but, apart from the speech of the right hon. Gentleman the Member for the City of London (Sir A. Duncan), which I entirely agree was the outstanding Opposition speech in the Debate and one worthy of the attention and consideration of us all, I cannot see that these two days have done much good except to provide an admirable opportunity for Government propaganda in support of their policy for the iron and steel industry.
    The hon. and learned Gentleman the Leader of the Liberal Party, I thought, stated the issue pretty well—[AN HON. MEMBER: " You have not read what he said."]—I have. You have no idea of how well informed I am. The hon. and learned Gentleman the Member. for Montgomery (Mr. C. Davies) said:
    "The problem that is confronting us is: How can we now, in this period, when there is a tremendous demand for steel, ensure in the future, and as a long-term policy, that steel of the proper quality, in the proper quantity and at the proper price is produced? "—[OFFICIAL REPORT, 27th May, 2946; Vol. 423, C. 923.]
    That, I agree, is the issue that we are really debating. We are debating the future of a great, vital, basic British industry. It is, therefore, not, in its essence, a matter of party politics at all; it is, in its essence, a business matter, namely,
    1106
    what is the best course to take in the interests of the community and of the nation in the handling of this great, vital, basic British industry. That is what it is all about, and although political theory and party politics are bound to flit across the Chamber and we all enjoy that on all sides, it is really not a party political matter. It is a matter of business, and national business at that.
    It was for that reason that I, in particular, welcomed the speech of the right hon. Gentleman the Member for the City of London, which I thought, although I did not agree with his conclusions, essentially relevant to the argument and, as I say, well worthy of consideration by all of us, But before I come to his speech, there are one or two observations I wish to make about the speech of the right hon. Gentleman the Member for Southport (Mr. Hudson). He asked why we should need greater control. The answer is in the mouths of the Iron and Steel Federation themselves. They themselves have. contemplated, and said that they are perfectly willing to submit to, a greater degree of control. The right hon. Gentleman asked, what more do we want besides control; is not control enough? He thought it was not essential to have ownership because the powers of control would meet the case.
    It is a fair point, and I am not going to say that control should not he used in a number of sectors of economic policy. Indeed, this Government are exercising economic controls in many cases without socialisation. But, in the case of this industry, which is vital, which is basic, but which has had a not altogether happy history in the interwar years I think we would be in danger, by using that method of control permanently, of exercising negative and irritating controls, instead of getting the freedom and sweep which we would get on the basis of ownership. To that I shall return in commenting on the speech of the right hon. Member for the City of London.
    The right hon. Member for Southport says that he has found in his experience that you cannot get Government Departments to move. I rather gathered that he has a bitter complaint that he could not get the right hon. and gallant Member for Pembroke (Major Lloyd George) to get a move on, at the Ministry of Fuel and Power, about something which he

    1107
    wanted dealt with when he was at the Ministry of Agriculture. That is what happens when we get a Tory and a Liberal National trying to compete with one another. If my right hon. Friend the present Minister of Fuel and Power had been in office then, I am sure the right hon. Gentleman would have got satisfaction.
    Mr. Henderson Stewart: That is the first I have heard of it.
    Mr. Morrison: The hon. Member, who is a Liberal National, should not intervene in this Debate. This is a private quarrel of the Front Opposition Bench.
    The right hon. Gentleman then tried to draw me on the question whether the new socialised undertaking, or public corporation or corporations will have cartel relationships with cartel organisations overseas. For very good reasons, I am not going to be drawn. I will just say that this will be a public concern and it will be its duty to do what is right in the public interest. [Laughter.] I really never saw such a lot of simpletons in all my life. I should be a complete fool if I were to say otherwise. Precisely the same answer has to be given on the point as to whether exports are going to be subsidised or not. Indeed, the proof of the irrelevance and unreality of these two questions is that if they were put down at Question time, or put in the form of supplementary questions, Mr. Speaker would probably rule them out of Order on the ground that they are hypothetical. I am bound to say that I took that liberty, a very risky one, with the name of Mr. Speaker, and when I was half way through I thought, " Now you will get into trouble with the Father of the House." But it seems to be all right.
    Earl Winterton: I am tar too much amused by the right hon. Gentleman's silly speech.
    Mr. Morrison: The trouble with the Father of the House is that there are occasions when he insists on being not the Father of the House but the Stepfather of the House.
    I want to deal, with every courtesy that his speech warranted, with the speech of the right hon. Gentleman the Member for the City of London. It was a business man's intelligent argument for
    1108
    private ownership, even if it was not an argument for private enterprise. It was an intelligently stated argument. Let not the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) be jealous and condescending to his right hon. Friend the Member for the City of London.
    Mr. Lyttelton: I was trying to console him.
    Mr. Morrison: I really mean this: This was a serious business man's contribution, for the right hon. Gentleman is not primarily a politician at all. Indeed, knowing he is a bit shy in the House of Commons, I thought he carried off his speech this afternoon with great confidence. We all congratulate him on his able speech.
    The first question that the right hon. Member for the City of London put to me concerned my statement in November, in which I said that when the Report of the industry was received, the Government would examine it with care, and that for that reason iron and steel was excluded from the list of industries which we had decided at that point to nationalise. He asked whether it was not to be legitimately deduced from that that if the Report was, in the judgment of the Government, satisfactory, the industry would then be left to carry on and carry out the Report. There was no such observation in the statement I made in November, nor was there any implication to that effect. What we thought was that it would be both mistaken and discourteous, the industry having taken the trouble to produce this Report, if we were to make a pronouncement on high policy before the Report had been studied by the Government. The Government were not prejudiced in their decision one way or the other.
    Let us understand what this Report does. It is a valuable Report. Neither I nor my right hon. Friend fundamentally quarrel with it. We cannot be committed to every detail of it, but it is an able and valuable contribution to the discussion of this problem. This is not a report on the issue of socialisation.. It is a technical report, suggesting what ought to happen in the technical development of the iron and steel industry. If the Report is broadly right, as I am inclined to think it is, then the carrying out of that technical scheme of

    1109
    development is desirable, whether there is private ownership or public ownership. But that was not for the industry to argue about in that Report, unless it so wished. I think that it was right not to do so. The industry was not going to bother itself at that point about what I might call the political aspect of the matter. It approached the job in a technical spirit, and I admire the industry for having done so, and thank it for a valuable Report.
    The other question, the real question which is before the House and His Majesty's Government, is whether the technical proposals in that Report, or something like them, can best be done under private ownership plus such controls as the State may impose upon it, or whether it can be better done upon the basis of public ownership. That is what we are really debating, together with the other issue, which is the immediate purpose of the Debate: What are we to do in this interregnum between now and the passage of the Bill, which in due course will be introduced by my right hon. Friend? The right hon. Gentleman said that my right hon. Friend the Minister of Supply had given a definition as to the general scope of the industry with which he was concerned. It was, of course, only a general statement, and the right hon. Gentleman said that in this industry there were 1,750 iron firms and 500 steel firms, and that the statement of my right hon. Friend had left nearly all those 2,250 firms in doubt whether they were inside or outside the definition of intended socialisation. In the judgment of the right hon. Gentleman, the definition had better not have been given by my right hon. Friend. I do not blame the right hon. Gentleman for this, because he is not primarily a politician. But I am bound to put it to the Front Bench opposite that if it was unwise of my right hon. Friend to give a definition at all, which I gather to be the view of the right hon. Gentleman—
    Mr. Lyttelton: That definition.
    Mr. H. Morrison: No—he should not have given a definition. That was the view. Why did my right hon. Friend do it? It was because he was firmly and strenuously pressed, particularly by the Leader of the Opposition, the whole of the Conservative Party and the whole Tory Press in the country, that he should do this very thing, and, of course—[Interruption.]
    1110
    —I am dealing with an argument from the Front Bench; I cannot see the point of that giggling. This is the argument, that if we are going to socialise an industry it would be nice if people knew broadly whether they were in or out. And it is no good demanding that my right hon. Friend should make a statement and then complaining that he has made it, yet that is in fact what has been done. My right hon. Friend has given a broad definition, as precise as he ought to try to give at this stage.
    Remember what we are doing. We are not debating a Bill. We are having a Debate for which, for some reason or another, two whole days were insisted upon by the Leader of the Opposition. I shall have to consider saving one of those days when we come to the Second Reading of the Bill. Two days have been spent in Debate to find out the broad intention of the Government, particularly in respect of the transition period. It is only when we get to a Bill that details legitimately can be insisted upon. Even then, complete details may not be given. As a matter of fact, there is still detail which has to be settled as to the scope and field of socialisation in connection with the Coal Nationalisation Bill. That will not be finally settled until the new Act has been in operation for some time. Therefore, it is childish to demand, at this early stage, that very precise definitions shall be given. The right hon. Gentleman says that the consequence of the announcement about the broadly defined field of socialisation will be that development will be difficult in this industry. For reasons which I shall give, I dispute that conclusion of the right hon. Gentleman. If the uncertainty of the situation is to stultify the development of the industry in the transition period, under the policy of my right hon. Friend, surely there is equally a lot of uncertainty about what is to happen under the Report of the Iron and Steel Federation. There would be a lot of argument before these things were implemented by the Federation.
    Moreover, the Federation had offered to come under a pretty stiff degree of State control. Therefore, that argument is equally applicable to the proposals of the Federation in themselves. Of course, whether we proceed by socialisation or by private ownership, if we are going in for the technical reorganisation of this great industry, then obviously there must be

    1111
    some element of uncertainty. What is the alternative? The alternative to some degree of uncertainty is to do nothing. I forget the exact phrase which was used by someone. It was, " Why interfere? " [HON. MEMBERS: " Why not leave it alone? "] I think that was said by the right hon. Gentleman the Member for Aldershot.
    Mr. Lyttelton: The right hon. Gentleman, who is always very fair, would agree that the argument was that the iron and steel industry should be left alone to carry out its own plan.
    Mr. H. Morrison: I quite agree, but, it I may say so, there is far too much of " Why not leave it alone? " on the part of the Conservative Party, and it has got our country into a lot of trouble in the past. It is not a fair charge against the Government to say that we are being indifferent to development and to the transition. What have we said? We have said that we will set up an intelligent Control largely composed of technical people who understand this industry.
    Colonel Gomme-Duncan: We have got it already.
    Mr. H. Morrison: We will modify and develop it and have even a better one. We will make it as intelligent, sensible and businesslike as we can. The Control and the Minister will decide a programme of technical development, and I would not be surprised if it is very much like—I do not say exactly like—the industry's own scheme. What is the matter with that? Do the Opposition want us to invent a brand new Socialist scheme of technical development? They are positively provoking us. The Control and the Minister will approve a scheme of technical development and the industry will be invited—indeed, it has already been invited—to put up schemes of capital expenditure and development. My right hon. Friend has approved the expenditure of many millions of pounds on the part of the industry. The Minister and the Control will then sanction schemes of capital expenditure and technical development so as to promote development and progress during the period of transition, so that we are not holding it up.
    Secondly, my right hon. Friend the Chancellor of the Exchequer has gone
    1112
    even further and has told the industry that if and when that is done, he will see that they get adequate recognition in the form of compensation for that capital expenditure and that he will be scrupulously fair about it. They will, of course, be in a strong position to get the right compensation if my right hon. Friend the Minister of Supply has sanctioned the capital outlay when they go to the Chancellor of the Exchequer. Finally, my right hon. Friend the Chancellor of the Exchequer has gone further still and said that, in appropriate cases, he will even guarantee the interest under the Borrowing Bill which is now on its way back again, slightly touched up, from another place. Was ever a Government more considerate to private enterprise than this Government? We are being considerate because we recognise that it is vital that the industry shall not be reduced to chaos and that there must be a peaceful and constructive transition period to the new, wider and different order of things. We have got our feet on the ground; we know what we are doing.
    The right hon. Gentleman the Member for the City of London said that the Iron and Steel Federation had been charged, he thought rather illogically, with either doing too much or too little—either it had done too much in the sense that it had become too powerful a combination of high-power trade association, cartel and semi-monopoly, on the one hand, or that it was incapable of seeing through this technical change because of weakness, on the other. Both things are true. On the surface, they may sound illogical to a Scotsman, but, fundamentally, they are both true. The danger of this situation is that this is a highly powerful trade association, nearly a cartel, which has pushed and pushed that way in the light of slumps and experience, and is seeking great power over the industry. That is true, and that is the danger, unless it is subjected to the proper public control to which the industry, I agree, is willing to subject itself. I will come to that in a minute. On the other hand, we have to look at this big scheme of technical development—I am not sure that it ought to be in the hands of a private undertaking—at these changes with their vast social consequences, which involve pushing people's private property about in a way which I think will meet with resistance, and this obliges us to recognise

    1113
    that there are dangers, that it is both too powerful, and, maybe, in certain circumstances, too weak.
    The right hon. Gentleman said that coal prices were one of the big factors in steel production and, therefore, it was important not to blame iron and steel too much, because coal had its responsibilities. He is quite right. Coal is a big factor, and coal, iron and steel are big raw material factors in the prices of a wide range of manufactured articles. It is partly because we realise the economic importance of coal, and the necessity for getting its price down to the lowest level consistent with the rights of the workpeople in the industry, that we are going to nationalise coal. Indeed, I think one Conservative Member opposite said he did not blame us for doing it, he rather agreed with that. It was this iron and steel business that he could not stomach. We are, therefore, trying to meet the right hon. Gentleman the Member for the City of London in respect of coal by pursuing the policy of socialisation which we hope will bring coal prices down. That is also one of our motives with regard to iron and steel
    Whoever is running this industry, whether it be public corporations, firms with State money behind them, private enterprise or whatever it may be the right hon. Gentleman was absolutely right in saying that it is vitally important—in this industry particularly, indeed it is vital to all industries—that there should be, as he said, a responsible, creative and flexible management. He said that it was difficult to get that, but that we must get it. I entirely agree with him, and I undertake to the House that the Government will make every endeavour, and strive with great energy, to see that this industry gets just that kind of management. I am perfectly certain that my right hon. Friend the Minister of Fuel and Power will himself do the same with the coal industry. So there is nothing between us on that point.
    It is often assumed that, when an industry becomes publicly owned, somehow or other it cannot be efficiently served. What does a limited liability company do when it wants to get people to run its undertakings? It really must not be assumed that the average director manages the affair, or indeed the average chairman, though some of them do.
    1114
    What the joint stock company does is to go out into the market and buy brains, skill, technical knowledge, managerial ability and proletarians. The State can do the same; the public corporations can do the same, and these are going to be public corporations, business concerns; they will buy the necessary brains and technical skill and give them their head. I could find some private companies which have failed infinitely more in buying technical skill and brains than some of our public concerns and municipal trading undertakings. We will buy them up and they will work for us, they will be adaptable, and we shall encourage them to manifest enterprise and not to run the thing according to red tape. [Laughter.] Well, as a matter of fact I think Conservative Ministers, if anything, had more red tape in their Departments than Socialist Ministers, but that, I admit, is a matter of opinion.
    Therefore, it is their view, according to the argument of the right hon. Gentleman, that nationalisation is not necessary. There is no proof for that allegation. There has indeed been no proof that nationalisation will do harm, and I admit there is an onus on me to show by argument that nationalisation will be an advantage. What is the practical problem that we are up against in this industry? We are first of all up against the problem of getting something like an assured, progressive and stable future for this industry. Let us see what happened to this industry in the inter-war years. Here are some illustrative figures from the" Economist."They make a very sad story, which must have involved very great anxiety to the men running the industry.
    The " Economist's " annual computations of representative steel and coal earnings—I believe it is mostly for steel —after debenture interest is paid, gives the following picture on the basis of 1914 at 100; 1914, 100; 1915, 89; 1916, 119. I will go on in years—143; 135; 138; 1920, 64; 1921, 66; 1922, 78. Then it goes; 92; 66; 27; 18. It was 27 in 1925, 18 in 1926, 32 in 1927 and then 35, 51, and 42, down to 22 in 1931. [An HON. MEMBER: " Under a Labour Government."] The figure is down to 18 in 1926, under a Tory Government. In 1932, it was 15, under a Tory Government. Personally. I do not argue that way. In 1933, it was 28.
    Mr. Jennings: On a point of Order. Is it possible for the House to get the figures circulated, so that we can hear something about the scheme?
    Mr. Morrison: That is not even a clever one. That is a mere time-wasting one. In 1934 it was 52; in 1935, 67; in 1936, go; in 1937 it was 119. It was up again. We were getting near to war again Finally, we get to 125. One of the main questions is, Are we to have an iron and steel industry, after the immediate boom in the years ahead, that will go up and down in this fashion? It means disaster to the men who are managing it and to the people dependent upon it for their livelihood. It just cannot be done. It must not be done. I am sure we are all agreed that it ought not to be done.
    The next point is that £168 million of capital is needed. The industry says that it can raise it. Perhaps it can. It has got some of it and it will, of course, need permission to go on the market for the other. I am not saying that that permission would not be given. But my own belief is that, with a public concern or with concerns which, with my right hon. Friend's guarantee, are going to be public concerns, we shall save materially on the interest rate, with the State guarantee behind it. That is the financial advantage. Secondly, it is agreed by the industry itself that there have to be very big physical changes in that industry. Our belief is that it will be easier, more decisive, more expeditious to get those physical changes in the industry under public ownership than by trying to get them by agreement, bargaining, negotiation and pressure, by cartel plus State control. We believe ours will be a cleaner, sweeter and more efficient job, done that way.
    Moreover, there would be many controversies under the alternative system. The social consequences of those technical changes are eminently a matter of public concern, in which the public have a right to be considered. Finally, we must, somehow, develop managerial consolidation and managerial fluidity, if this industry is to be well run. What do the right hon. Gentleman, his friends, and the industry propose? If even there was a means of running the industry in a bureaucratic, hopeless way, in which there is no sweep and freedom of management, it is their way. First of all, there are
    1116
    2,250 firms. There is then the Federation supervising the 2,250 firms.
    Sir A. Duncan: I think there are 1,750 firms in the iron industry, which has nothing to do with the British Iron and Steel Federation, or the steel industry.
    Mr. H. Morrison: I thought they were part of the iron and steel industry. I accepted the right hon. Gentleman's own words. In any case, there are hundreds of firms, if not 2,250. There are 500 steel firms, and 1,750 iron firms. This is their starting point. Then there is the Iron and Steel Federation, controlling them and working them on a cartel basis. Then there is the State Control Board controlling the Federation, and last of all the Minister behind the controlling body. That is the bureaucratic scheme advocated by the Opposition, beside which our socialisation scheme is simplicity and straightforwardness itself. I conclude in this spirit [Interruption.] I gave the right hon. Gentleman a courteous hearing, and I think I might receive the same.
    Lord John Hope: But his was a good speech.
    Mr. H. Morrison: I know all about the Tory Party and its difficulty in behaving itself. I conclude in this spirit. This industry is vital to the future of our country. The House will divide upon this Motion tonight, and I think the Motion will be carried. In due course, legislation will follow. The question for the industry is whether it will respond to the Motion that will be carried by the House, or whether it will not. I hope that the industry will recognise, after this Motion has been carried, that it is being invited to cooperate, not merely by the Government, but by the British House of Commons. We shall go through with this scheme anyway, cooperation or no cooperation, but both the industry and the Government will make a better job of it if there are good sense, understanding and cooperation on both sides. I earnestly trust that the industry will respond to the invitation which my right hon. Friend the Minister of Supply has made and will continue to make, namely, to enter into cooperative discussion with him in order that this great transformation may be carried through to the advantage and benefit both of the British iron and steel

    1117
    industry and of the people of these Islands.
    Question put,
    "That this House approves the decision of His Majesty's Government to bring forward
    proposals for transferring to the ownership of the nation appropriate sections of the iron and steel industry with a view to its efficient organisation in the public interest."
    The House divided: Ayes, 338; Noes, 184.

    Division No. 185.]

    AYES.

    [10.0 p.m.

    Adams, Richard (Balham)

    Davies, Harold (Leek)

    Hutchinson, H. L. (Rusholme)

    Adams, W T. (Hammersmith, South)

    Davies, Haydn (St. Pancras, S.W.)

    Hynd, H. (Hackney, C.)

    Allen, A. C. (Bosworth)

    Davies, R. J. (Westhoughton)

    Irving, W. J.

    Allen, Scholefield (Crewe)

    Deer, G.

    Isaacs, Rt. Hon. G. A.

    Allighan, Garry

    de Freitas, Geoffrey

    Janner B.

    Alpass, J. H.

    Delargy, Captain H. J.

    Jeger, G. (Winchester)

    Anderson, A. (Motherwell)

    Diamond, J

    Jeger, Dr. S. W (St. Pancras, S.E.)

    Anderson, F (Whitehaven)

    Dobbie, W.

    John, W.

    Attewell, H. C.

    Dodds, N. N.

    Jones A. C. (Shipley)

    Attlee, Rt. Hon C. R.

    Donovan, T.

    Jones, D. T. (Hartlepools)

    Austin, H. L.

    Driberg, T. E. N.

    Jones, J. H. (Bolton)

    Awbery, S. S.

    Dugdale, J. (W. Bromwich)

    Jones, P. Asterley (Hitchin)

    Ayles, W. H.

    Dumpleton, C. W.

    Keenan, W.

    Ayrton Gould, Mrs. B

    Durbin, E. F. M.

    Kenyon, C.

    Bacon, Miss A.

    Dye, S.

    King, E. M.

    Baird, Capt. J.

    Ede, Rt. Hon. J. C.

    Kinghorn, Sqn.-Ldr. E.

    Balfour, A.

    Edelman, M.

    Kinley, J.

    Barnes, Rt. Hon. A. J.

    Edwards, A. (Middlesbrough, E.)

    Kirby, B. V.

    Barstow, P. G.

    Edwards, Rt. Hon. Sir C. (Bedwellty)

    Kirkwood, D.

    Barton, C.

    Edwards, John (Blackburn)

    Lang, G.

    Battley, J. R.

    Edwards, N. (Caerphilly)

    Lavers, S.

    Bechervaise, A. E

    Edwards, W. J. (Whitechapel)

    Lawson, Rt. Hon. J. J.

    Belcher, J. W

    Evans, E. (Lowestoft)

    Lee, F. (Hulme)

    Bellenger, F. J.

    Evans, S. N. (Wednesbury)

    Lee, Miss J. (Cannock)

    Benson, G.

    Ewart, R.

    Leonard, W.

    Berry, H.

    Fairhurst, F.

    Leslie, J. R.

    Beswick, F.

    Farthing, W. J.

    Lever, F. Off. N. H.

    Bing, Capt. G. H. C.

    Fletcher, E. G. M. (Islington, E.)

    Levy, B. W.

    Binns, J.

    Follick, M.

    Lewis, J. (Bolton)

    Blenkinsop, Capt. A

    Foot, M. M.

    Lewis, T. (Southampton)

    Blyton, W. R.

    Forman, J. C.

    Lindgren, G. S.

    Boardman, H.

    Foster, W. (Wigan)

    Lipton, Lt.-Col. M.

    Bottomley, A. G.

    Fraser, T. (Hamilton)

    Logan, D. G.

    Bowdan, Flg.-Offr. H. W.

    Freeman, Maj. J. (Watford)

    Lyne, A. W.

    Bowles, F. G. (Nuneaton)

    Gaitskell, H. T. N.

    McAllister, G.

    Braddock, Mrs. E. M. (L'p'I, Exch'ge)

    Ganley, Mrs. C. S

    MoEntee, V. La T.

    Braddock, T. (Mitcham)

    Gibbins, J.

    Mack, J. D.

    Brook, D. (Halifax)

    Gibson, C. W.

    McKay, J. (Wallsend)

    Brooks, T. J. (Rothwell)

    Gilzean, A.

    Mackay, R. W. G. (Hull, N.W)

    Brown, George (Belper)

    Glanville, J. E. (Consett)

    McKinlay, A. S.

    Brown, T. J. (Ince)

    Goodrich, H. E.

    Maclean, N. (Govan)

    Bruce, Maj. D. W. T.

    Gordon-Walker, P. C.

    McLeavy, F.

    Buchanan, G.

    Greenwood, Rt. Hon. A. (Wakefield)

    McNeil, H.

    Burden, T. W.

    Greenwood, A. W. J. (Heywood)

    Macpherson, T. (Romford)

    Burke, W. A.

    Grenfell, D. R.

    Mainwaring, W. H.

    Butler, H. W. (Hackney, S)

    Grey, C. F.

    Mallalieu, J. P. W

    Callaghan, James

    Grierson, E.

    Mann, Mrs. J.

    Castle, Mrs. B. A.

    Griffiths, Rt. Hon. J. (Lianelly)

    Manning, C. (Camberwell, N.)

    Chamberlain, R. A.

    Gunter, Capt. R. J

    Manning, Mrs. L. (Epping)

    Champion, A. J.

    Guy, W. H.

    Marquand, H. A

    Chater, D.

    Hale, Leslie

    Marshall, F. (Brightside)

    Chetwynd, Capt. G. R.

    Hall, W. G. (Colne Valley)

    Martin, J. H.

    Clitherow, Dr. R.

    Hamilton, Lieut.-Col. R.

    Mayhew, C. P.

    Cluse, W. S.

    Hannan, W. (Maryhill)

    Medland, H. M.

    Cobb, F. A.

    Hardman, D. R.

    Messer, F.

    Cooks, F. S.

    Hardy, E. A.

    Middleton, Mrs. L

    Coldrick, W.

    Harrison, J.

    Mikardo, Ian

    Collick, P.

    Hastings, Dr. Somervill

    Millington, Wing-Comdr. E. R.

    Collindridge, F

    Haworth, J.

    Mitchison, Maj. G. R.

    Collins, V. J.

    Henderson, A, (Kingswinford)

    Monslow, W.

    Colman, Miss G. M.

    Henderson, Joseph (Ardwick)

    Montague, F.

    Comyns, Dr. L.

    Herbison, Miss M.

    Morgan, Dr. H. B.

    Cook, T. F.

    Hewitson, Capt M

    Morley, R.

    Cooper, Wing-Comdr. G.

    Hicks, G.

    Morris, Lt.-Col. H. (Sheffield, C.)

    Corbet, Mrs. F. K. (Camb'well, N.W.)

    Hobson, C. R.

    Morris, P. (Swansea, W.)

    Corlett, Dr. J.

    Holman, P.

    Morrison, Rt. Hon. H. (Lewishant, E.)

    Corvedale, Viscount

    Holmes, H. E. (Hemsworth)

    Mort, D. L.

    Cove, W G.

    Horabin, T. L

    Moyle, A.

    Crawley, Flt.-Lieut. A.

    House, G.

    Murray, J. D.

    Crossman, R. H. S.

    Hoy, J.

    Nally, W.

    Daggar, G.

    Hubbard, T.

    Naylor, T. E.

    Daines, P

    Hudson, J. H. (Ealing, W)

    Neal, H. (Claycross)

    Dalton, Rt. Hon H.

    Hughes, Emrys (S. Ayr)

    Nichol, Mrs. M. E. (Bradford, N.)

    Davies, Edward (Burslem)

    Hughes, Hector (Aberdeen, N.)

    Nicholls, H. R. (Stratford)

    Hughes, Lt. H. D. (W'lverh'pton, W.)

    Noel-Buxton, Lady

    O'Brien, T.

    Shurmer, P.

    Ungoed-Thomas, L.

    Oldfield, W. H

    Silverman, J. (Erdington)

    Usborne, Henry

    Oliver, G. H.

    Silverman, S. S. (Nelson)

    Vernon, Maj. W. F.

    Orbach, M.

    Simmons, C. J.

    Viant, S. P.

    Paget, R. T.

    Skeffington, A. M.

    Walkden, E.

    Paling, Rt. Hon. Wilfred (Wentworth)

    Skeffington-Lodge, T. C.

    Walker, G. H.

    Palmer, A. M. F.

    Skinnard, F. W.

    Wallace, G. D. (Chislehurst)

    Pargiter, G. A.

    Smith, Ellis (Stoke)

    Wallace, H. W. (Walthamstow, E.)

    Parker, J.

    Smith, H. N. (Nottingham, S.)

    Warbey, W. N.

    Parkin, Flt.-Lieut. B. T.

    Smith, T. (Normanton)

    Watkins, T. E.

    Pearson, A.

    Snow, Capt. J. W.

    Watson, W. M.

    Peart, Capt. T. F.

    Solley, L. J.

    Weitzman, D.

    Perrins, W.

    Sorensen, R. W.

    Wells, P. L. (Faversham)

    Piratin, P.

    Sparks, J. A.

    Wells, W. T. (Walsall)

    Platts-Mills, J. F. F.

    Stamford, W.

    Westwood, Rt. Hon. J.

    Popplewell, E.

    Steele, T.

    White, H. (Derbyshire, N.E.)

    Porter, E. (Warrington)

    Stephen, C.

    Wigg, Col. G. E.

    Price, M. Philips

    Stewart, Capt. Michael (Fulham, E.)

    Wilcock, Group-Capt. C. A. B

    Pritt, D. N.

    Stokes, R. R.

    Wilkes, Maj. L.

    Pryde, D. J.

    Strachey, J.

    Wilkins, W. A.

    Pursey, Cmdr. H.

    Stross, Dr. B.

    Wilkinson, Rt. Hon. Ellen

    Randall, H. E.

    Stubbs, A. E.

    Willey, F. T. (Sunderland)

    Ranger, J.

    Swingler, S.

    Willey, O. G. (Cleveland)

    Rankin, J.

    Symonds, Maj. A. L.

    Williams, D. J. (Neath)

    Reeves, J.

    Taylor, H. B. (Mansfield)

    Williams, J. L. (Kelvingrove)

    Richards, R.

    Taylor, Dr. S. (Barnet)

    Williams, Rt. Hon. T. (Don Valley)

    Ridealgh, Mrs. M.

    Thomas, Ivor (Keighley)

    Williams, W. R. (Heston)

    Robens, A.

    Thomas, I. O. (Wrekin)

    Willis, E.

    Roberts, Goronwy (Caernarvonshire)

    Thomas, John R. (Dover)

    Wills, Mrs. E. A.

    Robertson, J. J. (Berwick)

    Thomas, George (Cardiff)

    Wilmot, Rt. Hon. J.

    Rogers, G. H. R.

    Thomson, Rt. Hn. G. R. (Ed'b'gh, E.)

    Wilson, J. H.

    Royle, C.

    Thorneycroft, H. (Clayton)

    Wise, Major F. J.

    Sargood, R.

    Thurtle, E.

    Woodburn, A.

    Scollan, T

    Tiffany, S.

    Yates, V. F.

    Segal, Dr. S.

    Timmons, J.

    Young, Sir R. (Newton)

    Shackleton, Wing-Cdr. E. A. A.

    Titterington, M. F.

    Zilliacus, K.

    Sharp, Lt.-Col. G. M.

    Tolley, L.

    Shawcross, C. N. (Widnes)

    Tomlinson, Rt. Hon. G.

    TELLERS FOR THE AYES

    Shinwell, Rt. Hon. E.

    Turner-Samuels, M.

    Mr. Whiteley and Mr. R. J. Taylor.

    NOES.

    Agnew, Cmdr. P. G.

    Dugdale, Maj. Sir T. (Richmond)

    Keeling, E. H.

    Aitken, Hon. Max

    Duncan, Rt. Hn. Sir A. (City of Lond.)

    Kerr, Sir J. Graham

    Allen, Lt.-Col. Sir W. (Armagh)

    Duthie, W. S.

    Lambert, Hon. G.

    Anderson, Rt. Hn. Sir J. (Soot. Univ.)

    Eccles, D. M.

    Law, Rt. Hon. R. K.

    Assheton, Rt. Hon. R.

    Eden, Rt. Hon. A.

    Legge-Bourke, Maj. E. A. H.

    Astor, Hon. M.

    Erroll, F. J.

    Lennox-Boyd, A. T.

    Baldwin, A. E.

    Fleming, Sqn.-Ldr. E. L.

    Lindsay, M. (Solihull)

    Barlow, Sir J.

    Fletcher, W. (Bury)

    Linstead, H. N.

    Beamish, Maj. T. V. H.

    Foster, J. G. (Northwich)

    Lipson, D. L.

    Beechman, N. A.

    Fox, Sqn.-Ldr. Sir G.

    Lloyd, Maj. Guy (Renfrew, E.)

    Bennett, Sir P.

    Fraser, Maj. H. C. P. (Stone)

    Lloyd, Selwyn (Wirral)

    Birch, Nigel

    Fraser, Sir I. (Lonsdale)

    Low, Brig. A. R. W.

    Boothby, R.

    Gage, Lt.-Col. C.

    Lucas, Major Sir J.

    Bossom, A. C.

    Galbraith, Cmdr. T. D.

    Lucas-Tooth, Sir H.

    Bower, N.

    Gates, Maj. E. E.

    Lyttelton, Rt. Hon. O.

    Boyd-Carpenter, J. A.

    George, Maj. Rt. Hn. G. Lloyd (P'ke)

    MacAndrew, Col. Sir C.

    Bracken, Rt. Hon. Brendan

    Glossop, C. W. H.

    McCallum, Maj. D.

    Braithwaite, Lt. Comdr. J. G.

    Glyn, Sir R.

    Macdonald, Capt. Sir P. (I. of Wight)

    Bromley-Davenport, Lt.-Col. W.

    Gomme-Duncan, Col. A. G.

    Mackeson, Lt. Col. H. R.

    Bullock, Capt. M.

    Gridley, Sir A.

    McKie, J. H. (Galloway)

    Butcher, H. W.

    Grimston, R. V.

    Maclay, Hon, J. S.

    Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)

    Hannon, Sir P. (Moseley)

    Maclean, Brig. F. H. R. (Lancaster)

    Carson, E.

    Hare, Lt.-Col. Hn. J. H. (W'db'ge)

    Macpherson, Maj. N. (Dumfries)

    Challen, C.

    Harvey, Air-Comdre. A. V.

    Maitland, Comdr. J. W.

    Churchill, Rt. Hon. W. S.

    Haughton, S. G.

    Manningham-Buller, R. E.

    Clarke, Col. R. S.

    Head, Brig. A. H.

    Marples, A. E.

    Clifton-Brown, Lt.-Col. G-

    Headlam, Lieut.-Col. Rt. Hon. Sir C.

    Marsden, Capt. A.

    Cole, T. L.

    Henderson, John (Cathcart)

    Marshall, D. (Bodmin)

    Conant, Maj. R. J. E.

    Herbert, Sir A. P.

    Marshall, S. H. (Sutton)

    Cooper-Key, E. M.

    Hinchingbrooke, Viscount

    Maude, J. C.

    Corbett, Lieut.-Col. U. (Ludlow)

    Hogg, Hon. Q.

    Mellor, Sir J.

    Crookshank, Capt. Rt. Hon. H. F. C.

    Hollis, M. C.

    Molson, A. H. E.

    Crosthwaite-Eyre, Col. O. E.

    Hope, Lord J.

    Moore, Lt.-Col. Sir T.

    Crowder, Capt. J. F. E.

    Howard, Hon. A.

    Morris-Jones, Sir H.

    Cuthbert, W. N.

    Hudson, Rt. Hon. R. S. (Southport)

    Morrison, Maj. J. G. (Salisbury)

    Davidson, Viscountess

    Hulbert, Wing-Cdr. N. J.

    Morrison, Rt. Hn. W. S. (Cirencester)

    De la Bère, R.

    Hurd, A.

    Mott-Radolyffe, Maj. C. E.

    Digby, Maj. S. W.

    Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)

    Neven-Spence, Sir B.

    Dodds-Parker, A. D.

    Hutchison, Col. J. R. (Glasgow, C.)

    Nicholson, G.

    Donner, Sqn-Ldr. P. W.

    Jarvis, Sir J.

    Nield, B (Chester)

    Dower, E. L. G. (Caithness)

    Jeffreys, General Sir G.

    Noble, Comdr. A H. P.

    Drayson, G. B.

    Jennings, R.

    O'Neill, Rt. Hon. Sir H.

    Drewe, C.

    Joynson-Hi ks, Lt.-Cdr. Hon. L. W.

    Orr-Ewing, I. L.

    1120

    1121

    Osborne, C.

    Smith, E. P. (Ashford)

    Wakefield, Sir W. W.

    Peaks, Rt. Hon. O.

    Smithers, Sir W.

    Walker-Smith, D.

    Pickthorn, K.

    Snadden, W. M.

    Ward, Hon. G. R.

    Pitman, I. J.

    Spearman, A. C. M.

    Watt, Sir G. S. Harvie

    Poole, O. B. S. (Oswestry)

    Spence, H. R.

    Webbe, Sir H. (Abbey)

    Presoott, Stanley

    Stanley, Rt. Hon. O.

    Wheatley, Colonel M. J.

    Price-White, Lt.-Col. D.

    Stewart, J. Henderson (Fife, E.)

    White. Sir D. (Fareham)

    Prior-Palmer, Brig. O.

    Stoddart-Scott, Col. M.

    White, J. B. (Canterbury)

    Raikes, H. V.

    Strauss, H. G. (English Universities)

    Williams, C. (Torquay)

    Ramsay, Maj. S.

    Studholme, H. G.

    Williams, Gerald (Tonbridge)

    Rayner, Brig. R.

    Sutcliffe, H.

    Willink, Rt. Hon. H. U.

    Roberts, H. (Handsworth)

    Taylor, C. S. (Eastbourne)

    Willoughby de Eresby, Lord

    Roberts, Maj. P. G. (Ecclesall)

    Taylor, Vice-Adm. E. A. (P'dd't'n, S.)

    Winterton, Rt. Hon. Earl

    Robertson, Sir D. (Streatham)

    Thomas, J. P. L. (Hereford)

    York, C.

    Robinson, Wing-Comdr. Roland

    Thomson, Sir D. (Aberdeen, S.)

    Young, Sir A. S. L. (Partiek)

    Ropner, Col. L.

    Thorneycroft, G. E. P. (Monmouth)

    Savory, Prof. D. L.

    Thornton-Kemsley, C. N.

    TELLERS FOR THE NOES

    Sott, Lord W.

    Touche, G. C.

    Mr. James Stuart and Mr. Buchan-Hepbur

    Shepherd, W. S. (Bucklow)

    Turton, R. H.

    Smiles, Lt.-Col. Sir W.

    Vane, W. M. T.

    Question put, and agreed to.

    Resolved:
    "That this House approves the decision of His Majesty's Government to bring forward proposals for transferring to the ownership of the nation appropriate sections of the iron and steel industry with a view to its efficient organisation in the public interest."

    MERCHANT NAVY (SERVICE CONDITIONS)
    Motion made, and Question proposed, "That this House do now adjourn."— [Captain Michael Stewart.]
    10.12 p.m.
    Mr. Hector Hughes: My object in raising this matter tonight is to better the conditions of life and work for the men of the Merchant Navy. I urge that the Minister should hold an inquiry into those conditions, and I have every confidence that if he does so he will find that they are thoroughly unsatisfactory. I appreciate the skill and sympathy of the present Minister, but he has the neglect and damage of his predecessors to repair. He is not to blame for what is past, but he should make good where his predecessors have failed. It cannot be denied that this nation and, indeed, the whole world owes a great debt of gratitude to the merchant seamen, for their courage, skill, perseverance and self sacrifice. This is largely recognised, but the vast body of goodwill has not been implemented and has not led to better conditions. After the 1914–18 war striking tributes were paid to them. Lavish promises of better conditions were made, but they have not been implemented. If one looks back one finds that the Merchant Navy is the Cinderella Service. They have served the country and their fellows, but they have sacrificed themselves.
    1122
    The history of the last 100 years shows that the progress in the Merchant Navy has not been comparable with the progress in industry ashore. As regards health, hygiene, hours, wages, food, accommodation, or security no industry depends more on Statutes than does the Merchant Navy. The seaman is bound by Statute during most of his life. A series of Merchant Shipping Acts spread over the last 100 years ties him down in every way. Act by Act was wrung from successive Governments, and yet his conditions are not at all as favourable as the conditions of workers ashore. He served the country gallantly during the 1914–18 war, but as soon as that war was over the industry was allowed to drift, and the men's conditions became worse. Reduction after reduction was made in wages; undermanning became rife; unsatisfactory conditions at sea grew worse; men left the ships in large numbers, only to find ashore 3,000,000 people in unemployment, destitution and want. The reasons for these conditions were twofold: first, the inefficiency and mismanagement of individual owners and companies; and secondly, the unsound policy of the Government then in power. Then there Came the recent war—
    Mr. Malay: The hon. and learned Gentleman is making the most wild and outrageous charges against the industry, which are simply not sustainable. Has he any knowledge of the negotiations which have beet going on for years between the shipowners and the unions on this whole question of conditions? Has he any knowledge of the agreement of 1937 determining standards? Has he any knowledge of the fact that those standards have been continually improved? If so, will he please say so?
    Mr.Hughes: I hope that the hon. Member will not expect me to anticipate my speech. I shall deal with the subject in my own way. During the war the merchant seamen maintained our food supplies, transported vast numbers of men and materials, and braved, with unrelenting courage, the submarine menace and air attacks, as well as the gales and mountainous seas and the elements. Are they now to be forgotten? The figures show the service which the merchant seamen have rendered. Over 29,000 were killed by enemy action, and many more were maimed and are now physical and mental wrecks. Over 11 million gross tonnage of shipping was lost. This is a terrible but glorious record of loss, sacrifice and sorrow which is worthy of the highest traditions of the Merchant Service. The merchant seamen are justified in their expectation and hope for better conditions, but they have not got them on matters such as wages, continuity of employment entry to and training for the Service, promotion, safety and social insurance.
    I cannot hope to deal with all these subjects, but I would like to deal with one, namely, wages. I shall not deal with the quantum of wages, but with certain features regarding the manner in which merchant seamen are paid. Firstly, wages are not paid from the date when a man signs on, but from the date when he has to report for duty, and this is wrong and unfair, because there may be a loss of several days during which time he is awaiting call. The merchant seamen cannot afford to wait for payment. The second feature concerns advances. The merchant seaman is not entitled to any payments in advance before he starts on a voyage. This again is unfair, because he may be starting on a long voyage extending as long as two years, and he may require to make an apportionment of money to his family, which is impossible if he does not receive an advance. The third aspect is in regard to allotments. The restrictions should be altered, and allotments should be paid without—
    Sir Douglas Thomson: Will the hon. And learned Member say what these restrictions are because this is all quite new to us?
    Mr. Hughes: I am referring to the series of Merchant Shipping Acts. Seamen on monthly articles are not paid allotments
    1124
    except at the end of a voyage, which may take a very long time and extend over two years. This leaves him at the mercy of the master or the owner. Why should he not get the money he earns, as do workers on shore? Merchant seamen are not paid even at the end of the voyage, because under the Merchant Shipping Acts, the owners and masters have two clear days, exclusive of Sundays and holidays, in which to pay wages —
    Earl Winterton: On a point of Order. May I call your attention, Mr. Deputy-Speaker, to the fact that the hon. and learned Member is now dealing with a feature of an Act to which he takes objection which would require legislation?
    Mr. Deputy-Speaker(Mr. Hubert Beaumont: If the hon. and learned Member is making reference to something which involves legislation, it would be out of Order on a Motion for the Adjournment.
    Mr. Keenan: On a point of Order, Mr. Deputy-Speaker. I submit that the point of Order as submitted by the Noble Lord was rather rigid. I think that it is permissible for firms to pay off in less than two days, because they frequently do so.
    Mr. McKie: Mr. Deputy-Speaker, the Noble Lord was asking you to give a Ruling as to whether the hon. and learned Member for North Aberdeen (Mr. Hughes) was not transgressing on this Motion for the Adjournment in calling attention to certain Sections of the Merchant Shipping Act which would require legislation to amend. I fail to see how the interjection of the hon. Member for Kirkdale (Mr. Keenan) has anything to do with that.
    Mr. Deputy-Speaker: I did not hear what the hop and learned Gentleman said. If he did say anything that involves legislation, that is not permissible on the Adjournment. Further, I would say that, in view of the fact that the Debate has to terminate in a few minutes, I think that the hon. and learned Member for North Aberdeen (Mr. Hector Hughas) had better continue his speech.
    Mr. Hughes: I did not say anything about legislation in the hearing of hon. Members on this side of the House. If the words " Statute," " legislation " or " Act " are not to be used in a speech,

    1125
    without it being inferred that one is inviting legislation, that, in my respectful submission, is drawing the rule too tight. I am not, in any way, quarrelling with your Ruling on the subject, Mr. Deputy-Speaker. I am drawing attention to the fact that the seaman is not paid even on the conclusion of the voyage and that under the Act, under Statute, under legislation, the master or owner has power withhold payment for two days during which the seaman is bound to wait about to be paid. I had other points which I wished to raise relating to accommodation in the merchant service, but owing to the interruptions, the time has gone, and I think it right that I should give the Minister an opportunity of replying to the points that I have made.
    Mr. Maclay: I regret having had to interrupt a speech during a Debate on the Adjournment, when I know the time is so short. But it was absolutely essential to put right some of the astonishing misstatements that were made. I hope that the Minister will carry on that good work now.
    10.23 p.m.
    The Minister of Transport (Mr. Barnes): I should like to express my regret that this matter, and the debt which the nation owes to the merchant seamen of this country, should have come up in the circumstances in which it is being discussed tonight. I feel it would be the wish of hon. Members on all sides of the House that discussion of this matter in Parliament should be made the occasion to express the deep appreciation of the whole nation to the merchant seamen for the remarkable services which they rendered during the war. Although I only have a few minutes at my disposal, I feel that I cannot let the occasion pass without reminding the House of one or two facts. The record of the Merchant Navy is one of the most magnificent contributions which this country has made, not only to our own affairs, but to the affairs of the world, during the past six or seven years. In that period, over 180,000,000 tons of dry cargo was carried in British ships, more than half of which was food. We also have to remember the enormous supplies that had to be moved in different parts of the world to maintain our Armed Forces. The interest of the hon. and learned Gentleman in this matter is well
    1126
    known, and I fully appreciate it and applaud him for his efforts in trying to bring it to the notice of this House so as to ensure that some of the mistakes that possibly occurred after the last war would not be repeated on this occasion. I am sure that that is the main purpose of which he has in mind. I do not feel that we serve any purpose of that description if it is backed up by inaccurate statements, and I think that all sides of the industry would agree that there has been some slight exaggeration in the evidence that has been submitted.
    Mr. Keenan: No.
    Mr. Barnes: I think that we must recognise on behalf of my hon. and learned Friend that he raised the matter in very difficult cricumstances. He lost a good deal of the time at his disposal, and in those circumstances it is not easy to marshal the evidence in the way that one would wish. As a matter of fact, at the present moment a British delegation comprising shipowners and representatives of the officers and men's unions, with representatives of my Ministry, are travelling to America for the International Conference at Seattle. As far as I am concerned, so important did I consider the matter to which my hon. and learned Friend referred, that I requested the Parliamentary Secretary to the Ministry of Transport to accompany that delegation, so that there should be a direct representative of the Minister at the Conference. All those matters which my hon. and learned Friend has raised will come under review at the Seattle Conference. He will also recollect that some months ago there was a preliminary conference—a prelude to the International Conference—at Copenhagen, where many of these matters came under consideration. As regards the statement about allotments and matters of that kind, now that there is a pooling system in operation, seamen under the conditions that he referred to are today in a more favourable position for drawing their pool pay.
    Finally, a point I should like to make for the purpose of putting it on record is that the machinery of the National Maritime Board, which represents the shipowners and all the officers' and men's unions, stands fairly high in the machinery of negotiation in this country. I can say that because of the contribu-

    1127
    tion that that Board has made. In any case to that machinery the Government leaves these matters of negotiation between the unions. Even with the improvement that has taken place, I should be the last person to say that there is not room still for further improvement. I think we can best encourage that improvement by assisting machinery of that description
    1128
    gradually to work its way to improved conditions. The Government, I can assure my hon. and learned Friend, will give whatever assistance is possible to accomplish that end.
    Adjourned accordingly at Twenty-nine Minutes past Ten o' Clock.

  GREATER LONDON PLAN (GREEN BELT)
  GREATER LONDON PLAN (GREEN BELT)
MINISTRY OF WORKS
  Transport House (Repairs)
  Transport House (Repairs)
  Statutory Orders (Authority to Sign)
  Statutory Orders (Authority to Sign)
FUEL AND POWER
  Petrol
  Petrol
  Domestic Coal
  Domestic Coal
  NATIONAL ASSETS
  NATIONAL ASSETS
  MERCHANT SHIPPING ACT (REPRINT)
  MERCHANT SHIPPING ACT (REPRINT)
  TAX AVOIDANCE
  TAX AVOIDANCE
EMPLOYMENT
  Victory Celebrations (Wages)
  Victory Celebrations (Wages)
  Compositor (Trade Union Membership)
  Compositor (Trade Union Membership)
  Training Centres, South Wales (Ex-Miners)
  Training Centres, South Wales (Ex-Miners)
  G.W.R. Workshops, Swindon (Trade Union Dispute)
  G.W.R. Workshops, Swindon (Trade Union Dispute)
  Training Scheme (Grants)
  Training Scheme (Grants)
  National Institute of Houseworkers
  National Institute of Houseworkers
  Essential Work Orders
  Essential Work Orders
  Personal Case
  Personal Case
  Wales
  Wales
  NATIONAL SERVICE (CALL-UP)
  NATIONAL SERVICE (CALL-UP)
HOUSING (SCOTLAND)
  Damage
  Damage
  Bricklaying Output
  Bricklaying Output
  Aberdeen
  Aberdeen
  Edinburgh
  Edinburgh
  Angus
  Angus
  Bricks
  Bricks
  Contracts (Ceiling Prices)
  Contracts (Ceiling Prices)
SCOTLAND
  Sheriffs-Substitute (Salaries)
  Sheriffs-Substitute (Salaries)
  River Leven (Prevention of Pollution)
  River Leven (Prevention of Pollution)
  Statutory Orders (Authority to Sign)
  Statutory Orders (Authority to Sign)
  County Councillors, Lanark (Voting Powers)
  County Councillors, Lanark (Voting Powers)
BRITISH ARMY
  Hospital, Tripoli
  Hospital, Tripoli
  S.E.A.C. (Soap and Food)
  S.E.A.C. (Soap and Food)
  Court Martial and Holding Centre, C. M. F. (Conditions)
  Court Martial and Holding Centre, C. M. F. (Conditions)
  Detained N. C. Os., Aldershot
  Detained N. C. Os., Aldershot
  Overseas Tour
  Overseas Tour
  Welfare Publications, M.E.F.
  Welfare Publications, M.E.F.
  B. A.0.R. (Wives)
  B. A.0.R. (Wives)
  Troops, India (Release)
  Troops, India (Release)
  Illegitimate Children (Responsibility)
  Illegitimate Children (Responsibility)
  Holiday Home, Walton-on-the-Naze
  Holiday Home, Walton-on-the-Naze
  Camp, Woodhall Spa
  Camp, Woodhall Spa
  Serving Aliens (Demobilisation)
  Serving Aliens (Demobilisation)
  Ammunition Stores, Dumbarton
  Ammunition Stores, Dumbarton
  Jewish Soldiers (Demobilisation Allowances)
  Jewish Soldiers (Demobilisation Allowances)
  Sunnybridge Range (Danger Flags)
  Sunnybridge Range (Danger Flags)
  Pay Offices, Leicester (Removal)
  Pay Offices, Leicester (Removal)
  South Downs (Release and Clearance)
  South Downs (Release and Clearance)
  South Pacific
  South Pacific
  House, Drill Hall, Lockerbie
  House, Drill Hall, Lockerbie
  Officers (Family Responsibilities)
  Officers (Family Responsibilities)
  Personal Cases
  Personal Cases
  Release Deferment
  Release Deferment
  Cigarette Issue
  Cigarette Issue
  Regular Engagements (Pensionable Services)
  Regular Engagements (Pensionable Services)
  Statutory Orders (Authority to Sign)
  Statutory Orders (Authority to Sign)
  "The Lodge," Pax Hill
  "The Lodge," Pax Hill
  Repatriation
  Repatriation
PRISONERS OF WAR
  Camps, Germany and Belgium
  Camps, Germany and Belgium
  Germans, Great Britain
  Germans, Great Britain
  NETHERLANDS TROOPS, GREAT BRITAIN
  NETHERLANDS TROOPS, GREAT BRITAIN
  DISPLACED LOCAL AUTHORITY OFFICERS
  DISPLACED LOCAL AUTHORITY OFFICERS
  RHEUMATIC DISEASES
  RHEUMATIC DISEASES
  HOUSE ROOFING
  HOUSE ROOFING
  BULCAMP INSTITUTION, HALESWORTH
  BULCAMP INSTITUTION, HALESWORTH
  HILL HOUSE INSTITUTION, MANSTON
  HILL HOUSE INSTITUTION, MANSTON
ROADS
  Vehicles (Spare Parts)
  Vehicles (Spare Parts)
  Traffic Signals (Maintenance)
  Traffic Signals (Maintenance)
  BATHS
  BATHS
INDIA
  Armoured Division Signals (Welfare)
  Armoured Division Signals (Welfare)
  Interim Government (Responsibilities)
  Interim Government (Responsibilities)
BURMA
  Cost-of-Living Index
  Cost-of-Living Index
  Distribution of Commodities
  Distribution of Commodities
  CEREALS ACREAGE. DENBIGH
  CEREALS ACREAGE. DENBIGH
  VIVISECTION. BERKSHIRE
  VIVISECTION. BERKSHIRE
  METROPOLITAN POLICE (PROMOTION)
  METROPOLITAN POLICE (PROMOTION)
  EDUCATION (OLDER TEACHERS)
  EDUCATION (OLDER TEACHERS)
  AFRICA (MASS EDUCATION)
  AFRICA (MASS EDUCATION)
  FRENCH ARMY {BRITISH ASSISTANCE)
  FRENCH ARMY {BRITISH ASSISTANCE)
ROYAL NAVY
  Surplus Submarines
  Surplus Submarines
  Statutory Orders (Authority to Sign)
  Statutory Orders (Authority to Sign)

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

COAL INDUSTRY NATIONALISATION BILL.
Order of the Day for the Second Reading read.
THE LORD CHANCELLOR (LORD JOWITT): My Lords, in rising to move that this Bill be read a second time, I desire to make it quite plain to your Lordships that I do not do so as the result of any doctrinaire preconception of what is the right solution for this industry. I myself welcome the proposition that every question of nationalization must be considered and must be justified upon its own merits. It is not, therefore, as the result of a doctrinaire preconception, but rather of my assessment of the stern and very unpleasant facts of the case, that I now rise to move the Second Reading of this Bill.
I do not suggest that nationalization is a word like abracadabra, which smooths away all difficulties—far from it. But when we look at the difficulties with which we are confronted today, I do suggest that unless we have this scheme, or some such scheme, it will be impossible ever to get out of the appalling difficulties which confront us. Therefore, what I propose to do is this. I propose first of all to recall to your Lordships the situation today and some of the practical difficulties which which we are confronted. I then propose to remind your Lordships of the past history of the various steps we have taken in the past to try to surmount some of these difficulties. Then I propose to tell your Lordships what we are proposing in this Bill, and I am going to ask your Lordships in due course to tell me what, in the circumstances of today, is your remedy if you do not accept this one.
First, as to the situation with which to-day, whether we like it or not, no
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matter whose fault it is, we are confronted. The Minister of Fuel and Power in another place gave the House certain simple facts. May I repeat them to your Lordships? He recalled the fact that when, in 1924, he first became Parliamentary Secretary to the Department of Mines, there were 1,172,000 persons working in this industry. We were producing annually 267 million tons of coal or an average of 228 tons per person employed. There were 2,718 pits. Twenty years later, in 1945, instead of 1,172,000 men employed, the number employed is 694,000. That means that more than 40 per cent. of the men who were previously employed have gone. We produced 174 million tons, which is an average of 250 tons per person employed—slightly higher than the 228 tons of 1924; and we produced it from 1,634 pits instead of 2,718. Only that small increase of 228 tons to 250 tons in annual production per man has been achieved, in spite of very considerable mechanization. Our export trade of 70 million tons a year of coal has gone. Consumption at home is increasing and indications are that it is going to be higher than ever it was.
Coal in very truth is the life-blood of the nation, for without coal we cannot possibly recover an export trade, we cannot run our industries, and we cannot maintain in this country 45 million people. All industries are affected. The gravity of the situation to my mind is this. Recruits are not coming in—young men are not coming into the industry. The older men have stuck it out well. But we are removing—and I am sure we have your Lordships' approval—the Essential Work Order. The time is coming when the old men will go out. Major Lloyd George, in another place, gave an illustration of the seriousness of the situation. He described how he went to a meeting of a colliery village where there were some 400 men who worked in a mine. He asked that any man who had sent his son down to the mine should put up his hand. One hand only was raised, and this in an industry where it was traditional that the son should follow the father.
In spite of this grave shortage of labour we have not up to the present been doing what we ought to do. We have got less labour to devote to this, work, and we must at least see that our work is technically

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as efficient as possible, so that one man may, if possible, now do the work of two.
May I remind your Lordships of these facts from the Reid Report. That Report gives the history of the ten years after 1925–1926. Whereas in those years the Ruhr—they were careful to point out that these are comparable mines—had increased its output by about 81 per cent; Poland by 54 per cent; Holland by 118 per cent; we in this country had increased our output by 14 per cent. So far as the output per man shift is concerned, in the Ruhr it was 31 cwt., in Holland 33 cwt., in Poland 37 cwt., and in this country 23 cwt. There is one further fact stated in the Reid Report. They tell you the amount of work which one haulage worker does. In this country, one haulage worker shifts 5 tons per shift; in Holland 20 to 25 tons, and in the United States of America 5o tons. That is the sum measure of our backwardness in technical efficiency.
Come to the next point if you will—labour relations. There is in this industry an appalling absence of goodwill, of the co-operative spirit. We have, consequently, strikes, we have absenteeism, we have what is described as lack of discipline, but I prefer to call it lack of co-operation.
The Report says "the problem of securing full co-operation between them—that is, the owners and the men—"is the most difficult that the industry has to face." There can be no doubt that, owing to our backwardness in technical efficiency, our work is more arduous here than it is in other coalfields. I do not think we have any conception—at least I will confess for myself that I, until I became Minister of National Insurance, had no conception—of the ravages of disease, pneumoconiosis-silicosis. I recall being shown a photograph of a Welsh Rugby football fifteen, a goodly proportion of whom were miners. I was told that every one of those who were miners had died in the early forties. If you find a man suffering from this appalling disease, for which I believe at the present time there is no known cure, going about among his neighbours, can you wonder that the young men are not going down the pits? Then there is a further matter. I am not casting any aspersions on any side of the House, it is a problem we have inherited from our fathers. When you
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go round some of these mining villages and you see the utter lack of amenities, the lack of almost anything which differentiates, or should differentiate, the life of a man from the life of an animal, when you see the complete absence of any aesthetic appeal, can you wonder that the younger men of to-day are not anxious to cast in their lot in the mines?
But that is not all of the problem. At the present time, in addition to all those great difficulties, there is the fact that the old coalfields are very largely being worked out. In Durham, Lancashire and Lanarkshire, many of the coal seams are almost finished, and that means sinking new pits, and very deep pits, in different places. Those are some of the problems. As the result of this technical backwardness, as the result of bad labour conditions which, through no fault of ours or yours, are prevailing, can you wonder that there are no recruits, can you wonder that the individual output is small? And we must face it—there is a grave danger that the existing output, which is barely sufficient for our own needs, let alone the needs of any export trade, may fall.
I would say, if we look into these problems and try to face them as realists, there is one fundamental obstacle in the way of improvement. Twenty-five years ago the Sankey Commission in their Interim Report—a unanimous Interim Report—said this:
"Even upon the evidence already given the present system of ownership and working in the coal industry stands condemned"
That was 25 years ago, and in the Reid Report, 25 years later, there appears this quotation with which I will trouble your Lordships:
"We have come to the conclusion that it is not enough simply to recommend technical changes which we believe to be fully practicable, when it is evident to us, as milling engineers, that they cannot be satisfactorily carried through by the industry organized as it is to-day"
When you consider some of the practical difficulties which have got to be surmounted—there are between 85o and 900 separate undertakings, to-day—it is clear that the technical reorganization which, we all agree, must be carried out will involve very large sums of money, money which must be spread over the industry and spent in those places which are most likely to show the best return. There must be a grouping of the collieries—quite independent of ownership—which are to

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be worked together. That is essential for reorganization. Then you have to consider coping with the grave shortage of mining engineers possessing the necessary skill and competence. They must be spread, and allowed to operate freely where they are most needed, all over the country. Then you must have some system of levelling out of profits and losses, so as not always to base your prices upon the least economical colliery.
Those of us who had to look at this kind of problem in the days of the Coalition Government will remember the difficulties that occurred with regard to agriculture. In the matter of prices you were always up against this dilemma, that you had to fix your prices so high that the marginal farm was able to make a profit, with the result that the good farm reaped an enormous profit. These are the problems—or some of them. I have tried to state them fairly. I do not believe that anybody would controvert the sketch of them which I have given. Now let us look at the history. First of all I need spend no time on destroying of dual control. We had in the 1914–1918 period dual control, a control which amounted to little more than a guarantee of the profits of the companies, with practically no operational control. That system, we all agree, is a vicious system and must go.
We have tried mechanization, but our mechanization has been very largely misconceived. "Mechanization," says the Reid Report, "should have started at the shaft bottom instead of at the face. The underground roads and haulage systems should have been first remodelled before any extensive introduction of conveyors took place." We have tried output restrictions. We have tried price control. I myself bear a very heavy share of responsibility for that, in the 1930 Act, and I discovered, rather to my surprise, that I was quite popular, for the time being, with some of the coal owners. But it has not succeeded.
For a long time since the Samuel Report, we have been talking about amalgamation. The Samuel Report said there must be voluntary amalgamation, and if you could not get voluntary amalgamation you would have to have compulsory amalgamation. Now this is very important, and I stop here for a moment to tell your Lordships what has happened. There was a Reorganization Commission
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appointed. Sir Ernest Cowers, one of our ablest civil servants, became its chairman. I read from his Report made in 1931:
"For every scheme of amalgamation that has got safely through"—
he is dealing with voluntary amalgamations—
"in the last five years, there have probably been two or three that were launched only to be wrecked on the practical details of values or personalities."
Again in 1933 we get this, and I will trouble your Lordships with a rather longer quotation this time, from a Report of Sir Ernest's Commission:
"The very real difficulty of getting incongruous personalities to work together, doubt by the prosperous of the possibility of linking them on fair terms with the less prosperous, a reluctance by the less prosperous to see a state of relative inferiority, that they hoped was only temporary, crystallized in the terms of a merger, a conviction by each that he would weather the storm better than his neighbours—all these inevitable consequences of the industry's traditional individualism created an inclination to turn away from amalgamation as cure for its troubles and to regard with suspicion anybody whose business it was to foster it."
So far as compulsory amalgamations were concerned, there has not been a single one—not one. In the manifesto which the Conservative Party put out at the Election, a sort of counterpart to our "Let Us Face The Future" call—I do not know what they called it and I certainly would not like to suggest that they called it "Let Us Face The Past"—they said, that compulsory amalgamation was to be held in reserve. There is no doubt about that. It has been held in reserve. Let us see what Mr. Foot says about amalgamation"—he does not like it. He says:
"To compel parties who object to it to work together in a combined undertaking would be a mistaken policy."
I believe that amalgamations on any considerable scale are absolutely impossible under any system of private enterprise. What is the alternative? We hear a good deal about the establishment of a central authority, whether in the form recommended in the concluding chapter of the Reid Report, or in the weaker form of the declaration made during the time of the Caretaker Government by Major Lloyd George, or in the cumbrous, complicated shape proposed by the Tory Reform Committee. I say that to propose such a central authority, after ten years' completely abortive pre-war

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experience of the Reorganization Commission (during which not one single compulsory amalgamation was carried through), is no more than to revert to the discarded and hopeless remedies of a bygone age. And that at a time when, in the words of the Reid Report, "There is no time to be lost" Even if you got these amalgamations you could not deal with the finance of the industry as a whole. And moreover you would do absolutely nothing to improve, or to give yourself a chance of improving, labour relations.
Now, my Lords, those are the problems. That is the history of the matter. In another place, Mr. Anthony Eden asked about thirty questions—all of them very relevant to the Committee Stage of the Bill and all will be answered—but on Second Reading this is the question which I would propound: What is your remedy? It is no good saying "This industry has been bedevilled by politics" Be it so. Nor that it is the fault of the miners. Be it so. Here are the facts—what are you going to do about them? The Tory Party have got some remedy, I do not doubt, because they moved a considered Amendment declining to give this Bill a Second Reading in another place. I select from it. They declined to give the Bill a Second Reading because it took
"no immediate action to restore the export trade in coal to the levels reached under free enterprise"
I want that, beyond everything else. If you will tell me how to restore promptly and immediately the export trade to the level reached in the old days then I shall be most delighted to consider it. And I am not being doctrinaire. I rather doubt your ability to do so however. I doubt it for this reason. We have had speeches in this House—we had one review from the noble Lord, Lord Teviot, whom I am glad to see here. He gave us his review with great knowledge of the industry and with a careful assessment of the facts. But he added this:
"Whether any other course would have achieved what the Government are trying to achieve, I do not know. But there is no doubt that the result is very problematical. I think, from what the Minister has said on one or two occasions, that he is also disturbed in his mind as to what may happen"
I give him that. I always listen with instruction, if not with delight, to the speeches which the noble Lord makes,
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but I wish sometimes that he would show us some way out of the problems. You remember what Dr. Johnson said of "Macbeth"
"In the description of night in 'Macbeth' the beetle and the bat detract from the general idea of darkness—inspissated gloom"
I do not mind a review of the facts, but I wish that the noble Lord would sometimes introduce the beetle and the bat to show us how to get out of this darkness.
LORD TEVIOT: If the noble Lord would not mind my interrupting, I am tomorrow going to speak on the subject, and I have some constructive views to express.
THE LORD CHANCELLOR: I shall look forward to hearing the noble Lord with even more interest than I anticipated. The noble Lord, Lord Barnby, who spoke on the same lines is not here to-day unfortunately. I have known him for more years than I like to think of and I admire him more each year. He seemed to think it rather humorous that the Minister did not guarantee that this scheme would get over all the noble Lord's troubles. I give no guarantee at all. All I do is to give an expression of opinion. Unless you adopt this scheme you cannot get out of your troubles. I say that because I believe it essential that this industry should be amalgamated into a complete whole. I do not mean, of course, that there should be no decentralization. I am not crediting this very competent Board which we have set up with the conduct of absolute half-wits.
But one mine differs from another mine; one area from another area, and obviously you must decentralize and give self government, if not to pits, at least to areas. You must give scope for initiative and enterprise on the part of local people. That goes without saying, and anybody who knows the name of Lord Hyndley and sees the names of the rest of the Board will know that they realize that. There must, however, be complete amalgamation. There must be unity of policy, and there must be finance provided for reorganization and for research—research which we have fundamentally neglected. This research must be directed not only towards producing the coal but towards using it. As your Lordships know we propose under this Bill to provide £150,000,000 for the Board to start with. Then we must

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be able to make the best possible use of the very limited numbers of high-class mining engineers which we have, The Reid Report says that they have been handicapped by the short-term view taken by the colliery owners in the past. Then there must be levelling of prices on the basis of total cost of production in the whole industry. Finally there must at all costs be better labour relations. These I believe to be the pre-requisites of the success of any scheme.
This scheme, when it goes through, will not by itself, of course, solve the problem. The Board will be confronted with an appallingly difficult problem, a solution to which has been very long delayed. Its chance, its only chance, is that the Board should show efficiency and that the workers should show enthusiasm; that we should have a scientific outlook on all the problems, and that there should be some attempt at long-term planning. I do not believe—I say so quite sincerely—that there is a chance of any of these things happening, unless you introduce a Bill such as this.
I have spoken for a long time already, and I have only just taken the Bill in my hand. I shall glance at some of its major provisions, as I think I ought to do, but were I to go into it at length I should obviously occupy wholly undue time. Your Lordships will not, therefore, think that because I do not refer to some particular clause, or group of clauses, I do not think that there are important matters in these clauses which should form the subject of discussion here and, if necessary, discussion in Committee.
Now, obviously, the first part of the Bill is most important. We have constituted a Board. They are not a board of civil servants. We must have a board which is not unwilling to take risks, and I think that, with the Board as constituted as a whole, that will be found to be the case. What are they to do—this National Coal Board? They are to be entrusted with the monopoly of working and getting the coal in Great Britain to the exclusion of any other person; securing the efficient development of the coal mining industry; and making supplies of coal available, of such quality and sizes, in such quantities and at such prices as may seem to them best calculated to further the public interest. I cannot think (this question was raised in another place) that if there was
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any question of arbitrary discrimination, anybody could say that that was best calculated to further the public interest.
Then on the next page we set out from (a) to (f) various powers which this Board are to have, and which resemble the memorandum and articles of a private company. You do not want them to be in any way hampered or limited by lack of powers. I would particularly call your Lordships' attention to (f)—I think we are right to put that in the forefront—
"activities conducive to advancing the skill of persons employed or to be employed for the purposes of any of the activities aforesaid, or the efficiency of equipment and methods to be used therefor, including the provision by the Board themselves, and their assisting the provision by others, of facilities for training, education and research."
Then subsection (4) of that clause says this:—
"The policy of the Board shall be directed to securing consistently with the proper discharge of their duties under subsection (1) of this section—
(a) the advancement of the safety of persons in their employment and the promotion of their health and welfare;"
We set out therefore in the very forefront that this Board has to regard itself as a model employer. Secondly, we say in (b) that there is to be no concealed subsidy, that the revenues of the Board are to be sufficient, taking an average of good years and bad years, over a period, to pay their way. That is the broad scheme of the Board.
Then I come to Clause 3. Obviously, a Board which has conferred upon it these immense powers, for good or for ill, must be subject to Parliamentary check and Parliamentary control, so you find in Clause (3) (1) we have followed exactly the same words as are found in the Coal Act of 1938, by which the Board of Trade had power to give general directions to the industry. So also we say that the Minister should be able to give directions of a general character as to the exercise and performance by the Board of their functions.
I cannot define—it is impossible to define—what these directions will be, but the less the Minister interferes with the day-to-day working of the scheme, obviously the better. On the broad question of policy, however, the Minister must be able to interfere, and must be able to answer in the House of Commons for what has been done. That is a necessary and fundamental check. You must remember that

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the State will be the sole shareholder, that the State will be providing the finances, and that what is to be done has to be done in the national interest. If we are going to have, as I hope we always shall in this country, a system of democratic control, it is, therefore, essential that this Board should work under the approval of the Minister himself.
Clause 4 sets up the two Consumers' Councils, the Industrial Coal Consumers' Council and the Domestic Coal Consumers' Council. I always feel myself that there is much to be said for this proposition (perhaps I am old-fashioned in my view about this)—that Parliament itself is perhaps the best Consumers' Council of all; and therefore Parliament ought to have control, but the Councils will also be there to advise the Minister. In Clause 5, combined with the first Schedule, we indicate what assets are to be transferred to the Board. In the first place, there is the automatic transfer of assets which are part and parcel of the colliery undertaking. Secondly, there is a group of assets which can be transferred at the option of either side—it obviously would be unfair to leave an undertaking with just a little bit of its whole undertaking. Finally, there are those things which are transferred at the option of either side, but subject to the right of arbitration. And so we get a list of the assets which in one way or another are to be transferred.
I pass on to Clause 10. Clause 10 deals with the compensation to be provided. It divides the compensation under these two heads: first, compensation for assets of what is called the coal industry value—those assets which normally would be taken into account in wages ascertainments; and secondly, the other assets—of value for subsidiary purposes. Of course, it is quite possible that the value for subsidiary purposes may amount to a very large fraction of the figure for the coal industry; value. It may be half or more than half.
There is provision for the assessment of a global figure, that has to be made in accordance with an agreement made between the Minister and the Mining Association. I was asked at an earlier stage of the Bill to try to negotiate such an agreement. When I tell your Lordships that I suggested that the tribunal should
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consist of the Master of the Rolls, Lord Justice Cohen, and Sir Harold Howitt, who is now, I think, President of the Institute of Chartered Accountants, I think everybody will realise that you have a tribunal about as competent and impartial as you possibly could have.
The global figure so arrived at is then divided among the various districts, and finally you come down to valuations made within the districts themselves, and there, of course, you have to have an individual valuation of each unit of the Coal Industry. The quantum total of those figures will square with the district shares of the global figure, scaled up or scaled down as the case may be. That is the principle on which we have dealt with this question of compensation.
I pause for one moment to look at Clause 21. Subsection (1) deals with the mode of satisfaction of compensation, and I think that this has been misunderstood or misrepresented in not a few quarters. For reasons connected with the management of the gilt-edged market, it has been decided that the satisfaction of compensation should, with several major industries to be nationalized, be made in stock, and not in cash. The object of that is to prevent a flood of compensation money being thrown upon the market as soon as the compensation is paid but when in due course the money comes down to individuals, then, of course, that money is paid to the individuals in transferable stock—stock which ceases to be inalienable, and they are able to deal with it as they want. I think in other respects, if your Lord-ships look at this clause, you will find that we have been at pains to see that cash for the current needs of colliery concerns is amply provided for. So that is Clause 21, as affected by Clause 23, which deals with the restrictions connected with stock.
Clause 25 deals with the advances to be made by the Minister to the Board. It is there that we get the figure of £150,000,000 in the next five years. Clause 30 deals with the accounts, and your Lordships will see that the Board have to keep proper accounts, to be audited by auditors appointed by the Minister, and those accounts are to be made available to each House of Parliament.
I pass over many interesting Clauses to ask your Lordships' attention to Clause 50.

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There also, in order to preserve the Parliamentary control of this House and the other place, we provide that after each year the Board shall make to the Minister a report on the exercise and performance by them of their functions during the year, and the Minister shall lay a copy of every such Report before each House of Parliament. There is the scheme of the Bill, and we can discuss it. We shall discuss the details of it, I have no doubt, at very great length.
Now let me end, if I may, on this note. Do not let it be said that we are not conscious of the risks we are running. We are living in a world to-day where if you refuse to take risks you will take nothing at all. The true path of statesmanship to-day is not to refuse to take risks but to know which risk to take. It is because we believe that this is the risk to take, that it is the only risk to take, that it is the only way it is possible for us to get this industry into the condition in which it could do what was said in the reasoned Amendment—to restore once more our export trade, and to get the young people to come in, to make the life of the coal miner a life worth living, a life of vital importance to us—that we are taking it, in the full realization that we must have a clean break with the past. We must get away from those hopeless and vicious conditions, that atmosphere of suspicion and of distrust, and we must start again. To the new Board I would say this—and I am sure all your Lordships will agree: "You are called upon to perform a vastly difficult task. We wish you all success in that task. "And to the men I would say this: "Here, at long last, you are getting, the scheme for which you have worked and laboured so long. Now it is up to you to make this scheme a success," I beg to move that this Bill be read a second time.
Moved, That the Bill be now read 2a—(The Lord Chancellor.)
3.14 p.m.
VISCOUNT SWINTON: My Lords, The Lord Chancellor has moved the Second Reading of this Bill in a characteristically lucid and persuasive speech. On one thing we are all agreed, and that is as to the vital importance of this Bill, because upon it and upon its operation depends the failure or success of the most important industry in this country. With every word that he has said as to the importance
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of this industry everyone in this House will agree. The epithet "basic" is rather loosely applied to this or that industry to-day, but if there is one industry to which it is entirely appropriate, it is the coal industry. Coal enters every household and is the raw material of every industry. It affects the price of every commodity in the home and the export markets, and, as it is the raw material of transport and of power, it affects the cost of industry twice over. It has been, and I hope it will be again, our greatest export. As an export, coal has had a double value: it has had the value in the foreign exchange which it has earned, and it has had its value in shipping freight. It is a particularly important, perhaps the most important of all cargoes, because ships going out to the great grain ports and meat ports, which otherwise would be going out in ballast, have carried these great coal cargoes, thereby earning shipping freight and increasing the competitive power of our own ships in the carrying trade of the world.
That is all common ground, and I think common ground also is the avowed object of this Bill as the Lord Chancellor has put it to us and as, indeed, it is put in the first clause of the Bill: to obtain an abundance of coal, coal of the right quality, of the right sizes and at the right prices. We all agree. I would agree also with the Lord Chancellor that the results are going to depend on two things: efficiency and goodwill. Cheap coal does not mean low wages, but cheap coal and the efficient production of coal do depend on output per man-shift. The Lord Chancellor read a remarkable comparative table of output per man-shift. I am sure he would also agree with this: that the greater the mechanical improvements—and we must have those mechanical improvements, and have the right improvements in the right order and in the right place—the more necessary it is to have regularity of attendance of the whole of the team, underground and above ground, who are working in the pits.
Will a nationalized, uniform industry give us the results we all seek? Some of us may well doubt whether the Bill is the best way. But, accepting the structure of this Bill—and that is what your Lordships, I am sure, are prepared to do—within that framework it is our duty to do our best to secure those objectives and to make this Bill the best instrument for

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its purpose, just as we shall all seek together to make it work when once it is through. This Bill will require (and indeed the Lord Chancellor has invited us to give it) the most careful consideration in Committee; and the fact that this measure, as originally introduced in another place, has been so drastically amended in Committee and on Report—and more particularly on Report, where new clauses of very great importance were introduced—imposes a duty upon us to consider its details with care. I am sure your Lordships will do so. I might say this, without presumption or impertinence: I have spent a great many years in piloting Bills of one kind or another through Parliament, and the longer I sit here the more I am impressed with the capacity of this House in its Committee work—thorough, informed, relevant, with never any waste of time.
In spite of the invitation of the noble and learned Lord Chancellor, I am not going to argue the case for nationalization. Speaking for the Opposition, I accept the principle of this Bill, however much I doubt its wisdom. I am, however, going to accept the noble and learned Lord's challenge to put to him a number of what are, I hope, constructive suggestions. Where everything depends on the detailed provisions and how they will work, it is not easy on a Second Reading to decide what should be said now and what should be left over for Committee. On this occasion I propose to concentrate on certain important features of the Bill which are largely matters directly affecting the interests of consumers or matters which concern the duty and responsibility of Parliament as the trustee for and the representative of the public, whether as taxpayers or consumers.
First of all, I should like to deal with the functions and powers of the Board and the Minister. If I may say so with respect, I thought the noble and learned Lord, the Lord Chancellor, slid rather gracefully over this very important question. He thought it was disposed of by saying that some words had been taken from an Act of 1938 dealing with the nationalization of coal royalties, but that is -a very different proposition from the business management of every colliery undertaking in the country and all their ancilliary businesses. As the noble and
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learned Lord said, Parliament cannot escape its responsibility, and the Minister cannot escape his responsibility to Parliament. One of the real problems of nationalization is the inescapable dilemma which the Government and Parliament are up against when an industry is nationalized. There is a dual responsibility—a conflicting responsibility. There is the responsibility of the Minister to Parliament and there is the responsibility of the Board for running the industry. There used to be a cliché—if I remember rightly, the Lord President was very fond of it—that when you had Socialism and nationalization you would have Government ownership but independent business management. As we see from this Bill, that just does not work in practice. The attempt to divide the two functions into policy and day-to-day management in fact vests the real power in the Minister. After all, what is policy? Policy is that which makes an industry succeed or fail. Policy is the essential function of any directorate in any business undertaking.
With whom is the reality of the direction of this vital industry to rest? Clause 3 gives the only clue to that. That clause is, I think, very obscure and I hope that my noble friend who is to speak tomorrow will condescend—I use the term in the Scottish sense—to deal with this important matter in some detail. Clause 3 says:
"The Minister may, after consultation with the Board, give to the Board directions of a general character as to the exercise and performance by the Board of their functions in relation to matters appearing to the Minister to affect the national interest …."
In almost every respect coal affects the national interest. Let me put to the noble Lord who is to speak for the Government certain specific tests of where this responsibility is to lie. Let us take wages, hours and conditions of labour. I do not mean as laid down in legislation but in the ordinary day-to-day negotiations for the settlement of hours and working conditions. Is responsibility for that to rest with the Minister or with the Board? Then let us take prices. Nobody can doubt that the national interest is very directly affected by the price of coal, whether it be domestic or industrial coal. What is to be the price policy and who is to decide it—the Minister or the Board? Then reorganization and development.

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The Bill lays down—I am not quite sure in which clause—that programmes of reorganization and development which—and I paraphrase—involve any considerable expenditure of public money must be approved by the Minister.
THE LORD CHANCELLOR: It is Clause 3 (2).
VISCOUNT SWINTON: I am much obliged. The Clause says:
"In framing programmes of reorganization or development involving substantial outlay on capital account the Board shall act on lines settled from time to time with the approval of the Minister"
I think I paraphrased it correctly. Reorganization and development must be primarily the function of the Board. I want to put those specific tests which really ought to be susceptible of a clear and simple answer.
Then I want to put this to the Government. If the Board and the Minister disagree, and if the Minister over-rules the Board and gives them directions on a matter which he considers to be in the national interest, will Parliament be informed when the Minister has over-ruled the Board on a matter concerning what they think is the businesslike way in which the industry ought to be managed?
Now I turn to finance. The creation and the use of a reserve fund is the normal function and duty of any directorate. Here the creation, the management and the use of a reserve fund are vested entirely in the Minister by Clause 28. The next clause deals with the application of surplus revenue, which is entirely vested in the Minister. He is to decide how any surplus revenue is to be spent and, as no discretion is given to the Board in this matter, Parliament has a very special duty with regard to it. I shall return to that in a minute or two. Unless to-morrow the Minister can show us that he proposes something different—and we shall listen with great attention to what he has to say—on the face of it, and applying those tests which I have put to the House, the real responsibility is vested in the Minister, just as it is as between the Minister and his Department. The Board are in fact the Minister's civil servants, exactly in the same way as the civil servants of the Minister of any Department of State.
I want to put another matter of responsibility. With whom are the
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Miners' Federation to deal? At present they are dealing with the Minister. I agree entirely with what the noble and learned Lord, the Lord Chancellor, said as to the importance of constant consultation and of right labour relations, but when the Board is operating, with whom are the Miners' Federation to deal? It is essential that the miners' representatives should have full opportunity to discuss with the Board not only their conditions of employment but the widest problems of the industry, national and international. They should have what I called the other day a sufficient knowledge of the general idea. That is a problem which we have got to solve in all industries, and I think it is perhaps most important in the coal industry, which affects every other industry, and which, directly or indirectly, affects the whole of our export trade.
I think it is specially important in this industry, which least of all industries can afford to be isolationist, but which in the past, by the segregation of coal areas, has tended in all its relations, whether with employers or with the whole industrial machine, and even in its relations with other trade unions to be more isolationist perhaps than any other industry in the past. It is very important to solve this problem. I speak only for myself, but personally I cannot help regretting that an experiment was not made of having an elected representative of the miners on the Board. Very wide powers are taken in regard to ancillary industries. I hope the Minister will tell us what is the intention with regard to ancillary industries. The Board will have a colossal job in running the whole coal industry of this country. I hope it will not dissipate its energies in side-lines or side-shows. We should like to know what the Government intend.
Now may I come for a moment to the application of surplus revenue. The policy with regard to the application of surplus revenue rests with the Minister. What is the policy? The Government must know that, and we ought to be informed. The Board has to pay its interest, that is obvious. It has to create an adequate reserve fund, but beyond that—and I ask the Government this question quite specifically—what is to be the policy? Is it to make a profit for the Exchequer, or is it to reduce the price of coal? That is quite simple and quite specific. I am so certain that cheap coal is so vital to this country and to every

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industry in this country that any surplus revenue which is made ought to be used in reducing the price of coal. There is even the analogy of gas. That does not support me 100 per cent., but it at least supports me 50 per cent., and I think I am right in saying that the law lays down that if a gas company wishes to raise its dividend, above some standard minimum, then it must, if it increases the dividend, at the same time reduce the price to its consumers. For my own part, I should have thought it was so vital and so important to get cheap coal, as well as abundant coal, that it would pay us all along the line to apply surplus revenue in the reduction of price.
I turn next to accounts. I think your Lordships will agree that I am confining myself to matters of principle and of great importance. Clause 30 deals with accounts:
"The Board shall keep proper accounts and other records in relation thereto, and shall prepare in respect of each financial year of the Board a statement of accounts in such form as the Minister may direct"
I think we ought to be more specific about this. We want to know, and I am sure the Government would agree that Parliament should know, exactly how this business is working financially, and if it is making a profit, what profit it is making. We also should have the accounts so kept that the accounts of the ancillary industries are kept quite separate from the general coal accounts, so that we may not be setting off losses in one by profits in another. I think it will also be agreed that the Board should follow the best commercial practice both in the form of accounts and their presentation. As a commercial undertaking, it should conform not only to company law, but to the best and most informative commercial practice. It certainly should be a model in the information which is given to shareholders. The shareholders in this case are the taxpayers, and therefore the most informative accounts should be presented to Parliament.
Now I come to a matter on which both the noble and learned Lord, the Lord Chancellor, and the Bill seem to be entirely silent. Yet it is a question which has loomed large and has been the subject of special provisions hitherto in all monopoly legislation—that is, the question of discrimination or undue preference.
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I cannot see any provision about this in the Bill at all. I stand to be corrected if I am wrong. In every Act which has created a monopoly, discrimination, undue preference, and practices of that sort, are absolutely prohibited. Indeed that is essential, for a dissatisfied customer or trader has nowhere else to go. If I get bad coal, the wrong kind of coal, or if my neighbour, my competitor, gets coal on better terms than. I am getting, I can go to another coal merchant tomorrow morning, or at least I could before everybody was zoned. We have got to do a lot of things in war-time. At any rate, he will not be able to go anywhere else in the future, he will only have one wholesaler with whom he can deal.
THE SECRETARY OF STATE FOR DOMINION AFFAIRS (VISCOUNT ADDISON): There are many different kinds of coal.
VISCOUNT SWINTON: I know there are many different kinds of coal, and I hope that will be remembered by the Administration, and that people will not be fobbed off with coal of a wholly different class to that which they require, with the result that the production of power costs about twice as much as it ought to cost. The whole object of this Bill is to make things right for the future. I really did know that there are different kinds of coal. I spent nine months in a pit, which is more than the noble Viscount ever did. That does not alter the importance of discrimination. Discrimination does not mean merely giving a man one kind of coal instead of another. What we must ensure is that customers are treated equally in supply, in price, and in all those other matters which make ordinary trading. Not only in the past has discrimination and undue preference been prohibited, but aggrieved persons have been given recourse to a court, sometimes to a special tribunal. The Railway and Canal Commission was set up very largely to deal with discrimination and undue preference in railway rates, entirely in the interests of the trader and the consumer, and many cases were heard before it. The Railway Rates Tribunal exists for a rather similar purpose. Even in the Civil Aviation Bill my noble friend the Minister of Civil Aviation—I am not going to discuss it now, to do so would be out of order and invidious—has presented us with a bowdlerized edition of a special tribunal. I cannot find anything in this Bill which

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lays down that the Board is not to discriminate as between customers. I cannot find the provision of any remedy or any court to which the citizen can go if he is made the subject of discrimination. So I ask the Government specifically to answer this question. Is this omission accidental or intentional? I do not think you could do any greater injustice than to give one customer a preference in a matter of raw material like this over another. If there is to be no provision against discrimination, and no court or tribunal, then the only safeguard which the domestic or industrial consumer will have will lie in the Consumers' Councils. Those Councils will be important in any case, but they are doubly important if what I have said about discrimination is true.
I think that Clause 4, providing as it does for the setting up of Consumers' Councils is one of the most important clauses in the Bill. But as it stands, I do not think that it is one of the most satisfactory. If your Lordships will bear with me may I, for one moment, draw your attention to this clause. We have to consider the constitution of the Councils. What should be their functions, their powers and the publicity which should attach to their proceedings and recommendations? I think it is quite right to have an Industrial Council and a Domestic Council. And I think it is worth considering whether there ought or ought not to be an Export Council. On that I have an open mind.
But these Councils are all appointed by the Minister and I think that that is much less satisfactory. The Minister is to decide the number of members of these Councils. The Minister will appoint the people who are to represent the Board. But the people I am interested in are the representatives of the public—the domestic consumer and the industrial consumer. The Minister, under the Bill, has to decide how many of these representatives there are to be and who they are to be. It is true that as to who they are to be (but not as to how many persons), he has to consult with organizations. But the selection, the appointment, is his. I do not think that is right. I think the Minister would be well advised not to seek, or to appear to seek, to appoint people who in a sense are going to be his judges.
This is one of the real difficulties which you come up against in connexion with
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these nationalization schemes. The Minister, the Department, becomes plaintiff, defendant and judge. I certainly think that the consumers should themselves appoint their representatives on these Councils. Moreover, each of these Councils, domestic or industrial, should have power to appoint regional sub-councils or panels, if they wish to do so, and that ought not to be at the discretion of the Minister. Certainly if, as I imagine is going to be the case, the Board is going to operate through regional directorates, it would be convenient, indeed necessary, that there should be parallel Consumers' Councils or sub-councils sitting in the different regions.
Now let me turn to the functions and powers of these Councils. They are to hear complaints. That it is quite right. They may initiate complaints themselves. That, too, is obviously right. But what is their power? Their power is to report to the Minister, but no more. After that what is to happen? It rests solely with the Minister, in his discretion, to act or not to act. His discretion is absolute. I quite agree that we cannot let these Consumers' Councils supersede the Minister or the Board—whichever it is to be—in running this business. But, outside Parliament, these Councils are the only safeguard the public have, and I think, therefore, that they should be given as much power as possible. They should certainly have power to sit in public—I do not know if that is intended. They should be independently appointed. They should certainly have the right and duty to publish their reports, and those reports should state whether or not the Minister has acceded, and has concurred in and carried out the recommendations which the Councils have made.
I have tried to concentrate on important questions, questions which vitally affect the consumers and which go to the roots of the way in which this Bill is intended to operate. A clear reply will help us greatly in the Committee stage. If I have been critical, I have tried to accept the Lord Chancellor's invitation to be constructive in the suggestions which I have made. Whatever our views or misgivings, we all approach this Bill now in the debate on Second Reading, as we shall later at the Committee stage—with a wholehearted desire to do our best to help the coal industry to succeed.
3.46 p.m.
THE MARQUESS OF READING: My Lords, you will be of one mind with me in regretting the absence this afternoon of my noble friend Viscount Samuel, but unfortunately he is obliged in pursuance of a long-planned engagement to be abroad at this moment. His name will always be associated with one of the main episodes in the more recent history of the coal industry. In addition, he has been for the past half century so informed and experienced an observer and participant in public affairs, that his views could only have been of value to your Lordships to-day. It is, I think, unnecessary for me to point out that his case is not one of voluntary absenteeism. But in his absence it falls to me to define the attitude of those noble Lords who sit upon these Benches to this Bill, and to indicate the reasons which lead to that attitude. I have every hope that in so doing I shall be substantially representing my noble friend Viscount Samuel's present views.
It should cause no surprise in any quarter of the House, if I say at the outset that we are prepared to give to this Bill our general support. Even Liberals move with the times, though I have to admit that they are also sometimes removed by the times. But we have come to recognize that in this matter of public ownership or nationalization each question must be judged upon the merits or demerits of the particular case with a sole eye upon national interest and not upon political dogma. However much some of us might wish that it were otherwise, we are forced to the conclusion that in the case of the coal industry we can see no prospect of real recovery by any other means. At the still recent General Election the Liberal attitude was put in a manifesto of twenty points, far more concisely and aptly than I can put it. Under the heading of "Industry," in general, it stated that:
"Liberals believe in the need for both private enterprise and large-scale organization under Government control and their tests for deciding which form is necessary are the service of the public, the efficiency of production and the well-being of those concerned in the industry in question"
Under the specific heading of "Coal" there occurs this passage:
"Compared with other countries the British coal mining industry is inefficient and is losing ground. Since it is apparent that the necessary increase of efficiency cannot be brought
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about with the present organization the industry should be a public service, in which the miners can feel they are working for the benefit of the whole community"
That conclusion is based upon two main propositions which it may be of value to examine very briefly now. The first proposition is that compared with other countries the British coal-mining industry is inefficient and losing ground. It seems to me unnecessary to call any further evidence on that particular aspect than the Reid Report itself, although the evidence has been substantially weighted by the figures which the noble and learned Lord on the Woolsack has given this afternoon.
As regards the second proposition, that it is apparent that the necessary increase of efficiency cannot be brought about with the present organization, I would say this. I have attended some of the debates on this Bill in another place, I think I have read all that was spoken, as recorded by HANSARD, and I have waited the speech this afternoon of the noble Viscount who has just sat down, in the hope that from one or other of the sources, or from an amalgam of them, I might gather what was the great light which was now to be shed upon the coal industry and which was to reveal the panacea for all its inherited ills. The noble Viscount's speech this afternoon—if he will allow me to say so—was a somewhat chastened challenge. It was less a fiery cross than a crossexamination, and although the questions which he asked are no doubt of great importance, and will probably be answered in due course, they gave me little indication of where to continue my search.
From what I heard and read of the debates in another place, to which I must now turn back for guidance, it appears that those who opposed the measure—and it was stoutly opposed in that House—clung with the tenacity of despair to the Reid Report. No doubt the Report does contain a number of most valuable and profound recommendations, but there are two things to be said about that Report. The first, perhaps, is this. If I may so express it, it ought to have been a life policy taken out by the coal industry when its expectation of life was still good, and not a lifeline thrown to the industry when it was going down for the fourth time. If the Reid Report was necessary, and there is no doubt that it was, then it was necessary in 1925 or 1935 just as much as, if not more than,

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it was necessary in 1945. Yet it has only just arrived. Unfortunately, if you have been an invalid for many years, it is no good hoping that by sitting up on your death bed and swallowing a tonic you will be restored to health and vigour over-night. That kind of hope is likely to be disappointed.
There is also this to be said about the Reid Report. Widespread and far-reaching as are its recommendations, just because they are so widespread and far-reaching they involve expenditure of two things which the industry itself cannot at this moment afford. One is time; the other is money. Obviously the cost of the recommendations of the Reid Report is on a very extensive scale, and how that is going to be provided under the present system of management of the mines I, for one, am unable at this moment to see. Even with the concentration upon the operations proposed by the Reid Report of all the resources of the State, the mechanization and the other alternatives which are proposed are bound to take a very long time. If they are to take a long time with all the resources of the State behind them, how much longer will they take without the backing of those resources? These matters after all, are matters of the extremest urgency. We want coal now, and you can only get coal by getting the man-power, by getting mechanization, and by concentrating the whole effort which the country can bring to bear upon those proposals.
The experience of the past twentyfive years has not led us to have very profound hopes that, if these matters are left in the same hands as they are now, they will proceed any more rapidly or any more satisfactorily than they have in the past. For myself I have no great love for nationalization as an end in itself and perhaps nothing more than a platonic affection for it as a means to an end. But I have to recognize in this particular context one over-riding consideration. This matter of the nationalization of the mines—and I am talking only about mines—was not hit upon overnight by somebody in the present Government who in a bout of indigestion or in a period of night starvation wanted to think out something new. For years past this question of nationalization, whether we have agreed with it or not, has been one of the foremost arguments of the Labour
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creed. Twenty-five years ago the noble and learned Viscount, Lord Sankey, gave it his conditional blessing. Twenty years ago it was argued, although then in rather inchoate form, before Viscount Samuel's Commission. During the interval, in which there have been repeated General Elections, the Labour Party have put it forward as part of their case. Would anybody say that in the present House of Commons there was a single member on the Government Benches who had not included it in his election address and expounded it from his platform?
It was suggested to your Lordships in a recent debate that it was no part of our business to pay attention to such frivolous and ephemeral things as mandates from the electorate, and that we should go on our way, making up our own minds without regard to the consequences and without fear of popular clamour. Whatever may be the attractions to some members of your Lordships' House of that doctrine, I confess that apart from its somewhat suicidal tendencies it gives off—for my personal liking—too much of the authentic aroma of a Chôteau Halsbury, 1910—a very admirable and somewhat heady-wine in its day, but perhaps a little ullaged for modern consumption. I prefer the tactical appreciation of the functions of the Second Chamber which was given at a later stage of the same debate by the noble Viscount who has just spoken.
What the noble Viscount, Lord Swinton, said in that debate—and it will be fresh in your Lordships' minds—commends itself to practically all your Lordships to-day. I would only say this much about it, that, if ever there was a subject for which the Government had a mandate, it is the subject of this Bill.
I have ventured to advance, however inadequately, certain arguments which perhaps may have some measure of cogency, but over and above them all I come back to the preponderant argument—what else is to be done? The Lord Chancellor has given figures with regard to falling output, rising absenteeism and decreasing man-power. Nobody can guarantee, or is going to attempt to guarantee, that those ills are going to be cured by this measure, but I think that most people would guarantee that there is no hope of curing them by any other method. There is, as has been said, unfortunately a long history behind this matter. This feeling

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of the miners, that they are a class apart, segregated, exploited, ostracized, unfortunately, is no transient symptom. It has behind it more than 300 years of bitter and turbulent history.
In his Social History of England, Professor Trevelyan says this:
"Throughout the seventeenth century, coal played an important part in developing not only the national wealth, and therewith the wellbeing of many classes of the community above ground, but also the less pleasant characteristics of the Industrial Revolution in the life of the miners themselves. Their capitalist employers said little and cared less about their conditions of life and labour".
I ought to say "capitalist" is in inverted commas. Then a little later:
"Within the coal mining industry itself there was now a complete barrier between the capitalist employer and the manual worker".
I am not suggesting that that is everywhere and at all times the case to-day. But there are places, and there are times to-day when I am afraid that that is still true. I sometimes think that the present Government are being somewhat self-sacrificing, and are by this Bill depriving themselves in the future of the help of the coal-owners, some of whom—not, of course, by any means all—have in the past by their myopic intransigence, been among the most productive assets of the Socialist Party.
In the result, the miners have come to look upon themselves as the Ishmaels of industry, with their hand against every man, and every man's hand against them. Some of us during the war perhaps got to know England, Scotland and Wales better than we had known them before, by having, in the course of our duties, to travel much about the country. I was one of those fortunate ones, and I found always that, almost before one was in sight of the characteristic appliances on the skyline which indicated that one was coming to a mining area, one knew by something in the atmosphere; it was as if within a certain area a blight had descended upon the country, as if there was something in the air that intercepted the heat and the light of the sun. But it was not only an atmospheric blight; it was a psychological blight as well, and it is surely now the business of the rest of the country to try their best, not only in the interests of the miners, but in the
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interests of all classes of the country, and the future prosperity of the country, to lead the miners back out of the waste places into the main highway of national life. Rightly or wrongly, they have come over long years to believe that there is only one road back, and this Bill opens that road.
But I do suggest that all the giving should not be upon one side. We are surely entitled—(by we I mean the country at large, not your Lordships' House alone)—to ask the miners that, in return for what has now been given to them, they shall make their contribution towards the public need. We are, I suggest, entitled to say to them now: "The faults have not all been on one side. You have made your mistakes, and you would probably, if we were not listening, be the first to admit it. You have made your mistakes just as much as, or perhaps not much less than the other side. Now will you not make your reparation to the country at large? Although you have made it difficult for us, we have given You this measure to remove your ancient obsession. Now is the time for you to show a little more self-discipline than you have always shown in the past, a little more acknowledgment of your duties as responsible citizens. You have now recovered your status in the country. Now help the country to recover her status in the world at large" It seems to me that that is not asking too much of such an essentially and fundamentally public-spirited section of the population as I believe the miners at heart to be.
The Coal Board has, of course, an enormous task in front of it. The only other group I can think of offhand of nine such eminent persons were the Muses of classical literature, but I think these gentlemen will have to do an amount of musing which would have appalled their predecessors before they arrive at any very concrete scheme. Much was said in another place—and something was said to-day—about the power of direction of the Minister, and I confess that I do not find it entirely easy to make up my own mind on that question. At first sight it is attractive to define as closely as possible, so as to prevent assumption of political instead of national functions by the Minister, the circumstances in which he shall be entitled to intervene with direction.

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But however hard you may try to legislate for all cases, inevitably you will leave out the one which, when a crisis arrives, is the one on which he wants to give direction and finds that he has no power to do so. In the end, after some consideration, I am satisfied myself that it is in the best interests of the country at large that he should be left with the wide powers undefined. There are things to be said on the financial aspects of the Bill with which I do not propose to deal, leaving them to my noble friend Lord Rennell at a later stage of this debate. There may well be points on which, when the Committee stage is reached, we shall want to suggest matters of improvement for the consideration of your Lordships and of the Government.
Speaking for myself, I do not pretend that I shall greet the passing of this Bill with any particular outburst of ideological jubilation. Frankly it runs counter to much that I have myself in the past deeply and sincerely believed. But I believe that now there is no longer any other way. This way is going to be an uphill road, but the other ways lead only downhill, and I would rather, for myself, follow an uphill road with the chance of reaching the heights than a downhill road with the certainty of reaching the depths. If we must make a virtue of necessity, then at least let that virtue be courage. The Government are entitled to rejoice at this moment which crowns a long campaign in which they have fought hard for this end. Even though we may not share the full measure of their exuberance, we and many people outside your Lordships' House will join with them at least in hoping and praying that this victory, unlike some other victories, may in its own field soon lead to prosperity and peace.
4.14 p.m.
THE MARQUESS OF LONDONDERRY: My Lords, the noble Marquess who has just sat down could hardly expect me to follow him in his speech, although I am inclined to think, throwing my mind back a considerable number of years, that when I was in another place I would have been only too happy to make some retorts to one or two of the allegations which he has made. The circumstances in which we find ourselves, however, at the present moment, are far too important for us to embark on controversy of that description. I hardly think that
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what I am going to say will lead your Lordships to believe that I am making a controversial speech at all.
I would say at the outset that I do regret, from the public point of view, that the Government have embarked on this tremendous experiment, and at the same time have not told us how far their activities in what is called "nationalization" are likely to go. I am sure there are a great many people in this country who approve the desire of the Government to nationalize an industry like the coal industry, which a great many people may say, by reason of the organization that is required, needs nationalizing, but who nevertheless regret that the Government have not given us any indication as to what their future plans are. Your Lordships will realize that all those in an industry which is to be taken over by the Government naturally are considering what their future is likely to be. I see many signs all over the country that people in other industries are in a state of anxiety at the present moment because they do not know exactly what is going to happen. I am sure we are losing a great many of the benefits which are inherent in the British race—great energy, resource and resilience—by reason of the uncertainty which the policy of the Government is disseminating throughout the country.
We in your Lordships' House can follow one of two courses in regard to this Bill: the rejection of the measure may be moved and we can try to persuade people to follow us into the lobbies, or we can let the Second Reading go through and seek to amend the Bill and put it on the Statute Book in a better condition than it is at the present moment. I have no intention whatsoever of moving the rejection of the Bill or even of doing anything to hamper the Government in carrying out this measure. I trust that the Government will listen to the amendments which the Opposition will move in your Lordships' House, and if those amendments are passed here and go to another place I hope the majority in that other place will not think, because of their numbers, that they must refuse any amendment. I sincerely hope that certain amendments will be made and that by the end of this debate we shall hear more definitely what is proposed.
I am following my noble friend who is leading the Opposition at the present

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moment, in accepting the structure of the Bill. I would like to say one or two words, however, about nationalization. One must look on it to a large extent as an experiment, and I can hardly think that the Government have thought out this plan as clearly as they might. After all, the world is in a very difficult and perturbed state, and this country is no exception. Therefore one must realize that when a measure like this is brought in, a great deal concerning it has not been looked into. As my noble and learned friend on the Woolsack said in his speech, the Government are taking a great risk, but what they want to do is to take a risk on the right subject.
I doubt if any of your Lordships are aware of it—and I do not know why you should be—but I have always been in favour of the amalgamation of the coal trade. I ventured to move in this matter some twenty years ago. I consulted one of the leading industrialists in this country and told him exactly what I wanted, which was what I called the trustification of the industry. He said at that time "Your idea is too vast. It is much too big. I hope you will go back to your own county and try and trustify the coal industry in the county of Durham" To cut a long story short, I may tell you that twenty years ago, when men's minds were not attuned to the vital necessity of perfect organization—which is what we have to obtain—I was not very successful and I did not proceed with that idea. Rightly or wrongly, I took another line and I later went into the Government. I am sorry to say that instead of going forward as a fanatic during those years I left it to other people to consider exactly what those amalgamations amounted to and how they could be achieved. What the amalgamations which are to be brought about now consist of, I do not know, because we are not told in the Bill. As to whether they will be regional amalgamations or not, we shall no doubt hear in the course of the debate. I come now to the Board. I have, of course, no personal objection to any of its members—in fact some of them are personal friends of mine—but I do hope we shall hear exactly what they are going to do and what freedom and independence they will have to do it. After all, there is a political aspect to this question. I do not know whether they are Socialists or
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whether they favour free enterprise, but I must say that I sincerely hope that in the work which they will have to do they will be actuated by the principles which have governed free enterprise.
We have heard from the noble and learned Lord on the Woolsack and also from the noble Marquess something about mechanization. I do not know whether the noble Marquess has any personal knowledge of the coal trade, but when he says that the faults on both sides are probably equal, I accept that remark with alacrity and gratitude. With regard to mechanization, I think your Lordships should remember that one of the great reasons why it was not proceeded with so quickly was the determined opposition of the miners themselves to it. It is quite clear that they were opposed to it because they had in their minds the terrors and drawbacks of unemployment; they felt that if the industry was mechanized it would mean unemployment in their ranks. I do not say that that is the whole reason why mechanization has not gone forward more quickly than it has, but it has been a very important factor.
As to the relations between the owners and men I will venture to say a few words later on. Your Lordships will remember that Mr. Foot produced a plan, which was, I thought, a good one. Certain modifications and alterations were required, but it did have what I felt at the time and feel now to be a great advantage, namely, it brought into association together those people who are vitally concerned in this industry. I know your Lordships are aware that my object has been to bring about that co-operation between owners and men on which the whole success of the industry really depends. That plan, however, was put on one side because the Government came forward with a more comprehensive plan for nationalization. I said that I approved—if that is the right word to use—of the Foot plan because the Board which it proposed to establish was interested in the industry. They certainly would have had a profit motive, which is supposed to be wrong in owners but right in everybody else. Now we have the Board which it is proposed to set up under this Bill. As I have said, I have nothing whatever against it, but I do feel that it is vitally necessary that it should be important enough, broad-minded enough and big

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enough to control one of the greatest problems that has ever been turned over to an industrial community.
Another point was made by my noble friend behind me, and that is that accounts must be kept. I sincerely hope that we shall know every year exactly what the industry has done. I hope that nothing will be concealed, and that, looking at it from the commercial point of view, we shall be able to see where the industry has succeeded and where it has failed. The experiment of the General Post Office, which the Government control as a Government Department, affords no analogy to the problem we are now undertaking. I feel it is vitally important that this Board which is going to be set up should have full independence so that it can rule the industry and that the Government should only come in on questions of higher policy. While I agree that the Government should receive all the information they want, I think their functions should be confined to giving that assistance and guidance which in different ways they have given to all industries in years past.
Our experience of Government control has not been a very happy one. In 1913—the peak year—under private enterprise, the industry produced 287,000,000 tons of coal. Your Lordships' will remember that the Government intervened during the 1914–18 war. By reason of circumstances over which no control could really be exercised, the Government had to intervene then and take a leading part in the industry but after the war there was a dead loss in the industry until it was handed back to the owners. Then came the unfortunate 1926 strike, which made a great difference to our export trade, and following that there was the slump of 1931. By 1939, however, the industry was producing 231,000,000 tons of coal per year and employing 766,000 men. Notwithstanding the strike of 1926 and the slump of 1931 it had been built up to that extent. In 1941, when it was still under private enterprise, its output was 206,000,000 tons per year and the numbers employed were 697,000. In 1942 the output fell to 203,000,000 tons a year and the number of workers employed increased to 709,000, with a wage bill of £163,000,000. I am giving you those figures because they are of great importance in showing what Government control
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in the past has actually done. In 1944, when we had dual control, the Essential Work Order and the Government managing the business to a very large extent, we had 12,600 more men producing 22,500,000 tons less coal.
The miners got £30,000,000 more in wages and the country got 20,000,000 tons less coal than in 1942. To my mind that is a very important matter, and I feel that unless there was something in the influence of Government control in the past which can be eliminated in the future, we shall find exactly the same results accruing, the industry going down and down until I do not know exactly what point it will reach. That is the story of production under Government control. The question we want to ask is, shall we get the coal required when the mines are nationalized or shall we not? That is really the whole question in which we are interested at this time.
There are endless difficulties to be considered which have been fully recognised in this debate. All other industries in this country are based on coal and as my noble friend behind me has put it, on cheap coal. That is what we must have. Electricity and gas may be taken as examples. If the coal trade fails those industries, then we shall be faced with unemployment.
The coal industry cannot under any circumstances be considered a very attractive industry. It is a dangerous industry and it does not hold out prospects to the younger generation such as are offered by a great many other industries in this country. The modern outlook is different to that of the past. The noble and learned Lord on the Woolsack told us that coal-mining was a hereditary industry but that it has now changed from that altogether. I think there is a certain amount of exaggeration in that suggestion. There are many young people who are quite ready and quite willing to go down the mines, but one has to remember that the outlook of all these young people is very different. They have a wider imagination than their fathers and it has been stimulated by the literature of the day and by the films. It is hardly likely that the majority of young people would want to go and spend a certain portion of their day underground.
I am quite sure that conditions underground in all mines—of course in some

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to a greater extent than others—can be improved to a very large extent. But I do not think that it would be wise to make too certain of the fact that mechanization is going to solve all our difficulties here. The coal workings in America and other countries are much more suited to mechanization. Our thin seams in the greater portion of the country have always given us great difficulties about mechanization. There are very few families who have been closely associated with the coal industry for four generations as my family have been. I am sure that I may be allowed to say that I am proud of the experience of the Londonderry Collieries. That institution really dates from the beginning of 1828, when my great-grandfather made the harbour at Seaham and sank the pit at Seaham with no assistance whatsoever from anyone. My family has had no assistance—I am talking of the financial side—from anyone at all. My father sank a pit in 1900 and I sank a pit in 1923, trying to follow the family tradition because as was natural I was deeply interested. We have undertaken this business on our own account. Numbers of people in this country have tried but have failed; it is only the few who have been successful. We have been the butt of a great deal of propaganda, and on that point I would like to quote a passage from the Reid Report, which expresses something which people are inclined to forget:
"When we come, therefore, as we must, to point out the mistakes which were made in these early years of the coalmining industry, let us beware of merely being wise after the event, or of withholding the meed of praise due to a great race of men, employers, mining engineers, workmen and machinery makers alike. For whatever their faults, they were fit to rank with the greatest of Britain's industrial pioneers."
When we receive criticisms we may keep those words in the Reid Report in mind, and derive a certain amount of satisfaction from them.
I have always deeply regretted that my colleagues and friends on the owners' side of the industry have never been politicians. There are very few of us who ever tried to bring the industry into politics either in your Lordships' House or in another place. But we must remember that there are over fifty miners' representatives in the House of Commons, each with a large constituency. We in
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this House have no constituencies as the miners' reperesentatives have in another place We have had to face for years ceaseless Socialist propaganda, but I would draw a line between the Socialist propaganda section, and the miners themselves. I think there is a wide difference between them. The Mineworkers' Union has always been what I would call the Right Wing of Socialism. They preached Socialism day in and day out, and they used the coal trade as part of their propaganda. This definition of Socialism appeared in a weekly newspaper last week:
"The essence of Socialism is the strict regimentation of labour as well as of capital, and, under a single party system, the subordination of the individual to the State on every aspect of public and private life."
The Government have been returned on the Socialist ticket. Is that the definition which they would give?
THE MINISTER OF CIVIL AVIATION (LORD WINSTER): In which paper did that appear?
THE MARQUESS OF LONDON-DERRY: It was in the New Statesman and Nation. I may tell the noble Lord that it was quoted. The propaganda which we have had to face all these years has as its first slogan: "The mines for the miners." That is not at all an unattractive suggestion, but I am wondering how far the miners are getting the mines for the miners. When I was amongst my people the other day I saw one of my friends who had just come out of the pit, and he said: "I am not sure we had not better keep the devil we know, better than the saint we do not know." Another propaganda slogan is: "Less work and more pay". There has also been continual abuse of the owners personally and as a special section of the community. They have been isolated for purposes of this abusive kind of propaganda.
So far as I am aware no retort has been made to this. Certainly I have never made any retort. And nothing has been published to show what the owners have done. One would imagine after hearing all this sort of thing that no coal-owner dare venture upon his own property for fear of what might be done to him by those whom he employs. Now this propaganda has led to disastrous results. It has hampered and hindered full and loyal co-operation for years. I say "full" on

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purpose, for I am happy to think that in the Londonderry collieries, of which I have the honour to be the head, we have had a gratifying measure of loyalty and co-operation. We have had a lot of co-operation for generations. I must admit that I am told it does not exist everywhere else, but I do not believe that.
There is another important point in connexion with this Socialist propaganda. The miners' leaders have not been backward in it. They have preached disloyalty towards owners and they have encouraged indiscipline. If it were not so serious in the circumstances which surround us now, there would be grim irony in the judgment which would appear to be falling on the heads of a great many of the men's leaders. They have taught indiscipline, and now we find these same leaders begging and pleading with their followers to listen to what they are telling them to do. And in a great many instances the miners—particularly the younger ones—are refusing to listen when these appeals are made to them. If we could have had more co-operation from the propaganda section of the Mineworkers' Union, if we could have got the leaders to teach the men that loyalty and discipline are the real foundations of a successful industry, I think that the difficulties which we are facing now would not be nearly so great.
I apologize for detaining your Lordships, but in these days I am not accustomed to making speeches. In conclusion I would like to state as well as I can my own attitude—as one whose family has been, as I have said, associated with the industry for four generations—towards this Bill. I do not mind saying that I am seeing the actual change-over with profound regret. I do not want to see the industry thrown back into the condition in which it found itself in the past on both the occasions when the Government essayed to deal with it. But of course, my own personal feelings and interests do not matter at all. We owners can feel grateful and satisfied, perhaps, that by good management—if I may use the phrase, and say that I am speaking of my predecessor—and with the loyalty and co-operation of the men themselves, our results have been by no means unsatisfactory.
As to the future, I would say that everything depends on the Board which is going to be set up under the Bill. Hitherto, as
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I think your Lordships are most probably aware, the coal-owners have been the buffers between the State and the men. We have taken a lot of knocks, which some of us have survived. That has been all right. But those knocks are now going straight to the Government themselves—straight to the Government Department. Think what a strike now means. A strike to-day occupies a totally different position in our industrial mentality, and exercises a totally different influence on our industrial outlook as compared with a strike in the past. I am not well versed in the law, but I am not sure that a strike under present conditions does not approach the realm of high treason, for it is a strike against the State. That is a point which the Government will have to consider very carefully.
I have tried to make my case before your Lordships, and I reiterate my belief that the industry working through its own people, if I may so put it—the people who are really interested in the industry itself—if they could have brought about the implementation of the Foot Plan, or a modification of the Foot Plan, would have been much more successful. But under this Bill something entirely different is going to be done. I shall do my best, now that I am not otherwise occupied, to keep in the closest possible touch with the coal industry and to bring matters connected with it before Parliament, if I think necessary.
I shall do my utmost to urge my own Party to see that the Board really carries out what it is expected to do. In short I shall do everything in my power to help the industry. I realize that we have entered upon a new era, but I am sure that in view of the circumstances with which we are confronted, and the dangers surrounding us at present, it would be wrong of any of us by controversial methods to hamper those who are trying to carry on this great industry. Ultimate success depends on the men engaged in the industry and the spirit which actuates them. The kind of administration which we want and which we must have is one which will ensure that adequate supplies of cheap coal shall be available for the nation's need and for export, and that production is secured at an economic price.
4.48 p.m.
LORD LINDSAY OF BIRKER: My Lords, it is with some hesitation that I,

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an outsider, follow someone like the noble Marquess, Lord Londonderry, whose family has been for so long connected with the coal industry. But sometimes I think an outsider sees things that people inside do not see. We had, not long ago, a debate on conditions in the mining industry, and I was so bold then as to say that though I did not know very much about the mining industry I did know a good deal about miners. I explained at the time—if I may be allowed to repeat this—that my knowledge came from an acquaintance which is now about twenty years old, a pretty intimate acquaintanceship, with the Rhondda Valley, South Wales. I have some acquaintance also with the miners of North Staffordshire and some with the miners of West Cumberland. It has also been my fortune for about the same number of years to meet, summer after summer, with working men at Conferences in Oxford, and talk with them as they sat about in our quad. I do ask the noble Marquess to believe that nothing that I have come across in any other industry approaches the bitterness which you find exemplified in what is said by some miners. I hasten to say that when I described my experiences to someone who knows the coal industry very well, he said that my experience in South Wales was an experience of the very worst, and that what I said about the relations between the miners and mine-owners in South Wales did not apply all over the country. I want to say that sincerely to the noble Marquess.
It does not mean any criticism of what he said. I do not think there is any question whatever that if you know the miners in South Wales—and it applies, though in a lesser degree, to the miners in Warwickshire also—you will realize that it is no use supposing that you can get any co-operation between mine-owners and men in carrying out what we want. In a debate in this House the other day, the noble Lord, Lord Cherwell, was asking about nationalization. He did hint that perhaps coal might be nationalized, and he ascribed that to the doings of agitators. I would pray such a very eminent scientist to apply the elementary principle of scientific induction to this problem. Why is it that agitators are so successful in coal and nothing like so successful in any other industry?
LORD CHERWELL: Perhaps it is because the noble Lord himself appears to have visited the worst districts and spoken to the men there so often.
LORD LINDSAY OF BIRKER: That is a very nice and charming thing for the noble Lord, Lord Cherwell, to say. I might say that from other evidence too, I am sure it was in existence long before I got there. I do not think that I am as good an agitator as all that. I do not think there is any question that in certain parts of the country the whole mining populations have been so bedevilled that the relations are hopeless—quite, quite hopeless—and that nationalization is the indispensable condition without which you cannot get further. That does not mean that in itself it will enable you to get where you want to, but I am quite certain that without nationalization you can do nothing. I do venture to say—although the noble Lord may consider me impertinent—that in their heart of hearts noble Lords on the other side do recognize that. The noble Viscount, Lord Swinton, in a debate the week before last, said he thought in regard to nationalization—I am quoting from memory—it is right to apply the principles of commonsense, and that nationalization is sometimes good and sometimes bad. As against that view, some noble Lords on the other side seem to have as doctrinaire a theory against State ownership as we on this side are sometimes accused of having it for State ownership.
VISCOUNT SWINTON: Blimps on both sides.
LORD LINDSAY OF BIRKER: Lot me take a pertinent example in this matter. This Bill should not be at this moment quite the experiment it is. Take my own country, Scotland. Coal should have been nationalized in Scotland some years ago, for the very simple reason, as anybody knows, I think, that in Lanarkshire coal is petering out. There is an abundance of coal in East Scotland and Fife. It requires very deep pits and shafts and costs a great deal of money to sink them. It also means something very much more important; that is, that in Scotland a very large part of the population of Lanarkshire have got to move. That is very, very difficult to do under private enterprise. Under private enterprise private companies would borrow

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money and sink more shafts, but there would be considerable economic friction and fearful distress amongst the population before gradually the move was accomplished. It is not just the miners themselves, it is the whole population who have to move. It is a fearful operation to move people, with the links which they have with these little villages and small towns, where their fathers have lived and their grandfathers have lived. It partly affects me, and I have some inkling of what it means. My grandfather was Relief Minister in the mining town of Lermahagow, in Lanarkshire. The whole population, as I have said, has gradually got to be moved, and I submit that you can only do it by wise nationalization. I do not believe that it can be done under private or capitalist enterprise. It might be done, but only with extreme suffering.
Lanarkshire miners have known for a long time—and most people concerned with coal knew four or five years ago—that this was the case. They knew that the only way to assure Lanarkshire miners that when their pits were finished they would have new employment was to start sinking a shaft immediately. Unless we are prepared to act in that way we must be faced with a situation where men know that their coal mines are petering out and are therefore making a long job of it. That is only human. What do they see in front of them? They have hope of something, but that is all. I maintain that this would have been done by any sensible Government, unless they had been stopped by some a priori objection to nationalization as such. I think, therefore, in that case it is a case of six of one and half a dozen of the other. Do not let the pot, whichever that is, start calling the kettle black in this question of "doctrinairiness" which does exist on both sides. Let us welcome the attitude which we are all taking in this Second Reading to-day, in spite of our hesitations in saying that it is an experiment. Of course it is an experiment, We all recognize, I think, that nothing else can be done. At any rate the Bill is not going to be opposed, and I think that we all recognize that this will be a continuing experiment. I rejoice at the generality of some clauses in the Bill because I hope that the actual working of the Coal Board will go on receiving the criticism, advice and suggestions
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of all Parties in the House, and in both Houses.
The noble Marquess who has just spoken will not have the advantage of my learning as he has gone out, but may I say something as to what I think Socialism means. I heard the very words in the final summing up of the debate for the Third Reading of the Bill in another place. The member for Bromley—I wonder if conceivably he caught the definition from me—said that his ideal—he did not call it Socialism; he calls it the middle way—was the application of the tried principles of democracy to industry. That is what Socialism is. Communism is the application of the wholesale methods and rigid discipline which have been found sometimes efficient in industry to politics. That is quite a different thing—just the opposite, in fact.
Surely anybody must recognize that there is no single pattern of democratic government, and that if we are going to try to apply anything like democratic principles to industry we have to do it in all kinds of ways, and we have to do it by experiment. We must recognize that. I should have thought that the machinery proposed here is clearly the right machinery. It is the machinery which tries to set up a Board which will act very like the Board of managing directors of a good industrial company, but will give them a general responsibility, a general pattern of policy within which they are to work.
The noble Viscount, Lord Swinton, when he was talking about this point, confronted us with what I think he called "an inescapable dilemma." I do not know whether the noble Viscount objects as much as I do to being called academic, but I was reminded of the inescapable dilemma produced a long time ago by the Greek philosopher who showed that under no circumstances could a hare catch a tortoise. What was perhaps worse—if the noble Viscount will forgive me—was that part of his speech reminded me of many, many weary hours which I have spent in an academic city listening to my academically-minded colleagues explaining that the conditions under which they lived all their lives were quite impossible conditions under which to live. The noble Viscount said that you could not distinguish between the general policy within which the Board was to work and detailed direction.

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I almost said—only it would have been rude—"Oh, come, come" The noble Viscount knows perfectly well that that can be done. It cannot be defined very often. Sometimes it can, and sometimes it cannot. It does presume that the Minister is going to have a certain amount of sense. Ministers sometimes have. It is to presume that he is going to be amenable to criticism if he goes too far in one direction or another, and it is surely a simple proposition to know that this is the kind of thing which you would discover in practice. It is the kind of thing which, as a Scot, I would say the English do with perfection, as long as you do not ask them to explain it. If you ask them to explain and define it, and say, "What is the strategy? What is the policy? What is the general, and what is the particular?" they cannot do it; and bless them because they cannot do it! It is much better to know how to do it in practice. I do really submit to the noble Viscount that that part of his argument does need a little more thinking out. I hope I have not misrepresented him.
VISCOUNT SWINTON: I am not sure that the noble Lord has not a little bit, because, however difficult the definition may be, the application ought not to be so difficult.
LORD LINDSAY OF BIRKER: Oh, no.
VISCOUNT SWINTON: He will do me the justice of admitting this, that I did put three or four quite concrete tests of who was to run the business—the Board or the Minister—and, without having some definition, I should have thought that the Minister, who has got to start the business tomorrow morning, really must know whether he or the Board is going to do these specific things.
LORD LINDSAY OF BIRKER: That is not the argument of the noble Viscount to which I was referring. The noble Viscount will pardon me, but he did really begin by saying that you could not distinguish the general policy from details. He did begin by saying it was all one, and by saying that the Board would be exactly—and my heart sank when he used the adverb—like Civil Servants. That is when I wanted to say, "Oh, come, come," because I do not believe the noble Viscount really means that. It is important, because what this experiment
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does—it is a new experiment although there are things like it in the B.B.C. and other public utility corporations of that kind—is to produce a Board of Directors who will carry on the industry with the same power of decision, with the same power of taking risks, and with the same power of saying, "Yes," and "No," the same sort of powers which directors have in business, and yet will, in general policy, have a responsibility which is guided by, and eventually be referred to Parliament. That really is the essential thing about the experiment, and I do submit that it is right, because I have heard an argument with regard to nationalization in general, not nationalization of coal only—and the argument is not confined to people who call themselves Socialists—that in industry, as we know it at present, there is a very large divergence between power and responsibility. The people who run industry and have great power are very often, I am thankful to say, actuated by their own sense of responsibility to the public, but they have not institutionally any responsibility. They can do as they like. They can as we saw after the last war (or some of them) take a line which was right from the point of view of business, in the sense that it meant greater profits on a non-expansionist policy; not all did that, but some did, and they could do that without being called to account. I think if you go on like that, something is bound to happen that is going to lead to a smash.
I would respectfully ask noble Lords if they come across it, to read a book by a person whom they ought not to suspect, because he is a Professor of the Harvard Business School. It sounds unimpeachable, does it not? He is an engineer. He has written a very wonderful book called Democratic Leadership in a Free Society. If I may say so, do read it. It is a lovely book.
A NOBLE LORD: Will the noble Lord give the name of the author?
LORD LINDSAY OF BIRKER: Whitehead. He is a nephew of the rather famous Whitehead, the philosopher. It is called Democratic Leadership in a Free Society. It begins with most beautiful American experiments on various things, it is very well done. He does make the general point (and of course this applies

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far more in the States than it does here) that the leaders of industry, the people who make the big decisions in industry, have never regarded themselves, or have never as a whole acted, as being responsible people in the society which by technical power they control. Nationalization is only one way of doing that. But unless you have something like that, and as long as you go on having power with no institutional responsibility, you will get the kind of position with which you are now confronted.
I would say to the noble Marquess who spoke last, that it is not an accident that people have gone Socialist. It is not an accident that there are some trades where that flourishes and some where it does not. It is not an accident, and it is unfortunately necessarily true, I am afraid, that in this matter good employers suffer for the mistakes of the others.
I am perfectly prepared to believe, if the noble Marquess will allow me to say so, that if there had been only the Londonderry pits, and the kind of tradition in the pits that the noble Marquess and his family have had, there would not have been this agitation. But it is infectious; it spreads. If you have enough owners behaving in the sort of way in which some coal owners have been, in producing this frightful bitterness, it is no good blaming it on agitators or on people being Socialist. Who made them Socialist? May I just say one thing more? I entirely accept the view that nationalization itself is not going to do all we want to do. I think it is only a condition without which you cannot do it. I entirely accept the view so eloquently put forward by the noble Marquess, Lord Reading, that there has got to be a different spirit on the part of the miners. But I do not think that spirit will come, if I may say so with respect, by lecturing the miners. I think it has got to be done by people such as the managers or the Board, people who are in contact with them. It has got to be done by experiment. It is not easy to change the longtime habits of people. I do not think that anybody can have much to do with working-class people without finding that they will do certain unreasonable things because long conditions have instilled that into them, even after these evil conditions have gone. You will not cure in a day the sort of mind you have produced in miners. You will not cure it by
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nationalization, although that gives a chance for it to be cured. As I said the last time I spoke on this; matter, the young men who from 1927 until nearly 1939 stood about in Rhondda doing nothing but holding up the walls of public houses, have got something in their souls which it is going to take a long time to get away, and it needs a determined effort, recognizing that this business is an art. In the first world war, on the principle which then governed the Army, that you were put into a job as unlike as possible to the job you did in real life, when I went out to France I was put on to organizing labour, and I learned from it that the fact that yon were working for the public—that is, for the nation—so far as production was concerned cut a certain amount of ice, but not very much. If you were, for example, digging a site for a gun which you knew would fire on the Germans more rapidly, you did it in two days rather than three, you worked hard because your imagination caught fire. But if you were unloading cheeses at Rouen, day in and day out, it was just as dull as it could be and the production was low. Therefore you had to give your mind to increasing output without being able to pay people more, and you did it by encouraging pride and belief in the spirit of the company, and by making all that was to be made of that admirable tradition of the Army, of which it is so proud.
There is a lot to be done, but it will not be done easily, and it will not be done by scolding the miners. They are what their condition has produced, except that they are nobler in many ways. This is an art, and it has to be practised. I hope one of the things the Coal Board will set themselves, with enormous energy, to do—and I am sure they will get help from coal owners such as the noble Marquess who spoke last—is to perform this task. It is one of the most urgent things in the world.
5.12 p.m.
VISCOUNT STONEHAVEN: My Lords, may I start by telling the noble Lord, Lord Lindsay, that in Fife to-day the sinking of a new pit on the most up-to-date lines as envisaged in the recent report, plus the housing estate and all the super-pithead works has at least reached the tender stage. I am not at liberty to disclose anything more about it, but that

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is the fact, and it has been done under private enterprise. I would like also to draw the noble Lord's attention to the fact that we have just spent six years in war, during which time development work which did not produce coal was not allowed to be proceeded with, at any rate on a large scale. Intervening in this debate to-night, I must offer an excuse, and that is that while not connected with coal I can claim a certain amount of experience of mining, having paid for my technical education by working in the mines with a pick and shovel, in Canada and also in Cornwall. Since those days I have driven two tunnels under the Thames and did a certain amount of work during the war, so I have a slight knowledge of mining, but not very great. Of course, coal mining is absolutely the basic industry of the country, as has already been stressed. The whole of our export trade, on which the country and our recovery depends, is based, in the long run, on coal. At the very best nationalization is an experiment. We have to accept it; it is coming about; but it is an experiment. I do feel, however, that it is very serious to experiment with the life blood of industry. The whole thing depends on coal, and there are countless examples where nationalization has failed to produce the goods. So far as I have been able to ascertain, in the few places where nationalization in mining has been tried and has even approached being successful, it has nowhere approached success on a comparative basis with private enterprise. Therefore I think it is extremely risky to "monkey about" with industry's jugular vein.
Of course the industry is in very great trouble there is no question about that. The noble and learned Lord, the Lord Chancellor, said, "If you do not nationalize, what are you going to do?" Last time I addressed your Lordships I very properly received a rebuke for speaking too long, and I am not going to be too long again to-night; I have observed the lateness of the hour. There are one or two remarks of a general nature, however, which I will venture on the subject. Whether nationalization works or not is the problem. We hope it will. But surely nationalization must lead to a lack of leadership in the individual pits. I cannot see how a large national controlling organization is going
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to produce individual leadership and output, from my knowledge of miners, depends entirely on leadership and personal contact. I think it is useless to go to the miners and say: "You are an aggrieved party; we will do this and that for you. But please give us coal." That is entirely the wrong foot to start on. So far as I can see, it is a foregone conclusion, and has been for some time, that the industry will be nationalized. If you want to join the coal industry there is no queue at all. That is the only place where that state of affairs exists.
May I now make one or two remarks about the inefficiency of the industry? I think the Reid Report covers that subject fully and draws attention to all the various defects. After listening to the noble and learned Lord, the Lord Chancellor I am normally convinced that black is white or green is purple—whatever he wants me to believe. This time I must admit I was not so convinced as usual, but not on the grounds of what he said. I read with great interest the Reid Report, and it is what the noble and learned Lord left out that convinces me. He talked of the troubles of the industry, but he did not draw attention to the fact that one of the chief reasons why the underground transportation system in the coal mines is in such a deplorable state is because it is prohibited to improve it—at least, modern ideas cannot be employed, owing to stringent and, according to the Reid Report, unnecessary safety regulations. A modern system of loco-haulage, such as is used in America and in many other countries, cannot be employed in our mines because it is prohibited by Act of Parliament. Surely the remedy, before you nationalize, is to remove that prohibition, which can be done in one Act. Another point is that of industrial disease. I have a little experience of that side of it. Silicosis is caused by dust. I have only worked in hard rock mines where dust causes damage of this sort, and the means employed to combat it is water laid on to the rock drill. As that is troublesome to use, however, you will find that although the safety precautions are there, nine times out of ten the miner elects not to use them. That is fairly widespread, as I know from experience. That is one angle of the subject. Another is that under modern diagnosis the disease can be detected in its early stages and arrested,

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if not cured. That cannot be done in advanced cases, and most of the cases one comes across now are those of older men who were never periodically examined under the X-ray. That is a point that should be stressed much more than the dangers of the industry and the chances of contracting this disease, because obviously you will not encourage people to join an industry if they think it is one in which they are going to get a lot of disease and other discomforts. Nothing will make the coal mining industry a clean industry—I do not think even the Lord Chancellor could convince one of that.
Mining is a man's job, and, thank God, there are plenty of men in England to-day—we do not need the Poles to come and help us—who will take it on if they can see there is something in it for them. I can see that there is a very strong case for pensions for miners at the age of 45, because it is not an old man's job. One of our troubles to-day is that owing to the war and one thing and another a lot of old men are in industry. Recruits who might or might not have come into it have been in the Forces, and now that they have come back, while they have their war gratuities and resettlement leave, most of them are looking around to see if there is not a softer job, such as standing at a hotel door, where tips can be picked up. You will find there is no lack of men coming back into those jobs which are soft. You cannot blame them—I would do the same myself—but that does not help the mining industry. You must keep that aspect in mind. I do not see that that position is going to be eased under nationalization, but it may be.
There is another thing I would like to mention, and that is the mechanization of the mines. According to the Reid Report, 80 per cent. of the coal in this country is cut by machinery. I have already remarked about the transportation system. The thing which really counts is the layout of the mine and the system employed to win the coal. That is stressed in the Reid Report and it is a thing which cannot be altered in five minutes. You cannot alter it merely by buying plant from America which is adapted to the American system of mining, which is predominantly room and pillar, whilst our system is almost exclusively long wall advancing. The cutting of the coal is quite good, but it is in the loading that
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our trouble lies. It is no use increasing the quantity of coal you can win at the coal face if you cannot get it up the shaft. That is a difficulty which we can only hope that nationalization will solve, but I am very doubtful whether it will because I have not seen any figures produced to show that it has happened in other places.
5.24 p.m.
VISCOUNT LONG: My Lords, I could not help but be impressed by the tribute which the noble Lord, Lord Lindsay, paid to my noble friend the Marquess of Londonderry. It brought back memories of a direct relation of mine, who was a pit-boy in Durham and who rose to be the great manager of collieries in the north, the late Sir George Elliott. I happened to be talking to my noble friend just now and he well remembered, somewhere in the '80s or the '90s, when this great pit-boy advocated the amalgamation of collieries. I also have had experience of miners, having had the honour to serve with them in the 15th Division in the first world war. I have always paid tribute to their courage and to the wonderful type of men they are, but, like my noble friend Viscount Stonehaven, the more I have listened this afternoon the less have I learned as to how this Bill is going to help the mining industry.
I am quite aware, as has been stated here this afternoon, that the Government went to the country for a mandate to nationalize the mines and it may be said that, having been returned to power, they have to carry out that mandate. Whether the electorate were wise or not must be left to the future to decide. The noble and learned Lord, the Lord Chancellor, warned us that we were taking a grave risk at this moment, and the more I listened to what he said the graver I thought that risk was. This Bill has been hastily put together. I venture to suggest to your Lordships that in the past no Bill carrying with it such a grave risk as this carries with it has been put together so hastily as this. When the Bill was first introduced it had fifty pages but it now has sixty-one, thanks to a strong Opposition endeavouring to improve it and to get some of their objections removed. Even so there remain outstanding objections. I listened to the noble Viscount, the Leader of the Opposition, who pressed for information

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as to who really will be in control in the end—the Minister or the Board, and I yet have to learn the answer to that question.
The Bill creates a monopoly. We have got rather lax in our talk about monopolies. In 1623 an Act was passed by the then Government to abolish monopolies. Three hundred years ago Parliament in its wisdom saw fit to abolish monopolies. Section 1 of that Act complained that in spite of previous decisions not to grant monopolies, further monopolies had been granted, to the great grievance and inconvenience of His Majesty's subjects, and it went on to prohibit their further grant. It will be seen that the harm which could be done to the people at large by the creation of monopolies was fully realized at that time; yet, having had our freedom for over 300 years, we are, at this vital moment, granting once again a vast monopoly, upon which I believe there can be no going back.
To create this monopoly is bad enough, but in spite of efforts to persuade them to realize the magnitude of this change, the Government have refused to alleviate the hardships inherent in monopolies by providing any effective machinery, as far as I can learn, by means of which the consumers of coal can voice their complaints. What chance are the consumers going to have in case they want to present a case of hardship? I should have thought that at least we could have been given some information on that particular point. Every attempt has been made to get some provision to that effect but it has been met with strenuous opposition from the present Government. Although coal is the one natural resource that we possess in quantities sufficient to export, we have not been told how our exports in coal are to be increased, which would, of course, enable us to purchase the goods we so badly need.
I have been waiting for some statement to be made this afternoon as to how poor people—and I say "poor people" deliberately—who have got £1,000 or £1,200 of their savings upon which they have been living invested in coal are to get their interest on their money during the two years' hiatus mentioned in this Bill? No doubt they will get some interest, but nothing is specified, and I venture to suggest to your Lordships that there will be
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very many cases of grave hardship unless this particular point is cleared up. We on this side of the House, as the noble Viscount has said, will do our best, but on the other hand, looking back to a period three hundred years ago there is a risk, as the noble and learned Lord, the Lord Chancellor said, from which there may be very grave repercussions. As the noble Marquess, Lord Reading, said, unless we get the goodwill of the men in the mines, this Bill can in no way help us to increase our supplies of coal of which we are in such urgent need at this moment.
5.31 p.m.
LORD BALFOUR OF INCHRYE: My Lords, there has been expressed in different ways from both sides of the House to-day one clear fact which emerges from the conclusion of our first day's debate on the Second Reading of this Bill, and that fact is that it is quite clear on all sides that the Government have got a mandate for this Bill. The Bill will not be challenged, and will be passed into law, but we trust that after the stages in your Lordships' House have been gone through it will be amended and improved in some way.
There is, however, quite a different question which may have a different answer, and that is as to whether the hopes raised in the minds of the miners by the passage of this Bill are going to be fulfilled in the future or not. There is the question also as to whether any consumers, domestic or industrial, are going to feel any benefits from the passage of this Bill, for if your Lordships will study this measure, you will find no assurances as to the quantity of coal to be produced in the future, no assurances as to quality and no assurances as to the prices which are to be charged to consumers.
I would like for a moment to take the case of the miners. Undoubtedly, the mining community supported nationalization at the General Election, and indeed, nationalization of the coal mines has been held out for years as the social and economic promised land for the miners. The noble and learned Lord, the Lord Chancellor, said the men were getting what they wanted. That is a point of view, but we must also face the fact that approximately one year has now passed since the country returned the present administration with a clear mandate for

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what they are doing to-day. In spite of the passage of time, in spite of the knowledge of the miners that nationalization was in the forefront of the Government programme, the output has fallen, expectation has remained unfulfilled, recruitment lags, and indeed one can well ask: Where are the signs of that moral reawakening which the country was led to believe would be one of the first results in the mining community from the promise of this measure?
The truth is—and I do not believe noble Lords opposite will dispute this—that there are many miners who are disappointed and disillusioned at the steps proposed by His Majesty's Government, because many miners thought that nationalization would mean a new form of syndicalism, a thing which would mean a state of affairs with the miners owning the mines. The miners now see that they have exchanged one set of owners for another. There were owners with whom, in most cases, they were able to have personal relationships, sometimes good and sometimes bad, but to whom in the majority of cases they knew they could look as their employers; now they have exchanged those owners for a new and remote bureaucracy.
We heard to-day from the noble Lord, Lord Lindsay, and from the noble Marquess, Lord Londonderry, of the human factor in management. There is precious little human factor in the remote masters sitting as a Board far distant from the miners, and I believe that one of the reasons why there is this evident lack of enthusiasm in the mining areas at present is that the miners are disappointed and do not like the exchange of the present owners for the new bureaucracy and regret that what they thought was going to come about, namely, syndicalism with the miners as owners is not to be their lot.
One can question whether the conditions are going to be vastly altered. Perhaps the miners are wondering whether the promises made at an earlier date of better conditions are going to be redeemed. Certainly, there are misgivings in certain quarters as to the position of the trade unions negotiators under the new set-up when this Bill becomes law. There is in another place a Member of Parliament who writes in the daily Press, Mr. Garry Allighan, the honourable member
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for Gravesend. He wrote an article recently which was quoted in another place, and which I will quote here if I may. He was questioning what would be the position of the trade unions in this Socialist State. This is what he wrote in his journal:
"The question that faces every M.P. where he goes is: What will be the position of our trades unions when our industry is nationalized? That poser cannot be charmed away by asking the questioner How do the trade unions manage in Russia?"
Then he went on to say:
"Shall we be free to strike if the new boss, the Government, refuses to concede to our wage demands? That would complicate matters, because the National Mineworkers' Union will be part of the boss."
I think noble Lords on both sides of the House, and indeed perhaps a wider public, would like to learn from the spokesman for the Government, what would be the position as regards any industrial dispute in the future, once the State is the master and owner. I conclude my remarks concerning the miners by saying—and I hope the noble Lord who will speak to-morrow for the Government will contradict me if I am wrong—that there are certainly no signs at the moment of the new spirit in the coalfields although a year has passed since the General Election. There is no sign of that in any concrete results which can be seen at the present time. One cannot help thinking that the dead-end feeling of the miners is still continuing at the present time. I fear that nothing so far can be claimed by the Government—and I wish it could be claimed by the Government—on the score of moral revival as the result of the measure they have introduced.
I would like to turn for a few moments to the position of consumers. The consumers, industrial and commercial, are put at the mercy of a monopoly under this Bill, with no real safeguards of any worth as to the price and quantity of fuel that will be supplied to meet their requirements. Again I hope that the Minister, when he speaks to-morrow, will be able to say that I am wrong. But as I read it, the industrial users are to be supplied at the whim of the Government themselves. I draw that conclusion, my Lords, from reading what is set out in Clause 1 (1) on page 1 of the Bill. It gives no assurance as to discrimination being impossible for planning or for the political purposes of the Government of

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the day. That subsection of that particular clause says that part of the duty of the Board shall be
"making supplies of coal available, of such qualities and sizes, in such quantities and at such prices, as may seem to them"—
that is to the Board—
"best calculated to further the public interest."
That, I suggest must be read in conjunction with Clause 3 (1) which says that
"the Minister may, after consultation with the Board, give to the Board directions of a general character as to the exercise and performance by the Board of their functions in relation to matters appearing to the Minister to affect the national interest, and the Board shall give effect to any such directions."
Therefore, should the Minister wish to give a direction as to discrimination in favour of or against one particular section of industry or any particular industry in relation to another, as I read it, he can direct the Board under Clause 3, and there is no safeguard in Clause 1 that can possibly prevent the Board being under obligation to fulfil the requirements of the Minister. It is really a new form of industrial patronage that we are now introducing. The noble Lord opposite shakes his head, but I say that it is virtually industrial patronage in that the Government of the day can allocate coal where they wish for what purpose they wish. I know that the noble Lord will say to-morrow that of course the Government have only in view the good of the country and the industrial progress of the country. One will accept that entirely when the noble Lord says it.
But Governments change and Ministers change, and what we have to look at is the powers we are giving to the Executive, not in relation to the admirable personality who will speak to-morrow but in relation to the question of good or bad government. I sincerely hope that, in the Committee stage, the Government will look sympathetically at some provision whereby there shall be safeguards against the possibility—the noble Lord may say that is a remote possibility—that does exist to-day of discrimination for political or planning purposes. Supposing the Cooperative Societies of the country were desired by the Government to promote some particular new activity in competition with a similar activity carried out not—in the eyes of the Government—
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satisfactorily. The Government could indeed switch the heat, as it were, in both senses of the word on to the "Co-ops" and get them going, and, at the same time, starve private enterprise. The noble Lord may say that that is far-fetched, but it is a possibility under the provisions of the Bill as it stands at the present time.
And now, if I may be allowed to do so, I would turn for a moment to the export trade, of which my noble friend Viscount Swinton has already spoken. It does seem to me that exporters are neglected. Whether or not we propose the formation of an Export Council is a matter which, as my noble friend has said, he and his colleagues are considering at the present time. If we make suggestions along these lines, I am sure that the Government will, at any rate, give them unbiased and sympathetic consideration with a view to seeing whether they are improvements on the measure or not. The Consumers' Councils are not really a very good safeguard to the consumer. They are to be paid allowances and they are to be staffed by the Minister. So far as I can see, there is no provision which will ensure that differences between the Ministers and the Councils are brought to the light of day. I do not think you can give executive power to Consumers' Councils because the Board must rule under the general direction of the Minister, but you can give some safeguard to the public, not by giving executive power, but by bringing the spotlight of publicity to bear on any differences that may exist so that the public may make up their minds as to whether the Minister is or is not acting in the public interest.
The same, I think, applies to Clause 30 as regards accounts. My own view is that these should not be in the form directed by the Minister but should be in the best commercial form as is laid down for companies under the Companies Acts. In that way the public will be able to make a comparison, by studying all accounts, to show whether or not the Board is conducting its enterprise in a businesslike and efficient manner. The public will be able to make a far better comparison than if accounts are presented to Parliament in the form directed by the Minister. Again, I do not in any way question the good faith of the Minister, but I do say let us try to give as much publicity as possible to the doings of the

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Board and the doings of the Minister if we are going to give them these very wise executive powers. My general criticism is of the large powers left to the Minister coupled with no definition of any price policy. When the Board is told to supply coal "in such quantities and at such prices, as may seem to them best calculated to further the public interest" we are, as The Times newspaper has said, facing a difficult situation because the Miners' Charter may be a cause of embarrassment to the Minister. How is the Minister to determine what is the public interest, if the Miners' Charter is putting forward on political grounds, and indeed on the grounds of the welfare of their members, very large demands, and, on the other hand, industry is putting forward very acute demands for large quantities of coal at a very keen price. I do see grave difficulties and embarrassments for the Minister in the future by reason of the possession of these great powers.
The Bill is one for State control and is something like a blank cheque to the Minister. There has been a refusal on the part of the Government, in another place, to define what those powers are and how they are to be used, because, as the Government have said, of the unknown future. Yet, at the same time, the Government make a claim for independant management. It seems to me that the weakness of the Government lies in trying to ride these two horses at the same time. They go in opposite directions, and leave an unfortunate straddle. You cannot have State control over all and still, at the same time, claim to have independent management. The two things are essential in conflict. The noble Lord, Lord Lindsay, shakes his head. Surely if you are going to give the Minister wide powers to exercise over the management, you cannot at the same time say that you have independent management free of Ministerial interference. You cannot have it both ways.
I have tried without detaining your Lordships unduly long, to put forward some criticisms which as I see it are called for by this Bill. The Bill is an experiment in Socialism with a vital industry. It is vague in its terms and it is sweeping in its powers. By its effects the Government will be judged in the future. But far more important than that, a great and vital
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national industry will rise or fall by the success or failure of this Bill. This Bill will pass into law unchallenged—as I said at the beginning of my remarks—but I hope that by the time it passes from this House it may be a better Bill than it is at the present time. I trust it is going to bring about, in a spirit above Party politics, that measure of revival for our great national industry which is the common wish of all noble Lords on all sides of this House.
5.51 p.m.
LORD AMMON: My Lords, I beg to move that this debate be adjourned.
Moved, That the debate be now adjourned—(Lord Ammon.)
On Question, Motion agreed to, and debate adjourned accordingly.

BURMA LEGISLATURE BILL. [H.L.]
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee—(The Earl of Listowel.)
On Question, Motion agreed to.
House in Committee accordingly:
(THE EARL OF DROGHEDA in the Chair.)
Clauses 1 to 3 agreed to.
Clause 4:
Interpretation.
(2) Nothing in this Act shall affect the law in force before the passing thereof.
THE POSTMASTER-GENERAL (THE EARL OF LISTOWEL)THE POSTMASTER-GENERAL (THE EARL OF LISTOWEL) moved to leave out subsection (2). The noble Earl said: This subsection provides that the effect of the Bill, when it passes into law, shall not be retrospective. We have now been told by our legal advisers that such a provision in terms is not necessary in the Bill, and accordingly I am moving to omit this subsection.
Amendment moved—
Page 2, line 27, leave out subsection (2).—(The Earl of Listowel.)
On Question, Amendment agreed to.
Clause 4, as amended, agreed to.
Remaining clauses agreed to.

MARQUESS OF ABERGAVENNY'S ESTATE BILL. [H.L.]
The King's Consent signified and Bill reported with Amendments.
TYNE TUNNEL BILL. [H.L.]
Reported from the Select Committee with Amendments.
LONDON MIDLAND AND SCOTTISH RAILWAY ORDER CONFIRMATION BILL.
Brought from the Commons, read 1a and to be printed; and (pursuant to the Private Bill Legislation Procedure (Scotland) Act, 1936), deemed to have been read 2a (Lord Westwood); reported from the Committee.
LONG EATON URBAN DISTRICT COUNCIL BILL.
Brought from the Commons, read 1a and referred to the Examiners.
GREAT WESTERN RAILWAY BILL.
Returned from the Commons with the Amendments agreed to.
  CONSTITUENT ASSEMBLY IN INDIA.
  CONSTITUENT ASSEMBLY IN INDIA.